UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
Washington, D.C. 20549
|
FORM 10-K
|
☒
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended September 30, 2016
|
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Commission file number
1-10799
|
ADDVANTAGE TECHNOLOGIES GROUP, INC
.
|
(Exact name of registrant as specified in its charter)
|
Oklahoma
|
73-1351610
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
1221 E. Houston, Broken Arrow, Oklahoma
|
74012
|
(Address of principal executive offices)
|
(Zip code)
|
Registrant’s telephone number: (918) 251-9121
|
Securities registered under Section 12(b) of the Act:
|
Title of each class
|
Name of exchange on which registered
|
Common Stock, $.01 par value
|
NASDAQ Global Market
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
Yes
☐
No
☒
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
|
Yes
☐
No
☒
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 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
☒
No
☐
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post s
uch files).
|
Yes
☒
No
☐
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
|
☒
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☒
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
Yes
☐
No
☒
|
The aggregate market value of the outstanding shares of common stock, par value $.01 per share, held by non-affiliates
computed by reference to the closing price of the registrant’s common stock as of March 31, 2016 was $9,984,120.
|
|
The number of shares of the registrant’s outstanding common stock, $.01 par value per share, was 10,134,235 as of
November 30, 2016.
|
|
Documents Incorporated by Reference
|
|
The identified sections of definitive Proxy Statement to be filed as Schedule 14A pursuant to Regulation 14A in connection with the Registrant’s 2017 annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K.
|
Page
|
||
PART I
|
||
Item 1.
|
Business.
|
|
Item 2.
|
Properties.
|
|
Item 3.
|
Legal Proceedings.
|
|
PART II
|
||
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
|
|
Item 6.
|
Selected Financial Data.
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results
of Operations.
|
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
|
|
Item 9A.
|
Controls and Procedures.
|
|
Item 9B.
|
Other Information.
|
|
PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
|
Item 11.
|
Executive Compensation.
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
|
Item 14.
|
Principal Accounting Fees and Services.
|
|
PART IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
SIGNATURES
|
2016
|
2015
|
2014
|
||||||||||
United States
|
||||||||||||
Cable TV
|
$
|
21,936,344
|
$
|
23,975,197
|
$
|
25,738,706
|
||||||
Telco (a)
|
13,693,837
|
16,031,293
|
6,533,458
|
|||||||||
Canada, Central America, Asia, Europe, Mexico, South America and Other
|
||||||||||||
Cable TV
|
1,055,682
|
1,418,488
|
1,465,514
|
|||||||||
Telco (a)
|
1,977,401
|
2,308,642
|
2,151,014
|
|||||||||
$
|
38,663,264
|
$
|
43,733,620
|
$
|
35,888,692
|
·
|
we sell both new and refurbished Cable TV equipment as well as repair what we sell, while most of our competition does not offer all of these services;
|
·
|
we stock both new and refurbished inventory;
|
·
|
we stock a wide breadth of inventory, which many of our competitors do not due to working capital constraints;
|
·
|
we can reconfigure new and refurbished equipment to meet the different needs of our customers;
|
·
|
we can meet our customers’ timing needs for product due to our inventory on hand; and
|
·
|
we have experienced sales support staff that have the technical know-how to assist our customers regarding solutions for various products and configurations.
|
·
|
we stock a broad range of used inventory, which allows us to meet our customers’ timing needs;
|
·
|
we have experienced sales support staff that have strong relationships with our customers and technical knowledge of the products we offer;
|
·
|
we have the following quality certifications: TL9000 (telecommunications quality certification), ISO 14001 (environmental management certification), OHSAS18000 (occupational safety and health management certification), and R2 (EPA responsible recycling practices for electronics); and
|
·
|
we provide multiple services for our customers including deinstallation and decommission of products, storage and management of spares inventory and recycling.
|
·
|
Broken Arrow, Oklahoma – We own a facility in a suburb of Tulsa consisting of our headquarters, additional offices, warehouse and service center of approximately 100,000 square feet on ten acres, with an investment of $3.3 million, financed by a loan with a remaining balance of $0.9 million, due in monthly payments through 2021 at an interest rate of LIBOR plus 1.4%. In 2007, we also constructed a 62,500 square foot
|
|
warehouse facility on the rear of our existing property in Broken Arrow, OK, with an investment of $1.6 million, financed with cash flows from operations.
|
·
|
Deshler, Nebraska – We own a facility near Lincoln consisting of land and an office, warehouse and service center of approximately 8,000 square feet.
|
·
|
Warminster, Pennsylvania – We own a facility in a suburb of Philadelphia consisting of an office, warehouse and service center of approximately 12,000 square feet, with an investment of $0.6 million. We also lease property of approximately 2,000 square feet, with monthly rental payments of $1,467 through December 31, 2016. We also rent on a month-to-month basis another property of approximately 2,000 square feet, with monthly rental payments of $1,325.
|
·
|
Sedalia, Missouri – We own a facility near Kansas City consisting of land and an office, warehouse and service center of approximately 24,300 square feet. In 2007, we also constructed an 18,000 square foot warehouse facility on the back of our existing property in Sedalia, MO, with an investment of $0.4 million.
|
·
|
New Boston, Texas – We own a facility near Texarkana consisting of land and an office, warehouse and service center of approximately 13,000 square feet.
|
·
|
Suwanee, Georgia – We rent, on a month-to-month basis, a facility in a suburb of Atlanta consisting of an office and service center of approximately 5,000 square feet, with monthly rental payments of $3,060.
|
·
|
Phoenix, Arizona – We lease a facility in Phoenix, Arizona consisting of an office, service center and warehouse of approximately 6,300 square feet, with monthly rental payments of $3,690, and $3,815 through May 31, 2017, and 2018, respectively, plus monthly common area operating expenses of approximately $1,500.
|
·
|
Kingsport, Tennessee – We lease a facility in Kingsport, Tennessee consisting of office space, warehouse, and service center of approximately 14,000 square feet with monthly rental payments to a Company employee of $4,000 per month through December 31, 2018.
|
·
|
Jessup, Maryland – We lease a facility in a suburb of Baltimore consisting of an office, warehouse, and service center of approximately 88,000 square feet, with monthly rental payments of $42,025 increasing each year by 2.5% through November 30, 2023.
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Year Ended September 30, 2016
|
High
|
Low
|
||||||
First Quarter
|
$
|
2.38
|
$
|
1.30
|
||||
Second Quarter
|
$
|
2.07
|
$
|
1.57
|
||||
Third Quarter
|
$
|
2.04
|
$
|
1.67
|
||||
Fourth Quarter
|
$
|
2.31
|
$
|
1.70
|
||||
Year Ended September 30, 2015
|
High
|
Low
|
||||||
First Quarter
|
$
|
2.70
|
$
|
2.24
|
||||
Second Quarter
|
$
|
2.49
|
$
|
2.18
|
||||
Third Quarter
|
$
|
2.49
|
$
|
2.27
|
||||
Fourth Quarter
|
$
|
2.40
|
$
|
2.20
|
||||
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
Weighted-average exercise price of outstanding options, warrants and rights
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
|
570,000
|
$
|
2.73
|
434,211
|
||||||||
Equity compensation plans not approved by security holders
|
0
|
0
|
0
|
|||||||||
Total
|
570,000
|
$
|
2.73
|
434,211
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Sales
|
$
|
38,663
|
$
|
43,734
|
$
|
35,889
|
$
|
28,677
|
$
|
29,677
|
||||||||||
Income from operations
|
$
|
344
|
$
|
2,576
|
$
|
1,097
|
$
|
2,896
|
$
|
2,619
|
||||||||||
Income from continuing operations
|
$
|
294
|
$
|
1,498
|
$
|
659
|
$
|
1,772
|
$
|
939
|
||||||||||
Continuing operations earnings per share
|
||||||||||||||||||||
Basic
|
$
|
0.03
|
$
|
0.15
|
$
|
0.07
|
$
|
0.18
|
$
|
0.09
|
||||||||||
Diluted
|
$
|
0.03
|
$
|
0.15
|
$
|
0.07
|
$
|
0.18
|
$
|
0.09
|
||||||||||
Total assets
|
$
|
50,268
|
$
|
51,687
|
$
|
53,139
|
$
|
42,923
|
$
|
41,971
|
||||||||||
Long-term obligations inclusive
of current maturities
|
$
|
4,366
|
$
|
5,240
|
$
|
6,086
|
$
|
1,503
|
$
|
1,687
|
Year Ended September 30, 2016
|
Year Ended September 30, 2015 | |||||||||||||||||||||||
Cable TV
|
Telco
|
Total
|
Cable TV
|
Telco
|
Total
|
|||||||||||||||||||
Income (loss) from operations
|
$
|
1,478,676
|
$
|
(1,134,815
|
)
|
$
|
343,861
|
$
|
2,210,414
|
$
|
365,796
|
$
|
2,576,210
|
|||||||||||
Depreciation
|
322,076
|
99,874
|
421,950
|
296,876
|
111,827
|
408,703
|
||||||||||||||||||
Amortization
|
−
|
825,804
|
825,804
|
−
|
825,805
|
825,805
|
||||||||||||||||||
EBITDA
(a)
|
$
|
1,800,752
|
$
|
(209,137
|
)
|
$
|
1,591,615
|
$
|
2,507,290
|
$
|
1,303,428
|
$
|
3,810,718
|
(a) |
The Telco segment includes earn-out expenses of $0.2 and $0.7 million for the year ended September 30, 2016 and 2015, respectively, related to the acquisition of Nave Communications.
|
Year Ended September 30, 2015
|
Year Ended September 30, 2014
|
|||||||||||||||||||||||
Cable TV
|
Telco
|
Total
|
Cable TV
|
Telco
|
T
otal
|
|||||||||||||||||||
Income (loss) from operations
|
$
|
2,210,414
|
$
|
365,796
|
$
|
2,576,210
|
$
|
1,492,100
|
$
|
(395,001
|
)
|
$
|
1,097,099
|
|||||||||||
Depreciation
|
296,876
|
111,827
|
408,703
|
293,353
|
66,926
|
360,279
|
||||||||||||||||||
Amortization
|
−
|
825,805
|
825,805
|
−
|
481,722
|
481,722
|
||||||||||||||||||
EBITDA
(a)
|
$
|
2,507,290
|
$
|
1,303,428
|
$
|
3,810,718
|
$
|
1,785,453
|
$
|
153,647
|
$
|
1,939,100
|
(a) |
The Telco segment for the year ended September 30, 2014 includes acquisition-related costs of $0.6 million related to the acquisition of Nave Communications.
|
Index to Financial Statements
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets, September 30, 2016 and 2015
|
|
Consolidated Statements of Operations, Years ended
|
|
September 30, 2016, 2015 and 2014
|
|
Consolidated Statements of Changes in Shareholders’ Equity, Years ended
|
|
September 30, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows, Years ended
|
|
September 30, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
September 30,
|
||||||||
2016
|
2015
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
4,508,126
|
$
|
6,110,986
|
||||
Accounts receivable, net of allowance for doubtful accounts of
$250,000
|
4,278,855
|
4,286,377
|
||||||
Income tax receivable
|
480,837
|
−
|
||||||
Inventories, net of allowance for excess and obsolete
|
||||||||
inventory of $2,570,868 and $2,756,628, respectively
|
21,524,919
|
23,600,996
|
||||||
Prepaid expenses
|
323,289
|
153,454
|
||||||
Total current assets
|
31,116,026
|
34,151,813
|
||||||
Property and equipment, at cost:
|
||||||||
Land and buildings
|
7,218,678
|
7,218,678
|
||||||
Machinery and equipment
|
3,833,230
|
3,415,164
|
||||||
Leasehold improvements
|
151,957
|
151,957
|
||||||
Total property and equipment, at cost
|
11,203,865
|
10,785,799
|
||||||
Less: Accumulated depreciation
|
(4,993,102
|
)
|
(4,584,796
|
)
|
||||
Net property and equipment
|
6,210,763
|
6,201,003
|
||||||
Investment in and loans to equity method investee
|
2,588,624
|
–
|
||||||
Intangibles, net of accumulated amortization
|
4,973,669
|
5,799,473
|
||||||
Goodwill
|
3,910,089
|
3,910,089
|
||||||
Deferred income taxes
|
1,333,000
|
1,490,000
|
||||||
Other assets
|
135,988
|
134,678
|
||||||
Total assets
|
$
|
50,268,159
|
$
|
51,687,056
|
September 30,
|
||||||||
2016
|
2015
|
|||||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,857,953
|
$
|
1,784,482
|
||||
Accrued expenses
|
1,324,652
|
1,358,681
|
||||||
Income tax payable
|
–
|
122,492
|
||||||
Notes payable – current portion
|
899,603
|
873,752
|
||||||
Other current liabilities
|
963,127
|
982,094
|
||||||
Total current liabilities
|
5,045,335
|
5,121,501
|
||||||
Notes payable, less current portion
|
3,466,358
|
4,366,130
|
||||||
Other liabilities
|
131,410
|
1,064,717
|
||||||
Total liabilities
|
8,643,103
|
10,552,348
|
||||||
Shareholders’ equity:
|
||||||||
Common stock, $.01 par value; 30,000,000 shares authorized;
10,634,893 and 10,564,221 shares issued, respectively;
10,134,235 and 10,063,563 shares outstanding, respectively
|
106,349
|
105,642
|
||||||
Paid in capital
|
(4,916,791
|
)
|
(5,112,269
|
)
|
||||
Retained earnings
|
47,435,512
|
47,141,349
|
||||||
Total shareholders’ equity before treasury stock
|
42,625,070
|
42,134,722
|
||||||
Less: Treasury stock, 500,658 shares, at cost
|
(1,000,014
|
)
|
(1,000,014
|
)
|
||||
Total shareholders’ equity
|
41,625,056
|
41,134,708
|
||||||
Total liabilities and shareholders’ equity
|
$
|
50,268,159
|
$
|
51,687,056
|
Years ended September 30,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Sales
|
$
|
38,663,264
|
$
|
43,733,620
|
$
|
35,888,692
|
||||||
Cost of sales
|
26,222,381
|
28,434,731
|
24,283,236
|
|||||||||
Gross profit
|
12,440,883
|
15,298,889
|
11,605,456
|
|||||||||
Operating, selling, general and administrative expenses
|
12,097,022
|
12,722,679
|
10,508,357
|
|||||||||
Income from operations
|
343,861
|
2,576,210
|
1,097,099
|
|||||||||
Other income (expense):
|
||||||||||||
Other income
|
459,636
|
−
|
–
|
|||||||||
Interest income
|
90,686
|
−
|
–
|
|||||||||
Loss from equity method investment
|
(184,996
|
)
|
−
|
–
|
||||||||
Interest expense
|
(236,024
|
)
|
(305,310
|
)
|
(217,910
|
)
|
||||||
Total other income (expense), net
|
129,302
|
(305,310
|
)
|
(217,910
|
)
|
|||||||
Income before income taxes
|
473,163
|
2,270,900
|
879,189
|
|||||||||
Provision for income taxes
|
179,000
|
773,000
|
220,000
|
|||||||||
Income from continuing operations
|
294,163
|
1,497,900
|
659,189
|
|||||||||
Discontinued operations:
|
||||||||||||
Loss from discontinued operations, net of tax
|
−
|
−
|
(36,211
|
)
|
||||||||
Loss on sale of discontinued operations, net of tax
|
−
|
−
|
(629,835
|
)
|
||||||||
Discontinued operations, net of tax
|
−
|
−
|
(666,046
|
)
|
||||||||
Net income (loss)
|
$
|
294,163
|
$
|
1,497,900
|
$
|
(6,857
|
)
|
|||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
||||||||||||
Continuing operations
|
$
|
0.03
|
$
|
0.15
|
$
|
0.07
|
||||||
Discontinued operations
|
−
|
−
|
(0.07
|
)
|
||||||||
Net income (loss)
|
$
|
0.03
|
$
|
0.15
|
$
|
(0.00
|
)
|
|||||
Diluted
|
||||||||||||
Continuing operations
|
$
|
0.03
|
$
|
0.15
|
$
|
0.07
|
||||||
Discontinued operations
|
−
|
−
|
(0.07
|
)
|
||||||||
Net income (loss)
|
$
|
0.03
|
$
|
0.15
|
$
|
(0.00
|
)
|
|||||
Shares used in per share calculation:
|
||||||||||||
Basic
|
10,107,483
|
10,055,052
|
10,021,431
|
|||||||||
Diluted
|
10,111,545
|
10,055,052
|
10,049,440
|
Common Stock
|
Paid-in
|
Retained
|
Treasury
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Total
|
|||||||||||||||||||
Balance, September 30, 2013
|
10,499,138
|
$
|
104,991
|
$
|
(5,578,500
|
)
|
$
|
45,650,306
|
$
|
(1,000,014
|
)
|
$
|
39,176,783
|
|||||||||||
Net loss
|
–
|
–
|
–
|
(6,857
|
)
|
–
|
(6,857
|
)
|
||||||||||||||||
Restricted stock issuance
|
42,726
|
428
|
135,572
|
–
|
–
|
136,000
|
||||||||||||||||||
Share based compensation expense
|
–
|
–
|
130,047
|
–
|
–
|
130,047
|
||||||||||||||||||
Balance, September 30, 2014
|
10,541,864
|
$
|
105,419
|
$
|
(5,312,881
|
)
|
$
|
45,643,449
|
$
|
(1,000,014
|
)
|
$
|
39,435,973
|
|||||||||||
Net income
|
–
|
–
|
–
|
1,497,900
|
–
|
1,497,900
|
||||||||||||||||||
Restricted stock, net of forfeited
|
22,357
|
223
|
58,944
|
–
|
–
|
59,167
|
||||||||||||||||||
Share based compensation expense
|
–
|
–
|
141,668
|
–
|
–
|
141,668
|
||||||||||||||||||
Balance, September 30, 2015
|
10,564,221
|
$
|
105,642
|
$
|
(5,112,269
|
)
|
$
|
47,141,349
|
$
|
(1,000,014
|
)
|
$
|
41,134,708
|
|||||||||||
Net income
|
–
|
–
|
–
|
294,163
|
–
|
294,163
|
||||||||||||||||||
Restricted stock issuance
|
70,672
|
707
|
121,794
|
–
|
–
|
122,501
|
||||||||||||||||||
Share based compensation expense
|
–
|
–
|
73,684
|
–
|
–
|
73,684
|
||||||||||||||||||
Balance, September 30, 2016
|
10,634,893
|
$
|
106,349
|
$
|
(4,916,791
|
)
|
$
|
47,435,512
|
$
|
(1,000,014
|
)
|
$
|
41,625,056
|
Years ended September 30,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Operating Activities
|
||||||||||||
Net income (loss)
|
$
|
294,163
|
$
|
1,497,900
|
$
|
(6,857
|
)
|
|||||
Net loss from discontinued operations
|
−
|
−
|
(666,046
|
)
|
||||||||
Net income from continuing operations
|
294,163
|
1,497,900
|
659,189
|
|||||||||
Adjustments to reconcile net income (loss) to net cash
|
||||||||||||
provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
421,950
|
408,703
|
360,279
|
|||||||||
Amortization
|
825,804
|
825,805
|
481,722
|
|||||||||
Allowance for doubtful accounts
|
–
|
50,000
|
−
|
|||||||||
Provision for excess and obsolete inventories
|
951,282
|
600,000
|
601,351
|
|||||||||
(Gain) loss on disposal of property and equipment
|
(2,000
|
)
|
30,652
|
−
|
||||||||
Deferred income tax provision (benefit)
|
157,000
|
(341,000
|
)
|
(276,000
|
)
|
|||||||
Share based compensation expense
|
192,213
|
239,613
|
212,436
|
|||||||||
Loss from equity method investment
|
184,996
|
–
|
–
|
|||||||||
Cash provided (used) by changes in operating assets
and liabilities:
|
||||||||||||
Accounts receivable
|
115,479
|
2,057,203
|
(2,351,459
|
)
|
||||||||
Income tax receivable\payable
|
(603,329
|
)
|
342,596
|
38,686
|
||||||||
Inventories
|
1,140,895
|
(1,420,473
|
)
|
(2,188,205
|
)
|
|||||||
Prepaid expenses
|
(165,863
|
)
|
(17,359
|
)
|
(14,753
|
)
|
||||||
Other assets
|
(1,310
|
)
|
(3,250
|
)
|
−
|
|||||||
Accounts payable
|
15,514
|
(1,096,279
|
)
|
(78,670
|
)
|
|||||||
Accrued expenses
|
13,697
|
(330,544
|
)
|
838,479
|
||||||||
Net cash provided by (used in) operating activities −
continuing operations
|
3,540,491
|
2,843,567
|
(1,716,945
|
)
|
||||||||
Net cash provided by operating activities −
discontinued operations
|
−
|
−
|
280,462 | |||||||||
Net cash provided by (used in) operating activities
|
3,540,491
|
2,843,567
|
(1,436,483
|
)
|
||||||||
Investing Activities
|
||||||||||||
Acquisition of net operating assets, net of cash acquired
|
(178,000
|
)
|
−
|
(9,630,647
|
)
|
|||||||
Guaranteed payments for acquisition of business
|
(1,000,000
|
)
|
(1,000,000
|
)
|
−
|
|||||||
Investments in and loans to equity method investee
|
(3,040,839
|
)
|
–
|
−
|
||||||||
Distributions from equity method investee
|
267,219
|
–
|
−
|
|||||||||
Purchases of property and equipment
|
(317,810
|
)
|
(172,649
|
)
|
(43,977
|
)
|
||||||
Net cash used in investing activities – continuing operations
|
(4,269,430
|
)
|
(1,172,649
|
)
|
(9,674,624
|
)
|
||||||
Net cash provided by investing activities −
discontinued operations
|
−
|
−
|
3,413,001 | |||||||||
Net cash used in investing activities
|
(4,269,430
|
)
|
(1,172,649
|
)
|
(6,261,623
|
)
|
||||||
Financing Activities
|
||||||||||||
Proceeds on notes payable
|
−
|
−
|
5,000,000
|
|||||||||
Payments on notes payable
|
(873,921
|
)
|
(846,029
|
)
|
(492,522
|
)
|
||||||
Net cash provided by (used in) financing activities
|
(873,921
|
)
|
(846,029
|
)
|
4,507,478
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
(1,602,860
|
)
|
824,889
|
(3,190,628
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
6,110,986
|
5,286,097
|
8,476,725
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
4,508,126
|
$
|
6,110,986
|
$
|
5,286,097
|
||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid for interest
|
$
|
195,086
|
$
|
245,051
|
$
|
126,659
|
||||||
Cash paid for income taxes
|
$
|
597,200
|
$
|
944,000
|
$
|
62,000
|
||||||
Supplemental noncash investing activities:
|
||||||||||||
Deferred guaranteed payments for acquisition of business
|
$
|
−
|
$
|
−
|
$
|
(2,744,338
|
)
|
·
|
Level 1 – Quoted prices for identical assets in active markets or liabilities that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
·
|
Level 2 – Inputs are other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.
|
·
|
Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value.
|
Assets acquired:
|
||||
Accounts receivable
|
$
|
107,957
|
||
Refurbished inventory
|
16,100
|
|||
Fixed assets - equipment
|
111,900
|
|||
Liabilities assumed:
|
||||
Current liabilities
|
(57,957
|
)
|
||
Net assets acquired
|
$
|
178,000
|
2016
|
2015
|
|||||||
New:
|
||||||||
Cable TV
|
$
|
15,087,495
|
$
|
16,255,487
|
||||
Refurbished:
|
||||||||
Cable TV
|
3,383,079
|
3,676,132
|
||||||
Allowance for excess and obsolete inventory
|
(2,219,586
|
)
|
(2,756,628
|
)
|
||||
Telco
|
5,625,213
|
6,426,005
|
||||||
Allowance for excess and obsolete inventory
|
(351,282
|
)
|
–
|
|||||
$
|
21,524,919
|
$
|
23,600,996
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||
Intangible assets:
|
||||||||||||
Customer relationships – 10 years
|
$
|
4,257,000
|
$
|
(1,099,721
|
)
|
$
|
3,157,279
|
|||||
Technology – 7 years
|
1,303,000
|
(480,866
|
)
|
822,134
|
||||||||
Trade name – 10 years
|
1,293,000
|
(334,023
|
)
|
958,977
|
||||||||
Non-compete agreements – 3 years
|
254,000
|
(218,721
|
)
|
35,279
|
||||||||
Total intangible assets
|
$
|
7,107,000
|
$
|
(2,133,331
|
)
|
$
|
4,973,669
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||
Intangible assets:
|
||||||||||||
Customer relationships – 10 years
|
$
|
4,257,000
|
$
|
(674,023
|
)
|
$
|
3,582,977
|
|||||
Technology – 7 years
|
1,303,000
|
(294,725
|
)
|
1,008,275
|
||||||||
Trade name – 10 years
|
1,293,000
|
(204,724
|
)
|
1,088,276
|
||||||||
Non-compete agreements – 3 years
|
254,000
|
(134,055
|
)
|
119,945
|
||||||||
Total intangible assets
|
$
|
7,107,000
|
$
|
(1,307,527
|
)
|
$
|
5,799,473
|
2017
|
$
|
776,421
|
||
2018
|
741,143
|
|||
2019
|
741,143
|
|||
2020
|
741,143
|
|||
2021
|
632,561
|
|||
Thereafter
|
1,341,258
|
|||
Total
|
$
|
4,973,669
|
2016
|
2015
|
2014
|
||||||||||
Continuing operations:
|
||||||||||||
Current
|
$
|
22,000
|
$
|
1,114,000
|
$
|
496,000
|
||||||
Deferred
|
157,000
|
(341,000
|
)
|
(276,000
|
)
|
|||||||
179,000
|
773,000
|
220,000
|
||||||||||
Discontinued operations – current
|
−
|
−
|
(385,000
|
)
|
||||||||
Total provision (benefit) for income taxes
|
$
|
179,000
|
$
|
773,000
|
$
|
(165,000
|
)
|
2016
|
2015
|
2014
|
||||||||||
Statutory tax rate
|
34.0
|
%
|
34.0
|
%
|
34.0
|
%
|
||||||
State income taxes, net of U.S. federal tax benefit
|
(4.4
|
)%
|
2.1
|
%
|
5.7
|
%
|
||||||
Net operating loss
|
−
|
(4.0
|
%)
|
(10.2
|
%)
|
|||||||
Return to accrual adjustment
|
1.5
|
%
|
(3.0
|
%)
|
1.0
|
%
|
||||||
Additional state tax deduction for federal taxes
|
−
|
−
|
(5.6
|
%)
|
||||||||
Charges without tax benefit
|
6.8
|
%
|
1.6
|
%
|
3.9
|
%
|
||||||
Tax credits and other exclusions
|
(0.1
|
%
)
|
3.3
|
%
|
(3.8
|
%)
|
||||||
Company’s effective tax rate
|
37.8
|
%
|
34.0
|
%
|
25.0
|
%
|
2016
|
2015
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$
|
281,000
|
$
|
236,000
|
||||
Accounts receivable
|
97,000
|
96,000
|
||||||
Inventory
|
1,269,000
|
1,319,000
|
||||||
Intangibles
|
351,000
|
215,000
|
||||||
Accrued expenses
|
169,000
|
266,000
|
||||||
Stock options
|
226,000
|
212,000
|
||||||
Other
|
76,000
|
28,000
|
||||||
2,469,000 | 2,372,000 | |||||||
Deferred tax liabilities:
|
||||||||
Financial basis in excess of tax basis of certain assets
|
926,000
|
832,000
|
||||||
Investment in equity method investee
|
143,000
|
–
|
||||||
Other
|
67,000
|
50,000
|
||||||
Net deferred tax asset
|
$
|
1,333,000
|
$
|
1,490,000
|
2016
|
2015
|
|||||||
Employee costs
|
$
|
1,123,940
|
$
|
856,078
|
||||
Nave Communications earn-out
|
−
|
290,455
|
||||||
Taxes other than income tax
|
120,455
|
116,442
|
||||||
Interest
|
13,836
|
16,085
|
||||||
Other, net
|
66,421
|
79,621
|
||||||
$
|
1,324,652
|
$
|
1,358,681
|
2017
|
$
|
899,603
|
||
2018
|
908,859
|
|||
2019
|
2,143,601
|
|||
2020
|
184,008
|
|||
2021
|
184,008
|
|||
Thereafter
|
45,882
|
|||
Total
|
$
|
4,365,961
|
Options
|
Weighted Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding at September 30, 2015
|
535,000
|
$
|
2.88
|
|||||||||
Granted
|
50,000
|
$
|
1.75
|
|||||||||
Exercised
|
−
|
$
|
–
|
$
|
0
|
|||||||
Expired
|
(10,000
|
)
|
$
|
5.78
|
||||||||
Forfeited
|
(5,000
|
)
|
$
|
3.00
|
||||||||
Outstanding at September 30, 2016
|
570,000
|
$
|
2.73
|
$
|
0
|
|||||||
Exercisable at September 30, 2016
|
403,334
|
$
|
2.81
|
$
|
0
|
Exercisable
|
Remaining
|
||||||||||
Stock Options
|
Stock Options
|
Contractual
|
|||||||||
Exercise Price
|
Outstanding
|
Outstanding
|
Life
|
||||||||
|
$1.750
|
50,000
|
0
|
9.6 years
|
|||||||
|
$3.210
|
200,000
|
133,334
|
7.5 years
|
|||||||
|
$2.450
|
250,000
|
200,000
|
5.5 years
|
|||||||
|
$3.001
|
60,000
|
60,000
|
1.9 years
|
|||||||
|
$3.450
|
10,000
|
10,000
|
0.4 years
|
|||||||
570,000
|
403,334
|
2016
|
2014
|
|||||||
Estimated fair value of options at grant date
|
$
|
34,350
|
$
|
244,400
|
||||
Black-Scholes model assumptions:
|
||||||||
Average expected life (years)
|
6
|
6
|
||||||
Average expected volatile factor
|
38
|
%
|
34
|
%
|
||||
Average risk-free interest rate
|
1.75
|
%
|
2.79
|
%
|
||||
Average expected dividends yield
|
–
|
–
|
2016
|
2015
|
2014
|
||||||||||
Fiscal year 2012 grant
|
$
|
17,417
|
$
|
33,044
|
$
|
55,369
|
||||||
Fiscal year 2014 grant
|
47,522
|
108,624
|
74,678
|
|||||||||
Fiscal year 2016 grant
|
8,745
|
–
|
–
|
|||||||||
Total compensation expense
|
$
|
73,684
|
$
|
141,668
|
$
|
130,047
|
2016
|
2015
|
2014
|
||||||||||
Fiscal year 2013 grant
|
$
|
−
|
$
|
–
|
$
|
29,167
|
||||||
Fiscal year 2014 grant
|
14,779
|
58,778
|
53,222
|
|||||||||
Fiscal year 2015 grant
|
25,000
|
39,167
|
−
|
|||||||||
Fiscal year 2016 grant
|
78,750
|
−
|
–
|
|||||||||
$
|
118,529
|
$
|
97,945
|
$
|
82,389
|
2016
|
2015
|
2014
|
||||||||||
Income from continuing operations
|
$
|
294,163
|
$
|
1,497,900
|
$
|
659,189
|
||||||
Discontinued operations, net of tax
|
−
|
−
|
(666,046
|
)
|
||||||||
Net income (loss) attributable to common shareholders
|
$
|
294,163
|
$
|
1,497,900
|
$
|
(6,857
|
)
|
|||||
Basic weighted average shares
|
10,107,483
|
10,055,052
|
10,021,431
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock options
|
4,062
|
−
|
28,009
|
|||||||||
Diluted weighted average shares
|
10,111,545
|
10,055,052
|
10,049,440
|
|||||||||
Earnings (loss) per common share:
|
||||||||||||
Basic
|
||||||||||||
Continuing operations
|
$
|
0.03
|
$
|
0.15
|
$
|
0.07
|
||||||
Discontinued operations
|
−
|
−
|
(0.07
|
)
|
||||||||
Net income (loss)
|
$
|
0.03
|
$
|
0.15
|
$
|
(0.00
|
)
|
|||||
Diluted
|
||||||||||||
Continuing operations
|
$
|
0.03
|
$
|
0.15
|
$
|
0.07
|
||||||
Discontinued operations
|
−
|
−
|
(0.07
|
)
|
||||||||
Net income (loss)
|
$
|
0.03
|
$
|
0.15
|
$
|
(0.00
|
)
|
2016
|
2015
|
2014
|
||||||||||
Stock options excluded
|
520,000
|
535,000
|
310,000
|
|||||||||
Weighted average exercise price of
|
||||||||||||
stock options
|
$
|
2.83
|
$
|
2.88
|
$
|
3.37
|
||||||
Average market price of common stock
|
$
|
1.90
|
$
|
2.38
|
$
|
2.76
|
2017
|
$
|
630,533
|
||
2018
|
617,892
|
|||
2019
|
552,868
|
|||
2020
|
554,390
|
|||
2021
|
568,250
|
|||
Thereafter
|
1,279,383
|
|||
Total
|
$
|
4,203,316
|
Fiscal Years Ended
|
||||||||||||
September 30,
2016
|
September 30,
2015
|
September 30,
2014
|
||||||||||
Sales
|
||||||||||||
Cable TV
|
$
|
22,996,998
|
$
|
25,396,779
|
$
|
27,206,743
|
||||||
Telco
|
15,800,424
|
18,835,116
|
8,710,267
|
|||||||||
Intersegment
|
(134,158
|
)
|
(498,275
|
)
|
(28,318
|
)
|
||||||
Total sales
|
$
|
38,663,264
|
$
|
43,733,620
|
$
|
35,888,692
|
||||||
Gross profit
|
||||||||||||
Cable TV
|
$
|
7,753,735
|
$
|
8,025,651
|
$
|
7,770,723
|
||||||
Telco
|
4,687,148
|
7,273,238
|
3,834,733
|
|||||||||
Total gross profit
|
$
|
12,440,883
|
$
|
15,298,889
|
$
|
11,605,456
|
||||||
Operating income (loss)
|
||||||||||||
Cable TV
|
$
|
1,478,676
|
$
|
2,210,414
|
$
|
1,492,100
|
||||||
Telco
|
(1,134,815
|
)
|
365,796
|
(395,001
|
)
|
|||||||
Total operating income
|
$
|
343,861
|
$
|
2,576,210
|
$
|
1,097,099
|
||||||
Segment assets
|
||||||||||||
Cable TV
|
$
|
25,201,697
|
$
|
26,494,430
|
$
|
29,241,335
|
||||||
Telco
|
15,122,911
|
17,094,713
|
17,781,114
|
|||||||||
Non-allocated
|
9,943,551
|
8,097,913
|
6,116,232
|
|||||||||
Total assets
|
$ | 50,268,159 | $ | 51,687,056 | $ | 53,138,681 |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Fiscal year ended 2016
|
||||||||||||||||
Sales
|
$
|
8,249,668
|
$
|
10,587,187
|
$
|
10,060,242
|
$
|
9,766,167
|
||||||||
Gross profit
|
$
|
2,765,380
|
$
|
3,584,612
|
$
|
3,466,151
|
$
|
2,624,740
|
||||||||
Income (loss) from continuing
operations
|
$
|
23,994
|
$
|
145,630
|
$
|
316,086
|
$
|
(191,547
|
)
|
|||||||
Basic earnings (loss) from
continuing operations per
common share
|
$
|
0.00
|
$
|
0.01
|
$
|
0.03
|
$
|
(0.02
|
)
|
|||||||
Diluted earnings (loss) from
continuing operations per
common share
|
$
|
0.00
|
$
|
0.01
|
$
|
0.03
|
$
|
(0.02
|
)
|
|||||||
Fiscal year ended 2015
|
||||||||||||||||
Sales
|
$
|
10,837,158
|
$
|
11,366,539
|
$
|
11,902,391
|
$
|
9,627,532
|
||||||||
Gross profit
|
$
|
3,831,803
|
$
|
4,243,512
|
$
|
4,144,607
|
$
|
3,078,967
|
||||||||
Income from continuing
Operations
|
$
|
415,923
|
$
|
234,255
|
$
|
637,134
|
$
|
210,588
|
||||||||
Basic earnings from
continuing operations per
common share
|
$
|
0.04
|
$
|
0.02
|
$
|
0.06
|
$
|
0.02
|
||||||||
Diluted earnings from
continuing operations per
common share
|
$
|
0.04
|
$
|
0.02
|
$
|
0.06
|
$
|
0.02
|
||||||||
Fiscal year ended 2014
|
||||||||||||||||
Sales
|
$
|
6,119,733
|
$
|
8,313,815
|
$
|
9,323,158
|
$
|
12,131,986
|
||||||||
Gross profit
|
$
|
1,863,227
|
$
|
2,231,167
|
$
|
3,220,055
|
$
|
4,291,007
|
||||||||
Income (loss) from continuing
Operations
|
$
|
139,369
|
$
|
(243,264
|
)
|
$
|
143,726
|
$
|
619,358
|
|||||||
Basic earnings (loss) from
continuing operations per
common share
|
$
|
0.01
|
$
|
(0.02
|
)
|
$
|
0.01
|
$
|
0.06
|
|||||||
Diluted earnings (loss) from
continuing operations per
common share
|
$
|
0.01
|
$
|
(0.02
|
)
|
$
|
0.01
|
$
|
0.06
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
2. |
The following financial statement Schedule II – Valuation and Qualifying Accounts for the years ended September 30, 2016, 2015 and 2014 is filed as part of this report. All other financial statement schedules have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the financial statements or notes thereto contained in Part II, Item 8 of this current report.
|
Balance at
|
Charged to
|
Balance at
|
||||||||||||||||||
Beginning
|
Costs and
|
End
|
||||||||||||||||||
of Year
|
Expenses
|
Write offs
|
Recoveries
|
of Year
|
||||||||||||||||
Year Ended September 30, 2016
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$
|
250,000
|
14,899
|
(14,899
|
)
|
−
|
$
|
250,000
|
||||||||||||
Allowance for Excess and Obsolete Inventory
|
$
|
2,756,628
|
951,282
|
(1,137,042
|
)
|
−
|
$
|
2,570,868
|
||||||||||||
Year Ended September 30, 2015
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$
|
200,000
|
44,514
|
−
|
5,486
|
$
|
250,000
|
|||||||||||||
Allowance for Excess and Obsolete Inventory
|
$
|
2,156,628
|
600,000
|
−
|
−
|
$
|
2,756,628
|
|||||||||||||
Year Ended September 30, 2014
|
||||||||||||||||||||
Allowance for Doubtful Accounts
|
$
|
300,000
|
–
|
(103,403
|
)
|
3,403
|
$
|
200,000
|
||||||||||||
Allowance for Excess and Obsolete Inventory
|
$
|
1,600,000
|
601,351
|
(208,056
|
)
|
163,333
|
$
|
2,156,628
|
3.1 |
Certificate of Incorporation of the Company and amendments thereto incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission by the Company on January 10, 2003 (File No. 033-39902-FW).
|
3.2 |
Bylaws of the Company, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on December 31, 2007 (File No. 001-10799).
|
4.1 |
Certificate of Designation, Preferences, Rights and Limitations of ADDvantage Media Group, Inc. Series A 5% Cumulative Convertible Preferred Stock and Series B 7% Cumulative Preferred Stock as filed with the Oklahoma Secretary of State on September 30, 1999 incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on October 14, 1999 (File No. 033-39902-FW).
|
10.1 |
Senior Management Incentive Compensation Plan, incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on March 9, 2007 (File No. 001-10799).
|
10.2 |
Employment Contract between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on September 18, 2008 (File No. 001-10799).
|
10.3 |
Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2010, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 14, 2010 (File No. 001-10799).
|
10.4 |
Amendment One to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2011, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 15, 2011 (File No. 001-10799).
|
10.5 |
Employment Agreement dated April 2, 2012 between the Company and David L. Humphrey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.6 |
Form of Non-Qualified Stock Option Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.7 |
Change in Control Agreement dated April 2, 2012 between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.8 |
Form of Restricted Stock Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.9 |
Amendment Two to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2012, incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 11, 2012 (File No. 001-10799).
|
10.10 |
Amendment Three to Amended and Restated Revolving Credit and Term Loan Agreement dated November 29, 2013, incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K/A filed with the Securities and Exchange Commission on December 13, 2013 (File No. 001-10799).
|
10.11 |
Stock Purchase Agreement by and among ADDvantage Acquisition Corp. and Carlton Douglas Nave, Edward Howe, Ryan Hecox, John Leigh, Peter Boettcher, and Michael Burch dated as of February 28, 2014, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 6, 2014 (File 001-10799).
|
10.12 |
Amendment Four to Amended and Restated Revolving Credit and Term Loan Agreement dated March 3, 2014, incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 14, 2014 (File No. 001-10799).
|
10.13 |
Amendment Five to Amended and Restated Revolving Credit and Term Loan Agreement dated November 28, 2014, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 9, 2014 (File No. 001-10799).
|
10.14 |
The ADDvantage Technologies Group, Inc. 2015 Incentive Stock Plan, incorporated by reference to the Company's Form DEF 14A filed with the Securities and Exchange Commission on January 23, 2015 (File No. 001-10799).
|
10.15 |
Amendment Six to Amended and Restated Revolving Credit and Term Loan Agreement dated November 27, 2015, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 15, 2015 (File No. 001-10799).
|
10.16 |
Asset Purchase Agreement among Triton Miami Inc., Ross Himber, Bruce Tappen and Kevin Sadovnik and ADDvantage Triton, LLC dated as of October 14, 2016, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2016 (File 001-10799).
|
10.17 |
Amendment Seven to Amended and Restated Revolving Credit and Term Loan Agreement dated October 14, 2016.
|
21.1 |
Listing of the Company's subsidiaries.
|
23.1 |
Consent of HoganTaylor LLP.
|
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS |
XBRL Instance Document.
|
101.SCH |
XBRL Taxonomy Extension Schema.
|
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF |
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB |
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase.
|
3.1 |
Certificate of Incorporation of the Company and amendments thereto incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission by the Company on January 10, 2003 (File No. 033-39902-FW).
|
3.2 |
Bylaws of the Company, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on December 31, 2007 (File No. 001-10799).
|
4.1 |
Certificate of Designation, Preferences, Rights and Limitations of ADDvantage Media Group, Inc. Series A 5% Cumulative Convertible Preferred Stock and Series B 7% Cumulative Preferred Stock as filed with the Oklahoma Secretary of State on September 30, 1999 incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on October 14, 1999 (File No. 033-39902-FW).
|
10.1 |
Senior Management Incentive Compensation Plan, incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on March 9, 2007 (File No. 001-10799).
|
10.2 |
Employment Contract between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on September 18, 2008 (File No. 001-10799).
|
10.3 |
Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2010, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 14, 2010 (File No. 001-10799).
|
10.4 |
Amendment One to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2011, incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 15, 2011 (File No. 001-10799).
|
10.5 |
Employment Agreement dated April 2, 2012 between the Company and David L. Humphrey, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.6 |
Form of Non-Qualified Stock Option Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.7 |
Change in Control Agreement dated April 2, 2012 between the Company and Scott A. Francis, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.8 |
Form of Restricted Stock Agreement under the Company’s 1998 Incentive Stock Plan as amended, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission by the Company on April 6, 2012 (File No. 001-10799).
|
10.9 |
Amendment Two to Amended and Restated Revolving Credit and Term Loan Agreement dated November 30, 2012, incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 11, 2012 (File No. 001-10799).
|
10.10 |
Amendment Three to Amended and Restated Revolving Credit and Term Loan Agreement dated November 29, 2013, incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K/A filed with the Securities and Exchange Commission on December 13, 2013 (File No. 001-10799).
|
10.11 |
Amendment Four to Amended and Restated Revolving Credit and Term Loan Agreement dated March 3, 2014, incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 14, 2014 (File No. 001-10799).
|
10.12 |
Stock Purchase Agreement by and among ADDvantage Acquisition Corp. and Carlton Douglas Nave, Edward Howe, Ryan Hecox, John Leigh, Peter Boettcher, and Michael Burch dated as of February 28, 2014, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 6, 2014 (File 001-10799).
|
10.13 |
Amendment Five to Amended and Restated Revolving Credit and Term Loan Agreement dated November 28, 2014, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 9, 2014 (File No. 001-10799).
|
10.14 |
The ADDvantage Technologies Group, Inc. 2015 Incentive Stock Plan, incorporated by reference to the Company's Form DEF 14A filed with the Securities and Exchange Commission on January 23, 2015 (File No. 001-10799).
|
10.15 |
Amendment Six to Amended and Restated Revolving Credit and Term Loan Agreement dated November 27, 2015, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K filed with the Securities and Exchange Commission on December 15, 2015 (File No. 001-10799).
|
10.16 |
Asset Purchase Agreement among Triton Miami Inc., Ross Himber, Bruce Tappen and Kevin Sadovnik and ADDvantage Triton, LLC dated as of October 14, 2016, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 20, 2016 (File 001-10799).
|
10.17 |
Amendment Seven to Amended and Restated Revolving Credit and Term Loan Agreement dated October 14, 2016.
|
21.1 |
Listing of the Company's subsidiaries.
|
23.1 |
Consent of HoganTaylor LLP.
|
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS |
XBRL Instance Document.
|
101.SCH |
XBRL Taxonomy Extension Schema.
|
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF |
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB |
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase.
|
2.1.
|
“Loan” now means the loans under the $7,000,000 Line Facility, the $2,760,000 Term Facility, the $5,000,000 Term Facility and the $4,000,000 Term Facility.
|
2.2.
|
“Notes” means the Line Note, the $2,760,000 Term Note, the $5,000,000 Term Note and the $4,000,000 Term Note, together with extensions, renewals, modifications, restructures and/or consolidations thereof from time to time.
|
2.3.
|
Borrowing Base
. Section 1.5 is amended to read as follows:
|
2.4.
|
Borrowing Base Certificate
. The form of the Borrowing Base Certificate shall now be evidenced by a Restated Borrowing Base Certificate, in form and content satisfactory to Lender.
|
2.5.
|
Section 1.37 (Leverage Ratio) is amended to read as follows:
|
2.6.
|
Section 7.16 is mended to read as follows:
|
2.7.
|
Section 8.1 (Leverage Ratio) is hereby amended to evidence that the ratio “2.00 to 1.00” shall now mean and read “2.50 to 1.00”.
|
2.8.
|
A new Section 2.9 is added as follows:
|
3.1.
|
Loan Documents
. The following loan documents and other instruments, documents and agreement shall be duly executed and/or delivered to Lender, each in form and substance satisfactory to the Lender:
|
3.1.1.
|
This Amendment executed by Borrower and all Ratifications attached hereto;
|
3.1.2.
|
The $4,000,000 Term Note executed by Borrower;
|
3.1.3.
|
The Amendment to Mortgage executed by Borrower, accompanied by the Title Assurances;
|
3.1.4.
|
The Acquisition Completion Certificate;
|
3.1.5.
|
The ADDvantage Triton Company Documents;
|
3.1.6.
|
Copies of the Triton Asset Purchase Documents;
|
3.1.7.
|
The Guarantor Joinder Agreement executed by ADDvantage Triton;
|
3.1.8.
|
The Security Agreement Joinder Agreement executed by ADDvantage Triton;
|
3.1.9.
|
Certificates of Good Standing;
|
3.1.10.
|
UCC Searches as to the Borrower and Guarantors;
|
3.1.11.
|
Lender shall have received an updated appraisal as to the Mortgaged Property, which must evidence a Lender approved appraisal amount satisfactory to Lender;
|
3.1.12.
|
Borrower shall pay all costs, expenses and fees (including Lender legal counsel fees, appraisal costs and Title Assurances costs) incurred by Lender in connection herewith); and
|
3.1.13.
|
Any other instruments, documents or agreements reasonably requested by Lender in connection herewith.
|
3.2.
|
No Default
. No Event of Default shall have occurred and be continuing under the Loan Agreement or any other Loan Documents or will result from the execution of or performance under this Amendment or the documents executed pursuant hereto.
|
3.3.
|
Legal Matters
. All legal matters required by Lender and Lender’s legal counsel to be satisfied by the Borrower and any other Loan Party and the transactions contemplated hereby shall have been satisfied satisfactory to the Lender and its legal counsel.
|
3.4.
|
Ratification of Borrower
. Borrower hereby (i) ratifies, affirms and restates its obligations under, and acknowledges, renews and extends its continued liability under, the Loan Agreement (as amended hereby) and all other Loan Documents to which it is a party, (ii) agrees that the Loan Agreement (as amended hereby) and all other Loan Documents to which it is a party remain in full force and effect, and (iii) represents that each representation and warranty set forth in the Loan Agreement (as amended hereby) and other Loan Documents to which it is a party remains true, correct and accurate as of the Effective Date, and are hereby restated. Borrower further agrees and represents to Lender that the facts set forth in the Recitals are true and correct.
|
3.5.
|
Ratification of Guarantor
. Each Guarantor, by execution of the ratification following the signature page hereof, hereby (i) agrees to this Amendment, (ii) ratifies, affirms and restates its obligations under, and acknowledges, renews and extends its continued liability under, its Guaranty as to all Obligations of the Borrower, including without limitation the $4,000,000 Term Note, (iii) confirms that, after giving effect to the amendments provided for herein, its Guaranty remains in full force and effect, (iv) represents that each representation and warranty set forth in its Guaranty remains true, correct and accurate as of the Effective Date, and are hereby restated, and (v) acknowledges and agrees that nothing in this Amendment shall affect or impair any rights, remedies or powers which Lender may have under any of the Loan Documents, including without limitation the Guaranty.
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3.6.
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Ratification of Collateral Documents
. Each of the Borrower and other Loan Parties to any instruments, documents, agreements, assignments, security agreements or similar security instruments (separately and collectively, the “
Collateral Documents
”) executed under and pursuant to the Loan Agreement to secure payment of the Obligations of Borrower to Lender, by execution of the ratification following the signature page hereof, hereby (i) agrees to this Amendment, (ii) ratifies, affirms and restates each Collateral Document to which it is a party and agrees that the Collateral Documents are, and shall remain at all times during the term of the Loan, first and valid liens and security interests, (iii) confirms that, after giving effect to the amendments provided for herein, the Collateral Documents remain in full force and effect, (iv) represents that each representation and warranty set forth in the Collateral Documents remains true and correct as of the Effective Date, and are hereby restated as of the Effective Date, and (v) ratifies and confirms that all Exhibits and Schedules attached to the Loan Agreement and other Loan Documents remain true, correct and accurate as of the Effective Date, and are hereby restated.
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4.
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REPRESENTATIONS AND WARRANTIES
.
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4.1.
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Additional Representations and Warranties
. The Borrower further represents and warrants to the Lender that:
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4.1.1.
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Each Borrower, and each other Loan Party to any Loan Document has the requisite power and authority and has been duly authorized to execute, deliver and perform its obligations under this Amendment, the Loan Agreement (as amended by this Amendment), and the other Loan Documents set forth under Section 3.1 (separately and collectively, the “
Amendment Documents
”).
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4.1.2.
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The Amendment Documents are valid and legally binding obligations of each respective Loan Party, enforceable in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally.
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4.1.3.
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The execution, delivery and performance of the Amendment Documents by the Loan Parties do not and will not (a) conflict with, result in a breach of the terms, conditions or provisions of, constitute a default under, or result in any violation of the organizational and operating agreements and documents of Borrower or any Loan Party, or any agreement, instrument, undertaking, judgment, decree, order, writ, injunction, statute, law, rule or regulation to which Borrower or any Loan Party is subject or by which the assets and property of the Borrower or any Loan Party is bound or affected, (b) result in the creation or imposition of any lien on any assets or property now or hereafter owned by the Borrower or any Loan Party pursuant to the provisions of any mortgage, indenture, security agreement, contract, undertaking or other agreement to which Borrower or any Loan Party is a party, other than liens in favor of the Lender, (c) require any authorization, consent, license, approval or authorization of, or other action by, notice or declaration to, registration with, any governmental agency or authority or, to the extent any such consent or other action may be required, it has
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been validly procured or duly taken, or (d) result in the occurrence of an event materially adversely affecting the validity or enforceability of any rights or remedies of the Lender or the Borrower’s or any Loan Party’s ability to perform its obligations under the Loan Agreement and related Loan Documents.
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5.1.
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Effect of Amendment
. The terms of this Amendment shall be incorporated into and form a part of the Loan Agreement. Except as amended, modified and supplemented by this Amendment, the Loan Agreement shall continue in full force and effect in accordance with its stated terms, all of which are hereby reaffirmed, confirmed and restated in every respect as of the date hereof. In the event of any irreconcilable inconsistency between the terms of this Amendment and the terms of the Loan Agreement, the terms of this Amendment shall control and govern, and the agreements shall be interpreted so as to carry out and give full effect to the intent of this Amendment. All references to the Loan Agreement appearing in any of the Loan Documents shall hereafter be deemed references to the Loan Agreement as amended, modified and supplemented by this Amendment. This Amendment supersedes any prior or contemporaneous discussions, representations or agreements, oral or written, concerning the subject matter of this Amendment.
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5.2.
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Descriptive Headings
. The descriptive headings of the several paragraphs of this Amendment are inserted for convenience only and shall not be used in the construction of the content of this Amendment.
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5.3.
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Governing Law
. This Amendment, the Loan Agreement, and all other Loan Documents and all matters relating hereto or thereto or arising therefrom (whether sounding in contract law, tort law or otherwise), shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of Oklahoma, without regard to conflicts of laws principles. Borrower hereby consents to the jurisdiction of any state or federal court located within the County of Tulsa, State of Oklahoma and irrevocably agrees that, subject to Lender’s election, all actions or proceedings arising out of or relating to the foregoing described documents and matters shall be litigated in such courts. Borrower expressly submits and consents to the jurisdiction of the aforesaid courts and waives any defense of forum non conveniens. Borrower hereby waives personal service of any and all process and agrees that all such service of process may be made upon Borrower by certified or registered mail, return receipt requested, addressed to Borrower at the address set forth in the Loan Agreement and service so made shall be complete ten (10) days after the same has been posted.
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5.4.
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Reimbursement of Expenses.
Borrower agrees to pay the reasonable costs, expenses and fees, including without limitation reasonable legal fees and out-of-pocket expenses of Riggs, Abney, Neal, Turpen, Orbison & Lewis, legal counsel to the Lender, incurred by Lender in connection herewith.
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5.5.
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Release of Lender
. In consideration of the amendments contained herein, the Loan Parties hereby waive and release the Lender (and its employees, loan participants, agents attorneys, officers, directors, partners, successors and assigns) from any and all claims, damages, expenses, liabilities, disputes, defenses and setoffs of any and every character, known or unknown, with respect to the Loan Agreement and the other Loan Documents and the transactions contemplated thereby accruing or arising on or before the date hereof. Each Loan Party acknowledges that it has consulted by legal counsel of its choice and that each Loan Party has voluntarily and without coercion or duress of any kind entered into this Amendment.
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5.6.
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No Waiver
. Borrower expressly acknowledges and agrees that the execution of this Amendment shall not constitute a waiver, and shall not preclude the exercise, of any right, power or remedy granted to Lender in any Loan Document, or as provided by applicable law. No previous amendment, modification, extension or compromise entered into with respect to any obligations of Borrower to Lender shall constitute a course of dealing or be inferred or construed as constituting an expressed or implied understanding to enter into any future modification, extension, waiver or compromise. No delay on the part of Lender in exercising any right, power, or remedy shall operate as a waiver thereof, or otherwise prejudice Lender’s rights, powers, or remedies.
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5.7.
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Entire Agreement
. This Amendment reflects the entire understanding of the Borrower and other Loan Parties as to the matters set forth herein.
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5.8.
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Counterparts
. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart.
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5.9.
|
USA Patriot Act Notification
.
The Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act of 2001, 31 U.S.C. Section 5318, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender to identify the Borrower in accordance therewith.
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5.10.
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Late Fees
. To the extent any payment due under any Loan Document is not paid within 10 calendar days of the due date therefore, and, to the extent that the following described fee is deemed to constitute interest, subject to any usury savings clause in the Loan Documents and to the extent permitted by law, in addition to any interest or other fees and charges due under the applicable Loan Document, Borrower shall pay Lender a late fee equal to 5% of the amount of the payment that was required to have been made. Borrower agrees that the charges set forth herein are reasonable compensation to Lender for the acceptance and handling of such late payments.
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5.11.
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Waiver of Jury Trial
. Each of Borrower and Lender hereby irrevocably waives any and all right to trial by jury in any legal actions or proceeding arising out of or relating to the Loan Documents or the transactions contemplated thereby and agrees that any
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such action or proceeding shall be tried before a court and not before a jury. Each of Borrower and Lender acknowledges that this waiver is a material inducement to enter into a business relationship, and that each has relied on the waiver in entering into this Amendment and the other Loan Documents, and that each will continue to rely on this waiver in their related future dealings. Each of Borrower and Lender warrants and represents that each has had the opportunity of reviewing this jury waiver with legal counsel, and that each knowingly and voluntarily waives its jury trial rights.
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5.12.
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Flood Insurance
. Borrower must provide evidence that flood insurance is not required of Lender; provided, that if the Mortgaged Property is located in a special flood hazard area, a notification thereof shall be provided to and acknowledged by the mortgagor, and adequate proof of flood insurance (either a declaration page or an application for flood insurance accompanied by proof of payment) must be delivered to Lender, equal to the lesser of (i) the outstanding principal balance of the Loan, (ii) the maximum amount available under the NFIP for the particular type of improvement, or (iii) the full insurable value of the improvement.
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1.
|
I have reviewed this annual report on Form 10-K of ADDvantage Technologies Group, Inc.;
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2.
|
Based on my knowledge, this report 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 report;
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3.
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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 registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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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 registrant's ability to record, process, summarize and report financial information; and
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b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 10-K of ADDvantage Technologies Group, Inc.;
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2.
|
Based on my knowledge, this report 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 report;
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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 registrant as of, and for, the periods presented in this report;
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4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
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 registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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