AEMD - DARPA Picks Up Year 2 Option - Analyst Blog


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DARPA Picks Up Year 2 Option

Brian Marckx, CFA

This morning Aethlon Medical ( AEMD ) announced that DARPA has picked up the second-year option of the five-year $6.8 million DLT contract which will pay the company up to $1.6 million if all of the eight related milestones are met.  DARPA picking up the year-two option is an obvious positive for AEMD and lends additional support for their Hemopurifier technology.    

Through fiscal Q1 2013 (ending 6/30/2012) AEMD had billed $1.58 million of the possible $2.0 million payable under the current 12-month contract.  Subsequent to Q1, AEMD billed an additional ~$180k has now invoiced for seven of the eight milestones under this initial contract (and has completed the final milestone worth $217k but has not yet invoiced for it).  

Assuming all milestones are met through the two-year contract, AEMD will be paid in aggregate ~$3.2 million under these DARPA DLT awards through approximately  December 2013 (or potentially sooner).  This is roughly in-line with our modeled revenue estimates.   DARPA could also pick up the years three through five options which total an additional $3.6 million.  

This morning's press release also notes that Aethlon has partnered with two larger organizations relating to a follow-on DLT contract opportunity called DARPA BAA-12-36.  If AEMD scores the contract, this could offer revenue upside to our model.  The award announcement is slated for this fall.     

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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