10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

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

For the quarterly period ended September 30, 2022

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 No. 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 and telephone number, including area code, of registrant’s principal executive offices)

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

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

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

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

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

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

20,011,602 shares of common stock, par value $0.01 per share, outstanding as of November 11, 2022

AINOS, INC.

INDEX

		PAGE NO.
PART I:	FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 and 2021	6
	Condensed Consolidated Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	9
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	24
ITEM 4.	Controls and Procedures	24
PART II:	OTHER INFORMATION
ITEM 1.	Legal Proceedings	26
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
ITEM 3.	Defaults Upon Senior Securities	27
ITEM 4.	Mine Safety Disclosures	27
ITEM 5.	Other Information	27
ITEM 6.	Exhibits	28
Signatures		29

2

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

Ainos, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30			December 31
	2022			2021
Assets
Current assets:
Cash and cash equivalents		2,417,147			1,751,499
Accounts receivable		400,198			-
Inventory		698,295			-
Other current assets		152,406			466,198
Total current assets		3,668,046			2,217,697
Intangible assets, net		33,946,391			37,329,191
Property and equipment, net		1,350,960			1,187,702
Other Assets		116,425			87,571
Total assets		39,081,822			40,822,161
Liabilities and Stockholders’ Equity
Current liabilities:
Convertible notes payable		376,526			3,376,526
Notes payable		884,000			213,405
Accrued expenses and other current liabilities		1,382,721			1,004,868
Payables -related party		-			26,000,000
Total current liabilities		2,643,247			30,594,799
Long term liability:
Operating lease liabilities-non-current		12,505			30,255
Total liabilities		2,655,752			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 September 30, 2022 and December 31,2021; 19,478,270 shares and 9,625,133 shares issued and outstanding as of September 30, 2022 and December 31, 2021		194,783			96,251
Additional paid-in capital		58,491,505			20,203,972
Accumulated deficit		(21,984,598	)		(10,108,916	)
Translation adjustment		(275,620	)		5,800
Total stockholders’ equity		36,426,070			10,197,107
Total liabilities and stockholders’ equity		39,081,822			40,822,161

See accompanying notes to condensed consolidated financial statements.

3

Ainos, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30						Nine months ended September 30
	2022			2021			2022			2021
Revenues	$	1,757,774		$	363,052		$	2,481,602		$	568,164
Cost of revenues		(1,176,032	)		(103,638	)		(1,536,074	)		(174,395	)
Gross profit		581,742			259,414			945,528			393,769
Operating expenses:
Research and development expenses		1,834,786			646,798			5,047,096			646,798
Selling, general and administrative expenses		6,569,227			795,958			7,748,060			2,178,969
Total operating expenses		8,404,013			1,442,756			12,795,156			2,825,767
Operating loss		(7,822,271	)		(1,183,342	)		(11,849,628	)		(2,431,998	)
Non-operating income and expenses
Interest income and expenses, net		(9,821	)		23,517			(45,304	)		(9,361	)
Other income and expenses, net		10,336			(285	)		19,250			(2,532	)
Total non-operating income and expenses, net		515			23,232			(26,054	)		(11,893	)
Net loss		(7,821,756	)		(1,160,110	)		(11,875,682	)		(2,443,891	)
Net loss per common shares-basic and diluted		(0.51	)		(0.12	)		(1.03	)		(0.48	)
Weighted average common shares outstanding– basic and diluted		15,301,396			9,494,468			11,538,013			5,061,160

See accompanying notes to condensed consolidated financial statements.

4

Ainos, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

	Three months ended September 30						Nine months ended September 30
	2022			2021			2022			2021
Net loss	$	(7,821,756	)	$	(1,160,110	)	$	(11,875,682	)	$	(2,443,891	)
Other comprehensive loss:
Translation adjustment		(57,674	)		6,838			(281,420	)		6,838
Comprehensive loss		(7,879,430	)		(1,153,272	)		(12,157,102	)		(2,437,053	)

See accompanying notes to condensed consolidated financial statements

5

Ainos, Inc.

Statements of Stockholders’ Equity (Deficit)

For the three months ended September 30, 2022 and 2021

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid in		Accumulated			Translation			Total Stockholders’ Equity
	Shares		Par Value		Shares		Par Value		Capital		Deficit			Adjustment			(Deficit)
Balance at June 30, 2022		-	$	-		9,625,133	$	96,251	$	20,290,857	$	(14,162,842	)	$	(217,946	)	$	6,006,320
Issuance of stock upon offering, net of issuance cost		-		-		780,000		7,800		1,772,404		-			-			1,780,204
Conversion of convertible notes into common stock		-		-		9,073,137		90,732		30,352,227		-			-			30,442,959
Share-based compensation		-		-		-		-		6,076,017		-			-			6,076,017
Net loss		-		-		-		-		-		(7,821,756	)		-			(7,821,756	)
Translation adjustment		-		-		-		-		-		-			(57,674	)		(57,674	)
Balance at September 30, 2022		-	$	-		19,478,270	$	194,783	$	58,491,505	$	(21,984,598	)	$	(275,620	)	$	36,426,070
Balance at June 30, 2021		-	$	-		9,484,634	$	94,847	$	25,614,745	$	(7,504,035	)		-			18,205,557
Issuance of stock for option		-		-		11,360		113		64,639		-			-			64,752
Share-based compensation		-		-		-		-		19,322		-			-			19,322
Net loss		-		-		-		-		-		(1,160,110	)		-			(1,160,110	)
Translation adjustment		-		-		-		-		-		-			6,838			6,838
Balance at September 30, 2021		-	$	-		9,495,994	$	94,960	$	25,698,707	$	(8,664,145	)	$	6,838		$	17,136,360

See accompanying notes to condensed consolidated financial statements.

6

Ainos, Inc.

Statements of Stockholders’ Equity (Deficit)

For the nine months ended September 30, 2022 and 2021

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid in		Accumulated			Translation			Total Stockholders’ Equity
	Shares		Par Value		Shares		Par Value		Capital		Deficit			Adjustment			(Deficit)
Balance at December 31, 2021		-	$	-		9,625,133	$	96,251	$	20,203,972	$	(10,108,916	)	$	5,800		$	10,197,107
Issuance of stock upon offering, net of issuance cost		-		-		780,000		7,800		1,772,404		-			-			1,780,204
Conversion of convertible notes into common stock		-		-		9,073,137		90,732		30,352,227		-			-			30,442,959
Share-based compensation		-		-		-		-		6,162,902		-			-			6,162,902
Net loss		-		-		-		-		-		(11,875,682	)		-			(11,875,682	)
Translation adjustment		-		-		-		-		-		-			(281,420	)		(281,420	)
Balance at September 30, 2022		-	$	-		19,478,270	$	194,783	$	58,491,505	$	(21,984,598	)	$	(275,620	)	$	36,426,070
Balance at December 31, 2020		-	$	-		2,804,259	$	28,043	$	5,353,933	$	(6,220,254	)		-		$	(838,278	)
Issuance of stock for compensation		-		-		13,709		137		139,268		-			-			139,405
Issuance of stock for acquisition of patents		-		-		6,666,666	$	66,667		19,933,333		-			-			20,000,000
Issuance of stock for option		-		-		11,360		113		64,639		-			-			64,752
Share-based compensation		-		-		-		-		207,533		-			-			207,533
Net loss		-		-		-		-		-		(2,443,891	)		-			(2,443,891	)
Translation adjustment		-		-		-		-		-		-			6,838			6,838
Balance at September 30, 2021		-	$	-		9,495,994	$	94,960	$	25,698,707	$	(8,664,145	)	$	6,838		$	17,136,360

See accompanying notes to condensed consolidated financial statements.

7

Ainos, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine months ended September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(11,875,682	)	$	(2,443,891	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,608,080			1,178,693
Share-based compensation expense		6,162,902			207,533
Stock issued for compensation		-			139,405
Loss on disposal of fixed property and equipment		-			2,227
Changes in operating assets and liabilities:
Accounts receivable		(400,198	)		(44,643	)
Inventory		(698,295	)		2,849
Other current assets		313,792			(81,921	)
Accrued expenses and other current liabilities		483,660			470,598
Net cash used in operating activities		(2,405,741	)		(569,150	)
Cash flows from investing activities:
Payments to acquire properties and equipment		(669,792	)		(41,581	)
Proceeds from disposal of properties and equipment		-			36
Increase in refundable deposits and others		4,713			(1,795	)
Net cash used in investing activities		(665,079	)		(43,340	)
Cash flows from financing activities:
Payments of lease liabilities		(14,896	)		(6,815	)
Proceeds from convertible notes payable-non-current		1,400,000			-
Proceeds from convertible notes payable		-			1,232,192
Proceeds from notes payable		800,000			-
Principal payments on notes payable		(129,405	)		-
Net proceeds from Uplisting in Nasdaq		1,780,204			-
Proceeds from exercise of share options		-			64,752
Net cash provided by financing activities		3,835,903			1,290,129
Effect from foreign currency exchange		(99,435	)		7,047
Net increase in cash and cash equivalents		665,648			684,686
Cash and cash equivalents at beginning of period		1,751,499			22,245
Cash and cash equivalents at end of period		2,417,147			706,931
Supplemental Cash Flow Information:
Cash paid for interest		1,872			9,363
Supplemental disclosures of noncash financing and investing activities:
Stock issued for compensation, warrant and option expense		-			346,938
Stock issued for acquisition of patents		-			20,000,000
Issuance of convertible notes for payables-related party		26,000,000			-
Conversion of convertible notes and accrued interest into common stock		30,442,959			-
ROU leased assets and obligation		-			62,723
Payment to acquire properties and equipment:
Acquisition of property and equipment		575,567			-
Increase in prepaid for equipment		33,776			-
Decrease in payables for equipment		60,449			-
Total payments		669,792			-

See accompanying notes to condensed consolidated financial statements.

8

Ainos, Inc.

Notes to Financial Statements

(Unaudited)

1. Organization and Business

Ainos, Inc., a Texas corporation formerly known as Amarillo Biosciences, Inc. (the “Company”, “we” or “us”), is engaged in developing medical technologies for point-of-care (“POCT”) testing and safe and novel medical treatment for a broad range of disease indications. Since our inception in 1984, we have concentrated our resources on business planning, raising capital, research and clinical development activities for our programs, securing related intellectual property and commercialization of proprietary therapeutics using low-dose non-injectable interferon (“IFN”). In addition to our core IFN technology, we are committed to developing a diversified healthcare business portfolio to include medical devices and consumer healthcare products. Although we have historically been involved in extensive pharmaceutical research and development of low-dose oral interferon as a therapeutic, we are prioritizing the commercialization of medical devices as part of our diversification strategy. Since April 15, 2021, we have acquired significant intellectual property from our majority shareholder, Ainos, Inc., a Cayman Islands corporation (“Ainos KY”), to expand our potential product portfolio into Volatile Organic Compounds (“VOC”) POCTs and COVID-19 POCTs. We expect our underlying intellectual property to enable us to expedite the commercialization of our medical device pipeline, beginning with the Ainos-branded COVID-19 POCT product candidates.

2. Underwritten Public Offering

The Company’s registration statement related to its underwritten public offering (“Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (“Nasdaq”) on August 9, 2022 under the trading symbols “AIMD” and “AIMDW”, respectively. The Company completed its underwritten public offering of an aggregated 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25.

In connection with the Offering, the Company’s board of directors on April 29, 2022 and our shareholders on May 16, 2022 approved a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and each series of its redeemable convertible notes to be consummated prior to the effectiveness of the Offering The par value and authorized shares of the Company’s common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock, RSUs, warrants and options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented.

The Company filed an amended Restated Certificate of Formation with the Secretary of State of Texas on August 8, 2022 that effectuated the Reverse Stock Split.

Additional information regarding the Offering and Reverse Stock Split can be found below in Note 5 of the Notes to Financial Statements.

3. Basis of presentation

The accompanying consolidated financial statements, which should be read in conjunction with the audited financial statements and footnotes included in the Company’s Form 10-K/A for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022 and the un-audited financial statements and footnotes included in the Company’s Form 10-Q for the quarter ending June 30, 2022 as filed with the SEC on August 15, 2022, have been prepared in accordance with the Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by for audited financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022.

9

4. 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 the Offering concurrent with an uplisting to the Nasdaq Capital Markets, as described in Note 5.

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.

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.

5. Stockholders’ Equity

Reverse Stock Split

On May 16, 2022 our shareholders approved a reverse stock split proposal and on August 8, 2022 the Board approved a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and each series of its redeemable convertible notes to be consummated prior to the effectiveness of the Company’s underwritten public offering (“Offering”) on August 9, 2022. The par value and authorized shares of the Company’s common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock, RSUs, warrants and options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented.

The Company filed an amended Restated Certificate of Formation with the Secretary of State of Texas on August 8, 2022 that effectuated the Reverse Stock Split.

Preferred Stock

We have 10,000,000 shares of preferred stock authorized for issuance. No shares of preferred stock were outstanding as of September 30, 2022.

Common Stock

As of September 30, 2022, we have 300,000,000 shares of voting common shares authorized for issuance. As of September 30, 2022, a total of 21,959,509 shares of common stock were either issued (19,478,270), or reserved for Company equity incentive plans (1,369,999), conversion of convertible debt to stock (145,066), and shares reserved for warrant conversion (966,174).

Underwritten Public Offering

The Company’s registration statement related to its underwritten public offering (“Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (“Nasdaq”) on August 9,2022 under the trading symbols “AIMD” and “AIMDW”, respectively. The Company completed its underwritten public offering of an aggregated 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25. The foregoing described warrants may be exercised from February 5, 2023 (181 days from the effective date of our S-1 Registration Statement made effective August 8, 2022, thereafter “Registration Date”) to August 8, 2027 (5 years from the Registration Date).

10

The Company received aggregate net proceeds of approximately $1.8 million after deducting underwriting commissions and legal, accounting, and consulting fees related to the Offering.

The Company granted its underwriters a 45-day option to purchase up to an additional 117,000 shares of common stock and/or up to an additional 117,000 warrants at the public offering price to cover over-allotments. The underwriters partially exercised its option to purchase an additional 117,000 warrants at $0.01 per unit for a total of $1,170. In addition, pursuant to an underwriting Agreement, the Company agreed to issue to the Representative of the underwriters, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to a total of 39,000 shares of Common Stock (the “Representative’s Warrants”). The Representative’s Warrants are exercisable at $4.68 per share, are initially exercisable 180 days after the effective date of the Offering and have a term of five years from their initial exercise date. Pursuant to the customary FINRA rules, the Representative’s Warrants are subject to a lock-up agreement pursuant to which the Representative will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of the registration statement referenced below.

Upon completion of the Offering, convertible notes outstanding in the principal amount of $30.4 million and accrued interest of $42,959 were automatically converted into 9,073,137 shares of common stock. Additional information regarding the conversion can be found below in Note 7 and Note 8 of the Notes to Financial Statements.

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

6. Equity Incentive Plans

2018 Employee Stock Option Plan (the “2018-ESOP”)

On September 26, 2018, the Board adopted the Company 2018 Employee Stock Option Plan (the “2018-ESOP”), formerly referred to as the “Amarillo Biosciences, Inc., 2018 Employee Stock Option Plan” in prior filings. The 2018-ESOP provides for the grant of Qualified Incentive Stock Options to the Company’s employees. Qualified options automatically became non-qualified options effective September 26, 2019 and was governed under the 2018-NQSOP described below because the plan was not ratified by our shareholders. The maximum number of shares of common stock authorized under the plan was 66,666 shares. The option price per share of common stock deliverable upon the exercise of an incentive stock option was 100% of the fair market value of a share on the date of grant. The option price is $5.7 per share and the options are exercisable during a period of ten years from the date of grant, where the options vest 20% annually over five years, commencing one year from date of grant.

Effective as of October 6, 2021, with the adoption by the Board of the 2021 SIP, no further awards may be granted under the 2018-ESOP.

2018 Officers, Directors, Employees, and Consultants Nonqualified Stock Option Plan (the “2018-NQSOP”)

On September 26, 2018, the Board adopted the Company 2018 Officers, Directors, Employees, and Consultants Nonqualified Stock Option Plan (the “2018-NQSOP”), formerly referred to as the “Amarillo Biosciences, Inc., 2018 Officers, Directors, Employees, and Consultants Nonqualified Stock Option Plan” in prior filings. The 2018-NQSOP provides for the grant of nonqualified incentive stock options to employees. The 2018-NQSOP is administered by the Board or by the Compensation Committee as constituted from time to time. The maximum number of shares of common stock which may be issued under the 2018-NQSOP is 266,666 which will be reserved for issuance upon exercise of options. The option price for the nonqualified options is $5.73 exercisable for a period of ten years, with a vesting period of five years at 20% per year commencing one year from date of grant.

Effective as of October 6, 2021, with the adoption by the Board of the 2021 SIP, no further awards may be granted under the 2018-NQSOP. As of September 30, 2022, options to acquire 36,666 shares of common stock remained outstanding.

11

2021 Employee Stock Purchase Plan

On September 28, 2021, the Board and on May 16, 2022 our shareholders, respectively, approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP” or “Plan”). The purpose of the 2021 ESPP is to provide an opportunity for eligible employees of the company and its designated companies (as defined in the Plan) to purchase common stock at a discount through voluntary contributions, thereby attracting, retaining and rewarding such persons and strengthening the mutuality of interest between such persons and the Company’s stockholders. The Company intends for offerings under the Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code; provided, that the Plan administrator may also authorize the grant of rights under offerings that are not intended to comply with the requirements of Section 423, pursuant to any rules, procedures, agreements, appendices, or sub-plans adopted by the administrator. Subject to adjustments as provided in the Plan, the maximum number of shares of common stock that may be issued under the Plan may not exceed 50,000 shares. Such shares may be authorized but unissued shares, treasury shares or shares purchased in the open market. The Plan is subject to approval by the Company’s stockholders within twelve months after the date of Board approval. The Plan will become effective on the date that stockholder approval is obtained, and will continue in effect until it expires on the tenth anniversary of the effective date of the Plan, unless terminated earlier.

2021 Stock Incentive Plan

On September 28, 2021, the Board and on May 16, 2022 our shareholders, respectively, approved the 2021 Stock Incentive Plan (the “2021 SIP” or “Plan”). The purpose of the 2021 SIP is to provide a means through which the Company, and the other members of the Company Group, defined by Section 2(n) of the Plan as the Company and its subsidiaries, and any other affiliate of the Company designated as a member of the Company Group by the Committee, may attract and retain key personnel, and to provide a means whereby directors, officers, employees, consultants and advisors of the Company and the other members of the Company Group can acquire and maintain an equity interest in the Company, or be paid incentive compensation measured by reference to the value of common stock, thereby strengthening their commitment to the interests of the Company Group and aligning their interests with those of the Company’s stockholders. The types of awards that may be granted from the Plan include individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend Equivalent Rights and Other Equity-Based Award granted under the Plan. The Plan will be effective upon shareholder approval. The expiration date of the Plan, on and after which date no awards may be granted, will be the tenth anniversary of the date of Board approval of the Plan, provided, however, that such expiration will not affect awards then outstanding, and the terms and conditions of the Plan will continue to apply to such Awards. The aggregate number of shares which may be issued pursuant to awards under the Plan is 1,333,333 shares of Common Stock (the “Plan Share Reserve”), subject to adjustments as provided in the Plan. The number of shares underlying any award granted under 2018 ESOP or 2018 NQSOP (the “Prior Plans”) that expires, terminates or is canceled or forfeited for any reason whatsoever under the terms of the Prior Plans, will increase the Plan Share Reserve. Each Award granted under the Plan will reduce the Plan Share Reserve by the number of shares underlying the award. No more than 666,666 shares may be issued in the aggregate pursuant to the exercise of incentive stock options granted under the Plan. The maximum number of shares subject to awards granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such director during the fiscal year, will not exceed $600,000 in total value (calculating the value of any such awards based on their grant date fair value for financial reporting purposes).

On July 28, 2022, the Company granted 533,332 and 88,000 Restricted Stock Units (the “RSUs”), after giving effect to the Reverse Stock Split, under the 2021 SIP to employees and non-employee directors, respectively. The RSUs shall vest in accordance to 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.

Restricted Stock Units

RSUs entitle the recipient to be paid out an equal number of common stock shares upon vesting. The fair value of RSUs is based on market price of the underlying stock on the date of grant. A summary of the Company’s RSU activity and related information for the nine months ended September 30, 2022 is as follows:

	Number of RSUs			Weighted- Average Grant Date Fair Value Per RSU
Balance as of December 31,2021		-		$	N/A
RSUs granted		621,332		$	11.10
RSUs vested		(533,332	)	$	11.10
RSUs canceled		-		$	N/A
Balance as of September 30, 2022		88,000		$	11.10

The aggregate fair value of RSU awards that vested in the three- and nine-month periods ended September 30, 2022 was $1 million.  The grant date fair value of awards that vested in the three- and nine-month periods ended September 30, 2022 was $5.9 million.

Warrants

As of September 30, 2022, following warrants are outstanding:

Pursuant to the Offering on August 9, 2022, the Company issued 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25.

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Pursuant to an underwriting agreement, dated August 8, 2022, by and between the Company and Maxim Group LLC (“Maxim”), as representative of the underwriters, Maxim partially exercised the option to purchase 117,000 additional warrants at a price per warrant of $0.01.

Pursuant to the underwriting agreement the Company issued representative warrants to the Maxim, as representative of the underwriters, to purchase 39,000 shares of common stock at an exercise price of $4.675, effective from February 5, 2023 until August 8, 2027.

On November 25, 2020, the Company issued a warrant to i2China Management Group, LLC, a related party of the Company since August 1, 2021.  The warrant entitles the holder to purchase 30,174 shares $3.98 and expires on November 24, 2025.

Share-Based Compensation

The share-based compensation for the three months ended September 30, 2022 and 2021 were $6,076,017 and $19,322, respectively; and compensation for the nine months ended September 30, 2022 and 2021 were $6,162,902 and $ 207,533, respectively.

As of September 30, 2022, the total unrecognized compensation cost related to outstanding RSUs, stock options and warrant was $1,197,230, which the Company expects to recognize over a weighted-average period of 1.61 years.

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7. Current Convertible Notes Payable and Other Notes Payable

As of September 30, 2022, the details of the convertible notes payable and other notes payable are shown in the table below:

Payee	No.	Effective Date	Due Date	From Effective	Following Maturity	Conversion Rate	Issuing Purpose	As of 12/31/2021	Addition	Converted/ Payment	As of 9/30/2022		Accrued Interest
Convertible Notes Payable:
Stephen Chen	#1.16	1/30/2016	Payable on demand	0.75%	N/A	$ 2.52	working capital	114,026	-	-	114,026	6,479
Stephen Chen	#2.16	3/18/2016	Payable on demand	0.65%	N/A	$ 2.81	working capital	262,500	-	-	262,500	11,009
								376,526	-	-	376,526	17,488
Ainos KY	#12.21	4/27/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	15,000	-	(15,000)	-	-
Ainos KY	#13.21	5/5/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	20,000	-	(20,000)	-	-
Ainos KY	#14.21	5/25/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	30,000	-	(30,000)	-	-
Ainos KY	#15.21	5/28/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	35,000	-	(35,000)	-	-
Ainos KY	#16.21	6/9/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#17.21	6/21/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	107,000	-	(107,000)	-	-
Ainos KY	#18.21	7/2/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	54,000	-	(54,000)	-	-
Ainos KY	#19.21	9/1/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	120,000	-	(120,000)	-	-
Ainos KY	#20.21	9/28/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#21.21	11/10/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	50,000	-	(50,000)	-	-
Ainos KY	#22.21	11/25/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	450,000	-	(450,000)	-	-
Ainos KY	#23.21	11/29/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#24.21	12/29/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	1,219,000	-	(1,219,000)	-	-
								3,000,000	-	(3,000,000)	-	-
Total convertible notes payable- related parties								3,376,526	-	(3,000,000)	376,526	17,488
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)	-	--
Ainos KY	#26.22 (2)	3/4/2022	2/28/2023	1.85%	N/A	N/A	working capital	-	800,000	-	800,000	8,556
			Non-convertible notes payable-related party					129,405	800,000	(129,405)	800,000	8,556
i2 China	#8b.20	1/1/2020	1/1/2021	1.85%	N/A	N/A	consulting fee	84,000	-	-	84,000	2,473
			Non-Convertible Notes payable- non-related party					84,000	-	-	84,000	2,473
			Total non-convertible notes payable					213,405	800,000	(129,405)	884,000	11,029
		Total convertible and non-convertible						3,589,931	800,000	(129,405)	1,260,526	28,517

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Notes:

(1)

On March 17, 2022, we executed a Promissory Note Extension Agreement with Ainos KY in which the due dates for certain convertible notes enumerated as #12.21 to #24.21 issued by the Company to Ainos KY were extended to February 28, 2023. The total unpaid principal for these extended period convertible notes amounted to $3,000,000 in the aggregate. Upon closing of the Offering, the principal and accrued interest were automatically converted into common stock of the Company.

(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 current convertible notes payable and accrued interest of Ainos KY as of August 8, 2022 in the aggregate total amount of $3,042,959 were converted to 1,014,319 shares of common stock on August 9, 2022. Information regarding the conversion can be found in Note 5 of the Notes to Financial Statements.

As of September 30, 2022 and December 31, 2021, the amount of current convertible and other notes payable totaled $1,260,526 and $3,589,931, respectively.

The total interest expense of convertible notes payable and other notes payable for the nine months ended September 30, 2022 and 2021 were $44,674 and $32,775 respectively. The cumulative accrued interest as of September 30, 2022 and December 31, 2021 were $28,517 and $28,673, respectively.

8. Non-Current Convertible Notes Payable.

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 prepayment was permitted in whole or in part without penalty. The APA Convertible Note was noninterest bearing.

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 were payable in cash on March 30, 2027, although the Company was permitted to prepay the Convertible Notes in whole or in part without penalty. The March 2027 Convertible Notes were non-interest bearing.

The non-current convertible notes payable as of August 9, 2022 in the aggregate total amount of $27,400,000 were all converted to 8,058,818 shares of common stock on that day.

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9. Related Party Transactions. The following is a summary of related party transactions that met our disclosure threshold for the nine months ended September 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 6,666,666 shares of common stock at $3 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”).

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 three quarters of 2022 and 2021, Ainos KY provided working capital advances in the form of convertible note and non-convertible note financing in the aggregate amount of $800,000 and $981,000, respectively. As of September 30, 2022 and December 31, 2021, the convertible and non-convertible notes payable to Ainos KY totaled $800,000 and $3,000,000, respectively. Refer to Note 7 for more information.

ASE Test, Inc. (the “ASE”), an affiliate of the Company, provided a working capital advance in the form of a convertible note financing in the principal amount of $500,000 in the 2^nd quarter of 2022.

The convertible notes and related accrued interest of Ainos KY and ASE as of August 8, 2022 in the aggregate total amount of $29,542,959 were converted to common stock upon the uplisting to Nasdaq. Refer to Notes 5 for more information.

In the first three quarters of 2021, 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 non-convertible note $129,405 was redeemed for cash in the 3rd quarter of 2022. As of September 30, 2022 and December 31, 2021, the convertible and non-convertible notes payable to Dr. Stephen T. Chen were $376,526 and $505,931, respectively.

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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 $1,603,169 and $173,657 for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, the accounts payable to TCNT were $24,242 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 $1,988,150 and $185,376 for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, the accounts receivable to ASE Technology Holding were $335,799 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 $490,082 and $117,386 for the nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, the accrued payables were $21,594 and $65,156, respectively.

10. Subsequent Events.

In accordance with the respective employment agreements entered into by each of the employees, the Company issued 533,332 common stock shares upon settlement and conversion of vested Restricted Stock Units (the “RSUs”) issued under our 2021 Stock Incentive Plan on October 26, 2022.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

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

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

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

· 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, except as may be required by law, we do not have any obligation to publicly update any forward-looking statements contained in this report to reflect subsequent events or circumstances.

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

Overview

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

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

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Our Portfolio of Products

Our portfolio of products is currently comprised of the following:

· COVID-19 Antigen Rapid Test Kit and Ainos’ Cloud-based Test Management Apps. Our cloud-based test management platform is comprised of an antigen rapid test kit, a personal application, or app, and an enterprise app. We anticipate our management apps will allow individuals and organizations to seamlessly manage tests, trace infections, and share results. As the first commercialized COVID-19 product we sell, we currently market the Ainos COVID-19 antigen rapid test kit in Taiwan under emergency use authorization (“EUA”) issued by the Taiwan Federal and Drug Administration (“TFDA”). We market the Ainos COVID-19 antigen rapid test kit under our brand name. The kit is manufactured by TCNT, our product co-developer.

· VOC POCT – Ainos Flora. Our Ainos Flora device, currently under clinical study in Taiwan, is intended to perform a non-invasive test for female vaginal health and certain sexually transmitted diseases (“STDs”) including chlamydia, 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 recently completed our own animal studies for oral treatment of COVID-19 and potential other viral infections. Subsequently, we are now conducting studies based on the VELDONA-only program. We also intend to explore opportunities to advance our other candidates including thrombocytopenia, Sjögren’s syndrome, aphthous stomatitis, chemotherapy-induced stomatitis, influenza, and the common cold.

· 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.

As a general strategy, we plan to conduct clinical trials in Taiwan and use the data to apply for TFDA approval and FDA clearance or comparable pathway. If our products are approved, we plan to work with third-party distributors to market our products in countries where we receive regulatory approval and to seek various business relationships with other medtech companies to market our products. At the same time, we plan to initiate clinical trials for the VELDONA and SRNA programs over the course of this year.

We signed a Master Service Agreement with Swiss Pharmaceutical Co., Ltd. (Taiwan) (“Swiss Pharma”). Pursuant to the agreement, Swiss Pharma will test, manufacture, and package the Company’s VELDONA “GMP Clinical Batch” and “GMP Commercial Batch” product candidates for the Company’s planned clinical trials under both Pharmaceutical Inspection Co-operation Scheme Good Manufacturing Practice (“PIC/S GMP”) and U.S. Food & Drug Administration (“U.S. FDA”) Current Good Manufacturing Practice regulations. This relationship with Swiss Pharma is intended to develop the Company’s VELDONA product candidates and enable us to effectively increase our manufacturing capabilities for VELDONA for our clinical trials, including testing, quality inspection, labeling, and packaging.

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Our ability to generate product revenue sufficient to achieve profitability will depend on further successful development and commercialization of one or more of our current or future product candidates and programs. In the near-term, we expect the COVID-19 antigen test kits to generate organic cash flows while we invest in our other pipeline projects. We expect to continue to incur significant expenses for the next few years as we advance our product candidates through preclinical development, clinical trials and regulatory approval. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution, and legal and regulatory compliance. We may also incur expenses in connection with strategic relationships for the development of additional product candidates. Furthermore, we expect to continue to incur costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

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

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

As of September 30, 2022, we had available cash and cash equivalents of $2,417,147. We anticipate business revenues and further potential financial support from external sources to fund our operations over the next twelve months. We have based this estimate on assumptions that may prove to be incorrect and we could exhaust our available capital resources sooner than we expect. See “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” for additional information. To finance our continuing operations, we will need to raise additional capital, which cannot be assured.

Impact of COVID-19 on Our Business

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

We believe affordable, easy-to-use, rapid COVID-19 testing will continue to be in demand at least in the short-term.

Due to evolving market dynamics with COVID testing and the current financial environment, we decided to discontinue investment in commercializing the COVID-19 nucleic acid test program. We intend to evaluate our nucleic acid test technology for potential applications for other disease indications.  At the same time, we continue to develop our other long-term programs, including Ainos Flora and our VELDONA candidates. We intend to actively explore out-licensing opportunities for our VELDONA candidates to accelerate return of our investments.

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

Results of Operation for Quarter Ended September 30, 2022 (“Q3 2022”) and 2021 (“Q3 2021”)

Revenues

Revenues increased by 384.2% to US$1,757,774 in the third quarter of 2022 from US$363,052 in the same period of 2021, driven by increased sales of the Company’s COVID-19 Antigen Self-Test Kits in Taiwan. An increase in the number of COVID-19 cases in Taiwan and increased acceptance of our highly accurate self-test kit contributed to the strong performance.

21

Costs and Gross Profit

Cost of revenues was US$1,176,032 in the third quarter of 2022, compared with US$103,638 in the same period of 2021. Such increase was consistent with the corresponding increase in sales volume, as the Company shipped more of its COVID-19 Antigen Self-Test Kits.

In the third quarter of 2022, gross profit was US$581,742, representing a 33.1% gross margin, compared to US$259,414, or a 71.5% gross margin a year ago. The decline in gross margin was driven by a shift in the Company’s revenue mix. To align with Taiwan’s infection control policy, we generated more revenue from the COVID-19 Antigen Self-Test Kit in the third quarter. In comparison, the majority of our revenue during the comparable period had been generated from sales of our COVID-19 Rapid Test Kit for use by healthcare professionals. The self-test kit accounted for all our business in the third quarter, compared to 7% in the previous quarter.

Research and Development Expenses

Compared to $646,798 in Q3 2021, R&D expenses in Q3 2022 were $1,834,786, mainly consisting of amortization expense of intellectual property assets, staffing, experimental materials, service fee for CRO and animal study, co-development research with labs of universities and other companies. In Q3 2022, we committed additional funding toward our VELDONA development.

When excluding depreciation and amortization expenses, R&D expenses increased to US$628,367 from US$401,526 over the same period.

Selling, General and Administration Expenses

Selling, general and administrative expenses in Q3 2022 were $6,569,227, compared to $795,958 in Q3 2021. Aside from share-based compensation expense, SG&A expense mainly consisted of staffing, legal, audit, consulting, and professional service expenses.

Our share-based compensation expenses related to the Company’s 2018-ESOP, 2018-NQSOP, employee-related Warrants, and 2021 Stock Incentive Plan was $6,076,017 and $19,322 in Q3 2022 and Q3 2021, respectively.

When excluding depreciation and amortization expenses and share-based compensation, SG&A expenses increased to US$489,838 from US$358,063 over the same period.

Operating Loss

The Company’s operating loss was $7,822,271 and $1,183,342 in Q3 2022 and Q3 2021, respectively, reflecting a $6,638,929 (561%) increase in operating losses between the reporting periods, which was driven by R&D expenses and share-based compensation.

Net Loss

Net loss attributable to common stock shareholders was $7,821,756 in Q3 2022 compared to $1,160,110 in Q3 2021, resulting in a $6,661,646 (574%) increase in net losses. The net losses are attributable to increased R&D expenses and share-based compensation.

Results of Operation for the Nine months Ended September 30, 2022 and 2021

Revenues

Revenues increased by 337% to US$2,481,602 in the first nine months ended September 30, 2022 from US$568,164 in the same period of 2021, driven by increased sales of the Company’s COVID-19 Antigen Self-Test Kits in Taiwan. An increase in the number of COVID-19 cases in Taiwan and increased acceptance of our highly accurate self-test kit contributed to the strong performance.

22

Costs and Gross Profit

Cost of revenues was US$1,536,074 in the first nine months ended September 2022, compared with US$174,395 in the same period of 2021. Such increase was consistent with the corresponding increase in sales volume, as the Company shipped more of its COVID-19 Antigen Self-Test Kits.

In the first nine months ended September 30, 2022, gross profit was US$945,528, representing a 38.1% gross margin, compared to US$393,769, or a 69.3% gross margin in the same period in 2021. The decline in gross margin was driven by a shift in the Company’s revenue mix.

Research and Development Expenses

Research and development expenses of $5,047,096 were incurred for the first nine months of 2022, compared to $646,798 for the first nine months of 2021, an increase of $4,400,298. Nevertheless, the first six months of 2021, the R&D expense is $0. The increase in 2022 was primarily due to amortization expense of intellectual property assets, staffing experimental materials, service fee for CRO and animal study, co-development research with labs of universities and other companies.

When excluding depreciation and amortization expenses, R&D expenses increased to US$1,548,711 from US$211,506 over the same period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses of $7,748,060 were incurred for the first nine months of 2022, compared to $2,178,969 for the first nine months of 2021, an increase of $5,569,091 (256%). The mainly S&A expenses of the first nine months 2022 and 2021 are the same as Q3 2022 and Q3 2021, and the reasons for expenses increase are also the same. Please refer to the analysis in preceding paragraph.

When excluding depreciation and amortization expenses and share-based compensation, SG&A expenses increased to US$1,523,223 from US$1,089,176 over the same period.

Operating Loss

In the first nine months period ended September 30, 2022, the Company’s operating loss was $11,849,628 compared to an operating loss for the first nine months period ended September 30, 2021 of $2,431,998, a $9,417,630 (387%) increase. Our operating losses are mainly attributable to additional R&D expenses and share-based compensation expense, in line with the Company’s product development initiatives and human resource policy.

Net Loss

The Net Loss for the first nine months of 2022, increased to $11,875,682 from $2,443,891 in 2021, an increase of $9,431,791 (386%) for the period. The major constituents of the increase in net loss are the increases in R&D expenses in the first nine months of 2022 and share-based compensation expense in the third quarter of 2022.

Liquidity and Capital Resources

As of September 30, 2022 and December 31, 2021, the Company had available cash of $2,417,147 and $1,751,499, respectively.

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

	Nine Months Ended September 30,
	2022			2021
Net cash used in operating activities		(2,405,741	)		(569,150	)
Net cash used in investing activities		(665,079	)		(43,340	)
Net cash provided by financing activities		3,835,903			1,290,129

23

Operating activities:

While our revenues grew in the first nine months of 2022 due to sales of Ainos COVID-19 test kits, we increased investment in research and developments and working capital, resulting in a higher net operating outflow.

Cash expenditures for operating activities in the first nine months of 2022 and 2021 were $2,405,741 and $569,150, respectively.

Investing activities:

Cash used in investing activities increased in the first nine months of 2022 compared to cash used in the same period in 2021 were $665,079 and $43,340, respectively, attributed to the acquisition of R&D equipment and office facilities.

Financing activities:

Cash provided by financing activities increased in the first nine months in 2022 compared to cash provided in the same period in 2021 were $3,835,903 and $1,290,129, respectively, which primarily reflects higher proceeds from convertible notes and notes payable amounted to $838,403 and net proceeds from uplisting amounted to $1,780,204.

Our total liabilities decreased significantly due to the Offering and the conversion of the majority of outstanding convertible notes into common stock. As of September 30, 2022 and December 31, 2021, total liabilities were $2,655,752 and $30,625,054, and debt ratios were 7% and 75%, respectively.

In 2022 we intend to focus on commercializing our POCT candidates 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 and our VELDONA-based COVID-19 oral treatment program. We also intend to increase staffing for general administration, marketing and technology development purposes.

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

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. There can be no assurance that we will be successful in our efforts to make the Company profitable. If those efforts are not successful, the Company may raise additional capital through the issuance of equity securities, debt financings or other sources in order to further implement its business plan, including, as required, additional external financing from our majority shareholder. However, if such financing is not available when needed and at adequate levels, the Company will need to reevaluate its operating plan.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

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

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

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

24

Internal Control Over Financial Reporting

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

During the first nine months of 2022, as part of our remediation plan and procedures, we have been implementing the following changes:

· Increasing staff resources dedicated to internal controls and reporting including the hiring of a full-time accounting assistant for the CFO who is dedicated to financial reporting;

· Specifically delegating roles and responsibilities for each participant in compiling and reviewing our reports including designating a single-point of contact for consolidating data inputs and delegation of key reporting elements to relevant department leads;

· Designating an executive team to review all narrative disclosures, including potential changes thereto. The executive team is comprised of the CEO, CFO, Director of Corporate Development, Executive Vice President of Operations, and Chief Legal Counsel;

· Establishing a final review process with our Chief Executive Officer and Chief Financial Officer prior to finalizing and filing our reports. At each stage of preparing financial reports the executive team conducts a review of draft materials and discusses the results in telephone conferences; and

· Establishing an executive review team to approve the final EDGAR version and IXBRL data file for our reports. As described above, the executive team meets and confers to review the final financial reports that are then submitted to the Audit Committee and Board for final approval prior to filing.

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

25

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings.

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

ITEM 1A. Risk Factors.

There are no material changes to the risk factors as previously disclosed in our Form S-1/A (Amendment No. 3) filed with the SEC on July 27, 2022.

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

2021 Asset Purchase Agreement

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

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

26

2021 – 2022 Ainos KY Working Capital Advances

In 2021, Ainos KY provided working capital advances in the form of convertible note financing in the aggregate amount of $3,000,000. The working capital convertible notes issued in 2021 bear interest at the AFR short-term rate of 1.85% and may be convertible in whole or in part at a conversion price of $3.00 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, the 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.

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 our Offering.

ITEM 3. Defaults Upon Senior Securities.

None

ITEM 4. Mine Safety Disclosures.

Not applicable

ITEM 5. Other Information.

On September 28, 2022, the Board of Directors of the Company approved an amendment to Article V, Section 1 and 2 of the Company’s Bylaws which, as amended, require that: (a)  the ownership interests in the Company, inclusive of its common stock and its preferred stock, shall be either uncertificated or certificated shares, and (b) any certificated shares that have been issued and are outstanding to date shall be deemed to be uncertificated shares only after the certificate is surrendered to the Company in accordance with the requirements of the Board, as may be adopted at its discretion.  The Company’s Form 8-K filed on October 4, 2022 and its amended restated Bylaws are incorporated herein by this reference.

27

ITEM 6. Exhibits.

EXHIBIT INDEX

			INCORPORATED BY REFERENCE
EXHIBIT NUMBER	DESCRIPTION	FILED WITH THIS FORM 10-Q	FILING DATE WITH SEC	FORM	EXH #	HYPERLINK TO FILINGS
3.1(a)	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
3.1(b)	Certificate of Amendment to the Restated Certificate of Formation, dated August 8, 2022		8/12/2022	8-K	3.1	Certificate of Amendment, dated August 8 2022
3.2	Amended and Restated Bylaws of the Company, effective September 28, 2022		10/4/2022	8-K	3.2	Amended and Restated Bylaws, effective September 28, 2022
4.1(a)	Form Common Stock Certificate	X
4.1(b)	Form of Warrant		8/2/2022	S-1/A	4.1	Form of Warrant
4.1(c)	Form of Warrant Agency Agreement		8/2/2022	S-1/A	4.3	Form of Warrant Agency Agreement
10	Master Service Agreement with Swiss Pharmaceutical Co., Ltd. (Taiwan)	X
23.1	Consent of PWR CPA LLP, independent registered accounting firm	X
24	Power of Attorney	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		Form 10-K/A, year ended December 31, 2021
100	XBRL – Related Documents	X
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the XBRL document.	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase	X
101.LAB	XBRL Taxonomy Extension Label Linkbase	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	X
104.1	Cover Page Interactive Data File	X

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

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

* Indicates a management contract or compensatory plan or arrangement.

28

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.
	By:	/s/ Chun-Hsien Tsai
Date: November 14, 2022	Chun-Hsien Tsai, Chairman of the Board, AND
	Chief Executive Officer
Date: November 14, 2022	By:	/s/ Hui-Lan Wu
	Hui-Lan Wu, Chief Financial Officer

29

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934,

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

I, Chun-Hsien Tsai, certify that:

1. I have reviewed this report on Form 10-Q of Ainos, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

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

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

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

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

Date: November 14, 2022	/s/ Chun-Hsien Tsai
	Chun-Hsien Tsai, Principal Executive Officer (Chairman of the Board, President, and Chief Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934,

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

I, Hui-Lan Wu, certify that:

1. I have reviewed this report on Form 10-Q of Ainos, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

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

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

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

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

Date: November 14, 2022	/s/ Hui-Lan Wu
	Hui-Lan Wu, Principal Financial Officer (Chief Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

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

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

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

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

	AINOS, INC.
Date: November 14, 2022	By:	/s/ Chun-Hsien Tsai
		Chun-Hsien Tsai, Principal Executive Officer
		(Chairman of the Board, President, and Chief Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

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

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

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

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: November 14, 2022	By:	/s/ Hui-Lan Wu
		Hui-Lan Wu, Principal Financial Officer
		(Chief Financial Officer)

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 11, 2022
Cover [Abstract]
Entity Registrant Name	AINOS, INC.
Entity Central Index Key	0001014763
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		20,011,602
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-20791
Entity Incorporation State Country Code	TX
Entity Tax Identification Number	75-1974352
Entity Address Address Line 1	8880 Rio San Diego Drive
Entity Address Address Line 2	Ste. 800
Entity Address City Or Town	San Diego
Entity Address State Or Province	CA
Entity Address Postal Zip Code	92108
City Area Code	858
Local Phone Number	869-2986
Entity Interactive Data Current	Yes

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 2,417,147	$ 1,751,499
Inventory	698,295	0
Accounts receivable	400,198	0
Other current assets	152,406	466,198
Total current assets	3,668,046	2,217,697
Intangible assets, net	33,946,391	37,329,191
Property and equipment, net	1,350,960	1,187,702
Other assets	116,425	87,571
Total assets	39,081,822	40,822,161
Current liabilities:
Convertible notes payable	376,526	3,376,526
Notes payable	884,000	213,405
Accrued expenses and others current liabilities	1,382,721	1,004,868
Payables - related party	0	26,000,000
Total current liabilities	2,643,247	30,594,799
Long term liabilities:
Operating lease liabilities - noncurrent	12,505	30,255
Total liabilities	2,655,752	30,625,054
Stockholders' equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued	0	0
Common stock, $0.01 par value; 300,000,000 shares authorized as of September 30, 2022 and December 31,2021; 19,478,270 shares and 9,625,133 shares issued and outstanding as of September 30, 2022 and December 31, 2021	194,783	96,251
Additional paid-in capital	58,491,505	20,203,972
Accumulated deficit	(21,984,598)	(10,108,916)
Translation adjustment	(275,620)	5,800
Total stockholders' equity	36,426,070	10,197,107
Total liabilities and stockholders' equity	$ 39,081,822	$ 40,822,161

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 30, 2021
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	19,478,270	9,625,133
Common stock, shares outstanding (in shares)	19,478,270	9,625,133

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Condensed Consolidated Statements of Operations (Unaudited)
Revenues	$ 1,757,774	$ 363,052	$ 2,481,602	$ 568,164
Cost of revenues	(1,176,032)	(103,638)	(1,536,074)	(174,395)
Gross profit	581,742	259,414	945,528	393,769
Operating expenses:
Research and development expenses	1,834,786	646,798	5,047,096	646,798
Selling, general and administrative expenses	6,569,227	795,958	7,748,060	2,178,969
Total operating expenses	8,404,013	1,442,756	12,795,156	2,825,767
Operating loss	(7,822,271)	(1,183,342)	(11,849,628)	(2,431,998)
Non-operating income and expenses
Interest income and expenses, net	(9,821)	23,517	(45,304)	(9,361)
Other income and expenses, net	10,336	(285)	19,250	(2,532)
Total non-operating income and expenses, net	515	23,232	(26,054)	(11,893)
Net loss	$ (7,821,756)	$ (1,160,110)	$ (11,875,682)	$ (2,443,891)
Net loss per common shares-basic and diluted	$ (0.51)	$ (0.12)	$ (1.03)	$ (0.48)
Weighted average common shares outstanding- basic and diluted	15,301,396	9,494,468	11,538,013	5,061,160

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
Net loss	$ (7,821,756)	$ (1,160,110)	$ (11,875,682)	$ (2,443,891)
Other comprehensive loss:
Translation adjustment	57,674	(6,838)	281,420	(6,838)
Comprehensive loss	$ (7,879,430)	$ (1,153,272)	$ (12,157,102)	$ (2,437,053)

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (11,875,682)	$ (2,443,891)
Adjustments to reconcile net loss to net cash used in operating. activities:
Depreciation and amortization	3,608,080	1,178,693
Share-based compensation expense	6,162,902	207,533
Stock issued for compensation	0	139,405
Loss on disposal of fixed property and equipment	0	2,227
Changes in operating assets and liabilities:
Accounts receivable	(400,198)	(44,643)
Inventory	(698,295)	2,849
Other current assets	313,792	(81,921)
Accrued expenses and other current liabilities	483,660	470,598
Net cash used in operating activities	(2,405,741)	(569,150)
Cash flows from investing activities:
Payments to acquire properties and equipments	(669,792)	(41,581)
Proceeds from disposal of properties and equipments	0	36
Increase in refundable deposits and others	4,713	(1,795)
Net cash used in investing activities	(665,079)	(43,340)
Cash flows from financing activities:
Payments of lease liabilities	(14,896)	(6,815)
Proceeds from convertible notes payable-non-current	1,400,000	0
Proceeds from convertible notes payable	0	1,232,192
Proceeds from notes payable	800,000	0
Principal payments on notes payable	(129,405)	0
Net proceeds from Uplisting in Nasdaq	1,780,204	0
Proceeds from exercise of share options	0	64,752
Net cash provided by financing activities	3,835,903	1,290,129
Effect from foreign currency exchange	(99,435)	(7,047)
Net increase in cash and cash equivalents	665,648	684,686
Cash and cash equivalents at beginning of period	1,751,499	22,245
Cash and cash equivalents at end of period	2,417,147	706,931
Supplemental Cash Flow Information:
Cash paid for interest	1,872	9,363
Supplemental disclosures of noncash financing and investing activities:
Stock issued for compensation, warrant and option expense	0	346,938
Stock issued for acquisition of patents	0	20,000,000
Issuance of convertible notes for payables-related party	26,000,000	0
Conversion of convertible notes and accrued interest into common stock	30,442,959	0
ROU leased assets and obligation	0	62,723
Payment to acquire properties and equipments:
Acquisition of property and equipment	575,567	0
Increase in prepaid for equipments	33,776	0
Decrease in payables for equipments	60,449	0
Total payments	$ 669,792	$ 0

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Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Translation Adjustment
Balance, shares at Dec. 31, 2020			2,804,259
Balance, amount at Dec. 31, 2020	$ (838,278)	$ 0	$ 28,043	$ 5,353,933	$ (6,220,254)	$ 0
Issuance of stock for compensation, shares			13,709
Issuance of stock for compensation, amount	139,405	0	$ 137	139,268	0	0
Issuance of stock for acquisition of patents, shares			6,666,666
Issuance of stock for acquisition of patents, amount	20,000,000	0	$ 66,667	19,933,333	0	0
Issuance of stock for option, shares			11,360
Issuance of stock for option, amount	64,752	0	$ 113	64,639
Share-based compensation	207,533	0	0	207,533	0	0
Net loss	(2,443,891)	0	$ 0	0	(2,443,891)
Translation adjustment	6,838					6,838
Balance, shares at Sep. 30, 2021			9,495,994
Balance, amount at Sep. 30, 2021	17,136,360	0	$ 94,960	25,698,707	(8,664,145)	6,838
Balance, shares at Jun. 30, 2021			9,484,634
Balance, amount at Jun. 30, 2021	18,205,557	0	$ 94,847	25,614,745	(7,504,035)	0
Issuance of stock for compensation, shares			11,360
Issuance of stock for compensation, amount	64,752	0	$ 113	64,639	0	0
Share-based compensation	19,322	0	0	19,322	0	0
Net loss	(1,160,110)	0	0	0	(1,160,110)	0
Translation adjustment	6,838	0	$ 0	0	0	6,838
Balance, shares at Sep. 30, 2021			9,495,994
Balance, amount at Sep. 30, 2021	17,136,360	0	$ 94,960	25,698,707	(8,664,145)	6,838
Balance, shares at Dec. 31, 2021			9,625,133
Balance, amount at Dec. 31, 2021	10,197,107	0	$ 96,251	20,203,972	(10,108,916)	5,800
Issuance of stock for compensation, shares			780,000
Issuance of stock for compensation, amount	1,780,204	0	$ 7,800	1,772,404	0	0
Issuance of stock for option, shares			9,073,137
Issuance of stock for option, amount	30,442,959	0	$ 90,732	30,352,227	0	0
Share-based compensation	6,162,902	0	0	6,162,902	0	0
Net loss	(11,875,682)	0	0	0	(11,875,682)	0
Translation adjustment	$ (281,420)	0	$ 0	0	0	(281,420)
Balance, shares at Sep. 30, 2022	780,000		19,478,270
Balance, amount at Sep. 30, 2022	$ 36,426,070	0	$ 194,783	58,491,505	(21,984,598)	(275,620)
Balance, shares at Jun. 30, 2022			9,625,133
Balance, amount at Jun. 30, 2022	6,006,320	0	$ 96,251	20,290,857	(14,162,842)	(217,946)
Issuance of stock for compensation, shares			780,000
Issuance of stock for compensation, amount	1,780,204	0	$ 7,800	1,772,404	0	0
Issuance of stock for option, shares			9,073,137
Issuance of stock for option, amount	30,442,959	0	$ 90,732	30,352,227	0	0
Share-based compensation	6,076,017	0	0	6,076,017	0	0
Net loss	(7,821,756)	0	0	0	(7,821,756)	0
Translation adjustment	$ (57,674)	0	$ 0	0	0	(57,674)
Balance, shares at Sep. 30, 2022	780,000		19,478,270
Balance, amount at Sep. 30, 2022	$ 36,426,070	$ 0	$ 194,783	$ 58,491,505	$ (21,984,598)	$ (275,620)

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Organization and Business

9 Months Ended

Sep. 30, 2022

Organization and Business

1. Organization and Business

1. Organization and Business

Ainos, Inc., a Texas corporation formerly known as Amarillo Biosciences, Inc. (the “Company”, “we” or “us”), is engaged in developing medical technologies for point-of-care (“POCT”) testing and safe and novel medical treatment for a broad range of disease indications. Since our inception in 1984, we have concentrated our resources on business planning, raising capital, research and clinical development activities for our programs, securing related intellectual property and commercialization of proprietary therapeutics using low-dose non-injectable interferon (“IFN”). In addition to our core IFN technology, we are committed to developing a diversified healthcare business portfolio to include medical devices and consumer healthcare products. Although we have historically been involved in extensive pharmaceutical research and development of low-dose oral interferon as a therapeutic, we are prioritizing the commercialization of medical devices as part of our diversification strategy. Since April 15, 2021, we have acquired significant intellectual property from our majority shareholder, Ainos, Inc., a Cayman Islands corporation (“Ainos KY”), to expand our potential product portfolio into Volatile Organic Compounds (“VOC”) POCTs and COVID-19 POCTs. We expect our underlying intellectual property to enable us to expedite the commercialization of our medical device pipeline, beginning with the Ainos-branded COVID-19 POCT product candidates.

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Underwritten Public Offering

9 Months Ended

Sep. 30, 2022

Underwritten Public Offering

2. Underwritten Public Offering

2. Underwritten Public Offering

The Company’s registration statement related to its underwritten public offering (“Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (“Nasdaq”) on August 9, 2022 under the trading symbols “AIMD” and “AIMDW”, respectively. The Company completed its underwritten public offering of an aggregated 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25.

In connection with the Offering, the Company’s board of directors on April 29, 2022 and our shareholders on May 16, 2022 approved a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and each series of its redeemable convertible notes to be consummated prior to the effectiveness of the Offering The par value and authorized shares of the Company’s common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock, RSUs, warrants and options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented.

The Company filed an amended Restated Certificate of Formation with the Secretary of State of Texas on August 8, 2022 that effectuated the Reverse Stock Split.

Additional information regarding the Offering and Reverse Stock Split can be found below in Note 5 of the Notes to Financial Statements.

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Basis of presentation

9 Months Ended

Sep. 30, 2022

Basis of presentation

3. Basis of presentation

3. Basis of presentation

The accompanying consolidated financial statements, which should be read in conjunction with the audited financial statements and footnotes included in the Company’s Form 10-K/A for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022 and the un-audited financial statements and footnotes included in the Company’s Form 10-Q for the quarter ending June 30, 2022 as filed with the SEC on August 15, 2022, have been prepared in accordance with the Generally Accepted Accounting Principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by for audited financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022.

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Financial Condition

9 Months Ended

Sep. 30, 2022

Financial Condition

4. Financial Condition

4. 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 the Offering concurrent with an uplisting to the Nasdaq Capital Markets, as described in Note 5.

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.

There can be no assurance that capital will be available as necessary to meet the Company’s working capital requirements or, if the capital is available, that it will be on terms acceptable to the Company. The issuances of additional equity securities by the Company may result in dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company’s liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected and the Company may cease operations. These factors may raise uncertainty regarding our ability to continue as a going concern.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Stockholders' Equity

5. Stockholders' Equity

5. Stockholders’ Equity

Reverse Stock Split

On May 16, 2022 our shareholders approved a reverse stock split proposal and on August 8, 2022 the Board approved a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and each series of its redeemable convertible notes to be consummated prior to the effectiveness of the Company’s underwritten public offering (“Offering”) on August 9, 2022. The par value and authorized shares of the Company’s common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock, RSUs, warrants and options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented.

The Company filed an amended Restated Certificate of Formation with the Secretary of State of Texas on August 8, 2022 that effectuated the Reverse Stock Split.

Preferred Stock

We have 10,000,000 shares of preferred stock authorized for issuance. No shares of preferred stock were outstanding as of September 30, 2022.

Common Stock

As of September 30, 2022, we have 300,000,000 shares of voting common shares authorized for issuance. As of September 30, 2022, a total of 21,959,509 shares of common stock were either issued (19,478,270), or reserved for Company equity incentive plans (1,369,999), conversion of convertible debt to stock (145,066), and shares reserved for warrant conversion (966,174).

Underwritten Public Offering

The Company’s registration statement related to its underwritten public offering (“Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (“Nasdaq”) on August 9,2022 under the trading symbols “AIMD” and “AIMDW”, respectively. The Company completed its underwritten public offering of an aggregated 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25. The foregoing described warrants may be exercised from February 5, 2023 (181 days from the effective date of our S-1 Registration Statement made effective August 8, 2022, thereafter “Registration Date”) to August 8, 2027 (5 years from the Registration Date).

The Company received aggregate net proceeds of approximately $1.8 million after deducting underwriting commissions and legal, accounting, and consulting fees related to the Offering.

The Company granted its underwriters a 45-day option to purchase up to an additional 117,000 shares of common stock and/or up to an additional 117,000 warrants at the public offering price to cover over-allotments. The underwriters partially exercised its option to purchase an additional 117,000 warrants at $0.01 per unit for a total of $1,170. In addition, pursuant to an underwriting Agreement, the Company agreed to issue to the Representative of the underwriters, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to a total of 39,000 shares of Common Stock (the “Representative’s Warrants”). The Representative’s Warrants are exercisable at $4.68 per share, are initially exercisable 180 days after the effective date of the Offering and have a term of five years from their initial exercise date. Pursuant to the customary FINRA rules, the Representative’s Warrants are subject to a lock-up agreement pursuant to which the Representative will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of the registration statement referenced below.

Upon completion of the Offering, convertible notes outstanding in the principal amount of $30.4 million and accrued interest of $42,959 were automatically converted into 9,073,137 shares of common stock. Additional information regarding the conversion can be found below in Note 7 and Note 8 of the Notes to Financial Statements.

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

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Equity Incentive Plans

9 Months Ended

Sep. 30, 2022

Equity Incentive Plans

6. Equity Incentive Plans

6. Equity Incentive Plans

2018 Employee Stock Option Plan (the “2018-ESOP”)

On September 26, 2018, the Board adopted the Company 2018 Employee Stock Option Plan (the “2018-ESOP”), formerly referred to as the “Amarillo Biosciences, Inc., 2018 Employee Stock Option Plan” in prior filings. The 2018-ESOP provides for the grant of Qualified Incentive Stock Options to the Company’s employees. Qualified options automatically became non-qualified options effective September 26, 2019 and was governed under the 2018-NQSOP described below because the plan was not ratified by our shareholders. The maximum number of shares of common stock authorized under the plan was 66,666 shares. The option price per share of common stock deliverable upon the exercise of an incentive stock option was 100% of the fair market value of a share on the date of grant. The option price is $5.7 per share and the options are exercisable during a period of ten years from the date of grant, where the options vest 20% annually over five years, commencing one year from date of grant.

Effective as of October 6, 2021, with the adoption by the Board of the 2021 SIP, no further awards may be granted under the 2018-ESOP.

2018 Officers, Directors, Employees, and Consultants Nonqualified Stock Option Plan (the “2018-NQSOP”)

On September 26, 2018, the Board adopted the Company 2018 Officers, Directors, Employees, and Consultants Nonqualified Stock Option Plan (the “2018-NQSOP”), formerly referred to as the “Amarillo Biosciences, Inc., 2018 Officers, Directors, Employees, and Consultants Nonqualified Stock Option Plan” in prior filings. The 2018-NQSOP provides for the grant of nonqualified incentive stock options to employees. The 2018-NQSOP is administered by the Board or by the Compensation Committee as constituted from time to time. The maximum number of shares of common stock which may be issued under the 2018-NQSOP is 266,666 which will be reserved for issuance upon exercise of options. The option price for the nonqualified options is $5.73 exercisable for a period of ten years, with a vesting period of five years at 20% per year commencing one year from date of grant.

Effective as of October 6, 2021, with the adoption by the Board of the 2021 SIP, no further awards may be granted under the 2018-NQSOP. As of September 30, 2022, options to acquire 36,666 shares of common stock remained outstanding.

2021 Employee Stock Purchase Plan

On September 28, 2021, the Board and on May 16, 2022 our shareholders, respectively, approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP” or “Plan”). The purpose of the 2021 ESPP is to provide an opportunity for eligible employees of the company and its designated companies (as defined in the Plan) to purchase common stock at a discount through voluntary contributions, thereby attracting, retaining and rewarding such persons and strengthening the mutuality of interest between such persons and the Company’s stockholders. The Company intends for offerings under the Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code; provided, that the Plan administrator may also authorize the grant of rights under offerings that are not intended to comply with the requirements of Section 423, pursuant to any rules, procedures, agreements, appendices, or sub-plans adopted by the administrator. Subject to adjustments as provided in the Plan, the maximum number of shares of common stock that may be issued under the Plan may not exceed 50,000 shares. Such shares may be authorized but unissued shares, treasury shares or shares purchased in the open market. The Plan is subject to approval by the Company’s stockholders within twelve months after the date of Board approval. The Plan will become effective on the date that stockholder approval is obtained, and will continue in effect until it expires on the tenth anniversary of the effective date of the Plan, unless terminated earlier.

2021 Stock Incentive Plan

On September 28, 2021, the Board and on May 16, 2022 our shareholders, respectively, approved the 2021 Stock Incentive Plan (the “2021 SIP” or “Plan”). The purpose of the 2021 SIP is to provide a means through which the Company, and the other members of the Company Group, defined by Section 2(n) of the Plan as the Company and its subsidiaries, and any other affiliate of the Company designated as a member of the Company Group by the Committee, may attract and retain key personnel, and to provide a means whereby directors, officers, employees, consultants and advisors of the Company and the other members of the Company Group can acquire and maintain an equity interest in the Company, or be paid incentive compensation measured by reference to the value of common stock, thereby strengthening their commitment to the interests of the Company Group and aligning their interests with those of the Company’s stockholders. The types of awards that may be granted from the Plan include individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend Equivalent Rights and Other Equity-Based Award granted under the Plan. The Plan will be effective upon shareholder approval. The expiration date of the Plan, on and after which date no awards may be granted, will be the tenth anniversary of the date of Board approval of the Plan, provided, however, that such expiration will not affect awards then outstanding, and the terms and conditions of the Plan will continue to apply to such Awards. The aggregate number of shares which may be issued pursuant to awards under the Plan is 1,333,333 shares of Common Stock (the “Plan Share Reserve”), subject to adjustments as provided in the Plan. The number of shares underlying any award granted under 2018 ESOP or 2018 NQSOP (the “Prior Plans”) that expires, terminates or is canceled or forfeited for any reason whatsoever under the terms of the Prior Plans, will increase the Plan Share Reserve. Each Award granted under the Plan will reduce the Plan Share Reserve by the number of shares underlying the award. No more than 666,666 shares may be issued in the aggregate pursuant to the exercise of incentive stock options granted under the Plan. The maximum number of shares subject to awards granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such director during the fiscal year, will not exceed $600,000 in total value (calculating the value of any such awards based on their grant date fair value for financial reporting purposes).

On July 28, 2022, the Company granted 533,332 and 88,000 Restricted Stock Units (the “RSUs”), after giving effect to the Reverse Stock Split, under the 2021 SIP to employees and non-employee directors, respectively. The RSUs shall vest in accordance to 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.

Restricted Stock Units

RSUs entitle the recipient to be paid out an equal number of common stock shares upon vesting. The fair value of RSUs is based on market price of the underlying stock on the date of grant. A summary of the Company’s RSU activity and related information for the nine months ended September 30, 2022 is as follows:

	Number of RSUs			Weighted- Average Grant Date Fair Value Per RSU
Balance as of December 31,2021		-		$	N/A
RSUs granted		621,332		$	11.10
RSUs vested		(533,332	)	$	11.10
RSUs canceled		-		$	N/A
Balance as of September 30, 2022		88,000		$	11.10

The aggregate fair value of RSU awards that vested in the three- and nine-month periods ended September 30, 2022 was $1 million.  The grant date fair value of awards that vested in the three- and nine-month periods ended September 30, 2022 was $5.9 million.

Warrants

As of September 30, 2022, following warrants are outstanding:

Pursuant to the Offering on August 9, 2022, the Company issued 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25.

Pursuant to an underwriting agreement, dated August 8, 2022, by and between the Company and Maxim Group LLC (“Maxim”), as representative of the underwriters, Maxim partially exercised the option to purchase 117,000 additional warrants at a price per warrant of $0.01.

Pursuant to the underwriting agreement the Company issued representative warrants to the Maxim, as representative of the underwriters, to purchase 39,000 shares of common stock at an exercise price of $4.675, effective from February 5, 2023 until August 8, 2027.

On November 25, 2020, the Company issued a warrant to i2China Management Group, LLC, a related party of the Company since August 1, 2021.  The warrant entitles the holder to purchase 30,174 shares $3.98 and expires on November 24, 2025.

Share-Based Compensation

The share-based compensation for the three months ended September 30, 2022 and 2021 were $6,076,017 and $19,322, respectively; and compensation for the nine months ended September 30, 2022 and 2021 were $6,162,902 and $ 207,533, respectively.

As of September 30, 2022, the total unrecognized compensation cost related to outstanding RSUs, stock options and warrant was $1,197,230, which the Company expects to recognize over a weighted-average period of 1.61 years.

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Current Convertible Notes Payable and Other Notes Payable

9 Months Ended

Sep. 30, 2022

Current Convertible Notes Payable and Other Notes Payable

7. Current Convertible Notes Payable and Other Notes Payable

7. Current Convertible Notes Payable and Other Notes Payable

As of September 30, 2022, the details of the convertible notes payable and other notes payable are shown in the table below:

Payee	No.	Effective Date	Due Date	From Effective	Following Maturity	Conversion Rate	Issuing Purpose	As of 12/31/2021	Addition	Converted/ Payment	As of 9/30/2022		Accrued Interest
Convertible Notes Payable:
Stephen Chen	#1.16	1/30/2016	Payable on demand	0.75%	N/A	$ 2.52	working capital	114,026	-	-	114,026	6,479
Stephen Chen	#2.16	3/18/2016	Payable on demand	0.65%	N/A	$ 2.81	working capital	262,500	-	-	262,500	11,009
								376,526	-	-	376,526	17,488
Ainos KY	#12.21	4/27/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	15,000	-	(15,000)	-	-
Ainos KY	#13.21	5/5/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	20,000	-	(20,000)	-	-
Ainos KY	#14.21	5/25/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	30,000	-	(30,000)	-	-
Ainos KY	#15.21	5/28/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	35,000	-	(35,000)	-	-
Ainos KY	#16.21	6/9/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#17.21	6/21/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	107,000	-	(107,000)	-	-
Ainos KY	#18.21	7/2/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	54,000	-	(54,000)	-	-
Ainos KY	#19.21	9/1/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	120,000	-	(120,000)	-	-
Ainos KY	#20.21	9/28/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#21.21	11/10/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	50,000	-	(50,000)	-	-
Ainos KY	#22.21	11/25/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	450,000	-	(450,000)	-	-
Ainos KY	#23.21	11/29/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#24.21	12/29/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	1,219,000	-	(1,219,000)	-	-
								3,000,000	-	(3,000,000)	-	-
Total convertible notes payable- related parties								3,376,526	-	(3,000,000)	376,526	17,488
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)	-	--
Ainos KY	#26.22 (2)	3/4/2022	2/28/2023	1.85%	N/A	N/A	working capital	-	800,000	-	800,000	8,556
			Non-convertible notes payable-related party					129,405	800,000	(129,405)	800,000	8,556
i2 China	#8b.20	1/1/2020	1/1/2021	1.85%	N/A	N/A	consulting fee	84,000	-	-	84,000	2,473
			Non-Convertible Notes payable- non-related party					84,000	-	-	84,000	2,473
			Total non-convertible notes payable					213,405	800,000	(129,405)	884,000	11,029
		Total convertible and non-convertible						3,589,931	800,000	(129,405)	1,260,526	28,517

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 amounted to $3,000,000 in the aggregate. Upon closing of the Offering, the principal and accrued interest were automatically converted into common stock of the Company.

(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 current convertible notes payable and accrued interest of Ainos KY as of August 8, 2022 in the aggregate total amount of $3,042,959 were converted to 1,014,319 shares of common stock on August 9, 2022. Information regarding the conversion can be found in Note 5 of the Notes to Financial Statements.

As of September 30, 2022 and December 31, 2021, the amount of current convertible and other notes payable totaled $1,260,526 and $3,589,931, respectively.

The total interest expense of convertible notes payable and other notes payable for the nine months ended September 30, 2022 and 2021 were $44,674 and $32,775 respectively. The cumulative accrued interest as of September 30, 2022 and December 31, 2021 were $28,517 and $28,673, respectively.

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Non-Current Convertible Notes Payable

9 Months Ended

Sep. 30, 2022

Non-Current Convertible Notes Payable

7. Non-Current Convertible Notes Payable

8. Non-Current Convertible Notes Payable.

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 prepayment was permitted in whole or in part without penalty. The APA Convertible Note was noninterest bearing.

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 were payable in cash on March 30, 2027, although the Company was permitted to prepay the Convertible Notes in whole or in part without penalty. The March 2027 Convertible Notes were non-interest bearing.

The non-current convertible notes payable as of August 9, 2022 in the aggregate total amount of $27,400,000 were all converted to 8,058,818 shares of common stock on that day.

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Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions

8.Related Party Transactions

9. Related Party Transactions. The following is a summary of related party transactions that met our disclosure threshold for the nine months ended September 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 6,666,666 shares of common stock at $3 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”).

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 three quarters of 2022 and 2021, Ainos KY provided working capital advances in the form of convertible note and non-convertible note financing in the aggregate amount of $800,000 and $981,000, respectively. As of September 30, 2022 and December 31, 2021, the convertible and non-convertible notes payable to Ainos KY totaled $800,000 and $3,000,000, respectively. Refer to Note 7 for more information.

ASE Test, Inc. (the “ASE”), an affiliate of the Company, provided a working capital advance in the form of a convertible note financing in the principal amount of $500,000 in the 2^nd quarter of 2022.

The convertible notes and related accrued interest of Ainos KY and ASE as of August 8, 2022 in the aggregate total amount of $29,542,959 were converted to common stock upon the uplisting to Nasdaq. Refer to Notes 5 for more information.

In the first three quarters of 2021, 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 non-convertible note $129,405 was redeemed for cash in the 3rd quarter of 2022. As of September 30, 2022 and December 31, 2021, the convertible and non-convertible notes payable to Dr. Stephen T. Chen were $376,526 and $505,931, respectively.

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 $1,603,169 and $173,657 for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, the accounts payable to TCNT were $24,242 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 $1,988,150 and $185,376 for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, the accounts receivable to ASE Technology Holding were $335,799 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 $490,082 and $117,386 for the nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, the accrued payables were $21,594 and $65,156, respectively.

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Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events

9. Subsequent Events

10. Subsequent Events.

In accordance with the respective employment agreements entered into by each of the employees, the Company issued 533,332 common stock shares upon settlement and conversion of vested Restricted Stock Units (the “RSUs”) issued under our 2021 Stock Incentive Plan on October 26, 2022.

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Equity Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2022

Equity Incentive Plans (Tables)

Schedule of Convertible notes payable

	Number of RSUs			Weighted- Average Grant Date Fair Value Per RSU
Balance as of December 31,2021		-		$	N/A
RSUs granted		621,332		$	11.10
RSUs vested		(533,332	)	$	11.10
RSUs canceled		-		$	N/A
Balance as of September 30, 2022		88,000		$	11.10

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Current Convertible Notes Payable and Other Notes Payable (Tables)

9 Months Ended

Sep. 30, 2022

Current Convertible Notes Payable and Other Notes Payable

Schedule of Current Convertible notes payable

Payee	No.	Effective Date	Due Date	From Effective	Following Maturity	Conversion Rate	Issuing Purpose	As of 12/31/2021	Addition	Converted/ Payment	As of 9/30/2022		Accrued Interest
Convertible Notes Payable:
Stephen Chen	#1.16	1/30/2016	Payable on demand	0.75%	N/A	$ 2.52	working capital	114,026	-	-	114,026	6,479
Stephen Chen	#2.16	3/18/2016	Payable on demand	0.65%	N/A	$ 2.81	working capital	262,500	-	-	262,500	11,009
								376,526	-	-	376,526	17,488
Ainos KY	#12.21	4/27/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	15,000	-	(15,000)	-	-
Ainos KY	#13.21	5/5/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	20,000	-	(20,000)	-	-
Ainos KY	#14.21	5/25/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	30,000	-	(30,000)	-	-
Ainos KY	#15.21	5/28/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	35,000	-	(35,000)	-	-
Ainos KY	#16.21	6/9/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#17.21	6/21/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	107,000	-	(107,000)	-	-
Ainos KY	#18.21	7/2/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	54,000	-	(54,000)	-	-
Ainos KY	#19.21	9/1/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	120,000	-	(120,000)	-	-
Ainos KY	#20.21	9/28/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#21.21	11/10/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	50,000	-	(50,000)	-	-
Ainos KY	#22.21	11/25/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	450,000	-	(450,000)	-	-
Ainos KY	#23.21	11/29/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	300,000	-	(300,000)	-	-
Ainos KY	#24.21	12/29/2021	2/28/2023 (1)	1.85%	N/A	$ 3.00	working capital	1,219,000	-	(1,219,000)	-	-
								3,000,000	-	(3,000,000)	-	-
Total convertible notes payable- related parties								3,376,526	-	(3,000,000)	376,526	17,488
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)	-	--
Ainos KY	#26.22 (2)	3/4/2022	2/28/2023	1.85%	N/A	N/A	working capital	-	800,000	-	800,000	8,556
			Non-convertible notes payable-related party					129,405	800,000	(129,405)	800,000	8,556
i2 China	#8b.20	1/1/2020	1/1/2021	1.85%	N/A	N/A	consulting fee	84,000	-	-	84,000	2,473
			Non-Convertible Notes payable- non-related party					84,000	-	-	84,000	2,473
			Total non-convertible notes payable					213,405	800,000	(129,405)	884,000	11,029
		Total convertible and non-convertible						3,589,931	800,000	(129,405)	1,260,526	28,517

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Underwritten Public Offering (Details Narrative) $ in Thousands	Sep. 30, 2022 USD ($) shares
Underwritten Public Offering
Exercise price of share	$ 425
Warrants Issued | shares	780,000
Public offering price	$ 425

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Stockholders Equity (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 30, 2021	Apr. 15, 2021
Net proceeds Underwriting commissions	$ 1,800,000
Convertible debt	$ 145,066
Warrant conversion	966,174
Conversion Price Per Shares	$ 4.68
Common shares Authoreised	300,000,000		300,000,000
Preferred stock	0		0
CommonStock SHARES Issued	19,478,270		9,625,133	6,666,666
Common Stock
Accrued interest	$ 42,959
Common shares Authoreised	300,000,000
Discription	underwritten public offering (“Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (“Nasdaq”) on August 9,2022 under the trading symbols “AIMD” and “AIMDW”, respectively. The Company completed its underwritten public offering of an aggregated 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25. The foregoing described warrants may be exercised from February 5, 2023 (181 days from the effective date of our S-1 Registration Statement made effective August 8, 2022, thereafter “Registration Date”	underwriters a 45-day option to purchase up to an additional 117,000 shares of common stock and/or up to an additional 117,000 warrants at the public offering price to cover over-allotments. The underwriters partially exercised its option to purchase an additional 117,000 warrants at $0.01 per unit for a total of $1,170. In addition, pursuant to an underwriting Agreement, the Company agreed to issue to the Representative of the underwriters, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to a total of 39,000 shares of Common Stock (the “Representative’s Warrants”)
Principal amount	$ 30,400,000
Converted of shares	9,073,137
Preferred Stock
Preferred stock	10,000,000
CommonStock SHARES Issued	19,478,270
Shares issued	21,959,509
Reserve for equity	$ 1,369,999

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Equity Incentive Plans (Details)	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Number Of RSUs [Member]
Beginning Balance | shares	0
RSUs granted | shares	621,332
RSUs vested | shares	(533,332)
RSUs canceled | shares	0
Ending balance | shares	88,000
Weighted average grant [Member]
Beginning Balance | $ / shares	$ 0
RSUs granted | $ / shares	11.10
RSUs vested | $ / shares	11.10
RSUs canceled | $ / shares	0
Ending balance | $ / shares	$ 11.10

XML

Equity Incentive plans (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 26, 2021	Nov. 25, 2020	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 26, 2018	Aug. 08, 2022	Dec. 30, 2021	Sep. 28, 2021	Apr. 15, 2021	Sep. 26, 2019
Share based compensation			$ 6,076,017	$ 19,322	$ 6,162,902	$ 207,533
Aggregate fair value of RSU			1,000,000		1,000,000
Stock based compensation					6,162,902	207,533
Unrecognised stock options and warrants			1,197,230		$ 1,197,230
Weighted average period					2 years 2 months 27 days
Maturity date					1 year 7 months 10 days
Grant date fair value			$ 5,900,000		$ 5,900,000.0
Aggregate number of common shares issued			19,478,270		19,478,270				9,625,133		6,666,666
Common stock shares authorized			300,000,000		300,000,000				300,000,000
Warrants Issued			780,000		780,000
Public offering price			$ 425,000		$ 425,000
Exercise price of share			$ 425,000		$ 425,000
Warrants [Member]
Warrants Issued			780,000		780,000
Public offering price			$ 425,000		$ 425,000
Exercised the option to purchase additional warrants								$ 117,000
Price of per warrant		$ 3.98						$ 0.01
Purchase shares of common stock		$ 30,174						$ 39,000
Exercise price of share		$ 467,500	425,000		425,000
Expiry date		November 24, 2025
2018-NQSOP
Options exercisable term period	10 years
Number of shares of common stock issued	266,666
Vesting period	5 years
Vesting Percentage	20.00%
Options to acquire common stock outstanding			36,666		$ 36,666
Price of an option	$ 5.73
2018-ESOP
Price of an option	$ 5.7
Exercise of an incentive stock plan	100.00%
Common stock shares authorized												66,666
Option vesting							20.00%
2021 Employee Stock Purchase Plan
Number of shares of common stock issued										50,000
2021 Stock Incentive Plan Member
Restricted stock units			$ 88,000			$ 0
Aggregate number of common shares issued										1,333,333
Limitation of shares issued										$ 666,666
Total value of share issued										600,000
Warrants Issued			533,332		533,332

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Current Convertible Notes Payable and Other Notes Payable (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Non-convertible notes payable-related party
Accrued Interest		$ 8,556
Unpaid principal balance	$ 129,405	129,405
Payment	(129,405)
Addition	800,000
Total convertible notes payable- related parties
Accrued Interest		17,488
Unpaid principal balance	376,526	3,376,526
Payment	(3,000,000)
Addition	0
Non-Convertible Notes payable- non-related party
Accrued Interest		2,473
Unpaid principal balance	84,000	84,000
Payment	0
Addition	0
Total non-convertible notes payable
Accrued Interest		11,029
Unpaid principal balance	884,000	213,405
Payment	(129,405)
Addition	0
Total convertible and non-convertible
Accrued Interest		28,517
Unpaid principal balance	1,260,526	3,589,931
Payment	(129,405)
Addition	$ 800,000
12.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	4/27/2021
Unpaid principal balance	$ 0	15,000
Conversion rate	$ 3
Payment	$ (15,000)
Addition	$ 0
13.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	5/5/2021
Unpaid principal balance	$ 0	20,000
Conversion rate	$ 3
Payment	$ (20,000)
Addition	$ 0
14.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	5/25/2021
Unpaid principal balance	$ 0	30,000
Conversion rate	$ 3
Payment	$ (30,000)
Addition	$ 0
15.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	5/28/2021
Unpaid principal balance		35,000
Conversion rate	$ 3
Payment	$ (35,000)
Addition	$ 0
16.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	6/9/2021
Unpaid principal balance	$ 0	300,000
Conversion rate	$ 3
Payment	$ (300,000)
Addition	$ 0
17.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	6/21/2021
Unpaid principal balance	$ 0	107,000
Conversion rate	$ 3
Payment	$ (107,000)
Addition	$ 0
18.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	7/2/2021
Unpaid principal balance	$ 0	54,000
Payment	(54,000)
Addition	$ 0
Conversion Note	$ 3
19.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	9/1/2021
Unpaid principal balance		120,000
Payment	$ (120,000)
Addition	$ 0
Conversion Note	$ 3
20.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	9/28/2021
Unpaid principal balance		300,000
Payment	$ (300,000)
Addition	$ 0
Conversion Note	$ 3
21.21 [Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	11/10/2021
Unpaid principal balance		50,000
Conversion rate	$ 3
Payment	$ (50,000)
Addition	$ 0
22.21[Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	11/25/2021
Unpaid principal balance		450,000
Conversion rate	$ 3
Payment	$ (450,000)
Addition	$ 0
23.21[Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	11/29/2021
Unpaid principal balance	$ 0	300,000
Conversion rate	$ 3
Payment	$ (300,000)
Addition	$ 0
24.21[Member] | Ainos KY [Member]
Accrued Interest		0
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	12/29/2021
Unpaid principal balance	$ 0	1,219,000
Conversion rate	$ 3
Payment	$ 1,219,000
Addition	0
Total [Member] | Ainos KY [Member]
Accrued Interest		17,488
Unpaid principal balance	376,526	3,376,526
Payment	0	0
Addition	0	800,000
Convertible and other notes payable- related parties	$ 3,000,000	3,000,000
26.22 [Member] | Ainos KY [Member]
Accrued Interest		8,556
Due Date	2/28/2023
Annual interest rate, From effective	1.85%
Effective Date	3/4/2022
Unpaid principal balance	$ 800,000	800,000
Addition	0
Dr. Stephen T. Chen [Member]
Accrued Interest		17,488
Unpaid principal balance	376,526	376,526
Payment	0
Addition	$ 0
Dr. Stephen T. Chen [Member] | 1.16 [Member]
Accrued Interest		6,479
Due Date	Payable on demand
Annual interest rate, From effective	0.75%
Effective Date	1/30/2016
Unpaid principal balance	$ 114,026	114,026
Conversion rate	$ 2.52
Dr. Stephen T. Chen [Member] | 2.16 [Member]
Accrued Interest		11,009
Due Date	Payable on demand
Annual interest rate, From effective	0.65%
Effective Date	3/18/2016
Unpaid principal balance	$ 262,500	262,500
Conversion rate	$ 2.81
StephenChen
Accrued Interest		312
Due Date	4/14/2021
Annual interest rate, From effective	0.13%
Effective Date	1/1/2021
Unpaid principal balance	$ 0	129,405
StephenChen | 9.21 [Member]
Accrued Interest		0
Due Date	4/14/2021
Annual interest rate, From effective	0.13%
Effective Date	1/1/2021
Unpaid principal balance	$ 0	129,405
Payment	$ (129,405)
i2China Management Group LLC [Member] | 8b.20 [Member]
Accrued Interest		2,473
Due Date	1/1/2021
Annual interest rate, From effective	1.85%
Effective Date	1/1/2020
Unpaid principal balance	$ 84,000	84,000
Payment	$ 48,000
i2 China
Accrued Interest		$ 2,473
Due Date	1/1/2021
Annual interest rate, From effective	1.85%
Effective Date	1/1/2020
Unpaid principal balance	$ 84,000

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Current Convertible Notes Payable and Other Notes Payable (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Aug. 09, 2022	Aug. 08, 2022	Mar. 27, 2022	Mar. 17, 2022	Mar. 11, 2022	Dec. 31, 2021
Current Convertible Notes Payable and Other Notes Payable
Converted shares of common stock			$ 1,014,319
Principal amount of non convertible note	$ 26,000,000				$ 1,400,000		$ 800,000
Interest on unpaid principal and accrued interst	1.85%
Other notes payable	$ 1,260,526			$ 3,042,959				$ 3,589,931
Interest expense	44,674	$ 32,775
Cumulative accrued interest	$ 28,517							$ 28,673
Unpaid principal of promissory note						$ 3,000,000

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NonCurrent Convertible Notes Payable (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Apr. 11, 2022	Mar. 31, 2022	Mar. 28, 2022	Mar. 27, 2022	Mar. 11, 2022
Non-Current Convertible notes payable	$ 27,400,000
Common stock shares	8,058,818
Total Convertible and other notes payable	$ 26,000,000				$ 1,400,000	$ 800,000
Yun Han Liao [Member]
Convertible note issued			$ 50,000
Chih Heng Tsai [Member]
Convertible note issued				$ 850,000
Ase Test Inc. [Member]
Convertible note issued		$ 500,000

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Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 30, 2021	Apr. 15, 2021
Aggregate number of common shares issued	19,478,270		19,478,270			9,625,133	6,666,666
Common stock shares issued price per share							$ 3
common stock shares authorized							300,000,000
Issued and outstanding shares of common stock ownership percentage							70.30%
Assets purchase agrement	$ 26,000,000		$ 26,000,000
Development expenses	1,834,786	$ 646,798	5,047,096	$ 646,798
Property assets	39,081,822		39,081,822		$ 40,822,161
Accounts receivable	400,198		400,198		0
Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY
Totaling			1,603,169	173,657
Accounts payable	24,242		24,242		0
Product Co-development Agreement [Member]
Assets purchase agrement	29,542,959		29,542,959
Convertible	800,000		800,000		981,000
Development expenses			490,082	117,386
Accrued payables	21,594		21,594		65,156
Property assets	24,886,023		24,886,023
Equipment	1,113,977		1,113,977
Notes payble	376,526	$ 505,931	376,526	505,931
Convertible note	69,025		69,025		145,395
Non convertivle notes payble	129,405		129,405
COVID-19 Antigen Rapid Test Kits Sales
Totaling			1,988,150	$ 185,376
Accounts receivable	335,799		335,799		0
Ase Test Inc. [Member]
Assets purchase agrement	26,000,000		26,000,000
Convertible	800,000		800,000		$ 3,000,000
Principal amount	$ 500,000		$ 500,000

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Subsequent Events (Details Narrative) - shares	Oct. 26, 2022	Sep. 30, 2022	Dec. 30, 2021	Apr. 15, 2021
Aggregate number of common shares issued		19,478,270	9,625,133	6,666,666
Subsequent Event [Member]
Aggregate number of common shares issued	533,332