Business context and reporting period
This Form 10-Q covers the quarter and six months ended June 30, 2012. The financial statements are for Bayview Acquisition Corp., a development-stage shell company, before its combination with AmpliTech, Inc. The filing describes the share exchange as agreed August 10 and completed August 13, 2012; AmpliTech, Inc., a designer and manufacturer of microwave amplifiers and RF products, became a wholly owned subsidiary, and the registrant changed its name to AmpliTech Group, Inc. The standalone results below therefore do not reflect the operating business.
Financial results and position
| Metric | Three months ended June 30, 2012 | Six months ended June 30, 2012 |
|---|---|---|
| Revenue | $0 | $0 |
| Net loss | $2,570 | $3,824 |
| Basic and diluted loss per share | $0.03 | $0.04 |
| Net cash used in operating activities | $1,570 | $2,124 |
| Net cash from financing activities | $2,050 | $2,550 |
At June 30, cash was $501 and total assets were $551. Current liabilities were $8,397, including $6,017 due to a stockholder and $2,380 of accrued expenses. Stockholders’ deficit was $7,846; the filing reports negative working capital. There was no reported standalone revenue, gross margin, or operating cash inflow. No interest or taxes were paid.
Pro forma operating-company results
The filing presents combined pro forma results as though the companies had been combined at the start of each period. For the six months ended June 30, 2012, revenue was $575,788 and net income was $54,293, versus revenue of $467,978 and net income of $44,492 in the comparable 2011 period. For the second quarter, pro forma revenue was $313,035 and net income was $40,053, compared with $261,166 and $55,299, respectively, in 2011. These are pro forma figures, not results reported in the standalone statements.
Changes, outlook, and risks
- The shell reported a $2,570 second-quarter loss, consisting of professional and administrative expenses; cumulative loss from inception through June 30 was $12,546.
- Management stated that the company had no ongoing source of revenue sufficient to cover costs and that substantial doubt existed about its ability to continue as a going concern. It expected to seek funding from management, stockholders, or other investors but gave no assurance that funding would be available.
- After quarter-end, the company assumed $212,500 of subsidiary convertible notes. The notes have a six-month term, accrue interest at 8% annually, and are convertible at $0.10 per share, subject to adjustments. The filing also reports 17,875,000 shares outstanding after the transaction and up to 2,125,000 additional shares potentially issuable upon conversion.
- In the second quarter, the company issued 200,000 shares for officer services and sold shares in a private placement. It reported no legal proceedings, defaults upon senior securities, or material changes in internal controls. Management concluded disclosure controls were effective as of June 30.
- No forward revenue or earnings guidance is provided. The filing notes that financing and successful, profitable operations are necessary to sustain the business.
Important facts for investors to verify
- Confirm the acquisition’s effective date and share consideration: the filing gives differing transaction descriptions, including 458,400 Bayview shares exchanged for 1,200,000 shares in one note and 16,675,000 shares issued for AmpliTech, Inc. in MD&A.
- Reconcile the private-placement proceeds: 6,800 shares at $0.25 imply $1,700, while the cash-flow statement reports $1,650 of stock-sale proceeds.
- Review the acquired operating company’s financial statements, cash position, debt obligations, and the terms and conversion impact of the $212,500 notes; the pro forma summary alone does not provide full combined balance-sheet or cash-flow detail.
- Assess liquidity and going-concern risk given $501 of quarter-end cash, $8,397 of current liabilities, and reliance on further financing.