<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period __________ to __________
Commission File number 1-10799
ADDVANTAGE MEDIA GROUP, INC.
(Exact name of small business issuer as specified in its charter)
OKLAHOMA 73-1351610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 East Skelly Drive
Meridian Tower, Suite 1080
Tulsa, Oklahoma 74135-6552
(Address of principal executive office) (Zip Code)
(918) 665-8414
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ___
---
Shares outstanding of the issuer's $.01 par value common stock as of August 13,
1996 is 5,062,620. Transitional Small Business Issuer Disclosure Format (Check
one): Yes ___ No x
---
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 972,952 $ 20,444
Accounts receivable 2,742 6,926
Deferred income taxes 667,000 667,000
Other current assets 40,639 8,514
---------------------------
Total current assets 1,683,333 702,884
Property and equipment, at cost:
Calculators 1,403,594 749,107
Office and production equipment 407,678 341,575
Furniture and fixtures 75,527 64,417
---------------------------
1,886,799 1,155,099
Accumulated depreciation 408,907 331,385
---------------------------
1,477,892 823,714
Deferred income taxes 3,079,101 3,243,000
Patent, net of accumulated amortization of
$490,941 and $445,533 at June 30, 1996
and December 31, 1995, respectively 417,169 462,577
Deferred charges 72,522 12,064
---------------------------
Total assets $6,730,017 $5,244,239
===========================
</TABLE>
-2-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------------------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
(NET CAPITAL DEFICIENCY)
Current liabilities:
Note payable to bank $ 700,000 $ 519,968
Notes payable to shareholders and directors 176,808 176,808
Accounts payable 516,778 558,748
Accrued interest 488,784 252,677
Other accrued liabilities 738,992 687,782
Accrued preferred stock dividends 472,023 416,777
Unearned advertising revenue 276,750 -
----------------------------
Total current liabilities 3,370,135 2,612,760
Long-term obligations 595,021 515,163
Long-term bank debt 3,406,656 3,406,656
Stockholders' equity (net capital deficiency)
Preferred stock, $1.00 par value, 1,000,000
shares authorized; Series A preferred stock -
277,750 shares issued and outstanding at
June 30, 1996 and December 31, 1995;
liquidation preference, $1,111,000 927,167 927,167
Common stock, $.01 par value, 10,000,000 shares
authorized; 5,062,620 and 4,927,620 shares
issued and outstanding at June 30, 1996 and
December 31, 1995, respectively 50,626 49,276
Capital in excess of par value 6,426,390 5,991,428
Accumulated deficit (8,045,978) (8,258,211)
----------------------------
Net capital deficiency (641,795) (1,290,340)
----------------------------
Total liabilities and net capital deficiency $ 6,730,017 $ 5,244,239
============================
</TABLE>
-3-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30,
1996 1995
------------------------------
<S> <C> <C>
Revenues:
Advertising $1,375,830 $ -
Sales of calculators 3,990 74,085
Other - 7,480
------------------------------
1,379,820 81,565
Costs and expenses:
Cost of advertising services 397,786 36,335
Cost of sales of calculators 2,020 38,493
Selling expenses 50,198 10,696
General and administrative expenses 346,200 295,696
------------------------------
796,204 381,220
------------------------------
Operating income (loss) 583,616 (299,655)
Interest expense 135,116 105,525
------------------------------
Income (loss) before provision
for income taxes 448,500 (405,180)
Provision for income taxes 163,899 -
------------------------------
Net income (loss) 284,601 (405,180)
Preferred stock dividends (27,623) (27,623)
------------------------------
Net income (loss) applicable to common stock $ 256,978 $ (432,803)
==============================
Net income (loss) per common share $ 0.04 $ (0.11)
==============================
Shares used in computing net income
(loss) per common share 5,798,839 4,008,620
==============================
</TABLE>
-4-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
----------------------------------
<S> <C> <C>
Revenues:
Advertising $1,980,630 $ -
Sales of calculators 6,023 87,813
Other 236 7,536
------------------------------------
1,986,889 95,349
Costs and expenses:
Cost of advertising services 616,926 81,369
Cost of sales of calculators 3,683 43,241
Selling expenses 56,155 22,763
General and administrative expenses 612,520 416,695
Litigation expense - 50,607
-----------------------------------
1,289,284 614,675
------------------------------------
Operating income (loss) 697,605 (519,326)
Interest expense 266,227 221,090
------------------------------------
Income (loss) before provision
for income taxes 431,378 (740,416)
Provision for income taxes 163,899 -
------------------------------------
Net income (loss) 267,479 (740,416)
Preferred stock dividends (55,246) (55,246)
------------------------------------
Net income (loss) applicable to common stock $ 212,233 $ (795,662)
====================================
Net income (loss) per common share $ 0.04 $ (0.20)
====================================
Shares used in computing net income (loss)
per common share 5,680,109 3,958,896
====================================
</TABLE>
-5-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
----------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 267,479 $(740,416)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 122,930 75,796
Amortization of discount on shareholders
notes and long-term obligation 25,558 13,935
Bonuses awarded by issuance of common stock - 187,500
Deferred retirement plan obligation 54,300 -
Changes in assets and liabilities:
Accounts receivable 4,183 (3,613)
Inventory - 13,348
Other current assets (32,125) 301
Deferred charges (60,458) 6,092
Accounts payable (41,970) 16,310
Accrued interest 236,107 207,118
Other accrued liabilities 51,210 88,261
Unearned advertising revenue 276,750 -
Deferred income taxes 163,900 -
----------------------------
Net cash provided by (used in) operating activities 1,067,864 (135,368)
INVESTING ACTIVITIES
Purchases of property and equipment (731,700) -
----------------------------
Net cash used in investing activities (731,700) -
</TABLE>
-6-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF CASH FLOWS (continued)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
-------------------------------
<S> <C> <C>
FINANCING ACTIVITIES
Proceeds from issuance of bank notes $180,032 $ -
Proceeds from issuance of investor notes - 220,000
Exercise of underwriter warrants 432,000 -
Exercise of stock options 4,312 -
------------------------------
Net cash provided by financing activities 616,344 220,000
------------------------------
Increase in cash and cash equivalents 952,508 84,632
Cash and cash equivalents, beginning of period 20,444 169
------------------------------
Cash and cash equivalents, end of period $972,952 $ 84,801
==============================
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Interest paid $ 361 $ 37
Bonuses paid by issuance of stock - 187,500
==============================
</TABLE>
-7-
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, the information furnished reflects all adjustments, consisting only of
normal recurring adjustments which are, in the opinion of management, necessary
in order to make the financial statements not misleading.
NOTE 2 - DESCRIPTION OF BUSINESS
The Company markets and sells in-store advertising to national advertisers. The
advertising is positioned on the Company's solar powered calculators attached to
the handles of mass merchants' shopping carts. The calculators are patented and
registered under the trademark "Shoppers Calculators." The Company also sells
Shoppers Calculators(R) to third parties, including independent retailers and
international licensees.
The Company entered into separate agreements with Wal-Mart Stores, Inc. ("Wal-
Mart") in July 1993 and June 1994 which provided for the installation of the
Company's calculators in certain Wal-Mart stores. These contracts were never
implemented, and in January 1995, the Company field a suit against Wal-Mart for
the alleged breach of the terms of those contracts. On September 1, 1995, the
Company and Wal-Mart entered into a new contract in settlement of the lawsuit.
Under the terms of a new four-year contract, the Company will install and
maintain Shoppers Calculators(R) in all of Wal-Mart's Supercenters in the
continental United States and Wal-Mart is responsible for selling the
advertising for the calculators during the initial phase of the contract.
During the term of the contract in which Wal-Mart is responsible for selling the
advertising, Wal-Mart has agreed to guarantee advertising revenues to the
Company in excess of $23.5 million, subject to the Company's obligation to
install and service the Shoppers Calculators(R) during the revenue guaranty
period. After the Company has received payment of the total guaranteed
advertising revenues, the Company has the option to continue the contract and
assume the advertising sales responsibilities for the program. If the Company
elects to continue the contract, the program will then continue on this basis
for a fixed period of time, and upon conclusion of the term of the contract, the
program will be subject to re-evaluation by both parties. Through June 30,
1996, cumulative advertising revenues have totaled $2,107,530, reducing the
guaranteed advertising revenues to be received in future periods to $21,447,270.
-8-
<PAGE>
Certain terms of the contract were determined based on the following assumed
schedule with respect to the number of Supercenter stores to be participating in
the Company's program. The following table sets forth the assumed schedule of
Supercenter installations pursuant to the Wal-Mart contract's operating plan and
the actual installations in Supercenters to date.
<TABLE>
<CAPTION>
Shopping Shopping
Stores to Carts to Stores Carts
Year be Added be Added Installed Installed
--------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 33 39,600 41 31,925
1996 200 240,000 180 141,478/(1)/
1997 100 120,000 N/A N/A
1998 100 120,000 N/A N/A
----------------------
433 519,600
======================
</TABLE>
___________
/(1)/ Through June 30, 1996. The Company currently plans to complete
installations in 284 Supercenters during 1996.
In July 1996, the chief executive officer of Wal-Mart expressed concerns over
certain aspects of the current Wal-Mart contract. Since that time, the Company
and Wal-Mart have maintained communications in an effort to address the concerns
while continuing the installation of the Company's Shoppers Calculator(R)
program in the Supercenter stores under the terms of such contract. The Company
and Wal-Mart are currently negotiating an amendment to the existing contract and
Wal-Mart recently issued a press release stating that it remained committed to
honoring its contractual obligations to the Company.
The cost of Shoppers Calculator components and installation hardware not yet
installed was $215,468 at June 30, 1996, and is included in the balance sheet
under property and equipment.
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Business activity was primarily related to managing a Shoppers Calculator
program in Wal-Mart Supercenters and developing programs with other mass
merchants. Advertising revenues totaled $1,375,800 during the three months ended
June 30, 1996. The Company's first revenue period under the Wal-Mart contract
began on November 6, 1995, and there were no advertising revenues for the
comparable period last year.
Revenues from sales of calculators declined from $74,100 for the three months
ended June 30, 1995 to $4,000 for the three months ended June 30, 1996.
Approximately 5,200 units were sold during the second quarter of fiscal 1995,
compared to approximately 276 units sold in the second quarter of fiscal 1996.
Cost of services, representing primarily labor to supervise, service and
clean the installed units and to change advertising messages, and depreciation
of installed units, increased approximately $361,500 (995%) in 1996 as compared
to 1995 as a result of higher labor costs and depreciation due to the increase
in the number of calculators installed and serviced during the respective
periods.
Cost of sales of calculators, representing the manufacturing costs of units
sold, decreased approximately $36,500 (95%) in 1996 as compared to 1995. This
was due to the decreased number of units sold during the second quarter of 1996
as compared to 1995.
Selling expense increased approximately $39,500 (369%) in the second quarter
of 1996. This was primarily due to increases during 1996 in payroll, and payroll
related expenses.
General and administrative expenses increased $50,500 (17%) for the second
quarter of 1996 as compared to the same period in 1995. During 1996, payroll and
payroll related expenses increased $49,700 as the Company began to increase
staff to handle the increased work load required from the Wal-Mart Supercenter
contract. Officer bonus accruals decreased $120,800 during the second quarter
of 1996 as compared to the same period in 1995. Executive retirement plan
accruals, including insurance cost to fund future payments, totaled $68,600
during the 1996 second quarter, compared to none in the second quarter of 1995.
Expenses related to broker and analyst meetings and other shareholder expenses
increased $6,400 over 1995. Increases amounting to $46,600 occurred in
professional fees, occupancy costs, business taxes and other expenses.
Interest expenses increased approximately $29,600 (28%) in the second quarter
of 1996 due primarily to higher levels of borrowing as compared to the same
period in 1995. Also during 1996, interest has been accrued on amounts due
investors which has been recorded in the financial statements as long-term
obligation payable.
-10-
<PAGE>
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Business activity was primarily related to managing a Shoppers Calculator
program in Wal-Mart Supercenters and developing programs with other mass
merchants. Advertising revenues totaled $1,980,600 during the first six months
of 1996. The Company's first revenue period under the Wal-Mart contract began
on November 6, 1995, and there were no advertising revenues for the comparable
period last year.
Revenues from sales of calculators declined from $87,800 for the six months
ended June 30, 1995 to $6,000 for the six months ended June 30, 1996.
Approximately 6,150 units were sold during the first six months of fiscal 1995,
compared to approximately 392 units sold in the first six months of 1996.
Cost of services, representing primarily labor to supervise, service and
clean the installed units and to change advertising messages, and depreciation
of installed units, increased approximately $535,600 (658%) in 1996 as compared
to 1995 as a result of higher labor costs and depreciation due to the increase
in the number of calculators installed and serviced during the respective
periods.
Cost of sales of calculators, representing the manufacturing costs of units
sold, decreased approximately $39,600 (91%) in 1996 as compared to 1995. This
was due to the decreased number of units sold during the first half of 1996 as
compared to 1995.
Selling expense increased approximately $33,400 (147%) in the first six
months of 1996. This was primarily due to increases during 1996 in payroll, and
payroll related expenses.
General and administrative expenses increased $195,800 (47%) for the first
six months of 1996 as compared to the same period in 1995. During 1996, payroll
and payroll related expenses increased $86,300 as the Company began to increase
staff to handle the increased work load required from the Wal-Mart Supercenter
contract. Officer bonus accruals decreased $120,800 during the first half of
1996 as compared to the same period in 1995. Executive retirement plan
accruals, including insurance cost to fund future payments, totaled $137,000
during the 1996 first half. Expenses related to broker and analyst meetings and
other shareholder expenses increased $21,700 over 1995. Increases amounting to
$80,100 occurred in professional fees, occupancy costs, business taxes and other
expenses. The increase was offset by a decrease in investment banking fees of
$8,500 from the first quarter of 1995.
Litigation expenses in the amount of $50,600 were incurred during the first
half of 1995 in connection with the Company's lawsuit against Wal-Mart.
Interest expenses increased approximately $45,100 (20%) in the first half of
1996 due primarily to higher levels of borrowing as compared to the same period
in 1995. Also during 1996, interest has been accrued on amounts due investors
which has been recorded in the financial statements as long-term obligation
payable.
-11-
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
During the first quarter of 1995, the Company completed a private placement
of promissory notes and warrants for an aggregate consideration of $200,000. The
offering included (a) a total of 500,000 warrants, each of which, upon exercise,
entitled the holder to acquire one share of the Company's Common Stock at a
price of $.20 per share, and were exercisable within 24 months from the date of
issuance; (b) a total of 10% of the net recovery from the Wal-Mart lawsuit
described elsewhere herein; and (c) promissory notes in an aggregate principal
amount of $200,000 and bearing interest at the rate of 10% per annum due on or
before 20 days after the final resolution, by settlement, final judgment or
otherwise, of the Wal-Mart litigation. On November 30, 1995, investors holding
warrants to purchase 425,000 shares of Common Stock exercised such warrants by
converting promissory notes in the principal amount $85,000 to acquire the
shares. At the same date, new promissory notes totaling $130,808 (representing
$115,000 principal and $15,808 accrued interest on the original notes) were
issued. These notes mature on June 30, 1997.
During the second quarter of 1995, the Company issued 200,000 shares of
Common Stock as a partial settlement of a past due account. As a result of this
transaction, accounts payable and accrued interest were reduced by $75,000 and
$14,800 respectively.
The Company entered into separate agreements with Wal-Mart Stores, Inc. in
July 1993 and June 1994 which provided for the installation of the Company's
calculators in certain Wal-Mart stores. The July 1993 and June 1994 contracts
were never implemented and on January 18, 1995, the Company filed a suit against
Wal-Mart for the alleged breach of the terms of those contracts.
On September 1, 1995, the Company and Wal-Mart entered into a new contract in
settlement of the lawsuit. Under the terms of the new four-year contract, the
Company will install the Shoppers Calculators in all of Wal-Mart's Supercenters
in the continental United States and Wal-Mart will be responsible for selling
the advertising for the calculators during the initial phase of the contract.
During the term of the contract in which Wal-Mart is responsible for the
advertising sales, Wal-Mart has guaranteed advertising revenues to the Company
in excess of $23.5 million subject to the Company's obligation to install and
service the Shoppers Calculators during the revenue guaranty period. After the
Company has received payment of the guaranteed revenues, it has the option to
continue the contract through October 6, 1999, by assuming the advertising sales
responsibilities for the program. Upon conclusion of the contract, the
continuation of the program is subject to re-evaluation by both parties.
In July 1996, the chief executive officer of Wal-Mart expressed concerns over
certain aspects of the current Wal-Mart contract. Since that time, the Company
and Wal-Mart have maintained communications in an effort to address the concerns
while continuing the installation of the Company's Shoppers Calculator(R)
program in the Supercenter stores under the terms of such contract. The Company
and Wal-Mart are currently negotiating an amendment to the existing contract and
Wal-Mart recently issued a press release stating that it remained committed to
honoring its contractual obligations to the Company. While it is anticipated
that such amendment will benefit the interests of both parties, there can be no
assurance at this time, however, that an amendment to the existing contract
will be entered into by the parties or, if such
-12-
<PAGE>
amendment is entered into, that the resulting agreement between the parties, as
amended, will not materially increase the burdens of or reduce the benefits to
the Company.
The present value of the amounts payable to the participants in the Company's
private placement (including Messrs. Hood and Young who provided the initial
funding for the lawsuit), who have the right to receive an aggregate of 12% of
the net recovery from the Wal-Mart contract which was entered into in settlement
of the litigation has been calculated by the Company to be $540,721, including
accrued interest through June 30, 1996, and has been recorded as long-term
obligation payable in the financial statements.
In compliance with the terms of the Wal-Mart contract, the Company furnished
Wal-Mart with a detailed "operating plan" which projected advertising revenues,
capital costs and operating expenses based on the new contract. The operating
plan covered years 1995, 1996, 1997 and 1998. The key assumptions concerning
the number of Supercenters available for installation used in developing the
operating plan were provided to the Company by Wal-Mart and were as follows:
<TABLE>
<CAPTION>
Supercenter Installations
Year Stores Shopping Carts
---- ------ --------------
<S> <C> <C>
1995 33 39,600
1996 200 240,000
1997 100 120,000
1998 100 120,000
--- -------
Total Installations 433 519,600
=== =======
</TABLE>
The Wal-Mart contract provided the Company with additional bank financing,
which has been guaranteed by Wal-Mart, in the amount of $700,000.
On March 6, 1996, the Company completed a restructuring of all past due bank
debt effective as of October 1, 1995. The Company's $1,800,000 revolving line of
credit, other notes totaling $1,132,622 and accrued interest through September
30, 1995 of $474,034 were combined into a new note in the amount of $3,406,656.
This new loan bears interest at the Chase Manhattan Bank prime rate (8.25% on
June 30, 1996) plus 1%. The loan has a maturity date of May 31, 1998, with
payment terms tied to the Company's projected revenues under the Wal-Mart
contract. Payments of interest and principal on the $3,406,656 note will
commence after the $700,000 note guaranteed by Wal-Mart has been paid, which is
anticipated to be in January 1997. Based on projected revenues under the Wal-
Mart contract, the Company anticipates that payments on the restructured bank
debt will commence in February 1997.
The Company's first revenue period under the Wal-Mart contract began on
November 6, 1995. Through June 30, 1996, cumulative revenues received from Wal-
Mart totaled $2,107,530, reducing the guaranteed revenues to be received in
future periods to $21,447,270. The Company
-13-
<PAGE>
believes the cash flow from the Wal-Mart contract should allow the Company to
meet its anticipated cash requirements for the foreseeable future, including
repayment of all past due obligations.
During June 1996, certain warrants to purchase up to 60,000 units (each unit
consisting of two shares of common stock and one warrant to purchase one share
of common stock for $4.80 per share) were exercised. These unit warrants were
issued in June 1991 to the selling agent in connection with the Company's
initial public offering. A total of 120,000 shares of common stock were issued
with net proceeds amounting to $432,000. The warrants to purchase 60,000 shares
of Common Stock at $4.80 per share expire on September 25, 1996.
The Company's total stockholders' equity as reflected on its balance sheet at
December 31, 1992, fell below the minimum capital and surplus requirements
necessary to maintain the listing of the Common Stock and Warrants on the Nasdaq
Small Cap Market. Consequently, the Common Stock and Warrants were delisted
from the Nasdaq system on April 23, 1993 and from the Boston Stock Exchange on
January 14, 1994. Because the Common Stock and Warrants have been delisted from
the Nasdaq Small Cap Market and the Boston Stock Exchange, holders of such
securities may encounter greater difficulty in selling them should they desire
to do so, and it may prove to be more difficult for the Company to raise future
capital to meet its obligations. The Company's securities are now trading on
the OTC Bulletin Board with approximately eight market makers.
All statements other than statements of historical facts, including, without
limitation, statements concerning the projected installations of Shoppers
Calculators(R) in the Supercenters and the anticipated dates of repayment of
certain indebtedness of the Company, are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended. Although the
Company believes that such forward-looking statements are reasonable, such
statements are subject to various risks and uncertainties which could cause
actual results to differ from the Company's expectations, including, but not
limited to, general economic conditions and conditions affecting the mass
merchandising industry in general and Wal-Mart specifically, the availability of
manufactured components and the Company's ability to fund the costs thereof, and
other factors which may affect the Company's ability to comply with its
obligations under the Wal-Mart contract.
-14-
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description
----------- -----------
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarterly period ended
June 30, 1996.
II-1
<PAGE>
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.
ADDVANTAGE MEDIA GROUP, INC.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Charles H. Hood Director and President August 14, 1996
- --------------------- (Principal Executive Officer)
Charles H. Hood
/s/ Gary W. Young Director, Executive Vice President - August 14, 1996
- --------------------- Finance and Administration and Treasurer
Gary W. Young (Principal Financial Officer)
II-2
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
----------- -----------
11 Statement re: Computation of Per Share
Earnings
27 Financial Data Schedule
<PAGE>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
Six Months ended June 30, 1996
<TABLE>
<CAPTION>
Fully
Primary Diluted
-------------------------
<S> <C> <C>
Net income $ 267,479 $ 267,479
Less preferred stock dividends (55,246) (55,246)
-------------------------
Net income applicable to common stock $ 212,233 $ 212,233
Weighted average shares outstanding 4,946,164 4,946,164
Effect of options and warrants 733,945 990,340
-------------------------
Weighted average common and common
equivalent shares 5,680,109 5,936,504
-------------------------
Net income per common share $ .04 $ .04
=========================
Three Months ended June 30, 1996
<CAPTION>
<S> <C> <C>
Net income $ 284,601 $ 284,601
Less preferred stock dividends (27,623) (27,623)
-------------------------
Net income applicable to common stock $ 256,978 $ 256,978
Weighted average shares outstanding 4,957,125 4,957,125
Effect of options and warrants 841,714 983,085
-------------------------
Weighted average common and common
equivalent shares 5,798,839 5,940,210
=========================
Net income per common share $ .04 $ .04
=========================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 972,952
<SECURITIES> 0
<RECEIVABLES> 2,742
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0
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