Ainos Raises $9 Million in Growth Capital with Existing Shareholder

Rhea-AI Summary

Ainos, Inc. raises $9 million in growth capital through a convertible note with an existing shareholder. The capital will be used to scale up the company's VELDONA and AI Nose growth initiatives. Ainos aims to advance its AI Nose platform and VELDONA investigational new drugs, propelling the company forward in advancing clinical studies and pursuing out-licensing opportunities.

Positive

• Raised $9 million in growth capital to scale up VELDONA and AI Nose growth initiatives.

• Ainos deepened its relationship with an existing investor through the convertible note.

• The capital will enable Ainos to advance its AI Nose platform and VELDONA investigational new drugs.

• Pursuing out-licensing opportunities for VELDONA human drug candidates.

Negative

• Convertible note with a conversion price of $4.50 may lead to shareholder dilution.

• 6% compound interest rate on the convertible note may increase financial burden.

• Warrant coverage of 500,000 shares with a strike price of $4.50 could impact existing shareholders.

Insights

Financial Analyst

The transaction involving Ainos' $9 million convertible note illuminates a strategic maneuver to bolster the company's capital structure, particularly for its growth initiatives VELDONA and AI Nose. The convertible note, bearing a 6% compound interest rate and a conversion price at $4.50, presents an immediate cash infusion without diluting current shareholder equity—this serves to tactically delay dilution until conversion occurs, which can be positive if the share price appreciates. The financial instrument provides a win-win scenario for Ainos and the participating shareholder, assuming the company's valuation improves over the five-year time horizon before warrant expiration. However, over-reliance on debt financing can raise concerns regarding long-term solvency, especially if the growth initiatives don't yield expected outcomes. This capital raise allows Ainos to potentially expedite its product development, yet investors should remain vigilant about Ainos' cash burn rates and milestone achievements in the context of its clinical programs.

Biotech Industry Analyst

From a biotechnological standpoint, Ainos' recent capital raise is notably earmarked for advancing its VELDONA therapeutic programs and AI Nose technology. AI Nose's potential cross-industry applications signify an innovative leap in VOC point-of-care testing with far-reaching implications. If successful, such technology can redefine diagnostics and monitoring, particularly within telehealth—a sector witnessing exponential growth. VELDONA, targeting HIV-seropositive patient treatments, reflects Ainos' strategic focus on niche, yet critical therapeutic areas. The success of these programs depends heavily on the outcomes of clinical trials and the subsequent FDA approval process. Investors should thus monitor the progression of Ainos' R&D, regulatory landscape shifts and peer company comparisons regarding drug approval timelines for a clearer risk assessment.

Proceeds for scaling up the company's VELDONA and AI Nose growth initiatives

Convertible note convertible at $4.5 per share placed with existing shareholder

SAN DIEGO, CA / ACCESSWIRE / May 7, 2024 / Ainos, Inc. (NASDAQ:AIMD)(NASDAQ:AIMDW) ("Ainos", or the "Company"), a diversified healthcare company focused on the development of novel point-of-care testing, low-dose interferon therapeutics, and synthetic RNA-driven preventative medicine, today announced that it sold a $9 million convertible note with a conversion price of $4.50 to an existing shareholder.

The note bears 6% compound interest rate and is convertible into the Company's common shares at $4.50, and warrant coverage is 500,000 shares, with a strike price of $4.50 and five years to expiration.

Ainos Chairman, President and CEO Chun-Hsien Tsai commented, "We are pleased to deepen our relationship with our existing investor. This capital will enable us to put in place more resources to scale our VELDONA and AI Nose growth initiatives. We are excited about our opportunities and gratified with the attractive win-win terms of this financing package."

Ainos has several programs under development for which the growth capital can be used. For its AI Nose platform, Ainos aims to advance its flagship VOC POCT candidate Ainos Flora. Ainos has initiated the second phase of collaboration with Nisshinbo Micro Devices Inc. ("NISD") and Taiwan Inabata Sangyo Co ("Inabata") for an AI Nose-powered VOC sensing platform with potential applications spanning a wide variety of industries, including telehealth, automotive, industrial, and environmental safety. VELDONA® investigational new drugs are also a key program with the potential to deliver high-quality, safe, and effective therapeutics for a variety of indications. This growth capital will be pivotal in propelling Ainos forward in advancing clinical studies and the Company's active pursuit of out-licensing of VELDONA® human drug candidates, including its candidate for treating oral warts in HIV-seropositive patients.

Additional information can be found in the Form 8-K filed with the U.S. Securities and Exchange Commission.

About Ainos, Inc.

Headquartered in San Diego, California, Ainos is a diversified healthcare company focused on the development of novel point-of-care testing (POCT), low-dose VELDONA® interferon therapeutics, and synthetic RNA-driven preventative medicine. The company's products include VELDONA® clinical-stage human therapeutics, VELDONA® Pet cytoprotein health supplements, and telehealth-friendly POCTs powered by its AI Nose technology platform. The lead POCT candidate, Ainos Flora, is intended to be a telehealth-friendly POCT for women's health and certain common STIs. To learn more, visit https://www.ainos.com.

Follow Ainos on X, formerly known as Twitter, (@AinosInc) and LinkedIn to stay up-to-date.

Safe Harbor Statement

This press release contains "forward-looking statements" about Ainos within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "estimate," "approximate," "expect," "intend," "plan," "predict," "project," "target," "future," "likely," "strategy," "foresee," "may," "guidance," "potential," "outlook," "forecast," "should," "will" or other similar words or phrases. Similarly, statements that describe the Company's objectives, plans or goals are, or may be, forward-looking statements. Forward-looking statements are based only on the Company's current beliefs, expectations, and assumptions. Forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. The Company's actual results may differ materially from those indicated in the forward-looking statements.

Important factors that could cause the Company's actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this press release include, among others, the cost of production and sales potential of the products announced in this press release; the Company's dependence on projected revenues from the sale of current or future products ; the Company's limited cash and history of losses; the Company's ability to achieve profitability; the Company's ability to raise additional capital to continue the Company's product development; the ability to accurately predict the future operating results of the Company; the ability to advance Ainos' current or future product candidates through clinical trials, obtain marketing approval and ultimately commercialize any product candidates the Company develops; the ability to obtain and maintain regulatory approval of Ainos' product candidates; delays in completing the development and commercialization of the Company's current and future product candidates, which could result in increased costs to the Company, delay or limit the ability to generate revenue and adversely affect the business, financial condition, results of operations and prospects of the Company; intense competition and rapidly advancing technology in the Company's industry that may outpace its technology; customer demand for the products and services the Company develops; the accuracy of third-party market research data, the impact of competitive or alternative products, technologies and pricing; disruption in research and development facilities; lawsuits and other claims by third parties or investigations by various regulatory agencies governing the Company's operations; potential cybersecurity attacks; increased requirements and costs related to cybersecurity; the Company's ability to realize the benefits of third party licensing agreements; the Company's ability to obtain and maintain intellectual property protection for Ainos product candidates; compliance with applicable laws, regulations and tariffs; continued listing on and compliance with the applicable regulations of the Nasdaq Capital Market; and the Company's success in managing growth. A more complete description of these risk factors and others is included in the "Risk Factors" section of Ainos' Annual Report on Form 10-K for the year ended December 31, 2023, and other reports filed with the U.S. Securities and Exchange Commission ("SEC"), many of which risks are beyond the Company's control. In addition to the risks described above and in the Company's reports filed with the SEC, other unknown or unpredictable factors also could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this press release.

The forward-looking statements made in this press release are expressly qualified in their entirety by the foregoing cautionary statements. Any forward-looking statements contained in this press release represent Ainos' views only as of today and should not be relied upon as representing its views as of any subsequent date. Ainos undertakes no obligation to, and expressly disclaims any such obligation to, publicly update or revise any forward-looking statement to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to the future results over time or otherwise, except as required by law.

Investor Relations Contact
Feifei Shen
Email: IR@ainos.com

SOURCE: Ainos, Inc.

View the original press release on accesswire.com

FAQ

<p>What is the purpose of the $9 million convertible note raised by Ainos, Inc.?</p>

The capital will be used to scale up the company's VELDONA and AI Nose growth initiatives.

<p>What are the terms of the convertible note issued by Ainos, Inc.?</p>

The convertible note has a conversion price of $4.50, 6% compound interest rate, and warrant coverage of 500,000 shares with a strike price of $4.50.

<p>What programs does Ainos plan to advance with the growth capital raised?</p>

Ainos aims to advance its AI Nose platform and VELDONA investigational new drugs, focusing on clinical studies and pursuing out-licensing opportunities.

<p>Who is the existing shareholder that purchased the $9 million convertible note?</p>

The existing shareholder's identity was not disclosed in the press release.

<p>What industries can benefit from Ainos' AI Nose-powered VOC sensing platform?</p>

Potential applications span a wide variety of industries, including telehealth, automotive, industrial, and environmental safety.