UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
For the Quarterly Period Ended Septemberquarterly period ended June 30, 2017
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File NumberNo. 0-20791
AINOS, INC. | ||
(Exact name of registrant as specified in its charter) |
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 | ||||
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, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer"filer," "smaller reporting company," and "smaller reporting"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated | ☒ | 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 the issuer's common stock, outstanding.
AINOS, INC.
INDEX
PAGE NO. | ||
3 | ||
3 | ||
Balance Sheets– | 3 | |
4 | ||
Statements of Stockholders’ Equity (Deficit) – Six Months Ended June 30, 2022 and 202 (unaudited) | 6 | |
8 | ||
9 | ||
Management's Discussion and Analysis of Financial Condition and Results of Operations | 15 | |
Quantitative and Qualitative Disclosures About Market | 22 | |
22 | ||
24 | ||
24 | ||
25 | ||
25 | ||
25 | ||
26 | ||
27 |
2 |
Table of Contents |
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Ainos, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
September 30, 2017 | December 31, 2016 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 145,029 | $ | 134,125 | ||||
Inventory | - | 14,700 | ||||||
Advance to related party | 28,584 | 37,835 | ||||||
Prepaid expense and other current assets | 38,718 | 75,739 | ||||||
Total current assets | 212,331 | 262,399 | ||||||
Patents, net | 179,208 | 156,063 | ||||||
Property and equipment, net | 31,302 | 44,214 | ||||||
Total assets | $ | 422,841 | $ | 462,676 | ||||
Liabilities and Stockholders' Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 175,339 | $ | 165,502 | ||||
Accrued interest - related parties | 10,018 | 3,259 | ||||||
Advance from related party | 187,500 | 187,500 | ||||||
Stock subscription deposit | 142,107 | - | ||||||
Customer deposits – related parties | - | 124,833 | ||||||
Convertible note payable – related party | 886,481 | 791,481 | ||||||
Total current liabilities | 1,401,445 | 1,272,575 | ||||||
Total liabilities | 1,401,445 | 1,272,575 | ||||||
Commitments and contingencies | ||||||||
Stockholders' deficit | ||||||||
Preferred stock, $0.01 par value: | ||||||||
Authorized shares - 10,000,000, | ||||||||
Issued and outstanding shares – 0 at September 30, 2017 and December 31, 2016 | - | - | ||||||
Common stock, $0.01 par value: | ||||||||
Authorized shares - 100,000,000, | ||||||||
Issued and outstanding shares – 23,078,668 and 21,916,143 at September 30, 2017 and December 31, 2016, respectively | 230,787 | 219,161 | ||||||
Additional paid-in capital | 465,960 | 237,540 | ||||||
Accumulated deficit | (1,675,351 | ) | (1,266,600 | ) | ||||
Total stockholders' deficit | (978,604 | ) | (809,899 | ) | ||||
Total liabilities and stockholders' deficit | $ | 422,841 | $ | 462,676 |
|
| June 30, |
|
| December 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
Assets |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 1,753,877 |
|
| $ | 1,751,499 |
|
Inventory |
|
| 670,507 |
|
|
| 0 |
|
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 |
|
| 0 |
|
|
| 26,000,000 |
|
Total current liabilities |
|
| 6,988,399 |
|
|
| 30,594,799 |
|
Long term liabilities: |
|
|
|
|
|
|
|
|
Convertible notes payable - noncurrent |
|
| 27,400,000 |
|
|
| 0 |
|
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 |
|
See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended September 30 | Nine months ended September 30 | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Sales – ACM | $ | - | $ | - | $ | 250,502 | $ | - | |||||||
Sales – Herbs | - | - | - | 4.400 | |||||||||||
Total revenues | - | - | 250,502 | 4,400 | |||||||||||
Cost of revenues: | |||||||||||||||
Product sales | - | - | 58,801 | 5,100 | |||||||||||
Total cost of revenues | - | - | 58,801 | 5,100 | |||||||||||
Gross Margin | - | - | 191,701 | (700 | ) | ||||||||||
Operating expenses: | |||||||||||||||
Research and development expenses | - | - | - | - | |||||||||||
Selling, general and administrative expenses | 230,875 | 178,470 | 592,822 | 434,176 | |||||||||||
Total operating expenses | 230,875 | 178,470 | 592,822 | 434,176 | |||||||||||
Operating loss | (230,875 | ) | (178,470 | ) | (401,121 | ) | (434,876 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest expense | (1,929 | ) | (798 | ) | (7,630 | ) | (2,257 | ) | |||||||
Net loss | (232,804 | ) | $ | (179,268 | ) | (408,751 | ) | $ | (437,133 | ) | |||||
Basic and diluted net loss per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
Weighted average shares outstanding – basic and diluted | 22,789,370 | 21,394,810 | 22,500,663 | 20,871,635 |
|
| 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 |
|
|
| 0 |
|
|
| 3,212,310 |
|
|
| 0 |
|
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 |
|
|
| 0 |
|
|
| 8,914 |
|
|
| 0 |
|
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.
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.
5 |
Table of Contents |
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 |
|
| - |
|
| $ | 0 |
|
|
| 144,379,308 |
|
| $ | 1,443,793 |
|
| $ | 18,899,873 |
|
| $ | (12,208,811 | ) |
| $ | (52,259 | ) |
| $ | (8,082,596 | ) |
Warrant expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 3,417 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,417 |
|
Option expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 40,026 |
|
|
| 0 |
|
|
| 0 |
|
|
| 40,026 |
|
Net loss |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (1,954,032 | ) |
|
| 0 |
|
|
| (1,954,032 | ) |
Translation adjustment |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (165,687 | ) |
|
| (165,687 | ) |
Balance at June 30, 2022 |
|
| - |
|
| $ | 0 |
|
|
| 144,379,308 |
|
| $ | 1,443,793 |
|
| $ | 18,943,316 |
|
| $ | (14,162,843 | ) |
|
| (217,946 | ) |
| $ | 6,006,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2021 |
|
| - |
|
|
| 0 |
|
|
| 42,066,172 |
|
| $ | 420,662 |
|
| $ | 5,055,420 |
|
| $ | (6,754,261 | ) |
|
| 0 |
|
| $ | (1,278,179 | ) |
Issuance of stock for compensation |
|
| - |
|
|
| 0 |
|
|
| 205,643 |
|
|
| 2,056 |
|
|
| 137,349 |
|
|
| 0 |
|
|
| 0 |
|
|
| 139,405 |
|
Issuance of stock for acquisition of patents |
|
| - |
|
|
| 0 |
|
|
| 100,000,000 |
|
|
| 1,000,000 |
|
|
| 19,000,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 20,000,000 |
|
Warrant expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 3,417 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,417 |
|
Option expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 90,688 |
|
|
| 0 |
|
|
| 0 |
|
|
| 90,688 |
|
Net loss |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (749,774 | ) |
|
| 0 |
|
|
| (749,774 | ) |
Balance at June 30, 2021 |
|
| - |
|
| $ | 0 |
|
|
| 142,271,815 |
|
| $ | 1,422,718 |
|
| $ | 24,286,874 |
|
| $ | (7,504,035 | ) |
|
| 0 |
|
| $ | 18,205,557 |
|
See accompanying notes to condensed consolidated financial statements.
6 |
Table of Contents |
Ainos, Inc.
Statements of Stockholders’ Equity (Deficit)
For the six months ended June, 2022 and 2021
(Unaudited)
|
| 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 |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 6,834 |
|
|
| 0 |
|
|
| 0 |
|
|
| 6,834 |
|
Option expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 80,052 |
|
|
| 0 |
|
|
| 0 |
|
|
| 80,052 |
|
Net loss |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (4,053,927 | ) |
|
| 0 |
|
|
| (4,053,927 | ) |
Translation adjustment |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (223,746 | ) |
|
| (223,746 | ) |
Balance at June 30, 2022 |
|
| - |
|
| $ | 0 |
|
|
| 144,379,308 |
|
| $ | 1,443,793 |
|
| $ | 18,943,316 |
|
| $ | (14,162,843 | ) |
|
| (217,946 | ) |
| $ | 6,006,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020 |
|
| - |
|
|
| 0 |
|
|
| 42,066,172 |
|
| $ | 420,662 |
|
| $ | 4,961,315 |
|
| $ | (6,220,255 | ) |
|
| 0 |
|
| $ | (838,278 | ) |
Issuance of stock for compensation |
|
| - |
|
|
| 0 |
|
|
| 205,643 |
|
|
| 2,056 |
|
|
| 137,349 |
|
|
| 0 |
|
|
| 0 |
|
|
| 139,405 |
|
Issuance of stock for acquisition of patents |
|
| - |
|
|
| 0 |
|
|
| 100,000,000 |
|
|
| 1,000,000 |
|
|
| 19,000,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 20,000,000 |
|
Warrant expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 6,835 |
|
|
| 0 |
|
|
| 0 |
|
|
| 6,835 |
|
Option expense |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 181,376 |
|
|
| 0 |
|
|
| 0 |
|
|
| 181,376 |
|
Net loss |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (1,283,781 | ) |
|
| 0 |
|
|
| (1,283,781 | ) |
Balance at June 30, 2021 |
|
| - |
|
| $ | 0 |
|
|
| 142,271,815 |
|
| $ | 1,422,718 |
|
| $ | 24,286,874 |
|
| $ | (7,504,035 | ) |
|
| 0 |
|
| $ | 18,205,557 |
|
See accompanying notes to condensed consolidated financial statements.
7 |
Table of Contents |
Ainos, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended September 30, 2017 | Nine months ended September 30, 2016 | |||||||
Net cash used in operating activities: | $ | (188,526 | ) | $ | (426,988 | ) | ||
Cash flows from investing activities: | ||||||||
Investment in equipment | - | (47,685 | ) | |||||
Investment in patents | (39,945 | ) | (54,483 | ) | ||||
Net cash used in investing activities | (39,945 | ) | (102,168 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from private placement offering | 144,375 | 421,875 | ||||||
Proceeds from convertible note payable – related party | 95,000 | 262,500 | ||||||
Net cash provided by financing activities | 239,375 | 684,375 | ||||||
Net change in cash | 10,904 | 155,219 | ||||||
Cash and cash equivalents at beginning of period | 134,125 | 21,138 | ||||||
Cash and cash equivalents at end of period | $ | 145,029 | $ | 176,357 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest | $ | - | $ | 1,066 | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
Noncash transactions: | ||||||||
Common stock shares issued for services | $ | 10,671 | $ | - | ||||
Conversion of accounts payable – related party to convertible note payable – related party | $ | - | $ | 144,426 | ||||
Conversion of notes payable – related party to convertible note payable – related party | $ | - | $ | 384,555 |
|
| 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 |
|
|
| 0 |
|
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 | ) |
|
| 0 |
|
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 |
|
|
| 0 |
|
Stock issued for acquisition of patents |
|
| - |
|
|
| 20,000,000 |
|
Stock issued for compensation |
|
| - |
|
|
| 139,405 |
|
Net change in equipment payable |
|
| 117,185 |
|
|
| 0 |
|
ROU leased assets |
|
| - |
|
|
| 62,846 |
|
See accompanying notes to the condensed consolidated financial statements.
Notes to Financial Statements
(Unaudited)
1. | Organization and Business. Ainos, Inc., a Texas corporation formerly known as Amarillo Biosciences, Inc. (the "Company", "we" or |
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 |
3. | Financial Condition. These financial statements have been prepared in accordance with |
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. |
9 |
Table of Contents |
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. |
4. | Common Stock. |
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. |
6. | Current Convertible Notes Payable |
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 | 0 | 0 | 114,026 | 6,263 | |
Stephen Chen | #2.16 | 3/18/2016 | Payable on demand | 0.65% | N/A | $ 0.19 | working capital | 262,500 | 0 | 0 | 262,500 | 10,724 | |
376,526 | 0 | 0 | 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 | 0 | 0 | 15,000 | 326 | |
Ainos KY | #13.21 | 5/5/2021 | 2/28/2023 (1) | 1.85% | N/A | $ 0.20 | working capital | 20,000 | 0 | 0 | 20,000 | 427 | |
Ainos KY | #14.21 | 5/25/2021 | 2/28/2023 (1) | 1.85% | N/A | $ 0.20 | working capital | 30,000 | 0 | 0 | 30,000 | 610 | |
Ainos KY | #15.21 | 5/28/2021 | 2/28/2023 (1) | 1.85% | N/A | $ 0.20 | working capital | 35,000 | 0 | 0 | 35,000 | 706 | |
Ainos KY | #16.21 | 6/9/2021 | 2/28/2023 (1) | 1.85% | N/A | $ 0.20 | working capital | 300,000 | 0 | 0 | 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 | 0 | 0 | 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 | 0 | 0 | 54,000 | 994 | |
Ainos KY | #19.21 | 9/1/2021 | 2/28/2023 (1) | 1.85% | N/A | $ 0.20 | working capital | 120,000 | 0 | 0 | 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 | 0 | 0 | 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 | 0 | 0 | 50,000 | 588 | |
Ainos KY | #22.21 | 11/25/2021 | 2/28/2023 (1) | 1.85% | N/A | $ 0.20 | working capital | 450,000 | 0 | 0 | 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 | 0 | 0 | 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 | 0 | 0 | 1,219,000 | 11,307 | |
|
|
|
|
|
|
|
| 3,000,000 | 0 | 0 | 3,000,000 | 37,029 | |
Total convertible notes payable- related parties | 3,376,526 | 0 | 0 | 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 | 0 | 0 | 129,405 | 396 | |
Ainos KY | #26.22 (2) | 3/4/2022 | 3/31/2023 | 1.85% | N/A | N/A | working capital | - | 800,000 | 0 | 800,000 | 4,825 | |
Non-convertible notes payable-related party | 129,405 | 800,000 | 0 | 929,405 | 5,221 | ||||||||
i2 China | #8b.20 | 1/1/2020 | 1/1/2021 | 1.85% | N/A | N/A | consulting fee | 84,000 | 0 | 0 | 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 | 0 | 4,389,931 | 63,159 |
10 |
Table of Contents |
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. | |
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. |
11 |
Table of Contents |
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: |
· | $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”. |
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. |
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. |
12 |
Table of Contents |
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 | |
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. |
13 |
Table of Contents |
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, | |
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 | |
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 | |
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 |
September 30, 2017 | December 31, 2016 | |||||||
Convertible Note payable – related party | $ | 144,426 | $ | 144,426 | ||||
Convertible Note payable – related party | 262,500 | 262,500 | ||||||
Convertible Note payable – related party | 384,555 | 384,555 | ||||||
Convertible Note payable – related party | 70,000 | - | ||||||
Convertible Note payable – related party | 25,000 | - | ||||||
Convertible Notes payable – related party | $ | 886,481 | $ | 791,481 |
Additionally, convertible promissory notes held by Ainos KY in the aggregate principal amount of |
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of OperationsThe 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 made throughoutin this documentreport are "forward-looking statements"“forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Act").1995. Forward-looking statements include without limitation, any statementstatements 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 predict, forecast, indicatecause our actual results, performance or implyachievements to be different from any future results, performance and achievements costsexpressed or expensesimplied by these statements. We cannot guarantee that our forward-looking statements will turn out to be correct or that our beliefs and may contain words such as "believe," "anticipate," "expect," "estimate," "project," "budget," or words or phrasesgoals 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 similar meaning. Forward-looking statementsfuture 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 projectedset forth or contemplated in the
15 |
Table of Contents |
· | 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. |
Any forward-looking statements in this report are made only as of the date hereof and, uncertainties are detailed from timeexcept as may be required by law, we do not have any obligation to timepublicly update any forward-looking statements contained in reportsthis 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 by the Company with the SecuritiesSEC 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 Exchange Commission, including Forms 8-K, 10-Qsafe and 10-K and include among others the following: promulgation and implementation of regulations by the U.S. Food and Drug Administration ("FDA"); promulgation and implementation of regulations by foreign governmental instrumentalities with functions similar to those of the FDA; costs of research and development and trials, including without limitation, costs of clinical supplies, packaging and inserts, patient recruitment, trial monitoring, trial evaluation and publication; and possible difficulties in enrolling a sufficient number of qualified patientsnovel medical treatment for certain clinical trials. The Company is also dependent upon 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 economicstrategy, we plan to conduct clinical trials in Taiwan and financial risks, such as possible increasesuse 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 costssame time, we plan to initiate clinical trials for the VELDONA and SRNA programs over the course of employing and/or retaining qualified personnel and consultants and possible inflation which might affect the Company'sthis year.
Our ability to remain within its budget forecasts. The principal uncertaintiesgenerate product revenue sufficient to which the Company is presently subject are its inability to ensure that the results of trials performed by the Companyachieve profitability will be sufficiently favorable to ensure eventual regulatory approval for commercial sales, its inability to accurately budget at this time the possible costs associated with hiringdepend on further successful development and retaining of additional personnel, uncertainties regarding the terms and timingcommercialization of one or more commercial partner agreementsof our current or future product candidates and its abilityprograms. 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 going concern.
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 factors which could adversely impactfunds 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 Company's businessdevelopment and future operations. Moreover, the Company is engaged in a very competitive and rapidly changing industry.
We are unable to predict all such risk factors, nor can it assess the impacttiming or amount of all such risk factors onunexpected expenses or when or if we will be able to achieve or maintain profitability due to the Company's business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those projected in any forward-looking statements. Given thesenumerous risks and uncertainties investors shouldassociated with product development and related legal regulatory requirements. When we are eventually able to generate additional product sales, those sales may not place undue reliancebe sufficient to become profitable. If we fail to become profitable or are unable to sustain profitability on forward-looking statements as a predictioncontinuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
As of actual future events.
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 business of biopharmaceutical research and development. Its primary focus historically has been the development of low-dose, orally administered interferon. ABI holdsU.S. or licenses various patents; it also is the developer of Maxisal®, a dietary supplement to treat dry-mouth symptoms.
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We believe affordable, easy-to-use, rapid COVID-19 testing will continue to leverage its core technology going forward by using its thirty years of scientific and clinical data to establish interferon-alpha lozenges as a therapeutic agent for conditions such as influenza, hepatitis C, and various causes of thrombocytopenia just to name a few. The Company is committed to expanding its business operations from the currently narrow focus to encompass a wide variety of licensing, partnerships, and development opportunitiesbe in demand at least in the aforementioned sectors. This commitment extends not onlyshort-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 U.S., butpandemic, including the emergence of new variants, the pandemic may affect our ability to Taiwan, China,initiate and other Asian Countries.
Results of Operations for QuartersQuarter Ended SeptemberJune 30, 20172022 (“Q2 2022”) and 2016:
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 quarter ended September 30, 2017, no revenue was recognized nor was any recognized for the quarter ended September 30, 2016.
Research and Development Expenses. Research 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 expenses have not been incurredof 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 the quarters ended September 30, 2017, and September 30, 2016.
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 developmentexpenses 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 $230,875$1,178,834 were incurred for the third quarterfirst six months of 2017,2022, compared to $178,470$1,383,011 for the third quarterfirst six months of 2016, an increase2021, a decrease of $52,404 (29%$204,177 (15%). This increase is mostly dueThe 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 additional salary expense, stock compensation expense, fundraising fees, and professional feesthe analysis in 2017.
Operating Loss. In the three-monthsix month period ended SeptemberJune 30, 2017,2022, the Company experienced andCompany's operating loss of $230,875was $4,027,358 compared to an operating loss for the three-monthsix month period ended SeptemberJune 30, 20162021 of $178,470,$1,248,655, a $52,404 increase$2,778,703 (223%) increase. Our operating losses are mainly attributable to additional R&D expenses in loss. The increased expenses of $52,404 inline with the third quarter of 2017 over 2016 account for the loss.
Interest Income and Expense. During the three-month period ended September 30, 2017, interest Interest expense, net was $1,929, compared to $798 for the three-month period ended September 30, 2016, an increase of $1,131 for the period. The interest expense recognized in the third quarter of 2017 is mostly due to accrued interest for our convertible loans made by Dr. Stephen Chen.
Net Loss. The Net Loss for the nine-month period ended June 30, 2016,first half of 2022, increased to $4,053,927 from $1,283,781 in 2021, an increase of $5,373 (238%$2,770,146 (216%). for the period. The interest expense recognizedmajor constituents of the increase in net loss are the increases in R&D expenses in the nine-month period ended Septemberfirst six months of 2022.
Liquidity and Capital Resources
As of June 30, 2017 is mostly due to accrued interest for convertible loans from Dr. Stephen Chen2022 and interest paid associated with our D&O insurance policy payment.
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The following table summarizes our cash position of $134,125 as of December 31, 2016. The Company had a working capital deficit of $1,010,176flows at the end of SeptemberJune 30, 2016. For 2017, the September 30, working capital deficit was $1,189,114. Historically the burn rate was between $50,0002022:
|
| 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 $60,000 per month. It is difficult$42,926 for H1 2021. While our revenues grew in H1 2022 due to estimate the burn rate at this point insomuch as the new budgets and new projects are being developed. Onesales of the Company's main goals isAinos 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 returncash used in H1 2021, attributed to the statusacquisition 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 going concern by having reduced operating lossesdiscussion of the notes, see “Part II, Item 2 - Unregistered Sales of Equity Securities and subsequently becoming profitable. Use of Proceeds.”
As indicated throughout this document, two other major goals of ABIJune 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 (1) leverage the coreterms 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 low-dose oral interferon,development purposes.
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In 2023 and (2) diversify Company operationsbeyond, we intend to incorporate additional lines of business which will extend the reach of ABI into additional economic sectorsinvest in research and development and clinical trial spending to advance our VELDONA development efforts for disease indications such as biotech / bio-pharmaceutical / health care productsthrombocytopenia and life sciences business. Our investor groupSjögren’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 indicatedbeen increasing in Taiwan, we anticipate demand for the willingnesstest kits to assist in future financing of operations as ABI seeks to monetize its existing (and potentially newly developed) intellectual property. ABI estimates its financing needs to be between $1,000,000 and $1,600,000 to support our core technology, which is includedincrease, at least in the Pharmaceutical Division, and exploring the possibility of instituting new revenue streams with a Medical Division and a Consumer Products Division.
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk.As a "smaller“smaller reporting company",company,” we are not required to provide the information under this Item 3.
ITEM 4.
Controls and ProceduresDisclosure Controls and Procedures
Our management, with the participation of our management, including the Chief Executive Officer ("CEO") and Chief Financial Officer, ("CFO"), ofevaluated the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). Based on that evaluation, the CEO and the CFO have concluded that as of the end of the period covered by the Annual Reportthis report. Based upon that evaluation, our Chief Executive Officer and Quarterly Report,Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2022. The term “disclosure controls and procedures,” as defined in ensuring that: (i)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 usa company in the reports that we fileit files or submit to the SECsubmits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in applicablethe SEC’s rules and formsforms. Disclosure controls and (ii) materialprocedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in ourthe reports filedthat it files or submits under the Exchange Act is accumulated and communicated to ourthe company’s management, including our CEOits principal executive and CFO,principal financial officers, as appropriate to allow for accurate and timely decisions regarding required disclosure.
Internal Controls and Procedures overControl Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, to provide reasonable assurance regardingas 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 reliabilityyear ended December 31, 2021, under the supervision and with the participation of financial reportingour management, including our Chief Executive Officer and the preparationChief Financial Officer, we conducted an evaluation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP"). Management has assessed the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committeeas of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework. A material weakness, as defined by SEC rules, is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in internal control over financial reporting that were identified are:
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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 the financial reporting process and there is a reasonable possibility that material misstatements of the financial statements, including disclosures, will not be prevented or detected on a timely basis; and
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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 suchmaterial legal proceedings or claims against us.
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 SeptemberNovember 18, 2021, we entered into the Asset Purchase Agreement with Ainos KY, our majority shareholder. We closed the transaction on January 30, 2016,2022. Pursuant to the BoardAsset Purchase Agreement, we acquired certain intellectual property assets and certain manufacturing, testing, and office equipment for a total purchase price of Directors approved$26,000,000. As payment of the Purchase Price, at the closing on January 30, 2022, the Company issued to amendAinos KY the previously authorized Private Placement 2016-2 offer, sale, and issuanceAPA Convertible Note, a convertible promissory note in the principal amount of unregistered securities. The Private Placement 2016-2$26,000,000.
On August 9, 2022, the APA Convertible Note was amended to offer up to 10,000,000converted into 7,647,058 shares of the Company'sour 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 $.1875 per share for an aggregateour offering amount of $1,875,000. The offering is to be completed within one (1) year of the date of approval. On October 26, 2017, the Board of Directors unanimously approved a Consent Resolution authorizing the Company to amend the Private Placement 2016-2 offering to be extended through April 26, 2018 and to offer an additional 5,000,000 shares at a price of $.1875 per share. This amendment increased the aggregate offering amount to $2,812,500. On October 31, 2017, the Company filed the requisite Form D disclosing the amendment.
2021 – 2022 Ainos KY Working Capital Advances
In 2021, Ainos KY provided working capital advances in the third quarterform of 2017, 200,000 shares were sold to a related party, Dr. Stephen T. Chen, Chairman, CEO, and President of the Company. The shares were sold at a price per share of $.1875 for total proceeds of $37,500. Also during the third quarter, finders' feesconvertible note financing in the aggregate amount of 57,000 shares valued$3,000,000. The working capital convertible notes issued in 2021 bear interest at $10,671,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. |
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 $.1875, were paid to non-related partiesour 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
The exhibits listed in the Exhibit Index are filed or incorporated by reference as remuneration for introducing investors to the Company. No sharespart of this filing.
+ Schedules (as similar attachments) have been sold subsequentomitted from this filing pursuant to the balance sheet date nor through the date this report was filed.
* Indicates a management contract or compensatory plan or arrangement.
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 |
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