Related Party Transactions	3 Months Ended
Mar. 31, 2023
Related Party Transactions
Related Party Transactions	7. Related Party Transactions. The following is a summary of related party transactions that met our disclosure threshold: Asset Purchase Agreement Ainos KY and the Company entered into an Asset Purchase Agreement dated as of November 18, 2021 (the “Asset Purchase Agreement”), as modified by an Amended and Restated Asset Purchase Agreement dated as of January 29, 2022 (the “Amended Asset Purchase Agreement”). Pursuant to the Asset Purchase Agreement, we acquired certain intellectual property assets and certain manufacturing, testing, and office equipment for a total purchase price of $26,000,000 that included $24,886,023 for intangible intellectual property assets and $1,113,977 for equipment. As consideration we issued to Ainos KY a Convertible Promissory Note in the principal amount of $26,000,000 upon closing on January 30, 2022 (the “APA Convertible Note”). Ainos KY converted all of APA Convertible Note on or about August 8, 2022 upon the Company up-listing to the Nasdaq Capital Markets. Working Capital Advances Except for the payment of purchasing the intangible assets and equipment, all convertible and other notes payable were issued either as a result of financing or deferred compensation provided by shareholders. In the first quarter of 2023 and 2022, Ainos KY provided working capital advances in the form of non-convertible note financing in the aggregate amount of $0 and $800,000, respectively. As of March 31, 2023, and December 31, 2022, the non-convertible notes payable to Ainos KY totaled $600,000 and $800,000, respectively. On March 13, 2023, ASE Test, Inc. (the “ASE”), an affiliate of the Company, provided the Company financing in the form of a convertible notes in the principal amount of $1,500,000. Pursuant to that certain Convertible Note Purchase Agreement dated as of March 13, 2023, ASE’s obligation to pay (and the Company’s obligation to issue a convertible note) additional $500,000 remains outstanding and contingent on the Company achieving certain business benchmarks. As of March 31, 2023, and December 31, 2022, the convertible notes payable to Dr. Stephen T. Chen were both $376,526. The above-referenced convertible and other notes payable are particularly described in Notes 5 and 6 to the unaudited condensed consolidated financial statements. Purchase and Sales Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY On June 14, 2021, we entered into an exclusive agreement to serve as the master sales and marketing agent for the Ainos COVID-19 Antigen Rapid Test Kit and COVID-19 Nucleic Acid Test Kit with Ainos KY (the “Sales and Marketing Agreement”) which was developed by Taiwan Carbon Nano Technology Corporation (the “TCNT”), an affiliate of the Company. On June 7, 2021, the Taiwan Food and Drug Administration (the “TFDA”) approved emergency use authorization to TCNT for the Ainos COVID-19 Antigen Rapid Test Kit that will be sold and marketed under the “Ainos” brand in Taiwan. On June 21, 2022, we began marketing the Ainos SARS-CoV-2 Antigen Rapid Self-Test (“COVID-19 Antigen Self-Test Kit”) under a separate EUA issued by the TFDA to TCNT on June 13, 2022. As TCNT secures regulatory authorizations from foreign regulatory agencies, the Company expects to partner with regional distributors to promote sales in other strategic markets. We incurred costs associated with finished goods, raw materials and manufacturing fees for Covid-19 antigen rapid test kits from TCNT pursuant to the Sales and Marketing Agreement, totaling $46,762 and $386,412 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, the accounts payable to TCNT were $31,930 and $24,365, respectively. COVID-19 Antigen Rapid Test Kits Sales We sold Covid-19 antigen rapid test kits to ASE Technology Holding and Silicon Precision Industries Co., Ltd., an affiliate of the Company, totaling $0 and $81,100 for the three months ended March 31, 2023 and 2022, respectively. As of March 31,2023, and December 31, 2022, the accounts receivable to aforementioned related parties were $103,448 and $177,795, respectively. Product Co-development Agreement Pursuant to the five-year product co-development agreement effective on August 1, 2021 (the “Product Co-Development Agreement”) with TCNT, an affiliate of the Company, we incurred development expenses totaling $77,463 and $167,422 for the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, the accrued payables were $27,186 and $70,113, respectively.

Related Party Transactions

3 Months Ended

Mar. 31, 2023

7. Related Party Transactions.

The following is a summary of related party transactions that met our disclosure threshold:

Asset Purchase Agreement

Ainos KY and the Company entered into an Asset Purchase Agreement dated as of November 18, 2021 (the “Asset Purchase Agreement”), as modified by an Amended and Restated Asset Purchase Agreement dated as of January 29, 2022 (the “Amended Asset Purchase Agreement”).

Pursuant to the Asset Purchase Agreement, we acquired certain intellectual property assets and certain manufacturing, testing, and office equipment for a total purchase price of $26,000,000 that included $24,886,023 for intangible intellectual property assets and $1,113,977 for equipment. As consideration we issued to Ainos KY a Convertible Promissory Note in the principal amount of $26,000,000 upon closing on January 30, 2022 (the “APA Convertible Note”). Ainos KY converted all of APA Convertible Note on or about August 8, 2022 upon the Company up-listing to the Nasdaq Capital Markets.

Working Capital Advances

Except for the payment of purchasing the intangible assets and equipment, all convertible and other notes payable were issued either as a result of financing or deferred compensation provided by shareholders.

In the first quarter of 2023 and 2022, Ainos KY provided working capital advances in the form of non-convertible note financing in the aggregate amount of $0 and $800,000, respectively. As of March 31, 2023, and December 31, 2022, the non-convertible notes payable to Ainos KY totaled $600,000 and $800,000, respectively.

On March 13, 2023, ASE Test, Inc. (the “ASE”), an affiliate of the Company, provided the Company financing in the form of a convertible notes in the principal amount of $1,500,000. Pursuant to that certain Convertible Note Purchase Agreement dated as of March 13, 2023, ASE’s obligation to pay (and the Company’s obligation to issue a convertible note) additional $500,000 remains outstanding and contingent on the Company achieving certain business benchmarks.

As of March 31, 2023, and December 31, 2022, the convertible notes payable to Dr. Stephen T. Chen were both $376,526.

The above-referenced convertible and other notes payable are particularly described in Notes 5 and 6 to the unaudited condensed consolidated financial statements.

Purchase and Sales

Ainos COVID-19 Test Kits Sales and Marketing Agreement with Ainos KY

On June 14, 2021, we entered into an exclusive agreement to serve as the master sales and marketing agent for the Ainos COVID-19 Antigen Rapid Test Kit and COVID-19 Nucleic Acid Test Kit with Ainos KY (the “Sales and Marketing Agreement”) which was developed by Taiwan Carbon Nano Technology Corporation (the “TCNT”), an affiliate of the Company. On June 7, 2021, the Taiwan Food and Drug Administration (the “TFDA”) approved emergency use authorization to TCNT for the Ainos COVID-19 Antigen Rapid Test Kit that will be sold and marketed under the “Ainos” brand in Taiwan. On June 21, 2022, we began marketing the Ainos SARS-CoV-2 Antigen Rapid Self-Test (“COVID-19 Antigen Self-Test Kit”) under a separate EUA issued by the TFDA to TCNT on June 13, 2022. As TCNT secures regulatory authorizations from foreign regulatory agencies, the Company expects to partner with regional distributors to promote sales in other strategic markets.

We incurred costs associated with finished goods, raw materials and manufacturing fees for Covid-19 antigen rapid test kits from TCNT pursuant to the Sales and Marketing Agreement, totaling $46,762 and $386,412 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, the accounts payable to TCNT were $31,930 and $24,365, respectively.

COVID-19 Antigen Rapid Test Kits Sales

We sold Covid-19 antigen rapid test kits to ASE Technology Holding and Silicon Precision Industries Co., Ltd., an affiliate of the Company, totaling $0 and $81,100 for the three months ended March 31, 2023 and 2022, respectively. As of March 31,2023, and December 31, 2022, the accounts receivable to aforementioned related parties were $103,448 and $177,795, respectively.

Product Co-development Agreement

Pursuant to the five-year product co-development agreement effective on August 1, 2021 (the “Product Co-Development Agreement”) with TCNT, an affiliate of the Company, we incurred development expenses totaling $77,463 and $167,422 for the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, the accrued payables were $27,186 and $70,113, respectively.