Revenues increased by 384% year over year
Debt ratio decreased to 7% from 75% at year-end 2021
SAN DIEGO, Nov. 7, 2022 /PRNewswire/ — 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 unaudited financial results for the third quarter ended September 30, 2022.
Third Quarter 2022 Financial Highlights
Revenues were US$1,757,774 in the third quarter of 2022, up 384.2% year over year. Gross profit was US$581,742, up 124% year over year, representing a gross margin of 33.1% in the third quarter of 2022.
Chun-Hsien Tsai, Chairman of the Board, President, and Chief Executive Officer of Ainos, commented, “We once again delivered robust year-over-year revenue growth and continued to develop and advance the monetization of our innovative product pipeline. Looking ahead, we are recalibrating our R&D efforts to focus on the development and commercialization of our key VOC POCT and VELDONA® technologies. During the quarter, VELDONA®, our very low-dose oral interferon alpha formulation, showed its antiviral efficacy in a hamster study, and is on track to initiate Phase 2 clinical trials in Taiwan. We are also pursuing out-licensing for five Phase 2 VELONDA® candidates, with the goal of accelerating them to Phase 3 trials and commercialization. Our non-invasive and telehealth-friendly VOC POCT product pipeline delivers solutions to large and expanding markets such as STI testing and women’s health. Our Ainos Flora product, which allows users to easily and discreetly test for vaginal infections and certain STIs in just minutes, is currently going through clinical studies in Taiwan. In regards to our current product line, we will broaden distribution and expand sales channels for our COVID antigen test kits in Taiwan, while ramping up sales to our existing customer base. Going forward, we will further strengthen our monetization capabilities and deliver long-term sustainable value for our shareholders.”
Hui-Lan Wu, Chief Financial Officer of Ainos, commented, “Year-over-year top-line growth of 384.2% was driven by strong sales of our COVID19 Antigen Self-Test Kits during the third quarter. During the quarter, in addition to delivering strong topline growth, we reduced our debt and strengthened our balance sheet following the conversion of our convertible notes and proceeds from our public offering. As a result of these efforts, our debt ratio now stands at just 6.8%, down from 75% at year-end 2021. We will continue to ramp up our COVID antigen test business in Taiwan as we further develop and commercialize our product pipeline as scheduled.”
Third Quarter 2022 Financial Results
Revenues increased by 384.2% to US$1,757,774 in the third quarter of 2022 from US$363,052 in the same period of 2021, driven by increased sales of the Company’s COVID-19 Antigen Self-Test Kits in Taiwan. An increase in the number of COVID-19 cases in Taiwan and increased acceptance of our highly accurate self-test kit contributed to the strong performance.
Cost of Revenues
Cost of revenues was US$1,176,032 in the third quarter of 2022, compared with US$103,638 in the same period of 2021. Such increase was consistent with the corresponding increase in sales volume, as the Company shipped more of its COVID-19 Antigen Self-Test Kits.
In the third quarter of 2022, gross profit was US$581,742, representing a 33.1% gross margin, compared to US$259,414, or a 71.5% gross margin a year ago. The decline in gross margin was driven by a shift in the Company’s revenue mix. To align with Taiwan’s infection control policy, we generated more revenue from the COVID-19 Antigen Self-Test Kit in the third quarter. In comparison, the majority of our revenue during the comparable period had been generated from sales of our COVID-19 Rapid Test Kit for use by healthcare professionals. The self-test kit accounted for all our business in the third quarter, compared to 7% in the previous quarter.
Total Operating Expenses
Total operating expenses increased to US$8,404,013 in the third quarter of 2022 from US$1,442,756 in the same period of 2021. The increase was mainly attributable to depreciation and amortization expenses and share-based compensation. Operating expenses excluding depreciation and amortization expenses and share-based compensation remained relatively flat, reaching US$1,118,205 in the third quarter of 2022 as compared to US$759,589 a year ago.
R&D expenses increased to US$1,834,786 in the third quarter of 2022 from US$646,798 a year ago. When excluding depreciation and amortization expenses, R&D expenses increased to US$628,367 from US$401,526 over the same period. SG&A expenses increased to US$6,569,227 from US$795,958 over the same period. When excluding depreciation and amortization expenses and share-based compensation, SG&A expenses increased to US$489,838 from US$358,063 over the same period.
Net loss attributable to common stock shareholders was US$7,821,756 in the third quarter of 2022, compared with US$1,160,110 in the same period of 2021.
As of September 30, 2022, the Company had cash and cash equivalents of US$2,417,147 compared with US$1,751,499 as of December 31, 2021.
On August 15, 2022, the Company announced that it had signed a Master Service Agreement with Swiss Pharmaceutical Co., Ltd. (Taiwan) (“Swiss Pharma”). According to the agreement, Swiss Pharma will test, manufacture, and package the Company’s VELDONA® “GMP Clinical Batch” and “GMP Commercial Batch” product candidates for the Company’s planned clinical trials under both Pharmaceutical Inspection Co-operation Scheme Good Manufacturing Practice and U.S. Food & Drug Administration Current Good Manufacturing Practice regulations.
On August 24, 2022, the Company announced that it had submitted an Investigational New Drug application to the U.S. Food and Drug Administration for conducting a Phase 2 trial of its low-dose oral interferon alpha formulation, VELDONA®, for treatment of mild symptoms related to COVID-19.
On September 30, 2022, the Company announced the results from its antiviral efficacy study in hamsters against the Omicron variant of SARS-CoV-2. The Company’s results showed that its low-dose oral interferon alpha formulation, VELDONA®, had a therapeutic effect on lungs infected with the SARS-CoV-2 virus by regulating the immune response, thereby expediting recovery of infected animals. The Company has submitted the application documents for U.S. FDA Phase 2 clinical trials for evaluating the efficacy of VELDONA® in patients with mild COVID-19.
On October 31, 2022, the Company announced that it is pursuing out-licensing opportunities for five new drug candidates for its low-dose oral interferon-alpha formulation, VELDONA®. Ainos has completed Phase 2 trials for the five new drug candidates and will work with potential partners to accelerate the candidates to Phase 3 trials and eventual commercialization of VELDONA®.
About Ainos, Inc.
Headquartered in San Diego, California, Ainos, Inc. (f/k/a Amarillo Biosciences, 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 is committed to developing a comprehensive healthcare business portfolio encompassing medical devices and consumer healthcare products. While prioritizing the commercialization of medical devices as part of its diversification strategy, Ainos has also expanded its product portfolio to include Volatile Organic Compounds (VOC) and COVID-19 POCTs. Leveraging its patents related to VOC technologies and three issued patents for COVID-19 POCT products, the Company seeks to expedite the commercialization of its medical device pipeline, beginning with Ainos-branded COVID-19 POCT product candidates.
This press release contains ‘forward-looking statements’ 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 words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict,” “project,” ‘target,” “future,” “seek,” “likely,” “strategy,” “may,” “should,” “will,” and similar references to future periods. Forward-looking statements are based only on our 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 our control. Our actual results may differ materially from those indicated in the forward-looking statements.
Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others, the following: the cost of production and sales potential of the planned drug treatments announced in this press release; the impact of final approvals from the U.S. Food and Drug Administration (the “FDA”) or other regulatory bodies for the planned drug treatments including the availability of emergency use authorization; the Company’s limited cash and history of losses; the Company’s ability to achieve profitability; 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; the Company’s ability to manufacture any products it develops; general economic conditions and events and the impact they may have on the Company and its potential customers, including but not limited to the impact of Covid-19; the Company’s ability to obtain adequate financing in the future; the impact of promulgation and implementation of regulations by the World Health Organization, the FDA and by other governmental authorities with functions similar to those of the FDA on the Company’s operations and technologies; lawsuits and other claims by third parties or investigations by various regulatory agencies governing the Company’s operations; the Company’s ability to secure regulatory approvals for its products; and our success in managing the risks involved in the foregoing items. Readers should also review the risks and uncertainties listed in our Annual Report on Form 10-K for the year ended December 31, 2021 and other reports we file with the U.S. Securities and Exchange Commission.
Any forward-looking statement made by us in this press release speaks only as of the date on which such statement is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
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Condensed Consolidated Statements of Operations
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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 Sep 30, 2022 and
December 31, 2021;
19,478,270 shares and 9,625,133 shares issued and
outstanding as of Sep 30, 2022 and December 31, 2021
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