AmpliTech Group, Inc 10-Q for FY2025 Q1
AmpliTech Group, Inc. (AMPG)
About this 10-Q
AmpliTech Group, Inc filed this 10-Q on May 15, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.6M
- up 56.9% from $2.29M a year earlier
- Net loss
- $1.84M
- compared with a net loss of $4.66M a year earlier
- Diluted EPS
- -$0.09
- compared with -$0.48 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
or
EXCHANGE ACT OF 1934
For the transition period from ______________to ______________
Commission File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
(Address of principal executive offices) (Zip Code)
(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 | ||
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The Stock Market LLC | ||||
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The |
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.
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).
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 | ☐ |
| ☒ | 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
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As of May 12, 2025, the registrant had shares of common stock, par value $ per share, issued and outstanding.
AMPLITECH GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q
March 31, 2025
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 | 28 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 32 |
| Item 4. | Controls and Procedures | 32 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 33 |
| Item 1A. | Risk Factors | 33 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
| Item 3. | Defaults Upon Senior Securities | 33 |
| Item 4. | Mine Safety Disclosures | 33 |
| Item 5. | Other Information | 33 |
| Item 6. | Exhibits | 33 |
| SIGNATURES | 34 | |
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 “AGTGSS” 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.
| 2 |
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.
| 3 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
AmpliTech Group, Inc.
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right of use assets | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Cost method investment | ||||||||
| Long term deposits | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Customer deposits | ||||||||
| Current portion of financing lease obligations | ||||||||
| Current portion of operating lease obligations | ||||||||
| Total Current Liabilities | ||||||||
| Long-term Liabilities | ||||||||
| Financing lease obligations, net of current portion | ||||||||
| Operating lease obligations, net of current portion | ||||||||
| Deferred tax liability | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, par value $, shares authorized, and shares issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements
| 4 |
AmpliTech Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| 2025 | 2024 | |||||||
| For The Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of Goods Sold | ||||||||
| Gross Profit | ||||||||
| Operating Expenses | ||||||||
| Selling, general and administrative | ||||||||
| Research and development | ||||||||
| Total Operating Expenses | ||||||||
| Loss From Operations | ( | ) | ( | ) | ||||
| Other Income (Expenses) | ||||||||
| Loss on investment in digital assets | ( | ) | ||||||
| Realized gain on investments | ||||||||
| Interest income (expense), net | ( | ) | ||||||
| Total Other Income (Expenses) | ( | ) | ||||||
| Net Loss Before Income Taxes | ( | ) | ( | ) | ||||
| Provision For Income Taxes | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Net Loss Per Share; | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| Weighted Average Common Shares Outstanding; | ||||||||
| Basic and diluted | ||||||||
See accompanying notes to the condensed consolidated financial statements
| 5 |
AmpliTech Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
| Shares | Value | Capital | Deficit | Equity | ||||||||||||||||
| For The Three Months Ended March 31, 2025 | ||||||||||||||||||||
| Common Stock | Additional | Total | ||||||||||||||||||
| Number of | Par | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||
| Shares | Value | Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | | |||||||||||||
| Stock based compensation | - | |||||||||||||||||||
| Common stock issued for vesting of RSU’s | ( | ) | ||||||||||||||||||
| Net loss for the three months ended March 31, 2025 | - | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| For The Three Months Ended March 31, 2024 | ||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock based compensation | - | |||||||||||||||||||
| Common stock issued for vesting of RSU’s | ( | ) | ||||||||||||||||||
| Net loss for the three months ended March 31, 2024 | - | ( | ) | ( | ) | |||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to the condensed consolidated financial statements
| 6 |
AmpliTech Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| March 31, | March 31, | |||||||
| For The Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Operating lease costs | ||||||||
| Stock based compensation | ||||||||
| Inventory reserve | ||||||||
| Loss on investment of digital assets | ||||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Long term deposits | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ||||||||
| Operating lease obligations | ( | ) | ( | ) | ||||
| Customer deposits | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of investment in digital assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Repayment on finance lease obligations | ( | ) | ( | ) | ||||
| Repayment of notes payable | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and Cash Equivalents, Beginning of the Period | ||||||||
| Cash and Cash Equivalents, End of the Period | $ | $ | ||||||
| Supplemental disclosures: | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Common Stock issued on vesting of RSUs | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements
| 7 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
(1) Organization and Business Description
AmpliTech
Group, Inc. (“AmpliTech” or the “Company”) was incorporated under the laws of the State of Nevada on December
30, 2010. On August 13, 2012, the Company acquired AmpliTech, Inc., by issuing shares of the Company’s common stock to
the shareholders of AmpliTech, Inc. in exchange for
AmpliTech designs, engineers and assembles microwave component based low noise amplifiers (“LNA”) that meet individual customer specifications. Application of the Company’s proprietary technology results in maximum frequency gain with minimal background noise distortion as required by each customer. The Company has both domestic and international customers in such industries as aerospace, governmental, defense and commercial satellite.
On September 12, 2019, AmpliTech Group, Inc. acquired the assets of Specialty Microwave Corporation (“Specialty”), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, property and equipment, and all intellectual property. The assets also included all eight team members of Specialty.
Specialty designs and manufactures passive microwave components and related subsystems that meet individual customer specifications for both domestic and international customers for use in satellite communication ground networks.
On
February 17, 2021, AmpliTech Group, Inc., common stock and warrants under the symbols “AMPG” and “AMPGW”, respectively,
commenced trading on NASDAQ. A reverse split of the outstanding common stock at a
In 2021, the Company opened AGMDC, a monolithic microwave integrated circuits (“MMIC”) chip design center in Texas and has started to implement several of its proprietary amplifier designs into MMIC components. MMICs are semiconductor chips used in high-frequency communications applications. MMICs are widely desired for power amplification solutions to service emerging technologies, such as phased array antennas and quantum computing. MMICs carry a smaller footprint enabling them to be incorporated into a broader array of systems while reducing costs. AGMDC designs, develops and manufactures state-of-the-art signal processing components for satellite and 5G communications networks, defense, space and other commercial applications, allowing the Company to market its products to a wider base of customers requiring high technology in smaller packages.
| 8 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
On November 19, 2021, AmpliTech Group, Inc. entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Spectrum Semiconductor Materials Inc. (the “Seller” or “SSM”), pursuant to which AmpliTech would acquire substantially all the assets of the Company (the “Acquisition”). The Acquisition was completed on December 15, 2021.
Spectrum Semiconductor Materials (“SSM”), located in Silicon Valley (San Jose, CA), is a global authorized distributor of integrated circuit (“IC”) packaging and lids for semiconductor device assembly, prototyping, testing, and production requirements.
In August 2022, AmpliTech Group’s True G Speed Services (AGTGSS) division was founded to serve and provide complete system integration and ORAN compliant O-RU’s (Radio Units) for telcos, enabling the industry to access ‘True 5G Speeds’. AGTGSS provides Managed Services, Cyber Security, Cloud Services, Data Sciences and Telco Cloud Services. AGTGSS will also be providing full installation of Private 5G Networks (P5G) which includes the deployment of AmpliTech Group’s developed radio units. AGTGSS will implement AmpliTech’s low noise amplifier devices in these systems to promote greater coverage, longer range and faster speeds.
(2) Loss on Investment of Digital Assets
During
the three months ending March 31, 2024, the Company made several transactions in digital currency in the total amount of approximately
$
As
a result of the fraudulent digital currency transactions noted above, the Company was a victim of a cyber phishing scam that defrauded
the Company. During the year ended December 31, 2024, the Company recorded a complete loss from the investment in digital assets of $
(3) Tariffs
During the quarter ended March 31, 2025, the U.S. government increased certain existing tariffs and implemented new tariffs on imported products. In April 2025, the U.S. government increased import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and individualized higher tariffs on certain countries, which include certain countries where the Company’s distribution division sources raw materials and components. As a result, selling prices of the Company’s finished products are likely to increase if tariffs continue to be enforced at current levels or are increased in the future, which may have a negative impact on the Company’s revenues and cash flows. While some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses, due to the uncertainties pertaining to tariffs and tariff levels, it is difficult to for the Company to reliably forecast their short-term or ongoing impact to its business or that of its customers. While management is actively evaluating the potential impacts of these tariffs, as well as the Company’s ability to mitigate their related impacts, such tariffs may have a negative impact on the Company’s revenues, profitability and cash flows.
(4) Summary of Significant Accounting Policies
Basis of Accounting
The accompanying condensed consolidated financial statements have been prepared using the accrual basis of accounting.
The accompanying unaudited interim condensed consolidated financial statements of AmpliTech Group, Inc. (“Group” or the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for annual audited financial statements. In the opinion of management, all adjustments of a normal recurring nature, considered necessary for a fair presentation have been included.
The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the years ended December 31, 2024, and 2023, included in Form 10-K filed with the SEC on March 31, 2025.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
| 9 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers deposits that can be redeemed on demand and investments and marketable securities that have original maturities of less than three months, when purchased, to be cash equivalents. As of March 31, 2025, the Company’s cash and cash equivalents were deposited in five financial institutions.
The
Company’s policy is to place its cash and cash equivalents with high-quality, major financial and investment institutions to
limit the amount of credit exposure. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $
Accounts Receivable
Accounts receivable consists of trade receivables arising from credit sales to customers in the normal course of business. These receivables are recorded at the time of sale, net of an allowance for current expected credit losses. In accordance with ASC Topic 326, “Financial Instruments – Credit Losses,” the Company estimates expected credit losses based on historical bad debt experience, the aging of accounts receivable, the current creditworthiness of our customers, prevailing economic conditions, and reasonable and supportable forward-looking information.
An
allowance of $
| 10 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Inventories
Inventories, which consist primarily of raw materials, work in progress and finished goods, are stated at the lower of cost (first-in, first-out basis) or market (net realizable value).
Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving and obsolete. An inventory reserve is recorded for those items determined to be slow moving with a corresponding charge to cost of goods sold. Inventory items that are determined obsolete are written off currently with a corresponding charge to cost of goods sold.
As
of March 31, 2025 and December 31, 2024, the reserve for inventory obsolescence was $
Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements.
Property and equipment are depreciated as follows:
Schedule of Property and Equipment Depreciated
| Description | Useful Life | Method | ||
| Office equipment | ||||
| Machinery/shop equipment | ||||
| Computer equipment/software | ||||
| Vehicles | ||||
| Leasehold improvements |
Intangible Assets
Definite-lived intangible assets such as customer relationships are subject to amortization. Intangible assets are amortized over their estimated useful life on a straight-line basis. Estimated useful lives are determined considering the period the assets are expected to contribute to future cash flows. Indefinite-lived intangible assets are not subject to amortization.
Intangible assets are amortized as follows:
Schedule of Amortization of Intangible Assets
| Description | Useful Life | Method | ||
| Trade names | Indefinite | N/A | ||
| Customer relationships |
| 11 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Long-Lived Assets
The Company reviews the carrying value of long-lived assets such as property and equipment, right-of-use (“ROU”) assets, and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values. During the three months ended March 31, 2025 and 2024, there were no indicators of impairment.
Goodwill and Indefinite-Lived Intangible Assets
We follow the acquisition method of accounting to record the assets and liabilities of acquired businesses at their estimated fair value at the date of acquisition. We initially record goodwill for the amount the consideration transferred exceeds the acquisition-date fair value of net tangible and identifiable intangible assets acquired.
Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are tested for impairment annually on December 31, or more frequently when events or circumstances indicate an impairment may have occurred. When assessing the recoverability of goodwill and indefinite-lived intangible assets, the Company may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit, including goodwill, or an indefinite-lived intangible asset is less than its carrying amount. The qualitative assessment is based on several factors, including the current operating environment, industry and market conditions, and overall financial performance. The Company may elect to bypass this qualitative assessment for some or all of its reporting units or other indefinite-lived intangible assets and perform a quantitative assessment, based on management’s judgment.
If we quantitatively test goodwill and indefinite-lived intangible assets for possible impairment, we calculate the fair value for the reporting unit and indefinite-lived assets and compare the amount to their carrying amount. If the fair value of a reporting unit and indefinite-lived asset exceeds their carrying amount, the reporting unit and indefinite-lived assets are not considered impaired. If the carrying amount of the reporting unit and indefinite-lived assets exceed their fair value, the reporting unit and indefinite-lived assets are impaired, and an impairment charge is recognized for the difference.
| 12 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
We estimate the fair value of our reporting units and indefinite-lived intangible assets based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to measure fair value. Our estimates of future cash flows consider past performance, current and anticipated market conditions and internal projections and operating plans. Additional assumptions include forecasted growth rates, estimated discount rates, and estimated royalty rates for our indefinite-lived intangible assets.
Investment Policy-Cost Method
Investments
consist of non-controlling equity investments in privately held companies. The Company elected the measurement alternative for these
investments without readily determinable fair values and for which the Company does not control or have the ability to exercise considerable
influence over operating and financial policies. These investments are accounted for under the cost method of accounting. Under the cost
method of accounting, the non-marketable equity securities are carried at cost less any impairment, adjusted for observable price changes
of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes
in circumstances that may influence the fair value of the investment. Under this method, the Company’s share of the earnings or
losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations. The Company
held $
Investment in Digital Assets
We account for all digital assets as indefinite-lived intangible assets in accordance with ASC Topic 350, “Intangibles—Goodwill and Other.” The Company presents digital assets separately from other intangible assets, recorded as digital assets on the consolidated balance sheets. The digital assets are initially recorded at cost and are subsequently remeasured at cost, net of any impairment losses incurred since acquisition.
We conducted an analysis to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. When the then current carrying value of a digital asset exceeds the fair value determined each quarter, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the prices determined. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same digital assets. In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.
| 13 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Leases
We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. The Company has elected not to separate lease and non-lease components for all property leases for the purpose of calculating ROU assets and lease liabilities. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis considering such factors as lease term and economic environment risks.
Revenue Recognition
We sell our products through a combination of a direct sales force in the United States and independent sales representatives in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps:
Identify the contract with the customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods to be transferred and identifies the payment terms related to these goods, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We do not have significant costs to obtain contracts with customers. For commissions on product sales, we have elected the practical expedient to expense the costs as incurred.
Identify the performance obligations in the contract. Our contracts with customers do not include multiple performance obligations to be completed over a period.
Our performance obligations relate to delivering single-use products to a customer, subject to the shipping terms of the contract. Limited warranties are provided, under which we typically accept returns and provide either replacement parts or refunds. We do not have significant returns. We do not typically offer extended warranty or service plans.
Determine the transaction price. Payment by the customer is due under customary fixed payment terms, and we evaluate if collectability is reasonably assured. None of our contracts as of March 31, 2025 contained a significant financing component. Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns, rebates, discounts, and other adjustments. The estimates of variable consideration are based on historical payment experience, historical and projected sales data, and current contract terms. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.
| 14 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Allocate the transaction price to performance obligations in the contract. We typically do not have multiple performance obligations in our contracts with customers. We recognize revenue upon transfer of the product to the customer’s control at contractually stated pricing.
Recognize revenue when or as we satisfy a performance obligation. We generally satisfy performance obligations at a point in time upon either shipment or delivery of goods, in accordance with the terms of each contract with the customer. We do not have significant
service revenue.
Cost of Sales
We include product costs such material, direct labor, overhead costs, production-related depreciation expense, outside labor and production supplies in cost of sales.
Shipping and Handling
Shipping and handling charges are generally incurred at the customer’s expense. However, when billed to our customers, shipping and handling charges are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in the cost of sales.
Research and Development
In accordance with ASC Topic 730, “Research and Development,” the Company expenses research and development costs as incurred. The major components of research and development costs include payroll, consultants, outside service, and supplies.
Research
and development costs for the three months ended March 31, 2025 and 2024 were $
Income Taxes
The Company’s deferred tax assets and liabilities for the expected future tax consequences of events have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of certain assets and liabilities using tax rates enacted in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At March 31, 2025 and December 31, 2024, the Company had no material unrecognized tax benefits.
| 15 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Basic loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be anti-dilutive are not included in diluted loss per share. The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period. As of March 31, 2025 and 2024, there were and , respectively, potential common share equivalents from stock options excluded from the diluted loss per share calculations as their effect is anti-dilutive.
Fair Value Measurements
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices, and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following three categories:
Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date.
Level 2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly.
Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.
Cash and cash equivalents, receivables, inventories, prepaid expenses, accounts payable, accrued expenses, and customer deposits approximate fair value, due to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these instruments bear market rates of interest.
| 16 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets, intangible assets, and goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC Topic 718, “Share-Based Payments.” All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable.
The Company places its cash and cash equivalents and marketable securities with high-quality, major financial and investment institutions to limit the amount of credit exposure. For accounts receivable, the Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. ASU 2023-07 also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements.
In August 2023, the FASB issued ASU 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU 2023-05 did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
| 17 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its consolidated financial statements.
(5) Revenues
The following table presents sales disaggregated based on geographic regions and for the three months ended:
Schedule of Disaggregated Revenue
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| AmpliTech Inc. and Specialty Microwave | ||||||||
| Domestic sales | $ | $ | ||||||
| International sales | ||||||||
| Total sales | $ | $ | ||||||
| Spectrum | ||||||||
| Domestic sales | $ | $ | ||||||
| International sales | ||||||||
| Total sales | $ | $ | ||||||
Total
sales for the three months ended March 31, 2025 and 2024 were $
| 18 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
(6) Segment Reporting
ASC Topic 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. Operating segments are components of an enterprise for which separate discrete financial information is available and regularly evaluated by the CODM to allocate resources and assess performance. The Company has identified its Chief Executive Officer (“CEO”) as the CODM and has determined that it operates in two reportable segments; the manufacturing and engineering segment, which is operated by AmpliTech Inc. and Specialty Microwave: and the distribution segment, which is operated by Spectrum. The manufacturing and engineering segment assembles microwave components, and the distribution segment is a global distributor of integrated circuits packages and lids. The Company provides general corporate services to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These services are reported under “Corporate” below and include costs associated with executive management, financing activities and public company compliance.
The following table presents summary information by segment for the three months ended March 31, 2025:
Schedule of Segment Reporting
| Manufacturing and Engineering | Distribution | Corporate | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Net Income/(Loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Research and development | ||||||||||||||||
| Total Assets | ||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||
| Interest Income (Expense), net | ||||||||||||||||
The following table presents summary information by segment for the three months ended March 31, 2024:
| Manufacturing and Engineering | Distribution | Corporate | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Research and development | ||||||||||||||||
| Total Assets | ||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||
| Interest Income (Expense), net | ( | ) | ( | ) | ( | ) | ||||||||||
| 19 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
(7) Inventories
The inventory consists of the following at March 31, 2025 and December 31, 2024:
Schedule of Inventory
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Raw Materials | $ | $ | ||||||
| Work-in Progress | ||||||||
| Finished Goods | ||||||||
| Subtotal | $ | $ | ||||||
| Less: Reserve for | ||||||||
| Obsolescence | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
| 20 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
(8) Property and Equipment
Property and Equipment consisted of the following at March 31, 2025 and December 31, 2024:
Schedule of Property and Equipment
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Lab Equipment | $ | $ | ||||||
| Manufacturing Equipment | ||||||||
| Automobiles | ||||||||
| Computer Equipment and Software | ||||||||
| Leasehold Improvements | ||||||||
| Furniture and Fixtures | ||||||||
| Subtotal | ||||||||
| Less: Accumulated Depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Depreciation expense for the three months ended March
31, 2025 and 2024 was $
Property and equipment purchased in the amount of
$
(9) Goodwill and Intangible Assets
Goodwill
Goodwill is related to the acquisition of Spectrum
Semiconductor Materials Inc. on December 15, 2021. Goodwill is primarily related to expected improvements and technology performance and
functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets
that do not qualify for separate recognition. Goodwill is generally not amortizable for tax and financial statement purposes. As of March
31, 2025 and December 31, 2024 goodwill was $
Other Intangible Assets
Intangible assets consisted of the following at March 31, 2025:
Schedule of Intangible Assets
| Gross Carrying | Accumulated | Net | Weighted | |||||||||||||
| Amount | Amortization | Indefinite | Average Life | |||||||||||||
| Trade name | $ | $ | $ | - | ||||||||||||
| Customer relationships | ||||||||||||||||
| Total | $ | $ | $ | |||||||||||||
| 21 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Amortization expense for the three months ended March
31, 2025 and 2024 was $
Annual amortization of intangible assets are as follows:
Schedule of Amortization of Assets
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| $ |
(10) Cost Method Investment
On June 10, 2021, the Company entered into a membership
interest purchase agreement with SN2N, LLC for an aggregate purchase price of $
(11) Leases
The following was included in our balance sheet as of March 31, 2025:
Schedule of Lease Assets and Liabilities
| March 31, | ||||
| Operating leases | 2025 | |||
| Assets | ||||
| ROU operating lease assets | $ | |||
| Liabilities | ||||
| Current portion of operating lease | $ | |||
| Operating lease, net of current portion | $ | |||
| Total operating lease liabilities | $ | |||
| Financing leases | ||||
| Assets | ||||
| Property and equipment, gross | $ | |||
| Accumulated depreciation | ( | ) | ||
| Property and equipment, net | $ | |||
| Liabilities | ||||
| Current portion of financing lease | $ | |||
| Financing lease, net of current portion | $ | |||
| Total financing lease liabilities | $ |
The weighted average remaining lease term and weighted average discount rate at March 31, 2025 are as follows:
Schedule of Weighted Average Remaining Lease Term and Weighted Average Discount Rate
| Weighted average remaining lease term (years) | March
31, | |||
| Operating leases | ||||
| Financing leases | ||||
| Weighted average discount rate | ||||
| Operating leases | % | |||
| Financing leases | % |
Operating Leases
On October 15, 2021, the Company entered a new lease
for a
On December 15, 2021, the Company assumed the SSM
lease agreement for office and warehouse space in San Jose, CA, with the same terms and conditions. Effective February 1, 2020, the lease
term will expire on
| 22 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
On January 15, 2024, the Company entered a triple
net lease agreement for a
The following table reconciles future minimum operating lease payments to the discounted lease liability as of March 31, 2025:
Schedule of Future Minimum Operating Lease Payments
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Total lease obligations | ||||
| Less current obligations | ( | ) | ||
| Long-term lease obligations | $ |
Financing Lease
The following table reconciles future minimum financing lease payments to the discounted lease liability as of March 31, 2025:
Schedule of Future Minimum Lease Payments for Finance Lease
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Total lease obligations | ||||
| Less current obligations | ( | ) | ||
| Long-term lease obligations | $ |
| 23 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
(12) Notes Payable
Promissory Notes:
On September 12, 2019, AmpliTech Group, Inc. acquired
Specialty, a privately held company based in Ronkonkoma, NY. The purchase
included all inventory, orders, customers, property and equipment, and all intellectual property. The assets also included all eight
team members of Specialty. The total consideration paid was $
Revolving Line of Credit
On
March 25, 2025, AmpliTech Group, Inc., entered into a Bank Loan Agreement (the “Loan Agreement”) with Dime Community Bank
(the “Bank”) for a revolving line of credit for up to $
The
Revolving Line of Credit is evidenced by a promissory note, which is due on demand, or if there is no demand, then on March 1, 2026,
unless extended, modified or renewed (the “Note”). The Company has agreed to pay regular monthly payments of all accrued
unpaid interest due as of each payment date, beginning April 1, 2025, with all subsequent interest payments to be due on the same
day of each month thereafter.
(13) Stockholders’ Equity
The total number of shares of stock this Corporation is authorized to issue shall be five hundred one million () shares, par value $ per share. Our authorized capital stock consists of shares of common stock and shares of blank check preferred stock.
Preferred Stock
On July 10, 2013, the Board of Directors of the Company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize shares of Preferred Stock, par value $ per share. On October 7, 2020, the Board of Directors of the Company approved a certificate of amendment to the articles of incorporation and changed the total number of authorized shares of Preferred Stock to shares, $ per share.
On October 7, 2020, our Board of Directors and our stockholders approved a resolution to amend and restate the certificate of designation of preferences, rights and limitations of Series A Convertible Preferred Stock to restate that there are shares of the Company’s blank check Preferred Stock designated as Series A Convertible Preferred Stock. The amended and restated certificate clarifies that the Series A Convertible Preferred Stock converts at a rate of five shares of the Company’s common stock for every share of Series A Convertible Preferred Stock, and also restates that the Series A Convertible Preferred Stock shall be entitled to vote on all matters submitted to shareholders of the Company for each share of Series A Convertible Preferred Stock owned on the record date for the determination of shareholders entitled to vote on such matter or, if no such record date is established, on the date such vote is taken, or any written consent of shareholders is solicited. The number of votes entitled to be cast by the holders of the Series A Convertible Preferred Stock equals that number of votes that, together with votes otherwise entitled to be cast by the holders of the Series A Convertible Preferred Stock at a meeting, whether by virtue of stock ownership, proxies, voting trust agreements or otherwise, entitle the holders to exercise 51% of all votes entitled to be cast to approve any action which Nevada law provides may or must be approved by vote or consent of the holders of common stock entitled to vote.
| 24 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Common Stock:
The Company originally authorized shares of common stock with a par value of $. Effective May 20, 2014, the Company increased its authorized shares of common stock from to .
On February 17, 2021, AmpliTech Group Inc., common stock and warrants under the symbols “AMPG” and “AMPGW”, respectively, commenced trading on NASDAQ.
On May 20, 2022, restricted stock units at an exercise price of $ were issued to a board advisor. Vesting occurred in equal quarterly installments of shares beginning on May 20, 2022. The final installment of shares were issued on February 20, 2025 and as of March 31, 2025, shares of common stock were issued.
On March 21, 2025, we entered into an equity distribution agreement with Maxim Group LLC., relating to offer and
sell shares of our common stock having an aggregate offering price of up to $
2020 Equity Incentive Plan:
In 2023, the Board and the shareholders adopted the Company’s Amended and Restated 2020 Equity Incentive Plan (the “Amended and Restated Plan”), effective as of December 11, 2023. The Amended and Restated Plan is substantially similar to the 2020 Plan except that it increases the shares of our common stock available for issuance thereunder to shares of common stock.
As of March 31, 2025, all outstanding stock options were issued according to the Company’s 2020 Plan, and there remains shares of common stock available for future issuance under the 2020 Plan.
| 25 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Stock Options:
On February 7, 2025, the Company granted an employee ten-year stock options to purchase shares of common stock according to the Company’s 2020 Plan, of which vest immediately and the balance will vest on January 31, 2026. The stock options have an exercise price of $ per share. The Company has calculated these options estimated fair market value at $ using the Black-Scholes model, with the following assumptions: expected term of years, stock price of $, exercise price of $, volatility of %, risk-free rate of %, and no forfeiture rate.
Below is a table summarizing the changes in stock options outstanding for the three months ended March 31, 2025:
Schedule of Stock Options Outstanding
| Number of | Weighted Average | |||||||
| Options | Exercise Price ($) | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | $ | |||||||
| Exercised | ||||||||
| Forfeited or expired | ||||||||
| Outstanding at March 31, 2025 | $ | |||||||
| Exercisable at March 31, 2025 | $ | |||||||
Stock-based compensation expense related to stock options of $ and $ was recorded for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the remaining unrecognized compensation cost related to non-vested stock options is $ and is expected to be recognized over years. The outstanding stock options have a weighted average remaining contractual life of years and a total intrinsic value of $.
Warrants:
Below is a table summarizing the changes in warrants outstanding for the three months ended March 31, 2025:
Schedule of Warrants Outstanding
| Number of | Weighted Average | |||||||
| Warrants | Exercise Price ($) | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited or expired | ||||||||
| Outstanding at March 31, 2025 | $ | |||||||
| Exercisable at March 31, 2025 | $ | |||||||
| 26 |
AmpliTech Group, Inc.
Notes To Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2025 and 2024
Stock-based compensation expense related to warrants of $ was recorded for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the remaining unrecognized compensation cost related to non-vested warrants is $. The outstanding warrants have a weighted average remaining contractual life of years and a total intrinsic value of $.
Restricted Stock Units:
On May 20, 2022, restricted stock units at
an exercise price of $ were issued to a board advisor. Vesting occurred in equal quarterly installments of
Schedule of Changes in Restricted Stock Units Outstanding
| Number of | Weighted Average | |||||||
| RSUs | Exercise Price ($) | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | $ | |||||
| Forfeited or expired | ||||||||
| Outstanding at March 31, 2025 | ||||||||
Stock-based compensation expense related to restricted stock units of $ and $ was recorded for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the remaining unrecognized compensation cost related to non-vested restricted stock units is $. The outstanding restricted stock units have a weighted average remaining contractual life and a total intrinsic value of $.
(14) Commitments and Contingencies
On July 26, 2024, the Company’s AGTGSS
division entered into a licensing product agreement. Under the terms of the agreement, the licensor agreed to an exclusive United
States distribution and global licensing rights for certain 5G telecom equipment for 18 months for the purpose of marketing,
selling, renting, deployment and maintenance of the licensed products with the Company. For services, the Company will pay the
Licensor certain software IP license fees. and product certification support in the amount of $
On March 26, 2025, the Company entered into an asset purchase agreement with Titan Crest, LLC, a Delaware limited liability company (“Titan”), and its affiliate, to purchase certain assets including intellectual property used in developing, manufacturing, marketing and selling products that use radio frequency technology (“5G ORAN radio products”) (as amended by that certain amendment to asset purchase agreement dated April 15, 2025, the “APA”). The closing of the transactions and the payment of the purchase price contemplated by the APA is conditioned upon certain conditions, including but not limited to (i) the issue of a purchase order (“Initial Purchase Order”) from a third party customer (“Third Party Customer”) for fiscal year delivery to the Company, (ii) a purchase order between the Company and Titan or its affiliate pursuant to which Titan will assist in manufacturing the products to be sold to the Third Party Customer to meet its purchase order, and (iii) receipt of correspondence from Third Party Customer to the Company, indicating Third Party Customer’ intention to issue purchase orders (including such Third Party Customer’s initial purchase order) which purchase orders will be spread out over 3 years (“ Subsequent Purchase Orders”).
The
aggregate purchase price for the assets is $
In
addition, under the APA, the parties are obligated, subject to certain limitations, to indemnify the other for certain customary and
other specified matters, including breaches of representations and warranties, breaches of covenants and for certain liabilities and
third-party claims. Further, Titan and its affiliate, jointly and severally, agreed for a period of 10 years not to engage in certain
competitive activities with respect to the business or proposed business relating to the assets sold to the Company. In addition, the
APA contemplates that after the closing, the Company and Titan will enter short-term transition services agreements for up to two of
Titan’s employees to provide Company assistance in the assignment and transfer of the purchased assets from Titan to the Company
for a fee not to exceed $
In connection with the transaction, Titan’s affiliate agreed to transfer all of its rights, title and interest in 5G ORAN radio products technology and intellectual property rights to Titan. Subsequent to the transaction, Titan’s affiliate will continue its business and retain its employees focusing on software solutions and services.
(15) Subsequent events
On April 24, 2025, the Company agreed to issue to
Titan Crest, LLC, a Delaware limited liability company, shares of restricted common stock at $ per share, which is based on
the volume weighted average price of the Company’s common stock over the preceding thirty (30) trading days from the date the initial
milestone relating to the asset purchase agreement was achieved. The shares of common stock are being issued as part of the initial payment
for the acquisition of certain assets pursuant to an asset purchase agreement dated March 26, 2025, as amended by that certain amendment
to asset purchase agreement dated April 15, 2025 with Titan. Under the APA, subject to and payable in two tranches upon achievement of
the milestones set forth in the APA, the Company agreed to pay an aggregate purchase price of $
In addition, the APA contemplates that after the closing,
the Company and Titan will enter short-term transition services agreements for up to two of Titan’s employees to provide Company
assistance in the assignment and transfer of the purchased assets from Titan to the Company for a fee not to exceed $
| 27 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contain forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Business Overview
AmpliTech Group Inc. (“AMPG,” “AmpliTech” or the “Company”), incorporated in 2010 in the state of Nevada, is the parent company of its subsidiary, AmpliTech, Inc., and the Company’s divisions Specialty Microwave, Spectrum Semiconductor Materials, AmpliTech Group MMIC Design Center (“AGMDC”) and AmpliTech Group True G Speed Services (‘AGTGSS”).
AmpliTech, Inc. designs, engineers, and assembles microwave component-based low noise amplifiers (“LNA”) that meet individual customer specifications. Application of the Company’s proprietary technology results in maximum frequency gain with minimal background noise distortion as required by each customer. The Company has both domestic and international customers in such industries as aerospace, governmental, defense, and commercial satellite.
Specialty designs and manufactures passive microwave components and related subsystems that meet individual customer specifications for both domestic and international customers for use in satellite communication ground networks.
AGMDC designs, develops and manufactures state-of-the-art signal processing components for satellite and 5G communications networks, defense, space and other commercial applications, allowing the Company to market its products to wider base of customers requiring high technology in smaller packages.
Spectrum Semiconductor Materials (“SSM”), located in Silicon Valley (San Jose, CA), is a global authorized distributor of integrated circuit (“IC”) packaging and lids for semiconductor device assembly, prototyping, testing, and production requirements.
In August 2022, we formed our AGTGSS division to enable “true G speeds” to the industry. AGTGSS’ main function will be to plan and configure 5G radio systems and make them O-RAN compliant. AGTGSS will implement AmpliTech’ s low noise amplifier devices in these systems to promote greater coverage, longer range and faster speeds.
Our mission is to patent our proprietary IP and trade secrets that were used in small volume niche markets and expand our capabilities through strategic partnerships, joint ventures, mergers/acquisitions with key industry leaders in the 5G/6G, quantum computing, and cybersecurity markets. We believe this will enable us to scale up our products and revenue by developing full systems and subsystems with our unique technology as a core component, which we expect will position us as a global leader in these rapidly emerging technology sectors and addresses large volume markets as well, such as cell phone handsets, laptops, server networks, and many other applications that improve everyday quality of life.
The Company’s research and development initiative to expand its product line of low noise amplifiers to include its new 5G and wireless infrastructure products and MMIC designs is progressing significantly. Our combined engineering and manufacturing resources are expected to complement the development of new subsystems for satellite, wireless, and 5G infrastructure, as well as advanced military and commercial markets.
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Loss on Investment of Digital Assets
During the three months ended March 31, 2024, the Company made several transactions in digital currency in the total amount of approximately $3.25 million. The Company believes that it was fraudulently induced to hold its digital currency with a custodian whom the Company believed to be valid but no longer exists. The Company is taking steps in an attempt to seek recovery of the funds including discussions with local, federal, and international law enforcement agencies and private consultants and is currently conducting a review of its processes and procedures related to this investment. At the present time, the Company is not aware of and does not expect any additional losses arising out or relating to the above-described investment. In addition, the Company does not believe that the Company’s systems, records, or other assets were otherwise affected or compromised in connection with these investments.
As a result of the fraudulent digital currency transactions noted above, the Company was a victim of a cyber phishing scam that defrauded the Company. During the three months ended March 31, 2024, the Company recorded a complete loss from the investment in digital assets of $3,248,911. As of March 31, 2025, the remaining balance of digital assets was $0.
Recent Developments
ATM Offering
On March 21, 2025, we entered into an equity distribution agreement, or the Equity Distribution Agreement, with Maxim Group LLC , or Maxim, relating to offer and sell shares of our common stock having an aggregate offering price of up to $25 million from time to time through Maxim, acting as our exclusive sales agent, in an “At-the-Market Offering” at our discretion.
Asset Purchase Agreement
On March 26, 2025, the Company entered into an asset purchase agreement with Titan Crest, LLC, a Delaware limited liability company ( “Titan”), and its affiliate, to purchase certain assets including intellectual property used in developing, manufacturing, marketing and selling products that use radio frequency technology (“5G ORAN radio products”) (as amended by that certain amendment to asset purchase agreement dated April 15, 2025, the “APA”). The closing of the transactions and the payment of the purchase price contemplated by the APA is conditioned upon certain conditions, including but not limited to (i) the issue of a purchase order (“Initial Purchase Order”) from a third party customer (“Third Party Customer”) for fiscal year delivery to the Company, (ii) a purchase order between the Company and Titan or its affiliate pursuant to which Titan will assist in manufacturing the products to be sold to the Third Party Customer to meet its purchase order, and (iii) receipt of correspondence from Third Party Customer to the Company, indicating Third Party Customer’ intention to issue purchase orders (including such Third Party Customer’s initial purchase order) which purchase orders will be spread out over 3 years (“ Subsequent Purchase Orders”).
The aggregate purchase price for the assets is $8,000,000 which consists of $4,000,000 in cash and $4,000,000 in restricted shares of common stock of which the first $3,500,000 in cash was paid and $1,500,000 in restricted common stock was issued on April 24, 2025, upon the procurement of the Initial Purchase Order and receipt of assurance of the Subsequent Purchase Orders (the “First Milestone”). 914,635 shares of restricted common stock at $1.64 per share, which is based on the volume weighted average price of the Company’s common stock over the preceding thirty (30) trading days from the date the First Milestone was achieved. The remaining $500,000 in cash to be paid and $2,500,000 in shares of restricted common stock will be issued to Titan upon the transfer of the 5G ORAN radio products’ technology and intellectual property rights by Titan to the Company. The second milestone is expected to be achieved towards the end of the year.
In addition, under the APA, the parties are obligated, subject to certain limitations, to indemnify the other for certain customary and other specified matters, including breaches of representations and warranties, breaches of covenants and for certain liabilities and third-party claims. Further, Titan and its affiliate, jointly and severally, agreed for a period of 10 years not to engage in certain competitive activities with respect to the business or proposed business relating to the assets sold to the Company. In addition, the APA contemplates that after the closing, the Company and Titan will enter short-term transition services agreements for up to two of the Titan’s employees to provide Company assistance in the assignment and transfer of the purchased assets from Titan to the Company for a fee not to exceed $430,000.
In connection with the transaction, Titan’s affiliate agreed to transfer all of its rights, title and interest in 5G ORAN radio products technology and intellectual property rights to Titan. Subsequent to the transaction, Titan’s affiliate will continue its business and retain its employees focusing on software solutions and services.
Revolving Line of Credit
On March 25, 2025, the Company entered into a Bank Loan Agreement (the “Loan Agreement”) with Dime Community Bank (the “Bank”) for a revolving line of credit for up to $750,000 (the “Revolving Line of Credit”). The Company has established the Revolving Line of Credit for general working purposes and uses, as needed. The term of the Loan Agreement expires once all indebtedness under the Revolving Line of Credit has been paid in full, or until such time as the Bank and the Company agree in writing to terminate the Loan Agreement. In addition to interest, the Company agreed to pay an annual fee of $500.00 on the anniversary date of each year the Loan Agreement is in effect, subject to change by the Bank with notice. Pursuant to an Assignment of Deposit Agreement dated March 25, 2025 between us and the Bank, the Revolving Line of Credit is secured by a demand deposit account with the Bank which requires us to have a balance no less than $814,635.
The Revolving Line of Credit is evidenced by a promissory note, which is due on demand, or if there is no demand, then on March 1, 2026, unless extended, modified or renewed (the “Note”). The Company has agreed to pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning April 1, 2025, with all subsequent interest payments to be due on the same day of each month thereafter. The Note bears a variable interest rate based on changes in the Wall Street Journal Prime Rate as published in the Wall Street Journal from time to time, plus 1.000%, provided however, under no circumstances will the interest rate be less than 6.250% per annum or more than the maximum rate allowed by applicable law. Late payment is subject to a fee of 5.000% of the regularly scheduled payment. In the event of default, the Note bears an interest at a rate per annum equal to 5.000% above the rate that is otherwise applicable to such amounts. As of the March 31, 2025, the outstanding balance on the Revolving Line of Credit was $0.
Among other things, the Loan Agreement contains customary representations and warranties, events of default, negative and affirmative covenants and financial covenants, and certain limitations on dispositions of assets. The Loan Agreement also contains usual and customary events of default (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default, payment of all amounts payable under the Note may be accelerated at the Bank’s option and/or the Bank’s commitment and obligations will terminate without notice to the Company.
Letter of Intent
On March 20, 2025, the Company entered into a non-binding letter of intent with a contract manufacturer on behalf of its end user for the purchase of $78 million of the Company’s Oran radios. If fulfilled, deliveries of the order are expected to start in FY2025 and will substantially increase each year thereafter into 2027. The non-binding letter of intent is subject to the parties entering into a series of definitive purchase orders. No assurance can be given that the Company will enter into any purchase orders for the total amount of $78 million, however, to date the Company has received $810,000 in purchase orders.
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Corporate Information
Our principal executive offices are located at 155 Plant Avenue, Hauppauge, NY 11788. Our telephone number is (631) 521-7831. Our corporate website is www.amplitechinc.com. The information on our website is not a part of or incorporated in this report.
Results of Operations
For the Three Months Ended March 31, 2025 and March 31, 2024
Revenues
Sales increased from $2,293,331 for the three months ended March 31, 2024, to $3,599,099 for the three months ended March 31, 2025, an increase of $1,305,768 or approximately 56.94%. Sales in the amplifier and related passive microwave components and subsystems division decreased by $55,331, or 5.32%. 5G sales were approximately $75,000. Spectrum sales increased by $1,361,099, or 108.67%, an increase attributable to a rebound in the Asian markets.
Cost of Goods Sold and Gross Profit
Cost of goods sold increased from $1,410,701 for the three months ended March 31, 2024, to $2,411,229 for the three months ended March 31, 2025, an increase of $1,000,528 or 70.92%. Overall, this increase is directly related to the increase in sales. As a result, gross profit was $882,630 for the three months ended March 31, 2024, compared to $1,187,870 for the three months ended March 31, 2025, an increase of $305,240, or 34.58%. Overall, gross profit as a percentage of sales decreased to 33.00% from 38.49%, representing a shift in the sales mix away from our higher gross margin products, specifically for the Specialty and Spectrum divisions, while maintaining fixed production and overhead costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased to $2,338,215 for the three months ended March 31, 2025, from $2,033,747 for the first three months ended March 31, 2024, an increase of $304,468 or approximately 14.97%. This increase is primarily due to the increase in trade show expense as the 5G division exhibited at the MWC in Barcelona, an increase in legal expenses and consulting services related to the valuation of our intellectual property.
Research and Development Expenses
Research and development expenditures are charged to operations as incurred. The major components of research and development costs include salaries and benefits, consultants, outside service, and supplies.
Research and development costs for the three months ended March 31, 2025, and 2024, were $739,673 and $276,755, respectively, an increase of $462,918, or 167.27%, mainly attributable to the completion of our MIMO 64T64R Oran Cat B radio network and low-noise block down converter units, also known as LNB’s.
Loss From Operations
As a result of the above, the Company reported a loss from operations of $1,890,018 and $1,427,872 for the three months ended March 31, 2025, and 2024, respectively.
Other Income (Expenses)
As a result of the fraudulent digital current transactions noted above, during the three months ended March 31, 2024, the Company recorded an impairment loss of $3,248,911 related to digital assets.
Due to market fluctuations, the Company recorded a realized gain on investments of $25,965 for the three months ended March 31, 2024.
The Company recorded interest income, net of $49,497 and interest expense, net of $4,343 for the three months ended March 31, 2025, and 2024, respectively.
Net Loss
The Company reported a net loss of $1,840,521 and $4,655,161 for the three months ended March 31, 2025 and 2024, respectively.
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Cash Flow
Operating Activities
The net cash used in operating activities for the three months ended March 31, 2025, was $2,008,947 resulting primarily from the net loss and operating changes in accounts receivable, inventory, prepaid expenses, long-term deposits, accounts payable and accrued expenses and operating lease obligations.
The net cash used in operating activities for the three months ended March 31, 2024, was $1,076,864 resulting primarily from the net loss and operating changes in accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses customer deposits and operating lease obligations.
Investing Activities
The net cash used in investing activities for the three months ended March 31, 2025, was $361,045 for the purchase of equipment.
The net cash used in investing activities for the three months ended March 31, 2024, was $3,250,486 for the purchase of equipment and investment in digital assets.
Financing Activities
The net cash used in financing activities for the three months ended March 31, 2025, was $3,791 resulting primarily from the repayments of financing lease obligations.
The net cash used in financing activities for the three months ended March 31, 2024, was $21,769, resulting primarily from the repayments of notes payable and financing lease obligations.
As of March 31, 2025, we had cash and cash equivalents of $16,942,201, working capital of $24,600,230, and an accumulated deficit of $22,852,648.
As of December 31, 2024, we had cash and cash equivalents of $19,315,984, working capital of $26,795,745 and an accumulated deficit of $21,012,127.
Operating Capital and Capital Expenditure Requirements
As of March 31, 2025, we maintain cash and cash equivalents of $16,694,201. Based on our existing cash and cash equivalents, our working capital, our current and forecasted level of operations, and our forecasted cash flows, we believe that we will be able to meet our obligations and pay our liabilities arising from normal business operations when they come due and to provide for our capital requirements for the next 12 months.
Critical Accounting Policies, Estimates and Assumptions
The SEC defines critical accounting policies as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and those that require significant judgment and estimates.
The discussion and analysis of our financial condition and results of operations is based upon financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities. On an on-going basis, we evaluate our estimates, including the allowance for doubtful accounts, the salability and recoverability of inventory, income taxes and contingencies. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes there have been no significant changes during the three month period ended March 31, 2025, to the items disclosed as critical accounting policies in management’s discussion and analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
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We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.
Off Balance Sheet Transactions
None.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Smaller reporting companies are not required to provide the information required by this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. As a result of this evaluation, our chief executive officer and chief financial officer have concluded that, as of March 31, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Notwithstanding the identified material weaknesses, management, including our chief executive officer and chief financial officer, believes the condensed consolidated financial statements included in this report fairly represent, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with GAAP.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Management has evaluated the effectiveness of our internal control over financial reporting based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this evaluation, management has concluded that, as of March 31, 2025 our internal control over financial reporting was not effective due to the material weaknesses in internal control over financial reporting due to previously identified material weaknesses resulting from lack of written documentation of our internal controls and procedures, having ineffective internal controls related to our information technology general controls and lack of personnel resources to ensure adequate segregation of duties, as disclosed in the Form 10-K for the fiscal year ended December 31, 2024 (“Form 10-K”).
We continue to focus on our remediation plan disclosed in our Form 10-K.
In addition, we will continue to enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of authority, responsibility, and accountability to enable remediation of our material weaknesses. We believe that our remediation plan will be sufficient to remediate the identified material weaknesses and strengthen our internal control over financial reporting. As we continue to evaluate, and work to improve, our internal control over financial reporting, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary.
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Changes in Internal Control over Financial Reporting
Except for the foregoing, there were no changes that have affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period covered by this report.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
To the best of our knowledge, there are no pending legal proceedings to which we are a party or of which any of our property is the subject.
Item 1A. Risk Factors.
Carefully consider the risks set forth in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 before making an investment decision. You should read the section captioned “Cautionary Statement Regarding Forward Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report.
During the quarter ended March 31, 2025, the U.S. government increased certain existing tariffs and implemented new tariffs on imported products. In April 2025, the U.S. government increased import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and individualized higher tariffs on certain countries, which include certain countries where the Company sources raw materials and components. As a result, selling prices of the Company’s finished products are likely to increase if tariffs continue to be enforced at current levels or are increased in the future, which may have a negative impact on the Company’s revenues and cash flows. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses, however, due to the uncertainties pertaining to tariffs and tariff levels, it is difficult to for us to reliably forecast their short-term or ongoing impact to our business or that of our customers. While we are actively evaluating the potential impacts of these tariffs, as well as our ability to mitigate their related impacts, such tariffs may have a negative impact on our revenues, profitability and cash flows.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On April 24, 2025, upon achievement of the First Milestone pursuant to the APA, as partial payment for certain assets to be paid in the form of stock, the Company issued Titan 914,635 shares of restricted common stock at $1.64 per share, which is based on the volume weighted average price of the Company’s common stock over the preceding thirty (30) trading days from the date the First Milestone was achieved. The securities issued and issuable pursuant to the APA have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and are being offered and sold in reliance on the exemption from registration under the Securities Act, afforded by Section 4(a)(2) and/or Rule 506 promulgated thereunder. Titan has represented to the Company that is an “accredited investor” (as that term is defined in Rule 501(a) of Regulation D promulgated under Section 4(a)(2) of the Securities Act).
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable
Item 5. Other Information.
None.
Item 6. Exhibits.
(a) Exhibits
*Filed herewith
** furnished herewith
† Pursuant to item 601(b)(10)(iv) of Regulation S-K, certain information has been excluded because it is both not material and the type of information that the registrant treats as private or confidential.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AmpliTech Group, Inc. | ||
| Date: May 15, 2025 | By: | /s/ Fawad Maqbool |
| Fawad Maqbool | ||
|
President and Chief Executive Officer (Principal Executive Officer) |
||
| Date: May 15, 2025 | By: | /s/ Louisa Sanfratello |
|
Louisa Sanfratello Chief Financial Officer (Principal Financial and Accounting Officer) |
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Exhibit 10.6
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. [*****] INDICATES THAT INFORMATION HAS BEEN REDACTED OR OMITTED.
FORM OF AMENDMENT TO ASSET PURCHASE AGREEMENT
This Amendment is dated April 15, 2025, and amends that certain Asset Purchase Agreement dated March 26, 2025 (“Agreement”) entered into by and between Titan Crest, LLC, a Delaware limited liability company, with its principal office located at 9 E. Loockerman Street, Suite 311, Dover, Delaware 19901 (“Titan Crest”), (the “Seller”), [*****], a corporation organized under the laws of Canada (“[*****]”), and AmpliTech Group, Inc., an Nevada corporation (“Buyer”). Each Seller, [*****] and Buyer are referred to herein, individually, as a “Party” and, collectively, the “Parties.”
RECITALS
WHEREAS, Seller’s Business includes, but is not limited to, developing, manufacturing, marketing and selling products that use radio frequency technology to make [*****] products;
WHEREAS, pursuant to the Agreement, Seller desires to sell and Buyer desires to purchase from Seller the [*****] Assets subject to the terms and conditions set forth in the Agreement, as to be amended herein; and
WHEREAS, the Parties wish to amended certain terms of Agreement as follows.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used herein without definition shall have the respective meanings assigned to such terms in the Agreement.
2. Amendment to the Agreement.
A. Section 1.01(a) of the Agreement is replaced in its entirety as follows:
Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in its [*****] Assets, which consists of the following assets:
(a) all related product lines and product specifications listed on Section 1.01(a) of the disclosure schedules attached hereto (“Disclosure Schedules”) or as transferred to Seller under the [*****] IP Transfer Agreement;
(b) a list of all of Seller’s customers related to [*****] Assets, as set forth on Section 1.01(b) of the Disclosure Schedules or as transferred to Seller under the [*****] IP Transfer Agreement (“[*****] Assets Customers”);
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(c) Purchased IP (as defined below) listed on Section 1.01(c) of the Disclosure Schedules related to the [*****] Assets or as transferred to Seller under the [*****] IP Transfer Agreement;
(d) the [*****] IP Transfer Agreement and other contracts of Seller, if any, related to the [*****] Assets set forth on Section 1.01(d) of the Disclosure Schedules (the “Included Contracts”);
(e) the items and rights related to the [*****] Assets including samples, prototypes, inventory, jigs, molds, etc. set forth in Section 1.01(e) of the Disclosure Schedules or as transferred to Seller under the [*****] IP Transfer Agreement;
(f) all [*****] Assets related intellectual property listed on Section 1.01(f) of the Disclosure Schedules, or as transferred to Seller under the [*****] IP Transfer Agreement including, but not limited, the source code for any software related to the [*****] Assets including the intellectual property being developed by [*****] for future delivery under the [*****] IP Transfer Agreement;
(g) all [*****] Assets related data and records, vendor lists, research and development reports and records, production reports and records, operating guides and manuals, product formulas and designs, financial and accounting records, creative materials, advertising materials, promotional materials, studies, and reports or as transferred to Seller under the [*****] IP Transfer Agreement; and
(h) other assets set forth on Section 1.01(h) of the Disclosure Schedules.
Collectively, such assets are referred to herein as the “Purchased Assets” and shall be offered and sold to Buyer free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“Encumbrance”). The [*****] related assets and intellectual property shall be delivered to Buyer within thirty (30) days of the Closing Date.
B. Section 1.04 of the Agreement is replaced in its entirety as follows:
Section 1.04 Excluded Liabilities. Notwithstanding any provision in this Agreement to the contrary, other than the Assumed Liabilities set forth in Section 1.03 of this Agreement, Seller will retain and Buyer is not assuming nor will Buyer be responsible for any liability or obligation of Seller or any affiliate of Seller or arising out of or relating to the Purchased Assets including any warranty liability for products sold by Seller prior to the Closing. Specifically, the Buyer is not assuming any liability or obligation relating to the Seller’s Business, or operation of the Seller’s Business, of whatever nature, whether known or unknown, contingent or otherwise, arising out of or relating to Seller’s ownership or operation of the Seller’s Business and the Purchased Assets prior to the Closing (collectively, the “Excluded Liabilities”). All Excluded Liabilities will be retained by and remain obligations and liabilities of Seller. For clarity, Buyer is not liable or will not take responsibility for any [*****] loans and prepayments to [*****] or Seller which were granted to them prior to entering into the Agreement.
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C. Section 1.05 of the Agreement is replaced in its entirety as follows:
Section 1.05 Purchase Price. Buyer intends to acquire the Purchased Assets free and clear of all liens and encumbrances of any kind or nature for a total consideration of Eight Million United States Dollars ($8,000,000) (“Purchase Price”) to the Seller to be paid as follows:
(a) Cash Payment
(i) A first cash payment of Three Million Five Hundred Thousand U.S. Dollars (US$3,500,000) (the “Closing Payment”) which shall be contingent on the following conditions:
1. Assignment or new issuance of a [*****] purchase order from [*****] for fiscal year 2025 delivery to the Buyer, provided however, that deliveries already made by [*****] and paid by [*****] will not convey to Buyer before the Closing Date. Final purchase order amount for orders will be dependent upon Buyer’s direct discussion and agreement with [*****]; and
2. Receipt of correspondence from [*****] to Buyer, as determined by Buyer in its sole but reasonable discretion, indicating [*****]’s intention to issue purchase orders in the amount of [*****](including the initial purchase order indicated in Section 1.05(a)(i)1 above. These purchase orders are to be spread over three (3) years for [*****] to the Buyer. The purchase orders shall include [*****] for non-recurring engineering (NRE) related to the development of [*****], with such payment allocated in accordance with Appendix A attached hereto.
(ii) A second cash payment of Five Hundred Thousand U.S. Dollars (US$500,000) to be paid on December 5, 2025, contingent on the transfer of fully developed design package for [*****] technology (the “Transfer”) as contemplated by the [*****] IP Transfer Agreement and [*****] acknowledgment that the documentation/drawing package is suitable for full production purposes. If the Transfer does not occur by October 31, 2025, this milestone payment will be postponed by the same number of days equal to the difference between October 31, 2025 and the day Transfer occurs.
(b) Payment in Common Stock. A total of Five Million U.S. Dollars (US$4,000,000) to be paid in the form of restricted common stock of Buyer upon achievement of the following milestones:
(i) First payment of One Million Five Hundred Thousand U.S. Dollars (US$1,500,000) in the form of Buyer’s restricted common stock based on the Volume Weighted Average Price of Buyer’s common stock over the preceding thirty (30) trading days from the date the milestone set forth in Section 1.05(a)(i) is achieved.
(ii) Second payment of Two Million Five Hundred Thousand U.S. Dollars (US$2,500,000) in the form of Buyer’s restricted common stock based on the Volume Weighted Average Price of Buyer’s common stock over the preceding thirty (30) trading days from the date of the Transfer.
(c) Issuance of Shares: All share issuances contemplated by this Agreement shall be conducted in full compliance with applicable U.S. Federal and state securities laws, including, but not limited to, the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. The common stock contemplated to be issued in connection with the sale of [*****] Assets shall be subject to a six (6) month restriction period, during which Seller shall not be permitted to engage in any sale, transfer, or other disposition of such shares. All share issuances under this Agreement shall be subject to approval by the Buyer’s shareholders if, and only if, required by NASDAQ Rule 5635(d) or similar rule of another National Stock Exchange, if applicable.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.
TITAN CREST LLC, a Delaware limited liability company
| By: | ||
| Name: |
[*****], a Canadian corporation
| By: | ||
| Name: |
AMPLITECH GROUP, INC., a Nevada corporation
| By: | ||
| Name: | Fawad Maqbool, President & Chief Executive Officer |
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EXHIBIT 31.1
CERTIFICATION OF
PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
I, Fawad Maqbool, certify that:
| 1. | I have reviewed the quarterly report on Form 10-Q of AmpliTech Group, Inc. (the “registrant”) for the quarter ended March 31, 2025; |
| 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 |
| 5. | The registrant’s other certifying officer(s), and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| 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. |
| Dated: May 15, 2025 | By: | /s/ Fawad Maqbool |
| Fawad Maqbool | ||
|
President and Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF
PRINCIPAL FINANCIAL OFFICER PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
I, Louisa Sanfratello, certify that:
| 1. | I have reviewed the quarterly report on Form 10-Q of AmpliTech Group, Inc. (the “registrant”) for the quarter ended March 31, 2025; |
| 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 |
| 5. | The registrant’s other certifying officer, and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| 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. |
| Dated: May 15, 2025 | By: | /s/ Louisa Sanfratello |
|
Louisa Sanfratello Chief Financial Officer (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Fawad Maqbool, the President and Chief Executive Officer of AmpliTech Group, Inc. (the “Registrant”), certifies, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Quarterly Report on Form 10-Q of the Registrant for the quarter ended March 31, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| Date: May 15, 2025 | By: | /s/ Fawad Maqbool |
|
Fawad Maqbool President and Chief Executive Officer (Principal Executive Officer) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Louisa Sanfratello, Chief Financial Officer of AmpliTech Group, Inc. (the “Registrant”), certifies, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to her knowledge, the Quarterly Report on Form 10-Q of the Registrant for the quarter ended March 31, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| Dated: May 15, 2025 | By: | /s/ Louisa Sanfratello |
|
Louisa Sanfratello Chief Financial Officer (Principal Financial and Accounting Officer) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.