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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 December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period ________________ to ______________
Commission File number 1-10799
ADDvantage Technologies 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.)
1605 E. Iola
Broken Arrow, Oklahoma 74012
(Address of principal executive office) (Zip Code)
(918) 251-9121
(Registrant's telephone number, including area code)
ADDvantage Media Group, Inc.
5100 E. Skelly Drive Ste. 1080
Tulsa, Oklahoma 74135
December 31, 1998
(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 February 1,
2000 is 9,720,845.
Transitional Small Business Issuer Disclosure Format (Check one): Yes No x
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Part I - Financial Information Page
----
Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet
December 31, 1999 3
Consolidated Statements of Income
Three Months Ended December 31, 1999 and 1998 5
Consolidated Statements of Cash Flows
Three Months Ended December 31, 1999 and 1998 6
Notes to Consolidated Financial Statements 8
Item 2.
Management's Discussion and Analysis of the Financial
Condition and Results of Operation 10
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds 14
Item 4. Submission of Matter to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 17
2
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<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED BALANCE SHEET
December 31, 1999
<S> <C>
Assets
Current assets:
Cash $ 85,452
Accounts receivable 2,222,983
Inventories 13,415,609
Prepaid expenses 4,657
---------------
Total current assets 15,728,702
Property and equipment, at cost
Machinery and equipment 937,806
Leasehold improvements 123,013
Other property and equipment 70,163
1,130,981
Less accumulated depreciation (618,820)
---------------
Net property and equipment 512,162
Other assets:
Deferred income taxes 1,210,094
Investment 660,000
Goodwill 1,521,539
Other assets 31,462
3,423,095
---------------
Total assets $ 19,663,958
===============
</TABLE>
See notes to consolidated financial statements
3
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<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED BALANCE SHEET
December 31, 1999
<S> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,633,883
Accrued income taxes 393,554
Bank Revolving Line of Credit 2,798,110
Dividends payable 310,000
Stockholder loans 1,150,000
---------------
Total current liabilities 6,285,547
Stockholders' equity:
Preferred stock, 1,000,000 shares authorized,
$1.00 par value, at stated value
Series A, 5% cumulative convertible, 200,000 shares issued
and outstanding with a stated value of $40 per share 8,000,000
Series B, 7% cumulative; 300,000 shares issued and
outstanding with a stated value of $40 per share 12,000,000
Series C, convertible, 27,211 shares issued and outstanding
with a stated value of $36.75 per share 1,000,000
Common stock, $.01 par value, 10,000,000
shares authorized; 9,720,845 shares issued
and outstanding 97,209
Common stockholders' deficit (7,718,797)
Total stockholders' equity 13,378,411
---------------
Total liabilities and stockholders' equity $ 19,663,958
===============
</TABLE>
See notes to consolidated financial statements
4
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<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
STATEMENTS OF INCOME
For three months ended December 31, 1999
and 1998
Three months Three months
ended ended
December 31, December 31,
1999 1998
(unaudited) (unaudited)
---------------------------------
<S> <C> <C>
Net sales and service income $ 4,536,171 $ 4,782,325
Cost of sales 2,101,005 2,725,061
---------------------------------
Gross profit 2,435,166 2,057,264
Operating expenses 1,134,087 887,096
---------------------------------
Income from operations 1,301,079 1,170,168
Interest expense (67,554) (71,321)
---------------------------------
Income before income taxes 1,233,524 1,098,846
Provision for income taxes 428,199 -
---------------------------------
Net income 805,325 1,098,846
Preferred Dividends 310,000 -
---------------------------------
Net income attributable to common
stockholders $ 495,325 $ 1,098,846
=================================
Pro-forma net income (unaudited):
Income before income taxes $ 1,098,846
Provision for income taxes 417,562
---------------
Pro-forma net income 681,285
Provision for preferred dividends 310,000
---------------
Pro-forma net income attributable to
common stockholders $ 371,285
===============
Basic and Diluted Earnings per share $ 0.05 $ 0.04
=================================
</TABLE>
See notes to consolidated financial statements
5
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<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
STATEMENTS OF CASH FLOWS
For three months ended December 31, 1999
and 1998
Three months Three months
ended ended
December 31, December 31,
1999 1998
-----------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 805,325 $ 1,098,846
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization 139,539 48,149
Provision for Deferred Income Tax 44,906 -
Change in:
Receivables 866,601 307,593
Prepaid expense 214,438 (38,621)
Inventories (1,074,929) (721,104)
Accounts payable and accrued liabilities 415,570 735,194
------------------------------
Net cash provided by operating activities 1,411,451 1,430,057
------------------------------
Cash Flows from Investing Activities
Additions to property and equipment (205,986) (7,594)
Cash acquired in LEE CATV merger 90,047 -
Other (50,955) -
------------------------------
Net cash provided by (used in) investing activities (166,894) (7,594)
------------------------------
Cash Flows from Financing Activities
Distributions to owners - (320,000)
Net repayments under line of credit (858,378) (1,102,463)
Repayments of stockholders advances (325,007) -
Proceeds for exercise of common stock opt 7,437 -
------------------------------
Net cash used in financing activities (1,175,948) (1,422,463)
------------------------------
Net increase in cash 68,609 -
Cash, beginning of period 16,843 -
------------------------------
Cash, end of period $ 85,452 $ -
==============================
</TABLE>
See notes to consolidated financial statements
6
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<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
STATEMENTS OF CASH FLOWS
For the three months ended December 31, 1999 and
1998
Three months Three months
ended ended
December 31, December 31,
1999 1998
-----------------------------
<S> <C> <C>
Supplemental Cash Flow Information
Interest paid for the period $ 67,554 $ 71,321
Supplemental Disclosure of Non-cash
Investing and Financing Activities
Acquisition of Lee CATV Corporation:
Issuance of preferred stock $ 1,000,000 $ -
Working capital other than cash 241,017 -
Land and equipment 116,694 -
Intangibles and other assets 1,276,229 -
Assumption of note payable (723,987) -
</TABLE>
See notes to consolidated financial statements
7
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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.
On September 30, 1999, the former shareholders of TULSAT Corporation (formerly
named DRK Enterprises, Inc.) assumed control of ADDvantage Media Group, Inc.
("ADDvantage Media", now named ADDvantage Technologies Group, Inc)
pursuant to the Securities Exchange Agreement ("Agreement") entered into on
September 16, 1999. Pursuant to the Agreement, the TULSAT shareholders
transferred all the issued and outstanding common stock of TULSAT, along with
$10,000,000 of TULSAT promissory notes, to ADDvantage Media in exchange for
8,000,000 shares of ADDvantage Media $.01 par value common stock, 200,000
shares of newly issued Series A 5% Cumulative Convertible Preferred Stock, par
value $1.00 per share, with a stated value of $40.00 per share (convertible into
ADDvantage Media common stock at a price of $4.00 per share), and 300,000 shares
of newly issued Series B 7% Cumulative Preferred Stock, par value $1.00 per
share, with a stated value of $40.00 per share.
As a result of this transaction, TULSAT became a wholly owned subsidiary of
ADDvantage Media and the former TULSAT owners acquired approximately 82% of the
issued and outstanding common stock, and 100% of the issued and outstanding
preferred stock of ADDvantage Media. TULSAT's management assumed management and
control of ADDvantage Media.
The transaction has been accounted for as a purchase of ADDvantage Media by
TULSAT. The accompanying financial statements include the consolidated balance
sheet of ADDvantage Media and TULSAT as of December 31, 1999. The statements of
income and cash flows are those of the combined company for December 31, 1999
and those of TULSAT for the period ended December 31, 1998.
Note 2 - Description of Business
TULSAT sells new, surplus, and refurbished cable television equipment throughout
North America in addition to being a repair center for various cable companies.
TULSAT operates in one business segment.
ADDvantage Media continues to market and sell the Shoppers Calculators-R- to
various companies and entrepreneurs who use them to sell advertising within
local stores. The advertising is positioned on patented solar-powered
calculators attached to the handles of shopping carts.
8
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<CAPTION>
Note 3 - Earnings per Share
Pro-forma
Three months Three months
ended ended
December 31, December 31,
1999 1998
-----------------------------
<S> <C> <C>
Basic EPS Computation:
Net income $495,325 $371,285
Weighted average outstanding common 9,719,429 9,476,646
Basic and Diluted Earnings per Share $0.05 $0.04
</TABLE>
Stock options and warrants were not included in the computation of diluted EPS
as their effect is anti-dilutive.
Note 4 - Acquistions and other events
On November 22, 1999, Diamond W Investments, Inc. ("Diamond") was merged into a
wholly-owned subsidiary of the Company. As a result, the former shareholders of
Diamond received 27,211 shares of ADDvantage Media Series C Convertible
Preferred Stock, par value $1.00 per share with a stated value of $36.75 per
share (which are convertible into shares of ADDvantage Media common stock at a
price of $3.675 per share), and a promissory note in the amount of $271,094, for
a total merger consideration of $1,271,094.
Diamond was established in 1986 as a full service repair and sales center,
selling new and refurbished cable equipment and providing related services.
On November 10, 1999, the ADDvantage Media Board of Directors approved an
amendment to the certificate of incorporation to change the Company's name to
"ADDvantage Technologies Group, Inc." The amendment to the certificate of
incorporation was approved by a majority of the issued and outstanding shares of
ADDvantage Media's common stock. The name change became effective on
December 30, 1999.
On October 19, 1999, the name of TULSAT was changed from D.R.K. Enterprises,
Inc. to TULSAT Corporation.
Note 5 - Revolving Line of Credit
In January, ADDvantage received a Line of Credit increase to $l0,000,000. This
will provide up to $6,000,000 in a revolving Line of Credit for working capital
purposes and up to $4,000,000 for future acquisitions meeting Bank of Oklahoma
credit guidelines. This should provide ADDvantage with the financial resources
to help fund future business acquisitions or to establish new locations in
strategic markets.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
On September 30, l999, the former shareholders of TULSAT Corporation assumed
control of ADDvantage Media Group, Inc. ("AMG", now named ADDvantage
Technologies Group, Inc.) pursuant to the Securities Exchange Agreement
("Agreement") entered into on September l6, l999. Pursuant to the Agreement,
the TULSAT shareholders transferred all the issued and outstanding common stock
of TULSAT, along with $l0,000,000 of TULSAT promissory notes, to AMG in exchange
for 8,000,000 shares of AMG $.0l par value common stock, 200,000 shares of newly
issued Series A 5% Cumulative Convertible Preferred Stock, par value $l.00 per
share, with a stated value of $40.00 per share (convertible into AMG common
stock at a price of $4.00 per share), and 300,000 shares of newly issued Series
B 7% Cumulative Preferred Stock, par value $l.00 per share, with a stated
value of $40.00 per share.
As a result of this transaction TULSAT became a wholly owned subsidiary of AMG
and the former TULSAT owners acquired approximately 82% of the issued and
outstanding common stock, and l00% of the issued and outstanding preferred stock
of AMG. TULSAT'S management assumed control of AMG.
On November 22, l999, Diamond W. Investments, Inc. ("Diamond") was merged
into a wholly-owned subsidiary of AMG. As a result, the former shareholders of
Diamond received 27,2ll share of AMG Series C Convertible Preferred Stock, par
value of $l.00 per share, with a stated value of $36.75 per share (which are
convertible into shares of ADDvantage Media common stock at a price of $3.675
per share), and a promissory note in the amount of $27l,000, for a total merger
consideration of $l,27l,000.
On November l0, l999, the AMG Board of Directors approved an amendment to the
certificate of incorporation to change the Company's name to "ADDvantage
Technologies Group, Inc." The amendment to the certificate of incorporation was
approved by a majority of the issued and outstanding share of ADDvantage Media's
common stock. The name change became effective on December 30, l999.
Results of Operations
TULSAT had previously elected to be taxed as an S Corporation for federal income
tax purposes since its organization in l985. As a consequence, the taxable net
earnings of TULSAT were taxed as income to TULSAT's stockholders in
proportion to their individual stockholdings, and the payment of federal income
taxes on such proportionate share of TULSAT's taxable earnings was the personal
obligation of each stockholder. Immediately prior to the closing of the
offering, TULSAT's status as a S Corporation automatically terminated and since
then TULSAT has been treated as a C Corporation for income tax purposes as a
wholly owned subsidiary of the Company. The Company anticipates being taxed at
a combined effective rate of 38% based upon current federal and state income tax
regulations.
In order to present the results of operations for the three months ended
December 31, 1998 on a basis comparable to that for the three months ended
10
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December 31, 1999, a pro-forma provision for income taxes and preferred stock
dividends has been presented for the 1998 period.
Comparison of Results of Operations for the Three Months Ended December 3l,
l999 and December 3l, l998
Net income attributable to common stockholders for the first quarter of fiscal
2000 was $495,325 or $.05 per share versus $l,098,846 for the first quarter last
year ($371,285 attributable to common stockholders on a pro-forma basis, $.04
per share). TULSAT was taxed as an S Corporation under the Internal Revenue
Code last year so accordingly, last year's results reflect no provision for
income taxes or preferred stock dividends. The Company incurred income tax
expense of $428,199 and preferred stock dividends of $310,000 for the quarter
ended December 31, 1999.
Gross profits increased $377,903 or 18.4% in the first quarter of the fiscal
year 2000, as compared to l999. This increase was primarily due to a better mix
of products sold with higher profit margins.
Net Sales. Net Sales decreased $246,l54 or 5.1%, to $4,536,l7l in the first
quarter of 2000 from $4,782,325 in the first quarter of l999. The decrease was
attributable to purchases being postponed to the end of the year as the large
Multiple System Operators (MSO) were reassessing their engineering and upgrades
for the new acquisitions the result of the consolidation of the cable television
industry. Lee CATV had sales of $262,812 since the merger.
Cost of Goods Sold. Cost of goods sold decreased to $2,101,005 the first three
months of 2000 from $2,725,06l for the first three months of l999. The decrease
was primarily due to changes in product mix with higher profit margins.
Operating Expenses. Operating expenses increased to $l,l34,087 in the first
three months of 2000 from $887,096 in the first three months of l999. The
increase in operating expenses was primarily due to the higher costs resulting
from the acquisition of AMG and LEE CATV, and an increase in employee headcount
as a result of being a public company.
Income from Operations. Income from operations increased ll.2% to $l,301,079
for the first three months of 2000 from $l,l70,l68 for the first three months of
1999. Income from operations as a percentage of sales increased to 28.7% in the
first three months of 2000 from 24.4% in the first quarter ended December 31,
1998. This increase was primarily due to the product mix with higher profit
margins.
Liquidity and Capital Resources
The Company finances its operations primarily through internally generated
funds and bank lines of credit totaling $4,500,000. At December 3l, l999, notes
payable consist of a $2,798,ll0 balance outstanding due June 30, 2000, interest
payable monthly at Chase Manhattan Prime less .5% (8.00% at December 31, l999).
Net Cash provided by operating activities for the three-month period ended
December 3l, l999 was $1,411,451 compared to $1,430,057 for the quarter ended
December 31, 1998.
11
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Borrowings under the line of credit are limited to the lesser of $4,500,000 or
the sum of 80% of qualified accounts receivable and 25% of qualified inventory.
The line of credit is collateralized by inventory, accounts receivable,
equipment and fixtures, and general intangibles, and is guaranteed by certain
shareholders up to an aggregate $l,000,000.
In January, ADDvantage received a Line of Credit increase to $l0,000,000. This
will provide up to $6,000,000 in a revolving Line of Credit for working capital
purposes and up to $4,000,000 for future acquisitions meeting Bank of Oklahoma
credit guidelines. This should provide ADDvantage with the financial resources
to help fund future business acquisitions or to establish new locations in
strategic markets.
Stockholder loans include a $750,000 note bearing interest the same rate as the
Company's bank line of credit, and is subordinate to the bank notes payable. An
additional $27l,094 of the Diamond purchase is payable quarterly over two years
at 8% to the former owners. Shareholder loans also include advances of
$400,000 bearing interest at the same rate as the Company's line of credit.
The Company has authorized the repurchase of up to $l,000,000 of its outstanding
common stock from time to time in the open market at prevailing market prices or
in privately negotiated transactions. The repurchased shares will be held in
treasury and used for general corporate purposes including possible use in the
company's employees stock plans or for acquisitions.
Year 2000
The Company, like most other major companies, has addressed over the past
several years a universal problem commonly referred to as "Year 2000
Compliance," which relates to the ability of computer programs and systems to
properly recognize and process date sensitive information before and after
January 1, 2000. To date, there have not been, and the Company does not expect
there to be, any Year 2000 Compliance problems that are expected to have a
material adverse effect on its financial condition or its results of operations.
In addition, to date, the Company is not aware of any significant customer,
vendor, supplier, financial organization or service provider who experienced
critical Year 2000 Compliance problems.
Forward Looking Statements
Certain statements included in this report which are not historical facts are
forward-looking statements. These forward-looking statements are based on
current expectations, estimates, assumptions and beliefs of management; and
words such as "expects," "anticipates," "intends," "plans," "believes,"
"projects", "estimates" and similar expressions are intended to identify such
forward looking statements. These forward-looking statements involve risks and
uncertainties, including, but not limited to, the future prospects for the
business of the Company, the Company's ability to generate or to raise
sufficient capital to allow it to make additional business acquisitions,
changes or developments in the cable television business that could adversely
affect the business or operations of the Company, general economic conditions,
the availability of new and used equipment and other inventory and the Company's
ability to fund the costs thereof, and other factors which may affect the
12
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Company's ability to comply with future obligations. Accordingly, actual results
may differ materially from those expressed in the forward-looking statements.
13
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PART II - OTHER INFORMATION
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On November 22, 1999, the Company issued a total of 27,211 shares of its
Series C Convertible Preferred Stock, par value $1.00 per share, as part of the
consideration for its acquisition of Diamond W Investments, Inc. or Diamond.
Diamond merged with Lee CATV Corporation, a wholly-owned subsidiary of the
Company. Lee was the surviving corporation and the outstanding shares of
Diamond were converted into 27,211 shares of the Company's Series C preferred
stock (each of which will be convertible into 10 shares of the Company's common
stock) and a note payable in the original principal amount of $271,094. This
transaction is more fully described in the Company's Current Report on Form 8-K
filed December 7, 1999.
The securities were issued pursuant to the exemption from registration
requirements of the Securities Act of 1933, as amended, provided by Section 4(2)
thereof for transactions not involving a public offering and Rule 506
promulgated under such act. The former shareholders of Diamond are two
sophisticated individuals who are accredited investors capable of evaluating
the risks of an investment in the Company's stock and bearing the financial
risks of the investment. These persons had access to all material information
regarding the Company that would have been included in a registration statement
covering the securities if the shares had been offered publicly. No advertising
or general solicitation was involved in the offering of the securities. The
shares were acquired for investment purposes and not with a view to the
distribution thereof. The certificates evidencing the shares contained an
appropriate legend indicating the restrictive nature of the shares.
Item 4. Submission of Matter to a Vote of Security Holders
On November 10, 1999, the board of directors of the Company approved an
amendment to the certificate of incorporation to change its name from
"ADDvantage Media Group, Inc." to "ADDvantage Technologies Group, Inc." On
November 10, 1999, the written consent approving the amendment was signed by
David E. Chymiak, Kenneth A. Chymiak and Susan C. Chymiak, who were the
beneficial owners of 8,059,000 shares of the Company's common stock. As a
result, the amendment to the certificate of incorporation was approved by the
majority of the issued and outstanding shares of the Company's common stock and
no further votes were needed. A definitive information statement regarding this
action was filed with the SEC and mailed to the Company's shareholders.
14
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits pursuant to Item 601 of Regulation S-B.
Exhibit 2.1 The Agreement and Plan of Merger, dated as of November 22,
1999, by and among ADDvantage Media Group, Inc., TULSAT
Corporation, Lee CATV Corporation, Diamond W Investments,
Inc., Randy L. Weideman and Deborah R. Weideman
incorporated by reference to the Current Report on Form
8-K filed on December 7, 1999 (exhibits and schedules
omitted)
Exhibit 3.1 Certificate of Sixth Amendment to Certificate of
Incorporation as filed with the Oklahoma Secretary of
State on December 9, 1999 to be effective December 30,
1999
Exhibit 4.1 Certificate of the Designation, Preferences, Rights and
Limitations of ADDvantage Media Group, Inc. Series C
Convertible Preferred Stock as filed with the Secretary of
State of Oklahoma on November 22, 1999 incorporated by
reference to the Current Report on Form 8-K filed on
December 7, 1999
Exhibit 10.1 Lease Agreement, dated November 22, 1999, by and between
Randy L. Weideman and Deborah R. Weideman and Lee CATV
Corporation incorporated by reference to the Current
Report on Form 8-K filed on December 7, 1999
Exhibit 10.2 Employment Agreement, dated as of November 22, 1999, by
and between Lee CATV Corporation, Randy L. Weideman
and TULSAT Corporation incorporated by reference to the
Current Report on Form 8-K filed on December 7, 1999
Exhibit 10.3 Noncompete Agreement, dated as of November 22, 1999, by
and between Lee CATV Corporation and Deborah R. Weideman
incorporated by reference to the Current Report on Form
8-K filed on December 7, 1999
Exhibit 27.1 Financial Data Schedule
15
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(b) Reports on Form 8-K.
The following current reports on Form 8-K were filed during the
quarter ended December 31, 1999:
Current Report on Form 8-K filed on October 14, 1999,
reporting the change in control of the Company and the
acquisition of TULSAT Corporation.
Current Report on Form 8-K filed on December 7, 1999,
reporting the acquisition of Diamond W Investments, Inc.
Amendment No. 1 to Current Report on Form 8-K, filed October
14, 1999, filed on December 14, 1999, containing the
financial statements of the Company for the year ended
December 31, 1998 and the nine months ended September 30,
1999, together with the applicable pro-forma financial
information.
16
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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 TECHNOLOGIES GROUP, INC.
Signature Title Date
- --------- ----- ----
___________________ Director and President February 14, 2000
Kenneth A. Chymiak (Principal Executive Officer)
___________________ Controller February 14, 2000
Adam R. Havig (Principal Accounting Officer)
17
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3.1 Certificate of Sixth Amendment to Certificate of
Incorporation as filed with the Oklahoma Secretary
of State on December 30, 1999
27.1 Financial Data Schedule
18
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<PAGE>
CERTIFICATE OF SIXTH AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION OF
ADDVANTAGE MEDIA GROUP, INC.
TO: THE SECRETARY OF STATE OF OKLAHOMA
State Capitol Building
Oklahoma City, Oklahoma 73105
The undersigned Oklahoma corporation, for the purpose of amending its
Certificate of Incorporation as originally filed on September 20, 1989, as
provided by Section 1077 of the Oklahoma General Corporation Act, hereby states
as follows:
1. The name of the corporation is: ADDvantage Media Group, Inc.
2. The date of filing its original Certificate of Incorporation with
the Secretary of State of Oklahoma was September 20, 1989. Said
Certificate of Incorporation was thereafter amended on December 14,
1990, February 14, 1991, June 20, 1991, July 8, 1992, September 14,
1992, and October 8, 1998.
3. Article I is hereby amended to read as follows:
"ARTICLE I
NAME
----
The name of the Corporation is ADDvantage Technologies Group, Inc."
4. All other provisions of the Amended Certificate of Incorporation of
the Corporation not amended hereby shall remain in full force and
effect.
5. This Sixth Amendment to the Certificate of Incorporation was set
forth in a resolution duly adopted by the Board of Directors, which
declared the adoption of the Amendment to be advisable and which
ordered that the Amendment be considered by the shareholders of the
Corporation entitled to vote thereon.
Such Sixth Amendment was duly adopted in accordance with Sections 1073
and 1077 of the Oklahoma General Corporation Act by the written consent of the
holders of a majority of the issued and outstanding shares of voting stock of
the Corporation in lieu of a special meeting thereof, on November 10, 1999.
1
6. Such Sixth Amendment shall not become effective until December 30,
1999.
IN WITNESS WHEREOF, said ADDvantage Media Group, Inc. has caused
its corporate seal to be affixed hereto and this Sixth Amendment to be signed
by its President and Secretary this 8th day of December, 1999.
ADDVANTAGE MEDIA GROUP, INC.
ATTEST:
By /s/ Lynnwood R. Moore, Jr. By /s/ Kenneth A. Chymiak
------------------------------ --------------------------
Lynnwood R. Moore, Jr., Secretary Kenneth A. Chymiak, President
2
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
YEAR ENDED DEC. 31, 1999 AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-2000
<PERIOD-END> SEP-30-2000
<CASH> 85,452
<SECURITIES> 0
<RECEIVABLES> 2,222,983
<ALLOWANCES> 0
<INVENTORY> 13,415,609
<CURRENT-ASSETS> 15,728,702
<PP&E> 1,130,981
<DEPRECIATION> 618,820
<TOTAL-ASSETS> 19,663,958
<CURRENT-LIABILITIES> 6,285,547
<BONDS> 0
0
21,000,000
<COMMON> 97,209
<OTHER-SE> (7,718,797)
<TOTAL-LIABILITY-AND-EQUITY> 19,663,958
<SALES> 4,536,171
<TOTAL-REVENUES> 4,536,171
<CGS> 2,101,005
<TOTAL-COSTS> 2,101,005
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,321
<INCOME-PRETAX> 1,233,524
<INCOME-TAX> 428,199
<INCOME-CONTINUING> 805,325
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 805,325
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
