AmpliTech Group, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
AMPG$2.31+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001493152-24-012177
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001715
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 156 current paragraphs.
78 unchanged; 35 reworded; 42 added; 19 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
Recent Debt Reduction
Current report
On July 23, 2024, the Company entered into a business loan and security agreement with Altbanq Lending II LLC in the amount of $1,300,000, which included an origination fee of $26,000 and an original issue discount of $403,000. The loan is payable within 76-weeks through 38 bi-weekly payments of $44,816 and bore an annual interest rate of 21.2% with prepayment options available. The loan was secured by the Company’s assets through a UCC filing, and proceeds were used for working capital, 5G licensing and certification fees. During the year ended December 31, 2024, the Company repaid the loan in full, through principal payments of $1,534,000, and recorded $260,000 in debt discount amortization.
Current report
Recent Financings
Current report
On September 9, 2024, the Company entered into a Securities Purchase Agreement with a single institutional investor to sell 1,369,488 shares of the Company’s common stock, par value $0.001 per share at a per share price of $0.7302. The closing of the offering occurred on September 11, 2024. The gross proceeds to the Company from this offering was approximately $1 million, before deducting placement agent’s fees and other offering expenses payable by the Company of approximately $180,000.
Current report
On November 24, 2024, we entered into a Securities Purchase Agreement with three institutional investors pursuant to which we sold in a registered direct offering 1,425,377 shares of our common stock, at a per share price of $0.92 and prefunded warrants to purchase 177,882 shares of common stock, at $0.919 per prefunded warrant (“Prefunded Warrant”) (the “November Offering”). The closing of the registered direct offering occurred on November 26, 2024. The exercise price of each Prefunded Warrant is $0.001 and 177,882 warrants were exercised in full immediately. The gross proceeds to the Company from the offering was approximately $1,474,998, before deducting placement agent’s fees and other offering expenses payable by the Company of approximately $200,000.
Current report
On December 11, 2024, we entered into a Securities Purchase Agreement with three institutional investors pursuant to which we sold in a registered direct offering 1,352,500 shares of our common stock at a per share price of $1.60 (the “December Offering”). The closing of the registered direct offering occurred on December 13, 2024. The gross proceeds to the Company from this offering was approximately $2,164,000 before deducting placement agent’s fees and other offering expenses payable by the Company of approximately $220,000.
Current report
On December 16, 2024, we entered into a Securities Purchase Agreement with two institutional investors pursuant to which we sold in a registered direct offering 1,516,680 shares of our common stock at a per share price of $2.10 (the “Second December Offering”). The closing of the registered direct offering occurred on December 18, 2024. The gross proceeds to the Company from this offering was approximately $3,185,028 before deducting placement agent’s fees and other offering expenses payable by the Company of approximately $290,000.
Current report
On December 24, 2024, we entered into a Securities Purchase Agreement with three institutional investors pursuant to which we sold in a registered direct offering 1,871,000 shares of our common stock at a per share price of $3.10 (the “Third December Offering”). The closing of the registered direct offering occurred on December 27, 2024. The gross proceeds to the Company from this offering was approximately $5,800,100 before deducting placement agent’s fees and other offering expenses payable by the Company of approximately $490,000.
Current report
On December 27, 2024, we entered into a Securities Purchase Agreement with three institutional investors pursuant to which we sold in a registered direct offering 2,173,920 shares of our common stock, par value $0.001 per share, at a per share price of $4.60 (“Fourth December Offering”) . The closing of the registered direct offering occurred on December 31, 2024. The gross proceeds to the Company from this offering was approximately $10,000,032 before deducting placement agent’s fees and other offering expenses payable by the Company of approximately $660,000.
Current report
Pursuant to the Securities Purchase Agreements entered into in the November Offering, December Offering, Second December Offering, Third December Offering and Fourth December Offering we agreed to, among other things, not issue any shares of common stock for a period of 45 days after such Offerings’ respective closing dates. Investors who participated in the November Offering, December Offering, Second December Offering and Third December Offering agreed to waive this 45-day prohibition on issuing securities in connection with the Fourth December Offering.
Current report
On March 21, 2025, we entered into an equity distribution agreement, or the Equity Distribution Agreement, with Maxim Group LLC , or Maxim, relating to offer and sell shares of our common stock having an aggregate offering price of up to $25 million from time to time through Maxim, acting as our exclusive sales agent, in an “At-the-Market Offering”at our discretion.
Current report
Recent Developments
Current report
Asset Purchase Agreement
Current report
On March 26, 2025, the Company entered into an asset purchase agreement with Titan Crest, LLC, a Delaware limited liability company (the “Seller”), and its affiliate, to purchase certain assets including intellectual property used in developing, manufacturing, marketing and selling products that use radio frequency technology (“5G ORAN radio products”) (the “Asset Purchase Agreement”). The Asset Purchase Agreement contains customary representations and warranties and covenants by each party. In addition to customary closing conditions, the closing of the transactions and the payment of the purchase price contemplated by the Asset Purchase Agreement is conditioned upon certain conditions, including but not limited to (i) the issue of a purchase order from Telus for fiscal year delivery to the Company, (ii) a purchase order between the Company and the Seller or its affiliate pursuant to which the Seller will assist in manufacturing the products to be sold to Telus to meet its purchase order, and (iii) receipt of correspondence from Telus to the Company, indicating Telus’ intention to issue purchase orders (including Telus’ initial purchase order) which purchase orders will be spread out over 3 years (“Telus Subsequent Purchase Orders”).
Current report
The aggregate purchase price for the assets is $8,000,000 which consists of $3,000,000 in cash and $5,000,000 in restricted shares of common stock of which the first $2,500,000 in cash and $2,500,000 in restricted common stock will be issued upon the procurement of the Telus’ initial purchase order and receipt of assurance of the Telus Subsequent Purchase Orders; and that the remaining $500,000 in cash to be paid on December 5, 2025 and $2,500,000 in shares of restricted common stock will be issued to Company upon the transfer of the 5G ORAN radio products’ technology and intellectual property rights by the Seller to the Company.
Current report
In addition, under the Asset Purchase Agreement, the parties are obligated, subject to certain limitations, to indemnify the other for certain customary and other specified matters, including breaches of representations and warranties, breaches of covenants and for certain liabilities and third-party claims. Further, the Seller and its affiliate, jointly and severally, agreed for a period of 10 years not to engage in certain competitive activities with respect to the business or proposed business relating to the assets sold to the Company. In addition, the Asset Purchase Agreement contemplates that after the closing, the Company and the Seller will enter short-term transition services agreements for up to two of the Seller’s employees to provide Company assistance in the assignment and transfer of the purchased assets from the Seller to the Company for a fee not to exceed $430,000.
Current report
In connection with the transaction, Seller’s affiliate agreed to transfer all of its rights, title and interest in 5G ORAN radio products technology and intellectual property rights to Seller. Subsequent to the transaction, Seller’s affiliate will continue its business and retain its employees focusing on software solutions and services.
Current report
Revolving Line of Credit
Current report
On March 25, 2025, AmpliTech Group, Inc., a Nevada corporation (the “Company”), entered into a Bank Loan Agreement (the “Loan Agreement”) with Dime Community Bank (the “Bank”) for a revolving line of credit for up to $750,000 (the “Revolving Line of Credit”). The Company has established the Revolving Line of Credit for general working purposes and uses, as needed. As of the date of this filing, there is no outstanding balance on the Revolving Line of Credit. The term of the Loan Agreement expires once all indebtedness under the Revolving Line of Credit has been paid in full, or until such time as the Bank and the Company agree in writing to terminate the Loan Agreement. In addition to interest, the Company agreed to pay an annual fee of $500.00 on the anniversary date of each year the Loan Agreement is in effect, subject to change by the Bank with notice. Pursuant to an Assignment of Deposit Agreement dated March 25, 2025 between us and the Bank, the Revolving Line of Credit is secured by a demand deposit account with the Bank which requires us to have a balance no less than $814,635.
Current report
The Revolving Line of Credit is evidenced by a promissory note, which is due on demand, or if there is no demand, then on March 1, 2026, unless extended, modified or renewed (the “Note”). The Company has agreed to pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning April 1, 2025, with all subsequent interest payments to be due on the same day of each month thereafter. The Note bears a variable interest rate based on changes in the Wall Street Journal Prime Rate as published in the Wall Street Journal from time to time, plus 1.000%, provided however, under no circumstances will the interest rate be less than 6.250% per annum or more than the maximum rate allowed by applicable law. Late payment is subject to a fee of 5.000% of the regularly scheduled payment. In the event of default, the Note bears an interest at a rate per annum equal to 5.000% above the rate that is otherwise applicable to such amounts.
Current report
Among other things, the Loan Agreement contains customary representations and warranties, events of default, negative and affirmative covenants and financial covenants, and certain limitations on dispositions of assets. The Loan Agreement also contains usual and customary events of default (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default, payment of all amounts payable under the Note may be accelerated at the Bank’s option and/or the Bank’s commitment and obligations will terminate without notice to the Company.
Current report
Letter of Intent
Current report
On March 20, 2025, the Company entered into a non-binding letter of intent with a contract manufacturer on behalf of its end user for the purchase of $78 million of the Company’s Oran radios. If fulfilled, deliveries of the order are expected to start in FY2025 and will substantially increase each year thereafter into 2027. The non-binding letter of intent is subject to the parties entering into a series of definitive purchase orders. No assurance can be given that the Company will enter into any purchase orders for the total amount of $78 million.
Current report
Sales decreased from $15,584,577 for the year ended December 31, 2023 to $9,508,372 for the year ended December 31, 2024, a decrease of $6,076,205 or approximately 38.99%. Spectrum sales decreased by $3,288,527, or 35.76%. AmpliTech and Specialty’s sales decreased by $2,787,678 or 43.64%. 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, specifically in the Asian markets. Our RFQ (Request for Quote) activity has since increased in the first quarter of 2025 resulting in an increase in our backlog which we believe should translate to increased sales.
Current report
Selling, general and administrative expenses increased to $7,856,471 in 2024 from $7,511,319 in 2023, an increase of $345,152, or approximately 4.60%. The Company experienced an increase in professional fees, such as accounting, legal and consulting fees as well as stock compensation, offset by the decrease in officers’ compensation in the second half of the year and other general and administrative expenses.
Current report
Intangible asset impairment
Current report
As of December 31, 2024, intangible assets, consisting of trade name, customer relationships and intellectual property related to the purchase of Specialty Microwave were deemed impaired in the amount of $467,928.
Current report
Research and development costs for the years ended December 31, 2024 and 2023 were $3,590,695 and $2,341,845 respectively. Research and development expenses have increased by $1,248,850, or by 53.33%, mainly attributable to the completion of our massive MIMO 64T64R Oran Cat B radio network, which provides true 5G speeds with improved signal strength, enhanced coverage, increased user capacity and adheres to the ORAN specifications promoting openness and interoperability in radio access networks. This radio is currently being tested and certified at Northeastern University and is expected to become the Company’s flagship product.
Current report
Loss From Operations
Current report
As a result of the fraudulent digital currency transactions noted above, during the year ended December 31, 2024, the Company recorded an impairment loss of $3,248,911 related to digital assets.
Current report
In 2024, Spectrum was able to reclaim $716,943 of gold contained in its obsolete/slow moving inventory.
Current report
Interest expense, net for the year ended December 31, 2024 was $292,195 and interest income, net for the year ended December 31, 2023 was $19,281. Interest expense increased as a result of debt financing obtained during the year with Altbanq. The outstanding obligations under the loan was paid in full as of December 31, 2024.
Current report
Investment in Digital Assets
Current report
We account for all digital assets as indefinite-lived intangible assets in accordance with ASC Topic 350, “Intangibles—Goodwill and Other.” The Company presents digital assets separately from other intangible assets, recorded as digital assets on the consolidated balance sheets. The digital assets are initially recorded at cost and are subsequently remeasured at cost, net of any impairment losses incurred since acquisition.
Current report
We conducted an analysis to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. When the then current carrying value of a digital asset exceeds the fair value determined each quarter, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the prices determined. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same digital assets. In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.
Current report
Loss Per Share
Current report
Basic loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be anti-dilutive are not included in diluted loss per share. The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period. As of December 31, 2024 and 2023, there were 4,594,442 and 4,545,442, respectively, potential common share equivalents from stock options, warrants and restricted stock units which have been excluded from the diluted loss per share calculations as their effect is anti-dilutive.
Current report
Recently Adopted Accounting Pronouncements
Current report
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. ASU 2023-07 also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements.
Current report
Recently Issued Accounting Pronouncements Not Yet Adopted
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (19)
Previous report
Non-GAAP Financial Measures
Previous report
We believe that presenting non-GAAP financial measures provides management and investors with useful measures to evaluate the performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business.
Previous report
Sales decreased from $19,394,492 for the year ended December 31, 2022 to $15,584,577 for the year ended December 31, 2023, a decrease of $3,809,915 or approximately 19.64%. Spectrum sales decreased by $4,328,316 or 32.0%, a decline attributable primarily due to a decrease in international sales. The effect COVID placed on the supply chain in 2021 and 2022 triggered higher demand for our integrated circuit, or IC, products. With COVID restrictions and worldwide supply chain concerns easing, the demand for IC packaging has decreased. Sales in the manufacturing and engineering divisions increased by $518,401 or 8.83%, primarily in the telecommunication applications.
Previous report
Selling, general and administrative expenses decreased to $7,511,319 in 2023 from $7,629,644 in 2022, a decrease of $118,325, or approximately 1.55%. The Company experienced a decrease in parent company expenses, such as accounting, legal and stock compensation. Other expenses such as sales commissions and relocation expenses have decreased as well.
Previous report
Goodwill impairment
Previous report
As of December 31, 2022, goodwill related to the acquisition of Specialty was deemed impaired in the amount of $120,136. There were no indicators of goodwill impairment for the year ended December 31, 2023.
Previous report
Research and development costs for the years ended December 31, 2023 and 2022 were $2,341,845 and $1,024,127, respectively. Research and development expenses have increased by $1,317,718, or by 128.67%, a result of hiring additional personnel for the AGMDC division as it completes its MMIC design releases. The company’s research and development costs include the launch of over 75 new products, such as passive products and the new MMIC based LNA’s, Coaxial in line low noise amplifiers as well as Coaxial in line band pass filters. In addition, research and development costs were incurred for cryogenic amplifiers for quantum computing and 5G CAT B 64T64R ORAN Radios.
Previous report
Income (Loss) From Operations
Previous report
As part of the acquisition of Spectrum Microwave, the purchase agreement contained a revenue adjustment. The revenue adjustment was determined to be an amount equal to 25% of two years’ net revenues minus $20,000,000. The fair value of the revenue adjustment was determined to be $2,180,826 an increase of $815,788 as previously recorded in December 31, 2021. As such, a loss on contingent revenue earnout of $815,788 was recorded for the year ended December 31, 2022. On March 20, 2023, the revenue earnout of $2,180,826 was paid to the Seller.
Previous report
Interest income and interest expense, net for December 31, 2023 and 2022, were $19,281 and $13,013, respectively.
Previous report
We have historically financed our operations by the issuance of debt from third party lenders, equity offerings, notes issued to various private individuals and personal funds advanced from time to time by our largest shareholder, who is also the President and Chief Executive Officer of the Company.
Previous report
Reclassifications
Previous report
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year’s presentation. Certain expenses were reclassed from selling, general and administrative expenses to other income/ expenses. These reclassifications have no effect on previously reported results of operations.
Previous report
During the years ended December 31, 2023 and 2022, we recorded goodwill impairments of $0 and $120,136, respectively. During the years ended December 31, 2023 and 2022, there were no impairments of indefinite-lived intangible assets.
Previous report
Earnings Per Share
Previous report
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 December 31, 2023 and 2022, there were 4,545,442 and 4,235,442, respectively, potentially dilutive shares that need to be considered as common share equivalents. As a result of the net loss, the potentially dilutive shares that need to be considered as common share equivalents, for the years ended December 31, 2023 and 2022, are anti-dilutive.
Previous report
Recent Accounting Pronouncements
Previous report
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. As a smaller reporting company, the guidance was effective for our fiscal years beginning after December 15, 2022. The adoption of this guidance did not have an impact on our consolidated financial statements.
Previous report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. These amendments are to be applied retrospectively. We are currently evaluating the impact this standard will have on our consolidated financial statement disclosures.
Reworded paragraphs (35)
Previous wording
As of December 31, 2023, the Company had a working capital of $15,649,254 and an accumulated deficit of $9,769,723. The Company recorded a net loss of $2,465,439 and $677,107 for the years ended December 31, 2023 and December 31, 2022, respectively.
Current wording
As of December 31, 2024, the Company had a working capital of $26,795,745 and an accumulated deficit of $21,012,127. The Company recorded a net loss of $11,242,404 and $2,465,439 for the years ended December 31, 2024 and December 31, 2023, respectively.
Previous wording
Cost of goods sold decreased to $8,308,949 in 2023 from $10,469,628 in 2022, a decrease of $2,160,679 or approximately 20.64%. This decrease is directly related to the decline in sales. As a result, the gross profit was $7,275,628 for 2023 compared to $8,924,864 for 2022, a decrease of $1,649,236 or 18.48%. Gross profit as a percentage of sales increased to 46.69% from 46.02%. Spectrum reported a gross profit margin of 48.42% while AmpliTech’s gross profit margin was 44.19%.
Current wording
Cost of goods sold decreased to $6,023,265 in 2024 from $8,308,949 in 2023, a decrease of $2,285,684 or approximately 27.51%. This decrease is directly related to the decline in sales. As a result, the gross profit was $3,485,107 for 2024 compared to $7,275,628 for 2023, a decrease of $3,790,521 or 52.10%. Gross profit as a percentage of sales decreased to 36.65% from 46.69%, representing a shift in the sales mix away from our higher gross margin products, while maintaining fixed production and overhead expenses.
Previous wording
The Company’s research and development initiative to expand its product line of low noise amplifiers to include its new 5G and wireless infrastructure products and MMIC designs is progressing significantly. Our combined engineering and manufacturing resources are expected to complement the development of new subsystems for satellite, wireless, and 5G infrastructure, as well as advanced military and commercial markets.
Current wording
The Company’s research and development initiative to expand its product line of low noise amplifiers to include its new 5G and wireless infrastructure products and MMIC designs has progressed significantly. Our combined engineering and manufacturing resources are expected to complement the development of new subsystems for satellite, wireless, and 5G infrastructure, as well as advanced military and commercial markets.
Previous wording
As a result of the above, the Company has a loss from operations of $2,577,536 and income from operations of $150,957 for the year ended December 31, 2023 and 2022, respectively.
Current wording
As a result of the above, the Company has a loss from operations of $8,429,987 and $2,577,536 for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Loss on disposal of property and equipment was $16,403 and $1,606 for the years ended December 31, 2023 and 2022, respectively.
Current wording
Loss on disposal of property and equipment was $16,403 for the year ended December 31, 2023.
Previous wording
Due to market fluctuations, the Company recorded an unrealized gain on investments of $1,697 and $2,343 for the years ended December 31, 2023 and 2022, respectively.
Current wording
Due to market fluctuations, the Company recorded an unrealized gain on investments of $1,697 for the year ended December 31, 2023.
Previous wording
Realized gain on investments, resulting from the redemption of treasury bills, was $131,522 for the year ended December 31, 2023.
Current wording
Realized gain on investments, resulting from the redemption of treasury bills, was $26,746 and $131,522 for the years ended December 31, 2024 and 2023.
Previous wording
The Company reported a net loss of $2,465,439 and $677,107 in 2023 and 2022, respectively.
Current wording
The Company reported a net loss of $11,242,404 and $2,465,439 in 2024 and 2023, respectively.
Previous wording
The net cash used in operating activities for the year ended December 31, 2022 was $3,425,246 resulting primarily from net loss and the operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses as well as customer deposits and operating lease liability.
Current wording
The net cash used in operating activities for the year ended December 31, 2024 was $5,295,714, resulting primarily from net loss, the impairment of intangible assets and the loss on investment of digital assets, as well as the operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses as well as customer deposits and operating lease liability.
Previous wording
The net cash used in operating activities for the year ended December 31, 2023 was $3,470,890 resulting primarily from net loss and the operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses as well as customer deposits and operating lease liability.
Current wording
The net cash used in operating activities for the year ended December 31, 2023 was $3,470,890 resulting primarily from net loss and the operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses, customer deposits and operating lease liability.
Previous wording
The net cash used in investing activities for the year ended December 31, 2022 was $1,079,183 for the purchase of property and equipment, net investment in marketable securities and SN2N.
Current wording
The net cash used in investing activities for the year ended December 31, 2024 was $3,291,831 for the purchase of property and equipment and the net investment in marketable securities.
Previous wording
The net cash used in financing activities for the year ended December 31, 2022 was $224,223, for the repayment of financing lease liabilities and notes payable.
Current wording
The net cash provided by financing activities for the year ended December 31, 2024 was $21,177,516, a result of the proceeds received from the registered direct offerings and net proceeds received from notes payable offset by the repayment of financing lease liabilities and notes payable.
Previous wording
As of December 31, 2023, we had cash and cash equivalents of $6,726,013, working capital of $15,649,254 and an accumulated deficit of $9,769,723.
Current wording
As of December 31, 2024, we had cash and cash equivalents of $19,315,984, working capital of $26,795,745 and an accumulated deficit of $21,012,127.
Previous wording
We intend to continue to finance our internal growth with cash on hand and cash provided from operations. We believe that our cash provided from operations and cash on hand will provide enough working capital to fund our operations for the next twelve months.
Current wording
We intend to continue to finance our internal growth with cash on hand and cash provided from operations, borrowings, debt or equity offerings, or some combination thereof. We believe that our cash provided from operations and cash on hand will provide enough working capital to fund our operations for the next twelve months.
Previous wording
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 December 31, 2023, the Company’s cash and cash equivalents were deposited in five financial institutions.
Current wording
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 December 31, 2024, the Company’s cash and cash equivalents were deposited in four financial institutions.
Previous wording
The Company’s policy is to place its cash and cash equivalents with high-quality, major financial and investment institutions in order to limit the amount of credit exposure. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Additionally, cash and cash equivalents maintained with investment institutions are insured by the Securities Investor Protection Corporation (“SIPC”) up to $500,000, which includes a $250,000 limit for cash. In addition, the investment institution provides additional “excess of SIPC” coverage, which insures up to $600 million. The Company has not experienced any losses to date resulting from this policy. At December 31, 2023 and 2022, the Company had $3,170,500 and $12,040,022 in excess of FDIC, SIPC, and excess SIPC insured limits, respectively. The Company has not experienced any losses in such accounts.
Current wording
The Company’s policy is to place its cash and cash equivalents with high-quality, major financial and investment institutions to limit the amount of credit exposure. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At December 31, 2024 and 2023, the Company had $18,749,154 and $3,170,500 in excess of FDIC insured limits, respectively. The Company has not experienced any losses in such accounts.
Previous wording
An allowance of $ 0 has been recorded at December 31, 2023 and 2022, respectively.
Current wording
An allowance of $0 has been recorded at December 31, 2024 and 2023, respectively.
Previous wording
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 methods.
Current wording
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.
Previous wording
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).
Current wording
Inventories, which consist 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).
Previous wording
As of December 31, 2023 and 2022, the reserve for inventory obsolescence was $1,146,000 and $1,128,000, respectively.
Current wording
As of December 31, 2024 and 2023, the reserve for inventory obsolescence was $1,062,000 and $1,146,000, respectively.
Previous wording
The Company reviews the carrying value of long-lived assets such property and equipment, right-of-use (“ROU”) assets, and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
Current wording
The Company reviews the carrying value of long-lived assets such property and equipment, right-of-use (“ROU”) assets, and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to; significant decrease in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
Previous wording
The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values. During the years ended December 31, 2023 and 2022, there were no impairments of long-lived assets.
Current wording
The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values.
Previous wording
If we quantitatively test goodwill and indefinite-lived intangible assets for possible impairment, we calculate the fair value for the reporting unit and indefinite-lived assets and compare the amount to their carrying amount. If the fair value of a reporting unit and indefinite-lived asset exceeds their carrying amount, the reporting unit and indefinite-lived assets are not considered impaired. If the carrying amount of the reporting unit and indefinite-lived assets exceeds their fair value, the reporting unit and indefinite-lived assets are considered to be impaired, and an impairment charge is recognized for the difference.
Current wording
If we quantitatively test goodwill and indefinite-lived intangible assets for possible impairment, we calculate the fair value for the reporting unit and indefinite-lived assets and compare the amount to their carrying amount. If the fair value of a reporting unit and indefinite-lived asset exceeds their carrying amount, the reporting unit and indefinite-lived assets are not considered impaired. If the carrying amount of the reporting unit and indefinite-lived assets exceed their fair value, the reporting unit and indefinite-lived assets are considered to be impaired, and an impairment charge is recognized for the difference.
Previous wording
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 December 31, 2023 (see Note 9). These investments are included in other assets on the consolidated balance sheets. There were no indicators of impairment during the year ended December 31, 2023.
Current wording
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 December 31, 2024 and December 31, 2023, respectively. (see Note 9). These investments are included in other assets on the consolidated balance sheets. There were no indicators of impairment during the years ended December 31, 2024 and 2023.
Previous wording
Identify the performance obligations in the contract. Generally, our contracts with customers do not include multiple performance obligations to be completed over a period. Our performance obligations generally 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.
Current wording
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.
Previous wording
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.
Current wording
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 the cost of sales.
Previous wording
Research and development expenditures are charged to operations as incurred. The major components of research and development costs include payroll, consultants, outside service, and supplies.
Current wording
In accordance with ASC Topic 730, “Research and Development,” the Company expenses research and development costs as incurred. The major components of research and development costs include payroll, consultants, outside service, and supplies.
Previous wording
Research and development costs for the years ended December 31, 2023 and 2022 were $2,341,845 and $1,024,127, respectively.
Current wording
Research and development costs for the years ended December 31, 2024 and 2023 were $3,590,695 and $2,341,845, respectively.
Previous wording
The Company’s deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of certain assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary, to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2023 and 2022, the Company had no material unrecognized tax benefits.
Current wording
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 tax rates enacted in effect in the years in which the differences are expected to reverse. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2024 and 2023, the Company had no material unrecognized tax benefits.
Previous wording
Cash and cash equivalents, receivables, inventory, 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.
Current wording
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.
Previous wording
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.
Current wording
The Company records stock-based compensation in accordance with ASC Topic 718, “Share-Based Payments.” 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.
Previous wording
Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable.
Current wording
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable.
Previous wording
Sales to the Company’s largest customer represented approximately 8.45% of total sales for the year ended December 31, 2023. As of December 31, 2022, there were two customers that each accounted for 25.98% and 10.60% of total revenue.
Current wording
Sales to the Company’s largest customer represented approximately 13.97% and 8.45% of total sales for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, there were two vendors that accounted for 33.05% and 11.69%, and 33.14% and 17.18%, respectively, of total component parts purchased.
Previous wording
In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. We are currently evaluating the impact this standard will have on our consolidated financial statement disclosures.
Current wording
In August 2023, the FASB issued ASU 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
Previous wording
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. We are currently evaluating the impact this standard will have on our consolidated financial statement disclosures.
Current wording
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Identify the performance obligations in the contract. Our contracts with customers do not include multiple performance obligations to be completed over a period.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
We do not have significant returns. We do not typically offer extended warranty or service plans.
Previous report — wording carried elsewhere
As of December 31, 2023 and 2022, there were two vendors that accounted for 33.14% and 17.18% and 44.15% and 29.29%, respectively, of total component parts purchased.