The Background: A $3.2 Million Crypto Scam
In early 2024, AmpliTech Group made approximately $3.25 million in digital currency transactions. The company later determined it was the victim of a cyber phishing scam. It had been fraudulently induced to hold its digital currency with a custodian it believed was legitimate but that no longer exists. The result was a complete loss of roughly $3.2 million.
The company disclosed the loss in its Form 10-Q for the quarter ended March 31, 2024.
The Company's Response in 2024
After discovering the fraud, AmpliTech's board formed a special committee of independent directors. That committee hired outside counsel to conduct an internal and external investigation.
The investigation identified material weaknesses in the company's internal controls over financial reporting. Management then adopted several corrective measures:
- Requiring dual authorization on all ACH payments and bank wires
- Establishing an appropriate approval hierarchy
- Requiring board special committee approval for material transactions, agreements, or any investment of company funds above a threshold amount
The company stated the investigation found no evidence that any current or former director, officer, or employee personally benefited from, participated in, or knowingly facilitated the fraudulent scheme.
The New Threat: A Derivative Lawsuit
In June 2026, more than two years after the incident, AmpliTech received follow-up correspondence from a law firm representing a single shareholder. The shareholder first contacted the company in October 2024, demanding the board take action against certain officers and directors over alleged fiduciary duty violations related to the crypto investment. Correspondence between the parties continued until February 2025.
Now, the shareholder's law firm says it intends to file a derivative complaint in Washoe County, Nevada. The draft complaint names the company, its then-directors, and certain current officers as defendants. It alleges breaches of fiduciary duty, abuse of control, and related misconduct. The draft seeks monetary relief, restitution, attorney's fees, and corporate governance demands.
No lawsuit has actually been filed yet. The draft complaint contains only allegations, and no court has ruled on any claim.
AmpliTech's Position
The company and the individual defendants dispute the allegations and say they intend to "vigorously defend" themselves if a complaint is filed. AmpliTech believes the threatened lawsuit is without legal or factual merit and, based on current information, does not expect it to have a material adverse effect on its business, operations, or financial condition.
The company cautioned that it cannot predict the ultimate outcome or timing of any litigation, especially since no complaint has been filed and additional claims or facts could emerge later.
Why This Matters Now
This disclosure arrives at a time when AmpliTech's operating results have been improving. The company recently reported first quarter 2026 revenue of $5.35 million, up 48.6% year-over-year, with gross margin expanding to 48% from 33%. While the threatened lawsuit relates to an old, fully reserved loss, derivative litigation can still create distraction and legal expense for a small company, even when management believes the claims lack merit.