-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hk9BllTsY67L3kyXf/RU1/atfn1aKVjrh71ENE2HrBPhDbpV8a96vP3rNK/A0/xW 5nshbPmNOtgeJwmUxMHzMA== 0000930661-96-001075.txt : 19960816 0000930661-96-001075.hdr.sgml : 19960816 ACCESSION NUMBER: 0000930661-96-001075 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADDVANTAGE MEDIA GROUP INC /OK CENTRAL INDEX KEY: 0000874292 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES [5040] IRS NUMBER: 731351610 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-39902 FILM NUMBER: 96614563 BUSINESS ADDRESS: STREET 1: 5100 E SKELLY DR STREET 2: MERIDIAN TOWER SUITE 1080 CITY: TULSA STATE: OK ZIP: 74135-6552 BUSINESS PHONE: 9186658414 MAIL ADDRESS: STREET 1: 5100 EAST SKELLY DRIVE STREET 2: MERIDIAN TOWER SUITE 1080 CITY: TULSA STATE: OK ZIP: 74135 10QSB 1 QUARTERLY REPORT 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 --- ADDVANTAGE MEDIA GROUP, INC. BALANCE SHEETS
June 30, December 31, 1996 1995 --------------------------- (Unaudited) 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 ===========================
-2- ADDVANTAGE MEDIA GROUP, INC. BALANCE SHEETS
June 30, December 31, 1996 1995 ---------------------------- (Unaudited) 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 ============================
-3- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June 30, 1996 1995 ------------------------------ 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 ==============================
-4- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended June 30, 1996 1995 ---------------------------------- 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 ====================================
-5- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, 1996 1995 ---------------------------- 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) -
-6- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF CASH FLOWS (continued) (UNAUDITED)
Six Months Ended June 30, 1996 1995 ------------------------------- 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 ==============================
-7- 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- 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.
Shopping Shopping Stores to Carts to Stores Carts Year be Added be Added Installed Installed -------------------------------------------------------------- 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 ======================
___________ /(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- 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- 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- 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- 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:
Supercenter Installations Year Stores Shopping Carts ---- ------ -------------- 1995 33 39,600 1996 200 240,000 1997 100 120,000 1998 100 120,000 --- ------- Total Installations 433 519,600 === =======
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- 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- 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 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 EXHIBIT INDEX ------------- EXHIBIT NO. DESCRIPTION ----------- ----------- 11 Statement re: Computation of Per Share Earnings 27 Financial Data Schedule EX-11 2 COMP. OF EARNINGS PER SHARE EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE Six Months ended June 30, 1996
Fully Primary Diluted ------------------------- 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 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 =========================
EX-27 3 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 972,952 0 2,742 0 0 1,683,333 1,886,799 408,907 6,730,017 3,370,135 0 0 927,167 50,626 (1,619,588) 6,730,017 1,986,653 1,986,889 0 1,289,284 0 0 266,227 431,378 163,899 267,479 0 0 0 267,479 .04 .04
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