Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 07, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Entity Registrant Name | AINOS, INC. | ||
Entity Central Index Key | 0001014763 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2023 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity Common Stock Shares Outstanding | 0 | ||
Entity Public Float | $ 5,219,651 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Fin Stmt Error Correction Flag | false | ||
Entity File Number | 001-41461 | ||
Entity Incorporation State Country Code | TX | ||
Entity Tax Identification Number | 75-1974352 | ||
Entity Address Address Line 1 | 8880 Rio San Diego Drive | ||
Entity Address Address Line 2 | Ste.800 | ||
Entity Address City Or Town | San Diego | ||
Entity Address State Or Province | CA | ||
Entity Address Postal Zip Code | 92108 | ||
City Area Code | 858 | ||
Auditor Name | KCCW Accountancy Corp. | ||
Auditor Location | Diamond Bar, California | ||
Auditor Firm Id | 2851 | ||
Local Phone Number | 869-2986 | ||
Security 12b Title | Common Stock | ||
Trading Symbol | AIMD | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,885,628 | $ 1,853,362 |
Accounts receivable (including amounts of related party of nil and $177,595 as of December 31 2023 and 2022, respectively) | 455 | 201,546 |
Inventory, net | 167,593 | 595,222 |
Other current assets | 419,521 | 195,787 |
Total current assets | 2,473,197 | 2,845,917 |
Intangible assets, net | 28,283,208 | 32,806,738 |
Property and equipment, net | 876,572 | 1,375,676 |
Other assets | 208,827 | 80,683 |
Total assets | 31,841,804 | 37,109,014 |
Contract liabilities | 112,555 | 0 |
Convertible notes payable, related party | 0 | 376,526 |
Other notes payable, related party | 42,000 | 884,000 |
Accrued expenses and other current liabilities | 1,182,283 | 1,212,386 |
Total current liabilities | 1,336,838 | 2,472,912 |
Senior secured convertible notes measured at fair value | 2,651,556 | 0 |
Convertible notes payable - noncurrent (including amounts of related party of $2,000,000 and nil as of December 31, 2023 and 2022, respectively) | 3,000,000 | 0 |
Other notes payable, related party - noncurrent | 270,000 | 0 |
Other long-term liabilities | 135,829 | 8,096 |
Total liabilities | 7,394,223 | 2,481,008 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 50,000,000 shares and 10,000,000 shares authorized as of December 31, 2023 and 2022, respectively; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 300,000,000 shares authorized as of December 31, 2023 and 2022; 4,677,787 shares and 4,002,320 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 46,778 | 40,023 |
Common stock to be issued, 162,337 shares and nil as of December 31, 2023 and 2022, respectively | 1,623 | 0 |
Additional paid-in capital | 62,555,808 | 58,905,242 |
Accumulated deficit | (37,886,155) | (24,115,606) |
Accumulated other comprehensive loss - translation adjustment | (270,473) | (201,653) |
Total stockholders' equity | 24,447,581 | 34,628,006 |
Total liabilities and stockholders' equity | $ 31,841,804 | $ 37,109,014 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Balance Sheets | ||
Amounts of related party | $ 0 | $ 177,595 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 4,677,787 | 4,002,320 |
Common stock, shares outstanding | 4,677,787 | 4,002,320 |
Convertible notes payable related party | $ 2,000,000 | $ 0 |
Shares obligated to issue | 162,337 | 0 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statements of Operations | ||
Revenues (including amounts of related party of $33,388 and $2,855,205 for the years ended December 31, 2023 and 2022, respectively) | $ 122,112 | $ 3,519,627 |
Cost of revenues (including amounts of related party of $118,497 and $1,968,291 for the years ended December 31, 2023 and 2022, respectively) | (375,845) | (2,114,284) |
Gross (losses) profits | (253,733) | 1,405,343 |
Operating expenses: | ||
Research and development expenses (including amounts of related party of $368,372 and $618,522 for the years ended December 31, 2023 and 2022, respectively) | 7,317,388 | 6,845,964 |
Selling, general and administrative expenses | 5,635,275 | 8,535,591 |
Total operating expenses | 12,952,663 | 15,381,555 |
Loss from operating | (13,206,396) | (13,976,212) |
Interest expense | (144,193) | (53,528) |
Issuance cost of senior secured convertible note measured at fair value | (525,643) | 0 |
Fair value change of senior secured convertible note | 94,207 | 0 |
Other income, net | 12,276 | 23,050 |
Total non-operating expenses, net | (563,353) | (30,478) |
Net loss before income taxes | (13,769,749) | (14,006,690) |
Provision for income taxes | 800 | 0 |
Net loss | $ (13,770,549) | $ (14,006,690) |
Net loss per common share - basic and diluted | $ (3.36) | $ (5.14) |
Weighted-average shares used in computing net loss per common share-basic and diluted | 4,098,109 | 2,727,458 |
Statements of Comprehensive Los
Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statements of Comprehensive Loss | ||
Net loss | $ (13,770,549) | $ (14,006,690) |
Other comprehensive loss: | ||
Translation adjustment | (68,820) | (207,453) |
Comprehensive loss | $ (13,839,369) | $ (14,214,143) |
Statements of Stockholders Equi
Statements of Stockholders Equity - USD ($) | Total | Preferred Stock | Common Stock | Common Stock to Be Issued | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss -Translation Adjustment |
Balance, shares at Dec. 31, 2021 | 1,925,027 | ||||||
Balance, amount at Dec. 31, 2021 | $ 10,197,107 | $ 0 | $ 19,250 | $ 0 | $ 20,280,973 | $ (10,108,916) | $ 5,800 |
Issuance of stock upon public offering, net of issuance cost, shares | 1,780,204 | 156,000 | 1,778,644 | ||||
Issuance of stock upon public offering, net of issuance cost, amount | 0 | $ 1,560 | 0 | ||||
Issuance of stock to settle vested RSUs, shares | 106,666 | ||||||
Issuance of stock to settle vested RSUs, amount | $ 0 | 0 | $ 1,067 | 0 | $ (1,067) | 0 | 0 |
Conversion of convertible notes payable to common stock, shares | 30,442,959 | 1,814,627 | 30,424,813 | ||||
Conversion of convertible notes payable to common stock, amount | 0 | $ 18,146 | 0 | ||||
Share-based compensation | $ 6,421,879 | 0 | 0 | 0 | $ 6,421,879 | 0 | 0 |
Net loss | (14,006,690) | 0 | 0 | 0 | 0 | (14,006,690) | 0 |
Translation adjustment | (207,453) | 0 | $ 0 | 0 | 0 | 0 | (207,453) |
Balance, shares at Dec. 31, 2022 | 4,002,320 | ||||||
Balance, amount at Dec. 31, 2022 | 34,628,006 | 0 | $ 40,023 | 0 | 58,905,242 | (24,115,606) | (201,653) |
Issuance of stock to settle vested RSUs, shares | 44,680 | ||||||
Issuance of stock to settle vested RSUs, amount | 0 | 0 | $ 447 | 0 | (447) | 0 | 0 |
Conversion of convertible notes payable to common stock, shares | 18,666 | ||||||
Conversion of convertible notes payable to common stock, amount | 274,789 | 0 | $ 187 | 0 | 274,602 | 0 | 0 |
Share-based compensation | 1,114,767 | 0 | 0 | 0 | 1,114,767 | 0 | 0 |
Net loss | (13,770,549) | 0 | 0 | 0 | 0 | (13,770,549) | 0 |
Translation adjustment | (68,820) | 0 | $ 0 | 0 | 0 | 0 | (68,820) |
Issuance of stock in exchange of vehicle, shares | 12,231 | ||||||
Issuance of stock in exchange of vehicle, amount | 48,559 | 0 | $ 122 | 0 | 48,437 | 0 | 0 |
Issuance of stock for special stock bonus, shares | 600,000 | ||||||
Issuance of stock for special stock bonus, amount | 1,947,000 | 0 | $ 6,000 | 0 | 1,941,000 | 0 | 0 |
Fractional shares paid out in cash for the reverse stock split, shares | (110) | ||||||
Fractional shares paid out in cash for the reverse stock split, amount | (301) | 0 | $ (1) | 0 | (300) | 0 | 0 |
Warrants issued in connection with senior secured convertible note payable | 19,893 | 0 | 0 | $ 0 | 19,893 | 0 | 0 |
Conversion of senior secured convertible notes to common stock, shares | 162,337 | ||||||
Conversion of senior secured convertible notes to common stock, amount | 254,237 | 0 | $ 0 | $ 1,623 | 252,614 | 0 | 0 |
Balance, shares at Dec. 31, 2023 | 4,677,787 | 162,337 | |||||
Balance, amount at Dec. 31, 2023 | $ 24,447,581 | $ 0 | $ 46,778 | $ 1,623 | $ 62,555,808 | $ (37,886,155) | $ (270,473) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities : | ||
Net loss | $ (13,770,549) | $ (14,006,690) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,871,057 | 4,833,428 |
Impairment loss of property and equipment | 286,777 | 0 |
Loss on inventory write-downs | 235,047 | 0 |
Share-based compensation expense | 1,114,767 | 6,421,879 |
Stock issued for special stock bonus | 1,947,000 | 0 |
Issuance cost of senior secured convertible note measured at fair value | 525,643 | 0 |
Changes in fair value of senior secured convertible note | (94,207) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 201,091 | (201,546) |
Inventory | 221,767 | (595,222) |
Other current assets | (223,734) | 270,411 |
Contract liabilities | 112,555 | 0 |
Accrued expenses and others current and long-term liabilities | (121,882) | 237,003 |
Net cash used in operating activities | (4,694,668) | (3,040,737) |
Cash flows from investing activities : | ||
Purchase of property and equipment | (92,984) | (633,823) |
Increase in other assets | (8,541) | 3,645 |
Net cash used in investing activities | (101,525) | (630,178) |
Cash flows from financing activities : | ||
Proceeds from convertible notes payable | 1,000,000 | 850,000 |
Proceeds from convertible notes payable, related party | 2,000,000 | 550,000 |
Proceeds from other notes payable, related party | 0 | 800,000 |
Proceeds from senior secured convertible notes payable | 3,000,000 | 0 |
Repayment of convertible notes payable, related party | (114,026) | 0 |
Repayment of other notes payable, related party | (572,000) | (129,405) |
Net proceed from public offering | 0 | 1,780,204 |
Payment of issuance cost of senior secured convertible note measured at fair value | (390,000) | 0 |
Fractional shares paid out in cash for the reverse stock split | (301) | 0 |
Net cash provided by financing activities | 4,923,673 | 3,850,799 |
Effect from foreign currency exchange | (95,214) | (78,021) |
Net increase in cash and cash equivalents | 32,266 | 101,863 |
Cash and cash equivalents at beginning of year | 1,853,362 | 1,751,499 |
Cash and cash equivalents at end of year | 1,885,628 | 1,853,362 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 16,897 | 43,254 |
Cash paid for income taxes | 800 | 0 |
Noncash financing and investing activities | ||
Purchase of equipment and intangible assets by issuing convertible notes payable to a related party | 0 | 26,000,000 |
Conversion of convertible notes payable to common stock and accrued interest waived or converted by convertible note holders | 274,789 | 30,442,959 |
Conversion of senior secured convertible notes to common stock | 254,237 | 0 |
Issuance of common stock in exchange of vehicle | 48,559 | 0 |
Payable for purchase of equipment | $ 5,848 | $ 68,635 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business | |
Description of Business | 1. Description of Business Organization and Business Ainos, Inc. (the “Company”), incorporated in the State of Texas, is a diversified healthcare company focused on the development of novel point-of-care testing (the “POCT”), therapeutics based on very low-dose interferon alpha (the “VELDONA”), and synthetic RNA-driven preventative medicine. The Company’s products include VELDONA clinical-stage human therapeutics, VELDONA Pet cytoprotein supplements, and telehealth-friendly POCTs powered by its AI Nose technology platform. The Company’s POCT platforms aim to provide connected, rapid and convenient testing of a broad range of health conditions. Building on its extensive research and development of VELDONA, the Company is focused on commercializing a suite of VELDONA-based products including VELDONA Pet cytoprotein supplements and human related VELDONA therapeutics. In 2021 and 2022, the Company acquired intellectual property from its immediate controlling shareholder, Ainos Inc., a Cayman Islands company (“Ainos KY”), and continues to expand its product portfolio into POCTs. Pivoting from the sales of its COVID-19 POCT, the Company is commercializing POCTs that detect volatile organic compounds (the “VOC”) emitted by the body, powered by the Company’s AI Nose technology platform. The Company’s lead VOC POCT candidate, Ainos Flora, aims to quickly and easily test female vaginal health and certain common sexually transmitted infections (the “STIs”). During the year ended December 31, 2022, the Company generated revenues from sales of COVID-19 POCT. During the year ended December 31, 2023, revenues generated from COVID-19 POCT was decreased and ceased in January 2024. The Company launched the sales of VELDONA Pet cytoprotein supplements in the second quarter of 2023 and started to earn revenue from the sales of the new products. Public Offering and Uplisting The Company’s registration statement related to its underwritten public offering (the “Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (the “Nasdaq”) on August 9, 2022 under the trading symbols “AIMD” and “AIMDW”, respectively. Reverse Stock Splits In connection with the Offering, the Company’s board of directors on April 29, 2022 and its shareholders on May 16, 2022 approved a 1-for-15 reverse stock split of the Company’s common stock that became effective on August 9, 2022. Further, to comply with Nasdaq’s minimum $1.00 per share continued listing rules, the Company filed a Certificate of Amendment to its Restated Certificate of Formation on November 27, 2023, to apply for another reverse stock split of the Company’s common stock at a ratio of 1-for-5 which was effectuated on December 14, 2023 after receiving required approvals. The par value of $0.01 and authorized shares of the Company’s common stock remain the same and were not adjusted as a result of the reverse stock splits. All issued and outstanding common stock, restricted stock units (RSUs), outstanding convertible notes, warrants and options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to give effect to the reverse stock splits for all periods presented. Additional information regarding the Offering and the reverse stock splits can be found in Note 7 to the financial statements. Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (the “GAAP”) and rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Going Concern As of December 31, 2023, the Company had cash and cash equivalents of $1,885,628. The Company plans to finance its operations and development needs with its existing cash and cash equivalents, additional equity and/or debt financing arrangements, and expected revenue primarily from the sale of VELDONA Pet cytoprotein supplements to support the Company’s clinical trial activities, largely in connection with Ainos Flora and human related VELDONA therapeutics. There can be no assurance that the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis, or at all. If the Company is not able to obtain sufficient funds on acceptable terms when needed, the Company’s business, results of operations, and financial condition could be materially adversely impacted. For the year ended December 31, 2023, the Company generated a net loss of $13,770,549. The Company expects to continue incurring development expenses for the next twelve months as the Company advances Ainos Flora and VELDONA therapeutics for humans through clinical development until regulatory approval is received and the sales and marketing of the products is authorized. The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net operating losses and has an accumulated deficit as of December 31, 2023 of $37,886,155 and expects to incur additional losses and negative operating cash flows for at least the next twelve months. The Company’s ability to meet its obligations is dependent upon its ability to generate sufficient cash flows from operations and future financing transactions. Although management expects the Company will continue as a going concern, there is no assurance that management’s plans will be successful since the availability and amount of such funding is not certain. Accordingly, substantial doubt exists about the Company’s ability to continue as a going concern for at least one year from the issuance of these financial statements. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosures as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on various factors, including historical experience, and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources. Significant items subject to estimates and assumptions include useful lives of property and equipment, valuation of stock option, warrants and senior secured convertible notes measured at fair value, undiscounted cash flows used for an impairment testing of intangible assets, inventory losses and sales return. Actual results may differ from these estimates. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker (the “CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information prepared on the basis of accounting policy disclosed in its annual financial statement for purposes of making operating decisions, allocating resources, and evaluating financial performance of the Company. As such, the Company has determined that it operates as one operating segment. The revenues from external customers or long-term assets are based or located in Taiwan. Cash and Cash Equivalents As of December 31, 2023 and 2022, cash and cash equivalents consist of cash on hand and cash in bank which is potentially subject to concentration of credit risk. Such balance is maintained at financial institutions that management determines to be of high-credit quality. Cash accounts at each institution are insured by the Federal Deposit Insurance Corporation in the U.S.A or Central Deposit Insurance Corporation in Taiwan up to certain limits. At times, such deposits may be in excess of the insurance limit. The Company has not experienced any losses on its deposits. Allowances for Doubtful Accounts The allowances for doubtful accounts represent management’s best estimate of the expected future credit losses from the Company’s accounts receivable. Determination of the allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, therefore, net loss. The Company regularly performs detailed reviews of its portfolios to determine if an impairment has occurred and evaluates the collectability of receivables based on a combination of various financial and qualitative factors that may affect customers’ ability to pay. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the recognized receivable to the amount reasonably expected to be collected. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional reserves would be required. The Company has not experienced significant customer payment defaults, or identified other significant collectability concerns at December 31, 2023 and 2022. Inventory Inventories are stated at the lower of cost or net realizable value. Cost including amounts related to materials, labor and overhead is determined on a first-in, first-out basis for COVID-19 POCT or weighted-average basis for VELDONA Pet cytoprotein supplements. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The valuation of inventory requires management to estimate excess and obsolete inventory. Reserves for excess and obsolete inventory are primarily based on management’s estimates of forecasted sales, usage levels and expiration dates. The Company records inventory loss for excess and obsolete inventory within cost of revenues. Intangible Assets Intangible assets, mainly consisting of patents are initially recorded at fair value and stated net of accumulated amortization and, if applicable, impairments. The Company amortizes its intangible assets that have finite lives using the straight-line method. Amortization is recorded over the estimated useful lives ranging from 5 to 19 years. The Company evaluates the recoverability of its definite lived intangible assets together with property and equipment whenever events or changes in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations of future undiscounted cash flows for each asset group in accordance with ASC 360-10, Property, Plant and Equipment—Impairment or Disposal of Long-Lived Assets Fair Value Measurements During the fourth quarter of 2023, the Company reassessed its short-term and long-term commercial plans for its VOC POCT related products which is identified as an asset group being assigned the major intangible assets and identified that an impairment testing is warranted for the intangible assets. As a result, the Company performed an undiscounted cash flow analysis pursuant to ASC 360-10 to determine if the cash flows expected to be generated by the VOC POCT products over the estimated remaining useful life of its primary assets were sufficient to recover the carrying value of the asset group. Based on this analysis, the undiscounted cash flows were sufficient to recover the carrying value of the long-lived assets. Thus, no impairment loss is needed. To estimate the undiscounted cash flow of the asset group, the Company used assumptions requiring significant judgment, including judgment about when the in-development product can be commercialized, estimated selling price and sales volume of the in-development product and the amount and timing of other cash outflows required to complete the development, commercialization and sales of the product. The forecasted cash flows were based on the Company's most recent strategic plan and for periods beyond the strategic plan, the Company's estimates were based on assumed growth rates expected as of the measurement date. The Company believes its assumptions were consistent with the strategic plans and business goals. Property and Equipment Property and equipment are stated on the basis of historical cost less accumulated depreciation and impairment. Expenditures which materially increase value or extend useful lives of assets are capitalized, while maintenance and repairs which do not improve or extend the lives of the respective assets are charged to operations when incurred. Gains and losses on the retirement or disposal of individual assets are included in the results of operations. Depreciation is provided using the straight-line method over estimated useful lives of assets including 3 to 6 years for machinery and equipment and 2 to 5 years for furniture and fixture. Fair Value Option ASC 825-10, Financial Instruments The Company elected to account for the senior secured convertible notes issued to Lind Global Fund II LP (the “Lind Note”) using FVO, which allows for valuing the Lind Note at fair value in its entirety versus bifurcation of the embedded derivatives (see Note 6). The fair value of the Lind Note is determined using a binomial lattice valuation model, which is widely used for valuing convertible notes. The significant assumption used in the model is volatility of the Company's common stock. If different assumptions are used, the fair value of the convertible notes and the change in estimated fair value could be materially different. A significant increase in the volatility of the market price of the Company’s common stock, in isolation, would result in a significantly higher fair value; and a significant decrease in volatility would result in a significantly lower fair value. Foreign Currency Translation Assets and liabilities of a foreign entity whose functional currency is the local currency are translated to U.S. dollar at the exchange rate in effect at each balance sheet date. Before translation, the Company re-measures foreign currency denominated assets and liabilities into the functional currency of the respective entity, resulting in unrealized gains or losses recorded in the Statements of Operations. Revenues and expenses are translated using average exchange rates during the respective period. Foreign currency translation adjustments are accumulated as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. Revenue Recognition The Company accounts for revenue pursuant to ASC 606, Revenue from Contracts with Customer The Company considers revenue to be earned when all of the following criteria are met: the Company has a contract with a customer that creates enforceable rights and obligations; promised products or services are identified; the transaction price, or the amount the Company expects to receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that would result in a significant reversal upon resolution of the uncertainty, is determinable; and the Company has transferred control of the promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods and services expected to be transferred. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control of the distinct good or service is transferred. Transfer of control for the Company's products is generally at shipment or delivery, depending on contractual terms. As such, the Company has one performance obligation related to product sales which is satisfied at a point in time. The Company recognizes a receivable when it has an unconditional right to payment. Payment terms are typically 30 to 60 days based on the contractual term. Shipping and Handling Costs Shipping and handling costs represent those costs incurred in operating and staffing fulfillment, including costs attributable to receiving, inspecting, picking, packaging, and preparing customer orders for shipment, and outbound freight costs associated with shipping orders to customers. Shipping generally occurs prior to the transfer of control to the customer and is therefore accounted for as a fulfillment expense. Shipping and handling fees billed to the customers are recorded as revenue. Research and Development Costs incurred for the research and development (the “R&D”) of the Company’s products are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Nonrefundable advance payments for goods or services to be received in the future by the Company for use in R&D activities are deferred. The deferred costs are expensed as the related goods are delivered or the services are performed. Advertising Costs Costs associated with the Company’s advertising is expensed as incurred and are included in selling, general and administrative expenses in the Statements of Operations. During the years ended December 31, 2023 and 2022, the Company expensed $59,123 and nil, respectively, for advertising costs, which is comprised primarily of producing costs, print and internet advertising fees. General and Administrative General and administrative expenses mainly include compensation costs, share-based compensation expense and professional service fees. For the years ended December 31, 2023 and 2022, the compensation costs and professional service fees were $1,950,612 and $1,594,637, respectively. As of December 31, 2023 and 2022, the accrued compensation cost and professional service fees were $1,077,941 and $889,987, respectively, which were presented in the Accrued expenses and other current liabilities on the Balance Sheets. Share-Based Compensation Share-based compensation expense is recorded in accordance with ASC 718, Compensation – Stock Compensation Fair Value of Financial Instruments The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company measures financial instruments at fair value at each reporting period using a fair value hierarchy that requires to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs that are supported by little or no market activity. The carrying value of cash and cash equivalents, accounts receivable, accounts payable, convertible notes payable, current, and other notes payable, current, approximate their fair value because of their short-term nature. The carrying value of long-term debt related to noncurrent convertible notes payable, other notes payable and accrued interest expense approximates its fair value after calculating present value at observable market interest rate. In addition, the Company elected FVO to measure the senior secured convertible notes using Level 3 inputs on issuance and at each reporting date. Significant unobservable inputs used in the binominal lattice valuation model is the expected volatility of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The following table sets forth a reconciliation of senior secured convertible notes measured as Level 3 financial instrument: (nil as of December 31, 2022). December 31, 2023 Beginning of year $ - Issue 3,000,000 Conversion into common stock (254,237 ) Change in fair value – gain (94,207 ) End of year $ 2,651,556 Income Taxes The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes a tax benefit from uncertain tax positions only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authorities’ administrative practices and precedents. The tax benefits recognized from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being recognized upon settlement. The Company did not recognize any tax benefits from uncertain tax positions during the years ended December 31, 2023 and 2022. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense. Net Loss Per Common Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since the effect of potentially dilutive securities is anti-dilutive given the net loss of the Company. Recent Accounting Pronouncements Adopted On January 1, 2023, the Company adopted Accounting Standards Update (the “ASU”) 2016-13 (the “ASU 2016-13”), Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments On January 1, 2023, the Company early adopted ASU 2020-06 (the “ASU 2020-06”), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Accounting Standards Issued but Not Yet Adopted No other new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company’s financial statements. |
Inventory, net
Inventory, net | 12 Months Ended |
Dec. 31, 2023 | |
Inventory, net | |
Inventory, net | 3. Inventory, net Inventory stated at cost, net of reserve, consisted of the following: December 31, 2023 2022 Raw materials $ 92,708 $ 393,253 Work in process 1,208 111,119 Finished goods 73,677 90,850 Total $ 167,593 $ 595,222 Inventory related to COVID-19 POCT write-downs to estimated net realizable values and excess and obsolete inventory loss were $235,047 and nil for the years ended December 31, 2023, and 2022, respectively. The Company identified certain raw material that could be used for research and development of new POCT products and reclassified $255,000 of inventory to research and development material presented in the other current assets during the year ended December 31, 2023. As of December 31, 2023 and 2022, the inventory consisted of $167,593 and nil, related to the Company’s new product VELDONA Pet cytoprotein supplements. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets, net | |
Intangible assets, net | 4. Intangible assets, net Intangible assets are stated at cost less accumulated amortization, and consist of the following at December 31, 2023 and 2022: December 31, 2023 2022 Patents acquired $ 39,143,975 $ 39,143,975 Others 227,009 227,511 Total cost 39,370,984 39,371,486 Less: accumulated amortization (11,087,776 ) (6,564,748 ) Intangible assets, net $ 28,283,208 $ 32,806,738 Amortization expense for the years ended December 31, 2023 and 2022 was $4,523,516 and $4,522,002, respectively. No impairment loss was recorded in 2023 and 2022. Estimated future amortization expense is as follows: 2024 $ 4,534,864 2025 4,522,512 2026 4,522,345 2027 4,521,505 2028 4,533,858 Thereafter 5,648,124 Total expense $ 28,283,208 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2023 | |
Property and Equipment, net | |
Property and Equipment, net | 5. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment, and consist of the following at December 31, 2023 and 2022: December 31, 2023 2022 Machinery and equipment $ 1,137,352 $ 1,063,765 Furniture and fixture 669,502 620,064 Total cost 1,806,854 1,683,829 Less: accumulated depreciation and impairment (930,282 ) (308,153 ) Property and equipment, net $ 876,572 $ 1,375,676 Depreciation expense for the years ended December 31, 2023 and 2022 was $328,938 and $291,706, respectively. The Company charged $286,777 and nil of impairment loss to the equipment related to COVID-19 POCT and classified it to the research and development expenses for the years ended December 31, 2023 and 2022, respectively. |
Debts
Debts | 12 Months Ended |
Dec. 31, 2023 | |
Debts | |
Debts | 6. Debts The Company issued promissory notes to creditors for funding. As of December 31, 2023 and 2022, the details of the notes are as follows: December 31, 2023 2022 Convertible notes payable, related party – current (Chen Note) $ - $ 376,526 Other notes payable, related party – current 42,000 884,000 Other notes payable, related party – noncurrent (KY Note) 270,000 - March 2025 Convertible Notes, related party – noncurrent (ASE Note) 2,000,000 - March 2025 Convertible Notes – noncurrent (Lee Note) 1,000,000 - Senior secured convertible notes payable (Lind Note) – at fair value 2,651,556 - $ 5,963,556 $ 1,260,526 The Company received funding in the form of convertible promissory note from Dr. Stephen T. Chen, the former Chief Executive Officer or Chen (the “Chen Note”), in 2016 for the purpose of supporting working capital. The Chen Note was payable on demand and was convertible into common stock of the Company at the conversion price of $12.60 or $14.05 per share. The Chen Note bore an interest rate of 0.75% or 0.65%. During the year ended December 31, 2023, $114,026 of the Chen Note was paid off in cash and the remaining $262,500 of the Chen Note was assigned by Chen to unrelated parties who exercised the conversion right and converted the Chen Note into 18,666 shares of common stock of the Company. The accrued interest expense related to the converted Chen Note was waived by Chen and the assigned parties. The other notes payable was issued to Ainos KY in exchange for $800,000 in cash to support working capital of the Company in March 2022 (the “KY Note”). The Company paid off $530,000 of the KY Note during the year ended December 31, 2023. Another note payable was issued to i2China Management Group, LLC (“i2China”) in exchange for consulting services in 2020 (the “i2China Note”) which remains outstanding for the amount of $42,000 as of December 31, 2023. Both the KY Note and the i2China Note bear an interest rate of 1.85% per annum. On August 17, 2023, the Company entered into extension agreements with Ainos KY and i2China to extend the maturity of the KY Note and i2China Note to March 31, 2025 and September 1, 2024, respectively. All of the aforementioned convertible promissory notes and other notes payable are unsecured and due upon maturity. Holders of convertible notes have the option to convert some or the entire unpaid principal and accrued interest to common stock of the Company. March 2025 Convertible Notes On March 13, 2023, the Company entered into two convertible promissory note purchase agreements pursuant to Regulation S of the Securities Act of 1933, as amended, in the total principal amount of $3,000,000 with the following investors (the “March 2025 Convertible Notes” or “Notes”). Convertible Note Issued to ASE Test, Inc. Pursuant to the one of the aforementioned agreements, ASE Test, Inc. (the “ASE”), a shareholder of Ainos KY, committed to pay a total aggregate amount of $2,000,000 to the Company in exchange for convertible promissory note(s) in three tranches in the amounts of $1,000,000 (the “First Tranche”), $500,000 (the “Second Tranche”), and $500,000 (the “Third Tranche”) conditioned, among other things, on the Company achieving certain business milestones. As of December 31, 2023, the Company received $2,000,000 in cash upon achieving pre-defined business milestones. Convertible Note Issued to Li-Kuo Lee The Company issued a convertible note in the principal amount of $1,000,000 to an unrelated party, Li-Kuo Lee, in exchange of $1,000,000 in cash. As of December 31, 2023, the full amount of the payment was received. The March 2025 Convertible Notes will mature in two years from the issuance dates, bearing interest at the rate of 6% compounded interest per annum. At any time after the issuance and before the maturity date, the Notes are convertible into the common stock of the Company at the conversion price of $7.50 per share, subject to anti-dilutive adjustment as set forth in the Notes. Unless previously converted, the Company shall repay the outstanding principal amount plus all accrued and unpaid interest on the maturity date. The Notes shall be an unsecured general obligation of the Company. The total interest expense of convertible notes payable, other notes payable and March 2025 Convertible Notes for the years ended December 31, 2023 and 2022, were $132,843 and 49,994, respectively, among which were with related party for amounts of $83,622 and $49,994, respectively. As of December 31, 2023 and 2022, the unpaid accrued interest expense was $138,939 and $90,735, respectively, among which $135,829 and nil was long-term liabilities, respectively. Among the unpaid accrued interest expense, $90,743 and $90,735, respectively, was with related party as of December 31, 2023 and 2022. Senior Secured Convertible Notes Payable On September 25, 2023, the Company entered into a securities purchase agreement (the “SPA”) with Lind Global Fund II LP (the “Lind”). The SPA provides for loans in an aggregate amount of up to $10,000,000 under various tranches to fund clinical trials, commercial product launch and working capital of the Company. On September 28, 2023, the initial closing date, the Company issued and sold to Lind, in a private placement, (a) a senior secured convertible promissory note in the aggregate principal amount of $2,360,000 (the “Lind Note”) and (b) warrants to purchase 460,829 shares of common stock at an exercise price of $4.50 per share of common stock (the “Lind Warrant”) for a cash amount of $2,000,000. On December 21, 2023, an additional $1,000,000 was drawn down after certain conditions were met. The aggregate principal amount of the Lind Note was increased to $3,540,000 and the shares of common stock Lind Warrant can purchase was increased to 691,244 shares. The Lind Note does not bear any interest and matures on March 28, 2025. Following the earlier to occur of (i) 90 days from the date of the SPA or (ii) the date the resale Registration Statement is declared effective by the SEC, the Lind Note is convertible into shares of the Company’s common stock at the option of Lind at any time with the conversion price at lower of $7.50 per share, subject to adjustment, or 90% of stock price as defined in the SPA. Under certain conditions as defined in the SPA, the Company can prepay the note at 105% of the outstanding principal amount or Lind can put back the note at 105%, when there is a change of control, or 120%, when there is an event of default, of the outstanding principal amount, etc. Lind converted $300,000 of principal amount of the Lind Note into 162,337 shares of common stock on December 29, 2023. After the conversion, the remaining principal amount of the Lind Note was $3,240,000 as of December 31, 2023. From an accounting perspective, the Lind Note is considered a debt host instrument embedded with issuer’s call and investor’s contingent puts, and is issued at substantial discount. The Company elects the fair value option (the “FVO”) to account for the Lind Note at fair value and mark to market each quarter. As of December 31, 2023, the fair value of the Lind Note was $2,651,556. For the year ended December 31, 2023, the change in the fair value of the Lind Note was recorded in the Statements of Operations at amount of $94,207. No portion of the change in fair value was related to changes in credit risk of the Company which would be charged to other comprehensive loss if any. The Company has granted to Lind a senior security interest in all of the Company’s right, title, and interest in, to and under all of the Company’s property, subject to certain exceptions as set forth in the SPA. The Lind Note includes certain non-financial covenants and as of December 31, 2023, the Company was in compliance with these covenants. The issuance cost related to the first tranche of $3,000,000 of the Lind Note, including a commitment fee charged by Lind, placement agent fee and warrants, and legal fees is $525,643, which is expensed off due to FVO election. $159,250 of the remaining insurance cost related to the future funding of $7,000,000 offered by the SPA is deferred as other assets on the Balance Sheets and will be expensed off upon each closing or when the Company does not expect to complete the remaining funding. Convertible notes converted into common stock upon closing of the Public Offering in August 2022 APA Convertible Note Ainos KY and the Company entered into an Asset Purchase Agreement dated as of November 18, 2021 (the “Asset Purchase Agreement”), as modified by an Amended and Restated Asset Purchase Agreement dated as of January 29, 2022 (the “Amended Asset Purchase Agreement”). Pursuant to the Asset Purchase Agreement, the Company acquired certain intellectual property assets and certain manufacturing, testing, and office equipment for a total purchase price of $26,000,000. As consideration, the Company issued to Ainos KY a convertible promissory note in the principal amount of $26,000,000 upon closing on January 30, 2022 (the “APA Convertible Note”). The APA Convertible Note was matured on January 30, 2027 and had no interest bearing. Prepayment was permitted in whole or in part without penalty. March 2027 Convertible Notes In March and April of 2022, the Company issued convertible notes pursuant to certain Convertible Note Purchase Agreements under Regulation S to investors for a total cash amount of $1,400,000, including from related parties for a cash amount of $550,000, with maturity on March 30, 2027 (the “March 2027 Convertible Notes”). The Company can prepay the notes in whole or in part without penalty. The March 2027 Convertible Notes were non-interest bearing. The APA Convertible Note, the March 2027 Convertible Notes together with convertible notes issued to Ainos KY in 2021 in the aggregate total amount of $30,442,959 were fully converted to 1,814,627 shares of common stock upon closing of the Offering in August 2022. |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders Equity | |
Stockholders' Equity | 7. Stockholders’ Equity Preferred Stock The Company increased authorized shares of preferred stock from 10,000,000 shares to 50,000,000 shares upon the filing of an amendment to the Company’s Certificate of Formation with the Secretary of State of Texas on November 27, 2023. No shares of preferred stock were issued and outstanding as of December 31, 2023 and 2022. Common Stock Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. The Company has 300,000,000 shares of common stock authorized for issuance at par value of $0.01. As of December 31, 2023, 4,677,787 shares of common stock were issued and a total of 3,657,087 shares were reserved for conversion of convertible notes (1,794,971 shares), warrants issued to investors or in connection with funding's (894,444 shares) and share-based compensation awards (967,672 shares). The Company issued 600,000 shares of common stock to directors, officers, and consultants for achieving non-financial milestones or for on-boarding bonuses. The fair value of the special stock bonus was $1,947,000 based on the closing price of the common stock at the date of major shareholder approval was obtained and was recorded immediately as selling, general and administrative expenses in the Statements of Operations as no future service is required. For the year ended December 31, 2023, the Company issued 12,231 and 18,666 shares of common stock in exchange of a vehicle (Note 12) and upon conversion of Chen Note (Note 6), respectively. Upon conversion of the portion of the Lind Note on December 29, 2023, the Company was obligated to issue 162,337 shares of common stock to Lind as of December 31, 2023 which were subsequently issued in January 2024 (Note 6). Public Offering of Common Stock and Warrants The Company completed its public offering (the “Offering”) of an aggregated 780,000 units at a price of $4.25 per unit on August 9, 2022. Each unit issued in the Offering consisted of 0.2 share of common stock and one unit of warrant to purchase 0.2 share of common stock of the Company at a price of $21.25 per share (the “Public Warrants”). In addition, the Company issued its underwriters a 45-day over-allotments option to purchase up to an additional 23,400 shares of common stock and/or up to an additional 117,000 units of Public Warrants at the public offering price. The underwriters exercised its option to purchase an additional 117,000 units of Public Warrants at $0.01 per unit for a total cash proceeds of $1,170. The Company received aggregate net proceeds of approximately $1.78 million after deducting direct offering cost of approximately $1.54 million including underwriting commissions and legal fees. The Public Warrants may be exercised from February 5, 2023 (181 days from the effective date of the Company’s S-1 Registration Statement made effective August 8, 2022, hereafter “Registration Date”) to August 8, 2027 (5 years from the Registration Date). The fair value of the Public Warrants was around $3.28 million and was determined using the Black-Scholes option pricing model with the assumptions: $18.30 of stock price, $21.25 of stike price, 5-year expected term, 277% of expected volatility, 0% of expected dividend rate and 2.97% of risk-free interest rate. On August 11, 2022, the Company agreed to issue to the representative of the underwriters warrants to purchase up to a total of 7,800 shares of common stock (the “Representative’s Warrants”) pursuant to an underwriting agreement. The Representative’s Warrants are exercisable at $23.375 per share, are initially exercisable 180 days after the effective date of the Offering and have a term of five years from their initial exercise date. The fair value of the Representative’s Warrants was around $107 thousands which was recorded in the additional paid-in capital and was determined using the Black-Scholes option pricing model with the assumptions: $13.75 of stock price, $23.375 of strike price, 5-year expected term, 304% of expected volatility, 0% of expected dividend rate and 2.91% of risk-free interest rate. The direct issue cost paid in cash of $1.54 million together with the cost of the Representative's Warrants was allocated based on the relative fair value of common stocks issued for the Offering and the Public Warrants, and was recorded as a reduction to the additional paid-in capital. Upon completion of the Offering, convertible notes outstanding in the principal amount of $30.4 million and accrued interest of $42,959 were automatically converted into 1,814,627 shares of common stock. Refer to Note 6. Warrants As of December 31, 2023 and 2022, warrants issued and outstanding in connection with financing are summarized as below: December 31, (In number of shares of common stock to purchase when warrants exercised) 2023 2022 Lind Warrant with exercise price of $4.50 691,244 - Public Warrants with exercise price of $21.25 179,400 179,400 Representative’s Warrants with exercise price of $23.375 7,800 7,800 Placement agent warrant with exercise price of $8.25 16,000 - Total 894,444 187,200 As discussed in Note 6, the Company issued the Lind Warrant on September 28, 2023 and December 21, 2023 in connection with the private placement of the Lind Note. The Company total issued 16,000 shares of warrants with an exercise price of $8.25 per share to the placement agent as the agent fee. Each warrant has a contractual term of 5 years and can be exercised for the purchase of one share of common stock of the Company. The carrying amount of the Lind Warrant is nil after allocating proceeds to the Lind Note measured at fair value. The fair value of the placement agent warrant is estimated as $19,893 using the Black-Scholes Model. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging As of December 31, 2023, none of the warrants have been exercised nor have expired. The remaining contractual life of the warrants was 4.5 years as of December 31, 2023. Dividends The Company has never declared or paid, and does not anticipate declaring or paying, any cash dividends on any of its capital stock. The Company does not anticipate paying any dividends in the foreseeable future, and currently intends to retain all available funds and any future earnings for use in the operation of the business, to finance the growth and development and for future repayment of debt. Future determinations as to the declaration and payment of dividends, if any, will be at the discretion of the Company’s board of directors and will depend on then-existing conditions, including operating results, financial condition, contractual restrictions, capital requirements, business prospects and other factors of the Company that the board of directors may deem relevant. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Revenue | 8. Revenue Revenue is recognized upon shipment of products based upon contractually stated pricing at predetermined payment terms. For the year ended December 31, 2022, the Company generated revenue solely from sales of COVID-19 POCT in the Taiwan market. Due to a slowdown of the sales of the COVID-19 POCT, the revenue generated in 2023 decreased. There was no revenue recognized from performance obligation satisfied or partially satisfied in prior periods, nor were there any unsatisfied performance obligations related to the sales of COVID-19 POCT as of December 31, 2023 and 2022. The Company started to manufacture and deliver VELDONA Pet cytoprotein supplements to on-line and off-line distribution channels beginning the third quarter of 2023. Revenue from sales through on-line platform were recognized after the expiration of right of return which was offered for a limited time. Revenue from sales through off-line distribution channels was recognized only to the extent that the product sold was not expected to be returned. The Company has not generated material revenue from sales of VELDONA Pet cytoprotein supplements. As of December 31, 2023, $112,555 of contract liabilities was recorded for the cash received in advance from distribution channels during the year. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Compensation | |
Share-Based Compensation | 9. Share-Based Compensation 2023 Stock Incentive Plan The Company effectuated an amendment to its 2021 Stock Incentive Plan, now restated as the Company 2023 Stock Incentive Plan (the “2023 SIP” or “Plan”) which includes, among other things, a change in the number of reserved shares under the Plan. Under the 2023 SIP, subject to a change in capital structure or a change in control, the aggregate number of shares which may be issued or transferred pursuant to awards under the Plan will be equal to up to twenty percent (20%) of shares of outstanding common stock of the Company existing as of December 31 st 2021 Stock Incentive Plan On June 20, 2022, the Company’s 2021 Stock Incentive Plan (the “2021 SIP”) was effective following an approval by its sharholders. The 2021 SIP seeks to attract and retain key personnel, and to strengthen the commitment of the Company’s directors, officers, employees, consultants and advisors by making available equity interests in the Company or compensation measured by reference to the value of Company’s common stock. The 2021 SIP provides for the issuance of up to 266,666 shares of the Company’s common stock pursuant to equity awards, including options, stock appreciation rights and restricted stock units. No shares were granted or issued under the 2021 SIP. 2021 Employee Stock Purchase Plan On June 20, 2022, the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was effective following an approval by its shareholders. The 2021 ESPP provides eligible employees (as such term is defined in the ESPP) with an opportunity to purchase common stocks of the Company at a discount through voluntary contributions and is intended to qualify as an employee stock purchase plan under Section 423 of the U.S. Internal Revenue Code of 1986, as amended. A total of 10,000 shares of common stock have made available for issuance under the ESPP. As of December 31, 2023, no shares were issued under the 2021 ESPP. Based on the aforementioned plans, the Company will issue new shares upon option exercise or shares vested. Restricted Stock Units (“RSUs”) RSUs entitle the recipient to be paid out an equal number of common stock shares upon vesting which is generally 3 years. The fair value of RSUs is based on the closing price of the underlying stock on the date of grant. A summary of the Company’s RSUs activity and related information for the years ended December 31, 2023 and 2022 is as follows: For the Year Ended December 31, 2023 2022 Number of Shares Weighted-Average Grant Date Fair Value Per Share Number of Shares Weighted-Average Grant Date Fair Value Per Share Unvested balance at January 1 160,000 $ 12.08 - $ - RSUs granted 870,200 $ 3.46 266,666 $ 29.45 RSUs vested (44,680 ) $ 13.11 (106,666 ) $ 55.5 RSUs forfeited (31,214 ) $ 5.28 - $ - Unvested balance at December 31 954,306 $ 4.39 160,000 $ 12.08 Stock Options and Warrants A summary of option activity for the years ended December 31, 2023 and 2022 is presented below. Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 7,332 $ 28.50 9.3 - Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at December 31, 2022 7,332 28.50 8.3 - Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at December 31, 2023 7,332 $ 28.50 7.3 $ - Vested or expected to vest at December 31, 2023 7,332 $ 28.50 7.3 $ - Exercisable at December 31, 2023 5,110 $ 28.50 7.2 $ - As of December 31, 2023, 6,034 shares of warrants which were granted to i2China Management Group, LLC in November 2020 were outstanding and remained unexercised. The warrants were fully vested and exercisable as of December 31, 2023. The exercise price of the warrant is $19.88 with remaining contractual term in 1.9 years. The Company used the Black-Scholes option pricing model to value the above option and warrant awards to determine the grant date fair value. The contractual term of the option and warrant is 10 years and 5 years, respectively. Share-Based Compensation The RSUs, options and warrants (the “Awards”) were granted to employees and consultants with service conditions. The share-based compensation expense of the Awards for the years ended December 31, 2023 and 2022 were $1,114,767 and $6,421,879, respectively. For the Year Ended December 31, 2023 2022 Selling, general and administrative expenses $ 875,509 $ 6,394,198 Research and development expenses 220,723 24,232 Cost of revenues 18,535 3,449 Total $ 1,114,767 $ 6,421,879 The total income tax benefit recognized in the Statements of Operations for the share-based compensation arrangements were nil for the years ended December 31, 2023 and 2022. Compensation cost capitalized as part of inventory has been minimal. As of December 31, 2023, the total unrecognized compensation cost related to the Awards was $3,373,298, which is expected to be recognized over a weighted-average period of 2.3 years. The total fair value of shares vested during the years ended December 31, 2023 and 2022 was $745,706 and $6,080,095, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The components of the provision (benefit) for income taxes consist of the following: For the Year Ended December 31, 2023 2022 Current federal taxes $ - $ - Current state taxes 800 - Current tax provision 800 - Deferred tax provision 1,573,000 2,837,000 Change in valuation allowance (1,573,000 ) (2,837,000 ) Total income tax expense provision $ 800 $ - A reconciliation of the statutory tax rates to the effective tax rates applicable to the Company is as follows: For the Year Ended December 31, 2023 2022 Statutory federal income tax rate 21 % 21 % Permanent differences 0 % 0 % Deferred adjustment (5 %) 0 % State income tax expense 0 % 0 % Change in valuation allowance (16 %) (21 %) Effective income tax rate 0 % 0 % The components of the Company’s deferred tax asset and liabilities are as follows: December 31, 2023 2022 Deferred tax assets (liabilities) Net operating loss carry forwards $ 7,394,000 $ 6,480,000 Amortization 1,025,000 627,000 Depreciation 28,000 - Capitalized research and development 290,000 187,000 Share-based compensation 232,000 109,000 Other temporary differences 46,000 60,000 Total deferred tax assets 9,015,000 7,463,000 Depreciation - (21,000 ) Total deferred tax liabilities - (21,000 ) Valuation allowance (9,015,000 ) (7,442,000 ) Net deferred tax assets $ - $ - The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company has a valuation allowance against the full amount of its net deferred tax assets due to the operating loss history of the Company. The effect of a change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date of the rate change. As of December 31, 2023, the Company had U.S. federal net operating loss carryforwards of approximately $35,211,000. The federal net operating loss carryforwards generated through December 31, 2017 of $12,886,000 will expire in 2024 through 2037, while $22,325,000 of federal net operating loss carryforwards generated in post December 31, 2017 or later do not expire due to the provisions in the Tax Cuts and Jobs Act, but may only offset 80% of taxable income in periods of future utilization. The state net operating loss carryovers has been immaterial. The Company files returns with the U.S. federal government, and various state jurisdictions. The Company’s returns have been, and could in the future, subject to examination which may, or may not, have an impact to the financial statements. |
Net Loss per Common Share
Net Loss per Common Share | 12 Months Ended |
Dec. 31, 2023 | |
Net Loss per Common Share | |
Net Loss per Common Share | 11. Net Loss per Common Share The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders: For the Year Ended December 31, 2023 Net loss attributable to common stockholders, basic and diluted $ (13,770,549 ) $ (14,006,690 ) Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 4,098,109 2,727,458 Net loss per share attributable to common stockholders, basic and diluted $ (3.36 ) $ (5.14 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding because they would be anti-dilutive: For the Year Ended December 31, 2023 2022 Option and RSUs to purchase common stock 961,638 167,332 Warrants to purchase common stock 900,478 193,234 Convertible notes to purchase common stock 2,197,573 27,904 Total potential shares 4,059,689 388,470 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions During the years ended December 31, 2023 and 2022, other than disclosed elsewhere, the Company had the following material related party and related party transactions: Related Party Controlling shareholders Taiwan Carbon Nano Technology Corporation (the “TCNT”) is the controlling shareholder of the Company through its controlling interests in Ainos KY who is an immediate controlling shareholder of the Company as of December 31, 2023. The Company acquired the POCT intellectual properties from Ainos KY. TCNT manufactures COVID-19 antigen test kits sold by the Company and has a product development agreement with the Company. The Company relies on TCNT to manufacture or develop POCT products and has a concentration risk on the sole supplier. Entity under common control AI Nose Corporation, a wholly owned subsidiary of Ainos KY is under common control with the Company. Related Party Transactions Purchase Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY On June 14, 2021, the Company entered into an exclusive agreement with Ainos KY to serve as the master sales and marketing agent for the Ainos COVID-19 Antigen Rapid Test Kit and COVID-19 Nucleic Acid Test Kit which were developed and manufactured by TCNT, a controlling shareholder of Ainos KY (the “Sales and Marketing Agreement”). On June 7, 2021, the Taiwan Food and Drug Administration (the “TFDA”) approved emergency use authorization (the “EUA”) to TCNT for the Ainos COVID-19 Antigen Rapid Test Kit sold and marketed under the “Ainos” brand name in Taiwan. On June 21, 2022, the Company began marketing the Ainos SARS-CoV-2 Antigen Rapid Self-Test (together with Ainos COVID-19 Antigen Rapid Test Kit, the “COVID-19 Antigen Rapid Test Kits”) under a separate EUA issued by the TFDA to TCNT on June 13, 2022. The Company incurred costs associated with manufacturing COVID-19 Antigen Rapid Test Kits by TCNT pursuant to the Sales and Marketing Agreement, totaling $46,635 and $1,968,291 for the years ended December 31, 2023 and 2022, respectively. Due to the expiration of EUA to TCNT, excess materials, supplies and mode purchased by TCNT were sold back to the Company. As a result, the Company absorbed $33,002 of losses which was recorded in the cost of revenues. Manufacturing Service Agreement with TCNT for the VELDONA Pet Cytoprotein Supplements On August 28, 2023, the Company entered into a manufacturing service agreement with TCNT, together with another third-party vendor, to manufacture pet supplement products. The Company incurred costs totaling $38,860 for the year ended December 31, 2023. As of December 31, 2023 and 2022, the accounts payable to TCNT for the above two products were $323 and $24,365, respectively. Product Development Agreement with TCNT Pursuant to a five-year Product Development Agreement (the “Product Development Agreement”) with TCNT, effective August 1, 2021, the development expenses incurred were $368,372 and $618,522 for the years ended December 31, 2023 and 2022, respectively. In October 2023, the Company prepaid TCNT the estimated development expenses for the amount of $67,970. As of December 31, 2023, the remaining prepayment was $26,511. As of December 31, 2022, the accounts payable to TCNT for the development was $70,113. Under the Product Development Agreement, the Company made deposits of $31,511 and $31,490 to TCNT as of December 31, 2023 and 2022, respectively. On January 9, 2024, the Company and TCNT entered into an addendum to the Product Development Agreement (the “Addendum Agreement”) in connection with the scope of co-development and certain terms. For products defined in the Addendum agreement, TCNT will provide facilities, equipment, mass production process technology, ISO9001 and ISO13485 related management, as well as mass production support. The procurement of parts and raw materials, rental fees, and utility expenses are excluded. The Company will pay a total fee of NT$5 million (USD$162,840) for a five-years development commencing from January 2024. The Company prepaid the full amount of the fee on January 10, 2024 at TCNT’s request. P roduct sales COVID-19 Antigen Rapid Test Kits Sales The Company sold COVID-19 Antigen Rapid Test Kits to ASE’s affiliates, totaling $33,388 and $2,855,205 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the accounts receivable was nil and $177,595, respectively. Miscellaneous On April 26, 2023, the Company issued a total of 12,231 shares of common stock to Ting-Chuan Lee, a director of the Company, pursuant to a purchase and sale agreement relating to the Company’s acquisition of a vehicle. The purchase price was in the amount of $48,559. The Company engaged Ms. Chien-Hsuan Huang as a medical device development consultant in September 2022 for one year. Ms. Huang is the spouse of one of the members of the board of directors of the Company. The R&D expense was $51,143 and $81,321 for the years ended December 31, 2023 and 2022, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies The Company operates in an industry characterized by extensive patent litigation. Competitors may claim that the Company’s products infringe upon their intellectual property. Resolution of patent litigation or other intellectual property claims is typically time consuming and costly and can result in significant damage awards and injunctions that could prevent the manufacture and sale of the affected products or require the Company to make significant royalty payments in order to continue selling the affected products. As of December 31, 2023, there were no such commitments or contingencies. The Company has entered into agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. As of December 31, 2023, purchase obligations exclude agreements that are cancellable at any time without penalty totaled approximately $52,855 and the majority of these obligations are expected to be settled during 2024. The Company has granted to Lind a senior security interest in all of the Company’s right, title, and interest in, to and under all of the Company’s property, subject to certain exceptions as set forth in the SPA (Note 6). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | 14. Subsequent Events Related Party Transaction As part of the Addendum Agreement entered into on January 9, 2024 as disclosed in Note 12, TCNT will provide non-exclusive use of certain patents related to VOC and POCT technologies for a monthly fee of $95,000 (plus 5% indirect tax), with negotiable payment terms for six months from January 2024 to June 2024. The subsequent use of the patents after June 2024 will be discussed at a later date. As of the date of the report, the Company has paid $285,000 (plus 5% indirect tax) of license fee to TCNT. On January 9, 2024, the Company purchased a batch of used equipment from TCNT for internal use. As this is an asset purchase transaction under common control, the Company recorded the assets at TCNT’s book value which was nil. As such, the transaction was considered the Company’s capital distribution to TCNT,and the additional paid-in capital was reduced by the payment amount of $4,650 accordingly. Additional Lind Financing Pursuant to the SPA with Lind disclosed in Note 6, the Company exercised the rights under the SPA to draw down additional financing in the principal amount of $1,750,000 on January 23, 2024. The additional funding will be paid in two installments with the first $875,000 funded at closing and the second $875,000 to be funded subject to an effective registration statement and other conditions specified in the SPA and the First Amendment to Senior Secured Convertible Promissory Note (as amended, the "Note"). The principal amount of this tranche is $1,995,000. The maturity date of the Note was amended whereby the Company may extend the original maturity date on March 28, 2025 to July 28, 2025. In the event the Company exercises its right to extend the maturity date, for each month of extension, the principal amount in the Note will be increased by 1% of the principal amount outstanding upon the date of the notice of extension, up to a maximum amount of 4%. In connection with the amendment and additional closing contemplated under the Note, the Company will issue Lind a warrant to purchase 1,021,400 shares at an exercise price of $2.16 per share. The Company will also issue additional warrants to the placement agent for the SPA to purchase 9,332 shares at an exercise priced of $8.25 per share. As of the report date, the Company received $777,500 of the first installment funding after netting of issue cost in cash. The Company also issued 510,700 shares of Lind Warrant and 4,666 shares of placement agent warrants as a result of the additional funding received. Additional Conversion of the Senior Secured Convertible Notes Payable (Lind Note) In January and February 2024, Lind converted a total of $1,312,000 of the principal amount of Lind Note into 980,229 shares of common stock. The remaining principal amount of the Lind Note was $2,925,500 after the conversion and receiving the first installment of the aforementioned additional Lind financing. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosures as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on various factors, including historical experience, and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources. Significant items subject to estimates and assumptions include useful lives of property and equipment, valuation of stock option, warrants and senior secured convertible notes measured at fair value, undiscounted cash flows used for an impairment testing of intangible assets, inventory losses and sales return. Actual results may differ from these estimates. |
Segments | Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker (the “CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information prepared on the basis of accounting policy disclosed in its annual financial statement for purposes of making operating decisions, allocating resources, and evaluating financial performance of the Company. As such, the Company has determined that it operates as one operating segment. The revenues from external customers or long-term assets are based or located in Taiwan. |
Cash and Cash Equivalents | As of December 31, 2023 and 2022, cash and cash equivalents consist of cash on hand and cash in bank which is potentially subject to concentration of credit risk. Such balance is maintained at financial institutions that management determines to be of high-credit quality. Cash accounts at each institution are insured by the Federal Deposit Insurance Corporation in the U.S.A or Central Deposit Insurance Corporation in Taiwan up to certain limits. At times, such deposits may be in excess of the insurance limit. The Company has not experienced any losses on its deposits. |
Allowances for Doubtful Accounts | The allowances for doubtful accounts represent management’s best estimate of the expected future credit losses from the Company’s accounts receivable. Determination of the allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, therefore, net loss. The Company regularly performs detailed reviews of its portfolios to determine if an impairment has occurred and evaluates the collectability of receivables based on a combination of various financial and qualitative factors that may affect customers’ ability to pay. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the recognized receivable to the amount reasonably expected to be collected. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional reserves would be required. The Company has not experienced significant customer payment defaults, or identified other significant collectability concerns at December 31, 2023 and 2022. |
Inventory | Inventories are stated at the lower of cost or net realizable value. Cost including amounts related to materials, labor and overhead is determined on a first-in, first-out basis for COVID-19 POCT or weighted-average basis for VELDONA Pet cytoprotein supplements. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The valuation of inventory requires management to estimate excess and obsolete inventory. Reserves for excess and obsolete inventory are primarily based on management’s estimates of forecasted sales, usage levels and expiration dates. The Company records inventory loss for excess and obsolete inventory within cost of revenues. |
Intangible Assets | Intangible assets, mainly consisting of patents are initially recorded at fair value and stated net of accumulated amortization and, if applicable, impairments. The Company amortizes its intangible assets that have finite lives using the straight-line method. Amortization is recorded over the estimated useful lives ranging from 5 to 19 years. The Company evaluates the recoverability of its definite lived intangible assets together with property and equipment whenever events or changes in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations of future undiscounted cash flows for each asset group in accordance with ASC 360-10, Property, Plant and Equipment—Impairment or Disposal of Long-Lived Assets Fair Value Measurements During the fourth quarter of 2023, the Company reassessed its short-term and long-term commercial plans for its VOC POCT related products which is identified as an asset group being assigned the major intangible assets and identified that an impairment testing is warranted for the intangible assets. As a result, the Company performed an undiscounted cash flow analysis pursuant to ASC 360-10 to determine if the cash flows expected to be generated by the VOC POCT products over the estimated remaining useful life of its primary assets were sufficient to recover the carrying value of the asset group. Based on this analysis, the undiscounted cash flows were sufficient to recover the carrying value of the long-lived assets. Thus, no impairment loss is needed. To estimate the undiscounted cash flow of the asset group, the Company used assumptions requiring significant judgment, including judgment about when the in-development product can be commercialized, estimated selling price and sales volume of the in-development product and the amount and timing of other cash outflows required to complete the development, commercialization and sales of the product. The forecasted cash flows were based on the Company's most recent strategic plan and for periods beyond the strategic plan, the Company's estimates were based on assumed growth rates expected as of the measurement date. The Company believes its assumptions were consistent with the strategic plans and business goals. |
Property and Equipment | Property and equipment are stated on the basis of historical cost less accumulated depreciation and impairment. Expenditures which materially increase value or extend useful lives of assets are capitalized, while maintenance and repairs which do not improve or extend the lives of the respective assets are charged to operations when incurred. Gains and losses on the retirement or disposal of individual assets are included in the results of operations. Depreciation is provided using the straight-line method over estimated useful lives of assets including 3 to 6 years for machinery and equipment and 2 to 5 years for furniture and fixture. |
Fair Value Option | ASC 825-10, Financial Instruments The Company elected to account for the senior secured convertible notes issued to Lind Global Fund II LP (the “Lind Note”) using FVO, which allows for valuing the Lind Note at fair value in its entirety versus bifurcation of the embedded derivatives (see Note 6). The fair value of the Lind Note is determined using a binomial lattice valuation model, which is widely used for valuing convertible notes. The significant assumption used in the model is volatility of the Company's common stock. If different assumptions are used, the fair value of the convertible notes and the change in estimated fair value could be materially different. A significant increase in the volatility of the market price of the Company’s common stock, in isolation, would result in a significantly higher fair value; and a significant decrease in volatility would result in a significantly lower fair value. |
Foreign Currency Translation | Assets and liabilities of a foreign entity whose functional currency is the local currency are translated to U.S. dollar at the exchange rate in effect at each balance sheet date. Before translation, the Company re-measures foreign currency denominated assets and liabilities into the functional currency of the respective entity, resulting in unrealized gains or losses recorded in the Statements of Operations. Revenues and expenses are translated using average exchange rates during the respective period. Foreign currency translation adjustments are accumulated as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. |
Revenue Recognition | The Company accounts for revenue pursuant to ASC 606, Revenue from Contracts with Customer The Company considers revenue to be earned when all of the following criteria are met: the Company has a contract with a customer that creates enforceable rights and obligations; promised products or services are identified; the transaction price, or the amount the Company expects to receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that would result in a significant reversal upon resolution of the uncertainty, is determinable; and the Company has transferred control of the promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods and services expected to be transferred. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control of the distinct good or service is transferred. Transfer of control for the Company's products is generally at shipment or delivery, depending on contractual terms. As such, the Company has one performance obligation related to product sales which is satisfied at a point in time. The Company recognizes a receivable when it has an unconditional right to payment. Payment terms are typically 30 to 60 days based on the contractual term. |
Shipping and Handling Costs | Shipping and handling costs represent those costs incurred in operating and staffing fulfillment, including costs attributable to receiving, inspecting, picking, packaging, and preparing customer orders for shipment, and outbound freight costs associated with shipping orders to customers. Shipping generally occurs prior to the transfer of control to the customer and is therefore accounted for as a fulfillment expense. Shipping and handling fees billed to the customers are recorded as revenue. |
Research and Development | Costs incurred for the research and development (the “R&D”) of the Company’s products are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Nonrefundable advance payments for goods or services to be received in the future by the Company for use in R&D activities are deferred. The deferred costs are expensed as the related goods are delivered or the services are performed. |
Advertising Costs | Costs associated with the Company’s advertising is expensed as incurred and are included in selling, general and administrative expenses in the Statements of Operations. During the years ended December 31, 2023 and 2022, the Company expensed $59,123 and nil, respectively, for advertising costs, which is comprised primarily of producing costs, print and internet advertising fees. |
General and Administrative | General and administrative expenses mainly include compensation costs, share-based compensation expense and professional service fees. For the years ended December 31, 2023 and 2022, the compensation costs and professional service fees were $1,950,612 and $1,594,637, respectively. As of December 31, 2023 and 2022, the accrued compensation cost and professional service fees were $1,077,941 and $889,987, respectively, which were presented in the Accrued expenses and other current liabilities on the Balance Sheets. |
Share-Based Compensation | Share-based compensation expense is recorded in accordance with ASC 718, Compensation – Stock Compensation |
Fair Value of Financial Instruments | The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company measures financial instruments at fair value at each reporting period using a fair value hierarchy that requires to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs that are supported by little or no market activity. The carrying value of cash and cash equivalents, accounts receivable, accounts payable, convertible notes payable, current, and other notes payable, current, approximate their fair value because of their short-term nature. The carrying value of long-term debt related to noncurrent convertible notes payable, other notes payable and accrued interest expense approximates its fair value after calculating present value at observable market interest rate. In addition, the Company elected FVO to measure the senior secured convertible notes using Level 3 inputs on issuance and at each reporting date. Significant unobservable inputs used in the binominal lattice valuation model is the expected volatility of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The following table sets forth a reconciliation of senior secured convertible notes measured as Level 3 financial instrument: (nil as of December 31, 2022). December 31, 2023 Beginning of year $ - Issue 3,000,000 Conversion into common stock (254,237 ) Change in fair value – gain (94,207 ) End of year $ 2,651,556 |
Income Taxes | The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes a tax benefit from uncertain tax positions only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authorities’ administrative practices and precedents. The tax benefits recognized from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being recognized upon settlement. The Company did not recognize any tax benefits from uncertain tax positions during the years ended December 31, 2023 and 2022. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense. |
Net Loss Per Common Share | Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since the effect of potentially dilutive securities is anti-dilutive given the net loss of the Company. |
Recent Accounting Pronouncements Adopted | On January 1, 2023, the Company adopted Accounting Standards Update (the “ASU”) 2016-13 (the “ASU 2016-13”), Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments On January 1, 2023, the Company early adopted ASU 2020-06 (the “ASU 2020-06”), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Accounting Standards Issued but Not Yet Adopted | No other new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company’s financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Fair Value of Financial Instruments | December 31, 2023 Beginning of year $ - Issue 3,000,000 Conversion into common stock (254,237 ) Change in fair value – gain (94,207 ) End of year $ 2,651,556 |
Inventory, net (Tables)
Inventory, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory, net | |
Schedule Of Inventory | December 31, 2023 2022 Raw materials $ 92,708 $ 393,253 Work in process 1,208 111,119 Finished goods 73,677 90,850 Total $ 167,593 $ 595,222 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets, net | |
Schedule of Intangible assets net | December 31, 2023 2022 Patents acquired $ 39,143,975 $ 39,143,975 Others 227,009 227,511 Total cost 39,370,984 39,371,486 Less: accumulated amortization (11,087,776 ) (6,564,748 ) Intangible assets, net $ 28,283,208 $ 32,806,738 |
Schedule of Estimated future amortization expense | 2024 $ 4,534,864 2025 4,522,512 2026 4,522,345 2027 4,521,505 2028 4,533,858 Thereafter 5,648,124 Total expense $ 28,283,208 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and Equipment, net | |
Schedule of Property and equipment net | December 31, 2023 2022 Machinery and equipment $ 1,137,352 $ 1,063,765 Furniture and fixture 669,502 620,064 Total cost 1,806,854 1,683,829 Less: accumulated depreciation and impairment (930,282 ) (308,153 ) Property and equipment, net $ 876,572 $ 1,375,676 |
Debts (Tables)
Debts (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debts | |
Schedule of Convertible Notes Payable and Other Notes Payable | December 31, 2023 2022 Convertible notes payable, related party – current (Chen Note) $ - $ 376,526 Other notes payable, related party – current 42,000 884,000 Other notes payable, related party – noncurrent (KY Note) 270,000 - March 2025 Convertible Notes, related party – noncurrent (ASE Note) 2,000,000 - March 2025 Convertible Notes – noncurrent (Lee Note) 1,000,000 - Senior secured convertible notes payable (Lind Note) – at fair value 2,651,556 - $ 5,963,556 $ 1,260,526 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders Equity | |
Summary of Warrants | December 31, (In number of shares of common stock to purchase when warrants exercised) 2023 2022 Lind Warrant with exercise price of $4.50 691,244 - Public Warrants with exercise price of $21.25 179,400 179,400 Representative’s Warrants with exercise price of $23.375 7,800 7,800 Placement agent warrant with exercise price of $8.25 16,000 - Total 894,444 187,200 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Compensation | |
Schedule of Restricted Stock Units | For the Year Ended December 31, 2023 2022 Number of Shares Weighted-Average Grant Date Fair Value Per Share Number of Shares Weighted-Average Grant Date Fair Value Per Share Unvested balance at January 1 160,000 $ 12.08 - $ - RSUs granted 870,200 $ 3.46 266,666 $ 29.45 RSUs vested (44,680 ) $ 13.11 (106,666 ) $ 55.5 RSUs forfeited (31,214 ) $ 5.28 - $ - Unvested balance at December 31 954,306 $ 4.39 160,000 $ 12.08 |
Summary of option activity | Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 7,332 $ 28.50 9.3 - Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at December 31, 2022 7,332 28.50 8.3 - Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at December 31, 2023 7,332 $ 28.50 7.3 $ - Vested or expected to vest at December 31, 2023 7,332 $ 28.50 7.3 $ - Exercisable at December 31, 2023 5,110 $ 28.50 7.2 $ - |
Schedule of share-based compensation expense | For the Year Ended December 31, 2023 2022 Selling, general and administrative expenses $ 875,509 $ 6,394,198 Research and development expenses 220,723 24,232 Cost of revenues 18,535 3,449 Total $ 1,114,767 $ 6,421,879 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of income tax expense benefit | For the Year Ended December 31, 2023 2022 Current federal taxes $ - $ - Current state taxes 800 - Current tax provision 800 - Deferred tax provision 1,573,000 2,837,000 Change in valuation allowance (1,573,000 ) (2,837,000 ) Total income tax expense provision $ 800 $ - |
Schedule of reconciliation of the statutory tax rate to the effective tax rate | For the Year Ended December 31, 2023 2022 Statutory federal income tax rate 21 % 21 % Permanent differences 0 % 0 % Deferred adjustment (5 %) 0 % State income tax expense 0 % 0 % Change in valuation allowance (16 %) (21 %) Effective income tax rate 0 % 0 % |
Schedule of Deferred tax assets and liabilities | December 31, 2023 2022 Deferred tax assets (liabilities) Net operating loss carry forwards $ 7,394,000 $ 6,480,000 Amortization 1,025,000 627,000 Depreciation 28,000 - Capitalized research and development 290,000 187,000 Share-based compensation 232,000 109,000 Other temporary differences 46,000 60,000 Total deferred tax assets 9,015,000 7,463,000 Depreciation - (21,000 ) Total deferred tax liabilities - (21,000 ) Valuation allowance (9,015,000 ) (7,442,000 ) Net deferred tax assets $ - $ - |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Net Loss per Common Share | |
Schedule of basic and diluted net loss per share | For the Year Ended December 31, 2023 Net loss attributable to common stockholders, basic and diluted $ (13,770,549 ) $ (14,006,690 ) Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 4,098,109 2,727,458 Net loss per share attributable to common stockholders, basic and diluted $ (3.36 ) $ (5.14 ) |
Schedule of computations of diluted weighted average shares outstanding | For the Year Ended December 31, 2023 2022 Option and RSUs to purchase common stock 961,638 167,332 Warrants to purchase common stock 900,478 193,234 Convertible notes to purchase common stock 2,197,573 27,904 Total potential shares 4,059,689 388,470 |
Description of Business (Detail
Description of Business (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | |
Dec. 14, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Description of Business | |||
Cash and cash equivalents | $ 1,885,628 | ||
Exercise price of share | $ 1 | ||
Stock split description | 1-for-5 | 1-for-15 | |
Net loss | $ (13,770,549) | $ (14,006,690) | |
Accumulated deficit | $ (37,886,155) | $ (24,115,606) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Summary of Significant Accounting Policies | |
Fair value of financial instruments, beginning | $ 0 |
Issue | 3,000,000 |
Conversion into common stock | (254,237) |
Change in fair value - gain | (94,207) |
Fair value of financial instruments, end of year | $ 2,651,556 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Compensation costs and professional service fees | $ 1,950,612 | $ 1,594,637 |
Accrued compensation cost and professional service fees | 1,077,941 | 889,987 |
Advertising Costs | $ 59,123 | $ 0 |
Machinery and Equipment [Member] | Maximum [Member] | ||
Estimated useful lives of assets | 3 years | |
Machinery and Equipment [Member] | Miniimum [Member] | ||
Estimated useful lives of assets | 6 years | |
Furniture and Fixture [Member] | Maximum [Member] | ||
Estimated useful lives of assets | 2 years | |
Furniture and Fixture [Member] | Miniimum [Member] | ||
Estimated useful lives of assets | 5 years |
Inventory, net (Details)
Inventory, net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory, net | ||
Raw materials | $ 92,708 | $ 393,253 |
Work in process | 1,208 | 111,119 |
Finished goods | 73,677 | 90,850 |
Total | $ 167,593 | $ 595,222 |
Inventory, net (Details Narrati
Inventory, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Total | $ 167,593 | $ 595,222 |
Estimated net realizable values | 235,047 | 235,047 |
Research and development material | 220,723 | 24,232 |
Inventory [Member] | ||
Research and development material | 255,000 | |
Veldona Pet cytoprotein [Member] | ||
Total | $ 167,593 | $ 0 |
Intangible assets, net (Details
Intangible assets, net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Intangible assets, net | ||
Patents acquired | $ 39,143,975 | $ 39,143,975 |
Others | 227,009 | 227,511 |
Total cost | 39,370,984 | 39,371,486 |
Less: accumulated amortization | (11,087,776) | (6,564,748) |
Intangible assets, net | $ 28,283,208 | $ 32,806,738 |
Intangible assets, net (Detai_2
Intangible assets, net (Details 1) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Intangible assets, net | ||
2024 | $ 4,534,864 | |
2025 | 4,522,512 | |
2026 | 4,522,345 | |
2027 | 4,521,505 | |
2028 | 4,533,858 | |
Thereafter | 5,648,124 | |
Total expense | $ 28,283,208 | $ 32,806,738 |
Intangible assets, net (Detai_3
Intangible assets, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible assets, net | ||
Amortization expense | $ 4,523,516 | $ 4,522,002 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, equipment, gross | $ 1,806,854 | $ 1,683,829 |
Less: accumulated depreciation | (930,282) | (308,153) |
Property, equipment, net | 876,572 | 1,375,676 |
Machinery and Equipment [Member] | ||
Property, equipment, gross | 1,137,352 | 1,063,765 |
Furniture and Equipment [Member] | ||
Property, equipment, gross | $ 669,502 | $ 620,064 |
Property and Equipment, net (_2
Property and Equipment, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property and Equipment, net | ||
Depreciation expense | $ 328,938 | $ 291,706 |
Impairment loss to the equipment | $ 286,777 | $ 0 |
Debts (Details)
Debts (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Convertible notes payable, related party - current | $ 0 | $ 376,526 |
Other notes payable, related party - current | 42,000 | 884,000 |
Other notes payable, related party - noncurrent | 270,000 | 0 |
Senior secured convertible notes payable | 2,651,556 | 0 |
Convertible Notes Payable and Other Notes Payable | 5,963,556 | 1,260,526 |
March 2025 Convertible Notes One [Member] | ||
Total Convertible and other notes payable | 1,000,000 | 0 |
March 2025 Convertible Notes [Member] | ||
Total Convertible and other notes payable | $ 2,000,000 | $ 0 |
Debts (Details Narrative)
Debts (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 11 Months Ended | 12 Months Ended | |||
Sep. 25, 2023 | Nov. 18, 2021 | Apr. 30, 2022 | Dec. 14, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 30, 2022 | |
Conversion price | $ 0.01 | ||||||
Conversion price description | 1-for-5 | 1-for-15 | |||||
Common stock | 4,677,787 | 4,002,320 | |||||
Interest expense | $ 144,193 | $ 53,528 | |||||
March 2025 Convertible Notes [Member] | |||||||
Total principal amount | $ 3,000,000 | ||||||
Description of Convertible Note Sale to ASE Test, Inc | ASE Test, Inc. (the “ASE”), a shareholder of Ainos KY, committed to pay a total aggregate amount of $2,000,000 to the Company in exchange for convertible promissory note(s) in three tranches in the amounts of $1,000,000 (the “First Tranche”), $500,000 (the “Second Tranche”), and $500,000 (the “Third Tranche”) conditioned, among other things, on the Company achieving certain business milestones | ||||||
Total Convertible and other notes payable | $ 2,000,000 | 0 | |||||
Interest expense | 132,843 | 49,994 | |||||
Interest expense related party | 83,622 | 49,994 | |||||
Unpaid accrued interest | 138,939 | 90,735 | |||||
Unpaid accrued interest related party | 90,743 | 90,735 | |||||
Long term liabilities | 135,829 | $ 0 | |||||
March 2027 Convertible Notes [Member] | |||||||
Convertible note issued | $ 1,400,000 | ||||||
Convertible note ASE cash amount | $ 550,000 | ||||||
Asset Purchase Agreement | |||||||
Acquisition of property plant and equiptment assets | $ 26,000,000 | ||||||
Convertible promissory note issued | $ 26,000,000 | ||||||
Senior Secured Convertible Notes Payable member | |||||||
Total principal amount | $ 2,360,000 | ||||||
Total Convertible and other notes payable | $ 10,000,000 | ||||||
Conversion price | $ 7.50 | ||||||
Aggregate principal amount | $ 3,540,000 | ||||||
Additional funding | 1,000,000 | ||||||
Cash amount | $ 2,000,000 | ||||||
Exercise price | $ 4.50 | ||||||
Common stock | 460,829 | ||||||
Common stock shares of Lind warrant increased | 691,244 | ||||||
Fair value of the Lind Note | $ 2,651,556 | ||||||
Change in fair value of the Lind Note | 94,207 | ||||||
APA Convertible Note [Member] | |||||||
Converted common stock shares | 1,814,627 | ||||||
Convertible note issued aggregate amount | $ 30,442,959 | ||||||
Li-Kuo Lee [Member] | |||||||
Total principal amount | 1,000,000 | ||||||
Total Convertible and other notes payable | $ 1,000,000 | ||||||
Conversion price | $ 7.50 | ||||||
Interest rate | 6% | ||||||
SPA [Member] | |||||||
Principal amount converted | $ 300,000 | ||||||
Remaining principal amount | $ 3,240,000 | ||||||
Convertible note payable | $ 3,000,000 | ||||||
Legal fees | 525,643 | ||||||
Remaining insurance cost | $ 159,250 | ||||||
Common stock | 162,337 | ||||||
Notes payable | $ 7,000,000 | ||||||
i2China [Member] | |||||||
Convertible note payable | $ 42,000 | ||||||
Chen [Member] | |||||||
Conversion price description | price of $12.60 or $14.05 per share | ||||||
Interest rate description | rate of 0.75% or 0.65% | ||||||
Note paid | $ 114,026 | ||||||
Unrelated parties | $ 262,500 | ||||||
Common stock | 18,666 | ||||||
Ainos KY [Member] | |||||||
Note paid | $ 530,000 | ||||||
Interest rate | 1.85% | ||||||
Working capital | $ 800,000 |
Stockholders Equity (Details)
Stockholders Equity (Details) - Warrants [Member] - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Lind Warrant with exercise price of $4.50 | 691,244 | 0 |
Public warrant with exercise price of $21.25 | 179,400 | 179,400 |
Representative's Warrants with exercise price of $23.375 | 7,800 | 7,800 |
Placement agent warrant with exercise price of $8.25 | 16,000 | 0 |
Total | 894,444 | 187,200 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 05, 2023 | Aug. 11, 2022 | Apr. 26, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Preferred stock, shares authorized | 50,000,000 | 10,000,000 | |||
Common stock shares issued | 4,677,787 | 4,002,320 | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Conversion price per shares | $ 0.01 | ||||
Offering cost | $ 1,540,000 | ||||
Issuing cost paid | 1,540,000 | ||||
Aggregate net proceeds from public offerings | $ 1,780,000 | ||||
Conversion of stock | 12,231 | ||||
Lind Note private placement | |||||
Conversion of stock | 162,337 | ||||
Warrants issued | 16,000 | ||||
Exercise price | $ 8.25 | ||||
Contractual term | term of 5 years and can be exercised for the purchase of one share of common stock of the Company | ||||
Fair value of placement agent | $ 19,893 | ||||
Common Shares [Member] | |||||
Common stock shares issued | 600,000 | ||||
Common stock, shares authorized | 300,000,000 | ||||
Common stock, par value | $ 0.01 | ||||
Reserved shares for conversion of convertible notes | 3,657,087 | ||||
Convertible notes shares | 1,794,971 | ||||
Warrants shares issued | 894,444 | ||||
Share-based compensation awards shares | 967,672 | ||||
Common stock shares issued upon conversion of Chen Note | 18,666 | ||||
Converted common stock, shares | 1,814,627 | ||||
Fair value of special stock bonus | $ 1,947,000 | ||||
Common stock shares issued in exchange of vehicle | 12,231 | ||||
Principal amount outstanding | $ 30,400,000 | ||||
Accrued interest | $ 42,959 | ||||
Description of public offering | The Public Warrants may be exercised from February 5, 2023 (181 days from the effective date of the Company’s S-1 Registration Statement made effective August 8, 2022, hereafter “Registration Date”) to August 8, 2027 (5 years from the Registration Date). The fair value of the Public Warrants was around $3.28 million and was determined using the Black-Scholes option pricing model with the assumptions: $18.30 of stock price, $21.25 of stike price, 5-year expected term, 277% of expected volatility, 0% of expected dividend rate and 2.97% of risk-free interest rate | underwriters warrants to purchase up to a total of 7,800 shares of common stock (the “Representative’s Warrants”) pursuant to an underwriting agreement. The Representative’s Warrants are exercisable at $23.375 per share, are initially exercisable 180 days after the effective date of the Offering and have a term of five years from their initial exercise date. The fair value of the Representative’s Warrants was around $107 thousands which was recorded in the additional paid-in capital and was determined using the Black-Scholes option pricing model with the assumptions: $13.75 of stock price, $23.375 of strike price, 5-year expected term, 304% of expected volatility, 0% of expected dividend rate and 2.91% of risk-free interest rate | public offering (the “Offering”) of an aggregated 780,000 units at a price of $4.25 per unit on August 9, 2022. Each unit issued in the Offering consisted of 0.2 share of common stock and one unit of warrant to purchase 0.2 share of common stock of the Company at a price of $21.25 per share (the “Public Warrants”) | underwriters a 45-day over-allotments option to purchase up to an additional 23,400 shares of common stock and/or up to an additional 117,000 units of Public Warrants at the public offering price. The underwriters exercised its option to purchase an additional 117,000 units of Public Warrants at $0.01 per unit for a total cash proceeds of $1,170. The Company received aggregate net proceeds of approximately $1.78 million after deducting direct offering cost of approximately $1.54 million including underwriting commissions and legal fees | |
Warrants remaining contractual life | 4 years 6 months |
Revenue (Details Narrative)
Revenue (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Revenue | |
Cash received in advance | $ 112,555 |
ShareBased Compensation (Detail
ShareBased Compensation (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Options Outstanding, Beginning | 160,000 | 0 |
RSUs granted | 870,200 | 266,666 |
RSUs vested | (44,680) | (106,666) |
RSUs forfeited | (31,214) | 0 |
Options outstanding, Ending | 954,306 | 160,000 |
Weighted-Average Grant Date Fair Value Per RSU, beginning balance | $ 12.08 | $ 0 |
Weighted-Average Grant Date Fair Value Per RSUs granted | 3.46 | 29.45 |
Weighted-Average Grant Date Fair Value Per RSUs vested | 13.11 | 55.5 |
Weighted-Average Grant Date Fair Value Per RSUs forfeited | 5.28 | 0 |
Weighted-Average Grant Date Fair Value Per RSU, ending balance | $ 4.39 | $ 12.08 |
ShareBased Compensation (Deta_2
ShareBased Compensation (Details 1) - Stock Options and Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted average remaining contractual term vested or expected to vest | 7 years 3 months 18 days | |
Weighted average remaining contractual term Exercisable | 7 years 2 months 12 days | |
Weighted average remaining contractual term outstanding | 8 years 3 months 18 days | 9 years 3 months 18 days |
Weighted average remaining contractual term ending | 7 years 3 months 18 days | 8 years 3 months 18 days |
Options Outstanding, Beginning | 7,332 | |
Options granted | 0 | 0 |
Options exercised | 0 | |
Options expired or forfeited | 0 | 0 |
Options outstanding, Ending | 7,332 | 7,332 |
Options vested or expected to vest | 7,332 | |
Number of options, exercisable | 5,110 | |
Weighted average exercise price outstanding, beginning | $ 28.50 | |
Weighted average exercise price granted | 0 | $ 0 |
Weighted average exercise price exercised | 0 | 0 |
Weighted average exercise price expired or forfeited | 0 | 0 |
Weighted average exercise price outstanding, ending | 28.50 | $ 28.50 |
Weighted average exercise price Vested or expected to vest | 28.50 | |
Weighted average exercise price exercisable | $ 28.50 |
ShareBased Compensation (Deta_3
ShareBased Compensation (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation | ||
Selling, general and administrative expenses | $ 875,509 | $ 6,394,198 |
Research and development expenses | 220,723 | 24,232 |
Cost of revenues | 18,535 | 3,449 |
Total | $ 1,114,767 | $ 6,421,879 |
ShareBased Compensation (Deta_4
ShareBased Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair value of shares vested | $ 745,706 | $ 6,080,095 |
Unrecognized Option Expense | $ 3,373,298 | |
Unrecognized Option Expense Period Of Recognition | 2 years 3 months 18 days | |
Share-based compensation expense | $ 1,114,767 | $ 6,421,879 |
Common stock shares issued | 4,677,787 | 4,002,320 |
Warrants [Member] | ||
Exercise price | $ 19.88 | |
Remaining contactual term | 1 year 10 months 24 days | |
Contactual term | 5 years | |
Warrants granted | 6,034 | |
Stock option [Member] | ||
Contactual term | 10 years | |
Restricted Stock Units [Member] | ||
Vested period | 3 years | |
2023 Stock Incentive Plan | ||
Number Of Shares Of Common Stock Granted | 870,200 | |
2021 Stock Incentive Plan | ||
Number Of Shares Of Common Stock Granted | 266,666 | |
2021 Employee Stock Purchase Plan | ||
Common stock shares issued | 10,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Current federal taxes | $ 0 | $ 0 |
Current state taxes | 800 | 0 |
Current tax provision | 800 | 0 |
Deferred tax provision | 1,573,000 | 2,837,000 |
Change in valuation allowance | (1,573,000) | (2,837,000) |
Total income tax expense provision | $ 800 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Statutory Federal Income Tax Rate | 21% | 21% |
Permanent differences | 0% | 0% |
Deferred adjustment | (4.00%) | 0% |
State income tax expense | 0% | 0% |
Change in valuation allowance | (16.00%) | (21.00%) |
Effective income tax rate | 0% | 0% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Taxes | ||
Net operating loss carry forwards | $ 7,394,000 | $ 6,480,000 |
Amortization | 1,025,000 | 627,000 |
Depreciation | 28,000 | 0 |
Capitalized research and development | 290,000 | 187,000 |
Share-based compensation | 232,000 | 109,000 |
Other temporary differences | 46,000 | 60,000 |
Total deferred tax assets | 9,015,000 | 7,463,000 |
Total deferred tax liabilities | 0 | (21,000) |
Depreciation | 0 | (21,000) |
Valuation allowance | (9,015,000) | (7,442,000) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Income Taxes | |
Description of fedral net operating loss carry forwards | The federal net operating loss carryforwards generated through December 31, 2017 of $12,886,000 will expire in 2024 through 2037, while $22,325,000 of federal net operating loss carryforwards generated in post December 31, 2017 or later do not expire due to the provisions in the Tax Cuts and Jobs Act, but may only offset 80% of taxable income in periods of future utilization |
Net operating loss carry forwards | $ 35,211,000 |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Net Loss per Common Share | ||
Net loss attributable to common stockholders, basic and diluted | $ (13,770,549) | $ (14,006,690) |
Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted | 4,098,109 | 2,727,458 |
Net loss per share attributable to common stockholders, basic and diluted | $ (3.36) | $ (5.14) |
Net Loss per Common Share (De_2
Net Loss per Common Share (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Net Loss per Common Share | ||
Option and RSUs to purchase common stock | 961,638 | 167,332 |
Warrants to purchase common stock | 900,478 | 193,234 |
Convertible note to purchase common stock | 2,197,573 | 27,904 |
Total potential shares | 4,059,689 | 388,470 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 26, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Assets purchase agrement | $ 5,000,000 | ||
R&D expense | 220,723 | $ 24,232 | |
Issuance of common stock | 12,231 | ||
Incurred costs | 38,860 | ||
Market price | $ 48,559 | ||
Totaling | 33,002 | ||
Mr. Chien-Hsuan Huang [Member] | |||
Development expenses | 67,970 | ||
Product Co-development Agreement [Member] | |||
Development expenses | 368,372 | 618,522 | |
Deposits from related party | 31,511 | 31,490 | |
Property assets | 26,511 | ||
Accounts payable to related party | 70,113 | ||
Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY | |||
Totaling | 46,635 | 1,968,291 | |
COVID-19 Antigen Rapid Test Kits Sales | |||
Totaling | 33,388 | 2,855,205 | |
Accounts receivable | 0 | 177,595 | |
Accounts payable to related party | 323 | 24,365 | |
Ms. Chien-Hsuan Huang | |||
R&D expense | $ 51,143 | $ 81,321 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Dec. 31, 2023 USD ($) |
Commitments and Contingencies | |
Penalty | $ 52,855 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||
Jan. 09, 2024 | Jan. 23, 2024 | Apr. 26, 2023 | Feb. 29, 2024 | Dec. 31, 2023 | Jan. 30, 2024 | |
First installment received | $ 777,500 | |||||
Conversion of shares, amount | $ 254,237 | |||||
Conversion of shares, shares | 12,231 | |||||
Lind Note private placement | ||||||
Conversion of shares, shares | 162,337 | |||||
Subsequent Events [Member] | VOC and POCT technologies [Member] | ||||||
Monthly fee for patent | $ 95,000 | |||||
Indirect tax | 5% | |||||
Subsequent Events [Member] | TCNT [Member] | ||||||
Licence fee | $ 285,000 | |||||
Reduction of additional paid in capital | $ 4,650 | |||||
Subsequent Events [Member] | Lind Note private placement | ||||||
Exercise price | $ 8.25 | |||||
Warrants to purchase | 9,332 | |||||
Stock issued | 4,666 | |||||
Lind Financing [Member] | Subsequent Events [Member] | ||||||
Principal amount | $ 1,750,000 | $ 2,925,500 | $ 1,995,000 | |||
First installment payble | 875,000 | |||||
Second installment payble | $ 875,000 | |||||
Exercise price | $ 2.16 | |||||
Warrants to purchase | 1,021,400 | |||||
Stock issued | 510,700 | |||||
Conversion of shares, amount | $ 1,312,000 | |||||
Conversion of shares, shares | 980,229 | |||||
Lind Financing [Member] | Subsequent Events [Member] | Maximum [Member] | ||||||
Original maturity date | Jul. 28, 2025 | |||||
Increase rate | 4% | |||||
Lind Financing [Member] | Subsequent Events [Member] | Miniimum [Member] | ||||||
Original maturity date | Mar. 28, 2025 | |||||
Increase rate | 1% |