SCHEDULE: ASE Entities Disclose Ainos Stake

ASE Technology Holding and ASE Test disclose a combined 8.4% beneficial ownership in Ainos, Inc. following recent convertible note and warrant agreements.

Summary

• ASE Technology Holding Co., Ltd. and its subsidiary ASE Test, Inc. (collectively, the "Reporting Persons") have filed a Schedule 13D amendment to report their beneficial ownership of Ainos, Inc. common stock.
• The Reporting Persons collectively beneficially own 667,085 shares, representing 8.4% of Ainos, Inc.'s outstanding common stock.
• This ownership includes shares directly held, shares convertible under a March 2023 agreement (as amended in March 2025), shares convertible under a May 2024 agreement, and shares issuable upon exercise of a warrant issued under the May 2024 agreement.
• The 2023 agreement involves a $2,000,000 convertible promissory note maturing March 12, 2027, with a conversion price of the lower of $37.50 or the higher of the 30-day average closing price or $22.50.
• The 2024 agreement involves a $9,000,000 convertible note maturing May 15, 2027, with a fixed conversion price of $22.50 per share, and a warrant for 100,000 shares at $22.50 per share.
• A voting agreement is in place between ASE Test Taiwan and Ainos KY, requiring ASE Test Taiwan to vote its shares as directed by Ainos KY, with restrictions on selling more than 20% of its shares annually.
• The filing is an amendment to reflect accrual of interest and updated ownership details following these agreements.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as neutral to slightly positive, reflecting significant capital inflow for Ainos, Inc. but also potential future dilution and the complexities of convertible securities.

Positives

• ASE entities have secured significant convertible debt and warrant positions in Ainos, Inc., indicating a financial investment and potential strategic interest.
• The agreements provide Ainos, Inc. with substantial capital infusion totaling $11 million ($2 million from the 2023 agreement and $9 million from the 2024 agreement).
• The conversion price for the 2023 note offers flexibility, potentially benefiting ASE Test Taiwan if Ainos' stock price is lower than $37.50.
• The 2024 agreement includes a warrant, providing an additional upside opportunity for ASE Test Taiwan.
• The voting agreement suggests a collaborative relationship, with ASE Test Taiwan aligning its voting power with Ainos KY.

Negatives

• The significant stake and convertible nature of the securities could lead to future dilution for existing Ainos, Inc. shareholders.
• The fixed conversion price of $22.50 for the 2024 note and warrant may be unfavorable to Ainos if its stock price falls below this level.
• The voting agreement restricts ASE Test Taiwan's ability to freely trade its shares, potentially limiting market liquidity or its own investment flexibility.

Risks

• Potential for significant dilution to existing shareholders if convertible notes are converted or warrants are exercised.
• The fixed conversion price of $22.50 per share for the 2024 note and warrant could be disadvantageous to Ainos if market conditions lead to a lower stock price.
• The transfer restrictions under the voting agreement could limit the liquidity of ASE Test Taiwan's holdings.
• Future strategic discussions or actions by the Reporting Persons could lead to changes in Ainos' management, operations, or strategic direction, the outcomes of which are uncertain.

Future Outlook

The Reporting Persons intend to continuously review their investment in Ainos, Inc. and may engage in discussions with management and other parties regarding the company's business, assets, capitalization, financial condition, operations, management, strategy, potential business combinations, and future plans. Depending on various factors, they may purchase additional shares, engage in hedging transactions, or sell their holdings.

Industry Context

StockSavvy.ai notes that this filing highlights significant capital infusion into Ainos, Inc. from a major player in the semiconductor services industry, ASE Technology Holding. This type of investment, often through convertible notes and warrants, is common in the technology and biotech sectors as companies seek funding for development and expansion, while investors gain potential upside with downside protection.

Comparison to Industry Standards

• The structure of convertible notes and warrants is a standard financial instrument used for capital raising in the technology and semiconductor sectors, providing flexibility for both the issuer and investor.
• ASE Technology Holding's investment aligns with industry trends where larger established companies may invest in or acquire stakes in smaller, innovative firms to gain access to new technologies or markets.
• The reported 8.4% stake is a substantial minority holding, typical for strategic investors or significant debt providers in pre-IPO or early-stage public companies.

Corporate Governance

Related Party Transactions

• ASE Test Taiwan has entered into convertible note and warrant purchase agreements with Ainos, Inc., totaling $11,000,000.
• A voting agreement exists between ASE Test Taiwan and Ainos KY (a Cayman Islands corporation related to Ainos, Inc.) regarding the voting of Ainos, Inc. shares held by ASE Test Taiwan.

Stakeholder Impact

• Shareholders of Ainos, Inc.: Potential for future dilution due to convertible notes and warrants; potential for increased capital to fund growth; voting power may be influenced by the voting agreement.
• ASE Technology Holding Co., Ltd. and ASE Test, Inc.: Increased investment and potential influence in Ainos, Inc.; potential for financial returns on investment.
• Creditors of Ainos, Inc.: Increased financial stability due to capital infusion, but potential for future dilution impacting equity value.

Next Steps

• Reporting Persons will continue to review their investment in Ainos, Inc.
• Reporting Persons may engage in discussions with Ainos' management, board, and other stakeholders regarding the company's future.
• Reporting Persons may take actions such as purchasing additional shares, engaging in hedging, or selling shares based on market conditions and strategic reviews.

Key Dates

Recommendation

The filing indicates significant capital infusion into Ainos, Inc. via convertible debt and warrants from a major industry player, which is positive. However, the potential for substantial future dilution from these instruments, coupled with the fixed conversion prices and a voting agreement that restricts the investor's flexibility, warrants a cautious 'hold' stance until the company's strategic direction and the impact of these financial instruments become clearer.

Keywords

Ainos, Inc., Schedule 13D, ASE Technology Holding, ASE Test, Inc., Convertible Note, Warrant, Beneficial Ownership, Securities Exchange Act, Investment, Capital Raise