AmpliTech Group, Inc 10-Q for FY2023 Q1

AmpliTech Group, Inc. (AMPG)

10-Q 2023-05-15 For: 2023-03-31

Added on April 11, 2026

About this 10-Q

AmpliTech Group, Inc filed this 10-Q on May 15, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.11M; down 19.4% from $5.1M a year earlier
Net loss: $581.97K; compared with net income of $3625 a year earlier
Diluted EPS: -$0.06; compared with $0.00 a year earlier

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

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

		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		35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		38

Item 4.	Controls and Procedures		38

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		39

Item 1A.	Risk Factors		39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39

Item 3.	Defaults Upon Senior Securities		39

Item 4.	Mine Safety Disclosures		39

Item 5.	Other Information		39

Item 6.	Exhibits		40

SIGNATURES			41

	March 31,			December 31,
	2023			2022
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	7,595,366		$	13,290,222
Accounts receivable		1,857,519			1,801,769
Inventories, net		6,569,865			6,632,121
Marketable Securities		3,021,918			247,450
Prepaid expenses		617,019			194,635
Total Current Assets		19,661,687			22,166,197

Property and equipment, net		1,998,264			2,023,687
Right of use operating lease assets		4,047,279			4,197,324
Intangible assets, net		3,096,755			3,134,108
Goodwill		4,696,883			4,696,883
Cost method investment		348,250			348,250
Security deposits		109,434			113,185

Total Assets	$	33,958,552		$	36,679,634

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses		1,086,890		$	860,366
Customer deposits		156,069			210,848
Current portion of financing lease obligations		24,993			33,480
Current portion of operating lease obligations		597,920			586,379
Current portion of notes payable		129,438			144,358
Revenue earnout		-			2,180,826
Total Current Liabilities		1,995,310			4,016,257

Long Term Liabilities
Financing lease, net of current obligations		45,212			49,336
Operating lease, net of current obligations		3,615,248			3,768,932
Notes payable, net of current portion		63,195			89,597
Total Liabilities		5,718,965			7,924,122

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, 9,637,113 and 9,634,613 shares issued and outstanding, respectively		9,637			9,635
Additional paid-in capital		36,116,200			36,050,161
Accumulated deficit		(7,886,250	)		(7,304,284	)

Total Stockholders' Equity		28,239,587			28,755,512

Total Liabilities and
Stockholders' Equity	$	33,958,552		$	36,679,634

	For The Three Months Ended
	March 31,			March 31,
	2023			2022

Revenue	$	4,112,299		$	5,099,520

Cost of goods sold		2,295,768			2,775,922

Gross Profit		1,816,531			2,323,598

Operating Expenses
Selling, general and administrative		2,086,912			1,901,310
Research and development		348,730			413,303
Total operating expenses		2,435,642			2,314,613

Income (Loss) From Operations		(619,111	)		8,985

Other Income (Expenses)
Unrealized gain on investments		18,546			-
Realized gain on investments		4,828			-
Interest Income (expense), net		13,771			(5,360	)
Total other income (expense)		37,145			(5,360	)

Net Income (Loss) Before Income Taxes		(581,966	)		3,625

Provision For Income Taxes		-			-

Net Income (Loss)	$	(581,966	)	$	3,625

Net Loss Per Share;
Basic	$	(0.06	)	$	-
Diluted	$	(0.06	)	$	-

Weighted Average Shares Outstanding;
Basic		9,635,709			9,582,113
Diluted		9,635,709			9,582,113

	For The Three Months Ended March 31, 2023
	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, 2022		-	$	-		9,634,613	$	9,635	$	36,050,161		$	(7,304,284	)	$	28,755,512

Stock based compensation		-		-		-		-		66,041			-			66,041

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

Net loss for the three months ended March 31, 2023		-		-		-		-		-			(581,966	)		(581,966	)

Balance, March 31, 2023		-	$	-		9,637,113	$	9,637	$	36,116,200		$	(7,886,250	)	$	28,239,587

Description	Useful Life	Method
Office equipment	3 to 7 years	Straight-line
Machinery/shop equipment	7 to 10 years	Straight-line
Computer equipment/software	1 to 7 years	Straight-line
Vehicles	5 years	Straight-line
Leasehold improvements	7 years	Straight-line

	Net Income (Loss)			Shares		Per Share Amount
For the year ended March 31, 2023:
Basic EPS	$	(581,966	)		9,635,709	$	(0.06	)
Effect of dilutive stock options and warrants		-			-
Diluted EPS	$	(581,966	)		9,635,709	$	(0.06	)
For the year ended March 31, 2022:
Basic EPS	$	3,625			9,582,113	$	0.00
Effect of dilutive stock options and warrants		-			-
Diluted EPS	$	3,625			9,582,113	$	0.00

	AmpliTech Inc.			Spectrum			Corporate			Total
Revenue	$	1,222,199		$	2,890,100			-		$	4,112,299
Cost of Goods Sold		760,179			1,535,589			-			2,295,768
Net Income (Loss)		(1,009,532	)		720,854			(293,288	)		(581,966	)
Total Assets		13,870,908			16,946,958			3,140,686			33,958,552
Depreciation and Amortization		82,175			32,270			-			114,445
Interest Income (Expense), net		16,939			(75	)		(3,093	)		13,771

	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Level 1 (1)
Money Market Fund	$	7,216		-		-	$	7,216
Marketable Equitable Securities		3,003,372		18,546		-		3,021,918

Total	$	3,010,588		18,546		-	$	3,029,134

	Gross Carrying		Accumulated				Weighted Average
	Amount		Amortization		Net		Life
Trade name	$	584,517	$	-	$	584,517	Indefinite
Customer relationships		2,591,491		233,894		2,357,597	17.57
Intellectual Property		202,771		48,130		154,641	11.46

Total	$	3,378,779	$	282,024	$	3,096,755

2023		112,623
2024		149,976
2025		149,976
2026		149,976
2027		149,976
Thereafter		1,799,711
	$	2,512,238

	March 31,
Operating leases	2023
Assets
ROU operating lease assets	$	4,047,279

Liabilities
Current portion of operating lease	$	597,920
Operating lease, net of current portion	$	3,615,248
Total operating lease liabilities	$	4,213,168
Financing leases
Assets
Property and equipment, gross	$	234,036
Accumulated depreciation		(123,196	)
Property and equipment, net	$	110,840

Liabilities
Current portion of financing lease	$	24,993
Financing lease, net of current portion	$	45,212
Total financing lease liabilities	$	70,205

Weighted average remaining lease term (years)	March 31, 2023
Operating leases		9.10
Financing leases		2.50
Weighted average discount rate
Operating leases		4.49	%
Financing leases		4.70	%

2023		22,921
2024		18,751
2025		18,186
2026		11,976
Thereafter		3,992
Total lease payments		75,826
Less imputed interest		(5,621	)
Total lease obligations		70,205
Less current obligations		(24,993	)
Long-term lease obligations	$	45,212

	For the Three Months Ended
	March 31,			March 31,
Cash Flows from Operating Activities:	2023			2022

Net Income (Loss)	$	(581,966	)	$	3,625
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		114,445			85,201
Amortization of prepaid consulting		-			13,500
Amortization of right-of-use operating lease asset		150,045			87,889
Stock based compensation		66,041			44,946
Change in fair value of marketable securities		(18,546	)		-
Changes in Operating Assets and Liabilities:
Accounts receivable		(55,750	)		(327,110	)
Other receivable		-			(77,734	)
Inventories		62,256			(439,407	)
Prepaid expenses		(422,384	)		(146,233	)
Security deposits		3,751			(7,066	)
Accounts payable and accrued expenses		226,524			(1,383,655	)
Operating lease liability		(54,779	)		(99,765	)
Customer deposits		(142,143	)		403,758
Net cash used in operating activities		(652,506	)		(1,842,051	)

Cash Flows from Investing Activities:
Purchase of property and equipment		(51,669	)		(82,850	)
Net investment in marketable securities		(2,755,922	)		-
Purchase of cost method investment		-			(100,000	)
Net cash used in investing activities		(2,807,591	)		(182,850	)

Cash Flows from Financing Activities:
Repayment on financing lease liabilities		(12,611	)		(8,268	)
Repayment of notes payable		(41,322	)		(26,745	)
Payment of revenue earnout		(2,180,826	)		-
Net cash used in financing activities		(2,234,759	)		(35,013	)

Net change in cash and cash equivalents		(5,694,856	)		(2,059,914	)

Cash and Cash Equivalents, Beginning of Period		13,290,222			18,018,874

Cash and Cash Equivalents, End of Period	$	7,595,366		$	15,958,960

	March 31,		March 31,
	2023		2022
AmpliTech Inc.
Domestic sales	$	1,024,245	$	867,362
International sales		197,954		200,793
Total sales	$	1,222,199	$	1,068,155

Spectrum
Domestic sales	$	1,877,693	$	1,595,626
International sales		1,012,407		2,435,739
Total sales	$	2,890,100	$	4,031,365

Total sales	$	4,112,299	$	5,099,520

2023		578,423
2024		765,075
2025		400,321
2026		383,347
Thereafter		3,112,070
Total lease payments		5,239,236
Less imputed interest		(1,026,068	)
Total lease obligations		4,213,168
Less current obligations		(597,920	)
Long-term lease obligations	$	3,615,248

	·	On May 14, 2020, the Company borrowed $27,494 to be paid over a three-year term with monthly payments of $815 at an interest rate of 4.268%. The balance as of March 31, 2023, was $812. Principal payments of $2,418 and interest expense of $27 were paid for the three months ended March 31, 2023.

	·	On June 10, 2020, the Company borrowed $41,015 to be paid over a three-year term with monthly payments of $1,216 at an interest rate of 4.278%. The balance as of March 31, 2023, was $2,418. Principal payments of $3,593 and interest expense of $55 were paid for the three months ended March 31, 2023.

	Payments
2023	$	103,036
2024		89,597
Total remaining payments	$	192,633

	Number of		Weighted Average Exercise
	Options		Price ($)
Outstanding at December 31, 2022		916,000	$	2.49
Granted		2,000	$	2.59
Exercised		-		-
Expired		-		-
Outstanding at March 31, 2023		918,000	$	2.49
Exercisable at March 31, 2023		380,484	$	3.18

	Number of		Weighted Average Exercise
	Warrants		Price ($)
Outstanding at December 31, 2022		3,296,942	$	7.83
Granted		-		-
Exercised		-		-
Expired		-		-
Outstanding at March 31, 2023		3,296,942	$	7.83
Exercisable at March 31, 2023		3,296,942	$	7.83

	Number of			Weighted Average Exercise
	RSU’s			Price ($)
Outstanding at December 31, 2022		22,500		$	1.96
Granted		-			-
Exercised		(2,500	)	$	1.96
Expired		-			-
Outstanding at March 31, 2023		20,000		$	1.96
Exercisable at March 31, 2023		-			-

*Exhibit No.*		*Description*
31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Principal Executive Officer
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Principal Financial Officer
32.1		Section 1350 Certification of Principal Executive Officer
32.2		Section 1350 Certification of Principal Financial Officer
101. INS		XBRL Instance Document
101. SCH		XBRL Taxonomy Extension Schema Document
101. CAL		XBRL Taxonomy Extension Calculation Link base Document
101. DEF		XBRL Taxonomy Extension Definition Link base Document
101. LAB		XBRL Taxonomy Extension Label Link base Document
101. PRE		XBRL Taxonomy Extension Presentation Link base Document

	AmpliTech Group, Inc.

Date: May 15, 2023	By:	/s/ Fawad Maqbool
		Fawad Maqbool
		President and Chief Executive Officer (Principal Executive Officer)

1.	I have reviewed the quarterly report on Form 10-Q of AmpliTech Group, Inc.(the “registrant”) for the quarter ended March 31, 2023;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s), and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.