Ainos Inc
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
AIMD$0.70+11.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0001493152-24-030251
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001493152-24-043832
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 70 previous paragraphs and 74 current paragraphs.
33 unchanged; 37 reworded; 4 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
We believe AI Nose has additional opportunities in telehealth, automotive, industrial, and environmental safety applications. To address these additional opportunities, we are codeveloping a VOC POCT solution for the elderly care market. We are also codeveloping a VOC sensing solution to address the industrial market, as our first move to expand the application of AI Nose beyond healthcare. Our vision is to leverage digital nose sensors and our proprietary VOC sensing AI algorithm, to digitize smell and ultimately become AI’s nose.
Current report
We continue to strengthen our intellectual properties. During the third quarter of 2024, we have licensed additional patents from Taiwan Carbon Nano Technology Corporation (TCNT), our shareholder and product developer, as an effort to bolster our AI Nose and POCT technologies. For VELDONA, we secured a Taiwan invention patent titled “METHOD AND COMPOSITION OF TREATMENT OR PREVENTION OF CORONAVIRUS INFECTION” and we have filed for global patent protection under the Patent Cooperation Treaty (PCT) for this patent.
Current report
As disclosed in Note 5 (Convertible Notes Payable and Other Notes Payable), to our accompanying condensed financial statements we repaid $1,439,754 in cash to retired senior secured convertible notes from the LIND Note transaction in August 2024.
Current report
As disclosed in Note 5 (Convertible Notes Payable and Other Notes Payable), to our accompanying condensed financial statements we repaid $42,000 to retire the i2China Note transaction in August 2024.
Reworded paragraphs (37)
Previous wording
We have historically involved in the research and development of therapeutics based on VELDONA. Building on our research and development on VELDONA since inception, we are focused on commercializing a suite of VELDONA-based product candidates.
Current wording
We have historically involved in the research and development of therapeutics based on VELDONA. Building on our research and development on VELDONA since inception, we are focused on commercializing a suite of VELDONA-based product candidates. Currently our priority VELDONA pipeline includes drug candidates for treating oral warts for human immunodeficiency virus (HIV) seropositive patients, Sjögren’s syndrome, and feline chronic gingivostomatitis (FCGS), a cat oral infection.
Previous wording
In 2021 and 2022, we acquired certain types of intellectual property from controlling shareholder, Ainos Inc., a Cayman Island corporation (“Ainos KY”), to expand product portfolio into POCTs aimed to provide connected, rapid, and convenient testing for a broad range of health conditions. Pivoting from the sales of COVID-19 POCT, we aim to commercialize POCTs that detect volatile organic compounds (the “VOC”) emitted by the body, powered by our AI Nose technology platform. Our lead VOC POCT candidate, Ainos Flora, aims to test female vaginal health and certain common sexually transmitted infections (the “STIs”) quickly and easily.
Current wording
In 2021 and 2022, we acquired certain types of intellectual property from controlling shareholder, Ainos Inc., a Cayman Island corporation (“Ainos KY”), to expand product portfolio into POCTs aimed to provide connected, rapid, and convenient testing for a broad range of health conditions. Pivoting from the sales of COVID-19 POCT, we aim to commercialize POCTs that detect volatile organic compounds (the “VOC”) emitted by the body, powered by our AI Nose technology platform. Our AI Nose technology platform implements digital nose sensors and our proprietary algorithm to analyze and digitally profile VOCs emitted by the body. Our lead VOC POCT candidate, Ainos Flora, aims to test female vaginal health and certain common sexually transmitted infections (the “STIs”) quickly and easily.
Previous wording
From time to time, we assess our development plan based on available resources and market dynamics. Our current pipeline of the products, which are under development, includes the following:
Current wording
From time to time, we assess our development plan based on available resources and market dynamics. As of September 30, 2024, our current pipeline of the products, which are under development, includes the following:
Previous wording
An integral part of our operating strategy is to create multiple revenue streams through commercializing our product portfolio and leveraging our intellectual property patents. Our near-term development plans encompass advancing our flagship VOC POCT candidate, Ainos Flora, and co-developing a VOC sensing platform with our partners. At the same time, we will advance clinical studies and actively pursue the out-licensing of VELDONA human drug candidates and we are developing opportunities in the animal drug market.
Current wording
An integral part of our operating strategy is to create multiple revenue streams through commercializing our product portfolio and leveraging our intellectual property patents. Our near-term development plans encompass advancing our flagship VOC POCT candidate, Ainos Flora, and our co-development programs. At the same time, we will advance clinical studies and actively pursue the out-licensing of VELDONA human drug candidates.
Previous wording
As of June 30, 2024, we had available cash and cash equivalents of $8,014,098. We anticipate business revenues and further potential financial support from external sources to fund our operations over the next twelve months. We have based this estimate on assumptions that may prove to be incorrect, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and Capital Resources” for additional information. To finance our continuing operations, we will need to raise additional capital, which cannot be assured.
Current wording
As of September 30, 2024, we had available cash and cash equivalents of $5,156,606. We anticipate business revenues and further potential financial support from external sources to fund our operations over the next twelve months. We have based this estimate on assumptions that may prove to be incorrect, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and Capital Resources” for additional information. To finance our continuing operations, we will need to raise additional capital, which cannot be assured.
Previous wording
Our operating revenue previously came from the sale of COVID-19 test kits in Taiwan under emergency use authorization, since the expiration of EUA to TCNT, the company ceased the sale of the Ainos COVID-19 antigen rapid test kits in first quarter of 2024. The company began to generate sales revenue from VELDONA Pet in the third quarter of 2023. In Taiwan, we are primarily selling VELDONA Pet on certain e-commerce platforms.
Current wording
Our operating revenue previously came from the sale of COVID-19 test kits in Taiwan under emergency use authorization, since the expiration of EUA to TCNT, the company ceased the sale of the Ainos COVID-19 antigen rapid test kits in first quarter of 2024. The company began to generate sales revenue from VELDONA Pet in the third quarter of 2023. In Taiwan, we are primarily marketing VELDONA Pet on certain e-commerce platforms.
Previous wording
The Company reported nil and $28,555 in revenue in Q2 2024 and Q2 2023, respectively, from product sales of VELDONA pet cytoprotein supplements and Ainos COVID-19 Antigen Rapid Test Kits in Taiwan respectively. The Company launched its VELDONA pet cytoprotein supplement products in the third quarter of 2023; due to the expiration of EUA, the company ceased the sale of the Ainos COVID-19 antigen rapid test kits in the first quarter of 2024. There are few sales volume in 2024 Q2 but offset by exchange rate fluctuations.
Current wording
The Company reported nil and $24,489 in revenue in Q3 2024 and Q3 2023, respectively, from product sales of VELDONA pet cytoprotein supplements and Ainos COVID-19 Antigen Rapid Test Kits in Taiwan respectively. The Company launched its VELDONA pet cytoprotein supplement products in the third quarter of 2023; due to the expiration of EUA, the company ceased the sale of the Ainos COVID-19 antigen rapid test kits in the first quarter of 2024. Sales volume in 2024 Q3 was offset by the sales returns.
Previous wording
The cost of revenue related to product sales in Q2 2024 was $25,373 compared to $55,817 in Q2 2023. The decrease in cost of revenue was due to the decrease in sales volume.
Current wording
The cost of revenue related to product sales in Q3 2024 was $547 compared to $87,873 in Q3 2023. The decrease in cost of revenue was due to the decrease in sales volume.
Previous wording
The share-based compensation expense and the depreciation expense for manufacturing in Q2 2024 and Q2 2023 were $4,516 and $24,366, respectively. When excluding these non-cash cost, cost of revenue decreased to $20,857 in Q2 2024 compared to $31,451 in Q2 2023.
Current wording
The share-based compensation expense and the depreciation expense for manufacturing in Q3 2024 and Q3 2023 were nil and $21,715, respectively. When excluding these non-cash cost, cost of revenue was $547 in Q3 2024 compared to $66,158 in Q3 2023.
Previous wording
Gross loss from product sales in Q2 2024 was $25,373 as compared to $27,262 gross loss from product sales in Q2 2023. The decrease in gross loss was due to low sales volume for newly launched products, and a reduced cost of revenue.
Current wording
Gross loss from product sales in Q3 2024 was $547 as compared to $63,384 gross loss from product sales in Q3 2023. The decrease in gross loss was due to low sales volume for newly launched products, and a reduced cost of revenue.
Previous wording
When excluding these non-cash costs, gross loss decreased to $22,366 in H1 2024 compared to $30,592 gross loss in H1 2023.
Current wording
When excluding these non-cash costs, gross loss decreased to $547 in Q3 2024 compared to $41,669 gross loss in Q3 2023.
Previous wording
R&D expenses in Q2 2024 and Q2 2023 were $1,978,756 and $1,671,187, respectively. The increase of $307,569 (18%) was due to increased expenses associated with co-research for technology and product, as well as staffing expenditures (including share-based compensation), which were offset by a decrease in professional expense. We expect that our R&D expenses related to clinical trials will continue to grow as we further develop VOC POCT and VELDONA drug candidates and increase the pace of clinical trials previously delayed during the COVID-19 pandemic.
Current wording
R&D expenses in Q3 2024 and Q3 2023 were $2,022,244 and $1,710,265, respectively. The increase of $311,979 (18%) was due to increased expenses associated with co-research for technology and product, as well as staffing expenditures (including share-based compensation), which were offset by a decrease in professional expense. We expect that our R&D expenses related to clinical trials will continue to grow as we further develop VOC POCT and VELDONA drug candidates and increase the pace of clinical trials previously delayed during the COVID-19 pandemic.
Previous wording
The share-based compensation expense and the depreciation and amortization expense in Q2 2024 and Q2 2023 were $1,276,777 and $1,210,429, respectively. Excluding these non-cash expenses, R&D expenses increased to $701,979 in Q2 2024 from $460,758 in Q2 2023.
Current wording
The share-based compensation expense and the depreciation and amortization expense in Q3 2024 and Q3 2023 were $1,305,461 and $1,263,665, respectively. Excluding these non-cash expenses, R&D expenses increased to $716,783 in Q3 2024 from $446,600 in Q3 2023.
Previous wording
SG&A expenses were $1,044,880 and $618,149 in Q2 2024 and Q2 2023, respectively, reflecting an increase of $426,731 (69%) due to a significant increase in staffing expenditures (including share-based compensation) and professional expenses and Nasdaq and SEC filing fees. RSUs granted to officers and employees of the Company require a service period of 3 years and therefore, the total amount of the compensation expense was amortized over the service period.
Current wording
SG&A expenses were $1,015,758 and $902,017 in Q3 2024 and Q3 2023, respectively, reflecting an increase of $113,741 (13%) due to a significant increase in staffing expenditures (including share-based compensation) and professional expenses and Nasdaq and SEC filing fees, which were offset by a decrease in public relations and investor relations fees and D&O insurance expenses. RSUs granted to officers and employees of the Company require a service period of 3 years and therefore, the total amount of the compensation expense was amortized over the service period.
Previous wording
The share-based compensation expense and the depreciation and amortization expense in Q2 2024 and Q2 2023 were $338,669 and $121,025, respectively. Excluding these non-cash expenses, SG&A expenses increased to $706,211 in Q2 2024 compared to $497,124 in Q2 2023.
Current wording
The share-based compensation expense and the depreciation and amortization expense in Q3 2024 and Q3 2023 were $377,020 and $269,934, respectively. Excluding these non-cash expenses, SG&A expenses mildly increased to $638,738 in Q3 2024 compared to $632,083 in Q3 2023.
Previous wording
The Company’s operating loss was $3,049,009 and $2,316,598 in Q2 2024 and Q2 2023, respectively, reflecting a $732,411 (32%) increase in operating loss between the reporting periods. We incurred a gross loss in product sales. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Current wording
The Company’s operating loss was $3,038,549 and $2,675,666 in Q3 2024 and Q3 2023, respectively, reflecting a $362,883 (14%) increase in operating loss between the reporting periods. We incurred a gross loss in product sales. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Previous wording
In Q2 2024, interest expense was $118,759 compared to $40,311 in Q2 2023. The increase in interest expense was due toaccrued interest for convertible notes issued in May 2024.
Current wording
In Q3 2024, interest expense was $264,642 compared to $44,267 in Q3 2023. The increase in interest expense was due toaccrued interest for convertible notes issued in May 2024.
Previous wording
Net loss was $3,195,022 in Q2 2024 compared to $2,349,727 in Q2 2023, resulting in a $845,295 (36%) increase in net loss attributable to our shareholders of common stock. The net loss was due to an expanding operating expense. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Current wording
Net loss was $3,699,317 in Q3 2024 compared to $2,975,846 in Q3 2023, resulting in a $723,471 (24%) increase in net loss attributable to our shareholders of common stock. The net loss was due to an expanding operating expense. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Previous wording
Results of Operations for Six Months Ended June 30, 2024 (“H1 2024”) and June 30, 2023 (“H1 2023”):
Current wording
Results of Operations for Nine Months Ended September 30, 2024 (“first nine months 2024”) and September 30, 2023 (“first nine months 2023”):
Previous wording
The Company reported $20,729 and $77,719 in revenue in H1 2024 and H1 2023, respectively, from product sales of VELDONA pet cytoprotein supplements and Ainos COVID-19 Antigen Rapid Test Kits in Taiwan respectively. The Company launched its VELDONA pet cytoprotein supplement products in the third quarter of 2023; due to the expiration of EUA, the company ceased the sale of the Ainos COVID-19 antigen rapid test kits in the first quarter of 2024.
Current wording
The Company reported $20,729 and $102,208 in revenue in first nine months 2024 and first nine months 2023, respectively, from product sales of VELDONA pet cytoprotein supplements and Ainos COVID-19 Antigen Rapid Test Kits in Taiwan respectively. The Company launched its VELDONA pet cytoprotein supplement products in the third quarter of 2023; due to the expiration of EUA, the company ceased the sale of the Ainos COVID-19 antigen rapid test kits in the first quarter of 2024.
Previous wording
The cost of revenue related to product sales in H1 2024 was $52,127 compared to $156,665 in H1 2023. The decrease in cost of revenue was due to the decrease in sales volume.
Current wording
The cost of revenue related to product sales in first nine months 2024 was $52,674 compared to $244,538 in first nine months 2023. The decrease in cost of revenue was due to the decrease in sales volume.
Previous wording
The share-based compensation expense and the depreciation expense for manufacturing in H1 2024 and H1 2023 were $9,032 and $48,354, respectively. When excluding these non-cash cost, cost of revenue decreased to $43,095 in H1 2024 compared to $108,311 in H1 2023.
Current wording
The share-based compensation expense and the depreciation expense for manufacturing in first nine months 2024 and first nine months 2023 were $9,032 and $70,069, respectively. When excluding these non-cash cost, cost of revenue decreased to $43,642 in first nine months 2024 compared to $174,469 in first nine months 2023.
Previous wording
Gross loss from product sales in H1 2024 was $31,398 as compared to $78,946 gross loss from product sales in H1 2023. The decrease in gross loss was due to low sales volume for newly launched products, and a lower cost of revenue.
Current wording
Gross loss from product sales in first nine months 2024 was $31,945 as compared to $142,330 gross loss from product sales in first nine months 2023. The decrease in gross loss was due to low sales volume for newly launched products, and a lower cost of revenue.
Previous wording
When excluding these non-cash costs, gross loss increased to $20,857 in Q2 2024 compared to $2,896 gross loss in Q2 2023.
Current wording
When excluding these non-cash costs, gross loss decreased to $22,913 in first nine months 2024 compared to $72,261 gross loss in first nine months 2023.
Previous wording
R&D expenses in H1 2024 and H1 2023 were $4,063,404 and $3,370,070, respectively. The increase of $693,334 (21%) was due to increased expenses associated with co-research for technology and product and staffing expenditures (including share-based compensation), which were offset by a decrease in professional expense. We expect that our R&D expenses related to clinical trials will continue to grow as we further develop VOC POCT and VELDONA drug candidates and increase the pace of clinical trials previously delayed during the COVID-19 pandemic.
Current wording
R&D expenses in first nine months 2024 and first nine months 2023 were $6,085,648 and $5,080,335, respectively. The increase of $1,005,313 (20%) was due to increased expenses associated with co-research for technology and product and staffing expenditures (including share-based compensation), which were offset by a decrease in professional expense. We expect that our R&D expenses related to clinical trials will continue to grow as we further develop VOC POCT and VELDONA drug candidates and increase the pace of clinical trials previously delayed during the COVID-19 pandemic.
Previous wording
The share-based compensation expense and the depreciation and amortization expense in H1 2024 and H1 2023 were $2,561,120 and $2,405,414, respectively. When excluding these non-cash expenses, R&D expenses increased to $1,502,284 in H1 2024 from $964,656 in H1 2023.
Current wording
The share-based compensation expense and the depreciation and amortization expense in first nine months 2024 and first nine months 2023 were $3,866,581 and $3,669,081, respectively. When excluding these non-cash expenses, R&D expenses increased to $2,219,067 in first nine months 2024 from $1,411,254 in first nine months 2023.
Previous wording
SG&A expenses were $2,074,298 and $1,380,614 in H1 2024 and H1 2023, respectively, reflecting an increase of $693,684 (50%) due to a significant increase in staffing expenditures (including share-based compensation) and professional expenses. RSUs granted to officers and employees of the Company require a service period of 3 years and therefore, the total amount of the compensation expense was amortized over the service period.
Current wording
SG&A expenses were $3,090,056 and $2,282,631 in first nine months 2024 and first nine months 2023, respectively, reflecting an increase of $807,425 (35%) due to a significant increase in staffing expenditures (including share-based compensation) and professional expenses, which were offset by a decrease in public relations and investor relations fees and D&O insurance expenses. RSUs granted to officers and employees of the Company require a service period of 3 years and therefore, the total amount of the compensation expense was amortized over the service period.
Previous wording
The share-based compensation expense and the depreciation and amortization expense in H1 2024 and H1 2023 were $676,622 and $327,495, respectively. When excluding these non-cash expenses, SG&A expenses increased to $1,397,676 in H1 2024 compared to $1,053,119 in H1 2023.
Current wording
The share-based compensation expense and the depreciation and amortization expense in first nine months 2024 and first nine months 2023 were $1,053,642 and $597,429, respectively. When excluding these non-cash expenses, SG&A expenses increased to $2,036,414 in first nine months 2024 compared to $1,685,202 in first nine months 2023.
Previous wording
The Company’s operating loss was $6,169,100 and $4,829,630 in H1 2024 and H1 2023, respectively, reflecting a $1,339,470 (28%) increase in operating loss between the reporting periods. We incurred a gross loss in product sales. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Current wording
The Company’s operating loss was $9,207,649 and $7,505,296 in first nine months 2024 and first nine months 2023, respectively, reflecting a $1,702,353 (23%) increase in operating loss between the reporting periods. We incurred a gross loss in product sales. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Previous wording
In H1 2024, interest expense was $167,455 compared to $49,585 in H1 2023. The increase in interest expense was due toaccrued interest for convertible notes issued in May 2024.
Current wording
In first nine months 2024, interest expense was $432,097 compared to $93,852 in first nine months 2023. The increase in interest expense was due toaccrued interest for convertible notes issued in May 2024.
Previous wording
On January 23, 2024, the Company received an Increased Funding Amount and incurred an issuance cost including investor and placement agent fees, as well as legal fees. $138,992 of the issuance cost was expensed for the amendment of funding received and closed by the Company.
Current wording
On January 23, 2024, the Company received an Increased Funding Amount and incurred an issuance cost including investor and placement agent fees, as well as legal fees. $308,336 of the issuance cost was recognized for the amendment of funding received and closed by the Company.
Previous wording
Net loss was $6,509,832 in H1 2024 compared to $4,870,202 in H1 2023, resulting in a $1,639,630 (34%) increase in net loss attributable to our shareholders of common stock. The net loss was due to an expanding operating expense. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Current wording
Net loss was $10,209,149 in first nine months 2024 compared to $7,846,048 in first nine months 2023, resulting in a $2,363,101 (30%) increase in net loss attributable to our shareholders of common stock. The net loss was due to an expanding operating expense. We continued to invest resources to execute our growth strategy and product roadmap to improve our profitability.
Previous wording
As of June 30, 2024 and December 31, 2023, the Company had available cash of $8,014,098 and $1,885,628, respectively.
Current wording
As of September 30, 2024 and December 31, 2023, the Company had available cash of $5,156,606 and $1,885,628, respectively.
Previous wording
The following table summarizes our cash flow during the three months period ended June 30, 2024 and 2023:
Current wording
The following table summarizes our cash flow during the nine months period ended September 30, 2024 and 2023:
Previous wording
Cash used in operating activities decreased by $890,439 during the H1 of 2024 compared to the H1 of 2023. Our net loss for the H1 of 2024 increased by $1,639,630 primarily due to increase of operating expenses. The operating cash outflow as a result of changes in operating assets and liabilities was mainly attributable to:
Current wording
Cash used in operating activities increased by $1,622,282 during the first nine months of 2024 compared to the first, nine months of 2023. Our net loss for the first nine months of 2024 increased by $2,363,101 primarily due to increase of operating expenses. The operating cash outflow as a result of changes in operating assets and liabilities was mainly attributable to:
Previous wording
Cash used for investing activities were $119,792 and $71,262 during the H1 of 2024 and the H1 of 2023, respectively. The increase was due to increase in refundable deposits and other noncurrent assets offset by decrease in purchase of property and equipment.
Current wording
Cash used for investing activities were $138,577 and $117,528 during the first nine months of 2024 and the first nine months of 2023, respectively. The increase was due to increase in refundable deposits and other noncurrent assets offset by decrease in purchase of property and equipment.
Previous wording
Cash provided by financing activities were $9,777,500 and $2,185,974 during the H1 of 2024 and the H1 of 2023, respectively. The $7,591,526 increase was primarily reflected by the following:
Current wording
Cash provided by financing activities were $8,295,746 and $4,023,974 during the first nine months of 2024 and the first nine months of 2023, respectively. The $4,271,772 increase was primarily reflected by the following: