Aethlon Medical earnings preview: Cash crunch at its peak ahead of Q4 results

Aethlon Medical (NASDAQ: AEMD) is trading near an all-time low as it heads towards its fourth-quarter financial results, slated for Monday, July 1, after the closing bell. On the back of consecutive disappointing results, Wall Street expects Q4 loss to widen by a cent to $0.07 per share.

In the trailing two quarters, the company had missed earnings expectations.

The medical device company is projected to report meager revenues of $50,000, representing a 33% dip compared to last year. The company’s Hemopurifier is a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections. Hemopurifier has a “Breakthrough Device” designation from The United States Food and Drug Administration (FDA).

The biggest risk facing the company at the moment is shortage of funds. Its primary source of revenue is its contract with the National Institute of Health. Another such contract with the Defense Advanced Research Projects Agency ended recently and a lot would depend on the company’s success in finding another funder.

Increasing costs related to research and development, as well as clinical trials, are creating a financial burden, and the company estimates that it can go on for another year with the revenue sources it currently has.

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Those who had stayed invested in the stock had a rough last year. The stock has declined 72% in the trailing 12 months, and 77% in the year-to-date period. And with little revenues and almost no profits, it’s hard to remain committed to the stock.

The stock also faces the risk of getting delisted if it continues to lose investor interest.

Meanwhile, the market still has a ray of hope for the stock. For the current fiscal year, analysts’ expect the company to narrow its losses to 33 cents per share, compared to 44 cents per share last year. The year after that, it is projected to slash its losses by another 10 cents per share.

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