Financial Condition

9 Months Ended

Sep. 30, 2021

Financial Condition

4. Financial Condition

4. Financial Condition. These financial statements have been prepared in accordance with United States generally accepted accounting principles, assuming that the Company will continue as a going concern. The accompanying financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

While the Company has recurring losses and generated negative cash flows from operations, the Company has taken initiatives to improve its management capacity and business operations. Such initiatives include the procurement of innovative diagnostic technologies and securing a strategic investor, as a result of the closing of a securities purchase agreement with Ainos, Inc. a Cayman Island corporation (“Ainos KY”) on April 15, 2021 (the “Ainos KY Transaction”). Details of the Ainos Transaction were disclosed in the Company’s Form 10-Q filing for the second quarter of 2021.

After closing the Ainos KY Transaction, the Company engaged additional management resources including Mr. Chun-Hsien Tsai as Chairman and CEO, Ms. Hui-Lan (Celia) Wu as CFO and Mr. Chih-Heng (Jack Lu) as Head of Corporate Development, retained key management and legal staff, and implemented new business initiatives. On June 14, 2021, the Company became the master sales and marketing agent for the Ainos SARS-Cov-2 Antigen Rapid Test Kit (“Ainos Covid-19 Test Kit”) which has generated $568,164 in sales thus far in 2021.

As of September 30, 2021, the Company’s financial improvement includes the following:

Total stockholder’s equity increased to $17,136,360 as of September 30, 2021 compared to a negative total shareholder’s equity of $838,278 as of December 2021.

Cash and cash equivalents increased to $706,931 as of September 30, 2021 compared to $22,245 at December 31, 2020. This is attributable to increased revenues from sales of our Ainos Covid-19 Test Kit in Taiwan and operational loans made to the Company by Ainos KY. The Company’s revenues increased to $568,164 during this reporting period compared to $15,876 as of third quarter of 2020.

The Company anticipates business revenues and potential additional financial support from Ainos KY and other entities to fund the Company’s operations over the next twelve months. The Company may raise additional capital through the issuance of equity securities, debt financings or other sources in order to further implement its business plan. However, if such financing is not available when needed and at adequate levels, the Company will need to reevaluate its operating plan.

There can be no assurance that capital will be available as necessary to meet the Company's working capital requirements or, if the capital is available, that it will be on terms acceptable to the Company. Any issuances of additional equity securities by the Company may result in dilution in the equity interests of its current stockholders. Obtaining commercial loans will increase the Company's liabilities and future cash commitments to the extent such loans would be available. While management believes in its strategic plans, management cannot be certain that projected financial results can be achieved.