AmpliTech Group Inc

Previous wording

As a result of the fraudulent digital currency transactions noted above, the Company was a victim of a cyber phishing scam that defrauded the Company. During the six months ended June 30, 2024, the Company recorded a complete loss from the investment in digital assets of $3,248,911. As of June 30, 2024, the remaining balance of digital assets was $0.

Current wording

As a result of the fraudulent digital currency transactions noted above, the Company was a victim of a cyber phishing scam that defrauded the Company. During the nine months ended September 30, 2024, the Company recorded a complete loss from the investment in digital assets of $3,248,911. As of September 30, 2024, the remaining balance of digital assets was $0.

Previous wording

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

Current wording

Sales decreased from $3,387,169 for the three months ended September 30, 2023, to $2,834,512 for the three months ended September 30, 2024, a decrease of $552,657 or approximately 16.32%. Sales in the amplifier and related passive microwave components and subsystems division decreased by $819,124, or 51.81%, while Spectrum sales increased by $266,467, or 14.75%. Overall, this decline is attributable to a decrease in sales from both domestic and international customers because of global economic uncertainty. The global recession and adverse market conditions are affecting our business in terms of lost revenue.

Previous wording

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

Current wording

Cost of goods sold decreased from $1,904,388 for the three months ended September 30, 2023, to $1,486,583 for the three months ended September 30, 2024, a decrease of $417,805 or 21.94%. Overall, this decrease is directly related to the decline in sales. As a result, gross profit was $1,347,929 for the three months ended September 30, 2024, compared to $1,482,781 for the three months ended September 30, 2023, a decrease of $134,852, or 9.10%. Overall, the Company maintained a healthy gross profit margin as a percentage of sales of 47.55% as compared to 43.78% for the three months ended September 30, 2023, an increase of 3.78%, amid inflationary pressures.

Previous wording

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

Current wording

As a result of the above, the Company reported a loss from operations of $1,088,738 and $927,244 for the three months ended September 30, 2024, and 2023, respectively, an increase of $161,494 or 17.42%.

Previous wording

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

Current wording

The Company recorded interest expense, net of $100,945 and $750 for the three months ended September 30, 2024, and 2023, respectively, an increase of $100,195 because of the debt financing obtained during the quarter.

Previous wording

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

Current wording

Due to market fluctuations, the Company recorded an unrealized gain on investments of $4,098 and a realized gain on investments of $36,187 for the three months ended September 30, 2023.

Previous wording

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

Current wording

The Company reported a net loss of $1,189,683 and $887,709 for the three months ended September 30, 2024 and 2023, an increase of $301,974, or 34.02%.

Previous wording

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

Current wording

Sales decreased from $11,572,699 for the nine months ended September 30, 2023, to $7,655,285 for the nine months ended September 30, 2024, a decrease of $3,917,414 or approximately 33.85%. Sales in the amplifier and related passive microwave components and subsystems division decreased by $2,000,769, or 43.82%. Spectrum sales decreased by $1,916,645, or 27.35%. This decrease in sales is attributable to the decrease in global demand and recessionary market dynamics affecting most of our customers across all divisions and product lines.

Previous wording

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

Current wording

Cost of Goods Sold decreased from $6,305,928 for the nine months ended September 30, 2023, to $4,367,639 for the nine months ended September 30, 2024, a decrease of $1,938,289 or 30.74%. Overall, this decrease is directly related to the decline in sales. As a result, gross profit was $3,287,646 for the nine months ended September 30, 2024, compared to $5,266,771 for the nine months ended September 30, 2023, a decrease of $1,979,125 or 37.58%. Overall, gross profit as a percentage of sales decreased from 45.51% to 42.95%, or 2.56%.

Previous wording

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

Current wording

Selling, general and administrative expenses increased to $6,063,047 for the nine months ended September 30, 2024, from $5,677,778 for the nine months ended September 30, 2023, an increase of $385,269 or approximately 6.79%. This increase represents primarily an increase in legal, consulting and accounting fees, offset against the decrease in trade show expenses, employee benefits and IR/PR.

Previous wording

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

Current wording

Research and development costs for the nine months ended September 30, 2024, and 2023, were $1,309,299 and $1,643,458, respectively, a decrease of $344,159 or 20.33%, resulting from a decrease in consulting/foundry expenses as the major MMIC development efforts have been completed offset against an increase in rent, moving expenses and software licensing.

Previous wording

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

Current wording

As a result of the above, the Company reported a loss from operations of $4,084,700 and $2,054,465 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $2,030,235, or 98.82%.

Previous wording

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

Current wording

The Company recorded net interest expense of $113,472 and net interest income of $20,335 for the nine months ended September 30, 2024 and 2023, an increase of $133,807, or 658.01%. Interest expense increased as a result of the debt financing obtained during the quarter.

Previous wording

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

Current wording

Due to market fluctuations, the Company recorded a realized gain on investments of $25,965 and $49,994 for the nine months ended September 30, 2024 and 2023, respectively. In addition, the Company recorded an unrealized gain on investments of $41,700 for the nine months ended September 30, 2023.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The Company reported a net loss of $7,421,118 and $1,942,436 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $5,478,682, or 282.05%.

Previous wording

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

Current wording

The net cash used in operating activities for the nine months ended September 30, 2024, was $4,128,869 resulting primarily from the net loss and operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses, customer deposits and operating lease obligations.

Previous wording

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

Current wording

The net cash used in operating activities for the nine months ended September 30, 2023 was $1,766,090 resulting primarily from the net loss and operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses, operating lease liability and customer deposits

Previous wording

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

Current wording

The net cash used in investing activities for the nine months ended September 30, 2024, was $3,275,342 of which $26,431 related to the purchase of equipment and $3,248,911 related to investment in marketable securities.

Previous wording

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

Current wording

The net cash used in investing activities for the nine months ended September 30, 2023, was $3,739,714 of which $931,692 related to the purchase of equipment and $2,808,022 for the net purchases of marketable securities.

Previous wording

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

Current wording

The net cash from financing activities for the nine months ended September 30, 2024, was $1,754,735, resulting primarily from the net proceeds received from the issuance of common stock and notes payable, offset with the repayments of notes payable and financing lease liabilities.

Previous wording

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

Current wording

The net cash used in financing activities for the nine months ended September 30, 2023, was $2,326,712, resulting primarily from the repayments of notes payable, financing lease liabilities, and the revenue earnout.

Previous wording

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

Current wording

As of September 30, 2024, we had cash and cash equivalents of $1,076,537 working capital of $10,072,061 and an accumulated deficit of $17,190,841.

Previous wording

The discussion and analysis of our financial condition and results of operations is based upon financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities. On an on-going basis, we evaluate our estimates, including the allowance for doubtful accounts, the salability and recoverability of inventory, income taxes and contingencies. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes there have been no significant changes during the six-month period ended June 30, 2024, to the items disclosed as critical accounting policies in management’s discussion and analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

The discussion and analysis of our financial condition and results of operations is based upon financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities. On an on-going basis, we evaluate our estimates, including the allowance for doubtful accounts, the salability and recoverability of inventory, income taxes and contingencies. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes there have been no significant changes during the nine-month period ended September 30, 2024, to the items disclosed as critical accounting policies in management’s discussion and analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.