Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

 

As of November 18, 2013,May 14, 2014, the registrant had 20,443,86326,391,043 shares of common stock, par value $0.001 per share, issued and outstanding. 

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 of 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. In light of 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.

 

 

 

We design, engineer and assemble micro-wave component based amplifiers that meet individual customer’s specifications. Our products consists of Radio Frequency (RF) amplifiers and related subsystems, operating at multiple frequencies from 50kHz to 44GHz, including Low Noise Amplifiers, Medium Power Amplifiers, oscillators, filters, and custom assemblies such as MMIC (Monolithic Microwave Integrated Circuit) and MIC (Microwave Integrated Circuit) designs. 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.

 

On August 13, 2012, we assumed certainAsher Enterprises, Inc (“Asher), which was the obligations and rights under a number of convertible notes in an aggregate principal amount of $212,500 that were issued by our wholly owned subsidiary AmpliTech, Inc. pursuant to an assignment and assumption agreement among the noteholders, AmpliTech, Inc. and us, We cancelled the Original Notes and issued new convertible notes to the original note holders (the “Convertible Notes”). The Convertible Notes has a six-month term and compounds annually and accrues at 8% per annum from the issue date through the maturity date.  The holders are entitled to convert any portionholder of the outstandingConvertible Promissory Note dated August 21, 2013 for $58,000, converted the entire balance, plus accrued interest, between February 28, 2014 and unpaid amountMarch 18, 2014 into our1,069,436 shares of free trading common stock at an average conversion price of $0.10approximately $.06 per share.

Asher, which is the holder of the Convertible Promissory Note dated September 26, 2013 for $42,500 converted $15,000 of this balance on April 15, 2014 into 717,703 shares of free trading common stock at a conversion price of approximately $.021 per share. The holders have “piggyback” registration rights with respectbalance of this Note can be exercised, in whole or in part, at the shares issued or issuable upon conversion. On February 15, 2013, the Company received conversion notices from the holderssole discretion of the Convertible Notes, whereby the Holders requested the CompanyAsher through June 25, 2014 at which time any remaining balance, plus accrued interest, is due and payable to covert, the principal amounts and interests accrued until the notice date, into shares of the Company’s common stock. On February 28, 2013, the Company issued the holders a total of 2,000,000 shares of the Company’s common stock, which are covered on the Registration Statement on Form S-1 (No. 333-183291), representing their principal amounts dividing by the conversion price, and a total of 119,863 shares of the Company’s restricted common stock, to the holders representing their interest accrued through the notice date dividing by the conversion price.

On February 20, 2013,April 16, 2014, the Company received approval by Financial Industry Regulatory Authority (FINRA) for addingan additional advance of $40,000 pursuant to the Company’s common stock on the OTC Bulletin Board, effective the next day. The Company’s common stock has become quoted on the OTC Bulletin Board under the symbol “AMPG” on February 22, 2013.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.

Under the JOBS Act, we will remain an “emerging growth company” until the earliest of:

• the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;

• the last day of the fiscal year following the fifth anniversary of the completion of this offering;

• the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and

• the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, or the Exchange Act. We will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common equity held by our non-affiliates and (ii) been public for at least 12 months. The value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter.

Sales increased by $42,987,$14,693, or approximately 6%5%, when comparing sales for the ninethree months ended September 30, 2012March 31, 2014 of $716,259$323,876 to sales for the ninethree months ended September 30,March 31, 2013 of $759,246.$309,183. This increase was directly related to an increaseoutsourcing the assembly function for certain sales orders to a third party provider in production capacity during the thirdlocal Northeast that began in the fourth quarter of 2013 that resulted2012. Product sales for both periods were substantially from more efficient outsourcingthe sale of assembly with respect to similar sales orders.Low Noise Amplifiers (“LNA”).

General and administrative expenses increased from $156,270 for the first quarter of 2013 that was directly relatedcompared to $188,426 for the first quarter of 2014, an increase of $32,156, or approximately 21%. This resulted primarily from a $28,917 increase in general overhead expenses in the sales order backlog despite the increase in our production.

Interest Expense increased by $37,430 when comparing the above, the Company had a net loss of $60,099 for the ninethree months ended September 30, 2012 comparedMarch 31, 2013 to the three months ended March 31, 2014. This resulted primarily from recognizing, as interest expense, a non-cash $25,380 discount from the beneficial conversion feature related to a net lossconvertible note that was fully converted during the first quarter of $97,2362014. There was also a $5,580 gain that was recognized in the first quarter of 2014 resulting from certain debt that was exchanged for the nine months ended September 30, 2013, an overall increase of $37,137, or approximately 62%.common shares above fair market value.

As a result of the above, the Company had a net lossNet Income of $117,172$15,359 for the three months ended September 30, 2012March 31, 2013 compared to net incomea Net Loss of $35,135$82,110 for the three months ended September 30, 2013,March 31, 2014, an overall increasedecrease of $152,307,$97,469, or approximately 130%635%.

We have historically financed our operations through loansdebt from third party lenders, convertible promissory notes fromissued to various individual investorsprivate individuals and personal funds advanced from time to time by the majority shareholder, who is also the President and CEOChief Executive Officer of the Company.

As of September 30, 2013,March 31, 2014, we had $14,035$10,715 in cash and cash equivalents compared to $27,716$10,623 in cash and cash equivalents as of December 31, 2012.2013. As of December 31, 20122013 and September 30, 2013March 31, 2014 we had a working capital deficit of $599,787$323,897 and $504,117,$310,040, respectively, and an accumulateda stockholders’ deficit of $672,476$220,243 and $769,712,$189,653, respectively.

We intend 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 provided from operations and cash on hand will not provide sufficient working capital to fund our operations for the next twelve months.months as we estimate that we need an additional $100,000 for such period

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates the Company continuing as a going concern. As such, weof March 31, 2014, the Company had a working capital deficit of $310,040 and a Stockholders’ Deficit of $189,653. Additionally, there was a net loss of $82,110 for the three months ended March 31, 2014 and a net loss of $144,494 for the year ended December 31, 2013. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. However, the Company hopes to improve its financial condition by the existing Convertible Promissory Note holders electing to convert their notes to equity by issuing additional shares of common stock as well as raising working capital from the issuance of additional equity or debt instruments. Also, the Company plans to improve operations by pursuing new customers, developing new products and expanding its distribution channels, both domestically and internationally, in order to increase sales and improve cash flow. However, there is no assurance that the Company will be seeking additional capital by raising funds through borrowings, debt or equity offerings, or some combination thereof.

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 judgments and estimates.

 

The discussion and analysis of our financial condition and results of operations is based upon our 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 accompanying consolidated financial statements have been prepared using the accrual basis of accounting.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

The Company considers deposits that can be redeemed on demand and investments that have original maturities of less than three months, when purchased, to be cash equivalents. Company’s cash and cash equivalents were deposited primarily in one financial institution.

 

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of Accounts Receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change in the future.

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. The Company uses other depreciation methods (generally, accelerated depreciation methods) for tax purposes where appropriate. 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.

 

Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving or 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.

The Company’s sources of revenue are from the sale of various component amplifiers. Revenue is recognized on an accrual basis immediately asrecognizes upon shipment of such products. The Company offers a 100% satisfaction guarantee against defects for 90 days after the sale based on FOB shipping point.of their product except for a few circumstances. There are no maintenance or service contracts related to any product sale.

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.

 

None.

 

Smaller reporting companies are not required to provide the information required by this item.

 

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 the evaluation as of September 30, 2013,March 31, 2014, 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.

 

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. 

To the best of our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Shares IssuedBetween February 28, 2014 and March 18, 2014, the holder of the Convertible Promissory Note dated August 21, 2013 for $58,000 converted the entire balance, plus accrued interest related thereto of $2,320, into 1,069,436 shares of free trading common stock. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to ConsultantSection 4(2) thereof as a transaction by an issuer not involving a public offering.

On September 10, 2013, we issued 150,000March 31, 2014, a note payable due an individual in the amount of $12,000, plus accrued interest of $13,080 related thereto, was exchanged for 350,000 shares of restricted common stockstock. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a consultant as compensationtransaction by an issuer not involving a public offering.

On March 31, 2014, accrued commissions due a sales agent in the amount of $7,500 was exchanged for its service.100,000 shares of restricted common stock. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.

None.

 

 

Not applicable

 

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.