UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File No. 0-20791

AINOS, INC.
(Exact name of registrant as specified in its charter)
Texas	75-1974352
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(State or other jurisdiction of<br><br>incorporation or organization)	(IRS Employer<br><br>Identification No.)
8880 Rio San Diego Drive, Ste. 800, San Diego, CA 92108<br><br>(858) 869-2986
(Address and telephone number, including area code, of registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	AIMD	The Nasdaq Stock Market LLC
Warrants to purchase Common Stock	AIMD	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ Yes ☒ No

19,478,270 shares of common stock, par value $0.01 per share, outstanding as of August 12, 2022

AINOS, INC.

INDEX

		PAGE NO.
PART I:	FINANCIAL INFORMATION	3
ITEM 1.	Financial Statements	3
	Balance Sheets– June 30, 2022 and December 31, 2021 (unaudited)	3
	Statements of Operations – Three and Six Months Ended June 30, 2022 and 2021 (unaudited)	4
	Statements of Stockholders’ Equity (Deficit) – Six Months Ended June 30, 2022 and 202 (unaudited)	6
	Condensed Statements of Cash Flows – Six Months Ended June 30, 2022 and 2021 (unaudited)	8
	Notes to Financial Statements (unaudited)	9
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	22
ITEM 4.	Controls and Procedures	22
PART II:	OTHER INFORMATION
ITEM 1.	Legal Proceedings	24
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
ITEM 3.	Defaults Upon Senior Securities	25
ITEM 4.	Mine Safety Disclosures	25
ITEM 5.	Other Information	25
ITEM 6.	Exhibits	26
Signatures		27
2
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PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

Ainos, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

			December 31,
			2021
Assets
Current assets:
Cash and cash equivalents	1,753,877		$	1,751,499
Inventory	670,507			-
Other current assets	1,274,512			466,198
Total current assets	3,698,896			2,217,697
Intangible assets, net	35,086,424			37,329,191
Property and equipment, net	1,503,025			1,187,702
Other assets	124,697			87,571
Total assets	40,413,042		$	40,822,161
Liabilities and Stockholders' Equity
Current liabilities:
Convertible notes payable	3,376,526		$	3,376,526
Notes payable	1,013,405			213,405
Accrued expenses and others current liabilities	2,598,468			1,004,868
Payables – related party	-			26,000,000
Total current liabilities	6,988,399			30,594,799
Long term liabilities:
Convertible notes payable - noncurrent	27,400,000			-
Operating lease liabilities - noncurrent	18,323			30,255
Total long term liabilities	27,418,323			30,255
Total liabilities	34,406,722			30,625,054
Stockholders' equity
Preferred stock, 0.01 par value; 10,000,000 shares
authorized; none issued
Common stock, 0.01 par value; 300,000,000 shares
authorized as of June 30, 2022 and December 31,
2021; 144,379,308 shares issued and outstanding as
of June 30, 2022 and December 31, 2021	1,443,793			1,443,793
Additional paid-in capital	18,943,316			18,856,430
Accumulated deficit	(14,162,843	)		(10,108,916	)
Translation adjustment	(217,946	)		5,800
Total stockholders’ equity	6,006,320			10,197,107
Total liabilities and stockholders’ equity	40,413,042		$	40,822,161

All values are in US Dollars.

See accompanying notes to condensed consolidated financial statements.

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Ainos, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended June 30						Six months ended June 30
	2022			2021			2022			2021
Revenues	$	636,627		$	202,992		$	723,828		$	205,113
Cost of revenues		(318,963	)		(69,508	)		(360,042	)		(70,757	)
Gross profit		317,664			133,484			363,786			134,356
Operating expenses
Research and development expenses		1,634,856			-			3,212,310			-
Selling, general and administrative expenses		627,104			860,030			1,178,834			1,383,011
Total operating expenses		2,261,960			860,030			4,391,144			1,383,011
Operating loss		(1,944,296	)		(726,546	)		(4,027,358	)		(1,248,655	)
Non-operating income and expense, net
Loss on sale of fixed assets		-			(2,247	)		-			(2,247	)
Interest expense, net		(18,796	)		(20,981	)		(35,483	)		(32,879	)
Other income, net		9,060			-			8,914			-
Total non-operating income and expenses, net		(9,736	)		(23,228	)		(26,569	)		(35,126	)
Net loss		(1,954,032	)		(749,774	)		(4,053,927	)		(1,283,781	)
Basic and diluted net loss per share attributable to common shareholders	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.02	)
Weighted average common shares outstanding – basic and diluted		144,379,308			124,644,759			144,379,308			83,583,583

See accompanying notes to condensed consolidated financial statements.

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Ainos, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

	Three months ended June 30						Six months ended June 30
	2022			2021			2022			2021
Net loss	$	(1,954,032	)	$	(749,774	)	$	(4,053,927	)	$	(1,283,781	)
Other comprehensive loss:
Translation adjustment		(165,687	)		-			(223,746	)		-
Comprehensive loss	$	(2,119,719	)	$	(749,774	)	$	(4,277,673	)	$	(1,283,781	)

See accompanying notes to condensed consolidated financial statements.

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Ainos, Inc.

Statements of Stockholders’ Equity (Deficit)

For the three months ended June, 2022 and 2021

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid		Accumulated			Translation
	Shares		Par Value		Shares		Par Value		in Capital		Deficit			Adjustment			Total
Balance at March 31, 2022		-	$	-		144,379,308	$	1,443,793	$	18,899,873	$	(12,208,811	)	$	(52,259	)	$	(8,082,596	)
Warrant expense		-		-		-		-		3,417		-			-			3,417
Option expense		-		-		-		-		40,026		-			-			40,026
Net loss		-		-		-		-		-		(1,954,032	)		-			(1,954,032	)
Translation adjustment		-		-		-		-		-		-			(165,687	)		(165,687	)
Balance at June 30, 2022		-	$	-		144,379,308	$	1,443,793	$	18,943,316	$	(14,162,843	)		(217,946	)	$	6,006,320
Balance at March 31, 2021		-		-		42,066,172	$	420,662	$	5,055,420	$	(6,754,261	)		-		$	(1,278,179	)
Issuance of stock for compensation		-		-		205,643		2,056		137,349		-			-			139,405
Issuance of stock for acquisition of patents		-		-		100,000,000		1,000,000		19,000,000		-			-			20,000,000
Warrant expense		-		-		-		-		3,417		-			-			3,417
Option expense		-		-		-		-		90,688		-			-			90,688
Net loss		-		-		-		-		-		(749,774	)		-			(749,774	)
Balance at June 30, 2021		-	$	-		142,271,815	$	1,422,718	$	24,286,874	$	(7,504,035	)		-		$	18,205,557

See accompanying notes to condensed consolidated financial statements.

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Ainos, Inc.

Statements of Stockholders’ Equity (Deficit)

For the six months ended June, 2022 and 2021

(Unaudited)

	Preferred Stock				Common Stock				Additional<br><br>Paid in		Accumulated			Translation
	Shares		Par Value		Shares		Par Value		Capital		Deficit			Adjustment			Total
Balance at December 31, 2021		-	$	-		144,379,308	$	1,443,793	$	18,856,430	$	(10,108,916	)	$	5,800		$	10,197,107
Warrant expense		-		-		-		-		6,834		-			-			6,834
Option expense		-		-		-		-		80,052		-			-			80,052
Net loss		-		-		-		-		-		(4,053,927	)		-			(4,053,927	)
Translation adjustment		-		-		-		-		-		-			(223,746	)		(223,746	)
Balance at June 30, 2022		-	$	-		144,379,308	$	1,443,793	$	18,943,316	$	(14,162,843	)		(217,946	)	$	6,006,320
Balance at December 31, 2020		-		-		42,066,172	$	420,662	$	4,961,315	$	(6,220,255	)		-		$	(838,278	)
Issuance of stock for compensation		-		-		205,643		2,056		137,349		-			-			139,405
Issuance of stock for acquisition of patents		-		-		100,000,000		1,000,000		19,000,000		-			-			20,000,000
Warrant expense		-		-		-		-		6,835		-			-			6,835
Option expense		-		-		-		-		181,376		-			-			181,376
Net loss		-		-		-		-		-		(1,283,781	)		-			(1,283,781	)
Balance at June 30, 2021		-	$	-		142,271,815	$	1,422,718	$	24,286,874	$	(7,504,035	)		-		$	18,205,557

See accompanying notes to condensed consolidated financial statements.

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Ainos, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six months ended June 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(4,053,927	)	$	(1,283,781	)
Adjustments to reconcile net loss to net cash used in operating. activities:
Depreciation and amortization		2,378,835			514,850
Share-based compensation expense		86,886			188,210
Stock issued for compensation		-			139,405
Interest expense		36,202			32,934
Loss on disposal of fixed assets		-			2,247
Changes in operating assets and liabilities:
Accounts receivable		(29,881	)		(139,747	)
Inventory		(670,507	)		3,024
Other current assets		(775,909	)		(71,941	)
Accrued expenses and other current liabilities		802,282			238,110
Contract liabilities		606,866			333,763
Net cash used in operating activities		(1,619,153	)		(42,926	)
Cash flows from investing activities:
Acquisition of property and equipment		(424,557	)		(23,312	)
Proceeds from disposal of property and equipment					36
Net cash used in investing activities		(424,557	)		(23,276	)
Cash flows from financing activities
Proceeds from convertible notes payable		1,400,000			652,395
Proceeds from notes payable		800,000			-
Payments of lease liabilities		(10,125	)		(1,800	)
Net cash provided by financing activities		2,189,875			650,595
Net change in cash		146,165			584,393
Effect from foreign currency exchange		(143,787	)		-
Cash and cash equivalents at beginning of period		1,751,499			22,245
Cash and cash equivalents at end of period		1,753,877			606,638
Supplemental disclosures of noncash financing and investing activities
Issuance of convertible notes for payables - related party		26,000,000			-
Stock issued for acquisition of patents		-			20,000,000
Stock issued for compensation		-			139,405
Net change in equipment payable		117,185			-
ROU leased assets		-			62,846

See accompanying notes to the condensed consolidated financial statements.

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Ainos, Inc.

Notes to Financial Statements

(Unaudited)

1.	Organization and Business. Ainos, Inc., a Texas corporation formerly known as Amarillo Biosciences, Inc. (the "Company", "we" or "us"), is engaged in developing medical technologies for point-of-care (“POCT”) testing and safe and novel medical treatment for a broad range of disease indications. Since our inception in 1984, we have concentrated our resources on business planning, raising capital, research and clinical development activities for our programs, securing related intellectual property and commercialization of proprietary therapeutics using low-dose non-injectable interferon (“IFN”). In addition to our core IFN technology, we are committed to developing a diversified healthcare business portfolio to include medical devices and consumer healthcare products. Although we have historically been involved in extensive pharmaceutical research and development of low-dose oral interferon as a therapeutic, we are prioritizing the commercialization of medical devices as part of our diversification strategy. Since April 15, 2021, we have acquired significant intellectual property from our majority shareholder, Ainos, Inc., a Cayman Islands corporation (“Ainos KY”), to expand our potential product portfolio into Volatile Organic Compounds (“VOC”) POCTs and COVID-19 POCTs. We expect our underlying intellectual property to enable us to expedite the commercialization of our medical device pipeline, beginning with the Ainos-branded COVID-19 POCT product candidates.
2.	Basis of presentation. The accompanying consolidated financial statements, which should be read in conjunction with the audited financial statements and footnotes included in the Company’s Form 10-K/A for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022 and the un-audited financial statements and footnotes included in the Company’s Form 10-Q for the quarter ending March 31, 2022 as filed with the SEC on May 16, 2022, have been prepared in accordance with the Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by for audited financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2022, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022.
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3.	Financial Condition. These financial statements have been prepared in accordance with GAAP, on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has generated revenues from sales of COVID-19 antigen test kits since the second quarter of 2021. However, losses are anticipated in the ongoing development of its business and there can be no assurance that the Company will be able to achieve or maintain profitability. The Company’s operations have been funded primarily from related-party convertible debt and equity financings. In addition, the Company received additional funding through a public offering concurrent with an uplisting to the Nasdaq Capital Markets, as described in Note 9.
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	The continuing operations of the Company and the recoverability of the carrying value of assets is dependent upon the ability of the Company to obtain necessary financing to fund its working capital requirements, and upon future profitable operations. The accompanying financial statements do not include any adjustments relative to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.
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There can be no assurance that capital will be available as necessary to meet the Company’s working capital requirements or, if the capital is available, that it will be on terms acceptable to the Company. The issuances of additional equity securities by the Company may result in dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company’s liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected and the Company may cease operations. These factors may raise uncertainty regarding our ability to continue as a going concern.
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4.	Common Stock. We have 300,000,000 shares of voting common shares authorized for issuance. As of June 30, 2022, a total of 162,740,264 shares of common stock were either issued (144,379,308), or reserved for conversion of convertible debt to stock (17,358,339), held for future exercise of stock options (550,000) and shares reserved for warrant conversion (452,617). We also have $27,400,000 outstanding in convertibles notes which are convertible into shares of common stock upon and at a conversion price equal to 80% of the offering price of any public offering if the Company’s common stock is listed on a national exchange.
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	We have not paid any dividends to our common stock shareholders to date, and have no plans to do so in the immediate future.
5.	Preferred Stock. We have 10,000,000 shares of preferred stock authorized for issuance. No shares of preferred stock were outstanding as of June 30, 2022.
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6.	Current Convertible Notes Payable and Other Notes Payable. As of June 30, 2022 and December 31, 2021, the amount of current convertible and other notes payable totaled $4,389,931 and $3,589,931, respectively. The details of the convertible notes payable and other notes payable are shown in the table below:
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Payee	No.	Effective Date	Due Date	From Effective	Following Maturity	Conversion Rate	Issuing Purpose	As of 12/31/2021	Addition	Payment	As of 6 /3 0 /2022		Accrued Interest
---	---	---	---	---	---	---	---	---	---	---	---	---	---
Current Convertible Notes Payable:
Stephen Chen	#1.16	1/30/2016	Payable on demand	0.75%	N/A	$ 0.17	working capital	114,026	-	-	114,026	6,263
Stephen Chen	#2.16	3/18/2016	Payable on demand	0.65%	N/A	$ 0.19	working capital	262,500	-	-	262,500	10,724
								376,526	-	-	376,526	16,987
Ainos KY	#12.21	4/27/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	15,000	-	-	15,000	326
Ainos KY	#13.21	5/5/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	20,000	-	-	20,000	427
Ainos KY	#14.21	5/25/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	30,000	-	-	30,000	610
Ainos KY	#15.21	5/28/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	35,000	-	-	35,000	706
Ainos KY	#16.21	6/9/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	300,000	-	-	300,000	5,869
Ainos KY	#17.21	6/21/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	107,000	-	-	107,000	2,028
Ainos KY	#18.21	7/2/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	54,000	-	-	54,000	994
Ainos KY	#19.21	9/1/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	120,000	-	-	120,000	1,843
Ainos KY	#20.21	9/28/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	300,000	-	-	300,000	4,182
Ainos KY	#21.21	11/10/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	50,000	-	-	50,000	588
Ainos KY	#22.21	11/25/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	450,000	-	-	450,000	4,927
Ainos KY	#23.21	11/29/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	300,000	-	-	300,000	3,224
Ainos KY	#24.21	12/29/2021	2/28/2023 (1)	1.85%	N/A	$ 0.20	working capital	1,219,000	-	-	1,219,000	11,307
								3,000,000	-	-	3,000,000	37,029
Total convertible notes payable- related parties								3,376,526	-	-	3,376,526	54,016
Non-Convertible Notes Payable:
Stephen Chen	#9.21	1/1/2021	4/14/2021	0.13%	N/A	N/A	working capital	129,405	-	-	129,405	396
Ainos KY	#26.22 (2)	3/4/2022	3/31/2023	1.85%	N/A	N/A	working capital	-	800,000	-	800,000	4,825
			Non-convertible notes payable-related party					129,405	800,000	-	929,405	5,221
i2 China	#8b.20	1/1/2020	1/1/2021	1.85%	N/A	N/A	consulting fee	84,000	-	-	84,000	3,922
			Non-Convertible Notes payable- non-related party					84,000			84,000	3,922
			Total non-convertible notes payable					213,405	800,000	-	1,013,405	9,143
		Total convertible and non-convertible						3,589,931	800,000	-	4,389,931	63,159
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Notes:

(1)	On March 17, 2022, we executed a Promissory Note Extension Agreement with Ainos KY in which the due dates for certain convertible notes enumerated as #12.21 to #24.21 issued by the Company to Ainos KY were extended to February 28, 2023. The total unpaid principal for these extended period convertible notes amount to $3,000,000 in the aggregate.
(2)	On March 11, 2022, the Board approved a Non-Convertible Note dated March 4, 2022 in favor of Ainos KY with a principal amount of $800,000, interest of 1.85% per annum on unpaid principal and accrued interest, and a maturity date of February 28, 2023. The Note includes standard provisions for notice, default, and remedies for default.
All of the aforementioned convertible promissory notes and other notes payable are unsecured and due on demand upon maturity. The Company may prepay the notes in whole or in part at any time. The holder of convertible notes has the option to convert some or all of the unpaid principal and accrued interest to our common voting stock.
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The total interest expense of convertible notes payable and other notes payable for the six months ended June 30, 2022 and 2021 were $34,486 and $32,775 respectively; the cumulative related accrued interest as of June 30, 2022 and December 31, 2021 were $63,159 and $28,673, respectively.
7.	Non-Current Convertible Notes Payable. As of June 30, 2022 and December 31, 2021, the amounts of non-current convertible notes payable were $27,400,000 and $0, respectively.
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	APA Convertible Note
	On January 30, 2022, we issued to Ainos KY a Convertible Promissory Note in the principal amount of $26,000,000 (the “APA Convertible Note”) for the Asset Purchase Transaction as more particularly described below in Note 8. The principal sum of the APA Convertible Note is payable in cash on January 30, 2027, although we may prepay the APA Convertible Note in whole or in part without penalty. The APA Convertible Note is noninterest bearing. If not earlier repaid, the APA Convertible Note will be converted into shares of our common stock or such other securities or property for which the APA Convertible Note may become convertible, immediately prior to the closing of any public offering of our common stock if our common stock is listed on a U.S. stock exchange. The conversion price, subject to certain adjustments, will be 80% of the initial public offering price of the offering.
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March 2027 Convertible Notes
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The Company issued Convertible Notes pursuant to certain Convertible Note Purchase Agreements under Regulation S. The transactions are more particularly described below:
·	$50,000 Convertible Note issued on March 31, 2022 to Yun-Han Liao. The purchaser is the daughter of Wu Hui-Lan, the Company’s Chief Financial Officer.
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·	$850,000 aggregate Convertible Notes issued on March 28, 2022 to Chih-Cheng Tsai, Ming-Hsien Lee, Yu-Yuan Hsu, and Top Calibre Corporation, a British Virgin Islands company.
·	$500,000 Convertible Note issued on April 11, 2022 to ASE Test Inc., a minority owner of Ainos KY.
·	The above Convertible Notes totaling $1,400,000 are collectively referred to as the “March 2027 Convertible Notes”.
The Principal Amounts of the March 2027 Convertible Notes are payable in cash on March 30, 2027, although the Company may prepay the Convertible Notes in whole or in part without penalty. The March 2027 Convertible Notes are non-interest bearing. If not earlier repaid, the Convertible Notes will be converted into shares of common stock, $0.01 par value per share of the Company, or such other securities or property for which the Convertible Notes may become convertible, immediately prior to the closing of any public offering of the Company’s common stock if the Company’s common stock is listed on a U.S. stock exchange. The conversion price, subject to certain adjustments, will be eighty percent (80%) of the initial public offering price of any such public offering.
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8.	Related Party Transactions. The following is a summary of related party transactions that met our disclosure threshold for the six months ended June 30, 2022 and 2021:
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	Purchase of intangible assets and equipment
	Securities Purchase Agreement
	On April 15, 2021, we consummated a Securities Purchase Agreement with Ainos KY. Pursuant to the Securities Purchase Agreement, we issued 100,000,000 shares of common stock at $0.20 per share to Ainos KY in exchange for certain patent assignments relating to advanced testing devices and artificial intelligence consumer health care solutions, increased our authorized common stock to 300,000,000 shares and changed our name from “Amarillo Biosciences, Inc.” to “Ainos, Inc.” Immediately after consummating the transaction and issuance of the shares, Ainos KY’s ownership in the Company totaled approximately 70.30% of the issued and outstanding shares of common stock.
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Asset Purchase Agreement
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Ainos KY and the Company entered into an Asset Purchase Agreement dated as of November 18, 2021 (the “Asset Purchase Agreement”), as modified by an Amended and Restated Asset Purchase Agreement dated as of January 29, 2022 (the “Amended Asset Purchase Agreement”).
Pursuant to the Asset Purchase Agreement, we acquired certain intellectual property assets and certain manufacturing, testing, and office equipment for a total purchase price of $26,000,000 that included $24,886,023 for intangible intellectual property assets and $1,113,977 for equipment. As consideration we issued to Ainos KY a Convertible Promissory Note in the principal amount of $26,000,000 upon closing on January 30, 2022 (the “APA Convertible Note”). Refer to Note 7 for more information.
As part of the Asset Purchase Agreement, we agreed to hire certain employees of Ainos KY who are responsible for research and development of the IP Assets and/or Equipment on terms at least equal to the compensation arrangements undertaken by Ainos KY. From and after the closing, we will have no responsibility, duty or liability with respect to any employee benefit plans of Ainos KY.
Working Capital Advances
All convertible and other notes payable were issued either as a result of financing or deferred compensation provided by shareholders.
In the first half of 2021, Ainos KY provided working capital advances in the form of convertible note financing in the aggregate amount of $507,000 which bear interest at the AFR short-term rate of 1.85% and may be convertible in whole or in part at a conversion price of $0.20 per share, subject to adjustment. Dr. Stephen T. Chen provided working capital advances in the form of convertible note and non-convertible note financing in the aggregate amount of $69,025 and $145,395, respectively. The convertible notes bear interest at the AFR short-term rate of 1.85% and may be convertible in whole or in part at a conversion price of $0.25 per share, subject to adjustment. A sole non-convertible note bears interest at the AFR short-term rate of 0.13%.
In the first half of 2022, Ainos KY provided us a working capital advance in the form of a non-convertible note financing in the principal amount of $800,000, at a 1.85% per annum interest rate, maturing on February 28, 2023, and ASE Test, Inc. (the “ASE”) provided us a working capital advance in the form of a convertible note financing in the principal amount of $500,000 due on March 30, 2027 . We may prepay the convertible note in whole or in part without penalty (the “ASE Note”) before the maturity date. The ASE Note is non-interest bearing. The convertible note will automatically convert into shares of our common stock immediately prior to the closing of any public offering of our common stock if our common stock is listed on a U.S. stock exchange. The conversion price, subject to certain adjustments, will be 80% of the initial public offering price of any such public offering.
On March 17, 2022, we executed a Promissory Note Extension with Ainos KY, pursuant to which the due dates for the convertible notes issued in 2021 to Ainos KY were extended to February 28, 2023.
As of June 30, 2022 and December 31, 2021, the convertible and non-convertible notes payable for related parties totaled $30,855,931 and $3,505,931, respectively. Refer to Notes 6 and 7 for more information.
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Purchase and sales
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Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY
On June 14, 2021, we entered into an exclusive agreement to serve as the master sales and marketing agent for the Ainos COVID-19 Antigen Rapid Test Kit and COVID-19 Nucleic Acid Test Kit with Ainos KY (the “Sales and Marketing Agreement”) which was developed by Taiwan Carbon Nano Technology Corporation (the “TCNT”), an affiliate of the Company. On June 7, 2021, the Taiwan Food and Drug Administration (the “TFDA”) approved emergency use authorization to TCNT for the Ainos COVID-19 Antigen Rapid Test Kit that will be sold and marketed under the “Ainos” brand in Taiwan. On June 21, 2022, we began marketing the Ainos SARS-CoV-2 Antigen Rapid Self-Test ("COVID-19 Antigen Self-Test Kit") under a separate EUA issued by the TFDA to TCNT on June 13, 2022. As TCNT secures regulatory authorizations from foreign regulatory agencies, the Company expects to partner with regional distributors to promote sales in other strategic markets.
We incurred costs associated with finished goods, raw materials and manufacturing fees for Covid-19 antigen rapid test kits from TCNT pursuant to the Sales and Marketing Agreement, totaling $870,404 and $69,509 for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022 and December 31, 2021, the accounts payable to TCNT were $296,498 and $0, respectively.
COVID-19 Antigen Rapid Test Kits Sales
We sold Covid-19 antigen rapid test kits to ASE Technology Holding, an affiliate of the Company, totaling $482,359 and $121,202 for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022 and December 31, 2021, the accounts receivable to ASE Technology Holding were $28,769 and $0, respectively; the payments in advance totalling $630,888 and $0, respectively.
Product Co-development Agreement
Pursuant to the five-year product co-development agreement (the "Product Co-Development Agreement") with TCNT, effective on August 1, 2021, we incurred development expenses totaling $374,170 and $0 for the six months ended June 30, 2022 and 2021. As of June 30, 2022 and December 31, 2021, the accrued payables were $179,547 and $65,156, respectively.
9.	Subsequent Events.
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	On July 28, 2022, We granted 8,000,000 and 1,320,000 Restricted Stock Units (the “RSUs”) from our 2021 Stock Incentive Plan to employees and non-employee directors, respectively. The RSUs shall vest in accordance with the respective employment agreements entered into by each of the employees and the 2021 Non-Employee Director Compensation Policy relative to the non-employee directors, respectively.
	On August 8, 2022, We completed a public offering of 780,000 units on the Nasdaq Capital Market at a public offering price of $4.25 per unit (the “Offering”). Each unit issued in the Offering consists of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25. The common stock and warrants are immediately separable and are issued separately. In addition, We sold additional Warrants to purchase up to an aggregate of 117,000 shares of our common stock in connection with the partial exercise of the over-allotment option granted to the underwriters of the Offering. We received gross proceeds of $3,316,170, before deducting underwriting discounts and commissions and other estimated offering expenses. In connection with the Offering, We effectuated a reverse split of our issued and outstanding common stock at a ratio of 1-for-15, which became effective at 8 p.m., Eastern Standard Time, on August 8, 2022. The common stock and the warrants are currently quoted on the Nasdaq Capital Market under the symbols “AIMD” and “AIMDW,” respectively. The share numbers and pricing information in this quarterly report are not adjusted to reflect the impact of the reverse stock split.
	On August 9, 2022, the APA Convertible note and the march 2027 convertible notes in the aggregate principal amount of $27,400,000 were converted into common stock at a conversion price of 80% of the public offering price of the Offering, or $3.40, for a total of 8,058,818 shares of common stock.
	Additionally, convertible promissory notes held by Ainos KY in the aggregate principal amount of $3,000,000 plus accrued interest of $42,959 were converted into common stock on August 8, 2022, at a conversion price of $0.20, for a total of 1,014,319 shares of common stock.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our financial statements and the notes thereto which appear elsewhere in this report. The results shown herein are not necessarily indicative of the results to be expected in any future periods.

Some of the statements in this report are “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding our current beliefs, goals and expectations about matters such as our expected financial position and operating results, our business strategy and our financing plans. The forward-looking statements in this report are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. The forward-looking statements generally can be identified by the use of terms such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “guidance,” “estimate,” “potential,” “outlook,” “target,” “forecast,” “likely” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals are, or may be, forward-looking statements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements. We cannot guarantee that our forward-looking statements will turn out to be correct or that our beliefs and goals will not change. Our actual results could be very different from and worse than our expectations for various reasons. These forward-looking statements are not guarantees of future performance and involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data, or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

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·	the extent and duration of the COVID-19 pandemic and the impact of the end of the COVID-19 pandemic on our business and our expectations regarding customer and user demand for our COVID-19 test kits;
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·	possible changes in capital structure, financial condition, future working capital needs and other financial items;
·	our expectations of the reliability, accuracy and performance of our products and services;
·	our ability to obtain additional funds for our operations;
·	unforeseen changes in the course of research and development activities and in clinical trials;
·	our ability to obtain and maintain regulatory authorizations, clearances or approvals for our tests and other product candidates, including EUAs (“Emergency Use Authorizations”) for our COVID-19 test kits or other product candidates;
·	our ability to successfully build out our sales and marketing infrastructure, the costs and success of our marketing efforts, and our ability to promote our brand;
·	our ability to establish demand for our products and services and expand geographically;
·	our intellectual property position and our expectations regarding our ability to obtain and maintain intellectual property protection;
·	our ability to effectively manage our expected growth, including our ability to retain and recruit personnel, and maintain our culture;
·	possible changes in cost, timing and progress of development, preclinical studies, clinical trials and regulatory submissions;
·	the rate and degree of market acceptance of any approved product candidates;
·	the impact of applicable U.S., Taiwanese and international laws and regulations; and
·	our ability to implement, maintain and improve effective internal controls and remediate material weaknesses.

Any forward-looking statements in this report are made only as of the date hereof and, except as may be required by law, we do not have any obligation to publicly update any forward-looking statements contained in this report to reflect subsequent events or circumstances.

For a further discussion of these and other factors that could impact our future results, performance or transactions, see Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2021 filed with the SEC on April 15, 2022.

Overview

Ainos, Inc., a Texas corporation formerly known as Amarillo Biosciences, Inc. (the "Company", "we" or "us"), is engaged in developing medical technologies for point-of-care (“POCT”) testing and safe and novel medical treatment for a broad range of disease indications. Since our inception in 1984, we have concentrated our resources on business planning, raising capital, research and clinical development activities for our programs, securing related intellectual property and commercialization of proprietary therapeutics using low-dose non-injectable interferon (“IFN”). In addition to our core IFN technology, we are committed to developing a diversified healthcare business portfolio to include medical devices and consumer healthcare products.

Although we have historically been involved in extensive pharmaceutical research and development of low-dose oral interferon as a therapeutic, we are prioritizing the commercialization of medical devices as part of our diversification strategy. Since the beginning of 2021, we have acquired significant intellectual property from our majority shareholder, Ainos, Inc., a Cayman Islands corporation (“Ainos KY”), to expand our potential product portfolio into Volatile Organic Compounds (“VOC”) and COVID-19 POCTs. We expect our underlying intellectual property to enable us to expedite the commercialization of our medical device pipeline, beginning with Ainos-branded COVID-19 POCT product candidates.

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Our portfolio of products

Our portfolio of products is currently comprised of the following:

·	COVID-19 Antigen Rapid Test Kit and Ainos’ Cloud-based Test Management Apps. Our cloud-based test management platform is comprised of an antigen rapid test kit, a personal application, or app, and an enterprise app. We anticipate our management apps will allow individuals and organizations to seamlessly manage tests, trace infections, and share results. As the first commercialized COVID-19 product we sell, we currently market the Ainos COVID-19 antigen rapid test kit in Taiwan under emergency use authorization (“EUA”) issued by the Taiwan Federal and Drug Administration (“TFDA”) in 2021. We market the Ainos COVID-19 antigen rapid test kit under our brand name. The kit is manufactured by TCNT, our product co-developer.
·	COVID-19 Nucleic Acid Test. Our solution consists of a color-changing assay that is compatible with standard Polymerase Chain Reaction (“PCR”) machines and delivers test results within 40 minutes. In addition to our assay’s compatibility with existing PCR equipment, we will also offer portable, low-cost test equipment intended to help medical professionals quickly scale testing capacity. We will market the product under the Ainos brand name, and our co-developer TCNT will manufacture the product.
·	VOC POCT – Ainos Flora. Our Ainos Flora device will perform a non-invasive test for female vaginal health and certain sexually transmitted diseases (“STDs”) including vaginitis, gonorrhea and trichomoniasis, within a few minutes. We expect Ainos Flora will provide convenient, discreet, rapid testing in a point-of-care setting which will allow women to self-test at home.
·	VOC POCT – Ainos Pen. Our Ainos Pen device is a cloud-connected, multi-purpose, portable breath analyzer that is intended to monitor health conditions including oral, gastrointestinal, liver, and renal health within minutes. We expect consumers to be empowered to share their self-test results with their physicians through in-person and telehealth medical consultations.
·	VOC POCT – CHS430. The CHS430 device is intended to provide non-invasive testing for ventilator-associated pneumonia within 10 minutes, as compared to current standard of care invasive culture tests that typically take more than two days to provide results. We plan to be the exclusive sales agent for CHS430, pursuant to our Product Development Agreement with our co-developer, TCNT, who will manufacture the product.
·	Very Low-Dose Oral Interferon Alpha (“VELDONA”). VELDONA is a low-dose oral interferon alpha (“IFN-α”) formulation based on our nearly four decades of research on IFN-α’s broad treatment applications. We have conducted a parallel study based on VELDONA alone and joint study with InnoPharmax, Inc. for the treatment of COVID-19 and other potential viral infections. We have also recently completed our own animal studies for the same treatment and subsequently are now conducting studies based on the VELDONA-only program.
·	Synthetic RNA (“SRNA”). We are developing a SRNA technology platform in Taiwan. Our initial focus is to develop a potential COVID-19 mRNA vaccine platform using the full-length spike or the RBD gene sequence of the alpha and delta variants as reference sequences.

An integral part of our operating strategy is to create multiple revenue streams through commercializing our product portfolio and leveraging our intellectual property patents, including potentially out-licensing or forming strategic relationships to develop our medical devices, consumer healthcare products and low-dose interferon therapeutics.

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In 2022, we are prioritizing the commercialization of our POCT devices, beginning with seeking EUA authorizations for the COVID-19 POCT product candidates and plans to commercialize our other POCT product candidates. As a general strategy, we plan to conduct clinical trials in Taiwan and use the data to apply for TFDA approval and FDA clearance via the 510(k) or comparable pathway. If our products are approved, we plan to work with third-party distributors to market our products in countries where we receive regulatory approval and to seek various business relationships with other medtech companies to market our products. At the same time, we plan to initiate clinical trials for the VELDONA and SRNA programs over the course of this year.

Our ability to generate product revenue sufficient to achieve profitability will depend on further successful development and commercialization of one or more of our current or future product candidates and programs. We anticipate our POCT products candidates to potentially generate organic cash flows to support our business while we invest in our other pipeline projects. We expect to continue to incur significant expenses for the next few years as we advance our product candidates through preclinical development, clinical trials and regulatory approval. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution, and legal and regulatory compliance. We may also incur expenses in connection with strategic relationships for the development of additional product candidates. Furthermore, we expect to continue to incur costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

Until we can generate significant revenue from product sales, if ever, we expect to finance our operations with business revenues and proceeds from external sources. We may pursue additional funding that may include our entry into or expansion of borrowing arrangements; research and development incentive payments, government grants, co-financing from pharmaceutical companies and other corporate sources; and potential future collaboration agreements with pharmaceutical companies or other third parties. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization, potential in-licenses or acquisitions plans for one or more of our product candidates.

We are unable to predict the timing or amount of unexpected expenses or when or if we will be able to achieve or maintain profitability due to the numerous risks and uncertainties associated with product development and related legal regulatory requirements. When we are eventually able to generate additional product sales, those sales may not be sufficient to become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of June 30, 2022, we had available cash and cash equivalents of $1,753,877. We anticipate business revenues and further potential financial support from external sources to fund our operations over the next twelve months. We have based this estimate on assumptions that may prove to be incorrect and we could exhaust our available capital resources sooner than we expect. See “Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” for additional information. To finance our continuing operations, we will need to raise additional capital, which cannot be assured.

Impact of COVID-19 on Our Business

The COVID-19 pandemic presented us an opportunity to grow our business. Substantially all of our operating revenue came from the sale of the Ainos COVID-19 antigen rapid test kits in Taiwan. We intend to broaden our market reach if TCNT, our product co-developer and manufacturing partner, successfully obtains regulatory clearance in the U.S. or other countries.

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We believe affordable, easy-to-use, rapid COVID-19 testing will continue to be in demand at least in the short-term. We anticipate our management apps, when used with the Ainos antigen rapid test kit, will allow individuals and organizations to effectively manage tests, trace infections, and share results. We also anticipate the Ainos COVID-19 nucleic acid test can help medical professionals quickly scale testing capacity if the product receives regulatory clearance.

We are continuing to monitor the potential impact of the pandemic, but we cannot be certain the future impact on our business, financial condition, results of operations and prospects. Depending on developments relating to the pandemic, including the emergence of new variants, the pandemic may affect our ability to initiate and complete research studies, delay the initiation of our future research studies, disrupt regulatory activities or have other adverse effects on our business, results of operations, financial condition and prospects.

Results of Operations for Quarter Ended June 30, 2022 (“Q2 2022”) and June 30, 2021 (“Q2 2021”):

Revenues, Cost and Gross Profit. The Company reported revenue of $636,627 and $202,992 in Q2 2022 and Q2 2021, respectively from product sales of the Ainos COVID-19 Antigen Rapid Test Kits in Taiwan. The cost of sales relating to product sales of the Ainos COVID-19 Antigen Rapid Test Kits in Q2 2022 was $318,963 compared to of Covid-19 Test Kits $69,508 in Q2 2021. Gross profit from product sales in Q2 2022 was $317,664 as compared to $133,484 in Q2 2021. Gross profits generated from product sales of the Ainos COVID-19 Antigen Rapid Test Kits increased by $184,180 between Q2 2022 and the same quarter in the previous year.

Research and Development Expenses. R&D expenses in Q2 2022 were $1,634,856 mainly consisting of amortization expense of intellectual property assets, staffing and co-development research. There were no R&D expenses during the same quarter in 2021. We expect that our R&D expenses will increase over time as we further product development of our POCT and other product candidates. In addition to increasing our in-house R&D staffing, we also contribute R&D funding under our co-development agreements with Taiwan Carbon Nano Technology (“TCNT”), our manufacturing collaborator and our affiliate company for POCT products.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in Q2 2022 were $627,104 mainly consisting of staffing and legal, audit and consulting etc. professional service expenses, and in Q2 2021 were $860,030 mainly consisting of amortization expense of intellectual property assets, staffing and legal, audit and consulting etc. professional service expenses. Although personnel expenditure increased in Q2 2022, the total S&A expenses decreased by $232,926 (27%) compared with Q2 2021.The decrease was mainly due to the amortization expense of intellectual property assets, as these amortization expense has been charged to the R&D department after establishing R&D department in August 2021; besides, one-time transactional expenses such as the Securities Purchase Agreement transaction and initiation of new operational activities only incurred in 2021.

Operating Loss. The Company's operating loss was $1,944,295 and $726,546 in Q2 2022 and Q2 2021, respectively, reflecting a $1,217,749 (168%) increase in operating losses between the reporting periods. As stated in our discussion about R&D expenses, our operating losses are mainly attributable to additional R&D expenses in line with the Company's product development initiatives.

Interest Expense. In Q2 2022 interest expense was $18,796 compared to $20,981 in Q2 2021, due to accrued interest for convertible and other debt notes amounted to $ 4,389,931 and $1,711,420 as of June 30, 2022 and 2021, respectively. The interest of $20,981 in Q2 2021 including the default interest of the principal due and unpaid, and the holders of those notes waived their right to such default interest in Q3 2021.

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Net Loss. Net loss attributable to common stock shareholders was $1,954,032 in Q2 2022 compared to $749,774 in Q2 2021, resulting in a 1,204,258 (161%) increase in net losses. The net losses are attributable to increased R&D expenses in line with the Company's product development plans.

Results of Operations for the Six Months Ended June 30, 2022 (“H1 2022”) and June 30, 2021(“H1 2021”):

Revenues. The total revenue recognized from the sale of Covid-19 Test Kits in Taiwan was $723,828 through June 30, 2022, as compared to $205,113 for the first six months of 2021, an increase of $518,715 or 253%.

Cost of Revenues and Gross Profit. Cost of sales of Covid-19 Test Kits for the six months ended June 30, 2022 was $360,042 compared to $70,757 for the six months ended June 30, 2021. The increase in cost of sales of Covid-19 Test Kits for 2022 as compared to 2021 for the six month period was $289,285, or 409 %. Gross profit for six months ended June 30, 2022 was $363,786 compared to $134,356 for the six months ended June 30, 2021, an increase of $229,430 or 171%.

Research and Development Expenses. Research and development **** expenses of $3,212,310 were incurred for the first six months of 2022, compared to $0 for the first six months of 2021, an increase of $3,212,310. The increase in 2022 was primarily due to amortization expense of intellectual property assets, staffing and co-development research. In addition, we also contributed R&D funding to our COVID-19 oral treatment program.

Selling, General and Administrative Expenses. Selling, general and administrative expenses of $1,178,834 were incurred for the first six months of 2022, compared to $1,383,011 for the first six months of 2021, a decrease of $204,177 (15%). The mainly S&A expenses of H1 2022 and H1 2021 are the same as Q2 2022 and Q2 2021, and the reasons for expenses decrease are also the same. Please refer to the analysis in preceding paragraph.

Operating Loss. In the six month period ended June 30, 2022, the Company's operating loss was $4,027,358 compared to an operating loss for the six month period ended June 30, 2021 of $1,248,655, a $2,778,703 (223%) increase. Our operating losses are mainly attributable to additional R&D expenses in line with the Company's product development initiatives.

Interest Income and Expense. Interest expense, net was $35,483 for the six months ended June 30, 2022, compared to $32,879 for the six months period ended June 30, 2021. The interest expense was due to the interest-bearing debt, including convertible notes and other debt notes, amounted to $4,389,931 and $1,711,420 as of June 30, 2022 and 2021, respectively. The interest of $32,879 in H1 2021 including the default interest of the principal due and unpaid, and the holders of those notes waived their right to such default interest in Q3 2021.

Net Loss. The Net Loss for the first half of 2022, increased to $4,053,927 from $1,283,781 in 2021, an increase of $2,770,146 (216%) for the period. The major constituents of the increase in net loss are the increases in R&D expenses in the first six months of 2022.

Liquidity and Capital Resources ****

As of June 30, 2022 and December 31, 2021, the Company had available cash of $1,753,877 and $1,751,499, respectively.

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The following table summarizes our cash flows at the end of June 30, 2022:

	Six Months Ended June 30,
	2022			2021
Net cash used in operating activities		(1,619,153	)		(42,926	)
Net cash used in investing activities		(424,557	)		(23,276	)
Net cash provided by financing activities		2,189,875			650,595

Operating activities:

Cash used by operating activities increased in H1 2022 compared to H1 2021, due to higher operating expenses. We incurred net operating outflow of $1,619,153 for H1 2022 and $42,926 for H1 2021. While our revenues grew in H1 2022 due to sales of the Ainos COVID-19 test kits, our increased staffing and investment in research and developments increased our expenses resulted in higher net operating outflow.

Investing activities:

Cash used in investing activities increased in H1 2022 compared to cash used in H1 2021, attributed to the acquisition of R&D equipment and office facilities.

Financing activities:

Cash provided by financing activities increased in H1 2022 compared to cash provided in H1 2021, which primarily reflects higher proceeds from convertible notes payable amounted to $1,400,000 and other non-convertible notes payable amounted to $800,000. For a discussion of the notes, see “Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.”

As of June 30, 2022, the principal amount of our convertible and non-convertible notes payable due within the next 12 months was $3,376,526 and $1,013,405, respectively.

The convertible notes outstanding in the principal amount of $3,000,000 due in February 2023 are convertible at the option of the holder at a conversion price of $0.20. The non-convertible debt outstanding in the principal amount of $213,405 are currently payable and due on demand and the rest of amount $800,000 due in March 2023.

On January 30, 2022, we issued a non-interest bearing Convertible Promissory Note in the principal amount of $26,000,000 (the “APA Convertible Note”) in connection with the closing of the Asset Purchase Agreement.

In addition, in the first quarter of 2022, we executed $1,400,000 of the March 2027 Convertible Notes with terms that are substantially similar to the terms of the APA Convertible Note.

In 2022 we intend to focus on commercializing our POCT medical devices and developing our VELDONA-based COVID-19 oral treatment program. Our near-term liquidity requirements will include expenses for clinical trials, repayment of debt not converted into equity, regulatory clearances, and marketing to commercialize our POCT devices, including the Ainos COVID-19 Nucleic Acid Test, the Ainos Flora, the Ainos Pen and our VELDONA-based COVID-19 oral treatment program. We also intend to increase staffing for general administration, marketing and technology development purposes.

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In 2023 and beyond, we intend to invest in research and development and clinical trial spending to advance our VELDONA development efforts for disease indications such as thrombocytopenia and Sjögren’s syndrome. We also plan on investing in clinical trials and regulatory approval for the CHS430 device, in collaboration with TCNT, and clinical trial expenses for our SRNA program.

On August 9, 2022, in connection with the Offering, (i) the APA Convertible Note, (ii) the March 2027 Convertible Notes and (iii) $3,000,000 aggregate principal amount of convertible notes plus accrued interest of $42,959 were converted into a total of 9,037,137 shares of our common stock. Following the closing of the Offering on August 11, 2022, we received net proceeds of approximately $2.1 million.

The Company anticipates that its cash reserves, business revenues from the Ainos COVID-19 test kits, sales of its common stock, and debt financing through convertible and non-convertible notes are sufficient to fund the Company’s operations over the next twelve months. As the number of reported COVID cases has been increasing in Taiwan, we anticipate demand for the test kits to increase, at least in the short term. There can be no assurance that we will be successful in our efforts to make the Company profitable. If those efforts are not successful, the Company may raise additional capital through the issuance of equity securities, debt financings or other sources in order to further implement its business plan, including, as required, additional external financing from our majority shareholder. However, if such financing is not available when needed and at adequate levels, the Company will need to reevaluate its operating plan.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company,” we are not required to provide the information under this Item 3.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). As previously disclosed in our Form 10-K/A for the year ended December 31, 2021, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021. As a result of such review as of December 31, 2021, we identified certain deficiencies in the design and implementation of our internal controls with respect to reporting and implemented a remediation plan.

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During half of 2022, as part of our remediation plan and procedures, we began implementing the following changes:

·	Increasing staff resources dedicated to internal controls and reporting including the hiring of a full-time accounting assistant for the CFO who is dedicated to financial reporting;
·	Specifically delegating roles and responsibilities for each participant in compiling and reviewing our reports including designating a single-point of contact for consolidating data inputs and delegation of key reporting elements to relevant department leads;
·	Designating an executive team to review all narrative disclosures, including potential changes thereto. The executive team is comprised of the CEO, CFO, Director of Corporate Development, Executive Vice President of Operations, and Chief Legal Counsel;
·	Establishing a final review process with our Chief Executive Officer and Chief Financial Officer prior to finalizing and filing our reports. At each stage of preparing financial reports the executive team conducts a review of draft materials and discusses the results in telephone conferences; and
·	Establishing an executive review team to approve the final EDGAR version and IXBRL data file for our reports. As described above, the executive team meets and confers to review the final financial reports that are then submitted to the Audit Committee and Board for final approval prior to filing.

During the remainder of 2022, we will continue to implement our remediation plan. In connection with such plan, we expect to further increase our internal corporate resources focused on improving the design, implementation and monitoring of our internal control systems.

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PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of the date of this report, we were not aware of any material legal proceedings or claims involving the Company.

ITEM 1A. Risk Factors.

There are no material changes to the risk factors as previously disclosed in our Form 10-K/A in response to Part I - Item 1A of our annual report filed with the SEC on April 15, 2022.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

2021 Asset Purchase Agreement

On November 18, 2021, we entered into the Asset Purchase Agreement with Ainos KY, our majority shareholder. We closed the transaction on January 30, 2022. Pursuant to the Asset Purchase Agreement, we acquired certain intellectual property assets and certain manufacturing, testing, and office equipment for a total purchase price of $26,000,000. As payment of the Purchase Price, at the closing on January 30, 2022, the Company issued to Ainos KY the APA Convertible Note, a convertible promissory note in the principal amount of $26,000,000.

On August 9, 2022, the APA Convertible Note was converted into 7,647,058 shares of our common stock (on a post-split basis) at a conversion price equal to $3.40, or 80% of the per unit public offering price of our offering that closed on August 11, 2022.

2021 – 2022 Ainos KY Working Capital Advances

In 2021, Ainos KY provided working capital advances in the form of convertible note financing in the aggregate amount of $3,000,000. The working capital convertible notes issued in 2021 bear interest at the AFR short-term rate of 1.85% and may be convertible in whole or in part at a conversion price of $0.20 per share, subject to adjustment. On March 17, 2022, we executed a Promissory Note Extension with Ainos KY dated March 17, 2022, pursuant to which the maturity dates for the convertible notes issued in 2021 to Ainos KY were extended to February 28, 2023. On August 9, 2022, notes in the aggregate principal amount of $3,000,000 plus accrued interest of $42,959 were converted by Ainos KY into a total of 1,014,319 shares of our common stock.

In March 2022, Ainos KY provided us a working capital advance in the form of a non-convertible note financing in the principal amount of $800,000, at a 1.85% per annum interest rate, with a maturity date of February 28, 2023.

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Convertible Note Offering Pursuant to Regulation S

The Company issued convertible notes (the “March 2027 Convertible Notes”) pursuant to Regulation S as more particularly described below:

·	Under a Convertible Note Purchase Agreement dated as of March 31, 2022 by and between the Company and Yun-Han Liao (the “Purchaser”). The Purchaser is the daughter of Hui-Lan Wu, the Company’s Chief Financial Officer. Pursuant to the Agreement the Purchaser paid a total of $50,000 to the Company in exchange for a Convertible Promissory Note issued by the Company in the principal amount of $50,000 (the “Liao Convertible Note”).
·	Under those certain Convertible Note Purchase Agreements dated as of March 28, 2022 (the “Regulation S Agreements”) by and between the Company and Chih-Cheng Tsai, Ming-Hsien Lee, Yu-Yuan Hsu, and Top Calibre Corporation, a British Virgin Islands company (collectively the “Regulation S Purchasers”). Pursuant to the Regulation S Agreements, the Purchasers paid a total of $850,000 (the “Principal Amount”) to the Company in exchange for Convertible Promissory Notes issued by the Company in the Principal Amount (together with the Liao Convertible Note, the “Convertible Notes”).
·	$500,000 Convertible Note issued on April 11, 2022 to ASE Test Inc., a minority owner of Ainos KY and an affiliate of the Company.

Under a Convertible Note Purchase Agreement dated as of March 31, 2022 by and between the Company and Yun-Han Liao (the “Purchaser”). The Purchaser is the daughter of Hui-Lan Wu, the Company’s Chief Financial Officer. Pursuant to the Agreement the Purchaser paid a total of $50,000 to the Company in exchange for a Convertible Promissory Note issued by the Company in the principal amount of $50,000 (the “Liao Convertible Note”).

Under those certain Convertible Note Purchase Agreements dated as of March 28, 2022 (the “Regulation S Agreements”) by and between the Company and Chih-Cheng Tsai, Ming-Hsien Lee, Yu-Yuan Hsu, and Top Calibre Corporation, a British Virgin Islands company (collectively the “Regulation S Purchasers”). Pursuant to the Regulation S Agreements, the Purchasers paid a total of $850,000 (the “Principal Amount”) to the Company in exchange for Convertible Promissory Notes issued by the Company in the Principal Amount (together with the Liao Convertible Note, the “Convertible Notes”).

$500,000 Convertible Note issued on April 11, 2022 to ASE Test Inc., a minority owner of Ainos KY and an affiliate of the Company.

On August 9, 2022, in connection with the listing of the Company’s common stock on the Nasdaq Capital Market, the March 2027 Convertible Notes were converted into 411,760 shares of our common stock (on a post-split basis) at a conversion price equal to $3.40, or 80% of the per unit public offering price of our offering that closed on August 11, 2022.

ITEM 3. Defaults Upon Senior Securities.

None

ITEM 4. Mine Safety Disclosures.

Not applicable

ITEM 5. Other Information.

Not applicable

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ITEM 6. Exhibits.

EXHIBIT INDEX

			INCORPORATED BY REFERENCE
EXHIBIT NUMBER	DESCRIPTION	FILED WITH THIS FORM 10-K	FILING DATE WITH SEC	FORM	EXH #	HYPERLINK TO FILINGS
3.1	Restated Certificate of Formation of the Company, dated April 15, 2021		4/21/2021	8-K	3.1	Restated Certificate of Formation of the Company, dated April 15, 2021
3.2	Amended and Restated Bylaws of the Company, effective August 20, 2021		8/26/2021	S-1	3.2	https://www.sec.gov/Archives/edgar/data/0001014763/000165495422005505/aimd_ex32.htm
3.3	Certificate of Amendment to Restated Certificate of Formation, dated August 8, 2022		8/12/2022	8-K		https://www.sec.gov/Archives/edgar/data/1014763/000165495422011193/aimd_ex31.htm
10.1	Convertible Note Purchase Agreement dated as of April 11, 2022 between Ainos, Inc. and ASE Test, Inc.	X
10.2	Convertible Promissory Note dated April \[11\], 2022 issued by Ainos, Inc. to ASE Test, Inc.	X
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a- 14(a) / 15d – 14(a)	X
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a- 14(a) / 15d – 14(a)	X
32.1	Certification Of Principal Executive Officer Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002	X
32.2	Certification Of Principal Financial Officer Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002	X
99.1	Form 10-K/A for the year ended December 31, 2021		4/15/2022	10-K/A		https://www.sec.gov/ix?doc=/Archives/edgar/data/0001014763/000165495422005040/aimd_10ka.htm
100	XBRL – Related Documents	X
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the XBRL document.	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase	X
101.LAB	XBRL Taxonomy Extension Label Linkbase	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	X
104.1	Cover Page Interactive Data File	X

The exhibits listed in the Exhibit Index are filed or incorporated by reference as part of this filing.

Schedules (as similar attachments) have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K.

* Indicates a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AINOS, INC.
Date: August 15, 2022	By:	/s/ Chun-Hsien Tsai
		Chun-Hsien Tsai, Chairman of the Board, and
		Chief Executive Officer
Date: August 15, 2022	By:	/s/ Hui-Lan Wu
		Hui-Lan Wu, Chief Financial Officer
27
---

aimd_ex311.htm EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13A- 14(A) / 15D – 14(A)

UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Chun-Hsien Tsai, certify that:

I have reviewed this report on Form 10-Q of Ainos, Inc.;
Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2022	/s/ Chun-Hsien Tsai

| | Chun-Hsien Tsai, Principal Executive Officer<br> <br>(Chairman of the Board, President, and Chief Executive Officer) |

aimd_ex312.htm EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13A- 14(A) / 15D – 14(A)

UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Hui-Lan Wu, certify that:

I have reviewed this report on Form 10-Q of Ainos, Inc.;
Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2022	/s/ Hui-Lan Wu

| | Hui-Lan Wu, Principal Financial Officer<br> <br>(Chief Financial Officer) |

aimd_ex321.htm EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ainos, Inc. on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

	AINOS, INC.
Date: August 15, 2022	By:	/s/ Chun-Hsien Tsai

| | | Chun-Hsien Tsai, Principal Executive Officer |

| | | (Chairman of the Board, President, and Chief Executive Officer) |

aimd_ex322.htm EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 15, 2022	By:	/s/ Hui-Lan Wu

| | | Hui-Lan Wu, Principal Financial Officer |

| | | (Chief Financial Officer) |

aimd_ex101.htm EXHIBIT 10.1

CONVERTIBLE NOTE PURCHASE AGREEMENT

This Convertible Note Purchase Agreement (the “Agreement”) is made as of April 11 2022, by and between Ainos, Inc., a Texas corporation (the “Company”), and ASE TEST, INC. (the “Purchaser”).

1.	Purchase and Sale; Closing.
	1.1	Purchase of Note. Subject to the terms and conditions of this Agreement, the Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, a Convertible Promissory Note (the “Note”) in substantially the form attached hereto as Exhibit A in the principal amount set forth on the signature page hereto. The Note will be convertible into equity securities of the Company upon the terms and conditions contained in the form of Note attached hereto as Exhibit A. Securities of equity securities of the Company issued upon conversion of the Note are referred to herein as the “Underlying Securities.” The Note and the Underlying Securities are sometimes collectively referred to herein as the “Securities.”
	1.2	Closing. The closing of the sale and issuance of the Note shall be held at such time and place upon which the Company and the Purchaser shall agree (hereinafter referred to as the “Closing”). The date of the Closing is referred to herein as the “Closing Date.”
2.	Representations and Warranties of the Company.
	The Company represents and warrants to the Purchaser as follows:
	2.1	Organization and Standing. The Company is a corporation duly organized and existing under, and by virtue of, the laws of the State of Texas and is in good standing under such laws.
	2.2	Corporate Power. The Company will have at the Closing all requisite legal and corporate power and authority to execute and deliver this Agreement, to sell and issue the Securities and to carry out and perform its obligations under the terms of this Agreement.
	2.3	Authorization. All corporate action on the part of the Company necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of the Securities and the performance of all of the Company’s obligations hereunder and thereunder has been taken or will be taken prior to the Closing. This Agreement, and the Note when executed and delivered by the Company, shall constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. The Underlying Securities, when issued in compliance with the provisions of the Note, will be validly issued, fully paid and non-assessable, and will be free of any liens or encumbrances, assuming that the Purchaser takes the Underlying Securities with no notice thereof, other than any liens or encumbrances created by or imposed upon the Purchaser; provided, however, that the Underlying Securities will be subject to restrictions on transfer under state and/or federal securities laws.
	2.4	No Finder’s Fees. No person is entitled, directly or indirectly, to compensation from the Company by reason of any contract or understanding or contact with the Company as a finder or broker in connection with this sale and purchase of the Securities contemplated by this Agreement. The Company agrees to indemnify and hold the Purchaser harmless against and respect of any claim of brokerage or other commissions or similar fees relative to this Agreement or the transactions contemplated hereby which arises as a result of a contract or understanding made by the Company with any such broker or finder in connection with this sale and purchase of the Securities contemplated by this Agreement.

AINOS, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT

Page 1 of 6

Representations and Warranties of Purchaser.
The Purchaser hereby represents and warrants to the Company with respect to its purchase of the Securities and Warrant as follows:
3.1	Investment. The Purchaser understands that the investment in the Securities is a speculative investment and represents that it is aware of the business affairs and financial condition of the Company and has acquired sufficient information about the Company to r an informed and knowledgeable decision to acquire the Securities, and that it is purchasing the Securities for investment for its own account only and not with a view to, or for resale in connection with, any “distribution” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) or applicable state securities laws. The Purchaser further represents that it understands that the Securities have not been registered under the Securities Act or applicable state securities laws by reason of specific exemptions therefrom, which exemptions depend upon, among other things, the bona fide nature of the Purchaser’s investment intent as expressed herein. The Purchaser acknowledges and understands that the Securities must be held indefinitely unless subsequently registered under the Securities Act and qualified under applicable state securities laws or unless exemptions from such registration and qualification requirements are available and that the Company is under no obligation to register or qualify the Securities.
3.2	Access to Data. The Purchaser acknowledges that it has received and reviewed this Agreement and exhibits hereto. The Purchaser has had an opportunity to discuss the Company’s business, management and financial affairs with its officers and directors. The Purchaser understands that such discussions as well as any written information issued by the Company were intended to describe the aspects of the Company’s business and prospects which it believes to be material but were not necessarily a thorough or exhaustive description.
3.3	Risk Factors. The Purchaser acknowledges that it has reviewed and understands the risk factors relating to Company and the Company’s stock, including but not limited to, its review of the Company’s Form 10-K and other Company documents and filings with the Securities and Exchange Commission (the “SEC”). Such documents are available on the SEC website at WWW.SEC.GOV.
3.4	No Finder’s Fees. No person is entitled, directly or indirectly, to compensation from the Purchaser by reason of any contract or understanding or contact with the Purchaser as a finder or broker in connection with the sale and purchase of the Securities contemplated by this Agreement. Purchaser agrees to indemnify and hold the Company harmless against and in respect of any claim for brokerage or other commissions or similar fees relative to this Agreement or the transactions contemplated hereby which arises as a result of a contract or understanding made by the Purchaser with any such broker or finder in connection with the sale and purchase of the Securities contemplated by this Agreement.
3.5	Legends. The Purchaser understands that the Securities, and any securities issued in respect thereof or exchange therefor, may bear one or all of the following legends:
	(a)	“THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY OTHER SECURITIES LAWS. THIS NOTE AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. HOLDERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.”
	(b)	Any legend required by the SEC or blue sky laws of any state to the extent such laws are applicable to the Securities represented by the certificate so legended.
3.6	Lack of Liquidity. Purchaser acknowledges that the purchase of the Securities involves a high degree of risk and further acknowledges that it can bear the economic risk of the purchase of the Securities, including the total loss of its investment. Purchaser has no present need for liquidity in connection with its purchase of the Securities.

AINOS, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT

Page 2 of 6

3.7	Applicable Exemptions from Registration. Purchaser understands that the Securities are being offered and sold to it in reliance on an exemption from the registration requirements of United States federal and state securities laws under Regulation S (and potentially other exemptions under Rule 144 and Regulation D), promulgated under the Securities Act of 1933, as amended (“Securities Act”) and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the applicability of such exemptions and the suitability of Purchaser to acquire the Securities. In this regard, Purchaser represents, warrants and agrees that:
	3.7.1	No Public Solicitation. Neither the Company nor Purchaser has engaged in any ‘Directed Selling Efforts in the U.S.’ as defined in Regulation S promulgated by the Securities and Exchange Commission (“SEC”) under U.S. securities laws.
	3.7.2	Purchaser is not a U.S. Person (as defined below). A U.S. Person means any one of the following: (a) any U.S. Citizen; (b) any natural person resident in the United States of America; (c) any partnership or corporation organized or incorporated under the laws of the United States of America; (d) any estate of which any executor or administrator is a U.S. person; (e) any trust of which any trustee is a U.S. person; (f) any agency or branch of a foreign entity located in the United States of America; (g) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; (h) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States of America; and (i) any partnership or corporation if: (1) organized or incorporated under the laws of any foreign jurisdiction; and (2) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors **** (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.
	3.7.3	At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, Purchaser was outside of the United States.
	3.7.4	Purchaser will not, during the period commencing on the date of issuance of the Securities and ending on the first anniversary of such date, or such shorter period as may be permitted by Regulation S or other applicable securities law (“Restricted Period”), offer, sell, pledge or otherwise transfer the Securities in the United States, or to a U.S. Person for the account or benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S or under an available registration exemption.
	3.7.5	Purchaser will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Securities only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws.
	3.7.6	Purchaser has not in the United States, engaged in, and prior to the expiration of the Restricted Period will not engage in, any short selling of or any hedging transaction with respect to the Securities, including without limitation, any put, call or other option transaction, option writing or equity swap.
	3.7.7	Neither Purchaser nor or any person acting on its behalf has engaged, nor will engage, in any directed selling efforts to U.S. Citizens with respect to the Securities and Purchaser and any person acting on its behalf have complied and will comply with the “offering restrictions” requirements of Regulation S under the Securities Act.

AINOS, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT

Page 3 of 6

		3.7.8	The transactions contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act.
		3.7.9	Neither Purchaser nor any person acting on its behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the Securities. Purchaser agrees not to cause any advertisement of the Securities to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Securities, except such advertisements that include the statements required by Regulation S under the Securities Act, and only offshore and not in the U.S. or its territories, and only incompliance with any local applicable securities laws.
4.	Condition to Purchaser’s Obligations at Closing. The Purchaser’s obligation to purchase the Securities at the Closing is subject to the fulfillment on or prior to the Closing Date of the following condition:
	4.1	Representations and Warranties Correct. The representations and warranties made by the Company in Section 2 hereof shall be true and correct when made and shall be true and correct on the Closing Date.
5.	Conditions to the Company’s Obligations at Closing.
	The Company’s obligation to sell and issue the Note at the Closing is subject to the fulfillment of the following conditions:
	5.1	Representations and Warranties Correct. The representations and warranties made by the Purchaser in Section 3 hereof shall be true and correct when made and shall be true and correct on the Closing Date.
	5.2	Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of the Closing.
	5.3	Board Approval. The Company’s Board of Directors shall have authorized the sale and issuance of the Securities.
6.	Miscellaneous.
	6.1	Governing Law; Venue. This Agreement, the Securities shall in all respects be governed by and construed and enforced in accordance with the laws of the State of Texas, without regard to the conflicts of law provisions of the Texas or of any other state. The parties expressly stipulate that any litigation under this Agreement shall be brought in the state courts of the State of Texas (or in the event of exclusive federal jurisdiction, the courts of the Northern District of Texas located in Dallas County). The parties agree to submit to the exclusive jurisdiction and venue of those courts.
	6.2	Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto, provided, however, that the rights of the Purchaser to purchase the Note shall not be assignable without the consent of the Company and provided further that the Company may not assign its rights hereunder.
	6.3	Entire Agreement; Amendment. This Agreement, the Note and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

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6.4	Notices, etc. All notices and other communications under this Agreement shall be in writing and shall be delivered in person, via facsimile machine, sent by documented overnight delivery service, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed (a) if to the Purchaser at the address listed in the signature page of this Agreement, or (b) if to the Company, to the attention of its Principal Executive Officer at its principal offices at 28880 Rio San Diego Drive, Ste. 800. San Diego, CA 92108. Unless otherwise specified in this Agreement, all such notices and other written communications shall be effective (and considered delivered and received for the purposes of this Agreement) (i) if delivered, upon delivery, (ii) if by facsimile machine during normal business hours upon transmission with confirmation of receipt by the receiving party’s facsimile terminal and if not sent during normal business hours, then on the next day, (iii) if sent by documented overnight delivery service, on the date following the date on which such notice is delivered to such overnight delivery service for mailing, or (iv) if mailed via first-class regular mail, three (3) day after depositing in the U.S. Mail.
6.5	Expenses; Attorneys Fees. of the Company and the Purchaser shall bear its own expenses incurred on its behalf with respect to this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, if any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the Securities, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
6.6	Counterparts. This Agreement may be executed in any number of counterparts, of which shall be enforceable against the party or parties actually executing such counterparts, and all of which together shall constitute one instrument.
6.7	Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not considered in construing or interpreting this Agreement.

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AINOS, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT

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The foregoing Agreement is hereby executed as of the date first above written.

COMPANY:

| Title: | Chief Executive Officer |

PURCHASER:

| ASE TEST, INC. | | Name: |

| Title: | | Principal Amount: US 500,000 |

All values are in US Dollars.

[Signature Page to Convertible Note Purchase Agreement]

AINOS, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT

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aimd_ex102.htm EXHIBIT 10.2

EXHIBIT A

AINOS, INC.

THIS CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

CONVERTIBLE PROMISSORY NOTE

_US$500,000________ Principal Amount	April 11 , 2022

For value received, Ainos, Inc., a Texas corporation (the “Company”), promises to pay to ASE TEST, INC.____ (the “Holder”), the principal amount of US$500,000______ (the “Principal Amount”). No interest shall accrue on this Convertible Promissory Note (this “Note”). This Note is issued pursuant to that certain Convertible Note Purchase Agreement dated as of April 11, 2022. This Note is subject to the following terms and conditions.

Maturity. Unless converted or repaid pursuant to Section 2 or Section 3, the entire unpaid principal sum of this Note will be payable on March 30, 2027 (the “Maturity Date”). Notwithstanding the foregoing, the entire unpaid principal sum of this Note shall become immediately due and payable upon the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company.
Conversion.

(a) Mandatory Conversion. Prior to repayment of this Note, immediately prior to the closing of any public offering of the Company’s common stock as result of which the Company’s common stock will be listed on a Trading Market (the “Uplisting Offering”), the outstanding principal amount of this Note (the “Conversion Amount”) shall be converted into Securities of common stock, $0.01 par value per share (the “Common Stock”) of the Company or such other securities or property for which this Note may become convertible as a result of any adjustment described in Section 2(b) at a price that is eighty percent (80%) of the initial public offering price of the Uplisting Offering (the “Conversion Price”).

In addition to the terms defined elsewhere in this Note, for all purposes of this Note, the following terms shall have the meanings indicated in this Section 2(a):

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market (or any successors to any of the foregoing) on which the Common Stock is listed or quoted for trading on the date in question.

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(b) Adjustment .

(i) In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of Securities, separations, reorganizations, liquidations, merger, consolidation, acquisition of the Company, or the like, the number, class and type of Securities available upon conversion of this Note and the Conversion Price shall be correspondingly adjusted to give the Holder of the Note, on conversion for the same aggregate Conversion Amount, the total number, class, and type of Securities or other property as the Holder would have owned had the Note been converted prior to the event and had the Holder continued to hold such Securities until the event requiring adjustment. The form of this Note need not be changed because of any such adjustment.

(ii) Upon the occurrence of adjustment pursuant to this Section 2(b), the Company at its expense will, at the written request of the Holder, promptly compute such adjustment in accordance with the terms of this Note and prepare a certificate setting forth such adjustment, including a statement of the adjusted Conversion Price and adjusted number or type of Securities or other securities issuable upon conversion of this Note (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of such certificate to the Holder.

(c) Mechanics and Effect of Conversion. No fractional Securities of the Company’s Common Stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal balance of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note at the principal offices of the Company. At its expense, the Company will, as soon as practicable thereafter, cause to be issued and delivered to such Holder a certificate or certificates for the number of Securities to which such Holder is entitled upon such conversion or confirmation of book-entry registration of such Securities, together with a check payable to the Holder for any cash amounts payable as described herein. Upon conversion of this Note, the Company will be forever released from all of its obligations and liabilities under this Note with regard to any principal amount.

Payment Terms . All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company.
Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the prior written consent of the Company, except for transfers to affiliates. Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, a new convertible promissory note for the same principal amount will be issued to, and registered in the name of, the transferee.
Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of law.
Notices. Any notice required or permitted by this Note shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile or e-mail, or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address, facsimile number or e-mail as set forth below or as subsequently modified by written notice.
Amendments and Waivers. Any term of this Note may be amended or waived only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 7 shall be binding upon the Company, the Holder and transferee of this Note.
Stockholders, Officers and Directors Not Liable. In no event shall any stockholder, officer or director of the Company be liable for any amounts due or payable pursuant to this Note.
Titles and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing or interpreting this Note.

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This Note is executed and delivered as of the date first set forth above.

COMPANY:
Ainos, Inc., a Texas corporation<br> <br>(FORMERLY KNOWN AS AMARILLO BIOSCIENCES, INC.)
By:

| Name: | Chung-Hsien Tsai |

| Title: | Chief Executive Officer |

HOLDER:

| ASE TEST, INC. | | By: |

| Name: |

| Title: | | Principal Amount: __US500,000___ |

All values are in US Dollars.

[Signature Page to Convertible Note]

AINOS, INC. CONVERTIBLE NOTE PURCHASE AGREEMENT

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