🧾 What This Document Is

This is an 8-K filing, which is a report a company files with the SEC to announce major news to investors. Attached to it is Exhibit 99.1, which is a press release detailing Ainos's full-year financial results for 2025 and its business updates.

👉 In short: This is Ainos's official year-end report card and a progress update on its big new technology push.

🏢 What The Company Does

In simple terms, Ainos is trying to teach machines to smell. The company has two main businesses:

1. AI Nose (SmellTech): This is their focus. They've built an "electronic nose" platform that uses special sensors and AI to turn scents into digital data (called "Smell ID"). They sell this as a service to industries like semiconductor factories and robotics.
2. VELDONA®: A separate biotech business developing low-dose interferon for certain diseases.

Right now, they are heavily focused on commercializing the AI Nose in industrial settings.

💰 Financial Highlights

Here’s what the numbers for 2025 tell us:

• Revenue: $124,157, up a massive ~499% from $20,729 in 2024. This growth is almost entirely from their AI Nose business.
• Gross Profit: $102,911. This is a huge swing from a loss of -$31,866 in 2024. Their gross margin turned positive to ~82.9%, meaning they are now making good money on each sale before other costs.
• Net Loss: -$14.77 million. Despite the revenue jump, the company is still losing money overall. The loss was slightly narrower than 2024's loss of -$14.86 million.
• Operating Expenses: $14.09 million, up slightly from $13.81 million. The CFO noted that expenses excluding certain non-cash items actually decreased by 9%, showing cost control.

👉 Key Insight: The story here is explosive top-line growth and improving unit economics (gross margin), but the company is still in a heavy investment phase and is not yet profitable.

🚀 Key Moves & Deployments

The big news for 2026 is the move from selling a "platform" to actually deploying it in real factories. Two major semiconductor deals are highlighted:

• ~200 systems are targeted for deployment in wafer fabrication plants in Q1 2026 for technical validation.
• ~1,400 systems are under a three-year, $2.1 million contract for packaging and testing facilities, targeted for completion in Q2 2026. They've received deposits, and the plan could scale to 20,000 systems later.
• Financing: After year-end, they raised NTD 90 million (≈$2.82 million) to provide more cash for these operations.

👉 Why it matters: These are the first real revenue-generating deployments of their core technology. Success here is critical to prove the business model and unlock future growth.

📦 Financial Position (Balance Sheet Snapshot)

The balance sheet shows a company that has been spending heavily to build its technology.

• Cash: $417,353 as of Dec 31, 2025. This is down sharply from $3.89 million a year ago, showing significant cash burn.
• Total Assets: $20.87 million, down from $28.82 million. The drop is mainly due to a decrease in intangible assets (from $23.7M to $19.2M), likely from amortization.
• Total Liabilities: $13.31 million, which is stable year-over-year. A notable item is $11 million in long-term convertible notes.
• Stockholders' Equity: $7.56 million, down from $15.52 million. The decline is driven by the accumulated annual loss.

💸 Cash Flow Story

While a full cash flow statement isn't provided, the changes in the balance sheet tell the story:

• The company burned through most of its cash ($3.48 million decrease) to fund its $14.77 million net loss and invest in operations.
• The NTD 90 million (≈$2.82M) financing in early 2026 was crucial to add liquidity after the cash position got very low.
• They are now collecting deposits (seen as an increase in "Contract liabilities" to $350,000) from customers, which is a positive sign for cash flow from operations.

🔮 What's Next

The roadmap is clear: Execute the 2026 semiconductor deployments.

• Immediate Goal: Complete the technical validation and installations for the ~200 and ~1,400 systems in the first half of 2026.
• Business Model Goal: Generate "Smell ID" data from these deployments to train their AI model (SLM), creating a data moat and proving the value of their subscription ("SmellTech-as-a-Service") model.
• Growth Goal: Use these initial successes as case studies to scale commercially, with a potential path to 20,000 systems from one partner.

⚖️ Big Picture: Strengths & Risks

👍 Strengths:

• Explosive Growth: 499% revenue growth shows market interest.
• Improving Margins: Moving to a positive 82.9% gross margin is a major milestone for a hardware/software business.
• Clear Commercial Path: Moving from development to real, paid deployments with large industrial partners.
• Data Advantage: Each deployment feeds their AI, making it smarter and harder to replicate.

⚠️ Risks:

• Cash Burn & Runway: With only ~$417k in cash at year-end, they are heavily dependent on the new financing and future revenue/deposits to fund operations. They will likely need more capital.
• Execution Risk: Successfully deploying and scaling a complex hardware/software system in demanding semiconductor fabs is not guaranteed.
• Still Unprofitable: The company has a history of significant net losses and an accumulated deficit of $67.5 million.
• Niche Market: The "industrial smell" market is novel and unproven at large scale.

🧠 The Analogy

Ainos is like a startup that has spent years building a revolutionary, high-tech kitchen prototype. 2025 was the year they finally got the first few customers to order the kitchen and started earning real money from it (499% revenue growth). Now in 2026, they are in the critical phase of actually installing these kitchens in two big restaurants (semiconductor fabs). If the installations go well and the chefs (factory operators) love cooking with the new tools, it will prove the concept and lead to many more orders. However, their personal bank account is nearly empty after the build, so they need these installations to start paying off quickly.

📇 Key Contacts & People

• Investor Relations: [email protected]
• Company: Ainos, Inc.
• Website: https://www.ainos.com
• Social Media: Follow on X (@AinosInc) and LinkedIn.
• Key Executive: Eddy Tsai (Chairman & CEO), Christopher Lee (CFO).

🧩 Final Takeaway

Ainos is at a pivotal make-or-break moment: its breakthrough 2025 growth and margin success now hinge entirely on flawlessly executing its first major industrial deployments in early 2026. The technology works on paper, but real-world validation will determine if the company can scale or if it will face a cash crunch.