Ainos, Inc 10-Q for FY2022 Q2

Ainos, Inc. (AIMD)

10-Q 2022-08-15 For: 2022-06-30

Added on April 12, 2026

About this 10-Q

Ainos, Inc filed this 10-Q on August 15, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $636.63K; up 213.6% from $202.99K a year earlier
Net loss: $1.95M; compared with a net loss of $749.77K a year earlier

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Texas		75-1974352
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

8880 Rio San Diego Drive, Ste. 800, San Diego, CA 92108 (858) 869-2986
(Address and telephone number, including area code, of registrant's principal executive offices)

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

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

		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

	June 30,			December 31,
	2022			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

	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

	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

	Preferred Stock				Common Stock				Additional 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

	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

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.

	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.

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.

	We have not paid any dividends to our common stock shareholders to date, and have no plans to do so in the immediate future.

Payee	No.	Effective Date	Due Date	From Effective	Following Maturity	Conversion Rate	Issuing Purpose	As of 12/31/2021	Addition	Payment	As of 6/30/2022		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

(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.

	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.

	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.

	·	$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.

	·	$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”.

	March 2027 Convertible Notes

	The Company issued Convertible Notes pursuant to certain Convertible Note Purchase Agreements under Regulation S. The transactions are more particularly described below:

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:

	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.

	Asset Purchase Agreement

	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.

	Purchase and sales

	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.

	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.

	·	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;
	·	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.

	·	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.

	·	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.

	·	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.

			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

	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


Date: August 15, 2022	By:	/s/ Hui-Lan Wu
		Hui-Lan Wu, Principal Financial Officer
		(Chief Financial Officer)

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.

3.	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.

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.

		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.

		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.

	COMPANY:
	Ainos, Inc., a Texas corporation


	Name:	Chun-Hsien Tsai
	Title:	Chief Executive Officer

	PURCHASER:
	ASE TEST, INC.


	Name:	Chien Sheng Jason Chang
	Title:	Chairman

	Principal Amount: US$ 500,000

	COMPANY:

	Ainos, Inc., a Texas corporation (FORMERLY KNOWN AS AMARILLO BIOSCIENCES, INC.)

	By:
	Name:	Chung-Hsien Tsai
	Title:	Chief Executive Officer