AmpliTech Group, Inc. Commitments Disclosure

(15) Commitments and Contingencies

 

Contingent Liability – Intangible Asset Acquisition:

 

On March 26, 2025, the Company entered into the Titan APA to purchase 5G ORAN radio products. The closing of the transactions and the payment of the purchase price contemplated by the Titan APA is conditioned upon certain conditions, including but not limited to (i) the issue of a purchase order (“Initial Purchase Order”) from a third party customer (“Third Party Customer”) for fiscal year delivery to the Company, (ii) a purchase order between the Company and Titan or its affiliate pursuant to which Titan will assist in manufacturing the products to be sold to the Third Party Customer to meet its purchase order, and (iii) receipt of correspondence from Third Party Customer to the Company, indicating Third Party Customer’ intention to issue purchase orders (including such Third Party Customer’s initial purchase order) which purchase orders will be spread out over 3 years (“Subsequent Purchase Orders”).

 

 

AmpliTech Group, Inc.

Notes To Consolidated Financial Statements

For the Years Ended December 31, 2025 and 2024

 

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. Upon the procurement of the Initial Purchase Order and receipt of assurance of the Subsequent Purchase Orders (the “First Milestone”), the Company issued 914,635 shares of restricted common stock to Titan at $1.64 per share, based on the 30-day volume weighted-average price (“VWAP”). The fair value of the common stock issued was $1,710,367 based on the closing stock price on April 24, 2025 of $1.87 per share. These shares, together with $3.5 million in cash paid at closing, represented the initial consideration (the “First Milestone”) under the APA. 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 and approval 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 second quarter of 2026 and is recorded as a contingent liability of $3,000,000 as of December 31, 2025. As a result of the First Milestone payment of $5,210,367 and the contingent liability of $3,000,000, an intangible asset of $8,210,367 was recorded at December 31, 2025. (See Note 9).

 

In addition, under the Titan APA, 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, Titan 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 APA contemplates that after the closing, the Company and Titan will enter short-term transition services agreements for up to two of Titan’s employees to provide Company assistance in the assignment and transfer of the purchased assets from Titan to the Company for a fee not to exceed $430,000. To Company incurred a fee $403,916 in transaction fees for administrative support in connection with the transfer of the purchased assets, which are recorded in selling, general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2025.

 

In connection with the transaction, Titan’s affiliate agreed to transfer all of its rights, title and interest in 5G ORAN radio products technology and intellectual property rights to Titan. Subsequent to the transaction, Titan’s affiliate will continue its business and retain its employees focusing on software solutions and services.