-----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, TzCDZgJ9inzdqlHVN8ttp//epZq63ZW5cN7gY3sQyBWYft+XSGy6wBYtXOm6wUVU lW7aoj6EpyJAVKtx7UWzPg== 0001012082-04-000008.txt : 20040312 0001012082-04-000008.hdr.sgml : 20040312 20040312101918 ACCESSION NUMBER: 0001012082-04-000008 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20040312 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADDVANTAGE TECHNOLOGIES GROUP INC CENTRAL INDEX KEY: 0000874292 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES [5040] IRS NUMBER: 731351610 STATE OF INCORPORATION: OK FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10799 FILM NUMBER: 04664406 BUSINESS ADDRESS: STREET 1: 1605 EAST JOLA CITY: BROKEN ARROW STATE: OK ZIP: 74012 BUSINESS PHONE: 9182519121 MAIL ADDRESS: STREET 1: 1605 E IOLA CITY: BROKEN ARROW STATE: OK ZIP: 74012 FORMER COMPANY: FORMER CONFORMED NAME: ADDVANTAGE MEDIA GROUP INC /OK DATE OF NAME CHANGE: 19930328 10QSB/A 1 r10qsb2q03amend1.txt 2ND QTR 2003 10-QSB AMENDMENT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB/A Amendment No. 1 (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 [ ] 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) 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 December 31, 2002 were 10,010,414. Transitional Small Business Issuer Disclosure Format (Check one): Yes ___ No X This Amendment No. 1 to our Quarterly Report on Form 10-QSB for the quarter ended March 31, 2003 is being filed for the purpose of amending and restating the disclosures under Items 1 and 2 of Part I of Form 10-QSB. On September 30, 1999, the former shareholders of TULSAT Corporation (formerly named DRK Enterprises, Inc.) assumed control of ADDvantage Technologies Group, Inc. (formerly named ADDvantage Media Group, Inc.) The resulting merger was accounted for as a business combination, with the preferred stock issued in the merger recorded as first a reduction of paid-in capital in an amount to exhaust the account, and the remainder to retained earnings (deficit). Pursuant to Staff Accounting Bulletin Topic 4, the Company has revised its accounting for this series of capital transactions. The net difference from the previous reporting is that goodwill of $199,490 has been eliminated and the carrying value of common stock has been accordingly reduced. In addition, the amount of retained earnings at merger date has been adjusted to $0, while additional paid-in capital has been adjusted to report a deficiency of paid-in capital of $8,411,731. Common stock activity subsequent to this date has been credited to the deficiency of paid-in capital. Part I - Financial Information Page ---- Financial Information: Item 1. Financial Statements Consolidated Balance Sheet March 31, 2003 (Restated) 3 Consolidated Statements of Income Three Months and Six Months Ended March 31, 2003 and 2002 (Restated) 5 Consolidated Statements of Cash Flows Six Months Ended March 31, 2003 and 2002 (Restated) 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 6. Exhibits and Reports on Form 8-K 14 Signatures 14 2
ADDVANTAGE TECHNOLOGIES GROUP, INC. CONSOLIDATED BALANCE SHEET March 31, 2003 (Restated) Assets Current assets: Cash $ 431,282 Accounts receivable, net of allowance of $80,273 3,748,383 Inventories 18,906,152 Deferred income taxes 98,000 ------------ Total current assets 23,183,817 Property and equipment, at cost Machinery and equipment 2,023,790 Land and buildings 1,323,007 Leasehold improvements 512,339 ------------ 3,859,136 Less accumulated depreciation and amortization (1,156,702) ------------ Net property and equipment 2,702,434 Other assets: Deferred income taxes 1,003,000 Goodwill, net of accumulated amortization of $398,531 1,150,060 Other assets 34,329 ------------ Total other assets 2,187,389 ------------ Total assets $ 28,073,640 ============ See notes to consolidated financial statements. 3
ADDVANTAGE TECHNOLOGIES GROUP, INC. CONSOLIDATED BALANCE SHEET March 31, 2003 (Restated) Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 1,776,430 Accrued expenses 550,457 Accrued income taxes 275,132 Bank revolving line of credit 3,945,833 Notes payable - current portion 200,741 Dividends payable 310,000 Stockholder notes 1,047,064 ------------ Total current liabilities 8,105,657 Notes payable 402,144 Stockholder notes 405,078 Stockholders' equity: Preferred stock, 5,000,000 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 Common stock, $.01 par value; 30,000,000 shares authorized; 10,030,414 shares issued 100,304 Paid-in capital (7,389,197) Retained earnings 6,503,818 ------------ 19,214,925 Less: Treasury stock, 20,000 shares at cost (54,164) ------------ Total stockholders' equity 19,160,761 ------------ Total liabilities and stockholders' equity $ 28,073,640 ============ See notes to consolidated financial statements. 4
ADDVANTAGE TECHNOLOGIES GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (Restated) Three months ended Six months ended March 31, March 31, 2003 2002 2003 2002 ------------------------ -------------------------- Net sales income $ 7,468,762 $ 4,872,470 $ 13,947,359 $ 9,624,293 Net service income 1,101,964 971,494 2,320,345 1,804,400 ------------------------ -------------------------- 8,570,726 5,843,964 16,267,704 11,428,693 Costs of sales 4,873,851 2,862,187 8,946,773 5,781,358 ------------------------ -------------------------- Gross profit 3,696,875 2,981,777 7,320,931 5,647,335 Operating, selling, general and administrative expenses 1,953,738 1,682,281 3,871,512 3,187,123 Depreciation and amortization 64,005 61,337 121,683 143,931 ------------------------ -------------------------- Income from operations 1,679,132 1,238,159 3,327,736 2,316,281 Interest expense 43,626 48,522 103,386 115,370 ------------------------ -------------------------- Income before income taxes 1,635,506 1,189,637 3,224,350 2,200,911 Provision for income taxes 586,097 407,000 1,160,766 754,000 ------------------------ -------------------------- Net income 1,049,409 782,637 2,063,584 1,446,911 Preferred dividends 310,000 310,000 620,000 620,000 ------------------------ -------------------------- Net income attributable to common stockholders $ 739,409 $ 472,637 $ 1,443,584 $ 826,911 ======================== ========================== Earnings per share: Basic $ 0.07 $ 0.05 $ 0.14 $ 0.08 Diluted $ 0.07 $ 0.05 $ 0.14 $ 0.08 See notes to consolidated financial statements. 5
ADDVANTAGE TECHNOLOGIES GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Restated) Six months ended March 31, 2003 2002 ------------------------- Cash Flows from Operating Activities Net income $ 2,063,584 $ 1,446,911 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 121,683 143,931 Provision for deferred income taxes 6,000 89,813 Change in: Receivables (243,085) 225,336 Inventories (1,321,915) 256,500 Other assets (7,471) (117,467) Accounts payable and accrued liabilities 543,749 (1,002,382) ------------------------- Net cash provided by operating activities 1,162,545 1,042,642 ------------------------- Cash Flows from Investing Activities Additions to property and equipment (611,546) (379,960) ------------------------- Net cash used in investing activities (611,546) (379,960) ------------------------- Cash Flows from Financing Activities Net repayments under line of credit (527,848) (147,473) Payments on stockholder loans (107,207) (40,000) Proceeds on notes payable 359,598 20,997 Payments of preferred dividends (620,000) (620,000) ------------------------- Net cash used in financing activities (895,457) (786,476) ------------------------- Net decrease in cash (344,458) (123,794) Cash, beginning of period 775,740 230,558 Cash, end of period $ 431,282 $ 106,764 ========================= See notes to consolidated financial statements. 6
ADDVANTAGE TECHNOLOGIES GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Restated) Six months ended March 31, 2003 2002 ------------------------- Supplemental Cash Flow Information Cash paid for interest $ 102,893 $ 115,370 Cash paid for income taxes $ 734,300 $ 1,204,898 See notes to consolidated financial statements. 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 ADDvantage Technologies Group, Inc., through its subsidiaries TULSAT Corporation, ADDvantage Technologies Group of Nebraska, (dba "Lee Enterprise"), NCS Industries Inc. ("NCS"), ADDvantage Technologies Group of Missouri, (dba "Comtech Services"), ADDvantage Technologies Group of Texas, (dba "Tulsat - Texas"), and Tulsat - Atlanta LLC ("Tulsat - Atlanta")(collectively, the "Company"), sells new, surplus, and refurbished cable television equipment throughout North America in addition to being a repair center for various cable companies. The Company operates in one business segment. Note 3 - Earnings per Share
Three months ended Six months ended March 31, March 31, 2003 2002 2003 2002 ------------------------ ------------------------ (Restated) (Restated) (Restated) (Restated) Net income attributable to common stockholders $ 739,409 $ 472,637 $ 1,443,584 $ 826,911 Basic and Diluted EPS Computation: Weighted average outstanding common shares 10,010,414 9,991,716 10,007,298 9,991,716 Earnings per Share $ 0.07 $ 0.05 $ 0.14 $ 0.08
8 Note 4 - Line of Credit, Stockholder Loans, and Notes Payable At March 31, 2003, a $3,945,833 balance is outstanding under a $9.0 million line of credit due June 30, 2003, with interest payable monthly at Chase Manhattan Prime less 1 1/4% (3.0% at March 31, 2003). Borrowings under the line of credit are limited to the lesser of $7.0 million or the sum of 80% of qualified accounts receivable and 40% of qualified inventory for working capital purposes and $2.0 million for future acquisitions meeting Bank of Oklahoma credit guidelines. The line of credit agreement provides that the Company's net worth must be greater than $14.0 million and net income before the payment of preferred dividends greater than $2.0 million. The line of credit is collateralized by inventory, accounts receivable, equipment and fixtures, and general intangibles. Cash receipts are applied from the Company's lockbox account directly against the bank line of credit, and checks clearing the bank are funded from the line of credit. The resulting overdraft balance, consisting of outstanding checks, is $94,783 at March 31, 2003 and is included in the bank revolving line of credit. Stockholder loans of $950,000 bear interest at rates that correspond with the line of credit (3.0% at March 31, 2003) and are subordinate to the bank notes payable. The notes are due on demand and are classified as current. Stockholder notes, which were issued for purchases of real estate, total $502,142. Two of these notes totaling $441,829 bear interest at 7.5% and are due in monthly payments through 2011. Another note of $60,313 bears interest at 5.5% and is due in one installment in May 2003. Notes payable to unrelated parties totaled $602,885, of which $166,667 is due in quarterly payments through March 2004, with $66,667 of this amount bearing interest at 7%. The remaining note of $436,218 is due in monthly payments through 2013 with interest at 5.5% through 2008, converting thereafter to prime minus 1/4%. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We specialize in the refurbishment of previously owned cable television ("CATV") equipment and the distribution of new and surplus equipment to CATV operators and other broadband communication companies. Within the last two years, we have become distributors for a number of different manufacturers of equipment and other products. It is through our development of these relationships that we have focused our initiative to market our products and services to the larger cable multiple system operators (MSOs). As a result, our overall sales and profits are dramatically up for the first six months of 2003, while adding approximately $1.3 million of inventory to further enhance our product offerings. We continue to believe that as cable companies look at expanding their services in key markets and to recover from or address the effects of a slow economy and depressed capital markets, there will be an emphasis on minimizing their costs, thus creating a higher demand for the Company's repair services and surplus-new equipment. Results of Operations Comparison of Results of Operations for the Three Months Ended March 31, 2003 And March 31, 2002 Net Sales. Net sales increased $2.73 million, or 46.7%, to $8.6 million in the second quarter of fiscal 2003, from $5.8 million for the same period in fiscal 2002, primarily due to the positive results of our marketing initiatives and distributor relationships discussed in the previous paragraph. New equipment sales were up 99.5% to $5.8 million for the current period, compared with $2.89 million for the same period of fiscal 2002. Sales from remanufactured equipment decreased by 5.9% to $2.58 million for the current period, compared with $2.75 million in the same period last year. Repair service revenues were up 13.4% to $1.10 million for the current quarter, compared with $971,000 for the same period last year. The increase in repair services was due to the continued focus of being a leading repair service provider and the expansion of our repairs sales to our new Atlanta operations which began in June of 2002. Costs of Sales. Costs of sales increased to $4.87 million for the second quarter of fiscal 2003 from $2.86 million for the same period of fiscal 2002. The increase was primarily due to the increase in sales for the period. Gross Profit. Gross profit climbed $715,000 or 24.0% to $3.70 million for the second quarter of fiscal 2003 from $2.98 million for the same period in fiscal 2002. The gross margin percentage was 43.1% for the current quarter, compared to 51.0% for the same quarter last year. The percentage decrease was primarily due to an increase in sales of new and surplus equipment which is accompanied by margins lower than that of re-manufactured equipment or repairs. Operating, Selling, General and Administrative Expenses. Operating, selling, general and administrative expenses increased by $271,000 in the second quarter of fiscal 2003, to $1.95 million from $1.68 million for the same period in 2002, an increase of 16.1%. The increase in operating expenses was primarily due to the commencement of the operations of TULSAT-Atlanta in June 2002, coupled with an expanding sales force and other added expenses incurred to meet the marketing initiatives described previously. 10 Income from Operations. Income from operations rose $441,000, or 35.6% to $1.68 million for the second quarter of fiscal 2003 from $1.24 million for the same period last year. This increase was primarily due to increases in sales to the larger MSOs. Comparison of Results of Operations for the Six Months Ended March 31, 2003 and March 31, 2002 Net Sales. Net sales increased $4.84 million, or 42.3%, to $16.3 million in the first six months of fiscal 2003, from $11.4 million for the same period in fiscal 2002, primarily due to the positive results of our marketing initiatives and distributor relationships discussed above. New equipment sales were up 96.1% to $10.1 million for the current period, compared with $5.1 million for the same period of fiscal 2002. Sales from remanufactured equipment were relatively flat at $5.56 million for the current period, compared with $5.61 million in the same period last year. Repair service revenues were up 28.6% to $2.32 million for the current period, compared with $1.80 million for the same period last year. The increase in repair services was due to the continued focus of being a leading repair service provider and the expansion of our repairs sales to our new Atlanta operations which began in June of 2002. Costs of Sales. Costs of sales increased to $8.9 million for the first six months of fiscal 2003 from $5.8 million for the same period of fiscal 2002. The increase was primarily due to the increase in sales for the period. Gross Profit. Gross profit climbed $1.67 million or 29.6% to $7.3 million for the first six months of fiscal 2003 from $5.6 million for the same period in fiscal 2002. The gross margin percentage was 45.0% for the current quarter, compared to 49.4% for the same quarter last year. The percentage decrease was primarily due to an increase in sales of new and surplus equipment which is accompanied by margins lower than that of re-manufactured equipment or repairs. Operating, Selling, General and Administrative Expenses. Operating, selling, general and administrative expenses increased by $684,000 in the first six months of fiscal 2003, to $3.87 million from $3.19 million for the same period in 2002, an increase of 21.5%. The increase in operating expenses was primarily due to the commencement of the operations of TULSAT-Atlanta in June 2002, coupled with an expanding sales force and other added expenses incurred to meet the marketing initiatives described previously. Income from Operations. Income from operations rose $1.0 million, or 43.7% to $3.33 million for the first six months of fiscal 2003 from $2.32 million for the same period last year. This increase was primarily due to increases in sales to the larger MSOs. 11 Critical Accounting Policies Note 1 to the Consolidated Financial Statements in Form 10-KSB for fiscal year 2002 includes a summary of the significant accounting policies or methods used in the preparation of our Consolidated Financial Statements. Some of those significant accounting policies or methods require us to make estimates and assumptions that affect the amounts reported by us. We believe the following items require the most significant judgments and often involve complex estimates. General ------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates and judgments on historical experience, current market conditions, and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant estimates and assumptions relate to the carrying value of our inventory and, to a lesser extent, the adequacy of our allowance for doubtful accounts. Inventory Valuation ------------------- Inventory consists of new and used electronic components for the cable television industry. Inventory is stated at the lower of cost or market. Market is defined principally as net realizable value. Cost is determined using the weighted average method. We market our products primarily to MSOs and other users of cable television equipment who are seeking products for which manufacturers have discontinued production, or are seeking shipment on a same-day basis. Our position in the industry requires us to carry large inventory quantities relative to quarterly sales, but also allows us to realize high overall gross profit margins on our sales. Carrying these large inventories represents the Company's largest risk. For individual inventory items, we may carry inventory quantities that are excessive relative to market potential, or we may not be able to recover our acquisition costs for sales we are able to make in a reasonable period. In order to address the risks associated with our investment in inventory, we regularly review inventory quantities on hand and reduce the carrying value when the loss of usefulness of an item or other factors, such as obsolete and excess inventories, indicate that cost will not be recovered when an item is sold. Demand for some of the items in our inventory has been impacted by recent economic conditions present in the cable industry. We wrote certain items in inventory down to their estimated market values at September 30, 2002, which resulted in a charge to cost of sales of $1.4 million for fiscal 2002. No inventory write-downs were necessary during the six months ended March 31, 2003 and 2002. Any significant, unanticipated changes in product demand, technological developments or continued economic trends affecting the cable industry could have a significant impact on the value of our inventory and operating results. 12 Accounts Receivable Valuation ----------------------------- Management judgments and estimates are made in connection with establishing the allowance for doubtful accounts. Specifically, we analyze the aging of accounts receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms. Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness, as in the case of the bankruptcy of Adelphia and its affiliates, or weakening in economic trends could have a significant impact on the collectibility of receivables and our operating results. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. At March 31, 2003, accounts receivable, net of allowance for doubtful accounts of $80,000, amounted to $3.7 million. Goodwill -------- In July, 2001, the Financial Accounting Standards Board ("FASB") issued Statements of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. SFAS 142 was adopted by the Company on October 1, 2002, the date of the annual impairment review. The Company has completed its transitional impairment testing of goodwill. The results of these tests indicate that goodwill is not impaired as of October 1, 2002. The adoption of this pronouncement had no impact on the Company's carrying value of its goodwill. If SFAS 142 had been adopted in 2002, the Company's earnings would have been improved because of reduced amortization, as described below:
Goodwill - Adoption of Statement 142 ------------------------------------ Three Months ended March 31, - ---------------------------- 2003 2002 ----------- ---------- (Restated) (Restated) Reported Net Income $ 1,049,409 $ 782,637 Add back: Goodwill amortization - 24,283 ----------- ---------- Adjusted Net Income $ 1,049,409 $ 806,920 =========== ========== Basic and Diluted Earnings per Share: Reported Net Income $0.07 $0.05 Add back: Goodwill amortization - - ----------- ---------- Adjusted Net Income $0.07 $0.05 =========== ========== Six Months ended March 31, - -------------------------- 2003 2002 ----------- ---------- (Restated) (Restated) Reported Net Income $ 2,063,584 $1,446,911 Add back: Goodwill amortization - 48,564 ----------- ---------- Adjusted Net Income $ 2,063,584 $1,495,475 =========== ========== Basic and Diluted Earnings per Share: Reported Net Income $0.14 $0.08 Add back: Goodwill amortization - 0.01 ----------- ---------- Adjusted Net Income $0.14 $0.09 =========== ==========
Liquidity and Capital Resources The Company has a line of credit with the Bank of Oklahoma under which we are authorized to borrow up to $9.0 million at a borrowing rate of 1.25% below Chase Manhattan Prime (3.0% at March 31, 2003). This line of credit will provide the lesser of $7.0 million or the sum of 80% of qualified accounts receivable and 40% of qualified inventory in a revolving line of credit for working capital purposes and $2.0 million for future acquisitions meeting Bank of Oklahoma credit guidelines. The line of credit is collateralized by inventory, accounts receivable, equipment and fixtures, and general intangibles and had an outstanding balance at March 31, 2003 of $3.9 million, due June 30, 2003. We intend to renew the agreement at the maturity date under similar terms. 13 The Company finances its operations primarily through internally generated funds and a bank line of credit. Quarterly payments of principal for obligations related to the NCS purchase total $167,000 in the next 12 months. Monthly payments of principal for loans used to purchase buildings total $71,000 in the next 12 months. A $60,000 note in conjunction with a building purchase is due in one installment in May 2003. The Company expects to fund these payments through cash flows from operations. Stockholder loans include a $950,000 note, due on demand, bearing interest at the same rate as the Company's bank line of credit, and is subordinate to the bank notes payable. It is not expected that this note will be called within the next year. 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 Company's ability to comply with future obligations. Accordingly, actual results may differ materially from those expressed in the forward-looking statements. PART II - OTHER INFORMATION OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibit No. Description 31.1 Certification of Periodic Report by Chief Executive Officer and Chief Financial Officer under Section 302 of the Sarbanes Oxley Act of 2002. 32.1 Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 8 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to its report to be signed on its behalf by the undersigned thereunto duly authorized. ADDVANTAGE TECHNOLOGIES GROUP, INC. (Registrant) /s/ Kenneth A. Chymiak ------------------------------- Date: March 12, 2004 Kenneth A. Chymiak, Director and President (Principal Executive Officer and Principal Financial Officer) 14 EX-31 3 r10qsb2q03ex311.txt EXHIBIT 31.1 Exhibit 31.1 CERTIFICATION I, Kenneth A. Chymiak, certify that: 1. I have reviewed this amendment to quarterly report on Form 10-QSB of ADDvantage Technologies Group, Inc, (the "Company"); 2. Based on my knowledge, this amendment does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this amendment; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this amendment; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) for the Company and have; a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this amendment is being prepared; b. Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this amendment, based on my evaluation; and c. Disclosed in this amendment any change in the Company's internal control over financial reporting that occurred during the Company's fiscal quarter covered by this amendment that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of Company's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. Date: March 12, 2004 By: /s/ Kenneth A. Chymiak ----------------------------- Kenneth A. Chymiak, Principal Executive Officer and Principal Financial Officer EX-32 4 r10qsb2q03ex321.txt EXHIBIT 32.1 Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002 In connection with the amendment to the Quarterly Report of ADDvantage Technologies Group, Inc. (the "Company") on Form 10-QSB for the fiscal quarter ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kenneth A. Chymiak, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec 1350, as adopted pursuant to Sec 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Amendment fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Amendment fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Kenneth A. Chymiak - ----------------------------- Kenneth A. Chymiak Chief Executive Officer and Chief Financial Officer March 12, 2004 A signed original of this written statement required by Section 906, or other Document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to ADDvantage Technologies Group, Inc. and will be retained by ADDvantage Technologies Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----