Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | AmpliTech Group, Inc. | |
Entity Central Index Key | 0001518461 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 9,637,113 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40069 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 27-4566352 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 155 Plant Avenue | |
Entity Address City Or Town | Hauppauge | |
Entity Address State Or Province | NY | |
Entity Address Postal Zip Code | 11788 | |
City Area Code | 631 | |
Local Phone Number | 521-7831 | |
Trading Symbol | AMPG | |
Security Exchange Name | NASDAQ | |
Security 12b Title | Common Stock, par value $0.001 per share | |
Warrants [Member] | ||
Document Information Line Items | ||
Trading Symbol | AMPGW | |
Security Exchange Name | NASDAQ | |
Security 12b Title | Warrants to Purchase Common Stock |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 7,595,366 | $ 13,290,222 |
Accounts receivable | 1,857,519 | 1,801,769 |
Inventories, net | 6,569,865 | 6,632,121 |
Marketable Securities | 3,021,918 | 247,450 |
Prepaid expenses | 617,019 | 194,635 |
Total Current Assets | 19,661,687 | 22,166,197 |
Property and equipment, net | 1,998,264 | 2,023,687 |
Right of use operating lease assets | 4,047,279 | 4,197,324 |
Intangible assets, net | 3,096,755 | 3,134,108 |
Goodwill | 4,696,883 | 4,696,883 |
Cost method investment | 348,250 | 348,250 |
Security deposits | 109,434 | 113,185 |
Total Assets | 33,958,552 | 36,679,634 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,086,890 | 860,366 |
Customer deposits | 156,069 | 210,848 |
Current portion of financing lease obligations | 24,993 | 33,480 |
Current portion of operating lease obligations | 597,920 | 586,379 |
Current portion of notes payable | 129,438 | 144,358 |
Revenue earnout | 0 | 2,180,826 |
Total Current Liabilities | 1,995,310 | 4,016,257 |
Long Term Liabilities | ||
Financing lease, net of current obligations | 45,212 | 49,336 |
Operating lease, net of current obligations | 3,615,248 | 3,768,932 |
Notes payable, net of current portion | 63,195 | 89,597 |
Total Liabilities | 5,718,965 | 7,924,122 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Equity | ||
Series A convertible preferred stock, par value $0.001, 1,000,000 shares authorized, 0 shares issued and outstanding | 0 | 0 |
Common Stock, par value $0.001, 500,000,000 shares authorized, 9,637,113 and 9,634,613 shares issued and outstanding, respectively | 9,637 | 9,635 |
Additional paid-in capital | 36,116,200 | 36,050,161 |
Accumulated deficit | (7,886,250) | (7,304,284) |
Total Stockholders' Equity | 28,239,587 | 28,755,512 |
Total Liabilities and Stockholders' Equity | $ 33,958,552 | $ 36,679,634 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 9,637,113 | 9,634,613 |
Common stock, shares outstanding | 9,637,113 | 9,634,613 |
Preferred stock, shares authorized | 1,000,000 | |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Operations (Unaudited) | ||
Revenue | $ 4,112,299 | $ 5,099,520 |
Cost of goods sold | 2,295,768 | 2,775,922 |
Gross Profit | 1,816,531 | 2,323,598 |
Operating Expenses | ||
Selling, general and administrative | 2,086,912 | 1,901,310 |
Research and development | 348,730 | 413,303 |
Total operating expenses | 2,435,642 | 2,314,613 |
Income (Loss) From Operations | (619,111) | 8,985 |
Other Income (Expenses) | ||
Unrealized gain on investments | 18,546 | 0 |
Realized gain on investments | 4,828 | 0 |
Interest Income (expense), net | 13,771 | (5,360) |
Total other income (expense) | 37,145 | (5,360) |
Net Income (Loss) Before Income Taxes | (581,966) | 3,625 |
Provision For Income Taxes | 0 | 0 |
Net Income (Loss) | $ (581,966) | $ 3,625 |
Net Loss Per Share; | ||
Basic | $ (0.06) | $ 0 |
Diluted | $ (0.06) | $ 0 |
Weighted Average Shares Outstanding; | ||
Weighted Average Shares Outstanding- Basic | 9,635,709 | 9,582,113 |
Weighted Average Shares Outstanding- Diluted | 9,635,709 | 9,582,113 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Total | Series A Convertible Preferred Shares [Member] | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2021 | 9,582,113 | ||||
Balance, amount at Dec. 31, 2021 | $ 29,033,493 | $ 0 | $ 9,582 | $ 35,651,088 | $ (6,627,177) |
Stock based compensation | 44,946 | 0 | 0 | 44,946 | 0 |
Net income for the three months ended March 31, 2022 | 3,625 | 0 | $ 0 | 3,625 | |
Balance, shares at Mar. 31, 2022 | 9,582,113 | ||||
Balance, amount at Mar. 31, 2022 | 29,082,064 | $ 9,582 | 35,696,034 | (6,623,552) | |
Balance, shares at Dec. 31, 2022 | 9,634,613 | ||||
Balance, amount at Dec. 31, 2022 | 28,755,512 | 0 | $ 9,635 | 36,050,161 | (7,304,284) |
Stock based compensation | 66,041 | 0 | 0 | 66,041 | 0 |
Net income for the three months ended March 31, 2022 | (581,966) | 0 | $ 0 | 0 | (581,966) |
Common stock issued for vesting of RSU's, shares | 2,500 | ||||
Common stock issued for vesting of RSU's, amount | 0 | 0 | $ 2 | (2) | 0 |
Balance, shares at Mar. 31, 2023 | 9,637,113 | ||||
Balance, amount at Mar. 31, 2023 | $ 28,239,587 | $ 0 | $ 9,637 | $ 36,116,200 | $ (7,886,250) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
Net Income (Loss) | $ (581,966) | $ 3,625 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 114,445 | 85,201 |
Amortization of prepaid consulting | 0 | 13,500 |
Amortization of right-of-use operating lease asset | 150,045 | 87,889 |
Stock based compensation | 66,041 | 44,946 |
Change in fair value of marketable securities | (18,546) | 0 |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | (55,750) | (327,110) |
Other receivable | 0 | (77,734) |
Inventories | 62,256 | (439,407) |
Prepaid expenses | (422,384) | (146,233) |
Security deposits | 3,751 | (7,066) |
Accounts payable and accrued expenses | 226,524 | (1,383,655) |
Operating lease liability | (54,779) | (99,765) |
Customer deposits | (142,143) | 403,758 |
Net cash used in operating activities | (652,506) | (1,842,051) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (51,669) | (82,850) |
Net investment in marketable securities | (2,755,922) | 0 |
Purchase of cost method investment | 0 | (100,000) |
Net cash used in investing activities | (2,807,591) | (182,850) |
Cash Flows from Financing Activities: | ||
Repayment on financing lease liabilities | (12,611) | (8,268) |
Repayment of notes payable | (41,322) | (26,745) |
Payment of revenue earnout | (2,180,826) | 0 |
Net cash used in financing activities | (2,234,759) | (35,013) |
Net change in cash and cash equivalents | (5,694,856) | (2,059,914) |
Cash and Cash Equivalents, Beginning of Period | 13,290,222 | 18,018,874 |
Cash and Cash Equivalents, End of Period | 7,595,366 | 15,958,960 |
Supplemental disclosures: | ||
Cash paid for interest expense | 7,930 | 6,397 |
Cash paid for income taxes | 0 | 0 |
Non-Cash Investing and Financing Activities: | ||
Common Stock issued on vesting of RSUs | 2 | 0 |
Equipment received for prepaid assets | 0 | 50,644 |
Promissory Note on Equipment | $ 0 | $ 82,615 |
Organization and Business Descr
Organization and Business Description | 3 Months Ended |
Mar. 31, 2023 | |
Organization and Business Description | |
Organization and Business Description | (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 833,750 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 60,000 shares of the 889,250 shares of Company common stock outstanding, 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 the assets of Specialty Microwave Corporation (“Specialty”), a privately held company based in Ronkonkoma, NY. The purchase included all inventory, orders, customers, property and equipment, and intellectual property. The assets also included all eight team members of Specialty. 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. On February 17, 2021, the Company priced its underwritten public offering of 1,371,428 units at $7.00 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant. Concurrently, AmpliTech effected a 1-for-20 reverse split of its outstanding common stock and uplisted to the Nasdaq Capital Market, where its common stock and warrants trade under the symbols “AMPG” and “AMPGW,” respectively. In 2021, the Company opened AGMDC, a monolithic microwave integrated circuits (“MMIC”) chip design center in Texas and has started to implement several of its proprietary amplifier designs into MMIC components. MMICs are semiconductor chips used in high-frequency communications applications. MMICs are widely desired for power amplification solutions to service emerging technologies, such as phased array antennas and quantum computing. MMICs carry a smaller footprint enabling them to be incorporated into a broader array of systems while reducing costs. AGMDC designs, develops and manufactures state-of-the-art signal processing components for satellite and 5G communications networks, defense, space and other commercial applications, allowing the Company to market its products to wider base of customers requiring high technology in smaller packages. On November 19, 2021, AmpliTech Group, Inc., entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Spectrum Semiconductor Materials Inc. (the "Seller" or “SSM”), pursuant to which AmpliTech acquired substantially all the assets of the Company (the “Acquisition”). The Acquisition was completed on December 15, 2021. Spectrum Semiconductor Materials ("SSM”), located in Silicon Valley (San Jose, CA), is a global authorized distributor of integrated circuit ("IC") packaging and lids for semiconductor device assembly, prototyping, testing, and production requirements. In August 2022, the AmpliTech Group True G Speed Services (“TGSS”) division was formed to provide “true G speeds” to the industry. TGSS’ main function will be to plan and configure 5G radio systems and make them Open Radio Access Network compatible. TGSS will implement AmpliTech’s low noise amplifier devices in these systems to promote greater coverage, longer range and faster speeds. The COVID-19 Pandemic The COVID-19 pandemic had disrupted and affected our business operations, which has led to business and supply chain disruptions. The lingering effects of the pandemic are likely to continue to disrupt our business and supply chain in the future. For example, our offices and R&D and manufacturing locations were, and may continue to be, impacted due to national and regional government declarations requiring closures, quarantines, and travel restrictions, although nearly all government-imposed restrictions have been significantly reduced in most parts of the world. However, given the unpredictable nature of COVID-19 and its variants, it is difficult, if not impossible, to predict, whether any government-imposed restrictions will be reimposed at previous levels or enhanced in one or more ways impacting our business operations or those of third parties upon which we rely. The COVID-19 pandemic, including associated business interruptions and recovery, as well as other possible epidemics or outbreaks of other contagions could result in a material adverse impact on our or our current or anticipated customers’ or suppliers’ business operations, including reduction or suspension of operations in the U.S. or other parts of the world. Our design and engineering operations, among others, cannot all be conducted remotely and often require on-site access to materials and equipment. We have customers, suppliers, and partners with international operations, and our customers, suppliers, and partners also depend on suppliers and manufacturers worldwide, which means that our business and prospects could be affected by the lingering effects of the COVID-19 pandemic anywhere in the world. Depending upon the duration of the lingering effects of the COVID-19 pandemic and the associated business interruptions, our customers, suppliers, manufacturers, and partners may suspend or delay their engagements with us. We and our customers’ and suppliers’ response to the lingering effects of the COVID-19 pandemic may prove to be inadequate and they may be unable to continue their respective operations in the manner they had prior to the outbreak or the worsening of the outbreak, and we may consequently endure interruptions, reputational harm, delays in our product development, and shipments, all of which could have an adverse effect on our business, operating results, and financial condition. In addition, we cannot assure you as to the timing of the economic recovery given the lingering effects of the pandemic, which could have a material adverse effect on our target markets and our business |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Basis of Accounting The accompanying condensed consolidated 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 months ended March 31, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023. 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, 2022, and 2021, included in Form 10-K filed with the SEC filed on March 31, 2023. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries and divisions. All intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications have no effect on previously reported results of operations. The revenue earnout was reclassed from long term liabilities to current liabilities on the balance sheet as of December 31, 2022. 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 and marketable securities that have original maturities of less than three months, when purchased, to be cash equivalents. As of March 31, 2023, the Company’s cash and cash equivalents were deposited in four financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At March 31, 2023, and December 31, 2022, the Company had $6,845,366 and $12,040,022 in excess of the FDIC insured limit, respectively. Accounts Receivable Trade accounts receivables 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 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 March 31, 2023, and December 31, 2022, respectively. Marketable Securities The Company’s investments in marketable securities are classified based on the nature of the securities and their availability for use in current operations. The Company’s marketable securities are stated at fair value with all realized and unrealized gains and losses on investments in marketable equity securities recognized in other income, net. The realized and unrealized gains and losses on marketable securities are determined using specific identification method. Inventories Inventories, which consists primarily of raw materials, work in progress and finished goods, are 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. As of March 31, 2023, and December 31, 2022, the reserve for inventory obsolescence was $1,128,000, respectively. 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 3 to 7 years Straight-line Machinery/shop equipment 7 to 10 years Straight-line Computer equipment/software 1 to 7 years Straight-line Vehicles 5 years Straight-line Leasehold improvements 7 years Straight-line Long-lived assets The Company reviews its property and equipment and right-of-use (“ROU”) assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. There were no indicators of impairment during the three months ended March 31, 2023. Intangible assets The Company periodically evaluates the reasonableness of the useful lives of these assets. These assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. There were no indicators of impairment during the three months ended March 31, 2023. Goodwill We follow the acquisition method of accounting to record the assets and liabilities of acquired businesses at their estimated fair value at the date of acquisition. We initially record goodwill for the amount the consideration transferred exceeds the acquisition-date fair value of net identifiable assets acquired. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is our business segment level or one level below the business segment. We test our goodwill for impairment annually on December 31, or under certain circumstances more frequently, such as when events or circumstances indicate there may be impairment. Such events or circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business or the disposal of all or a portion of a reporting unit. To test goodwill for impairment, we may perform both qualitative and quantitative assessments. If we elect to perform a qualitative assessment for a certain reporting unit, we evaluate events and circumstances impacting the reporting unit to determine the probability that goodwill is impaired. If we perform a quantitative assessment for a certain reporting unit, we calculate the fair value of that reporting unit and compare the fair value to the reporting unit’s net book value. We estimate fair values of our reporting units based on projected cash flows, and sales and/or earnings multiples applied to the latest twelve months’ sales and earnings of our reporting units. Projected cash flows are based on our best estimate of future sales, operating costs and balance sheet metrics reflecting our view of the financial and market conditions of the underlying business; and the resulting cash flows are discounted using an appropriate discount rate that reflects the risk in the forecasted cash flows. If we determine it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, we measure any loss from an impairment by comparing the fair value of each reporting unit to its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired, and an impairment loss is recognized in an amount equal to that excess. There were no indicators of impairment during the three months ended March 31, 2023. Investment Policy-Cost Method Investments consist of non-controlling equity investments in privately held companies. The Company elected the measurement alternative for these investments without readily determinable fair values and for which the Company does not control or have the ability to exercise considerable influence over operating and financial policies. These investments are accounted for under the cost method of accounting. Under the cost method of accounting, the non-marketable equity securities are carried at cost less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may influence the fair value of the investment. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations. The Company held $348,250 of investments without readily determinable fair values at March 31, 2023 (see Note 9). These investments are included in other assets on the condensed consolidated balance sheets. There were no indicators of impairment during the three months ended March 31, 2023. Leases 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. The Company has elected not to separate lease and non-lease components for all property leases for the purpose of calculating ROU assets and lease liabilities. 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. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis considering such factors as lease term and economic environment risks. 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 Our performance obligations relate to delivering single-use products to a customer, subject to the shipping terms of the contract. Limited warranties are provided, under which we typically accept returns and provide either replacement parts or refunds. 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. Cost of Sales We include product costs such material, direct labor, overhead costs, production-related depreciation expense, outside labor and production supplies in cost of sales. Shipping and Handling Shipping and handling charges are generally incurred at the customer’s expense. However, when billed to our customers, shipping and handling charges are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in cost of sales. 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 three months ended March 31, 2023, and 2022, were $348,730 and $413,303, respectively. Income Taxes The Company’s deferred tax assets and liabilities for the expected future tax consequences of events 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 March 31, 2023, 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 March 31, 2023, and 2022, there were 4,234,942 and 1,415,342, respectively, potentially dilutive shares that need to be considered as common share equivalents. As a result of the net loss for the three months ended March 31, 2023, the potentially dilutive shares that need to be considered as common share equivalents are anti-dilutive. For the three months ended March 31, 2022, options and warrants were not included in the dilutive earnings per share calculation as their strike price was above the average share price. The computation of weighted average shares outstanding and the basic and diluted earnings per share consisted of the following: Net Income (Loss) Shares Per Share Amount For the year ended March 31, 2023: Basic EPS $ (581,966 ) 9,635,709 $ (0.06 ) Effect of dilutive stock options and warrants - - Diluted EPS $ (581,966 ) 9,635,709 $ (0.06 ) For the year ended March 31, 2022: Basic EPS $ 3,625 9,582,113 $ 0.00 Effect of dilutive stock options and warrants - - Diluted EPS $ 3,625 9,582,113 $ 0.00 Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the 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 three categories: Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Cash and cash equivalents, receivables, inventories, prepaid expenses, accounts payable, accrued expenses, and customer deposits approximate fair value, due to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these instruments bear market rates of interest. Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets, intangible assets, and goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. 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 cash and 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 March 31, 2023. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2023 | |
Revenues | |
Revenues | (3) Revenues The following table presents sales disaggregated based on geographic regions and for the three months ended: March 31, March 31, 2023 2022 AmpliTech Inc. Domestic sales $ 1,024,245 $ 867,362 International sales 197,954 200,793 Total sales $ 1,222,199 $ 1,068,155 Spectrum Domestic sales $ 1,877,693 $ 1,595,626 International sales 1,012,407 2,435,739 Total sales $ 2,890,100 $ 4,031,365 Total sales $ 4,112,299 $ 5,099,520 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting | |
Segment Reporting | (4) Segment Reporting ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments. The following table presents summary information by segment for the three months ended March 31, 2023: AmpliTech Inc. Spectrum Corporate Total Revenue $ 1,222,199 $ 2,890,100 - $ 4,112,299 Cost of Goods Sold 760,179 1,535,589 - 2,295,768 Net Income (Loss) (1,009,532 ) 720,854 (293,288 ) (581,966 ) Total Assets 13,870,908 16,946,958 3,140,686 33,958,552 Depreciation and Amortization 82,175 32,270 - 114,445 Interest Income (Expense), net 16,939 (75 ) (3,093 ) 13,771 The following table presents summary information by segment for the three months ended March 31, 2022: AmpliTech Inc. Spectrum Corporate Total Revenue $ 1,068,155 $ 4,031,365 - $ 5,099,520 Cost of Goods Sold 644,338 2,131,584 - 2,775,922 Net Income (Loss) (805,856 ) 1,077,984 (268,503 ) 3,625 Total Assets 16,466,809 15,121,520 2,655,372 34,243,701 Depreciation and Amortization 53,681 31,520 - 85,201 Interest Expense, net 2,924 - 3,473 6,397 |
Marketable Securities
Marketable Securities | 3 Months Ended |
Mar. 31, 2023 | |
Marketable Securities | |
Marketable Securities | (5) Marketable Securities The following table is a summary of marketable securities at March 31, 2023: Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Level 1 (1) Money Market Fund $ 7,216 - - $ 7,216 Marketable Equitable Securities 3,003,372 18,546 - 3,021,918 Total $ 3,010,588 18,546 - $ 3,029,134 Cash and cash equivalents in our marketable securities account at March 31, 2023 was $7,216. (1) Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities. When evaluating an investment for impairment, the Company reviews factors including the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, changes in market interest rates and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of March 31, 2023, the Company does not consider any of its investments to be impaired. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventories | |
Inventories | (6) Inventories The inventory consists of the following at March 31, 2023, and December 31, 2022: March 31, December 31, 2023 2022 Raw Materials $ 837,148 $ 872,184 Work-in Progress 264,673 229,771 Finished Goods 6,596,044 6,658,166 Subtotal $ 7,697,865 $ 7,760,121 Less: Reserve for Obsolescence (1,128,000 ) (1,128,000 ) Total $ 6,569,865 $ 6,632,121 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property and Equipment | |
Property and Equipment | (7) Property and Equipment Property and Equipment consisted of the following at March 31, 2023 and December 31, 2022: March 31, December 31, 2023 2022 Lab Equipment $ 2,507,774 $ 2,455,045 Manufacturing Equipment 129,745 129,745 Automobiles 7,335 7,335 Computer Equipment and Software 203,051 210,240 Leasehold Improvements 84,171 78,042 Furniture and Fixtures 148,987 148,987 Subtotal 3,081,063 3,029,394 Less: Accumulated Depreciation (1,082,799 ) (1,005,707 ) Total $ 1,998,264 $ 2,023,687 Depreciation expense for the three months ended March 31, 2023, and 2022, was $77,092 and $47,848, respectively, of which $57,894 and $39,385, respectively were included in cost of goods sold. Property and equipment purchased in the amount of $234,036 under financing leases is included in the totals above. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (8) Goodwill and Intangible Assets Goodwill Goodwill is related to the acquisition of Spectrum Semiconductor Materials Inc. on December 15, 2021. Goodwill 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 March 31, 2023, and December 31, 2022, the carrying value of goodwill was $4,698,883, respectively. Other Intangible Assets Intangible assets with an estimated useful life of fifteen and twenty years consisted of the following at March 31, 2023: Gross Carrying Accumulated Weighted Average Amount Amortization Net Life Trade name $ 584,517 $ - $ 584,517 Indefinite Customer relationships 2,591,491 233,894 2,357,597 17.57 Intellectual Property 202,771 48,130 154,641 11.46 Total $ 3,378,779 $ 282,024 $ 3,096,755 Amortization expense for the three months ended March 31, 2023 and 2022 was $37,353, respectively. Annual amortization of intangible assets are as follows: 2023 112,623 2024 149,976 2025 149,976 2026 149,976 2027 149,976 Thereafter 1,799,711 $ 2,512,238 |
CostMethod Investment
CostMethod Investment | 3 Months Ended |
Mar. 31, 2023 | |
Marketable Securities | |
Cost-Method Investment | (9) Cost Method Investment On June 10, 2021, the Company entered into a membership interest purchase agreement with SN2N, LLC, for an aggregate purchase price of $350,000, to be paid in four tranches. Each tranche represents a 5% membership interest, and in aggregate a 20% membership interest. On June 15, 2022, an amendment to the membership interest purchase agreement was made to reflect a 19.9% membership interest. In light of this amendment, the Company overpaid by $1,750 for the membership interest and was subsequently reimbursed. As of March 31, 2023, the Company has made an investment of $348,250 for a 19.9% membership interest. (10) Leases The following was included in our balance sheet as of March 31, 2023: March 31, Operating leases 2023 Assets ROU operating lease assets $ 4,047,279 Liabilities Current portion of operating lease $ 597,920 Operating lease, net of current portion $ 3,615,248 Total operating lease liabilities $ 4,213,168 Financing leases Assets Property and equipment, gross $ 234,036 Accumulated depreciation (123,196 ) Property and equipment, net $ 110,840 Liabilities Current portion of financing lease $ 24,993 Financing lease, net of current portion $ 45,212 Total financing lease liabilities $ 70,205 The weighted average remaining lease term and weighted average discount rate at March 31, 2023 were as follows: Weighted average remaining lease term (years) March 31, 2023 Operating leases 9.10 Financing leases 2.50 Weighted average discount rate Operating leases 4.49 % Financing leases 4.70 % Financing Lease The Company entered into several 60-month lease agreements to finance certain laboratory and office equipment. As such, the Company has accounted for these transactions as a financing lease. The following table reconciles future minimum financing lease payments to the discounted lease liability as of March 31, 2023: 2023 22,921 2024 18,751 2025 18,186 2026 11,976 Thereafter 3,992 Total lease payments 75,826 Less imputed interest (5,621 ) Total lease obligations 70,205 Less current obligations (24,993 ) Long-term lease obligations $ 45,212 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 13, 2021, a lease rider was annexed to the original lease whereby the lease term will be extended on a month-by-month basis, commencing on February 1, 2021. The lease was terminated in April 2022. 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. This option has expired and was not exercised. On April 13, 2023, this lease was terminated subject to the terms of a Surrender Agreement between the Company and landlord. On November 27, 2019, the Company entered a 39-month agreement to lease an automobile with a monthly payment of $420. This lease was paid in full as of March 31, 2023. On December 15, 2021, the Company assumed the SSM lease agreement for office and warehouse space in San Jose, CA, with the same terms and conditions. Effective February 1, 2020, the lease term will expire on January 31, 2025, with a base rent of $24,234 for the first 12 months and increase by approximately 3% every year. On October 15, 2021, the Company entered into a new lease for a 20,000 square foot facility at 155 Plant Avenue, Hauppauge, New York, for a term of seven years and two months. The yearly base rent of $346,242 shall increase at a rate of 2.75% per year to begin on the first anniversary lease commencement date and each year thereafter. The first two months of basic rent shall be abated following the commencement lease date. In the event the landlord decides to sell the property, the Company shall have the right of first offer to purchase subject property. Upon lease execution, the Company paid two months of base rent as a security deposit and one month’s rent totaling $86,560. The Company moved into the new manufacturing and headquarters facility April 1, 2022. The following table reconciles future minimum operating lease payments to the discounted lease liability as of March 31, 2023: 2023 578,423 2024 765,075 2025 400,321 2026 383,347 Thereafter 3,112,070 Total lease payments 5,239,236 Less imputed interest (1,026,068 ) Total lease obligations 4,213,168 Less current obligations (597,920 ) Long-term lease obligations $ 3,615,248 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2023 | |
Notes Payable | |
Notes Payable | (11) Notes Payable Promissory Note: On September 12, 2019, AmpliTech Group, Inc., acquired Specialty, 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 Specialty. 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 of $9,203 due October 1, 2024. As of March 31, 2023, the balance of this promissory note was $158,055. Principal payments of $24,960 along with interest expense of $2,681 were paid during the three months ended March 31, 2023. Loan Payable: On September 12, 2019, the Company was approved for a $250,000 equipment leasing facility which was subsequently increased to $500,000. The Company has borrowed against the leasing facility as follows: · On May 14, 2020, the Company borrowed $27,494 to be paid over a three-year term with monthly payments of $815 at an interest rate of 4.268%. The balance as of March 31, 2023, was $812. Principal payments of $2,418 and interest expense of $27 were paid for the three months ended March 31, 2023. · On June 10, 2020, the Company borrowed $41,015 to be paid over a three-year term with monthly payments of $1,216 at an interest rate of 4.278%. The balance as of March 31, 2023, was $2,418. Principal payments of $3,593 and interest expense of $55 were paid for the three months ended March 31, 2023. As of March 14, 2023, the Company closed the equipment line of credit of $500,000. All UCC filings on the Company assets have been released as well as the Company’s president’s personal guarantee. In January 2022, the Company purchased machinery for $91,795, applying a deposit of $9,180 and financing the balance of $82,616 over 24 payments at an interest rate of 1.90%. The balance as of March 31, 2023, was $31,349. Principal payments of $10,351 and interest expense of $182 were paid for the three months ended March 31, 2023. Future principal payments over the term of the notes payable as of March 31, 2023 are as follows: Payments 2023 $ 103,036 2024 89,597 Total remaining payments $ 192,633 |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders Equity | |
Stockholders' Equity | (12) Stockholders’ Equity The total number of shares of stock this Corporation is authorized to issue shall be five hundred one million (501,000,000) shares, par value $0.001 per share. Our authorized capital stock consists of 500,000,000 shares of common stock and 1,000,000 shares of blank check preferred 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. On October 7, 2020, the Board of Directors of the Company approved a certificate of amendment to the articles of incorporation and changed the total number of authorized shares of Preferred Stock to be 1,000,000 shares, $0.001 per share. On October 7, 2020, our Board of Directors and our stockholders approved a resolution to amend and restate the certificate of designation of preferences, rights and limitations of Series A Convertible Preferred Stock to restate that there are 401,000 shares of the Company’s blank check Preferred Stock designated as Series A Convertible Preferred Stock. The amended and restated certificate clarifies that the Series A Convertible Preferred Stock convert at a rate of five shares of the Company’s common stock for every share of Series A Convertible Preferred Stock, and also restates that the Series A Convertible Preferred Stock shall be entitled to vote on all matters submitted to shareholders of the Company for each share of Series A Convertible Preferred Stock owned on the record date for the determination of shareholders entitled to vote on such matter or, if no such record date is established, on the date such vote is taken or any written consent of shareholders is solicited. The number of votes entitled to be cast by the holders of the Series A Convertible Preferred Stock equals that number of votes that, together with votes otherwise entitled to be cast by the holders of the Series A Convertible Preferred Stock at a meeting, whether by virtue of stock ownership, proxies, voting trust agreements or otherwise, entitle the holders to exercise 51% of all votes entitled to be cast to approve any action which Nevada law provides may or must be approved by vote or consent of the holders of common stock entitled to vote. 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 February 17, 2021, the Company priced its underwritten public offering of 1,371,428 units at $7.00 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant. Concurrently, AmpliTech effected a 1-for-20 reverse split of its outstanding common stock and uplisted to the Nasdaq Capital Market, where its common stock and warrants trade under the symbols “AMPG” and “AMPGW,” respectively. 2020 Equity Incentive Plan: In October 2020, the Board of Directors and shareholders adopted the Company's 2020 Equity Incentive Plan (the "2020 Plan"), effective as of December 14, 2020. Under the 2020 Plan, the Company reserved 1,250,000 shares of common stock to grant shares of the Company's common stock to employees and individuals who perform services for the Company. The purpose of the 2020 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide incentives to individuals who perform services for the Company, and to promote the success of the Company's business. The 2020 Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, and other stock or cash awards as the Board of Directors may determine. Stock Options: On February 27, 2023, the Company granted one employee ten-year stock options to purchase 2,000 shares of common stock according to the Company’s 2020 Plan. The stock options vest in equal quarterly installments over five years commencing on May 27, 2023, with an exercise price of $2.59 per share. The Company has calculated these options estimated fair market value at $4,800 using the Black-Scholes model, with the following assumptions: expected term of 7.46 years, stock price of $2.59, exercise price of $2.59, volatility of 126.8%, risk-free rate of 4.08%, and no forfeiture rate. Below is a table summarizing the changes in stock options outstanding for the three months ended March 31, 2023: Number of Weighted Average Exercise Options Price ($) Outstanding at December 31, 2022 916,000 $ 2.49 Granted 2,000 $ 2.59 Exercised - - Expired - - Outstanding at March 31, 2023 918,000 $ 2.49 Exercisable at March 31, 2023 380,484 $ 3.18 As of December 31, 2022, all outstanding stock options were issued according to the Company's 2020 Plan, and there remain 257,000 shares of common stock available for future issuance under the 2020 Plan. Stock-based compensation expense related to stock options of $61,224 was recorded for the three months ended March 31, 2023. As of March 31, 2023, the remaining unrecognized compensation cost related to non-vested stock options is $929,066 and is expected to be recognized over 5 years. The outstanding stock options have a weighted average remaining contractual life of 5.49 years and a total intrinsic value of $544,090. Warrants: On February 17, 2021, the Company priced its underwritten public offering of 1,371,428 units at $7.00 per unit. Each unit issued in the offering consisted of one share of common stock and one warrant. Concurrently, AmpliTech effected a 1-for-20 reverse split of its outstanding common stock and uplisted to the Nasdaq Capital Market, where its common stock and warrants trade under the symbols “AMPG” and “AMPGW,” respectively. Maxim Group LLC acted as sole book-running manager for the offering and partially exercised its overallotment option to purchase 205,714 warrants at the public offering price. The warrants expire ten years from the date of issuance. Effective April 16, 2021, the Company entered into definitive agreements with certain institutional investors to sell 2,715,000 shares of common stock in a registered direct offering priced at the market under NASDAQ rules. Concurrently, the Company agreed to issue to the investors, in a private placement, warrants to purchase an aggregate of 1,900,500 shares of common stock at an exercise price of $8.48 per share with a five-year term. On July 20, 2021, in connection with a product development agreement with an unrelated party, the Company issued warrants to purchase 30,000 shares of common stock. The warrants vest in one year from issuance, with an exercise price of $5.00 per share. The Company has calculated these warrants estimated fair market value at $88,803 using the Black-Scholes model, with the following assumptions: expected term 3.0 years, stock price $3.80, exercise price $5.00, volatility 149.8%, risk-free rate 0.37%, and no forfeiture rate. Below is a table summarizing the changes in warrants outstanding for the three months ended March 31, 2023: Number of Weighted Average Exercise Warrants Price ($) Outstanding at December 31, 2022 3,296,942 $ 7.83 Granted - - Exercised - - Expired - - Outstanding at March 31, 2023 3,296,942 $ 7.83 Exercisable at March 31, 2023 3,296,942 $ 7.83 The outstanding warrants have a weighted average remaining contractual life of 2.99 years and a total intrinsic value of $0. Restricted Stock Units On May 20, 2022, 30,000 restricted stock units at an exercise price of $1.96 were issued to a board advisor. Vesting will occur in equal quarterly installments of 2,500 shares beginning on May 20, 2022. As of March 31, 2023, 10,000 RSU’s have vested. Below is a table summarizing the changes in restricted stock units outstanding for the three months ended March 31, 2023: Number of Weighted Average Exercise RSU’s Price ($) Outstanding at December 31, 2022 22,500 $ 1.96 Granted - - Exercised (2,500 ) $ 1.96 Expired - - Outstanding at March 31, 2023 20,000 $ 1.96 Exercisable at March 31, 2023 - - Stock-based compensation expense related to restricted stock units of $4,817 was recorded for the three months ended March 31, 2023. As of March 31, 2023, the remaining unrecognized compensation cost related to non-vested restricted stock units is $37,040. The outstanding restricted stock units have a weighted average remaining contractual life of 1.90 years and a total intrinsic value of $55,200. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent events | (13) Subsequent events On April 13, 2023, the lease located in Ronkonkoma, NY was terminated subject to the terms of a Surrender Agreement between the Company and Landlord. On April 17, 2023, the Company signed a distribution agreement with NGK Electronics Devices, to become their US distributor for their RF Microwave products. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Accounting | The accompanying condensed consolidated 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 months ended March 31, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023. 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, 2022, and 2021, included in Form 10-K filed with the SEC filed on March 31, 2023. |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries and divisions. All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications have no effect on previously reported results of operations. The revenue earnout was reclassed from long term liabilities to current liabilities on the balance sheet as of December 31, 2022. |
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 and marketable securities that have original maturities of less than three months, when purchased, to be cash equivalents. As of March 31, 2023, the Company’s cash and cash equivalents were deposited in four financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At March 31, 2023, and December 31, 2022, the Company had $6,845,366 and $12,040,022 in excess of the FDIC insured limit, respectively. |
Accounts Receivables | Trade accounts receivables 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 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 March 31, 2023, and December 31, 2022, respectively. |
Marketable Securities | The Company’s investments in marketable securities are classified based on the nature of the securities and their availability for use in current operations. The Company’s marketable securities are stated at fair value with all realized and unrealized gains and losses on investments in marketable equity securities recognized in other income, net. The realized and unrealized gains and losses on marketable securities are determined using specific identification method. |
Inventories | Inventories, which consists primarily of raw materials, work in progress and finished goods, are 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. As of March 31, 2023, and December 31, 2022, the reserve for inventory obsolescence was $1,128,000, respectively. |
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 3 to 7 years Straight-line Machinery/shop equipment 7 to 10 years Straight-line Computer equipment/software 1 to 7 years Straight-line Vehicles 5 years Straight-line Leasehold improvements 7 years Straight-line |
Long-lived assets | The Company reviews its property and equipment and right-of-use (“ROU”) assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. There were no indicators of impairment during the three months ended March 31, 2023. |
Intangible assets | The Company periodically evaluates the reasonableness of the useful lives of these assets. These assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. There were no indicators of impairment during the three months ended March 31, 2023. |
Goodwill | We follow the acquisition method of accounting to record the assets and liabilities of acquired businesses at their estimated fair value at the date of acquisition. We initially record goodwill for the amount the consideration transferred exceeds the acquisition-date fair value of net identifiable assets acquired. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is our business segment level or one level below the business segment. We test our goodwill for impairment annually on December 31, or under certain circumstances more frequently, such as when events or circumstances indicate there may be impairment. Such events or circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business or the disposal of all or a portion of a reporting unit. To test goodwill for impairment, we may perform both qualitative and quantitative assessments. If we elect to perform a qualitative assessment for a certain reporting unit, we evaluate events and circumstances impacting the reporting unit to determine the probability that goodwill is impaired. If we perform a quantitative assessment for a certain reporting unit, we calculate the fair value of that reporting unit and compare the fair value to the reporting unit’s net book value. We estimate fair values of our reporting units based on projected cash flows, and sales and/or earnings multiples applied to the latest twelve months’ sales and earnings of our reporting units. Projected cash flows are based on our best estimate of future sales, operating costs and balance sheet metrics reflecting our view of the financial and market conditions of the underlying business; and the resulting cash flows are discounted using an appropriate discount rate that reflects the risk in the forecasted cash flows. If we determine it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, we measure any loss from an impairment by comparing the fair value of each reporting unit to its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired, and an impairment loss is recognized in an amount equal to that excess. There were no indicators of impairment during the three months ended March 31, 2023. |
Investment Policy-Cost Method | Investments consist of non-controlling equity investments in privately held companies. The Company elected the measurement alternative for these investments without readily determinable fair values and for which the Company does not control or have the ability to exercise considerable influence over operating and financial policies. These investments are accounted for under the cost method of accounting. Under the cost method of accounting, the non-marketable equity securities are carried at cost less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may influence the fair value of the investment. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations. The Company held $348,250 of investments without readily determinable fair values at March 31, 2023 (see Note 9). These investments are included in other assets on the condensed consolidated balance sheets. There were no indicators of impairment during the three months ended March 31, 2023. |
Leases | 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. The Company has elected not to separate lease and non-lease components for all property leases for the purpose of calculating ROU assets and lease liabilities. 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. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis considering such factors as lease term and economic environment risks. |
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 Our performance obligations relate to delivering single-use products to a customer, subject to the shipping terms of the contract. Limited warranties are provided, under which we typically accept returns and provide either replacement parts or refunds. 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. |
Cost of Sales | We include product costs such material, direct labor, overhead costs, production-related depreciation expense, outside labor and production supplies in cost of sales. |
Shipping and Handling | Shipping and handling charges are generally incurred at the customer’s expense. However, when billed to our customers, shipping and handling charges are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in cost of sales. |
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 three months ended March 31, 2023, and 2022, were $348,730 and $413,303, respectively. |
Income Taxes | The Company’s deferred tax assets and liabilities for the expected future tax consequences of events 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 March 31, 2023, 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 March 31, 2023, and 2022, there were 4,234,942 and 1,415,342, respectively, potentially dilutive shares that need to be considered as common share equivalents. As a result of the net loss for the three months ended March 31, 2023, the potentially dilutive shares that need to be considered as common share equivalents are anti-dilutive. For the three months ended March 31, 2022, options and warrants were not included in the dilutive earnings per share calculation as their strike price was above the average share price. The computation of weighted average shares outstanding and the basic and diluted earnings per share consisted of the following: Net Income (Loss) Shares Per Share Amount For the year ended March 31, 2023: Basic EPS $ (581,966 ) 9,635,709 $ (0.06 ) Effect of dilutive stock options and warrants - - Diluted EPS $ (581,966 ) 9,635,709 $ (0.06 ) For the year ended March 31, 2022: Basic EPS $ 3,625 9,582,113 $ 0.00 Effect of dilutive stock options and warrants - - Diluted EPS $ 3,625 9,582,113 $ 0.00 |
Fair Value Measurements | The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the 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 three categories: Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Cash and cash equivalents, receivables, inventories, prepaid expenses, accounts payable, accrued expenses, and customer deposits approximate fair value, due to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these instruments bear market rates of interest. Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets, intangible assets, and goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. |
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 cash and 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 March 31, 2023. |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment depreciated | Description Useful Life Method Office equipment 3 to 7 years Straight-line Machinery/shop equipment 7 to 10 years Straight-line Computer equipment/software 1 to 7 years Straight-line Vehicles 5 years Straight-line Leasehold improvements 7 years Straight-line |
Schedule of weighted average shares outstanding and the basic diluted earnings per share | Net Income (Loss) Shares Per Share Amount For the year ended March 31, 2023: Basic EPS $ (581,966 ) 9,635,709 $ (0.06 ) Effect of dilutive stock options and warrants - - Diluted EPS $ (581,966 ) 9,635,709 $ (0.06 ) For the year ended March 31, 2022: Basic EPS $ 3,625 9,582,113 $ 0.00 Effect of dilutive stock options and warrants - - Diluted EPS $ 3,625 9,582,113 $ 0.00 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenues | |
Schedule of sales disaggregated based on geographic regions | March 31, March 31, 2023 2022 AmpliTech Inc. Domestic sales $ 1,024,245 $ 867,362 International sales 197,954 200,793 Total sales $ 1,222,199 $ 1,068,155 Spectrum Domestic sales $ 1,877,693 $ 1,595,626 International sales 1,012,407 2,435,739 Total sales $ 2,890,100 $ 4,031,365 Total sales $ 4,112,299 $ 5,099,520 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting | |
Summary of information by segment | AmpliTech Inc. Spectrum Corporate Total Revenue $ 1,222,199 $ 2,890,100 - $ 4,112,299 Cost of Goods Sold 760,179 1,535,589 - 2,295,768 Net Income (Loss) (1,009,532 ) 720,854 (293,288 ) (581,966 ) Total Assets 13,870,908 16,946,958 3,140,686 33,958,552 Depreciation and Amortization 82,175 32,270 - 114,445 Interest Income (Expense), net 16,939 (75 ) (3,093 ) 13,771 AmpliTech Inc. Spectrum Corporate Total Revenue $ 1,068,155 $ 4,031,365 - $ 5,099,520 Cost of Goods Sold 644,338 2,131,584 - 2,775,922 Net Income (Loss) (805,856 ) 1,077,984 (268,503 ) 3,625 Total Assets 16,466,809 15,121,520 2,655,372 34,243,701 Depreciation and Amortization 53,681 31,520 - 85,201 Interest Expense, net 2,924 - 3,473 6,397 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Marketable Securities | |
Summary of marketable securities | Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Level 1 (1) Money Market Fund $ 7,216 - - $ 7,216 Marketable Equitable Securities 3,003,372 18,546 - 3,021,918 Total $ 3,010,588 18,546 - $ 3,029,134 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventories | |
Schedule of Inventory | March 31, December 31, 2023 2022 Raw Materials $ 837,148 $ 872,184 Work-in Progress 264,673 229,771 Finished Goods 6,596,044 6,658,166 Subtotal $ 7,697,865 $ 7,760,121 Less: Reserve for Obsolescence (1,128,000 ) (1,128,000 ) Total $ 6,569,865 $ 6,632,121 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property and Equipment | |
Schedule of Property and Equipment useful life | March 31, December 31, 2023 2022 Lab Equipment $ 2,507,774 $ 2,455,045 Manufacturing Equipment 129,745 129,745 Automobiles 7,335 7,335 Computer Equipment and Software 203,051 210,240 Leasehold Improvements 84,171 78,042 Furniture and Fixtures 148,987 148,987 Subtotal 3,081,063 3,029,394 Less: Accumulated Depreciation (1,082,799 ) (1,005,707 ) Total $ 1,998,264 $ 2,023,687 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets | Gross Carrying Accumulated Weighted Average Amount Amortization Net Life Trade name $ 584,517 $ - $ 584,517 Indefinite Customer relationships 2,591,491 233,894 2,357,597 17.57 Intellectual Property 202,771 48,130 154,641 11.46 Total $ 3,378,779 $ 282,024 $ 3,096,755 |
Schedule of amortization of assets | 2023 112,623 2024 149,976 2025 149,976 2026 149,976 2027 149,976 Thereafter 1,799,711 $ 2,512,238 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases (Tables) | |
Schedule of lease assets and liabilities | March 31, Operating leases 2023 Assets ROU operating lease assets $ 4,047,279 Liabilities Current portion of operating lease $ 597,920 Operating lease, net of current portion $ 3,615,248 Total operating lease liabilities $ 4,213,168 Financing leases Assets Property and equipment, gross $ 234,036 Accumulated depreciation (123,196 ) Property and equipment, net $ 110,840 Liabilities Current portion of financing lease $ 24,993 Financing lease, net of current portion $ 45,212 Total financing lease liabilities $ 70,205 |
Schedule of weighted average remaining lease term and weighted average discount rate | Weighted average remaining lease term (years) March 31, 2023 Operating leases 9.10 Financing leases 2.50 Weighted average discount rate Operating leases 4.49 % Financing leases 4.70 % |
Schedule of future minimum lease payments for finance lease | 2023 22,921 2024 18,751 2025 18,186 2026 11,976 Thereafter 3,992 Total lease payments 75,826 Less imputed interest (5,621 ) Total lease obligations 70,205 Less current obligations (24,993 ) Long-term lease obligations $ 45,212 |
Schedule of future minimum lease payments for operating lease | 2023 578,423 2024 765,075 2025 400,321 2026 383,347 Thereafter 3,112,070 Total lease payments 5,239,236 Less imputed interest (1,026,068 ) Total lease obligations 4,213,168 Less current obligations (597,920 ) Long-term lease obligations $ 3,615,248 |
Note Payable (Tables)
Note Payable (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Notes Payable | |
Schedule of future principal and interest payments | Payments 2023 $ 103,036 2024 89,597 Total remaining payments $ 192,633 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders Equity | |
Summary of stock options | Number of Weighted Average Exercise Options Price ($) Outstanding at December 31, 2022 916,000 $ 2.49 Granted 2,000 $ 2.59 Exercised - - Expired - - Outstanding at March 31, 2023 918,000 $ 2.49 Exercisable at March 31, 2023 380,484 $ 3.18 |
Summary of warrants outstanding | Number of Weighted Average Exercise Warrants Price ($) Outstanding at December 31, 2022 3,296,942 $ 7.83 Granted - - Exercised - - Expired - - Outstanding at March 31, 2023 3,296,942 $ 7.83 Exercisable at March 31, 2023 3,296,942 $ 7.83 |
Summary of restricted stock units | Number of Weighted Average Exercise RSU’s Price ($) Outstanding at December 31, 2022 22,500 $ 1.96 Granted - - Exercised (2,500 ) $ 1.96 Expired - - Outstanding at March 31, 2023 20,000 $ 1.96 Exercisable at March 31, 2023 - - |
Organization and Business Des_2
Organization and Business Description (Details Narrative) - $ / shares | 1 Months Ended | |||
Feb. 17, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Aug. 13, 2012 | |
Organization and Business Description | ||||
Reverse stock split | 1-for-20 | |||
Common stock, outstanding | 9,637,113 | 9,634,613 | 889,250 | |
Acquisition of entity by issuing of common stock | 833,750 | |||
Public offering shares | 1,371,428 | |||
Selling shareholders shares owned after share exchange | 60,000 | |||
Percentage of acquired entity in exchange of outstanding shares | 100% | |||
Offering price | $ 7 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Office equipment [Member] | |
Depreciation Method | Straight-line |
Computer equipment/software [Member] | |
Depreciation Method | Straight-line |
Machinery And Equipment [Member] | |
Depreciation Method | Straight-line |
Vehicles [Member] | |
Estimated useful life | 5 years |
Depreciation Method | Straight-line |
Leasehold improvements [Member] | |
Estimated useful life | 7 years |
Depreciation Method | Straight-line |
Minimum [Member] | Office equipment [Member] | |
Estimated useful life | 3 years |
Minimum [Member] | Computer equipment/software [Member] | |
Estimated useful life | 1 year |
Minimum [Member] | Machinery And Equipment [Member] | |
Estimated useful life | 7 years |
Maximum [Member] | Office equipment [Member] | |
Estimated useful life | 7 years |
Maximum [Member] | Computer equipment/software [Member] | |
Estimated useful life | 7 years |
Maximum [Member] | Machinery And Equipment [Member] | |
Estimated useful life | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net loss | $ (581,966) | $ 3,625 |
Basic EPS [Member] | ||
Net loss | $ (581,966) | $ 3,625 |
Effect of dilutive stock options and warrants | 0 | 0 |
Shares | 9,635,709 | 9,582,113 |
Per Share Amount | $ (0.06) | $ 0 |
Diluted EPS [Member] | ||
Net loss | $ (581,966) | $ 3,625 |
Effect of dilutive stock options and warrants | 0 | 0 |
Shares | 9,635,709 | 9,582,113 |
Per Share Amount | $ (0.06) | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | |
Inventory obsolescence reserve | 1,128,000 | 1,128,000 | |
Cost-method-investment | $ 348,250 | ||
Potentially dilutive shares | 4,234,942 | 1,415,342 | |
FDIC insured limit | $ 250,000 | ||
Cash in excess of FDIC insured limit | 6,845,366 | $ 12,040,022 | |
Goodwill impairments | 0 | ||
Research and development | $ 348,730 | $ 413,303 |
Revenues (Details)
Revenues (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | $ 4,112,299 | $ 5,099,520 |
Amplitech Inc [Member] | ||
Revenues | 1,222,199 | 1,068,155 |
Spectrum [Member] | ||
Revenues | 2,890,100 | 4,031,365 |
Domestic sales [Member] | Amplitech Inc [Member] | ||
Revenues | 1,024,245 | 867,362 |
Domestic sales [Member] | Spectrum [Member] | ||
Revenues | 1,877,693 | 1,595,626 |
International sales [Member] | Amplitech Inc [Member] | ||
Revenues | 197,954 | 200,793 |
International sales [Member] | Spectrum [Member] | ||
Revenues | $ 1,012,407 | $ 2,435,739 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue | $ 4,112,299 | $ 5,099,520 | |
Cost of goods sold | 2,295,768 | 2,775,922 | |
Net loss | (581,966) | 3,625 | |
Total Assets | 33,958,552 | 34,243,701 | $ 36,679,634 |
Depreciation and amortization | 114,445 | 85,201 | |
Interest Expense, net | 13,771 | 6,397 | |
Interest Income (Expense), net | 13,771 | (5,360) | |
Corporate [Member] | |||
Revenue | 0 | 0 | |
Cost of goods sold | 0 | 0 | |
Net loss | (293,288) | (268,503) | |
Total Assets | 3,140,686 | 2,655,372 | |
Depreciation and amortization | 0 | 0 | |
Interest Income (Expense), net | (3,093) | 3,473 | |
Amplitech Inc [Member] | |||
Revenue | 1,222,199 | 1,068,155 | |
Cost of goods sold | 760,179 | 644,338 | |
Net loss | (1,009,532) | (805,856) | |
Total Assets | 13,870,908 | 16,466,809 | |
Depreciation and amortization | 82,175 | 53,681 | |
Interest Income (Expense), net | 16,939 | 2,924 | |
Spectrum [Member] | |||
Revenue | 2,890,100 | 4,031,365 | |
Cost of goods sold | 1,535,589 | 2,131,584 | |
Net loss | 720,854 | 1,077,984 | |
Total Assets | 16,946,958 | 15,121,520 | |
Depreciation and amortization | 32,270 | 31,520 | |
Interest Income (Expense), net | $ (75) | $ 0 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Marketable Securities Estimated Fair Value | $ 3,021,918 | $ 247,450 |
Marketable Equitable Securities [Member] | ||
Marketable Securities Adjusted Cost | 3,003,372 | |
Marketable Securities Gross unrealized Gain | 18,546 | |
Marketable Securities Gross unrealized Loss | 0 | |
Marketable Securities Estimated Fair Value | 3,029,134 | |
Money Market Funds [Member] | ||
Marketable Securities Adjusted Cost | 7,216 | |
Marketable Securities Gross unrealized Gain | 0 | |
Marketable Securities Gross unrealized Loss | 0 | |
Marketable Securities Estimated Fair Value | 7,216 | |
Total Securities [Member] | ||
Marketable Securities Adjusted Cost | 3,010,588 | |
Marketable Securities Gross unrealized Gain | 18,546 | |
Marketable Securities Gross unrealized Loss | 0 | |
Marketable Securities Estimated Fair Value | $ 3,021,918 |
Marketable Securities (Details
Marketable Securities (Details Narrative) | Mar. 31, 2023 USD ($) |
Marketable Securities | |
Cash and cash equivalents | $ 7,216 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw Materials | $ 837,148 | $ 872,184 |
Work-in Progress | 264,673 | 229,771 |
Finished Goods | 6,596,044 | 6,658,166 |
Subtotal | 7,697,865 | 7,760,121 |
Less: Reserve for Obsolescence | (1,128,000) | (1,128,000) |
Total | $ 6,569,865 | $ 6,632,121 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Property and Equipment | ||
Lab Equipment | $ 2,507,774 | $ 2,455,045 |
Manufacturing Equipment | 129,745 | 129,745 |
Automobiles | 7,335 | 7,335 |
Computer Equipment and Software | 203,051 | 210,240 |
Leasehold Improvements | 84,171 | 78,042 |
Furniture and Fixtures | 148,987 | 148,987 |
Subtotal | 3,081,063 | 3,029,394 |
Less: Accumulated Depreciation | (1,082,799) | (1,005,707) |
Total | $ 1,998,264 | $ 2,023,687 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property and Equipment | ||
Depreciation expense | $ 77,092 | $ 47,848 |
Amount paid to purchase Property and equipment under finance lease | 234,036 | |
Cost of goods sold | $ 57,894 | $ 39,385 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Gross Carrying amount | $ 3,378,779 |
Accumulated Amortization | 282,024 |
Goodwill, net | 3,096,755 |
Trade Name [Member] | |
Gross Carrying amount | 584,517 |
Accumulated Amortization | 0 |
Goodwill, net | $ 584,517 |
Weighted Average Life | Indefinite |
Customer Relationships [Member] | |
Gross Carrying amount | $ 2,591,491 |
Accumulated Amortization | 233,894 |
Goodwill, net | $ 2,357,597 |
Weighted Average Life | 17 years 6 months 25 days |
Intellectual Property [Member] | |
Gross Carrying amount | $ 202,771 |
Accumulated Amortization | 48,130 |
Goodwill, net | $ 154,641 |
Weighted Average Life | 11 years 5 months 15 days |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) | Mar. 31, 2023 USD ($) |
Annual amortization of intangible assets are as follows: | |
2023 | $ 112,623 |
2024 | 149,976 |
2025 | 149,976 |
2026 | 149,976 |
2027 | 149,976 |
Thereafter | 1,799,711 |
Net | $ 2,512,238 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill | $ 4,696,883 | $ 4,696,883 | |
Amortization expenses | 37,353 | $ 37,353 | |
Goodwill [Member] | |||
Goodwill | $ 4,698,883 | $ 4,696,883 |
Cost Method Investment (Details
Cost Method Investment (Details Narrative) - SN2N, LLC [Member] - USD ($) | 1 Months Ended | 3 Months Ended | |
Jun. 10, 2021 | Jun. 15, 2021 | Mar. 31, 2023 | |
Aggregate purchase price for membership interest | $ 350,000 | ||
Membership interest purchase agreement description | Each tranche represents a 5% membership interest, and in aggregate a 20% membership interest | ||
Investment | $ 348,250 | ||
Overpaid for the membership interest | $ 1,750 | ||
Cost method investment, membership interest percentage | 20% | 19.90% | 19.90% |
Lease (Details)
Lease (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Lease (Details) | ||
Right of Use operating lease asset | $ 4,047,279 | $ 4,197,324 |
Current portion of operating lease | 597,920 | 586,379 |
Operating lease, net of current portion | 3,615,248 | 3,768,932 |
Total operating lease liabilities | 4,213,168 | |
Property and equipment, gross | 234,036 | |
Accumulated depreciation | (123,196) | |
Property and equipment, net | 110,840 | |
Current portion of financing lease | 24,993 | 33,480 |
Finance lease, net of current portion | 45,212 | $ 49,336 |
Total finance lease liabilities | $ 70,205 |
Lease (Details 1)
Lease (Details 1) | 3 Months Ended |
Mar. 31, 2023 | |
Weighted average remaining lease term (years) | |
Operating leases | 9 years 1 month 6 days |
Finance leases | 2 years 6 months |
Weighted average discount rate | |
Operating leases, percent | 4.49% |
Finance leases, percent | 4.70% |
Lease (Details 2)
Lease (Details 2) | Mar. 31, 2023 USD ($) |
Lease (Details) | |
2023 | $ 22,921 |
2024 | 18,751 |
2025 | 18,186 |
2026 | 11,976 |
Thereafter | 3,992 |
Total lease payments | 75,826 |
Less imputed interest | (5,621) |
Total lease obligations | 70,205 |
Less current obligations | 24,993 |
Long-term lease obligations | $ 45,212 |
Lease (Details 3)
Lease (Details 3) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Lease (Details) | ||
2023 | $ 578,423 | |
2024 | 765,075 | |
2025 | 400,321 | |
2026 | 383,347 | |
Thereafter | 3,112,070 | |
Total lease payments | 5,239,236 | |
Less imputed interest | (1,026,068) | |
Total lease obligations | 4,213,168 | |
Less current obligations | (597,920) | |
Long-term lease obligations | $ 3,615,248 | $ 3,768,932 |
Lease (Details Narrative)
Lease (Details Narrative) | 1 Months Ended | 3 Months Ended | ||||
Dec. 15, 2021 USD ($) | Oct. 15, 2021 USD ($) ft² | Sep. 12, 2019 USD ($) | Dec. 04, 2015 | Nov. 27, 2019 | Mar. 31, 2023 | |
Lease (Details) | ||||||
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 several 60-month lease agreements to finance certain laboratory and office equipment | ||||
Operating lease agreement description | 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 13, 2021, a lease rider was annexed to the original lease whereby the lease term will be extended on a month-by-month basis, commencing on February 1, 2021 | |||||
Operating lease, rental expenses | $ 24,234 | |||||
Annual rent | $ 346,242 | $ 90,000 | ||||
New lease for facility | ft² | 20,000 | |||||
Lease rate increase each successive year, percentage | 3% | 2.75% | 3% | |||
Purchase option, description | 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 | |||||
Prepaid expense | $ 86,560 |
Notes Payable (Details)
Notes Payable (Details) | Mar. 31, 2023 USD ($) |
Notes Payable | |
2023 | $ 103,036 |
2024 | 89,597 |
Total remaining payments | $ 192,633 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 12, 2019 | Mar. 31, 2023 | Mar. 14, 2023 | |
Leasing facility amount | $ 250,000 | ||
Clousure of equipment line of credit | $ 500,000 | ||
Increased leasing facility amount | $ 500,000 | ||
May 14, 2020 [Member] | |||
Interest Expense | $ 27 | ||
Principal payment | 2,418 | ||
Loan amount | $ 812 | ||
Interest rate percentage | 4.26% | ||
Proceeds from loans | $ 27,494 | ||
Monthly repayment amount | 815 | ||
June 10, 2020 [Member] | |||
Interest Expense | 55 | ||
Principal payment | 3,593 | ||
Loan amount | $ 2,418 | ||
Interest rate percentage | 4.27% | ||
Proceeds from loans | $ 41,015 | ||
Monthly repayment amount | 1,216 | ||
January 2022 [Member] | |||
Interest Expense | 182 | ||
Principal payment | 10,351 | ||
Loan amount | $ 31,349 | ||
Interest rate percentage | 1.90% | ||
Purchase of machinery | $ 91,795 | ||
Payments for Deposits | 9,180 | ||
Machinery financed, balance | $ 82,616 | ||
Number of payments | 24 payments | ||
Convertible Notes Payable [Member] | |||
Interest Expense | $ 2,681 | ||
Principal payment | 24,960 | ||
Loan amount | $ 158,055 | ||
Promissory Note [Member] | |||
Interest rate percentage | 6% | ||
Total consideration paid | $ 1,143,633 | ||
Cash paid in acquisition, net of cash acquired | 668,633 | ||
Considration paid in promissory note | $ 475,000 | ||
Principal and interest payable description | 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 of $9,203 due October 1, 2024 |
Stockholders Equity (Details)
Stockholders Equity (Details) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Options Outstanding, beginning | shares | 916,000 |
Number of Options, Granted | shares | 2,000 |
Number of Options, Exercised | shares | 0 |
Number of Options, Expired | shares | 0 |
Number of Options Outstanding, ending | shares | 918,000 |
Number of Options, Exercisable, Ending balance | shares | 380,484 |
Weighted Average Exercise Price Outstanding, beginning | $ / shares | $ 2.49 |
Weighted Average Exercise Price Granted | $ / shares | 2.59 |
Weighted Average Exercise Price Exercised | $ / shares | 0 |
Weighted Average Exercise Price Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, ending | $ / shares | 2.49 |
Weighted Average Exercise Price exercisable ending | $ / shares | $ 3.18 |
Stockholders Equity (Details 1)
Stockholders Equity (Details 1) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Options Outstanding, beginning | 3,296,942 |
Number of Options, Exercised | 0 |
Number of Options, Expired | 0 |
Number of Options Outstanding, ending | 3,296,942 |
Number of Options, Exercisable, Ending balance | 3,296,942 |
Weighted Average Exercise Price Outstanding, beginning | $ / shares | $ 7.83 |
Weighted Average Exercise Price Outstanding, ending | $ / shares | 7.83 |
Weighted Average Exercise Price exercisable ending | $ / shares | $ 7.83 |
Stockholders Equity (Details 2)
Stockholders Equity (Details 2) - Restricted Stock Units [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Options Outstanding, beginning | shares | 22,500 |
Number of Options, Granted | shares | 0 |
Number of Options, Exercised | shares | (2,500) |
Number of Options, Expired | shares | 0 |
Number of Options Outstanding, ending | shares | 20,000 |
Number of Options, Exercisable, Ending balance | shares | 0 |
Weighted Average Exercise Price Outstanding, beginning | $ / shares | $ 1.96 |
Weighted Average Exercise Price Granted | $ / shares | 0 |
Weighted Average Exercise Price Exercised | $ / shares | 1.96 |
Weighted Average Exercise Price Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, ending | $ / shares | 1.96 |
Weighted Average Exercise Price exercisable ending | $ / shares | $ 0 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||||||
Feb. 27, 2023 | May 20, 2022 | Jul. 20, 2021 | Feb. 17, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Apr. 16, 2021 | Oct. 07, 2020 | May 20, 2014 | Jul. 10, 2013 | |
Preferred stock designated as Convertible Preferred Stock, shares | 401,000 | ||||||||||
Preferred Stock shares, authorized | 1,000,000 | 500,000 | |||||||||
Corporation authorized shares | 501,000,000 | ||||||||||
Blank check preferred stock | 1,000,000 | ||||||||||
Equity Incentive Plan | In October 2020, the Board of Directors and shareholders adopted the Company's 2020 Equity Incentive Plan (the "2020 Plan"), effective as of December 14, 2020. Under the 2020 Plan, the Company reserved 1,250,000 shares of common stock to grant shares of the Company's common stock to employees and individuals who perform services for the Company | ||||||||||
Preferred Stock, par value | $ 0.001 | $ 0.001 | |||||||||
Common stock shares, authorized | 500,000,000 | 500,000,000 | 50,000,000 | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Common stock shares issued | 9,637,113 | 9,634,613 | |||||||||
Stock-based compensation expenses | $ 66,041 | $ 44,946 | |||||||||
Maximum [Member] | |||||||||||
Increase in common stock shares authorized | 500,000,000 | ||||||||||
Minimum [Member] | |||||||||||
Increase in common stock shares authorized | 50,000,000 | ||||||||||
AmpliTech Group, Inc [Member] | |||||||||||
Stock price | $ 7 | ||||||||||
Public offering | 1,371,428 | ||||||||||
Stock Options [Member] | |||||||||||
Stock-based compensation expenses | $ 61,224 | ||||||||||
Exercise price | $ 2.59 | ||||||||||
Estimated fair market value | $ 4,800 | ||||||||||
Stock price | $ 2.59 | ||||||||||
Weighted average remaining contractual life | 5 years 5 months 26 days | ||||||||||
Intrinsic value | $ 544,090 | ||||||||||
Unrecognized compensation cost | $ 929,066 | ||||||||||
Number of Options, Granted | 2,000 | ||||||||||
Weighted Average Exercise Price Granted | $ 2.59 | ||||||||||
Common stock shares issuable upon exercise of warrants | 257,000 | ||||||||||
Expected term | 7 years 5 months 15 days | ||||||||||
Volatility | 126.80% | ||||||||||
Risk-free rate | 4.08% | ||||||||||
Restricted Stock Units [Member] | |||||||||||
Stock-based compensation expenses | $ 4,817 | ||||||||||
Weighted average remaining contractual life | 1 year 10 months 24 days | ||||||||||
Intrinsic value | $ 55,200 | ||||||||||
Unrecognized compensation cost | $ 37,040 | ||||||||||
Number of Options, Granted | 0 | ||||||||||
Weighted Average Exercise Price Granted | $ 0 | ||||||||||
Restricted Stock Units [Member] | Board advisor [Member] | |||||||||||
Number of Options, Granted | 30,000 | ||||||||||
Weighted Average Exercise Price Granted | $ 1.96 | ||||||||||
Equal quarterly installments | 2,500 | ||||||||||
Vested RSU's | 10,000 | ||||||||||
Warrants [Member] | |||||||||||
Warrants issued to purchase | 30,000 | ||||||||||
Warrants to purchase an aggregate shares of common stock | 1,900,500 | ||||||||||
Common stock shares issued | 2,715,000 | ||||||||||
Warrants to purchase an aggregate shares of common stock exercise price | $ 8.48 | ||||||||||
Exercise price | $ 5 | ||||||||||
Estimated fair market value | $ 88,803 | ||||||||||
Stock price | $ 3.80 | $ 7 | |||||||||
Public offering | 1,371,428 | ||||||||||
Weighted average remaining contractual life | 2 years 11 months 26 days | ||||||||||
Intrinsic value | $ 0 | ||||||||||
Purchase of additional common stock | 205,714 | ||||||||||
Expected term | 3 years | ||||||||||
Volatility | 149.80% | ||||||||||
Risk-free rate | 0.37% |