Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

AmpliTech Group Inc. ("AMPG," "AmpliTech" or the "Company"), incorporated in 2010 in the state of Nevada, is the parent company of AmpliTech, Inc., and the Company's divisions, Specialty Microwave, Spectrum Semiconductor Materials, AmpliTech Group MMIC Design Center ("AGMDC") and AmpliTech Group True G Speed Services ("AGTGSS").

AmpliTech, Inc. designs, engineers and assembles micro-wave component-based amplifiers 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.

On December 15, 2021, we acquired substantially all of the assets of Spectrum Semiconductor Materials Inc. ("SSM"), a globally authorized distributor of integrated circuit (IC) packaging and lids for semiconductor device assembly, prototyping, testing, and production requirements founded in 1990 and headquartered in San Jose, CA.

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.

In August 2022, we formed our AGTGSS division to enable "true G speeds" to the industry. AGTGSS' main function will be to plan and configure 5G radio systems and make them O-RAN compliant. AGTGSS will implement AmpliTech's low noise amplifier devices in these systems to promote greater coverage, longer range and faster speeds.

On March 26, 2025, we entered into an asset purchase agreement, as amended by that certain amendment dated April 15, 2025, with Titan, and its affiliate (as amended, the "Titan APA") to purchase certain assets including intellectual property used in developing, manufacturing, marketing and selling products that use radio frequency technology ("5G ORAN radio products) ("Titan Asset Acquisition"). The aggregate purchase price for the assets is $8,000,000, which consists of $4,000,000 in cash and $4,000,000 in restricted shares of common stock of which the first $3,500,000 in cash was paid and $1,500,000 in restricted common stock was issued on April 24, 2025. The remaining $500,000 in cash to be paid and $2,500,000 in shares of restricted common stock will be issued to Titan upon the transfer of the 5G ORAN radio products' technology and intellectual property rights by Titan to the Company (the "Second Milestone"). The Second Milestone is expected to be achieved towards the end of the year 2025 and is recorded as a contingent liability of $3,000,000 as of September 30, 2025.

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 cell phone 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 infrastructure, as well as advanced military and commercial markets.

Recent Developments

On October 1, 2025, the Company's Board unanimously approved, an Amendment to the Amended and Restated Plan to increase the number of shares subject to the Amended and Restated Plan by an additional 2,800,000 which, if such Amendment is approved by the stockholders at the 2025 Annual Meeting of Stockholders to be held on December 10, 2025, would bring the total number of awards subject to the Amended and Restated Plan to 3,525,142, which total includes 725,142 remaining awards under the Amended and Restated Plan.

On October 30, 2025, the Company entered into a dealer manager agreement with Moody Capital Solutions, Inc. (the "Dealer-Manager") in connection with a rights offering (the "Rights Offering") pursuant to which the Company will distribute to the holders of record of its common stock, $0.001 par value ("Common Stock") and certain eligible warrantholders who have contractual rights to participate in the Rights Offering, at no charge, two transferable unit subscription rights (the "Unit Subscription Rights") for each share of the Company's Common Stock beneficially owned or subject to eligible warrants as of November 10, 2025. Each Unit Subscription Right entitles the registered holder to purchase a Unit at $4.00 with each Unit consisting of one share of Common Stock, one Series A Right to purchase one share of Common Stock at an exercise price of $5.00 (the "Series A Right") and one Series B Right to purchase one share of Common Stock at an exercise price of $6.00 (the Series B Right, and together with the Series A Right, the "Series Rights"), subject to the maximum Unit issuance limitation of 8,000,000 in the aggregate and potential pro-rata adjustments. Record Holders who fully exercise their Unit Subscription Rights will be entitled to subscribe, subject to certain limitations and subject to potential pro-rata adjustment, for additional Units covered by any unexercised Unit Subscription Rights. Each Unit will consist of one share of Common Stock, one series A right to purchase one share of Common Stock for $5.00 (a "Series A Right") and one series B right to purchase one share of Common Stock for $6.00 (a "Series B Right" and, collectively with the Series A Right, the "Series Rights"). The Common Stock and the Series Rights comprising the Units may only be purchased as a Unit but will be issued separately. Subject to extension of the expiration date, the Rights Offering will terminate on December 10, 2025. The Series A Rights and Series B Rights may be exercised commencing on their date of issuance and continuing until their expiration dates, respectively, July 18, 2026 and November 20, 2026.

We have agreed to pay the Dealer-Manager a cash fee equal to 7.0% of the proceeds of the Rights Offering from the exercise of the Unit Subscription Rights and the Series Rights; provided however, if the aggregate subscription proceeds equal more than $10 million but less than $20 million, we have agreed to pay the Dealer-Manager a cash fee equal to 6.0%; provided further, if the aggregate subscription proceeds equal less than $10 million, we have agreed to pay the Dealer-Manager a cash fee equal to 5.0%. We also paid the Dealer-Manager an out-of-pocket accountable expense allowance of $35,000.

In connection with the Rights Offering, the Company entered into a Subscription Agent and Rights Agent Agreement, dated October 30, 2025, with VStock Transfer, LLC to provide subscription agent services for the Unit Subscription Rights and Series Rights with respect to the Rights Offering.

Corporate Information

Our principal executive offices are located at 155 Plant Avenue, Hauppauge, NY 11788. Our telephone number is (631) 521-7831. Our corporate website is www.amplitechgroup.com. The information on our website is not a part of or incorporated in this report.

Results of Operations

For the Three Months Ended September 30, 2025 and September 30, 2024

Revenues

Sales increased from $2,834,512 for the three months ended September 30, 2024, to $6,093,832 for the three months ended September 30, 2025, an increase of $3,259,320 or approximately 114.99%. The Company's revenues increased during the current period primarily due to higher sales in its Low Noise Amplifier (LNA), Low Noise Block (LNB), and 5G product lines. The increase reflects strong demand from telecommunications and satellite communication customers, as well as expansion in 5G infrastructure projects and new product launches. Management continues to focus on product innovation and expanding market presence in these high-growth segments.

Cost of Goods Sold and Gross Profit

Cost of goods sold increased from $1,486,583 for the three months ended September 30, 2024, to $3,134,189 for the three months ended September 30, 2025, an increase of $1,647,606 or 110.83%. This increase is directly attributable to the significant ramp-up in 5G product sales, reflecting the Company's strategy to penetrate the multi-billion-dollar global telecommunications market, dominated by major network operators (MNO's). Gross profit for the three months ended September 30, 2024 was $1,347,929 compared to $2,959,643 for the three months ended September 30, 2025, an increase of $1,611,714, or 119.57%. Gross profit as a percentage of sales increased to 48.57% from 47.55%.

The Company is strategically investing in building long-term business relationships with global network operators by providing innovative, carrier-grade ORAN true 5G radios and high-performance private 5G solutions.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $2,481,580 for the three months ended September 30, 2025, from $1,864,245 for the three months ended September 30, 2024, an increase of $617,335 or approximately 33.11%. This increase is primarily due to the increase in expenses relating to accounting, consulting, recruiting and amortization expense.

Research and Development Expenses

Research and development expenditures are charged to operations as incurred. The major components of research and development costs include salaries and benefits, consultants, outside service, and supplies.

Research and development costs for the three months ended September 30, 2025, and 2024, were $699,319 and $572,422, respectively, an increase of $126,897 or 22.17%. Our research and development is closely tied to emerging high-growth markets: quantum computing hardware, open radio access networks, WiFi/enterprise private networks.

Loss From Operations

As a result of the above, the Company reported a loss from operations of $221,256 and $1,088,738 for the three months ended September 30, 2025, and 2024, respectively.

Other Income (Expenses)

Other losses consist of $27,985 from foreign currency exchange rates.

Due to market fluctuations, the Company recorded a realized gain on investments of $28,001 for the three months ended September 30, 2025.

The Company recorded interest income, net of $32,867 and interest expense, net of $100,945 for the three months ended September 30, 2025 and 2024, respectively. Interest expense has decreased due to the repayment of the debt financing in 2024.

Net Loss

The Company reported a net loss of $188,373 and $1,189,683 for the three months ended September 30, 2025 and 2024, respectively.

For the Nine Months Ended September 30, 2025 and September 30, 2024

Revenues

Sales increased from $7,655,285 for the nine months ended September 30, 2024, to $20,718,858 for the nine months ended September 30, 2025, an increase of $13,063,573 or approximately 170.65%. This increase in sales is predominantly from the 5G orders that needed to be fulfilled per the Titan APA in the 2^nd quarter of 2025.

Cost of Goods Sold and Gross Profit

Cost of goods sold increased from $4,367,639 for the nine months ended September 30, 2024, to $15,708,466 for the nine months ended September 30, 2025, an increase of $11,340,827 or 259.66%. Overall, this increase is directly related to the increase in sales from the Titan Asset Acquisition. As a result, gross profit was $5,010,392 for the nine months ended September 30, 2025, compared to $3,287,646 for the nine months ended September 30, 2024, an increase of $1,722,746, or 52.41%. Overall, gross profit as a percentage of sales decreased to 24.18% from 42.95%, reflecting the Company's strategy to penetrate the multi-billion-dollar global telecommunications market. The Company is strategically investing in building long-term business relationships with these global network operators by providing innovative, carrier-grade ORAN true 5G radios and high-performance Private 5G solutions. This initial phase of market penetration emphasizes top-line revenue growth and customer acquisition over short-term margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $6,948,938 for the nine months ended September 30, 2025, from $6,063,047 for the nine months ended September 30, 2024, an increase of $885,891 or approximately 14.61%. The increase is primarily due to the increase in trade show expense, legal, accounting, recruiting, consulting and amortization expenses.

Research and Development Expenses

Research and development expenditures are charged to operations as incurred. The major components of research and development costs include salaries and benefits, consultants, outside service, and supplies.

Research and development costs for the nine months ended September 30, 2025, and 2024, were $2,097,787 and $1,309,299 respectively, an increase of $788,488, or 60.22%, mainly attributable to our MIMO 64T64R Oran Cat B radio network and low-noise block down converter units, also known as LNB's.

Loss From Operations

As a result of the above, the Company reported a loss from operations of $4,036,333 and $4,084,700 for the nine months ended September 30, 2025, and 2024, respectively.

Other Income (Expenses)

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

Other income consists of $60,237 realized gain on foreign currency exchange rates.

Due to market fluctuations, the Company recorded a realized gain on investments of $64,020 and $25,965 for the nine months ended September 30, 2025 and 2024, respectively.

The Company recorded interest income, net of $111,557 and interest expense, net of $113,472 for the nine months ended September 30, 2025 and 2024, respectively.

Net Loss

The Company reported a net loss of $3,800,519 and $7,421,118 for the nine months ended September 30, 2025 and 2024, respectively.

Cash Flow

Operating Activities

The net cash used in operating activities for the nine months ended September 30, 2025, was $5,259,588 resulting primarily from the net loss and operating changes in accounts receivable, inventory, prepaid expenses, long-term deposits, accounts payable and accrued expenses and operating lease obligations and customer deposits.

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, loss on investment of digital assets and operating changes in accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses, customer deposits and operating lease obligations.

Investing Activities

The net cash used in investing activities for the nine months ended September 30, 2025, was $5,670,128 for the purchase of equipment, intangible assets and the Titan Asset Acquisition.

The net cash used in investing activities for the nine months ended September 30, 2024, was $3,275,342 for the purchase of equipment and investment in digital assets.

Financing Activities

The net cash from financing activities for the nine months ended September 30, 2025, was $926 resulting primarily from the proceeds from the exercise of stock options and the repayments of financing lease obligations.

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 shares in a private equity offering and notes payable, offset by the repayments of notes payable and financing lease obligations.

Operating Capital and Capital Expenditure Requirements

As of September 30, 2025, we had cash and cash equivalents of $8,387,194, working capital of $14,017,641, and an accumulated deficit of $24,812,646. 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. Based on our existing cash and cash equivalents, our working capital, our current and forecasted level of operations, and our forecasted cash flows, we believe that we will be able to meet our obligations and pay our liabilities arising from normal business operations when they come due and to provide for our capital requirements for the next 12 months.

Critical Accounting Policies, Estimates and Assumptions

The SEC defines critical accounting policies as those that are, in management's view, most important to the portrayal of our financial condition and results of operations and those that require significant judgment and estimates.

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, 2025, 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, 2024.

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.