Cover
Cover | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | AmpliTech Group, Inc. |
Entity Central Index Key | 0001518461 |
Document Type | S-1 |
Amendment Flag | false |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Filer Category | Non-accelerated Filer |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | |||
Cash and cash equivalents | $ 425,876 | $ 574,712 | $ 442,098 |
Accounts receivable | 766,489 | 619,195 | 262,002 |
Inventories, net | 602,436 | 557,710 | 391,188 |
Prepaid expenses | 72,504 | 124,209 | 120,100 |
Total Current Assets | 1,867,305 | 1,875,826 | 1,215,388 |
Property and equipment, net | 299,566 | 198,110 | 180,745 |
Right of use operating lease assets | 365,064 | 465,092 | 0 |
Intangible assets, net | 572,320 | 673,429 | 0 |
Goodwill | 120,136 | 120,136 | |
Security deposits | 27,821 | 27,821 | 11,707 |
Total Assets | 3,322,445 | 3,360,414 | 1,407,840 |
Current Liabilities | |||
Accounts payable and accrued expenses | 201,394 | 154,507 | 86,125 |
Customer deposits | 112,612 | 35,680 | 190,400 |
Current portion of financing lease | 31,695 | 30,556 | 29,180 |
Current portion of operating lease | 98,275 | 130,628 | 0 |
Current portion of notes payable | 208,297 | 169,697 | 0 |
Line of credit | 0 | 72,897 | |
Line of Credit | 300,000 | 0 | |
Total Current Liabilities | 952,273 | 521,068 | 378,602 |
Long Term Liabilities | |||
Finance lease, net of current portion | 59,327 | 83,376 | 113,933 |
Operating lease, net of current portion | 273,672 | 338,344 | 0 |
Notes payable, net of current portion | 1,453,791 | 1,323,953 | 0 |
Total Liabilities | 2,739,063 | 2,266,741 | 492,535 |
Commitments and Contingencies | 0 | 0 | 0 |
Stockholders' Equity | |||
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 | 48,336 |
Common stock payable | 0 | 24,480 | 0 |
Additional paid-in capital | 1,923,824 | 1,862,919 | 1,715,726 |
Accumulated deficit | (1,392,032) | (842,813) | (848,758) |
Total Stockholders' Equity | 583,382 | 1,093,673 | 915,305 |
Total Liabilities and Stockholders' Equity | 3,322,445 | 3,360,414 | 1,407,840 |
Series A Convertible Preferred Stock [Member] | |||
Stockholders' Equity | |||
Preferred stock value | 1 | 1 | 1 |
Series B Convertible Preferred Stock [Member] | |||
Stockholders' Equity | |||
Preferred stock value | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, shares par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common stock, shares issued | 51,588,958 | 49,086,326 | 48,336,326 |
Common stock, shares outstanding | 51,588,958 | 49,086,326 | 48,336,326 |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, shares par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 401,000 | 401,000 | 401,000 |
Preferred stock, shares issued | 1,000 | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 | 1,000 |
Series B Convertible Preferred Stock [Member] | |||
Preferred stock, shares par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 75,000 | 75,000 | 75,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Consolidated Statements of Operations | ||||||
Revenue | $ 1,150,732 | $ 708,896 | $ 2,567,379 | $ 2,018,422 | $ 3,122,630 | $ 2,397,418 |
Cost of goods sold | 630,486 | 358,526 | 1,581,831 | 983,168 | 1,556,654 | 1,016,226 |
Gross Profit | 520,246 | 350,370 | 985,548 | 1,035,254 | 1,565,976 | 1,381,192 |
Selling, general and administrative expense | 475,248 | 478,297 | 1,456,266 | 1,021,448 | 1,483,979 | 1,039,768 |
Income (Loss) From Operations | 44,998 | (127,927) | (470,718) | 13,806 | 81,997 | 341,424 |
Interest expense, net | (27,988) | (10,457) | (78,501) | (24,971) | (76,052) | (12,431) |
Income Before Income Taxes | 17,010 | (138,384) | (549,219) | (11,165) | 5,945 | 328,993 |
Net Income (Loss) | $ 17,010 | $ (138,384) | $ (549,219) | $ (11,165) | $ 5,945 | $ 328,993 |
Net Income (Loss) Per Share; | ||||||
Basic | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 |
Diluted | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 |
Weighted Average Shares Outstanding; | ||||||
Basic | 50,964,244 | 48,336,326 | 50,015,773 | 48,336,326 | 48,593,312 | 47,771,668 |
Diluted | 90,921,254 | 48,336,326 | 50,015,773 | 48,336,326 | 89,998,615 | 87,674,310 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities: | ||||
Net Loss | $ (549,219) | $ (11,165) | $ 5,945 | $ 328,993 |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization | 67,678 | 31,997 | 53,879 | 38,821 |
Amortization of prepaid consulting | 37,108 | 32,184 | 65,640 | 37,604 |
Amortization of right-of-use operating lease asset | 100,028 | 44,229 | 75,558 | |
Stock based compensation | 38,928 | 119,148 | 118,023 | 7,879 |
Amortization of debt discount | 0 | 2,650 | 24,465 | |
Accounts receivable | (147,294) | (302,929) | (357,193) | (124,537) |
Changes in Operating Assets and Liabilities: | ||||
Inventories | (44,726) | 19,225 | 135,232 | (55,520) |
Prepaid expenses | (43,595) | 59,145 | 42,843 | (57,903) |
Security deposits | 0 | (15,000) | (16,114) | (2,954) |
Accounts payable and accrued expenses | 46,887 | 117,904 | 65,954 | 28,980 |
Operating lease liability | (97,025) | (39,261) | (69,250) | |
Customer deposits | 76,932 | (53,004) | (164,997) | 158,818 |
Total Adjustments | 34,921 | 16,288 | (25,960) | 23,309 |
Net cash (used in) provided by operating activities | (514,298) | 5,123 | (20,015) | 352,302 |
Cash Flows from Investing Activities: | ||||
Purchase of equipment | (11,557) | (668,633) | (12,653) | 10,584 |
Cash paid in acquistions | (668,663) | |||
Net cash used in investing activities | (11,557) | (668,633) | (681,286) | (10,584) |
Repayment of line of credit, net | 0 | (72,897) | (72,897) | (3,538) |
Cash Flows from Financing Activities: | ||||
Proceeds from line of credit | 300,000 | 0 | ||
Repayments on finance lease | (22,910) | (21,754) | (29,181) | (14,072) |
Proceeds from notes payable | 232,200 | 1,298,374 | 1,325,535 | 0 |
Repayment of notes payable | 132,272 | 0 | (389,542) | 0 |
Net cash provided by financing activities | 377,018 | 1,203,723 | 833,915 | (17,610) |
Repayment of notes payable | (132,272) | 0 | 389,542 | 0 |
Net change in cash and cash equivalents | (148,837) | 540,213 | 132,614 | 324,108 |
Cash and Cash Equivalents, Beginning of Period | 574,712 | 442,098 | 442,098 | 117,990 |
Cash and Cash Equivalents, End of Period | 425,876 | 982,311 | 574,712 | 442,098 |
Supplemental disclosures: | ||||
Cash paid for interest expense | 71,125 | 20,388 | 51,891 | 8,706 |
Cash paid for income taxes | 0 | 50 | 50 | 50 |
Non-Cash Investing and Financing Activities | ||||
Shares issued for prepaid consulting | 0 | 85,950 | ||
Original issuance discount | 0 | 24,465 | 24,465 | |
Equipment purchased with capital lease | 0 | 157,184 | ||
Adoption of ASC 842 operating lease asset and liability | 0 | 523,313 | 540,651 | 0 |
Promissory note issued in Specialty acquistion | 475,000 | 0 | ||
Promissory note on equipment | 68,510 | 0 | ||
Intangible assets acquired in Specialty acquistion | 806,000 | 806,000 | 0 | |
Equipment received for prepaid assets | 58,192 | 0 | ||
Inventory acquired in Specialty acquistion | 301,754 | 0 | ||
Common stock issued for common stock payable | 24,480 | 0 | ||
Property acquired in Specialty acquistion | 46,156 | 0 | ||
Cashless exercise of warrant | 2,053 | 0 | ||
Liabilities assumed in Specialty acquistion | 10,277 | $ 0 | ||
Promissory note issued in Specialty acquisition | 0 | 475,000 | ||
Promissory note entered for deposit on equipment | $ 58,192 | |||
Intangible assets acquired in Specialty acquisition | 0 | 806,000 | ||
Inventory acquired in Specialty acquisition | 0 | 301,754 | ||
Property acquired in Specialty acquisition | 0 | 46,156 | ||
Liabilities assumed in Specialty acquisition | $ 0 | $ 10,277 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders Equity - USD ($) | Total | Series A Convertible Preferred | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Common Stock Payable |
Balance, shares at Dec. 31, 2017 | 1,000 | 46,136,326 | ||||
Balance, amount at Dec. 31, 2017 | $ 500,362 | $ 1 | $ 46,136 | $ 1,631,976 | $ (1,177,751) | |
Common stock issued for prepaid consulting, shares | 2,200,000 | |||||
Common stock issued for prepaid consulting, amount | 83,750 | $ 2,200 | ||||
Net Income (Loss) | 328,993 | 328,993 | ||||
Stock based compensation | 7,879 | |||||
Balance, shares at Dec. 31, 2018 | 1,000 | 48,336,326 | ||||
Balance, amount at Dec. 31, 2018 | 915,305 | $ 1 | $ 48,336 | 1,715,726 | (848,758) | |
Stock based compensation | 119,148 | |||||
Balance, shares at Jun. 30, 2019 | 1,000 | 48,336,326 | ||||
Balance, amount at Jun. 30, 2019 | 1,092,294 | $ 1 | $ 48,336 | 1,765,496 | (721,539) | $ 0 |
Balance, shares at Dec. 31, 2018 | 1,000 | 48,336,326 | ||||
Balance, amount at Dec. 31, 2018 | 915,305 | $ 1 | $ 48,336 | 1,715,726 | (848,758) | |
Net Income (Loss) | (11,165) | 0 | 0 | (11,165) | 0 | |
Stock based compensation | 119,148 | $ 0 | $ 0 | 119,148 | 0 | 0 |
Balance, shares at Sep. 30, 2019 | 1,000 | 48,336,326 | ||||
Balance, amount at Sep. 30, 2019 | 1,023,288 | $ 1 | $ 48,336 | 1,834,874 | (859,923) | 0 |
Balance, shares at Dec. 31, 2018 | 1,000 | 48,336,326 | ||||
Balance, amount at Dec. 31, 2018 | 915,305 | $ 1 | $ 48,336 | 1,715,726 | (848,758) | |
Net Income (Loss) | 5,945 | $ 0 | 5,945 | |||
Stock based compensation, shares | 750,000 | |||||
Stock based compensation, amount | 147,943 | $ 750 | 147,193 | |||
Common stock payable | 24,480 | 24,480 | ||||
Stock based compensation | 118,023 | |||||
Balance, shares at Dec. 31, 2019 | 1,000 | 49,086,326 | ||||
Balance, amount at Dec. 31, 2019 | 1,093,673 | $ 1 | $ 49,086 | 1,862,919 | (842,813) | 24,480 |
Balance, shares at Jun. 30, 2019 | 1,000 | 48,336,326 | ||||
Balance, amount at Jun. 30, 2019 | 1,092,294 | $ 1 | $ 48,336 | 1,765,496 | (721,539) | 0 |
Net Income (Loss) | (138,384) | 0 | 0 | 0 | (138,384) | 0 |
Stock based compensation | 69,378 | $ 0 | $ 0 | 69,378 | 0 | 0 |
Balance, shares at Sep. 30, 2019 | 1,000 | 48,336,326 | ||||
Balance, amount at Sep. 30, 2019 | 1,023,288 | $ 1 | $ 48,336 | 1,834,874 | (859,923) | 0 |
Balance, shares at Dec. 31, 2019 | 1,000 | 49,086,326 | ||||
Balance, amount at Dec. 31, 2019 | 1,093,673 | $ 1 | $ 49,086 | 1,862,919 | (842,813) | 24,480 |
Net Income (Loss) | (549,219) | 0 | 0 | (549,219) | 0 | 0 |
Stock based compensation | 38,928 | 0 | $ 0 | 38,928 | 0 | 0 |
Common stock issued for common stock payable, shares | 450,000 | |||||
Common stock issued for common stock payable, amount | 0 | 0 | $ 450 | 24,030 | 0 | (24,480) |
Common stock issued upon exercise of warrants, shares | 2,052,632 | |||||
Common stock issued upon exercise of warrants, amount | 0 | $ 0 | $ 2,053 | (2,053) | 0 | 0 |
Balance, shares at Sep. 30, 2020 | 1,000 | 51,588,958 | ||||
Balance, amount at Sep. 30, 2020 | 583,382 | $ 1 | $ 51,589 | 1,923,824 | (1,392,032) | 0 |
Balance, shares at Jun. 30, 2020 | 1,000 | 49,086,326 | ||||
Balance, amount at Jun. 30, 2020 | 551,139 | $ 1 | $ 49,086 | 1,886,614 | (1,409,042) | 24,480 |
Net Income (Loss) | 17,010 | 0 | 0 | 0 | 17,010 | 0 |
Stock based compensation | 15,233 | 0 | $ 0 | 15,233 | 0 | 0 |
Common stock issued for common stock payable, shares | 450,000 | |||||
Common stock issued for common stock payable, amount | 0 | 0 | $ 450 | 24,030 | 0 | (24,480) |
Common stock issued upon exercise of warrants, shares | 2,052,632 | |||||
Common stock issued upon exercise of warrants, amount | 0 | $ 0 | $ 2,053 | (2,053) | 0 | 0 |
Balance, shares at Sep. 30, 2020 | 1,000 | 51,588,958 | ||||
Balance, amount at Sep. 30, 2020 | $ 583,382 | $ 1 | $ 51,589 | $ 1,923,824 | $ (1,392,032) | $ 0 |
Organization and Business Descr
Organization and Business Description | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Organization and Business Description | ||
Note 1. Organization and Business Description | AmpliTech Group Inc. (“AmpliTech” or “the Company”) was incorporated under the laws of the State of Nevada on December 30, 2010. On August 13, 2012, the Company acquired AmpliTech Inc., by issuing 16,675,000 shares of the Company’s Common Stock to the shareholders of AmpliTech Inc. in exchange for 100% of the outstanding shares of AmpliTech Inc. (“the Share Exchange”). After the Share Exchange, the selling shareholders owned 1,200,000 shares of the outstanding 17,785,000 shares of Company common stock, resulting in a change in control. Accordingly, the transaction was accounted for as a reverse acquisition in which AmpliTech, Inc. was deemed to be the accounting acquirer, and the operations of the Company were consolidated for accounting purposes. The capital balances have been retroactively adjusted to reflect the reverse acquisition. AmpliTech 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. On September 12, 2019, AmpliTech Group Inc. acquired substantially all of the operating assets of Specialty Microwave Corporation (SMW), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, property and equipment, and all intellectual property. The assets also included all eight team members of SMW (see Note 4). 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. The COVID-19 Pandemic The novel strain of the coronavirus identified in China in late 2019 (COVID-19) has globally spread throughout other areas such as Asia, Europe, the Middle East, and North America and has resulted in authorities imposing, and businesses and individuals implementing, numerous unprecedented measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, and shutdowns. These measures have temporarily impacted our workforce and operations, and some of the operations of our customers, vendors, suppliers, and partners. Some of the countries in which we operate has been affected by the outbreak and taken measures to try to contain it. The ultimate impact and efficacy of government measures and potential future measures is currently unknown. There is uncertainty regarding the business impacts from such measures and potential future measures. While we have been able to continue our operations through a combination of work-from-home and social distancing policies implemented to protect employees, these measures have resulted in reduced workforce availability. Restrictions on our access to customer facilities may impact our ability to meet customer demand this quarter and into next quarter and could effect on our financial condition and results of operations. Some of our customers may have experienced disruptions in their operations, but our RFQ (Request for Quote) activity remains strong which may result in delayed orders in the fourth quarter. | AmpliTech Group Inc. (“AmpliTech” or “the Company”) was incorporated under the laws of the State of Nevada on December 30, 2010. On August 13, 2012, the Company acquired AmpliTech Inc., by issuing 16,675,000 shares of the Company’s Common Stock to the shareholders of Amplitech Inc. in exchange for 100% of the outstanding shares of AmpliTech Inc. (“the Share Exchange”). After the Share Exchange, the selling shareholders owned 1,200,000 shares of the outstanding 17,785,000 shares of Company common stock, resulting in a change in control. Accordingly, the transaction was accounted for as a reverse acquisition in which AmpliTech, Inc. was deemed to be the accounting acquirer, and the operations of the Company were consolidated for accounting purposes. The capital balances have been retroactively adjusted to reflect the reverse acquisition. AmpliTech designs, engineers and assembles micro-wave 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. On September 12, 2019, AmpliTech Group Inc. acquired substantially all of the operating assets of Specialty Microwave Corporation (SMW), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, fixed assets, and all intellectual property. The assets also included all eight team members of SMW. The total consideration paid was $1,143,633, consisting of $668,633 in cash and a $475,000 promissory note with an interest rate of 6%. The Company also entered into a five-year lease on the property located at 120 Raynor Avenue, Ronkonkoma, NY with an option to buy the property during the first two years of the lease for $1,200,000 and then at fair market value for the remainder of the lease term (see Note 4). 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Note 2. Summary of Significant Accounting Policies | Basis of Accounting The accompanying financial statements have been prepared using the accrual basis of accounting. The accompanying unaudited interim condensed consolidated financial statements of AmpliTech Group, Inc. (“Group” or the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for annual audited financial statements. In the opinion of management, all adjustments of a normal recurring nature, considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the years ended December 31, 2019 and 2018 included in Form 10-K filed with the SEC. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All inter company accounts and transactions have been eliminated in consolidation. Use of Estimates 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. Cash and Cash Equivalents 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. As of September 30, 2020, the Company’s cash and cash equivalents were deposited in two financial institutions. Accounts Receivable Trade accounts receivable are recorded at the net invoice value and are not interest bearing. 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. No allowance has been recorded at September 30, 2020 and 2019, respectively. Inventories Inventories, which consist primarily of raw materials, work in progress and finished goods, is stated at the lower of cost (first-in, first-out basis) or market (net realizable value). Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving and 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. Property and Equipment 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. 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. Property and equipment are depreciated as follows: 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 Long-lived assets Long lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values. Goodwill and Intangible Assets Intangibles assets include goodwill, trademarks, intellectual property and customer base acquired through the asset purchase of Specialty Microwave. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Goodwill is not amortized. We test goodwill balances for impairment annually at December 31 or whenever impairment indicators arise. Leases On January 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted this standard using the modified retrospective approach with an effective date as of the beginning of January 2019. Prior year financial statements were not restated under the new standard. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Revenue Recognition We sell our products through a combination of a direct sales force in the United States and independent sales representatives in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps: Identify the contract with the customer Identify the performance obligations in the contract We do not have significant returns. We do not typically offer extended warranty or service plans. Determine the transaction price Allocate the transaction price to performance obligations in the contract Recognize revenue when or as we satisfy a performance obligation. Reserves are recorded as a reduction in net sales and are not considered material to our condensed consolidated statements of income for the nine months ended September 30, 2020. Research and Development 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 nine months ended September 30, 2020 and 2019 were $ 41,083 and $ 48,262. Income Taxes The Company’s deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of certain assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At September 30, 2020, the Company had no material unrecognized tax benefits. Earnings Per Share Basic earnings per share (“EPS”) are determined by dividing the net earnings by the weighted-average number of shares of common shares outstanding during the period. Diluted EPS is determined by dividing net earnings by the weighted average number of common shares used in the basic EPS calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method. As of September 30, 2020, there were 40,100,000 potentially dilutive shares that need to be considered as common share equivalents and because of the net loss, the effect of these potential common shares is anti-dilutive. The computation of weighted average shares outstanding and the basic and diluted earnings per share consisted of the following: 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 ) Net (Loss) Income Shares Per Share Amount For the nine months ended September 30, 2020: Basic EPS $ (549,219 ) 50,015,773 $ (0.01 ) Effect of dilutive stock options, warrants and series A shares Diluted EPS $ (549,219 ) 50,015,773 $ (0.01 ) For the nine months ended September 30, 2019: Basic EPS $ (11,165 ) 48,336,326 $ (0.00 ) Effect of dilutive stock options, warrants and series A shares Diluted EPS $ (11,165 ) 48,336,326 $ (0.00 ) Fair Value of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following categories as follows: Level 1. Level 2. Level 3. Stock-Based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. Concentration of Credit Risk Financial instruments that potentially subject the company to concentration of credit risk consist primarily of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Therefore, management does not believe significant credit risks exist at September 30, 2020. Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. The adoption of this standard became effective for us on January 1,2020 and did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact of this standard on our combined financial statements. We do not expect the adoption of these or other recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow. | Basis of Accounting The accompanying financial statements have been prepared using the accrual basis of accounting. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates 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. Cash and Cash Equivalents 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. As of December 31, 2019, the Company’s cash and cash equivalents were deposited in two financial institutions. Accounts Receivable Trade accounts receivable are recorded at the net invoice value and are not interest bearing. 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. An allowance of $0 has been recorded at December 31, 2019 and 2018, respectively. Inventories Inventories, which consist primarily of raw materials, work in progress and finished goods, is stated at the lower of cost (first-in, first-out basis) or market (net realizable value) determined on average cost basis. Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving and 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. Property and Equipment 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. 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. Property and equipment are depreciated as follows: 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 Long-lived assets Long lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values. Goodwill and Intangible Assets Intangibles assets include goodwill, trademarks, intellectual property and customer base acquired through the asset purchase of Specialty Microwave. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives Intangible assets with indefinite lives are tested annually for impairment. Goodwill is not amortized. We test goodwill balances for impairment annually at December 31 or whenever impairment indicators arise. Leases On January 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted this standard using the modified retrospective approach with an effective date as of the beginning of January 2019. Prior year financial statements were not restated under the new standard. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Revenue Recognition We sell our products through a combination of a direct sales force in the United States and independent sales representatives in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps: Identify the contract with the customer Identify the performance obligations in the contract We do not have significant returns. We do not typically offer extended warranty or service plans. Determine the transaction price Allocate the transaction price to performance obligations in the contract Recognize revenue when or as we satisfy a performance obligation. service revenue. Reserves are recorded as a reduction in net sales and are not considered material to our consolidated statements of income for the years ended December 31, 2019 and 2018. Research and Development 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 years ended December 31, 2019 and 2018 were $56,507 and $42,941. Income Taxes The Company’s deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of certain assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2019 and 2018, the Company had no material unrecognized tax benefits. Earnings Per Share Basic earnings per share (“EPS”) are determined by dividing the net earnings by the weighted-average number of shares of common shares outstanding during the period. Diluted EPS is determined by dividing net earnings by the weighted average number of common shares used in the basic EPS calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method. The computation of weighted average shares outstanding and the basic and diluted earnings per share consisted of the following: Net Income Shares Per Share Amount For the year ended December 31, 2019: Basic EPS $ 5,945 49,536,326 $ 0.00 Effect of dilutive stock options, warrants and series A shares 40,462,289 Diluted EPS $ 5,945 89,998,615 $ 0.00 For the year ended December 31, 2018: Basic EPS $ 328,993 47,771,668 $ 0.00 Effect of dilutive stock options, warrants and series A shares 39,902,642 Diluted EPS $ 328,993 87,674,310 $ 0.00 Fair Value of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to information used to determine fair values. Categorization within fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following categories as follows: Level 1. Level 2. Level 3. Stock-Based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. Concentration of Credit Risk Financial instruments that potentially subject the company to concentration of credit risk consist primarily of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Therefore, management does not believe significant credit risks exist at December 31, 2019. Sales to the Company’s two largest customers represented approximately 11% and 10% of total sales for the year ended December 31, 2019. Recent Accounting Pronouncements On January 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted this standard using the modified retrospective approach with an effective date as of the beginning of January 2019. Prior year financial statements were not restated under the new standard. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation - Stock Compensation In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. ASU 2018-13 will be effective for the Company for its fiscal year beginning after December 15, 2019 and each quarterly period thereafter. Early adoption is permitted. The Company is currently assessing the impact this new guidance may have on the Company’s consolidated financial statements and footnote disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact of this standard on our combined financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of a business or as acquisitions (or disposals) of assets. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2018, with early adoption permitted under certain circumstances. The amendments of ASU No. 2017-01 were adopted by the Company effective January 1, 2019. The adoption of this standard had no impact on our consolidated financial position or results of operations. We do not expect the adoption of these or other recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow. |
Revenues
Revenues | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Revenues | ||
Note 3. Revenues | The following table presents sales disaggregated based on geographic regions and for the three and nine months ended: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Domestic sales $ 1,031,653 $ 505,844 $ 2,205,324 $ 1,283,720 International sales 119,079 203,052 362,055 734,702 Total sales $ 1,150,732 $ 708,896 $ 2,567,379 $ 2,018,422 | The following table presents sales disaggregated based on geographic regions by entity and for the years ended: Amplitech Inc. 2019 2018 Domestic sales $ 1,706,946 $ 2,007,357 Foreign sales 905,056 390,061 Total sales $ 2,612,002 $ 2,397,418 Specialty Microwave 2019 2018 Domestic sales $ 454,235 $ - Foreign sales 56,129 - Total sales $ 510,364 $ - |
Acquisition of Specialty Microw
Acquisition of Specialty Microwave | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Acquisition of Specialty Microwave | ||
Note 4. Acquisition of Specialty Microwave | On September 12, 2019, AmpliTech Group Inc. acquired substantially all of the operating assets of Specialty Microwave Corporation(SMW), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, property and equipment, and all intellectual property. The assets also included all eight team members of SMW. The total consideration paid was $1,143,633, consisting of $668,633 in cash and a $475,000 promissory note with an interest rate of 6%. Additional acquisition costs that were expensed at December 31, 2019 totaled approximately $77,000. The Company also entered a five- year lease on the property located at 120 Raynor Avenue, Ronkonkoma, NY with an option to buy the property during the first two years of the lease for $1.2 mm and then at fair market value for the remainder of the lease term. As both companies are similar in nature, the acquisition will allow the combined resources and customer base to support more productivity and help in the development of new product lines. We started consolidating both companies for financial reporting purposes as of September 12, 2019. The fair value of the purchase consideration issued to Specialty Microwave was allocated to the net tangible assets acquired. The Company accounted for the Acquisition as the purchase of a business under GAAP under the acquisition method of accounting, and the assets and liabilities acquired were recorded as the acquisition date, at their respective fair values and consolidated with those of the Company. The fair value of the net assets acquired was approximately $337,633. The excess of the aggregate fair value of the net tangible assets has been allocated to net intangible assets of $806,000. The following table summarizes the allocation of the purchase price of the acquisition: 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 The following table summarizes the Company’s consolidated results of operations for the period ended, as well as unaudited pro forma consolidated results of operations as though the acquisition had occurred on January 1, 2019. The proforma results for the nine months ended September 30, 2020 are not included in the table below because the operating results of Specialty Microwave were included in our consolidated statement of operations. 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 The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the Acquisition been completed as of January 1, 2019 or to project potential operating results as of any future date or for any future periods. | On September 12, 2019, AmpliTech Group Inc. acquired substantially all of the operating assets of Specialty Microwave Corporation (SMW), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, property and equipment, and all intellectual property. The assets also included all eight team members of SMW. The total consideration paid was $1,143,633, consisting of $668,633 in cash and a $475,000 promissory note with an interest rate of 6%. Additional acquisition costs that were expensed at December 31, 2019 totaled approximately $77,000. The Company also entered into a five- year lease on the property located at 120 Raynor Avenue, Ronkonkoma, NY with an option to buy the property during the first two years of the lease for $1.2 mm and then at fair market value for the remainder of the lease term. As both companies are similar in nature, the acquisition will allow the combined resources and customer base to support more productivity and help in the development of new product lines. We started consolidating both companies for financial reporting purposes as of September 12, 2019. From the date of acquisition to December 31, 2019, SMW reported revenue of $ 510,364. The fair value of the purchase consideration issued to Specialty Microwave was allocated to the net tangible assets acquired. The Company accounted for the Acquisition as the purchase of a business under GAAP under the acquisition method of accounting, and the assets and liabilities acquired were recorded as the acquisition date, at their respective fair values and consolidated with those of the Company. The fair value of the net assets acquired was approximately $337,633. The excess of the aggregate fair value of the net tangible assets has been allocated to net intangible assets of $806,000. The following table summarizes the allocation of the purchase price of the acquisition: 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 Tradename 70,233 Customer relationships 412,860 Intellectual property 202,771 Less: Customer Deposit (10,277 ) Net assets acquired $ 1,143,633 The following table summarizes the Company’s consolidated results of operations for the three and nine months ended, as well as unaudited pro forma consolidated results of operations as though the acquisition had occurred on January 1, 2018: For the year ended 31-Dec-19 As Reported Pro Forma Net sales $ 3,122,630 $ 4,041,837 Net income attributable to common shareholders $ 5,945 $ 141,053 Earnings per common share, basic and diluted: Basic $ 0.00 $ 0.00 Diluted $ 0.00 $ 0.00 For the year ended 31-Dec-18 As Reported Pro Forma Net sales $ 2,397,418 $ 3,085,889 Net income attributable to common shareholders $ 328,993 $ 554,677 Earnings per common share, basic and diluted: Basic $ 0.00 $ 0.01 Diluted $ 0.00 $ 0.00 The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the Acquisition been completed as of January 1, 2018 or to project potential operating results as of any future date or for any future periods. |
Inventories
Inventories | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Inventories | ||
Note 5. Inventories | The inventory value at September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Raw Materials $ 427,974 $ 403,397 Work-in Progress 132,746 135,223 Finished Goods 125,990 124,510 Engineering Models 3,726 3,726 Subtotal $ 690,436 $ 666,856 Less: Reserve for Obsolescence (88,000 ) (109,146 ) Total $ 602,436 $ 557,710 | The inventory value at December 31, 2019 and 2018 was as follows: December 31, 2019 December 31, 2018 Raw Materials $ 403,168 $ 279,437 Work-in Progress 135,223 69,480 Finished Goods 124,510 118,545 Engineering Models 3,726 3,726 Subtotal $ 666,856 $ 471,188 Less: Reserve for Obsolescence (109,146 ) (80,000 ) Total $ 557,710 $ 391,188 |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property and Equipment | ||
Note 6. Property and Equipment | Property and Equipment consisted of the following at September 30, 2020 and December 31, 2019: September 30, December 31, 2020 2019 Lab Equipment $ 861,914 $ 728,620 Manufacturing Equipment 25,000 25,000 Automobiles 19,527 19,527 Furniture and Fixtures 36,165 31,201 Subtotal 942,606 804,348 Less: Accumulated Depreciation (643,040 ) (606,238 ) Total $ 299,566 $ 198,110 Depreciation expense for the nine months ended September 30, 2020 and 2019 was $36,802 and $31,997, respectively. | Property and Equipment with estimated useful lives of three, five and seven years consisted of the following at December 31, 2019 and 2018: December 31, 2019 December 31, 2018 Lab Equipment $ 728,620 $ 725,348 Manufacturing Equipment 25,000 - Automobiles 19,527 - Furniture and Fixtures 31,201 20,192 Subtotal 804,348 745,540 Less: Accumulated Depreciation (606,238 ) (564,795 ) Total $ 198,110 $ 180,745 Depreciation expense for the years ended December 31, 2019 and 2018 was $41,443 and $38,821 respectively. |
Intangible Assets
Intangible Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Intangible Assets | ||
Note 7. Intangible Assets | Goodwill The goodwill is related to the acquisition of Specialty Microwave Corp. on September 12, 2019 and is primarily related to expected improvements and technology performance and functionality, as well sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. Goodwill is generally not amortizable for tax purposes and is not amortizable for financial statement purposes. As of September 30, 2020, goodwill is valued at $120,136. Other Intangible Assets Intangible assets with an estimated useful life of fifteen years consisted of the following at September 30, 2020: 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 Amortization expense for the nine months ended September 30, 2020 and 2019 was $30,876 and $0, respectively. Annual amortization of intangible assets are as follows: Remaining in 2020 $ 10,292 2021 41,042 2022 41,042 2023 41,042 2024 41,042 Thereafter 438,902 $ 572,320 | Goodwill The goodwill is related to the acquisition of Specialty Microwave Corp. on September 12, 2019 and is primarily related to expected improvements and technology performance and functionality, as well sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. Goodwill is generally not amortizable for tax purposes and is not amortizable for financial statement purposes. As of December 31, 2019, goodwill is valued at $120,136. Other Intangible Assets Intangible assets with an estimated useful life of fifteen years consisted of the following at December 31, 2019: Gross Carrying Amount Accumulated Amortization Net Weighted Average Life Trade name $ 70,233 $ - $ 70,233 Indefinite Customer relationships 412,860 8,295 404,565 14.7 Intellectual Property 202,771 4,140 198,631 14.7 Total $ 685,864 $ 12,435 $ 673,429 |
Line of Credit
Line of Credit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Line of Credit | ||
Note 8. Line of Credit | On September 12, 2019, AmpliTech entered a new business line of credit for $500,000 maturing on October 1, 2020. The line will be evaluated monthly on a borrowing base formula advancing 75% of accounts receivables aged less than 90 days and 50% of inventory raw materials costs. The interest rate shall be based upon the Wall Street Journal Prime Rate, plus 1%. As of September 30, 2020, the outstanding balance is $300,000, with accrued interest of $1,008. | On November 16, 2015, the Company entered into a commercial line of credit for $150,000. This agreement will be paid over a three-year term with monthly payments equal to 2.780% of the outstanding balance plus accrued interest. The initial variable interest rate on this agreement is 5.25% per annum. This interest rate may change every year on the anniversary date or change date to reflect the new prime rate in effect as per the Wall Street Journal plus 2%. The interest rate will never be greater than 25% or less than 5%. On April 20, 2016, the existing line of credit was increased from $150,000 to $250,000 with an extended maturity date of April 20, 2019. The outstanding balance as of December 31, 2019 and 2018 was $0 and $72,897, respectively. The Company repaid the line of credit and interest $74,283 during the year ended December 31, 2019. Interest expense relating to this line of credit for the years ended December 31, 2019 and 2018 was $1,386 and $6,979, respectively. This line of credit was closed on October 4, 2019. On September 12, 2019, Amplitech entered a new business line of credit for $500,000 maturing on October 1, 2020. The line will be evaluated monthly on a borrowing base formula advancing 75% of the accounts receivables aged less than 90 days and 50% of inventory raw materials costs. The interest rate shall be based upon the Wall Street Journal Prime Rate, plus 1%. As of December 31, 2019, the outstanding balance is $0. |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases | ||
Note 9. Leases | We adopted ASC 842 “Leases” using the modified retrospective approach, electing the practical expedient that allows us not to restate our comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. The following was included in our balance sheet as of September 30, 2020: 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 The weighted average remaining lease term and weighted average discount rate at September 30, 2020 were as follows: 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 % Finance Lease The Company entered into a 60-month lease agreement to finance certain laboratory equipment in July 2018 with a purchase option of $1. As such, the Company has accounted for this transaction as a finance lease. The following table reconciles future minimum finance lease payments to the discounted lease liability as of September 30, 2020: 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 Operating Leases On December 4, 2015, the Company entered into a new operating lease agreement to rent office space in Bohemia, NY. This five-year agreement commenced February 1, 2016 with an annual rent of $50,000 and 3.75% increases in each successive lease year. On January 15, 2016, the Company entered into a five-year agreement to lease 2 copiers with and annual payment of $2,985. On September 12, 2019, the Company entered into a new operating lease agreement to rent office space in Ronkonkoma, NY. This five-year agreement commenced on September 12, 2019 with an annual rent of $90,000 and 3% increase in each successive lease year beginning in 2021. The Company has an option to buy the property during the first two years of the lease for $1,200,000 and then at fair market value for the remainder of the lease term. On November 27, 2019, the Company entered a 39-month agreement to lease an automobile with a monthly payment of $420 The following table reconciles future minimum operating lease payments to the discounted lease liability as of September 30, 2020: 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 | We adopted ASC 842 “Leases” using the modified retrospective approach, electing the practical expedient that allows us not to restate our comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. The following was included in our balance sheet as of December 31, 2019: Operating leases As of December 31, 2019 Assets ROU operating lease assets $ 465,092 Liabilities Current portion of operating lease 130,628 Operating lease, net of current portion 338,344 Total operating lease liabilities $ 468,972 Finance leases Assets Property and equipment, gross $ 157,184 Accumulated depreciation (33,682 ) Property and equipment, net $ 123,502 Liabilities Current portion of financing lease $ 30,556 Finance lease, net of current portion 83,376 Total operating lease liabilities $ 113,932 The weighted average remaining lease term and weighted average discount rate at December 31, 2019 were as follows: Weighted average remaining lease term (years) December 31, 2019 Operating leases 4.18 Finance leases 3.50 Weighted average discount rate December 31, 2019 Operating leases 6.34 % Finance leases 4.89 % Finance Lease The Company entered into a 60-month lease agreement to finance certain laboratory equipment in July 2018 with a purchase option of $1. As such, the Company has accounted for this transaction as a finance lease. The following table reconciles future minimum finance lease payments to the discounted lease liability as of December 31,2019: 2020 $ 37,778 2021 37,778 2022 37,778 2023 18,889 Total lease payments 132,224 Less imputed interest (10,112 ) Less sales tax (8,179 ) Total lease obligations 113,932 Less current obligations (30,556 ) Long-term lease obligations $ 83,376 Operating Leases On December 4, 2015, the Company entered into a new operating lease agreement to rent office space in Bohemia, NY. This five-year agreement commenced February 1, 2016 with an annual rent of $50,000 and 3.75% increases in each successive lease year. On January 15, 2016, the Company entered into a five-year agreement to lease 2 copiers with and annual payment of $2,985. On September 12, 2019, the Company entered into a new operating lease agreement to rent office space in Ronkonkoma, NY. This five- year agreement commenced on September 12, 2019 with an annual rent of $90,000 and 3% increase in each successive lease year beginning in 2021. The Company has an option to buy the property during the first two years of the lease for $1,200,000 and then at fair market value for the remainder of the lease term. On November 27, 2019, the Company entered a 39-month agreement to lease an automobile with a monthly payment of $420. The following table reconciles future minimum operating lease payments to the discounted lease liability as of December 31, 2019: 2020 $ 156,169 2021 102,849 2022 100,521 2023 98,765 2024 75,972 Total lease payments 534,276 Less imputed interest (65,304 ) Total lease obligations 468,972 Less current obligations (130,628 ) Long-term lease obligations $ 338,344 |
Notes Payable
Notes Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Notes Payable | ||
Note 10. Notes Payable | Promissory Note: On September 12, 2019, AmpliTech Group Inc. acquired substantially all of the operating assets of Specialty Microwave Corporation(SMW), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, property and equipment, and all intellectual property. The assets also included all eight team members of SMW. The total consideration paid was $1,143,633, consisting of $668,633 in cash and a $475,000 promissory note with an interest rate of 6%. Beginning November 1, 2019, payment of principal and interest shall be due payable in fifty-nine (59) monthly payments of $9,213 with a final payment due October 1, 2024 of $9,203. As of September 30, 2020, the balance of this promissory note was $398,439. Principal payments of $56,107 along with interest expense of $17,604 was paid during the nine months ended September 30, 2020. The promissory note is secured by certain assets of the Company. Loan Payable: On September 12, 2019, the Company entered a $1,000,000 seven-year term loan with amortization based on a ten- year repayment schedule. The loan bears interest at a fixed rate of 6.75% with a monthly repayment amount of $11,533. As of September 30, 2020, the balance of the loan was $928,347 and interest expense paid was $49,772. This loan is collateralized by all Company assets. On April 20, 2020, the Company entered into a Paycheck Protection Program Promissory Note (“PPP Note”) in the principal amount of $232,200 (“PPP Loan”) from BNB Bank (“PPP Loan Lender”). The PPP Loan was obtained pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid Reliefand Economic Security Act (“CARES Act”) administered by the US Small Business Administration (“SBA”). The PPP Loan was disbursed by the PPP Loan Lender on April 20, 2020 (the “Disbursement Date”). The PPP Loan bears an interest at 1.00% per annum and will mature two years from the Disbursement Date. The Company plans to apply for PPP Loan forgiveness. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used by the Company for 2020 payroll costs, mortgage interest payments, rent and utilities. This has helped to offset some of the adverse effects of this pandemic and allowed us to serve our customers at a reduced capacity but without experiencing any cancellation of our open orders. In addition, on September 12, 2019, the Company was approved for a $250,000 equipment leasing facility. The Company has borrowed against the leasing facility as follows: · 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. Future principal payments over the term of the loans as of September 30, 2020 are as follows: Payments 2020 75,777 2021 364,123 2022 273,770 2023 201,729 Thereafter 746,689 Total remaining payments $ 1,662,088 | Promissory Note: On September 12, 2019, AmpliTech Group Inc. acquired substantially all of the operating assets of Specialty Microwave Corporation (SMW), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, fixed assets, and all intellectual property. The assets also included all eight team members of SMW. The total consideration paid was $1,143,633, consisting of $668,633 in cash and a $475,000 promissory note with an interest rate of 6%. Beginning November 1, 2019, payment of principal and interest shall be due payable in fifty-nine (59) monthly payments of $9,213 with a final payment due October 1, 2024 of $9,203. As of December 31, 2019, the balance of this promissory note was $454,544. Principal payments of $20,456 along with interest expense of $7,185 was paid for the year ended December 31, 2019. The promissory note is secured by certain assets of the Company. Loan Payable: On March 18, 2019, the Company secured additional financing of $350,000, net of a $24,465 original issuance discount. The note bears interest at a rate of 10.79% per annum, under a five-year term to aid our growth initiatives. The loan balance of $324,199, including accrued interest was paid in full in October 2019. On September 12, 2019, the Company entered a $1,000,000 seven- year term loan with amortization based on a ten- year repayment schedule. The loan bears interest at a fixed rate of 6.75% with a monthly repayment amount of $11,533. As of December 31, 2019, the balance of the loan was $982,423 and interest expense paid was $17,022. This loan is collateralized by all Company assets. In addition, on September 12, 2019, the Company was approved for a $250,000 equipment leasing facility. On December 20, 2019, the Company borrowed $58,192 against this facility 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 December 31, 2019 was $56,683. Future principal payments over the term of the loans as of December 31, 2019 are as follows: For the years ended December 31, Payments 2020 169,697 2021 187,969 2022 198,398 2023 191,725 Thereafter 745,861 Total remaining payments $ 1,493,650 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Stockholders' Equity | ||
Note 11. Stockholders' Equity | Preferred Stock On July 10, 2013, the board of directors of the company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize 500,000 shares of Preferred Stock, par value $0.001 per share. In July 2013, the Board of Directors of the Company designated 140,000 shares of Preferred Stock as Series A Convertible Preferred Stock (or “Series A”). Furthermore, each share of Series A is convertible into 100 shares of common stock at any time after issuance and the holder of each share of Series A is entitled to 100 votes when the vote of holders of the Company’s common stock is sought. In January 2015, the Board of Directors of the Company increased the number of Series A designated from 140,000 to 401,000. There are currently 1,000 shares of Series A outstanding. In April 2015, the Board of Directors of the Company designated 75,000 shares of Preferred Stock as Series B Convertible Preferred Stock (or “Series B”). The Series B shares are convertible into common stock at a conversion rate of one Series B share for 289 common shares. In addition, a holder of Series B Preferred Stock shall not be entitled to have any voting rights and shall hold a liquidation preference junior to a holder of Series A shares and pari passu with common shareholders. There are currently no shares of Series B outstanding. Common Stock: The Company originally authorized 50,000,000 shares of common stock with a par value of $0.001. Effective May 20, 2014, the Company increased its authorized shares of common stock from 50,000,000 to 500,000,000. On July 9, 2020, Maxim was issued 450,000 shares of common stock in exchange for common stock payable. On July 28, 2020, Wayne Homschek elected to exercise 3,000,000 of his cashless warrants and 2,052,632 of common stock was issued. As of September 30, 2020, and December 31, 2019, the Company had 51,588,958 and 49,086,326 shares of common stock issued and outstanding. On October 15, 2019, the Company engaged Maxim Group LLC (“Maxim”) as its financial advisor to assist the Company in growth strategy to the investment community with an ultimate goal of a potential up-list and capital raise on NASDAQ. As consideration for Maxim’s services, Maxim shall be entitled to receive, and the Company agrees to pay Maxim, the following compensation: (a) 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. Options: During 2014, the Company granted the chief executive officer of the Company an immediately exercisable option to purchase an aggregate of 400,000 shares of Series A at an exercise price of $0.0206 per share. There is no expiration date for this option and the related expense has been recorded in prior years. Warrants: On April 25, 2019, Wayne Homschek joined the Board of Directors as an independent Director who aided in corporate strategy, financing and investor relations. He was paid $5,000 per month for one year and receive a warrant, exercisable into 3,000,000 shares of common stock at an exercise price of $0.03 per share. As per the agreement, 1,500,000 warrants vested in six months and the remaining balance of 1,500,000 vested one year later. The following table summarizes the warrants outstanding of the Company for the nine months ended September 30, 2020: Number of Weighted Average Warrants Exercise Price ($) Outstanding at December 31,2019 3,000,000 .03 Granted - - Exercised (3,000,000 ) (.03 ) Expired - - Outstanding at September 30, 2020 0 0 The Company has calculated the estimated fair market value of these warrant sat $142,950, using the Black-Scholes model and the following assumptions: expected term 5.75 years, stock price $0.05, exercise price $0.03, 153.48% volatility, 2.35% risk free rate, and no forfeiture rate. The Company recognized stock-based compensation of $38,928 and $119,148 for the nine months ended September 30, 2020 and 2019, respectively. On July 25, 2020, Wayne Homschek was terminated as a director of Amplitech Group, Inc. The Board of Directors of the Company determined that the monthly compensation payable to Mr. Homschek was no longer financially viable. Prior to such termination, the Company had no disagreements with Mr. Homschek regarding the reporting or operations of the Company. Upon Mr. Homshek's termination, the Company accelerated the vesting period of his warrants. On July 28, 2020, Mr. Homschek exercised 3,000,000 of his cashless warrants for 2,052,632 of common stock. | Preferred Stock On July 10, 2013, the board of directors of the company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize 500,000 shares of Preferred Stock, par value $0.001 per share. In July 2013, the Board of Directors of the Company designated 140,000 shares of Preferred Stock as Series A Convertible Preferred Stock (or “Series A”). Furthermore, each share of Series A is convertible into 100 shares of common stock at any time after issuance and the holder of each share of Series A is entitled to 100 votes when the vote of holders of the Company’s common stock is sought. In January 2015, the Board of Directors of the Company increased the number of Series A designated from 140,000 to 401,000. There are currently 1,000 shares of Series A outstanding. In April 2015, the Board of Directors of the Company designated 75,000 shares of Preferred Stock as Series B Convertible Preferred Stock (or “Series B”). The Series B shares are convertible into common stock at a conversion rate of one Series B share for 289 common shares. In addition, a holder of Series B Preferred Stock shall not be entitled to have any voting rights and shall hold a liquidation preference junior to a holder of Series A shares and pari passu with common shareholders. There are currently no shares of Series B outstanding. Common Stock: The Company originally authorized 50,000,000 shares of common stock with a par value of $0.001. Effective May 20, 2014, the Company increased its authorized shares of common stock from 50,000,000 to 500,000,000. As of December 31, 2019, and 2018, the Company had 49,086,326 and 48,336,326 shares of common stock issued and outstanding, respectively. On February 14, 2018, the Company entered into an advisory agreement to assist in product sales and distribution in Asia and the Middle East. The advisor was paid compensation of a total of 2.2 million shares of restricted common stock valued at the closing market price on the date the shares were issued. The first installment of 500,000 shares was issued on February 14, 2018 at $0.035 and the second installment of 1,700,000 shares on April 9, 2018 at $0.04. The total value of shares issued for services aggregated to $85,500. As of December 31, 2019, $80,633 of the stock- expense had been recognized and $5,317 remained as a prepaid to be amortized over a two-year service period. On July 2, 2019, Amplitech Group, Inc. entered an engagement for strategic intellectual property consulting services with ipCapital Group (“ipCG”), to assist in the formulation and execution ofAmplitech’s intellectual property (“IP”) strategy around its proprietary trade secrets, knowhow and technology to formulate a comprehensive “ipStory”. The consideration paid to ipCG is $30,000, of which ipCG has agreed to accept 200,000 shares of restricted common stock upon completion of the project. These shares were issued on October 15, 2019 at a value of $14,000. On October 15, 2019, the Company engaged Maxim Group LLC (“Maxim”) as its financial advisor to assist the Company in growth strategy to the investment community with an ultimate goal of a potential up-list and capital raise on NASDAQ. As consideration for Maxim’s services, Maxim shall be entitled to receive, and the Company agrees to pay Maxim, the following compensation: (a) The Company will issue to Maxim or its designees 2,000,000 shares of the Company’s Common Stock (“Common Stock”) based on the following schedule: 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 December 31,2019, $12,589 was expensed with the balance of $17,331 in prepaid expenses to be amortized over the vesting period. 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 December 31, 2019, these shares have not been issued and classified as common stock payable. iii. 1,000,000 restricted shares of Common Stock upon an up listing of the Company’s Common Stock to a national exchange (NASDAQ or NYSE). Options: During 2014, the Company granted the chief executive officer of the Company an immediately exercisable option to purchase an aggregate of 400,000 shares of Series A at an exercise price of $0.0206 per share. There is no expiration date for this option and the related expense has been recorded in prior years. Warrants: On April 25, 2019, Wayne Homschek joined the Board of Directors as an independent Director who will aid in corporate strategy, financing and investor relations. He will be paid $5,000 per month for one year and receive a warrant, exercisable into 3,000,000 shares of common stock at an exercise price of $0.03 per share. As per the agreement, 1,500,000 warrants vest in six months and the remaining balance of 1,500,000 shall vest one year later. The following table summarizes the warrants outstanding of the Company for the year ended December 31, 2019: Weighted Average Number of Warrants Exercise Price ($) Intrinsic Value Outstanding at December 31, 2018 - - Granted 3,000,000 .03 Exercised - - Expired - - Outstanding at December 31, 2019 3,000,000 .03 $ 113,400 Exercisable at December 31, 2019 1,500,000 .03 $ 56,700 The Company has calculated the estimated fair market value of these warrants at $142,950, using the Black-Scholes model and the following assumptions: expected term 5.75 years, stock price $0.05, exercise price $0.03, 153.48% volatility, 2.35% risk free rate, and no forfeiture rate. The weighted average life of these warrants is 9.32 years. The Company recognized stock-based compensation of $104,023 and $0 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, the total remaining unrecognized compensation cost related to non-vested warrants was $38,927. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Note 12. Income Taxes | In 2017, the U.S. enacted the Tax Cuts and Jobs Act which significantly changed U.S. tax law. The Act lowered the U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018. This had an effect on the value of the Company’s net operating loss carryover, but since the deferred tax asset is fully reserved, it had no impact on the Company’s financial statements. The impact of the change is reflected in the table below. The provision for (benefit from) income taxes for the years ended December 31, 2019 and 2018 are as follows, at the expected combined effective tax rate of approximately 26%. December 31, 2019 2018 Federal and state net operating loss $ 1,248 $ 69,089 Meals & entertainment 90 61 Life insurance 825 825 Goodwill amortization (888 ) - Stock-based compensation 24,875 7,879 Depreciation (5,474 ) 737 State tax, net of federal benefit (62 ) (6,580 ) Other (3,344 ) (3,344 ) Tax rate change - 72,413 Change in Valuation Allowance (17,180 ) (141,098 ) Total income tax provision $ - $ - The provision for Federal income tax consists of the following for the years ended December 31, 2019 and 2018: December 31, 2019 2018 Net operating loss carryforwards $ 19,273 $ 75,922 Depreciation 3,191 8,665 Goodwill amortization (888 ) - Stock based compensation 137,934 92,102 Valuation allowance (159,509 ) (176,689 ) Total net deferred tax assets $ - $ - The Company has maintained a full valuation allowance against the total deferred tax assets for all periods due to the uncertainty of future utilization. As of December 31, 2019, the Company has net federal and state net operating loss carry forwards of approximately $91,777 that begin to expire in 2037. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Note 13. Commitments and Contingencies | On September 21, 2020, the Company engaged a service provider for a fee up to $200,000 to be paid in installments based upon the occurrence of certain events. The Company also agreed to issue 2,000,000 shares of common stock to service providers. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Subsequent Events | ||
Note 14. Subsequent events | In accordance with ASC 855-10, Company management reviewed all material events through the date of this report. On October 14,2020, the Company filed a preliminary information statement on Schedule 14C highlighting the following: (1) the authorization of the Company’s Board of Directors to effect a reverse stock split of the Company’s common stock, in connection with a potential listing on a national stock exchange in a ratio to be determined by the Board based on market conditions and the Company’s trading price at the time of such reverse split in the range of 1:100 to 1:200, whereby every 100-200 shares of the authorized, issued and outstanding common stock shall be combined into one (1) share of authorized, issued and outstanding common stock; (2) to amend and restate the Company’s articles of incorporation to keep the authorized shares of Common Stock at 500,000,000 and set the authorized shares of blank check preferred stock at 1,000,000; (3) to amend and restate the Company’s Bylaws (4) to amend and restate the certificate of designation of preferences, rights and limitations of the Series A convertible preferred stock in order to restate the designation of 401,000 shares of blank check Preferred Stock as Series A Preferred and refile the rights thereof; (5) to withdraw the Series B preferred stock designation collectively with the Amended Articles, the Amended Bylaws and the Amended Certificate, and; (6) to adopt the 2020 Equity Incentive Plan. As of the filing of this report, the 14C is still in the approval process and not effective. | In accordance with ASC 855-10, Company management reviewed all material events through the date of this report. There are no material subsequent events to report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Basis of Accounting | The accompanying financial statements have been prepared using the accrual basis of accounting. The accompanying unaudited interim condensed consolidated financial statements of AmpliTech Group, Inc. (“Group” or the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for annual audited financial statements. In the opinion of management, all adjustments of a normal recurring nature, considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the years ended December 31, 2019 and 2018 included in Form 10-K filed with the SEC. | The accompanying financial statements have been prepared using the accrual basis of accounting. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All inter company accounts and transactions have been eliminated in consolidation. | The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | 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. | 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. |
Cash and Cash Equivalents | 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. As of September 30, 2020, the Company’s cash and cash equivalents were deposited in two financial institutions. | 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. As of December 31, 2019, the Company’s cash and cash equivalents were deposited in two financial institutions. |
Accounts Receivables | Trade accounts receivable are recorded at the net invoice value and are not interest bearing. 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. No allowance has been recorded at September 30, 2020 and 2019, respectively. | Trade accounts receivable are recorded at the net invoice value and are not interest bearing. 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. An allowance of $0 has been recorded at December 31, 2019 and 2018, respectively. |
Inventory | Inventories, which consist primarily of raw materials, work in progress and finished goods, is stated at the lower of cost (first-in, first-out basis) or market (net realizable value). Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving and 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. | Inventories, which consist primarily of raw materials, work in progress and finished goods, is stated at the lower of cost (first-in, first-out basis) or market (net realizable value) determined on average cost basis. Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving and 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. |
Property and Equipment | 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. 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. Property and equipment are depreciated as follows: 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 | 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. 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. Property and equipment are depreciated as follows: 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 |
Long-lived assets | Long lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values. | Long lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values. |
Goodwill and Intangible Assets | Intangibles assets include goodwill, trademarks, intellectual property and customer base acquired through the asset purchase of Specialty Microwave. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Goodwill is not amortized. We test goodwill balances for impairment annually at December 31 or whenever impairment indicators arise. | Intangibles assets include goodwill, trademarks, intellectual property and customer base acquired through the asset purchase of Specialty Microwave. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives Intangible assets with indefinite lives are tested annually for impairment. Goodwill is not amortized. We test goodwill balances for impairment annually at December 31 or whenever impairment indicators arise. |
Leases | On January 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted this standard using the modified retrospective approach with an effective date as of the beginning of January 2019. Prior year financial statements were not restated under the new standard. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. | On January 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted this standard using the modified retrospective approach with an effective date as of the beginning of January 2019. Prior year financial statements were not restated under the new standard. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. |
Revenue Recognition | We sell our products through a combination of a direct sales force in the United States and independent sales representatives in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps: Identify the contract with the customer Identify the performance obligations in the contract We do not have significant returns. We do not typically offer extended warranty or service plans. Determine the transaction price Allocate the transaction price to performance obligations in the contract Recognize revenue when or as we satisfy a performance obligation. Reserves are recorded as a reduction in net sales and are not considered material to our condensed consolidated statements of income for the nine months ended September 30, 2020. | We sell our products through a combination of a direct sales force in the United States and independent sales representatives in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps: Identify the contract with the customer Identify the performance obligations in the contract We do not have significant returns. We do not typically offer extended warranty or service plans. Determine the transaction price Allocate the transaction price to performance obligations in the contract Recognize revenue when or as we satisfy a performance obligation. service revenue. Reserves are recorded as a reduction in net sales and are not considered material to our consolidated statements of income for the years ended December 31, 2019 and 2018. |
Research and Development | 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 nine months ended September 30, 2020 and 2019 were $ 41,083 and $ 48,262. | 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 years ended December 31, 2019 and 2018 were $56,507 and $42,941. |
Income Taxes | The Company’s deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of certain assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At September 30, 2020, the Company had no material unrecognized tax benefits. | The Company’s deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of certain assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2019 and 2018, the Company had no material unrecognized tax benefits. |
Earnings Per Share | Basic earnings per share (“EPS”) are determined by dividing the net earnings by the weighted-average number of shares of common shares outstanding during the period. Diluted EPS is determined by dividing net earnings by the weighted average number of common shares used in the basic EPS calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method. As of September 30, 2020, there were 40,100,000 potentially dilutive shares that need to be considered as common share equivalents and because of the net loss, the effect of these potential common shares is anti-dilutive. The computation of weighted average shares outstanding and the basic and diluted earnings per share consisted of the following: 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 ) Net (Loss) Income Shares Per Share Amount For the nine months ended September 30, 2020: Basic EPS $ (549,219 ) 50,015,773 $ (0.01 ) Effect of dilutive stock options, warrants and series A shares Diluted EPS $ (549,219 ) 50,015,773 $ (0.01 ) For the nine months ended September 30, 2019: Basic EPS $ (11,165 ) 48,336,326 $ (0.00 ) Effect of dilutive stock options, warrants and series A shares Diluted EPS $ (11,165 ) 48,336,326 $ (0.00 ) | Basic earnings per share (“EPS”) are determined by dividing the net earnings by the weighted-average number of shares of common shares outstanding during the period. Diluted EPS is determined by dividing net earnings by the weighted average number of common shares used in the basic EPS calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method. The computation of weighted average shares outstanding and the basic and diluted earnings per share consisted of the following: Net Income Shares Per Share Amount For the year ended December 31, 2019: Basic EPS $ 5,945 49,536,326 $ 0.00 Effect of dilutive stock options, warrants and series A shares 40,462,289 Diluted EPS $ 5,945 89,998,615 $ 0.00 For the year ended December 31, 2018: Basic EPS $ 328,993 47,771,668 $ 0.00 Effect of dilutive stock options, warrants and series A shares 39,902,642 Diluted EPS $ 328,993 87,674,310 $ 0.00 |
Fair Value of Assets and Liabilities | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following categories as follows: Level 1. Level 2. Level 3. | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to information used to determine fair values. Categorization within fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following categories as follows: Level 1. Level 2. Level 3. |
Stock-Based Compensation | The Company records stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. | The Company records stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. |
Concentration of Credit Risk | Financial instruments that potentially subject the company to concentration of credit risk consist primarily of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Therefore, management does not believe significant credit risks exist at September 30, 2020. | Financial instruments that potentially subject the company to concentration of credit risk consist primarily of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Therefore, management does not believe significant credit risks exist at December 31, 2019. Sales to the Company’s two largest customers represented approximately 11% and 10% of total sales for the year ended December 31, 2019. |
Recent Accounting Pronouncements | In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. The adoption of this standard became effective for us on January 1,2020 and did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact of this standard on our combined financial statements. We do not expect the adoption of these or other recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow. | On January 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted this standard using the modified retrospective approach with an effective date as of the beginning of January 2019. Prior year financial statements were not restated under the new standard. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the lease term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation - Stock Compensation In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. ASU 2018-13 will be effective for the Company for its fiscal year beginning after December 15, 2019 and each quarterly period thereafter. Early adoption is permitted. The Company is currently assessing the impact this new guidance may have on the Company’s consolidated financial statements and footnote disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact of this standard on our combined financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of a business or as acquisitions (or disposals) of assets. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2018, with early adoption permitted under certain circumstances. The amendments of ASU No. 2017-01 were adopted by the Company effective January 1, 2019. The adoption of this standard had no impact on our consolidated financial position or results of operations. We do not expect the adoption of these or other recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Schedule of property and equipment depreciated | 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 | 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 |
Schedule of weighted average shares outstanding and the basic diluted earnings per share | 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 ) Net (Loss) Income Shares Per Share Amount For the nine months ended September 30, 2020: Basic EPS $ (549,219 ) 50,015,773 $ (0.01 ) Effect of dilutive stock options, warrants and series A shares Diluted EPS $ (549,219 ) 50,015,773 $ (0.01 ) For the nine months ended September 30, 2019: Basic EPS $ (11,165 ) 48,336,326 $ (0.00 ) Effect of dilutive stock options, warrants and series A shares Diluted EPS $ (11,165 ) 48,336,326 $ (0.00 ) | Net Income Shares Per Share Amount For the year ended December 31, 2019: Basic EPS $ 5,945 49,536,326 $ 0.00 Effect of dilutive stock options, warrants and series A shares 40,462,289 Diluted EPS $ 5,945 89,998,615 $ 0.00 For the year ended December 31, 2018: Basic EPS $ 328,993 47,771,668 $ 0.00 Effect of dilutive stock options, warrants and series A shares 39,902,642 Diluted EPS $ 328,993 87,674,310 $ 0.00 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Revenues | ||
Schedule of sales disaggregated based on geographic regions | For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Domestic sales $ 1,031,653 $ 505,844 $ 2,205,324 $ 1,283,720 International sales 119,079 203,052 362,055 734,702 Total sales $ 1,150,732 $ 708,896 $ 2,567,379 $ 2,018,422 | Amplitech Inc. 2019 2018 Domestic sales $ 1,706,946 $ 2,007,357 Foreign sales 905,056 390,061 Total sales $ 2,612,002 $ 2,397,418 Specialty Microwave 2019 2018 Domestic sales $ 454,235 $ - Foreign sales 56,129 - Total sales $ 510,364 $ - |
Acquisition of Specialty Micr_2
Acquisition of Specialty Microwave (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Acquisition of Specialty Microwave | ||
Schedule of allocation of the preliminary purchase price | 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 | 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 Tradename 70,233 Customer relationships 412,860 Intellectual property 202,771 Less: Customer Deposit (10,277 ) Net assets acquired $ 1,143,633 |
Schedule of consolidated statement operations | 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 | For the year ended 31-Dec-19 As Reported Pro Forma Net sales $ 3,122,630 $ 4,041,837 Net income attributable to common shareholders $ 5,945 141,053 Earnings per common share, basic and diluted: Basic $ 0.00 $ 0.00 Diluted $ 0.00 $ 0.00 For the year ended 31-Dec-18 As Reported Pro Forma Net sales $ 2,397,418 $ 3,085,889 Net income attributable to common shareholders $ 328,993 $ 554,677 Earnings per common share, basic and diluted: Basic $ 0.00 $ 0.01 Diluted $ 0.00 $ 0.00 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Inventories | ||
Schedule of Inventory | September 30, December 31, 2020 2019 Raw Materials $ 427,974 $ 403,397 Work-in Progress 132,746 135,223 Finished Goods 125,990 124,510 Engineering Models 3,726 3,726 Subtotal $ 690,436 $ 666,856 Less: Reserve for Obsolescence (88,000 ) (109,146 ) Total $ 602,436 $ 557,710 | December 31, 2019 December 31, 2018 Raw Materials $ 403,168 $ 279,437 Work-in Progress 135,223 69,480 Finished Goods 124,510 118,545 Engineering Models 3,726 3,726 Subtotal $ 666,856 $ 471,188 Less: Reserve for Obsolescence (109,146 ) (80,000 ) Total $ 557,710 $ 391,188 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property and Equipment | ||
Schedule of Property and Equipment useful life | September 30, December 31, 2020 2019 Lab Equipment $ 861,914 $ 728,620 Manufacturing Equipment 25,000 25,000 Automobiles 19,527 19,527 Furniture and Fixtures 36,165 31,201 Subtotal 942,606 804,348 Less: Accumulated Depreciation (643,040 ) (606,238 ) Total $ 299,566 $ 198,110 | December 31, 2019 December 31, 2018 Lab Equipment $ 728,620 $ 725,348 Manufacturing Equipment 25,000 - Automobiles 19,527 - Furniture and Fixtures 31,201 20,192 Subtotal 804,348 745,540 Less: Accumulated Depreciation (606,238 ) (564,795 ) Total $ 198,110 $ 180,745 |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Intangible assets (Tables) | ||
Schedule of amortization of assets | Remaining in 2020 $ 10,292 2021 41,042 2022 41,042 2023 41,042 2024 41,042 Thereafter 438,902 $ 572,320 | |
Schedule of intangible assets | 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 | Gross Carrying Amount Accumulated Amortization Net Weighted Average Life Trade name $ 70,233 $ - $ 70,233 Indefinite Customer relationships 412,860 8,295 404,565 14.7 Intellectual Property 202,771 4,140 198,631 14.7 Total $ 685,864 $ 12,435 $ 673,429 |
Leases (Tables)
Leases (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases (Tables) | ||
Schedule of lease assets and liabilities | 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 | Operating leases As of December 31, 2019 Assets ROU operating lease assets $ 465,092 Liabilities Current portion of operating lease 130,628 Operating lease, net of current portion 338,344 Total operating lease liabilities $ 468,972 Finance leases Assets Property and equipment, gross $ 157,184 Accumulated depreciation (33,682 ) Property and equipment, net $ 123,502 Liabilities Current portion of financing lease $ 30,556 Finance lease, net of current portion 83,376 Total operating lease liabilities $ 113,932 |
Schedule of weighted average remaining lease term and weighted average discount rate | 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 % | Weighted average remaining lease term (years) December 31, 2019 Operating leases 4.18 Finance leases 3.50 Weighted average discount rate December 31, 2019 Operating leases 6.34 % Finance leases 4.89 % |
Schedule of future minimum lease payments for finance lease | 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 $ 37,778 2021 37,778 2022 37,778 2023 18,889 Total lease payments 132,224 Less imputed interest (10,112 ) Less sales tax (8,179 ) Total lease obligations 113,932 Less current obligations (30,556 ) Long-term lease obligations $ 83,376 |
Schedule of future minimum lease payments for operating lease | 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 | 2020 $ 156,169 2021 102,849 2022 100,521 2023 98,765 2024 75,972 Total lease payments 534,276 Less imputed interest (65,304 ) Total lease obligations 468,972 Less current obligations (130,628 ) Long-term lease obligations $ 338,344 |
Note Payable (Tables)
Note Payable (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Notes Payable | ||
Schedule of future principal and interest payments | Payments 2020 75,777 2021 364,123 2022 273,770 2023 201,729 Thereafter 746,689 Total remaining payments $ 1,662,088 | For the years ended December 31, Payments 2020 169,697 2021 187,969 2022 198,398 2023 191,725 Thereafter 745,861 Total remaining payments $ 1,493,650 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Stockholders' Equity | ||
Summary of warrants outstanding | Number of Weighted Average Warrants Exercise Price ($) Outstanding at December 31,2019 3,000,000 .03 Granted - - Exercised (3,000,000 ) (.03 ) Expired - - Outstanding at September 30, 2020 0 0 | Weighted Average Number of Warrants Exercise Price ($) Intrinsic Value Outstanding at December 31, 2018 - - Granted 3,000,000 .03 Exercised - - Expired - - Outstanding at December 31, 2019 3,000,000 .03 $ 113,400 Exercisable at December 31, 2019 1,500,000 .03 $ 56,700 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of provision for income taxes | December 31, 2019 2018 Federal and state net operating loss $ 1,248 $ 69,089 Meals & entertainment 90 61 Life insurance 825 825 Goodwill amortization (888 ) - Stock-based compensation 24,875 7,879 Depreciation (5,474 ) 737 State tax, net of federal benefit (62 ) (6,580 ) Other (3,344 ) (3,344 ) Tax rate change - 72,413 Change in Valuation Allowance (17,180 ) (141,098 ) Total income tax provision $ - $ - |
Schedule of provision for Federal income tax | December 31, 2019 2018 Net operating loss carryforwards $ 19,273 $ 75,922 Depreciation 3,191 8,665 Goodwill amortization (888 ) - Stock based compensation 137,934 92,102 Valuation allowance (159,509 ) (176,689 ) Total net deferred tax assets $ - $ - |
Organization and Business Des_2
Organization and Business Description (Details Narrative) - USD ($) | Sep. 12, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Aug. 13, 2012 |
Acquisition of entity by issuing of common stock | 16,675,000 | ||||
Percentage of acquired entity in exchange of outstanding shares | 100.00% | ||||
Selling shareholders shares owned after share exchange | 1,200,000 | ||||
Common stock, outstanding | 49,086,326 | 48,336,326 | 51,588,958 | 17,785,000 | |
Promissory note issued in Specialty acquistion | $ 475,000 | $ 475,000 | $ 0 | ||
Total consideration paid | $ 1,143,633 | ||||
Interest rate | 6.00% | ||||
Cash paid against acquisition | $ 668,633 | ||||
Pro Forma [Member] | |||||
Promissory note issued in Specialty acquistion | 475,000 | ||||
Capital lease description | The Company also entered into a five-year lease on the property located at 120 Raynor Avenue, Ronkonkoma, NY with an option to buy the property during the first two years of the lease for $1,200,000 and then at fair market value for the remainder of the lease term. | ||||
Total consideration paid | $ 1,143,633 | ||||
Interest rate | 6.00% | ||||
Cash paid against acquisition | $ 668,633 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Office Equipment [Member] | ||
Estimated useful life | 7 years | 7 years |
Depreciation Method | Straight-line | Straight-line |
Machinery And Equipment [Member] | Minimum [Member] | ||
Estimated useful life | 5 years | 5 years |
Depreciation Method | Straight-line | Straight-line |
Machinery And Equipment [Member] | Maximum [Member] | ||
Estimated useful life | 7 years | 7 years |
Depreciation Method | Straight-line | Straight-line |
Computer Equipment [Member] | Minimum [Member] | ||
Estimated useful life | 3 years | 3 years |
Depreciation Method | Straight-line | Straight-line |
Computer Equipment [Member] | Maximum [Member] | ||
Estimated useful life | 7 years | 7 years |
Depreciation Method | Straight-line | Straight-line |
Vehicles [Member] | ||
Estimated useful life | 5 years | 5 years |
Depreciation Method | Straight-line | Straight-line |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Income (Loss) | $ 17,010 | $ (138,384) | $ (549,219) | $ (11,165) | $ 5,945 | $ 328,993 |
Shares | 90,921,254 | 48,336,326 | 50,015,773 | 48,336,326 | 89,998,615 | 87,674,310 |
Effect of dilutive stock options, warrants and series A shares [Member] | ||||||
Shares | 40,100,000 | 40,462,289 | 39,902,642 | |||
Basic EPS [Member] | ||||||
Net Income (Loss) | $ 17,010 | $ (138,384) | $ (549,219) | $ (11,165) | $ 5,945 | $ 328,993 |
Shares | 50,964,244 | 48,336,326 | 50,015,773 | 48,336,326 | 49,536,326 | 47,771,668 |
Per Share Amount | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 |
Diluted EPS [Member] | ||||||
Net Income (Loss) | $ 17,010 | $ (138,384) | $ (549,219) | $ (11,165) | $ 5,945 | $ 328,993 |
Shares | 90,921,254 | 48,336,326 | 50,015,773 | 48,336,326 | 89,998,615 | 87,674,310 |
Per Share Amount | $ 0 | $ 0 | $ (0.01) | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for Doubtful Accounts | $ 0 | $ 0 | ||
Research and development costs | $ 41,083 | $ 48,262 | $ 56,507 | $ 42,941 |
Potentially dilutive shares | 40,100,000 | |||
Customer One [Member] | ||||
Concentration of Credit Risk | 10.00% | |||
Customer [Member] | ||||
Concentration of Credit Risk | 11.00% |
Revenues (Details)
Revenues (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Specialty Microwave [Member] | ||||||
Total sales | $ 510,364 | |||||
Domestic sales [Member] | Specialty Microwave [Member] | ||||||
Total sales | 454,235 | |||||
Foreign Sales [Member] | Specialty Microwave [Member] | ||||||
Total sales | 56,129 | |||||
Amplitech Inc. [Member] | ||||||
Total sales | $ 1,150,732 | $ 708,896 | $ 2,567,379 | $ 2,018,422 | 2,612,002 | $ 2,397,418 |
Amplitech Inc. [Member] | Domestic sales [Member] | ||||||
Total sales | 1,031,653 | 505,844 | 2,205,324 | 1,283,720 | 1,706,946 | 2,007,357 |
Amplitech Inc. [Member] | Foreign Sales [Member] | ||||||
Total sales | $ 119,079 | $ 203,052 | $ 362,055 | $ 734,702 | $ 905,056 | $ 390,061 |
Acquisition of Specialty Micr_3
Acquisition of Specialty Microwave (Details) - USD ($) | Sep. 30, 2020 | Aug. 20, 2020 | Apr. 20, 2020 | Dec. 31, 2019 | Sep. 12, 2019 | Dec. 31, 2018 |
Promissory note | $ 398,439 | $ 232,200 | $ 232,200 | $ 454,544 | $ 475,000 | |
Inventory | 602,436 | 557,710 | $ 391,188 | |||
Goodwill | 120,136 | 120,136 | ||||
Less: Customer Deposit | 112,612 | 35,680 | $ 190,400 | |||
Specialty Microwave [Member] | ||||||
Promissory note | 475,000 | 475,000 | ||||
Inventory | 301,754 | 301,754 | ||||
Goodwill | 120,136 | 120,136 | ||||
Cash | 668,633 | 668,633 | ||||
Total purchase price | 1,143,633 | 1,143,633 | ||||
Property and equipment | 46,156 | 46,156 | ||||
Trade name | 70,233 | 70,233 | ||||
Customer relationships | 412,860 | 412,860 | ||||
Intellectual property | 202,771 | 202,771 | ||||
Less: Customer Deposit | $ (10,277) | $ (10,277) | ||||
Net assets acquired | 1,143,633 | 1,143,633 |
Acquisition of Specialty Micr_4
Acquisition of Specialty Microwave (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net sales | $ 1,150,732 | $ 708,896 | $ 2,567,379 | $ 2,018,422 | $ 3,122,630 | $ 2,397,418 |
Basic | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 |
Diluted | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 |
As Reported [Member] | ||||||
Net sales | $ 1,309,526 | $ 3,122,630 | $ 2,397,418 | |||
Basic | $ 0 | $ 0 | $ 0 | |||
Diluted | $ 0 | $ 0 | $ 0 | |||
Net income attributable to common shareholders | $ 127,229 | $ 5,945 | $ 328,993 | |||
Pro Forma [Member] | ||||||
Net sales | $ 2,000,751 | $ 4,041,837 | ||||
Basic | $ 0 | $ 0 | ||||
Diluted | $ 0 | $ 0 | ||||
Net income attributable to common shareholders | $ 229,581 | $ 141,053 |
Acquisition of Specialty Micr_5
Acquisition of Specialty Microwave (Details Narrative) - USD ($) | Sep. 12, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Total consideration paid | $ 1,143,633 | |||
Cash paid against acquisition | 668,633 | |||
Intangible assets acquired in Specialty acquistion | $ 806,000 | $ 806,000 | $ 0 | |
Promissory note issued in Specialty acquistion | $ 475,000 | 475,000 | $ 0 | |
Interest rate | 6.00% | |||
Lease | $ 1,200,000 | 1,200,000 | ||
Acquisition costs | 77,000 | |||
Fair value of net assets acquired | $ 337,633 | |||
Pro Forma [Member] | ||||
Total consideration paid | 1,143,633 | |||
Cash paid against acquisition | 668,633 | |||
Intangible assets acquired in Specialty acquistion | 806,000 | |||
Promissory note issued in Specialty acquistion | $ 475,000 | |||
Interest rate | 6.00% | |||
Acquisition costs | 77,000 | |||
Fair value of net assets acquired | $ 337,633 | |||
Reported revenue | $ 510,364 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Inventories | |||
Raw Materials | $ 427,974 | $ 403,397 | $ 279,437 |
Work-in Progress | 132,746 | 135,223 | 69,480 |
Finished Goods | 125,990 | 124,510 | 118,545 |
Engineering Models | 3,726 | 3,726 | 3,726 |
Subtotal | 690,436 | 666,856 | 471,188 |
Less: Reserve for Obsolescence | (88,000) | (109,146) | (80,000) |
Total | $ 602,436 | $ 557,710 | $ 391,188 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Property and Equipment | |||
Lab Equipment | $ 861,914 | $ 728,620 | $ 725,348 |
Manufacturing Equipment | 25,000 | 25,000 | 0 |
Automobiles | 19,527 | 19,527 | 0 |
Furniture and Fixtures | 36,165 | 31,201 | 20,192 |
Subtotal | 942,606 | 804,348 | 745,540 |
Less: Accumulated Depreciation | (643,040) | (606,238) | (564,795) |
Total | $ 299,566 | $ 198,110 | $ 180,745 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment | ||||
Depreciation expense | $ 36,802 | $ 31,977 | $ 41,443 | $ 38,821 |
Property and equipment estimated useful lives | 5 Years | 7 Years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gross Carrying amount | $ 685,864 | $ 685,864 | |
Accumulated Amortization | 43,311 | 43,311 | |
Net | 572,320 | $ 673,429 | $ 0 |
Weighted Average Life | 9 years 3 months 25 days | ||
Weighted Average Life | P9Y3M25D | ||
Trade Name [Member] | |||
Gross Carrying amount | 70,233 | $ 70,233 | |
Accumulated Amortization | 0 | 0 | |
Net | $ 70,233 | $ 70,233 | |
Weighted Average Life | Indefinite | Indefinite | |
Customer Relationships [Member] | |||
Gross Carrying amount | $ 412,860 | $ 412,860 | |
Accumulated Amortization | 28,957 | 28,957 | |
Net | $ 383,903 | $ 383,903 | |
Weighted Average Life | 14 years | 14 years 8 months 12 days | |
Intellectual Property [Member] | |||
Gross Carrying amount | $ 202,771 | $ 202,771 | |
Accumulated Amortization | 14,354 | (4,140) | |
Net | $ 188,417 | $ 198,631 | |
Weighted Average Life | 14 years | 14 years 8 months 12 days |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Sep. 30, 2020USD ($) |
Annual amortization of intangible assets are as follows: | |
Remaining in 2020 | $ 10,292 |
2021 | 41,042 |
2022 | 41,042 |
2023 | 41,042 |
2024 | 41,042 |
Thereafter | 438,902 |
Net | $ 572,320 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Intangible Assets | |||
Intangible Estimated useful life | 15 years | ||
Goodwill | $ 120,136 | $ 120,136 | |
Amortization expenses | $ 30,876 | $ 0 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 12, 2019 | Nov. 16, 2015 | |
Initial variable interest rate | 5.25% | ||||
Commercial line of credit | $ 500,000 | $ 150,000 | |||
Line of credit facility | $ 250,000 | ||||
Line of credit, maturity date | Oct. 1, 2020 | Apr. 20, 2019 | |||
Line of credit, outstanding balance | $ 300,000 | $ 0 | $ 72,897 | ||
Interest expense relating to line of credit | $ 1,386 | 6,979 | |||
Accrued interest | $ 10,008 | ||||
Description of payment term | The line will be evaluated monthly on a borrowing base formula advancing 75% of the accounts receivables aged less than 90 days and 50% of inventory raw materials costs. | This agreement will be paid over a three year term with monthly payments equal to 2.780% of the outstanding balance plus accrued interest. | |||
Description of interest rate | The interest rate shall be based upon the Wall Street Journal Prime Rate, plus 1%. | This interest rate may change every year on the anniversary date or change date to reflect the new prime rate in effect as per the Wall Street Journal plus 2%. The interest rate will never be greater than 25% or less than 5%. | |||
Repayments of lines of credit | $ 74,283 | ||||
Specialty Microwave [Member] | |||||
Commercial line of credit | $ 500,000 | ||||
Line of credit, maturity date | Oct. 1, 2020 | ||||
Line of credit, outstanding balance | $ 0 | $ 72,897 | |||
Description of payment term | The line will be evaluated monthly on a borrowing base formula advancing 75% of the accounts receivables aged less than 90 days and 50% of inventory raw materials costs. | ||||
Description of interest rate | The interest rate shall be based upon the Wall Street Journal Prime Rate, plus 1%. | ||||
Agreement term | 3 years |
Lease (Details)
Lease (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Operating leases Assets | |||
ROU operating lease assets | $ 365,064 | $ 465,092 | $ 0 |
Liabilities | |||
Current portion of operating lease | 98,275 | ||
Current portion of operating lease | 98,275 | 130,628 | 0 |
Operating lease, net of current portion | 273,672 | ||
Operating lease, net of current portion | 273,672 | 338,344 | 0 |
Total operating lease liabilities | 371,947 | 468,972 | |
Finance leases Assets | |||
Property and equipment, gross | 157,184 | 157,184 | |
Accumulated depreciation | (50,523) | (33,682) | |
Property and equipment, net | 106,661 | 123,502 | |
Liabilities | |||
Current portion of financing lease | 31,695 | 30,556 | $ 29,180 |
Finance lease, net of current portion | 59,327 | 83,376 | |
Total operating lease liabilities | $ 91,022 | $ 113,932 |
Lease (Details 1)
Lease (Details 1) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Weighted average remaining lease term (years) | ||
Operating leases | 3 years 8 months 30 days | 4 years 2 months 5 days |
Finance leases | 3 years 8 months 30 days | 3 years 6 months |
Weighted average discount rate | ||
Operating leases | 6.28% | 6.34% |
Finance leases | 4.89% | 4.89% |
Lease (Details 2)
Lease (Details 2) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Total lease payments | $ 534,276 | $ 417,193 | $ 534,276 |
International sales [Member] | |||
Total lease payments | 132,224 | 103,890 | |
Remaining in 2020 | 37,778 | 9,445 | |
2021 | 37,778 | 37,778 | |
2022 | 37,778 | 37,778 | |
2023 | 18,889 | 18,889 | |
Less imputed interest | (10,112) | (6,442) | |
Less sales tax | (8,179) | (6,426) | |
Total lease obligations | 113,932 | 91,022 | |
Less current obligations | (30,556) | (31,695) | |
Long-term lease obligations | $ 83,376 | $ 59,327 |
Lease (Details 3)
Lease (Details 3) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Leases (Tables) | ||||
2020 | $ 39,086 | $ 156,169 | ||
2021 | 102,849 | 102,849 | ||
2022 | 100,521 | 100,521 | ||
2023 | 98,765 | 98,765 | ||
2024 | 75,972 | 75,972 | ||
Total lease payments | $ 534,276 | 417,193 | 534,276 | |
Less imputed interest | (45,246) | (65,304) | ||
Total lease obligations | 371,947 | 468,972 | ||
Less current obligations | (98,275) | (130,628) | ||
Long-term lease obligations | $ 273,672 | $ 338,344 | $ 0 |
Lease (Details Narrative)
Lease (Details Narrative) | Sep. 12, 2019USD ($) | Feb. 01, 2016USD ($) | Jan. 15, 2016USD ($)integer | Dec. 04, 2015 | Nov. 27, 2019 | Sep. 30, 2020USD ($) | Dec. 31, 2019 |
Leases (Tables) | |||||||
Finance lease agreement description | The Company entered a 39-month agreement to lease an automobile with a monthly payment of $420. | The Company entered into a 60-month lease agreement to finance certain laboratory equipment in July 2018 with a purchase option of $1 | The Company entered into a 60-month lease agreement to finance certain laboratory equipment in July 2018 with a bargain purchase option of $1. | ||||
Annual rent | $ 90,000 | $ 50,000 | |||||
Operating lease agreement description | The Company entered into a new operating lease agreement to rent office space in Ronkonkoma, NY. This five- year agreement commenced on September 12, 2019 with an annual rent of $90,000 and 3% increase in each successive lease year beginning in 2021. The Company has an option to buy the property during the first two years of the lease for $1,200,000 and then at fair market value for the remainder of the lease term. | The Company entered into a five-year agreement to lease 2 copiers with and annual payment of $2,985. | The Company entered into a new operating lease agreement to rent office space in Bohemia, NY This five-year agreement commenced February 1, 2016 with an annual rent of $50,000 and 3.75% increases in each successive lease year. | ||||
Term of lease agreement | 2 years | 5 years | 5 years | ||||
Lease | $ 1,200,000 | $ 1,200,000 | |||||
Operating lease, commencement date | Feb. 1, 2016 | ||||||
Lease rate increase each successive year, percentage | 0.03% | 3.75% | |||||
Operating lease, rental expenses | $ 2,985 | ||||||
Number of copiers | integer | 2 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Notes Payable | ||
2020 | $ 75,777 | $ 169,697 |
2021 | 364,123 | 187,969 |
2022 | 273,770 | 198,398 |
2023 | 201,729 | 191,725 |
Thereafter | 746,689 | 745,861 |
Total remaining payments | $ 1,662,088 | $ 1,493,650 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Jun. 10, 2020USD ($) | May 14, 2020USD ($) | Sep. 12, 2019USD ($) | Dec. 20, 2019USD ($) | Mar. 18, 2019USD ($) | Sep. 30, 2020USD ($)integer | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)integer | Aug. 20, 2020USD ($) | Apr. 20, 2020USD ($) | Oct. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Consideration paid | $ 1,143,633 | ||||||||||||
Secured debt | $ 350,000 | ||||||||||||
Cash | 668,633 | $ 574,712 | $ 442,098 | $ 117,990 | |||||||||
Promissory note | $ 475,000 | $ 398,439 | 454,544 | $ 232,200 | $ 232,200 | ||||||||
Principal payment | $ 36,589 | $ 23,804 | 56,107 | 20,456 | |||||||||
Interest expense | 17,604 | 17,022 | |||||||||||
Interest rate | 4.278% | 4.268% | 6.00% | 5.26% | |||||||||
Loan amount | $ 1,000,000 | $ 324,199 | |||||||||||
Original issuance discount | $ 24,465 | 0 | $ 24,465 | 24,465 | |||||||||
Long-term debt, bearing fixed interest rate | 6.75% | 10.79% | |||||||||||
Long-term debt, term | 7 years | 3 years | 5 years | ||||||||||
Debt monthly payment | $ 1,216 | $ 815 | $ 1,736 | ||||||||||
Loans payable | 982,423 | ||||||||||||
Term of loan description | The Company entered into a $1,000,000 seven- year term loan with amortization based on a ten- year repayment schedule. | ||||||||||||
December 20, 2019 [Member] | |||||||||||||
Loan amount | $ 56,683 | ||||||||||||
Long-term debt, gross | $ 41,015 | $ 27,494 | $ 58,192 | ||||||||||
On September 12, 2019 [Member] | |||||||||||||
Loans payable | $ 928,347 | ||||||||||||
Number of installment | integer | 59 | 59 | |||||||||||
Monthly payments | $ 9,213 | $ 9,213 | |||||||||||
Monthly repayment amount | $ 11,533 | $ 11,533 | |||||||||||
Due date | Oct. 1, 2024 | Oct. 1, 2024 | |||||||||||
Interest expense | $ 49,772 | $ 7,185 | |||||||||||
Final payment due | $ 9,203 | $ 9,203 | |||||||||||
Equipment leasing facility | $ 250,000 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Warrants | ||
Outstanding, beginning | 3,000,000 | |
Granted | 3,000,000 | |
Exercised | (3,000,000) | |
Expired | ||
Outstanding, ending | 3,000,000 | |
Exercisable at December 31, 2019 | 1,500,000 | |
Weighted average exercise price | ||
Outstanding, beginning | $ 0.03 | |
Granted | 0 | $ .03 |
Exercised | (.03) | |
Expired | 0 | |
Outstanding, ending | $ 0 | 0.03 |
Exercisable at December 31, 2019 | $ 0.3 | |
Intrinsic value | ||
Outstanding, beginning | $ 0 | $ 0 |
Outstanding, ending | 113,400 | |
Exercisable at December 31, 2019 | $ 56,700 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | Sep. 12, 2019 | Jul. 02, 2019 | Jul. 28, 2020 | Apr. 25, 2019 | Feb. 14, 2018 | Dec. 31, 2014 | Jul. 31, 2013 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 09, 2020 | Oct. 15, 2019 | Apr. 30, 2015 | Jan. 31, 2015 | May 20, 2014 | Jul. 10, 2013 | Aug. 13, 2012 |
Expected life | 5 years 8 months 30 days | 5 years 8 months 30 days | |||||||||||||||||||
Preferred Stock, par value | $ 0.001 | ||||||||||||||||||||
Preferred Stock shares, authorized | 500,000 | ||||||||||||||||||||
Common stock shares, authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||
Increase in common stock shares authorized | 500,000,000 | ||||||||||||||||||||
Common stock shares issued | 51,588,958 | 51,588,958 | 49,086,326 | 48,336,326 | |||||||||||||||||
Common stock shares outstanding | 51,588,958 | 51,588,958 | 49,086,326 | 48,336,326 | 17,785,000 | ||||||||||||||||
Fair market value of warrants | $ 142,950 | $ 142,950 | |||||||||||||||||||
Fair value assumptions, Stock price | $ 0.05 | $ 0.05 | $ 0.05 | ||||||||||||||||||
Fair value assumptions, Exercise price | $ 0.03 | $ 0.03 | $ 0.03 | ||||||||||||||||||
Expected volatility | 153.48% | 153.48% | |||||||||||||||||||
Risk free interest rate | 2.35% | 2.35% | |||||||||||||||||||
Stock based compensation | $ 15,233 | $ 69,378 | $ 119,148 | $ 38,928 | $ 119,148 | $ 118,023 | $ 7,879 | ||||||||||||||
Consideration paid | $ 1,143,633 | ||||||||||||||||||||
Shares issued for warrants exercised | (3,000,000) | ||||||||||||||||||||
Restricted common stock, amount | 51,589 | $ 51,589 | 49,086 | 48,336 | |||||||||||||||||
Prepaid expenses | 72,504 | 72,504 | $ 124,209 | 120,100 | |||||||||||||||||
Weighted average life | P9Y3M25D | ||||||||||||||||||||
Prepaid expenses | (43,595) | $ 59,145 | $ 42,843 | $ (57,903) | |||||||||||||||||
Capital Lease Agreement [Member] | |||||||||||||||||||||
Preferred Stock shares, outstanding | 1,000 | ||||||||||||||||||||
Preferred stock designated as Convertible Preferred Stock, shares | 140,000 | 75,000 | |||||||||||||||||||
Exercisable option to purchase shares | 400,000 | ||||||||||||||||||||
Exercise price | 0.0206 | ||||||||||||||||||||
Number of shares issuable upon conversion of each convertible preferred stock | 289 | ||||||||||||||||||||
Description of number of shares issuable upon conversion of each convertible preferred stock | Furthermore, each share of Series A is convertible into 100 shares of common stock at any time after issuance and the holder of each share of Series A is entitled to 100 votes when the vote of holders of the Company’s common stock is sought. | ||||||||||||||||||||
Chief Executive Officer [Member] | In Capital [Member] | |||||||||||||||||||||
Aggregate Options to purchase | $ 400,000 | $ 400,000 | |||||||||||||||||||
Exercise Price | $ 0.0206 | $ 0.0206 | |||||||||||||||||||
Maxim Group LLC [Member] | |||||||||||||||||||||
Common stock shares, authorized | 2,000,000 | 2,000,000 | 2,000,000 | ||||||||||||||||||
Common stock, par value | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.054 | |||||||||||||||||
Common stock shares issued | 1,000,000 | 1,000,000 | 1,000,000 | 450,000 | 550,000 | ||||||||||||||||
Restricted common stock, amount | $ 29,920 | ||||||||||||||||||||
Prepaid expenses | $ 17,331 | ||||||||||||||||||||
Expensed | $ 29,920 | 12,589 | |||||||||||||||||||
Advisory agreement [Member] | |||||||||||||||||||||
Restricted common stock, shares issued for compensation | 500,000 | ||||||||||||||||||||
Restricted common stock, market price per shares | $ 0.035 | ||||||||||||||||||||
Advisory agreement [Member] | Final installment [Member] | |||||||||||||||||||||
Fair market value of warrants | $ 1,500,000 | ||||||||||||||||||||
Officers compensation, periodic payments | $ 5,000 | ||||||||||||||||||||
Frequency of periodic payments | Monthly | ||||||||||||||||||||
Common stock shares issuable upon exercise of warrants | 3,000,000 | 1,500,000 | 1,500,000 | ||||||||||||||||||
Exercise price | 0.03 | ||||||||||||||||||||
Convertible Preferred Stock Series A [Member] | |||||||||||||||||||||
Preferred stock designated as Convertible Preferred Stock, shares | 140,000 | ||||||||||||||||||||
Preferred Stock shares outstanding | $ 1,000 | $ 1,000 | |||||||||||||||||||
Convertible Preferred Stock Series A [Member] | Maximum [Member] | |||||||||||||||||||||
Restricted common stock, shares issued for compensation | 2,200,000 | ||||||||||||||||||||
Restricted common stock, value for compensation | $ 85,500 | ||||||||||||||||||||
Restricted stock expense | 80,633 | ||||||||||||||||||||
Prepaid expenses | 5,317 | ||||||||||||||||||||
Convertible Preferred Stock Series A [Member] | Minimum [Member] | |||||||||||||||||||||
Preferred stock designated as Convertible Preferred Stock, shares | 401,000 | ||||||||||||||||||||
On September 12, 2019 [Member] | |||||||||||||||||||||
Monthly repayment amount | $ 11,533 | $ 11,533 | |||||||||||||||||||
IpCapital Group [Member] | |||||||||||||||||||||
Common stock, par value | $ 0.10 | ||||||||||||||||||||
Common stock shares issued | 200,000 | ||||||||||||||||||||
Consideration paid | $ 30,000 | ||||||||||||||||||||
Restricted common stock, amount | $ 14,000 | ||||||||||||||||||||
Wayne Homschek [Member] | |||||||||||||||||||||
Shares issued for warrants exercised | 2,052,632 | ||||||||||||||||||||
Warrants exercised | 3,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 1 Months Ended |
Sep. 21, 2020USD ($)shares | |
Commitments and Contingencies | |
Service provider fee | $ | $ 200,000 |
Common stock shares issued to service provider | shares | 2,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
Federal and state net operating loss | $ 1,248 | $ 69,089 |
Meals & entertainment | 90 | 61 |
Life insurance | 825 | 825 |
Goodwill amortization | (888) | 0 |
Stock based compensation | 24,875 | 7,879 |
Depreciation | (5,474) | 737 |
State tax, net of federal benefit | (62) | (6,580) |
Other | (3,344) | (3,344) |
Tax rate change | 0 | 72,413 |
Change in Valuation Allowance | $ (17,180) | $ (141,098) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes | ||
Net operating loss carryforwards | $ 19,273 | $ 75,922 |
Depreciation | 3,191 | 8,665 |
Goodwill amortization | (888) | 0 |
Stock based compensation | 137,934 | 92,102 |
Valuation allowance | (159,509) | (176,689) |
Total net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
Effective income tax rate | 0.26% | 0.26% |
Net operating loss carry forwards | $ 91,777 | |
Net operating loss carry forwards expiry year | 2037 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) | Oct. 14, 2020 |
Subsequent Events | |
Reverse stock split description | reverse split in the range of 1:100 to 1:200, whereby every 100-200 shares of the authorized, issued and outstanding common stock shall be combined into one (1) share of authorized, issued and outstanding common stock |
Preferences, rights and limitations amendement description | to amend and restate the certificate of designation of preferences, rights and limitations of the Series A convertible preferred stock in order to restate the designation of 401,000 shares of blank check Preferred Stock as Series A Preferred and refile the rights thereof |
Authorized capital description | to amend and restate the Company’s articles of incorporation to keep the authorized shares of Common Stock at 500,000,000 and set the authorized shares of blank check preferred stock at 1,000,000 |