UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~_____________________________~~

FORM 10-Q

~~_____________________________~~

(Mark One)

~~[√]~~

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

[√]

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

For the quarterly period ended ~~June 30, 2020~~March 31, 2021

~~[ ]~~

~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____to____ Commission File No. 0-20791

~~_____________________________~~

~~AMARILLO BIOSCIENCES,~~AINOS, INC.

(Exact name of registrant as specified in its charter)

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

~~4134 Business Park~~8880 Rio San Diego Drive, ~~Amarillo, Texas 79110~~Ste. 800, San Diego, CA 92108

~~(806) 376-1741~~(858) 869-2986

(Address and telephone number, including area code, of registrant's principal executive offices)

AMARILLO BIOSCIENCES, INC.

4134 Business Park Drive, Amarillo, TX 79110-4225

(Former name or former address if changed since last report)

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

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

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

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [√ [√]		Smaller reporting company [√]
		Emerging growth company [ ]

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

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

~~40,916,351~~

142,240,594 shares of common stock, par value $0.01 per share, outstanding as of ~~August 12, 2020~~

~~AMARILLO BIOSCIENCES, INC.~~May 14, 2021

AINOS, INC.

INDEX

		PAGE NO.
PART I:	FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Balance Sheets– ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019 (unaudited)~~ 2020 (unaudited	3
	Statements of Operations – Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	4
	Statements of Stockholders’ Equity (Deficit) – ~~Six~~Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	5
	Condensed Statements of Cash Flows – ~~Six~~Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	6
	Notes to Financial Statements (unaudited)	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10 12
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	16 19
ITEM 4.	Controls and Procedures	16 19

PART II:	OTHER INFORMATION
ITEM 1.	Legal Proceedings	17 20
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18 24
ITEM 3.	Defaults Upon Senior Securities	18 24
ITEM 4.	Mine Safety Disclosures	18 24
ITEM 5.	Other Information	1824
ITEM 6.	Exhibits	19 25
Signatures			20 27

PART I - FINANCIAL INFORMATION

~~ITEM 1.~~

~~Financial Statements~~

~~Amarillo Biosciences,~~

ITEM 1.

Financial Statements

Ainos, Inc.

Balance Sheets

(Unaudited)

	June 30, 2020			December 31, 2019			March 31, 2021	December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	172,802		$	409,039		$9,377	$22,245
Accounts receivable		751			-
Inventory		3,675			4,131		-	3,024
Prepaid expense and other current assets		14,583			32,125		32,890	51,144
Total current assets		191,811			445,295		42,267	76,413
Patents, net		141,257			146,263		177,051	180,628
Property and equipment, net		3,904			5,068		2,921	3,249
Total assets	$	336,972		$	596,626		$222,239	$260,290


Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	292,241		$	208,727		$348,548	$145,567
Advances from investors		10,000			100,000
Notes payable – related party							236,854	-
Convertible notes payable – related party		578,664			444,581		915,016	953,001
Total current liabilities		880,905			753,308		1,500,418	1,098,568
Total liabilities		880,905			753,308		1,500,418	1,098,568



Stockholders' equity (deficit)
Preferred stock, $0.01 par value:
Authorized shares - 10,000,000,
Issued and outstanding shares – 0 at June 30, 2020 and December 31, 2019		-			-
Issued and outstanding shares – 0 at March 31, 2021 and December 31, 2020							-
Common stock, $0.01 par value:
Authorized shares - 100,000,000,
Issued and outstanding shares –40,916,351 and 40,516,351 at June 30, 2020 and December 31, 2019, respectively		409,164			405,164
Issued and outstanding shares – 42,066,172 and 42,066,172 at March 31, 2021 and December 31, 2020, respectively							420,662
Additional paid-in capital		4,495,380			4,207,786		5,055,420	4,961,315
Accumulated deficit		(5,448,477	)		(4,769,632	)	(6,754,261)	(6,220,255)
Total stockholders’ equity (deficit)		(543,933	)		(156,682	)	(1,278,179)	(838,278)
Total liabilities and stockholders’ equity (deficit)	$	336,972		$	596,626		$222,239	$260,290

See accompanying notes to financial statements.

~~Amarillo Biosciences,~~

Ainos, Inc.

Statements of Operations

(Unaudited)

	Three months ended June 30						Six months ended June 30
	2020			2019			2020			2019			Three Months Ended March 31,
													2021	2020
Revenues	$	484		$	606		$	15,684		$	4,682		$2,121	$15,200
Cost of revenues		(292	)		(563	)		(11,098	)		(3,281	)	(1,249)	(10,806)
Gross margin		192			43			4,586			1,401		872	4,394

Operating expenses:
Research and development expenses		389			50,124			389			52,510
Selling, general and administrative expenses		300,472			404,958			680,740			794,493		522,981	380,268
Total operating expenses		(300,861	)		(455,082	)		(681,129	)		(847,003	)	522,981	380,268

Operating income (loss)		(300,669	)		(455,039	)		(676,543	)		(845,602	)
Operating loss													(522,109)	(375,874)

Other income (expense)
Interest income (expense), net		(1,297	)		1,522			(2,302	)		637
Net income (loss)		(301,966	)		(453,517	)		(678,845	)		(844,965	)
Other income (expense):
Interest expense, net													(11,897)	(1,005)
Net loss													(534,006)	(376,879)
Less: Net Income attributable to non-controlling interests													-
Net loss attributable to common shareholders													$(534,006)	$(376,879)

Basic and diluted net loss per average share available to common shareholders	$	(0.02	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$(0.01)

Weighted average common shares outstanding – basic and diluted		40,516,351			39,624,247			40,516,351			39,444,456		42,066,172	40,516,351

See accompanying notes to financial statements.

Amarillo Biosciences, Inc.
Statements of Stockholders’ Equity (Deficit)
For the six months ended June 30, 2020 and 2019
(Unaudited)

Preferred Stock Common Stock Additional Paid in Capital Accumulated Deficit Total Stockholders’ Equity (Deficit)
Shares Par Value Shares Par Value

Balance December 31, 2019 - $ - 40,516, 351 $ 405,164 $ 4,207,786 $ (4,769,632 ) $ (156,682 )
Issuance of stock for compensation - - - -
Issuance of stock for cash 400,000 4,000 96,000 100,000
Issuance of stock for debt - - - - -
Warrant expense 10,218 10,218
Option expense 181,376 181,376
Net loss - - - - - (678,845 ) (678,845 )
Balance June 30, 2020 - $ - 40,916,351 $ 409,164 $ 4,495,380 $ (5,448,477 ) $ (543,933 )

Balance December 31, 2018 - $ - 39,117,524 $ 391,175 $ 3,527,238 $ (3,188,334 ) $ 730,079

Compensation – i2china (Q4 2018 accrual) - - 40,170 401.70 11,598 - 12,000
Compensation – Cohen and Chen (Q4 2018 accrual) - - 191,505 1,915.05 55,585 - 57,500

Subscription Issuance – Hen Vai Wu - - 200,000 2,000 48,000 - 50,000

Finder’s fee issuance – Hen Vai Wu 115,000 1,150 22,600 23,750

Warrant expense - - - - 18,992 - 18,992

Option expense - - 192,298 - 192,298

Net loss for the period ended June 30, 2019 - - - - - (844,965 ) (844,965 )
Balance June 30, 2019 - $ - 39,664,199 $ 396,642 $ 3,876,311 $ (4,033,299 ) $ (239,654 )

Ainos, Inc.

Statements of Stockholders’ Equity (Deficit)

For the three months ended March 31, 2021 and 2020

(Unaudited)

	Preferred Stock		Common Stock		Additional Paid in	Accumulated	Total Stockholders'
	Shares	Amount	Shares	Amount	Capital	Deficit	Equity (Deficit)
Balance at December 31, 2019	-	$-	40,516,351	$405,164	4,207,786	(4,769,632)	(156,682)
Warrant expense	-	-	-	-	9,496	-	9,496
Option expense	-	-	-	-	90,688	-	90,688
Net loss	-	-	-	-	-	(376,879)	(376,879)
Balance at March 31, 2020	-	$-	40,516,351	$405,164	4, 307,970	(5,146,511)	(433,377)

Balance at December 31, 2020	-	$-	42,066,172	$420,662	4,961,315	(6,220,255)	(838,278)
Warrant expense	-	-	-	-	3,417	-	3,417
Option expense	-	-	-	-	90,688	-	90,688
Net loss	-	-	-	-	-	(534,006)	(534,006)
Balance at March 31, 2021	-	$-	42,066,172	$420,662	5,055,420	(6,754,261)	(1,278,179)

See accompanying notes to financial statements.

~~Amarillo Biosciences,~~

Ainos, Inc.

Condensed Statements of Cash Flows

(Unaudited)

	Six months ended June 30,						Three months ended March 31,
	2020			2019			2021	2020

Net cash used in operating activities	$	(244,967	)	$	(539,076	)	$(115,712)	$(119,482)

Cash flows from investing activities
Investment in patents		(1,270	)		(1,637	)
Net cash used in investing activities		(1,270	)		(1,637	)

Cash flows from financing activities
Payments on convertible notes		-			(37,500	)
Advances from shareholder		10,000			-
Proceeds from private placement offering		-			25,000
Net cash used in financing activities		10,000			(12,500	)
Proceeds from related party note							102,844	-
Net cash provided by financing activities							102,844	-

Net change in cash		(236,237	)		(553,213	)	(12,868)	(119,482)
Cash and cash equivalents at beginning of period		409,039			1,276,654		22,245	409,039
Cash and cash equivalents at end of period	$	172,802		$	723,441		9,377	$289,557
Supplemental Cash Flow Information
Cash paid for interest	$	-		$	203		$-
Cash paid for income taxes	$	-		$	-		$-
Non-Cash Transactions
Stock issued for accrued liabilities	$	-		$	93,250		$-
Stock issued for advances from investors	$	100,000		$	25,000		$-

Conversion of debt to common stock							$-

See accompanying notes to financial statements.

~~Amarillo Biosciences,~~Ainos, Inc.

Notes to Financial Statements

(Unaudited)

Organization and Business. Ainos, Inc., formerly known as Amarillo Biosciences, Inc. (the "Company") is a diversified healthcare company engaged in the discovery and development of pharmaceutical and biotech products. The Company is a Texas corporation which was formed in 1984.

The Company primarily operates through three divisions: Pharmaceutical, Medical and Consumer. The Pharmaceutical division leverages our extensive library of clinical research by applying the Company's experience in the use of low-dose non-injectable interferon (IFN) for the treatment of neoplastic, viral, and fibrotic diseases. The Company seeks to engage in patent licensing and commercialization opportunities with global partners. The Medical division is focused on developing technology to treat metabolism related diseases such as type-1 and type-2 diabetes in Asia. The Consumer division includes a range of nutraceutical and food supplement products that utilize a unique liposomal delivery system. The Company currently has offices in the United States and Taiwan. The Company operates in Taiwan under the name AMARILLO BIOSCIENCES, INC. TAIWAN BRANCH.

1.	~~Organization and Business.~~ Amarillo Biosciences, Inc. (the "Company" or "ABI"), is a diversified healthcare company engaged in the discovery and development of pharmaceutical and biotech products. ABI is a Texas corporation which was formed in 1984.

ABI primarily operates through three divisions: Pharmaceutical, Medical and Consumer. The Pharmaceutical division leverages our extensive library of clinical research by applying the Company's experience in the use of low-dose non-injectable interferon (IFN) for the treatment of neoplastic, viral, and fibrotic diseases. ABI seeks to engage in patent licensing and commercialization opportunities with global partners. The Medical division is focused on developing technology to treat metabolism related diseases such as type-1 and type-2 diabetes in Asia, The Consumer division includes a range of nutraceutical and food supplement products that utilize a unique liposomal delivery system. ABI currently has offices in the United States and Taiwan. ABI operates in Taiwan under the name AMARILLO BIOSCIENCES, INC. TAIWAN BRANCH (美商康華全球生技股份有限公司台灣分公司).

Basis of presentation. The accompanying consolidated financial statements, which should be read in conjunction with the audited financial statements and footnotes included in the Company's Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on March 30, 2021 attached hereto as Exhibit 13 and which is incorporated by this reference, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.

~~Basis of presentation.~~ The accompanying consolidated financial statements, which should be read in conjunction with the audited financial statements and footnotes included in the Company's Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 30, 2020, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and six months ended June 30, 2020, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020.

~~Financial Condition.~~ These financial statements have been prepared in accordance with United States generally accepted accounting principles, on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has not yet achieved sustained operating income, and its operations are funded primarily from related-party convertible debt and equity financings. However, losses are anticipated in the ongoing development of its business and there can be no assurance that the Company will be able to achieve or maintain profitability.

Financial Condition. These financial statements have been prepared in accordance with United States generally accepted accounting principles, on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has not yet achieved sustained operating income, and its operations are funded primarily from related-party convertible debt and equity financings. However, losses are anticipated in the ongoing development of its business and there can be no assurance that the Company will be able to achieve or maintain profitability.

The continuing operations of the Company and the recoverability of the carrying value of assets is dependent upon the ability of the Company to obtain necessary financing to fund its working capital requirements, and upon future profitable operations. The accompanying financial statements do not include any adjustments relative to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

There can be no assurance that capital will be available as necessary to meet the Company's working capital requirements or, if the capital is available, that it will be on terms acceptable to the Company. The issuances of additional equity securities by the Company may result in

dilution in the equity interests of its current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the business and future success may be adversely affected and the Company may cease operations. These factors raise substantial doubt regarding our ability to continue as a going concern.

~~Common Stock.~~ The shareholders have authorized 100,000,000 shares of voting common shares for issuance. On June 30, 2020, a total of 49,662,450 shares of common stock were either issued (40,916,351), reserved for conversion of convertible debt to stock (3,529,417), issuance to two Company officers as compensation (453,726), one Company employee (6,309), held for future compensation issue to a consultant (99,647), and held for future exercise of nonqualified options (4,657,000).

Common Stock. The shareholders have authorized 100,000,000 shares of voting common shares for issuance. On March 31, 2021, a total of 51,383,130 shares of common stock were either issued (42,066,172), reserved for conversion of convertible debt to stock (4,032,919), issuance to two Company officers and consultants as compensation (174,422), and held for future exercise of nonqualified options and warrants (5,109,617).

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

~~Convertible Notes Payable – Related Party.~~ As of December 31, 2019, the amount of convertible debt, including principal and accrued interest, on the Company’s balance sheet was $452,040. The total balance of the principal and accrued interest for convertible promissory notes as of June 30, 2020, is $595,571. This amount consisted of the following convertible promissory notes payable to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, and i2China, a consultant, as shown in the table below.

Convertible Notes Payable and Other Related Party Notes Payable. As of December 31, 2020, the amount of convertible debt principal, on the Company’s balance sheet was $953,001. The total balance of the principal for convertible promissory notes as of March 31, 2021, is $915,016. This amount consisted of the following convertible promissory notes payable to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, and i2China, a consultant, as shown in the table below.

Note #.		Conversion Rate		Interest Rate			June 30, 2020		December 31, 2019		Conversion Rate	Interest Rate	March 31, 2021	December 31, 2020
Note 1 - Chen		$	0.1680		0.75	%	$	117,861	$	117,433	$0.1680	0.75%	$114,026
Note 2 - Chen		$	0.1875		0.65	%	$	267,134	$	266,281	$0.1875	0.65%	$262,500
Note 3.19 - Chen		$	0.2500		1.85	%	$	39,986	$	39,620	$0.2500	1.85%	$39,620
Note 4.19 - Chen		$	0.2500		1.61	%	$	12,550	$	12,453	$0.2500	1.61%	$14,879
Note 5.19 – i2China		$	0.2500		1.85	%	$	16,401	$	16,253	$0.2500	1.85%	$16,000
Note 6.20 - Chen		$	0.2500		1.85	%	$	109,051	$	-	$0.2500	1.85%	$216,600
Note 7.20 - Chen		$	0.2500		1.60	%	$	8,421	$	-	$0.2500	1.60%	$23,366
Note 8.20 – i2China		$	0.2500		1.85	%	$	24,167	$	-
Note 8.20a – i2China											$0.2500	1.85%	$48,000
Note 8.20b – i2China											$0.2500	1.85%	$84,000
Note 9.21 - Chen											N/A	0.13%	$236,854	$134,010
Note 10.21 – Chen											$0.2500	1.85%	$59,025	-
Note 11 – i2China											$0.2500	1.85%	$37,000	-
Total Convertible Notes (including accrued Interest) – Related Party	Total Convertible Notes (including accrued Interest) – Related Party						$	595,571	$	452,040	Total Convertible Notes (including accrued Interest) – Related Party		$1,151,870	$953,001

Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, and i2China Management Group, LLC, the Company’s management consultant, elected to defer cash compensation during a period of development and fundraising. The parties received convertible promissory notes in consideration of the deferrals.

On January 1, 2020, the Company issued Note #6.20 for deferred compensation to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, in the amount of $216,600, the maximum amount of cash compensation that could be deferred for 2020. The Note is payable on January 1, 2021, or on demand and bears interest at the AFR¹ short-term rate of 1.85%. The note is an advancing note with a maximum limit of $216,600 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity.

~~1 Applicable Federal Rate~~

~~ABI~~The Company may request and the payee shall advance up to $9,025 on the 15th and last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share into ~~Amarillo Biosciences, Inc., Common~~the Company’s common voting stock. All shares issued are to be restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the Note in whole or in part at any time without penalty.

On January 1, 2020, the Company issued Note #7.20 to Dr. Stephen T. Chen for deferred reimbursement of expenses advanced on behalf of ~~ABI~~the Company for $30,000, the maximum amount of reimbursable expense that could be deferred. Actual reimbursable expenses deferred is $23,366. The Note is payable on January 1, 2021, or on demand and bears interest at the AFR¹ short-term rate of ~~1.85%~~1.60%. The note is an advancing note with a maximum limit of $30,000 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. ~~ABI~~The Company may request and the payee shall advance against the Note, until Maturity, the amount submitted on a completed and approved reimbursement form along with documentation of the amount to be advanced. The Note may be convertible in whole or in part at a conversion price of $0.25 per share into ~~Amarillo Biosciences, Inc., Common~~the Companuy’s common voting stock. All shares issued are to be restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the Note in whole or in part at any time without penalty.

On January 1, 2020, the Company issued Note #8.20 for deferred compensation to i2China Management Group, LLC in the amount of $48,000, the maximum amount of cash compensation that could be deferred in 2020. The Note is payable on January 1, 2021, or on demand and bears interest at the AFR¹ short-term rate of 1.85%. The note is an advancing note with a maximum limit of $48,000 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. ~~ABI~~The Company may request and the payee shall advance up to $4,000 on the last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share.

On January 1, 2021, the Company issued Note #10.21 for deferred compensation to Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, in the amount of $59,025. The Note is payable on April 1, 2021, or on demand and bears interest at the AFR short-term rate of 1.85%. The note is an advancing note with a maximum limit of $59,025 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance up to $9,025 on the 15th and last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share into the Company’s common voting stock.

__________

1Applicable Federal Rate -theminimum interest rate that the Internal Revenue Service (IRS) allows for private loans. The IRS publishes a monthly set of interest rates that the agency considers the minimum market rate for loans, whereas, interest rates less than the AFR would have tax implications.

On January 1, 2021, the Company issued Note #11 for deferred compensation to i2China Management Group, LLC in the amount of $37,000. The Note is payable on April 1, 2021, or on demand and bears interest at the AFR1 short-term rate of 1.85%. The note is an advancing note with a maximum limit of $37,000 whereby the Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance up to $11,000 on the last day of each month until the note matures. The Note may be convertible in whole or in part at a conversion price of $0.25 per share.

The notes are unsecured and are due on demand. All shares issued on conversion are to be restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the notes in whole or in part at any time without penalty. The convertible notes due to Dr. Chen are related party notes.

7.	~~Other Related Party Transactions.~~ ~~Other than the aforementioned convertible notes activity, there were no related party transactions that occurred during the period from January 1, 2020 to June 30, 2020.~~

Other Related Party Transactions. Other than the aforementioned convertible notes activity, there were no related party transactions that occurred during the period from January 1, 2021 to March 31, 2021.

8.	~~Subsequent Events~~

Subsequent Events.

On ~~July 29, 2020,~~April 1, 2021, the Company ~~renewed its Directors and Officers Liability Insurance Policy~~issued Note #11.21 for the period July 29, 2020 through July 29, 2021. The Company tendered payment for extended coverage from June 1, 2020 through June 29, 2020, for the U.S. and Taiwan Branch Office policies and a down-payment for the financing of the premium balance for the renewal period. The Company entered into a finance agreement with BankDirect Capital Finance for the renewal amount of $67,687 less the down-payment of $27,675. The remaining balance of $40,012 isdeferred compensation to ~~be carried at a six percent (6%) annual percentage rate for eight monthly payments of $5,115 principal and interest. The total finance charge paid will be $905 over the course of the agreement.~~

~~On July 28, 2020,~~ Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, ~~executed~~in the amount of $18,050. The Note is payable on May 1, 2021, or on demand and ~~submitted~~bears interest at the AFR[1] short-term rate of 1.85%. The note is an advancing note with a ~~Private Place Memorandum for~~maximum limit of $18,050 whereby the ~~purchase~~Company promises to repay the aggregate Principal Amount advanced to date up to the stated maximum amount at Maturity. The Company may request and the payee shall advance up to $9,025 on the 15th and last day of ~~520,833 Common voting shares~~each month until the note matures. The Note may be convertible in whole or in part at ~~$0.192~~a conversion price of $0.25 per share ~~through~~into the Company’s ~~2020-1 Private Placement Stock Offering.~~common voting stock.

On April 15, 2021, the Company consummated its Securities Purchase Agreement dated December 24, 2020 (“Ainos Agreement”) with a strategic investor, Ainos, Inc., a Cayman Islands corporation (“Investor”) focused on advanced technology diagnostic medical devices and artificial intelligence consumer healthcare solutions. Investor develops and manufactures point-of-care testing (“POCT”) rapid test kit products that include diagnostics for COVID-19 (SARS CoV2 Antigen Rapid Test), pneumonia, vaginal infection and helicobacter pylori (H. pylori) bacterial infection. Investor POCT delivers test results rapidly utilizing biosensors and artificial intelligence algorithms for volatile organic compound (VOC) analysis. Pursuant to the Agreement, the Company issued 100,000,000 shares of common stock at $0.20 per share to Investor in exchange for certain patent assignments, increased its authorized common stock to 300,000,000 shares, and changed the Company’s name to “Ainos, Inc.” The ~~total~~Company’s prior Board of Directors resigned and seven (7) new board members were elected by our shareholders. In connection with the consummation of the transaction, Mr. Chun-Hsien Tsai was appointed to serve as the Company’s Chairman of Board, President, Chief Executive Officer and Chief Financial Officer. Mr. Chia-Hsi Chen was appointed to serve as the Company’s Chief Operating Officer effective as of April 15, 2021 but thereafter resigned effective as of April 28, 2021. Immediately after the consummation of the transaction and the issuance of the shares to the Investor, the Investor ownership in the Company is approximately 70.30% of the issued and outstanding shares of common stock of the Company. The foregoing description of the closing of the Ainos Agreement is not complete and is qualified in its entirety by the Form 8-K filed by the Company with the SEC on April 21, 2021, attached hereto as Exhibit 99.2 and which is incorporated herein by reference.

On April 27, 2021, the Company issued Note #12.21 for a short-term loan for working capital purposes from Ainos, Inc., a Cayman Islands Corporation in the amount of $15,000. The Note is payable on October 27, 2021, or on demand and bears interest at the ~~investment~~AFR1 short-term rate of 1.85%. The note has a maximum limit of $15,000 whereby the Company promises to repay the aggregate Principal Amount to date up to the stated maximum amount at Maturity. The Note may be convertible in whole or in part at a conversion price of $0.20 per share.

On April 28, 2021, Mr. Chia-Hsi Chen resigned as the Company’s Chief Operating Officer as of April 28, 2021 as reported by the Form 8-K filed by the Company with the SEC on May 3, 2021, attached hereto as Exhibit 99.3 and which is ~~$100,000~~incorporated by reference.

On May 5, 2021, the Company issued Note #13.21 for a short-term loan for working capital purposes from Ainos, Inc., a Cayman Islands Corporation in the amount of ~~which $50,000~~$20,000. The Note is payable on November 5, 2021, or on demand and bears interest at the Applicable Federal Rate (short-term rate) of 1.85%. The note has ~~been submitted by Dr. Chen.~~a maximum limit of $20,000 whereby the Company promises to repay the aggregate Principal Amount to date up to the stated maximum amount at Maturity. The ~~balance~~Note may be convertible in whole or in part at a conversion price of ~~the cash is expected~~$0.20 per share.

Notes#11.21, #12.21, and #13.21are un-secured and are due on demand. All shares issued on conversion are to be ~~received by August 31, 2020,~~restricted subject to Rule 144 promulgated under the U.S. Securities Act of 1933. The Company may prepay the notes in whole or in part at ~~which~~any time ~~the shares will be issued.~~without penalty. The convertible notes due to Dr. Chen and Ainos, Inc., a Cayman Islands Corporation are related party notes.

ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Forward-Looking Statements: Certain statements made throughout this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance, achievements, costs or expenses and may contain words such as "believe," "anticipate," "expect," "estimate," "project," "budget," or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those projected in the forward-looking statements. Such risks and uncertainties are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K and include among others the following: promulgation and implementation of regulations by the U.S. Food and Drug Administration ("FDA"); promulgation and implementation of regulations by foreign governmental instrumentalities with functions similar to those of the FDA; costs of research and development and trials, including without limitation, costs of clinical supplies, packaging and inserts, patient recruitment, trial monitoring, trial evaluation and publication; and possible difficulties in enrolling a sufficient number of qualified patients for certain clinical trials. The Company is also dependent upon a broad range of general economic and financial risks, such as possible increases in the costs of employing and/or retaining qualified personnel and consultants and possible inflation which might affect the Company's ability to remain within its budget forecasts. The principal uncertainties to which the Company is presently subject are its inability to ensure that the results of trials performed by the Company will be sufficiently favorable to ensure eventual regulatory approval for commercial sales, its inability to accurately budget at this time the possible costs associated with hiring and retaining of additional personnel, uncertainties regarding the terms and timing of one or more commercial partner agreements and its ability to continue as a going concern.Overview

The risks cited here are not exhaustive. Other sections of this report may include additional factors which could adversely impact the Company's business and future operations. Moreover, the Company is engaged in a very competitive and rapidly changing industry.

New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company's business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those projected in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future events.

~~Overview.~~ ~~Amarillo Biosciences,~~Ainos, Inc. (the "Company” ~~or “ABI”~~) is a Texas corporation formed in 1984 engaged in developing biologics for the treatment of human and animal diseases. Our current focus is research aimed at the treatment of human disease indications, particularly influenza, hepatitis C, thrombocytopenia, and other indications using interferon (IFN) alpha that is administered in a proprietary ~~low dose oral~~low-dose non-injectable form. In addition to its core technology ~~ABI~~the Company is working to expand the Company’s current focus into a diversified healthcare business portfolio in order to generate new revenue streams.

~~ABI currently~~The Company presently owns ~~or licenses five~~eight issued patents ~~four in~~with two patents pending. This collection consists of patents with claims that encompass method of use or treatment, and/or composition of matter and manufacturing as well as design utility and/or invention. Of the ~~U.S., and one in Taiwan, of which~~eight issued patents, four patents are related to the low-dose oral delivery of interferon, ~~and~~ one patent is for a product promoting oral health, and three patents are associated with ~~a dietary supplement, Maxisal~~^®~~. In our history, we have completed more than 100 pre-clinical (animal) and human studies on the safety and efficacy~~treatment of ~~low-dose orally administered interferon, including two phase 3 clinical trials.~~metabolic disorders.

The Company primarily operates three business units: the Medical, Pharmaceutical, and Consumer Product Divisions. Historically, the Company has focused on R&D involving low-dose, orally administered lozenges containing the natural immune system activator interferon-alpha as a treatment for a variety of disease indications. ~~ABI~~The Company owns a proprietary library of over thirty years of scientific and clinical data on the human and animal applications of low-dose oral interferon. Through the Pharmaceutical Division, ~~ABI~~the Company seeks to out-license or leverage in other ways its core technology by forming partnerships to develop current and new discoveries and commercialize the resulting products.

An integral part of the company’s operating strategy is to create multiple revenue streams through the implementation of programs (including but not limited to in-licensing) of medical and healthcare products and therapeutics. The Medical Division and Consumer Products Division facilitate the enhancement of these revenue streams. These programs will be the catalysts that allow ~~ABI~~the Company to enter markets in Taiwan, Hong Kong, China, and other Asian countries for the distribution of new medical and healthcare products.

Diabetes is a global epidemic with an estimated cost topping $2.5 trillion world-wide. Taiwan, gateway to China and representative of the upward trend in diabetes prevalence and cost throughout Asia, saw a 70% increase in total diabetes cases between 2000-2009 with a 35% increase in standardized prevalence rate. Currently, almost 2 million people suffer from diabetes in Taiwan, which equals 11% prevalence or 1 in 9 people, for a country with a population of around 18 million adults. The adoption of a Western diet and lifestyle has had more detrimental effects on East Asian countries with diabetes prevalence in Taiwan and China now outpacing the US and other Western nations. Studies have shown that East Asians have weaker insulin secretions compared with other ethnicities which make controlling blood glucose more challenging which in turn makes them more susceptible to type-2 diabetes. The weaker insulin response seen in Taiwanese and Chinese populations could be due to certain genetic polymorphisms or differential intestinal secretions and helps explain why only 30-40% of East Asians with type-2 diabetes are overweight or obese compared to over 80% of Americans. While obesity is on the rise in China, diabetes is climbing at a faster rate than other obesity-related diseases such as heart disease and cancer. Diabetic complications such as retinopathy, which is a leading cause of blindness, peripheral neuropathies which contribute to delayed wound healing and amputations, and nephropathy which can necessitate dialysis and kidney transplant, are catastrophic both to quality of life and cost of care.

Currently, type-2 diabetes is treated as a chronic progressive disease with increases in both number and dose of drugs seen across a patient’s lifetime. Generally one or more oral hypoglycemic drugs are used for months or years until a combination of short and long-acting insulin is required to keep the patient’s blood glucose within normal limits. Unfortunately, once a patient’s pancreas is exhausted and they are finally forced to go on insulin, they require insulin for the rest of their lives. And even more unfortunate is that even with fairly well-controlled blood glucose levels, diabetics will face one or more undesirable complications with poor outcomes from cardiovascular, eye, nerve, or kidney disease secondary to their diabetes. This unsuccessful model of diabetes care is not satisfactory.

Over the past several years the Company has focused its research efforts towards the development of a novel pulsatile insulin pump infusion therapy in Taiwan that consists of delivering insulin intravenously ~~by pump~~ in pulses, as opposed to the typical subcutaneous route of administration, in order to more closely imitate how the pancreas secretes insulin in healthy non-diabetics.

When the liver receives insulin in discreet pulses, it appears to be better able to regulate blood glucose levels. Patients suffering from peripheral neuropathies have reported less numbness and pain after receiving pulsatile insulin infusion treatments for several weeks or months. Pulsatile-insulin treatments given once or twice a week for a number of months show promise in lessening the incidence and severity of microvascular complications of diabetes such as retinopathy, neuropathy, and nephropathy. In addition, certain endpoints such as reduction of patient medications and avoidance of worsening kidney function leading to kidney dialysis can be achieved. ABI’s Medical Division has developed a proprietary insulin infusion pump dedicated for administering its pulsatile insulin therapy and is currently in the process of obtaining patents and medical device approvals, including 510k FDA clearance.

~~ABI~~ The Company plans to offer an innovative and comprehensive diabetes treatment that provides solutions to all stages of diabetes from pre-diabetes through late-stage diabetes with advanced complications. ~~We intend~~The Company intends to target Taiwan first as an R&D base and demonstration platform in Greater China, ~~then~~and subsequently establish a licensing platform for clinics in Greater China. The Consumer Product Division is presently focused on sales of liposomal nutraceuticals and food supplements that include Vitamin C, Glutathione, CoQ10, Curcumin/Resveratrol, DHA, and a Multi-Vitamin.

~~ABI~~

The Company maintains a representative branch office in Taiwan – Amarillo Biosciences, Inc. ~~(Taiwan Branch) (美商康華全球生技股份有限公司台灣分公司) (“ABI Taiwan”~~(the “Taiwan Branch”) to increase the Company's presence in Taiwan and to serve as an operational hub to access growing Asian markets.

~~Core Technology.~~ Injectable high-dose interferon is FDA-approved to treat some neoplastic, viral and autoimmune diseases. Many patients experience moderate to severe side-effects causing them to discontinue injectable interferon therapy. Our core technology is primarily based on low-dose non-injectable interferon-alpha that is delivered into the oral cavity as a lozenge in low ~~(nanogram)~~ doses. The lozenge dissolves in the mouth where interferon binds to surface (mucosal) cells in the mouth and throat, resulting in activation of hundreds of genes in the peripheral blood that stimulate the immune system. Human studies have shown that oral interferon is safe and effective against viral and neoplastic diseases. Oral interferon is given in concentrations 10,000 times less than that usually given by injection. The Company’s low-dose formulation results in almost no side effects, in contrast to high dose injectable interferon, which causes adverse effects in at least 50% of recipients.

Governmental or FDA approval is required for low-dose oral interferon. We believe that our technology is sound and can be commercialized for various indications. Due to ~~occurrences~~lack of appropriate interferon supply in the ~~interferon supply~~ market over the past several years, we have been unsuccessful at such commercialization to date. However, as a result of Covid-19, Chinese government health authorities

~~recently~~ have recommended use of anti-AIDS drugs and interferon. The Company believes this has brought renewed attention in the importance of incorporating low-dose interferon as a treatment to help stem the pandemic. In light of these circumstances, the ~~circumstances, ABI~~Company is uniquely positioned to potentially develop ~~these~~ safe, low-dose interferon.

~~Interferon Supply.~~ The Company’s long-time human interferon producer is no longer manufacturing interferon. Plans for further clinical trials and commercialization of a low-dose interferon product have been placed on hold until a new cGMP source of interferon is found. ABI is actively seeking a new manufacturing partner and exploring sourcing options with pharmaceutical companies that have a supply of either recombinant interferon or natural human interferon made in a similar manner, but from a different cell line as our previous product.

Procuring a new source of interferon may require some studies demonstrating comparability and further clinical trials will have to be performed. The Company will be able to use optimized protocols from its thirty years of experience in conducting trials with natural human interferon. Rather than having to start from a greenfield development stage, the Company will be able to leverage its history, past results, and data library to target the most appropriate disease states with the best dosage regimens and minimize the time wasted by trial-and-error searching prevalent in pharmaceutical research.

While the pharmaceutical industry is creating and marketing new and effective anti-viral medications, there is still ~~sufficient time~~exists opportunities to develop and commercialize low-dose interferon as a safer anti-viral treatment for ~~Influenza, Hepatitis,~~influenza, hepatitis, and other conditions caused by viruses such as genital warts and canker sores. Interferon also has powerful cytotoxic effects which in combination with its immune stimulating activities could play a role in the rapidly expanding field of cancer immunotherapy. Other demonstrated effects of interferon offer opportunities to commercialize low-dose interferon for the treatment of Thrombocytopenia and chronic cough in lung diseases such as COPD and Idiopathic Pulmonary Fibrosis (IPF). The Company has the opportunity to capitalize on its relationship channels in the Asian markets to explore sources of raw materials, capital, production facilities, and to target a significant and growing sales market.

Ainos, Inc. Securities Purchase Agreement

On December 24, 2020, the Company entered into a Securities Purchase Agreement (“Ainos Agreement”) with Ainos, Inc., a Cayman Islands corporation (“Purchaser”) and certain principal shareholders of the Company including (i) Stephen T. Chen, individually and as Trustee of the Stephen T. Chen and Virginia M. Chen Living Trust, dated April 12, 2018, (ii) Virginia M. Chen, individually and as Trustee of the Stephen T. Chen and Virginia M. Chen Living Trust, dated April 12, 2018, and (iii) Hung Lan Lee (collectively, “Principal Shareholders”).

~~Intellectual Property.~~

Pursuant to the Ainos Agreement, upon the closing of the transactions contemplated thereby (the “Closing”), the Company will acquire certain patent assets (the “Patent Assets”) by issuing 100,000,000 shares of common stock (the “Shares”) valued at $0.20 to Purchaser. The Patent Assets encompass technologies relating to development and manufacturing of point-of-care testing rapid test kit products that include diagnostics for COVID-19 (SARS CoV2 Antigen Rapid Test), pneumonia, vaginal infection and helicobacter pylori (H. pylori) bacterial infection. The Company anticipates that the Shares issued to the Purchaser will represent approximately 70.30% of the issued and outstanding shares of common stock of the Company and effect a change of control in the Company at the Closing. The Ainos Agreement provides for certain registration rights to the Purchaser regarding the Shares.

The foregoing description of the Ainos Agreement is not complete and is qualified in its entirety by the text of the agreement, which is included as Exhibit 2.1 to the Form 8-K filed by the Company with the SEC on December 30, 2020, which is incorporated herein by reference.

On December 18, 2020, the Company Board, and on January 25, 2021, the holders owning a majority of the shares of common stock of the Company as of the record date of January 22, 2021 approved certain Company actions required under the Ainos Agreement. The Company filed a Form 14-C definitive information statement regarding the majority stockholder approval of the Company actions required for closing the Ainos transaction on March 19, 2021, which is incorporated herein by reference, and completed mailing of the information statements to its shareholders on March 26, 2021. The Company expects the Closing to occur on or after April 15, 2021, subject to the terms and conditions of the Ainos Agreement.

Patents and Proprietary Rights

Since inception, the ~~company~~Company has worked to build an extensive patent portfolio for ~~low dose~~low-dose orally administered interferon. This portfolio consists of patents with claims that encompass method of use or treatment, and/or composition of matter and manufacturing. As listed below, the Company presently owns ~~or licenses five~~eight issued ~~patents.~~patents with two patents pending.

ACTIVE PATENTS:

"TREATMENT OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as described and claimed in U.S. Patent No. 9,526,694 B2 issued December 27, 2016, Owned. Expiration: April 2033.

“TREATMENT OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as described and claimed in U.S. Patent No. 9,750,786 B2 issued September 5, 2017, Owned. Expiration: April 2033.

“TREATMENT OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as described and claimed in U.S. Patent No. 9,839,672 B2 issued December 12, 2017, Owned. Expiration: April 2033.

"TREATMENT OF THROMBOCYTOPENIA USING ORALLY ADMINISTERED INTERFERON" as described and claimed in TAIWAN Patent No. I592165 issued July 21, 2017, Owned. Expiration: May 2033.

"COMPOSITION AND METHOD FOR PROMOTING ORAL HEALTH" as described and claimed in U.S. Patent No. 6,656,920 B2 issued December 2003, Owned. Expiration: April 2021.

“SMART DRUG INJECTION DEVICE” as described and claimed in TAIWAN invention patent application number 108137797, Owned, Issued: November 27, 2020, Expiration: October 18, 2039

“SMART DRUG INJECTION DEVICE” as described and claimed in TAIWAN design utility model patent application number 108213819, Owned, Issued: December 12, 2019, Expiration: November 11, 2038.

“SMART DRUG INJECTION DEVICE” as described and claimed in CHINA design utility model patent application number 201921808292.6, Owned, Issued: July 28, 2020, Expiration: June 27, 2039.

“SMART DRUG INJECTION DEVICE” as described and claimed in CHINA invention patent application number 201911024619.5, Pending.

“SMART DRUG INJECTION DEVICE” as described and claimed in US invention patent application number 17/069,418, Pending.

There are no current patent litigation proceedings involving the Company.

Cost of Compliance with Environmental Regulations

The Company incurred no costs to comply with environment regulations during the timeframe of this report.

United States Regulation

Before products with health claims can be marketed in the United States, they must receive approval from the U.S. Food and Drug Administration (“FDA”). To receive this approval, any drug must undergo rigorous preclinical testing and clinical trials that demonstrate the product candidate’s safety and effectiveness for each indicated use. This extensive regulatory process controls, among other things, the development, testing, manufacture, safety, efficacy, record keeping, labeling, storage, approval, advertising, promotion, sale, and distribution of pharmaceutical products.

In general, before any ethical pharmaceutical product can be marketed in the United States, the FDA will require the following process:

●	Preclinical laboratory and animal tests;
●	Submission of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;
●	Adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use;
●	Pre-approval inspection of manufacturing facilities and selected clinical investigators;
●	Submission of a New Drug Application (NDA) to the FDA; and
●	FDA approval of an NDA, or of an NDA supplement (for subsequent indications or other modifications, including a change in location of the manufacturing facility).

Substantial financial resources are necessary to fund the research, clinical trials, and related activities necessary to satisfy FDA requirements or similar requirements of state, local, and foreign regulatory agencies. At such time as the Company undertakes to commercialize any of its products, all necessary preclinical testing, clinical trials, data review, and approval steps will be judiciously executed to insure that the product satisfies all regulatory requirements at all levels.

505(b)(2)

The Company has historically followed and will continue to follow the traditional approval process for New Drugs as set out in Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act. If an alternative path to FDA approval for new or improved formulations of previously approved products is scientifically and economically feasible and beneficial to the Company and the public, the Company may choose to follow this alternative path as established by section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. This section of the Act permits the applicant to rely on certain preclinical or clinical studies conducted for an approved product as some of the information required for approval and for which the applicant has not obtained a right of reference. The process of approval under 505(b)(2) will be followed as judiciously as 505(b)(1) or any regulation.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States. The Company may choose to seek approval for a product satisfying the definition of an Orphan Drug if that product can be used to treat such an indication. Orphan drug designation does not convey any advantage in or shorten the duration or rigidity of the regulatory review and approval process.

Similarly, substantial financial resources are necessary to fund the research, design, testing, fabrication and related activities necessary to satisfy FDA requirements or similar requirements of state, local, and foreign regulatory agencies for medical devices. The Company may seek to obtain FDA clearance for the sales, marketing, and use of its novel pulsatile insulin pump for the U.S. market after obtaining FDA approvals under one of the following regulatory approvals:

Premarket Notification 510(k)

Each person who intends to market in the U.S., a Class I, II, and III device intended for human use, for which a Premarket Approval application (“PMA”) is not required, must submit a 510(k) to FDA unless the device is exempt from 510(k) requirements of the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”) and does not exceed the limitations of exemptions in .9 of the device classification regulation chapters (e.g., 21 CFR 862.9, 21 CFR 864.9).

If the Company’s novel pulsatile insulin pump is determined to be similar to one already cleared for the U.S. market, the Company will seek FDA clearance under 510(k) at least 90 days before the device is marketed. A 510(k) application requires demonstration of substantial equivalence to another legally U.S. marketed device. Substantial equivalence means that the new device is as safe and effective as the predicate. Documented laboratory testing among other submissions will be required and if the Company’s device features significant alterations from predecessor devices the Company may be required to present results from clinical trials.

Premarket Approval (PMA)

Alternatively, if the Company’s device is deemed to be completely new to the U.S. market or classified as a Class III device, the Company will be required to apply for PMA approval. The Medical Device Amendments of 1976 to the FD&C Act established three regulatory classes for medical devices. The three classes are based on the degree of control necessary to assure that the various types of devices are safe and effective. The most regulated devices are in Class III. The amendments define a Class III device as one that supports or sustains human life or is of substantial importance in preventing impairment of human health or presents a potential, unreasonable risk of illness or injury.

Under Section 515 of the FD&C Act, all devices placed into Class III are subject to premarket approval requirements. Premarket approval by FDA is the required process of scientific review to ensure the safety and effectiveness of Class III devices.

Foreign Regulation

In addition to regulations in the United States, a variety of foreign regulations govern clinical trials and commercial sales and distribution of products in foreign countries. Whether or not the Company obtains FDA approval for a product, the Company must obtain approval of a product by the comparable regulatory authorities of foreign countries before the Company can commence clinical trials or market the product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

The policies of the FDA and foreign regulatory authorities may change and additional government regulations may be enacted which could prevent or delay regulatory approval of investigational drugs or approval of new diseases for existing products and could also increase the cost of regulatory compliance. It is not possible to predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the United States or abroad.

Research and Development

During the quarter ended March 31, 2021 and the first quarter of 2020, the Company did not incur research and development expenses.

Employees

The Company currently has two full-time employees and two part-time employees. Of these four employees, two are executive officers and two work in administrative capacities.

Stephen T. Chen: Chairman, Chief Executive Officer (CEO), President and Chief Operating Officer (COO), and Chief Financial Officer (CFO). Dr. Chen was named Chairman of the Board in February 2012, and he has been a director of the Company since February 1996. He currently executes the management functions as not only Chairman, but as CEO, President, COO, and CFO.

Bernard Cohen: Vice President - Administration (VP-Admin). Mr. Cohen holds BBA and MPA degrees from West Texas A&M University. He is a long time Amarillo resident with over thirty years of management experience. Mr. Cohen has been with the Company since October 2009. Mr. Cohen works with Ms. Shelton, providing the reporting necessary for the Company’s various SEC filings, and ordinary-course internal bookkeeping and accounting services.

Chrystal Shelton: Office Manager & Administration. Ms. Shelton has been with the Company since 1987. In addition to handling routine office administration, Ms. Shelton is responsible for accounting, form, and formatting of SEC filings. She is an integral part of the reporting process and interacts with outside professionals who assist the Company in its various compliance measures.

Maggie Wang: Director of Business Development. Ms. Wang has an extensive background in business development and marketing of consumer products in Asian countries. Ms. Wang is also the branch manager for the Taiwan Branch.

Consultants

From time to time, the Company engages consultants as needed for specific areas of responsibility. Presently, the Company has engaged the following consultants: John Junyong Lee, Esq. - Chief Legal Counsel and Corporate Secretary, Dr. Yung-Hsiang Hung - Director-Medical Division; and i2China Management Group, LLC (Mr. Lawrence Lin)- Executive Advisor.

Results of Operations for ~~Quarters~~Quarter Ended ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Revenues. ~~ABI~~The Company reported revenue for the quarter ended ~~June 30, 2020,~~March 31, 2021, of ~~$484~~$2,121 from sales of liposomal nutraceuticals. Revenue for the same period in ~~2019~~2020 was ~~$606~~$15,200 also from sales of nutraceuticals. The cost of sales for the ~~second~~first quarter of ~~2020~~2021 was ~~$292~~$1,249 as compared to ~~$563~~$10,806 for cost of sales in ~~2019. The cost of goods sold~~2020. Gross profit for the quarter in 2021 was $872 as compared to $4,394 in 2020, ~~was 60%~~a decrease of ~~sales making gross profit on sales for 2020 40%.~~$3,522.

Research and Development Expenses. ~~The~~There was no R&D activity in ~~2020 was $389 as compared to 2019 when there were $50,124 direct R&D expenses. The large expenditure in 2019 was the initial development investment for the metabolic pump which consisted~~this quarter of modification of LCD function, prototype development, hardware and software engineering. The amount expended in 2020 through June 30, 2020, was testing and fine tuning. The spread of Covid-19 in 2020 slowed the development and testing process.2021 or 2020.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were ~~$104,486 (26%~~$142,713 (38%) ~~lower~~higher in ~~2020~~2021 than ~~2019~~2020 largely due to ~~reductions in salary, professional fees, accounting and other expenses.~~increased expenses associated with the Securities Purchase Agreement transaction with Ainos Inc.

Operating Loss. The Company's operating loss was ~~$300,669~~$522,109 which was ~~$154,370 (34%~~$146,235 (39%) ~~lower~~higher for ~~2020~~2021 than ~~the 2019 operating loss of $455,039~~2020 mostly due to the ~~SG&A~~ expense ~~decrease constituted by salary decreases.~~of the Securities Purchase Agreement transaction with Ainos Inc.

Interest ~~Income and~~ Expense. During the three months ended ~~June 30, 2020,~~March 31, 2021, interest ~~income~~expense, net was ~~$120 consisting of~~$11,897, compared to $1,005 for the three months ended March 31, 2020. The interest ~~earned on two interest-bearing bank accounts. Interest~~ expense recognized in ~~those~~the three months ~~was $1,415~~ended March 31, 2021 is mostly due to accrued interest for convertible debt ~~- notes payable.~~notes.

Net Loss.Net loss attributable to common shareholders was ~~$301,966~~$534,006 which was ~~$151,551 (33%~~$157,127 (42%) ~~less~~higher during ~~2020~~2021 than ~~2019.~~2020. This ~~decrease~~increase was mainly due to ~~a reduction~~expenses related to processing of ~~selling, general and administrative expenses~~our Securities Purchase Agreement with Ainos Inc. in ~~2020.~~2021.

~~Results of Operations for the Six Months Ended June 30, 2020 and 2019:~~

~~Revenues.~~ ~~The total revenue recognized from the sale of nutraceuticals was $15,684 through June 30, 2020, as compared to $4,682 for the first six months of 2019, an increase of $11,002 or 235%.~~

~~Cost of Revenues.~~ Cost of sales for the six months ended June 30, 2020 was $11,098. For the six months ended June 30, 2019, the cost of sales was $3,281. The increase in cost of sales for 2020 as compared to 2019 for the six month period was $7,817, or 238%. Gross profit for six months ended June 30, 2020 was $4,586 compared to $1,401 for the six months ended June 30, 2019, an increase of $3,185 or 227%.

~~Research and Development Expenses.~~ ~~There was a decrease in R&D activity for the six months ended June 30, 2020, of $52,121, 99%. R&D activity is anticipated to ramp up significantly in both the U.S. and Asian markets.~~

~~Selling, General and Administrative Expenses.~~ Selling, general and administrative expenses of $680,740 were incurred for the first six months of 2020, compared to $794,493 for the first six months of 2019, an increase of $113,753 (14%). The 2020 decrease was due in large part to decreases in numerous expense line items. Expense decreases of 2020 over 2019 primarily include: (1) Salaries and wages - $171,995 compared to $225,457 (a decrease of $53,462 or 24%); (2) payroll tax expense decreases related to decreased salaries - $4,303 compared to $18,981 (a decrease of $14,678 or 77%); (3) travel, meals, and entertainment - $14,349 compared to $30,060 (a decrease of $17,711 or 52%); (4) professional fees - $129,394 compared to $141,612 (a decrease of $12,218 or 9%); and (5) occupancy expense (rent) - $21,439 compared to $29,280 (a decrease of $7,841 or 27%).

There were also areas where expenses increased for the 2020 – 2019 comparative period. These expense items include: (1) Insurance expense including general liability, directors & officers liability, group health insurance, and property casualty - $42,519 compared to $32,586 ( an increase of $9,933 or 30%); and (2) legal services - $6,362 compared to $2,271 (an increase of $4,091 or 180%).

~~Operating Loss.~~ In the six month period ended June 30, 2020, the Company's operating loss was $676,543 compared to an operating loss for the six month period ended June 30, 2019 of $845,602, a $169,059 (20%) decrease. The decreased selling, general, and administrative expenses in 2020 was a major factor in decreasing the operating loss.

~~Interest Income and Expense.~~ During the six month period ended June 30, 2020, there was interest income of $281 versus expense of $2,532 for the same period of 2019. Cash balances were higher for the 2019 period resulting in greater interest income.

Interest expense was $2,583 for the six months ended June 30, 2020, compared to $1,895 for the six month period ended June 30, 2019, an increase of $688 (36%). The increase in interest expense for 2020 was precipitated by the continued deferral of salary for Dr. Chen and consulting fees for i2china, both of which were included in the outstanding balances for Convertible Notes – Related Party as explained in footnote 6 to financial statements. There was an increase in outstanding Convertible Debt- Related Party for the period December 31, 2019, through June 30, 2020, in the amount of $134,083, from $444,581to $578,664. As shown in the table of footnote 6, principal and interest for the notes increased from $452,040 on December 31, 2019 to $595,571 as of June 30, 2020, or $143,531, or 32%.

~~Net Loss.~~ The Net Loss for the first half of 2020, decreased to $678,845 from $844,965 in 2019, an increase of $166,120 (20%) for the period. The major constituents of the decrease in net loss are the decreases in operating expenses in the first six months of 2020 previously discussed.

Liquidity and Capital Resources

As of ~~June 30, 2020,~~March 31, 2021, the Company had available cash of ~~$172,802~~$9,377 whereas it had a cash position of ~~723,443~~$289,557 for the same period in ~~2019~~2020 and ~~$409,039~~$22,245 as of December 31, ~~2019.~~2020. The Company had a working capital deficit of ~~$689,094~~$1,458,151 at the end of ~~June 2020,~~March 2021, and a working capital deficit of ~~$88,383~~$580,993 for the same period in ~~2019, a reduction~~2020, an increase of ~~622%~~151%. As of December 31, ~~2019,~~2020, working capital was a deficit of ~~$308,013.~~$1,022,155. The average monthly burn rate in 2020 was ~~$41,000 with a 12-month trailing average of $67,500.~~$65,000. Going forward, we expect that the burn rate will continue to be in that same range.

~~As explained in the previous paragraph entitled~~ ~~Selling, General, and administrative Expenses, the~~The Company did, indeed, reduce expenses by an overall amount of $160,528 or 19%. Significant reductions were made in the areas discussed in that paragraph. A comparative review of cash flows for the six-month periods ending June 30, 2020 and 2019 reveal that cash used for operations in 2020 was $441,105 as compared to $945,598 used in 2019. In 2020, the Company used $1,270 for investing activities while investing activities provided $39,845 through the investment in patents. Financing activities provided $201,594 in 2020 and $354,540 in 2019.

~~ABI~~ continues to develop and establish new revenue streams to become, and maintain, the position of a profitable going concern. Two major areas of focus are (1) to continue to leverage the Company’s core technology, the development and application of low-dose oral interferon, and (2) to commercialize its metabolic restoration therapy for the treatment of diabetes and other metabolic diseases. ~~ABI~~The Company aggressively seeks to monetize its existing intellectual property as well as potential new discoveries and estimates its short-term project development needs to be between $3,000,000 and ~~$5,000,000~~$6,000,000 depending upon project negotiated terms and structuring yet to be determined.

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 will be forced to cease operations.

ITEM 3.

~~ITEM 3.~~Quantitative and Qualitative Disclosures About Market Risk.

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

ITEM 4.

~~ITEM 4.~~Controls and Procedures

Disclosure Controls and Procedures

At the end of the period covered by ~~the Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and~~ this ~~Form 10-Q Quarterly Report for the quarter ending June 30, 2020, an evaluation was carried out under the supervision of and~~report, our management, with the participation of our ~~management, including the~~ Chief Executive Officer ~~(“CEO”)/~~and Chief Financial Officer, ~~(“CFO”), and~~evaluated the ~~Consulting Accounting Manager as to the~~ effectiveness ~~of the design and operations~~ of our disclosure controls and procedures ~~(as~~as of March 31, 2021. The term "disclosure controls and procedures," as defined in ~~Rule~~Rules 13a-15(e) and ~~Rule~~ 15d-15(e) under the Exchange ~~Act). Based on that evaluation, the CEO/CFO and Accounting Manager have concluded that as of the end of the period covered by this Annual Report, our disclosure~~Act, means controls and other procedures ~~were not effective in ensuring that: (i)~~of a company that are designed to ensure that information required to be disclosed by usa company in the reports that ~~we file~~it files or ~~submit to the SEC~~submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in ~~applicable~~the SEC's rules and ~~forms~~forms. Disclosure controls and ~~(ii) material~~procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in ~~our~~the reports ~~filed~~that it files or submits under the Exchange Act is accumulated and communicated to ~~our~~the company's management, including ~~our CEO/CFO~~its principal executive and ~~accounting manager,~~principal financial officers, as appropriate to allow ~~for accurate and~~ timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2021, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

~~Changes to~~

Management's Report on Internal ~~Controls and Procedures over~~Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the annual period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Management’s Remediation Plans~~

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, ~~to provide reasonable assurance regarding~~as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the ~~reliability~~supervision and with the participation of our management, including our principal executive officer and principal financial ~~reporting and the preparation~~officer, we conducted an evaluation of ~~financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”). Management has assessed~~ the effectiveness of our internal control over financial reporting based on the ~~criteria set forth~~framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway ~~Commission (“COSO”)~~Commission. Based on our evaluation under the framework inInternal ~~Control-Integrated~~Control - Integrated Framework (2013),~~. A material weakness, as defined by SEC rules, is a control deficiency, or combination of control deficiencies, such~~ our management concluded that ~~there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in~~our internal control over financial reporting ~~that were identified are:~~was effective at the reasonable assurance level as of March 31, 2021.

~~a) We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training~~Changes in ~~the application of GAAP commensurate with our complexity and our financial accounting and reporting requirements.~~ Internal Control Over Financial Reporting

We have ~~limited experience in the areas of financial reporting and disclosure controls and procedures. Also, we do~~ not ~~have an independent audit committee. As a result, there is a lack of monitoring of the financial reporting process and there is a reasonable possibility that~~experienced any material ~~misstatements of the financial statements, including disclosures, will not be prevented or detected on a timely basis; and~~

~~b) Due~~impact to our small size, we do not have a proper segregation of duties in certain areas of our financial reporting process. The areas where we have a lack of segregation of duties include cash receipts and disbursements, approval of purchases and approval of accounts payable invoices for payment. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis.

~~As a result of the existence of these material weaknesses as of June 30, 2019, management has concluded that we did not maintain effective~~ internal ~~control~~controls over financial reporting ~~as of June 30, 2019, based~~even though our workforce continues to primarily work-from-home due to COVID-19. We are continually monitoring and assessing the COVID-19 situation and its impact on ~~the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in~~ ~~Internal Control-Integrated Framework.~~our internal controls.

This interim report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit the company to provide only management's report in this interim report.

PART II - OTHER INFORMATION

ITEM 1.

~~ITEM 1.~~

~~Legal Proceedings.~~

Legal Proceedings.

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

ITEM 1A.

Risk Factors.

Please carefully consider the following discussion of significant factors, events, and uncertainties that make an investment in our securities risky. The events and consequences discussed in these risk factors could, in circumstances we may or may not be able to accurately predict, recognize, or control, have a material adverse effect on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), cash flows, liquidity, and stock price. These risk factors do not identify all risks that we face; our operations could also be affected by factors, events, or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations. In addition, the global economic climate amplifies many of these risks.

~~ITEM 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

~~On December 31, 2019,~~

We Face Intense Competition

The pharmaceutical industry is an expanding and rapidly changing industry characterized by intense competition. The Company believes that our ability to compete will be dependent in large part upon our ability to successfully operate business lines, continue recapitalization, and steadily enhance and improve our core technology products. In order to do so, we must effectively utilize and expand our research and development capabilities and, once developed, quickly convert new technology into products and processes, which can then be commercialized. Competition is based primarily on scientific and technological superiority, technical support, availability of patent protection, access to adequate capital, the ability to develop, acquire and market products and processes successfully, the ability to obtain governmental approvals and the ability to serve the particular needs of commercial customers. Corporations and institutions with greater resources therefore, have a significant competitive advantage.

Our potential competitors include entities that develop and produce therapeutic agents and/or medical devices for treatment of human and animal disease. These include numerous public and private academic and research organizations and pharmaceutical and biotechnology companies pursuing production of, among other things, biologics from cell cultures, genetically engineered drugs and natural and chemically synthesized drugs. Many of these potential competitors have substantially greater capital resources, research and development capabilities, manufacturing and marketing resources. Competitors may succeed in developing products or processes that are more effective or less costly or that gain regulatory approval prior to our products. The Company ~~received $100,000 for investment through~~expects that the ~~2019-2 Private Placement Equity Security Offering.~~number of competitors and potential competitors will increase as more anti-viral and cytotoxic products receive commercial marketing approvals from the FDA or analogous foreign regulatory agencies. Any of these competitors may be more successful in manufacturing, marketing and distributing its products.

Our Expansion Places a Significant Strain on our Management, Operational, Financial, and Other Resources

Increasing our product and service offerings will require scaling our management, financial and research and development resources. The ~~executed Private Placement Memorandum (PPM) was~~complexity of the current focus of our business on innovative biotechnologies and treatments can place significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions, and our expansion increases these factors. Failure to manage growth effectively could damage our reputation, limit our growth, and negatively affect our operating results.

Our Expansion into New Products, Services, Technologies, and Geographic Regions Subjects Us to Additional Risks

We may have limited or no experience in our newer market segments, and our customers may not ~~received until January 6, 2020. The equity purchase was for 400,000 ABI Common voting shares at $0.25 per share. The stock was subsequently ordered on July 20, 2020, effectively issued~~adopt our product or service offerings. These offerings, which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience service disruptions or failures or other quality issues. In addition, profitability, if any, in ~~June, 2020.~~our newer activities may not meet our expectations, and we may not be successful enough in these newer activities to recoup our investments in them. Failure to realize the benefits of amounts we invest in new technologies, products, or services could result in the value of those investments being written down or written off.

Our International Operations Expose Us to a Number of Risks

We have relatively little operating experience and may not benefit from any first-to-market advantages or otherwise succeed. It is costly to establish, develop, and maintain international operations, sales and marketing channels, and research and development and licensing capacity. Our international operations may not become profitable on a sustained basis.

In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including:

●

local economic and political conditions;

●

government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs); nationalization; and restrictions on foreign ownership restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights;

●

business licensing or certification requirements, such as for imports, exports, medical devices and medical treatments;

●

limitations on the repatriation and investment of funds and foreign currency exchange restrictions;

●

difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences;

●

compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties;

●

laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and

●

geopolitical events, including war and terrorism.

Our Commercial Agreements, Strategic Alliances, and Other Business Relationships Expose Us to Risks

Our business growth depends on commercial agreements, strategic alliances, and business relationships. Under these agreements, we provide access to our research library and clinical data as part of licensing and sales and marketing agreements. These arrangements are complex and require substantial infrastructure capacity, personnel, and other resource commitments, which may limit the amount of business we can service. We may not be able to implement, maintain, and develop the components of these commercial relationships, which may include research and development, clinical trials, diagnostic software and hardware design, and engaging third parties to perform services.

Our licensing agreements partially dependent on the volume of the other company’s sales. Therefore, when the other company’s offerings are not successful, the compensation we receive may be lower than expected or the agreement may be terminated. Moreover, we may not be able to enter into additional or alternative commercial relationships and strategic alliances on favorable terms. We also may be subject to claims from businesses to which we provide these services if we are unsuccessful in implementing, maintaining, or developing these services.

We Face Significant Supply Risk

We are exposed to significant supply risks that may adversely affect our operating results. The Company’s long-time human interferon producer is no longer manufacturing interferon. Plans for further clinical trials and commercialization of a low-dose interferon product have been placed on hold until a new source of interferon is found. The Company is actively seeking a new manufacturing partner and exploring sourcing options with pharmaceutical companies that have a supply of either recombinant interferon or natural human interferon made in a similar manner, but from a different cell line as our previous product.

Procuring a new source of interferon may require additional studies to compare results to the Company’s research and further clinical trials will have to be performed. The Company’s inability to secure interferon supplies may adversely affect our operating results.

Government Regulation Is Evolving and Unfavorable Changes Could Harm Our Business

We are subject to general business regulations and laws, as well as regulations and laws specifically governing biologics, pharmaceuticals, and medical devices and treatments. A large number of jurisdictions regulate our operations, and the extent, nature, and scope of such regulations is evolving and expanding as the scope of our businesses expand. We are regularly subject to formal and informal reviews and investigations by governments and regulatory authorities under existing laws, regulations, or interpretations or pursuing new and novel approaches to regulate our operations. Unfavorable regulations, laws, decisions, or interpretations by government or regulatory authorities applying those laws and regulations, or inquiries, investigations, or enforcement actions threatened or initiated by them, could cause us to incur substantial costs, expose us to unanticipated civil and criminal liability or penalties (including substantial monetary fines), diminish the demand for, or availability of, our products and services, increase our cost of doing business, require us to change our business practices in a manner materially adverse to our business, damage our reputation, impede our growth, or otherwise have a material effect on our operations.

Claims, Litigation, Government Investigations, and Other Proceedings May Adversely Affect Our Business and Results of Operations

As a company focusing on diagnostics and treatments for a wide range of human health care needs, we may be subject to actual and threatened claims, litigation, reviews, investigations, and other proceedings, including proceedings by governments and regulatory authorities, involving a wide range of issues, including patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, product liability, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters. Any of these types of proceedings can have an adverse effect on us because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors. The outcomes of these matters are inherently unpredictable and subject to significant uncertainties.

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

The 2020-1 Private Placement Equity Security Offering was unanimously authorized and approved by Consent of ~~ABI~~the Company’s Board of Directors. The Company offered up to 5,208,334 shares of Common voting stock at a price of $0.192 per share for an aggregate amount of $1,000,000. That offering is currently open and still available for investment.

~~ITEM 3.~~

~~Defaults Upon Senior Securities.~~

On July 28, 2020, Dr. Stephen T. Chen, Chairman, CEO, President, and CFO, executed and submitted a Private Placement Memorandum for the purchase of 520,833 common voting shares at $0.192 per share through the Company’s 2020-1 Private Placement Stock Offering. The total amount of the investment subscription was $100,000 of which $85,000 was tendered to the Company by Dr. Chen subject to his payment of the balance of the subscription. Subsequently, the Company and Dr. Chen rescinded the subscription, the Company retained $85,000 previously tendered as an investment, and the Company included the foregoing amount in an open ended, non-convertible promissory note #9.21 as indicated item 6 (Convertible Notes Payable – Related Parties) in the Notes to Financial Statements.

ITEM 3.

Defaults Upon Senior Securities.

None

~~ITEM 4.~~

~~Mine Safety Disclosures.~~

ITEM 4.

Mine Safety Disclosures.

Not applicable

~~ITEM.5.~~

~~Other Information.~~

~~None~~

ITEM 5.

Other Information.

18On March 31, 2021, the Company entered into Amendment No. 2 to an Employment Agreement dated December 30, 2020 and effective January 1, 2021 between the Company and Stephen T. Chen (“Chen Agreement”) that extended the agreement to the closing date of the Ainos Agreement and transaction, a copy of which is provided as Exhibit 10.1(l) in this report. The Chen Agreement was reported in the Company’s 10-K report filed with the SEC on March 30, 2021, and is incorporated by this reference.

On March 31, 2021, the Company entered into Amendment No. 1 to an Employment Agreement dated December 30, 2020 and effective January 1, 2021 between the Company and Bernard Cohen (“Cohen Agreement”) that extended the agreement to April 5, 2021, a copy of which is provided as Exhibit 10.1(m) in this report. The Cohen Agreement was reported in the Company’s 10-K report filed with the SEC on March 30, 2021, and is incorporated by this reference.

~~ITEM 6.~~

~~Exhibits.~~

ITEM 6.

Exhibits.

EXHIBIT INDEX

~~3(i)†~~			INCORPORATED BY REFERENCE
EXHIBIT NUMBER	DESCRIPTION	FILED WITH THIS FORM 10-K	FILING DATE WITH SEC	FORM	EXH #	HYPERLINK TO FILINGS

3.1(a)	Restated Certificate of Formation of the Company, dated and filed July 27, 2015		3/30/2016	10-K	3.i.	Restated Certificate of Formation of the Company, dated and filed July 27, 2015.
~~3(ii)††~~	3.1(b)	Bylaws of the Company, as amended July 10, ~~2015.~~
4.1*2015		3/30/2016	10-K	3.ii.	Bylaws of the Company, as amended July 10, 2015.
4.1(a)	Specimen Common Stock Certificate		8/8/1996	SB-2	4.1	Specimen Common Stock ~~Certificate.~~Certificate.
4.2*4.1(b)	Form of Underwriter’s Warrant		8/8/1996	SB-2	4.2	Form of ~~Underwriter's Warrant.~~Underwriter’s Warrant.
~~10.1~~⁽¹¹⁾ 10.1(a)	2008 Stock Incentive Plan dated May 20, 2008		5/22/2008	S-8	10.1(11)	2008 Stock Incentive Plan dated May 20, 2008.
10.2*10.1(b)	2018 Employee Stock Option Plan		~~License Agreement dated as of March 22, 1988 between the Company and The Texas A&M University System.~~
10.30***4/16/2019	10-K	10.72	~~Amendment No. 1 dated September 28, 1998 to License Agreement of March 22, 1988 between The Texas A&M University System and the Company.~~
10.72***		2018 Employee Stock Option Plan
10.73***10.1(c)	2018 Officer, Directors, Employees and Consultants Nonqualified Stock Option Plan		4/16/2019	10-K	10.73	2018 Officer, Directors, Employees and Consultants Nonqualified Stock Option Plan
10.74***10.1(c)	2018 Stock Option Agreement – Nonqualified Stock Option		4/16/2019	10-K	10.74	Stock Option Agreement – Nonqualified Stock Option
10.75***10.1(e)	2018 Stock Option Agreement – Employee Plan		4/16/2019	10-K	10.75	Stock Option Agreement – Employee Plan
~~31.1~~10.1(f)*	Employment Agreement between Company and Stephen T. Chen, Ph.D. dated 12/31/20 and effective 01/01/21		3/30/2021	10-K	10.1(f)	https://www.sec.gov/Archives/edgar/data/1014763/000165495421003517/amar_ex101f.htm
10.1(g)*	Amendment No. 1 to Employment Agreement between Company and Stephen T. Chen, Ph.D. effective 01/01/21		3/30/2021	10-K	10.1(g)	https://www.sec.gov/Archives/edgar/data/1014763/000165495421003517/amar_101g.htm
10.1(h)*	Employment Agreement between Company and Bernard Cohen dated 12/31/20 and effective 01/01/21		3/30/2021	10-K	10.1(h)	https://www.sec.gov/Archives/edgar/data/1014763/000165495421003517/amar_ex101h.htm
10.1(i)	Settlement Agreement and Mutual General Release, effective 12/24/20		3/30/2021	10-K	10.1(i)	https://www.sec.gov/Archives/edgar/data/1014763/000165495421003517/amar_ex101i.htm
10.1(j)*	Extension of the consulting agreement and pre-existing warrant certificate between the Company and i2China Management Group, LLC (originally dated April 15, 2018), dated November 30, 2020		3/30/2021	10-K	10.1(j)	https://www.sec.gov/Archives/edgar/data/1014763/000165495421003517/amar_ex101j.htm

10.1(k)	Securities Purchase Agreement between Company and Ainos, Inc., dated December 24, 2020		12/30/2020	8-K	2.1	https://www.sec.gov/Archives/edgar/data/1014763/000165495420014016/amar_ex2-1.htm
10.1(l)	Amendment No. 2 to Employment Agreement between Company and Stephen T. Chen, Ph.D. dated March 31, 2021	X
10.1(m)	Amendment No. 1 to Employment Agreement between Company and Bernard Cohen dated March 31, 2021	X
13	Form 10-K for period ending December 31, 2020		3/30/2021	10-K		https://www.sec.gov/Archives/edgar/data/1014763/000165495421003517/amar_10k.htm
31.1	Certification of Chief Executive Officer (Principal Executive Officer) required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
~~32.1~~X
32.1	Certification ~~Pursuant~~of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to 18 U.S.C. Section 1350 ~~as adopted pursuant to~~ Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.	X

~~101.INS~~99.1	906 Certification	X
99.2	Form 8-K reporting on the closing of the Ainos Agreement and transaction		4/21/2021	8-K	https://www.sec.gov/Archives/edgar/data/1014763/000165495421004461/0001654954-21-004461-index.htm
99.3	Form 8-K reporting on the resignation of the Company’s Chief Operating Officer		5/3/21	8-K	https://www.sec.gov/Archives/edgar/data/1014763/000165495421005015/0001654954-21-005015-index.htm
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the XBRL document.	X
101.SCH		XBRL Taxonomy Extension Schema Document	X
101.CAL		XBRL Taxonomy Extension Calculation Linkbase	X
101.DEF		XBRL Taxonomy Extension Definition Linkbase	X
101.LAB		XBRL Taxonomy Extension Label Linkbase	X
101.PRE		XBRL Taxonomy Extension Presentation Linkbase	X
104.1	Cover Page Interactive Data File	X

~~99.1906 Certification~~

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

+ Schedules (as similar attachments) have been omitted from this filing pursuant to ~~the exhibit~~Item 601(a)(5) of ~~the same number to the Company's Registration Statement on Form SB-2 filed with and declared effective by the Commission (File No. 333-4413) on August 8, 1996.~~Regulation S-K.

**The Exhibit is incorporated by reference to the Company's 1998 Annual Report on Form 10-KSB filed with the Commission on Indicates a management contract or ~~before March 31, 1999.~~compensatory plan or arrangement.

~~(11) The Exhibit is incorporated by reference to the Company’s Report on Form S-8 filed with the SEC on May 22, 2008.~~

***Incorporated as required by: Item 601, Regulation S-K. Each compensatory Plan required to be filed as an Exhibit per Item 15(b) of Form 10K.

~~† The Exhibit is incorporated by reference to the Company's 2015 Annual Report on Form 10-K filed with the Commission on or before March 30, 2016.~~

~~†† The Exhibit is incorporated by reference to the Company's 2015 Annual Report on Form 10-K filed with the Commission on or before March 30, 2016.~~

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Date: August 12, 2020~~	~~AMARILLO BIOSCIENCES,~~AINOS, INC. ~~By:~~ ~~/s/ Stephen Chen~~

Date: May 14, 2021	By:	/s/ Chun-Hsien Tsai
		~~Stephen Chen,~~Chun-Hsien Tsai, Chairman of the Board,
		Chief Executive Officer and Chief Financial Officer

Amarillo Biosciences, Inc.
Statements of Stockholders’ Equity (Deficit)
For the six months ended June 30, 2020 and 2019 (Unaudited)
	Preferred Stock				Common Stock				Additional Paid in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Par Value		Shares		Par Value		Additional Paid in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)

Balance December 31, 2019		-	$	-		40,516, 351	$	405,164	$	4,207,786	$	(4,769,632	)	$	(156,682	)
Issuance of stock for compensation						-		-		-					-
Issuance of stock for cash						400,000		4,000		96,000					100,000
Issuance of stock for debt						-		-		-		-			-
Warrant expense										10,218					10,218
Option expense										181,376					181,376
Net loss		-		-		-		-		-		(678,845	)		(678,845	)
Balance June 30, 2020		-	$	-		40,916,351	$	409,164	$	4,495,380	$	(5,448,477	)	$	(543,933	)

Balance December 31, 2018		-	$	-		39,117,524	$	391,175	$	3,527,238	$	(3,188,334	)	$	730,079

Compensation – i2china (Q4 2018 accrual)		-		-		40,170		401.70		11,598		-			12,000
Compensation – Cohen and Chen (Q4 2018 accrual)		-		-		191,505		1,915.05		55,585		-			57,500

Subscription Issuance – Hen Vai Wu		-		-		200,000		2,000		48,000		-			50,000

Finder’s fee issuance – Hen Vai Wu						115,000		1,150		22,600					23,750

Warrant expense		-		-		-		-		18,992		-			18,992

Option expense		-		-						192,298		-			192,298

Net loss for the period ended June 30, 2019		-		-		-		-		-		(844,965	)		(844,965	)
Balance June 30, 2019		-	$	-		39,664,199	$	396,642	$	3,876,311	$	(4,033,299	)	$	(239,654	)