Aethlon Medical Inc (AEMD)

[bbarry]

8K this AM, subcontract with Battelle for DARPA DLT integration work
ENTRY INTO MATERIAL DEFINITIVE AGREEMENT

On April 11, 2013, Aethlon Medical, Inc. (the "Company") entered into a subcontract agreement (“Subcontract”) with Battelle Memorial Institute (“Battelle”). The Subcontract provides for the Company to provide services under Prime Contract No. HR0011-13-C-0023 (“Prime Contract”), which was awarded to Battelle by the Defense Advanced Research Projects Agency (DARPA) on March 12, 2013. The amount of the prime contract award is $22,830,840. The objective of the Prime Contract is to integrate component technologies developed in a previously established DARPA program entitled Dialysis Like Therapeutics (DLT). The DLT integration program will design, test, and validate an extracorporeal blood purification system to treat sepsis. The program endpoint is the submission of an Investigational Device Exemption (IDE) to the United States Food and Drug Administration.

The Subcontract award from Battelle is a cost-plus contract over the course of approximately four years. Payments to the Company will be dependent upon the time and costs incurred on the Subcontract under the direction of Battelle. The Subcontract is composed of a base period and three option periods to achieve a number of tasks to integrate the DLT component technologies. The right to grant those option periods is also at the discretion of the prime contractor. There can be no assurance that the Company alone, or with third party participants, will achieve the identified tasks under the Subcontract to the satisfaction of Battelle and the government. The Company began work on the Subcontract effective April 1, 2013.

The Company was previously awarded a DLT contract by DARPA to develop two technology components that will be tested in the systems integration program for use within an extracorporeal device to treat sepsis. The first component is a selective therapeutic filtration mechanism to eliminate sepsis precursors, bacterial toxins, viral pathogens, and disease enhancing exosomes from the entire circulatory system. The second component is a blood processing system with an open architecture to deliver a variety of extracorporeal therapies without the need for systemic anticoagulant administration. To date, the Company has achieved eleven milestone goals under this contract and is in year two of that five year contract.