Aethlon Medical (NASDAQ: AEMD) stock should jump 1,000% at the open today. This should not be taken as an incentive to invest in AEMD stock. There’s not a lot that we would accept as being such an incentive in fact. As far as we can tell they’re 24 years now without having actually brought their product to market. An unkind analysis would be that they live by issuing stock through their at the market program and not much else. But there is this 1,000% rise - which we could describe as simply the technical necessity required for them to remain on the market and be able to issue more stock. But it would be terribly unkind to insist upon that as the analysis.
As to what’s done at the company: “Aethlon Medical, Inc., a medical therapeutic company, focuses on developing products to treat cancer and life-threatening infectious diseases in the United States. It develops Aethlon Hemopurifier, a clinical-stage immunotherapeutic device that removes tumor-derived exosomes and life-threatening viruses from the human circulatory system.” Well, yes except that’s been in development that 24 years and there’s still no revenue.
Aethlon Medical stock price from Google Finance
As we say, the company lives by issuing more stock - some 7% of the base in the last quarter alone. That’s through the at the market program and it’s a significant and ongoing dilution. Well, OK, that’s the reason for being on a public market - to be able to raise more capital. But that does require remaining on the public market. Which is the specific problem that must be solved.
Nasdaq has a $1 minimum bid price. Simply because - via fashion, perhaps culture - penny stocks are seen as not being quite good enough to be on the main markets. So, if the stock price falls below that $1 for a significant period of time you can lose that Nasdaq quote. Which makes raising that new capital more difficult. So, something must be done. The thing is to simply declare that 10 old shares are now one new one - a one for ten reverse stock split: “Aethlon Medical, Inc. (AEMD) will effect a one-for-ten (1-10) reverse split of its Common Stock. The reverse stock split will become effective on Thursday, October 5, 2023.”
This doesn’t change the overall value of the company, just the number of shares that make it up. Therefore the stock price reacts mechanically, rising 1,000% or 10x. The Nasdaq problem is solved.
This leaves the business problem unsolved though. Actually getting the equipment to work and out into the market. Which, after 24 years, might be one of those problems that never does get quite solved.