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 June 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 August 10, 2022, the registrant had 9,629,613 shares of common stock, par value $0.001 per share, issued and outstanding.

AMPLITECH GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q

June 30, 2022

TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)		4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		41

Item 4.	Controls and Procedures		42

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		43

Item 1A.	Risk Factors		43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		43

Item 3.	Default Upon Senior Securities		43

Item 4.	Mine Safety Disclosures		43

Item 5.	Other Information		43

Item 6.	Exhibits		44

SIGNATURES			45

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”, are the combined business of AmpliTech Group, Inc., and its consolidated subsidiary, AmpliTech, Inc. and AMPG’s divisions Specialty Microwave, Spectrum Semiconductor Materials, and AmpliTech Group MMIC Design Center.

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

	June 30,			December 31,
	2022			2021
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	14,361,554		$	18,018,874
Accounts receivable, net		2,523,698			1,659,878
Other Receivable		10,526			201,215
Inventories, net		5,703,176			4,192,812
Prepaid expenses		600,196			210,028
Total Current Assets		23,199,150			24,282,807

Property and equipment, net		1,708,812			1,355,288
Right of use operating lease assets		4,494,806			1,115,588
Intangible assets, net		3,209,263			3,284,082
Goodwill		4,817,019			4,817,019
Investment		348,250			250,000
Security deposits		121,217			122,404

Total Assets	$	37,898,517		$	35,227,188

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses	$	1,733,177		$	3,006,334
Customer deposits		362,544			253,909
Current portion of financing obligations		50,149			33,688
Current portion of operating obligations		565,372			391,571
Current portion of notes payable		298,247			129,876
Total Current Liabilities		3,009,489			3,815,378

Long Term Liabilities
Finance lease, net of current obligations		57,438			17,471
Operating lease, net of current obligations		4,066,697			795,317
Notes payable, net of current portion		450,004			200,491
Revenue earnout		1,365,038			1,365,038
Total Liabilities		8,948,666			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, 9,629,613 and 9,582,113 shares issued and outstanding, respectively		9,630			9,582
Additional paid-in capital		35,933,313			35,651,088
Accumulated deficit		(6,993,092	)		(6,627,177	)
Total Stockholders' Equity		28,949,851			29,033,493
Total Liabilities and Stockholders' Equity	$	37,898,517		$	35,227,188

See accompanying notes to the condensed consolidated financial statements

Table of Contents

AmpliTech Group, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For The Three Months Ended						For The Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2022			2021			2022			2021

Revenue	$	4,584,042		$	1,024,410		$	9,683,562		$	1,497,386

Cost of goods sold		2,546,323			679,787			5,322,245			1,097,781

Gross Profit		2,037,719			344,623			4,361,317			399,605

Operating Expenses
Selling, general and administrative		2,221,785			987,818			4,123,095			1,889,143
Research and development		175,836			55,732			589,139			62,962
Total operating expenses		2,397,621			1,043,550			4,712,234			1,952,105

Loss From Operations		(359,902	)		(698,927	)		(350,917	)		(1,552,500	)

Other Income (Expenses)
Gain on extinguishment of debt		-			232,200			-			232,200
Unrealized gain on investments		-			672			-			672
Interest expense, net		(9,638	)		(6,640	)		(14,998	)		(32,998	)
Total other income (expense)		(9,638	)		226,232			(14,998	)		199,874

Loss Before Income Taxes		(369,540	)		(472,695	)		(365,915	)		(1,352,626	)

Provision For Income Taxes		-			-			-			-

Net Loss	$	(369,540	)	$	(472,695	)	$	(365,915	)	$	(1,352,626	)

Net Loss Per Share;
Basic	$	(0.04	)	$	(0.05	)	$	(0.04	)	$	(0.19	)
Diluted	$	(0.04	)	$	(0.05	)	$	(0.04	)	$	(0.19	)

Weighted Average Shares Outstanding;
Basic		9,589,668			8,863,517			9,585,911			7,225,036
Diluted		9,589,668			8,863,517			9,585,911			7,225,036

See accompanying notes to the condensed consolidated financial statements

Table of Contents

AmpliTech Group, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For The Six Months Ended
	June 30,			June 30,
	2022			2021
Cash Flows from Operating Activities:
Net loss	$	(365,915	)	$	(1,352,626	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		180,280			50,114
Amortization of prepaid consulting		-			134,778
Amortization of right-of-use operating lease asset		233,930			46,789
Stock based compensation		282,273			188,550
Loss on disposal of property and equipment		1,606			-
Gain on forgiveness of debt		-			(232,200	)
Change in fair value of marketable securities		-			(672	)
Changes in Operating Assets and Liabilities:
Accounts receivable		(863,820	)		(243,624	)
Other receivable		190,689			-
Inventories		(1,510,364	)		(288,886	)
Prepaid expenses		327			(196,498	)
Security deposits		1,187			-
Accounts payable and accrued expenses		(1,273,157	)		206,715
Operating lease liability		(167,967	)		(45,765	)
Customer deposits		108,635			112,780
Net cash used in operating activities		(3,182,296	)		(1,620,545	)

Cash Flows from Investing Activities:
Purchase of equipment		(250,480	)		(413,536	)
Purchase of marketable securities, net		-			(1,108,966	)
Investment		(98,250	)		(150,000	)
Net cash used in investing activities		(348,730	)		(1,672,502	)

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
Proceeds (Repayment) of line of credit, net		-			(200,000	)
Repayments on finance lease		(20,424	)		(15,846	)
Proceeds (Repayment) of notes payable, net		(105,870	)		(967,086	)
Net cash (used in) provided by financing activities		(126,294	)		30,717,908

Net change in cash and cash equivalents		(3,657,320	)		27,424,861

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

Cash and Cash Equivalents, End of Period	$	14,361,554		$	27,624,397

Supplemental disclosures:
Cash paid for interest expense	$	12,530		$	38,400
Cash paid for income taxes	$	-		$	-

Non-Cash Investing and Financing Activities:
Common Stock issued on vesting of RSUs	$	48		$	-
Finance agreement entered in exchange for prepaid assets	$	441,139		$	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

Table of Contents

AmpliTech Group, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

	For The Three Months Ended June 30, 2022

Balance, March 31, 2022		-	$	-	9,582,113	$	9,582	$	35,696,034		$	(6,623,552	)	$	29,082,064

Stock based compensation		-		-	-		-		237,327			-			237,327

Common stock issued for vesting of RSUs		-		-	47,500		48		(48	)		-			-

Net loss for the three months ended June 30, 2022		-		-	-		-		-			(369,540	)		(369,540	)

Balance June 30, 2022		-	$	-	9,629,613	$	9,630	$	35,933,313		$	(6,993,092	)	$	28,949,851

	For The Six Months Ended June 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		-		-		-		-		282,273			-			282,273

Common stock issued for vesting of RSUs		-		-		47,500		48		(48	)		-			-

Net loss for the six months ended June 30, 2022		-		-		-		-		-			(365,915	)		(365,915	)

Balance June 30, 2022		-	$	-		9,629,613	$	9,630	$	35,933,313		$	(6,993,092	)	$	28,949,851

For The Three Months Ended June 30, 2021

Balance March 31, 2021

6,579,771

6,580

12,938,271

(2,748,303

)

10,196,548

Common stock issued in private placement

2,715,000

2,715

20,973,629

20,976,344

SEC Form 10-Q filed by Amplitech Group Inc.