Core Insights - Ainos, Inc. has formed a strategic partnership with NEXCOM International Co., Ltd. to enhance its AI-powered scent digitization technology [1] - The collaboration aims to tap into the approximately $60 billion edge AI market, which is expected to expand global industrial channels [1] - The partnership is set to accelerate the commercialization of Ainos' AI Nose technology, contributing to advancements in intelligent sensing and industrial sustainability [1] Company Overview - Ainos, Inc. is recognized as a leader in AI-powered scent digitization [1] - NEXCOM International Co., Ltd. is a Taiwan-based pioneer in industrial computing and edge AI solutions [1] Market Potential - The partnership targets the edge AI market, valued at around $60 billion, indicating significant growth opportunities [1] - The collaboration is expected to enhance the reach and application of AI Nose technology across various industrial sectors [1]

Core Insights - Ainos, Inc. has transitioned from biotechnology to the technology sector, specifically focusing on AI-powered scent digitization [1] - The company has been reclassified under the Global Industry Classification Standard (GICS) to Technology Hardware, Storage & Peripherals, effective October 1, 2025 [1] - This reclassification positions Ainos as a technology innovator in the emerging field of digital olfaction, enabling artificial intelligence to sense smell [1] Industry Impact - The shift in classification reflects the growing importance of AI and digital technologies in various sectors, including semiconductors, robotics, smart manufacturing, and healthcare [1] - Ainos' advancements in AI scent technology may lead to new applications and partnerships across these industries, enhancing operational efficiencies and product offerings [1]

Core Insights - Ainos, Inc. has announced a strategic distribution partnership with Topco Scientific Co., Ltd., enhancing its AI Nose platform's commercialization prospects [1] - The collaboration is expected to expand Ainos' global reach across key industries, positioning the company for large-scale commercialization in 2026 [1] Company Overview - Ainos, Inc. is recognized as a leader in AI-powered scent detection technology [1] - The partnership with Topco is highlighted as a significant milestone for Ainos [1] Industry Impact - The collaboration with a leading global semiconductor solutions provider indicates a strengthening of Ainos' cross-industry ecosystem [1] - This strategic move is aimed at accelerating the path toward large-scale commercialization of the AI Nose platform [1]

Group 1 - Ainos, Inc. has signed a distribution agreement with Topco Scientific Co., Ltd. to enhance the commercialization of its AI-powered scent digitization technology across various sectors including semiconductors, healthcare, and smart manufacturing [1] - Topco Scientific Co., Ltd. is recognized as one of Taiwan's leading semiconductor solution providers, bringing 35 years of trusted global supply chain relationships and customer access to the partnership [1]

Core Insights - Ainos, Inc. is set to debut its AI Nose industrial module at SEMICON Taiwan 2025, showcasing advancements in scent intelligence for the semiconductor industry [1] Company Overview - Ainos, Inc. is recognized as a leader in AI-powered scent digitization, indicating a strong position in the emerging market of scent technology [1] Product Details - The AI Nose is described as a trainable, portable, and cloud-connected device that utilizes a Software as a Service (SaaS) model to convert scent data into actionable insights for smart manufacturing [1] Event Information - SEMICON Taiwan 2025 will take place from September 10-12 at the Taipei Nangang Exhibition Center, providing a platform for Ainos to present its innovative technology [1]

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) This section provides an overview of Ainos, Inc.'s strategic shift, management's financial and operational highlights, and recent business developments [Company Overview and Strategic Focus](index=1&type=section&id=Company%20Overview%20and%20Strategic%20Focus) Ainos, Inc. (NASDAQ:AIMD) is an AI and biotech company specializing in AI-driven scent digitization (AI Nose) and immune therapeutics (VELDONA®), with the first half of 2025 marking a strategic shift from R&D to commercial execution for its AI Nose platform in Japan - Ainos, Inc. is a leader in **AI-driven scent digitization**, announcing financial results for Q2 2025[2](index=2&type=chunk) - The first half of 2025 marked a strategic inflection point, successfully transitioning from R&D to **revenue-generating deployment in Japan** for the proprietary AI-powered scent digitization platform, AI Nose[3](index=3&type=chunk) - The company is expanding AI Nose into a multi-industry deployment ecosystem through strategic partnerships, paving the way for a **SmellTech-as-a-Service subscription model** designed for scalable, recurring revenue[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlights the successful commercial execution of the AI Nose platform, securing significant orders and expanding pilot programs across various industries, while achieving gross profitability, reducing operating cash outflows, and strengthening its capital structure [CEO's Strategic Vision and AI Nose Momentum](index=1&type=section&id=CEO%27s%20Strategic%20Vision%20and%20AI%20Nose%20Momentum) The CEO outlines the successful commercialization of the AI Nose platform, securing significant orders and expanding pilot deployments, alongside progress in VELDONA® immunotherapy programs - AI Nose platform has entered the **commercial execution phase**, transitioning from R&D to revenue-generating deployment in Japan[3](index=3&type=chunk) - Secured a first three-year subscription order valued at **$2.1 million** for AI Nose deployment in semiconductor manufacturing, following first revenue in the senior care sector during 1Q 2025[3](index=3&type=chunk) - Achieved **90% accuracy** in classifying food and beverage scents[3](index=3&type=chunk) - A focused 90-day action plan is underway to advance the SmellTech platform, including approximately **1,400 pilot deployments** of AI Nose with a semiconductor customer, targeting Phase 1 expansion to around **5,000 units**, and Phase 2 scale-up to as many as **15,000 units**[4](index=4&type=chunk) - VELDONA® immunotherapy programs are advancing with **two human clinical trials** in Taiwan and promising interim results from a veterinary study in feline chronic gingivostomatitis (FCGS)[4](index=4&type=chunk) [CFO's Financial Review and Capital Strategy](index=2&type=section&id=CFO%27s%20Financial%20Review%20and%20Capital%20Strategy) The CFO reports strong first-half revenue growth, improved gross margin, reduced operating cash outflows, and a strengthened capital structure through a reverse stock split - Achieved **strong first-half revenue growth** driven by the AI Nose platform through a co-development project in Japan's senior care sector[4](index=4&type=chunk) - Improved gross margin, turning to **gross profitability** in both Q2 and the first half[4](index=4&type=chunk) - Capital discipline narrowed first-half operating cash outflows by **26% year over year**[4](index=4&type=chunk) - Generated **$719K in net proceeds** from the at-the-market facility[4](index=4&type=chunk) - Completed a **1-for-5 reverse stock split** to regain Nasdaq compliance and strengthen the capital structure to attract institutional investors[4](index=4&type=chunk) [Recent Business Developments](index=2&type=section&id=Recent%20Business%20Developments) Ainos accelerated AI Nose commercialization through a series of strategic partnerships and pilot deployments, securing a $2.1 million order with ASEH, piloting AI Nose-equipped robots at seven sites in Japan, regaining Nasdaq compliance, and expanding partnerships for smart factory integration across Asia, while also improving AI Nose accuracy for eldercare and reporting promising interim VELDONA® FCGS clinical trial results - Secured a three-year subscription-based order valued at **$2.1 million** with ASE Technology Holding Co., Ltd. (ASEH) for the AI Nose platform in semiconductor manufacturing (August 6, 2025)[6](index=6&type=chunk) - ugo, Ainos' first robotics partner, will pilot AI Nose-equipped service robots at **seven sites across Japan** in pharmaceutical, industrial, and energy sectors (July 22, 2025)[7](index=7&type=chunk) - Regained compliance with the **minimum bid price requirement** for continued listing on The Nasdaq Capital Market (July 16, 2025)[8](index=8&type=chunk) - Announced a **five-year distribution partnership** with Solomon to accelerate AI Nose adoption across key manufacturing sectors in Asia (July 7, 2025)[9](index=9&type=chunk) - Expanded strategic relationship with ASEH for a multi-phase roadmap to deploy AI Nose across its global manufacturing, targeting up to **15,000 units** (June 27, 2025)[10](index=10&type=chunk) - Completed a **1-for-5 stock consolidation** to align its capital structure with its 2025 execution roadmap and attract institutional interest (June 26, 2025)[11](index=11&type=chunk) - AI Nose improved its accuracy in detecting excretion-related odors from **80% to approximately 85%** (May 29, 2025)[13](index=13&type=chunk) - Debuted its AI Nose platform at COMPUTEX 2025 in partnership with ugo, demonstrating **real-time robotic olfaction** (May 22, 2025)[14](index=14&type=chunk) - Reported promising interim results from its VELDONA® clinical trial for FCGS, showing **10–44% symptom improvement** and a potential steroid-sparing effect (May 19, 2025)[15](index=15&type=chunk) [Product and Company Information](index=4&type=section&id=Product%20and%20Company%20Information) This section details the AI Nose platform's technology and service model, along with an overview of Ainos, Inc. as a dual-platform AI and biotech company [About AI Nose Platform](index=4&type=section&id=About%20AI%20Nose%20Platform) The AI Nose platform is a full-stack electronic nose (e-nose) that digitizes scent into 'Smell ID' using precision MEMS sensor arrays and proprietary AI algorithms, aiming to detect scents at parts-per-billion sensitivity and convert analog data into actionable insights via a proprietary smell language model, delivered as 'SmellTech-as-a-Service' - AI Nose digitizes scent into **Smell ID**, an AI-driven scent intelligence, combining precision MEMS sensor arrays with proprietary AI algorithms[16](index=16&type=chunk) - Aims to detect scent at **parts-per-billion (ppb) sensitivity** and converts analog scent data into actionable insights via its proprietary smell language model (SLM)[16](index=16&type=chunk) - To be delivered as **SmellTech-as-a-Service**, offering subscription access to ongoing scent intelligence, analytics, and real-time alerts[16](index=16&type=chunk) [About Ainos, Inc.](index=4&type=section&id=About%20Ainos%2C%20Inc.) Ainos, Inc. is a dual-platform company combining AI and biotech, pioneering smelltech with its AI Nose platform and immune therapeutics with VELDONA® - Ainos, Inc. (NASDAQ: AIMD) is a **dual-platform AI and biotech company**[17](index=17&type=chunk) - Pioneers smelltech with its **AI Nose platform** and immune therapeutics with **VELDONA®**[17](index=17&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section provides a detailed overview of the company's condensed balance sheets and statements of operations for the reported periods [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Ainos reported total assets of $23.92 million, a decrease from $28.82 million at December 31, 2024, with total liabilities decreasing to $12.48 million from $13.30 million, and total stockholders' equity also decreasing to $11.44 million from $15.52 million, primarily due to a significant reduction in cash and cash equivalents and a reclassification of convertible notes payable Condensed Balance Sheet Highlights | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | Change | | :-------------------------- | :------------------------ | :---------------- | :----- | | Cash and cash equivalents | $1,223,184 | $3,892,919 | -$2,669,735 | | Total current assets | $1,733,977 | $4,337,808 | -$2,603,831 | | Intangible assets, net | $21,505,821 | $23,748,328 | -$2,242,507 | | Total assets | $23,922,176 | $28,820,199 | -$4,898,023 | | Total current liabilities | $602,782 | $3,954,944 | -$3,352,162 | | Convertible notes payable - noncurrent | $11,000,000 | $9,000,000 | +$2,000,000 | | Total liabilities | $12,479,390 | $13,303,889 | -$824,499 | | Total stockholders' equity | $11,442,786 | $15,516,310 | -$4,073,524 | - Accumulated deficit increased to **$(60,120,328)** as of June 30, 2025, from $(52,749,316) at December 31, 2024[21](index=21&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) For Q2 2025, Ainos reported revenues of $4,663, a significant increase from $0 in Q2 2024, achieving a gross profit of $3,726 (vs. gross loss of $(25,373) in Q2 2024), though net loss widened to $(4,084,990) from $(3,195,022) due to increased SG&A and interest expense; for 1H 2025, revenues grew substantially to $110,870 from $20,729 in 1H 2024, resulting in a gross profit of $91,700 (vs. gross loss of $(31,398) in 1H 2024), but net loss also increased to $(7,371,012) from $(6,509,832) Condensed Statements of Operations Highlights (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------------------- | :---------- | :---------- | :----------- | | Revenues | $4,663 | $0 | N/A | | Cost of revenues | $(937) | $(25,373) | +$24,436 | | Gross profit (loss) | $3,726 | $(25,373) | +$29,099 | | Research and development expenses | $1,911,800 | $1,978,756 | -$66,956 | | Selling, general and administrative expenses | $1,837,613 | $1,044,880 | +$792,733 | | Loss from operations | $(3,745,687) | $(3,049,009) | -$696,678 | | Net loss | $(4,084,990) | $(3,195,022) | -$889,968 | Condensed Statements of Operations Highlights (1H 2025 vs. 1H 2024) | Metric | 1H 2025 | 1H 2024 | Change (YoY) | | :---------------------------------- | :---------- | :---------- | :----------- | | Revenues | $110,870 | $20,729 | +$90,141 | | Cost of revenues | $(19,170) | $(52,127) | +$32,957 | | Gross profit (loss) | $91,700 | $(31,398) | +$123,098 | | Research and development expenses | $3,635,884 | $4,063,404 | -$427,520 | | Selling, general and administrative expenses | $3,364,374 | $2,074,298 | +$1,290,076 | | Loss from operations | $(6,908,558) | $(6,169,100) | -$739,458 | | Net loss | $(7,371,012) | $(6,509,832) | -$861,180 | [Additional Information](index=4&type=section&id=Additional%20Information) This section provides important disclaimers regarding forward-looking statements and contact information for investor relations [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, stating that certain statements in the press release are forward-looking and inherently subject to risks and uncertainties, advising against relying on these statements as predictions of future events and listing factors that could cause actual results to differ materially - All statements other than statements of historical fact are **forward-looking statements**, based on management's current assumptions and expectations[18](index=18&type=chunk) - Actual results and other events may differ materially due to numerous risks and uncertainties, including the expectation of **net losses**, ability to become profitable, ability to raise additional capital, and ability to obtain marketing approval for product candidates[18](index=18&type=chunk) [Investor Relations Contact](index=4&type=section&id=Investor%20Relations%20Contact) Provides contact information for investor relations inquiries - Investor Relations Contact: **Feifei Shen**, Email: **IR@ainos.com**[19](index=19&type=chunk)

Revenue Performance - Ainos, Inc. reported revenues of $4,663 in Q2 2025, compared to nil in Q2 2024, primarily from VELDONA pet supplements sales in Taiwan [128]. - In H1 2025, the company reported revenues of $110,870, a significant increase of $90,141 (435%) compared to $20,729 in H1 2024 [138]. Cost of Revenues - The cost of revenues decreased to $937 in Q2 2025 from $25,373 in Q2 2024, attributed to lower sales volume as the company shifts focus to the AI Nose platform [128]. - The cost of revenues decreased to $19,170 in H1 2025 from $52,127 in H1 2024, reflecting a reduction of $32,957 (63%) due to changes in product compositions [140]. Gross Profit - Gross profit in Q2 2025 was $3,726, a significant improvement from a gross loss of $25,373 in Q2 2024, due to increased sales volume [129]. - Gross profit in H1 2025 was $91,700, compared to a gross loss of $31,398 in H1 2024, marking an improvement of $123,098 (392%) due to product composition changes [141]. Research and Development Expenses - Research and development (R&D) expenses were $1,911,800 in Q2 2025, a decrease of 3% from $1,978,756 in Q2 2024, reflecting reduced co-research and staffing expenditures [131]. - R&D expenses decreased by $427,520 (11%) to $3,635,884 in H1 2025 from $4,063,404 in H1 2024, attributed to reduced clinical trial fees and staffing expenditures [143]. Selling, General and Administrative Expenses - Selling, general and administrative (SG&A) expenses rose to $1,837,613 in Q2 2025, a 76% increase from $1,044,880 in Q2 2024, driven by higher share-based compensation [133]. - SG&A expenses increased by $1,290,076 (62%) to $3,364,374 in H1 2025 from $2,074,298 in H1 2024, primarily due to higher share-based compensation [145]. Operating Loss - The company's operating loss increased by 23% to $3,745,687 in Q2 2025 from $3,049,009 in Q2 2024, as resources were invested in growth strategies [135]. - The company's operating loss increased by $739,458 (12%) to $6,908,558 in H1 2025 compared to $6,169,100 in H1 2024, reflecting ongoing investments in growth strategies [147]. Net Loss - Net loss for H1 2025 was $7,371,012, an increase of $861,180 (13%) from $6,509,832 in H1 2024, driven by exchange rate fluctuations and expanding operating expenses [149]. Cash Position - As of June 30, 2025, Ainos had cash and cash equivalents of $1,223,184, with plans to seek additional financing to support operations [122]. - As of June 30, 2025, the company had available cash of $1,223,184, down from $3,892,919 as of December 31, 2024 [150]. - Cash used in operating activities decreased by $893,892 in H1 2025 compared to H1 2024, primarily due to increased non-cash expenses and changes in working capital [151]. - The company anticipates that cash reserves, business revenues, and potential debt financing will fund operations over the next twelve months, with no assurance of achieving profitability [154]. Strategic Initiatives - Ainos plans to enter commercial pilot phases for the AI Nose platform across various sectors in the second half of 2025 [111]. - The company is advancing clinical trials for its VELDONA platform in Taiwan, focusing on oral warts in HIV-positive patients and Sjögren's syndrome [118]. - Ainos has formed strategic partnerships to expand the use of AI Nose technology into robotics and industrial applications [109].

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides the basic filing details for AINOS, INC.'s Form 10-Q for the quarterly period ended March 31, 2025, including registrant information, securities registered, and filer status - **Registrant**: AINOS, INC., incorporated in Texas, with principal executive offices in San Diego, CA[3](index=3&type=chunk) | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |---|---|---| | Common Stock, par value $0.01 per share | AIMD | The Nasdaq Stock Market LLC | | Warrants to purchase Common Stock | AIMDW | The Nasdaq Stock Market LLC | - **Filer Status**: Non-accelerated filer and Smaller reporting company[5](index=5&type=chunk) - Shares of common stock outstanding as of May 14, 2025: **20,764,225**[6](index=6&type=chunk) [PART I: FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%3A%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements for Ainos, Inc., including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows for the periods ended March 31, 2025, and December 31, 2024 (or March 31, 2024 for income/cash flow statements), along with detailed notes explaining significant accounting policies, liquidity, and specific financial line items [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) **Condensed Balance Sheet Highlights:** | Metric | March 31, 2025 | December 31, 2024 | |---|---|---| | Total Assets | $26,353,076 | $28,820,199 | | Total Liabilities | $13,231,424 | $13,303,889 | | Total Stockholders' Equity | $13,121,652 | $15,516,310 | | Cash and Cash Equivalents | $2,628,286 | $3,892,919 | - Total assets decreased by approximately **$2.47 million** from December 31, 2024, to March 31, 2025, primarily driven by a decrease in cash and cash equivalents and intangible assets[11](index=11&type=chunk) - Total stockholders' equity decreased by approximately **$2.39 million**, mainly due to the net loss incurred during the period[11](index=11&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) **Condensed Statements of Operations Highlights (Three Months Ended March 31):** | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |---|---|---|---|---| | Revenues | $106,207 | $20,729 | $85,478 | 412% | | Gross profit (loss) | $87,974 | $(6,025) | $93,999 | (1,560)% | | Research and development expenses | $1,724,084 | $2,084,648 | $(360,564) | (17)% | | Selling, general and administrative expenses | $1,526,761 | $1,029,418 | $497,343 | 48% | | Loss from operations | $(3,162,871) | $(3,120,091) | $(42,780) | 1% | | Net loss | $(3,286,022) | $(3,314,810) | $28,788 | (1)% | | Net loss per common share - basic and diluted | $(0.21) | $(0.57) | $0.36 | (63)% | - Revenue significantly increased by **412%** year-over-year, leading to a positive gross profit in Q1 2025 compared to a gross loss in Q1 2024[14](index=14&type=chunk) - Net loss slightly decreased by **1%** despite increased selling, general and administrative expenses, primarily due to higher revenue and lower R&D expenses[14](index=14&type=chunk) [Condensed Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Loss) **Condensed Statements of Comprehensive Loss Highlights (Three Months Ended March 31):** | Metric | 2025 | 2024 | |---|---|---| | Net loss | $(3,286,022) | $(3,314,810) | | Other comprehensive loss: Translation adjustment | $(40,641) | $(65,269) | | Comprehensive loss | $(3,326,663) | $(3,380,079) | - Total comprehensive loss decreased from **$3,380,079** in Q1 2024 to **$3,326,663** in Q1 2025, primarily driven by a reduction in net loss and a smaller translation adjustment[17](index=17&type=chunk) [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) - Total stockholders' equity decreased from **$15,516,310** at December 31, 2024, to **$13,121,652** at March 31, 2025, mainly due to the net loss incurred[19](index=19&type=chunk) - Common stock shares outstanding increased from **15,427,385** to **17,215,164** during Q1 2025 due to issuance for vested RSUs, special stock awards, and at-the-market offering[19](index=19&type=chunk) - Additional paid-in capital increased by **$914,127**, reflecting share-based compensation and stock issuances[19](index=19&type=chunk) [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) **Condensed Statements of Cash Flows Highlights (Three Months Ended March 31):** | Activity | 2025 | 2024 | |---|---|---| | Net cash used in operating activities | $(1,224,578) | $(1,494,747) | | Net cash used in investing activities | $(20,587) | $(111,280) | | Net cash provided by financing activities | $14,605 | $777,500 | | Net decrease in cash and cash equivalents | $(1,264,633) | $(854,729) | | Cash and cash equivalents at end of period | $2,628,286 | $1,030,899 | - Net cash used in operating activities decreased by **$270,169** in Q1 2025 compared to Q1 2024, primarily due to a decrease in net loss and changes in working capital[21](index=21&type=chunk)[113](index=113&type=chunk) - Net cash provided by financing activities significantly decreased from **$777,500** in Q1 2024 to **$14,605** in Q1 2025, mainly due to lower proceeds from convertible notes[21](index=21&type=chunk)[114](index=114&type=chunk) [Notes to Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) [1. Description of Business](index=9&type=section&id=1.%20Description%20of%20Business) - Ainos, Inc. is an AI-driven healthcare and technology company pioneering scent digitization, AI-powered diagnostics, and novel therapeutics (VELDONA)[24](index=24&type=chunk)[88](index=88&type=chunk) - The company is commercializing VELDONA-based product candidates for oral warts (HIV patients), Sjögren's syndrome, and feline chronic gingivostomatitis (FCGS)[25](index=25&type=chunk)[89](index=89&type=chunk) - Ainos is expanding its AI Nose technology into robotics and industrial applications through strategic partnerships, including with a Japanese service robot developer[26](index=26&type=chunk)[91](index=91&type=chunk) - An At The Market Offering Agreement was entered into on May 31, 2024, to sell common stock, with **$14,605** in net proceeds received as of March 31, 2025[30](index=30&type=chunk)[34](index=34&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are prepared in accordance with GAAP and SEC interim reporting rules, with certain information condensed or omitted[35](index=35&type=chunk) - Management makes estimates and assumptions affecting reported amounts, including useful lives of property, valuation of stock options/warrants/convertible notes, and impairment testing of intangible assets[38](index=38&type=chunk) - The company has an accumulated deficit of **$56,035,338** as of March 31, 2025, and expects to incur additional losses, raising substantial doubt about its ability to continue as a going concern for at least one year[42](index=42&type=chunk) [3. Cash and Cash Equivalents](index=12&type=section&id=3.%20Cash%20and%20Cash%20Equivalents) **Cash and Cash Equivalents:** | Date | Amount | |---|---| | March 31, 2025 | $2,628,286 | | December 31, 2024 | $3,892,919 | - Cash and cash equivalents decreased by approximately **$1.26 million** from December 31, 2024, to March 31, 2025[11](index=11&type=chunk)[49](index=49&type=chunk) - The company had approximately **$226,600** in excess of FDIC insured limits in the U.S. and **$2,025,800** in excess of insured amounts in Taiwan as of March 31, 2025[49](index=49&type=chunk) [4. Inventory](index=13&type=section&id=4.%20Inventory) **Inventory, Net:** | Category | March 31, 2025 | December 31, 2024 | |---|---|---| | Raw materials | $73,928 | $74,875 | | Work in process | $1,116 | $1,131 | | Finished goods | $66,787 | $67,750 | | Total | $141,831 | $143,756 | - Total inventory decreased slightly from **$143,756** at December 31, 2024, to **$141,831** at March 31, 2025[50](index=50&type=chunk) - No inventory write-downs to estimated net realizable values were recorded for the three months ended March 31, 2025, and 2024[50](index=50&type=chunk) [5. Convertible Notes Payable and Other Notes Payable](index=13&type=section&id=5.%20Convertible%20Notes%20Payable%20and%20Other%20Notes%20Payable) **Convertible Notes Payable:** | Note Type | March 31, 2025 | December 31, 2024 | |---|---|---| | March 2025 Convertible Notes, related party (ASE Note) - noncurrent | $2,000,000 | $0 | | March 2025 Convertible Notes, related party (ASE Note) - current | $0 | $2,000,000 | | March 2025 Convertible Notes (Lee Note) - current | $1,000,000 | $1,000,000 | | May 2027 Convertible Notes, related party (ASE Note) - noncurrent | $9,000,000 | $9,000,000 | | Total | $12,000,000 | $12,000,000 | - The March 2025 Convertible Note with ASE Test, Inc. was amended to extend its maturity date to March 12, 2027, and change its conversion price, reclassifying it from current to noncurrent[55](index=55&type=chunk) - The March 2025 Convertible Note with Li-Kuo Lee had its maturity date extended to May 13, 2025[56](index=56&type=chunk) - Total interest expense for convertible notes increased significantly to **$180,229** in Q1 2025 from **$46,386** in Q1 2024[58](index=58&type=chunk) [6. Stockholders' Equity](index=14&type=section&id=6.%20Stockholders%27%20Equity) - Authorized preferred stock increased to **50,000,000** shares, but none were issued or outstanding[59](index=59&type=chunk) - Common stock outstanding increased by **1,787,779** shares in Q1 2025 due to RSU settlements, special stock awards, and ATM transactions, reaching **17,215,164** shares[60](index=60&type=chunk) **Warrants Outstanding:** | Warrant Type | March 31, 2025 | December 31, 2024 | |---|---|---| | Lind Warrant | 1,201,944 | 1,201,944 | | Public warrant | 179,400 | 179,400 | | Representative's warrant | 7,800 | 7,800 | | Placement agent warrant | 20,666 | 20,666 | | ASE Warrant | 500,000 | 500,000 | | Total | 1,909,810 | 1,909,810 | - All warrants are equity-classified and none have been exercised or expired as of March 31, 2025[63](index=63&type=chunk)[65](index=65&type=chunk) [7. Revenue](index=15&type=section&id=7.%20Revenue) - Revenue is recognized upon product shipment, based on contractually stated pricing, with standard payment terms of **30** to **60** days[66](index=66&type=chunk) - The company generated revenue from VELDONA Pet supplements in Taiwan and VOC sensing products related to NISD co-development[67](index=67&type=chunk)[68](index=68&type=chunk) - Contract liabilities decreased from **$106,329** at December 31, 2024, to nil at March 31, 2025, as **$105,942** in revenue from VOC sensing products was recognized[68](index=68&type=chunk) [8. Share-Based Compensation](index=16&type=section&id=8.%20Share-Based%20Compensation) - The 2023 Stock Incentive Plan allows for up to **20%** of outstanding common stock, with **1,816,632** shares granted as of March 31, 2025[71](index=71&type=chunk) **RSU Activity (Three Months Ended March 31):** | Metric | 2025 (Shares) | 2024 (Shares) | |---|---|---| | Unvested balance at January 1 | 89,831 | 954,306 | | RSUs vested | (5,870) | (133,964) | | Unvested balance at March 31 | 83,961 | 814,392 | - Share-based compensation expense decreased significantly to **$55,170** in Q1 2025 from **$425,703** in Q1 2024[76](index=76&type=chunk) [9. Income Taxes](index=17&type=section&id=9.%20Income%20Taxes) - No income tax provision or benefit was recorded for Q1 2025 and Q1 2024 due to expected losses and a full valuation allowance against net deferred tax assets[77](index=77&type=chunk) [10. Net Loss per Common Share](index=17&type=section&id=10.%20Net%20Loss%20per%20Common%20Share) **Net Loss per Common Share (Three Months Ended March 31):** | Metric | 2025 | 2024 | |---|---|---| | Net loss attributable to common stockholders | $(3,286,022) | $(3,314,810) | | Weighted-average shares (basic and diluted) | 15,863,060 | 5,771,283 | | Net loss per share (basic and diluted) | $(0.21) | $(0.57) | - Net loss per common share improved from **$(0.57)** in Q1 2024 to **$(0.21)** in Q1 2025, despite a higher weighted-average number of shares outstanding[78](index=78&type=chunk) - Potentially dilutive securities totaling **4,758,346** shares in Q1 2025 were excluded from diluted EPS calculation as they were anti-dilutive[78](index=78&type=chunk) [11. Related Party Transactions](index=17&type=section&id=11.%20Related%20Party%20Transactions) - Interest expense from related party convertible notes (KY Note and ASE Note) increased to **$164,348** in Q1 2025 from **$31,078** in Q1 2024[79](index=79&type=chunk) - The company ceased sales of Ainos COVID-19 antigen rapid test kits in Q1 2024, which were marketed under an exclusive agreement with Ainos KY[81](index=81&type=chunk) - Development expenses under the Product Co-development Agreement with TCNT were **$96,695** in Q1 2025, and fees for non-exclusive patent use were **$149,566**[82](index=82&type=chunk) [12. Commitments and Contingencies](index=17&type=section&id=12.%20Commitments%20and%20Contingencies) - The company operates in an industry characterized by extensive patent litigation, but as of March 31, 2025, there were no material commitments or contingencies[84](index=84&type=chunk) [13. Subsequent Events](index=18&type=section&id=13.%20Subsequent%20Events) - On April 30, 2025, the company repaid Mr. Lee the convertible notes payable in the principal amount of **$1,000,000** with accrued interest of **$132,650**, totaling **$1,132,650**[85](index=85&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended March 31, 2025, compared to the same period in 2024, highlighting key business developments, financial performance drivers, liquidity, and critical accounting policies [Overview](index=19&type=section&id=Overview) - Ainos, Inc. is an AI-driven healthcare and technology company focused on VELDONA therapeutics and AI Nose technology for scent digitization and diagnostics[88](index=88&type=chunk) - The company is commercializing VELDONA-based product candidates for human and animal health and expanding AI Nose technology into robotics and industrial applications through strategic partnerships[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - A strategic partnership was formed with ugo, Inc., a Japanese service robot developer, in March 2025 to integrate AI Nose into autonomous robotic platforms[91](index=91&type=chunk) [Our Pipeline](index=19&type=section&id=Our%20Pipeline) - The company's operating strategy involves creating multiple revenue streams through product sales, out-licensing, and strategic partnerships[92](index=92&type=chunk)[95](index=95&type=chunk) - Current pipeline includes VELDONA human drugs (oral warts for HIV patients, Sjögren's syndrome, common cold, influenza, mild COVID-19), with orphan drug designation for oral warts[92](index=92&type=chunk) - The company has ceased selling COVID-19 Antigen Rapid Test Kits since Q1 2024[93](index=93&type=chunk) - VOC POCT candidates include Ainos Flora (female vaginal health/STIs), Ainos Pen (portable breath analyzer), and CHS430 (ventilator-associated pneumonia)[98](index=98&type=chunk) [Results of Operations for Quarter Ended March 31, 2025 ("Q1 2025") and March 31, 2024 ("Q1 2024")](index=21&type=section&id=Results%20of%20Operations%20for%20Quarter%20Ended%20March%2031%2C%202025%20%28%22Q1%202025%22%29%20and%20March%2031%2C%202024%20%28%22Q1%202024%22%29) **Key Financial Results (Three Months Ended March 31):** | Metric | 2025 | 2024 | Change (Amount) | Change (%) | |---|---|---|---|---| | Revenues | $106,207 | $20,729 | $85,478 | 412% | | Gross profit (loss) | $87,974 | $(6,025) | $93,999 | (1,560)% | | R&D expenses | $1,724,084 | $2,084,648 | $(360,564) | (17)% | | SG&A expenses | $1,526,761 | $1,029,418 | $497,343 | 48% | | Loss from operations | $(3,162,871) | $(3,120,091) | $(42,780) | 1% | | Interest expense | $(180,445) | $(48,696) | $(131,749) | 271% | | Net loss | $(3,286,022) | $(3,314,810) | $28,788 | (1)% | [Revenues, Cost and Gross Loss](index=23&type=section&id=Revenues%2C%20Cost%20and%20Gross%20Loss) - Revenue increased by **412%** to **$106,207** in Q1 2025, primarily due to **$105,942** from VOC sensing products related to NISD co-development[100](index=100&type=chunk) - Cost of revenue decreased by **32%** to **$18,233** in Q1 2025 due to differences in product compositions[101](index=101&type=chunk) - Gross profit improved significantly to **$87,974** in Q1 2025 from a **$6,025** gross loss in Q1 2024[102](index=102&type=chunk) [Research and Development (R&D) Expenses](index=23&type=section&id=Research%20and%20Development%20%28R%26D%29%20Expenses) - R&D expenses decreased by **$360,564** (**17%**) to **$1,724,084** in Q1 2025, driven by lower clinical trial fees, co-research, and staffing expenditures[104](index=104&type=chunk) - Excluding non-cash expenses, R&D decreased to **$531,214** in Q1 2025 from **$800,305** in Q1 2024[105](index=105&type=chunk) - R&D expenses are expected to grow as the company further develops AI Nose, VOC POCT, and VELDONA drug candidates[104](index=104&type=chunk) [Selling, General and Administrative (SG&A) Expenses](index=23&type=section&id=Selling%2C%20General%20and%20Administrative%20%28SG%26A%29%20Expenses) - SG&A expenses increased by **$497,343** (**48%**) to **$1,526,761** in Q1 2025, primarily due to a significant increase in share-based compensation, partially offset by decreased professional expenses[106](index=106&type=chunk) - Excluding non-cash expenses, SG&A decreased to **$624,961** in Q1 2025 compared to **$691,465** in Q1 2024[107](index=107&type=chunk) [Operating Loss](index=23&type=section&id=Operating%20Loss) - Operating loss slightly increased by **1%** to **$3,162,871** in Q1 2025, reflecting continued investment in growth strategy and product roadmap[108](index=108&type=chunk) [Interest Expense and Issuance Cost of Convertible Note](index=23&type=section&id=Interest%20Expense%20and%20Issuance%20Cost%20of%20Convertible%20Note) - Interest expense increased by **271%** to **$180,445** in Q1 2025, due to accrued interest on convertible notes issued in May 2024 with a higher principal amount[109](index=109&type=chunk) - Issuance costs and fair value changes for senior secured convertible notes were nil in Q1 2025, compared to **$138,992** and **$31,568** respectively in Q1 2024[97](index=97&type=chunk) [Net Loss](index=24&type=section&id=Net%20Loss) - Net loss decreased by **1%** to **$3,286,022** in Q1 2025, primarily due to increased sales revenue offsetting expanding operating expenses[110](index=110&type=chunk)[113](index=113&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) **Cash and Cash Equivalents:** | Date | Amount | |---|---| | March 31, 2025 | $2,628,286 | | December 31, 2024 | $3,892,919 | **Cash Flow Summary (Three Months Ended March 31):** | Activity | 2025 | 2024 | |---|---|---| | Net cash used in operating activities | $(1,224,578) | $(1,494,747) | | Net cash used in investing activities | $(20,587) | $(111,280) | | Net cash provided by financing activities | $14,605 | $777,500 | - Cash used in operating activities decreased by **$270,169** in Q1 2025, while cash provided by financing activities decreased by **$762,895**, mainly due to lower proceeds from convertible notes[113](index=113&type=chunk)[114](index=114&type=chunk) - The company anticipates funding operations for the next twelve months through cash reserves, business revenues, and potential debt financing, but acknowledges no assurance of profitability or sufficient financing[115](index=115&type=chunk) [Critical Accounting Policies and Significant Management Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Management%20Estimates) - The preparation of financial statements requires estimates and assumptions for inventory valuation, useful lives of property/equipment, valuation of stock options/warrants/convertible notes, and impairment testing of intangible assets[118](index=118&type=chunk)[119](index=119&type=chunk) - No material changes to critical accounting policies and estimates were reported compared to the 2024 Annual Report, except as noted in the financial statements[120](index=120&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Ainos, Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide detailed market risk disclosures[121](index=121&type=chunk) [ITEM 4. Controls and Procedures](index=25&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the period - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2025[122](index=122&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[123](index=123&type=chunk) [PART II: OTHER INFORMATION](index=25&type=section&id=PART%20II%3A%20OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=25&type=section&id=ITEM%201.%20Legal%20Proceedings) Ainos, Inc. is not aware of any material legal proceedings as of the report date, despite operating in an industry prone to patent litigation - The company is not aware of any material legal proceedings as of the date of this report[124](index=124&type=chunk) - The industry is characterized by extensive patent litigation, which could result in significant costs or injunctions[84](index=84&type=chunk) [ITEM 1A. Risk Factors](index=25&type=section&id=ITEM%201A.%20Risk%20Factors) This section highlights potential risks that could materially impact Ainos, Inc.'s business, financial condition, and results of operations, including new risks related to fluctuating foreign currency exchange rates and policy changes affecting international trade - Fluctuating foreign currency and exchange rates may negatively impact the company's business, results of operations, and financial position due to foreign operations[128](index=128&type=chunk) - Policy changes affecting international trade, such as tariffs or new barriers to entry, could adversely impact demand for products, competitive position, and financial results[129](index=129&type=chunk) - Readers should consider risk factors from the 2024 Annual Report and other filings[126](index=126&type=chunk)[127](index=127&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=26&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Ainos, Inc. reported no unregistered sales of equity securities, no issuer purchases of equity securities, and no applicable use of proceeds from registered securities during the quarter - No unregistered sales of equity securities occurred in this quarter[130](index=130&type=chunk) - Issuer purchases of equity securities are not applicable[131](index=131&type=chunk) - Use of proceeds of registered securities is not applicable[132](index=132&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=26&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) Ainos, Inc. reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[133](index=133&type=chunk) [ITEM 4. Mine Safety Disclosures](index=26&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to Ainos, Inc - Mine Safety Disclosures are not applicable[133](index=133&type=chunk) [ITEM 5. Other Information](index=26&type=section&id=ITEM%205.%20Other%20Information) Ainos, Inc. reported no other information for this item - No other information was reported for this item[133](index=133&type=chunk) [ITEM 6. Exhibits](index=27&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of the Form 10-Q, including amendments to convertible promissory notes, certifications, and Inline XBRL documents - Exhibits include amendments to convertible promissory notes with ASE Test, Inc. and Li-Kuo Lee, dated March 10 and March 12, 2025, respectively[135](index=135&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350) are filed[135](index=135&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbases, and Cover Page Interactive Data File) are included[135](index=135&type=chunk) [Signatures](index=28&type=section&id=Signatures) The report is duly signed on behalf of AINOS, INC. by its Chairman of the Board, President, and Chief Executive Officer, Chun-Hsien Tsai, and its Chief Financial Officer, Hsin-Liang Lee, on May 14, 2025 - Report signed by Chun-Hsien Tsai, Chairman of the Board, President, and Chief Executive Officer, and Hsin-Liang Lee, Chief Financial Officer, on May 14, 2025[138](index=138&type=chunk)

Ainos Q1 2025 Financial Results and Business Update [Q1 2025 Financial Highlights](index=1&type=section&id=Q1%202025%20Financial%20Highlights) Ainos reported a significant 412% year-over-year revenue increase in Q1 2025, driven by its AI Nose products, achieving a notable turnaround from a gross loss to a gross profit, while expanding AI Nose technology into robotics and semiconductor sectors and advancing its VELDONA® therapeutic program with key clinical trial approvals Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $106,207 | $20,729 | +412% | | Gross Profit (Loss) | $87,974 | ($6,025) | Turnaround to Profit | - The substantial revenue growth was primarily driven by sales of AI Nose products for elderly care under the Nisshinbo Micro Devices Inc. ("NISD") co-development project[3](index=3&type=chunk) - The company is expanding its AI Nose technology beyond healthcare, establishing strategic partnerships in the robotics and semiconductor manufacturing sectors[2](index=2&type=chunk)[3](index=3&type=chunk) - The VELDONA® therapeutics program advanced significantly, securing Taiwan Food and Drug Administration (TFDA) and Institutional Review Board (IRB) approvals for two separate clinical trials in Taiwan[2](index=2&type=chunk)[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted the successful execution of their long-term strategy, emphasizing the commercial viability of AI Nose technology and its expansion beyond healthcare, noting key milestones in the VELDONA® therapeutics program and a disciplined financial approach that turned a gross loss into a profit, positioning the company for future growth [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO emphasized the strategic progress in Q1, highlighting the 412% revenue growth driven by AI Nose sales, detailing the expansion of AI Nose applications into robotics and industrial sectors through new partnerships, aligning with significant market growth projections, and noting key regulatory approvals for the VELDONA® program, reinforcing the company's commitment to innovation and shareholder value - The company is expanding the application of its AI Nose technology from its roots in healthcare into the robotics and industrial sectors through strategic collaborations[3](index=3&type=chunk) - Management cited significant market potential, with the global electronic nose market projected to grow from **$29.8 billion** in 2025 to **$76.5 billion** by 2032[3](index=3&type=chunk) - The VELDONA® program secured TFDA approval for a clinical trial targeting HIV oral warts and IRB clearance for a trial targeting primary Sjögren's syndrome[4](index=4&type=chunk) - The CEO positioned Ainos as a U.S.-based innovator pioneering digital scent to provide a missing layer of perception for the next generation of intelligent systems[4](index=4&type=chunk) [CFO Commentary](index=2&type=section&id=CFO%20Commentary) The CFO highlighted the financial benefits of the company's strategic shift, noting a 412% YoY revenue increase to $106,207 and a 32% reduction in cost of revenues, resulting in a strong turnaround to a gross profit of $87,974 from a gross loss in the prior year, and despite higher non-cash SG&A expenses, disciplined capital management maintained operational efficiency, with continued investment planned for R&D Q1 2025 Financial Performance Highlights | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $106,207 | $20,729 | +412% | | Cost of Revenues | $18,233 | $26,754 | -32% | | Gross Profit (Loss) | $87,974 | ($6,025) | Turnaround | - The turnaround from gross loss to gross profit was attributed to the unique product composition of AI Nose sales and a decline in the cost of revenues[4](index=4&type=chunk) - Selling, general and administrative (SG&A) expenses increased due to non-cash share-based compensation[4](index=4&type=chunk) - Future strategy involves continued investment in R&D for AI Nose and clinical trials, while evaluating optimal financing and partnership opportunities[4](index=4&type=chunk) [Recent Business Developments](index=3&type=section&id=Recent%20Business%20Developments) During the first quarter of 2025, Ainos established several key strategic partnerships to expand the application of its AI Nose technology, notably with semiconductor leader Advanced Semiconductor Engineering, Inc. (ASE) and robotics firm ugo, Inc., also advancing its VELDONA® therapeutic program by securing regulatory approvals for two clinical trials in Taiwan and strengthening its intellectual property with a new patent in Japan - Formed a strategic partnership with ASE Chung Li, a key site of the world's leading semiconductor assembly and test provider, to deploy AI Nose in semiconductor manufacturing[5](index=5&type=chunk)[8](index=8&type=chunk) - Partnered with ugo, Inc., Japan's leading service robotics company, to integrate AI Nose into robots, with the initial installation successfully completed[6](index=6&type=chunk)[9](index=9&type=chunk) - Secured TFDA and IRB approvals for clinical trials of its VELDONA® formulation for treating HIV-related oral warts and primary Sjögren's syndrome[7](index=7&type=chunk) - Received a key invention patent in Japan for its oral interferon formulation, VELDONA®, for treating and preventing coronavirus infections[10](index=10&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The unaudited financial statements for the period ending March 31, 2025, detail the company's financial position and performance, with the balance sheet showing a decrease in total assets and total liabilities compared to year-end 2024, and the statement of operations highlighting a significant revenue increase and a shift from a gross loss to a gross profit, though the company still recorded a net loss for the quarter [Condensed Balance Sheets](index=5&type=section&id=Ainos%2C%20Inc.%20Condensed%20Balance%20Sheets) As of March 31, 2025, Ainos reported total assets of $26.4 million, down from $28.8 million at the end of 2024, primarily due to a decrease in cash and cash equivalents, while total liabilities slightly decreased to $13.2 million, and total stockholders' equity fell to $13.1 million from $15.5 million Balance Sheet Summary (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,050,992 | $4,337,808 | | **Total Assets** | **$26,353,076** | **$28,820,199** | | Total Current Liabilities | $1,523,467 | $3,954,944 | | **Total Liabilities** | **$13,231,424** | **$13,303,889** | | **Total Stockholders' Equity** | **$13,121,652** | **$15,516,310** | - Cash and cash equivalents decreased from **$3.9 million** on December 31, 2024, to **$2.6 million** on March 31, 2025[16](index=16&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Ainos%2C%20Inc.%20Condensed%20Statements%20of%20Operations) For the three months ended March 31, 2025, Ainos reported revenues of $106,207, a 412% increase from the same period in 2024, achieving a gross profit of $87,974, a significant turnaround from a gross loss of $6,025 in the prior year, and despite this, the net loss remained relatively stable at $3.29 million, or ($0.21) per share, compared to a net loss of $3.31 million, or ($0.57) per share, in Q1 2024 Statement of Operations Summary (Unaudited) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $106,207 | $20,729 | | Gross Profit (Loss) | $87,974 | ($6,025) | | Loss from Operations | ($3,162,871) | ($3,120,091) | | **Net Loss** | **($3,286,022)** | **($3,314,810)** | | Net Loss per Share | ($0.21) | ($0.57) | - Research and development expenses decreased to **$1.72 million** from **$2.08 million** in the prior-year period[18](index=18&type=chunk) - Selling, general and administrative expenses increased to **$1.53 million** from **$1.03 million** year-over-year[18](index=18&type=chunk)

Financial Performance - Revenues for fiscal year 2024 were $20,729, a significant decline from $122,112 in 2023, primarily due to lower sales of COVID-19 antigen rapid test kits [5]. - Cost of revenues decreased to $52,595 in 2024 from $375,845 in 2023, reflecting the reduced sales volume [6]. - Gross profit for 2024 was negative $31,866, an improvement from negative $253,733 in 2023, attributed to lower sales volume and reduced costs [7]. - Net loss attributable to common stock shareholders was $14,863,161 in 2024, compared to $13,770,549 in 2023 [11]. Operating Expenses - Total operating expenses increased to $13,809,338 in 2024 from $12,952,663 in 2023, driven by investments in AI Nose and VELDONA® development [8]. - Research and development expenses rose to $8,413,923 in 2024 from $7,317,388 in 2023, reflecting increased collaborative research and staffing costs [9]. - Selling, general and administrative expenses decreased to $5,395,415 in 2024 from $5,635,275 in 2023, mainly due to lower professional and public relations expenses [10]. Cash Position - As of December 31, 2024, cash and cash equivalents increased to $3,892,919 from $1,885,628 in 2023 [12]. Future Plans - Ainos plans to commence clinical studies for the second-generation Ainos Flora in H1 2025, aiming to establish leadership in the global POCT market [3]. - The company has received IRB approval for its clinical trial of VELDONA® in treating Sjögren's syndrome, with trials expected to begin in early 2025 [14].