<PAGE> 1
As filed with the Securities and Exchange Commission on November 25, 1997.
Registration No. ___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUEST MEDICAL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1646002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 ALLENTOWN PARKWAY
ALLEN, TEXAS 75002
(972) 390-9800
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
---------------
Thomas C. Thompson
President
201 Allentown Parkway
Allen, Texas 75002
(972) 390-9800
(Name, address, and telephone number,
including area code, of agent for service)
---------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=====================================================================================================================
TITLE OF SHARES AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock,
$.05 par value 100,000 $6.8125(2) $681,250(2) $206.44
=====================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Calculated pursuant to Rule 457(c) of the Securities Act of 1933, as
amended, based upon the average of the high and low prices per share of
Quest Medical, Inc. on November 20, 1997, as reported by the Nasdaq
National Market.
---------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
QUEST MEDICAL, INC.
100,000 SHARES
COMMON STOCK
This Prospectus relates to an offering of up to 100,000 shares of
common stock, par value $.05 per share (the "Common Stock"), of Quest Medical,
Inc., a Texas corporation (the "Company"), acquired pursuant to that certain
Quest Medical, Inc. Common Stock Purchase Warrant dated February 21, 1997
granted by the Company to Robert L. Swisher, Jr. (the "Selling Shareholder").
The Common Stock being registered is being offered for the account of
the Selling Shareholder. See "Selling Shareholder." The Company will not receive
any proceeds from the sale of shares of Common Stock offered hereby. The shares
may be offered in transactions on the Nasdaq National Market, in negotiated
transactions, or through a combination of such methods of distribution, at
prices relating to the prevailing market prices or at negotiated prices. See
"Plan of Distribution."
The Common Stock is quoted on the Nasdaq National Market under the
symbol "QMED." On November 20, 1997 the last sale price of the Common Stock, as
reported on the Nasdaq National Market, was $7.00 per share.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus and, if given or made, such other
information and representations must not be relied upon as having been
authorized by the Company or the Selling Shareholder. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of any time subsequent to its date. This Prospectus does not
constitute an offer to sell, or a solicitation of any offer to buy, any
securities other than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell, or a solicitation of any offer
to buy, such securities in any circumstances in which such offer or solicitation
is unlawful.
The date of this Prospectus is November 25, 1997.
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<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, information statements
and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements, information statements and other
information filed by the Company with the Commission pursuant to the
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549-1004, at its Northeast Regional
Office located at 7 World Trade Center, Suite 1300, New York, New York 10048 and
at its Central Regional Office located at 1801 California Street, Suite 4800,
Denver, Colorado 80202-2648. Copies of such material may be obtained from the
Public Reference Section of the Commission located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site
that contains reports, proxy statements, information statements and other
information regarding the Company. The Commission's Web site address is
http://www.sec.gov. The Company is a publicly held corporation and its Common
Stock is traded on the Nasdaq National Market under the symbol "QMED." Reports,
proxy statements, information statements and other information can also be
inspected at the offices of the Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20549.
The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as it
may determine to furnish or as may be required by law.
The Company has filed with the Commission a Registration Statement on
Form S-3 (referred to herein, together with all exhibits, as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the shares of Common Stock offered hereby. This Prospectus does
not contain all information set forth in the Registration Statement. Certain
parts of the Registration Statement have been omitted in accordance with the
rules and regulations of the Commission. For further information, reference is
made to the Registration Statement which can be inspected at the public
reference rooms at the offices of the Commission.
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<PAGE> 4
DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates). Requests should be directed to:
Quest Medical, Inc.
201 Allentown Parkway
Allen, Texas 75002
Telephone: (972) 390-9800
Attention: F. Robert Merrill III,
Secretary
The Company's (i) Annual Report on Form 10-K, which contains audited
financial statements for the fiscal year ended December 31, 1996, (ii) all
reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of the Form 10-K, and (iii) a description of the Common Stock contained
in the Company's registration statement on Form SB-2, dated September 28, 1995
(Commission File Number 33-62991), including any amendment or reports filed for
the purpose of updating such description, are hereby incorporated by reference
into this Prospectus.
All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering relating to this
Prospectus will be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents. Any statement
incorporated or deemed to be incorporated by reference herein will be deemed to
be modified, replaced or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded will be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
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<PAGE> 5
THE COMPANY
Quest Medical, Inc. designs, develops, manufactures and markets a
variety of healthcare products used primarily in cardiovascular surgery,
interventional pain management and intravenous fluid delivery applications. The
Company operates several stable and profitable product lines, including
cardiovascular products (such as pressure control valves, filters and surgical
retracting tapes), specialized intravenous fluid delivery tubing sets and
accessories and pressure monitoring kits used primarily in labor and delivery.
The Company has levered these product lines, its existing corporate
infrastructure and its core competencies in manufacturing, engineering and
regulatory affairs to expand into new markets as evidenced by the internally
funded development of the Quest MPS(R) myocardial protection system, an
innovative and sophisticated system designed to manage the delivery of solutions
to the heart during open-heart surgery. In addition, through its wholly-owned
subsidiary, Advanced Neuromodulation Systems, Inc., the Company designs,
develops, manufactures and markets a line of electronic spinal cord stimulation
devices used to manage chronic severe pain.
The Company is a Texas corporation formed in 1979. The Company's
principal executive offices are located at 201 Allentown Parkway, Allen, Texas
75002, and its telephone number is (972) 390-9800.
RISK FACTORS
A discussion of "Risk Factors" relating to the Company is located in
the Company's 1996 Annual Report on Form 10-K under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operation-Outlook
and Uncertainties," which is incorporated by reference in this Prospectus.
SELLING SHAREHOLDER
The Selling Shareholder has informed the Company that he reasonably
expects to sell the number of shares of Common Stock set forth in the following
table within eighteen months after the date of this Prospectus. The table below
sets forth information with respect to the beneficial ownership of the Company's
Common Stock by the Selling Shareholder immediately prior to this offering and
as adjusted to reflect the sale of shares of Common Stock pursuant to the
offering. All information with respect to the beneficial ownership has been
furnished by the respective Selling Shareholder.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering(1)
----------------------------------------- --------------------------
Number of Percent of Shares to Number of Percent of
Name of Beneficial Owner Shares Class be Sold Shares Class
- ------------------------ ------ ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
Robert L. Swisher, Jr. 500,000 5.8% 100,000 400,000 4.6%
</TABLE>
- ------------------
(1) Assumes all the shares of Common Stock that may be offered are sold.
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<PAGE> 6
PLAN OF DISTRIBUTION
The sale of the Common Stock offered hereby may be effected from time
to time directly, or by one or more broker-dealers or agents, in one or more
transactions on the Nasdaq National Market, in negotiated transactions, or
through a combination of such methods of distribution, at prices related to
prevailing market prices or at negotiated prices.
In the event one or more broker-dealers or agents agree to sell the
Common Stock, they may do so by purchasing the Common Stock as principals or by
selling the Common Stock as agent for the Selling Shareholder. Any such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholder or the purchasers of the shares of
Common Stock for which such broker-dealer may act as agent or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer may
be in excess of customary compensation).
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Common Stock may not simultaneously
engage in market-making activities with respect to the Company's Common Stock
for the applicable period under Regulation M of the Exchange Act prior to the
commencement of such distribution. In addition and without limiting the
foregoing, the Selling Shareholder will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including, without
limitation Regulation M, which provisions may limit the timing of purchases and
sales of the Common Stock by the Selling Shareholder. All of the foregoing may
affect the marketability of the Common Stock.
In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states, the Common Stock may not be sold
unless the Common Stock has been registered or qualified for sale in such state
or an exemption from registration or qualification is available and is complied
with.
USE OF PROCEEDS
The Company will not receive any proceeds from the offering.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Hughes & Luce, L.L.P., Dallas, Texas.
EXPERTS
The financial statements and schedule of the Company included in the
Annual Report on Form 10-K referred to under "Documents Incorporated by
Reference" have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon, and are included herein by
-5-
<PAGE> 7
reference in reliance upon their report given upon their authority as experts in
accounting and auditing.
INDEMNIFICATION
The Company's Articles of Incorporation include a provision eliminating
or limiting director liability to the Company and its shareholders for monetary
damages arising from acts or omissions in the director's capacity as a director.
Consistent with the Texas Business Corporation Act, the Company's Articles of
Incorporation do not eliminate or limit a director's liability to the extent the
director is found liable for (i) a breach of the director's duty of loyalty to
the Company or its shareholders, (ii) an act or omission not in good faith that
constitutes a breach of duty of the director to the Company or an act or
omission that involves intentional misconduct or a knowing violation of the law,
(iii) a transaction from which the director received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of the
director's office, (iv) an act or omission for which the liability of a director
is expressly provided by an applicable statute, or (v) an act related to an
unlawful stock repurchase or payment of a dividend. In addition, the Company
maintains insurance on behalf of its directors and executive officers insuring
them against any liability asserted against them in their capacities as
directors or officers or arising out of such status.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company under Texas law, the Company's Articles of Incorporation or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer, or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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<PAGE> 8
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fee $ 207*
Accounting fees and expenses 1,500*
Legal fees and expenses 5,000*
Blue Sky fees and expenses (including counsel fees) 1,000*
Miscellaneous expenses 293*
-------
Total: $ 8,000
</TABLE>
- ---------------
* Estimated
All of the above expenses will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the Texas Business Corporation Act, the Company's
Articles of Incorporation include a provision eliminating or limiting director
liability to the Company or its shareholders for monetary damages arising from
certain acts or omissions in the director's capacity as a director. In addition,
the Company maintains insurance on behalf of its directors and executive
officers insuring them against any liability asserted against them in their
capacities as directors or officers or arising out of such status.
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Index to
Exhibits on page II-6 of this Registration Statement, which Index is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement
to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act.
II-1
<PAGE> 9
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) and 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the
II-2
<PAGE> 10
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Allen, State of Texas, on November 25, 1997.
QUEST MEDICAL, INC.
By: /s/ Thomas C. Thompson
--------------------------
Thomas C. Thompson,
President
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Thomas C. Thompson President and Director of Quest September 30, 1997
- -------------------------------- Medical, Inc. (Principal
Thomas C. Thompson Executive Officer)
/s/F. Robert Merrill III Senior Vice President - Finance, September 30, 1997
- -------------------------------- Secretary and Treasurer of
F. Robert Merrill III Quest Medical, Inc. (Principal
Financial and Accounting
Officer)
/s/Linton E. Barbee Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Linton E. Barbee
/s/Robert C. Eberhart Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Robert C. Eberhart
/s/Richard D. Nikolaev Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Richard D. Nikolaev
/s/Hugh M. Morrison Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Hugh M. Morrison
/s/Michael J. Torma Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Michael J. Torma
</TABLE>
II-4
<PAGE> 12
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Thomas C. Thompson and F. Robert Merrill III his or her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him or her and in his or her name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement or amendment thereto has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Thomas C. Thompson President and Director of Quest September 30, 1997
- -------------------------------- Medical, Inc. (Principal
Thomas C. Thompson Executive Officer)
/s/F. Robert Merrill III Senior Vice President - Finance, September 30, 1997
- -------------------------------- Secretary and Treasurer of
F. Robert Merrill III Quest Medical, Inc. (Principal
Financial and Accounting
Officer)
/s/Linton E. Barbee Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Linton E. Barbee
/s/Robert C. Eberhart Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Robert C. Eberhart
/s/Richard D. Nikolaev Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Richard D. Nikolaev
/s/Hugh M. Morrison Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Hugh M. Morrison
/s/Michael J. Torma Director of Quest Medical, Inc. September 30, 1997
- --------------------------------
Michael J. Torma
</TABLE>
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<PAGE> 13
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
------ -----------------------
*5.1 Opinion of Hughes & Luce, L.L.P.
*23.1 Consent of Hughes & Luce, L.L.P. (included in Exhibit 5.1)
*23.2 Consent of Ernst & Young LLP
*24.1 Power of Attorney (included in Part II of this Registration
Statement)
- ---------------
*Filed Herewith.
II-6
<PAGE> 1
EXHIBIT 5.1
[Hughes & Luce, L.L.P. Letterhead]
November 25, 1997
Quest Medical, Inc.
201 Allentown Parkway
Allen, Texas 75002
Ladies and Gentlemen:
We have acted as counsel to Quest Medical, Inc., a Texas corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), of 100,000 shares of the Company's
common stock, par value $.05 per share (the "Common Stock"), acquired pursuant
to that certain Quest Medical, Inc. Common Stock Purchase Warrant (the
"Warrant"), dated February 21, 1997, granted by the Company to Robert L.
Swisher, Jr. ("Swisher"), as described in the Registration Statement of the
Company on Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission.
In rendering this opinion, we have examined and relied upon executed
originals, counterparts or copies of such documents, records and certificates
(including certificates of public officials and officers of the Company) as we
considered necessary or appropriate for enabling us to express the opinions set
forth herein. In all such examinations, we have assumed the authenticity and
completeness of all documents submitted to us as originals and the conformity to
originals and completeness of all documents submitted to us as photostatic,
conformed, notarized or certified copies.
Based on the foregoing, we are of the opinion that such shares of
Common Stock have been duly authorized and, if and when issued and paid for in
full upon exercise of the Warrant by Swisher, in accordance with its respective
terms, will be validly issued, fully paid and nonassessable.
This opinion may be filed as an exhibit to the Registration Statement.
We also consent to the reference to this firm as having passed on the validity
of such shares of Common Stock under the caption "Legal Matters" in the
prospectus that constitutes a part of the Registration Statement. In giving this
consent, we do not admit that we are included in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
HUGHES & LUCE, L.L.P.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
this Registration Statement on Form S-3 of Quest Medical, Inc. and to the
incorporation by reference of our report dated March 14, 1997 with respect to
the consolidated financial statements and schedule of Quest Medical, Inc. and
subsidiaries included in the Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
November 24, 1997
