Ainos(AIMD) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights 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 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] - 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] - 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] Management Commentary 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 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] - 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] - Achieved 90% accuracy in classifying food and beverage scents[3] - 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] - 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] CFO's Financial Review and Capital Strategy 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] - Improved gross margin, turning to gross profitability in both Q2 and the first half[4] - Capital discipline narrowed first-half operating cash outflows by 26% year over year[4] - Generated $719K in net proceeds from the at-the-market facility[4] - Completed a 1-for-5 reverse stock split to regain Nasdaq compliance and strengthen the capital structure to attract institutional investors[4] Recent Business Developments 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] - 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] - Regained compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (July 16, 2025)[8] - Announced a five-year distribution partnership with Solomon to accelerate AI Nose adoption across key manufacturing sectors in Asia (July 7, 2025)[9] - 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] - 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] - AI Nose improved its accuracy in detecting excretion-related odors from 80% to approximately 85% (May 29, 2025)[13] - Debuted its AI Nose platform at COMPUTEX 2025 in partnership with ugo, demonstrating real-time robotic olfaction (May 22, 2025)[14] - 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] Product and Company Information 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 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] - 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] - To be delivered as SmellTech-as-a-Service, offering subscription access to ongoing scent intelligence, analytics, and real-time alerts[16] About Ainos, Inc. 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] - Pioneers smelltech with its AI Nose platform and immune therapeutics with VELDONA®[17] Financial Statements This section provides a detailed overview of the company's condensed balance sheets and statements of operations for the reported periods Condensed Balance Sheets 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] Condensed Statements of Operations 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 This section provides important disclaimers regarding forward-looking statements and contact information for investor relations Forward-Looking Statements 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] - 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] Investor Relations Contact Provides contact information for investor relations inquiries - Investor Relations Contact: Feifei Shen, Email: IR@ainos.com[19]