AmpliTech Group, Inc.: Form 10-Q for the period ended Jun 30, 2026

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 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 micro-wave component-based amplifiers that meet individual customer specifications. Our products consist of Radio Frequency (“RF”) amplifiers and related subsystems, operating at multiple frequencies from 50kHz to 44GHz, including low noise amplifiers (“LNA”), medium power amplifiers, cryogenic amplifiers, and custom assembly designs for the global satellite communications, telecom (5G & IoT), space, defense, and quantum computing markets. We also offer non-recurring engineering services on a project-by-project basis, for a predetermined fixed contractual amount, or on a time plus material basis. We have both domestic and international customers in such industries as aerospace, governmental, defense and commercial satellite.

Specialty Microwave designs and manufactures state-of- the-art precision SATCOM microwave components, RF subsystems and specialized electronic assemblies for the military and commercial markets, flexible and rugged waveguides, wave guide adapters and more.

On December 15, 2021, we acquired substantially all of the assets of Spectrum Semiconductor Materials Inc. (“SSM”), a globally authorized distributor of integrated circuit (IC) packaging and lids for semiconductor device assembly, prototyping, testing, and production requirements founded in 1990 and headquartered in San Jose, CA.

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 wider base of customers requiring high technology in smaller packages.

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.

On March 26, 2025, we entered into an asset purchase agreement (as amended, “Titan APA”), 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”).

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, cryogenic amplifiers 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 infrastructures, as well as advanced military and commercial markets.

Recent Developments

Termination of ATM Offering

On July 7, 2026, we provided notice to Maxim Group LLC (“Maxim”), as Agent, that we were terminating the Equity Distribution Agreement dated March 21, 2025, between us and Maxim effective immediately.

Adoption of Stock Repurchase Program

On July 7, 2026, we announced that our Board of Directors has authorized a stock repurchase program under which we may repurchase up to $10 million of our outstanding common stock over the next 24 months. Under the program, repurchases may be made from time to time through open market purchases, privately negotiated transactions, block trades, or other means in accordance with applicable federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. We may also enter into a trading plan under Rule 10b5-1. The timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including market conditions, the trading price of our common stock, applicable legal and regulatory requirements, and other considerations. The program does not obligate us to acquire any particular number of shares, and it may be suspended, modified, or discontinued at any time without prior notice.

Closing of Series A Rights

On July 22, 2026, we closed on the Series A Rights (the “Closing”), which expired on July 18, 2026. Each Series A Right entitled the holder to purchase one share of our common stock at an exercise price of $5.00 per share. Of the 4,498,204 Series A Rights outstanding, 4,384,163 were exercised and 114,041 expired unexercised and were automatically cancelled. We received approximately $21,920,815 in gross proceeds from the exercise of the Series A Rights and issued 4,384,163 shares of common stock. Gross proceeds include $113,003 received and held in escrow as of June 30, 2026, at which date a corresponding rights offering subscription liability was recorded. Net proceeds from the Closing were approximately $20,121,994 after deducting fees and expenses of Moody Capital, as placement agent, and our other offering expenses. The Series A Rights ceased trading on Nasdaq following their expiration. The Series B Rights, exercisable at $6.00 per share, remain outstanding and continue to trade on Nasdaq under the symbol “AMPGZ” until their expiration on November 20, 2026.

Amendment No. 2 to Titan APA

On August 6, 2026, we entered into Amendment No. 2 to the Titan APA (the “Amendment”) with Titan and Titan’s affiliate (the “Affiliate”). The Amendment was entered into as a result of Titan’s and the Affiliate’s substantial delinquency in timely delivering products to us, which has caused us substantial delays in developing our products, including the delivery of documentation and drawing packages for the 5G ORAN radio products. Pursuant to the Amendment, the parties agreed, among other things, to (i) decrease the aggregate purchase price from $8,000,000 to $7,000,000 and (ii) amend the form of payment of the remaining purchase price. Subject to the transfer of the fully developed design package for the 5G ORAN radio technology (the “Transfer”) and acknowledgment by our manufacturing partner that the documentation and drawing package is suitable for full production purposes, the remaining unpaid purchase price of $2,000,000 will be paid as follows: (i) $1,000,000 in cash and (ii) $1,000,000 in our restricted common stock based on the volume-weighted average price of our common stock over the thirty (30) trading days preceding the date of the Transfer. Pursuant to the Amendment, Titan was released from substantially all of its remaining covenants and indemnification obligations under the Titan APA, and the Affiliate assumed such obligations. We did not waive any rights or claims we may have against Titan or the Affiliate arising prior to the date of the Amendment.

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 (http://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 June 30, 2026 and June 30, 2025

Revenues

Sales decreased from $11,025,927 for the three months ended June 30, 2025, to $8,070,379 for the three months ended June 30, 2026, a decrease of $2,955,548 or approximately 26.81%. Distribution sales increased to $4,061,722 from $1,707,471 in the same period in the prior year, representing a significant year-over-year increase of $2,354,251. The growth was primarily attributable to higher sales volumes through distribution channels and continued expansion of the distribution business. The year-over-year decrease in 5G sales is primarily attributable to the acquired revenue recognized in the same period in the prior year related to the fulfillment of sales orders obtained through the Titan asset acquisition. Sales in the amplifier and related passive microwave components and subsystems division increased by $328,260 or 42.68%.

Cost of Goods Sold and Gross Profit

Cost of goods sold decreased from $10,163,048 for the three months ended June 30, 2025, to $5,816,367 for the three months ended June 30, 2026, a decrease of $4,346,681 or 42.77%. Cost of goods sold decreased compared to the same period in the prior year primarily due to lower sales volumes. The same period in the prior year included the fulfillment of acquired 5G product sales resulting from the asset acquisition, which increased both sales and the related cost of goods sold. Gross profit for the three months ended June 30, 2025 was $862,879 compared to $2,254,012 for the three months ended June 30, 2026, an increase of $1,391,133, or 161.22 %. Gross profit as a percentage of sales increased to 27.93% from 7.83%.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $4,075,527 for the three months ended June 30, 2026, from $2,129,143 for the three months ended June 30, 2025, an increase of $1,946,384, or approximately 91.42%. The increase was primarily attributable to higher parent company expenses, including increased amortization expense, legal fees and stock-based compensation. Selling, general and administrative expenses also increased as a result of greater investments in marketing and business development activities, including participation in additional industry trade shows such as the IMS and Network X trade shows, as well as expanded promotional initiatives designed to enhance brand awareness, strengthen customer engagement, and support business growth. The increase also reflects the engagement of two consultants to expand marketing and business development efforts for the Company’s 5G product portfolio.

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 expenses increased to $1,374,405 for the three months ended June 30, 2026, from $658,795 for the three months ended June 30, 2025, an increase of $715,610, or approximately 108.62%. The increase was primarily attributable to expanded 5G product development activities, including higher prototype and testing costs, as well as increased consulting expenses to support ongoing product innovation and development efforts.

Loss From Operations

As a result of the above, the Company reported a loss from operations of $3,195,920 and $1,925,059 for the three months ended June 30, 2026, and 2025, respectively.

Other Income (Expenses)

Other income consists of $88,222 of realized gain on foreign currency exchange rates for the three months ended June 30, 2025.

Due to market fluctuations, the Company recorded an unrealized loss on investments of $13,363 for the three months ended June 30, 2026 and $62,499 and $36,019 of realized gains on investments for the three months ended June 30, 2026 and 2025, respectively.

The Company recorded interest income, net of $58,272 and $29,193 for the three months ended June 30, 2026 and 2025, respectively.

Net Loss

The Company reported a net loss of $3,088,512 and $1,771,625 for the three months ended June 30, 2026 and 2025, respectively.

For the Six Months Ended June 30, 2026 and June 30, 2025

Revenues

Sales decreased to $13,419,825 for the six months ended June 30, 2026, from $14,625,026 for the six months ended June 30, 2025, a decrease of $1,205,201, or approximately 8.24%. The decrease was primarily attributable to lower 5G product sales, as the same period in the prior year included revenue generated from the Titan asset acquisition, which contributed to incremental sales that did not recur in the current period, offset by the increase in Spectrum sales.

Cost of Goods Sold and Gross Profit

Cost of goods sold decreased to $8,598,947 for the six months ended June 30, 2026, from $12,574,277 for the six months ended June 30, 2025, a decrease of $3,975,330, or approximately 31.61%. The decrease was primarily attributable to lower sales volumes. The same period in the prior year included the fulfillment of acquired 5G product sales resulting from the asset acquisition, which increased both sales and the related cost of goods sold. Gross profit increased to $4,820,878 for the six months ended June 30, 2026, from $2,050,749 for the six months ended June 30, 2025, an increase of $2,770,129, or approximately 135.08%. Gross profit as a percentage of sales increased to approximately 35.92% for the six months ended June 30, 2026, from approximately 14.02% for the comparable same period in the prior year. The improvement in gross margin was primarily attributable to a more favorable product mix and the absence of the lower-margin acquired 5G product sales that were included in the same period in the prior year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $7,758,455 for the six months ended June 30, 2026, from $4,467,358 for the six months ended June 30, 2025, an increase of $3,291,097, or approximately 73.67%. The increase was primarily attributable to higher parent company expenses, including increased amortization expense, legal fees and stock-based compensation. Selling, general and administrative expenses also increased due to greater investments in marketing and business development activities, including participation in additional industry trade shows such as IMS, MWC and Network X trade shows, expanded promotional initiatives to enhance brand awareness and customer engagement, and the engagement of two consultants to support the marketing and business development of the Company’s 5G product portfolio.

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 six months ended June 30, 2026, and 2025, were $1,877,451 and $1,398,468, respectively, an increase of $478,983, or 34.25%. The increase was primarily attributable to continued investment in 5G product development, including higher prototype and testing costs and increased consulting expenses to support ongoing research, product innovation, and development activities.

Loss From Operations

As a result of the above, the Company reported a loss from operations of $4,815,028 and $3,815,077 for the six months ended June 30, 2026, and 2025, respectively.

Other Income (Expenses)

Other income consists of $88,222 of realized gain on foreign currency exchange rates for the six months ended June 30, 2025.

Due to market fluctuations, the Company recorded an unrealized gain on investments of $24,601 for the six months ended June 30, 2026 and $62,499 and $36,019 of realized gains on investments for the six months ended June 30, 2026 and 2025, respectively.

The Company recorded interest income, net of $117,709 and $78,690 for the six months ended June 30, 2026 and 2025, respectively.

Net Loss

The Company reported a net loss of $4,610,219 and $3,612,146 for the six months ended June 30, 2026 and 2025, respectively.

Cash Flow

Operating Activities

The net cash used in operating activities for the six months ended June 30, 2026, was $8,678,386 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 and customer deposits.

The net cash used in operating activities for the six months ended June 30, 2025, was $4,260,237 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 and customer deposits.

Investing Activities

The net cash used in investing activities for the six months ended June 30, 2026, was $4,530,283 representing the net investment in marketable securities and the purchase of property and equipment.

The net cash used in investing activities for the six months ended June 30, 2025, was $3,987,492 for the purchase of property and equipment and the Titan Asset Acquisition.

Financing Activities

The net cash provided by financing activities for the six months ended June 30, 2026, was $10,529,115 resulting primarily from the net proceeds received from the rights offering, the registered direct offering and proceeds received from the exercise of stock options.

The net cash used in financing activities for the six months ended June 30, 2025, was $10,500 resulting primarily from the repayments of financing lease obligations.

As of June 30, 2026, we had cash and cash equivalents of $8,892,838, rights offering subscription proceeds in escrow of $113,003, working capital of $22,932,180 and an accumulated deficit of $32,629,501.

As of December 31, 2025, we had cash and cash equivalents of $4,981,091, rights offering subscription proceeds in escrow of $6,704,304, working capital of $10,157,641 and an accumulated deficit of $28,019,282.

Operating Capital and Capital Expenditure Requirements

As of June 30, 2026, we had cash and cash equivalents of $8,892,838. 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 June 30, 2026, 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, 2025.

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.

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 June 30, 2026, 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 June 30, 2026, 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 June 30, 2026 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, 2025 (“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.

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.

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, 2025 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.