Ainos, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023; filed August 11, 2023. Ainos is a healthcare company developing point-of-care tests, VELDONA therapeutics and pet supplements, and synthetic RNA technologies. Period revenue came solely from COVID-19 antigen test-kit sales in Taiwan.
Financial results
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $28,555 | $636,627 | $77,719 | $723,828 |
| Gross profit (loss) | $(27,262) | $317,664 | $(78,946) | $363,786 |
| Operating expenses | $2,289,336 | $2,261,960 | $4,750,684 | $4,391,144 |
| Operating loss | $(2,316,598) | $(1,944,296) | $(4,829,630) | $(4,027,358) |
| Net loss | $(2,349,727) | $(1,954,032) | $(4,870,202) | $(4,053,927) |
| Net loss per share | $(0.12) | $(0.20) | $(0.24) | $(0.42) |
Q2 R&D expense was $1.67 million and SG&A was $618,149. For the six months, R&D was $3.37 million and SG&A was $1.38 million. No income-tax provision was recorded.
Cash flow and liquidity: Six-month operating cash use was $2.58 million, investing cash use $71,262, and financing cash inflow $2.19 million. Cash declined from $1.85 million at year-end 2022 to $1.36 million at June 30, 2023. Current assets were $2.14 million and current liabilities $1.11 million. Total liabilities were $3.65 million; notes payable totaled $3.18 million, including $2.5 million of March 2025 convertible notes. Total assets were $34.05 million, including $30.56 million of net intangible assets. Accumulated deficit was $28.99 million.
Material changes versus prior periods
- Revenue fell 96% in Q2 and 89% in the first half, which management attributed to lower COVID-19 infection rates in Taiwan, reducing kit sales volume and selling prices.
- Gross profit turned to a loss in both periods, reflecting weaker sales, inventory write-downs, and, in the first half, idle manufacturing capacity costs.
- Net loss increased 20% in Q2 and 20% in the first half. Operating expenses rose 1% in Q2 and 8% in the first half; first-half interest expense also increased, partly due to the new convertible notes.
- First-half operating cash use increased by $949,175 from 2022. The company received $2.5 million from March 2025 convertible-note financing; the notes bear 6% compounded annual interest and convert at $1.50 per share, subject to adjustment.
Outlook, risks, and notable items
- Management plans to prioritize VELDONA Pet sales and marketing, advance Ainos Flora and other VOC point-of-care candidates, and pursue out-licensing of human VELDONA drug candidates. It expects increased R&D and clinical-trial spending. VELDONA Pet sales launched in July 2023.
- The company expects to fund operations through cash, business revenue, and potential financing, but says additional capital may be required and cannot be assured. It expects losses and negative operating cash flows for at least the next 12 months. The filing states that substantial doubt exists about its ability to continue as a going concern for at least one year from issuance.
- On August 9, 2023, Ainos entered a co-development agreement with Nisshinbo Micro Devices and Taiwan Inabata for an odor platform and gas-sensor products. Contract value is variable based on future purchase orders; the agreement runs through August 31, 2026.
- After quarter-end, Ainos paid $300,000 of the related-party KY Note and $42,000 of the i2China Note; remaining principal was $300,000 and $42,000, respectively. Management reported no material changes to previously disclosed risk factors and no material legal proceedings as of the report date.
Important facts for investors to verify
- Cash runway, financing availability, and progress in addressing the disclosed going-concern doubt.
- Whether new products—particularly VELDONA Pet and Ainos Flora—gain commercial traction and offset the decline in COVID-19 kit revenue.
- Clinical and regulatory progress, future R&D and trial spending, and potential dilution or repayment obligations from convertible notes and other securities.