AmpliTech Group, Inc. - Quarter Report: 2013 March (Form 10-Q)

amplitech_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-54355

AmpliTech Group, Inc.

(Exact name of registrant as specified in its charter)

Nevada		27-4566352
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

35 Carlough Rd. #3

Bohemia, NY 11716

(address of principal executive offices) (Zip Code)

631-521-7831

(Registrant’s telephone number, including area code)

Indicate by check mark whether registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 13, 2013, the registrant had 19,994,863 shares of common stock, par value $0.001 per share, issued and outstanding.

AMPLITECH GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q

MARCH 31, 2013

TABLE OF CONTENTS

PART 1 - FINANCIAL INFORMATION
		PAGE

Item 1.	Financial Statements (Unaudited)		4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16

Item 4.	Controls and Procedures		16

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.		17

Item 1A.	Risk Factors		17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17

Item 3.	Default Upon Senior Securities		18

Item 4.	Mine Safety Disclosures		18

Item 5.	Other Information		18

Item 6.	Exhibits		18

SIGNATURES			19

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AmpliTech Group, Inc.

Condensed Consolidated Balance Sheets

As of December 31, 2012 and March 31, 2013 (Unaudited)

	March 31,			December 31,
	2013			2012
Assets	(Unaudited)

Current Assets

Cash and Cash Equivalents	$	9,336		$	27,716
Accounts Receivable		146,851			45,784
Inventory, Net of Reserve		126,531			112,817
Prepaid Expenses		1,800			1,800

Total Current Assets		284,518			188,117

Property and Equipment, Net of
Accumulated Deprecaition		192,188			207,572
Deferred Financing Costs, Net of
Accumulateed Amortization		9,342			9,786
Security Deposits		6,070			6,070

Total Assets	$	492,118		$	411,545


Liabilities and Stockholders' Equity

Current Liabilities

Accounts Payable and
Accrued Expenses	$	228,544		$	186,564
Customer Deposits		24,285			98,953
Payroll Taxes Payable		30,526			19,072
Convertible Notes Psysble		100,000			206,250
Notes Payable		65,997			118,355
Factor Financing		104,300			50,054
Current Portion of Capital Leases		60,995			55,936
Current Portion of Loans Payable		57,622			52,720

Total Current Liabilities		672,269			787,904

Long-Term Liabilities

Capital Leases		65,408			78,838
Loans Payable		62,325			75,869
Due to Officer		3,510			7,673

Total Liabilities		803,512			950,284

Commitments and Contingencies

Stockholders' Deficit

Common Stock, par value $.001,
50,000,000 shares authorized,
19,994,863 and 17,875,000 shares issued		19,995			17,875
and outstanding, respectively
Additional Paid-In Capital		325,728			115,862
Accumulated Deficit		(657,117	)		(672,476	)

Total Stockholders' Deficit		(311,394	)		(538,739	)

Total Liabilities and
Stockholders' Deficit	$	492,118		$	411,545

See accompanying notes to financial statements

AmpliTech Group, Inc.

Condensed Consolidated Statements of Operations

For The Three Months Ended March 31, 2012 and 2013

(Unaudited)

	For The Three Months Ended
	March 31,			March 31,
	2013			2012

Sales	$	309,183		$	262,752

Cost of Gools Sold		121,641			123,914

Gross Profit		187,542			138,838

General and Administrative		156,270			104,793

Income From Operations		31,272			34,045

Other Income (Expenses);

Interest Expense		(15,913	)		(17,493	)

Income Before Income Taxes		15,359			16,552

Provision (Credit) For Income Taxes		-			-

Net Income		15,359			16,552

Basic and Diluted Income per Share	$	0.00		$	0.00

Weightel Average Number of Shares Outstanling, Basic and Diluted		18,911,377			17,516,600

See accompanying notes to financial statements

Amplitech Group, Inc.

Condensed Consolidated Statements of Stockholders' Equity

For The Three Months Ended March 31, 2013

	Common Stock				Additional					Total
	Number of		Par		Paid-In		Accumulated			Stockholders'
	Shares		Value		Capital		Deficit			Equity

Balance, December 31, 2012		17,875,000	$	17,875	$	115,862	$	(672,476	)	$	(538,739	)

Conversion of convertible promissory notes		2,119,863		2,120		209,866					211,986

Net income for the three months ended March 31, 2013								15,359			15,359

Balance, March 31, 2013		19,994,863	$	19,995	$	325,728	$	(657,117	)	$	(311,394	)

See accompanying notes to financial statements

AmpliTech Group, Inc.

Condensed Consolidated Statements of Cash Flows

For The Three Months Ended March 31, 2012 and 2013

(Unaudited)

	March 31,			March 31,
	2013			2012
Cash Flows from Operating Activities:

Net Income	$	15,359		$	16,552

Adjustments to reconcile net income to
net cash provided by (used in) operating activities:

Depreciation and Amortization		15,828			10,739
Changes in Operating Assets and Liabilities:
Accounts Receivable		(101,067	)		41,685
Inventory		(13,714	)		29,348
Tax Credit Receivable					48,254
Accounts Payable and
Accrued Expenses		53,966			(25,552	)
Customer Deposits		(74,668	)		(27,594	)
Payroll Taxes Payable		11,454			(15,577	)

Total Adjustments		(108,201	)		61,303

Net cash provided by (used in) operating activities		(92,842	)		77,855

Cash Flows from Financing Activities:

Repayment of Convertible Note		(6,250	)		-
Proceeds from Convertible Note		50,000			-
Advances From/(Repayments To) Factor Financing, Net		54,246			(92,005	)
Note and Loan Repayments		(11,000	)		(18,007	)
Capital Lease Financing Repayments		(8,371	)		(3,949	)
Decrease in Due to Officer		(4,163	)		(15,438	)

Net cash provided by (used in) financing activities		74,462			(129,399	)

Net (decrease) in cash and cash equivalents		(18,380	)		(51,544	)

Cash and Cash Equivalents, Beginning of Period		27,716			54,038

Cash and Cash Equivalents, End of Period	$	9,336		$	2,494

Supplemental disclosures:

Interest and Taxes paid:

Interest Expense	$	15,022		$	20,466
Income Taxes	$	521		$	585

Non-Cash Financing and Investing Activities

Common Shares Issued Related To Convertible Notes	$	211,986		$	-
Exchange of Notes Payable For Convertible Note	$	50,000		$	-

See accompanying notes to financial statements

AmpliTech Group, Inc.

Notes To Condensed Consolidated Financial Statements

For The Three Months Ended March 31, 2012 and 2013 (Unaudited)

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of AmpliTech Group, Inc. (the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for annual audited financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included.

The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the years ended December 31, 2011 and 2012 included in Form 10-K filed with the SEC.

Going Concern Uncertainty

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates the Company continuing as a going concern. As of March 31, 2013, the Company had a working capital deficit of $387,751 and an Accumulated Deficit of $657,117. Additionally, there was minimal profit of $15,359 for the three months ended March 31, 2013 and a net loss of $192,995 for the year ended December 31, 2012. These factors raise substantial doubt as to the ability of the Company to continue as a going concern. However, the Company plans to improve its financial condition by raising additional working capital from various debt and equity financings. Also, the Company plans to pursue new customers and acquisition prospects in order to improve operations and cash flow. However, there is no assurance that the Company will be successful in accomplishing these objectives. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Notes Payable

Notes Payable at March 31, 2013 included demand notes totaling $61,695 from several individuals and one corporation, with interest rates ranging from 0% to 12% per annum. Accrued interest related to these notes was $15,611 and interest expense for the three months ended March 31, 2013 was $360.

Notes Payable at March 31, 2013 included $4,302 related to a bank line of credit that expired prior to 2010. As such, there is no current availability on this facility. The current minimum monthly payment is approximately $375, including interest at prime plus 4.85%. This note is being paid as per the original agreement.

Factor Financing

The outstanding balances owed to the Factor at March 31, 2013 for financed Accounts Receivable and Domestic Sales Orders was $58,120 and $46,180, respectively. Interest expense and related costs paid to the Factor for the three months ended March 31, 2013 was $3,926.

AmpliTech Group, Inc.

Notes To Condensed Consolidated Financial Statements

For The Three Months Ended March 31, 2012 and 2013 (Unaudited)

Convertible Notes Payable

On February 1, 2013, the holder of two Notes Payable totaling $50,000 exchanged them for a Convertible Promissory Note with a six month term. The convertible note accrues interest at 8% per annum and is convertible, at the sole discretion of the holder, into shares of Group common stock at $.10 per share. The Company determined that the fair market value of the common shares underlying the convertible notes was equal to the estimated fair market of the Company’s common stock on the date of issuance. As such, there is no beneficial conversion feature related to these convertible notes that needs to be recorded as a discount on the date of issuance. Accured interest at March 31, 2013 was $647.

On February 8, 2013 the Company repaid a convertible note holder $6,250, plus accrued interest of $53, which represented the entire principle balance due this holder.

On February 8, 2013, the Company issued a Convertible Promissory Note for $50,000 with a six month term. The convertible note accrues interest at 8% per annum and is convertible, at the sole discretion of the holder, into shares of Group common stock at $.10 per share. The Company determined that the fair market value of the common shares underlying the convertible notes was equal to the estimated fair market of the Company’s common stock on the date of issuance. As such, there is no beneficial conversion feature related to these convertible notes that needs to be recorded as a discount on the date of issuance. Accured interest at March 31, 2013 was $559.

On February 15, 2013, the holders of the Convertible Promissory Notes outstanding at December 31, 2012 with a principle balance of $200,000 elected to convert the notes to 2,000,000 shares of Group common stock. The shares underlying these notes were registered in the S-1 filed with the SEC that was declared effective on January 18, 2013. As such, these shares of common stock have been designated as free trading. In addition, these notes accrued interest through the date of conversion in the amount of $11,986. Pursuant to the Convertible Promissory Note terms, Group issued an additional 119,863 restricted common shares in full payment of the accrued interest due each note holder.

Capital Lease

AmpliTech entered into a thirty-six month lease agreement to finance certain lab equipment in May 2012 with a bargain purchase option of $1. As such, the Company has accounted for this transaction as a Capital Lease, assuming an imputed 6% annual interest rate. Future lease payments related to this capital lease as of March 31, 2013 are as follows;

Total rental payments	$	135,773
Less: Discount at 6%		( 9,370	)
Principal balance	$	126,403

Future twelve month discounted principal payments as of March 31, 2013 are as follows;

2013		60,995
2014		55,782
2015		9,626
Total	$	126,403

AmpliTech Group, Inc.

Notes To Condensed Consolidated Financial Statements

For The Three Months Ended March 31, 2012 and 2013 (Unaudited)

Loans Payable

Loans payable at March 31, 2013 consisted of the following;

SBA backed working capital loan at prime plus 2.75% per annum. Current monthly payment, including Interest, is $3,633. The loan matures in September 2015	$	103,932

Bank Note payable in equal monthly installments of $1,233, plus interest at prime plus 10.5% through March 2014.		16,015

Total		119,947

Less: Current Portion		(57,622	)

Loans Payable, Net of Current Portion	$	62,325

Future twelve month maturities of Loans Payable as of March 31, 2013 are as follows;

2013		57,622
2014		40,910
2015		21,415

	$	119,947

Interest expense related to these loans for the three months ended March 31, 2013 was $1,005

Capital Stock

Subsequent Events

The Company evaluated all events or transactions that occurred after March 31, 2013 through the date of this filing in accordance with FASB ASC 855 “Subsequent Events”. The Company determined that it does not have any subsequent event requiring recording or disclosure.

Item 2. 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 contains 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

We design, engineer and assemble micro-wave component based amplifiers that meet individual customer specifications. Our products consists of RF amplifiers and related subsystems, operating at multiple frequencies from 50kHz to 44GHz, including Low Noise Amplifiers, Medium Power Amplifiers, oscillators, filters, and custom assemblies such as MMIC (Monolithic Microwave Integrated Circuit) and MIC ( Microwave Integrated Circuit) designs. 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.

Recent Developments

Convertible Notes

On August 13, 2012, we assumed certain the obligations and rights under a number of convertible notes in an aggregate principal amount of $212,500 that were issued by our wholly owned subsidiary AmpliTech, Inc. pursuant to an assignment and assumption agreement among the noteholders, AmpliTech, Inc. and us, We cancelled the Original Notes and issued new convertible notes to the original note holders (the “Convertible Notes”). The Convertible Notes has a six-month term and compounds annually and accrues at 8% per annum from the issue date through the maturity date. The holders are entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share. The holders have “piggyback” registration rights with respect the shares issued or issuable upon conversion.

On February 15, 2013, the Company received conversion notices from the holders of the Convertible Notes, whereby the Holders requested the Company to covert, the principal amounts and interests accrued until the notice date, into shares of the Company’s common stock. On February 28, 2013, the Company issued the holders a total of 2,000,000 shares of the Company’s common stock, which are covered on the Registration Statement on Form S-1 (No. 333-183291), representing their principal amounts dividing by the conversion price, and a total of 119,863 shares of the Company’s restricted common stock, to the holders representing their interest accrued through the notice date dividing by the conversion price.

On February 8, 2013, the Company issued a promissory note in a principal amount of $50,000. The terms and conditions of this note are identical to that of the Convertible Notes as described above.

OTC Bulletin Board

On February 20, 2013, the Company received approval by Financial Industry Regulatory Authority (FINRA) for adding the Company’s common stock on the OTC Bulletin Board, effective the next day. The Company’s common stock has become quoted on the OTC Bulletin Board under the symbol “AMPG” on February 22, 2013.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.

Under the JOBS Act, we will remain an “emerging growth company” until the earliest of:

• the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;

• the last day of the fiscal year following the fifth anniversary of the completion of this offering;

• the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and

• the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, or the Exchange Act. We will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common equity held by our non-affiliates and (ii) been public for at least 12 months. The value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter.

The Section 107 of the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting standards and such election is irrevocable if made. As such, we have made the election to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

Results of Operations

Our auditor has indicated in their report on our financial statements for the fiscal years ended December 31, 2012 that conditions exist that raise substantial doubt about our ability to continue as a going concern due to our recurring losses from operations, deficit in equity, and the need to raise additional capital to fund operations. A “going concern” opinion could impair our ability to finance our operations through the sale of debt or equity securities.

As of March 31, 2013, the Company had a working capital deficit of $387,751 and an accumulated deficit of $657,117. Additionally, there was minimal profit of $15,359 for the three months ended March 31, 2013 and a net loss of $192,995 for the year ended December 31, 2012. These factors raise substantial doubt as to the ability of the Company to continue as a going concern. The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. We plan to improve the Company’s financial condition by raising working capital from the issuance of additional notes with equity convertible features and pursue new customers and acquisition prospects to improve our operational results. However, there is no assurance that the Company will be successful in accomplishing these objectives. If adequate funds are not available, our business would be jeopardized and we may not be able to continue. If we ceased operations, it is likely that all of our investors would lose their investment.

For The Three Months Ended March 31, 2013 and March 31, 2012

Revenues

Sales increased by $46,431, or approximately 18%, when comparing sales for the three months ended March 31, 2012 of $262,752 to sales for the three months ended March 31, 2013 of $309,183. This increase was directly related to outsourcing the assembling process for certain sales orders to a third-party provider that began in the fourth quarter of 2012, which change spared in-house production to focus on higher margin sales orders and increased our overall production. Product sales for both periods were substantially from the sale of Low Noise Amplifiers (“LNA”).

Cost of Goods Sold and Gross Profit

Cost of Goods Sold as a percentage of Sales decreased by approximately 8% when comparing 47% for the three months ended March 31, 2012 to 39% for the three months ended March 31, 2013. This decrease results from outsourcing the assembling process for certain sales orders to a third-party provider that began in the fourth quarter of 2012, which allowed in-house production to focus on higher margin sales orders. This also resulted in a corresponding 8% increase in gross profit as a percentage of sales, or $48,704, when comparing the first quarter of 2012 gross profit of $138,838, or 52%, to the first quarter of 2013 gross profit of $187,542, or 60%.

General and Administrative Expenses

General and administrative expenses increase from $104,793 for the first quarter of 2012 compared to $156,270 for the first quarter of 2013, an increase of $51,477, or approximately 49%. This increase resulted from legal, accounting and professional fees incurred in the first quarter of 2013 related to filing of our Form S-1 that became effective January 18, 2013, filing of our Form 10-K for the year ended December 31, 2012, fees paid to our transfer agent, and the cost of applying for depository services for our common stock with the Depository Trust Corporation. We did not have costs of same nature in the first quarter of 2012.

Other Income (Expenses)

Interest Expense decreased by $1,580 when comparing the three months ended March 31, 2012 to the three months ended March 31, 2013. This decrease results primarily from a decline in advances from the private lender under the Master Factoring Agreement dated September 2011that was necessary to finance accounts receivable and sales orders in the first quarter of 2013.

Net Income (Loss)

As a result of the above, the Company had net income of $16,552 for the three months ended March 31, 2012 compared to net income of $15,359 for the three months ended March 31, 2013, an overall decrease of $1,193, or approximately 7%.

Liquidity and Capital Resources

We have historically financed our operations through debt from third party lenders, notes issued to various private individuals and funds advanced from the majority shareholder, who is also the President and Chief Executive Officer of the Company.

As of March 31, 2013, we had $9,336 in cash and cash equivalents compared to $27,716 in cash and cash equivalents as of December 31, 2012. As of March 31, 2013 and December 31, 2012, we had a working capital deficit of $387,751 and $599,787, respectively, and an accumulated deficit of $657,117 and $672,476, respectively.

Net cash used in operating activities was $92,842 for the three months ended March 31, 2013. The net cash provided by financing activities for three months ended March 31, 2013 was $74,462, which results primarily from proceeds received from the issuance of a convertible promissory note in February 2013 and advances from the private lender under the Master Factoring Agreement dated September 2011to finance accounts receivable and certain sales orders.

We will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. We intend to finance our internal growth with cash on hand, cash provided from operations, borrowings, debt or equity offerings, or some combination thereof. However, there is no assurance that the Company will be successful in accomplishing these objectives. If adequate funds are not available, our business would be jeopardized and we may not be able to continue. If we ceased operations, it is likely that all of our investors would lose their investment.

Financing Activities

On February 1, 2013, the Company issued a promissory note in a principal amount of $50,000, in exchange for the holder’s cancellation of two notes held by him and issued by the Company in 2012. The note has a six-month term and compounds annually and accrues at 8% per annum from the issue date through the maturity date. The holder is entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share. The holder has “piggyback” registration rights with respect the shares issued or issuable upon conversion.

On February 8, 2013, the Company issued a promissory note in a principal amount of $50,000. The note has a six-month term and compounds annually and accrues at 8% per annum from the issue date through the maturity date. The holder is entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share. The holder has “piggyback” registration rights with respect the shares issued or issuable upon conversion.

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 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 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.

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.

Basis of Accounting

The accompanying consolidated financial statements have been prepared using the accrual basis of accounting.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers deposits that can be redeemed on demand and investments that have original maturities of less than three months, when purchased, to be cash equivalents. Company’s cash and cash equivalents were deposited primarily in one financial institution.

Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of Accounts Receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change in the future.

Depreciation and Amortization

Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally, accelerated depreciation methods) for tax purposes where appropriate. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements.

Income Taxes

The Company accounts for income taxes under the provisions of Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Tax”. ASC 740 requires the recognition of 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 Company has adopted the provisions of FASB ASC 740-10-05 “Accounting for Uncertainty in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. 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.

Income (Loss)Per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares (such as stock options and convertible securities) had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the periods presented.

Inventory Obsolescence

Inventory quantities and related values are analyzed at the end of each fiscal quarter to determine those items that are slow moving or obsolete. An inventory reserve is recorded for those items determined to be slow moving with a corresponding charge to cost of goods sold. Inventory items that are determined obsolete are written off currently with a corresponding charge to cost of goods sold.

Revenue Recognition

Revenue is recognized on an accrual basis immediately as a sale based on FOB shipping point. There are no maintenance or service contracts related to any product sale.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results could differ from those estimates.

Off Balance Sheet Transactions

None.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Smaller reporting companies are not required to provide the information required by this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based on the evaluation as of March 31, 2013, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes that have affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period covered by this report.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

To the best of our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On August 13, 2012, we assumed certain the obligations and rights under a number of convertible notes in an aggregate principal amount of $212,500 that were issued by our wholly owned subsidiary AmpliTech, Inc. pursuant to an assignment and assumption agreement among the noteholders, AmpliTech, Inc. and us, We cancelled the original notes and issued new convertible notes to the original note holders (the “Convertible Notes”). The Convertible Notes has a six-month term and compounds annually and accrues at 8% per annum from the issue date through the maturity date. The holders are entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share. The holders have “piggyback” registration rights with respect the shares issued or issuable upon conversion. The issuance of these Convertible Notes was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.

On February 28, 2013, the Company issued a total of 119,863 shares of the Company’s restricted common stock, to the holders of Convertible Notes, representing the interest accrued through the notice date dividing by the conversion price, upon their conversion of the Convertible Notes. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.

On February 1, 2013, the Company issued a promissory note in a principal amount of $50,000, in exchange for the holder’s cancellation of two notes held by him and issued by the Company in 2012. The terms and conditions of this note are identical to that of the Convertible Notes as described above. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.

On February 8, 2013, the Company issued a promissory note in a principal amount of $50,000. The terms and conditions of this note are identical to that of the Convertible Notes as described above. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information.

None.

Item 6. Exhibits.

(a) Exhibits

Exhibit No.		Description

31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Principal Executive Officer
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Principal Financial Officer
32.1+		Section 1350 Certification of Principal Executive Officer
32.2+		Section 1350 Certification of Principal Financial Officer

101. INS*		XBRL Instance Document
101. SCH*		XBRL Taxonomy Extension Schema Document
101. CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101. LAB*		XBRL Taxonomy Extension Label Linkbase Document
101. PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

________________

+ In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

* Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AmpliTech Group, Inc.

Date: May 15, 2013	By:	/s/ Fawad Maqbool
		Fawad Maqbool
		President and Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)

Dated: May 15, 2013	By:	/s/ Louisa Sanfratello
		Louisa Sanfratello Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)