NonCurrent Convertible Notes Payable

3 Months Ended

Mar. 31, 2023

NonCurrent Convertible Notes Payable

Non-Current Convertible Notes Payable

6. Non-Current Convertible Notes Payable.

As of March 31, 2023 and December 31, 2022, the amounts of non-current convertible notes payable were $2,500,000 and $0, respectively.

APA Convertible Note

On January 30, 2022, we issued to Ainos KY a Convertible Promissory Note in the principal amount of $26,000,000 (the “APA Convertible Note”) for the Asset Purchase Transaction as more particularly described below in Note 7. The principal sum of the APA Convertible Note is payable in cash on January 30, 2027, although prepayment was permitted in whole or in part without penalty. The APA Convertible Note was noninterest bearing.

March 2027 Convertible Notes

The Company issued Convertible Notes pursuant to certain Convertible Note Purchase Agreements under Regulation S. The transactions are more particularly described below:

· $50,000 Convertible Note issued on March 31, 2022, to Yun-Han Liao. The purchaser is the daughter of Wu Hui-Lan, the Company’s Chief Financial Officer.

· $850,000 aggregate Convertible Notes issued on March 28, 2022, to Chih-Cheng Tsai, Ming-Hsien Lee, Yu-Yuan Hsu, and Top Calibre Corporation, a British Virgin Islands company.

· $500,000 Convertible Note issued on April 11, 2022, to ASE Test Inc., a minority owner of Ainos KY.

· The above Convertible Notes totaling $1,400,000 are collectively referred to as the “March 2027 Convertible Notes”.

The Principal Amounts of the March 2027 Convertible Notes were payable in cash on March 30, 2027, although the Company was permitted to prepay the Convertible Notes in whole or in part without penalty. The March 2027 Convertible Notes were non-interest bearing.

The non-current convertible notes payable as of August 9, 2022, in the aggregate total amount of $27,400,000 were all converted to 8,058,818 shares of common stock on that day.

March 2025 Convertible Notes

On March 13, 2023, we entered into two convertible note purchase agreements made pursuant to Regulation S of the Securities Act of 1933 relating to the sale of convertible notes, under which the Company issued and sold two convertible promissory notes (the “March 2025 Convertible Notes” or “Notes”) in the total principal amount of US$3 million to the following investors:

Convertible Note Sale to ASE Test, Inc.

Pursuant to a Convertible Note Purchase Agreement dated as of March 13, 2023, ASE Test, Inc. (a shareholder of the Company’s controlling shareholder, Ainos, Inc., a Cayman Islands corporation) committed to pay a total aggregate amount of $2,000,000 U.S.D. (the “Principal Amount”) to the Company in exchange for one or more Convertible Promissory Note(s) issued by the Company in the total aggregate Principal Amount (the “ASE Note”). The Purchaser’s obligation to pay the total aggregate Principal Amount in three (3) tranches in the amounts of One Million Dollars (USD $1,000,000) (the “First Tranche”), Five Hundred Thousand Dollars (USD $500,000) (the “Second Tranche”), and Five Hundred Thousand Dollars (USD $500,000) (the “Third Tranche”) is conditioned, among other things, on the Company achieving certain business benchmarks. ASE Test, Inc. purchased Notes for an aggregated principal amount of $1.5 million in the first quarter of 2023 disclosed in other receivable and its obligation to pay $500,000 remains outstanding and contingent on the Company achieving certain business benchmarks.

Convertible Note Sale to Li-Kuo Lee

Pursuant to the Convertible Note Purchase Agreement dated as of March 13, 2023, Li-Kuo Lee committed to pay $1,000,000 U.S.D. (the “Principal Amount”) to the Company in exchange for a Convertible Promissory Note issued by the Company (the “Lee Note”).  Li-Kuo Lee. purchased Notes for an aggregated principal amount of $1 million in the first quarter of 2023. The total interest expense for the three months ended March 31, 2023 was $3,123; the related accrued interest as of March 31, 2023 was $3,123.

The above-referenced Notes will mature in two years from the issuance dates, bearing 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 shares of the Company. The conversion price is US$1.50 per common share, subject to 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 Note shall be an unsecured general obligation of the Company.