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The following discussion provides information which management believes is
relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our financial
statements and notes thereto contained elsewhere in this Quarterly Report on
Form 10-Q. The following discussion and analysis contain forward-looking
statements, which involve risks and uncertainties. Our actual results may differ
significantly from the results, expectations and plans discussed in these
forward-looking statements.
Business Overview
2010 in the state of
Inc.
Materials, and AmpliTech Group MMIC Design Center (“AGMDC”).
that meet individual customer specifications. Our products consist of radio
frequency (“RF”) amplifiers and related subsystems, operating at multiple
frequencies from 50kHz to 44GHz, including low noise amplifiers (“LNA”), medium
power amplifiers, cryogenic amplifiers, and custom assembly designs for the
global satellite communications, telecom (5G & IoT), space, defense, and quantum
computing markets. We also offer non-recurring engineering services on a
project-by-project basis, for a predetermined fixed contractual amount, or on a
time plus material basis. We have both domestic and international customers in
such industries as aerospace, governmental, defense and commercial satellite.
Specialty Microwave designs and manufactures state-of- the-art precision SATCOM
microwave components, RF subsystems and specialized electronic assemblies for
the military and commercial markets, flexible and rugged waveguides, wave guide
adapters and more.
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.
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On
of integrated circuit (IC) packaging and lids for semiconductor device assembly,
prototyping, testing, and production requirements founded in 1990 and
headquartered in
of the assets of the Company (the Acquisition). The Acquisition was completed on
In 2021, the Company opened a monolithic microwave integrated circuits (“MMIC”)
chip design center in
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.
In
formed to enable “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
compliant. TGSS will implement
systems to promote greater coverage, longer range and faster speeds.
Our mission is to patent our proprietary IP and trade secrets that were used in
small volume niche markets and expand our capabilities through strategic
partnerships, joint ventures, mergers/acquisitions with key industry leaders in
the 5G/6G, quantum computing, and cybersecurity markets. We believe this will
enable us to scale up our products and revenue by developing full systems and
subsystems with our unique technology as a core component, which we expect will
position us as a global leader in these rapidly emerging technology sectors and
addresses large volume markets as well, such as cellphone handsets, laptops,
server networks, and many other applications that improve everyday quality of
life.
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 infrastructures, as well as advanced
military and commercial markets.
Corporate Information
Our principal executive offices are located at
11788. Our telephone number is (631) 521-7831. Our corporate website is
www.amplitechinc.com. The information on our website is not a part of, or
incorporated in, this prospectus.
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Results of Operations
For the Three Months Ended
Revenues
Sales increased from
acquisition of Spectrum Microwave, whose sales for the quarter totaled
subsystems division increased by
increase in military and telecommunication applications.
Cost of Goods Sold and Gross Profit
Cost of Goods Sold increased from
30, 2021
increase of
approximately
part of the SSM acquisition, additional hiring of direct labor and an increase
in outsourcing because of the increase in sales. As a result, the gross profit
was
to 48.95% from 29.68% as a result of the acquisition and the increase in LNA and
RF subsystem sales.
Spectrum’s gross profit margin was 47.19%.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased to
three months ended
ended
With the acquisition of Spectrum, selling, general and administrative expenses
increased by
accounting fees, D&O insurance, stock compensation, trade show expenses and
business development expenses have increased as well. Additionally, with the
relocation to the new facility, rent and utilities have increased.
Research and Development Expenses
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
2021 were
The increase in research and development of
due to the Company implementing its research and development into the next
generation of 5G/6G subsystems for cellular and satellite communications. The
Company is in the process of designing and developing antennas and subsystems
that will be an integral part of the GPS and 5G infrastructure. These subsystems
will enable high-speed, high capacity 5G/6G networks that will be installed into
infrastructure for retrofitting and improving connectivity for cellphones,
satellites and many other everyday applications.
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In addition, AGMDC, the MMIC chip design center in
implement several of its proprietary amplifier designs into MMIC components.
MMICs are semiconductor chips used in high-frequency communications applications
and are widely desired for power amplification solutions to service emerging
technologies such as phased array antennas and quantum computing.
Income (Loss) From Operations
As a result of the above, the Company reported income from operations of
and 2021, respectively.
Other Income (Expenses)
Interest expense increased by
ended
Due to market fluctuations, the Company recorded an unrealized gain on
investments of
unrealized loss of
Net Income (Loss)
The Company reported net income of
three months ended
For the Nine Months Ended
Revenues
Sales increased by
for the nine months ended
months ended
the acquisition of Spectrum Microwave, whose sales for the nine months ended
by
telecommunication and military markets.
Cost of Goods Sold and Gross Profit
Cost of goods sold increased by
increase of
Microwave, with the balance attributable to the increase in direct labor and
outsourcing.
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Gross profit increased by
months of 2021 to the first nine months of 2022. Overall, gross profit
percentage increased from 27.93% to 46.45%, with
profit of 45.73% and Spectrum reporting a gross profit of 46.75%.
Selling, General and Administrative Expenses
General and administrative expenses increased from
months of 2021 compared to
increase of
Spectrum, selling, general and administrative expenses increased by
The Company experienced an increase in parent company expenses, such as stock
compensation, accounting fees and DO insurance. Additional increases include
salaries and employee benefits. Approximately
the trade shows that the Company attended in
With the relocation to the new facility, we incurred moving expenses of
along with the increase in rent expense, utilities, and office expense.
Research and Development Expenses
Research and development expenditures are charged to operations as incurred. The
major components of research and development costs include consultants, outside
service, and supplies.
Research and development costs for the nine months ended
2021 were
The increase in research and development of
implementing its research and development into the next generation of 5G/6G
subsystems for cellular and satellite communications. The Company is in the
process of designing and developing antennas and subsystems that will be an
integral part of the GPS and 5G infrastructure. These subsystems will enable
high-speed, high capacity 5G/6G networks that will be installed into
infrastructure for retrofitting and improving connectivity for cellphones,
satellites and many other everyday applications.
In addition, AGMDC, the MMIC chip design center in
implement several of its proprietary amplifier designs into MMIC components.
MMICs are semiconductor chips used in high-frequency communications applications
and are widely desired for power amplification solutions to service emerging
technologies such as phased array antennas and quantum computing.
Income (Loss) From Operations
As a result of the above, the Company reported income from operations of
operations of
overall increase of
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Other Income (Expenses)
Interest expense decreased from
compared to
34.0%. The decrease was primarily due to the repayment of debt.
The Company recorded an unrealized gain on investments of
months ended
for the nine months ended
On
The Company also recorded other income of
Net Income (Loss)
The Company reported net income of
30, 2022
Liquidity and Capital Resources
Operating Activities
The net cash used in operating activities for the nine months ended
30, 2022
changes in accounts receivable, inventories, accounts payable and accrued
expenses, operating lease liability and customer deposits.
The net cash used in operating activities for the nine months ended
30, 2021
changes in accounts receivable, inventories, prepaid expenses and the operating
lease liability.
Investing Activities
The net cash used in investing activities for the nine months ended
30, 2022
investment in SN2N.
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The net cash used in investing activities for the nine months ended
30, 2021
securities and a 10% membership interest in SN2N.
Financing Activities
The net cash used in financing activities for the nine months ended
30, 2022
and finance lease.
The net cash provided by financing activities for the nine months ended
issuances of common stock and warrants, netted against the repayment of the line
of credit, notes payable and finance lease payments.
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 the majority shareholder, who is
also the President and Chief Executive Officer of the Company.
As of
working capital of
As of
working capital of
We intend to continue to finance our internal growth with cash on hand, cash
provided from operations, borrowings, debt or equity offerings, or some
combination thereof. We believe that our cash provided from operations and cash
on hand will provide enough working capital to fund our operations for the next
twelve months.
Critical Accounting Policies, Estimates and Assumptions
The
view, most important to the portrayal of our financial condition and results of
operations and those that require significant judgments and estimates.
The discussion and analysis of our financial condition and results of operations
is based upon our financial statements which have been prepared in accordance
with accounting principles generally accepted in
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
critical accounting policies in management’s discussion and analysis in the
Company’s Annual Report on Form 10-K for the year ended
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We cannot predict what future laws and regulations might be passed that could
have a material effect on our results of operations. We assess the impact of
significant changes in laws and regulations on a regular basis and update the
assumptions and estimates used to prepare our financial statements when we deem
it necessary.
Off Balance Sheet Transactions
None.
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