{"url_path":"/sec/aimd/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 BUSINESS.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-30","source_url":"https://www.sec.gov/Archives/edgar/data/1014763/0001493152-26-013579-index.html","accession_number":"0001493152-26-013579","cik":"0001014763","ticker":"AIMD","issuer_name":"Ainos, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1014763/0001493152-26-013579-index.html","primary_entity_key":"0001014763","primary_entity_name":"Ainos, Inc."},"word_count":2567,"has_tables":true,"body_markdown":"**ITEM\n1. BUSINESS.**\n\n \n\n**Overview**\n\n \n\nAinos,\nInc. (the “Company”), incorporated in the State of Texas in 1984, is a dual-platform company advancing artificial intelligence–based\nsmelltech technologies and immune therapeutics. Our primary strategic focus is the commercialization of our proprietary scent digitization\nplatform, AI Nose, while we also continue to develop therapeutic assets based on our low-dose oral interferon program, VELDONA®.\n\n \n\nOur\ncore technology platform, AI Nose, is an AI-based electronic olfaction system that integrates gas sensor arrays with proprietary artificial\nintelligence models, which we refer to as a smell language model (“SLM”), to digitize scent and volatile organic compound\n(“VOC”) signals into Smell ID, a machine-readable data format. AI Nose is initially developed in healthcare-related settings,\nincluding point-of-care testing (“POCT”). These early healthcare applications shaped the platform’s sensor architecture,\ndata models, and system calibration.\n\n \n\nBuilding\non this foundation, we are expanding the application of AI Nose into industrial environments, where we believe real-time environmental\nsensing, anomaly detection, and operational monitoring are important. Current and planned use cases include industrial applications across\nsemiconductor manufacturing, robotics, and smart manufacturing settings. We believe the underlying scent digitization architecture of\nAI Nose is adaptable across a range of industrial and non-industrial verticals, and we continue to evaluate additional application opportunities\nbased on partner engagement and deployment experience.\n\n \n\n3\n\n \n\n \n\nWe\nare advancing the AI Nose platform through partner-led deployments, with a strategy focused on platform scalability, data-driven performance\nimprovement, and integration into existing industrial ecosystems. Our approach emphasizes expanding the role of scent as a machine-readable\ndata modality alongside vision and sound, while maintaining flexibility to address diverse operational requirements.\n\n \n\nSeparately,\nwe continue to develop VELDONA®, our low-dose oral interferon platform, targeting selected rare, autoimmune, and infectious disease\nindications. Our VELDONA® programs include candidates for the treatment of oral warts in HIV-positive patients, Sjögren’s\nsyndrome, and feline chronic gingivostomatitis (“FCGS”). We have conducted research and development activities related to\nVELDONA® since our inception.\n\n \n\n**Our\nTechnologies**\n\n** **\n\n**AI\nNose Platform (AI-Powered Scent Digitization SmellTech)**\n\n** **\n\nAI\nNose is our core artificial intelligence–based scent digitization SmellTech platform designed to enable machines to detect, classify,\nand interpret scent and volatile organic compound (“VOC”) signals in real time. While artificial intelligence has broadly\nadopted vision and sound as primary data modalities, smell remains a largely underrepresented perception layer for machines. We are developing\nAI Nose to address this gap by translating complex scent signals into a structured, machine-readable data format.\n\n \n\nOur\ntargeted revenue sources include sales of AI Nose hardware systems and recurring service-based offerings associated with our SmellTech\nplatform.\n\n \n\nAI\nNose differs from conventional gas sensors in that it is positioned as a connected, trainable SmellTech sensing platform rather than\na single-purpose detection component. The system combines portable sensor hardware capable of parts-per-billion–level sensitivity\nwith cloud connectivity and proprietary artificial intelligence models. This architecture enables centralized data aggregation, remote\nmodel updates, and performance refinement over time. Unlike fixed-function sensors calibrated for specific compounds, AI Nose is designed\nto support ongoing training and adaptation as additional scent data are collected across deployments.\n\n \n\nThe\nAI Nose platform integrates gas sensor arrays with our proprietary artificial intelligence models, which we refer to as smell language\nmodel (“SLM”), to digitize scent signals into Smell ID, a structured digital data format designed to support computational\nanalysis, comparison, and learning across applications and environments. The SLM is designed to classify and contextualize scent data\nand to enable learning across different operating conditions using a trainable data framework. Through continued development of the SLM,\nwe are working to treat scent data as an AI-native data asset that can be applied across multiple use cases and deployment models.\n\n \n\nAI\nNose was initially developed in healthcare-related environments, including point-of-care testing (“POCT”) and healthcare\nmonitoring use cases such as ventilator-associated pneumonia, women’s vaginal health, and selected sexually transmitted infections.\nThese early applications required reliable operation in variable clinical settings and influenced the design of the platform’s\nsensor architecture, signal processing pipeline, data labeling methodology, and model training framework. Development in healthcare settings\nalso contributed to calibration, quality control, and validation processes that are applicable across other operating environments. Based\non this foundation, AI Nose is designed to detect and analyze target VOC patterns with parts-per-billion sensitivity within short time\nframes, supporting non-invasive and timely monitoring applications.\n\n \n\nBuilding\non this healthcare foundation, we have expanded the application of AI Nose into industrial environments, where continuous environmental\nsensing, anomaly detection, and operational monitoring are important. Current and targeted industrial applications include deployments\nacross semiconductor manufacturing, robotics, and smart manufacturing settings. In these environments, AI Nose is designed to function\nas a modular sensing component supporting safety-related detection, process awareness, and environmental monitoring.\n\n \n\n4\n\n \n\n \n\nDuring\n2025, we expanded the AI Nose industrial ecosystem through collaborations supporting pilot deployments. These deployments generate real-world\nscent data across diverse operating conditions, which we use to refine models, improve classification performance, and broaden the range\nof detectable patterns. We believe this process creates a data-driven feedback loop, whereby increased deployment generates additional\nSmell ID data that supports ongoing model improvement and broader applicability of the platform. As part of our industrial commercialization\nefforts, in 2025 we secured an initial commercial deployment under a multi-year subscription agreement with a leading semiconductor packaging\nand testing company involving AI Nose within manufacturing environments.\n\n \n\nIn\naddition to industrial applications, we continue to evaluate healthcare-adjacent use cases, including senior care, women’s vaginal\nhealth, selected sexually transmitted infections, and environmental control and monitoring in hospital operations, where non-invasive\nand continuous sensing capabilities may support monitoring and safety-related applications.\n\n \n\nTo\nsupport the continued development and scaling of the AI Nose platform, we operate ScentAI Inc. (“ScentAI”), a wholly owned\nsubsidiary focused on advancing the SLM algorithm, with Ainos focusing on hardware, deployment, and data generation.\n\n \n\n**Point-of-Care\nTesting (POCT)**\n\n** **\n\nOur\npoint-of-care testing (“POCT”) development activities incorporate multiple detection approaches, including volatile organic\ncompound (“VOC”) sensing, lateral flow immunochromatographic assays, and nucleic acid–based methods. Current POCT development\nefforts emphasize applications that leverage VOC sensing capabilities derived from the AI Nose platform. While initially developed for\nventilator-associated pneumonia, our planned POCT pipeline also includes applications in senior care hygiene monitoring, women’s\nvaginal health, and selected sexually transmitted infections. We continue to evaluate lateral flow and nucleic acid technologies for\nselected disease indications as part of our broader technology portfolio.\n\n \n\n**VELDONA®\n(Low-Dose Oral Interferon Platform)**\n\n** **\n\nVELDONA®\nis our low-dose oral interferon alpha formulation delivered to the oral cavity and designed to modulate immune responses through the\noral mucosa. Interferons are naturally occurring proteins produced by host cells in response to pathogens and play a role in immune signaling.\nThe VELDONA® formulation is intended to enable immune modulation at low doses, with the objective of reducing the risks and side\neffects commonly associated with higher-dose interferon therapies.\n\n \n\nSince\nour inception, we have conducted research and development of low-dose oral interferon across human and animal health applications. To\ndate, we have completed 68 human clinical studies evaluating low-dose oral interferon alpha, including Phase 1, Phase 2, and Phase 3\nstudies. Of these, 63 were Phase 2 trials that evaluated safety, tolerability, and potential therapeutic effects across multiple indications.\n\n \n\nIn\naddition, we have conducted 28 preclinical and animal studies evaluating low-dose oral interferon across a range of species. These studies\nassessed immune-related effects and explored potential applications in both companion and production animals. Results from these studies\nshaped our understanding of oral mucosal delivery and systemic immune modulation.\n\n \n\nOur\ncurrent VELDONA® development programs focus on selected rare, autoimmune, and infectious disease indications. These include candidates\nfor the treatment of oral warts in HIV-seropositive patients, Sjögren’s syndrome, and feline chronic gingivostomatitis (“FCGS”).\nThe U.S. Food and Drug Administration has granted orphan drug designation for our VELDONA® formulation as a potential treatment for\noral warts in HIV-seropositive patients.\n\n \n\nWe\nare advancing clinical studies in Taiwan to further evaluate VELDONA® in HIV-seropositive patients, Sjögren’s syndrome,\nand FCGS indications, subject to enrollment progress. We intend to primarily pursue out-licensing and partnership opportunities to advance\nthe further development and commercialization of the VELDONA® assets. In parallel, we commercialized VELDONA® Pet supplements\nin Taiwan to support companion animal health.\n\n \n\n5\n\n \n\n \n\n**Product\nPortfolio and Pipeline**\n\n** **\n\nAn\nintegral part of our operating strategy is to advance commercially viable products while expanding the deployment of the AI Nose platform\nthrough partnerships and system integrations.\n\n \n\n●AI\nNose platform deployments for industrial applications, including semiconductor manufacturing,\nrobotics, and smart manufacturing, delivered through partner-led commercialization efforts.\n\n●Selected\nPOCT devices under development powered by AI Nose, designed for healthcare applications including\nsenior care, women’s vaginal health and certain common STIs.\n\n●VELDONA®\nPet supplements, launched in Taiwan.\n\n●VELDONA®\nhuman and animal drug candidates, targeting oral warts in HIV-seropositive patients, Sjögren’s\nsyndrome, and FCGS, currently under clinical study in Taiwan.\n\n \n\nFrom\ntime to time, we evaluate our development priorities based on available resources, partner engagement, and market conditions. Our current\nfocus emphasizes scaling the AI Nose platform and expanding its commercial footprint across industrial and infrastructure-oriented environments,\nwhile continuing to advance selected healthcare and therapeutic programs.\n\n \n\n**Our\nBusiness Model**\n\n \n\nWe\nstructure our operations to emphasize capital efficiency through a combination of geographic footprint, outsourced manufacturing, and\nthird-party commercial relationships, as described below.\n\n \n\n**Geographic\nfootprint.** We operate our research and development and certain operating functions primarily in Taiwan as part of a capital-efficient\noperating model. Taiwan is a significant hub in the global technology supply chain and offers access to a skilled workforce, including\nengineers, researchers, and healthcare professionals. We believe our presence in Taiwan supports our current commercialization activities\nby enabling close coordination with manufacturing partners, distributors, and customers in the region. We also believe that maintaining\noperations in Taiwan in the near term enables us to access technical and scientific talent while managing operating costs, supporting\nthe development of high-quality and cost-effective products.\n\n \n\n**Outsourced\nManufacturing.** We rely on an outsourced manufacturing model, which we believe allows us to manage capital efficiently and maintain\noperational flexibility. We outsource the manufacturing of our AI Nose hardware products and point-of-care testing (POCT) product candidates\nto Taiwan Carbon Nano Technology Corp. (TCNT). We outsource the manufacturing of our VELDONA® human-use drug candidates to Swiss\nPharmaceutical Co., Ltd., a Taiwan-based pharmaceutical manufacturer. We outsource the manufacturing of our VELDONA® pet supplement\nproducts to third-party manufacturers in Taiwan, including TCNT.\n\n \n\n**Commercial\nRelationships.** We work with third parties to support the commercialization of our products across different markets and applications.\nWe maintain relationships with companies including Inabata & Co. Ltd. and its Taiwan subsidiary, Taiwan Inabata Sangyo Co., Topco\nScientific Co., Ltd., Trusval Technology Co., Ltd., Solomon Technology Corporation, Kenmec Mechanical Engineering Co., Ltd., and Topmed\nInternational Biotech Co., Ltd.\n\n \n\n**Intellectual\nProperty**\n\n \n\nWe\nseek to protect our technology and competitive position through a combination of patents, trade secrets, proprietary know-how, and other\nintellectual property rights. Our intellectual property portfolio includes issued patents and pending patent applications covering aspects\nof our core technologies, including AI Nose sensing technologies, point-of-care testing, and interferon-based therapeutics. The issued\npatents within our portfolio have expiration dates ranging from 2026 through 2046, depending on jurisdiction and the specific patent\ngrant. We also rely on contractual protections, including confidentiality and non-disclosure agreements with employees, collaborators,\nand other third parties, to safeguard proprietary information. We continue to evaluate opportunities to expand and strengthen our intellectual\nproperty portfolio as our technologies evolve. We also license certain patents and patent applications related to AI Nose, point-of-care\ntesting and other technologies pursuant to certain agreements with our affiliated companies as disclosed in Part III, Item 13.\n\n \n\n6\n\n \n\n \n\n**Employees**\n\n \n\nAs\nof December 31, 2025, we had 41 full-time employees, of whom 20 were engaged in research and development. Most of our employees are based\nin Taiwan. None of our employees are represented by a labor union or are party to a collective bargaining agreement. We plan to continue\nto expand our workforce in research and development, sales and marketing, and general operations to support our business programs.\n\n \n\n**Additional\nInformation**\n\n \n\nUnder\nour former name, Amarillo Biosciences, Inc., we completed an initial public offering on the Nasdaq SmallCap Market in August 1996 and\nhave traded on the U.S. over-the-counter market since October 1999. On October 31, 2013, we filed a voluntary petition for reorganization\nunder Chapter 11 of the United States bankruptcy code. We emerged from bankruptcy on January 23, 2015. We established a Taiwan branch\noffice in 2017. We renamed as Ainos, Inc in April 2021.\n\n \n\nOn\nAugust 9, 2022, our common stock and warrants began trading on the Nasdaq Capital Market under the trading symbols “AIMD”\nand “AIMDW,” respectively. We effectuated a 1-for-15 reverse stock split of our common stock on August 8, 2022, and a 1-for-5\nreverse stock split on December 14, 2023, and a 1-for-5 reverse stock split on June 30, 2025.\n\n \n\nOur\nannual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available\nfree of charge on the Company’s website at www.ainos.com as soon as reasonably practicable after such material is electronically\nfiled with, or furnished to, the Securities and Exchange Commission.\n\n \n\n**Government\nRegulation**\n\n \n\nOur\nAI Nose platform products incorporate electronic components and may include wireless communication capabilities, which may subject them\nto regulatory requirements governing radio frequency emissions, electromagnetic compatibility, and wireless device certification in jurisdictions\nwhere they are manufactured, marketed, or operated. In the United States, such devices are regulated by the Federal Communications Commission\n(“FCC”). In Taiwan, devices with radio frequency functionality may be subject to certification by the National Communications\nCommission (“NCC”). In Japan, wireless devices may be regulated under the Radio Law administered by the Ministry of Internal\nAffairs and Communications (“MIC”). Applicable requirements depend on device configuration and functionality, and compliance\nmay require testing, certification, and labeling prior to commercialization in certain markets\n\n \n\nOur\ndrug and medical device product candidates are subject to regulatory oversight by governmental authorities responsible for protecting\npublic health and safety. In the United States, medical and diagnostic technologies may be regulated by the U.S. Food and Drug Administration\n(“FDA”), which oversees clinical testing, product approval, and post-market surveillance. Internationally, our product candidates\nmay also be subject to review and approval by regulatory authorities in the jurisdictions, including the Taiwan Food and Drug Administration\n(“TFDA”) and other comparable agencies. As of December 31, 2025, our medical device product candidates are in development\nstage and have not been approved to sell by the FDA, the TFDA or other comparable agencies. Our VELDONA drug candidates, currently under\nclinical studies in Taiwan for HIV oral warts, Sjogren Syndrome, have not been approved to sell by the FDA, TFDA and other comparable\nagencies.\n\n \n\nOur\nVELDONA veterinary product candidates are subject laws and regulations in Taiwan including, but not limited to, the Veterinary Drugs\nControl Act, Enforcement Rules under the Veterinary Control Act, Guidelines of Good Manufacture Practice for Veterinary Drug Manufacturers,\nand Taiwan Regulations for Pet Foods and Supplements. The laws and regulations govern, among other things, product design and development,\npre-clinical and clinical testing, quality testing, manufacturing, packaging, labeling, storage, record keeping and reporting, clearance\nor approval, marketing, sales and distribution, promotion and advertising, import and export and post-marketing surveillance. As of December\n31, 2025, our VELDONA FCGA candidate, a veterinary application of our VELDONA drug, has not been approved to sell by TFDA.\n\n \n\nCompliance\nwith applicable regulatory requirements may require time and financial resources and may affect commercialization of certain products.\nFailure to comply with applicable regulations could result in fines, suspension of operations, or other regulatory actions.\n\n \n\n7"}