AmpliTech Group, Inc 10-Q for FY2021 Q1

AmpliTech Group, Inc. (AMPG)

10-Q 2021-05-17 For: 2021-03-31

Added on April 11, 2026

About this 10-Q

AmpliTech Group, Inc filed this 10-Q on May 17, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $472.97K; down 37.4% from $755.95K a year earlier
Net loss: $879.93K; compared with a net loss of $322.96K a year earlier
Diluted EPS: -$0.16; compared with -$0.13 a year earlier

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		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	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Default Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

SIGNATURES		36

	March 31,			December 31,
	2021			2020
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	9,855,238		$	199,536
Accounts receivable, net		421,455			357,055
Inventories, net		790,296			517,338
Prepaid expenses		212,062			322,124
Total Current Assets		11,279,051			1,396,053

Property and equipment, net		290,065			289,251
Right of use operating lease assets		321,549			347,156
Intangible assets, net		622,089			632,209
Goodwill		120,136			120,136
Security deposits		26,707			26,707

Total Assets	$	12,659,597		$	2,811,512

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses		348,438		$	113,541
Customer deposits		149,870			15,300
Current portion of financing lease		32,478			32,084
Current portion of operating lease		84,991			87,930
Current portion of notes payable		213,357			205,592
Line of credit		-			200,000
Total Current Liabilities		829,134			654,447

Long Term Liabilities
Finance lease, net of current portion		42,890			51,159
Operating lease, net of current portion		244,845			267,050
Notes payable, net of current portion		1,346,180			1,398,574
Total Liabilities		2,463,049			2,371,230

Commitments and Contingencies		-			-

Stockholders' Equity
Series A convertible preferred stock, par		-			-
value $0.001, 1,000,000 shares authorized,
0 issued and outstanding
Common Stock, par value $0.001, 500,000,000 shares authorized,
6,579,771 and 4,839,448 shares issued and outstanding, respectively		6,580			4,839
Additional paid-in capital		12,938,271			2,303,815
Accumulated deficit		(2,748,303	)		(1,868,372	)

Total Stockholders' Equity		10,196,548			440,282

Total Liabilities and
Stockholders' Equity	$	12,659,597		$	2,811,512

	For The Three Months Ended
	March 31,			March 31,
	2021			2020

Revenue	$	472,974		$	755,948

Cost of goods sold		417,993			516,634

Gross Profit		54,981			239,314

Selling, general and administrative expense		908,554			538,561

Loss From Operations		(853,573	)		(299,247	)

Other Expenses
Interest expense, net		(26,358	)		(23,714	)

Loss Before Income Taxes		(879,931	)		(322,961	)

Provision For Income Taxes		-			-

Net Loss	$	(879,931	)	$	(322,961	)

Net Loss Per Share;
Basic	($0.16)			($0.13)
Diluted	($0.16)			($0.13)

Weighted Average Shares Outstanding;
Basic		5,568,350			2,476,816
Diluted		5,568,350			2,476,816

	For The Three			For The Three
	Months Ended			Months Ended
	March 31,			March 31,
Cash Flows from Operating Activities:	2021			2020

Net Loss	$	(879,931	)	$	(322,961	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		24,306			21,167
Amortization of prepaid consulting		113,742			32,648
Amortization of right-of-use operating lease asset		25,607			32,753
Stock based compensation		54,000			11,847
Changes in Operating Assets and Liabilities:
Accounts receivable		(64,400	)		131,468
Inventories		(272,958	)		1,488
Prepaid expenses		28,542			(25,704	)
Accounts payable and accrued expenses		202,675			80,724
Operating lease liability		(25,144	)		(31,635	)
Customer deposits		134,570			(7,990	)

Net cash used in operating activities		(658,991	)		(76,195	)

Cash Flows from Investing Activities:
Purchase of equipment		(15,000	)		(8,088	)
Net cash used in investing activities		(15,000	)		(8,088	)

Cash Flows from Financing Activities:
Proceeds received from private placement, net of expenses		9,449,597			-
Proceeds received from exercise of warrants		1,132,600			-
Repayment of line of credit, net		(200,000	)		-
Repayments on finance lease		(7,875	)		(7,633	)
Repayment of notes payable		(44,629	)		(36,549	)
Net cash provided by financing activities		10,329,693			(44,182	)

Net change in cash and cash equivalents		9,655,702			(128,465	)

Cash and Cash Equivalents, Beginning of Period		199,536			574,712

Cash and Cash Equivalents, End of Period	$	9,855,238		$	446,247

Supplemental disclosures:
Cash paid for interest expense	$	25,550		$	23,714
Cash paid for income taxes	$	-		$	-

Non-Cash Investing and Financing Activities
Promissory note on equipment	$	-		$	58,192
Finance agreement in exchange for prepaid assets	$	32,222		$	-

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

	For the three months ended March 31, 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		2,454,317	$	2,454	$	24,480	$	1,909,551		$	(842,813	)	$	1,093,673

Stock based compensation		-		-		-		-		-		11,847			-			11,847

Net loss for the three months ended March 31, 2020		-		-		-		-		-		-			(322,961	)		(322,961	)

Balance, March 31, 2020		1,000	$	1		2,454,317	$	2,454	$	24,480	$	1,921,398		$	(1,165,774	)	$	782,559

	For the three months ended March 31, 2021

Balance, December 31, 2020		-	$	-		4,839,448	$	4,839	$	-	$	2,303,815		$	(1,868,372	)	$	440,282

Common stock issued in private placement		-		-		1,577,142		1,578		-		9,448,019			-			9,449,597

Additional shares issued in connection to reverse split due to rounding						1,381		1				(1	)					-

Common stock issued upon exercise of warrants		-		-		161,800		162		-		1,132,438						1,132,600

Stock based compensation												54,000						54,000

Net loss for the three months ended March 31, 2021		-		-		-		-		-		-		$	(879,931	)		(879,931	)

Balance, March 31, 2021		-	$	-		6,579,771	$	6,580	$	-	$	12,938,271		$	(2,748,303	)	$	10,196,548

Description	Useful Life	Method
Office equipment	7 years	Straight-line
Machinery and equipment	5 to 10 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 March 31, 2021:

Basic EPS	$	(879,931	)		5,568,350	$	(0.16	)
Effect of dilutive stock options, warrants and series A shares

Diluted EPS	$	(879,931	)		5,568,350	$	(0.16	)
For the three months ended March 31, 2020:

Basic EPS	$	(322,961	)		2,476,816	$	(0.13	)
Effect of dilutive stock options, warrants and series A shares

Diluted EPS	$	(322,961	)		2,476,816	$	(0.13	)

	March 31, 2021		March 31, 2020
Domestic sales	$	403,510	$	620,203
International sales		69,464		135,745
Total sales	$	472,974	$	755,948

	Gross Carrying		Accumulated				Weighted
	Amount		Amortization		Net		Average Life
Trade name	$	70,233	$	-	$	70,233		Indefinite
Customer relationships		412,860		42,681		370,179		13.0
Intellectual Property		202,771		21,094		181,677		13.0

Total	$	685,864	$	63,775	$	622,089

2021		30,922
2022		41,042
2023		41,042
2024		41,042
2025		41,042
Thereafter		356,766
	$	551,856

Operating leases	March 31, 2021

Assets
ROU operating lease assets	$	321,549

Liabilities
Current portion of operating lease	$	84,991
Operating lease, net of current portion	$	244,845
Total operating lease liabilities	$	329,836

Finance leases
Assets
Property and equipment, gross	$	157,184
Accumulated depreciation		(61,751	)
Property and equipment, net	$	95,433
Liabilities
Current portion of financing lease	$	32,478
Finance lease, net of current portion		42,890
Total operating lease liabilities	$	75,368

Weighted average remaining lease term (years)	March 31, 2021
Operating leases		3.61
Finance leases		2.25

Weighted average discount rate
Operating leases		6.29	%
Finance leases		4.89	%

2021		28,334
2022		37,778
2023		18,889
Total lease payments		85,001
Less imputed interest		(4,375	)
Less sales tax		(5,258	)
Total lease obligations		75,368
Less current obligations		(32,478	)
Long-term lease obligations	$	42,890

	March 31,			December 31,
	2021			2020

Raw Materials	$	401,636		$	325,251
Work-in Progress		310,602			129,882
Finished Goods		141,332			128,479
Engineering Models		3,726			3,726

Subtotal	$	857,296		$	587,338
Less: Reserve for Obsolescence		(67,000	)		(70,000	)

Total	$	790,296		$	517,338

	March 31,			December 31,
	2021			2020

Lab Equipment	$	880,414		$	865,414
Manufacturing Equipment		25,000			25,000
Automobiles		19,527			19,527
Furniture and Fixtures		36,165			36,165
Subtotal		961,106			946,106
Less: Accumulated Depreciation		(671,041	)		(656,855	)

Total	$	290,065		$	289,251

2021		76,286
2022		104,497
2023		102,741
2024		79,948
2025		3,645
Total lease payments		367,117
Less imputed interest		(37,281	)
Total lease obligations		329,836
Less current obligations		(84,991	)
Long-term lease obligations	$	244,845

	·	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 March 31, 2021 was $33,256.
	·	On May 14, 2020, the Company borrowed $27,494 to be paid over a three-year term with monthly payments of $815 at an interest rate of 4.268%. The balance as of March 31, 2021 was $19,411.
	·	On June 10, 2020, the Company borrowed $41,015 to be paid over a three-year term with monthly payments of $1,216 at an interest rate of 4.278%. The balance as of March 31, 2021 was $30,061.

	Payments
2021		158,875
2022		453,950
2023		200,967
2024		186,035
2025		103,254
Thereafter		456,456
Total remaining payments	$	1,559,537

	i.	27,500 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. The full amount of $29,920 was expensed as consulting fees in 2020 and the shares were issued on January 13, 2020.

	ii.	$54,000 payable in 22,500 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 and classified as common stock subscription payable as they had not been issued. On July 9, 2020, Maxim was issued 22,500 shares of common stock in exchange for the common stock subscription payable. The full amount of consulting fees was expensed in 2019.

	iii.	50,000 restricted shares of Common Stock 90 days following the placement agency agreement dated April 15, 2021. These shares were valued on October 15, 2019 at a price of $0.054 with a value of $54,000 and expensed as consulting fees for the three months ended March 31, 2021.

				Weighted
	Number of			Average Exercise
	Warrants			Price ($)
Outstanding at December 31, 2020		-			-
Granted		1,577,142		$	7.00
Exercised		(161,800	)	$	(7.00	)
Expired		-			-
Outstanding at March 31, 2021		1,415,342		$	7.00

*Exhibit No.*		*Description*

31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Principal Executive Officer
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Principal Financial Officer
32.1		Section 1350 Certification of Principal Executive Officer
32.2		Section 1350 Certification of Principal Financial Officer
101. INS		XBRL Instance Document
101. SCH		XBRL Taxonomy Extension Schema Document
101. CAL		XBRL Taxonomy Extension Calculation Link base Document
101. DEF		XBRL Taxonomy Extension Definition Link base Document
101. LAB		XBRL Taxonomy Extension Label Link base Document
101. PRE		XBRL Taxonomy Extension Presentation Link base Document

	AmpliTech Group, Inc.

Date: May 17, 2021	By:	/s/ Fawad Maqbool
		Fawad Maqbool
		President and Chief Executive Officer (Principal Executive Officer)

1.	I have reviewed the quarterly report on Form 10-Q of AmpliTech Group, Inc.(the “registrant”) for the quarter ended March 31, 2021;

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.