Ainos, Inc. Debt Disclosure

6. Debts

 

The Company issued promissory notes to creditors for funding. As of December 31, 2025 and 2024, the details of the notes are as follows:

 Schedule of Promissory Notes to Creditors

		2025				2024
		December 31,
		2025				2024
March 2025 Convertible Notes, related party – noncurrent (ASE Note)			2,000,000				-
March 2025 Convertible Notes, related party – current (ASE Note)			-				2,000,000
March 2025 Convertible Notes – current (Lee Note)			-				1,000,000
May 2027 Convertible Notes, related party – noncurrent (ASE Note)			9,000,000				9,000,000
Convertible notes payable and other notes payable		$	11,000,000			$	12,000,000

 

The other 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 “KY Note”). The Company paid off $530,000 of the KY Note during the year ended December 31, 2023 and $270,000 with accrued interest of the KY Note during the year ended December 31, 2024.

 

Another note payable was issued to i2China Management Group, LLC (“i2China”) in exchange for consulting services in 2020 (the “i2China Note”). The Company paid off $42,000 with accrued interest of the i2China Note during the year ended December 31, 2024.

 

Both the KY Note and the i2China Note bear an interest rate of 1.85% per annum.

 

May 2027 Convertible Notes and Warrant Purchase Agreement

 

On May 3, 2024, the Company entered into a Convertible Note and Warrant Purchase Agreement with the ASE Test, Inc. (“ASE”), a shareholder of Ainos KY, for the issuance of convertible promissory notes with 6% compound interest in the aggregate principal amount of $9,000,000 (collectively the “Notes”) convertible into shares of common stock, par value $0.01 per share, of the Company, payable 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 the 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, exercisable until May 3, 2029. As of December 31, 2025, the Company received the full amount of the payment.

 

March 2025 Convertible Notes

 

On March 13, 2023, the Company entered into two convertible promissory note purchase agreements pursuant to Regulation S of the Securities Act of 1933, as amended, in the total principal amount of $3,000,000 with the following investors (the “March 2025 Convertible Notes” or “Notes”).

 

Convertible Note Issued to Li-Kuo Lee (the “Lee Note”)

 

The Company 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 in cash.

 

On March 12, 2025, the Company entered into an amendment to the Convertible Note (the “Convertible Note Amendment”) with Li-Kuo Lee to extend the maturity date to May 13, 2025. On April 30, 2025, the Company repaid the full principal with accrued interest aggregate amount of $1,132,650.

 

Convertible Note Issued to ASE Test, Inc. (the “ASE Note”)

 

Pursuant to the one of the aforementioned agreements, ASE Test, Inc. (the “ASE”), a shareholder of Ainos KY, committed to pay a total aggregate 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 (the “First Tranche”), $500,000 (the “Second Tranche”), and $500,000 (the “Third Tranche”) conditioned, among other things, on the Company achieving certain business milestones. As of December 31, 2025, the Company received the full amount of the payment.

 

 

On March 10, 2025, the Company entered into an amendment to the Convertible Note (the “Convertible Note Amendment”) with ASE Test 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 reverse 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 higher 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 noteholder exercises the conversion right or (y) $22.50.

 

The March 2025 Convertible Notes bear interest at the rate of 6% compounded interest per annum. At any time after the issuance and before the 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, subject to anti-dilutive adjustment as set forth in the Notes. Unless previously converted, the Company shall repay the outstanding principal amount plus all accrued and unpaid interest on the maturity date. The Notes shall be an unsecured general obligation of the Company.

 

The total interest expense of convertible notes payable and other notes payable for year ended December 31, 2025 and 2024 was $711,225 and $533,405 respectively. As of December 31, 2025 and 2024, the unpaid accrued interest expense was $1,229,843 and $651,268, respectively.

 

Senior Secured Convertible Notes Payable

 

On September 25, 2023, the Company entered into a securities purchase agreement (the “SPA”) with Lind Global Fund II LP (the “Lind”). The SPA provides for loans in an aggregate amount of up to $10,000,000 under various tranches to fund clinical trials, commercial product launch and working capital of the Company. On September 28, 2023, the initial closing date, the Company issued and sold to Lind, in a private placement, (a) a senior secured convertible promissory note in the aggregate principal amount of $2,360,000 (the “Lind Note”) and (b) warrants to purchase 92,165 shares (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025) of common stock at an exercise price of $22.50 per share of common stock (the “Lind Warrant”) for a cash amount of $2,000,000.

 

On December 21, 2023, an additional $1,000,000 was drawn down after certain conditions were met. The aggregate principal amount of the Lind Note was increased to $3,540,000 and the shares of common stock Lind Warrant can purchase was increased to 138,248 shares (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025).

 

On January 23, 2024, the Company received an Increased Funding Amount of up to $1.75 million, with $875,000 funded at closing and $875,000 to be funded subject to an effective registration statement and other conditions specified in the Securities Purchase Agreement, and amended the Initial Note to, among other amendments, increase the principal amount to $4,235,000 (the Initial Note as so amended, the “Note”). In connection with additional funding, the Company issued Lind a warrant to purchase 204,280 shares (adjusted for the 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 Lind Warrants and together with the First Lind Warrants, the “Lind Warrants”).

 

The Lind Note does not bear any interest and matures on March 28, 2025.

 

Following the earlier to occur of (i) 90 days from the date of the SPA or (ii) the date the resale Registration Statement is declared effective by 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 price 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 in 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 is a change of control, or 120%, when there is an event of default, of the outstanding principal amount, etc.

 

On August 2, 2024, the Company retired its remaining senior secured convertible debt (the “Note”) with Lind Global Fund II LP, an institutional investment fund managed by The Lind Partners (together the “Investor”), as a result of conversions by the Investor and payments by the Company, which aggregates at a total of approximately US$1.67 million. The repayment was made with $1,439,754 in 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 stock on June 30, 2025) of Common Stock, valued at $2.94 per share.

 

 

During the year ended December 31, 2024, the Company issued an aggregate of 646,731 shares (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025) of its common stock upon the conversions of senior secured convertible notes payable at the conversion price from $2.94 to $9.24 per share.

 

From an accounting perspective, the Lind Note is considered a debt host instrument embedded with an issuer’s call and investor’s contingent puts, and it was issued at substantial discount. The Company elected the fair value option (the “FVO”) to account for 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 the Lind Note was recorded in the Statements of Operations in the amount $275,624. No portion of the change in fair value was related to changes in credit risk of the Company which would be charged to other comprehensive loss if any. The Company has granted to Lind a senior security interest in all of the Company’s right, title, and interest in, to and under all of the Company’s property, subject to certain exceptions as set forth in the SPA. The issuance cost including a commitment fee charged by Lind, placement agent fee and warrants, and legal fees is $308,336, which was expensed due to FVO election.