Ainos Issues 2023 Shareholder Letter

SAN DIEGO, CA / ACCESSWIRE / January 17, 2023 / Ainos, Inc. (NASDAQ: AIMD, AIMDW) ("Ainos", or the "Company"), a diversified medtech company focused on the development of novel point-of-care testing, low-dose interferon therapeutics, and synthetic RNA-driven preventative medicine, is pleased to provide the following shareholder letter from Ainos' Chairman of the Board, President, and Chief Executive Officer, Mr. Chun-Hsien Tsai.

Dear Shareholders,

2022 was a year of growing inflation, rising interest rates, and broad-based declines in the equity capital markets. Entering 2023, we can see light at the end of the tunnel; the Federal Reserve seems to be slowing the pace of rate increases and markets expect a pullback of monetary tightening as inflation eases off its highs.

As we continue our growth path toward becoming a multi-product medtech company, we are sharpening our focus on advancing the commercialization of our product pipeline. Our strategic priorities remain our key VOC POCT and VELDONA® technologies, both of which made significant and encouraging progress during 2022.

Uplisting on Nasdaq

First and foremost, we completed our uplisting to the Nasdaq Capital Market and our common stock and warrants began trading under the tickers "AIMD" and "AIMDW", respectively, in August 2022. This new milestone in our corporate development strengthens our brand equity and provides us with broader access to capital and the global investment community.

Accelerating Growth with a Robust Pipeline

Our two major near-term growth drivers, Ainos Flora and VELDONA®, remain on their promising development trajectories, further enhancing our confidence in their monetization potential. Ainos Flora, our leading VOC POCT product candidate, is a non-invasive, telehealth-friendly device for detecting Sexually Transmitted Infections (STIs) and vaginal infections. Unlike traditional STI testing, Flora affords users the privacy and convenience of discreetly testing anywhere and returns results within minutes. As STI rates continue to grow globally, there is still a notable lack of effective at-home STI testing solutions. Ainos Flora addresses this current gap in the market. The product is currently undergoing clinical studies in medical centers in Taiwan, and we will further advance the product's commercialization during 2023.

Our other growth driver is VELDONA®, an orally-administered very low-dose interferon alpha treatment. Designed to boost patients' immune systems without the risks and side-effects carried by higher-dose interferon treatments, VELDONA® is intended to be more easily administered, more practical to store, less expensive, and requires less physician follow-up than existing treatments. VELDONA® has consistently demonstrated its safety and efficacy across 68 clinical trials, including 63 Phase 2 trials and two Phase 3 trials.

We have begun pursuing out-licensing opportunities for drug candidates for five disease areas, including Sjögren's Syndrome, Aphthous Stomatitis, Chemotherapy-induced Stomatitis, Influenza, and Common Cold, with the goal of accelerating the advancement of these candidates to Phase 3 trials and eventual commercialization. We are also planning to initiate Phase 2 trials in Taiwan for VELDONA®'s use in the treatment of COVID-19 symptoms, pending the issuance of an IND.

Additionally, recent preclinical data demonstrated VELDONA®'s potential benefits for two of the most common veterinary diseases, feline chronic gingivostomatitis (FCGS) and canine atopic dermatitis (CAD). We are prioritizing our efforts to commercialize this program as healthcare supplements in applicable countries. Our goal is to begin clinical trials into the formulation's potential veterinary applications by the second quarter of 2023, which, in combination with our development of VELDONA® for use in humans, will create a wide range of opportunities for its future commercialization and development.

Investing in the Future

We believe that during the COVID-19 pandemic, consumers have been increasingly familiar with at-home tests. Home self-testing and self-collection have been increasingly available for health areas such as women's health and sexual health. We believe this new user behavior, supported by a variety of telehealth platforms, will become increasingly supportive to our other POCT products as COVID-19 becomes endemic.

Our top medium-term priority is the further development of our VOC POCT technology portfolio. Our AI Nose platform, which combines digital nose sensors, AI algorithms, and our innovative Smell ID technology, opens up significant long-term opportunities for us. We are happy to see that more and more healthcare innovators have introduced VOC-based POCTs for a variety of healthcare purposes.

An important component of our future VOC POCT solutions portfolio is our multi-purpose Ainos Pen breath analyzer. The pen is a non-invasive POCT device that analyzes the user's breath for changes in VOCs. Whereas many breath analysis tools on the market today are manufactured for specific use cases, Ainos Pen can be utilized for a wide variety of different testing scenarios. Our goal for 2023 is to continue to optimize Ainos Pen's performance to expand its long-term potential in the telehealth sector.

We will also continue to build our SRNA platform which is capable of expediting the development of precision treatments and tests. In combination with VELDONA® and our VOC POCT, the platform endows us with a synergistic product range of telehealth-enabled precision medicine.

Other Growth Opportunities

Sales of our COVID-19 Antigen Test Kits in Taiwan continued to grow in 2022, boosting our revenue by 384.2% from the third quarter of 2021 to the third quarter of 2022. COVID-19 remains a prominent public health concern, and we expect to continue to market our test-kit in Taiwan in the near future.

We have recently established several strategic partnerships. Notably, we have entered into an exclusive agreement with the Taiwan Carbon Nano Corporation ("TCNT"), which granted TCNT the right to manufacture, sell, and market Ainos' COVID-19 Antigen Rapid Test Kit. In addition, we appointed Inabata as a non-exclusive worldwide distributor of our product candidates upon commercialization under a five-year distribution agreement, greatly enhancing our potential monetization capabilities. We have also entered into a strategic agreement with the Taiwan-based Swiss Pharmaceutical Co., Ltd., whereby the company was licensed to test, manufacture, and package Ainos' VELDONA® product candidates. These relationships with our strategic partners have bolstered our manufacturing and distribution capabilities, and they will remain an important part of our growth strategy.

Debt Settlements and Cash Balance

Following the conversion of our convertible notes and the proceeds from our public offering, we have significantly reduced our debt and strengthened our balance sheet. At the end of the third quarter of 2022, our debt ratio stood at 6.8%, down from 75% at year-end 2021. As of September 30, 2022, we had cash and cash equivalents of US$2,417,147, compared with US$1,751,499 as of December 31, 2021.

Ainos' Objectives

We enter 2023 confident and prepared for the promising, albeit challenging, road ahead. As we transform into a multi-product medtech company, we will leverage our competitive advantages and innovative product array to generate value and facilitate stable, high-quality growth. Our strategic partnerships, combined with Taiwan's robust healthcare, human capital, R&D, and manufacturing capabilities, mean that we can maintain cost-effective operations as we begin to bring our product pipeline to market. Our capital raise strategy will take care to avoid the dilution we have seen in recent small-cap healthcare deals. For the benefit of our shareholders, we will carefully monitor the market, evaluate our opportunities, and make informed decisions.

Following an exceptionally challenging past year, the determination and diligence of our entire team means that we are well-positioned to continue to pursue our strategic goals during 2023. We stand at the cusp of a new chapter in our company's history, and we will enter it with the innovative, hard-working, and resilient spirit our team has always embraced.

Sincerely,

Chun-Hsien Tsai
Chairman of the Board, President, and Chief Executive Officer

About Ainos, Inc.

Headquartered in San Diego, California, Ainos, Inc. (f/k/a Amarillo Biosciences, Inc.) is a diversified medtech company engaged in developing innovative medical technologies for point-of-care testing and safe and novel medical treatment for a broad range of disease indications. In addition to its proprietary therapeutics using low-dose non-injectable interferon, Ainos has also expanded its product portfolio to include Volatile Organic Compounds (VOC) and COVID-19 POCTs.

Forward-Looking Statements

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

Important factors that could cause the Company's actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this press release include, among others, the cost of production and sales potential of the planned drug treatments announced in this press release; the Company's dependence on revenues from the sale of COVID-19 test kits; the Company's limited cash and history of losses; the Company's ability to achieve profitability; the Company's ability to raise additional capital to continue the Company's product development; the ability to accurately predict the future operating results of the Company; the ability to advance Ainos' current or future product candidates through clinical trials, obtain marketing approval and ultimately commercialize any product candidates the Company develops; the ability to obtain and maintain regulatory approval of Ainos product candidates; delays in completing the development and commercialization of the Company's current and future product candidates, which could result in increased costs to the Company, delay or limit the ability to generate revenue and adversely affect the business, financial condition, results of operations and prospects of the Company; intense competition and rapidly advancing technology in the Company's industry that may outpace its technology; customer demand for the products and services the Company develops; the impact of competitive or alternative products, technologies and pricing; disruption in research and development facilities; lawsuits and other claims by third parties or investigations by various regulatory agencies governing the Company's operations; potential cybersecurity attacks; increased requirements and costs related to cybersecurity; the Company's ability to realize the benefits of third party licensing agreements; the Company's ability to obtain and maintain intellectual property protection for Ainos product candidates; compliance with applicable laws, regulations and tariffs; and the Company's success in managing the growth. A more complete description of these risk factors and others is included in the "Risk Factors" section of Ainos' most recent Annual Report on Form 10-K/A and other reports filed with the U.S. Securities and Exchange Commission, many of which risks are beyond the Company's control. In addition to the risks described above and in the Company's Form 10-K/A, other unknown or unpredictable factors also could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this press release.

The forward-looking statements made in this press release are expressly qualified in their entirety by the foregoing cautionary statements. Ainos undertakes no obligation to, and expressly disclaims any such obligation to, publicly update or revise any forward-looking statement to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to the future results over time or otherwise, except as required by law.

Investor Relations Contact

ICR, LLC
Robin Yang
Tel: +1 646-224-6971
Email: Ainos.IR@icrinc.com

SOURCE: Ainos, Inc.