ampg_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number 001-40069

AmpliTech Group, Inc.

(Exact name of registrant as specified in its charter)

Nevada		27-4566352
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

155 Plant Avenue

Hauppauge, NY 11788

(Address of principal executive offices) (Zip Code)

(631)-521-7831

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on

which registered

Common Stock, par value $0.001 per share

AMPG

The Nasdaq Stock Market LLC

Warrants to Purchase Common Stock

AMPGW

The Nasdaq Stock Market LLC

Indicate by check mark whether registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 9, 2022, the registrant had 9,632,113 shares of common stock, par value $0.001 per share, issued and outstanding.

AMPLITECH GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q

September 30, 2022

TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)		5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		37

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		44

Item 4.	Controls and Procedures		44

PART II - OTHER INFORMATION			45

Item 1.	Legal Proceedings		45

Item 1A.	Risk Factors		45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		45

Item 3.	Default Upon Senior Securities		45

Item 4.	Mine Safety Disclosures		45

Item 5.	Other Information		45

Item 6.	Exhibits		46

SIGNATURES			47

Table of Contents

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our Company”, “the Company”, “AmpliTech”, “Specialty” or “SMW” “Spectrum” or “SSM”, “AmpliTech Group MMIC Design Center” or “AGMDC”, “AmpliTech Group True G Speed Services” or “TGSS” are the combined business of AmpliTech Group, Inc., and its consolidated subsidiary, AmpliTech, Inc. and AMPG’s divisions Specialty Microwave, Spectrum Semiconductor Materials, AmpliTech Group MMIC Design Center and AmpliTech Group True G Speed Services.

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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AmpliTech Group, Inc.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2022			2021
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	13,054,956		$	18,018,874
Accounts receivable, net		2,667,433			1,659,878
Other Receivable		6,599			201,215
Inventories, net		6,253,951			4,192,812
Marketable Securities		493,323			-
Prepaid expenses		147,031			210,028
Total Current Assets		22,623,293			24,282,807

Property and equipment, net		2,078,983			1,355,288
Right of use operating lease assets		4,346,815			1,115,588
Intangible assets, net		3,171,685			3,284,082
Goodwill		4,817,019			4,817,019
Cost method investment		348,250			250,000
Security deposits		121,217			122,404

Total Assets	$	37,507,262		$	35,227,188

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses		1,554,656		$	3,006,334
Customer deposits		128,435			253,909
Current portion of financing lease obligations		41,865			33,688
Current portion of operating lease obligations		575,816			391,571
Current portion of notes payable		152,135			129,876
Total Current Liabilities		2,452,907			3,815,378

Long Term Liabilities
Financing lease, net of current obligations		53,412			17,471
Operating lease, net of current obligations		3,918,623			795,317
Notes payable, net of current portion		126,096			200,491
Revenue earnout		1,365,038			1,365,038
Total Liabilities		7,916,076			6,193,695

Commitments and Contingencies		-			-

Stockholders' Equity
Series A convertible preferred stock, par value $0.001, 1,000,000 shares authorized, 0 shares issued and outstanding		-			-
Common Stock, par value $0.001, 500,000,000 shares authorized, 9,632,113 and 9,582,113 shares issued and outstanding, respectively		9,632			9,582
Additional paid-in capital		35,997,730			35,651,088
Accumulated deficit		(6,416,176	)		(6,627,177	)

Total Stockholders' Equity		29,591,186			29,033,493

Total Liabilities and
Stockholders' Equity	$	37,507,262		$	35,227,188

See accompanying notes to the condensed consolidated financial statements

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AmpliTech Group, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For The Three Months Ended						For The Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2022			2021			2022			2021

Revenue	$	5,435,654		$	1,056,596		$	15,119,216		$	2,553,982

Cost of goods sold		2,774,739			742,983			8,096,984			1,840,764

Gross Profit		2,660,915			313,613			7,022,232			713,218

Operating Expenses
Selling, general and administrative		1,852,345			833,574			5,975,440			2,763,292
Research and development		222,549			16,755			811,688			39,142
Total operating expenses		2,074,894			850,329			6,787,128			2,802,434

Income (Loss) From Operations		586,021			(536,716	)		235,104			(2,089,216	)

Other Income (Expenses)
Gain on extinguishment of debt		-			-			-			232,200
Other income		-			11,520			-			11,520
Unrealized gain (loss) on investments		213			(63,807	)		213			(63,135	)
Interest expense, net		(9,318	)		(3,842	)		(24,316	)		(36,840	)
Total other income (expense)		(9,105	)		(56,129	)		(24,103	)		143,745

Income (Loss) Before Income Taxes		576,916			(592,845	)		211,001			(1,945,471	)

Provision For Income Taxes		-			-			-			-

Net Income (Loss)	$	576,916		$	(592,845	)	$	211,001		$	(1,945,471	)

Net Income (Loss) Per Share;
Basic	$	0.06		$	(0.06	)	$	0.02		$	(0.25	)
Diluted	$	0.06		$	(0.06	)	$	0.02		$	(0.25	)

Weighted Average Shares Outstanding;
Basic		9,630,739			9,343,671			9,601,084			7,939,008
Diluted		9,712,756			9,343,671			9,716,868			7,939,008

See accompanying notes to the condensed consolidated financial statements

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AmpliTech Group, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For The Nine Months Ended
	September 30, 2022			September 30, 2021

Cash Flows from Operating Activities:
Net income (loss)	$	211,001		$	(1,945,471	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		293,460			94,295
Amortization of prepaid consulting		40,389			148,390
Amortization of right-of-use operating lease asset		381,921			68,278
Stock based compensation		346,692			214,661
Loss on disposal of property and equipment		1,606			7,188
Gain on forgiveness of debt		-			(232,200	)
Change in fair value of marketable securities		(213	)		63,135
Changes in Operating Assets and Liabilities:
Accounts receivable		(1,007,555	)		(132,681	)
Other receivable		194,616			-
Inventories		(2,061,139	)		(431,174	)
Prepaid expenses		(28,036	)		(707,970	)
Security deposits		1,187			-
Accounts payable and accrued expenses		(1,451,678	)		208,965
Operating lease liability		(305,597	)		(66,692	)
Customer deposits		(125,474	)		196,767
Net cash used in operating activities		(3,508,820	)		(2,514,509	)

Cash Flows from Investing Activities:
Purchase of equipment		(696,253	)		(948,123	)
Purchase of marketable securities, net		(493,110	)		(4,215,724	)
Purchase of cost method investment		(98,250	)		(250,000	)
Net cash used in investing activities		(1,287,613	)		(5,413,847	)

Cash Flows from Financing Activities:
Proceeds received from private placement, net of expenses		-			20,976,344
Proceeds received from public offering, net of expenses		-			9,449,597
Proceeds received from exercise of warrants		-			1,474,899
Repayment of line of credit		-			(200,000	)
Repayments on financing lease		(32,734	)		(23,916	)
Proceeds of note payable		441,139			-
Repayment of notes payable		(575,890	)		(1,000,231	)
Net cash (used in) provided by financing activities		(167,485	)		30,676,693

Net change in cash and cash equivalents		(4,963,918	)		22,748,337

Cash and Cash Equivalents, Beginning of Period		18,018,874			199,536

Cash and Cash Equivalents, End of Period	$	13,054,956		$	22,947,873

Supplemental disclosures:
Cash paid for interest expense	$	33,836		$	45,175
Cash paid for income taxes	$	-		$	-

Non-Cash Investing and Financing Activities:
Common Stock issued on vesting of RSUs	$	50		$	-
Finance agreement entered in exchange for prepaid assets		-			32,222
Equipment received for prepaid assets	$	50,644		$	-
Operating lease right-of-use asset and liability initial measurement		3,626,985			-
Financed purchases of property and equipment	$	145,630		$	-
Loss on disposal of property and equipment	$	1,606		$	-

See accompanying notes to the condensed consolidated financial statements

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AmpliTech Group, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

	For The Three Months Ended September 30, 2022
	Series A Convertible Preferred				Common Stock				Additional						Total
	Number of		Par		Number of		Par		Paid-In			Accumulated			Stockholders'
	Shares		Value		Shares		Value		Capital			Deficit			Equity
Balance, June 30, 2022		-	$	-		9,629,613	$	9,630	$	35,933,313		$	(6,993,092	)	$	28,949,851

Stock based compensation		-		-		-		-		64,419			-			64,419

Common stock issued for vesting of RSU's		-		-		2,500		2		(2	)		-			-

Net income for the three months ended September 30, 2022		-		-		-		-		-			576,916			576,916

Balance September 30, 2022		-	$	-		9,632,113	$	9,632	$	35,997,730		$	(6,416,176	)	$	29,591,186

	For The Nine Months Ended September 30, 2022
	Series A Convertible Preferred				Common Stock				Additional						Total
	Number of		Par		Number of		Par		Paid-In			Accumulated			Stockholders'
	Shares		Value		Shares		Value		Capital			Deficit			Equity
Balance, December 31, 2021		-	$	-		9,582,113	$	9,582	$	35,651,088		$	(6,627,177	)	$	29,033,493

Stock based compensation		-		-		-		-		346,692			-			346,692

Common stock issued for vesting of RSU's		-		-		50,000		50		(50	)		-			-

Net income for the nine months ended September 30, 2022		-		-		-		-		-

SEC Form 10-Q filed by Amplitech Group Inc.