<SEC-DOCUMENT>0001683168-18-003582.txt : 20181129
<SEC-HEADER>0001683168-18-003582.hdr.sgml : 20181129
<ACCEPTANCE-DATETIME>20181129112404
ACCESSION NUMBER:		0001683168-18-003582
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20181129
DATE AS OF CHANGE:		20181129

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AETHLON MEDICAL INC
		CENTRAL INDEX KEY:			0000882291
		STANDARD INDUSTRIAL CLASSIFICATION:	LABORATORY ANALYTICAL INSTRUMENTS [3826]
		IRS NUMBER:				133632859
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-211151
		FILM NUMBER:		181207407

	BUSINESS ADDRESS:	
		STREET 1:		9635 GRANITE RIDGE DRIVE, SUITE 100
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92123
		BUSINESS PHONE:		858-459-7800

	MAIL ADDRESS:	
		STREET 1:		9635 GRANITE RIDGE DRIVE, SUITE 100
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92123

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BISHOP EQUITIES INC
		DATE OF NAME CHANGE:	19930602
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>aethlon_424b5-211151.htm
<DESCRIPTION>424B5
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><BR>
<BR>
Filed Pursuant to Rule 424(b)(5)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Registration No. 333-211151</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(To Prospectus dated&nbsp;May 12, 2016)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>Aethlon
Medical, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>75,000 shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We are offering
75,000 shares of our common stock, $0.001 par value per share, to institutional and/or accredited investors pursuant to this prospectus
supplement and the accompanying prospectus to be issued upon exercise of warrants issued in connection with a public offering of
5,454,546 units, pursuant to which  5,454,546 shares of common stock were registered under a registration statement on Form
S-1 (Registration No. 333-219589) of the registrant declared effective on September 29, 2017 by the Commission. The aforesaid registration
statement originally registered the 5,454,546 shares of common stock contained in the&nbsp;<FONT STYLE="background-color: white">5,454,546
units (each unit consisting of one share of our common stock and one common warrant to purchase one share of our common stock)
offered with respect to the aforesaid registration statement. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">Our common stock
is listed on The Nasdaq Capital Market under the symbol &quot;AEMD&quot;. On November 27, 2018, the last reported sale price per
share of our common stock was $1.57 per share. The Warrants being issued in the concurrent private placement are not listed on
any securities exchange and we do not expect to list the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">As of November
27, 2018, the aggregate market value of our outstanding common stock held by non-affiliates (the public float) was approximately
$8.8 million, which was calculated based on 16,827,384 shares of outstanding common stock held by non-affiliates and on a price
per share of $1.57, the closing price of our common stock on November 27, 2018. In no event will we sell our common stock in a
public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public
float remains below $75.0 million. During the 12 calendar month period that ends on, and includes, the date of this prospectus
supplement, we have not offered and sold any other securities pursuant to General Instruction I.B.6 of Form S-3, other
than $975,000 (rounded) of common stock under our at the market offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><B>Investing in
our securities involves a high degree of risk. See &quot;Risk Factors&quot; beginning on page&nbsp;S-6 of this prospectus supplement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We retained H.C.
Wainwright&nbsp;&amp;&nbsp;Co, LLC. as our exclusive placement agent to use its reasonable best efforts to solicit offers to purchase
the securities in this offering. The placement agent has no obligation to buy any of the securities from us or to arrange for the
purchase or sale of any specific number or dollar amount of the securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We expect that
delivery of the securities being offered pursuant to this prospectus supplement and the accompanying prospectus will be made on
or about November 29, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><B>Neither the
Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-top: black 1pt double; border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common Stock</B></FONT></TD>
    <TD STYLE="border-top: black 1pt double; border-bottom: black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: black 1pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Per Share</B></FONT></TD>
    <TD STYLE="border-top: black 1pt double; border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-top: black 1pt double; border-bottom: black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: black 1pt double; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Maximum</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Offering</B></FONT></TD>
    <TD STYLE="border-top: black 1pt double; border-bottom: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #EEEEEE">
    <TD STYLE="width: 66%; border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Public offering price</FONT></TD>
    <TD STYLE="width: 2%; border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 11%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.10</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 2%; border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 15%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">82,500</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Placement agents fees(1)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.066</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,950</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #EEEEEE">
    <TD STYLE="border-bottom: black 1pt double"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proceeds to us, before expenses(2)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt double"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.034</FONT></TD>
    <TD STYLE="border-bottom: black 1pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt double"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">77,550</FONT></TD>
    <TD STYLE="border-bottom: black 1pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="width: 97%"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have also agreed to (i)&nbsp;issue warrants to purchase shares of common stock to the placement agent as described under &quot;Plan
of Distribution&quot; on page S-12 of this prospectus supplement and (ii)&nbsp;pay the placement agent for non-accountable expenses
in the amount of $50,000. For additional information about the compensation paid to the placement agent, see &quot;Plan of Distribution.&quot;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The amount of the offering proceeds to us presented in this table does not give effect to any exercise of the Warrants being issued in this offering.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>Rodman&nbsp;&amp;
Renshaw</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>a unit of H.C.
Wainwright&nbsp;&amp;&nbsp;Co.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">The date of this
prospectus supplement is November 29, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></P>

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    <TD STYLE="width: 33%">&nbsp;</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 91%">&nbsp;</TD>
    <TD STYLE="width: 9%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Page</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PROSPECTUS SUPPLEMENT</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a01">About this Prospectus Supplement</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a02">Cautionary Note Regarding Forward-Looking Statements</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a03">Prospectus Supplement Summary</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a04">The Offering</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a05">Risk Factors</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a06">Use of Proceeds</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-6</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a07">Dilution</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-6</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a08">Plan of Distribution</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a09">Experts</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a10">Information Incorporated by Reference and Exhibits</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a11">Legal Matters</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a12">Where You Can Find More Information</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 91%">&nbsp;</TD>
    <TD STYLE="width: 9%; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Page</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PROSPECTUS</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a14"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">About this Prospectus</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a15"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cautionary Note Regarding Forward-Looking Statements</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a16"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prospectus Summary</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a17"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk Factors</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a18"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use of Proceeds</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a19">Dilution</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a20"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities We May Offer</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">24</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a21"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Capital Stock</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">24</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a22"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Debt Securities</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">26</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a23"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Warrants</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a24"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Units</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">33</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a25"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Plan of Distribution</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">34</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a26">Experts</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a27"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Legal Matters</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a28"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information Incorporated by Reference</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a29"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where You Can Find More Information</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">36</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You should rely only on the information contained in or incorporated
by reference in this prospectus supplement and the accompanying prospectus. We have not, and the sales agent has not, authorized
anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should
not rely on it. We are not, and the sales agent is not, making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information in this prospectus supplement, the accompanying prospectus,
and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus is accurate only as of
the date of those respective documents. Our business, financial condition, results of operations and prospects may have changed
since those dates. You should read this prospectus supplement, the accompanying prospectus, and the documents incorporated by reference
in this prospectus supplement and the accompanying prospectus in their entirety before making an investment decision. You also
should read and consider the information in the documents to which we have referred you in the section of this prospectus supplement
entitled &ldquo;Information Incorporated by Reference&rdquo; and the sections of the accompanying prospectus entitled &ldquo;Information
Incorporated by Reference&rdquo; and &ldquo;Where You Can Find More Information.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a01"></A><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus supplement and the accompanying prospectus form
a part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the &ldquo;Commission&rdquo;)
utilizing a &ldquo;shelf&rdquo; registration process. This document contains two parts. The first part consists of this prospectus
supplement, which provides you with specific information about this offering. The second part, the accompanying prospectus, provides
more general information, some of which may not apply to this offering. Generally, when we refer only to the &ldquo;prospectus,&rdquo;
we are referring to both parts combined. This prospectus supplement may add to, update or change information contained in the accompanying
prospectus. To the extent that any statement we make in this prospectus supplement is inconsistent with statements made in the
accompanying prospectus or any documents incorporated by reference herein or therein, the statements made in this prospectus supplement
will be deemed to modify or supersede those made in the accompanying prospectus and such documents incorporated by reference herein
and therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>For investors outside the United States, we have not done
anything that would permit this offering or possession or distribution of this prospectus supplement in any jurisdiction where
action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe
any restrictions relating to this offering and the distribution of this prospectus supplement outside of the United States.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As permitted by the rules and regulations of the Commission,
the registration statement, of which this prospectus supplement and the accompanying prospectus form a part, includes additional
information not contained in this prospectus supplement or the accompanying prospectus. You may read the registration statement
and the other reports we file with the Commission at the Commission's web site or at the Commission's offices described below under
the heading &ldquo;Where You Can Find Additional Information.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless the context requires otherwise or unless otherwise noted,
all references to &ldquo;Aethlon&rdquo; are to Aethlon Medical, Inc., a Nevada corporation, and all references to &ldquo;we,&rdquo;
&ldquo;us&rdquo; or &ldquo;our&rdquo; are to Aethlon Medical, Inc. and its subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Trademarks, service marks or trade names of any other companies
appearing in this prospectus supplement are the property of their respective owners. Use or display by us of trademarks, service
marks or trade names owned by others is not intended to and does not imply a relationship between us and, or endorsement or sponsorship
by, the owners of the trademarks, service marks or trade names.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a02"></A>Cautionary Note Regarding Forward-Looking
Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus supplement and the documents incorporated herein
by reference, in particular the &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
incorporated herein by reference, contain certain &ldquo;forward-looking statements&rdquo; within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;). These forward-looking
statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to,
any statements regarding our assumptions about financial performance; the continuation of historical trends; the sufficiency of
our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our
results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; and the economy
in general or the future of the medical device industry, all of which are subject to various risks and uncertainties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When we use in this prospectus supplement as well as in reports,
statements, and information we have filed with the Commission, in our press releases, in presentations to securities analysts or
investors, or in oral statements made by or with the approval of an executive officer, the words or phrases &ldquo;believes,&rdquo;
&ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;expects,&rdquo; &ldquo;should,&rdquo; &ldquo;continue,&rdquo; &ldquo;anticipates,&rdquo;
&ldquo;intends,&rdquo; &ldquo;will likely result,&rdquo; &ldquo;estimates,&rdquo; &ldquo;projects&rdquo; or similar expressions
and variations thereof, we intend to identify forward-looking statements. However, any statements contained in this prospectus
supplement that are not statements of historical fact may be deemed to be forward-looking statements. We caution that these statements
by their nature involve risks and uncertainties, certain of which are beyond our control, and actual results may differ materially
depending on a variety of important factors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a03"></A>PROSPECTUS SUPPLEMENT SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>The following summary highlights some of the information
contained elsewhere in this prospectus supplement or the accompanying prospectus or incorporated by reference herein or therein.
Because this is only a summary, however, it does not contain all of the information that may be important to you. You should carefully
read this prospectus supplement and the accompanying prospectus, including the documents incorporated by reference, which are described
under &ldquo;Information Incorporated by Reference&rdquo; in this prospectus supplement and under &ldquo;Information Incorporated
by Reference&rdquo; and &ldquo;Where You Can Find More Information&rdquo; in the accompanying prospectus. You also should carefully
consider the matters discussed in the section entitled &ldquo;Risk Factors&rdquo; in the accompanying prospectus and in other periodic
reports incorporated herein by reference.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Company Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are a therapeutic technology
company focused on addressing unmet needs in global health and biodefense. In the field of infectious disease therapeutics, a
majority of viruses that transmit human infections are not addressed with approved antiviral therapies. To address this
significant unmet need, the Aethlon Hemopurifier&reg; is an affinity hemofiltration device developed for the single-use
elimination of life-threatening viruses from the human circulatory system. In the United States, we are advancing the
Hemopurifier under a &ldquo;Breakthrough Device&rdquo; designation from The United States Food and Drug Administration
(FDA).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the &ldquo;Breakthrough Device&rdquo;
program, the FDA has permitted the proposed &ldquo;Indication for Use&rdquo; for our device to include: &ldquo;The Hemopurifier
is a single-use device indicated for the treatment of life-threatening glycosylated viruses that are not addressed with an approved
therapy.&rdquo; We are currently in discussions with FDA to determine the pathway to clinically advance this &ldquo;Indication
for Use&rdquo; under the &ldquo;Breakthrough Device&rdquo; program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The &ldquo;Indication for Use&rdquo; under
the &ldquo;Breakthrough Device&rdquo; program also aligns with our goal to fulfill the broad-spectrum countermeasure objective
set forth by the U.S. Government to protect citizens from life-threatening bioterror and pandemic threat viruses that are not addressed
with approved therapies. Based on previous human treatment outcomes, we believe our Hemopurifier may also augment the benefit of
approved antiviral drug agents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In human studies, the Hemopurifier has been
administered to individuals infected with the following glycosylated viruses: The Human Immunodeficiency Virus (HIV), Hepatitis-C
Virus (HCV) and Ebola Virus (EBV). Additionally, the Hemopurifier has been validated&nbsp;<I>in vitro&nbsp;</I>to capture a broad-spectrum
of glycosylated viral threats including; Marburg virus, Zika virus, Lassa virus, MERS-CoV, Cytomegalovirus, Epstein-Barr virus,
Herpes Simplex virus, Chikungunya virus, Dengue virus, West Nile virus, Smallpox related viruses, H1N1 Swine Flu virus, H5N1 Bird
Flu virus, and the reconstructed Spanish flu virus of 1918. In many cases, these validations were conducted in collaboration with
leading government or non-government research institutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In collaboration with the FDA, we are focused
on the clinical advancement of our Hemopurifier in the U.S. In March of 2017, we concluded an Investigational Device Exemption
(IDE) feasibility study that was previously approved by FDA. The feasibility study demonstrated safety of our device in health-compromised
dialysis patients infected with HCV. The protocol of the IDE study was originally recommended by FDA as a surrogate model to advance
the Hemopurifier as a broad-spectrum candidate to treat virulent viruses that are often classified as bioterror or pandemic threats.
Prior to FDA approval of our IDE feasibility study, we conducted several clinical studies in virally infected individuals outside
of the U.S.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In September of 2017, our Hemopurifier received
an Expedited Access Pathway (EAP) program designation from FDA to support an accelerated clinical advancement of our device. Subsequent
to the EAP designation, the Hemopurifier was transitioned to the &ldquo;Breakthrough Device&rdquo; program that was established
under the 21<SUP>st</SUP>&nbsp;Century Cures Act, which was signed into law in December of 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are also investigating the ability of
the Hemopurifier to capture glycosylated bacterial toxins and tumor-derived exosomes that promote cancer progression and treatment
resistance. Additionally, we are the majority owner of Exosome Sciences, Inc. (ESI), a Company that is focused on the discovery
of exosomal biomarkers to diagnose and monitor life-threatening disease conditions that may be current or future therapeutic targets
for Aethlon Medical.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Associated with our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have incurred significant losses and expect to continue
to incur losses for the foreseeable future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have never been profitable. We have generated
revenues during the fiscal years ended March 31, 2018 and March 31, 2017, in the amounts of $149,625, and $392,073, respectively,
primarily from our contract with the National Institute of Health, or NIH, in the fiscal year ended March 31, 2018 and from the
Defense Advanced Research Projects Agency, or DARPA in the fiscal year ended March 31, 2017. However, our revenues continue to
be insufficient to cover our cost of operations.&nbsp;Additionally, our contracts with DARPA have now ended, and we cannot be assured
when, if at all, we will be able to enter into future government contracts beyond the current NIH contract. Future profitability,
if any, will require the successful commercialization of our Hemopurifier technology, other products that may emerge from our potential
diagnostic products or from additional government contract or grant income. We cannot assure you when or if we will be able to
successfully commercialize one or more of our products, or if commercialization is successful, whether we will ever be profitable.
We compete with U.S. and foreign companies that have greater scientific and organizational resources, market presence and financial
backing than we have. We may be unable to obtain FDA or international clearance of the Hemopurifier. Even if we do achieve such
regulatory clearances, we may be unable to successfully manufacture, market and sell our devices in the U.S. or elsewhere. These
risks and others are discussed more fully in the section of the accompanying prospectus entitled &ldquo;Risk Factors&rdquo; immediately
following the prospectus summary. You should read these risks before you invest in our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Corporate History</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On March 10, 1999, Aethlon, Inc., a California corporation,
Hemex, Inc., a Delaware corporation and the accounting predecessor to Aethlon, Inc., and Bishop Equities, Inc., a publicly traded
Nevada corporation, completed an Agreement and Plan of Reorganization structured to result in Bishop Equities, Inc.'s acquisition
of all of the outstanding common shares of Aethlon, Inc. and Hemex, Inc. Upon completion of the transaction, Bishop Equities, Inc.
was renamed Aethlon Medical, Inc. In 2009, we formed Exosome, which today is a majority-owned subsidiary focused on identifying
and monitoring neurological conditions and cancer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Contact Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our executive offices are located at 9635 Granite Ridge Drive,
Suite 100, San Diego, California 92123. Our telephone number is (858) 459-7800. Our website address is www.aethlonmedical.com.
Our website and the information contained on our website are not incorporated by reference into this prospectus supplement, the
accompanying prospectus or the registration statement of which it forms a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a04"></A><B>THE OFFERING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="vertical-align: top; width: 30%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common Stock</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 5%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 65%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common Stock offered by us</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">75,000 shares of common stock</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Public offering price</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$1.10 per share</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common stock to be outstanding immediately after the offering(1)</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17,931,543 shares</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Use of proceeds</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We intend to use the net proceeds from this offering to fund working capital and other general corporate purposes. See &quot;Use of Proceeds.&quot;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risk factors</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investing in our securities involves a high degree of risk. You should carefully review and consider the &quot;Risk Factors&quot; section of this prospectus supplement for a discussion of factors to consider before deciding to invest in shares of our common stock.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Nasdaq Capital Market Symbol</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AEMD</FONT></TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">____________________</P>










<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 5%; text-align: left; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 94%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The total shares of common stock outstanding immediately following this offering is based on 17,856,543 shares outstanding as of November 26, 2018. It excludes shares of common stock issuable upon exercise of outstanding stock options, warrants and RSUs, conversion of our convertible notes and reserved for issuance under our incentive plans.</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><A NAME="a05"></A><B>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I>Investing in our securities involves
a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties
described below. You should also consider the risks, uncertainties and assumptions discussed under the heading &quot;Risk Factors&quot;
included in our most recent annual report on Form&nbsp;10-K which is on file with the SEC and is incorporated herein by reference,
and which may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future. There
may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse
effects on our future results. If any of these risks actually occurs, our business, business prospects, financial condition or
results of operations could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in
a loss of all or part of your investment. Please also read carefully the section above titled &quot;Forward-Looking Statements.&quot;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt; background-color: white"><B>Risks
Related to this Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Management will have broad discretion
as to the use of the proceeds from this offering, and we may not use the proceeds effectively.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We currently intend
to use the net proceeds from this offering for working capital and other general corporate purposes. We have not allocated specific
amounts of the net proceeds from this offering for any specific purposes. Accordingly, our management will have broad discretion
in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results
of operations or enhance the value of our common stock. You will be relying on the judgment of our management with regard to the
use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net
proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable,
or any, return for us. Our failure to apply these funds effectively could have a material adverse effect on our business and cause
the price of our common stock to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>A large number of our common shares are issuable upon
exercise of outstanding convertible securities which, if exercised or converted, would be dilutive to your holdings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of March 31, 2018, there are outstanding
purchase options and warrants entitling the holders to purchase 6,331,618 common shares at a weighted average exercise price of
$1.96 per share. This includes 26,105 warrants that are conditional upon the exercise of other warrants. As of March 31, 2018,
there are 349,431 shares underlying promissory notes convertible into common stock at a weighted average exercise price of $3.00.
Additionally, as of March 31, 2018, we had reserved 369,000 shares of common stock for issuance under our restricted stock unit
program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The exercise price for all of our outstanding
options and warrants, or the conversion price of our convertible notes, may be less than your cost to acquire our common shares.
In the event of the exercise or conversion of these securities, you could suffer substantial dilution of your investment in terms
of your percentage ownership in us as well as the book value of your common shares. In addition, the holders of the convertible
notes, common share purchase options or warrants may sell common shares in tandem with their exercise or conversion of those securities
to finance that exercise or conversion, or may resell the shares purchased in order to cover any income tax liabilities that may
arise from their exercise of the options or warrants or conversion of the notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The exercise price for all of our outstanding
options and warrants, or the conversion price of our convertible notes, may be less than your cost to acquire our common shares.
If holders exercise or convert these securities, you could suffer substantial dilution of your investment in terms of your percentage
ownership in us as well as the book value of your common shares. In addition, the holders of the convertible notes, common share
purchase options or warrants may sell common shares in tandem with their exercise or conversion of those securities to finance
that exercise or conversion, or may resell the shares purchased in order to cover any income tax liabilities that may arise from
their exercise of the options or warrants or conversion of the notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a06"></A><B>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We estimate that the net proceeds that we will receive from
this offering will be approximately $77,550, after commissions and estimated expenses payable by us, assuming the sale of an aggregate
of $82,500 of our common stock pursuant to this offering, which is the maximum dollar amount of gross proceeds for which we may
offer our common stock under this prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We currently intend to use the net proceeds from this offering
for general corporate purposes, including for research and development, sales and marketing initiatives and general administrative
expenses, working capital and capital expenditures. In addition, our use of proceeds may include the repayment of debt or refinancing
of indebtedness or the acquisition of complementary products or companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have not determined the amount of net proceeds from this
offering that we will use specifically for the foregoing purposes. Pending use of the net proceeds, we intend to invest the proceeds
in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a07"></A><B>DILUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you purchase shares of our common stock in this offering,
you will experience dilution to the extent of the difference between the price per share you pay in this offering and the net tangible
book value per share of our common stock immediately after this offering. Our net tangible book value as of September 40, 2018
was approximately $4,000,000, or approximately $0.23 per share. Net tangible book value per share represents our total tangible
assets less total tangible liabilities, divided by the number of shares of common stock outstanding as of September 30, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">After giving effect to the assumed sale by us of $82,500 of
our common stock in this offering at an assumed public offering price of $1.10 per share of our common stock, and after deducting
estimated fees and commissions and estimated offering expenses of $4,950 payable by us, our as adjusted net tangible book value
as of September 30, 2018 would have been approximately $4,000,000 or approximately $0.23 per share of common stock. This represents
no increase in net tangible book value to existing shareholders and an immediate dilution of approximately $0.87 per share to new
investors. The following table illustrates this per share dilution:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have calculated the dilution discussed above in accordance
with Item 506 of Regulation S-K using the last reported sale price of our common stock on a date within five days of the date of
this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The total shares of common stock outstanding immediately following
this offering is based on 17,856,543 shares outstanding as of November 26, 2018. It excludes shares of common stock issuable upon
exercise of outstanding stock options, warrants and RSUs, conversion of our convertible notes and reserved for issuance under our
incentive plans.<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><A NAME="a08"></A><B>PLAN OF DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Pursuant to an engagement agreement
dated March 15, 2017, we have engaged H.C.&nbsp;Wainwright&nbsp;&amp;&nbsp;Co., LLC, or the placement agent, to act as our exclusive
placement agent in connection with this offering of our shares of common stock pursuant to this prospectus supplement and accompanying
prospectus. Under the terms of the engagement agreement, the placement agent has agreed to be our exclusive placement agent, on
a reasonable best efforts basis, in connection with the issuance and sale by us of our shares of common stock in this takedown
from our shelf registration statement. The terms of this offering were subject to market conditions and negotiations between us,
the placement agent and prospective investors. The engagement agreement does not give rise to any commitment by the placement agent
to purchase any of our shares of common stock or the private placement warrants, and the placement agent will have no authority
to bind us by virtue of the engagement agreement. Further, the placement agent does not guarantee that it will be able to raise
new capital in any prospective offering. The placement agent may engage sub-agents or selected dealers to assist with the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We will enter into securities purchase
agreements directly with investors in connection with this offering, and we will only sell to institutional investors who have
entered into securities purchase agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We will deliver the shares of common
stock being issued to the investors electronically upon receipt of investor funds for the purchase of the shares of our common
stock offered pursuant to this prospectus supplement. We expect to deliver the shares of our common stock being offered pursuant
to this prospectus supplement on or about November 29, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We have agreed to pay the placement
agent a total cash fee equal to 6% of the gross proceeds of this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We have agreed to indemnify the placement
agent and specified other persons against some civil liabilities, including liabilities under the Securities Act, and the Securities
Exchange Act of 1934, as amended, or the Exchange Act, and to contribute to payments that the placement agent may be required to
make in respect of such liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The placement agent may be deemed
to be an underwriter within the meaning of Section&nbsp;2(a)(11) of the Securities Act, and any commissions received by it
and any profit realized on the resale of the securities sold by it while acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. As an underwriter, the placement agent would be required to
comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule&nbsp;415(a)(4)
under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the
timing of purchases and sales of shares of common stock and warrants by the placement agent acting as principal. Under these
rules and regulations, the placement agent:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 4%"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD STYLE="width: 92%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">may not engage in any stabilization activity in connection with our securities; and&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The placement agent and its affiliates
have provided us in the past and may provide from time to time in the future certain commercial banking, financial advisory, investment
banking and other services for us in the ordinary course of their business, for which they have received and may continue to receive
customary fees and commissions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Our common stock is listed on The Nasdaq
Capital Market under the symbol &quot;AEMD&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a09"></A><B>EXPERTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The consolidated financial statements of Aethlon Medical, Inc.
as of March 31, 2018 and 2017 and for each of the years in the two-year period ended March 31, 2018 have been audited by Squar
Milner LLP (formerly Squar, Milner, Peterson, Miranda &amp; Williamson, LLP), an independent registered public accounting firm,
as stated in their report thereon and incorporated by reference in this prospectus supplement, the accompanying prospectus and
the registration statement in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a10"></A><B>INFORMATION INCORPORATED BY REFERENCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus supplement is part of a registration statement
on Form S-3. The Commission allows this filing to &quot;incorporate by reference&quot; information that we previously have filed
with the Commission. This means we can disclose important information to you by referring you to other documents that we have filed
with the Commission. The information that is incorporated by reference is considered part of this prospectus supplement, and information
that we file later will automatically update and may supersede this information. For further information about our company and
the securities being offered, you should refer to the registration statement and the following documents that are incorporated
by reference:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our Annual Report on Form 10-K for the fiscal year ended March 31, 2018, filed with the Commission on June 8, 2018</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our Quarterly Reports on Form 10-Q for the quarter ended June 30, 2018, filed with the Commission on August 8, 2018 and for the quarter ended September 30,2018, filed with the Commission on November 8, 2018</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our Current Reports on Form 8-K filed with the Commission on June 25, 2018, August 9, 2018, October 30, 2018 and November 27, 2018, respectively</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our Definitive Proxy Statement on Schedule 14A filed with the Commission on February 16, 2018</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All other reports filed by us pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the annual report referred to above</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The description of our common stock contained in our registration statement on Form 8-A filed with the Commission on July 8, 2015, including any amendments or reports filed for the purpose of updating such description.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><A NAME="a11"></A><B>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The validity of the issuance of the
securities offered hereby will be passed upon for us by Jolie Kahn, Esq. of Locust Valley, NY.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&nbsp;<BR>
<B><A NAME="a12"></A>WHERE YOU CAN FIND MORE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We are subject to the information requirements
of the Exchange Act and, in accordance therewith, file annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy any document we file at the SEC's Public Reference Room at 100&nbsp;F Street, Washington, D.C.
20549. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. These documents
also may be accessed through the SEC's electronic data gathering, analysis and retrieval system, or EDGAR, via electronic means,
including the SEC's home page on the Internet (<I>www.sec.gov</I>).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">This prospectus supplement and the
accompanying prospectus are only part of a registration statement on Form&nbsp;S-3 that we have filed with the SEC under the Securities
Act and therefore omits certain information contained in the registration statement. We have also filed exhibits and schedules
with the registration statement that are excluded from this prospectus supplement and the accompanying prospectus, and you should
refer to the applicable exhibit or schedule for a complete description of any statement referring to any contract or other document.
You may inspect a copy of the registration statement, including the exhibits and schedules, without charge, at the public reference
room or obtain a copy from the SEC upon payment of the fees prescribed by the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We also maintain a website at&nbsp;<I>www.aethlonmedical.com</I>,
through which you can access our SEC filings. The information contained on our website is not incorporated by reference into, and
does not form any part of, this prospectus supplement or the accompanying prospectus. We have included our website address as a
factual reference and do not intend it to be an active link to our website.</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: red"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Aethlon Medical, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>$12,500,000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common Stock<BR>
Debt Securities<BR>
Warrants<BR>
Units</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From time to time, we may offer up to $12,500,000 of any combination
of the securities described in this prospectus, either individually or in units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus provides a general description of the securities
we may offer. Each time we sell securities, we will provide specific terms of the securities offered in a supplement to this prospectus.
We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The prospectus
supplement and any related free writing prospectus may also add, update or change information contained in this prospectus. You
should carefully read this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as
any documents incorporated by reference herein and therein, before you invest in any securities. This prospectus may not be used
to consummate a sale of securities unless accompanied by the applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our common stock is listed on the Nasdaq Capital Market
under the symbol &quot;AEMD.&quot; On May 2, 2016, the last reported sale price for our common stock was $5.16 per share. The
applicable prospectus supplement will contain information, where applicable, as to any other listing on the Nasdaq Capital
Market or any securities market or other exchange of the securities, if any, covered by the prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> The closing sale price of our common stock on April 4, 2016
was $5.89 per share. As of April 4, 2016, the aggregate market value of our outstanding common stock held by non-affiliates, or
the public float, was approximately $38,164,378 based upon 6,479,521 shares of our outstanding stock held by non-affiliates at
the per share price of $5.89. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell our common stock in
a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our
public float remains below $75,000,000. We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3
during the prior 12 calendar month period that ends on and includes the date of this prospectus. One-third of our public float,
calculated in accordance with General Instruction I.B.6 of Form S-3, is equal to approximately $12,721,459. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>INVESTING IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD
REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING &quot;RISK FACTORS&quot; ON PAGE  5 AND CONTAINED IN
THE APPLICABLE PROSPECTUS SUPPLEMENT AND ANY RELATED FREE WRITING PROSPECTUS AND UNDER SIMILAR HEADINGS IN THE OTHER
DOCUMENTS THAT ARE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will sell these securities directly to investors, through
agents designated from time to time or to or through underwriters or dealers. For additional information on the methods of sale,
you should refer to the section entitled &quot;Plan of Distribution&quot; in this prospectus. If any underwriters are involved
in the sale of any securities with respect to which this prospectus is being delivered, the names of such underwriters and any
applicable commissions or discounts will be set forth in a prospectus supplement. The price to the public of such securities and
the net proceeds we expect to receive from such sale will also be set forth in a prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The date of this prospectus is &nbsp;
&nbsp; &nbsp; &nbsp; , 2016.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>






<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a13"></A><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 90%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: center; border-bottom: Black 1pt solid"><B>Page</B></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a14">About this Prospectus</A></TD>
    <TD STYLE="text-align: center">1</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a15">Cautionary Note Regarding Forward-Looking Statements</A></TD>
    <TD STYLE="text-align: center">2</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a16">Prospectus Summary</A></TD>
    <TD STYLE="text-align: center">3</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a17">Risk Factors</A></TD>
    <TD STYLE="text-align: center">5</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a18">Use of Proceeds</A></TD>
    <TD STYLE="text-align: center">23</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a19">Dilution</A></TD>
    <TD STYLE="text-align: center">23</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a20">Securities We May Offer</A></TD>
    <TD STYLE="text-align: center">24</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a21">Description of Capital Stock</A></TD>
    <TD STYLE="text-align: center">24</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a22">Description of Debt Securities</A></TD>
    <TD STYLE="text-align: center">26</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a23">Description of Warrants</A></TD>
    <TD STYLE="text-align: center">31</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a24">Description of Units</A></TD>
    <TD STYLE="text-align: center">33</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a25">Plan of Distribution</A></TD>
    <TD STYLE="text-align: center">34</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><A HREF="#a26">Experts</A></TD>
    <TD STYLE="text-align: center">35</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a27">Legal Matters</A></TD>
    <TD STYLE="text-align: center">35</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a28">Information Incorporated by Reference</A></TD>
    <TD STYLE="text-align: center">35</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><A HREF="#a29">Where You Can Find More Information</A></TD>
    <TD STYLE="text-align: center">36</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>No dealer, salesperson, or other person has been authorized
to give any information or to make any representation not contained in this prospectus, and, if given or made, such information
and representation should not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any of the securities offered by this prospectus in any jurisdiction or to any person to whom
it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall under
any circumstances create an implication that there has been no change in the facts set forth in this prospectus or in our affairs
since the date hereof.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a14"></A><B>ABOUT THIS PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus is a part of a registration statement that we
filed with the Securities and Exchange Commission (the &quot;Commission&quot;) utilizing a &quot;shelf&quot; registration process.
Under this shelf registration process, we may sell any combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $12,500,000. This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities under this shelf registration, we will provide a prospectus supplement that will contain
specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided
to you that may contain material information relating to these offerings. The prospectus supplement and any related free writing
prospectus that we may authorize to be provided to you may also add, update or change information contained in this prospectus
or in any documents that we have incorporated by reference into this prospectus. You should read this prospectus, any applicable
prospectus supplement and any related free writing prospectus, together with the information incorporated herein by reference as
described under the heading &quot;Where You Can Find More Information.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You should rely only on the information that we have provided
or incorporated by reference in this prospectus, any applicable prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you. We have not authorized any dealer, salesman or other person to give any information or
to make any representation other than those contained or incorporated by reference in this prospectus, any applicable prospectus
supplement or any related free writing prospectus that we may authorize to be provided to you. You must not rely upon any information
or representation not contained or incorporated by reference in this prospectus or the accompanying prospectus supplement. This
prospectus and the accompanying supplement to this prospectus do not constitute an offer to sell or the solicitation of an offer
to buy any securities other than the registered securities to which they relate, nor do this prospectus and the accompanying supplement
to this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person
to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained
in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate on any date subsequent
to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any
date subsequent to the date of the document incorporated by reference, even though this prospectus, any applicable prospectus supplement
or any related free writing prospectus is delivered or securities sold on a later date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>For investors outside the United States, we have not done
anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for
that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions
relating to this offering and the distribution of this prospectus outside of the United States.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As permitted by the rules and regulations of the Commission,
the registration statement, of which this prospectus forms a part, includes additional information not contained in this prospectus.
You may read the registration statement and the other reports we file with the Commission at the Commission's web site or at the
Commission's offices described below under the heading &quot;Where You Can Find Additional Information.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You should assume that the information contained or incorporated
by reference in this prospectus, any prospectus supplement or other offering materials is accurate only as of the dates of those
documents or documents incorporated by reference, as applicable. Our business, financial condition, results of operations and
prospects may have changed since those dates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless the context requires otherwise or unless otherwise noted,
all references to &quot;Aethlon&quot; are to Aethlon Medical, Inc., a Nevada corporation, and all references to &quot;we,&quot;
&quot;us&quot; or &quot;our&quot; are to Aethlon Medical, Inc. and its subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Trademarks, service marks or trade names of any other companies
appearing in this prospectus are the property of their respective owners. Use or display by us of trademarks, service marks or
trade names owned by others is not intended to and does not imply a relationship between us and, or endorsement or sponsorship
by, the owners of the trademarks, service marks or trade names.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a15"></A>Cautionary Note Regarding Forward-Looking
Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus, in particular the &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations&rdquo; incorporated herein by reference, contains certain
&ldquo;forward-looking statements&rdquo; within the meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;). These forward-looking statements represent our expectations,
beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding our assumptions
about financial performance; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and
capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition
or cash flows; anticipated problems and our plans for future operations; and the economy in general or the future of the medical
device industry, all of which are subject to various risks and uncertainties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When used in this prospectus as well as in reports, statements,
and information we have filed with the Commission, in our press releases, in presentations to securities analysts or investors,
or in oral statements made by or with the approval of an executive officer, the words or phrases &ldquo;believes,&rdquo; &ldquo;may,&rdquo;
&ldquo;will,&rdquo; &ldquo;expects,&rdquo; &ldquo;should,&rdquo; &ldquo;continue,&rdquo; &ldquo;anticipates,&rdquo; &ldquo;intends,&rdquo;
&ldquo;will likely result,&rdquo; &ldquo;estimates,&rdquo; &ldquo;projects&rdquo; or similar expressions and variations thereof
are intended to identify such forward-looking statements. However, any statements contained in this prospectus that are not statements
of historical fact may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks
and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of
important factors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a16"></A>PROSPECTUS SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>This summary highlights information included or incorporated
by reference in this prospectus. This summary may not contain all of the information that may be important to you. Before making
an investment decision, you should read carefully this entire prospectus, any accompanying prospectus supplement and any other
offering materials, together with the additional information described under the heading &quot;Where You Can Find More Information&quot;
on page  36 of this prospectus.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Company Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our mission is to create innovative medical devices that address
unmet medical needs in cancer, infectious disease, and other life-threatening conditions. Our Aethlon ADAPT&trade; system provides
a platform to develop medical devices that target the selective removal of disease-promoting particles from the circulatory system.
At present, the Aethlon ADAPT product pipeline includes the Aethlon Hemopurifier&reg; to address infectious disease and cancer,
and a medical device being developed under a five-year contract with the Defense Advanced Research Projects Agency, or DARPA, to
reduce the incidence of sepsis in combat-injured soldiers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the treatment of infectious diseases, the Hemopurifier is
designed for the single-use removal of viruses and shed glycoproteins from circulation. In cancer-related therapy situations, we
are exploring the potential use of the Hemopurifier to remove tumor-secreted exosomes, which promote cancer progression. <I>In
vitro </I>studies have demonstrated that our Hemopurifier can capture exosomes underlying a broad-spectrum of cancer indications.
To support our endeavors, we applied for and have received patent protection for the capture of tumor-secreted exosomes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In June 2013, the U.S. Food and Drug Administration, or FDA,
approved an investigational device exemption that allows us to initiate human feasibility studies of the Aethlon Hemopurifier in
the U.S. Under our approved feasibility study protocol, we will study ten end-stage renal disease patients who are infected with
the Hepatitis C virus to demonstrate the safety of Hemopurifier therapy. Assuming successful completion of this study, we will
be able to initiate further stage studies required for market clearance to treat Hepatitis C and other viral pathogens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We began enrolling patients for the study at the DaVita Dialysis
Medical Center in Houston, Texas in February 2015. We expect to complete the study by the end of 2016. However, we cannot assure
you that the clinical trial will be completed by then.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September 30, 2011, we entered into a $6.8 million multi-year
contract with DARPA, which will terminate on September 30, 2016 unless further extended by DARPA. Under this contract, our tasks
include the development of a dialysis-like device to prevent sepsis, a fatal bloodstream infection that is often the cause of death
in combat-injured soldiers. To date, we have billed and collected $5,548,573 for achieving 27 milestones under this contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Through our majority-owned subsidiary, Exosome Sciences, Inc.,
we are also developing exosome-based products to diagnose and monitor neurological disorders and cancer. To date, we are still
in the product development stage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Since inception, we have primarily financed our operations through
net proceeds obtained from the private placement of our debt and equity securities. At December 31, 2015, we had a cash balance
of $3,250,897 and working capital of $2,551,395. In June 2015, we raised $5,591,988 in net proceeds from a financing, which, coupled
with previously existing funds on hand and expected revenues from our government contracts, should finance our operations through
June 30, 2016. We will require significant additional financing to complete additional future clinical trials in the U.S., as well
as fund all of our continued research and development activities for the Hemopurifier and products on the Aethlon ADAPT platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Associated with our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have experienced substantial operating losses since inception.
As of December 31, 2015, we had an accumulated deficit of $82,254,522, which included losses of approximately $3,624,808 and $5,910,444
for the nine-month periods ended December 31, 2015 and 2014, respectively. Historically, our losses have resulted principally from
costs incurred in the research and development of our medical devices, and general and administrative expenses, which together
were approximately $3,980,367 and $3,423,985 for the nine-month periods ended December 31, 2015 and 2014, respectively. We may
continue to incur losses in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although we have made substantial progress in the development
and testing of our devices, and have begun to generate revenue under our contract with DARPA as we meet billable milestones under
such contract, we are not yet able to commercialize our devices and may never obtain the approvals necessary to commercialize our
products or technologies in the U.S. or elsewhere. Our contract with DARPA is time limited. DARPA may determine to terminate our
contract, and we cannot assure you that we will enter into any new government contracts with the Department of Defense or otherwise.
We compete with U.S. and foreign companies that have greater scientific and organizational resources, market presence and financial
backing than we have. We may be unable to obtain FDA or international clearance of the Hemopurifier. Even if we do achieve such
regulatory clearances, we may be unable to successfully manufacture, market and sell our devices in the U.S. or elsewhere. These
risks and others are discussed more fully in the section of this prospectus entitled &ldquo;Risk Factors&rdquo; immediately following
this prospectus summary. You should read these risks before you invest in our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Corporate History</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On March 10, 1999, Aethlon, Inc., a California corporation,
Hemex, Inc., a Delaware corporation and the accounting predecessor to Aethlon, Inc., and Bishop Equities, Inc., a publicly traded
Nevada corporation, completed an Agreement and Plan of Reorganization structured to result in Bishop Equities, Inc.'s acquisition
of all of the outstanding common shares of Aethlon, Inc. and Hemex, Inc. Under the plan's terms, Bishop Equities, Inc. issued shares
of its common stock to the stockholders of Aethlon, Inc. and Hemex, Inc. such that Bishop Equities, Inc. then owned 100% of each
company. Upon completion of the transaction, Bishop Equities, Inc. was renamed Aethlon Medical, Inc. In 2009, we formed Exosome,
which today is a majority-owned subsidiary focused on identifying and monitoring neurological conditions and cancer. We commenced
formal operations of Exosome in 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Contact Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our executive offices are located at 9635 Granite Ridge Drive,
Suite 100, San Diego, California 92123. Our telephone number is (858) 459-7800. Our website address is www.aethlonmedical.com.
Our website and the information contained on our website are not incorporated by reference into this prospectus or the registration
statement of which it forms a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Securities We May Offer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">With this prospectus, together with any applicable prospectus
supplement and related free writing prospectus, we may offer common stock, debt securities and warrants, or any combination of
the foregoing, either individually or as units comprised of one or more of the other securities. The aggregate initial offering
price of all securities we sell in the primary offering under this prospectus will not exceed $12,500,000. If we issue debt securities
at a discount from their original stated principal amount, then, for purposes of calculating the total dollar amount of all securities
issued under this prospectus, we will treat the initial offering price of the debt securities as the total original principal amount
of the debt securities. Each time we offer securities with this prospectus, we will provide offerees with a prospectus supplement
that will contain the specific terms of the securities being offered. The following is a summary of the securities we may offer
with this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may sell the securities to or through underwriters, dealers
or agents or directly to purchasers. We, as well as any agents acting on our behalf, reserve the sole right to accept and to reject
in whole or in part any proposed purchase of securities. Each prospectus supplement will set forth the names of any underwriters,
dealers or agents involved in the sale of securities described in that prospectus supplement and any applicable fee, commission
or discount arrangements with them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Common Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may offer shares of our common stock, par value $0.001 per
share, either alone or underlying other registered securities convertible into or exercisable for our common stock. Holders of
our common stock are entitled to such dividends as our Board of Directors may declare from time to time out of legally available
funds. Currently, we do not pay any dividends. Each holder of our common stock is entitled to one vote per share. In this prospectus,
we provide a general description of, among other things, our dividend policy and the rights and restrictions that apply to holders
of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Debt Securities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may offer general debt obligations, which may be secured
or unsecured, senior or subordinated and convertible into shares of our common stock. In this prospectus, we refer to the senior
debt securities and the subordinated debt securities together as the &quot;debt securities.&quot; We may issue debt securities
under a note purchase agreement or under an indenture to be entered between us and a trustee. If we issue debt securities under
an indenture, a form of the indenture will be filed as an exhibit to the registration statement of which this prospectus is a part,
or will be incorporated by reference from a current report on Form 8-K that we file with the Commission. The senior debt securities
will have the same rank as all of our other indebtedness that is not subordinated. The subordinated debt securities will be subordinated
to our senior debt on terms set forth in the applicable prospectus supplement. In addition, the subordinated debt securities will
be effectively subordinated to creditors of our subsidiaries. Our Board of Directors will determine the terms of each series of
debt securities being offered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus contains only general terms and provisions of
the debt securities. The applicable prospectus supplement will describe the particular terms of the debt securities offered thereby.
We urge you to read the prospectus supplements and any free writing prospectus that we may authorize to be provided to you related
to the debt securities being offered, as well as the complete indentures that contain the terms of the debt securities. Although
the forms of indentures may be filed as exhibits to the registration statement to which this prospectus is a part, supplemental
indentures and forms of debt securities containing the terms of debt securities being offered will be incorporated by reference
into the registration statement of which this prospectus is a part in reports we file with the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Warrants</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may offer warrants for the purchase of debt securities or
shares of common stock. We may issue the warrants by themselves or together with debt securities or common stock, and the warrants
may be attached to or separate from any offered securities. Each series of securities warrants will be issued under a separate
warrant agreement to be entered into between us and the investors or a warrant agent. Our Board of Directors will determine the
terms of the warrants. This prospectus contains only general terms and provisions of the warrants. The applicable prospectus supplement
will describe the particular terms of the warrants being offered thereby. We urge you to read the prospectus supplements and any
free writing prospectus that we may authorize to be provided to you related to the warrants being offered, as well as the complete
warrant agreements and warrant certificates that contain the terms of the warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Units</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may offer units consisting of common stock, debt securities
and/or warrants to purchase any of such securities in one or more series. In this prospectus, we have summarized certain general
features of the units under &quot;Description of Units.&quot; We urge you, however, to read the prospectus supplements and any
free writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the
unit agreements that contain the terms of the units. We will file as exhibits to the registration statement of which this prospectus
is a part, or will incorporate by reference from a current report on Form 8-K that we file with the Commission, the form of unit
agreement and any supplemental agreements that describe the terms of the series of units we are offering before the issuance of
the related series of units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will evidence each series of units by unit certificates that
we will issue under a separate agreement. We will enter into the unit agreements with a unit agent. Each unit agent will be a bank
or trust company that we select. We will indicate the name and address of the unit agent in the applicable prospectus supplement
relating to a particular series of units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a17"></A>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>An investment in our securities involves a high degree of
risk. You should carefully consider the risks described below as well as the other information in this prospectus before deciding
to invest in or maintain your investment in our company. The risks described below are not intended to be an all-inclusive list
of the potential risks relating to an investment in our securities. Any of the risk factors described below could significantly
and adversely affect our business, prospects, financial condition and results of operations. Additional risks and uncertainties
not currently known or that are currently considered to be immaterial may also materially and adversely affect our business. As
a result, the trading price or value of our securities could be materially adversely affected and you may lose all or part of your
investment.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Relating to Our Financial Position and Need for Additional
Capital</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have incurred significant losses and expect to continue
to incur losses for the foreseeable future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have never been profitable. We have generated revenues during
the fiscal years ended March 31, 2015 and March 31, 2014, in the amounts of $762,417, and $1,623,769, respectively, primarily from
our contract with DARPA. During the nine-month periods ended December 31, 2015 and December 31, 2014, we generated revenues in
the amounts of $681,907 and $563,805, respectively, primarily from our contract with DARPA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">However, our revenues continue to be
insufficient to cover our cost of operations.&nbsp;Future profitability, if any, will require the successful commercialization
of our Hemopurifier technology, other products that may emerge from our Aethlon ADAPT platform or from additional government contract
or grant income. We cannot assure you when or if we will be able to successfully commercialize one or more of our products, or
if commercialization is successful, whether we will ever be profitable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our internal control over financial reporting does not
currently meet the standards required by Section&nbsp;404 of the Sarbanes-Oxley Act of 2002, as amended, and failure to achieve
and maintain effective internal control over financial reporting in accordance with Section&nbsp;404 of the Sarbanes-Oxley Act
of 2002 could result in material misstatements of our annual or interim financial statements and have a material adverse effect
on our business and share price.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are not currently required to make a formal assessment of
the effectiveness of our internal control over financial reporting for purposes of compliance with the Commission&rsquo;s rules
that implement Section&nbsp;404 of the Sarbanes-Oxley Act of 2002. We are, however, required to comply with certain of these rules,
which require management to certify financial and other information in our quarterly and annual reports and provide an annual management
report on the effectiveness of our internal control over financial reporting. This assessment must include the disclosure of any
material weaknesses or significant deficiencies in our internal control over financial reporting identified by our management or
our independent registered public accounting firm. A material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim
financial statements will not be prevented or detected on a timely basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In connection with our audits for the years ended March&nbsp;31,
2015 and 2014, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such periods, due to the
material weaknesses in our internal controls over financial reporting identified in our Annual Report on Form 10-K for the year
ended March 31, 2015, our disclosure controls and procedures are not effective in recording, processing, summarizing and reporting,
on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and
are not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange
Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate
to allow timely decisions regarding required disclosure. Our management identified material weaknesses related to a lack of segregation
of duties and a lack of sufficient staffing in our accounting department.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are in the process of developing and implementing remediation
plans to address these material weaknesses. We cannot assure you that our plans will sufficiently address these issues, nor can
we assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting
in the future. A failure to remediate these issues may lead to significant year-end audit adjustments to our consolidated financial
statements and related disclosures or to material misstatement of our annual or interim financial statements. Additionally, in
the event that our internal control over financial reporting is perceived as inadequate, or that we are unable to produce timely
or accurate financial statements, investors may lose confidence in our operating results, we may be unable to raise capital and
the trading price of our common stock could decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We will require additional financing to sustain our operations,
and without it, we will not be able to continue operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In June 2015, we raised $5,591,988 in net proceeds from a financing.
That amount, coupled with previously existing funds on hand and expected revenues from our government contracts, should finance
our operations through June 30, 2016. We will require significant additional financing to complete additional future clinical trials
in the U.S., as well as fund all of our continued research and development activities for the Hemopurifier and products on our
Aethlon ADAPT platform. In addition, as we expand our activities, our overhead costs to support personnel, laboratory materials
and infrastructure will increase. The financing we require to sustain our working capital needs may not be available to us on reasonable
terms, if at all, when we require it. In addition, raising funds at a price below $6.30 per share of common stock will require
us to obtain the consent of certain of our investors, which they may or may not be willing to provide. Therefore, we may be unable
to support our research and FDA clearance activities including our planned clinical trials. The failure to implement our research
and clearance activities would have a material adverse effect on our ability to commercialize our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We will need to raise additional funds through debt or
equity financings in the future to achieve our business objectives and to satisfy our cash obligations, which would dilute the
ownership of our existing stockholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will need to raise additional funds through debt or equity
financings in order to complete our ultimate business objectives, including funding working capital to support development and
regulatory clearance of our products. We also may choose to raise additional funds in debt or equity financings if they are available
to us on reasonable terms to increase our working capital and to strengthen our financial position. Any sales of additional equity
or convertible debt securities would result in dilution of the equity interests of our existing stockholders, which could be substantial.
Also, new investors may require that we and certain of our stockholders enter into voting arrangements that give them additional
voting control or representation on our Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Business Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We face intense competition in the medical device industry</I></B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We compete with numerous U.S. and foreign companies in the medical
device industry, and many of our competitors have greater financial, personnel and research and development resources than we have.
Our competitors are developing vaccine candidates, which could compete with the Hemopurifier medical device candidates we are developing.
Our commercial opportunities will be reduced or eliminated if our competitors develop and market products for any of the diseases
we target that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are more effective;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">have fewer or less severe adverse side effects;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are better tolerated;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are more adaptable to various modes of dosing;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are easier to administer; or</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are less expensive than the products or product candidates we are developing.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Even if we are successful in developing the Hemopurifier and
other Aethlon ADAPT-based products, and obtain FDA and other regulatory approvals necessary for commercializing them, our products
may not compete effectively with other successful products. Researchers are continually learning more about diseases, which may
lead to new technologies for treatment. Our competitors may succeed in developing and marketing products either that are more effective
than those that we may develop, alone or with our collaborators, or that are marketed before any products we develop are marketed.
Our competitors include fully integrated pharmaceutical companies and biotechnology companies as well as universities and public
and private research institutions. Many of the organizations competing with us have substantially greater capital resources, larger
research and development staffs and facilities, greater experience in product development and in obtaining regulatory approvals,
and greater marketing capabilities than we have. If our competitors develop more effective pharmaceutical treatments for infectious
disease or cancer, or bring those treatments to market before we can commercialize the Hemopurifier for such uses, we may be unable
to obtain any market traction for our products, or the diseases we seek to treat may be substantially addressed by competing treatments.
If we are unable to successfully compete against larger companies in the pharmaceutical industry, we may never generate significant
revenue or be profitable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have limited experience in identifying and working
with large scale contracts with medical device manufacturers. Manufacture of our devices must comply with good manufacturing practices
in the U.S.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To achieve the levels of production necessary to commercialize
our Hemopurifier and other future Aethlon ADAPT-based products, we will need to secure large-scale manufacturing agreements with
contract manufacturers that comply with good manufacturing practice standards and other standards prescribed by various federal,
state and local regulatory agencies in the U.S. and any other country of use. We have limited experience coordinating and overseeing
the manufacture of medical device products on a large scale. We cannot assure you that manufacturing and control problems will
not arise as we attempt to commercialize our products or that such manufacturing can be completed in a timely manner or at a commercially
reasonable cost. In addition, we cannot assure you that we will be able to adequately finance the manufacture and distribution
of our products on terms acceptable to us, if at all. If we cannot successfully oversee and finance the manufacture of our products
when they have obtained regulatory clearances, we may never generate revenue from product sales and we may never be profitable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our Aethlon ADAPT technology may become obsolete.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Aethlon ADAPT products may be made unmarketable by new scientific
or technological developments where new treatment modalities are introduced that are more efficacious and/or more economical than
our Aethlon ADAPT products. The homeland security industry is growing rapidly with many competitors that are trying to develop
products or vaccines to protect against infectious disease. Any one of our competitors could develop a more effective product that
would render our technology obsolete. Further, our ability to achieve significant and sustained penetration of our key target markets
will depend upon our success in developing or acquiring technologies developed by other companies, either independently, through
joint ventures or through acquisitions. If we fail to develop or acquire, and manufacture and sell, products that satisfy our customers&rsquo;
demands, or we fail to respond effectively to new product announcements by our competitors by quickly introducing competitive products,
then market acceptance of our products could be reduced and our business could be adversely affected. We cannot assure you that
our products will remain competitive with products based on new technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our use of hazardous materials, chemicals and viruses
exposes us to potential liabilities for which we may not have adequate insurance.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our research and development involves the controlled use of
hazardous materials, chemicals and viruses. The primary hazardous materials include chemicals needed to construct the Hemopurifier
cartridges and the infected plasma samples used in pre-clinical testing of the Hemopurifier. All other chemicals are fully inventoried
and reported to the appropriate authorities, such as the fire department, who inspect our facilities on a regular basis. We are
subject to federal, state, local and foreign laws governing the use, manufacture, storage, handling and disposal of such materials.
Although we believe that our safety procedures for the use, manufacture, storage, handling and disposal of such materials comply
with the standards prescribed by federal, state, local and foreign regulations, we cannot completely eliminate the risk of accidental
contamination or injury from these materials. We have had no incidents or problems involving hazardous chemicals or biological
samples. In the event of such an accident, we could be held liable for significant damages and/or fines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We currently carry a limited amount of insurance to protect
us from damages arising from hazardous materials. Our product liability policy has a $3,000,000 limit of liability that would cover
certain releases of hazardous substances away from our facilities. For our facilities, our property policy provides $25,000 in
coverage for contaminant clean-up or removal and $50,000 in coverage for damages to the premises resulting from contamination.
Should we violate any regulations concerning the handling or use of hazardous materials, or should any injuries or death result
from our use or handling of hazardous materials, we could be the subject of substantial lawsuits by governmental agencies or individuals.
We may not have adequate insurance to cover all or any of such claims, if any. If we were responsible to pay significant damages
for violations or injuries, if any, we might be forced to cease operations since such payments could deplete our available resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our success is dependent in part on a few key executive
officers.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our success depends to a critical extent on the continued services
of our Chief Executive Officer, James A. Joyce, and our President, Rodney S. Kenley. If one or both of these key executive officers
were to leave us, we would be forced to expend significant time and money in the pursuit of a replacement, which would result in
both a delay in the implementation of our business plan and the diversion of limited working capital. The unique knowledge and
expertise of these individuals would be difficult to replace within the biotechnology field. We can give you no assurances that
we can find satisfactory replacements for these key executive officers at all, or on terms that are not unduly expensive or burdensome
to us. Although Mr. Joyce has signed an employment agreement providing for his continued service to us, this agreement will not
preclude him from leaving us should we be unable to compete with offers for employment he may receive from other companies. We
do not currently carry key man life insurance policies on either of our key executive officers, which would assist us in recouping
our costs in the event of the loss of those officers. If either of our key officers were to leave us, it could make it impossible,
if not cause substantial delays and costs, to implement our long-term business objectives and growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our inability to attract and retain qualified personnel
could impede our ability to achieve our business objectives.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have five full-time employees consisting of our Chief Executive
Officer, our President, our Chief Financial Officer, a research scientist and an executive assistant and one consultant acting
in the capacity of Chief Science Officer. We utilize consultants, whenever appropriate, in order to conserve cash and resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although we believe that these employees and consultants will
be able to handle most of our additional administrative, research and development and business development in the near term, we
will nevertheless be required over the longer term to hire highly skilled managerial, scientific and administrative personnel to
fully implement our business plan and growth strategies, including to mitigate the material weakness in our internal control over
financial reporting described above. Due to the specialized scientific nature of our business, we are highly dependent upon our
ability to attract and retain qualified scientific, technical and managerial personnel. Competition for these individuals, especially
in San Diego, California, where many biotechnology companies are located, is intense, and we may not be able to attract, assimilate
or retain additional highly qualified personnel in the future. We cannot assure you that we will be able to engage the services
of such qualified personnel at competitive prices or at all, particularly given the risks of employment attributable to our limited
financial resources and lack of an established track record. Also, if we are required to attract personnel from other parts of
the U.S. or abroad, we may have significant difficulty doing so due to the high cost of living in the Southern California area
and due to the costs incurred with transferring personnel to the area. If we cannot attract and retain qualified staff and executives,
we will be unable to develop our products and achieve regulatory clearance, and our business could fail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We plan to grow rapidly which will strain our resources.
Our inability to manage our growth could delay or derail implementation of our business objectives.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will need to significantly expand our operations to implement
our longer-term business plan and growth strategies. We also will be required to manage multiple relationships with various strategic
partners, technology licensors, customers, manufacturers and suppliers, consultants and other third parties. This expansion and
these expanded relationships will require us to significantly improve or replace our existing managerial, operational and financial
systems, procedures and controls; to improve the coordination between our various corporate functions; and to manage, train, motivate
and maintain a growing employee base. The time and costs to effectuate these steps may place a significant strain on our management
personnel, systems and resources, particularly given the limited amount of financial resources and skilled employees that may be
available at the time. We cannot assure you that we will institute, in a timely manner or at all, the improvements to our managerial,
operational and financial systems, procedures and controls necessary to support our anticipated increased levels of operations
and to coordinate our various corporate functions, or that we will be able to properly manage, train, motivate and retain our anticipated
increased employee base. If we cannot manage our growth initiatives, we will be unable to commercialize our products on a large
scale in a timely manner, if at all, and our business could fail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>As a public company with limited financial resources undertaking
the launch of new medical technologies, we may have difficulty attracting and retaining executive management and directors.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The directors and management of publicly traded corporations
are increasingly concerned with the extent of their personal exposure to lawsuits and stockholder claims, as well as governmental
and creditor claims that may be made against them, particularly in view of recent changes in securities laws imposing additional
duties, obligations and liabilities on management and directors. Due to these perceived risks, directors and management are also
becoming increasingly concerned with the availability of directors&rsquo; and officers&rsquo; liability insurance to pay on a timely
basis the costs incurred in defending such claims. While we currently carry directors&rsquo; and officers&rsquo; liability insurance,
such insurance is expensive and difficult to obtain. If we are unable to continue to provide directors&rsquo; and officers&rsquo;
liability insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain qualified outside
directors to serve on our Board of Directors. We may lose potential independent board members and management candidates to other
companies in the biotechnology field that have greater directors&rsquo; and officers&rsquo; liability insurance to insure them
from liability or to biotechnology companies that have revenues or have received greater funding to date that can offer greater
compensation packages. The fees of directors are also rising in response to their increased duties, obligations and liabilities.
In addition, our products could potentially be harmful to users, and we are exposed to claims of product liability including for
injury or death. We have limited insurance and may not be able to afford robust coverage even as our products are introduced into
the market. As a company with limited resources and potential exposures to management, we will have a more difficult time attracting
and retaining management and outside independent directors than a more established public or private company due to these enhanced
duties, obligations and potential liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we fail to comply with extensive regulations of U.S.
and foreign regulatory agencies, the commercialization of our products could be delayed or prevented entirely.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Hemopurifier products are subject to extensive government
regulations related to development, testing, manufacturing and commercialization in the U.S. and other countries. The determination
of when and whether a product is ready for large-scale purchase and potential use will be made by the U.S. Government through consultation
with a number of governmental agencies, including the FDA, the National Institutes of Health, the Centers for Disease Control and
Prevention and the Department of Homeland Security. Our product candidates are in the pre-clinical and clinical stages of development
and have not received required regulatory approval from the FDA, or any foreign regulatory agencies, to be commercially marketed
and sold. The process of obtaining and complying with FDA and other governmental regulatory approvals and regulations in the U.S.
and in foreign countries is costly, time consuming, uncertain and subject to unanticipated delays. Obtaining such regulatory approvals,
if any, can take several years. Despite the time and expense exerted, regulatory approval is never guaranteed. We also are subject
to the following risks and obligations, among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the FDA may refuse to approve an application if it believes that applicable regulatory criteria are not satisfied;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the FDA may require additional testing for safety and effectiveness;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the FDA may interpret data from pre-clinical testing and clinical trials in different ways than we interpret them;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">if regulatory approval of a product is granted, the approval may be limited to specific indications or limited with respect to its distribution; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the FDA may change its approval policies and/or adopt new regulations.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left">Failure to comply with these or other regulatory
requirements of the FDA may subject us to administrative or judicially imposed sanctions, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">warning letters;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">civil penalties;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">criminal penalties;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">injunctions;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">product seizure or detention;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">product recalls; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">total or partial suspension of productions.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Delays in successfully completing our planned clinical
trials could jeopardize our ability to obtain regulatory approval.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our business prospects will depend on our ability to complete
studies and clinical trials, obtain satisfactory results, obtain required regulatory approvals and successfully commercialize our
Hemopurifier product candidates. Completion of our clinical trials, announcement of results of the trials and our ability to obtain
regulatory approvals could be delayed for a variety of reasons, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">serious adverse events related to our medical device candidates;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unsatisfactory results of any clinical trial;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the failure of our principal third-party investigators to perform our clinical trials on our anticipated schedules; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">different interpretations of our pre-clinical and clinical data, which could initially lead to inconclusive results.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our development costs will increase if we have material delays
in any clinical trial or if we need to perform more or larger clinical trials than planned. If the delays are significant, or if
any of our product candidates do not prove to be safe or effective or do not receive required regulatory approvals, our financial
results and the commercial prospects for our product candidates will be harmed. Furthermore, our inability to complete our clinical
trials in a timely manner could jeopardize our ability to obtain regulatory approval.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we or our suppliers fail to comply with ongoing FDA
or other foreign regulatory authority requirements, or if we experience unanticipated problems with our products, these products
could be subject to restrictions or withdrawal from the market.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any product for which we obtain clearance or approval, and the
manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will
be subject to continued regulatory review, oversight and periodic inspections by the FDA and other domestic and foreign regulatory
bodies. In particular, we and our third-party suppliers may be required to comply with the FDA&rsquo;s Quality System Regulation.
These FDA regulations cover the methods and documentation of the design, testing, production, control, quality assurance, labeling,
packaging, sterilization, storage and shipping of our products. Compliance with applicable regulatory requirements is subject to
continual review and is monitored rigorously through periodic inspections by the FDA. If we, or our manufacturers, fail to adhere
to Quality System Regulation requirements in the U.S., this could delay production of our products and lead to fines, difficulties
in obtaining regulatory clearances, recalls, enforcement actions, including injunctive relief or consent decrees, or other consequences,
which could, in turn, have a material adverse effect on our financial condition or results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the FDA assesses compliance with the Quality System
Regulation through periodic announced and unannounced inspections of manufacturing and other facilities. The failure by us or one
of our suppliers to comply with applicable statutes and regulations administered by the FDA, or the failure to timely and adequately
respond to any adverse inspectional observations or product safety issues, could result in any of the following enforcement actions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unanticipated expenditures to address or defend such actions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">operating restrictions or partial suspension or total shutdown of production;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">withdrawing 510(k) clearances or premarket approvals that have already been granted;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">refusal to grant export approval for our products; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">criminal prosecution.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any of these sanctions could have a material adverse effect
on our reputation, business, results of operations and financial condition. Furthermore, our key component suppliers may not currently
be or may not continue to be in compliance with all applicable regulatory requirements, which could result in our failure to produce
our products on a timely basis and in the required quantities, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If our products, or malfunctions of our products, cause
or contribute to a death or a serious injury, we will be subject to medical device reporting regulations, which can result in voluntary
corrective actions or agency enforcement actions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under the FDA medical device reporting regulations, medical
device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death
or serious injury or has malfunctioned in a way that would likely cause or contribute to death or serious injury if the malfunction
of the device or one of our similar devices were to recur. If we fail to report these events to the FDA within the required timeframes,
or at all, the FDA could take enforcement action against us. Any such adverse event involving our products also could result in
future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement
action. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the
dedication of our time and capital, will distract management from operating our business, and may harm our reputation and financial
results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>In the future, our products may be subject to product
recalls. A recall of our products, either voluntarily or at the direction of the FDA or another governmental authority, including
a third-country authority, or the discovery of serious safety issues with our products, could have a significant adverse impact
on us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The FDA and similar foreign governmental authorities have the
authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture.
In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is reasonable probability
that the device would cause serious injury or death. In addition, foreign governmental bodies have the authority to require the
recall of our products in the event of material deficiencies or defects in design or manufacture. Manufacturers may, under their
own initiative, recall a product if any material deficiency in a device is found. The FDA requires that certain classifications
of recalls be reported to the FDA within 10 working days after the recall is initiated. A government-mandated or voluntary recall
by us or one of our international distributors could occur as a result of an unacceptable risk to health, component failures, malfunctions,
manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of our products would divert
managerial and financial resources and have an adverse effect on our reputation, results of operations and financial condition,
which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers&rsquo;
demands. We may also be subject to liability claims, be required to bear other costs, or take other actions that may have a negative
impact on our future sales and our ability to generate profits. Companies are required to maintain certain records of recalls,
even if they are not reportable to the FDA or another third-country competent authority. We may initiate voluntary recalls involving
our products in the future that we determine do not require notification of the FDA or another third-country competent authority.
If the FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement
could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for
failing to report the recalls when they occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are also required to follow detailed recordkeeping requirements
for all company-initiated medical device corrections and removals. In addition, in December 2012, the FDA issued a draft guidance
intended to assist the FDA and industry in distinguishing medical device recalls from product enhancements. Per the guidance, if
any change or group of changes to a device addresses a violation of the Federal Food, Drug, and Cosmetic Act, as amended, 21 U.S.C.
&sect; 301 et seq., that change would generally constitute a medical device recall and require submission of a recall report to
the FDA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We outsource almost all of our operational and development
activities, and if any party to which we have outsourced certain essential functions fails to perform its obligations under agreements
with us, the development and commercialization of our lead product candidate and any future product candidates that we may develop
could be delayed or terminated.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We generally rely on third-party consultants or other vendors
to manage and implement the day-to-day conduct of our operations, including conducting clinical trials and manufacturing our current
product candidates and any future product candidates that we may develop. Accordingly, we are and will continue to be dependent
on the timeliness and effectiveness of their efforts. Our dependence on third parties includes key suppliers and third-party service
providers supporting the development, manufacture and regulatory approval of our products as well as support for our information
technology systems and other infrastructure. While our management team oversees these vendors, failure of any of these third parties
to meet their contractual, regulatory and other obligations or the development of factors that materially disrupt the performance
of these third parties could have a material adverse effect on our business. For example, all of the key oversight responsibilities
for the development and manufacture of our lead product candidate are conducted by our management team but all activities are the
responsibility of third-party vendors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If a clinical research organization that we utilize is unable
to allocate sufficient qualified personnel to our studies in a timely manner or if the work performed by it does not fully satisfy
the requirements of the FDA or other regulatory agencies, we may encounter substantial delays and increased costs in completing
our development efforts. Any manufacturer that we select may encounter difficulties in the manufacture of new products in commercial
quantities, including problems involving product yields, product stability or shelf life, quality control, adequacy of control
procedures and policies, compliance with FDA regulations and the need for further FDA approval of any new manufacturing processes
and facilities. If any of these occur, the development and commercialization of our product candidates could be delayed, curtailed
or terminated because we may not have sufficient financial resources or capabilities to continue such development and commercialization
on our own. If we rely on only one source for the manufacture of the clinical or commercial supplies of any of our product candidates
or products, any production problems or supply constraints with that manufacturer could adversely impact the development or commercialization
of that product candidate or product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we or our contractors or service providers fail to
comply with regulatory laws and regulations, we or they could be subject to regulatory actions, which could affect our ability
to develop, market and sell our product candidates and any future product candidates that we may develop and may harm our reputation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If we or our manufacturers or other third-party contractors
fail to comply with applicable federal, state or foreign laws or regulations, we could be subject to regulatory actions, which
could affect our ability to develop, market and sell our current product candidates or any future product candidates under development
successfully and could harm our reputation and lead to reduced acceptance or non-acceptance of our proposed product candidates
by the market. Even technical recommendations or evidence by the FDA through letters, site visits, and overall recommendations
to academia or biotechnology companies may make the manufacturing of a clinical product extremely labor intensive or expensive,
making the product candidate no longer viable to manufacture in a cost-efficient manner. The mode of administration may make the
product candidate not commercially viable. The required testing of the product candidate may make that candidate no longer commercially
viable. The conduct of clinical trials may be critiqued by the FDA, or a clinical trial site&rsquo;s institutional review board
or institutional biosafety committee, which may delay or make impossible clinical testing of a product candidate. The institutional
review board for a clinical trial may stop a trial or deem a product candidate unsafe to continue testing. This may have a material
adverse effect on the value of the product candidate and our business prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We will need to outsource and rely on third parties for
the clinical development and manufacture, sales and marketing of our current product candidates or any future product candidates
that we may develop, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third
parties.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We do not have the required financial and human resources to
carry out on our own all the pre-clinical and clinical development for our current product candidates or any future product candidates
that we may develop, and we do not have the capability and resources to manufacture, market or sell our current product candidates
or any future product candidates that we may develop. Our business model calls for the partial or full outsourcing of the clinical
and other development and manufacturing, sales and marketing of our product candidates in order to reduce our capital and infrastructure
costs as a means of potentially improving our financial position. Our success will depend on the performance of these outsourced
providers. If such providers fail to perform adequately, our development of product candidates may be delayed and any delay in
the development of our product candidates would have a material and adverse effect on our business prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are and will be exposed to product liability risks,
and clinical and pre-clinical liability risks, which could place a substantial financial burden upon us should we be sued.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our business exposes us to potential product liability and other
liability risks that are inherent in the testing, manufacturing and marketing of medical devices. We cannot be sure that claims
will not be asserted against us. A successful liability claim or series of claims brought against us could have a material adverse
effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We cannot give assurances that we will be able to continue to
obtain or maintain adequate product liability insurance on acceptable terms, if at all, or that such insurance will provide adequate
coverage against potential liabilities. Claims or losses in excess of any product liability insurance coverage that we may obtain
could have a material adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Hemopurifier products may be used in connection with medical
procedures in which it is important that those products function with precision and accuracy. If our products do not function as
designed, or are designed improperly, we may be forced by regulatory agencies to withdraw such products from the market. In addition,
if medical personnel or their patients suffer injury as a result of any failure of our products to function as designed, or our
products are designed inappropriately, we may be subject to lawsuits seeking significant compensatory and punitive damages. The
risk of product liability claims, product recalls and associated adverse publicity is inherent in the testing, manufacturing, marketing
and sale of medical products. We have recently obtained general clinical trial liability insurance coverage. We cannot give assurances
that our insurance coverage will be adequate or available. We may not be able to secure product liability insurance coverage on
acceptable terms or at reasonable costs when needed. Any product recall or lawsuit seeking significant monetary damages may have
a material adverse effect on our business and financial condition. Any liability for mandatory damages could exceed the amount
of our coverage. Moreover, a product recall could generate substantial negative publicity about our products and business and inhibit
or prevent commercialization of other future product candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have not received, and may never receive, approval
from the FDA to market a medical device in the United States.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Before a new medical device can be marketed in the U.S., it
must first receive either premarket approval or 510(k) clearance from the FDA, unless an exemption exists. A premarket approval
submission, which is a higher standard than a 510(k) clearance, is used to demonstrate to the FDA that a new or modified device
is safe and effective. A 510(k) submission is used to demonstrate that a device is &ldquo;substantially equivalent&rdquo; to a
predicate device (one that has been cleared by the FDA). A 510(k) submission is cleared when the FDA issues an order finding the
device to be substantially equivalent to the predicate device and stating that the device can be marketed in the U.S. We expect
that any product we seek regulatory approval for will require a premarket approval. The FDA approval process involves, among other
things, successfully completing clinical trials and filing for and obtaining a premarket approval. The premarket approval process
requires us to prove the safety and effectiveness of our products to the FDA&rsquo;s satisfaction. This process, which includes
pre-clinical studies and clinical trials, can take many years and requires the expenditure of substantial resources and may include
post-marketing surveillance to establish the safety and efficacy of the product. Notwithstanding the effort and expense incurred,
the process may never result in the FDA granting a premarket approval. Data obtained from pre-clinical studies and clinical trials
are subject to varying interpretations that could delay, limit or prevent regulatory approval. Delays or rejections may also be
encountered based upon changes in governmental policies for medical devices during the period of product development. The FDA can
delay, limit or deny approval of a premarket approval application for many reasons, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our inability to demonstrate safety or effectiveness to the FDA&rsquo;s satisfaction;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">insufficient data from our pre-clinical studies and clinical trials to support approval;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">failure of the facilities of our third-party manufacturer or suppliers to meet applicable requirements;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">inadequate compliance with pre-clinical, clinical or other regulations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our failure to meet the FDA&rsquo;s statistical requirements for approval; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in the FDA&rsquo;s approval policies, or the adoption of new regulations that require additional data or additional clinical studies.</FONT></TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Modifications to products that are approved through a premarket
approval application generally need FDA approval. Similarly, some modifications made to products cleared through a 510(k) may require
a new 510(k). The FDA&rsquo;s 510(k) clearance process usually takes from three to 12 months, but may last longer. The process
of obtaining a premarket approval is much more costly and uncertain than the 510(k) clearance process and generally takes from
one to three years, or even longer, from the time the application is submitted to the FDA until an approval is obtained. Any of
our products considered to be a class III device, which are considered to pose the greatest risk and the approval of which is governed
by the strictest guidelines, will require the submission and approval of a premarket approval in order for us to market them in
the U.S. We also may design new products in the future that could require the clearance of a 510(k).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although we have received approval to proceed with clinical
trials in the U.S. under the investigational device exemption, we cannot assure you that the current approval from the FDA to proceed
will not be revoked, that the study will be successful, or that the FDA premarket approval will eventually be obtained and not
revoked. Even if we obtain approval, the FDA or other regulatory authorities may require expensive or burdensome post-market testing
or controls. Any delay in, or failure to receive or maintain, clearance or approval for our future products could prevent us from
generating revenue from these products or achieving profitability. Additionally, the FDA and other regulatory authorities have
broad enforcement powers. Regulatory enforcement or inquiries, or other increased scrutiny on us, could dissuade some physicians
from using our products and adversely affect our reputation and the perceived safety and efficacy of our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The approval requirements for medical products used to
fight bioterrorism are still evolving, and we cannot be certain any products we develop for such uses would meet these requirements.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are advancing product candidates under governmental policies
that regulate the development and commercialization of medical treatment countermeasures against bioterror and pandemic threats.
&nbsp;While we intend to pursue FDA market clearance to treat infectious bioterror and pandemic threats, it is often not feasible
to conduct human studies against these deadly high threat pathogens. Thus, we may not be able to demonstrate the effectiveness
of our treatment countermeasures through controlled human efficacy studies. Additionally, a change in government policies could
impair our ability to obtain regulatory approval, and we cannot be certain that the FDA will approve any of our product candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The Hemopurifier was used to treat one patient suffering
from Ebola, and we have received a supplement to our investigational device exemption to establish protocols to treat Ebola patients
in the U.S.; however, you should not construe these events as demonstrating that the device is effective in treating Ebola.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In October 2014, physicians at the Frankfurt University Hospital
in Frankfurt, Germany administered Hemopurifier therapy in a 6.5-hour treatment session to a patient infected with Ebola. This
treatment was made on an emergency basis. The patient was administered Hemopurifier therapy through special approval from The Federal
Institute for Drugs and Medical Devices (Bundesinstitut fur Arzneimittel und Medizinprodukte, BfArM), an independent federal higher
authority within the portfolio of the Federal Ministry of Health of Germany. While we believe the results of the treatment of the
Ebola patient in Germany to be positive with respect to the usage of the Hemopurifier to combat Ebola, no medical organization
or regulatory organization, inside or outside the U.S., has cleared the use of the device for Ebola treatment on a commercial basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, although the FDA approved a supplement to our investigational
device exemption to establish a protocol for the treatment of Ebola patients in the U.S., this approval is very limited and we
cannot predict the results of such protocol and potential treatments, if any. The usefulness of the Hemopurifier in treating Ebola
is still unproven in any clinical or regulatory process in the U.S. or elsewhere. Even if we enroll patients in the Ebola protocol,
the results of such treatments may not demonstrate the safety and efficacy of the device, may be equivocal or may otherwise not
be sufficient to obtain approval of the Hemopurifier for any uses associated with Ebola. In addition, the approval of the supplement
to our investigational device exemption does not in any way ensure clearance or approval of the Hemopurifier device for any purpose.
In April 2015, we submitted a Humanitarian Use Device submission to the FDA to support market clearance of the Hemopurifier as
a treatment for Ebola virus. If the application is designated by the FDA, we then may submit a Humanitarian Device Exemption marketing
application to the Center for Devices and Radiological Health for marketing review. We cannot assure you that the Hemopurifier
will prove to be useful in the treatment of Ebola, that U.S. or foreign regulatory agencies will ever approve it for such use,
or if approved, that we will successfully commercialize it for such use. We may never commercialize the Hemopurifier specifically
for use in treating Ebola.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The results of our clinical trials may not support our
product candidate claims or may result in the discovery of adverse side effects.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any research and development, pre-clinical testing and clinical
trial activities involving any products that we are developing or may develop will be subject to extensive regulation and review
by numerous governmental authorities both in the U.S. and abroad. In the future, we may conduct clinical trials to support approval
of new products. We must conduct clinical studies in compliance with FDA regulations, or the FDA may take enforcement action. Ultimately,
we may use the data collected from these clinical studies to support market clearance for these products. Even if our clinical
trials are completed as planned, we cannot be certain that their results will support our product candidate claims or that the
FDA will agree with our conclusions regarding them. Success in pre-clinical studies and early clinical trials does not ensure that
later clinical trials will be successful, and we cannot be sure that the later trials will replicate the results of prior trials
and pre-clinical studies. The clinical trial process may fail to demonstrate that our product candidates are safe and effective
for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others. Any delay
or termination of our clinical trials will delay the filing of our product submissions and, ultimately, our ability to commercialize
our product candidates and generate revenues. It is also possible that patients enrolled in clinical trials will experience adverse
side effects that are not currently part of the product candidate&rsquo;s profile.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>U.S. legislative or FDA regulatory reforms may make it
more difficult and costly for us to obtain regulatory approval of our product candidates and to manufacture, market and distribute
our products after approval is obtained.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From time to time, legislation is drafted and introduced in
Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing
of regulated products or the reimbursement thereof. In addition, FDA regulations and guidance are often revised or reinterpreted
by the FDA in ways that may significantly affect our business and our products. Any new regulations or revisions or reinterpretations
of existing regulations may impose additional costs or lengthen review times of future products. In addition, FDA regulations and
guidance are often revised or reinterpreted by the agency in ways that may significantly affect our business and our products.
We cannot predict whether legislative changes will be enacted or FDA regulations, guidance or interpretations changed, and what
the impact of such changes, if any, may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Should our products be approved for commercialization,
lack of third-party coverage and reimbursement for our devices could delay or limit their adoption.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In both the U.S. and international markets, the use of medical
devices is dependent in part on the availability of reimbursement from third-party payors, such as government and private insurance
plans. Healthcare providers that use medical devices generally rely on third-party payors to pay for all or part of the costs and
fees associated with the medical procedures being performed or to compensate them for their patient care services. Should the FDA
approve our products for commercialization, we cannot assure you that our future products will be considered cost-effective, that
reimbursement will be available in other sites or in other countries, including the U.S., if approved, or that reimbursement will
be sufficient to allow sales of our future products on a profitable basis. The assessment of our future products by health technology
assessment bodies will significantly influence coverage decisions of third-party payors. Such assessments are outside our control,
and we cannot assure you that such evaluations will be conducted or that they will have a favorable outcome.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If approved for use in the U.S., we expect that any products
that we develop will be purchased primarily by medical institutions, which will in turn bill various third-party payors for the
health care services provided to patients at their facility. Payors may include the Centers for Medicare &amp; Medicaid Services,
which administers the Medicare program and works in partnership with state governments to administer Medicaid, other government
programs and private insurance plans. The process involved in applying for coverage and incremental reimbursement from the Centers
for Medicare &amp; Medicaid Services is lengthy and expensive. Further, Medicare coverage is based on our ability to demonstrate
the treatment is &ldquo;reasonable and necessary&rdquo; for Medicare beneficiaries. Even if products utilizing our Aethlon ADAPT
system receive FDA and other regulatory clearance or approval, they may not be granted coverage and reimbursement by any payor,
including by the Centers for Medicare &amp; Medicaid Services. For some governmental programs, such as Medicaid, coverage and reimbursement
differ from state to state and some state Medicaid programs may not pay adequate amounts for the procedure necessary to utilize
products utilizing our Aethlon ADAPT system, or any payment at all. Moreover, many private payors use coverage decisions and payment
amounts determined by the Centers for Medicare &amp; Medicaid Services as guidelines in setting their coverage and reimbursement
policies and amounts. If the Centers for Medicare &amp; Medicaid Services or other agencies limit coverage or decrease or limit
reimbursement payments for doctors and hospitals, this may affect coverage and reimbursement determinations by many private payors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Should our products be approved for commercialization,
adverse changes in reimbursement policies and procedures by payors may impact our ability to market and sell our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Healthcare costs have risen significantly over the past decade,
and there have been and continue to be proposals by legislators, regulators and third-party payors to decrease costs. Third-party
payors are increasingly challenging the prices charged for medical products and services and instituting cost containment measures
to control or significantly influence the purchase of medical products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For example, in the U.S., the Patient Protection and Affordable
Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, as amended, 42 U.S.C. &sect; 18001 et seq., among
other things, reduced and/or limited Medicare reimbursement to certain providers. The Budget Control Act of 2011, Pub. L. 112-25,
as amended by subsequent legislation, further reduces Medicare&rsquo;s payments to providers by two percent through fiscal year
2024. These reductions may reduce providers&rsquo; revenues or profits, which could affect their ability to purchase new technologies.
Furthermore, the healthcare industry in the U.S. has experienced a trend toward cost containment as government and private insurers
seek to control healthcare costs by imposing lower payment rates and negotiating reduced contract rates with service providers.
Legislation could be adopted in the future that limits payments for our products from governmental payors. In addition, commercial
payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers&rsquo;
products. Therefore, we cannot be certain that payors will reimburse our product or the procedures or patient care performed using
our product at a cost-effective level. We face similar risks relating to adverse changes in reimbursement procedures and policies
in other countries where we may market our products. Reimbursement and healthcare payment systems vary significantly among international
markets. Our inability to obtain international reimbursement approval, or any adverse changes in the reimbursement policies of
foreign payors, could negatively affect our ability to sell our products and have a material adverse effect on our business and
financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Should our products be approved for commercialization,
our financial performance may be adversely affected by medical device tax provisions in the healthcare reform laws.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Patient Protection and Affordable Care Act, as amended by
the Health Care and Education Reconciliation Act of 2010, as amended, 42 U.S.C. &sect;18001 et seq., currently imposes, among other
things, an excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the U.S. Under these
provisions, the Congressional Research Service predicts that the total cost to the medical device industry may be up to $20 billion
over the next decade. The Internal Revenue Service issued final regulations implementing the tax in December 2012, which requires,
among other things, bi-monthly payments and quarterly reporting. Once we market products, we will be subject to this or any future
excise tax on our sales of certain medical devices in the U.S. We anticipate that primarily all of our future sales of medical
devices in the U.S. will be subject to this 2.3% excise tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Intellectual Property and Related Litigation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We rely upon licenses and patent rights from third parties,
which are subject to termination or expiration.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We rely upon third party licenses and ownership rights assigned
from third parties for the development of specific uses for our Hemopurifier devices. For example, we are researching, developing
and testing cancer-related applications for our devices under patents assigned from the London Health Science Center Research,
Inc. Should any of our licenses be prematurely terminated for any reason, or if the patents and intellectual property assigned
to us or owned by such entities that we have licensed should be challenged or defeated by third parties, our research efforts could
be materially and adversely affected. We cannot assure you that any of our licenses or patents assigned to us will continue in
force for as long as we require for our research, development and testing of cancer treatments. We cannot assure you that, should
our licenses terminate, should third parties challenge or defeat the underlying patents and intellectual property, or should third
parties challenge or defeat patents and intellectual property assigned to us, we can obtain suitable replacements or develop suitable
replacements on terms acceptable to us, if at all. There is also the related risk that we may not be able to make the required
payments under any patent license or assignment agreement, in which case we may lose our ability to use one or more of the licensed
or assigned patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We could become subject to intellectual property litigation
that could be costly, result in the diversion of management&rsquo;s time and efforts, require us to pay damages, prevent us from
selling our commercially available products and/or reduce the margins we may realize from our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The medical devices industry is characterized by extensive litigation
and administrative proceedings over patent and other intellectual property rights. Whether a product infringes a patent involves
complex legal and factual issues, and the determination is often uncertain. We may be unaware of existing third-party patents that
our products under development may inadvertently infringe. The likelihood that patent infringement claims may be brought against
us increases as the number of participants in the infectious disease market increases and as we achieve more visibility in the
market place and introduce products to market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any infringement claim against us, even if without merit, may
cause us to incur substantial costs and would place a significant strain on our financial resources, divert the attention of management
from our core business, and harm our reputation. In some cases, a patent holding company or other adverse patent owner that has
no relevant product revenues and against which our patents may provide little or no deterrence may threaten or bring litigation.
If a court were to find that we infringed any of these patents, it could require us to pay substantial damages, including triple
damages if it were to find a willful infringement. A court could require us to pay royalties and could prevent us from selling
our products unless we obtain a license or are able to redesign our products to avoid infringement. We may not be able to obtain
a license enabling us to sell our products on reasonable terms, or at all, and we cannot assure you that we would be able to redesign
our products in a way that would not infringe those patents. If we fail to obtain any required licenses or make any necessary changes
to our technologies or the products that incorporate them, we may be unable to commercialize one or more of our products or may
have to withdraw products from the market, all of which would have a material adverse effect on our business, financial condition
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If the combination of patents, trade secrets and contractual
provisions upon which we rely to protect our intellectual property is inadequate, our ability to commercialize our products successfully
will be harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our success depends significantly on our ability to protect
our proprietary rights to the technologies incorporated in our products. We currently have three issued U.S. patents and eight
pending U.S. patent applications. We also have fourteen issued foreign patents, have applied for five additional foreign patents
and have two pending international patent applications. Our issued patents begin to expire in 2019, with the last of these patents
expiring in 2029, although terminal disclaimers, patent term extension or patent term adjustment can shorten or lengthen the patent
term. We rely on a combination of patent protection, trade secret laws and nondisclosure, confidentiality and other contractual
restrictions to protect our proprietary technology. However, these may not adequately protect our rights or permit us to gain or
keep any competitive advantage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The issuance of a patent is not conclusive as to its scope,
validity or enforceability. Third parties can challenge the scope, validity or enforceability of our issued patents in litigation
or proceedings before the U.S. Patent and Trademark Office or foreign patent offices where our applications are pending. The U.S.
Patent and Trademark Office or foreign offices may deny or require significant narrowing of claims in our pending patent applications.
Patents issued as a result of the pending patent applications, if any, may not provide us with significant commercial protection
or be issued in a form that is advantageous to us. Proceedings before the U.S. Patent and Trademark Office or foreign offices could
result in adverse decisions as to the priority of our inventions and the narrowing or invalidation of claims in issued patents.
The laws of some foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S.,
if at all. Some of our patents may expire before we receive FDA approval to market our products in the U.S. or we receive approval
to market our products in a foreign country. Although we believe that certain patent applications and/or other patents issued more
recently will help protect the proprietary nature of the Hemopurifier treatment technology, we cannot assure you that this protection
will be sufficient to protect us during the development of that technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our competitors may successfully challenge and invalidate or
render unenforceable our issued patents, including any patents that may issue in the future, which could prevent or limit our ability
to market our products and could limit our ability to stop competitors from marketing products that are substantially equivalent
to ours. In addition, competitors may be able to design around our patents or develop products that provide outcomes that are comparable
to our products but that are not covered by our patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have also entered into confidentiality and assignment of
intellectual property agreements with all of our employees, consultants and advisors directly involved in the development of our
technology as one of the ways we seek to protect our intellectual property and other proprietary technology. However, we may not
be able to enforce these agreements, or they may not provide meaningful protection for our trade secrets or other proprietary information
in the event of unauthorized use or disclosure or other breaches of the agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the event a competitor infringes upon any of our patents
or other intellectual property rights, enforcing our rights may be difficult, time consuming and expensive, and would divert management&rsquo;s
attention from managing our business. We cannot assure you that we will be successful on the merits in any enforcement effort.
In addition, we may not have sufficient resources to litigate, enforce or defend our intellectual property rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may need to rely on licenses for new technology, and
any inability to obtain licenses or integrate those licenses could have a material adverse effect on our continued operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As we develop our technology, we may need to license additional
technologies to optimize the performance of our products and/or to develop new products. We may not be able to license these technologies
on commercially reasonable terms or at all. In addition, we may fail to successfully integrate any licensed technology into our
proposed products. Our inability to obtain any necessary licenses could delay our product development and testing until alternative
technologies can be identified, licensed and integrated. The inability to obtain any necessary third-party licenses could cause
us to abandon a particular development path, which could seriously harm our business, financial position and results of our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>New technology may lead to our competitors developing
superior products, which would reduce demand for our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Research into technologies similar to ours is proceeding at
a rapid pace, and many private and public companies and research institutions are actively engaged in the development of products
similar to ours. These new technologies may, if successfully developed, offer significant performance or price advantages when
compared with our technologies. We cannot provide assurances that our existing patents or our pending and proposed patent applications
will offer meaningful protection if a competitor develops a novel product based on a new technology.<B>&nbsp;</B>If our competitors
develop new technology that is competitive with our products, the demand for our products could decline and adversely affect the
results of our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we are unable to protect our proprietary technology
and preserve our trade secrets, we will increase our vulnerability to competitors, which could materially adversely impact our
ability to remain in business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our ability to successfully commercialize our products will
depend on our ability to protect those products and our technology with domestic and foreign patents. We will also need to continue
to preserve our trade secrets. The issuance of a patent is not conclusive as to its validity or as to the enforceable scope of
the claims of the patent. The patent positions of technology companies, including us, are uncertain and involve complex legal and
factual issues.&nbsp;We cannot assure you that our patents will prevent other companies from developing similar products or products
that produce benefits substantially the same as our products, or that other companies will not be issued patents that may prevent
the sale of our products or require us to pay significant licensing fees in order to market our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From time to time, we may need to obtain licenses to patents
and other proprietary rights held by third parties in order to develop, manufacture and market our products. If we are unable to
timely obtain these licenses on commercially reasonable terms, our ability to commercially exploit such products may be inhibited
or prevented. Additionally, we cannot assure investors that any of our products or technology will be patentable or that any future
patents we obtain will give us an exclusive position in the subject matter claimed by those patents. Furthermore, we cannot assure
investors that our pending patent applications will result in issued patents, that patent protection will be secured for any particular
technology, or that our issued patents will be valid or enforceable or provide us with meaningful protection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we are required to engage in expensive and lengthy
litigation to enforce our intellectual property rights, such litigation could be very costly and the results of such litigation
may not be satisfactory.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although we have entered into invention assignment agreements
with our employees and with certain advisors, and we routinely enter into confidentiality agreements with our contract partners,
if those employees, advisors or contract partners develop inventions or processes independently that may relate to products or
technology under development by us, disputes may arise about the ownership of those inventions or processes. We may be required
to engage in time-consuming and costly litigation to enforce and determine the scope of our rights under these agreements. In addition,
we may be required to commence litigation to enforce such agreements if they are violated, and it is certainly possible that we
will not have adequate remedies for breaches of our confidentiality agreements as monetary damages may not be sufficient to compensate
us. In addition, we may be unable to fund the costs of such litigation to a satisfactory conclusion, which could leave us without
recourse to enforce contracts that protect our intellectual property rights.<B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Other companies may claim that our technology infringes
on their intellectual property or proprietary rights and commence legal proceedings against us, which could be time-consuming and
expensive and could result in our being prohibited from developing, marketing, selling or distributing our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Because of the complex and difficult legal and factual questions
that relate to patent positions in our industry, we cannot assure you that a court will not find our products or technology to
infringe upon the intellectual property or proprietary rights of others. Third parties may claim that our products or technology
infringe on their patents, copyrights, trademarks or other proprietary rights and demand that we cease development or marketing
of those products or technology or pay license fees. We may not be able to avoid costly patent infringement litigation, which will
divert the attention of management away from the development of new products and the operation of our business. We cannot assure
investors that we would prevail in any such litigation. If a court finds us to have infringed on a third party&rsquo;s intellectual
property rights, we may be liable for money damages, encounter significant delays in bringing products to market or be precluded
from manufacturing particular products or using particular technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other parties may challenge certain of our foreign patent applications.
If such parties are successful in opposing our foreign patent applications, we may not gain the protection afforded by those patent
applications in particular jurisdictions and may face additional proceedings with respect to similar patents in other jurisdictions,
as well as related patents. The loss of patent protection in one jurisdiction may influence our ability to maintain patent protection
for the same technology in other jurisdictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to U.S. Government Contracts</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our revenues are almost entirely derived from one U.S.
Government contract.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have derived and expect for the near future to continue to
derive substantially all of our revenue under our DARPA contract. If DARPA chooses not to continue our contract in year five (commencing
October 1, 2015 through September 30, 2016) of the contract, our revenues could be substantially reduced. In addition, if we are
unable to meet any of the DARPA contract milestones to the satisfaction of DARPA, if at all, we may not earn payments under the
contract. Any reduction in our revenues, or the termination of the DARPA contract for any reason, could have a material and adverse
effect on our business and operations. In addition, DARPA has the right to unilaterally cancel the contract at any time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may not obtain additional U.S. Government contracts
to further develop our technology.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We can give no assurances that we will be successful in obtaining
additional government grants or contracts. The process of applying for government contracts is lengthy, and we cannot be certain
that we will be successful in obtaining announced grants or contracts for therapeutics as a medical device technology. Accordingly,
we cannot be certain that we will be awarded any additional U.S. Government grants or contracts utilizing our Hemopurifier<SUP>
</SUP>platform technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>U.S. Government agencies have special contracting requirements,
including a right to audit us, which create additional risks.</I></B> A<B><I> negative audit would be detrimental to us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our business plan to utilize the Aethlon ADAPT system is likely
to involve contracts with the U.S. Government. Such contracts typically contain unfavorable termination provisions and are subject
to audit and modification by the government at its sole discretion, which subjects us to additional risks. These risks include
the ability of the U.S. Government to unilaterally:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">suspend or prevent us for a period of time from receiving new contracts or extending existing contracts based on violations or suspected violations of laws or regulations;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">audit and object to our contract-related costs and fees, including allocated indirect costs;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">control and potentially prohibit the export of our products; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">change certain terms and conditions in our contracts.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a U.S. Government contractor, we are required to comply with
applicable laws, regulations and standards relating to our accounting practices and would be subject to periodic audits and reviews.
As part of any such audit or review, the U.S. Government may review the adequacy of, and our compliance with, our internal control
systems and policies, including those relating to our purchasing, property, estimating, compensation and management information
systems. Based on the results of its audits, the U.S. Government may adjust our contract-related costs and fees, including allocated
indirect costs. In addition, if an audit or review uncovers any improper or illegal activity, we would possibly be subject to civil
and criminal penalties and administrative sanctions, including termination of our contracts, forfeiture of profits, suspension
of payments, fines and suspension or prohibition from doing business with the U.S. Government. We could also suffer serious harm
to our reputation if anyone were to make allegations of impropriety against us. Although we have not had any government audits
and reviews to date, future audits and reviews could cause adverse effects. In addition, under U.S. Government purchasing regulations,
some of our costs, including most financing costs, amortization of intangible assets, portions of our research and development
costs, and some marketing expenses, would possibly not be reimbursable or allowed under such contracts. Further, as a U.S. Government
contractor, we would be subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits
and other legal actions and liabilities to which purely private sector companies are not.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our DARPA contract is a fixed price contract, which may
not adequately cover our costs in performance should those costs increase.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our contract with DARPA is on a firm fixed price basis, which
means that we are required to deliver our products at a fixed price regardless of the actual costs we incur and to absorb any costs
in excess of the fixed price.&nbsp; If we have not accurately estimated the costs of expenses to perform the contract, we may not
have positive revenue and we may incur losses to cover our costs.&nbsp;We expect that our future contracts, if any, with the U.S.
Government also may be fixed price contracts. Estimating costs that are related to performance in accordance with contract specifications
is difficult, particularly where the period of performance is over several years. Our failure to anticipate technical problems,
estimate costs accurately or control costs during performance of a fixed price contract could reduce the profitability of a fixed
price contract or cause a loss, which could in turn harm our operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>As a U.S. Government contractor, we are subject to a number
of procurement rules and regulations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Government contractors must comply with numerous procurement
regulations. These regulations, although customary in government contracts, impact our performance and compliance costs. In addition,
current U.S. Government budgetary constraints could lead to changes in the procurement environment, including the Department of
Defense&rsquo;s recent initiative focused on efficiencies, affordability and cost growth and other changes to its procurement practices.
If and to the extent such changes occur, they could impact our results of operations and liquidity, and could affect whether and,
if so, how we pursue certain opportunities and the terms under which we are able to do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, failure to comply with these regulations
could result in reductions of the value of contracts, contract modifications or termination, and the assessment of penalties
and fines, which could negatively impact our results of operations and financial condition. Our failure to comply with these
regulations could also lead to suspension or debarment, for cause, from government contracting or subcontracting for a period
of time. Among the causes for debarment are violations of various statutes, including those related to procurement integrity,
export control, government security regulations, employment practices, protection of the environment, accuracy of records and
the recording of costs, and foreign corruption. The termination of our government contract as a result of any of these acts
could have a negative impact on our results of operations and financial condition and could have a negative impact on our
reputation and ability to procure other government contracts in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>In fulfilling our DARPA contract, we depend on a predictable
supply of raw materials and components.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are dependent upon the delivery by suppliers of materials
and the assembly by subcontractors of major components and subsystems used in our products in a timely and satisfactory manner
and in full compliance with applicable terms and conditions. Some products require relatively scarce raw materials. We are generally
subject to specific procurement requirements, which may, in effect, limit the suppliers and subcontractors we may utilize. In some
instances, we are dependent on sole-source suppliers. If any of these suppliers or subcontractors fails to meet our needs, we may
not have readily available alternatives. In addition, the recent global financial crisis may impact some of our suppliers or subcontractors,
which could impair their ability to meet their obligations to us. If we experience a material supplier or subcontractor problem,
our ability to satisfactorily and timely complete our clinical trial or delivery obligations could be negatively impacted which
could result in reduced sales, termination of contracts and damage to our reputation and relationships with clinical trial providers
and if applicable, the U.S. Government. We could also incur additional costs in addressing such a problem. Any of these events
could have a negative impact on our results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Relating to Our Common Stock, This Offering and Our
Corporate Governance</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Historically we have not paid dividends
on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have never paid cash dividends on our common stock. We intend
to retain our future earnings, if any, to fund operational and capital expenditure needs of our business, and we do not anticipate
paying any cash dividends in the foreseeable future. Furthermore, future financing instruments may do the same. As a result, capital
appreciation, if any, of our common stock will be the sole source of gain for our common stockholders in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Our stock price is speculative,
and there is a risk of litigation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The trading price of our common stock
in the past has been and in the future may be subject to wide fluctuations in response to factors such as the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">revenue or results of operations in any quarter failing to meet the expectations, published or otherwise, of the investment community;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">reduced investor confidence in equity markets, due in part to corporate collapses in recent years;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">speculation in the press or analyst community;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">wide fluctuations in stock prices, particularly with respect to the stock prices for other medical device companies;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">announcements of technological innovations by us or our competitors;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">new products or the acquisition of significant customers by us or our competitors;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in interest rates;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in investors&rsquo; beliefs as to the appropriate price-earnings ratios for us and our competitors;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in recommendations or financial estimates by securities analysts who track our common stock or the stock of other medical device companies;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in management;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">sales of common stock by directors and executive officers;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">rumors or dissemination of false or misleading information, particularly through Internet chat rooms, instant messaging, and other rapid-dissemination methods;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">conditions and trends in the medical device industry generally;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the announcement of acquisitions or other significant transactions by us or our competitors;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">adoption of new accounting standards affecting our industry;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">general market conditions;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">domestic or international terrorism and other factors; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the other factors described in this section.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fluctuations in the price of our common stock may expose us
to the risk of securities class action lawsuits. Although no such lawsuits are currently pending against us and we are not aware
that any such lawsuit is threatened to be filed in the future, third parties could sue us based on fluctuations in the price of
our common stock. Defending against such suits could result in substantial cost and divert management&rsquo;s attention and resources.
In addition, any settlement or adverse determination of such lawsuits could subject us to significant liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If at any time our common stock is subject to the Commission&rsquo;s
penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities
may be adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If at any time our common stock is not listed on a national
securities exchange or we have net tangible assets of $5,000,000 or less and our common stock has a market price per share of less
than $5.00, transactions in our common stock will be subject to the Commission&rsquo;s &ldquo;penny stock&rdquo; rules. If our
common stock is subject to the &ldquo;penny stock&rdquo; rules promulgated under the Exchange Act, broker-dealers may find it difficult
to effectuate customer transactions and trading activity in our securities may be adversely affected. For any transaction involving
a penny stock, unless exempt, the rules require:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">that a broker or dealer approve a person&rsquo;s account for transactions in penny stocks; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In order to approve a person&rsquo;s account for transactions
in penny stocks, the broker or dealer must:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">obtain financial information and investment experience objectives of the person; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form
sets forth:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the basis on which the broker or dealer made the suitability determination; and</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 150px">&nbsp;</TD>
    <TD STYLE="width: 75px"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">that the broker or dealer received a signed, written agreement from the investor prior to the transaction.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Generally, brokers may be less willing to execute transactions
in securities subject to the &ldquo;penny stock&rdquo; rules. This may make it more difficult for investors to dispose of our common
stock and cause a decline in the market value of our stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Disclosure also has to be made about the risks of investing
in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our common stock has had an unpredictable trading volume,
which means you may not be able to sell our shares at or near asking prices or at all.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Trading in our common shares historically has been volatile
and often has been thin, meaning that the number of persons interested in purchasing our common shares at or near ask prices at
any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact
that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in
the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they
tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase
of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or
more when trading activity in our shares is minimal, as compared to a seasoned issuer that has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance
that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading
levels will be sustained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The market price for our common stock is volatile; you
may not be able to sell our common stock at or above the price you have paid for it, which may result in losses to you.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The market for our common shares is characterized by significant
price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a
seasoned issuer for the indefinite future. In fact, during the 52-week period ended March 31, 2016, the high and low closing sale
prices of a share of our common stock were $14.00 and $4.34, respectively. The volatility in our share price is attributable to
a number of factors. First, as noted above, trading in our common shares often has been thin. As a consequence of this lack of
liquidity, the trading of relatively small quantities of shares by our stockholders may disproportionately influence the price
of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large
number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better
absorb those sales without adverse impact on its share price. Secondly, we are a speculative investment due to our limited operating
history, limited amount of revenue, lack of profit to date, and the uncertainty of future market acceptance for our potential products.
As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment
in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater
discounts than would be the case with the stock of a seasoned issuer. The following factors may add to the volatility in the price
of our common shares: actual or anticipated variations in our quarterly or annual operating results; acceptance of our proprietary
technology as a viable method of augmenting the immune response of clearing viruses and toxins from human blood; government regulations;
announcements of significant acquisitions, strategic partnerships or joint ventures; our capital commitments; and additions or
departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our common shares
regardless of our operating performance. We cannot predict or project the prevailing market price for our common shares at any
time, including whether our common shares will sustain their current market prices, or what effect the sale of shares or the availability
of common shares for sale at any time will have on the prevailing market price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Although our common stock trades on the Nasdaq Capital
Market, we cannot assure you that we will be able to comply with the continued listing standards of the Nasdaq Capital Market.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although our common stock trades on the Nasdaq Capital Market,
we cannot assure you that we will be able to comply with the continued listing standards that we are required to meet in order
to maintain that listing. Our failure to meet the listing maintenance requirements may result in our common stock being delisted
from the Nasdaq Capital Market. If the Nasdaq Capital Market were to delist our common stock, we could face significant material
adverse consequences, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a limited availability of market quotations for our securities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">reduced liquidity with respect to our securities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a limited amount of news and analyst coverage for our company; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a decreased ability to issue additional securities or obtain additional financing in the future.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The National Securities Markets Improvement Act of 1996, which
is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as
&ldquo;covered securities.&rdquo; While our common stock is listed on the Nasdaq Capital Market, such securities will be covered
securities. Although the states would be preempted from regulating the sale of our securities, in that event, the federal statute
does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity,
then the states can regulate or bar the sale of covered securities in a particular case. Further, if the Nasdaq Capital Market
were to delist our common stock, our common stock would not be a covered security and we would be subject to regulation in each
state in which we offer our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The Depository Trust Company imposed restrictions upon
electronic trading of our common stock, which negatively affected liquidity of the stock and our ability to raise capital.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In September 2011, The Depository Trust Company placed a &quot;chill&quot;
on the electronic clearing of trades in our shares, which led to some brokerage firms being unwilling to accept certificates and/or
electronic deposits of our stock. We have since been successful in lifting the restrictions and our shares now clear electronically,
making more brokers willing to trade in our common stock. We cannot assure you that The Depository Trust Company will not again
place a chill on our common stock. A chill, if placed on our common stock, would affect the liquidity of our shares, which may
make it difficult to purchase or sell shares in the open market. It may also have an adverse effect on our ability to raise capital
since investors may be unable to resell shares into the market. Our inability to raise capital on terms acceptable to us, if at
all, could have a material and adverse effect on our business and operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our directors and officers own or control approximately
10% of our outstanding common shares, which may limit your ability to propose new management or influence the overall direction
of the business. This concentration of control may also discourage potential takeovers that could otherwise provide a premium to
you.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of May 3, 2016, our officers and directors beneficially own
or control approximately 10% of our outstanding common shares (assuming the exercise of all outstanding options and warrants exercisable
within the next 60 days held by our officers and directors). These persons will have the ability to substantially influence all
matters submitted to our stockholders for approval and to control our management and affairs, including extraordinary transactions
such as mergers and other changes of corporate control, and going private transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>A large number of our common shares are issuable upon
exercise of outstanding convertible securities, which, if exercised or converted, would be dilutive to your holdings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2015, there were outstanding purchase options
and warrants entitling the holders to purchase 2,659,782 common shares at a weighted average exercise price of $7.46 per share.
This includes 26,105 warrants that are conditional upon the exercise of other warrants. As of December 31, 2015, there were 105,112
shares underlying promissory notes convertible into common stock at a weighted average exercise price of $5.60.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of May 3, 2016, there were outstanding purchase options and
warrants entitling the holders to purchase 2,602,639 common shares at a weighted average exercise price of $7.40 per share. This
includes 26,105 warrants that are conditional upon the exercise of other warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The exercise price for all of our outstanding options and warrants,
or the conversion price of our convertible notes, may be less than your cost to acquire our common shares. If holders exercise
or convert these securities, you could suffer substantial dilution of your investment in terms of your percentage ownership in
us as well as the book value of your common shares. In addition, the holders of the convertible notes, common share purchase options
or warrants may sell common shares in tandem with their exercise or conversion of those securities to finance that exercise or
conversion, or may resell the shares purchased in order to cover any income tax liabilities that may arise from their exercise
of the options or warrants or conversion of the notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our issuance of additional common shares, or convertible
securities, would be dilutive to your holdings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are entitled under our Articles of Incorporation to issue
up to 30,000,000 shares of common stock. We have reserved for issuance 2,710,107 shares of common stock for existing options, warrants
and convertible notes. As of March 31, 2016, we had issued and outstanding 7,622,393 shares of common stock. As a result, as of
March 31, 2016, we had 19,667,500 common shares available for issuance to new investors or for use to satisfy indebtedness or pay
service providers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Board of Directors may generally issue shares of common
stock, or options or warrants to purchase those shares, without further approval by our stockholders based upon such factors as
our Board of Directors may deem relevant at that time. It is likely that we will be required to issue a large amount of additional
securities to raise capital to further our development. It is also likely that we will be required to issue a large amount of additional
securities to directors, officers, employees and consultants as compensatory grants in connection with their services, both in
the form of stand-alone grants or under our stock plans. We cannot give you any assurance that we will not issue additional shares
of common stock, or options or warrants to purchase those shares, under circumstances we may deem appropriate at the time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our issuance of additional shares of common stock in satisfaction
of services, or to repay indebtedness, would be dilutive to your holdings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Board of Directors may generally issue shares of common
stock to pay for debt or services, without further approval by our stockholders based upon such factors that our Board of Directors
may deem relevant at that time. For the past four fiscal years (ending March 31, 2015), we issued a total of 2,602,909 shares for
debt to reduce our obligations. The average price discount of common stock issued for debt in this period, weighted by the number
of shares issued for debt in such period, was 76% and 43% for the years ended March 31, 2015 and 2014, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the past four fiscal years (ending March 31, 2015), we issued
a total of 216,032 shares as payment for services. The average price discount (premium) of common stock issued for services during
this period, weighted by the number of shares issued, was (6.6)% and 16.0% for the years ended March 31, 2015 and 2014, respectively.
It is likely that we will issue additional securities to pay for services and reduce debt in the future. We cannot give you any
assurance that we will not issue additional shares of common stock at various discounts under circumstances we may deem appropriate
at the time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our officers and directors are entitled to indemnification
from us for liabilities under our Articles of Incorporation, which could be costly to us and may discourage the exercise of stockholder
rights.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Articles of Incorporation contain provisions that eliminate
the liability of our directors for monetary damages to our company and stockholders. Our by-laws also require us to indemnify our
officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers
and employees. As a result of these obligations, we could incur substantial expenditures to cover settlement or damage awards against
directors, officers and employees that we may be unable to recoup. These provisions and resultant costs may also discourage us
from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage
stockholders from filing derivative litigation against our directors, officers and employees even though such actions, if successful,
might otherwise benefit our company and stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our by-laws and Nevada law may discourage, delay or prevent
a change of control of our company or changes in our management, which may depress the trading price of our common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Provisions of Nevada anti-takeover law (NRS 78.378 <I>et seq.</I>)
could delay or prevent a third party from acquiring us, even if the acquisition arguably could benefit our stockholders. Our by-laws
may be adopted, amended or repealed by the affirmative vote of the holders of at least a majority of our outstanding shares of
capital stock entitled to vote for the election of directors, and except as provided by Nevada law, our Board of Directors has
the power to adopt, amend or repeal the by-laws by a vote of not less than a majority of our directors. The interests of these
stockholders and directors may not be consistent with your interests, and they may make changes to the by-laws that are not in
line with your concerns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our authorized but unissued shares of common stock are available
for our Board or Directors to issue without stockholder approval. We may use these additional shares for a variety of corporate
purposes; however, faced with an attempt to obtain control of us by means of a proxy contest, tender offer, merger or other transaction,
our Board of Directors acting alone and without approval of our stockholders can issue large amounts of capital stock as part of
a defense to a take-over challenge.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The foregoing provisions and other potential anti-takeover measures
could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter
potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an
acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We incur substantial costs as a result of being a public
company, and our management expects to devote substantial time to public company compliance programs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a public company, we incur significant legal, insurance,
accounting and other expenses, including costs associated with public company reporting. We intend to invest resources to comply
with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses
and may divert management&rsquo;s time and attention from product development and commercialization activities. If our efforts
to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to
ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.
These laws and regulations could make it more difficult and costly for us to obtain director and officer liability insurance for
our directors and officers, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
These factors could also make it more difficult for us to attract and retain qualified executive officers and qualified members
of our Board of Directors, particularly to serve on our audit and compensation committees. In addition, if we are unable to continue
to meet the legal, regulatory and other requirements related to being a public company, we may not be able to maintain the listing
of our common stock on the <FONT STYLE="background-color: white">Nasdaq Capital Market,</FONT> which would likely have a material
adverse effect on the trading price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If securities or industry analysts do not publish research
or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading
volume could decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The research and reports that industry or securities analysts
publish about us or our business will influence the trading market for our common stock. Our research coverage by industry and
financial analysts is currently limited. Even if our analyst coverage increases, if one or more of the analysts who cover us downgrade
our stock, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly
publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading
volume to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a18"></A><B>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Except as described in any prospectus supplement, we currently
intend to use the net proceeds from the sale of the securities for general corporate purposes, including for research and development,
sales and marketing initiatives and general administrative expenses, working capital and capital expenditures. In addition, our
use of proceeds may include the repayment of debt or refinancing of indebtedness or the acquisition of complementary products or
companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have not determined the amount of net proceeds to be used
specifically for the foregoing purposes. As a result, our management will have broad discretion in the allocation of the net proceeds
and investors will be relying on the judgment of our management regarding the application of the proceeds of any sale of the securities.
Pending use of the net proceeds, we intend to invest the proceeds in a variety of capital preservation instruments, including short-term,
investment-grade, interest-bearing instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When we offer a particular series of securities, we will describe
the intended use of the net proceeds from that offering in a prospectus supplement. The actual amount of net proceeds we spend
on a particular use will depend on many factors, including our future revenue growth, if any, our future capital expenditures and
the amount of cash required by our operations. Many of these factors are beyond our control. Therefore, we will retain broad discretion
in the use of the net proceeds.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a19"></A>DILUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you purchase shares of our common stock in this offering,
you will experience dilution to the extent of the difference between the price per share you pay in this offering and the net tangible
book value per share of our common stock immediately after this offering. Our net tangible book value as of December 31, 2015 was
approximately $2,612,522, or approximately $0.34 per share. Net tangible book value per share represents our total tangible assets
less total tangible liabilities, divided by the number of shares of common stock outstanding as of December 31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">After giving effect to the assumed sale by us of $12,500,000
of our common stock in this offering at an assumed public offering price of $5.16 per share of our common stock (the last reported
sale price of our common stock on the Nasdaq Capital Market on May 2, 2016), and after deducting the estimated fees and commissions
and estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2015 would have been
approximately $14,637,522 or approximately $1.46 per share of common stock. This represents an immediate increase in net tangible
book value of approximately $1.12 per share to existing shareholders and an immediate dilution of approximately $3.70 per share
to new investors. The following table illustrates this per share dilution:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>Assumed public offering price per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD STYLE="text-align: right">5.16</TD>
    <TD>&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>Net tangible book value per share as of December 31, 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>Increase in net tangible book value per share attributable to new investors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1.12</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left; width: 68%">As adjusted net tangible book value per share as of December 31, 2015, after giving effect to this offering</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 13%">&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD><TD STYLE="width: 13%; border-bottom: Black 1pt solid; text-align: right">1.46</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Dilution per share to new investors in the offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.70</TD>
    <TD>&nbsp;</TD>
    </TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have calculated the dilution discussed above in accordance
with Item 506 of Regulation S-K using the last reported sale price of our common stock on a date within five days of the date of
this prospectus. However, we are unable to issue common stock or securities convertible into or exchangeable for common stock at
a price per share below $6.30 absent the consent of certain of our investors. That price is higher than the price we used to calculate
the dilution information presented above. If you purchase shares of our common stock in this offering at a price of $6.30 per share
or more, you would experience more dilution than discussed above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The above discussion and table are based on 7,622,393 shares
of our common stock outstanding as of December 31, 2015 and excludes the following, as of that date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">445,557 shares of common stock issuable upon exercise of outstanding stock options under our stock incentive plans at a weighted average exercise price of $10.89 per share;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2,164,093 shares of common stock reserved for issuance under outstanding warrants with a weighted average exercise price of $6.68 per share;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">105,112 shares of common stock reserved for
    issuance under outstanding convertible notes, including accrued interest through  December 31, 2015, with a fixed conversion
    price of $5.60 per share;</FONT></TD></TR>

<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">28,845 additional shares of common stock reserved for future issuance under our stock incentive plans.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a20"></A>SECURITIES WE MAY OFFER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may offer shares of common stock, debt securities, or warrants
to purchase common stock or debt securities, or any combination of the foregoing, either individually or as units comprised of
one or more of the other securities. We may offer up to $12,500,000 of securities under this prospectus. If securities are offered
as units, we will describe the terms of the units in a prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a21"></A>DESCRIPTION OF CAPITAL STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our authorized capital consists of 30,000,000 shares of common
stock, par value $0.001 per share. As of May 3, 2016, there were issued and outstanding 7,622,393 shares of common stock. On April
14, 2015, we completed a 1-for-50 reverse stock split. Accordingly, our authorized common stock was reduced from 500,000,000 shares
to 10,000,000 shares, and each 50 shares of outstanding common stock held by stockholders were combined into one share of common
stock. All shares and per share amounts have been revised accordingly. On March 31, 2016, we amended our Articles of Incorporation
to increase our authorized common stock to 30,000,000 shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Common Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The holders of our common stock are entitled to one vote (or
consent) per share on all matters to be voted on by the stockholders. Holders of common stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors out of funds legally available therefor. If we liquidate, dissolve or wind
up, holders of common stock are entitled to share ratably in all assets remaining after payment of all debts and other liabilities.
Holders of common stock have no preemptive, conversion or subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are, and all shares of common stock to be outstanding upon
completion of this offering will be, validly issued, fully paid and nonassessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Except as otherwise required by Nevada law, all stockholder
action is taken by the vote of a majority of common stock voting as a single class present at a meeting of stockholders at which
a quorum is present in person or by proxy. Stockholders representing a majority of the stock issued and outstanding, either in
person or by proxy, shall constitute a quorum at a meeting of stockholders; <I>provided</I>, <I>however</I>, that at any time during
which shares of our capital stock are listed for trading on The NASDAQ Stock Market LLC, stockholders representing not less than
thirty-three and one-third percent (33 1/3%) of the common voting stock issued and outstanding, either in person or by proxy, shall
constitute a quorum at a meeting of the holders of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Options and Warrants Convertible into Common Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of May 3, 2016, there were outstanding common share purchase
options and warrants entitling the holders to purchase 2,602,639 common shares at a weighted average exercise price of $7.40 per
share. This includes 26,105 warrants that are conditional upon the exercise of other warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth certain information relating
to the options outstanding and exercisable as of May 3, 2016:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD COLSPAN="9" STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Options Outstanding</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Options Exercisable</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Range of</FONT><BR> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Exercise Prices</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Number</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Outstanding</P></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Weighted Average</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Remaining</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Life (Years)</P></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Weighted Average</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Exercise</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Price</P></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Number</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Outstanding</P></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Weighted Average</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Exercise</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Price</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$3.80 - $9.50</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">190,547</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">7.70 years</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">6.03</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">140,414</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">5.91</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$10.50 - $12.50</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.39 years</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12.50</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">$18.00 - $20.50</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">85,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2.02 years</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">19.03</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">85,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">19.03</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">438,547</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">388,414</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth certain information relating
to the warrants outstanding and exercisable as of May 3, 2016:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD COLSPAN="9" STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrants Outstanding</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrants Exercisable</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Range of <BR>Exercise Prices</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Outstanding</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Remaining</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Life (Years)</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exercise Price</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Outstanding</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Weighted Average</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exercise Price</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 13%; text-align: center">$5.00 or Below</TD>
    <TD STYLE="width: 1%">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">515,533</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">2.78</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">2.63</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">515,533</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">2.63</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">$5.20 - $9.00</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,351,632</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.85</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.46</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,351,632</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.46</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">$9.65 - $15.00</TD>
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">296,929</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">3.71</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">14.70</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">296,929</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">14.70</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,164,094</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,164,094</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Anti-Takeover Effects of Certain Provisions of Nevada Law
and Our Articles of Incorporation and Bylaws</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Nevada Revised Statutes (&ldquo;NRS&rdquo;) 78.378 to 78.3793
contain anti-takeover provisions in certain circumstances whereby a person acquires a controlling interest in a Nevada corporation
(the &ldquo;Controlling Interest Law&rdquo;). This law generally provides that any person or entity that acquires 20% or more of
the outstanding voting shares of a publicly held Nevada corporation in the secondary public or private market will be denied voting
rights with respect to the acquired shares, unless a majority of the disinterested stockholders of the corporation elects to grant
such voting rights in whole or in part to the investor. Under the law, a person or entity acquires &quot;control shares&quot; whenever
it acquires shares that, but for the operation of the law, would bring its voting power to elect directors within any of the following
three ranges: (1) one-fifth or more but less than one-third, (2) one-third or more but less than a majority, or (3) a majority
or more.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This law defines an &quot;acquisition&quot; as the direct or
indirect acquisition of either ownership or voting power associated with issued and outstanding voting shares. A corporation's
articles of incorporation or bylaws may provide that the Controlling Interest Law does not apply to the corporation. Neither our
Articles of Incorporation nor our Bylaws exclude us from the application of the Controlling Interest Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">However, this law is applicable only to a Nevada corporation
(1) with 200 or more stockholders (100 of whom are both stockholders of record and residents of Nevada), and (2) that does business
in Nevada directly or through an affiliated corporation. At this time, we do not have 100 stockholders of record who are residents
of Nevada. Therefore, the provisions of the Controlling Interest Law do not currently apply to acquisitions of our shares and will
not until the number of our stockholders of record who are residents of Nevada exceeds 100. If the Controlling Interest Law becomes
applicable to us, its application may discourage companies or persons interested in acquiring a significant interest in or control
of us, regardless of whether such acquisition may be in the interest of our stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, our authorized but unissued shares of common stock
are available for our Board of Directors to issue without stockholder approval. We may use these additional shares for a variety
of corporate purposes, including future public or private offerings to raise additional capital, corporate acquisitions and employee
benefit plans. The existence of our authorized but unissued shares of common stock could render more difficult or discourage an
attempt to obtain control of our company by means of a proxy contest, tender offer, merger or other transaction. Our authorized
but unissued shares may be used to delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider
in its best interest, including those attempts that might result in a premium over the market price for the shares held by our
stockholders. The Board of Directors is also authorized to adopt, amend or repeal our Bylaws which could delay, defer or prevent
a change in control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Transfer Agent, Warrant Agent and Registrar</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our transfer agent and registrar for our common stock is Computershare
Investor Services, located at 350 Indiana Street, Suite 800, Golden, Colorado 80401.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a22"></A><B>DESCRIPTION OF DEBT SECURITIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following description, together with the additional information
we include in any applicable prospectus supplements or free writing prospectuses, summarizes the material terms and provisions
of the debt securities that we may offer under this prospectus. We may issue debt securities, in one or more series, as either
senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized below will apply
generally to any future debt securities we may offer under this prospectus, we will describe the particular terms of any debt securities
that we may offer in more detail in the applicable prospectus supplement or free writing prospectus. The terms of any debt securities
we offer under a prospectus supplement may differ from the terms we describe below. However, no prospectus supplement shall fundamentally
change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus
at the time of its effectiveness. As of the date of this prospectus, we have no outstanding registered debt securities. Unless
the context requires otherwise, whenever we refer to the &quot;indentures,&quot; we also are referring to any indenture or supplemental
indentures that specify the terms of a particular series of debt securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will issue any senior debt securities under the senior indenture
that we will enter into with the trustee named in the senior indenture. We will issue any subordinated debt securities under the
subordinated indenture that we will enter into with the trustee named in the subordinated indenture. We will file forms of these
documents, supplemental indentures and forms of debt securities containing the terms of the debt securities as exhibits to the
registration statement, of which this prospectus is a part, or they will be incorporated by reference from reports that we file
with the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The indentures will be qualified under the Trust Indenture Act
of 1939, as amended. We use the term &quot;trustee&quot; to refer to either the trustee under the senior indenture or the trustee
under the subordinated indenture, as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following summaries of material provisions of the senior
debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference
to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable
prospectus supplements and any applicable free writing prospectuses related to the debt securities that we may offer under this
prospectus, as well as the complete indentures that contain the terms of the debt securities. Except as we may otherwise indicate,
the terms of the senior indenture and the subordinated indenture will be identical.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The terms of each series of debt securities will be established
by or pursuant to a resolution of our Board of Directors and set forth or determined in the manner provided in an officers' certificate
or by a supplement indenture. Debt securities may be issued in separate series without limitation as to aggregate principal amount.
We may specify a maximum aggregate principal amount for the debt securities of any series. We will describe in the applicable
prospectus supplement the terms of the series of debt securities being offered, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the title;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the principal amount being offered, and if a series, the total
amount authorized and the total amount outstanding;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any limit on the amount that may be issued;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>whether or not we will issue the series of debt securities
in global form, and, if so, the terms and who the depositary will be;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the maturity date;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>whether and under what circumstances, if any, we will pay additional
amounts on any debt securities held by a person who is not a U.S. person for tax purposes, and whether we can redeem the debt securities
if we have to pay such additional amounts;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the annual interest rate, which may be fixed or variable, or
the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular
record dates for interest payment dates or the method for determining such dates;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>whether or not the debt securities will be secured or unsecured,
and the terms of any secured debt;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the terms of the subordination of any series of subordinated
debt;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the place where payments will be payable;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>restrictions on transfer, sale or other assignment, if any;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>our right, if any, to defer payment of interest and the maximum
length of any such deferral period;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the date, if any, after which, and the price at which, we may,
at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms
of those redemption provisions;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the date, if any, on which, and the price at which we are obligated,
pursuant to any mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the holder's option, to purchase,
the series of debt securities and the currency or currency unit in which the debt securities are payable;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>whether the indenture will restrict our ability or the ability
of our subsidiaries to:</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>incur additional indebtedness;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>issue additional securities;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>create liens;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>pay dividends or make distributions in respect of our capital
stock or the capital stock of our subsidiaries;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>redeem capital stock;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>place restrictions on our subsidiaries' ability to pay dividends,
make distributions or transfer assets;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>make investments or other restricted payments;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>sell or otherwise dispose of assets;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>enter into sale-leaseback transactions;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>engage in transactions with stockholders or affiliates;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>issue or sell stock of our subsidiaries; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Symbol">&#111;</FONT></TD>
    <TD>effect a consolidation or merger;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>whether the indenture will require us to maintain any interest
coverage, fixed charge, cash flow-based, asset-based or other financial ratios;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>a discussion of certain material or special U.S. federal income
tax considerations applicable to the debt securities;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>information describing any book-entry features;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>provisions for a sinking fund, purchase or other analogous
fund, if any;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the applicability of the provisions in the indenture on discharge;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>whether the debt securities are to be offered at a price such
that they will be deemed to be offered at an &quot;original issue discount&quot; as defined in paragraph (a) of Section 1273 of
the Internal Revenue Code of 1986, as amended;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the denominations in which we will issue the series of debt
securities, if other than denominations of $1,000 and any integral multiple thereof;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the currency of payment of debt securities if other than U.S.
dollars and the manner of determining the equivalent amount in U.S. dollars; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any other specific terms, preferences, rights or limitations
of, or restrictions on, the debt securities, including any additional events of default or covenants provided with respect to the
debt securities, and any terms that may be required by us or advisable under applicable laws or regulations.</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Conversion or Exchange Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will set forth in the applicable prospectus supplement the
terms on which a series of debt securities may be convertible into or exchangeable for our common stock or other securities (including
securities of a third party). We will include provisions as to whether conversion or exchange is mandatory, at the option of the
holder or at our option. We may include provisions pursuant to which the number of shares of our common stock or other securities
(including securities of a third party) that the holders of the series of debt securities receive would be subject to adjustment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Consolidation, Merger or Sale</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless we provide otherwise in the prospectus supplement applicable
to a particular series of debt securities, the indentures will not contain any covenant that restricts our ability to merge or
consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to
or acquirer of such assets must assume all of our obligations under the indentures or the debt securities, as appropriate. If the
debt securities are convertible into or exchangeable for our other securities or securities of other entities, the person with
whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt securities
into securities that the holders of the debt securities would have received if they had converted the debt securities before the
consolidation, merger or sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Events of Default under the Indenture</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless we provide otherwise in the prospectus supplement applicable
to a particular series of debt securities, the following will be events of default under the indentures with respect to any series
of debt securities that we may issue:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>if we fail to pay interest when due and payable and our failure
continues for 90 days and the time for payment has not been extended;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>if we fail to pay the principal, premium or sinking fund payment,
if any, when due and payable at maturity, upon redemption or repurchase or otherwise, and the time for payment has not been extended;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>if we fail to observe or perform any other covenant contained
in the debt securities or the indentures, other than a covenant specifically relating to another series of debt securities, and
our failure continues for 90 days after we receive notice from the trustee or we and the trustee receive notice from the holders
of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>if specified events of bankruptcy, insolvency or reorganization
occur.</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will describe in each applicable prospectus supplement any
additional events of default relating to the relevant series of debt securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If an event of default with respect to debt securities of any
series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders
of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and
to the trustee if notice is given by such holders, may declare the unpaid principal, premium, if any, and accrued interest, if
any, due and payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the
unpaid principal, premium, if any, and accrued interest, if any, of each issue of debt securities then outstanding shall be due
and payable without any notice or other action on the part of the trustee or any holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The holders of a majority in principal amount of the outstanding
debt securities of an affected series may waive any default or event of default with respect to the series and its consequences,
except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default
or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Subject to the terms of the indentures, if an event of default
under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers
under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such
holders have offered the trustee reasonable indemnity or security satisfactory to it against any loss, liability or expense. The
holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred
on the trustee, with respect to the debt securities of that series, provided that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the direction so given by the holder is not in conflict with
any law or the applicable indenture; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>subject to its duties under the Trust Indenture Act of 1939,
as amended, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to
the holders not involved in the proceeding.</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The indentures will provide that if an event of default has
occurred and is continuing, the trustee will be required in the exercise of its powers to use the degree of care that a prudent
person would use in the conduct of its own affairs. The trustee, however, may refuse to follow any direction that conflicts with
law or the indenture, or that the trustee determines is unduly prejudicial to the rights of any other holder of the relevant series
of debt securities, or that would involve the trustee in personal liability. Prior to taking any action under the indentures,
the trustee will be entitled to indemnification against all costs, expenses and liabilities that would be incurred by taking or
not taking such action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A holder of the debt securities of any series will have the
right to institute a proceeding under the indentures, appoint a receiver or trustee, or seek other remedies only if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the holder has given written notice to the trustee of a continuing
event of default with respect to that series;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the holders of at least 25% in aggregate principal amount of
the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity to
the trustee or security satisfactory to it against any loss, liability or expense or to be incurred in compliance with instituting
the proceeding as trustee; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the trustee does not institute the proceeding, and does not
receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting
directions within 90 days after the notice, request and offer.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">These limitations do not apply to a suit instituted by a holder
of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities, or other
defaults that may be specified in the applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will periodically file statements with the trustee regarding
our compliance with specified covenants in the indentures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The indentures will provide that if a default occurs and is
continuing and is actually known to a responsible officer of the trustee, the trustee must mail to each holder notice of the default
within the earlier of 90 days after it occurs and 30 days after it is known by a responsible officer of the trustee or written
notice of it is received by the trustee, unless such default has been cured or waived. Except in the case of a default in the payment
of principal or premium of or interest on any debt security or certain other defaults specified in an indenture, the trustee shall
be protected in withholding such notice if and so long as the Board of Directors or a trust committee of directors, or responsible
officers of the trustee, in good faith determine that withholding notice is in the best interests of holders of the relevant series
of debt securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Modification of Indenture; Waiver</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Subject to the terms of the indenture for any series of debt
securities that we may issue, we and the trustee may change an indenture without the consent of any holders with respect to the
following specific matters:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to fix any ambiguity, defect or inconsistency in the indenture;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to comply with the provisions described above under &quot;Description
of Debt Securities - Consolidation, Merger or Sale&quot;;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to comply with any requirements of the Commission in connection
with the qualification of any indenture under the Trust Indenture Act of 1939, as amended;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to add to, delete from or revise the conditions, limitations,
and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set
forth in the indenture;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to provide for the issuance of and establish the form and terms
and conditions of the debt securities of any series as provided under &quot;Description of Debt Securities - General,&quot; to
establish the form of any certifications required to be furnished pursuant to the terms of the indenture or any series of debt
securities, or to add to the rights of the holders of any series of debt securities;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to evidence and provide for the acceptance of appointment hereunder
by a successor trustee;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to provide for uncertificated debt securities and to make all
appropriate changes for such purpose;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to add to our covenants such new covenants, restrictions, conditions
or provisions for the benefit of the holders, to make the occurrence, or the occurrence and the continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred
to us in the indenture; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to change anything that does not adversely affect the interests
of any holder of debt securities of any series in any material respect.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0">In addition, under the indentures, the rights of holders of a series of debt securities
may be changed by us and the trustee with the written consent of the holders of at least a majority in aggregate principal amount
of the outstanding debt securities of each series that is affected. However, subject to the terms of the indenture for any series
of debt securities that we may issue or otherwise provided in the prospectus supplement applicable to a particular series of debt
securities, we and the trustee may only make the following changes with the consent of each holder of any outstanding debt securities
affected:</P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to extend the stated maturity of the series of debt securities;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to reduce the principal amount, reduce the rate of or extend
the time of payment of interest, or reduce any premium payable upon the redemption or repurchase of any debt securities; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to reduce the percentage of debt securities, the holders of
which are required to consent to any amendment, supplement, modification or waiver.</TD></TR>
</TABLE>

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="margin: 0"><B></B></P>

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<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Discharge</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each indenture will provide that, subject to the terms of the
indenture and any limitation otherwise provided in the prospectus supplement applicable to a particular series of debt securities,
we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified
obligations, including obligations to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>register the transfer or exchange of debt securities of the
series;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>replace stolen, lost or mutilated debt securities of the series;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>maintain paying agencies;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>hold monies for payment in trust;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>recover excess money held by the trustee;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>compensate and indemnify the trustee; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>appoint any successor trustee.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>



<P STYLE="margin-top: 0; margin-bottom: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In order to exercise our rights to be discharged, we must deposit
with the trustee money or government obligations sufficient to pay all the principal of and any premium and interest on the debt
securities of the series on the dates payments are due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Denominations, Registrations and Transfer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless an accompanying prospectus supplement states otherwise,
debt securities will be represented by one or more global certificates registered in the name of a nominee for The Depository Trust
Company, or DTC. In such case, each holder's beneficial interest in the global securities will be shown on the records of DTC and
transfers of beneficial interests will only be effected through DTC's records.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A holder of debt securities may only exchange a beneficial interest
in a global security for certificated securities registered in the holder's name if:</P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>we deliver to the trustee notice from DTC that it is unwilling
or unable to continue to act as depository or that it is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor depositary is not appointed by us within 120 days after the date of such notice from DTC;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>we in our sole discretion determine that the debt securities
(in whole but not in part) should be exchanged for definitive debt securities and deliver a written notice to such effect to the
trustee; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>there has occurred and is continuing a default or event of
default with respect to the debt securities.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If debt securities are issued in certificated form, they will
only be issued in the minimum denomination specified in the accompanying prospectus supplement and integral multiples of such denomination.
Transfers and exchanges of such debt securities will only be permitted in such minimum denomination. Transfers of debt securities
in certificated form may be registered at the trustee's corporate office or at the offices of any paying agent or trustee appointed
by us under the indentures. Exchanges of debt securities for an equal aggregate principal amount of debt securities in different
denominations may also be made at such locations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Information Concerning the Trustee</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The trustee or trustees under the indentures will be named in
any applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The trustee, other than during the occurrence and continuance
of an event of default under an indenture, will undertake to perform only those duties as are specifically set forth in the applicable
indenture and will be under no obligation to exercise any of the powers given it by the indentures at the request of any holder
of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might
incur. However, upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would
exercise or use in the conduct of his or her own affairs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Payment and Paying Agents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless we otherwise indicate in the applicable prospectus supplement,
we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities,
or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will pay principal of and any premium and interest on the
debt securities of a particular series at the office of the paying agents designated by us, except that, unless we otherwise indicate
in the applicable prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer
to certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate the corporate trust
office of the trustee as our sole paying agent for payments with respect to debt securities of each series. We will name in the
applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series.
We will maintain a paying agent in each place of payment for the debt securities of a particular series.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All money we pay to a paying agent or the trustee for the payment
of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after such
principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter
may look only to us for payment thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Governing Law</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of California, except to the extent that the Trust Indenture Act of 1939, as
amended, is applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Ranking Debt Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The subordinated debt securities will be unsecured and will
be subordinate and junior in priority of payment to certain other indebtedness to the extent described in a prospectus supplement.
The subordinated indenture will not limit the amount of subordinated debt securities that we may issue. It also will not limit
us from issuing any other secured or unsecured debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The senior debt securities will be unsecured and will rank equally
in right of payment to all our other senior unsecured debt. The senior indenture will not limit the amount of senior debt securities
that we may issue. It also will not limit us from issuing any other secured or unsecured debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a23"></A>DESCRIPTION OF WARRANTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following description, together with the additional information
we may include in any applicable prospectus supplements and free writing prospectuses, summarizes the material terms and provisions
of the warrants that we may offer under this prospectus, which may consist of warrants to purchase common stock or debt securities
and may be issued in one or more series. Warrants may be offered independently or together with common stock or debt securities
offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have summarized
below will apply generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any
series of warrants that we may offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus.
The terms of any warrants offered under a prospectus supplement may differ from the terms described below. However, no prospectus
supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered
and described in this prospectus at the time of its effectiveness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will issue the warrants under a warrant agreement that we
will enter into with a warrant agent to be selected by us. The warrant agent will act solely as an agent of ours in connection
with the warrants and will not act as an agent for the holders or beneficial owners of the warrants. We will file as exhibits to
the registration statement of which this prospectus is a part, or will incorporate by reference from a current report on Form 8-K
that we file with the Commission, the form of warrant agreement, including a form of warrant certificate, that describes the terms
of the particular series of warrants we are offering before the issuance of the related series of warrants. The following summaries
of material provisions of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference
to, all the provisions of the warrant agreement and warrant certificate applicable to a particular series of warrants. We urge
you to read the applicable prospectus supplement and any applicable free writing prospectus related to the particular series of
warrants that we sell under this prospectus, as well as the complete warrant agreements and warrant certificates that contain the
terms of the warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will describe in the applicable prospectus supplement the
terms relating to a series of warrants, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the offering price and aggregate number of warrants offered;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the currency for which the warrants may be purchased;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>if applicable, the designation and terms of the securities
with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>if applicable, the date on and after which the warrants and
the related securities will be separately transferable;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>in the case of warrants to purchase debt securities, the principal
amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in, which this principal amount
of debt securities may be purchased upon such exercise;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>in the case of warrants to purchase common stock, the number
of shares of common stock purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon
such exercise;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the effect of any merger, consolidation, sale or other disposition
of our business on the warrant agreements and the warrants;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the terms of any rights to redeem or call the warrants;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any provisions for changes to or adjustments in the exercise
price or number of securities issuable upon exercise of the warrants;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the dates on which the right to exercise the warrants will
commence and expire;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the manner in which the warrant agreements and warrants may
be modified;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>U.S. federal income tax consequences of holding or exercising
the warrants;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the terms of the securities issuable upon exercise of the warrants;
and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any other specific terms, preferences, rights or limitations of or restrictions on the warrants.</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Before exercising their warrants, holders of warrants will not
have any of the rights of holders of the securities purchasable upon such exercise, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>in the case of warrants to purchase debt securities, the right
to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce
covenants in the applicable indenture; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>in the case of warrants to purchase common stock, the right
to receive dividends, if any, or payments upon our liquidation, dissolution or winding up, or to exercise voting rights, if any.</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Exercise of Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each warrant will entitle the holder to purchase the securities
that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement.
Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time
up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business
on the expiration date, unexercised warrants will become void.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Holders of the warrants may exercise the warrants by delivering
the warrant certificate representing the warrants to be exercised together with specified information, and paying the required
amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth
on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the
warrant will be required to deliver to the warrant agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Upon receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable
prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants
represented by the warrant certificate are exercised, we will issue a new warrant certificate for the remaining amount of warrants.
If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the
exercise price for warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Enforceability of Rights by Holders of Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single
bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility
in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate
any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related
warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities
purchasable upon exercise of, its warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a24"></A>DESCRIPTION OF UNITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following description, together with the additional information
we may include in any applicable prospectus supplements, summarizes the material terms and provisions of the units that we may
offer under this prospectus. While the terms we have summarized below will apply generally to any units that we may offer under
this prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement.
The terms of any units offered under a prospectus supplement may differ from the terms described below. However, no prospectus
supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered
and described in this prospectus at the time of its effectiveness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will file as exhibits to the registration statement of which
this prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file with the Commission,
the form of unit agreement that describes the terms of the series of units we are offering, and any supplemental agreements, before
the issuance of the related series of units. The following summaries of material terms and provisions of the units are subject
to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable
to a particular series of units. We urge you to read the applicable prospectus supplements related to the particular series of
units that we sell under this prospectus, as well as the complete unit agreement and any supplemental agreements that contain the
terms of the units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may issue units comprised of one or more debt securities,
shares of common stock and warrants in any combination. Each unit will be issued so that the holder of the unit is also the holder
of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included
security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held
or transferred separately, at any time or at any time before a specified date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will describe in the applicable prospectus supplement the
terms of the series of units, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the designation and terms of the units and of the securities
comprising the units, including whether and under what circumstances those securities may be held or transferred separately;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any provisions of the governing unit agreement that differ
from those described below; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the units.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0">The provisions described in this section, as well as those described under &quot;Description
of Capital Stock,&quot; &quot;Description of Debt Securities&quot; and &quot;Description of Warrants&quot; will apply to each
unit and to any common stock, debt security or warrant included in each unit, respectively.</P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Issuance in Series</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may issue units in such amounts and in numerous distinct
series as we determine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Enforceability of Rights by Holders of Units</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each unit agent will act solely as our agent under the applicable
unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single bank
or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case
of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings
at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or
the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in the unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We, the unit agents and any of their agents may treat the registered
holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person
entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a25"></A>PLAN OF DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may sell the securities being offered hereby in one or more
of the following ways from time to time:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>through agents to the public or to investors;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>to underwriters for resale to the public or to investors;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>directly to investors; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>through a combination of any of these methods of sale.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may sell the securities from time to time in one or more
transactions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>at a fixed price or prices, which may be changed from time
to time;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>at market prices prevailing at the times of sale;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>at prices related to such prevailing market prices; or</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>at negotiated prices.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will set forth in a prospectus supplement the terms of that
particular offering of securities, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the name or names of any agents or underwriters;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>the purchase price of the securities being offered and the
proceeds we will receive from the sale;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any over-allotment options under which underwriters may purchase
additional securities from us;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any agency fees or underwriting discounts and other items constituting
agents' or underwriters' compensation;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any initial public offering price;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any discounts or concessions allowed or reallowed or paid to
dealers; and</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD>any securities exchanges or markets on which such securities
may be listed.</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Agents, Underwriters, and Direct Sales</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may designate agents who agree to use their reasonable efforts
to solicit purchases of our securities for the period of their appointment or to sell our securities on a continuing basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If we use underwriters for a sale of securities, the underwriters
will acquire the securities for their own account. The underwriters may resell the securities in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations
of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement.
The underwriters will be obligated to purchase all the securities of the series offered if they purchase any of the securities
of that series. We may change from time to time any initial public offering price and any discounts or concessions the underwriters
allow or re-allow or pay to dealers. We may use underwriters with whom we have a material relationship. We will describe the nature
of any such relationship in any prospectus supplement naming any such underwriter. Only underwriters we name in the prospectus
supplement are underwriters of the securities offered by the prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Underwriters, dealers and agents that participate in the distribution
of the securities may be underwriters as defined in the Securities Act, and any discounts or commissions they receive from us and
any profit on their resale of the securities may be treated as underwriting discounts and commissions under the Securities Act.
We will identify in the applicable prospectus supplement any underwriters, dealers or agents and will describe their compensation.
We may have agreements with the underwriters, dealers and agents to indemnify them against specified civil liabilities, including
liabilities under the Securities Act. Underwriters, dealers and agents may engage in transactions with or perform services for
us in the ordinary course of their businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may also sell securities directly to one or more purchasers
without using underwriters or agents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Trading Markets and Listing of Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless otherwise specified in the applicable prospectus supplement,
each class or series of securities will be a new issue with no established trading market, other than our common stock, which is
listed on the Nasdaq Capital Market. We may elect to list any other class or series of securities on any exchange or market, but
we are not obligated to do so. The listing of our common stock on the Nasdaq Capital Market does not ensure the listing of any
other class of our securities on that or any other exchange or market in the future. It is possible that one or more underwriters
may make a market in a class or series of securities, but the underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for any of the
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Stabilization Activities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any underwriter may engage in overallotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Overallotment involves sales
in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters
to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction
to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of these activities at any time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Passive Market Making</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any underwriters who are qualified market makers on the Nasdaq
Capital Market may engage in passive market making transactions in the securities on the Nasdaq Capital Market in accordance with
Rule 103 of Regulation M, during the business day prior to the pricing of the offering, before the commencement of offers or sales
of the securities. Passive market makers must comply with applicable volume and price limitations and must be identified as passive
market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid
for such security. If all independent bids are lowered below the passive market maker's bid, however, the passive market maker's
bid must then be lowered when certain purchase limits are exceeded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a26"></A>EXPERTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0; text-align: left">The consolidated financial statements of Aethlon
Medical, Inc. as of March 31, 2015 and 2014 and for each of the years in the two-year period ended March 31, 2015 have been audited
by Squar Milner LLP (formerly Squar, Milner, Peterson, Miranda &amp; Williamson, LLP), an independent registered public accounting
firm, as stated in their report thereon and incorporated by reference in this prospectus and registration statement in reliance
upon such report and upon the authority of such firm as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="a27"></A><B>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Raines Feldman LLP has passed upon the validity of the securities
offered by this prospectus. Jennifer A. Post, Esq., a partner of the firm, owns approximately 16,000 shares of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a28"></A>INFORMATION INCORPORATED BY REFERENCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus is part of a registration statement on Form
S-3. The Commission allows this filing to &quot;incorporate by reference&quot; information that we previously have filed with the
Commission. This means we can disclose important information to you by referring you to other documents that we have filed with
the Commission. The information that is incorporated by reference is considered part of this prospectus, and information that we
file later will automatically update and may supersede this information. For further information about our company and the securities
being offered, you should refer to the registration statement and the following documents that are incorporated by reference:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Symbol">&middot;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Annual Report on Form 10-K for the fiscal year ended March
        31, 2015, filed with the Commission on June 26, 2015, as amended on July 13, 2015;</P></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Quarterly Reports on Form 10-Q for the quarter ended June
        30, 2015, filed with the Commission on August 13, 2015, for the quarter ended September 30, 2015, filed with the Commission on
        November 16, 2015, and for the quarter ended December 31, 2015, filed with the Commission on February 4, 2016, respectively;</P></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Symbol">&middot;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Current Reports on Form 8-K filed with the Commission on
        April 7, 2015, April 9, 2015, April 14, 2015, April 15, 2015, June 9, 2015, June 15, 2015, June 16, 2015, June 18, 2015, June 24,
        2015, June 26, 2015, July 8, 2015, September 10, 2015, September 28, 2015, October 22, 2015, October 29, 2015, November 12, 2015,
        February 16, 2016, and March 30, 2016, respectively;</P></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Our Definitive Proxy Statement on Schedule 14A filed with the Commission on February 23, 2016;</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Symbol">&middot;</FONT> </FONT></TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All other reports filed by us pursuant to Section 13(a) or 15(d)
        of the Exchange Act since the end of the fiscal year covered by the annual report referred to above; and</P></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The description of our common stock contained in our registration statement on Form 8-A filed with the Commission on July 8, 2015, including any amendments or reports filed for the purpose of updating such description.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All documents filed by us subsequent to those listed above with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act following the date of filing of the registration
statement of which this prospectus is a part and prior to the termination of the offering, shall be deemed to be incorporated by
reference into this prospectus and to be a part hereof from the date of filing of such documents (all of such documents, and the
documents enumerated above. The information relating to our company contained in this prospectus does not purport to be comprehensive
and should be read together with the information contained in the incorporated documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that
a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You may request a copy of all documents that are incorporated
by reference in this prospectus by writing or telephoning us at the following address and number: Aethlon Medical, Inc., 9635 Granite
Ridge Drive, Suite 100 San Diego, California 92123, (858) 459-7800. We will provide copies of all documents requested (not including
exhibits to those documents, unless the exhibits are specifically incorporated by reference into those documents or this prospectus)
without charge.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>You should rely only on the information provided in and incorporated
by reference into this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different
information. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date
other than the date on the front cover of these documents.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="a29"></A>WHERE YOU CAN FIND MORE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus is part of a registration statement on Form
S-3 filed with the Commission under the Securities Act. This prospectus does not contain all the information set forth in the registration
statement because certain information has been incorporated into the registration statement by reference in accordance with the
rules and regulations of the Commission. Please review the documents incorporated by reference for a more complete description
of the matters to which such documents relate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are a reporting company under the Exchange Act, and we file
annual, quarterly and current reports and other information with the Commission. The public may read and copy any materials that
we file with the Commission at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet
site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that
file electronically with the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our website address is www.aethlonmedical.com. Our website and
the information contained on our website are not incorporated into this prospectus or the registration statement of which it forms
a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Aethlon Medical, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>$12,500,000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common Stock<BR>
Debt Securities<BR>
Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Units</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>__________________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>_________________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>, 2016</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin: 0"></P>

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