AmpliTech Group, Inc 10-Q for FY2020 Q3

AmpliTech Group, Inc. (AMPG)

10-Q 2020-11-16 For: 2020-09-30

Added on April 11, 2026

About this 10-Q

AmpliTech Group, Inc filed this 10-Q on November 16, 2020, covering the quarter ended September 30, 2020 (FY2020 Q3).

Headline figures

Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.15M; up 62.3% from $708.9K a year earlier
Net income: $17.01K; compared with a net loss of $138.38K a year earlier
Diluted EPS: $0.00; compared with $0.00 a year earlier

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
NA		NA		NA

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

		PAGE
PART 1 - 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.	Default Upon Senior Securities		33

Item 4.	Mine Safety Disclosures		33

Item 5.	Other Information		33

Item 6.	Exhibits		34

SIGNATURES			35

AmpliTech Group, Inc.
Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2020			2019
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	425,876		$	574,712
Accounts receivable		766,489			619,195
Inventories, net		602,436			557,710
Prepaid expenses		72,504			124,209
Total Current Assets		1,867,305			1,875,826

Property and equipment, net		299,566			198,110
Right of use operating lease assets		365,064			465,092
Intangible assets, net		642,553			673,429
Goodwill		120,136			120,136
Security deposits		27,821			27,821

Total Assets	$	3,322,445		$	3,360,414

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses	$	201,394		$	154,507
Customer deposits		112,612			35,680
Current portion of financing lease		31,695			30,556
Current portion of operating lease		98,275			130,628
Current portion of notes payable		208,297			169,697
Line of credit		300,000			-
Total Current Liabilities		952,273			521,068

Long Term Liabilities
Finance lease, net of current portion		59,327			83,376
Operating lease, net of current portion		273,672			338,344
Notes payable, net of current portion		1,453,791			1,323,953
Total Liabilities		2,739,063			2,266,741

Commitments and Contingencies		-			-

Stockholders' Equity
Series A convertible preferred stock, par
value $0.001, 401,000 shares authorized,
1,000 shares issued and
outstanding, respectively		1			1
Series B convertible preferred stock, par
value $0.001, 75,000 shares authorized, 0
shares issued and outstanding, respectively		-			-
Common Stock, par value $0.001,
500,000,000 shares authorized,
51,588,958 and 49,086,326 shares
issued and outstanding, respectively		51,589			49,086
Common stock payable		-			24,480
Additional paid-in capital		1,923,824			1,862,919
Accumulated deficit		(1,392,032	)		(842,813	)

Total Stockholders' Equity		583,382			1,093,673

Total Liabilities and
Stockholders' Equity	$	3,322,445		$	3,360,414

See accompanying notes to the unaudited condensed consolidated financial statements

AmpliTech Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	For The Three Months Ended						For The Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2020			2019			2020			2019

Revenue	$	1,150,732		$	708,896		$	2,567,379		$	2,018,422

Cost of goods sold		630,486			358,526			1,581,831			983,168

Gross Profit		520,246			350,370			985,548			1,035,254

Selling, general and administrative expense		475,248			478,297			1,456,266			1,021,448

Income (Loss) From Operations		44,998			(127,927	)		(470,718	)		13,806

Other Expenses
Interest expense, net		(27,988	)		(10,457	)		(78,501	)		(24,971	)

Income (Loss) Before Income Taxes		17,010			(138,384	)		(549,219	)		(11,165	)

Provision For Income Taxes		-			-			-			-

Net Income (Loss)	$	17,010		$	(138,384	)	$	(549,219	)	$	(11,165	)

Net Income (Loss) Per Share;
Basic	$	0.00		$	(0.00	)	$	(0.01	)	$	(0.00	)
Diluted	$	0.00		$	(0.00	)	$	(0.01	)	$	(0.00	)

Weighted Average Shares Outstanding;
Basic		50,964,244			48,336,326			50,015,773			48,336,326
Diluted		90,921,254			48,336,326			50,015,773			48,336,326

	For The Nine			For The Nine
	Months Ended			Months Ended
	September 30,			September 30,
Cash Flows from Operating Activities:	2020			2019

Net Loss	$	(549,219	)	$	(11,165	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		67,678			31,997
Amortization of prepaid consulting		37,108			32,184
Amortization of right-of-use operating lease asset		100,028			44,229
Stock based compensation		38,928			119,148
Amortization of debt discount		-			2,650
Changes in Operating Assets and Liabilities:
Accounts receivable		(147,294	)		(302,929	)
Inventories		(44,726	)		19,225
Prepaid expenses		(43,595	)		59,145
Security deposits		-			(15,000	)
Accounts payable and accrued expenses		46,887			117,904
Operating lease liability		(97,025	)		(39,261	)
Customer deposits		76,932			(53,004	)
Total Adjustments		34,921			16,288

Net cash (used in) provided by operating activities		(514,298	)		5,123

Cash Flows from Investing Activities:
Purchase of equipment		(11,557	)		(668,633	)
Net cash used in investing activities		(11,557	)		(668,633	)

Cash Flows from Financing Activities:
Proceeds from line of credit		300,000			-
Repayment of line of credit, net		-			(72,897	)
Repayments on finance lease		(22,910	)		(21,754	)
Proceeds from notes payable		232,200			1,298,374
Repayment of notes payable		(132,272	)		-
Net cash provided by financing activities		377,018			1,203,723

Net change in cash and cash equivalents		(148,837	)		540,213

Cash and Cash Equivalents, Beginning of Period		574,712			442,098

Cash and Cash Equivalents, End of Period	$	425,875		$	982,311

Supplemental disclosures:
Cash paid for interest expense	$	71,125		$	20,388
Cash paid for income taxes	$	-		$	50

Non-Cash Investing and Financing Activities
Original issuance discount	$	-		$	24,465
Adoption of ASC 842 operating lease asset and liability	$	-		$	523,313
Promissory note on equipment	$	68,510		$	-
Equipment received for prepaid assets	$	58,192		$	-
Common stock issued for common stock payable	$	24,480		$	-
Cashless exercise of warrant	$	2,053		$	-
Promissory note issued in Specialty acquisition	$	-		$	475,000
Intangible assets acquired in Specialty acquisition	$	-		$	806,000
Inventory acquired in Specialty acquisition	$	-		$	301,754
Property acquired in Specialty acquisition	$	-		$	46,156
Liabilities assumed in Specialty acquisition	$	-		$	10,277

See accompanying notes to the unaudited condensed consolidated financial statements

	For The Three Months Ended September 30, 2020
	Series A Convertible Preferred				Common Stock				Common			Additional						Total
	Number of		Par		Number of		Par		Stock			Paid-In			Accumulated			Stockholders'
	Shares		Value		Shares		Value		Payable			Capital			Deficit			Equity

Balance, June 30, 2020		1,000	$	1		49,086,326	$	49,086	$	24,480		$	1,886,614		$	(1,409,042	)	$	551,139

Common stock issued for common stock payable		-		-		450,000		450		(24,480	)		24,030			-			-

Stock based compensation		-		-		-		-		-			15,233			-			15,233

Common stock issued upon exercise of warrants		-		-		2,052,632		2,053		-			(2,053	)		-			-

Net income for the three months ended September 30, 2020		-		-		-		-		-			-			17,010			17,010

Balance, September 30, 2020		1,000	$	1		51,588,958	$	51,589	$	-		$	1,923,824		$	(1,392,032	)	$	583,382

	For The Three Months Ended September 30, 2019

Balance, June 30, 2019		1,000	$	1	48,336,326	$	48,336	$	-	$	1,765,496	$	(721,539	)	$	1,092,294

Stock based compensation		-		-	-		-		-		69,378		-			69,378

Net loss for the three months ended September 30, 2019		-		-	-		-		-		-		(138,384	)		(138,384	)

Balance, September 30, 2019		1,000	$	1	48,336,326	$	48,336	$	-	$	1,834,874	$	(859,923	)	$	1,023,288

	For The Nine Months Ended September 30, 2020
	Series A Convertible Preferred				Common Stock				Common			Additional						Total
	Number of		Par		Number of		Par		Stock			Paid-In			Accumulated			Stockholders'
	Shares		Value		Shares		Value		Payable			Capital			Deficit			Equity

Balance, December 31, 2019		1,000	$	1		49,086,326	$	49,086	$	24,480		$	1,862,919		$	(842,813	)	$	1,093,673

Common stock issued for common stock payable		-		-		450,000		450		(24,480	)		24,030			-			-

Stock based compensation		-		-		-		-		-			38,928			-			38,928

Common stock issued upon exercise of warrants		-		-		2,052,632		2,053		-			(2,053	)		-			-

Net loss for the nine months ended September 30, 2020		-		-		-		-		-			-			(549,219	)		(549,219	)

Balance, September 30, 2020		1,000	$	1		51,588,958	$	51,589	$	-		$	1,923,824		$	(1,392,032	)	$	583,382

	For The Nine Months Ended September 30, 2019

Balance, December 31, 2018		1,000	$	1	48,336,326	$	48,336	$	-	$	1,715,726	$	(848,758	)	$	915,305

Stock based compensation		-		-	-		-		-		119,148		-			119,148

Net loss for the nine months ended September 30, 2019		-		-	-		-		-		-		(11,165	)		(11,165	)

Balance, September 30, 2019		1,000	$	1	48,336,326	$	48,336	$	-	$	1,834,874	$	(859,923	)	$	1,023,288

Description	Useful Life	Method
Office equipment	7 years	Straight-line
Machinery and equipment	5 to 7 years	Straight-line
Computer equipment	3 to 7 years	Straight-line
Vehicles	5 years	Straight-line

	Net (Loss) Income			Shares		Per Share Amount

For the three months ended September 30, 2020:

Basic EPS	$	17,010			50,964,244	$	0.00
Effect of dilutive stock options, warrants and series A shares					40,100,000

Diluted EPS	$	17,010			90,921,254	$	0.00
For the three months ended September 30, 2019:

Basic EPS	$	(138,384	)		48,336,326	$	(0.00	)
Effect of dilutive stock options, warrants and series A shares

Diluted EPS	$	(138,384	)		48,336,326	$	(0.00	)

Provisional purchase consideration at fair value:
Cash	$	668,633
Promissory Note		475,000
Total purchase price	$	1,143,633

Allocation of purchase price:
Inventory	$	301,754
Property and equipment		46,156
Goodwill		120,136
Trade name		70,233
Customer relationships		412,860
Intellectual property		202,771
Less: Customer Deposit		(10,277	)
Net assets acquired	$	1,143,633

	For The Nine Months Ended
	September 30, 2019
	As Reported		Pro Forma

Net sales	$	1,309,526	$	2,000,751
Net income attributable to common shareholders		127,219		229,581

Earnings per common share, basic and diluted:
Basic	$	0.00	$	0.00
Diluted	$	0.00	$	0.00

	Gross Carrying		Accumulated				Weighted
	Amount		Amortization		Net		Average Life
Trade name	$	70,233	$	-	$	70,233	Indefinite
Customer relationships		412,860		28,957		383,903		14
Intellectual Property		202,771		14,354		188,417		14

Total	$	685,864	$	43,311	$	642,553

Remaining in 2020	$	10,292
2021		41,042
2022		41,042
2023		41,042
2024		41,042
Thereafter		438,902
	$	572,320

Operating leases	As of September 30, 2020
Assets
ROU operating lease assets	$	365,064

Liabilities
Current portion of operating lease		98,275
Operating lease, net of current portion		273,672
Total operating lease liabilities	$	371,947

Finance leases
Assets
Property and equipment, gross	$	157,184
Accumulated depreciation		(50,523	)
Property and equipment, net		106,661
Liabilities
Current portion of financing lease		31,695
Finance lease, net of current portion		59,327
Total operating lease liabilities	$	91,022

Weighted average remaining lease term (years)	September 30, 2020
Operating leases		3.75
Finance leases		3.75

Weighted average discount rate	September 30, 2020
Operating leases		6.28	%
Finance leases		4.89	%

Remaining in 2020	$	9,445
2021		37,778
2022		37,778
2023		18,889
Total lease payments		103,890
Less imputed interest		(6,442	)
Less sales tax		(6,426	)
Total lease obligations		91,022
Less current obligations		(31,695	)
Long-term lease obligations	$	59,327

2020	$	39,086
2021		102,849
2022		100,521
2023		98,765
2024		75,972
Total lease payments		417,193
Less imputed interest		(45,246	)
Total lease obligations		371,947
Less current obligations		(98,275	)
Long-term lease obligations	$	273,672

	·	On December 20, 2019, the Company borrowed $58,192 to be paid over a three-year term with monthly payments of $ 1,736 at an interest rate of 5.26%. The balance as of September 30, 2020 was $42,709.
	·	On May 14, 2020, the Company borrowed $27,494 to be paid over a three-year term with monthly payments of $815 at an interest rate of 4.268%. The balance as of September 30, 2020 was $23,804.
	·	On June 10, 2020, the Company borrowed $41,015 to be paid over a three-year term with monthly payments of $1,216 at an interest rate of 4.278%. The balance as of September 30, 2020 was $36,589.

	Payments
2020		75,777
2021		364,123
2022		273,770
2023		201,729
Thereafter		746,689
Total remaining payments	$	1,662,088

	i.	550,000 restricted shares of Common Stock upon the execution of the Agreement implying a price per share of $0.10. These shares were valued on October 15, 2019 at $0.054 with a value of $29,920. As of September 30,2020, the full amount of $29,920 was expensed as consulting fees and the shares were issued on January 13, 2020.

	ii.	$54,000 payable in 450,000 restricted shares of Common Stock six months from the date of the Agreement implying a price per shares of $0.12. These shares were valued on October 15, 2019 at a price of $0.054 with a value of $24,480. As of September 30, 2020, $24,480 was expensed as consulting fees and the shares were issued on July 9, 2020.

	iii.	1,000,000 restricted shares of Common Stock upon an up listing of the Company’s Common Stock to a national exchange.

	Number of			Weighted Average
	Warrants			Exercise Price ($)
Outstanding at December 31,2019		3,000,000			.03
Granted		-			-
Exercised		(3,000,000	)		(.03	)
Expired		-			-
Outstanding at September 30, 2020		0			0

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

	AmpliTech Group, Inc.

Dated: November 16, 2020	By:	/s/ Fawad Maqbool
		Fawad Maqbool
		President and Chief Executive Officer (Principal Executive Officer)

1.	I have reviewed the quarterly report on Form 10-Q of AmpliTech Group, Inc. (the “registrant”) for the quarter ended September 30, 2020.

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

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

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

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

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

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

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

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

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