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AETHLON MEDICAL INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits

June 30, 2014



ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On June 24, 2014, the Registrant entered into an agreement with the Ellen R. Weiner Family Revocable Trust (the "Trust"), a holder of a Series A 12% Convertible Note (the "Note"), which previously was classified as being in default. As per the agreement, the Trust converted a past due combined principal and interest balance of $1,003,200 into restricted Common Stock of the Registrant.

Additionally, the Trust agreed to waive anti-dilution price protection underlying warrants previously issued to the Trust. On June 26, 2014, three other parties, all related to the Trust's attorney, who held similar warrants also agreed to waive their anti-dilution price protection. As a result of the debt conversion and elimination of warrant anti-dilution price protection, $3.7 million of the Registrant's previously classified derivative liability will convert into equity based on the fair value of securities on the Registrant's fiscal year-end date of March 31, 2014.

As a result of the note conversion and derivative liability reclassification into equity, the Registrant's balance sheet equity will increase by approximately $4.7 million.

Under its agreement, the Trust converted the entire $1,003,200 past due principal and interest balance on the Note, which previously was in default, into an aggregate of 23,318,254 restricted shares of the Registrant's Common Stock. The Trust received five-year warrants to acquire up to 6,809,524 shares of the Registrant's Common Stock at an exercise price of $.042 per share (which exercise price was the result of certain contractual price adjustments previously made during 2011). Based on the Registrant's Common Stock prices during a period of negotiation with the Trust including during calendar year 2013, the Trust also received five-year warrants to acquire up to 397,222 shares of the Registrant's Common Stock at an exercise price of $.108 (collectively known as the "Conversion Securities").

In exchange for the Trust's conversion in full of the Note and accrued interest and for the waivers of anti-dilution price protection in the previously issued warrants, in addition to the Conversion Securities, the Registrant also issued to the Trust 75,000 restricted shares of Common Stock as a service fee and extended the expiration date of all of the previously issued warrants to July 1, 2018.

The foregoing discussion merely summarizes the material terms of the documents described above and is qualified in its entirety by reference to the forms of those documents filed as exhibits hereto.

The above transactions were effected in reliance upon the exemption from registration set forth in Section 4(2) of the Act as the shares and warrants were issued to accredited investors and the transactions did not involve any form of general solicitation or general advertising.

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.

2 ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) EXHIBITS EXHIBIT NO. DESCRIPTION 4.1 Form of Common Stock Purchase Warrant 10.1 Form of Restructuring Agreement 10.2 Form of Restructuring Agreement 3


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Source: Edgar Glimpses


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