Stockholders Equity

12 Months Ended

Dec. 31, 2022

Stockholders Equity

Stockholders' Equity

7. Stockholders’ Equity

Reverse Stock Split

On April 29, 2022, the Company’s board of directors and on May 16, 2022 our shareholders approved a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock and each series of its redeemable convertible notes to be consummated prior to the effectiveness of the Company’s underwritten public offering (“Offering”) on August 9, 2022. The par value and authorized shares of the Company’s common stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock, RSUs, warrants and options to purchase common stock and per share amounts contained in the financial statements have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented.

The Company filed an amended Restated Certificate of Formation with the Secretary of State of Texas on August 8, 2022 that effectuated the Reverse Stock Split.

Preferred Stock

The Company has 10,000,000 shares of preferred stock authorized for issuance. No shares of preferred stock were outstanding as of December 31, 2022 and 2021.

Common Stock

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders.

The Company has reserved authorized shares of common stock for future issuance at December 31, 2022 and 2021 as follows:

	December 31,
	2022		2021
Conversion of convertible notes		145,355		1,147,580
Unvested RSUs		800,000		88,000
Stock options		36,666		36,666
Warrants		966,174		30,174
		1,948,195		1,302,420

Public Offering of Common Stock and Warrants

The Company’s registration statement related to its underwritten public offering (“Offering”) was declared effective on August 8, 2022, and the Company’s common stock and warrants began trading on the Nasdaq Capital Market (“Nasdaq”) on August 9,2022 under the trading symbols “AIMD” and “AIMDW”, respectively. The Company completed its underwritten public offering of an aggregated 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25. The foregoing described warrants may be exercised from February 5, 2023 (181 days from the effective date of our S-1 Registration Statement made effective August 8, 2022, hereafter “Registration Date”) to August 8, 2027 (5 years from the Registration Date). In addition, the Company granted its underwriters a 45-day option to purchase up to an additional 117,000 shares of common stock and/or up to an additional 117,000 warrants at the public offering price to cover over-allotments. The underwriters partially exercised its option to purchase an additional 117,000 warrants at $0.01 per unit for a total of $1,170.

The Company received aggregate net proceeds of approximately $1.8 million after deducting direct offering cost of approximately $1.5 million including underwriting commissions and legal, accounting, and consulting fees related to the Offering.

On August 11, 2022, the Company agreed to issue to the Representative of the underwriters, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to a total of 39,000 shares of Common Stock (the “Representative’s Warrants”) pursuant to an underwriting Agreement. The Representative’s Warrants are exercisable at $4.68 per share, are initially exercisable 180 days after the effective date of the Offering and have a term of five years from their initial exercise date. The fair value of these warrants amounted to $107,164 which was determined using a Black-Scholes option pricing model with the following assumptions:

Expected term (years)	5
Expected volatility	304	%
Expected dividends	0	%
Risk free interest rate	2.91	%

Since these warrants were issued as direct offering costs associated with the offering, the Company has accounted for these warrants as both a charge and increase to additional paid-in capital, resulting in a net effect on stockholders’ equity of $0.

Pursuant to the customary FINRA rules, the Representative’s Warrants are subject to a lock-up agreement pursuant to which the Representative will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of the registration statement referenced below.

Upon completion of the Offering, convertible notes outstanding in the principal amount of $30.4 million and accrued interest of $42,959 were automatically converted into 9,073,137 shares of common stock. Additional information regarding the conversion can be found in Note 4 and 5.

Warrants

A summary of the status of the Company’s warrants and changes are presented in the following table:

	For the Year Ended December 31,
	2022				2021
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Warrants outstanding at beginning of year		30,174	$	3.98		30,174	$	3.98
Issued		936,000		4.27
Warrants outstanding at end of year		966,174	$	4.26		30,174	$	3.98
Exercisable at end of year		927,174		4.24		30,174	$	3.98

The following table summarizes information about warrants outstanding at December 31, 2022:

		Outstanding Warrants		Weighted Average Remaining		Exercisable
Exercise Price		December 31, 2022		Contractual Life		Warrants
$	3.98		30,174		2.90		30,174
	4.25		780,000		4.61		780,000
	4.25		117,000		4.61		117,000
	4.68		39,000		4.61		-
			966,174				927,174

On November 25, 2020, the Company issued a warrant to i2China Management Group, LLC, a related party of the Company since August 1, 2021. The warrant entitles the holder to purchase 30,174 shares at an exercise price of $3.98 and expires on November 24, 2025.

Pursuant to the Offering on August 9, 2022, the Company issued 780,000 units at a public offering price of $4.25 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $4.25.

Pursuant to an underwriting agreement, dated August 8, 2022, by and between the Company and Maxim Group LLC (“Maxim”), as representative of the underwriters, Maxim partially exercised the option to purchase 117,000 additional warrants at a price per warrant of $0.01.

Pursuant to the underwriting agreement the Company issued representative warrants to the Maxim, as representative of the underwriters, to purchase 39,000 shares of common stock at an exercise price of $4.675, effective from February 5, 2023 until August 8, 2027.

Stock Incentive Plan

See footnote 8 for the information of Stock Incentive Plan

Acquisition of patents

See footnote 6 for the information of issuance common stock for acquisition of patents.

Dividends

We have never declared or paid, and do not anticipate declaring or paying, any cash dividends on any of our capital stock. We do not anticipate paying any dividends in the foreseeable future, and we currently intend to retain all available funds and any future earnings for use in the operation of our business, to finance the growth and development of our business and for future repayment of debt. Future determinations as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our operating results, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.