What changed in Ainos, Inc.'s 2023 10-K compared to 2022?

Across the narrative sections we track, Ainos, Inc. (AIMDW) added 307 paragraphs, removed 270, and edited 123 between the 2022 and 2023 10-K filings. The biggest movers are Item 1A. Risk Factors (+116/−126), Item 7. Management's Discussion & Analysis (+86/−63), Item 1. Business (+96/−63).

Did Ainos, Inc. add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 116 new/edited paragraphs and 126 removed paragraphs versus the 2022 10-K.

What changed in Ainos, Inc.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 86 new/edited paragraphs and 63 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this AIMDW 10-K diff come from?

The source filings are Ainos, Inc.'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Ainos, Inc.'s 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of Ainos, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+307 added−270 removedSource: 10-K (2024-03-08) vs 10-K (2023-04-03)

Top changes in Ainos, Inc.'s 2023 10-K

307 paragraphs added · 270 removed · 123 edited across 4 sections

Item 1A. Risk Factors+116 / −126 · 73 edited
Item 7. Management's Discussion & Analysis+86 / −63 · 14 edited
Item 1. Business+96 / −63 · 31 edited
Item 5. Market for Registrant's Common Equity+9 / −18 · 5 edited

Item 1. Business

Business — how the company describes what it does

31 edited+65 added−32 removed66 unchanged

2022 filing

2023 filing

Biggest changeIf we fail to comply with the PDPA, we may be subject to serious punishment for civil claims, criminal offenses and administrative liabilities: the ceiling of the aggregate compensation amount for damages payable in a single case will be up to NT$200,000,000 or the actual value of loss arising from our violation provided the amount of actual value of such loss is higher than NT$200,000,000; the defendant may be subject to an imprisonment of up to five years; and the penalty for administrative liabilities will be up to NT$500,000 for each violation, and may be imposed consecutively if such violation continues.

Biggest changeThe bill also empowers the TFDA to conduct regular inspections and audits. If we fail to comply with the PDPA, we may be subject to punishment for civil claims, criminal offenses and administrative liabilities; the defendant may be subject to an imprisonment; and the penalty for administrative liabilities, and may be imposed consecutively if such violation continues.

We expect consumers to be empowered to share their test results with their physicians through in-person and telehealth medical consultations. · VOC POCT – CHS430 .

We expect consumers to be empowered to share test results with their physicians through in-person and telehealth medical consultations. · VOC POCT – CHS430.

Concerning the post-marketing regulatory requirements apply, a company engaging in medical devices business will be required to follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the design and manufacturing process and report to TFDA when the device it markets has or may have caused or contributed to a death or serious injury.

Concerning the post-marketing regulatory requirements, a company engaging in medical devices business will be required to follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the design and manufacturing process and report to TFDA when the device it markets has or may have caused or contributed to a death or serious injury.

Additionally, similar reporting requirements have also been enacted on the state level domestically, and an increasing number of countries worldwide either have adopted or are considering similar laws requiring transparency of interactions with healthcare professionals. 9 Table of Contents Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977, or FCPA, prohibits any U.S. individual or business from paying, offering or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.

Additionally, similar reporting requirements have also been enacted on the state level domestically, and an increasing number of countries worldwide either have adopted or are considering similar laws requiring transparency of interactions with healthcare professionals. 14 Table of Contents Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977, or FCPA, prohibits any U.S. individual or business from paying, offering or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.

Any company engaging in medical devices business may be additionally subject to ten times the criminal fines for each violation made by its authorized representative and/or employees. 4 Table of Contents Personal Data Protection Laws in Taiwan Under the Taiwan Personal Data Protection Act (“ PDPA ”), each individual or governmental or non-governmental agencies, including our affiliate in Taiwan, should be subject to certain requirements and restrictions for collecting, processing or using personal data.

Any company engaging in medical devices business may be additionally subject to ten times the criminal fines for each violation made by its authorized representative and/or employees. 6 Table of Contents Personal Data Protection Laws in Taiwan Under the Taiwan Personal Data Protection Act (“ PDPA ”), each individual or governmental or non-governmental agencies, including our affiliate in Taiwan, should be subject to certain requirements and restrictions for collecting, processing or using personal data.

Regulation of Veterinary Drugs in Taiwan Our veterinary product candidates are subject laws and regulations in Taiwan including, but not limited to, the Veterinary Drugs Control Act, Enforcement Rules under the Veterinary Control Act, Guidelines of Good Manuacture Practice for Veterinary Drug Manufacturers, and Taiwan Regulations for Pet Foods and Supplements.

Regulation of Veterinary Drugs in Taiwan Our veterinary product candidates are subject laws and regulations in Taiwan including, but not limited to, the Veterinary Drugs Control Act, Enforcement Rules under the Veterinary Control Act, Guidelines of Good Manufacture Practice for Veterinary Drug Manufacturers, and Taiwan Regulations for Pet Foods and Supplements.

Failure to comply with HIPAA, Healthcare Information Technology for Economic and Clinical Health Act of 2009 or their implementing regulations, and similar state laws, may result in significant penalties, including civil, criminal and administrative penalties, fines, imprisonment and exclusion from participation in federal or state healthcare programs, and the curtailment or restructuring of our operations. 8 Table of Contents U.S.

These include: · Establishment registration and device listing with the FDA; · QSR requirements, which require manufacturers and contract manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the design and manufacturing process; · Labeling regulations and FDA prohibitions against the promotion of investigational products, or “off-label” uses of cleared or approved products; · Clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; · Medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; · Post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

An applicant must submit the requested information within 180 days before the FDA will proceed with additional review of the submission. 6 Table of Contents If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device.

An applicant must submit the requested information within 180 days before the FDA will proceed with additional review of the submission. If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device.

Health Insurance Portability and Accountability Act We are subject to compliance with the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Healthcare Information Technology for Economic and Clinical Health Act of 2009, or HIPAA, among other things, established federal protection for the privacy and security of protected health information, or PHI.

Health Insurance Portability and Accountability Act We may be subject to compliance with the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Healthcare Information Technology for Economic and Clinical Health Act of 2009, or HIPAA, among other things, established federal protection for the privacy and security of protected health information, or PHI.

Failure to comply with applicable requirements under the Taiwan MDA may subject a device and/or manufacturers, including us, to a variety of administrative sanctions, such as the TFDA’s refusal to approve pending premarket applications, mandatory product recalls, import detentions, business suspension or license/listing cancellation, administrative fines up to NT$50,000,000, product seizures and destruction, civil monetary penalties and/or criminal prosecution and criminal penalties up to NT$50,000,000.

Failure to comply with applicable requirements under the Taiwan MDA may subject a device and/or manufacturers to a variety of administrative sanctions, such as the TFDA’s refusal to approve pending premarket applications, mandatory product recalls, import detentions, business suspension or license/listing cancellation, administrative fines, product seizures and destruction, civil monetary penalties and/or criminal prosecution and criminal penalties.

The CHS430 device is intended to provide non-invasive testing for ventilator-associated pneumonia within few minutes, as compared to current standard of care invasive culture tests that typically take more than two days to provide results.

The CHS430 device, powered by AI Nose, is intended to provide non-invasive testing for ventilator-associated pneumonia within few minutes, as compared to current standard of care invasive culture tests that typically take more than two days to provide results. · Synthetic RNA (“SRNA”) .

Certain of these changes could impose additional limitations on the rates we will be able to charge for our current and future products or the amounts of reimbursement available for our current and future products from governmental agencies or third-party payors. Employees As of December 31, 2022, we had 43 full-time employees.

When the FDA grants a de novo request for classification, the device is granted marketing authorization and further can serve as a predicate for future devices of that type, through a 510(k) premarket notification. We are not currently seeking a de novo classification for the Ainos COVID-19 antigen rapid test kit or any device in development.

When the FDA grants a de novo request for classification, the device is granted marketing authorization and further can serve as a predicate for future devices of that type, through a 510(k) premarket notification. As of December 31, 2023, we are not currently seeking a de novo classification for any device in development.

The FDA may approve a PMA with post-approval conditions, it may also condition PMA approval on some form of post-market surveillance. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.

De novo Classification Medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk they pose.

However, we may in the future develop devices which will require the approval of a PMA. De novo Classification Medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk they pose.

Under the FDCA, medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to provide reasonable assurance of its safety and effectiveness. 5 Table of Contents Class I devices include those with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to the FDA’s “general controls” for medical devices.

Furthermore, in September 2021, the TFDA published the draft bill of Regulations Governing Security Measures of the Personal Information File for the Business of Wholesale of Medical Devices and Retail Sale of Medical Apparatus authorized under the PDPA, which requires the medical devices wholesalers and retailers to adopt necessary data security/protection measures, and establish prevention and reporting mechanisms in relation to any data breach.

Furthermore, in January 2022, the TFDA published the Regulations for the Security and the Maintenance of Personal Information Files in Wholesaling and Retailing Medical Devices authorized under the PDPA, which requires the medical devices wholesalers and retailers to adopt necessary data security/protection measures, and establish prevention and reporting mechanisms in relation to any data breach.

Government officials have focused their enforcement efforts on the marketing of healthcare services and products, among other activities, and recently have brought cases against companies, and certain individual sales, marketing and executive personnel, for allegedly offering unlawful inducements to potential or existing customers in an attempt to procure their business.

Some of these state prohibitions apply to referral of recipients for healthcare products or services reimbursed by any source, not only government healthcare programs, and may apply to payments made directly by the patient. 13 Table of Contents Government officials have focused their enforcement efforts on the marketing of healthcare services and products, among other activities, and recently have brought cases against companies, and certain individual sales, marketing and executive personnel, for allegedly offering unlawful inducements to potential or existing customers in an attempt to procure their business.

Before the FDA will accept a 510(k) submission for substantive review, the FDA will first assess whether the submission satisfies a minimum threshold of acceptability.

In addition, the FDA collects user fees for certain medical device submissions and annual fees and for medical device establishments. Before the FDA will accept a 510(k) submission for substantive review, the FDA will first assess whether the submission satisfies a minimum threshold of acceptability.

Our Medtech Solutions Our solutions are currently comprised of the following: · COVID-19 Antigen Rapid Test Kit . As the first commercialized COVID-19 product we sell, we currently market COVID-19 antigen rapid test kits in Taiwan under emergency use authorization (“EUA”) issued by the Taiwan Federal and Drug Administration (“TFDA”) for healthcare professional use and for self-test use.

As of December 31, 2023, we have commercialized the following products: · COVID-19 Antigen Rapid Test Kit . As the first commercialized products we sell, we have marketed COVID-19 antigen rapid test kits in Taiwan under emergency use authorization (“EUA”) issued by the Taiwan Federal and Drug Administration (“TFDA”) to TCNT, the product manufacturer.

Some Class I or low risk devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below. Class II devices are moderate risk devices that require premarket review and clearance by the FDA through the 510(k) premarket notification process, though certain Class II devices are exempt from this premarket review process.

Class II devices are moderate risk devices that require premarket review and clearance by the FDA through the 510(k) premarket notification process, though certain Class II devices are exempt from this premarket review process. Unless a specific exemption applies, 510(k) premarket notification submissions are subject to user fees.

Failure to comply with applicable requirements may subject a device and/or its manufacturer to a variety of administrative sanctions, such as FDA refusal to approve pending premarket applications, issuance of warning letters, mandatory product recalls, import detentions, civil monetary penalties, and/or judicial sanctions, such as product seizures, injunctions, and criminal prosecution. 7 Table of Contents FDA Premarket Clearance and Approval Requirements Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, approval of a premarket approval, or PMA, or grant of a de novo request for classification.

Instead, only approval from the IRB overseeing the investigation at each clinical trial site is required. After a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons. Post-market Regulation After a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply.

If the device is considered a ”non-significant risk,” IDE submission to FDA is not required. Instead, only approval from the IRB overseeing the investigation at each clinical trial site is required. After a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons.

To obtain 510(k) clearance for a medical device, an applicant must submit to the FDA a 510(k) submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A showing of substantial equivalence sometimes, but not always, requires clinical data.

The FDA also may revise or revoke an EUA if the circumstances justifying its issuance no longer exist, the criteria for its issuance are no longer met, or other circumstances make a revision or revocation appropriate to protect the public health or safety. 8 Table of Contents 510(k) Clearance Marketing Pathway To obtain 510(k) clearance for a medical device, an applicant must submit to the FDA a 510(k) submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A showing of substantial equivalence sometimes, but not always, requires clinical data.

If an IDE application is approved by the FDA and one or more IRBs, clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA. 7 Table of Contents If the device is considered a ”non-significant risk,” IDE submission to FDA is not required.

The clinical trials must be approved by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site. If an IDE application is approved by the FDA and one or more IRBs, clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA.

Our Ainos Flora device, currently under clinical study in Taiwan, is intended to perform a non-invasive test for female vaginal health and certain common sexually transmitted diseases (“STDs”) within a few minutes. We are developing a companion app that enables users to conveniently manage test results.

Except for COVID-19, we have conducted Phase 2 studies for these programs. · VOC POCT – Ainos Flora . Ainos Flora, powered by AI Nose, is intended to perform a non-invasive test for female vaginal health and certain common STIs within a few minutes. A companion app is also being developed that enables users to conveniently manage test results.

Of these, 27 employees, a majority of our employees, are dedicated to research and development. Our employees are primarily located in Taiwan with some of our employees located in California. None of our employees are represented by a labor union or are a party to a collective bargaining agreement and we believe that we have good relations with our employees.

None of our employees are represented by a labor union or are a party to a collective bargaining agreement. We plan to continue expand our manpower in research development, sales and marketing, and general operations to support our business programs.

We believe Ainos Flora provides connected, convenient, discreet, rapid testing in a point-of-care setting. · VOC POCT – Ainos Pen . Our Ainos Pen device is a cloud-connected, multi-purpose, portable breath analyzer that is intended to monitor health conditions within minutes.

The platform under development is intended to be used in applications including telehealth, automotive, industrial, and environmental safety. · VOC POCT – Ainos Pen. The device is intended to be a cloud-connected, multi-purpose, portable breath analyzer that is intended to monitor health conditions within minutes, powered by AI Nose.

The clinical trials must be approved by, and conducted under the oversight of, an Institutional Review Board, or IRB, for each clinical site.

Furthermore, each clinical trial must be reviewed and approved by an Institutional Review Board (IRB) for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.

We are developing a SRNA technology platform in Taiwan with a long-term goal of developing next-generating precision treatments and rapid tests. 3 Table of Contents Business Strategies 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 POCT products and low-dose interferon therapeutics.

We plan develop a SRNA technology platform in Taiwan with a long-term goal of developing next-generating precision treatments and rapid tests. 4 Table of Contents Our Business Model We believe our business model is capital efficient based on the following: Operation in Taiwan.

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ITEM 1. BUSINESS. Overview Ainos Inc., formerly 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.

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ITEM 1. BUSINESS. Overview Ainos, Inc. (the “Company”), incorporated in the State of Texas in 1984, is a diversified healthcare company focused on the development of novel point-of-care testing (the “POCT”), therapeutics based on very low-dose interferon alpha (the “VELDONA”), and synthetic RNA-driven preventative medicine.

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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”).

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Our product pipeline includes commercial-stage VELDONA Pet cytoprotein supplements, clinical-stage VELDONA human therapeutics and telehealth-friendly POCTs powered by the AI Nose technology platform. We have historically involved in the research and development of therapeutics based on VELDONA.

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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. We have historically been involved in extensive research and development of low-dose oral interferon as a therapeutic.

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Building on our research and development on VELDONA since inception, we are focused on commercializing a suite of VELDONA-based products including VELDONA Pet cytoprotein supplements and human related VELDONA therapeutics.

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We continue to develop our VELDONA platform and other pharmaceutical platforms and recently have acquired intellectual properties to expand our POCT business. In 2021 and 2022, we acquired significant intellectual property from our majority shareholder, Ainos KY, to expand our potential product portfolio into Volatile Organic Compounds (“VOC”) and COVID-19 POCTs.

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In 2021 and 2022, we acquired certain types of intellectual property from controlling shareholder, Ainos Inc., a Cayman Island corporation (“Ainos KY”), to expand product portfolio into POCTs aimed to provide connected, rapid, and convenient testing for a broad range of health conditions.

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We also offer companion test management apps for the tests kits for healthcare professional use. We market the test kits under the Ainos brand name. The kit is manufactured by TCNT, our product co-developer. · VOC POCT – Ainos Flora .

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Pivoting from the sales of COVID-19 POCT, we aim to commercialize POCTs that detect volatile organic compounds (the “VOC”) emitted by the body, powered by our AI Nose technology platform. Our lead VOC POCT candidate, Ainos Flora, aims to test female vaginal health and certain common sexually transmitted infections (the “STIs”) quickly and easily.

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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.

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We believe the following attributes differentiate us from other diversified life science companies: - intuitive, telehealth-friendly point-of-care testing - AI-powered VOC testing platform - decades of proprietary low-dose oral interferon clinical research - capital-efficient business model - outsourced manufacturing - global distribution relationships Our Technologies VELDONA Interferons are proteins made by host cells in response to the presence of pathogens.

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Our pipeline candidates include oral treatment for COVID-19 for human, feline chronic gingivostomatitis (FCGS) and canine atopic dermatitis (CAD). We also intend to explore various business opportunities, including outlicensing, to advance other candidates including thrombocytopenia, Sjögren’s syndrome, aphthous stomatitis, chemotherapy-induced stomatitis, influenza, and the common cold. · Synthetic RNA (“SRNA”) .

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Interferons allow for communication between cells to trigger the protective defenses of the immune system. VELDONA formulation, delivered into the oral cavity as a lozenge in low doses, is designed to enhance autoimmunity to resist virus damages, potentially reducing side effects and risks caused by high-dose interferon and other small molecule drugs.

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In 2023, we are prioritizing the commercialization of our lead VOC POCT candidate, Ainos Flora, and pursue outlicensing of our VELDONA candidates. As a general strategy, we plan to conduct clinical trials in Taiwan and use the data to apply for TFDA approval and, if applicable, FDA clearance for our product candidates.

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We believe VELDONA has shown to be safe and effective in the clinical studies for treatment of intended human and animal diseases. Since our inception to date, 68 human clinical trials have been conducted with low-dose oral IFNα. 63 studies were Phase 2 trials, and 3 Phase 1 and 2 Phase 3 studies have also been conducted.

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If our products are approved, we plan to either work with third-party distributors to market our products in applicable countries or seek various business relationships with other companies to advance our products to eventual commercialization.

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In 28 studies performed by Ainos, VELDONA was found to exhibit systemic effects in mice, cats, dogs, ferrets, chickens, rats, guinea pigs, horses, calves/cows, and particularly pigs. VELDONA aided in boosting feed conversion efficiency and fighting deadly viral infections in these species, including canine parvovirus, equine herpesvirus, feline coronavirus, and others.

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Patents and Proprietary Rights The Company has built an extensive patent portfolio of intellectual property consisting of patents related to VOC technologies, POCT products, and low-dose orally administered interferon that encompass method of use or treatment, and/or composition of matter and manufacturing.

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We believe the studies demonstrate VELDONA’s therapeutic or preventive effect via the oral mucosa and shows VELDONA modulates systemic and mucosal immunity without serious side effects. We have researched VELDONA for a broad range of human disease indications.

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The Company presently owns a total of 63 patents, of which 50 are active patents and 13 are pending patent approval. There are no current patent litigation proceedings involving the Company.

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We intend to prioritize advancing the following candidates: oral warts for HIV-seropositive patients, Sjogren’s Syndrome, mid COVID-19 syndromes, common cold, influenza, aphthous stomatitis, and chemotherapy-induced stomatitis. The United States Food and Drug Administration (the “U.S. FDA”) have granted Orphan Drug Designation (“ODD”) for our VELDONA formulation as a potential treatment for oral warts in HIV-seropositive patients.

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TCNT received EUA from TFDA for distribution of the Ainos SARS-CoV-2 Antigen Rapid Test Kit on June 7, 2021, which we distribute.

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Leveraging our VELDONA technology, we have launched a series of health supplements for dogs and cats under the brand name “VELDONA Pet” in Taiwan since the second quarter of 2023 and we intend to explore international sales and marketing opportunities.

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The draft bill also empowers the TFDA to conduct regular inspections and audits.

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Our VELDONA Pet product line is formulated to address a variety of health issues, including skin, gum, emotion, discomfort caused by allergies, eye, and weight-related issues.

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FDA Premarket Clearance and Approval Requirements Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, approval of a premarket approval, or PMA, or grant of a de novo request for classification.

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We also intend to conduct clinical studies in Taiwan for the treatment of feline chronic gingivostomatitis (FCGS). 3 Table of Contents Point-of-Care Tests (POCTs) Our POCT technologies aim to provide a simple, effective and telehealth-friendly tests that can deliver results within minutes. Our POCT detection technologies consists of VOC sensing, lateral flow immunochromatographic assay and nucleic acid.

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Unless a specific exemption applies, 510(k) premarket notification submissions are subject to user fees.

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Currently we prioritize developing products based on VOC sensing. We intend to evaluate our lateral flow and nucleic acid test technologies for potential applications for other disease indication. VOC Sensing Powered by AI Nose We believe the analysis of VOC is a powerful, non-invasive option for disease detection and health monitoring.

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The FDA also may revise or revoke an EUA if the circumstances justifying its issuance no longer exist, the criteria for its issuance are no longer met, or other circumstances make a revision or revocation appropriate to protect the public health or safety. 510(k) Clearance Marketing Pathway Our current products are class II and, but for the immediate ability to seek an EUA, would be subject to premarket notification and clearance under section 510(k) of the FDCA.

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Our VOC sensing technology aims to detect the target VOCs within few minutes. AI Nose, the key enabler of our VOC sensing, consists of three key technologies: 1) a “digital nose” detects the target VOCs; 2) a trained artificial intelligence (“AI”) algorithm analyzes the target VOCs; 3) a “Smell ID” stores the VOC’s digital profile in the cloud.

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In addition, the FDA collects user fees for certain medical device submissions and annual fees and for medical device establishments. For fiscal year 2020, the standard user fee for a 510(k) premarket notification application is $11,594.

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We believe VOC sensing powered by AI Nose is scalable into a broad range of industries for two reasons. First, digital nose sensors can be made small and at low cost through semiconductor manufacturing technology. Second, as we train our AI with more Smell IDs, our VOC sensing can continue to improve.

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None of our test kits are currently approved under a PMA, nor are we currently seeking approval under a PMA for the Ainos COVID-19 antigen rapid test kit. However, we may in the future develop devices which will require the approval of a PMA.

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While health testing is our near-term focus, we believe we can broaden VOC sensing powered by AI Nose to other applications including telehealth, automotive, industrial, and environmental safety. Our Pipeline An integral part of our operating strategy is to create multiple revenue streams through sales of commercially ready products, out-licensing or forming strategic relationships to develop and commercialize our products.

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The FDA has broad regulatory compliance and enforcement powers.

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We are pivoting away from this business. · VELDONA Pet. VELDONA Pet is formulated to address a variety of health issues in dogs and cats, including skin, gum, emotion, discomfort caused by allergies, eye, and weight-related issues. We launched VELDONA Pet in Taiwan in the second quarter of 2023.

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Many states have adopted laws similar to the federal Anti-Kickback Statute. Some of these state prohibitions apply to referral of recipients for healthcare products or services reimbursed by any source, not only government healthcare programs, and may apply to payments made directly by the patient.

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From time to time, we assess our development plan based on available resources and market dynamics. Our current pipeline of the products, which are under development, includes the following: · VELDONA human drugs. Our high-priority programs include oral warts for human immunodeficiency virus (HIV) seropositive patients, common cold, influenza, Sjögren’s syndrome and treatment for mild COVID-19 symptoms.

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We plan to continue expand our manpower in research development, sales and marketing, and general operations to support our business programs. Executive Officers Chun-Hsien Tsai . Mr. Tsai has served as our Chairman of the Board of Directors, President, Chief Executive Officer, and as a director since April 15, 2021.

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We believe Ainos Flora can provide connected, convenient, discreet, rapid testing in a point-of-care setting. We are conducting clinical study in Taiwan and exploring strategic opportunities to commercialize the product. · VOC platform – NISD co-development . We are co-developing a VOC sensing platform with Nisshinbo Micro Devices Inc. (“NISD”) and Taiwan Inabata Sangyo Co. (“Taiwan Inabata”).

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From April 15, 2021 until August 11, 2021, he also served as Chief Financial Officer. He concurrently serves as the CEO and Chairman of the Board of Directors of Ainos KY, as the Chairman of the Board of Directors of Taiwan Carbon Nano Technology Co., and as the Chief Executive Officer and director of AI Nose Corporation. Mr.

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We have constructed our operation to be capital efficient by choosing Taiwan as our R&D and operating center. We believe Taiwan has been a key center of the global technology supply chain and it is also home to high-caliber engineers, scientists and healthcare professionals.

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Tsai has served as Chairman and CEO of Taiwan Carbon Nano Technology since July 2018, as a director and President of Ainos KY since October 2017, and in each of his other roles since 2012. In his capacity as the Chief Executive Officer of Taiwan Carbon Nano Technology Co., Mr.

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We believe maintaining operations in Taiwan, at least in the near-term, allows us to access high-caliber talent while staying cost effective, enabling us to develop high quality, affordable, consumer-friendly products. Outsourced Manufacturing. We believe our outsourced manufacturing strategy potentially saves us the time and resources required to establish our own infrastructure.

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Tsai oversaw the completion of the world’s first carbon nanotube reactor. Mr. Tsai also currently serves as a member of the Taiwan Energy Storage Alliance and a member of the China Alternative Energy Association. Mr. Tsai owns more than 150 patents. Mr. Chun-Hsien Tsai is the brother of Mr. Chung-Yi Tsai and Mr. Chun-Jung Tsai.

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We outsource manufacturing of our POCT product candidates to Taiwan Carbon Nano Technology (“TCNT”). We outsource manufacturing of VELDONA drugs for human-use to Swiss Pharmaceutical Co., Ltd., a Taiwan-based company. We outsource manufacturing of VELDONA Pet supplements to a Taiwan-based third party and to TCNT. Distribution Relationships. We work with distributors to sell products. We appointed Inabata & Co. Ltd.

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He is also the husband of Ms. Ting-Chuan Lee. Hui-Lan Wu . Ms. Wu has served as our Chief Financial Officer since August 11, 2021. She has nearly 30 years of accounting, audit and management consulting experience. Before joining Ainos, Ms.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

73 edited+43 added−53 removed226 unchanged

2022 filing

2023 filing

Biggest changeEven if we complete the necessary nonclinical studies and clinical trials, the marketing approval process is expensive, time consuming and uncertain, which may prevent us or any of our future collaboration partners from obtaining approvals for the commercialization of our current product candidates and any other product candidate we develop.

Biggest changeIf a product candidate fails to develop as expected, or we experience additional and/or unforeseen development costs and/or delays, we could face additional costs and/or loss of expected future revenue, which would adversely affect our current financial position and future prospects may be adversely affected. 21 Table of Contents Even if we complete the necessary nonclinical studies and clinical trials, the marketing approval process is expensive, time consuming and uncertain, which may prevent us or any of our future collaboration partners from obtaining approvals for the commercialization of our current product candidates and any other product candidate we develop.

We are a company primarily focused on product development and our product revenues may not sufficient to fund our operations. Until, and if, we receive approval from the TFDA, FDA and other regulatory authorities for our product candidates, our revenues generated from products may be limited.

We are a company primarily focused on product development and our product revenues may not be sufficient to fund our operations. Until, and if, we receive approval from the TFDA, FDA and other regulatory authorities for our product candidates, our revenues generated from products may be limited.

If we are unable to expand sales and marketing capabilities on our own or through third parties, or are delayed in establishing these capabilities, we will be unable to successfully commercialize our product candidates, if approved, or generate product revenue. We currently have limited marketing capabilities.

We currently have limited marketing capabilities. If we are unable to expand sales and marketing capabilities on our own or through third parties, or are delayed in establishing these capabilities, we will be unable to successfully commercialize our product candidates, if approved, or generate product revenue. We currently have limited marketing capabilities.

Misconduct by employees, independent contractors, consultants, commercial partners, principal investigators, contract manufacturing organizations or CROs could include intentional, reckless, negligent, or unintentional failures to comply with TFDA or FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the TFDA or FDA, properly calculate pricing information required by federal programs, report financial information or data accurately or disclose unauthorized activities to us.

Misconduct by employees, independent contractors, consultants, commercial partners, principal investigators, contract manufacturing organizations (CROs) could include intentional, reckless, negligent, or unintentional failures to comply with TFDA or FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the TFDA or FDA, properly calculate pricing information required by federal programs, report financial information or data accurately or disclose unauthorized activities to us.

To obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate that our products are safe and effective in humans and animals with respect to our veterinary drug candidates in Taiwan. Clinical trials are expensive and can take many years to complete, and their outcomes are inherently uncertain.

To obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate that our products are safe and effective in humans and animals with respect to our veterinary drug candidates. Clinical trials are expensive and can take many years to complete, and their outcomes are inherently uncertain.

These products may compete with our product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. We do not have patent rights in certain foreign countries in which a market may exist in the future.

These products may compete with our product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. We may not have patent rights in certain foreign countries in which a market may exist in the future.

Moreover, under certain of our license or collaboration agreements, we may not have the right to control the preparation, filing, prosecution and maintenance of patent applications, or to maintain the rights to patents licensed to or from third parties. 23 Table of Contents Although we enter into confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach these agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

Moreover, under certain of our license or collaboration agreements, we may not have the right to control the preparation, filing, prosecution and maintenance of patent applications, or to maintain the rights to patents licensed to or from third parties. 28 Table of Contents Although we enter into confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach these agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

In other jurisdictions, for instance, in Taiwan, there is a similar risk regarding the acceptability of clinical trial data conducted outside of that jurisdiction. Our long-term prospects depend in part upon discovering, developing and commercializing additional products, including POCT testing devices and VELDONA candidates, which may fail in development or suffer delays that adversely affect their commercial viability.

In other jurisdictions, for instance, in Taiwan, there is a similar risk regarding the acceptability of clinical trial data conducted outside of that jurisdiction. Our long-term prospects depend in part upon discovering, developing and commercializing additional products, including POCT and VELDONA candidates, which may fail in development or suffer delays that adversely affect their commercial viability.

Central labs continue to represent the most significant portion of the POCT testing market, and as a result we will be competing against very large and well-established lab companies such as Quest POCTs, Inc. and Laboratory Corporation of America. These companies have also expanded beyond centralized laboratory testing into home sample collection.

Central labs continue to represent the most significant portion of the POCT testing market, and as a result we will be competing against very large and well-established lab companies such as Quest Diagnostics, Inc. and Laboratory Corporation of America. These companies have also expanded beyond centralized laboratory testing into home sample collection.

Our future operating results are dependent on our ability to successfully discover, develop, obtain regulatory approval for and commercialize product candidates, including POCT testing devices and VELDONA candidates, beyond those we currently have in development. The success of a product candidate is unknown and initial product development success may not result in a viable commercial product.

Our future operating results are dependent on our ability to successfully discover, develop, obtain regulatory approval for and commercialize product candidates, including POCT and VELDONA candidates, beyond those we currently have in development. The success of a product candidate is unknown and initial product development success may not result in a viable commercial product.

We have not declared or paid any cash dividends on our capital stock in 2022, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and may be restricted by the terms of any then-current credit facility.

We have not declared or paid any cash dividends on our capital stock in 2023, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and may be restricted by the terms of any then-current credit facility.

These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: · the scalability of our COVID-19 test sales which is dependent on the severity of COVID-19 infections · the timing and cost of, and level of investment in, research, development and commercialization activities, which may change from time to time; · the timing and status of enrollment for our clinical trials; · the timing of regulatory approvals, if any, in the United States and internationally; · the timing of expanding our operational, financial and management systems and personnel, including personnel to support our clinical development, quality control, manufacturing and commercialization efforts and our operations as a public company; 14 Table of Contents · the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity produced, and the terms of any agreements we enter into with third-party suppliers; · the timing and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement; · coverage and reimbursement policies with respect to any future approved products, and potential future drugs that compete with our products; · the timing and cost to establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with current or future collaborators; · expenditures that we may incur to acquire, develop or commercialize additional products and technologies; · the level of demand for any future approved products, which may vary significantly over time; · future accounting pronouncements or changes in accounting principles or our accounting policies; and · the timing and success or failure of nonclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners.

These fluctuations may occur due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: · the scalability of our product sales, which is difficult to predict · the timing and cost of, and level of investment in, research, development and commercialization activities, which may change from time to time; · the timing and status of enrollment for our clinical trials; · the timing of regulatory approvals, if any, in the United States and internationally; · the timing of expanding our operational, financial and management systems and personnel, including personnel to support our clinical development, quality control, manufacturing and commercialization efforts and our operations as a public company; 18 Table of Contents · the cost of manufacturing, as well as building out our supply chain, which may vary depending on the quantity produced, and the terms of any agreements we enter into with third-party suppliers; · the timing and amount of any milestone, royalty or other payments due under any current or future collaboration or license agreement; · coverage and reimbursement policies with respect to any future approved products, and potential future drugs that compete with our products; · the timing and cost to establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with current or future collaborators; · expenditures that we may incur to acquire, develop or commercialize additional products and technologies; · the level of demand for any future approved products, which may vary significantly over time; · future accounting pronouncements or changes in accounting principles or our accounting policies; and · the timing and success or failure of nonclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or collaboration partners.

We and our collaboration partners have conducted and plan to continue to conduct, clinical trials outside the United States, particularly in Taiwan. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA.

We and our collaboration partners have conducted and plan to continue to conduct, clinical trials outside the United States, including in Taiwan. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA.

For instance, our business or operations may change in a manner that would consume available funds more rapidly than anticipated and substantial additional funding may be required to maintain operations, fund expansion, develop new or enhanced products, acquire complementary products, business or technologies or otherwise respond to competitive pressures and opportunities, such as a change in the regulatory environment or a change in COVID-19 treatment modalities.

These measures may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

These challenges may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

Our product candidates will require additional clinical, manufacturing, and non-clinical development, regulatory approval, commercial manufacturing arrangements, establishment of a commercial organization, significant marketing efforts, and further investment before we generate significant product sales. We cannot assure you that we will meet our timelines for our development programs, which may be delayed or not completed for a number of reasons.

Our product candidates will require additional clinical, manufacturing, and non-clinical development, regulatory approval, commercial manufacturing arrangements, establishment of a commercial organization, significant marketing efforts, and further investment before we generate significant product sales. 16 Table of Contents We cannot assure you that we will meet our timelines for our development programs, which may be delayed or not completed for a number of reasons.

Such a loss of patent rights would materially harm our business, financial condition, results of operations and prospects. 24 Table of Contents Interference and/or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications.

Such a loss of patent rights would materially harm our business, financial condition, results of operations and prospects. Interference and/or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications.

If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any approved products.

If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval. 23 Table of Contents If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any approved products.

Any increase in resources devoted to research and product development without a corresponding increase in our operational, financial and management systems could have a material adverse effect on our business, financial condition, and results of operations. Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

Any increase in resources devoted to research and product development without a corresponding increase in our operational, financial and management systems could have a material adverse effect on our business, financial condition, and results of operations. 32 Table of Contents Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. 29 Table of Contents We have acquired, and may in the future acquire, assets and technologies as part of our business strategy.

Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. We have acquired, and may in the future acquire, assets and technologies as part of our business strategy.

We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Many foreign countries, including some EU countries, India, Japan, and China, have compulsory licensing laws under which a patent owner may be compelled under specified circumstances to grant licenses to third parties.

We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. 27 Table of Contents Many foreign countries, including some EU countries, India, Japan, and China, have compulsory licensing laws under which a patent owner may be compelled under specified circumstances to grant licenses to third parties.

As a result, our business and results of operations may be materially and adversely affected. 26 Table of Contents Risks related to our business We will need to increase the size of our Company and may not effectively manage our growth. Our success will depend upon growing our business and our employee base.

As a result, our business and results of operations may be materially and adversely affected. Risks related to our business We will need to increase the size of our Company and may not effectively manage our growth. Our success will depend upon growing our business and our employee base.

The success of our current and future product candidates will depend on many factors, which may include the following: · sufficiency of our financial and other resources to complete the necessary nonclinical studies and clinical trials, and our ability to raise any additional required capital on acceptable terms, or at all; · the timely and successful completion of our nonclinical studies and clinical trials for which the TFDA, FDA, or any comparable foreign regulatory authority, agree with the design, endpoints, or implementation; · receipt of regulatory approvals or authorizations to conduct future clinical trials or other studies beyond those planned to support approval of our product candidates; · successful enrollment and completion of clinical trials; · successful data from our clinical program that supports an acceptable risk-benefit profile of our product candidates in the intended populations; 15 Table of Contents · timely receipt and maintenance of marketing approvals from applicable regulatory authorities; · establishing, scaling up and scaling out, either alone or with third-party manufacturers, cGMP compliant manufacturing capabilities of clinical supply for our clinical trials and commercial manufacturing (including licensure), if any of our product candidates are approved; · entry into collaborations to further the development of our product candidates in select indications or geographies; · obtaining and maintaining regulatory exclusivity for our product candidates as well as establishing competitive positioning amongst other therapies; and · successfully launching commercial sales of our product candidates and obtaining and maintaining healthcare coverage and reimbursement from third party payors, if approved.

We may be required to expend significant resources to obtain regulatory approval and to comply with ongoing regulations in these jurisdictions. 19 Table of Contents The success of our current and future product candidates will depend on many factors, which may include the following: · sufficiency of our financial and other resources to complete the necessary nonclinical studies and clinical trials, and our ability to raise any additional required capital on acceptable terms, or at all; · the timely and successful completion of our nonclinical studies and clinical trials for which the TFDA, FDA, or any comparable foreign regulatory authority, agree with the design, endpoints, or implementation; · receipt of regulatory approvals or authorizations to conduct future clinical trials or other studies beyond those planned to support approval of our product candidates; · successful enrollment and completion of clinical trials; · successful data from our clinical program that supports an acceptable risk-benefit profile of our product candidates in the intended populations; · timely receipt and maintenance of marketing approvals from applicable regulatory authorities; · establishing, scaling up and scaling out, either alone or with third-party manufacturers, cGMP (Current Good Manufacturing Practice) compliant manufacturing capabilities of clinical supply for our clinical trials and commercial manufacturing (including licensure), if any of our product candidates are approved; · entry into collaborations to further the development of our product candidates in select indications or geographies; · obtaining and maintaining regulatory exclusivity for our product candidates as well as establishing competitive positioning amongst other therapies; and · successfully launching commercial sales of our product candidates and obtaining and maintaining healthcare coverage and reimbursement from third party payors, if approved.

If we fail to maintain the patents and patent applications covering our product or procedures, we may not be able to stop a competitor from marketing products that are the same as or similar to our product and technologies. Patents have a limited lifespan.

Our ability to generate future revenues from product sales depends heavily on our, or our collaborators’ ability to successfully: · complete research and obtain favorable results from preclinical and clinical development of our current and future product candidates, including addressing any clinical holds that may be placed on our development activities by regulatory authorities; · seek and obtain regulatory and marketing approvals for any of our product candidates for which we complete clinical trials, as well as their manufacturing facilities; · launch and commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner; · qualify for coverage and establish adequate reimbursement by government and third-party payors for any of our product candidates for which we obtain regulatory and marketing approval; · develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for the product candidates we may develop; · establish and maintain supply and manufacturing capabilities or capacities internally or with third parties that can provide adequate, in both amount and quality, products, and services to support clinical development and the market demand for any of our product candidates for which we obtain regulatory and marketing approval; · obtain market acceptance of current or any future product candidates and effectively compete to establish market share; · maintain a continued acceptable safety and efficacy profile of our product candidates following launch; · address competing technological and market developments; · implement internal systems and infrastructure, as needed; · negotiate favorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations; · maintain, protect, enforce, defend, and expand our portfolio of intellectual property rights, including patents, trade secrets, and know-how; · avoid and defend against third-party interference, infringement, and other intellectual property claims; and · attract, hire, and retain qualified personnel. 12 Table of Contents Even if one or more of our current and future product candidates are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate.

ITEM 1A. RISK FACTORS . Please carefully consider the following discussion of significant factors, events, and uncertainties that make an investment in our securities risky.

ITEM 1A. RISK FACTORS. Investors should carefully consider the following discussion of significant factors, events, and uncertainties that make an investment in our securities risky.

We may also experience numerous unforeseen events prior to, during, or as a result of our nonclinical studies or clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including: · regulators, Institutional Review Boards (“IRBs”) or ethics committees may not authorize us to conduct the clinical study; · we may experience delays due to challenges with third-party contractors and contract research organizations (“CROs”), including negotiating agreement terms, compliance with regulatory requirements, compliance with clinical trial protocols; · it may be difficult to enroll a sufficient number of suitable patients, or enrollment may be slower than we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; · the supply or quality of materials for product candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and · we may experience disruptions by man-made or natural disasters or public health pandemics or epidemics or other business interruptions, including the current COVID-19 pandemic and future outbreaks of the disease.

We may also experience numerous unforeseen events prior to, during, or as a result of our nonclinical studies or clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including: · regulators, Institutional Review Boards (“IRBs”) or ethics committees may not authorize us to conduct the clinical study; · we may experience delays due to challenges with third-party contractors and contract research organizations (“CROs”), including negotiating agreement terms, compliance with regulatory requirements, compliance with clinical trial protocols; · it may be difficult to enroll a sufficient number of suitable patients, or enrollment may be slower than we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; · the supply or quality of materials for product candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and · we may experience disruptions by man-made or natural disasters or public health pandemics or epidemics or other business interruptions, including any future significant outbreaks of diseases similar to the COVID-19 pandemic. 20 Table of Contents We could encounter delays if a current or future clinical trial is suspended or terminated by us, by the TFDA, FDA or other regulatory authorities and/or review boards.

We are focused on product development and have generated $3,519,627 and $594,563 in revenues from COVID-19 antigen test kit sales in 2022 and 2021, respectively. We expect to continue to incur operating losses until we are able to commercialize or license our other products.

We are focused on product development and have generated $102,256 and $3,519,627 in revenues from COVID-19 antigen rapid test kit sales in 2023 and 2022, respectively. We expect to continue to incur operating losses until we are able to commercialize or license our other products.

We had cash and cash equivalents of $1,853,362 as of December 31, 2022, and we will need to continue to seek capital from time to time to continue to capitalize the development and commercialization of our product candidates and to acquire and develop other product candidates. Our actual capital requirements will depend on many factors.

We had cash and cash equivalents of approximately $1.9 million as of December 31, 2023, and we will need to continue to seek capital from time to time to capitalize the development and commercialization of our product candidates and to acquire and develop other product candidates. Our actual capital requirements will depend on many factors.

The trading market for our common stock in the future could be subject to wide fluctuations in response to several factors, including, but not limited to: · actual or anticipated variations in our results of operations; · our ability or inability to generate revenues or profit; · the number of shares in our public float; and · increased competition.

Our common stock and public warrants are currently quoted on the Nasdaq Capital Market. 36 Table of Contents The trading market for our common stock in the future could be subject to wide fluctuations in response to several factors, including, but not limited to: · actual or anticipated variations in our results of operations; · our ability or inability to generate revenues or profit; · the number of shares in our public float; and · increased competition.

The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution.

With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution.

Our independent registered public accounting firm, PWR CPA, LLP, has expressed substantial doubt about our ability to continue as a going concern in their audit opinion of our financial statements for the year ended December 31, 2022. See audit report for more information. You could lose your investment if we cease operations.

Our independent registered public accounting firm, KCCW Accountancy Corp., has expressed substantial doubt about our ability to continue as a going concern in their audit opinion of our financial statements for the year ended December 31, 2023. See audit report for more information. You could lose all or substantially all of your investment if we cease operations.

If we raise capital through equity financings in the future, that will result in dilution to all other stockholders. We also expect to grant equity awards to employees, directors, and consultants under our 2021 Stock Incentive Plan.

We may need to raise additional capital through equity and debt financings in order to fund our operations. If we raise capital through equity financings in the future, that will result in dilution to all other stockholders. We also expect to grant equity awards to employees, directors, and consultants under our 2023 Stock Incentive Plan.

For example, our VELDONA product candidates are based on a novel technology with only a few gene therapies approved to date, which makes it difficult to predict the time and cost of development and the ability to obtain regulatory approval. Further, our VELDONA therapies may face difficulties in gaining the acceptance of patients or the medical community.

An active trading market for our common stock may not develop and the market price of our common stock and warrants could be volatile. Our common stock and warrants are currently quoted on the Nasdaq Capital Market.

An active trading market for our common stock may not develop and the market price of our common stock and warrants could be volatile.

The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: · efficacy and potential advantages compared to alternative tools; · the ability to offer our products, if approved, for sale at competitive prices; · convenience and ease of use; · the willingness of the target market to adopt new technologies; and · the strength of marketing and distribution support.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, financial condition, results of operations, stock price and prospects, including the imposition of significant fines or other sanctions. 21 Table of Contents We may form or seek strategic partnerships in the future, and we may not realize the benefits of such alliances or licensing arrangements.

Any failure or delay in the development of our internal sales, marketing, distribution and pricing/reimbursement/access capabilities would impact adversely the commercialization of these products.

Any failure or delay in the development of our internal sales, marketing, distribution and pricing/reimbursement/access capabilities would impact adversely the commercialization of these products. To commercialize our products, we also intend to leverage the commercial infrastructure of our distributors.

If we are unable to remediate the deficiencies identified adequately or otherwise fail to maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and adversely affect our results of operations and financial condition. 37 Table of Contents Our issuance of additional capital stock in connection with financings, acquisitions, investments, our 2023 Stock Incentive Plan or otherwise will dilute all other stockholders.

These operating losses have adversely affected and are likely to continue to adversely affect our working capital, total assets and stockholders’ equity. We have generated operating losses of $13,976,212 and $3,867,426 in the year ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and December 31, 2021, we had cumulative losses of $24,115,606 and $10,108,916, respectively.

These operating losses have adversely affected and are likely to continue to adversely affect our working capital, total assets and stockholders’ equity. We have generated operating losses of $13,206,396 and $13,976,212 in the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, we had cumulative losses of $37,886,155 and $24,115,606, respectively.

Our failure to become and remain profitable would decrease the value of the Company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our Company also could cause you to lose all or part of your investment.

Any potential delisting of our common stock from the Nasdaq Capital Market would also make it more difficult for our stockholders to sell our common stock in the public market. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. DESCRIPTION OF PROPERTY . Our executive and administrative offices are located at San Diego, California and in Taiwan.

In addition to seeking patents for our technologies and product candidates, we also rely on trade secret protection, as well as confidentiality agreements, non-disclosure agreements and invention assignment agreements with our employees, consultants and third-parties, to protect our know-how and other confidential and proprietary information, especially where we do not believe patent protection is appropriate or obtainable. 25 Table of Contents It is our policy to require our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors, and other third parties to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.

If a failure, accident or security breach were to occur and cause interruptions in our operations, or the operations of our partners or third-party providers, it could result in a misappropriation of confidential information, including our intellectual property or financial information or clinical trial participant personal data, a material disruption or delay in our drug development programs, and/or significant monetary losses.

The risks of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber-terrorists, have increased significantly and are becoming increasingly difficult to detect. 24 Table of Contents If a failure, accident or security breach were to occur and cause interruptions in our operations, or the operations of our partners or third-party providers, it could result in a misappropriation of confidential information, including our intellectual property or financial information or clinical trial participant personal data, a material disruption or delay in our drug development programs, and/or significant monetary losses.

Should any third party with which we enter into any of these arrangements not comply with the applicable regulatory requirements, we or they may be subject to regulatory enforcement action and we or they may be delayed or prevented from obtaining marketing approval for the applicable product candidate. 26 Table of Contents In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.

Product candidates we develop may not be effective or may prove to have adverse characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. 17 Table of Contents The process of obtaining marketing approvals, in Taiwan, the United States and other jurisdictions, is expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved.

The process of obtaining marketing approvals, in Taiwan, the United States and other jurisdictions, is expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved.

The regulations that govern marketing approvals, pricing and reimbursement for new products vary widely from country to country. Some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing approval is granted.

Some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing approval is granted.

An adverse result in any litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties.

An adverse result in any litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted narrowly.

Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our product candidates. 16 Table of Contents If we experience termination or delays in the completion of any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates may be delayed.

If we experience termination or delays in the completion of any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates may be delayed.

Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of products to continue our business.

Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of products to continue our business. Clinical product development involves a lengthy and expensive process, with uncertain outcomes.

If we do not update our products to keep pace with technological and scientific advances, our products could become obsolete and sales of our products could decline or fail to grow as expected. 27 Table of Contents Many of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise than we do in research and development, manufacturing, obtaining regulatory clearances and approvals and regulatory compliance, and sales and distribution.

Many of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise than we do in research and development, manufacturing, obtaining regulatory clearances and approvals and regulatory compliance, and sales and distribution.

The total addressable market opportunity for our current and future products may be much smaller than we estimate. Our estimates of the total addressable market for our product candidates are based on internal and third-party estimates as well as a number of significant assumptions.

Our estimates of the total addressable market for our product candidates are based on internal and third-party estimates as well as a number of significant assumptions. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates.

We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 31 Table of Contents We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors.

Further, the continued development of, and approval or authorizations for, vaccines and therapeutic treatments may affect these market opportunity estimates. Our market opportunity may also be limited by new POCT tests or other products that enter the market.

These estimates, which have been derived from a variety of sources, including market research and our own internal estimates, may prove to be incorrect. Further, the continued development of, and approval or authorizations for, vaccines and therapeutic treatments may affect these market opportunity estimates. Our market opportunity may also be limited by new products that enter the market.

Further, our VELDONA therapies may face difficulties in gaining the acceptance of patients or the medical community. 28 Table of Contents Our business activities are subject to the Foreign Corrupt Practices Act, or the FCPA, and similar anti-bribery and anti-corruption laws of other countries in which we operate, including Taiwan, w as well as U.S. and certain foreign export controls, trade sanctions, and import laws and regulations.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition. 35 Table of Contents Our business activities are subject to the Foreign Corrupt Practices Act, or the FCPA, and similar anti-bribery and anti-corruption laws of other countries in which we operate, including Taiwan, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and regulations.

Any such breach, loss or compromise of clinical trial participant personal data may also subject us to civil fines and penalties under the privacy laws of the European Union or other countries as well as state and federal privacy laws in the United States. 20 Table of Contents Risks related to reliance on third parties We rely substantially on Taiwan Carbon Nano Technology (“TCNT”), an affiliate of our Company, to co-develop products.

Our competitors may develop and commercialize competing or alternative products or services and improvements faster than we are able to do so, which would negatively affect our ability to increase or sustain our revenue or achieve profitability and could materially adversely affect our future growth prospects. 34 Table of Contents Research and development of drug candidates as VELDONA is extremely expensive and complex and its difficult to evaluate the likelihood of the outcome of clinical trials, regulatory approvals, and our business and future prospects.

In addition, health epidemics could cause significant disruption in the operations of third-party manufacturers, contract research organizations and other third parties upon whom we rely. For example, the COVID-19 pandemic has presented a substantial public health and economic challenge around the world and is affecting employees, patients, communities and business operations, as well as the U.S. economy and financial markets.

Our business could be adversely affected by health epidemics wherever we have clinical trial sites or other business operations. In addition, health epidemics could cause significant disruption in the operations of third-party manufacturers, contract research organizations and other third parties upon whom we rely. For example, the COVID-19 pandemic has presented a substantial public health and economic challenge worldwide.

If we were to initiate legal proceedings against a third party to enforce a patent directed to our product candidates, or one of our future product candidates, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.

We may find it impractical or undesirable to enforce our intellectual property against some third parties. 29 Table of Contents If we were to initiate legal proceedings against a third party to enforce a patent directed to our product candidates, or one of our future product candidates, the defendant could counterclaim that our patent is invalid or unenforceable.

Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or insufficient written description. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution.

In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or insufficient written description.

Even if we are successful, these types of lawsuits may consume significant amounts of our time and other resources. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Even if we are successful, these types of lawsuits may consume significant amounts of our time and other resources.

Third parties may also raise similar claims before the USPTO or an equivalent foreign body, even outside the context of litigation. Such proceedings could result in the revocation of, cancellation of, or amendment to our patents in such a way that they no longer cover our technology or any product candidates that we may develop.

Such proceedings could result in the revocation of, cancellation of, or amendment to our patents in such a way that they no longer cover our technology or any product candidates that we may develop. The outcome following legal assertions of invalidity and unenforceability is unpredictable.

We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.

We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Thus, we may not be able to stop a competitor from marketing and selling in foreign countries products that are the same as or similar to our product.

We believe that our cash on hand, along with the anticipated net proceeds from products and additional financing, will enable us to fund our operations over the short and medium terms based on our current plan.

Because of the risks and uncertainties associated with product development, we are unable to predict the extent of any future losses, whether we will ever generate significant revenues or if we will ever achieve or sustain profitability. 15 Table of Contents We believe that our cash on hand, along with the anticipated net proceeds from products sales and additional financing, will enable us to fund our operations over the short and medium terms based on our current plan.

Obtaining regulatory approvals in various jurisdictions and complying with the regulatory requirements of multiple jurisdictions could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our product candidates in certain countries. 18 Table of Contents Even if we are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business.

Our business, operations and clinical development plans and timelines and supply chain could be adversely affected by the effects of epidemics, including the ongoing COVID-19 pandemic. Our business could be adversely affected by health epidemics wherever we have clinical trial sites or other business operations.

If we fail to maintain the favorable perception of our brands, our business, financial condition and results of operations could be negatively impacted. Our business, operations, clinical development plans and timelines, and supply chain could be adversely affected by the effects of epidemics , including but not limited to COVID-19.

The point-of-care testing (“POCT”) market is extremely competitive and rapidly evolving, making it difficult to evaluate our business and future prospects. The market for POCT testing is extremely competitive.

Expansion into markets served by our competitors and entry of new competitors or expansion of existing competitors into our markets could materially adversely affect our business, financial condition and results of operations. 33 Table of Contents The point-of-care testing (“POCT”) market is extremely competitive and rapidly evolving, making it difficult to evaluate our business and future prospects.

We expect that sales of the Ainos COVID-19 antigen rapid test kits will account for majority of our revenue until at least such time as we can commercialize additional tests or other products.

Until such time as we can commercialize additional products, the discontinuation of sales of the Ainos COVID-19 antigen rapid test kits may adversely affect our business, operating results, and financial condition.

Similar challenges to obtaining coverage and reimbursement will apply to companion POCTs that we or our collaborators may develop.

Similar challenges to obtaining coverage and reimbursement will apply to companion POCTs that we or our collaborators may develop. Even if our agreements with current or future collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely. We need to raise additional capital to operate our business. If we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development.

A decline in the value of our Company also could cause you to lose all or part of your investment. 17 Table of Contents We need to raise additional capital to operate our business. If we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development.

We rely on our partners and third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or breaches. The risks of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber-terrorists, have increased significantly and are becoming increasingly difficult to detect.

We rely on our partners and third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or breaches.

Food and Drug Administration, or FDA, and similar foreign regulatory authority laws and regulations. 11 Table of Contents Our revenue for at least the near term will almost exclusively depend on sales of the Ainos COVID-19 test kits until we can develop, obtain regulatory clearance or other appropriate authorization for, and commercialize additional product candidates.

Food and Drug Administration, or FDA, and similar foreign regulatory authority laws and regulations. Our revenue for the fiscal year of 2023 was almost exclusively dependent on sales of the Ainos COVID-19 antigen rapid test kits and we ceased the sale of the Ainos COVID-19 antigen rapid test kits in early 2024.

Adoption and use of the Ainos COVID-19 antigen rapid test kits will depend on several factors, including, but not limited to the accuracy, affordability and ease of use of our product as compared to other products and products that compete with the Ainos COVID-19 antigen rapid test kits.

The sales of VELDONA Pet will depend on several factors, including, but not limited to, sales and marketing strategies, affordability, and ease of use compared to other products and competitors of VELDONA Pet. If we cannot expand our customer base or improve our sales and marketing strategies, we may not be able to increase our revenue.

Removed

Added

We anticipate that VELDONA Pet will serve as our primary source of our future revenue until we can develop, obtain regulatory clearance or other appropriate authorization for, and commercialize additional product candidates.

Removed

As a result, our ability to execute our growth strategy and become profitable in the near term will depend upon consumer adoption of the Ainos COVID-19 test kits. COVID-19 infection is moderating and we currently have a very small number of customers for the Ainos COVID-19 antigen rapid test kits in Taiwan.

Added

Our revenue for the fiscal year of 2023 was almost exclusively dependent on sales of the Ainos COVID-19 antigen rapid test kits and we ceased the sale of the Ainos COVID-19 antigen rapid test kits in early 2024.

Removed

If infection rates remain low and if we are unable to expand our customer base, we may not be able to increase our revenue.

Added

Starting from the year 2024, we anticipate VELDONA Pet to serve as a key source of our future revenue until we can develop, obtain regulatory clearance, or secure other appropriate authorization for additional product candidates and commercialize them.

Removed

Because we expect virtually all of our revenue for at least the near term to be generated from sales of the Ainos COVID-19 antigen rapid test kits in Taiwan, our the failure to increase sales volume or retain regulatory authorization under our EUA in Taiwan for the Ainos COVID-19 antigen rapid test kits may have a material adverse effect on our business, operating results and financial condition.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+4 added−13 removed2 unchanged

2022 filing

2023 filing

Biggest changeTransfer Agent American Stock Transfer and Trust Company is the Company’s transfer agent. Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report.

Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report. 40 Table of Contents ITEM 6. [RESERVED]

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES . Market Information Effective August 9, 2022, our common stock and warrants began trading on the Nasdaq Capital Market under the symbols “AIMD” and “AIMDW”, respectively. Prior to August 9, 2022, the Company’s common stock traded on the OTCPK.

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Effective August 9, 2022, our common stock and public warrants began trading on the Nasdaq Capital Market under the symbols “AIMD” and “AIMDW”, respectively. Prior to August 9, 2022, the Company’s common stock traded on the OTCPK.

Dividends We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on any of our capital stock.

Issuer Purchases of Equity Securities None. Dividends We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on any of our capital stock.

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.

All issued and outstanding common stock, restricted stock units, outstanding convertible notes, warrants and options to purchase common stock and per share amounts contained in this report have been retroactively adjusted to give effect to the reverse stock splits for all periods presented.

In connection with the offering, the Company effectuated a reverse split of its issued and outstanding common stock at a ratio of 1-for-15.

In connection with the above uplisting to Nasdaq Capital Market, we effectuated a 1-for-15 reverse stock split of our common stock on August 8, 2022.

Removed

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.

Added

Further, to comply with Nasdaq’s minimum $1.00 per share continued listing rules, we filed a Certificate of Amendment to its Restated Certificate of Formation on November 27, 2023, to apply for another reverse stock split of our common stock at a ratio of 1-for-5 which was effectuated on December 14, 2023 after receiving required approvals.

Removed

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. Holders of Common Stock We have 300,000,000 shares of voting common shares authorized for issuance.

Added

The par value of $0.01 and authorized shares of the Company’s common stock were not adjusted as a result of the reverse stock splits.

Removed

As of December 31, 2022, a total of 21,959,797 shares of common stock were either issued (20,011,602), reserved for conversion of convertible debt to stock (145,355), reserved for RSUs awarded (800,000), held for future exercise of stock options (36,666) and shares reserved for warrant conversion (966,174). Preferred Stock The Company has 10,000,000 shares of preferred stock authorized for issuance.

Added

Holders of Common Stock As of March 7, 2024, there were approximate 254 shareholders of record of the Company’s common stock based upon the records of the shareholders provided by the Company’s transfer agent.

Removed

No shares of preferred stock were outstanding as of December 31, 2022 and none are outstanding as of the date of the Balance Sheet in this report. Stock Performance Graph Not applicable. Recent Sales of Unregistered Securities None.

Added

Since many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders. Stock Performance Graph Not applicable. Recent Sales of Unregistered Securities Not applicable. Use of Proceeds from Registered Securities Not applicable.

Removed

Use of Proceeds From Registered Securities On August 8, 2022, we closed on our underwritten public offering of 780,000 units at a public offering price of $4.25 per unit (the “IPO”). 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.

Removed

The common stock and warrants were immediately separable and were issued separately. The common stock and warrants began trading on the Nasdaq Capital Market on August 9, 2022, under the symbols “AIMD” and “AIMDW,” respectively. Ainos received gross proceeds of approximately $3.3 million, before deducting underwriting discounts and commissions and other estimated offering expenses.

Removed

The reverse stock split became effective at 8 p.m., Eastern Time, on August 8, 2022. 31 Table of Contents As part of its offering Ainos 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.

Removed

The underwriters partially exercised its option to purchase an additional 117,000 warrants at $0.01/warrant. Maxim Group LLC acted as sole book-running manager for the offering. Brookline Capital Markets, a division of Arcadia Securities, LLC acted as co-manager for the offering.

Removed

The offering was conducted pursuant to the Company’s registration statement on Form S-1 (Registration No. 333-264527) that was previously filed with Securities and Exchange Commission (“SEC”), and declared effective on August 8, 2022. Issuer Purchases of Equity Securities None.

Removed

Recent Sales of Unregistered Securities None of the following transactions involved any underwriters, underwriting discounts or commissions, or any public offering unless specified otherwise.

Removed

Unless otherwise specified below, we believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder), or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or under benefit plans and contracts relating to compensation as provided under Rule 701.

Removed

The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the share certificates issued in these transactions.

Removed

All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising. ITEM 6. [RESERVED] This item is not applicable to smaller reporting companies.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2022 filing

2023 filing

Biggest changeWe believe that the following critical policies affect our judgments and estimates used in preparation of our consolidated financial statements: Long-Lived Asset Impairment We regularly evaluate long-lived assets, including property, equipment, and intangible assets subject to amortization, for impairment in accordance with Accounting Codification Standards (ASC) 360-10-35-17 thru 35-35, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which requires us to review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable and exceeds its fair value.

Biggest changeWe evaluate the recoverability of the definite lived intangible assets whenever events or changes in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations of future undiscounted cash flows for each asset group in accordance with ASC 360-10, Property, Plant and Equipment—Impairment or Disposal of Long-Lived Assets (ASC 360-10).

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . The consolidated financial statements and notes of the Company are set forth beginning on page F-1 immediately following the signature page of this report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE . None. 37 Table of Contents

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements and notes of the Company are set forth beginning on page F-1 immediately following the signature page of this report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.

If those efforts are not successful, the Company may raise additional capital through the issuance of equity securities, debt financings or other sources, including, as required, additional external financing from our majority shareholder, in order to further implement its business plan.

There can be no assurance that we will be successful in our efforts to make the Company profitable. If those efforts are not successful, we may raise additional capital through the issuance of equity securities, debt financings or other sources to further implement its business plan.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . The following discussion should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this Form 10-K. This discussion contains forward-looking statements based on current expectations, which involve uncertainties.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

We may also have cash requirements related to capital expenditures to support the planned growth of our business, including investments in corporate facilities and equipment. Going Concern The Company’s consolidated financial statements have been prepared in accordance with U.S.

We may also have cash requirements related to capital expenditures to support the planned growth of our business, including investments in corporate facilities and equipment. Going Concern As of December 31, 2023, we had cash and cash equivalents of $1,885,628.

We may continue to incur operating losses in the near term as our operating expenses will be increased to support the growth of our business.

We may continue to incur operating losses in the near term as our operating expenses will be increased to support the growth of our business. We expect that our selling, general and administrative expenses, and research and development expenses will continue to increase our internal sales force to move forward our product development and commercialization roadmaps.

Uses of Liquidity Our primary uses of cash are to fund our operations as we continue to grow our business. We may require a significant amount of cash to fund capital expenditures, inventory purchases and timing of accounts receivable as we grow our commercial infrastructure.

We also plan to allocate sales and marketing efforts for VELDONA Pet. 45 Table of Contents For future liquidity consideration, we expect primary uses of cash are to fund our operations as we continue to grow our business. We may require a significant amount of cash to fund working capital and capital expenditures as we grow our commercial infrastructure.

If circumstances related to our long-lived assets change, we may record an impairment charge in the future. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements as of December 31, 2022. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation. ITEM 8.

We believe our assumptions were consistent with the strategic plans and business goals. 46 Table of Contents Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2023. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K. ITEM 8.

Given our available resources, we intend continue marketing the COVID-19 test kit primarily in Taiwan. We believe that during the COVID-19 pandemic, consumers have been increasingly familiar with at-home tests. Moving forward, people may seek additional at-home tests to manage other infections as quickly as possible.

We believe that post COVID-19, consumers have become increasingly familiar with at-home tests. Moving forward, people may seek additional at-home tests to manage other infections as quickly as possible. Home self-testing have become increasingly available for other infections such as vaginal infections or sexually transmitted infections (STIs).

Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Key Developments in 2022 The following are highlights of major corporate milestones in 2022 that we believe will serve as catalysts for us to develop and commercialize our product pipeline over the next several years: · In 2021, we acquired intellectual property assets from Ainos KY valued at approximately $20,000,000 to augment our product development pipeline.

Key Developments in 2023 The following highlights major corporate milestones in 2023 that we believe will serve as catalysts for us to develop and commercialize our product pipeline over the next several years: In December 2023, we initiated the second phase of co-development of a VOC sensing platform, powered by AI Nose technology, in collaboration with Nisshinbo Micro Devices Inc.

These factors raise substantial doubt about the Company’s ability to continue as a going concern, but 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. See the audit report for related information.

Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability of assets or the amounts and classifications of liabilities that may result from our possible inability to continue as a going concern.

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. At December 31, 2022, we had available cash and cash equivalents of $1,853,362. We anticipate business revenues and potential financial support from outside sources to fund our operations over the next twelve months.

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America and the Company’s discussion and analysis of its financial condition and operating results requires the Company’s management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.

Removed

Actual results and the timing of events could differ materially from the forward-looking statements as a result of a number of factors, including those discussed in “Item 1A. Risk Factors.” 32 Table of Contents Overview Our Company and Business Ainos Inc., formerly Amarillo Biosciences, Inc.

Added

Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Removed

(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.

Added

There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Removed

Added

Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make.

Removed

Added

We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly in the section entitled “Risk Factors” in Part I, Item 1A that could cause actual results or events to differ materially from the forward-looking statements that we make.

Removed

Added

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

Removed

Subsequently, in 2022 we acquired additional intellectual property and equipment assets from Ainos KY valued at approximately $26,000,000 including technical know-how, medical device manufacturing, testing and office equipment in Taiwan and hired certain of Ainos KY’s R&D personnel. · In June 2022, we began marketing the Ainos COVID-19 antigen test kit for self-test use under an Emergency Use Authorization (“EUA”) issued by the TFDA on June 13, 2022 to TCNT, the manufacturer and product co-developer of the test in conjunction with Ainos. · In August 2022, we signed a Master Service Agreement with Swiss Pharmaceutical Co., Ltd.

Added

You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect.

Removed

(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. FDA Current Good Manufacturing Practice regulations.

Added

The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Overview Ainos, Inc.

Removed

This relationship with Swiss Pharma is intended to develop our 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. · In August 2022, we uplisted to Nasdaq Capital Market and concurently completed an underwritten public offering of 780,000 units at a public offering price of $4.25 per unit.

Added

(the “Company”), incorporated in the State of Texas in 1984, is a diversified healthcare company focused on the development of novel point-of-care testing (the “POCT”), therapeutics based on very low-dose interferon alpha (the “VELDONA”), and synthetic RNA-driven preventative medicine.

Removed

In connection with the offering, we effectuated a reverse split of our common stock at a ratio of 1-for-15. · In August 2022, we submitted Investigational New Drug Application to the U.S.

Added

Our products pipeline include commercial-stage VELDONA Pet cytoprotein supplements, clinical-stage VELDONA human therapeutics and telehealth-friendly POCTs powered by the AI Nose technology platform. Please refer to “Business” in Part I, Item 1 for description of our business.

Removed

FDA for our planned Phase 2 study of VELDONA formulation against mild COVID-19 symptoms. · In September 2022, we announced positive results from additional preclinical study of VELDONA formulation against COVID-19 variant virus – Omicron. · In November 2022, we published preclinical data demonstrating VELDONA formulation’s potential as treatment candidates for feline chronic gingivostomatitis (FCGS) and canine atopic dermatitis (CAD).

Added

(“NISD”) and Taiwan Inabata Sangyo Co. (“Taiwan Inabata”). First announced in August 2023, Ainos, NISD and Taiwan Inabata plan to co-develop a VOC sensing platform, leveraging our intellectual properties surrounding AI Nose, for applications including telehealth, automotive, industrial, and environmental safety. Inabata will provide business logistics for the program and liaise between Ainos and NISD.

Removed

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. While in the short-term demand for rapid COVID-19 testing is expected, market conditions are unpredictable.

Added

This project underscores our commitment to digitizing smell by pioneering VOC sensing’s potential across diverse industries, thereby broadening our addressable market. In November 2023, our contract manufacturer, Swiss Pharmaceutical Co., Ltd. ("Swiss Pharma"), has completed manufacturing of a Good Manufacturing Practice ("GMP") clinical batch of VELDONA investigational new drugs.

Removed

Home self-testing and self-collection have been increasingly available for other infections such as vaginal or sexually transmitted infections.

Added

In November 2023, we announced that based on top-line data reported from three clinical studies for VELDONA formulation as a potential treatment for oral warts in HIV-seropositive patients, we plan to pursue a pre-IND meeting with the United States Food and Drug Administration (the "U.S. FDA") for our planned Phase III clinical studies. U.S.

Removed

We believe this new user behaviour, supported by variety of telehealth platforms, will become increasingly supportive to our other POCT products as COVID-19 becomes endemic. 33 Table of Contents 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.

Added

FDA has granted Orphan Drug Designation ("ODD") for our VELDONA formulation as a potential treatment for oral warts in HIV-seropositive patients. In the third quarter of 2023, we commenced shipping VELDONA Pet cytoprotein supplements in Taiwan.

Removed

We intend to evaluate our nucleic acid test technology for potential applications for other disease indications. At the same time, we plan to prioritize our other long-term growth programs, including Ainos Flora and our VELONDA candidates. We intend to actively explore out-licensing opportunities for our VELDONA candidates to accelerate return of our investments.

Added

Launched in the second quarter of 2023, our VELDONA Pet product line is formulated to address a variety of health issues in dogs and cats, including skin, gum, emotion, discomfort caused by allergies, eye, and weight-related issues. In March 2023, we signed a distribution agreement with Topmed International Biotech Co., Ltd.

Removed

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.

Added

("Topmed") for distribution of VELDONA Pet cytoprotein supplements in Taiwan. 41 Table of Contents Factors Affecting Our Business We are pivoting away from sale of COVID-19 antigen rapid test kits, which were the main source of our revenues in 2023.

Removed

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.

Added

Going forward, our near-term priorities include sales and marketing of VELDONA Pet, advancing our lead VOC POCT candidate, Ainos Flora, co-developing VOC sensing platform with our Japan partners, as well as advancing clinical studies and pursuing out-licensing of VELDONA human drug candidates. We are currently marketing VELDONA Pet in Taiwan and intend to explore overseas commercial opportunities.

Removed

Financial Summary of Fiscal Year 2022 A discussion regarding our results of operations and financial conditio for fiscal year 2022 compared to fiscal year 2021 is presented below.

Added

We have offered VELDONA Pet on certain Taiwanese e-commerce platforms. Offline, we are exploring opportunities in channels such as pet supply stores, chain drugstores and convenience stores. Pet food and supplement industry is highly competitive. Our ability to effectively compete may affect our business, at least in the near-term.

Removed

A discussion regarding our results of operations and financial condition for fiscal year 2021 compared to fiscal year 2020 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Results of Operations The following table summarizes our results of operations for the years ended December 31, 2022 and 2021.

Added

We believe this new user behavior, supported by a variety of telehealth platforms, will facilitate consumer adoption of our other POCT product candidates. Our lead candidate Ainos Flora is under clinical studies and we plan to explore strategic relationships to commercialize the product.

Removed

Years ended December 31, Change 2022 2021 Amount % Revenues 3,519,627 594,563 2,925,064 492 % Cost of revenues (2,114,284 ) (184,181 ) (1,930,103 ) 1,048 % Gross profits 1,405,343 410,382 994,961 242 % Operating expenses: Research and development expenses 6,845,964 1,920,645 4,925,319 256 % Selling, general and administrative expenses 8,535,591 2,357,163 6,178,428 262 % 15,381,555 4,277,808 11,103,747 260 % Operating loss (13,976,212 ) (3,867,426 ) (10,108,786 ) 261 % Non-operating income and expenses Interest expense, net (53,528 ) (18,689 ) (34,839 ) 186 % Other income and (expenses), net 23,050 (2,547 ) 25,597 (1005 %) (30,478 ) (21,236 ) (9,242 ) 44 % Net loss (14,006,690 ) (3,888,661 ) (10,118,029 ) 260 % Revenues Net revenues for 2022 and 2021 were $3,519,627 and $594,563, respectively.

Added

The result of clinical studies and our success in exploring strategic relationships, and the likelihood of regulatory approvals, may affect our business, at least in the near-term. We are co-developing a VOC sensing platform, powered by AI Nose technology, with our Japanese partners.

Removed

In 2022, we substantially increased revenues by 492%, consistent with a corresponding increase in sales volume of our COVID-19 Antigen Self-Test Kit in Taiwan. Costs and Gross Profits Cost of revenues for 2022 and 2021 were $2,114,284 and $184,181, respectively, representing a 1,048% increase year-over-year.

Added

This project underscores our commitment to digitizing smell by pioneering VOC sensing’s potential across diverse industries, thereby broadening our addressable market. The progress of this co-development may affect our business, at least in the near-term. As of December 31, 2023, we had available cash and cash equivalents of $1,885,628.

Removed

The increase was primarily attributable to increased business activity relating to the test kits. 34 Table of Contents Gross profits rose to $1,405,343 from $410,382, an improvement of $994,961, or 242%. Gross margin rate for 2022 decreased to 40% from 69% for 2021, as a result of a shift in the Company’s revenue mix.

Added

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 “Liquidity and Capital Resources” for additional information.

Removed

To align with the Taiwan government’s infection control policy, we generated more revenue from the COVID-19 Antigen Self-Test Kit beginning in the third quarter of 2022. In comparison, the majority of our revenue during the comparable period had been previously generated from sales of our COVID-19 Rapid Test Kit for use by healthcare professionals.

Added

To finance our continuing operations, we will need to raise additional capital, which cannot be assured.

Removed

We did not sell the self-test kit in 2021. Research and Development Expenses Following the strategic investment by Ainos KY, since August 2021 we have increased research and development staffing to develop our product candidates including POCTs, VELDONA and SRNA research. Research and development expenses for 2022 and 2021 were $6,845,964 and $1,920,645, an increase of $4,925,319, or 256%.

Added

Recent Financing On September 25, 2023, we entered into a securities purchase agreement with Lind Global Fund II LP (“Lind) to issue and sell the initial $3 million tranche of a total anticipated $10 million private placement with $2 million funded at closing and $1 million at conditions specified in the agreement.

Removed

The increase is associated with higher amortization of intellectual property assets, staffing, experimental materials, service fee for CRO and animal study, co-development research with the universitity lab and other companies When excluding share-based compensation, depreciation and amortization expenses, R&D expenses increased to US$2,134,935 from US$655,706 over the year of 2022.

Added

The investment is in the form of a senior secured convertible promissory note, convertible into shares of the Company’s common stock at the lower of $7.50 per share reverse-stock-split adjusted, or 90.0% of the average of the three lowest daily volume weighted average price (“VWAP") of the common stock during the 20 trading days prior to conversion, subject to certain adjustments.

Removed

Selling, General and Administrative Expenses Selling, general and administration expense increased to $8,535,591 in 2022 from $2,357,163 in 2021, an increase of $6,178,428, or 262%. which included the share-based compensation approximately $6,394,000. Aside from share-based compensation expense, SG&A expense mainly consisted of staffing, legal, audit, consulting, and professional service expenses.

Added

We also issued Lind warrants to purchase 691,244 shares of common stock giving effect to the 1-for-5 reverse stock split on December 14, 2023, at an initial exercise price of $4.50 per share reverse-stock-split adjusted, subject to certain adjustments. On January 24, 2024, we announced an additional financing with Lind.

Removed

When excluding share-based compensation, depreciation and amortization expenses, SG&A expenses increased to US$2,062,046 from US$1,404,811 over the year of 2022. Operating Loss While our gross profits improved by $994,961 in 2022 compared to $405,096 in 2021, we incurred additional operating expenses as we continue to invest resources to execute our growth strategy and product roadmap.

Added

The funding amount is up to $1.75 million, with $875,000 funded at closing and $875,000 to be funded subject to effective registration statement and conditions specified in the agreement. In connection with additional funding, we issued Lind a warrant to purchase 1,021,400 shares at an exercise price of $2.16 per share.

Removed

As a result, our operating loss in 2022 increased to $13,976,212 from $3,867,426 in 2021. Liquidity and Capital Resources As of December 31, 2022, we had cash and cash equivalents of $1,853,362, representing an increase from $1,751,499 as of December 31, 2021.

Added

On March 13, 2023, we issued and sold two convertible promissory notes in a principal amount of $3 million to certain investors. The note will mature in two years following the issuance, bearing interest at the rate of 6% per annum, convertible to Company’s common stock at $7.50 per share reverses-stock-split adjusted.

Removed

The increase is primarily attributable to revenues from sales of our Ainos COVID-19 antigen rapid test kit in Taiwan and proceeds from financing activities..

Added

Reverse Stock Split On December 12, 2023, the Company announced that, as previously authorized by its shareholders, it is implementing a consolidation (reverse stock split) of its outstanding shares of common stock on the basis of one (1) new share of common stock for every five (5) currently outstanding shares.

Removed

The following table summarizes our cash flows at the end of December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Net cash used in operating activities (3,021,183 ) (1,249,977 ) Net cash used in investing activities (630,178 ) (180,517 ) Net cash provided by financing activities 3,831,245 3,154,373 Operating activities While our revenues grew in 2022 due to sales of Ainos COVID-19 test kits, we increased investment in staffing, activities of research and developments and working capital, resulting in a higher net operating outflow.

Added

The Reverse Stock Split was effectuated on December 14, 2023 and all the shares and per share dollar information within this Annual Report on Form 10-K has been reflected the Reverse Stock Split. 42 Table of Contents Results of Operations The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Years ended December 31, Change 2023 2022 Amount % Revenues $ 122,112 $ 3,519,627 $ (3,397,515 ) (97 %) Cost of revenues (375,845 ) (2,114,284 ) 1,738,439 (82 %) Gross (loss) Profit (253,733 ) 1,405,343 (1,659,076 ) (118 %) Operating expenses: Research and development expenses 7,317,388 6,845,964 471,424 7 % Selling, general and administrative expenses 5,635,275 8,535,591 (2,900,316 ) (34 %) Total operating expenses 12,952,663 15,381,555 (2,428,892 ) (16 %) Loss from operating (13,206,396 ) (13,976,212 ) 769,816 (6 %) Non-operating (expenses) income Interest expense (144,193 ) (53,528 ) (90,665 ) 169 % Issuance cost of senior secured convertible note measured at fair value (525,643 ) - (525,643 ) - Fair value change for senior secured convertible note 94,207 - 94,207 - Other income, net 12,276 23,050 (10,774 ) (47 %) Total non-operating expenses, net (563,353 ) (30,478 ) (532,875 ) 1748 % Net loss before income taxes (13,769,749 ) (14,006,690 ) 236,941 (2 %) Provision for income taxes 800 - 800 - Net loss $ (13,770,549 ) $ (14,006,690 ) $ 236,141 (2 %) Revenues, Cost and Gross Profit (Loss) The Company reported $122,112 of revenues for the year ended December 31, 2023, as compared to $3,519,627 for the year ended December 31, 2022 from the sales of Ainos COVID-19 Antigen Rapid Test Kits in Taiwan.

Removed

Changes in working capital were primarily driven by increases in trade receivables and inventories due to rapid growth of revenue.

Added

The decrease of revenue in 2023 was primarily caused by the decline of both per unit selling price and sales volume of Ainos COVID-19 Antigen Rapid Test Kits in 2023 due to substantial slowdown of COVID-19 infection in Taiwan.

Removed

As a result, cash expenditures for operating activities in 2022 and 2021 were $3,021,183 and $1,249,977, respectively. 35 Table of Contents Investing activities Cash used in investing activities were $630,178 and $180,517 for the year of 2022 and 2021, respectively, attributed to the acquisition of R&D equipment and office facilities.

Added

The cost of revenues relating to product sales for the year ended December 31, 2023 was $375,845 compared to $2,114,284 for the year ended December 31, 2022.

Removed

Financing activities In 2022, we raised $3,831,245 from financing activities including through issuance of convertible notes, notes payable and our uplisting to the Nasdaq Capital Market; in 2021, we raised $3,154,373 which primarily from issuance of convertible notes. Refer to Note 4, 5 and 7 to the Consolidated Financial Statements of this Annual Report on Form 10-K for further discussion.

Added

The decrease of cost of revenues was due to the decrease in sales volume of Ainos COVID-19 Antigen Rapid Test Kits but offset by an increase of $235,047 in loss of excess and obsolete inventory in 2023.

Removed

As a result of the conversion of convertible notes in conjunction with our IPO in 2022, our total liabilities decreased significantly. As of December 31, 2022 and 2021, total liabilities were $2,481,008 and $30,625,054, respectively; and debt ratios were 7% and 75%, respectively.

Added

Gross (loss) profit from product sales for the year ended December 31, 2023 was $(253,733) as compared to $1,405,343 for the year ended December 31, 2022.

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Top changes in Ainos, Inc.'s 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

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