AETHLON MEDICAL INC

If this Proposal No. 7 is approved, the Articles will be amended to authorize the issuance of up to 20,000,000 shares of Preferred Stock, par value $0.001 per share. The Board of Directors will be authorized to establish one or more series of Preferred Stock and, with respect to each such series, determine the designations, voting powers, dividend rights, conversion rights, liquidation preferences, redemption rights and other relative rights, preferences, qualifications and limitations, all as permitted by Nevada law. The Board of Directors will not be required to obtain additional stockholder approval before authorizing or issuing a series of Preferred Stock unless such approval is required by applicable law, the Nasdaq Listing Rules or the terms of any outstanding securities. Depending on the terms established by the Board of Directors, shares of Preferred Stock could have rights and preferences that are senior to or otherwise different from the rights of holders of Common Stock. The Company has no present plans, agreements or understandings to issue any shares of preferred stock. The proposed amendment is intended to provide the Company with flexibility to respond promptly to future business opportunities should they arise.

Approval of Proposal No. 7 will not, by itself, result in the issuance of any shares of Preferred Stock.