# AmpliTech Group, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [AmpliTech Group, Inc.](/companies/ampg.md) (CIK 1518461)
- Form: 10-Q
- Filed: 2024-08-14
- Accepted by EDGAR: Aug 14, 2024, 20:30 ET
- Period: 2024-06-30
- Accession: 0001493152-24-032264
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1518461/000149315224032264/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1518461/000149315224032264/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $2.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-01-01 to 2024-06-30 | $4.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-04-01 to 2024-06-30 | $1.5m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-01-01 to 2024-06-30 | $2.9m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-04-01 to 2024-06-30 | $1.1m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-01-01 to 2024-06-30 | $1.9m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-04-01 to 2024-06-30 | $460.1k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-01-01 to 2024-06-30 | $736.9k | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-04-01 to 2024-06-30 | $2.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-01-01 to 2024-06-30 | $4.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$1.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | −$3.0m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$1.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | −$6.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.16 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.64 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.16 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.64 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 9,718,239 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 9,716,976 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$2.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-01-01 to 2024-06-30 | $13.7k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-06-30 | $1.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $11.7m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $25.4m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $1.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $4.7m | us-gaap:Liabilities |
| Long-term debt | at 2024-06-30 | $36.4k | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-06-30 | $20.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 15,713 characters.

*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 cellphone 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.

### 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 six months ended June 30, 2024, the Company recorded a complete loss from the investment in digital assets of $3,248,911. As of June 30, 2024, the remaining balance of digital assets was $0.

### 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 prospectus.

### Results of Operations

### For the Three Months Ended June 30, 2024 and June 30, 2023

#### Revenues

Sales decreased from $4,073,231 for the three months ended June 30, 2023, to $2,527,442 for the three months ended June 30, 2024, a decrease of $1,545,789 or approximately 37.95%. Sales in the amplifier and related passive microwave components and subsystems division decreased by $1,003,313, or 56.75%, while Spectrum sales decreased by $545,476, or 23.61%. This decline is attributable to a decrease in sales from both domestic and international customers because of global economic uncertainty. The global recession and adverse market conditions are affecting our business in terms of lost revenue.

#### Cost of Goods Sold and Gross Profit

Cost of goods sold decreased from $2,152,022 for the three months ended June 30, 2023, to $1,470,355 for the three months ended June 30, 2024, a decrease of $681,667 or 31.68%. Overall, this decrease is directly related to the decline in sales. As a result, gross profit was $1,057,087 for the three months ended June 30, 2024, compared to $1,921,209 for the three months ended June 30, 2023, a decrease of $864,122, or 44.98%. Overall, gross profit as a percentage of sales decreased to 41.82% from 47.17%, because of decreased sales and fulfilling sales orders with lower gross margins.

#### Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $2,165,055 for the three months ended June 30, 2024, from $1,731,414 for the three months ended June 30, 2023, an increase of $433,641 or approximately 25.05%. This increase represents primarily an increase in legal, consulting and accounting fees, primarily related to the fraudulent digital currency transaction.

#### 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 June 30, 2024, and 2023, were $460,122 and $697,905, respectively, a decrease of $237,783, or 34.07%, resulting from a decrease in consulting expenses as the major MMIC development efforts have been completed.

#### Loss From Operations

As a result of the above, the Company reported a loss from operations of $1,568,090 and $508,110 for the three months ended June 30, 2024, and 2023, respectively.

#### Other Income (Expenses)

The Company recorded interest expense, net of $8,184 and interest income, net of $7,314 for the three months ended June 30, 2024, and 2023.

Due to market fluctuations, the Company recorded an unrealized gain on investments of $19,056 and a realized gain on investments of $8,979 for the three months ended June 30, 2023.

#### Net Loss

The Company reported a net loss of $1,576,274 and $472,761 for the three months ended June 30, 2024 and 2023.

### For the Six Months Ended June 30, 2024 and June 30, 2023

#### Revenues

Sales decreased from $8,185,530 for the six months ended June 30, 2023, to $4,820,773 for the six months ended June 30, 2024, a decrease of $3,364,757 or approximately 41.11%. Sales in the amplifier and related passive microwave components and subsystems division decreased by $1,181,645, or 39.59%. Spectrum sales decreased by $2,183,112, or 41.98%. This decline is attributable to a decrease in sales from both domestic and international customers because of global economic uncertainty. The global recession and adverse market conditions are affecting our business in terms of lost revenue.

#### Cost of Goods Sold and Gross Profit

Cost of Goods Sold decreased from $4,401,540 for the six months ended June 30, 2023, to $2,881,056 for the six months ended June 30, 2024, a decrease of $1,520,484 or 34.54%. Overall, this decrease is directly related to the decline in sales. As a result, gross profit was $1,939,717 for the six months ended June 30, 2024, compared to $3,783,990 for the six months ended June 30, 2023, a decrease of $1,844,273, or 48.74%. Overall, gross profit as a percentage of sales decreased from 46.23% to 40.24%.

#### Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $4,198,802 for the six months ended June 30, 2024, from $3,693,326 for the six months ended June 30, 2023, an increase of $505,476 or approximately 13.69%. This increase represents primarily an increase in legal, consulting and accounting fees, primarily related to the fraudulent digital currency transactions.

#### Research and Development Expenses

Research and development expenditures are charged to operations as incurred. The major components of research and development costs include consultants, outside service, and supplies.

Research and development costs for the six months ended June 30, 2024, and 2023, were $736,877 and $1,217,885, respectively, a decrease of $481,008 or 39.50%, resulting from a decrease in consulting expenses as the major MMIC development efforts have been completed.

#### Loss From Operations

As a result of the above, the Company reported a loss from operations of $2,995,962 and $1,127,221 for the six months ended June 30, 2024 and 2023, respectively.

#### Other Income (Expenses)

The Company recorded net interest expense of $12,527 and net interest income of $21,085 for the six months ended June 30, 2024 and 2023.

Due to market fluctuations, the Company recorded an unrealized gain on investments of $37,602 for the six months ended June 30, 2023. In addition, the Company recorded a realized gain on investments of $25,965 and $13,807, respectively for the six months ended June 30, 2024 and 2023.

As a result of the fraudulent digital currency transactions noted above, during the six months ended June 30, 2024, the Company recorded an impairment loss of $3,248,911 related to digital assets.

#### Net Loss

The Company reported a net loss of $6,231,435 and $1,054,727 for the six months ended June 30, 2024 and 2023, respectively.

### Liquidity and Capital Resources

#### Operating Activities

The net cash used in operating activities for the six months ended June 30, 2024, was $ 2,396,466 resulting primarily from the net loss and operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses, customer deposits and operating lease obligations.

The net cash used in operating activities for the six months ended June 30, 2023, was $1,256,886 resulting primarily from the net loss and operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses and operating lease obligations.

#### Investing Activities

The net cash used in investing activities for the six months ended June 30, 2024, was $3,262,591 for the purchase of equipment and investment in digital assets.

The net cash used in investing activities for the six months ended June 30, 2023, was $3,547,692 of which $776,507 related to the purchase of equipment and $2,771,185 for the net purchases of marketable securities.

#### Financing Activities

The net cash used in financing activities for the six months ended June 30, 2024, was $52,752, resulting primarily from the repayments of notes payable and financing lease liabilities.

The net cash used in financing activities for the six months ended June 30, 2023, was $2,286,500, resulting primarily from the repayments of notes payable, financing lease liabilities, and the revenue earnout.

As of June 30, 2024, we had cash and cash equivalents of $1,014,204, working capital of $9,995,731, and an accumulated deficit of $16,001,158.

As of December 31, 2023, we had cash and cash equivalents of $6,726,013, working capital of $15,649,254, and an accumulated deficit of $9,769,723.

We intend to continue to finance our internal growth with cash on hand, cash provided from operations, borrowings, debt or equity offerings, or some combination thereof. We believe that our cash to be provided from operations, cash on hand and current working capital, will be sufficient to fund our operations for the next twelve months.

On July 23, 2024, the Company entered into a business loan and security agreement with Altbanq Lending II LLC in the amount of $1,300,000, with an origination fee of $26,000. The loan is payable within 76 weeks through 38 bi-weekly payments of $44,816 and bears an annual interest rate of 21.2%. The loan is secured by the Company’s assets through a UCC filing. Proceeds from the business loan will be used for working capital and 5G licensing and certification fees.

### 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 six-month period ended June 30, 2024, 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, 2023.

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.

## Controls and procedures

As filed, 1,686 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act as of the end of the period covered by this report. 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.

Based on that evaluation, as of June 30, 2024, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in 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.

### Changes in Internal Control over Financial Reporting

There were 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. Please refer to the March 31, 2024 10Q filed on May 28, 2024.

Filed Aug 14, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-032264. Last ingested by Listed: Oct 24, 2026, 15:13 ET. No prices; not investment advice.