UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2005
AETHLON MEDICAL, INC.
(Exact name of Registrant as specified in charter)
Nevada 000-21846 13-3632859
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
3030 Bunker Hill Street, Suite 4000
San Diego, California 92109
(Address of principal executive offices)
Registrant's telephone number, including area code: (858) 459-7800
NOT APPLICABLE
(Former name or former address, if changed since last report)
FORWARD LOOKING STATEMENTS
This Form 8-K and other reports filed by Registrant from time to time
with the Securities and Exchange Commission (collectively the "Filings") contain
or may contain forward looking statements and information that are based upon
beliefs of, and information currently available to, Registrant's management as
well as estimates and assumptions made by Registrant's management. When used in
the Filings the words "anticipate, "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar expressions as they
relate to Registrant or Registrant's management identify forward looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors relating to Registrant's industry, Registrant's operations and results
of operations and any businesses that may be acquired by Registrant. Should one
or more of these risks or uncertainties materialize, or should the underlying
assumptions prove incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the
forward looking statements are reasonable, Registrant cannot guarantee future
results, levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, Registrant
does not intend to update any of the forward-looking statements to conform these
statements to actual results.
ITEM 1.01 Entry into a Material Definitive Agreement
On November 2, 2005 (the "Closing Date"), Aethlon Medical, Inc. (the
"Company") entered into two 10% Series A Convertible Promissory Notes for an
aggregate $705,000 (individually, a "Promissory Note" and collectively, the
"Promissory Notes") with Allan S. Bird and Ellen R. Weiner Family Revocable
Trust (individually, a "Holder" and collectively the "Holders"), each qualified
as an "accredited investor" as that term is defined in the Securities Act of
1933, as amended (the "Act"). The Promissory Notes formalized a series of prior
cash investments by the Holders which, at the time such investments were made,
the conversion prices represented an average discount of 13.15% to the market
price of the Company's common stock. An associated Registration Rights Agreement
between the Company and the Holders, dated November 2, 2005 (the "Registration
Rights Agreement") provides for the issuance of up to $1,000,000 under this
financing. There are no material relationships between the Company, the
investors or their respective affiliates.
The Promissory Notes bear an interest rate of 10 percent (10%) per
annum on the unpaid principal balance and mature on January 2, 2007 (the
"Maturity Date"). The Notes are convertible into shares of restricted common
stock at any time at the election of the Holders at a conversion price equal to
an individually negotiated amount per share for any conversion occurring on or
prior to the Maturity Date (the "Conversion Price"). At any time prior to the
Maturity Date, the Company has the right to prepay the Promissory Notes, in
whole or in part, on ten (10) days' advance note to the Holders. Additionally,
upon conversion the Promissory Notes, the Company will issue to the Holders
three-year warrants to purchase the same number of shares of common stock into
which each Promissory Note is converted at an exercise price equal to the
Conversion Price per share (each a "Warrant" and collectively, the "Warrants").
A Holder shall not be entitled to convert the Promissory Note or exercise the
Warrant if upon giving effect to such conversion or exercise, would cause the
Holder's ownership to exceed 9.9% of the outstanding shares of common stock.
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The securities issued in the private placement have not been registered
under the Act, as amended, and until so registered the securities may not be
offered or sold in the United States absent registration or availability of an
applicable exemption from registration. Pursuant to the Registration Rights
Agreement, in the form attached hereto as Exhibit 10.1, the Company is required
to file a registration statement on Form SB-2 the later of November 30, 2005 or
30 days after the date the Company completes an additional financing of at least
$1.0 million but in no event later than December 31, 2005 for the purposes of
registering the resale of the shares of common stock issuable upon conversion of
the Promissory Notes and exercise of the Warrants. The Copies of the Agreement,
the Promissory Notes, the Registration Right Agreements and the form of Warrant
are filed as exhibits to this current report on Form 8-K.
These transactions were in reliance upon the exemption from
registration set forth in Section 4(2) of the Act. The shares were issued to
accredited investors. The following conditions were all met with respect to
these transactions: (1) the Company did not advertise these issuance in any
public medium or forum, (2) the Company did not solicit any investors with
respect to these issuances, (3) the Company did not publicize any portion of the
purchase or sale of the securities issued, (4) none of the shares issued were
offered in conjunction with any public offering, (5) neither the Company nor the
investor paid any fees to any finder or broker-dealer in conjunction with this
issuance.
This announcement is not an offer to sell securities of Aethlon
Medical, Inc. and any opportunity to participate in the private placement was
available to a very limited group of accredited investors.
ITEM 2.03 Creation of a Direct Financial Obligation of a Registrant
The information called for by this item is contained in Item 1.01,
which is incorporated herein by reference.
ITEM 3.02 Unregistered Sales of Equity Securities
The information called for by this item is contained in Item 1.01,
which is incorporated herein by reference.
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ITEM 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information Not applicable.
(c) Exhibits
Exh. No. Description
-------- ------------
4.1 10% Convertible Promissory Note by and between
Aethlon Medical, Inc. and Allan S. Bird dated
November 2, 2005
4.2 Convertible Promissory Note by and between Aethlon
Medical, Inc. and Ellen R. Weiner Family Revocable
Trust dated November 2, 2005
4.3 Form of Warrant
10.1 Form of Registration Rights Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 4, 2005 AETHLON MEDICAL, INC.
By: /s/ James A. Joyce
----------------------
James A. Joyce
Chief Executive Officer
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EXHIBITS FILED WITH THIS REPORT
Exh. No. Description
-------- ------------
4.1 10% Convertible Promissory Note by and between Aethlon
Medical, Inc. and Allan S. Bird dated November 2, 2005
4.2 Convertible Promissory Note by and between Aethlon Medical,
Inc. and Ellen R. Weiner Family Revocable Trust dated November
2, 2005
4.3 Form of Warrant
10.1 Form of Registration Rights Agreement
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