| **UNITED                STATES**                                                                                                 |
|----------------------------------------------------------------------------------------------------------------------------------|
| **SECURITIES                AND EXCHANGE                COMMISSION**                                                             |
| **Washington,                D.C. 20549**                                                                                        |
|                                                                                                                             |
| **FORM                10-K**                                                                                                     |
|                                                                                                                             |
| xANNUAL                REPORT                UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934     |
| **For                the fiscal year ended September 30,                2007**                                                   |
|                                                                                                                             |
| oTRANSITION                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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Yeso       No  x                                               |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                        |
| Indicate                by check mark if the registrant is not required to                file reports pursuant to Section 13 or 15(d) of the Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  Yeso       No  x                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                        |
| Indicate                by check mark whether the registrant (1)                has filed all reports required to be filed by Section 13 or                15(d) of the SecuritiesExchange                Act 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.                                                                                                                                                                                                                                                                                                                                                                                                               |  Yesx                           No  o |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                        |
| 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |               x                       |
|  Indicate by check mark whether the registrant is a large accelerated                filer, an accelerated filer, or a non-accelerated filer (asdefined                in Rule 12b-2 of the Act)Large                Accelerated Filer   o                                           Accelerated                Filer   o                                                           Non-accelerated filer   x |                                                                                                        |
|  Indicate                by check mark whether the registrant is a shell                company (as defined in Rule 12b-2 of the Act). The                aggregate market value of the outstanding shares of common                stock, par value $.01 per share, held by non-affiliatescomputed                by reference to the closing price of the registrant’s                common stock as of March 31, 2007 was $19,537,691.                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  Yeso       No  x                                         |
|  The                number of shares of the registrant’s outstanding common                stock, $.01 par value per share, was 10,249,656 as of December 10,                2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                        |
|   **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 2008 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.                                                                                                                                                                | 3        |
| Item                1A.                           | Risk                Factors.                                                                                                                                             | 6        |
| Item                1B.                           | Unresolved                Staff Comments.                                                                                                                                | 7        |
| Item                2.                            | Properties.                                                                                                                                                              | 8        |
| Item                3.                            | Legal                Proceedings.                                                                                                                                        | 9        |
| Item                4.                            | Submission                of Matters to a Vote of                Security Holders.                                                                                       | 9        |
|                                              |                                                                                                                                                                     |     |
|                                              | PART                II                                                                                                                                                   |     |
|                                              |                                                                                                                                                                     |     |
| Item                5.                            | Market                for Registrant's Common Equity,                Related Stockholder Matters andIssuer                Purchases of Equity                Securities. |  9  |
| Item                6.                            | Selected                Financial Data.                                                                                                                                  | 11       |
| Item                7.                            | Management's                Discussion and Analysis of                Financial Condition and Resultsof                Operation.                                        |  12 |
| Item                7A.                           | Quantitative                and Qualitative Disclosures                About Market Risk.                                                                                | 16       |
| Item                8.                            | Financial                Statements and Supplementary                Data.                                                                                               | 17       |
| Item                9.                            | Changes                in and Disagreements With                Accountants on Accounting andFinancial                Disclosure.                                        |  35 |
| Item                9A.Item                9A(T). | Controls                and Procedures.Controls                and Procedures.                                                                                           | 3535     |
| Item                9B.                           | Other                Information.                                                                                                                                        | 35       |
|                                              | PART                III                                                                                                                                                  |     |
|                                              |                                                                                                                                                                     |     |
| Item                10.                           | Directors,                Executive Officers and                Corporate Governance.                                                                                    | 36       |
| Item                11                            | Executive                Compensation.                                                                                                                                   | 36       |
| Item                12.                           | Security                Ownership of Certain Beneficial                Owners and Management and RelatedStockholder                Matters.                              |  36 |
| Item                13.                           | Certain                Relationships and Related                Transactions, and Director Independence.                                                                 | 36       |
| Item                14.                           | Principal                Accounting Fees and                Services.                                                                                                    | 36       |
|                                              |                                                                                                                                                                     |     |
|                                              | PART                IV                                                                                                                                                   |     |
|                                              |                                                                                                                                                                     |     |
| Item                15.                           | Exhibits,                Financial Statement                Schedules.                                                                                                   | 37       |
|                                              |                                                                                                                                                                     |     |
|                                              | SIGNATURES                                                                                                                                                          |     |

----

**PART   I**

| **Item  1.** | **Business.** |
|------------------------|---------------|

|   | **FORWARD-LOOKING                STATEMENTS** |
|--------|-----------------------------------------------|

**Background**

**Overview      of the Industry**

----

**Recent      Business Developments**

**Products      and Services**

**Revenues      by Geographic Areas**

|                                                 |   |    2007 |        |   |                                        2006 |   |       |                                         2005 |
|------------------------------------------------------|--------|------------------------|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Geographic                Area                       |   |                   |        |   |                                                                                                                                                           |   |       |                                                                                                                                                                 |
|     United                States |   | $                      | 59,756,983  |   |                                                                                                                                                           | $      | 48,713,482 |                                                                                                                                                                 |   | $ | 47,863,096 |
|     Latin                America |   |                   |        |   |                                                                                                                                                           |   |       |                                                                                                                                                                 |   |   |   |
|     and                Other     |   |                   | 5,889,102   |   |                                                                                                                                                           |   | 3,827,727  |                                                                                                                                                                 |   |   | 2,410,099 |
|                                                 |   |                   |        |   |                                                                                                                                                           |   |       |                                                                                                                                                                 |   |   |   |
| Total                                                |   | $                      | $65,646,085 |   |                                                                                                                                                           | $      | 52,541,209 |                                                                                                                                                                 |   | $ | 50,273,195 |
|                                                 |   |                   |        |   |                                                                                                                                                           |   |       |                                                                                                                                                                 |   |   |   |

**Sales      and Marketing**

**Suppliers**

**Seasonality**

**Competition      and Working Capital Practices.**

**Significant      Customers**

**Personnel**

----

**Item      1A.   Risk Factors.**

***We      are highly dependent upon our principal executive officers who also own a      significant amount of our outstanding***
***s***
***tock.***

***Our      business is dependent on our customers' capital      budgets.***

***The      markets in which we operate are very competitive, and competitive pressures      may      adversely affect our results of operations.***

***Consolidations      in the***
***CATV and***
***telecommunications      industry could result in delays or      reductions in purchases of products, which would have a material adverse effect      on our business.***

***Our      success depends in large part on our ability to attract and retain qualified      personnel in all facets of our operations.***

***We      are substantially dependent on certain manufacturers, and an inability to obtain      adequate and timely delivery of products could adversely affect our      business.***

***We      have a large investment in our inventory which could become obsolete or      outdated.***

----

***We      have pu***
***rchased a large quantity of      legacy***
***digital converter boxes which could become      obsolete or outdated***

***Access      to surplus digital converter boxes may become limited which would limit future      sales of this product line***

***Our      outstanding common stock is very thinly traded.***

***We      have not paid any dividends on our outstanding common stock and have no plans      to      pay dividends in the future.***

***Our      principal executive officers and shareholders have***
***certain***
***conflicts of      interest with us.***

***Our      sales to international customers***
***may be adversely      affected by a number of factors.***

| ●   | local                political and economic developments could restrict or                increase the cost of selling to foreign                locations; |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     ●   | exchange                controls and currency fluctuations; |
|-------------------------------------------------------------|-------------------------------------------------------------|

|                     ●  | tax                increases and retroactive tax claims for profits                generated from international sales; |
|---------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|

| ●   | expropriation                of our property could result in loss of revenue and                inventory; |
|---------------------|------------------------------------------------------------------------------------------------------------|

| ●   | import                and export regulations and other foreign laws or policies could result                in                loss of revenues; and |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●                  | laws                and policies of the United States affecting foreign trade, taxation                and                investment could restrict our ability to fund foreign business or                make                foreign business more costly |
|-------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      1B.                      Unresolved Staff Comments.**

----

| **Item                2.** | **Properties.** |
|----------------------------|-----------------|

| ·   | Broken                Arrow, Oklahoma - On November 20, 2006 Tulsat                purchased a facility consisting of an office, warehouse and service                center                of  approximately 100,000 square feet on ten                acres,  with an investment of $3.3 million, financed by a loan                of $2.8 million, due in monthly payments through 2021 at an interest                rate of LIBOR plus 1.4%.  Tulsat also continues to lease a total                of approximately 80,000 square feet of warehouse facilities in three                buildings from entities which are controlled by David E. Chymiak,                Chairman                of the Company, and Kenneth A. Chymiak, President and Chief Executive                Officer of the Company.  Each lease has a renewable five-year                term, expiring at different times through 2008.  Monthly rental                payments on these leases total $26,820. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Deshler,                Nebraska – Tulsat-Nebraska owns a facility consisting of land and an                office, warehouse and service center of approximately 8,000 square                feet. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Warminster,                Pennsylvania - NCS owns its facility consisting of an office,                warehouse and service center of approximately 12,000 square feet,                with an                investment of $0.6 million, financed by loans of $0.4 million, due                in                monthly payments through 2013 at an interest rate of 5.5% through                2008,                converting thereafter to prime minus 0.25%.  NCS also rents                property of approximately 4,000 square feet, with monthly rental                payments                of $2,490 through December 2008. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Sedalia,                Missouri - ComTech Services owns land and an office, warehouse and                service                center of approximately 42,300 square feet.  Subsequent to                fiscal 2007, ComTech Services completed the construction of an 18,000                square foot warehouse facility on the back of its existing property                in                Sedalia, MO.  The new facility cost approximately $0.4 million                to complete and the construction was financed with cash flow from                operations.   |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | New                Boston, Texas - Tulsat-Texas owns land and an office, warehouse and                service center of approximately 13,000 square                feet. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Suwannee,                Georgia - Tulsat-Atlanta leases an office and service center of                approximately 5,000 square feet. The lease provides for 36 monthly                lease                payments of $3,500 ending on March 31,                2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Oceanside,                California - Jones Broadband leases an office, warehouse and service                center of approximately 15,000 square feet for $12,600 a                month.  The lease includes a 3% annual increase in lease                payments starting June 2008 and the lease term ends June                2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Stockton,                California - Jones Broadband leases a warehouse of approximately                30,000                square feet for $4,110 a month.  The lease ends February 28,                2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Chambersburg,                Pennsylvania - Broadband Remarketing International leases an office,                warehouse, and service center of approximately 18,000 square feet.                The                lease is month to month and the lease payment varies based on the                volume                of warehouse space used. The average rent for the year was $9,000                per                month. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Item                3.** | **Legal                Proceedings.** |
|----------------------------|---------------------------------------|

| **Item                4.** | **Submission                of Matters to a Vote of Security                Holders.** |
|----------------------------|----------------------------------------------------------------------------------------|

|   | There                were no matters submitted to a vote of our stockholders in the fourth                quarter of fiscal 2007.  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

**PART      II**

| **Item                5.** | **Market                for Registrants Common Equity, Related Stockholder                Matters and Issuer Purchases of Equity                Securities.** |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year                Ended September 30, 2007 |   | High   |   |   | Low    |
|----------------------------------------------|--------|--------|--------|--------|--------|
|                                         |   |   |   |   |   |
| First                Quarter                 |   | $      | 4.55   |   |   | $ | 2.66 |
| Second                Quarter                |   | $      | 3.74   |   |   | $ | 2.77 |
| Third                Quarter                 |   | $      | 5.30   |   |   | $ | 3.85 |
| Fourth                Quarter                |   | $      | 9.28   |   |   | $ | 4.88 |
|                                         |   |   |   |   |   |   |   |
| Year                Ended September 30, 2006 |   |   |   |   |   |   |   |
|                                         |   |   |   |   |   |   |   |
| First                Quarter                 |   | $      | 7.10   |   |   | $ | 3.51 |
| Second                Quarter                |   | $      | 9.09   |   |   | $ | 5.75 |
| Third                Quarter                 |   | $      | 6.86   |   |   | $ | 4.63 |
| Fourth                Quarter                |   | $      | 4.97   |   |   | $ | 3.55 |

**Holders.**

**Dividend        Policy.**

**Securities        authorized for issuance under equity compensation plans.**

|     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     |   |                                                                                                                                              | 110,350 |   |                                                                                            | $      | 3.15   |                                                                                                                                                                                              |   |   | 744,966 |   |
| Equity                  compensation plans not approved by security holders |   |                                                                                                                                              | 0       |   |                                                                                            |   | 0      |                                                                                                                                                                                              |   |   | 0 |   |
| Total                                                                       |   |                                                                                                                                              | 110,350 |   |                                                                                            | $      | 3.15   |                                                                                                                                                                                              |   |   | 744,966 |   |

----

**Shareholder        Performance Graph.**

**COMPARISON        OF 5 YEAR CUMULATIVE TOTAL RETURN***

|                                                 | **Cumulative                  Total Return** |   |    |    |
|------------------------------------------------------|----------------------------------------------|--------|---------|---------|
|                                                 | 9/30/02                                      |   | 9/30/03 |    |   | 9/30/04 |   |   | 9/30/05 |   |   | 9/30/06 |   | 9/30/07 |
|                                                 |                                         |   |    |    |   |   |   |   |   |   |   |   |   |   |
| ADDvantage                  Technologies Group, Inc. | $                                            | 100.00 |    | $       | 542.86 |   |   | $ | 550.00 |   |   | $ | 555.71 |   |   | $ | 555.7 |   | $ | 1,160.00 |
|                                                 |                                         |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NASDAQ                  Composite Index              |  $                                      | 100.00 |    |  $ | 152.26 |   |   |  $ | 161.79 |   |   |  $ | 182.39 |   |   |  $ | 191.23 |   |  $ | 229.12 |
|                                                 |                                         |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nasdaq                  Telecommunications           |  $                                      | 100.00 |    |  $ | 176.58 |   |   |  $ | 195.65 |   |   |  $ | 217.25 |   |   |  $ | 233.91 |   |  $ | 327.06 |
|                                                 |                                         |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| American                  Stock Exchange             |  $                                      | 100.00 |    |  $ | 119.77 |   |   |  $ | 153.74 |   |   |  $ | 209.95 |   |   |  $ | 230.49 |   |  $ | 291.34 |

----

**Item      6.    Selected Financial      Data.**

|                                                        |     2007                         |     2006                   |       2005            |     2004                   |      2003             |
|-------------------------------------------------------------|------------------------------------------------------|------------------------------------------------|-----------------------------------------------------|------------------------------------------------|------------------------------------------------|
|                                                        |                                                 |                                           |                                                |                                           |                                           |
| Net                Sales and service income                 | $  65,646                                  | $  52,541                            | $                50,273                             | $                47,071                        | $                33,327                        |
|                                                        |                                                 |                                           |                                                |                                           |                                           |
| Income                from operations                       | $ 12,543                                        | $    8,117                 | $   9,973                            | $   9,484                       | $   6,197                       |
|                                                        |                                                 |                                           |                                                |                                           |                                           |
| Net                income applicable to Common Shareholders | $   6,590                             | $    4,003                 | $   4,974                            | $   4,574                       |  $   3,253                 |
|                                                        |                                                 |                                           |                                                |                                           |                                           |
| Earnings                per share                           |                                                 |                                           |                                                |                                           |                                           |
|   Basic                                           | $       ..64      | $       .39 | $       .49      | $       .46 | $       .33 |
|   Diluted                                         | $        .64 | $       .39 | $        49 | $       .41 | $       .30 |
|                                                        |                                                 |                                           |                                                |                                           |                                           |
| Total                assets                                 | $  49,009                                  | $                40,925                        | $                39,269                             | $                32,359                        | $                31,748                        |
|                                                        |                                                 |                                           |                                                |                                           |                                           |
| Long-term                obligations inclusive              |                                                 |                                           |                                                |                                           |                                           |
| of                current maturities & Dividends        | $   9,009                             | $   9,385                       | $   9,382                            | $                11,610                        | $   6,912                       |

----

|   |   |
|--------|--------|

**Item      7.                      Management's Discussion and Analysis      of Financial Condition      and Results of Operation.**

**General**

**Overview**

**New      Product Offering**

**Results      of Operations**

*Year      Ended September 30, 2007, compared to Year Ended September 30, 2006 (all      references are to fiscal years)*

*Total      Net Sales*

*Costs      of Sales*

*Gross      Profit*

*Operating,      Selling, General and Administrative Expenses*

----

*Income      from Operations*

*Interest      Expense*

*Income      Taxes*

*Year      Ended September 30, 2006, compared to Year Ended September 30, 2005 (all      references are to fiscal years)*

*Net      Sales*

*Costs      of Sales*

*Gross      Profit*

*Operating,      Selling, General and Administrative Expenses*

*Income      from Operations*

*Interest      Expense*

*Income      Taxes*

----

| Fiscal                Year |   |   |
|----------------------------|--------|--------|
| 2008                       |   | $      | 528,370 |
| 2009                       |   |   | 155,136 |
| 2010                       |   |   | 159,792 |
| 2011                       |   |   | 26,762 |
|                       |   |   |   |
| Total                      |   | $      | 870,060 |

| Contractual                Obligations                  |   | Total  |                |   |   Less than                1 year |   |          | 1-                3 years |   |   | 3-5                years |   |   | More                than 5 years |
|---------------------------------------------------------|--------|--------|---------------------|--------|--------------------------------------------------|--------|---------------|--------------------------------|--------|--------|--------------------------|--------|--------|----------------------------------|
| Long                Term Debt                           |   | $      |  9,008,747     |   |                                             | $      | 3,163,098     |                           |   | $      |  3,662,936          |   |   | $                                |  473,931 |   |   | $ | 1,708,782 |
| Estimated                Interest on Long Term Debt (a) |   |   |  1,745,253     |   |                                             |   | 489,109       |                           |   |   |   435,128      |   |   |                             |  273,275 |   |   |   | 547,741 |
| Capital                Leases                           |   |   |    - |   |                                             |   |   - |                           |   |   |   -            |   |   |                             | - |   |   |   | - |
| Operating                Leases                         |   |   |  870,060       |   |                                             |   | 528,370       |                           |   |   | 341,690                  |   |   |                             |  - |   |   |   | - |
| Purchase                Obligations                     |   |   |   -       |   |                                             |   |   - |                           |   |   |   -            |   |   |                             | - |   |   |   | - |
| Total                                                   |   | $      | 11,624,060          |   |                                             | $      | 4,180,577     |                           |   | $      |  4,439,754          |   |   | $                                | 747,206 |   |   | $ | 2,256,523 |

| (a)   | The                estimated interest payments are calculated by multiplying the fixed                and                variable interest rates, associated with the long term debt agreements,                by                the average debt outstanding for the year(s) presented.  To                estimate the variable rates, the Company used the average of the                rates                incurred in fiscal 2007.  Actual variable rates may vary from                the historical rates used to calculate the estimated interest                expense. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*The Fair Value Option for Financial Assets and Financial Liabilities.      *

*Considering the Effects of Prior Year      Misstatements when Quantifying Current Year Misstatements. *

*Fair Value Measurements*

*Accounting for      Uncertainty in Income Taxes, an interpretation of FASB Statement No.*
*109, Accounting for Income Taxes*

----

* Accounting for Sabbatical Leave and Other Similar      Benefits Pursuant to FASB Statement No. 43.  *

*The Meaning of      Other-Than-Temporary Impairment and its Application to Certain Investments*

*Accounting for      S*
*hare*
*-Based *
*Payment,*

**Off-Balance      Sheet Arrangements**

**e**

**Item      7A.   Quantitative and Qualitative Disclosures      About Market Risk.**

----

**Item        8.                      Financial Statements and Supplementary        Data.**

| Index                  to Financial Statements                                                                                                               | Page   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                         |   |
| Report                  of Independent Registered Public                  Accounting Firm                                                                    | 18     |
|                                                                                                                                                         |   |
| Report                  of Independent Registered Public                  Accounting Firm                                                                    | 19     |
|                                                                                                                                                         |   |
| Consolidated                  Balance Sheets, September 30, 2007                  and 2006                                                                   | 20     |
|                                                                                                                                                         |   |
| Consolidated                  Statements of Income and                  Comprehensive Income, Years ended September 30, 2007, 2006 and                  2005 | 22     |
|                                                                                                                                                         |   |
| Consolidated                  Statements of Changes in Stockholders’                  Equity, Years ended September 30, 2007, 2006 and 2005            | 23     |
|                                                                                                                                                         |   |
| Consolidated                  Statements of Cash Flows, Years ended                  September 30, 2007, 2006 and 2005                                       | 24     |
|                                                                                                                                                              |   |
| Notes                  to Consolidated Financial                  Statements                                                                                 | 25     |

----

REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM

----

REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM

----

ADDVANTAGE      TECHNOLOGIES GROUP, INC.

CONSOLIDATED      BALANCE SHEETS

|                                                                                                                |   | September                  30, |
|---------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|
| **Assets**                                                                                                          |   | 2007                           |   |   | 2006 |
| Current                  assets:                                                                                    |   |                           |   |   |   |
|    Cash                                                                                              |   | $                              | 60,993 |   |   | $ | 98,898 |
|    Accounts                  receivable, net of allowance of                  $261,000 and           |   |                           |   |   |   |   |   |
|       $554,000,                  respectively                                         |   |                           | 6,709,879 |   |   |   | 5,318,127 |
|    Income                  tax refund receivable                                                     |   |                           | 153,252 |   |   |   | 307,299 |
|    Inventories,                  net of allowance for excess and                  obsolete inventory |   |                           |   |   |   |   |   |
|       of                  $697,000 and $1,178,000,                  respectively      |   |                           | 31,464,527 |   |   |   | 28,990,696 |
|    Deferred                  income taxes                                                            |   |                           | 678,000 |   |   |   | 1,074,000 |
| Total                  current assets                                                                               |   |                           | 39,066,651 |   |   |   | 35,789,020 |
|                                                                                                                |   |                           |   |   |   |   |   |
| Property                  and equipment, at cost:                                                                   |   |                           |   |   |   |   |   |
|    Machinery                  and equipment                                                          |   |                           | 3,144,927 |   |   |   | 2,697,476 |
|    Land                  and buildings                                                               |   |                           | 6,488,731 |   |   |   | 1,668,511 |
|    Leasehold                  improvements                                                           |   |                           | 205,797 |   |   |   | 205,797 |
|                                                                                                                |   |                           | 9,839,455 |   |   |   | 4,571,784 |
| Less                  accumulated depreciation and amortization                                                     |   |                           | (2,341,431) |  |   |   | (2,033,679) |
| Net                  property and equipment                                                                         |   |                           | 7,498,024 |   |   |   | 2,538,105 |
|                                                                                                                |   |                           |   |   |   |   |   |
| Other                  assets:                                                                                      |   |                           |   |   |   |   |   |
|    Deferred                  income taxes                                                            |   |                           | 679,000 |   |   |   | 702,000 |
|    Goodwill                                                                                          |   |                           | 1,560,183 |   |   |   | 1,560,183 |
|    Other                  assets                                                                     |   |                           | 204,843 |   |   |   | 335,566 |
| Total                  other assets                                                                                 |   |                           | 2,444,026 |   |   |   | 2,597,749 |
|                                                                                                                |   |                           |   |   |   |   |   |
| Total                  assets                                                                                       |   | $                              | 49,008,701 |   |   |   | 40,924,874 |

----

|                                                                                                                                    |   | September                  30, |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|
| **Liabilities                  and Stockholders’ Equity**                                                                         |   | 2007                           |   |   | 2006 |
| Current                  liabilities:                                                                                                   |   |                           |   |   |   |
|    Accounts                  payable                                                                                     |   | $                              | 4,301,672 |   |   | $ | 2,618,490 |
|    Accrued                  expenses                                                                                     |   |                           | 1,331,890 |   |   |   | 1,181,139 |
|    Bank                  revolving line of credit                                                                        |   |                           | 1,735,405 |   |   |   | 3,476,622 |
|    Notes                  payable – current portion                                                                |   |                           | 1,427,693 |   |   |   | 1,241,348 |
|    Dividends                  payable                                                                                    |   |                           | 210,000 |   |   |   | 210,000 |
| Total                  current liabilities                                                                                              |   |                           | 9,006,660 |   |   |   | 8,727,599 |
|                                                                                                                                    |   |                           |   |   |   |   |   |
| Notes                  payable                                                                                                          |   |                           | 5,845,689 |   |   |   | 4,666,738 |
|                                                                                                                                    |   |                           |   |   |   |   |   |
| Stockholders’equity:                                                                                                              |   |                           |   |   |   |   |   |
|    Preferred                  stock, 5,000,000 shares authorized,                  $1.00 par value,                      |   |                           |   |   |   |   |   |
|      at                  stated value: Series B, 7%                  cumulative; 300,000 shares                |   |                           |   |   |   |   |   |
|        issued                  and                  outstanding with a stated value of $40 per share |   |                           | 12,000,000 |   |   |   | 12,000,000 |
|    Common                  stock, $.01 par value; 30,000,000                  shares authorized;                         |   |                           |   |   |   |   |   |
|      10,270,756                  and 10,252,856 shares                  issued, respectively                   |   |                           | 102,708 |   |   |   | 102,528 |
|    Paid                  in capital                                                                                      |   |                           | (6,383,574) |  |   |   | (6,474,018) |
|    Retained                  earnings                                                                                    |   |                           | 28,454,024 |   |   |   | 21,863,685 |
|    Accumulated                  other comprehensive                  income:                                             |   |                           |   |   |   |   |   |
|      Unrealized                  gain on interest rate                  swap, net of tax                       |   |                           | 37,358 |   |   |   | 92,506 |
|                                                                                                                                    |   |                           | 34,210,516 |   |   |   | 27,584,701 |
|                                                                                                                                    |   |                           |   |   |   |   |   |
|    Less:                  Treasury stock, 21,100 shares at                  cost                                         |   |                           | (54,164) |  |   |   | (54,164) |
| Total                  stockholders’ equity                                                                                       |   |                           | 34,156,352 |   |   |   | 27,530,537 |
|                                                                                                                                    |   |                           |   |   |   |   |   |
| Total                  liabilities and stockholders’ equity                                                                       |   | $                              | 49,008,701 |   |   |   | 40,924,874 |

----

ADDVANTAGE      TECHNOLOGIES GROUP, INC.

CONSOLIDATED      STATEMENTS OF INCOME AND

COMPREHENSIVE      INCOME

|                                                                                                                                                                                         |   | Years                  ended September 30, |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                                                                                                                                                         |   | 2007                                       |   |   | 2006 |   |   | 2005 |
| Net                  new sales income                                                                                                                                                        |   | $                                          | 44,991,536 |   |   | $ | 38,585,308 |   |   | $ | 37,431,223 |
| Net                  refurbished sales income                                                                                                                                                |   |                                       | 15,264,336 |   |   |   | 8,815,508 |   |   |   | 8,323,975 |
| Net                  service income                                                                                                                                                          |   |                                       | 5,390,213 |   |   |   | 5,140,393 |   |   |   | 4,517,997 |
| Total                  net sales                                                                                                                                                             |   |                                       | 65,646,085 |   |   |   | 52,541,209 |   |   |   | 50,273,195 |
|    Cost                  of sales                                                                                                                                             |   |                                       | 44,336,505 |   |   |   | 36,321,278 |   |   |   | 33,880,881 |
| Gross                  profit                                                                                                                                                                |   |                                       | 21,309,580 |   |   |   | 16,219,931 |   |   |   | 16,392,314 |
|    Operating,                  selling, general and                  administrative                                                                                           |   |                                       |   |   |   |   |   |   |   |   |   |
|    expenses                                                                                                                                                                   |   |                                       | 8,458,384 |   |   |   | 7,855,705 |   |   |   | 6,162,927 |
|    Depreciation                  and amortization                                                                                                                             |   |                                       | 307,752 |   |   |   | 247,504 |   |   |   | 256,435 |
| Income                  from operations                                                                                                                                                      |   |                                       | 12,543,444 |   |   |   | 8,116,722 |   |   |   | 9,972,952 |
|    Interest                  expense                                                                                                                                          |   |                                       | 555,105 |   |   |   | 530,004 |   |   |   | 557,560 |
| Income                  before income taxes                                                                                                                                                  |   |                                       | 11,988,339 |   |   |   | 7,586,718 |   |   |   | 9,415,392 |
|    Provision                  for income taxes                                                                                                                                |   |                                       | 4,558,000 |   |   |   | 2,744,000 |   |   |   | 3,601,000 |
| Net                  income                                                                                                                                                                  |   |                                       | 7,430,339 |   |   |   | 4,842,718 |   |   |   | 5,814,392 |
|                                                                                                                                                                                         |   |                                       |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income:                                                                                                                                                 |   |                                       |   |   |   |   |   |   |   |   |   |
|    Unrealized                  gain (loss) on interest rate swap,                  net of ($34,000), $2,000 and $56,000 in (tax benefit) taxes,                  respectively |   |                                       | (55,148)  |   |   |   | 3,300  |   |   |   | 89,206  |
|                                                                                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| Comprehensive                  income                                                                                                                                                        |   | $                                          | 7,375,191 |   |   | $ | 4,846,018 |   |   | $ | 5,903,598 |
|                                                                                                                                                                                         |   |                                       |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                                                                                  |   |                                       | 7,430,339 |   |   |   | 4,842,718 |   |   |   | 5,814,392 |
|    Preferred                  stock dividends                                                                                                                                 |   |                                       | 840,000 |   |   |   | 840,000 |   |   |   | 840,000 |
| Net                  income attributable to common stockholders                                                                                                                              |   | $                                          | 6,590,339 |   |   | $ | 4,002,718 |   |   | $ | 4,974,392 |
|                                                                                                                                                                                         |   |                                       |   |   |   |   |   |   |   |   |   |
| Earnings                  per share:                                                                                                                                                         |   |                                       |   |   |   |   |   |   |   |   |   |
|    Basic                                                                                                                                                                      |   | $                                          | 0.64 |   |   | $ | 0.39 |   |   | $ | 0.49 |
|    Diluted                                                                                                                                                                    |   | $                                          | 0.64 |   |   | $ | 0.39 |   |   | $ | 0.49 |
| Shares                  used in per share calculation:                                                                                                                                       |   |                                       |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                        |   |                                       | 10,237,331 |   |   |   | 10,152,472 |   |   |   | 10,067,277 |
| Diluted                                                                                                                                                                                      |   |                                       | 10,250,835 |   |   |   | 10,201,474 |   |   |   | 10,109,854 |

----

ADDVANTAGE      TECHNOLOGIES GROUP, INC.

CONSOLIDATED      STATEMENTS OF CHANGES IN STOCKHOLDERS'      EQUITY

|                                                        |   |                        |       |   |      |   |    | Series                B |   |   |       |   |   | Retained      |        |   | Other    |   |       |   |   |   |     |
|-------------------------------------------------------------|--------|-----------------------------|------------|--------|-----------|--------|---------|-------------------------|--------|--------|------------|--------|--------|---------------|-------------|--------|----------|--------|------------|--------|--------|--------|----------|
|                                                        |   | Common                Stock |       |   | Preferred |   |    | Paid-in                 |   |   | Earnings   |   |   | Comprehensive |        |   | Treasury |   |       |   |
|                                                        |   | Shares                      |       |   | Amount    |   |    | Stock                   |   |   | Capital    |   |   | (Deficit)     |        |   | Income   |   |       | Stock  |   |   | Total    |
| Balance,                September 30, 2004                  |   |                        | 10,081,789 |   |      | $      | 100,818 |                    |   | $      | 12,000,000 |   |   | $             | (7,285,564) |   |     | $      | 12,886,575 |   |   |   | -        |   |   | $ | (54,164) |   |   | $ | 17,647,665 |
|                                                        |   |                        |       |   |      |   |    |                    |   |   |       |   |   |          |        |   |     |   |       |   |   |   |     |   |   |   |   |   |   |   |   |
| Net                income                                   |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | 5,814,392  |   |   |   | -        |   |   |   | - |   |   |   | 5,814,392 |
| Preferred                stock dividends                    |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | (840,000   | )      |   |   | -        |   |   |   | - |   |   |   | (840,000) |
| Stock                options exercised                      |   |                        | 11,358     |   |      |   | 113     |                    |   |   | -          |   |   |          | 19,634      |   |     |   | -          |   |   |   | -        |   |   |   | - |   |   |   | 19,747 |
| Unrealized                gain on interest swap             |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | -          |   |   |   | 89,206   |   |   |   | - |   |   |   | 89,206 |
|                                                        |   |                        |       |   |      |   |    |                    |   |   |       |   |   |          |        |   |     |   |       |   |   |   |     |   |   |   |   |   |   |   |   |
| Balance,                September 30, 2005                  |   |                        | 10,093,147 |   |      | $      | 100,931 |                    |   | $      | 12,000,000 |   |   | $             | (7,265,930) |   |     | $      | 17,860,967 |   |   | $      | 89,206   |   |   | $ | (54,164) |   |   | $ | 22,731,010 |
|                                                        |   |                        |       |   |      |   |    |                    |   |   |       |   |   |          |        |   |     |   |       |   |   |   |     |   |   |   |   |   |   |   |   |
| Net                income                                   |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | 4,842,718  |   |   |   | -        |   |   |   | - |   |   |   | 4,842,718 |
| Preferred                stock dividends                    |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | (840,000)  |   |   |   | -        |   |   |   | - |   |   |   | (840,000) |
| Stock                options exercised                      |   |                        | 72,500     |   |      |   | 725     |                    |   |   | -          |   |   |          | 244,674     |   |     |   | -          |   |   |   | -        |   |   |   | - |   |   |   | 245,399 |
| Unrealized                gain on interest swap             |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | -          |   |   |   | 3,300    |   |   |   | - |   |   |   | 3,300 |
| Share                based compensation expense             |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | 98,110      |   |     |   | -          |   |   |   | -        |   |   |   | - |   |   |   | 98,110 |
| Shares                issued in exchange for certain assets |   |                        | 87,209     |   |      |   | 872     |                    |   |   | -          |   |   |          | 449,128     |   |     |   | -          |   |   |   | -        |   |   |   | - |   |   |   | 450,000 |
|                                                        |   |                        |       |   |      |   |    |                    |   |   |       |   |   |          |        |   |     |   |       |   |   |   |     |   |   |   |   |   |   |   |   |
| Balance,                September 30, 2006                  |   |                        | 10,252,856 |   |      | $      | 102,528 |                    |   | $      | 12,000,000 |   |   | $             | (6,474,018) |   |     | $      | 21,863,685 |   |   | $      | 92,506   |   |   | $ | (54,164) |   |   | $ | 27,530,537 |
|                                                        |   |                        |       |   |      |   |    |                    |   |   |       |   |   |          |        |   |     |   |       |   |   |   |     |   |   |   |   |   |   |   |   |
| Net                income                                   |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | 7,430,339  |   |   |   | -        |   |   |   | - |   |   |   | 7,430,339 |
| Preferred                stock dividends                    |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | (840,000)  |   |   |   | -        |   |   |   | - |   |   |   | (840,000) |
| Stock                options exercised                      |   |                        | 17,900     |   |      |   | 180     |                    |   |   | -          |   |   |          | 33,193      |   |     |   | -          |   |   |   | -        |   |   |   | - |   |   |   | 33,373 |
| Unrealized                loss on interest swap        |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | -           |   |     |   | -          |   |   |   | (55,148) |   |   |   | - |   |   |   | (55,148) |
| Share                based compensation expense             |   |                        | -          |   |      |   | -       |                    |   |   | -          |   |   |          | 57,251      |   |     |   | -          |   |   |   | -        |   |   |   | - |   |   |   | 57,251 |
|                                                        |   |                        |       |   |      |   |    |                    |   |   |       |   |   |          |        |   |     |   |       |   |   |   |     |   |   |   |   |   |   |   |   |
| Balance,                September 30, 2007                  |   |                        | 10,270,756 |   |      | $      | 102,708 |                    |   | $      | 12,000,000 |   |   | $             | (6,383,574) |   |     | $      | 28,454,024 |   |   | $      | 37,358   |   |   | $ | (54,164) |   |   | $ | 34,156,352 |

----

CONSOLIDATED      STATEMENTS OF CASH FLOWS

|                                                                                                               |   | Years                  ended September 30, |
|--------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                                                                               |   | 2007                                       |   |   | 2006 |   |   | 2005 |
| **Cash                  Flows from Operating Activities**                                                          |   |                                       |   |   |   |   |   |   |
| Net                  income                                                                                        |   | $                                          | 7,430,339 |   |   | $ | 4,842,718 |   |   | $ | 5,814,392 |
| Adjustments                  to reconcile net income to net cash provided by operating                  activities |   |                                       |   |   |   |   |   |   |   |   |   |
|    Depreciation                  and amortization                                                   |   |                                       | 307,752 |   |   |   | 247,504 |   |   |   | 256,435 |
|    Provision                  for losses on accounts receivable                                     |   |                                       | 185,000 |   |   |   | 445,541 |   |   |   | 40,080 |
|    Provision                  for exess and obsolete inventories                                    |   |                                       | 746,000 |   |   |   | 439,625 |   |   |   | 482,395 |
|    Loss                  on disposal of property and equipment                                      |   |                                       | 100,971 |   |   |   | 76,829 |   |   |   | - |
|    Deferred                  income tax benefit                                                     |   |                                       | 419,000 |   |   |   | (22,000) |   |   |   | (3,000) |
|    Share                  based compensation expense                                                |   |                                       | 60,314 |   |   |   | 98,111 |   |   |   | - |
| Change                  in:                                                                                        |   |                                       |   |   |   |   |   |   |   |   |   |
|     Receivables                                                                                |   |                                       | (1,422,705) |   |   |   | 1,600,582 |   |   |   | (2,174,498) |
|     Inventories                                                                                |   |                                       | (3,219,831) |   |   |   | (4,109,172) |   |   |   | (1,927,585) |
|     Other assets                                                                          |   |                                       | 75,575 |   |   |   | (132,276) |   |   |   | (51,577) |
|     Accounts                  payable                                                          |   |                                       | 1,683,182 |   |   |   | (1,985,706) |   |   |   | 2,855,516 |
|     Accrued                  liabilities                                                       |   |                                       | 296,585 |   |   |   | (660,242) |   |   |   | 233,181 |
| Net                  cash provided by operating activities                                                         |   |                                       | 6,662,182 |   |   |   | 841,514 |   |   |   | 5,525,339 |
|                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Investing Activities**                                                          |   |                                       |   |   |   |   |   |   |   |   |   |
| Additions                  to machinery and equipment                                                              |   |                                       | (381,471) |   |   |   | (99,520) |   |   |   | (446,534) |
| Additions                  of land and buildings                                                                   |   |                                       | (4,820,220) |   |   |   | - |   |   |   | - |
| Investment                  in Jones Broadband International                                                       |   |                                       | (145,834) |   |   |   | (500,471) |   |   |   | (2,884,614) |
| Acquisition                  of business and certain assets                                                        |   |                                       | (166,951) |   |   |   |   |   |   |   |   |
| Net                  cash used in investing activities                                                             |   |                                       | (5,514,476) |   |   |   | (599,991) |   |   |   | (3,331,148) |
|                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Financing Activities**                                                          |   |                                       |   |   |   |   |   |   |   |   |   |
| Net                  change under bank revolving line of credit                                                    |   |                                       | (1,741,217) |   |   |   | 1,241,942 |   |   |   | (990,503) |
| Proceeds                  on notes payable                                                                         |   |                                       | 2,760,291 |   |   |   | - |   |   |   | - |
| Payments                  on notes payable                                                                         |   |                                       | (1,394,995) |   |   |   | (1,239,184) |   |   |   | (1,250,455) |
| Proceeds                  from stock options exercised                                                             |   |                                       | 30,310 |   |   |   | 245,398 |   |   |   | 19,747 |
| Payments                  of preferred dividends                                                                   |   |                                       | (840,000) |   |   |   | (840,000) |   |   |   | (840,000) |
| Net                  cash used in financing activities                                                             |   |                                       | (1,185,611) |   |   |   | (591,844) |   |   |   | (3,061,211) |
|                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| Net                  (decrease) in cash                                                                            |   |                                       | (37,905) |   |   |   | (350,321) |   |   |   | (867,020) |
|                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| Cash,                  beginning of year                                                                           |   |                                       | 98,898 |   |   |   | 449,219 |   |   |   | 1,316,239 |
|                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| Cash,                  end of year                                                                                 |   | $                                          | 60,993 |   |   | $ | 98,898 |   |   | $ | 449,219 |
|                                                                                                               |   |                                       |   |   |   |   |   |   |   |   |   |
| Supplemental                  Cash Flow Information                                                                |   |                                       |   |   |   |   |   |   |   |   |   |
| Cash                  paid for interest                                                                            |   | $                                          | 558,605 |   |   | $ | 531,596 |   |   | $ | 557,560 |
| Cash                  paid for income taxes                                                                        |   | $                                          | 4,089,459 |   |   | $ | 3,019,768 |   |   | $ | 3,582,616 |
| Value                  of shares issued in exchange for business and                  certain assets.              |   | $                                          |   |   |   | $ | 450,000  |   |   | $  |   |

----

NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS

**Note      1 – Summary of Significant Accounting Policies**

*Description      of business*

*Principles      of consolidation and segment reporting*

*Accounts      receivable*

*Inventory      valuation*

*Property      and equipment*

*Income      taxes*

*Accounting for Income Taxes*

*Revenue      recognition and product line reporting*

*Derivatives*

*Accounting for Derivative Instruments and Hedging Activities*

----

*Freight*

*Advertising      costs*

*Management      estimates*

*Concentrations      of credit risk*

*Goodwill*

*Employee      stock-based awards*

*Share      Based Payment*

*Earnings      per share*

*Fair      value of financial instruments*

*Impact      of recently issued accounting standards*

*The Fair Value Option for Financial Assets and Financial Liabilities.      *

*Considering the Effects of Prior Year      Misstatements when Quantifying Current Year Misstatements. *

*Fair Value Measurements*

*Accounting for      Uncertainty in Income Taxes, an interpretation of FASB Statement No.*
*109, Accounting for Income Taxes*

----

* Accounting for Sabbatical Leave and Other Similar      Benefits Pursuant to FASB Statement No. 43.  *

*The Meaning of      Other-Than-Temporary Impairment and its Application to Certain Investments*

*Accounting for      S*
*hare*
*-Based *
*Payment,*

*Reclassifications*

**Note      2 – Inventories**

|                                                                                        |   | 2007   |       |   | 2006   |
|---------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|
| New                                                                                         |   | $      | 17,155,976 |   |   | $ | 21,012,912 |
| Refurbished                                                                                 |   |   | 15,005,551 |   |   |   | 9,155,784 |
|    Allowance                for excess and obsolete                inventory |   |   | (697,000)  |   |   |   | (1,178,000) |
|                                                                                        |   |   |       |   |   |   |   |
|                                                                                        |   | $      | 31,464,527 |   |   | $ | 28,990,696 |

----

**Note      3 – Business Combination**

**Note      4 – Line of Credit, Notes Payable and Interest Rate      Swap**

| 2008              |   | $      | 3,163,098 |
|-------------------|--------|--------|-----------|
| 2009              |   |   | 3,430,163 |
| 2010              |   |   | 232,773   |
| 2011              |   |   | 235,529   |
| 2012              |   |   | 238,442   |
| Thereafter        |   |   | 1,708,782 |
|              |   |   |      |
|   Total |   | $      | 9,008,787 |

----

**Note      5 – Income Taxes**

|                                                                                         |   | 2007    |      |   | 2006   |    |      | 2005   |
|----------------------------------------------------------------------------------------------|--------|---------|-----------|--------|--------|---------|-----------|--------|
| Current                                                                                      |   | $       | 4,139,000 |   |   | $       | 2,766,000 |   |   | $ | 3,604,000 |
| Deferred               |   |    | 419,000   |   |   |    | (22,000)  |   |   |   | (3,000) |
|                                                                                         |   |    |      |   |   |    |      |   |   |   |   |
|                                                                                         |   |  $ | 4,558,000 |   |   |  $ | 2,744,000 |   |   | $ | 3,601,000 |

|                                           |   |                                2007 |   |   |      2006  |   |   |                              2005 |
|------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------|
| Statutory                tax rate              |   |                                                                                                           | 34.0%  |   |                                     |   | 34.0%  |                                                                                               |   |   | 34.0% |
| State                income taxes, net of U.S. |   |                                                                                                           |   |   |                                     |   |   |                                                                                               |   |   |   |
| federal                tax benefit             |   |                                                                                                           | 4.8%   |   |                                     |   | 4.9%   |                                                                                               |   |   | 4.7% |
| Tax                credits and exclusions      |   |                                                                                                           | (0.8%) |   |                                     |   | (1.7%) |                                                                                               |   |   | (0.5%) |
| Other                                          |   |                                                                                                           | -      |   |                                     |   | (1.0%) |                                                                                               |   |   | - |
|                                           |   |                                                                                                           |   |   |                                     |   |   |                                                                                               |   |   |   |
| Company's              effective tax rate      |   |                                                                                                           | 38.0%  |   |                                     |   | 36.2%  |                                                                                               |   |   | 38.2% |

|                                                  |   | 2007   |      |   | 2006   |
|-------------------------------------------------------|--------|--------|-----------|--------|--------|
| Net                operating loss carryforwards       |   | $      | 1,016,000 |   |   | $ | 1,117,000 |
| Financial                basis in excess of tax basis |   |   |      |   |   |   |
| of                certain assets                      |   |   | (403,000) |   |   |   | (321,000) |
| Accounts                Receivable                    |   |   | 99,000    |   |   |   | 211,000 |
| Inventory                                             |   |   | 492,000   |   |   |   | 718,000 |
| Other,                net                             |   |   | 153,000   |   |   |   | 51,000 |
|                                                  |   |   |      |   |   |   |
| Deferred                tax assets, net               |   | $      | 1,357,000 |   |   | $ | 1,776,000 |

| Deferred                tax assets are classified as: |   |   |      |   |   |
|-------------------------------------------------------|--------|--------|-----------|--------|--------|
| Current                                               |   | $      | 678,000   |   |   | $ | 1,074,000 |
| Non-Current                                           |   |   | 679,000   |   |   |   | 702,000 |
|                                                  |   |   |      |   |   |   |   |
|                                                  |   | $      | 1,357,000 |   |   | $ | 1,776,000 |

----

**Note      6 – Stockholders’ Equity**

|                                          | 2007   |     |                     | 2006   |   | 2005   |
|-----------------------------------------------|--------|----------|--------------------------|--------|--------|--------|
|                                          |   |     | Wtd.                Avg. |   |   |   |   |   | Wtd.                Avg |   |   |   |   | Wtd.                Avg. |
|                                          | Shares |     | Ex.                Price |   |   | Shares |   |   | Ex.                Price |   | Shares |   |   | Ex. Price |
| Outstanding,                beginning of year |   | 104,750  |                     | $      | 4.01   |   |   |   | 144,767 |   |   | $ | 3.23 |   |   | 131,125 |   |   | $ | 2.83 |
| Granted                                       |   | 30,000   |                     | $      | 3.45   |   |   |   | 35,000 |   |   | $ | 5.78 |   |   | 25,000 |   |   | $ | 4.62 |
| Exercised                                     |   | (16,900) |                     | $      | 1.69   |   |   |   | (72,500) |   |   | $ | 3.38 |   |   | (11,358) |   |   | $ | 1.74 |
| Canceled                                      |   | (-)      |                     |   | (-)    |   |   |   | (2,517) |   |   | $ | 1.50 |   |   | (-) |   |   |   | (-) |
| Outstanding,                end of year       |   | 117,850  |                     | $      | 4.20   |   |   |   | 104,750 |   |   | $ | 4.01 |   |   | 144,767 |   |   | $ | 3.23 |
| Exercisable,                end of year       |   | 110,350  |                     | $      | 3.15   |   |   |   | 94,750 |   |   | $ | 3.83 |   |   | 144,767 |   |   | $ | 3.23 |

| Options                Exercisable  |
|------------------------------------------|
|                                     | Number | Remaining |
|                                     | Outstanding | Contractual |
| Exercise                Price            | At                9/30/07 | Life |
| $                                        | 3.450 |   | 30,000 | 9.5                years |
| $                                        | 5.780 |   | 27,500 | 8.5                years |
| $                                        | 4.620 |   | 25,000 | 7.5                years |
| $                                        | 4.400 |   | 4,000 | 6.5                years |
| $                                        | 1.650 |   | 2,000 | 5.5                years |
| $                                        | 0.810 |   | 2,000 | 4.5                years |
| $                                        | 1.500 |   | 6,850 | 3.5                years |
| $                                        | 3.125 |   | 13,000 | 2.5                years |
|                                     |   |   | 110,350 |   |

*Share      Based Payment*

----

|                                              |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Average                expected life              |   |   | 5.5    |   |   |   | 5.5 |   |
| Average                expected volatility factor |   |   | 25%    |   |   |   | 63% |   |
| Average                risk-free interest rate    |   |   | 4.5%   |   |   |   | 4.7% |   |
| Average                expected dividends yield   |   |   | -----  |   |   |   | ----- |   |

| **                                                                  ** | 2007  | 2006  | 2005  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------|
| Expected                life in years                                                                                                                                                                                                                                                                                                                                                                            | 5.5   | 5.5   | 6.0   |
| Expected                volatility                                                                                                                                                                                                                                                                                                                                                                               | 25%   | 63.0% | 55.0% |
| Risk-free                interest rate                                                                                                                                                                                                                                                                                                                                                                           | 4.5%  | 4.7%  | 4.3%  |
| Expected                dividend yield                                                                                                                                                                                                                                                                                                                                                                           | ----- | -     | -     |

|                                                             |   | 2007                          |   |   | 2006   |   |   | 2005   |
|------------------------------------------------------------------|--------|-------------------------------|--------|--------|--------|--------|--------|--------|
|                                                             |   | (In                thousands) |
| Net                income as reported                            |   | $                             | 6,590  |   |   | $      | 4,003  |   |   | $ | 4,974 |
| Pro                forma compensation expense from stock options |   |                          | 0      |   |   |   | 0      |   |   |   | (65) |
| Pro                forma net income                              |   | $                             | 6,590  |   |   | $      | 4,003  |   |   | $ | 4,909 |
|                                                             |   |                          |   |   |   |   |   |   |   |   |   |
| Earnings                per common share as reported:            |   |                          |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   | $                             | .64    |   |   | $      | .39    |   |   | $ | .49 |
| Diluted                                                          |   | $                             | .64    |   |   | $      | .39    |   |   | $ | .49 |
| Proforma                earrings per common share                |   |                          |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   | $                             | .64    |   |   | $      | .39    |   |   | $ | .49 |
| Diluted                                                          |   | $                             | .64    |   |   | $      | .39    |   |   | $ | .49 |

----

**Note      7 – Related Parties**

| Stock                Ownership       |                                                                                                                                                                                                                                                                     |                                                                                 |
|--------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|
|   Name of Beneficial Owner |                                                 Percent of Common StockBeneficially                Owned | Percent                of Series B Preferred Stock Beneficially                Owned |
|                                 |                                                                                                                                                                                                                                                                     |                                                                                 |
| David                E. Chymiak      | 23%                                                                                                                                                                                                                                                                      | 50.0%                                                                                |
| Kenneth                A. Chymiak    | 20%                                                                                                                                                                                                                                                                      | 50.0%                                                                                |

**Note      8 – Retirement Plan**

----

**Note      9 – Earnings per Share**

**                                                                                                                                                                                                 Years ended September 30,**

**                                                                                                 **

|                                                                                        | 2007   |             |   | 2006   |   |             | 2005   |
|---------------------------------------------------------------------------------------------|--------|------------------|--------|--------|--------|------------------|--------|
|                                                                                        |   |             |   |   |   |             |   |
| Net                income                                                                   | $      | 7,430,339        |   |   | $      | 4,842,718        |   |   | $ | 5,814,392 |
| Dividends                on preferred stock                                                 |   | 840,000          |   |   |   | 840,000          |   |   |   | 840,000 |
| Net                  income attributable to common                  shareholders            |   | 6,590,339   |   |   |   | 4,002,718   |   |   |   | 4,974,392  |
|                                                                                        |   |             |   |   |   |             |   |   |   |   |
| Weighted                average shares outstanding                                          |   | 10,237,331       |   |   |   | 10,152,472       |   |   |   | 10,067,277 |
|                                                                                        |   |             |   |   |   |             |   |   |   |   |
| Potentially                dilutive securities                                              |   |             |   |   |   |             |   |   |   |   |
| Effect                of dilutive stock options                                             |   | 13,504           |   |   |   | 49,002           |   |   |   | 42,577 |
|                                                                                        |   |             |   |   |   |             |   |   |   |   |
| Weighted                average shares outstanding – assuming                dilution |   | 10,250,835  |   |   |   | 10,201,474  |   |   |   | 10,109,854  |
|                                                                                        |   |             |   |   |   |             |   |   |   |   |
| Earnings                per common share:                                                   |   |             |   |   |   |             |   |   |   |   |
| Basic                                                                                       | $      | 0.64             |   |   | $      | 0.39             |   |   | $ | 0.49 |
| Diluted                                                                                     | $      | 0.64             |   |   | $      | 0.39             |   |   | $ | 0.49 |

**Note      10 – Commitments and Contingencies**

| Fiscal                Year |   | Rental                Payments |    |
|----------------------------|--------|--------------------------------|---------|
| 2008                       |   | $                              | 528,370 |   |
| 2009                       |   |                           | 155,136 |   |
| 2010                       |   |                           | 159,792 |   |
| 2011                       |   |                           | 26,762  |   |
|                       |   |                           |    |   |
| Total                      |   | $                              | 870,060 |   |

----

**Note      11 - Subsequent Events**

**Note      12 – Quarterly Results of Operations (Unaudited)**

|                                             |   |                       |       |   |                    |    |       |                   |   |                        |
|--------------------------------------------------|--------|----------------------------|------------|--------|-------------------------|---------|------------|------------------------|--------|-----------------------------|
|                                             |   | December                31 |       |   | March                31 |    |       | June                30 |   | September                30 |
| **Fiscal                year ended 2007**        |   |                       |       |   |                    |    |       |                   |   |                        |
| Net                sales and service income      |   |  $                    | 14,748,517 |   |                    |  $ | 16,040,551 |                   |   |  $                     | 17,563,101 |   | $  | 17,293,916 |
| Gross                profit                      |   |                       | 4,679,157  |   |                    |    | 5,222,011  |                   |   |                        | 6,077,642 |   |   | 5,330,770 |
| Net                income                        |   |                       | 1,638,279  |   |                    |    | 1,771,254  |                   |   |                        | 2,210,411 |   |   | 1,810,395 |
| Basic                earnings per common share   |   |                       | .14        |   |                    |    | .15        |                   |   |                        | .20 |   |   | .16 |
| Diluted                earnings per common share |   |                       | .14        |   |                    |    | .15        |                   |   |                        | .19 |   |   | .16 |
|                                             |   |                       |       |   |                    |    |       |                   |   |                        |   |   |   |   |
| **Fiscal                year ended 2006**        |   |                       |       |   |                    |    |       |                   |   |                        |   |   |   |   |
| Net                sales and service income      |   |  $                    | 14,753,611 |   |                    |  $ | 12,419,157 |                   |   | $                      | 13,199,459 |   |  $ | 12,168,982 |
| Gross                profit                      |   |                       | 4,922,541  |   |                    |    | 3,947,800  |                   |   |                        | 4,047,558 |   |   | 3,302,032 |
| Net                income                        |   |                       | 1,741,594  |   |                    |    | 1,076,798  |                   |   |                        | 1,342,699 |   |   | 681,627 |
| Basic                earnings per common share   |   |                       | .15        |   |                    |    | .09        |                   |   |                        | .11 |   |   | .05 |
| Diluted                earnings per common share |   |                       | .15        |   |                    |    | .09        |                   |   |                        | .11 |   |   | .05 |

** **

----

| **Item                9.** | **Changes                in and Disagreements with                Accountants on Accounting and                Financial  Disclosure.** |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| **Item                9A.** | **Controls                and                Procedures.** |
|-----------------------------|------------------------------------------------------------|

**Evaluation        of Disclosure Controls and        Procedures.**

**Changes      in Internal Controls**

**Item        9A(T).    Controls and        Procedures.**

|   |   |
|--------|--------|

| **Item                9B.** | **Other                Information.** |
|-----------------------------|---------------------------------------|

----

**PART      III**

| **Item                10.** | **Directors                and 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      DirectorsIndependence.**

| **Item                14.** | **Principal                Accounting Fees and                Services.** |
|-----------------------------|---------------------------------------------------------------------------|

----

**PART      IV**

| **Item                15.** | **Exhibits,                Financial Statements                Schedules.**  |
|-----------------------------|-----------------------------------------------------------------------------------|

| (a)        1.                      | The                  following financial statements are filed as part of this report                  in Part                  II, Item 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Report                  of Independent Registered Public Accounting Firm for                  2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Report                  of Independent Registered Public Accounting Firm for 2006 and                  2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Consolidated                  Balance Sheets as of September 30, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Consolidated                  Statements of Income for the years ended September 30, 2007, 2006and                  2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Consolidated                  Statements of Changes in Stockholders’ Equity for the years ended September                  30, 2007, 2006 and 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Consolidated                  Statements of Cash Flows for the years ended September 30, 2007,2006                  and 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                       | Notes                  to Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|             2. | The                  following financial statement Schedule II – Valuation and Qualifying                  Accounts for the years ended September 30, 2007, 2006 and 2005                  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                Period  |      |   | Expenses                  |   |    | Write                offs |   |   | Recoveries  |   |   | of                Period  |
| **Period                Ended September 30, 2007**         |   |                      |      |   |                      |   |    |                      |   |   |        |   |   |                      |
| Allowance                for Doubtful Accounts             |   | $                         | 554,000   |   |                      | $      | 185,337 |                      |   |   | (478,337)   |   |   |                      | - |   |   | $ | 261,000 |
| Allowance                for Excess and Obsolete Inventory |   |                      | 1,178,000 |   |                      |   | 745,836 |                      |   |   | (1,226,836) |   |   |                      | - |   |   |   | 697,000 |
| Valuation                Allowance of Deferred Tax Asset   |   |                      | -         |   |                      |   | -       |                      |   |   | -           |   |   |                      | - |   |   |   | - |
|                                                       |   |                      |      |   |                      |   |    |                      |   |   |        |   |   |                      |   |   |   |   |   |
| **Period                Ended September 30, 2006**         |   |                      |      |   |                      |   |    |                      |   |   |        |   |   |                      |   |   |   |   |   |
| Allowance                for Doubtful Accounts             |   | $                         | 92,000    |   |                      | $      | 445,541 |                      |   |   | -           |   |   | $                         | 16,459 |   |   | $ | 554,000 |
| Allowance                for Excess and Obsolete Inventory |   |                      | 1,575,395 |   |                      |   | 439,625 |                      |   |   | (837,020)   |   |   |                      | - |   |   |   | 1,178,000 |
| Valuation                Allowance of Deferred Tax Asset   |   |                      | -         |   |                      |   | -       |                      |   |   | -           |   |   |                      | - |   |   |   | - |
|                                                       |   |                      |      |   |                      |   |    |                      |   |   |        |   |   |                      |   |   |   |   |   |
| **Period                Ended September 30, 2005**         |   |                      |      |   |                      |   |    |                      |   |   |        |   |   |                      |   |   |   |   |   |
| Allowance                for Doubtful Accounts             |   | $                         | 68,063    |   |                      | $      | 40,080  |                      |   |   | (16,143)    |   |   |                      | - |   |   | $ | 92,000 |
| Allowance                for Excess and Obsolete Inventory |   |                      | 1,093,000 |   |                      |   | 482,395 |                      |   |   | -           |   |   |                      | - |   |   |   | 1,575,395 |
| Valuation                Allowance of Deferred Tax Asset   |   |                      | -         |   |                      |   | -       |                      |   |   | -           |   |   |                      | - |   |   |   | - |

----

| 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.                                                                                                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2    | Bylaws                    of the Company, as amended, incorporated by reference to Exhibit                    3.2 to                    the Annual Report on 10-KSB filed with the Securities Exchange                    Commission                    by the Company on January 10, 2003.                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.1   | Revolving                    Credit and Term Loan Agreement dated September 30, 2004 (“Revolving Credit                    and Term Loan Agreement”), incorporated by reference to Exhibit 10.5 to                    the Company’s Form 10-K filed December 22, 2004.                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2   | Third                    Amendment to Revolving Credit and Term Loan Agreement dated November                    20,                    2006, incorporated by reference to Exhibit 10.5 to the Company’s Form 10-K                    filed December 27, 2006.                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3   | Fourth                    Amendment to Revolving Credit and Term Loan Agreement dated November                    27,                    2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.4   | The                    ADDvantage Media Group, Inc. 1998 Incentive Stock Plan, incorporated                    by                    reference to Appendix A to the Company’s Proxy Statement relating to the                    Company’s 1998 Annual Meeting, filed April 28, 1998.                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.5   | First                    Amendment to ADDvantage Media Group, Inc. 1998 Incentive Stock                    Plan,                    incorporated by reference to Exhibit 4.4 to the Company’s Registration                    Statement on Form S-8 filed November 20, 2003.                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.6   | Contract                    of sale of real estate between Chymiak Investments, LLC and ADDvantage                    Technologies, Group, Inc. dated November 20, 2006, 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 November                    20,                    2006.                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.7   | 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.                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 14.1   | Amended                    Code of Business Conduct and Ethics for directors, officers and                    employees                    of the Company, incorporated by reference to the Current Report                    on Form                    8-K filed with the Securities and Exchange Commission by the                    Company on                    March 6, 2006.                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 16.1   | Letter                    regarding change in certifying accountant, incorporated by reference                    to                    the Current Report on Form 8-K filed with the Securities and                    Exchange                    Commission by the Company on February 13, 2006.                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 21.1   | Listing                    of the Company’s subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 23.1   | Consent                    of Hogan & Slovacek.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 23.2   | Consent                    of Tullius Taylor Sartain & Sartain 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

**SIGNATURES**

| Date:     December                  28, 2007 | /s/ David                E.                Chymiak                                                                                                                                                                                                                                       |
|-----------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                  | David                  E. Chymiak, Chairman of the Board of                  Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 | /s/ Kenneth                A.                Chymiak                                                                                                                                                                                             |
|                                                                  | Kenneth                  A. Chymiak, President (Principal Exectuive Officer)                  and Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 |  /s/ Daniel                E.                O'Keefe                                                                                              |
|                                                                  | Daniel                  E. O’Keefe, Chief Financial Officer (Principal Financial                  Officer) and Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 | /s/ Henry                F.                McCabe                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                  | Henry                  F. McCabe, Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 |  /s/                James C.                McGill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                  | James                  C. McGill, Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 | /s/ Paul                F.                Largess                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                  | Paul                  F. Largess, Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 |  /s/ Stephen                J                Tyde                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                  | Stephen                  J. Tyde, Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Date:     December                  28, 2007 |  /s/ Thomas                J.                Franz                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                  | Thomas                  J. Franz, Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| 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.                                                                                                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2    | Bylaws                    of the Company, as amended, incorporated by reference to Exhibit                    3.2 to                    the Annual Report on 10-KSB filed with the Securities Exchange                    Commission                    by the Company on January 10, 2003.                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.1   | Revolving                    Credit and Term Loan Agreement dated September 30, 2004 (“Revolving Credit                    and Term Loan Agreement”), incorporated by reference to Exhibit 10.5 to                    the Company’s Form 10-K filed December 22, 2004.                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2   | Third                    Amendment to Revolving Credit and Term Loan Agreement dated November                    20,                    2006, incorporated by reference to Exhibit 10.5 to the Company’s Form 10-K                    filed December 27, 2006.                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3   | Fourth                    Amendment to Revolving Credit and Term Loan Agreement dated November                    27,                    2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.4   | The                    ADDvantage Media Group, Inc. 1998 Incentive Stock Plan, incorporated                    by                    reference to Appendix A to the Company’s Proxy Statement relating to the                    Company’s 1998 Annual Meeting, filed April 28, 1998.                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.5   | First                    Amendment to ADDvantage Media Group, Inc. 1998 Incentive Stock                    Plan,                    incorporated by reference to Exhibit 4.4 to the Company’s Registration                    Statement on Form S-8 filed November 20, 2003.                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.6   | Contract                    of sale of real estate between Chymiak Investments, LLC and ADDvantage                    Technologies, Group, Inc. dated November 20, 2006, 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 November                    20,                    2006.                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.7   | 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.                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 14.1   | Amended                    Code of Business Conduct and Ethics for directors, officers and                    employees                    of the Company, incorporated by reference to the Current Report                    on Form                    8-K filed with the Securities and Exchange Commission by the                    Company on                    March 6, 2006.                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 16.1   | Letter                    regarding change in certifying accountant, incorporated by reference                    to                    the Current Report on Form 8-K filed with the Securities and                    Exchange                    Commission by the Company on February 13, 2006.                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 21.1   | Listing                    of the Company’s subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 23.1   | Consent                    of Hogan & Slovacek.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 23.2   | Consent                    of Tullius Taylor Sartain & Sartain 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |