Company description

Tue, 27 Jul 2021 03:31:53 GMT

AmpliTech Group Inc is incorporated under the laws of the Nevada on December 30, 2010. The Company develops, engineers and assembles micro-wave component based amplifiers that meet individual customer specifications. Its products consist 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. It 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. It also operates as a designer, manufacturer and distributor of cryogenic microwave amplifiers, RF designs and applications for Wireless Networks and the future of Wireless Communication. The Company also offers non-recurring engineering services on a project-by-project basis, for a predetermined fixed contractual amount, or on a time plus material basis.

Research

Fri, 27 Aug 2021 04:00:00 GMT

Maj Soueidan, Glenn Bloxham-Mundy and Jan Svenda talk about AmpliTech Group, Inc. (AMPG) in preparation for Glenn’s talk with company management. Amplitech designs, engineers, and assembles micro-wave component-based amplifiers.

Reasons For Tracking

Wed, 28 Jul 2021 12:22:06 GMT

Amplitech designs, engineers and assembles micro-wave component-based low-noise amplifiers (“LNA”) that meet individual customer specifications. Application of their proprietary technology results in maximum frequency gain within minimal background noise distortion as required by each customer. The company has both domestic and international customers in such industries as aerospace, governmental, defense and commercial satellite.

All in all, AmpliTech is an interesting business that we’re keen to monitor going forward. However, the company is not making much money and shares are selling at a lofty EB/S valuation. Furthermore, we want to verify the claims made by management relating to its superior performance Vs competitors, as this will be integral to their success. So, at this time we will just closely track the story.

Bullets Summarizing Our Reasons to Begin Tracking AMPG’s Story

Capital Structure: Maj had spoken with management previously and at the time, their capital structure was not particularly investor-friendly (specifically due to the preferred stock), which made it tough for them to raise the money required to expand. They remedied this in 2021 with their up-listing onto the NASDAQ, in turn raising over $30MM and providing them with ample capital to embark on their strategy. This capital will be allocated to fund organic growth through sales force expansion/marketing efforts, expand production capabilities, fund research and development, and make strategic/accretive acquisitions.
Capital Allocation/Bootstrapping It’s worth noting that in the years prior to this, the company managed to remain near breakeven despite a number of challenges and with fairly low revenues, hinting at frugal capital allocation and a desire to avoid excessive debt;
Insider Buying: We also recently noticed a cluster of insider buying by both Fawad Maqbool (Chairman & CEO) and Daniel Mazziota (Director), who as of today own 30% of the company;
Shift in Business Model: In the most recent Letter to Shareholders, the company noted: ‘We have changed our business model from an established low volume, custom niche product manufacturer and designer to that of using our advanced intellectual property to address the larger and rapidly growing commercial high-volume markets.’ On our most recent call, we delved much deeper into this as it seemed integral in understanding their future growth potential. The CEO explained that previously, only large, Fortune 500 companies were building the radar and satellite systems that required AmpliTech’s LNAs (Low Noise Amplifiers), as these systems required the absolute best performance available and hence AmpliTech only had a small market in the high-end performance space. This challenge was compounded by the fact that these companies were often hesitant to work with a company as small as AmpliTech was at the time. But now, due to multitude of new communication systems and applications coming into the market, which all require high-speed data applications with high performance fidelity, demand for such LNA technologies has now opened up their market significantly (e.g. think about video streaming apps and the desire for reducing ghosting/freeze-frames). Moreover, their recent up-listing to the NASDAQ and the capital sitting on their balance sheet now allows them to embark on these conversations with credibility;
Margin Expansion: AmpliTech is in the process of creating their LNAs in chip/IC form. ICs are much lower cost and can address the large volume markets aforementioned. AmpliTech is confident their performance here cannot be matched by competitors and, should companies like QualComm use these technologies in their own designs, margins could expand materially (currently sitting at 30-30% net, 60% gross but moving to 200 - 300%);
No Need to Raise Capital: Management confirmed that the recent raise ensures they have ample capital to operate without any dilutive fundraising in the coming years;
M&A Activity: Management confirmed that part of the capital raised has been ear-marked for acquisitions. When delving deeper here, they explained that they were looking for both strategic and accretive acquisitions, rather than these two factors being mutually exclusive. They want to acquire companies that will get them ‘to the finish line faster’ and have already identified targets that achieve this synergistic M&A.

Interviews

Wed, 28 Jul 2021 04:00:00 GMT

Briefly after our skull session preparing for GeoInvesting Research Contributor Glenn Bloxham-Mundy’s discussion with Fawad Maqbool, Founder and CEO of Amplitech Group, Inc. (OTC:AMPG) , they were able to catch up and speak for about 45 minutes.

We are pleased to make the audio interview available to you, which you can listen to below.

Based on the discussion, Glenn drew up several reasons why we are beginning to track AMPG, which you can read here.

Amplitech Group, Inc. (AMPG) research, news, and more from GeoInvesting

Company description

Research

Reasons For Tracking

Interviews