Ainos continues its strategic transition away from marketing COVID test kits and further advances commercialization of its VELDONA® and VOC POCT technologies
Strategic pivot is underpinned by Ainos' diversified product pipeline
SAN DIEGO, CA / ACCESSWIRE / May 12, 2023 / Ainos, Inc.Ainos, Inc. (NASDAQ:AIMD, AIMDW) ("Ainos", or the "Company"), a diversified medtech company focused on the development of novel point-of-care testing, low-dose interferon therapeutics, and synthetic RNA-driven preventative medicine, today announced its financial results for the first quarter ended March 31, 2023.
Chun-Hsien Tsai, Chairman of the Board, President, and Chief Executive Officer of Ainos, commented, "The first quarter of 2023 marks the beginning of a new chapter for Ainos. As our VOC POCT and VELDONA® technologies progress towards commercialization and COVID-19 becomes endemic, we are pivoting the primary focus of our business away from COVID-19. This strategic shift comes after years of clinical trials and development for our product pipeline, and lays a solid foundation for Ainos' continued long-term growth. Past sales of our COVID-19 test kits have helped us establish key infrastructure and partnerships that will support this transition and the success of our upcoming product offerings."
"During the first quarter, we made significant progress in the commercialization of our VELDONA® low-dose oral interferon-alpha ("IFNα") formulation, especially in regard to its applications for animal health. We signed an agreement with a Taiwanese pharmaceutical biotech company which granted them exclusive distribution rights for our VELDONA® animal health supplements in Taiwan, marking our entry into the multi-billion-dollar veterinary health market. Meanwhile, our efforts in developing VELDONA® drug candidates for the treatment of various human disease applications continue to progress. In addition, our lead VOC POCT testing candidate, the AI Nose platform-powered Ainos Flora, is currently undergoing clinical trials and is on track to reach commercialization by the end of 2023."
"We currently operate primarily in the Taiwan market, which, in contrast to the United States, saw its COVID-19 peak occur last year. This difference in timing has allowed us to make the transition to a commercial endemic market later than our American peers while continuing to execute our long-term growth strategy. Our achievements thus far have set the stage for a successful transition into our next product cycle, and I am both proud of our progress to date and eager to see where our innovative spirit takes us in the future."
Hui-Lan Wu, Chief Financial Officer of Ainos, commented, "In the first quarter of 2023, we recorded total revenues of US$49,164. We strengthened our financial position through two convertible note purchase agreements in a principal amount of US$3 million. In combination with our prudent financial management, reflected by only a small year-over-year increase in cash-based operating expenses, we have created a solid foundation from which we can continue the development and monetization of our product pipeline."
First Quarter 2023 Financial Results
Revenues
Revenues were US$49,164 in the first quarter of 2023, compared to US$87,200 in the same period of 2022, reflecting a slowdown of COVID-19 infections in Taiwan.
Cost of Revenues
Cost of revenues was US$100,848 in the first quarter of 2023, compared with US$41,078 in the same period of 2022. The change was primarily attributable to the one-time inventory provision of $42,826 and unallocated manufacturing overhead of $22,602.
Gross Profit
In the first quarter of 2023, gross profit was negative US$51,684 compared with a positive gross profit of US$46,122 a year ago, driven by a shift in the Company's revenue mix, increased unallocated manufacturing overhead, and a one-time inventory charge. Gross profit excluding unallocated overhead and inventory provision was $13,744 in the first quarter of 2023.
Total Operating Expenses
Total operating expenses were US$2,461,348 in the first quarter of 2023 compared with US$2,129,184 in the same period of 2022. The change was mainly attributable to depreciation and increased staffing and share-based compensation. Operating expenses, excluding depreciation and amortization expenses and share-based compensation, were US$1,059,894 in the first quarter of 2023 as compared with US$972,746 a year ago.
- R&D expenses were US$1,698,883 in the first quarter of 2023 compared with US$1,577,454 a year ago. When excluding share-based compensation, depreciation and amortization expenses, R&D expenses were US$503,899, compared with US$441,241 over the same period.
- SG&A expenses were US$762,465 compared with US$551,730 in the same period of 2022. When excluding share-based compensation, depreciation and amortization expenses, SG&A expenses were US$555,995, compared with US$531,505 over the same period.
Net Loss
Net loss attributable to common stock shareholders was US$2,520,475 in the first quarter of 2023, compared with US$2,099,895 in the same period of 2022.
Balance Sheet
As of March 31, 2023, the Company had cash and cash equivalents of US$1,146,132 compared with US$1,853,362 as of December 31, 2022.
Recent Developments
On January 23, 2023, the Company announced that it had signed a Memorandum of Understanding with Taiwanese animal drug manufacturer Tah-An Chemical & Pharmaceutical Co., Ltd. to jointly explore the feasibility of manufacturing an animal investigational new drug based on the VELDONA® formulation.
On March 13, 2023, the Company announced that it had entered into two convertible note purchase agreements, under which the Company issued and sold two convertible promissory notes in a principal amount of US$3 million to certain investors.
On March 14, 2023 the Company announced that it had signed a Memorandum of Understanding with Merdury Biopharmaceutical Corp., a Taipei Exchange Emerging Stock Board listed company, to jointly explore and develop a strategic business relationship, including Merdury's potential investment and participation in the completion of a Phase 3 clinical trial of the Company's VELDONA® drug candidate for treatment of oral warts in HIV-seropositive patients.
On March 21, 2023, the Company announced that it had signed a distribution agreement with Topmed International Biotech Co., Ltd. ("Topmed"), a Taiwanese biotech company. Under the agreement, Topmed will be the exclusive distributor of pet supplements for cats and dogs based on Ainos' low-dose oral interferon-alpha formulation, VELDONA® in Taiwan.
About Ainos, Inc.
Headquartered in San Diego, California, Ainos, Inc. is a diversified medtech company engaged in developing innovative medical technologies for point-of-care testing and safe and novel medical treatment for a broad range of disease indications. In addition to its proprietary therapeutics using low-dose non-injectable interferon, Ainos has also expanded its product portfolio to include Volatile Organic Compounds (VOC) and COVID-19 POCTs. To learn more, visit https://www.ainos.com.
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Forward-Looking Statements
This press release contains "forward-looking statements" about Ainos within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," "project," "target," "future," "likely," "strategy," "foresee," "may," "guidance," "potential," "outlook," "forecast," "should," "will" or other similar words or phrases. Similarly, statements that describe the Company's objectives, plans or goals are, or may be, forward-looking statements. Forward-looking statements are based only on the Company's current beliefs, expectations, and assumptions. Forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. The Company's actual results may differ materially from those indicated in the forward-looking statements.
Important factors that could cause the Company's actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this press release include, among others, the cost of production and sales potential of the planned drug treatments announced in this press release; the Company's dependence on revenues from the sale of COVID-19 test kits; the Company's limited cash and history of losses; the Company's ability to achieve profitability; the Company's ability to raise additional capital to continue the Company's product development; the ability to accurately predict the future operating results of the Company; the ability to advance Ainos' current or future product candidates through clinical trials, obtain marketing approval and ultimately commercialize any product candidates the Company develops; the ability to obtain and maintain regulatory approval of Ainos product candidates; delays in completing the development and commercialization of the Company's current and future product candidates, which could result in increased costs to the Company, delay or limit the ability to generate revenue and adversely affect the business, financial condition, results of operations and prospects of the Company; intense competition and rapidly advancing technology in the Company's industry that may outpace its technology; customer demand for the products and services the Company develops; the impact of competitive or alternative products, technologies and pricing; disruption in research and development facilities; lawsuits and other claims by third parties or investigations by various regulatory agencies governing the Company's operations; potential cybersecurity attacks; increased requirements and costs related to cybersecurity; the Company's ability to realize the benefits of third party licensing agreements; the Company's ability to obtain and maintain intellectual property protection for Ainos product candidates; compliance with applicable laws, regulations and tariffs; continued listing on and compliance with the Nasdaq Capital Market; and the Company's success in managing the growth. A more complete description of these risk factors and others will be included in the "Risk Factors" section of Ainos' Annual Report on Form 10-K and other reports to be filed with the U.S. Securities and Exchange Commission, many of which risks are beyond the Company's control. In addition to the risks described above and in the Company's reports filed with the Securities and Exchange Commission, and press releases, other unknown or unpredictable factors also could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this press release.
The forward-looking statements made in this press release are expressly qualified in their entirety by the foregoing cautionary statements. Ainos undertakes no obligation to, and expressly disclaims any such obligation to, publicly update or revise any forward-looking statement to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to the future results over time or otherwise, except as required by law.
Investor Relations Contact
ICR, LLC
Robin Yang
Tel: +1 646-224-6971
Email: [email protected]
| Ainos, Inc. Condensed Consolidated Statements of Operations (Unaudited) | |||||||||
| Three months ended March 31 | |||||||||
| 2023 | 2022 | ||||||||
Revenues | 49,164 | 87,200 | |||||||
Cost of revenues | (100,848 | ) | (41,078 | ) | |||||
Gross (loss) profits | (51,684 | ) | 46,122 | ||||||
Operating expenses: | |||||||||
Research and development expenses | 1,698,883 | 1,577,454 | |||||||
Selling, General and administrative expenses | 762,465 | 551,730 | |||||||
Total operating expenses | 2,461,348 | 2,129,184 | |||||||
Operating loss | (2,513,032 | ) | (2,083,062 | ) | |||||
Non-operating income (expenses),net | |||||||||
Interest expenses, net | (9,273 | ) | (16,687 | ) | |||||
Other income (expenses), net | 1,830 | (146 | ) | ||||||
Total non-operating income(expenses),net | (7,443 | ) | (16,833 | ) | |||||
Net loss | (2,520,475 | ) | (2,099,895 | ) | |||||
Net loss per common shares-basic and diluted | (0.13 | ) | (0.22 | ) | |||||
Weighted average common shares outstanding- basic | |||||||||
and diluted | 20,011,602 | 9,625,133 | |||||||
| Ainos, Inc. Condensed Consolidated Balance Sheets (Unaudited) | |||||||||
| March 31, | December 31, | ||||||||
| 2023 | 2022 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | 1,146,132 | 1,853,362 | |||||||
Accounts receivable, including related parties | 111,283 | 201,546 | |||||||
Inventory, net | 572,390 | 595,222 | |||||||
Other receivables - related parties | 1,500,000 | - | |||||||
Other current assets | 303,318 | 195,787 | |||||||
Total current assets | 3,633,123 | 2,845,917 | |||||||
Intangible assets, net | 31,691,698 | 32,806,738 | |||||||
Property and equipment, net | 1,314,605 | 1,375,676 | |||||||
Other Assets | 68,817 | 80,683 | |||||||
Total assets | 36,708,243 | 37,109,014 | |||||||
Liabilities and Stockholders' Equity | |||||||||
Current liabilities: | |||||||||
Convertible notes payable - related party | 376,526 | 376,526 | |||||||
Notes payable, including related parties | 684,000 | 884,000 | |||||||
Accrued expenses and others current liabilities | 806,017 | 1,212,386 | |||||||
Total current liabilities | 1,866,543 | 2,472,912 | |||||||
Long term liabilities: | |||||||||
Convertible Note payable-non-current | 2,500,000 | - | |||||||
Operating lease liabilities-non-current | 3,276 | 8,096 | |||||||
Total liabilities | 4,369,819 | 2,481,008 | |||||||
Stockholders' equity | |||||||||
Preferred stock, $0.01 par value; 10,000,000 shares | |||||||||
authorized; none issued | - | - | |||||||
Common stock, $0.01 par value; | |||||||||
300,000,000 shares authorized as of March 31, 2023 and December 31,2022; | |||||||||
20,011,602 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 200,116 | 200,116 | |||||||
Additional paid-in capital | 58,965,981 | 58,745,149 | |||||||
Accumulated deficit | (26,636,081 | ) | (24,115,606 | ) | |||||
Translation adjustment | (191,592 | ) | (201,653 | ) | |||||
Total stockholders' equity | 32,338,424 | 34,628,006 | |||||||
Total liabilities and stockholders' equity | 36,708,243 | 37,109,014 | |||||||
SOURCE: Ainos, Inc.