Related Party Transactions

6 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

Related Party Transactions

11. Related Party Transactions

The following is a summary of related party transactions that met our disclosure threshold:

Working Capital Advances

The proceeds of the KY Note and ASE Note (see Note 5) were used for working capital advances. The total interest expense incurred in related to the notes for the three and six months ended June 30, 2024 were $101,777 and $132,855 compared to $22,637 and $26,057, for the three and six months ended June 30, 2023. As of June 30, 2024 and December 31, 2023, unpaid accrued interest expenses were $220,488 and $87,632, respectively.

Purchase and Sales

Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY

On June 14, 2021, the Company entered into an exclusive agreement with Ainos KY 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 which were developed and manufactured by Taiwan Carbon Nano Technology Corporation (the “TCNT”), a controlling shareholder of Ainos KY (the “Sales and Marketing Agreement”). On June 7, 2021, the Taiwan Food and Drug Administration (the “TFDA”) approved emergency use authorization (the “EUA”) to TCNT for the Ainos COVID-19 Antigen Rapid Test Kit sold and marketed under the “Ainos” brand in Taiwan. On June 21, 2022, the Company began marketing the Ainos SARS-CoV-2 Antigen Rapid Self-Test (together with Ainos COVID-19 Antigen Rapid Test Kit, the “COVID-19 Antigen Rapid Test Kits”) under a separate EUA issued by the TFDA to TCNT on June 13, 2022.

The Company incurred costs associated with manufacturing COVID-19 Antigen Rapid Test Kits by TCNT pursuant to the Sales and Marketing Agreement, totaling nil for the three and six months ended June 30, 2024compared with the amount for the three and six months ended June 30, 2023 of nil and $46,635 respectively.

Manufacturing Service Agreement with TNCT for the VELDONA Pet cytoprotein supplements

On August 28, 2023, the Company entered into a manufacturing service agreement with TCNT, together with another third-party vendor, to manufacture pet supplement products. The Company incurred costs totaling nil for the three and six months ended June 30, 2024.

As of June 30, 2024 and December 31, 2023, the accounts payable to TCNT were nil and $323, respectively; and prepayment for COVID-19 Antigen Rapid Test Kits were $21,872 and $27,208, respectively.

COVID-19 Antigen Rapid Test Kits Sales

The Company sold COVID-19 Antigen Rapid Test Kits to affiliates of ASE Test Inc., totaling nil for the three and six months ended June 30, 2024 compared with the three and six months ended June 30, 2023 amount of $12,541 and $12,541, respectively. As of June 30, 2024, and December 31, 2023, the accounts receivable to aforementioned related parties were nil, respectively.

Product Co-development Agreement

Pursuant to a five-year Product Co-development Agreement effective on August 1, 2021 (the “Product Co-Development Agreement”) with TCNT, the development expenses incurred were $101,244 and $191,838 for the three and six months ended June 30,2024, respectively, compared to $74,733 and $152,196 for the three and six months ended June 30, 2023, respectively. The fee for non-exclusive use of patents were $285,263 and $569,862 for the three and six months ended June 30, 2024 and nil for the three and six months ended June 30, 2023, respectively. Advance payment $138,615 and $ 26,511 as of June 30, 2024 and December 31, 2023, respectively.

Miscellaneous

The Company engaged Ms. Chien-Hsuan Huang as a medical device development consultant in September 2022 for one year. Ms. Huang is the spouse of one of the board of directors of the Company. The R&D expense was nil for the three and six months ended June 30, 2024 and $19,618 and $39,344 for the three and six months ended June 30, 2023, respectively.