{"url_path":"/sec/aimd/10-k/2026/item-16","section_key":"item-16","section_title":"Item 16 FORM 10-K SUMMARY.**","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":15151,"has_tables":true,"body_markdown":"** **\n\n**ITEM\n16. FORM 10-K SUMMARY.**\n\n \n\nNone.\n\n \n\n57\n\n \n\n** **\n\n**SIGNATURES**\n\n \n\nPursuant\nto the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed\non its behalf by the undersigned, thereunto duly authorized.\n\n \n\n \nAINOS,\nINC.\n\n \n \n\nDate:\nMarch 30, 2026\nBy:\n*/s/\nChun-Hsien Tsai*\n\n \n \nChun-Hsien\nTsai, Chairman of the Board, President, and\n\n \n \nChief\nExecutive Officer\n\n \n \n \n\nDate:\nMarch 30, 2026\nBy:\n/s/\n*Hsin-Liang Lee*\n\n \n \nHsin-Liang\nLee, Chief Financial Officer\n\n \n\nPursuant\nto the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the\nregistrant and in the capacities and on the dates indicated.\n\n \n\nSignature\n \nTitle\n \nDate\n\n \n \n \n \n \n\n*/s/\nChun-Hsien Tsai*\n \n\nChairman\nof the Board, President, and Chief Executive Officer\n\n \nMarch\n30, 2026\n\nChun-Hsien\nTsai\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nHsin-Liang Lee*\n \nChief\nFinancial Officer\n \nMarch\n30, 2026\n\nHsin-Liang\nLee\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nWen-Han Chang*\n \nDirector\n \nMarch\n30, 2026\n\nWen-Han\nChang\n \n \n \n \n\nBy:\nChun-Hsien Tsai, Attorney in fact\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nYao-Chung Chiang*\n \nDirector\n \nMarch\n30, 2026\n\nYao-Chung\nChiang\n \n \n \n \n\nBy:\nChun-Hsien Tsai, Attorney in fact\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nPao-Sheng Wei*\n \nDirector\n \nMarch\n30, 2026\n\nPao-Sheng\nWei\n \n \n \n \n\nBy:\nChun-Hsien Tsai, Attorney in fact\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nTing-Chuan Lee*\n \nDirector\n \nMarch\n30, 2026\n\nTing-Chuan\nLee\n \n \n \n \n\nBy:\nChun-Hsien Tsai, Attorney in fact\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nChun-Jung Tsai*\n \nDirector\n \nMarch\n30, 2026\n\nChun-Jung\nTsai\n \n \n \n \n\nBy:\nChun-Hsien Tsai, Attorney in fact\n \n \n \n \n\n \n \n \n \n \n\n*/s/\nChung-Yi Tsai*\n \nDirector\n \nMarch\n30, 2026\n\nChung-Yi\nTsai\n \n \n \n \n\nBy:\nChun-Hsien Tsai, Attorney in fact\n \n \n \n \n\n \n\n58\n\n \n\n \n\nAinos,\nInc.\n\nConsolidated\nFinancial Statements\n\n \n\nAs\nof and for the years ended December 31, 2025 and 2024\n\n \n\n**Contents**\n\n \n\n[Report of Independent Registered Public Accounting Firm](#fin_001) (PCAOB ID: 6871 and 2851)\nF-2\n\n \n \n\n[Consolidated\nBalance Sheets as of December 31, 2025 and 2024](#fin_002)\nF-4\n\n \n \n\n[Consolidated\nStatements of Operations for the years ended December 31, 2025 and 2024](#fin_003)\nF-5\n\n \n \n\n[Consolidated\nStatements of Comprehensive Loss for the years ended December 31, 2025, and 2024](#fin_004)\nF-6\n\n \n \n\n[Consolidated\nStatements of Stockholders’ Equity for the years ended December 31, 2025 and 2024](#fin_005)\nF-7\n\n \n \n\n[Consolidated\nStatements of Cash Flows for the years ended December 31, 2025 and 2024](#fin_006)\nF-8\n\n \n \n\n[Notes\nto Consolidated Financial Statements](#fin_007)\nF-9\n\n \n\nF-1\n\n \n\n \n\n**REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\n \n\nTo\nthe Board of Directors and Shareholders of Ainos, Inc.\n\n** **\n\n**Opinion\non the Financial Statements**\n\n** **\n\nWe\nhave audited the accompanying consolidated balance sheet of Ainos, Inc. and its subsidiaries (the “Company”) as of December\n31, 2025, the related statements of operations, comprehensive loss, shareholders’ equity, and cash flows for the year then ended,\nand the related notes (collectively referred to as the “consolidated financial statements”).\n\n \n\nIn\nour opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as\nof December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with the U.S. generally\naccepted accounting principles.\n\n** **\n\n**Consideration\nof the Company’s Ability to Continue as a Going Concern**\n\n** **\n\nThe\naccompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As described\nin Note 2 to the consolidated financial statements, the Company incurred recurring losses from operations and has an accumulated deficit,\nwhich raises substantial doubt about its ability to continue as a going concern. Management’s plans with regard to these matters\nare described in Note 2. The accompanying consolidated financial statements do not include any adjustments that might result from the\noutcome of this uncertainty.\n\n** **\n\n**Basis\nfor Opinion**\n\n** **\n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error\nor fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit\nprovide a reasonable basis for our opinion.\n\n** **\n\n**Critical\nAudit Matter**\n\n** **\n\nThe\ncritical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated\nor required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial\nstatements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters\ndoes not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit\nmatter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\n** **\n\n**Assessment\nof Impairment of Intangible Assets**\n\n** **\n\n**Critical\nAudit Matter Description**\n\n** **\n\nAs\ndiscussed in Notes 2 and 4 to the financial statements, the Company acquired certain finite-lived intellectual properties from a related\nparty. These intellectual properties were capitalized and are amortized over their estimated useful lives. The Company assessed whether\nevents and circumstances indicate the carrying amount of these assets may not be fully recoverable. Given the audit effort in evaluating\nmanagement’s judgements of the indicators of impairment and the required degree of auditor judgment, we determined it was a critical\naudit matter.\n\n \n\nHow\nthe Critical Audit Matter Was Addressed in the Audit\n\n \n\nOur\nprincipal audit procedures related to the Company’s assessment of impairment included, amongst others:\n\n \n\n●We\nevaluated management’s accounting policy related to intangible assets.\n\n   \n\n●We\nevaluated the management’s assumptions used in the estimates of undiscounted cash flows\nfor the asset group and the conclusion reached by management.\n\n** **\n\n*/s/\nYCM CPA INC.*\n \n\n \n\nWe\nhave served as the Company’s auditor since 2025.\n\nPCAOB\nID 6781\n\nIrvine,\nCalifornia\n\nMarch\n30, 2026\n\n \n\nF-2\n\n \n\n \n\n \n\n**REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\nTo\nthe stockholders and the board of directors of Ainos, Inc.\n\n \n\n**Opinion\non the Financial Statements**\n\n \n\nWe\nhave audited the accompanying balance sheet of Ainos, Inc. (the “Company”) as of December 31, 2024, the related statements\nof operations, comprehensive loss, shareholders’ equity (deficit), and cash flows for the year then ended, and the related notes\n(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all\nmaterial respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows\nfor the year then ended, in conformity with the U.S. generally accepted accounting principles.\n\n \n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error\nor fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits\nprovide a reasonable basis for our opinion.\n\n \n\n**Critical\nAudit Matters**\n\n \n\nThe\ncritical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated\nor required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial\nstatements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters\ndoes not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit\nmatters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\n \n\n**Assessment\nof Impairment of Intangible Assets**\n\n \n\nCritical\nAudit Matter Description\n\n \n\nAs\ndiscussed in Notes 2 and 4 to the financial statements, the Company acquired certain finite life intellectual properties from a related\nparty. These intellectual properties were capitalized and are amortized over their estimated useful lives. The Company assessed whether\nevents and circumstances indicate the carrying amount of these assets may not be fully recoverable. Given the audit effort in evaluating\nmanagement’s judgements of the indicators of impairment and the required degree of auditor judgment, we determined it was a critical\naudit matter.\n\n \n\nHow\nthe Critical Audit Matter Was Addressed in the Audit\n\n \n\nOur\nprincipal audit procedures related to the Company’s assessment of impairment included, amongst others:\n\n \n\n●We\nevaluated management’s accounting policy related to intangible assets.\n\n   \n\n●We\nevaluated the Company’s assumptions used in the estimates of undiscounted cash flow\nfor the asset group and the conclusion reached by management.\n\n \n\n*/s/\nKCCW Accountancy Corp.*\n \n\n \n\nWe\nhave served as the Company’s auditor since 2023.\n\nDiamond\nBar, California\n\nMarch\n7, 2025\n\n** **\n\nKCCW\nAccountancy Corp.\n\n3333\nSouth Brea Canyon Rd. #206, Diamond Bar, CA 91765, USA\n\nTel:\n+1 909 348 7228 ● Fax: +1 909 895 4155 ● info@kccwcpa.com\n\n** **\n\nF-3\n\n \n\n** **\n\n**Ainos,\nInc.**\n\n**Consolidated\nBalance Sheets**\n\n \n\n  \n2025  \n2024 \n\n  \nDecember 31, \n\n  \n2025  \n2024 \n\nAssets \n    \n   \n\nCurrent assets: \n    \n   \n\nCash and cash equivalents \n$417,353  \n$3,892,919 \n\nAccounts receivable \n 22  \n 56 \n\nInventory, net \n 295,565  \n 143,756 \n\nOther current assets \n 425,859  \n 301,077 \n\nTotal current assets \n 1,138,799  \n 4,337,808 \n\nIntangible assets, net \n 19,226,003  \n 23,748,328 \n\nProperty and equipment, net \n 343,281  \n 559,645 \n\nOther assets \n 163,025  \n 174,418 \n\nTotal assets \n$20,871,108  \n$28,820,199 \n\n  \n    \n   \n\nLiabilities and Stockholders’ Equity \n    \n   \n\nCurrent liabilities: \n    \n   \n\nContract liabilities (including amounts to related party of $350,000 and nil as of December 31, 2025 and 2024, respectively) \n$350,000  \n$106,329 \n\nConvertible notes payable (including amounts to related party of nil and $2,000,000 as of December 31, 2025 and 2024, respectively) \n -  \n 3,000,000 \n\nAccrued expenses and other current liabilities \n 728,683  \n 848,615 \n\nTotal current liabilities \n 1,078,683  \n 3,954,944 \n\nConvertible notes payable - noncurrent (including amounts to related party of $11,000,000 and $9,000,000 as of December 31, 2025 and 2024, respectively) \n 11,000,000  \n 9,000,000 \n\nOther long-term liabilities \n 1,229,843  \n 348,945 \n\nTotal liabilities \n 13,308,526  \n 13,303,889 \n\nCommitments and contingencies \n -  \n - \n\nStockholders’ equity: \n    \n   \n\nPreferred stock, $0.01 par value; 50,000,000 shares authorized as of December 31, 2025 and 2024, respectively; none issued and outstanding \n -  \n - \n\nCommon stock, $0.01 par value; 300,000,000 shares authorized as of December 31, 2025 and 2024; 6,982,675 shares and 3,085,477 shares issued and 5,882,675 and 3,085,477 shares outstanding as of December 31, 2025 and 2024, respectively \n 69,827  \n 30,854 \n\nTreasury stock, at cost (1,160,000 and nil shares held as of December 31, 2025 and 2024, respectively) (1) \n (1,972,000) \n - \n\nAdditional paid-in capital \n 77,234,374  \n 68,644,301 \n\nAccumulated deficit \n (67,520,328) \n (52,749,316)\n\nAccumulated other comprehensive loss - translation adjustment \n (249,291) \n (409,529)\n\nTotal stockholders’ equity \n 7,562,582  \n 15,516,310 \n\nTotal liabilities and stockholders’ equity \n$20,871,108  \n$28,820,199 \n\n \n\n(1)The\nCompany issued 1,160,000 shares of its common stock in exchange for 116,000,000 newly issued\nshares of wholly owned Subsidiary. The Company treats those shares as Treasury Stock in its\nconsolidated financial statements. Both entities are under the same ultimate controlling\nparty before and after the transaction. The transaction represents an equity restructuring\nwithin the group and is considered a common control transaction under ASC 805-50.\n\n \n\n*The\naccompanying notes are an integral part of these consolidated financial statements.*\n\n** **\n\nF-4\n\n \n\n** **\n\n**Ainos,\nInc.**\n\n**Consolidated\nStatements of Operations**\n\n \n\n  \n2025  \n2024 \n\n  \nYears ended December 31, \n\n  \n2025  \n2024 \n\nRevenues \n$124,157  \n$20,729 \n\nCost of revenues \n (21,246) \n (52,595)\n\nGross profit (loss) \n 102,911  \n (31,866)\n\n  \n    \n   \n\nOperating expenses: \n    \n   \n\nResearch and development expenses (including amounts for related party of $947,084 and $1,418,887 for the years ended December 31, 2025 and 2024, respectively) \n 7,749,772  \n 8,413,923 \n\nSelling, general and administrative expenses \n 6,343,547  \n 5,395,415 \n\nTotal operating expenses \n 14,093,319  \n 13,809,338 \n\nLoss from operations \n (13,990,408) \n (13,841,204)\n\n  \n    \n   \n\nNon-operating income (expenses), net \n    \n   \n\nInterest expense \n (711,903) \n (616,467)\n\nIssuance cost of senior secured convertible note measured at fair value \n -  \n (308,336)\n\nFair value change of senior secured convertible note \n -  \n (275,624)\n\nOther income (expenses), net \n (67,901) \n 179,270 \n\nTotal non-operating expenses, net \n (779,804) \n (1,021,157)\n\nNet loss before income taxes \n (14,770,212) \n (14,862,361)\n\nProvision for income taxes \n 800  \n 800 \n\nNet loss \n$(14,771,012) \n$(14,863,161)\n\nNet loss per common share - basic and diluted \n$(3.46) \n$(7.82)\n\n  \n    \n   \n\nWeighted-average shares used in computing net loss per common share-basic and diluted \n 4,270,815  \n 1,900,723 \n\n \n\n*The\naccompanying notes are an integral part of these consolidated financial statements.*\n\n \n\nF-5\n\n \n\n** **\n\n**Ainos,\nInc.**\n\n**Consolidated\nStatements of Comprehensive Loss**\n\n \n\n  \n2025  \n2024 \n\n  \nYears ended December 31, \n\n  \n2025  \n2024 \n\nNet loss \n$(14,771,012) \n$(14,863,161)\n\nOther comprehensive loss: \n    \n   \n\nTranslation adjustment \n 160,238  \n (139,056)\n\nComprehensive loss \n$(14,610,774) \n$(15,002,217)\n\n \n\n*The\naccompanying notes are an integral part of these consolidated financial statements.*\n\n \n\nF-6\n\n \n\n \n\n**Ainos,\nInc.**\n\n**Consolidated\nStatements of Stockholders’ Equity**\n\n**Years\nEnded December 31, 2025 and 2024**\n\n** **\n\n****\n\n** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares\n(1)**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Capital**** **** **\n**Deficit**** **** **\n**Loss**** **** **\n**(Deficit)**** **\n\n** **** **\n**Preferred Stock**** **** **\n**Common Stock**** **** **\n**Tearsury Stock**** **** **\n**Common Stock - to be issued**** **** **\n**Additional Paid-in**** **** **\n**Accumulated**** **** **\n**Accumulated Other Comprehensive**** **** **\n\n**Total**\n\n**Stockholders’\nEquity**\n** **\n\n** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Shares\n(1)**** **** **\n**Amount**** **** **\n**Shares**** **** **\n**Amount**** **** **\n**Capital**** **** **\n**Deficit**** **** **\n**Loss**** **** **\n**(Deficit)**** **\n\nBalance at December 31, 2024 \n          -  \n$                -  \n 3,085,477  \n$30,854  \n                   -  \n$-  \n -  \n$-  \n$   68,644,301  \n$(52,749,316) \n$(409,529) \n$15,516,310 \n\nIssuance of stock to settle vested RSUs \n -  \n -  \n 634,966  \n 6,350  \n -  \n -  \n -  \n -  \n (6,350) \n -  \n -  \n - \n\nIssuance of stock to special stock bonus \n -  \n -  \n 1,300,500  \n 13,005  \n -  \n -  \n -  \n -  \n 2,682,525  \n -  \n -  \n 2,695,530 \n\nIssuance of common stock from at-the-market offering, net of issuance costs \n -  \n -  \n 734,214  \n 7,343  \n -  \n -  \n -  \n -  \n 2,001,378  \n -  \n -  \n 2,008,721 \n\nIssuance of common stock for consulting services \n -  \n -  \n 67,617  \n 676  \n -  \n -  \n -  \n -  \n 224,324  \n -  \n -  \n 225,000 \n\nFractional shares paid out in cash for the reverse stock split \n -  \n -  \n (99) \n (1) \n -  \n -  \n -  \n -  \n (259) \n -  \n -  \n (260)\n\nIssuance of common stock exchanging Subsidiary shares \n -  \n -  \n 1,160,000  \n 11,600  \n (1,160,000) \n (1,972,000) \n -  \n -  \n 1,960,400  \n -  \n -  \n - \n\nShare-based compensation \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 1,728,055  \n -  \n -  \n 1,728,055 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (14,771,012) \n -  \n (14,771,012)\n\nTranslation adjustment \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 160,238  \n 160,238 \n\nBalance at December 31, 2025 \n -  \n$-  \n 6,982,675  \n$69,827  \n (1,160,000) \n$(1,972,000) \n -  \n$-  \n$77,234,374  \n$(67,520,328) \n$(249,291) \n$7,562,582 \n\n  \n    \n    \n    \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance at December 31, 2023 \n -  \n$-  \n 935,557  \n$9,355  \n -  \n$-  \n 32,467  \n$325  \n$62,594,529  \n$(37,886,155) \n$(270,473) \n$24,447,581 \n\nBalance \n -  \n$-  \n 935,557  \n$9,355  \n -  \n$-  \n 32,467  \n$325  \n$62,594,529  \n$(37,886,155) \n$(270,473) \n$24,447,581 \n\nConversion of convertible notes payable to common stock \n -  \n -  \n 646,730  \n 6,467  \n -  \n -  \n (32,467) \n (325) \n 2,435,549  \n -  \n -  \n 2,441,691 \n\nIssuance of stock to settle vested RSUs \n -  \n -  \n 353,690  \n 3,537  \n -  \n -  \n -  \n -  \n (3,537) \n -  \n -  \n - \n\nIssuance of stock to special stock bonus \n -  \n -  \n 49,500  \n 495  \n -  \n -  \n -  \n -  \n 88,501  \n -  \n -  \n 88,996 \n\nRelated party used computer equipment \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (4,428) \n -  \n -  \n (4,428)\n\nWarrants issued in connection with senior secured convertible note payable \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 1,586  \n -  \n -  \n 1,586 \n\nissue common stock for patent license agreement \n -  \n -  \n 1,100,000  \n 11,000  \n -  \n -  \n -  \n -  \n (11,000) \n -  \n -  \n - \n\nShare-based compensation \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 3,543,101  \n -  \n -  \n 3,543,101 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (14,863,161) \n -  \n (14,863,161)\n\nTranslation adjustment \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (139,056) \n (139,056)\n\nBalance at December 31, 2024 \n -  \n$-  \n 3,085,477  \n$30,854  \n -  \n$-  \n -  \n$-  \n$68,644,301  \n$(52,749,316) \n$(409,529) \n$15,516,310 \n\nBalance \n -  \n$-  \n 3,085,477  \n$30,854  \n -  \n$-  \n -  \n$-  \n$68,644,301  \n$(52,749,316) \n$(409,529) \n$15,516,310 \n\n** **\n\n(1)The\nCompany issued 1,160,000 shares of its common stock in exchange for 116,000,000 newly issued\nshares of wholly owned Subsidiary. The Company treats those shares as Treasury Stock in its\nconsolidated financial statements. Both entities are under the same ultimate controlling\nparty before and after the transaction. The transaction represents an equity restructuring\nwithin the group and is considered a common control transaction under ASC 805-50.\n\n \n\n*The\naccompanying notes are an integral part of these consolidated financial statements.*\n\n* *\n\nF-7\n\n \n\n** **\n\n**Ainos,\nInc.**\n\n**Consolidated\nStatements of Cash Flows**\n\n \n\n  \n2025  \n2024 \n\n  \nYears Ended December 31, \n\n  \n2025  \n2024 \n\nCash flows from operating activities: \n    \n   \n\nNet loss \n$(14,771,012) \n$(14,863,161)\n\nAdjustments to reconcile net loss to net cash used in operating activities: \n    \n   \n\nDepreciation and amortization \n 4,780,150  \n 4,801,716 \n\nShare-based compensation expense \n 1,728,055  \n 3,543,101 \n\nStock issued for special stock bonus \n 2,695,530  \n 88,996 \n\nIssuance cost of senior secured convertible note measured at fair value \n -  \n 308,336 \n\nIssuance of common stock for consulting services \n 225,000  \n - \n\nChanges in fair value of senior secured convertible note \n -  \n 275,624 \n\nGain on disposal of property, plant and equipment \n (1,096) \n - \n\nChanges in operating assets and liabilities: \n    \n   \n\nAccounts receivable \n 34  \n 399 \n\nInventory \n (151,809) \n 23,837 \n\nOther current assets \n (123,085) \n 118,444 \n\nAccrued expenses and other current and long-term liabilities \n 1,003,536  \n (105,559)\n\nNet cash used in operating activities \n (4,614,697) \n (5,808,267)\n\nCash flows from investing activities: \n    \n   \n\nPurchase of property and equipment \n (34,561) \n (21,331)\n\nDecrease (Increase) in refundable deposits and other assets \n 32,338  \n (103,961)\n\nNet cash used in investing activities \n (2,223) \n (125,292)\n\nCash flows from financing activities: \n    \n   \n\nProceeds from convertible notes payable- noncurrent, related party \n -  \n 9,000,000 \n\nProceeds from senior secured convertible notes payable \n -  \n 875,000 \n\nProceeds from at-the-market offering, net of issuance costs \n 2,008,721  \n - \n\nRepayment of convertible notes payable \n (1,000,000) \n - \n\nRepayment of senior secured convertible notes payable \n -  \n (1,439,754)\n\nRepayment of other notes payable, related party \n -  \n (312,000)\n\nPayment of issuance cost of senior secured convertible note measured at fair value \n -  \n (97,500)\n\nFractional shares paid out in cash for the reverse stock split \n (260) \n - \n\nNet cash provided by financing activities \n 1,008,461  \n 8,025,746 \n\nEffect from foreign currency exchange \n 132,893  \n (84,896)\n\nNet (decrease) increase in cash and cash equivalents \n (3,475,566) \n 2,007,291 \n\nCash and cash equivalents at beginning of year \n 3,892,919  \n 1,885,628 \n\nCash and cash equivalents at end of year \n$417,353  \n$3,892,919 \n\n  \n    \n   \n\nSupplemental Cash Flow Information \n    \n   \n\nCash paid for interest \n$32  \n$21,671 \n\nCash paid for income taxes \n$800  \n$800 \n\nIssuance of common stock for consulting services \n$225,000  \n$- \n\n  \n    \n   \n\nNoncash financing and investing activities \n    \n   \n\nConversion of senior secured convertible notes to common stock \n$-  \n$2,441,691 \n\nReceivable from disposal of property, plant and equipment\n \n$\n1,697\n \n \n$\n-\n \n\nIssuance of common stock for exchanging subsidiary company shares \n$1,972,000  \n$- \n\n \n\n*The\naccompanying notes are an integral part of these consolidated financial statements.*\n\n** **\n\nF-8\n\n \n\n** **\n\n**Ainos,\nInc.**\n\n**Notes\nto Consolidated Financial Statements**\n\n**December\n31, 2025 and 2024**\n\n \n\n**1.\nDescription of Business**\n\n \n\n**Organization\nand Business**\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\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**Public\nOffering and Uplisting**\n\n \n\nThe\nCompany’s registration statement related to its underwritten public offering (the “Offering”) was declared effective\non August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (the “Nasdaq”)\non August 9, 2022 under the trading symbols “AIMD” and “AIMDW”, respectively.\n\n \n\n**Reverse\nStock Splits**\n\n \n\nIn\nconnection with the Offering, the Company’s board of directors on April 29, 2022 and its shareholders on May 16, 2022 approved\na 1-for-15 reverse stock split of the Company’s common stock that became effective on August 9, 2022. On November 27, 2023, to\ncomply with Nasdaq’s minimum $1.00 per share continued listing rules, the Company filed a Certificate of Amendment to its Restated\nCertificate of Formation to apply for reverse stock split of the Company’s common stock at a ratio of 1-for-5, which was effectuated\non December 14, 2023 after receiving required approvals. Further, to comply with Nasdaq’s minimum $1.00 per share continued listing\nrules, on June 27, 2025, the Company applied for another reverse stock split of the Company’s common stock at a ratio of 1-for-5,\nwhich was effectuated on June 30, 2025 after receiving required approvals.\n\n \n\nThe\npar value of $0.01 and authorized shares of the Company’s common stock remain the same and were not adjusted as a result of the\nreverse stock splits. All issued and outstanding common stock, restricted stock units (RSUs), outstanding convertible notes, warrants\nand options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to\ngive effect to the reverse stock splits for all periods presented.\n\n \n\nAdditional\ninformation regarding the Offering and the reverse stock splits can be found in Note 7 to the financial statements.\n\n** **\n\nF-9\n\n \n\n \n\n**2.\nSummary of Significant Accounting Policies**\n\n \n\n**Basis\nof Presentation**\n\n \n\nThe\naccompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States\nof America (the “GAAP”) and rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).\n\n \n\n**Use\nof Estimates**\n\n \n\nThe\npreparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions\nthat affect the reported amounts of assets and liabilities and disclosures as of the date of the financial statements and the reported\namounts of revenues and expenses during the reporting period. The Company bases its estimates on various factors, including historical\nexperience, and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are\nnot readily available from other sources. Significant items subject to estimates and assumptions include useful lives of property and\nequipment, valuation of stock option, warrants and senior secured convertible notes measured at fair value, undiscounted cash flows used\nfor an impairment testing of intangible assets, inventory losses and sales return. Actual results may differ from these estimates.\n\n \n\n**Segments**\n\n \n\nOperating\nsegments are defined as components of an entity for which separate financial information is available and that is regularly reviewed\nby the chief operating decision maker (the “CODM”) in deciding how to allocate resources to an individual segment and in\nassessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information\nprepared on the basis of accounting policy disclosed in its annual financial statement for purposes of making operating decisions, allocating\nresources, and evaluating financial performance of the Company. As such, the Company has determined that it operates as one operating\nsegment.\n\n \n\nThe\nrevenues from external customers or long-term assets are based or located in Taiwan.\n\n \n\n**Liquidity\nand Capital Resources**\n\n \n\n****\n\nAs\nof December 31, 2025, the Company had cash and cash equivalents of $417,353. The Company plans to finance its operations and development\nneeds with its existing cash and cash equivalents, additional equity and/or debt financing arrangements, and expected revenue primarily\nfrom the sale of AI Nose related program to support the Company’s operation and product developments. There can be no assurance\nthat the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis, or at all. If the\nCompany is not able to obtain sufficient funds on acceptable terms when needed, the Company’s business, results of operations,\nand financial condition could be materially adversely impacted.\n\n \n\nFor\nthe year ended December 31, 2025, the Company generated a net loss of $14,771,012. The Company expects to continue incurring development\nexpenses for the next twelve months as the Company advances product pipeline.\n\n \n\nThe\nfinancial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of\nliabilities in the normal course of business. The Company has incurred net operating losses and has an accumulated deficit as of December\n31, 2025 of $67,520,328 and expects to incur additional losses and negative operating cash flows for at least the next twelve months.\nThe Company’s ability to meet its obligations is dependent upon its ability to generate sufficient cash flows from operations and\nfuture financing transactions. Although management expects the Company will continue as a going concern, there is no assurance that management’s\nplans will be successful since the availability and amount of such funding is not certain. Accordingly, substantial doubt exists about\nthe Company’s ability to continue as a going concern for at least one year from the issuance of these financial statements. The\naccompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability of assets\nor the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.\n\n \n\n**Cash\nand Cash Equivalents**\n\n \n\nAs\nof December 31, 2025 and 2024, cash and cash equivalents consist of cash on hand and cash in bank which is potentially subject to concentration\nof credit risk. Such balance is maintained at financial institutions that management determines to be of high-credit quality. Cash accounts\nat each institution are insured by the Federal Deposit Insurance Corporation in the U.S.A or Central Deposit Insurance Corporation in\nTaiwan up to certain limits. At times, such deposits may be in excess of the insurance limit. Accounts are guaranteed by the Federal\nDeposit Insurance Corporation (FDIC) up to $250,000. As of December 31, 2025 and December 31, 2024, the Company had approximately nil\nand $212,400 in excess of FDIC insured limits, respectively. The Company maintains cash in state-owned banks in Taiwan. In Taiwan, the\ninsurance coverage of each bank is NT$3,000,000 (approximately US$95,450). As of December 31, 2025 and December 31, 2024, the Company\nhad approximately $242,000 and $3,311,000 cash in excess of the insured amount, respectively. The Company has not experienced any losses\nin such accounts.\n\n \n\nF-10\n\n \n\n \n\n**Allowances\nfor Doubtful Accounts**\n\n \n\nThe\nallowances for doubtful accounts represent management’s best estimate of the expected future credit losses from the Company’s\naccounts receivable. Determination of the allowances requires management to exercise judgment about the timing, frequency and severity\nof credit losses that could materially affect the provision for credit losses and, therefore, net loss. The Company regularly performs\ndetailed reviews of its portfolios to determine if an impairment has occurred and evaluates the collectability of receivables based on\na combination of various financial and qualitative factors that may affect customers’ ability to pay. In circumstances where the\nCompany is aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts\ndue to reduce the recognized receivable to the amount reasonably expected to be collected. If the financial condition of the Company’s\ncustomers were to deteriorate, resulting in an impairment of their ability to make payments, additional reserves would be required. The\nCompany has not experienced significant customer payment defaults or identified other significant collectability concerns at December\n31, 2025 and 2024.\n\n \n\n**Inventory**\n\n \n\nInventories\nare stated at the lower of cost or net realizable value. Cost including amounts related to materials, labor and overhead is determined\non a weighted-average basis. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable\ncosts of completion, disposal, and transportation. The valuation of inventory requires management to estimate excess and obsolete inventory.\nReserves for excess and obsolete inventory are primarily based on management’s estimates of forecasted sales, usage levels and\nexpiration dates. The Company records inventory loss for excess and obsolete inventory within cost of revenues.\n\n** **\n\n**Intangible\nAssets**\n\n \n\nIntangible\nassets, mainly consisting of patents, are initially recorded at fair value and stated net of accumulated amortization and, if applicable,\nimpairments. The Company amortizes its intangible assets that have finite lives using the straight-line method. Amortization is recorded\nover the estimated useful lives ranging from 5 to 19 years.\n\n \n\n**Impairment\nof Long-lived Assets**\n\n \n\nThe\nCompany evaluates the recoverability of its definite lived intangible assets together with property and equipment whenever events or\nchanges in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations\nof future undiscounted cash flows for each asset group in accordance with ASC 360-10, *Property, Plant and Equipment—Impairment\nor Disposal of Long-Lived Assets*. If the carrying value of an asset or asset group exceeds its undiscounted cash flows, the Company\nestimates the fair value of the assets using market participant assumptions pursuant to ASC 820, *Fair Value Measurements*.\n\n \n\nDuring\nthe 4th quarter of 2025, the Company reassessed its short-term and long-term commercial plans for its VOC POCT related products which are\nidentified as an asset group being assigned the major intangible assets and identified that an impairment testing is warranted for the\nintangible assets. As a result, the Company performed an undiscounted cash flow analysis pursuant to ASC 360-10 to determine if the cash\nflows expected to be generated by the VOC POCT products over the estimated remaining useful life of its primary assets were sufficient\nto recover the carrying value of the asset group. Based on this analysis, the undiscounted cash flows were sufficient to recover the\ncarrying value of the long-lived assets. Thus, management has concluded that no impairment loss is needed.\n\n \n\nTo\nestimate the undiscounted cash flows of the asset group, the Company used assumptions requiring significant judgment, including judgment\nabout when the in-development product can be commercialized, estimated selling price and sales volume of the in-development product and\nthe amount and timing of other cash outflows required to complete the development, commercialization and sales of the product. The forecasted\ncash flows were based on the Company’s most recent strategic plan, and for periods beyond the strategic plan, the Company’s\nestimates were based on assumed growth rates expected as of the measurement date. The Company believes its assumptions were consistent\nwith the strategic plans and business goals.\n\n \n\nF-11\n\n \n\n \n\n**Property\nand Equipment**\n\n \n\nProperty\nand equipment are stated on the basis of historical cost less accumulated depreciation and impairment. Expenditures which materially\nincrease value or extend useful lives of assets are capitalized, while maintenance and repairs which do not improve or extend the lives\nof the respective assets are charged to operations when incurred. Gains and losses on the retirement or disposal of individual assets\nare included in the results of operations. Depreciation is provided using the straight-line method over estimated useful lives of assets\nincluding 3 to 6 years for machinery and equipment and 2 to 5 years for furniture and fixture.\n\n \n\n**Fair\nValue Option**\n\n \n\nASC\n825-10, *Financial Instruments*, provides a fair value option (the “FVO”) election that allows companies an irrevocable\nelection to use fair value as the initial and subsequent accounting measurement attribute for certain financial assets and liabilities.\nASC 825-10 permits entities to elect to measure eligible financial assets and liabilities at fair value on an ongoing basis. Unrealized\ngains and losses on items for which the FVO has been elected are reported in earnings, except for the effect of changes in own credit,\nwhich are recognized in other comprehensive income/loss. The decision to elect the FVO is determined on an instrument-by-instrument basis,\nmust be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to ASC\n825-10 are required to be reported separately from those instruments measured using another accounting method.\n\n \n\nThe\nCompany elected to account for the senior secured convertible notes issued to Lind Global Fund II LP (the “Lind Note”) using\nFVO, which allows for valuing the Lind Note at fair value in its entirety versus bifurcation of the embedded derivatives (see Note 6).\nThe fair value of the Lind Note is determined using a binomial lattice valuation model, which is widely used for valuing convertible\nnotes. The significant assumption used in the model is volatility of the Company’s common stock. If different assumptions are used,\nthe fair value of the convertible notes and the change in estimated fair value could be materially different. A significant increase\nin the volatility of the market price of the Company’s common stock, in isolation, would result in a significantly higher fair\nvalue; and a significant decrease in volatility would result in a significantly lower fair value.\n\n \n\n**Foreign\nCurrency Translation**\n\n** **\n\nAssets\nand liabilities of a foreign entity whose functional currency is the local currency are translated to the U.S. dollar at the exchange\nrate in effect at each balance sheet date. Before translation, the Company re-measures foreign currency denominated assets and liabilities\ninto the functional currency of the respective entity, resulting in unrealized gains or losses recorded in the Statements of Operations.\nRevenues and expenses are translated using average exchange rates during the respective period. Foreign currency translation adjustments\nare accumulated as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders’\nequity. The translations from NT dollars to U.S. dollars were made at the exchange rates set forth in the statistical release of the\nBank of Taiwan. On December 31, 2025 the exchange rate was 31.43 NT dollars to one U.S. dollar.\n\n \n\nNo\nrepresentation is made that the NT dollar or U.S. dollar amounts referred to herein could have been or could be converted into U.S. dollars\nor NT dollars, as the case may be, at any particular rate or at all.\n\n \n\n**Revenue\nRecognition**\n\n \n\nThe\nCompany accounts for revenue pursuant to ASC 606, *Revenue from Contracts with Customer*, and generates revenue from the sale of\nits products, primarily AI Nose related program.\n\n \n\nF-12\n\n \n\n \n\nThe\nCompany considers revenue to be earned when all of the following criteria are met: the Company has a contract with a customer that creates\nenforceable rights and obligations; promised products or services are identified; the transaction price, or the amount the Company expects\nto receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that\nwould result in a significant reversal upon resolution of the uncertainty, is determinable; and the Company has transferred control of\nthe promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the\ncustomer and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration\nthe Company expects to receive in exchange for the goods and services expected to be transferred. A contract’s transaction price\nis allocated to each distinct performance obligation and recognized as revenue when, or as, control of the distinct good or service is\ntransferred. Transfer of control for the Company’s products is generally at shipment or delivery, depending on contractual terms.\nAs such, the Company has one performance obligation related to product sales which is satisfied at a point in time.\n\n \n\nThe\nCompany recognizes a receivable when it has an unconditional right to payment. Payment terms are typically 30 to 60 days based on the\ncontractual term.\n\n \n\n**Contract\nBalances**\n\n \n\nDeferred\nrevenue consists of customer billings in advance of revenue being recognized. The Company invoices its customers at the beginning of\nthe contractual period. Amounts anticipated to be recognized within one year of the balance sheet date are recorded on the consolidated\nbalance sheets as deferred revenue, current; the remaining portion is recorded as deferred revenue, noncurrent.\n\n \n\nThe\nbalance of deferred revenue will fluctuate based on timing of invoices and recognition of revenue. The amount of revenue recognized during\nthe years ended December 31, 2025 and 2024 that was included in deferred revenue at the beginning of each period was $106,329 and nil,\nrespectively.\n\n \n\n**Shipping\nand Handling Costs**\n\n \n\nShipping\nand handling costs represent those costs incurred in operating and staffing fulfillment, including costs attributable to receiving, inspecting,\npicking, packaging, and preparing customer orders for shipment, and outbound freight costs associated with shipping orders to customers.\nShipping generally occurs prior to the transfer of control to the customer and is therefore accounted for as a fulfillment expense. Shipping\nand handling fees billed to the customers are recorded as revenue.\n\n \n\n**Research\nand Development**\n\n \n\nCosts\nincurred for the research and development (the “R&D”) of the Company’s products are expensed as incurred. Clinical\ntrial costs incurred by third parties are expensed as the contracted work is performed. Nonrefundable advance payments for goods or services\nto be received in the future by the Company for use in R&D activities are deferred. The deferred costs are expensed as the related\ngoods are delivered or the services are performed.\n\n \n\n**Advertising\nCosts**\n\n \n\nCosts\nassociated with the Company’s advertising is expensed as incurred and are included in selling, general and administrative expenses\nin the Statements of Operations, which is comprised primarily of print and internet advertising fees.\n\n \n\n**General\nand Administrative**\n\n \n\nGeneral\nand administrative expenses mainly include compensation costs, share-based compensation expense and professional service fees.\n\n \n\n**Share-Based\nCompensation**\n\n \n\nShare-based\ncompensation expense is recorded in accordance with ASC 718, *Compensation – Stock Compensation*, for stock, RSUs and stock\noptions awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as\ncompensation expense on a straight-line basis over the service period, which is the vesting period. The Company has adopted the simplified\nmethod to account for forfeitures of employee awards as they occur and as a result, the Company records compensation cost assuming all\ngrantees will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service\nperiod, the Company will reverse compensation cost previously recognized in the period the award is forfeited.\n\n \n\n**Fair\nValue of Financial Instruments**\n\n \n\nThe\nfair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly\ntransaction between market participants at the measurement date. The Company measures financial instruments at fair value at each reporting\nperiod using a fair value hierarchy that requires to maximize the use of observable inputs and minimize the use of unobservable inputs\nwhen measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level\nof input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:\n\n \n\nLevel\n1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\nLevel\n2 - Other inputs that are directly or indirectly observable in the marketplace.\n\nLevel\n3 - Unobservable inputs that are supported by little or no market activity.\n\n \n\nF-13\n\n \n\n \n\nThe\ncarrying value of cash and cash equivalents, accounts receivable, accounts payable, convertible notes payable, current, and other notes\npayable, current, approximate their fair value because of their short-term nature. The carrying value of long-term debt related to noncurrent\nconvertible notes payable, other notes payable and accrued interest expense approximates its fair value after calculating present value\nat observable market interest rate.\n\n \n\nIn\naddition, the Company elected FVO to measure the senior secured convertible notes using Level 3 inputs on issuance and at each reporting\ndate. Significant unobservable inputs used in the binominal lattice valuation model is the expected volatility of the Company’s\ncommon stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values.\nThe following table sets forth a reconciliation of senior secured convertible notes measured as Level 3 financial instrument:\n\n \n\nSchedule\nof Fair Value Measured As Level 3 Financial Instrument\n\n  \n\n**December 31,**\n\n**2025**\n  \n\n**December 31,**\n\n**2024**\n \n\nBeginning of year \n$       -  \n$2,651,556 \n\nIssue \n -  \n 875,000 \n\nConversion into common stock \n -  \n (2,441,691)\n\nChange in fair value \n -  \n 275,624 \n\nRetirement in fair value \n -  \n (1,360,489)\n\nEnd of year \n$-  \n$- \n\n \n\n**Interest\nExpense**\n\n** **\n\nThe\nCompany recorded interest expense based upon interest rates and maturities of current and noncurrent debt (see Note 6).\n\n \n\n**Interest\nIncome**\n\n \n\nThe\nCompany recorded interest income based on interest earned on the cash and cash equivalents.\n\n \n\n**Income\nTaxes**\n\n \n\nThe\nasset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected\nfuture tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company\nrecords a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.\n\n \n\nThe\nCompany recognizes a tax benefit from uncertain tax positions only if it is more likely than not that the position is sustainable, based\nsolely on its technical merits and consideration of the relevant taxing authorities’ administrative practices and precedents. The\ntax benefits recognized from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being\nrecognized upon settlement. The Company did not recognize any tax benefits from uncertain tax positions during the years ended December\n31, 2025 and 2024. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense.\n\n \n\n**Net\nLoss Per Common Share**\n\n \n\nBasic\nnet loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by\nthe weighted average number of shares of common stock outstanding during the period, without consideration of common stock equivalents.\nDiluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders\nsince the effect of potentially dilutive securities is anti-dilutive given the net loss of the Company.\n\n** **\n\nF-14\n\n \n\n** **\n\n**Recent\nAccounting Pronouncements**\n\n \n\nIn\nNovember 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07,\nwhich is applicable to entities with a single reportable segment, will primarily require enhanced disclosures about significant segment\nexpenses and enhanced disclosures in interim periods. The guidance in ASU 2023-07 will be applied retrospectively and is effective for\nannual reporting periods in fiscal years beginning after December 15, 2023 and interim reporting periods in fiscal years beginning after\nDecember 31, 2024, with early adoption permitted. The Company adopted the ASU for the fiscal year ended December 31, 2025 on a retrospective\nbasis for all prior periods presented in the financial statements.\n\n \n\nIn\nDecember 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended\nto improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the\nrate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the\nincome tax disclosure requirements. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning\nafter December 15, 2024. The Company adopted the ASU for the fiscal year ended December 31, 2025 on a retrospective basis for all prior\nperiods presented in the financial statements.\n\n \n\nIn\nNovember 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures\n(Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified\ncategories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions\npresented on the statement of operations. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and\ninterim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either\n(1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior\nperiods presented in the financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have\non its financial statements and disclosures.\n\n \n\nIn\nSeptember 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) (“ASU\n2025-06”). ASU 2025-06 updates the accounting guidance for internal-use software by eliminating references to software development\nproject stages, thereby requiring companies to start capitalizing software costs when (i) management has authorized and committed to\nfunding the project, and (ii) it is probable the project will be completed and the software will be used as intended. ASU 2025-06 is\neffective for annual periods beginning after December 15, 2027, with early adoption permitted. Amendments can be applied either (i) prospectively,\n(ii) through a modified transition approach based on the status projects and whether software costs were capitalized before the date\nof adoption, or (iii) retrospectively. The Company is currently evaluating the impact of ASU 2025-06 on the Company’s financial\ncondition and results of operations.\n\n \n\nIn\nDecember 2025, the FASB issued ASU 2025-10 to provide specific authoritative guidance about the recognition, measurement, and presentation\nof a grant received by a business entity from a government. The amendments in this guidance require that a government grant received\nby a business entity should not be recognized until (1) it is probable that a business entity will comply with the conditions attached\nto the grant and the grant will be received and (2) a business entity meets the recognition guidance for a grant related to an asset\nor a grant related to income. Adoption of this standard is required using either a modified prospective, modified retrospective, or a\nretrospective approach. This standard is effective for the Company for both interim and annual reporting for the year ended December\n31, 2029. The Company is currently evaluating the impact of ASU 2025-06 on the Company’s financial condition and results of operations.\n\n \n\nThe\nCompany does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material\neffect on the consolidated financial position, statements of operations and cash flows.\n\n \n\nF-15\n\n \n\n \n\n**3.\nInventory, net**\n\n \n\nInventory\nstated at cost, net of reserve, consisted of the following:\n\n \n\nSchedule of Inventory\n\n  \n2025  \n2024 \n\n  \nDecember 31, \n\n  \n2025  \n2024 \n\nRaw materials \n$118,329  \n$74,875 \n\nWork in process \n 108,278  \n 1,131 \n\nFinished goods \n 68,958  \n 67,750 \n\nTotal \n$295,565  \n$143,756 \n\n \n\nAs\nof December 31, 2025 and 2024, the inventory consisted of $295,565 and $143,756, related to the Company’s product VELDONA Pet supplements\nand AI Nose related products.\n\n \n\n**4.\nIntangible Assets, net**\n\n \n\nIntangible\nassets are stated at cost less accumulated amortization and consist of the following at December 31, 2025 and 2024:\n\n \n\nSchedule\nof Intangible Assets\n\n  \n2025  \n2024 \n\n  \nDecember 31, \n\n  \n2025  \n2024 \n\nPatents acquired \n$39,143,975  \n 39,143,975 \n\nOthers \n 226,723  \n 227,013 \n\nTotal cost \n 39,370,698  \n 39,370,988 \n\nLess: Accumulated amortization \n (20,144,695) \n (15,622,660)\n\nIntangible assets, net \n$19,226,003  \n 23,748,328 \n\n \n\nAmortization\nexpense for the years ended December 31, 2025 and 2024 was $4,522,407 and $4,534,729, respectively. No impairment loss was recorded in\n2025 and 2024.\n\n \n\nThe\nweighted-average remaining useful lives for the amortizable intangible assets was 7.4 years as of December 31, 2025.\n\n \n\nEstimated\nfuture amortization expense is as follows:\n\nSchedule\nof Estimated Future Amortization Expense\n\n  \n   \n\n2026 \n$4,522,322 \n\n2027 \n 4,521,505 \n\n2028 \n 4,533,858 \n\n2029 \n 1,926,411 \n\n2030 \n 1,926,411 \n\nThereafter \n 1,795,496 \n\nTotal expense \n$19,226,003 \n\n \n\n \n\n**5.\nProperty and Equipment, net**\n\n \n\nProperty\nand equipment are stated at cost less accumulated depreciation and impairment and consist of the following at December 31, 2025 and 2024:\n\n Schedule\nof Property and Equipment Net\n\n  \n2025  \n2024 \n\n  \nDecember 31, \n\n  \n2025  \n2024 \n\nMachinery and equipment \n$1,089,428  \n$1,046,534 \n\nFurniture and fixture \n 664,398  \n 636,939 \n\nTotal cost \n 1,753,826  \n 1,683,473 \n\nLess: Accumulated depreciation and impairment \n (1,410,545) \n (1,123,828)\n\nProperty and equipment, net \n$343,281  \n$559,645 \n\n \n\nDepreciation\nexpense for the years ended December 31, 2025 and 2024 was $243,027 and $252,548, respectively.\n\n \n\nAt\nthe 4th quarter of 2025, the Company disposed an equipment and recognized gain on this transaction totaling $1,096; the payment\nwas received in January 2026.\n\n \n\nF-16\n\n \n\n \n\n**6.\nDebts**\n\n \n\nThe\nCompany issued promissory notes to creditors for funding. As of December 31, 2025 and 2024, the details of the notes are as follows:\n\n Schedule\nof Promissory Notes to Creditors\n\n  \n2025  \n2024 \n\n  \nDecember 31, \n\n  \n2025  \n2024 \n\nMarch 2025 Convertible Notes, related party – noncurrent (ASE Note) \n 2,000,000  \n - \n\nMarch 2025 Convertible Notes, related party – current (ASE Note) \n -  \n 2,000,000 \n\nMarch 2025 Convertible Notes – current (Lee Note) \n -  \n 1,000,000 \n\nMay 2027 Convertible Notes, related party – noncurrent (ASE Note) \n 9,000,000  \n 9,000,000 \n\nConvertible notes payable\nand other notes payable \n$11,000,000  \n$12,000,000 \n\n \n\nThe\nother note payable was issued to Ainos KY in exchange for $800,000 in cash to support working capital of the Company in March 2022 (the\n“KY Note”). The Company paid off $530,000 of the KY Note during the year ended December 31, 2023 and $270,000 with accrued\ninterest of the KY Note during the year ended December 31, 2024.\n\n \n\nAnother\nnote payable was issued to i2China Management Group, LLC (“i2China”) in exchange for consulting services in 2020 (the “i2China\nNote”). The Company paid off $42,000 with accrued interest of the i2China Note during the year ended December 31, 2024.\n\n \n\nBoth\nthe KY Note and the i2China Note bear an interest rate of 1.85% per annum.\n\n \n\n**May\n2027 Convertible Notes and Warrant Purchase Agreement**\n\n \n\nOn\nMay 3, 2024, the Company entered into a Convertible Note and Warrant Purchase Agreement with the ASE Test, Inc. (“ASE”),\na shareholder of Ainos KY, for the issuance of convertible promissory notes with 6% compound interest in the aggregate principal amount\nof $9,000,000 (collectively the “Notes”) convertible into shares of common stock, par value $0.01 per share, of the Company,\npayable three (3) years from May 3, 2024, as well as the issuance of warrants for the purchase of up to 100,000 shares (adjusted for\nthe 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025) of common stock at a price per share of $22.50,\nexercisable until May 3, 2029. As of December 31, 2025, the Company received the full amount of the payment.\n\n \n\n**March\n2025 Convertible Notes**\n\n \n\nOn\nMarch 13, 2023, the Company entered into two convertible promissory note purchase agreements pursuant to Regulation S of the Securities\nAct of 1933, as amended, in the total principal amount of $3,000,000 with the following investors (the “March 2025 Convertible\nNotes” or “Notes”).\n\n \n\nConvertible\nNote Issued to Li-Kuo Lee (the “Lee Note”)\n\n \n\nThe\nCompany issued a convertible note in the principal amount of $1,000,000 to an unrelated party, Li-Kuo Lee, in exchange for $1,000,000\nin cash.\n\n \n\nOn\nMarch 12, 2025, the Company entered into an amendment to the Convertible Note (the “Convertible Note Amendment”) with Li-Kuo\nLee to extend the maturity date to May 13, 2025. On April 30, 2025, the Company repaid the full principal with accrued interest aggregate\namount of $1,132,650.\n\n \n\nConvertible\nNote Issued to ASE Test, Inc. (the “ASE Note”)\n\n \n\nPursuant\nto the one of the aforementioned agreements, ASE Test, Inc. (the “ASE”), a shareholder of Ainos KY, committed to pay a total\naggregate amount of $2,000,000 to the Company in exchange for convertible promissory note(s) in three tranches in the amounts of $1,000,000\n(the “First Tranche”), $500,000 (the “Second Tranche”), and $500,000 (the “Third Tranche”) conditioned,\namong other things, on the Company achieving certain business milestones. As of December 31, 2025, the Company received the full amount\nof the payment.\n\n \n\nF-17\n\n \n\n \n\nOn\nMarch 10, 2025, the Company entered into an amendment to the Convertible Note (the “Convertible Note Amendment”) with ASE\nTest to (1) extend the maturity date to March 12, 2027, and (2) change the conversion price from $37.50 per share (adjusted for the 1-for-5\nreverse stock split of the Company’s common stock on June 30, 2025) to a price of the lower of (a) $37.50 per share and (b) the\nhigher of (x) the average closing price per share of Common Stock for the period of thirty (30) trading days prior to the day when the\nnoteholder exercises the conversion right or (y) $22.50.\n\n \n\nThe\nMarch 2025 Convertible Notes bear interest at the rate of 6% compounded interest per annum. At any time after the issuance and before\nthe maturity date, the Notes are convertible into the common stock of the Company at the conversion price from $22.50 to $37.50 per share,\nsubject to anti-dilutive adjustment as set forth in the Notes. Unless previously converted, the Company shall repay the outstanding principal\namount plus all accrued and unpaid interest on the maturity date. The Notes shall be an unsecured general obligation of the Company.\n\n \n\nThe\ntotal interest expense of convertible notes payable and other notes payable for year ended December 31, 2025 and 2024 was $711,225 and\n$533,405 respectively. As of December 31, 2025 and 2024, the unpaid accrued interest expense was $1,229,843 and $651,268, respectively.\n\n \n\n**Senior\nSecured Convertible Notes Payable**\n\n \n\nOn\nSeptember 25, 2023, the Company entered into a securities purchase agreement (the “SPA”) with Lind Global Fund II LP (the\n“Lind”). The SPA provides for loans in an aggregate amount of up to $10,000,000 under various tranches to fund clinical trials,\ncommercial product launch and working capital of the Company. On September 28, 2023, the initial closing date, the Company issued and\nsold to Lind, in a private placement, (a) a senior secured convertible promissory note in the aggregate principal amount of $2,360,000\n(the “Lind Note”) and (b) warrants to purchase 92,165 shares (adjusted for the 1-for-5 reverse stock split of the Company’s\ncommon stock on June 30, 2025) of common stock at an exercise price of $22.50 per share of common stock (the “Lind Warrant”)\nfor a cash amount of $2,000,000.\n\n \n\nOn\nDecember 21, 2023, an additional $1,000,000 was drawn down after certain conditions were met. The aggregate principal amount of the Lind\nNote was increased to $3,540,000 and the shares of common stock Lind Warrant can purchase was increased to 138,248 shares (adjusted for\nthe 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025).\n\n \n\nOn\nJanuary 23, 2024, the Company received an Increased Funding Amount of up to $1.75 million, with $875,000 funded at closing and $875,000\nto be funded subject to an effective registration statement and other conditions specified in the Securities Purchase Agreement, and\namended the Initial Note to, among other amendments, increase the principal amount to $4,235,000 (the Initial Note as so amended, the\n“Note”). In connection with additional funding, the Company issued Lind a warrant to purchase 204,280 shares (adjusted for\nthe 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025) at an exercise price of $10.80 per share (the “Second\nLind Warrants and together with the First Lind Warrants, the “Lind Warrants”).\n\n \n\nThe\nLind Note does not bear any interest and matures on March 28, 2025.\n\n \n\nFollowing\nthe earlier to occur of (i) 90 days from the date of the SPA or (ii) the date the resale Registration Statement is declared effective\nby the SEC, the Lind Note is convertible into shares of the Company’s common stock at the option of Lind at any time with the conversion\nprice at lower of $37.50 per share, subject to adjustment, or 90% of stock price as defined in the SPA. Under certain conditions as defined\nin the SPA, the Company can prepay the note at 105% of the outstanding principal amount or Lind can put back the note at 105%, when there\nis a change of control, or 120%, when there is an event of default, of the outstanding principal amount, etc.\n\n \n\nOn\nAugust 2, 2024, the Company retired its remaining senior secured convertible debt (the “Note”) with Lind Global Fund II LP,\nan institutional investment fund managed by The Lind Partners (together the “Investor”), as a result of conversions by the\nInvestor and payments by the Company, which aggregates at a total of approximately US$1.67 million. The repayment was made with $1,439,754\nin cash and $224,842 through the issuance of 76,476 shares (adjusted for the 1-for-5 reverse stock split of the Company’s common\nstock on June 30, 2025) of Common Stock, valued at $2.94 per share.\n\n \n\nF-18\n\n \n\n \n\nDuring\nthe year ended December 31, 2024, the Company issued an aggregate of 646,731 shares (adjusted for the 1-for-5 reverse stock split of\nthe Company’s common stock on June 30, 2025) of its common stock upon the conversions of senior secured convertible notes payable\nat the conversion price from $2.94 to $9.24 per share.\n\n \n\nFrom\nan accounting perspective, the Lind Note is considered a debt host instrument embedded with an issuer’s call and investor’s\ncontingent puts, and it was issued at substantial discount. The Company elected the fair value option (the “FVO”) to account\nfor the Lind Note at fair value and mark to market each quarter. For the year ended December 31, 2024, the change in the fair value of\nthe Lind Note was recorded in the Statements of Operations in the amount $275,624. No portion of the change in fair value was related\nto changes in credit risk of the Company which would be charged to other comprehensive loss if any. The Company has granted to Lind a\nsenior security interest in all of the Company’s right, title, and interest in, to and under all of the Company’s property,\nsubject to certain exceptions as set forth in the SPA. The issuance cost including a commitment fee charged by Lind, placement agent\nfee and warrants, and legal fees is $308,336, which was expensed due to FVO election.\n\n \n\n**7.\nStockholders’ Equity**\n\n \n\n**Preferred\nStock**\n\n \n\nThe\nCompany increased authorized shares of preferred stock from 10,000,000 shares to 50,000,000 shares upon the filing of an amendment to\nthe Company’s Certificate of Formation with the Secretary of State of Texas on November 27, 2023. No shares of preferred stock\nwere issued and outstanding as of December 31, 2025 and 2024.\n\n \n\n**Common\nStock**\n\n \n\nHolders\nof common stock are entitled to one vote per share and to receive dividends and, upon liquidation or dissolution, are entitled to receive\nall assets available for distribution to stockholders.\n\n \n\nThe\nCompany has 300,000,000\nshares of common stock authorized for issuance at par value of $0.01.\nAs of December 31, 2025, 6,982,675\nshares of common stock were issued, and a total of 1,255,476\nshares were reserved for conversion of convertible notes (588,626\nshares) upon maturity, warrants issued to investors or in connection with fundings (381,953\nshares), share-based compensation awards (1,561\nshares) and ATM reserved (283,336\nshares).\n\n \n\nThe\nCompany issued 1,300,500 shares of common stock to directors, officers, and employees for achieving non-financial milestones. The fair\nvalue of the special stock bonus was $2,695,530 based on the closing price of the common stock at the date that major shareholder approval\nwas obtained and was recorded immediately as selling, general and administrative and research and development expenses in the Statements\nof Operations, as no future service is required.\n\n \n\n**Subsidiary\nShare Exchange**\n\n \n\nThe\nCompany issued 1,160,000 shares of its common stock in exchange for 116,000,000 newly issued shares of wholly owned Subsidiary. The Company\ntreats those shares as Treasury Stock in consolidated financial statements. Both entities are under the same ultimate controlling party\nbefore and after the transaction.\n\n \n\nThe\ntransaction represents an equity restructuring within the group and is considered a common control transaction under ASC 805-50.\n\n \n\nThe\nCompany recorded its investment in Subsidiary using carryover basis; no gain or loss was recognized.\n\n \n\nSubsidiary\nrecorded an equity issuance in exchange for non-cash consideration received from Parent. All intercompany equity holdings were fully\neliminated upon consolidation.\n\n** **\n\nF-19\n\n \n\n** **\n\n**Public\nOffering of Common Stock and Warrants**\n\n \n\nThe\nCompany completed its public offering (the “Offering”) of an aggregated 780,000 units at a price of $4.25 per unit on August\n9, 2022. Each unit issued in the Offering consisted of 0.04 share (adjusted for the 1-for-5 reverse stock split of the Company’s\ncommon stock on June 30, 2025) of common stock and one unit of warrant to purchase 0.04 share of common stock of the Company at a price\nof $106.25 per share (the “Public Warrants”). In addition, the Company issued its underwriters a 45-day over-allotments option\nto purchase up to an additional 4,680 shares of common stock and/or up to an additional 117,000 units of Public Warrants at the public\noffering price. The underwriters exercised its option to purchase an additional 117,000 units of Public Warrants at $0.01 per unit for\na total cash proceeds of $1,170. The Company received aggregate net proceeds of approximately $1.78 million after deducting direct offering\ncost of approximately $1.54 million including underwriting commissions and legal fees.\n\n \n\nThe\nPublic Warrants may be exercised from February 5, 2023 (181 days from the effective date of the Company’s S-1 Registration Statement\nmade effective August 8, 2022, hereafter “Registration Date”) to August 8, 2027 (5 years from the Registration Date). The\nfair value of the Public Warrants was around $3.28 million and was determined using the Black-Scholes option pricing model with the assumptions:\n$91.50 of stock price, $106.25 of strike price, 5-year expected term, 277% of expected volatility, 0% of expected dividend rate and 2.97%\nof risk-free interest rate.\n\n \n\nOn\nAugust 11, 2022, the Company agreed to issue to the representative of the underwriters warrants to purchase up to a total of 1,560 shares\nof common stock (the “Representative’s Warrants”) pursuant to an underwriting agreement. The Representative’s\nWarrants are exercisable at $116.88 per share, are initially exercisable 180 days after the effective date of the Offering and have a\nterm of five years from their initial exercise date. The fair value of the Representative’s Warrants was around $107 thousands\nwhich was recorded in the additional paid-in capital and was determined using the Black-Scholes option pricing model with the assumptions:\n$13.75 of stock price, $116.88 of strike price, 5-year expected term, 304% of expected volatility, 0% of expected dividend rate and 2.91%\nof risk-free interest rate.\n\n \n\nThe\ndirect issue cost paid in cash of $1.54 million together with the cost of the Representative’s Warrants was allocated based on\nthe relative fair value of common stocks issued for the Offering and the Public Warrants and was recorded as a reduction to the additional\npaid-in capital.\n\n \n\nUpon\ncompletion of the Offering, convertible notes outstanding in the principal amount of $30.4 million and accrued interest of $42,959 were\nautomatically converted into 362,925 shares of common stock in 2022 August.\n\n \n\n**At The Market**\n\n \n\nOn\nMay 31, 2024, the Company entered into an At The Market Offering Agreement, or sales agreement, with H.C. Wainwright & Co., LLC or\nWainwright, pursuant to which the Company may issue and sell, from time to time, shares of its common stock (the “Shares”),\ndepending on market demand, with the Sales Agent acting as the sales agent or principal (the “Offering”). Sales of the Shares\nmay be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities\nAct of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on or through the Nasdaq\nCapital Market. The Agent will use its commercially reasonable efforts to sell the Shares requested by the Company to be sold on its\nbehalf, consistent with the Agent’s normal trading and sales practices, under the terms and subject to the conditions set forth\nin the ATM Agreement. The Company has no obligation to sell any of the Shares. The Company may instruct the Agent not to sell the Shares\nif the sales cannot be effected at or above the price designated by the Company from time to time and the Company may at any time suspend\nsales pursuant to the ATM Agreement.\n\n \n\nThe\nCompany will pay the Agent placement fee of 3.0% of the gross sales price of the Shares sold by the Agent under the ATM Agreement. The\nCompany has also agreed to reimburse the Agent for the fees and disbursements of its counsel, payable upon execution of the Sales Agreement,\nin an amount not to exceed $35,000 in addition to certain ongoing disbursements of its legal counsel up to $2,500 per calendar quarter.\nIn addition, the Company has agreed to provide customary indemnification rights to the Sales Agent.\n\n \n\nThe\naggregate market value of Shares eligible for sale in the Offering and under the ATM Agreement will be subject to the limitations of\nGeneral Instruction I.B.6 of Form S-3, to the extent required under such instruction. The prospectus supplement filed with the SEC on\nJuly 11, 2024, is offering Shares having an aggregate offering price of $1,840,350.\n\n \n\nThe\nCompany intends to use the net proceeds from the offering to fund the continued development of its product candidate and for general\ncorporate purposes and working capital. The precise amount and timing of the application of these proceeds will depend upon a number\nof factors, such as the timing and progress of our research and development efforts, our funding requirements and the availability and\ncosts of other funds.\n\n \n\nOn\nSeptember 5, 2025, the Company filed a prospectus supplement to amend the Prospectus to update the amount of shares the Company is eligible\nto sell under the Sales Agreement to an aggregate of $874,496 of additional shares of common stock. Pursuant to General Instruction I.B.6\nof Form S-3, in no event will we sell securities in a public primary offering with a value exceeding one-third of our public float in\nany 12-month calendar period so long as our public float remains below $75.0 million.\n\n \n\nAs\nof December 31, 2025, the Company sold an aggregate of 734,214 shares of the Company’s common stock under the ATM facility and\nreceived $2,008,721 in net proceeds, after deducting commissions and expenses.\n\n \n\n**Warrants**\n\n \n\nAs\nof December 31, 2025 and 2024, warrants (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30,\n2025) issued and outstanding in connection with financing are summarized as below:\n\n Schedule\nof Warrants Issued and Outstanding\n\n(In\nnumber of shares of common stock to purchase when warrants exercised) \n2025  \n2024 \n\n  \nDecember 31, \n\n(In number of shares of common stock to purchase when warrants exercised) \n2025  \n2024 \n\nLind Warrant with exercise price ranging from $10.80 to $22.50 \n 240,388  \n 240,388 \n\nPublic Warrants with exercise price of $106.25 \n 35,880  \n 35,880 \n\nRepresentative’s Warrants with exercise price of $116.875 \n 1,560  \n 1,560 \n\nPlacement agent warrant with exercise price of $41.25 \n 4,125  \n 4,125 \n\nASE Warrant with exercise price of $22.50 \n 100,000  \n 100,000 \n\nTotal \n 381,953  \n 381,953 \n\n \n\nAs\ndiscussed in Note 6, the Company issued the Lind Warrant on September 28, 2023, December 21, 2023, and January 23, 2024 in connection\nwith the private placement of the Lind Note. The Company issued 4,125 shares of warrants with an exercise price of $41.25 per share to\nthe placement agent as the agent fee. Each warrant has a contractual term of 5 years and can be exercised for the purchase of one share\nof common stock of the Company. The carrying amount of the Lind Warrant is nil after allocating proceeds to the Lind Note measured at\nfair value. The fair value of the placement agent warrant is estimated as $21,479 using the Black-Scholes Model.\n\n \n\nF-20\n\n \n\n \n\nThe\nCompany accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’\nspecific terms and applicable authoritative guidance in ASC 480, *Distinguishing Liabilities from Equity*, and ASC 815, *Derivatives\nand Hedging*. The assessment considers whether the instruments are free standing financial instruments pursuant to ASC 480, meet the\ndefinition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under\nASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could\npotentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions\nfor equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance\nand as of each subsequent period end date while the instruments are outstanding. Management has concluded that the warrants issued in\nconnection with the underwritten public offering and the private placement of Lind Note qualify for equity accounting treatment and are\nrecorded as additional paid-in capital.\n\n \n\nAs\nof December 31, 2025, none of the warrants have been exercised, nor have they expired. The remaining contractual life of the warrants\nwas 2.78 years as of December 31, 2025.\n\n \n\n**Dividends**\n\n \n\nThe\nCompany has never declared or paid, and does not anticipate declaring or paying, any cash dividends on any of its capital stock. The\nCompany does not anticipate paying any dividends in the foreseeable future and currently intends to retain all available funds and any\nfuture earnings for use in the operation of the business to finance growth and development and for future repayment of debt. Future determinations\nas to the declaration and payment of dividends, if any, will be at the discretion of the Company’s board of directors and will\ndepend on then-existing conditions, including operating results, financial condition, contractual restrictions, capital requirements,\nbusiness prospects and other factors of the Company that the board of directors may deem relevant.\n\n \n\n**8.\nRevenue**\n\n \n\nThe\nCompany started to launch AI Nose related program beginning the third quarter of 2025 and deliver to customer at fourth quarter of 2025.\nRevenue from sales recognition depends on the contract condition.\n\n \n\nThe Company manufactures and delivers VOC POCT products\npowered by its AI Nose technology platform to customers in the semiconductor manufacturing industry and to distribution partners. Revenue\nis recognized when control of the products transfers to the customer, which occurs upon delivery to the customer's designated location\nand upon completion of installation and inspection.\n\n \n\nThe\nCompany manufactures and delivers VELDONA Pet supplements to on-line and off-line distribution channels. Revenue from sales through on-line\nplatform were recognized after the expiration of right of return which was offered for a limited time. Revenue from sales through off-line\ndistribution channels was recognized only to the extent that the product sold was not expected to be returned.\n\n \n\nThe\nCompany reported $124,157 of revenues for the year ended December 31, 2025, as compared to $20,729 for the year ended December 31, 2024. The Company generated $123,360 and nil in revenues from AI Nose related programs, $797 and $20,321 from pet\nsupplements, and nil and $408 in revenues from COVID-19 Antigen Rapid Test Kits in 2025 and 2024, respectively. The Company has ceased\nselling COVID-19 Antigen Rapid Test Kit since first quarter of 2024.\n\n \n\nConcentration risk\n\n \n\nThe\ncustomers accounting for 10% or more of the Company’s total net revenues for the years ended December 31, 2025 and 2024 are as\nfollows:\n\n Schedule\nof Concentration of Risk\n\n  \nYear ended December 31 \n\n  \n2025  \n2024 \n\nCustomers \n% of revenue  \n% of revenue \n\nCustomer A \n 90% \n -%\n\nCustomer B \n -% \n 56%\n\nCustomer C \n -% \n 34%\n\n** **\n\n****\n\nFor\nthe years ended December 31, 2025 and 2024, our product sales to three customers represented approximately 90% of our total gross product\nrevenue. We expect high level of customer concentration to continue for the foreseeable future. The loss of any large customer, a significant\nreduction in sales we make to them, any cancellation of orders they have made with us, or any failure to pay for the products we have\nshipped to them could adversely affect our results of operations.\n\n \n\nF-21\n\n \n\n** **\n\n**9.\nShare-Based Compensation**\n\n \n\n**2023\nStock Incentive Plan**\n\n \n\nThe\nCompany effectuated an amendment to its 2021 Stock Incentive Plan, now restated as the Company 2023 Stock Incentive Plan (the “2023\nSIP” or “Plan”) which includes, among other things, a change in the number of reserved shares under the Plan. Under\nthe 2023 SIP, subject to a change in capital structure or a change in control, the aggregate number of shares which may be issued or\ntransferred pursuant to awards under the Plan will be equal to up to twenty percent (20%) of shares of outstanding common stock of the\nCompany existing as of December 31st of the previous calendar year (the “Plan Share Reserve”). Upon the effectiveness\nof the 2023 SIP on February 16, 2023, the aggregate number of shares which may be issued pursuant to awards under the Plan is 174,215\nshares of common stock, including shares that remained available for grant under the 2021 Stock Incentive Plan. On July 19, 2024, the\nCompany filed Form S-8 to increase the aggregate number of shares may be issued to 189,286 shares of common stock including shares that\nremained available for grant under the 2021 Stock Incentive Plan. On April 4, 2025, the Company filed Form S-8 to increase the aggregate\nnumber of shares that may be issued to 617,095 shares of common stock. As of December 31, 2025, 980,326 shares have been granted under\nthe 2023 SIP.\n\n \n\n**2021\nStock Incentive Plan**\n\n \n\nOn\nSeptember 28, 2021, the Company’s board of directors, and on May 16, 2022, its shareholders approved the 2021 Stock Incentive Plan\n(the “2021 SIP”). On June 20, 2022, the 2021 SIP was effective following approval by its shareholders. The 2021 SIP seeks\nto attract and retain key personnel, and to strengthen the commitment of the Company’s directors, officers, employees, consultants\nand advisors by making available equity interests in the Company or compensation measured by reference to the value of Company’s\ncommon stock. The 2021 SIP provides for the issuance of up to 53,333 shares (adjusted for the 1-for-5 reverse stock split of the Company’s\ncommon stock on June 30, 2025) of the Company’s common stock pursuant to equity awards, including options, stock appreciation rights\nand restricted stock units. During the period from January 1, 2023 up to the date that the prior plan was superseded by the 2023 SIP,\nno shares were granted under the 2021 SIP.\n\n \n\n**2021\nEmployee Stock Purchase Plan**\n\n \n\nOn\nJune 20, 2022, the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was effective following an approval\nby its shareholders. The 2021 ESPP provides eligible employees (as such term is defined in the ESPP) with an opportunity to purchase\ncommon stocks of the Company at a discount through voluntary contributions and is intended to qualify as an employee stock purchase plan\nunder Section 423 of the U.S. Internal Revenue Code of 1986, as amended. A total of 2,000 shares (adjusted for the 1-for-5 reverse stock\nsplit of the Company’s common stock on June 30, 2025) of common stock have made available for issuance under the ESPP. During the\nperiod from January 1, 2024 up to the date that the prior plan was superseded by the 2023 SIP, no shares were granted under the 2021\nESPP.\n\n \n\nBased\non the aforementioned plans, the Company will issue new shares upon option exercise or shares vested.\n\n \n\n**Restricted\nStock Units (“RSUs”)**\n\n \n\nRSUs\nentitle the recipient to be paid out an equal number of common stock shares upon vesting which is generally 3 years. The fair value of\nRSUs is based on the closing price of the underlying stock on the date of grant. A summary of the Company’s RSUs activity and related\ninformation for the years ended December 31, 2025 and 2024 is as follows:\n\n Schedule\nof Restricted Stock Units\n\n  \nFor the Year Ended December 31, \n\n  \n2025  \n2024 \n\n  \nNumber of Shares  \nWeighted-Average Grant Date Fair Value Per Share  \nNumber of Shares  \nWeighted-Average Grant Date Fair Value Per Share \n\nUnvested balance at January 1 \n 17,966  \n$  27.54  \n 190,860  \n$    21.97 \n\nRSUs granted \n 617,000  \n$2.58  \n 189,286  \n$2.65 \n\nRSUs vested \n (634,966) \n$3.29  \n (353,688) \n$11.54 \n\nRSUs forfeited \n -  \n$-  \n (8,492) \n$13.73 \n\nUnvested balance at December 31 \n -  \n$-  \n 17,966  \n$27.54 \n\n \n\nF-22\n\n \n\n \n\n**Stock\nOptions and Warrants**\n\n \n\nA\nsummary of option activity for the years ended December 31, 2025 and 2024 is presented below.\n\n Schedule\nof Option Activity\n\n  \nNumber of Shares  \nWeighted-Average Exercise Price Per Share  \nWeighted-Average Remaining Contractual Term (in years)  \nAggregate Intrinsic Value \n\nOutstanding at December 31, 2023 \n 1,466  \n$    142.50  \n     7.3  \n    - \n\nGranted \n -  \n -  \n -  \n - \n\nExercised \n -  \n -  \n -  \n - \n\nForfeited or expired \n -  \n -  \n -  \n - \n\nOutstanding at December 31, 2024 \n 1,466  \n$142.50  \n 6.3  \n - \n\nGranted \n -  \n -  \n -  \n - \n\nExercised \n -  \n -  \n -  \n - \n\nForfeited or expired \n -  \n -  \n -  \n - \n\nOutstanding at December 31, 2025 \n 1,466  \n$142.50  \n 5.3  \n - \n\nVested or expected to vest at December 31, 2025 \n 1,466  \n$142.50  \n 5.3  \n - \n\nExercisable at December 31, 2025 \n 1,466  \n$142.50  \n 5.3  \n - \n\n \n\nAs\nof December 31, 2025, 1,206 warrants granted to i2China Management Group, LLC, adjusted for the 1-for-5 reverse stock split of the Company’s\ncommon stock on June 30, 2025, were expired. The exercisable price of the warrant is $99.42.\n\n \n\nThe\nCompany used the Black-Scholes option pricing model to value the above option and warrant awards to determine the grant date fair value.\nThe contractual term of the option and warrant is 10 years and 5 years, respectively.\n\n \n\n**Share-Based\nCompensation**\n\n \n\nThe\nRSUs, options and warrants (the “Awards”) were granted to employees and consultants with service conditions. The share-based\ncompensation expense of the Awards for the years ended December 31, 2025 and 2024 were $1,728,055 and $3,543,101, respectively.\n\n Schedule\nof Share-based compensation expense\n\n  \n2025  \n2024 \n\n  \nFor the Year Ended December 31, \n\n  \n2025  \n2024 \n\nSelling, general and administrative expenses \n$1,492,502  \n$2,728,852 \n\nResearch and development expenses \n 235,553  \n 805,217 \n\nCost of revenues \n -  \n 9,032 \n\nTotal \n$1,728,055  \n$3,543,101 \n\n \n\nThe\ntotal income tax benefit recognized in the Statements of Operations for the share-based compensation arrangements was nil for the years\nended December 31, 2025 and 2024. Compensation cost capitalized as part of inventory has been minimal.\n\n \n\nAs\nof December 31, 2025, the total unrecognized compensation cost related to the Awards was nil. The total fair value of shares vested during\nthe years ended December 31, 2025 and 2024 was $2,246,894 and $4,242,956, respectively.\n\n \n\nF-23\n\n \n\n \n\n**10.\nIncome Taxes**\n\n \n\nThe\ncomponents of the provision (benefit) for income taxes consist of the following:\n\n Schedule\nof Income Tax Expense Benefit\n\n  \n2025  \n2024 \n\n  \nFor the Year Ended December 31, \n\n  \n2025  \n2024 \n\nCurrent federal taxes \n$-  \n$- \n\nCurrent state taxes \n 800  \n 800 \n\nCurrent tax provision \n 800  \n 800 \n\nDeferred tax provision \n 4,522,000  \n 129,000 \n\nChange in valuation allowance \n (4,522,000) \n (129,000)\n\nTotal income tax expense provision \n$800  \n$800 \n\n \n\nA\nreconciliation of the statutory tax rates to the effective tax rates applicable to the Company is as follows:\n\n Schedule\nof Reconciliation of Statutory Tax Rate to the Effective Tax Rate\n\n  \n2025  \n2024 \n\n  \nFor the Year Ended December 31, \n\n  \n2025  \n2024 \n\nStatutory federal income tax rate \n 21% \n 21%\n\nPermanent differences \n (2)% \n (1)%\n\nDeferred adjustment \n (4)% \n (4)%\n\nState income tax expense \n 0% \n 0%\n\nChange in valuation allowance \n (15)% \n (16)%\n\nEffective income tax rate \n 0% \n 0%\n\n \n\nThe\ncomponents of the Company’s deferred tax assets and liabilities are as follows:\n\n Schedule\nof Deferred Tax Assets and :Liabilities\n\n  \n2025  \n2024 \n\n  \nDecember 31, \n\n  \n2025  \n2024 \n\nDeferred tax assets (liabilities) \n    \n   \n\nNet operating loss carry forwards \n$11,028,000  \n$6,911,000 \n\nAmortization \n 1,825,000  \n 1,426,000 \n\nDepreciation \n 14,000  \n 23,000 \n\nCapitalized research and development \n 635,000  \n 611,000 \n\nShare-based compensation \n 113,000  \n 119,000 \n\nOther temporary differences \n 51,000  \n 54,000 \n\nTotal deferred tax assets \n 13,666,000  \n 9,144,000 \n\nDepreciation \n -  \n - \n\nTotal deferred tax liabilities \n -  \n - \n\nLess: Valuation allowance \n (13,666,000) \n (9,144,000)\n\nNet deferred tax assets \n$-  \n$- \n\n \n\nThe\nasset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected\nfuture tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company\nrecords a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company\nhas a valuation allowance against the full amount of its net deferred tax assets due to the operating loss history of the Company. The\neffect of a change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes\nthe enactment date of the rate change.\n\n \n\nF-24\n\n \n\n \n\nAs\nof December 31, 2025, the Company had U.S. federal net operating loss carryforwards of approximately $52,516,177. The federal net operating\nloss carryforwards generated through December 31, 2017 of $11,549,477 will expire in 2026 through 2037, while $40,966,700 of federal\nnet operating loss carryforwards generated in post December 31, 2017 or later do not expire due to the provisions in the Tax Cuts and\nJobs Act but may only offset 80% of taxable income in periods of future utilization. The state net operating loss carryovers has been\nimmaterial.\n\n \n\nThe\nCompany files returns with the U.S. federal government and various state jurisdictions. The Company’s returns have been, and could\nbe in the future, subject to examination which may, or may not, have an impact to the financial statements.\n\n \n\n**11.\nNet Loss per Common Share**\n\n \n\nThe\nfollowing table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders:\n\n Schedule\nof Basic and Diluted Net Loss Per Share\n\n  \n2025  \n2024 \n\n  \nFor the Year Ended December 31, \n\n  \n2025  \n2024 \n\nNet loss attributable to common stockholders, basic and diluted \n$(14,771,012) \n$(14,863,161)\n\nWeighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted \n 4,270,815  \n 1,900,723 \n\nNet loss per share attributable to common stockholders, basic and diluted \n$(3.46) \n$(7.82)\n\n \n\nThe\nfollowing potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding because\nthey would be anti-dilutive:\n\n Schedule\nof Computations of Diluted Weighted Average Shares Outstanding\n\n  \n2025  \n2024 \n\n  \nFor the Year Ended December 31, \n\n  \n2025  \n2024 \n\nOption and RSUs to purchase common stock \n 1,466  \n 19,432 \n\nSpecial Stock Award \n -  \n 350,500 \n\nWarrants to purchase common stock \n 381,953  \n 383,159 \n\nConvertible notes entitled to purchase common stock \n 543,547  \n 503,441 \n\nTotal potential shares \n 926,966  \n 1,256,532 \n\n \n\n**12.\nRelated Party Transactions**\n\n \n\nDuring\nthe years ended December 31, 2025 and 2024, other than disclosed elsewhere, the Company had the following material related party and\nrelated party transactions:\n\n \n\n**Related\nParty**\n\n \n\n*Controlling\nshareholders*\n\n \n\nTaiwan\nCarbon Nano Technology Corporation (“TCNT”) is the controlling shareholder of the Company through its controlling interests\nin Ainos KY, who is an immediate controlling shareholder of the Company as of December 31, 2025. The Company acquired the POCT intellectual\nproperties from Ainos KY. TCNT has a product development agreement with the Company. The Company relies on TCNT to manufacture or develop\nAI Nose products and has a concentration risk on the sole supplier.\n\n \n\n*Entity\nunder common control*\n\n \n\nAI\nNose Corporation, a wholly owned subsidiary of Ainos KY, is under common control with the Company.\n\n \n\nF-25\n\n \n\n \n\n*Subsidiary*\n\n \n\nScentAI\nInc. (“ScentAI”) is a wholly owned subsidiary of the Company.\n\n \n\nThe\nCompany issued 1,160,000 shares of its common stock in exchange for 116,000,000 newly issued shares of ScentAI in 2025. Both entities\nare under the same ultimate controlling party before and after the transaction.\n\n \n\n**Related\nParty Transactions**\n\n \n\n**Product\nDevelopment Agreement with TCNT**\n\n \n\nPursuant\nto a five-year Product Development Agreement (the “Product Development Agreement”) with TCNT, effective August 1, 2021, the\ndevelopment expenses incurred were $340,314 and $413,324 for the years ended December 31, 2025 and 2024, respectively.\n\n \n\nOn\nJanuary 9, 2024, the Company and TCNT entered into an addendum to the Product Development Agreement (the “Addendum Agreement”)\nin connection with the scope of co-development and certain terms. For products defined in the Addendum agreement, TCNT will provide facilities,\nequipment, mass production process technology, ISO9001 and ISO13485 related management, as well as mass production support. The procurement\nof parts and raw materials, rental fees, and utility expenses are excluded. The Company paid a total fee of NT$5 million (approximately\nUS$162,840) for a five-years development commencing from January 2024. The Company prepaid the full amount of the fee on January 10,\n2024 at TCNT’s request. Under the Product Development Agreement, the Company advance payment were $92,014 and $120,869 to TCNT\nas of December 31, 2025 and 2024, respectively. In addition, TCNT provided non-exclusive use of certain patents related to VOC and POCT\ntechnologies for a monthly fee of $95,000 (plus 5% indirect tax), with negotiable payment terms for six months from January 2024 to June\n2024.\n\n \n\nAs\npart of the Second Addendum Agreement entered on July 8, 2024, TCNT provided non-exclusive use of certain patents related to VOC and\nPOCT technologies for a monthly fee of $95,000 (plus 5% indirect tax), with negotiable payment terms to extend another three months from\nJuly 2024 to September 2024.\n\n \n\nAs\npart of the Third Addendum Agreement entered into on October 16, 2024 the Company entered an Addendum Agreement with TCNT. TCNT provided\nexclusive use of certain patents related to VOC, POCT and nitrogen-oxygen separation machine technologies for a monthly fee of $50,000\n(plus 5% indirect tax) for twelve months from October 16, 2024, with negotiable payment terms.\n\n \n\nAs\npart of the Fourth Addendum Agreement entered into on October 15, 2025, the Company and TCNT entered into the fourth addendum to the\nProduct Development Agreement (the “Fourth Addendum Agreement”) to amend the fee for the exclusive use of patents to $50,000\nper month (plus 5% sales tax) for a two-year period starting from October 16, 2025 instead of one year starting from October 16, 2024.\nThe parties may negotiate payment terms and subsequent licensing methods thereafter.\n\n \n\nThe\nCompany paid license fees to TCNT during the year ended December 31, 2025 amounting to $600,000 (plus 5% indirect tax) compared to $1,005,000\n(plus 5% indirect tax) during the year ended December 31, 2024.\n\n \n\n**Patent\nLicense Agreement**\n\n** **\n\nOn\nAugust 6, 2024, the Company entered into a patent license agreement (the “License Agreement”) with TCNT as an effort to bolster\nthe Company’s AI Nose and point-of-care testing (POCT) technologies while preserving cash. As of August 5, 2024, prior to TCNT\nentering into the License Agreement, TCNT controlled, via its majority interest in Ainos Inc., a Cayman Islands corporation (“Ainos\nKY”) which is a party to certain previously disclosed Voting Agreements, approximately 38% of the voting power of the Company.\nPursuant to the License Agreement, TCNT has agreed to assign and grant, and the Company has agreed to accept, an exclusive, irrevocable,\nand perpetual license of certain invention patents and patent applications related to gas sensors and medical devices (the “Licensed\nPatents”) in exchange for 1,100,000 shares (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on\nJune 30, 2025) of the Company’s common stock (the “Common Stock”) at a price per share of 1.05 times the highest closing\nsale price of the Common Stock during the 30-trading day period preceding the effective date of the License Agreement. The License Agreement\nshall remain in effect until terminated by mutual written agreement of the parties, or until the expiration of the Licensed Patents,\nor all claims for alleged infringement of the Licensed Patents are barred by applicable laws. Following the issuance of the 1.1 million\nshares of stock, TCNT controls the Company through its majority interest in Ainos KY and its direct ownership in the Company.\n\n \n\nF-26\n\n \n\n \n\n**Manufacturing\nService Agreement with TCNT for the AI Nose hardware products**\n\n \n\nOn\nNovember 14, 2025, the Company entered into a manufacturing service agreement with TCNT to manufacture AI Nose hardware products. A deposit\nequal to 50% of the contract price was prepaid by the Company totaling $53,063 for the year ended December 31, 2025.\n\n \n\n**AI\nNose subscription-based order with ASE Technology Holding**\n\n \n\nOn\nAugust 6, 2025, the Company entered into a three-year subscription-based agreement with ASE Technology Holding Co., Ltd. (“ASEH”),\na related party, with a total contract value of approximately $2.1 million. Pursuant to the agreement, the Company will deploy approximately\n1,400 AI Nose units at select ASEH manufacturing facilities. The agreement provides for the delivery of AI Nose hardware and related\nsubscription-based services. ASEH prepaid approximately $350,000, representing 50% of the first-year contract consideration, which was\nreceived by the Company during the year ended December 31, 2025.\n\n \n\n**13.\nCommitments and Contingencies**\n\n \n\nThe\nCompany operates in an industry characterized by extensive patent litigation. Competitors may claim that the Company’s products\ninfringe upon their intellectual property. Resolution of patent litigation or other intellectual property claims is typically time-consuming\nand costly and can result in significant damage awards and injunctions that could prevent the manufacture and sale of the affected products\nor require the Company to make significant royalty payments in order to continue selling the affected products. As of December 31, 2025,\nthere were no such commitments or contingencies.\n\n \n\nThe\nCompany has entered into agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify\nall significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate\ntiming of the transaction. As of December 31, 2025, there are no purchase obligations excluding agreements that are cancellable at any\ntime without penalty.\n\n \n\nThe\nCompany recorded $350,000 cash received in advance as a contract liability from AI Nose units sold to its customer (as disclosed in Note\n12 Related Party Transactions); the Company expects to realize the revenue in 2026.\n\n \n\n**14.\nSubsequent Events**\n\n \n\n**Additional\nATM offering**\n\n \n\nDuring\nthe period from January 1, 2026 to March 30, 2026, the Company sold 283,336 shares of common stock under the At-the-Market Offering Agreement,\nresulting in net proceeds of approximately $601,600.\n\n \n\n**Additional Loan Agreement**\n\n** **\n\nOn March 27, 2026, the Company entered into a loan\nagreement with ASE Test, Inc., a related party, pursuant to which ASE Test, Inc. agreed to lend the Company an aggregate principal amount\nof NT$90 million (the “Loan”) (approximately US$2,820,000).\n\n** **\n\nThe Loan bears interest at a rate of 2.5% per annum, accruing daily based\non a 365-day year. The loan and the accrued Interest are payable in full on the date falling exactly one (1) year after the drawdown date.\n\n \n\nF-27"}