<PAGE>
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUESTRON TECHNOLOGY, INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
23-2257354
(I.R.S. Employer
Identification Number)
6400 Congress Avenue, Suite 200, Boca Raton, FL 33487
(407) 241-5251
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
DOMINIC A. POLIMENI
Chief Executive Officer
6400 Congress Avenue, Suite 200, Boca Raton, FL 33487
(407) 241-5251
(Name, address, including zip code, 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 Registration Statement becomes effective.
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 under 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, 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, 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. | |
Calculation of Registration Fee
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<TABLE>
<CAPTION>
Title of each class
of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered offering price per unit aggregate offering price registration fee (1)
<S> <C> <C> <C> <C>
Common Stock, 1,311,656 shares $1.4375 $1,885,505.50 $650.17
.0001 par value
Total $650.17
</TABLE>
================================================================================
(1) Estimated solely for purposes of calculation of the registration fee.
Pursuant to Rule 457(c), estimated on the basis of the average of the closing
bid and asked prices of the Common Stock on June 25, 1996.
================================================================================
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
June 27, 1996
QUESTRON TECHNOLOGY, INC
1,311,656 shares of Common Stock
($.0001 par value)
This Prospectus relates to the possible resale on a continuous basis of up to
1,311,656 shares of Common Stock, $.0001 par value, of Questron Technology,
Inc., a Delaware corporation formerly known as Judicate, Inc. ("Questron" or the
"Company"). 1,160,000 of these shares were previously issued in March 1995 in a
private placement, 47,000 shares were previously issued in November 1994 in a
private placement, 64,656 shares are issuable upon exercise of Series I Warrants
and 40,000 shares are issuable upon exercise of Series III Warrants. The shares
issuable upon exercise of the Series I and Series III Warrants if these Series I
Warrants and Series III Warrants are exercised prior to the effective date of
the Registration Statement of which this Prospectus is a part. The shares
included in the Registration Statement are sometimes referred to as the
"Securities". The Securities may be offered from time to time by the selling
securityholders (the "Selling Securityholders"). THE COMPANY WILL NOT RECEIVE
ANY OF THE PROCEEDS FROM THE SALE OF THE SECURITIES BY THE SELLING
SECURITYHOLDERS. THE COMPANY WILL RECEIVE THE PROCEEDS FROM THE EXERCISE BY THE
SELLING SECURITYHOLDERS OF ANY OF THE AFOREMENTIONED WARRANTS AND SUCH FUNDS
WILL BE USED FOR GENERAL WORKING CAPITAL PURPOSES OF THE COMPANY. SEE "USE OF
PROCEEDS."
The Securities will be offered for sale from time to time on terms to be
determined at the time of sale by the Selling Securityholders. The Securities
may not be sold until thirteen (13) months from the date of this Prospectus,
subject to earlier release at the sole discretion of Biltmore Securities, Inc.
("Biltmore"), which acted as the placement agent with respect to the March 1995
private placement. In other offerings involving similar restrictions, Biltmore
has released such restrictions prior to the expiration of the lock-up period and
in some cases immediately after the effective date of the subject registration
statement. The Securities are listed on the NASDAQ Small Cap Market under the
symbol "QUST" and the last reported bid and asked prices on June 26, 1996 were
$1-3/8 and $ 1-1/2 respectively. Certain of the Securities are being registered
at the request of the Selling Securityholders, and the remainder are being
registered pursuant to certain "piggy-back" registration rights of the holders
of these shares. The Company will pay certain expenses of this offering. See
"USE OF PROCEEDS" and "PLAN OF DISTRIBUTION."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND 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.
====================
An investment in the Securities offered hereby involves a high degree of risk
and should be considered only by persons who can afford the loss of their entire
investment. See "RISK FACTORS" (pp. 5-9) for important information which should
be considered by prospective investors.
(cover continued on following page)
<PAGE>
Although Biltmore Securities, Inc. ("Biltmore") is not the sole market maker in
the Company's common stock, from time to time it may be the dominant market
maker in the Company's common stock. Biltmore is involved in litigation with the
Securities and Exchange Commission and in the event that such litigation
adversely affects Biltmore's ability to act as a market maker for the Company's
securities, the market for and liquidity of the Company's securities may be
adversely affected. There can be no assurance that Biltmore will continue to
make a market in the Company's securities. In the event that other broker
dealers fail to make a market in the Company's securities, the possibility
exists that the market for and the liquidity of the Company's securities may be
adversely affected to such an extent that public securityholders may not have
anyone to purchase their securities when offered for sale at any price. In such
event, the market for, liquidity and prices of the Company's securities may not
exist. FOR ADDITIONAL INFORMATION REGARDING BILTMORE, INVESTORS MAY CALL THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AT (800) 289-9999.
====================
Underwriting
Price to Discounts Proceeds to
Public(1) and Commissions Selling Securityholders
Per Share $ 1.4375 (2) $ 1.4375
Total $ 1,885,505.50 (2) $ 1,885,505.50
==============================================================================
(1) Based upon the average of the last reported bid and asked prices on June 26,
1996.
(2) Not known at this time.
The Selling Securityholders, directly or through agents designated from time to
time, or through dealers or underwriters also to be designated, may sell the
Securities from time to time on terms to be determined at the time of sale. To
the extent required, the specific Securities to be sold, the purchase price, the
public offering price, the name of any such agent, dealer or underwriter, and
any applicable commission or discount with respect to a particular offer will be
set forth in a Prospectus Supplement. The aggregate proceeds to the Selling
Securityholders from the Securities will be the purchase price of such
Securities sold less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses of issuance and distribution not borne by
the Company. Any such Prospectus Supplement will also set forth any additional
information regarding indemnification by the Company of the Selling
Securityholders or any underwriter, dealer or agent against certain
liabilities,including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). The Selling Securityholders and any broker-dealers,
agents or underwriters that participate with the Selling Securityholders in the
distribution of any of the Securities may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commission received by them and any
profit on the resale of the Securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The Selling
Securityholders may also from time to time dispose of Securities pursuant to
available exemptions under the Securities Act, including sales under Rule 144 to
the extent permitted under such rule. See "PLAN OF DISTRIBUTION".
The date of this Prospectus is June __, 1996.
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<PAGE>
NOTE ON FORWARD LOOKING STATEMENTS
Certain information set forth or incorporated by reference herein includes
"forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and is subject to certain risks and uncertainties
including those identified under the caption "Risk Factors." Readers are
cautioned not to place undue reliance on these statements, which are made as of
the date hereof. The Company undertakes no obligation to release any revisions
to these forward looking statements to reflect events or circumstances after the
date hereof or to reflect unanticipated events or developments.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). This Prospectus,
which constitutes part of the Registration Statement, does not contain all the
information set forth in the Registration Statement and the exhibits and
schedule thereto, to which reference is hereby made, as permitted by the rules
and regulations of the Commission. Statements made in this Prospectus or in any
document incorporated or deemed to be incorporated by reference herein as to the
contents of any contract, agreement or other document referred to are not
necessarily complete and with respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference. Any
interested parties may inspect the Registration Statement, the exhibits and
schedules forming a part thereof and the reports, proxy statements and other
information referred to above, without charge, at the public reference
facilities of the Securities and Exchange Commission, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and may obtain copies of all or any part
of such documents from the Commission upon payment of the fees prescribed by the
Commission. Such documents also are available for inspection and copying at
prescribed rates at the regional offices of the Commission located at Seven
World Trade Center, 13th Floor, New York, New York 10048; and the Northwestern
Atrium Center, 500 W. Madison, Suite 1400, Chicago, Illinois 60661-2511.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 0-13324), are hereby
incorporated by reference and made a part of this Prospectus:
(i) the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995; and
(ii) the Company's Quarterly Report on Form 10-QSB for the three months
ended March 31, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus shall be
deemed to be incorporated by reference and a part of this Registration Statement
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, upon the request of
such person, a copy of any or all documents referred to above which have been
incorporated in this Prospectus by reference, other than exhibits to such
documents. Requests for such copies should be directed to Office of the
Secretary, Questron Technology, Inc., 6400 Congress Avenue, Suite 200, Boca
Raton, FL 33487.
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by
the more detailed information, including information
contained under the caption "Risk Factors," appearing
elsewhere in this Prospectus.
THE COMPANY
Questron Technology, Inc. (the "Company"), formerly
known as Judicate, Inc., is a Delaware corporation which was
incorporated in 1983. Through its wholly owned subsidiary
Quest Electronic Hardware, Inc. ("Quest"), the Company acts
as a specialized distributor of fasteners and electronic
hardware sold to electronic equipment manufacturers. The
business serves more than 250 customers in the high
technology electronic equipment manufacturing industry,
including leading computer, telecommunications and medical
instrumentation companies. The Company also conducts an
alternate dispute resolution service through its wholly owned
subsidiary Judicate of Philadelphia, Inc.
The principal executive offices of the Company are
located at 6400 Congress Avenue, Suite 200, Boca Raton,
Florida 33487 and its telephone number is (407) 241-5251.
See "Risk Factors" for a discussion of certain factors
which should be considered in evaluating the Company and its
business.
THE OFFERING
Securities Offered by Selling Securityholders .1,311,656 Shares
Use of Net Proceeds . . . . . . . . . . . . . .See "Use of Proceeds"
Nasdaq Symbol - Common Stock . . . . . . . . .QUST
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<PAGE>
RISK FACTORS
The Securities registered hereby are speculative in nature and involve a
high degree of risk of loss. Accordingly, in analyzing an investment in these
Securities, prospective investors should carefully consider, along with the
other matters referred to herein, the following risk factors in light of the
investor's particular financial circumstances and investment objectives:
Litigation Involving Market Maker
Although Biltmore Securities, Inc. ("Biltmore") is not the sole market
maker in the Company's stock, from time to time it may be the dominant market
maker in the Company's stock. Biltmore is involved in litigation which may
adversely affect its ability to make a market in the Company's stock. This
litigation is described below.
The Company has been advised by Biltmore that on or about May 22, 1995,
Biltmore and Elliot Loewenstern and Richard Bronson, principals of Biltmore, and
the Commission agreed to an offer of settlement (the "Offer of Settlement") in
connection with a complaint filed by the Commission in the United States
District Court for the Southern District of Florida alleging violations of the
federal securities laws, Section 17(a) of the Securities Act of 1933, Section
10(b) and 15(c) of the Securities Exchange Act of 1934, and Rules 10b-5, 10b-6
and 15c1-2 promulgated thereunder. The complaint also alleged that in connection
with the sale of securities in three (3) IPOs in 1992 and 1993, Biltmore engaged
in fraudulent sales practices. The proposed Offer of Settlement was consented to
by Biltmore and Messrs. Loewenstern and Bronson without admitting or denying the
allegations of the complaint. The Offer of Settlement was approved by Judge
Gonzales on June 6, 1995. Pursuant to the final judgment (the "Final Judgment"),
Biltmore:
o was required to disgorge $1,000,000 to the Commission, which
amount was paid in four (4) equal installments on or before
June 22, 1995;
o agreed to the appointment of an independent consultant
("Consultant").
Such Consultant is obligated, on or before July 15, 1996:
o to review Biltmore's policies, practices and procedures in six
(6) areas relating to compliance and sales practices;
o to formulate policies, practices and procedures for Biltmore
that the Consultant deems necessary with respect to Biltmore's
compliance and sales practices;
o to prepare a report devoted to and which details the
aforementioned policies, practices and procedures (the
"Report");
o to deliver the Report to the President of Biltmore and to the
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<PAGE>
staff of the Southeast Regional office of the Commission;
o to prepare, if necessary, a supervisory procedures and
compliance manual for Biltmore, or to amend Biltmore's
existing manual; and
o to formulate policies, practices and procedures designed to
provide mandatory on-going training to all existing and newly
hired employees of Biltmore. The Final Judgment further
provides that, within thirty (30) days of Biltmore's receipt
of the Report, unless such time is extended, Biltmore shall
adopt, implement and maintain any and all policies, practices
and procedures set forth in the Report.
The Final Judgment also provides that an independent auditor ("Auditor")
shall conduct four (4) special reviews of Biltmore's policies, practices and
procedures, the first such review to take place six (6) months after the Report
has been delivered to Biltmore and thereafter at six-month intervals. The
Auditor is also authorized to conduct a review, on a random basis and without
notice to Biltmore, to certify that any persons associated with Biltmore who
have been suspended or barred by any Commission order are complying with the
terms of such orders.
On July 10, 1995, the action as against Messrs. Loewenstern and Bronson was
dismissed with prejudice. Mr. Bronson has agreed to a suspension from
associating in any supervisory capacity with any broker, dealer, municipal
securities dealer, investment advisor or investment company for a period of
twelve (12) months, dating from the beginning of such suspension. Mr.
Loewenstern has agreed to a suspension from associating in any supervisory
capacity with any broker, dealer, municipal securities dealer, investment
advisor or investment company for a period of twelve (12) months commencing upon
the expiration of Mr. Bronson's suspension.
In the event that the requirements of the foregoing judgment adversely
affect Biltmore's ability to act as a market maker for the Company's stock, and
additional brokers do not make a market in the Company's securities, the market
for and liquidity of the Company's securities may be adversely affected. In the
event that other broker dealers fail to make a market in the Company's
securities, the possibility exists that the market for and the liquidity of the
Company's securities may be adversely affected to such an extent that public
security holders may not have anyone to purchase their securities when offered
for sale at any price. In such event, the market for, liquidity and prices of
the Company's securities may not exist. FOR ADDITIONAL INFORMATION REGARDING
BILTMORE, INVESTORS MAY CALL THE NATIONAL ASSOCIATION OF SECURITIES DEALERS,
INC. AT (800) 289-9999.
Effect of Share Issuances and Warrants
At June 1, 1996, the Company believes that it had outstanding options and
warrants to purchase 362,322 shares of the Company's Common Stock at exercise
prices ranging from $0.35 to $28.65 with expiration dates ranging to February 7,
2006. As a part of its acquisition of Quest, the Company issued to the Quest
stockholders Common Stock of the Company in an amount which resulted in the
former stockholders of Quest
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<PAGE>
owning 25% of the Company's Common Stock outstanding (on a fully diluted
basis). In addition, the Company has entered into certain agreements pursuant to
which it will be obligated to grant warrants to purchase up to 15% of the
Company's Common Stock outstanding (on a fully diluted basis) as of the date of
the closing of the Fasteners Business (March 31, 1995) at $.10 per share upon
the attainment of specified earnings targets. The issuance of the 25% interest
to the stockholders of Quest caused substantial dilution to the other
stockholders. In addition, the warrants issuable in connection therewith may
result in further dilution to the stockholders. Furthermore, the issuance of
shares upon exercise of such warrants will result in substantial charges to the
Company's earnings equal to the difference between the warrant exercise price
and the
market price of the Company's stock at the date of exercise. These warrants,
assuming the earnings targets are attained, will become exercisable one year
after the date of any award and will remain exercisable for a period of ten
years. As a result, these charges to earnings may occur in one fiscal period or
over a number of fiscal periods.
To the best knowledge of management, the foregoing represents all of the
outstanding options and warrants of the Company. Due to prior resignations of
members of the Company's senior management team, current management is unable to
verify at this time whether additional options or warrants may have been granted
which are not reflected on the corporate records. If such additional options
or warrants exist, and are lawfully exercised, a stockholder's interest in the
Company may be further diluted.
Dependence on Bank Financing; Substantially All of Quest's Assets Pledged
In connection with its acquisition of the Fasteners Business, Quest has
entered into a security and loan agreement pursuant to which all of the shares
of stock and substantially all of the assets of Quest have been pledged to the
bank as security for such financing.
Absence of Dividends
The Company has not paid any cash dividends on the Common Stock of the
Company and does not expect to do so in the foreseeable future.
Voting Control; Potential Anti-Takeover Effect
Prior to any sales under the Registration Statement of which this
Prospectus is a part the officers, directors and principal stockholders of the
Company beneficially owned approximately 32.8% of the Company's Common Stock.
Accordingly, such persons will have substantial influence on the approval of
major corporate transactions including amending the Certificate of Incorporation
of the Company or the sale of substantially all of the Company's assets, the
election of all of the directors of the Company and the control of the Company's
affairs. The Company's stockholders do not have the right to cumulative voting
in the election of directors. The Board of Directors has the authority, without
further approval of the Company's stockholders, to issue shares of Preferred
Stock, having such rights, preferences and privileges as the Board of Directors
may determine. Any such issuance of shares of Preferred Stock, under certain
circumstances, could have the effect of delaying or preventing a change in
control of the Company and could adversely affect
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<PAGE>
the rights of the holders of the shares of Common Stock of the Company. In
addition, the Company is subject to a State of Delaware statute regulating
business combinations which may also hinder or delay a change in control of the
Company.
Penny Stock Restrictions
If the Common Stock registered hereby is removed from NASDAQ, the shares
could be subject to a rule that imposes additional sales practice requirements
on broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally defined as persons with assets in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with their spouse). For transactions covered by this rule, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
purchase. Consequently, the rule may restrict the ability of broker-dealers to
sell the Company's securities and may affect the ability of holders to sell the
Company's securities in the secondary market.
The Commission has also adopted regulations which define a "penny stock" to
be any equity security that has a market price (as defined) less than $5.00 per
share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the transaction,
of a disclosure schedule prepared by the Commission related to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control of the market.
Finally, monthly statements must be sent disclosing recent price information for
the penny stock held in the account and information on the limited market in
penny stocks. While many NASDAQ listed securities would be covered by the
definition of penny stock, transactions in a NASDAQ listed security would be
exempt from all but the sole market maker provisions for (i) issuers who have in
excess of $2,000,000 in net tangible assets ($5,000,000 if the issuer has not
been in continuous operation for three years), (ii) transactions in which the
customer is an institutional accredited investor, and (iii) transactions that
are not recommended by the broker-dealer. In addition, transactions in a NASDAQ
security directly with a NASDAQ market maker for such securities would be
subject only to the sole market maker disclosure and the disclosure with respect
to commissions to be paid to the broker-dealer and the registered
representative.
Sale of Substantial Number of Shares May Adversely Affect Market Price
Sales of substantial numbers of shares of Common Stock in the public market
pursuant to the Registration Statement of which this Prospectus is a part or
otherwise could adversely affect the market price of the Common Stock. Although
the Securities may not be sold until thirteen (13) months from the date of this
Prospectus, subject to earlier release at the sole discretion of Biltmore, in
other offerings involving similar restrictions, Biltmore has released such
restrictions prior to the expiration of the lock-up period and in some cases
immediately after the effective date of the subject registration statement. In
addition, the Company has previously registered for resale from time to time by
the
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<PAGE>
selling securityholders named therein 2,140,442 shares pursuant to a
Registration Statement (No. 33-84222) which was declared effective on September
27, 1995 and 6,017,444 shares pursuant to a Registration Statement (No.
33-63555) which was declared effective on December 22, 1995. The sale of these
securities could also adversely affect the market price of the Common Stock. In
addition, as noted above (see "Effect of Share Issuances and Warrants"), there
are a substantial number of shares issuable in connection with the acquisition
of the fasteners business. The market overhang of such a substantial number of
shares may adversely affect the market price for the stock. Furthermore, the
issuance of shares upon exercise of such warrants will result in substantial
charges to the Company's earnings equal to the difference between the warrant
exercise price and the market price of the Company's stock at the date of
exercise. These warrants, assuming the earnings targets are attained, will
become exercisable one year after the date of any award and will remain
exercisable for a period of ten years. As a result, these charges to earnings
may occur in one fiscal period or over a number of fiscal periods.
THE COMPANY
The Company, through its wholly-owned subsidiary, Quest Electronic
Hardware, Inc. ("Quest"), acts as a specialized distributor of fasteners and
electronic hardware sold to electronic equipment manufacturers. The business
serves more than 250 customers in the high technology electronic equipment
manufacturing industry, including leading computer, telecommunications, and
medical instrumentation companies. Prior to Quest's acquisition from Arrow
Electronics, Inc., the fasteners business had operated as a distributor of
fasteners and electronic hardware for more than twenty years.
Management believes that Quest has the opportunity to become a significant
participant in a very fragmented industry dominated by so-called "mom and pop"
type operations. Management's goal is to expand the business through a
combination of continued penetration of existing markets, expansion into new
markets (including geographic expansion), and acquisitions.
Approximately 50% of Quest's sales are of industrial fasteners, 10% are of
"spacers" and "standoffs" (products used in conjunction with fasteners), and the
remaining sales are divided among a variety of products, including plastic
components, cable ties and accessories, drawer slides, connectors, and
design/prototype components. The demand for products offered by Quest is
relatively stable, with minimal technological change.
Quest has developed a customer base consisting of over 250 active
customers. These customers demand quality service and in many cases are willing
to pay premium prices. Accordingly, Quest's gross margins are more than 40%, and
are sustainable because of the high level of importance placed on service by its
customers and the low level of price sensitivity for the relatively low cost
fasteners products sold (compared with the high cost electronic components) to
the manufacturers of high technology products. Over 95% of Quest's sales are
recurring sales to existing customers.
Currently, the business is concentrated in California, Texas,
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<PAGE>
Colorado and Nevada; however, Quest is seeking to expand its business to
the eastern U.S.
Quest's sales have increased at a compound annual growth rate of 17% over
the past four years. This sales growth was achieved from word-of-mouth
referrals without the benefit of a comprehensive marketing program or geographic
expansion. Management believes that Quest's future growth will be achieved by
implementing a comprehensive marketing plan, including the present strategy of
adding marketing programs responsive to customers' specific requirements (e.g.,
bin replenishment programs), further penetration of existing accounts,
identification of new accounts, geographic expansion, and acquisitions.
Management estimates that the total U.S. market for fasteners and related
products distributed by Quest is approximately $1 billion. This market is
divided into two major segments, large manufacturers of fasteners, who supply
large industrial users directly, and distributors, who service smaller
industrial users, but are increasingly supplying larger accounts that can no
longer be serviced effectively by the manufacturers. The distribution side
consists of distributors who provide a rapid response capability to service
customer needs and assist in selecting appropriate fasteners. As a distributor,
Quest's business falls into this latter category, providing such services as bin
stock replenishment programs.
The Company also operates an alternate dispute resolution service business
through its wholly-owned subsidiary Judicate of Philadelphia, Inc.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Securities
by the Selling Securityholders.
In the event of the exercise of all of the Series I and Series III Warrants
outstanding, the Company will receive $130,380.80 in proceeds and such funds
will be used for general working capital purposes.
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<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth certain information with respect to the
Selling Securityholders as of June 1, 1996. The Securities to which this
Prospectus relates may be sold from time to time in whole or in part by the
Selling Securityholders as described in and subject to the restrictions set
forth in the "PLAN OF DISTRIBUTION".
<TABLE>
<CAPTION>
Shares that
Shares of may be offered Shares of
Common Stock pursuant to Common Stock % of Class
Selling owned prior to this owned after owned after
Securityholders this offering Prospectus offering(1) offering(2)
- --------------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Eric Blumen 30,000(3) 30,000 -0- N/A
92 Virginia Avenue
Plainview, NY 11803
Ira Boshnack 30,000(4) 30,000 -0- N/A
326 Doral Court
Jericho, NY 11753
Bobby D. Dillon 22,917(5) 18,473 4,444 N/A
1289 Morgan Drive
Temple, TX 76502
Robert Goodrich 9,236(6) 9,236 -0- N/A
9 Floyd Place
Great Neck, NY 11024
Graco Holdings Inc. 100,000 100,000 -0- N/A
43 Hunt Drive
Jericho, NY 11753
Paul Greco 7,000 7,000 -0- N/A
c/o Stratton Oakmont, Inc.
1979 Marcus Avenue
Lake Success, NY 11042
Gulfstream Financial 2,602,721 40,000 2,562,721 17.1%
Group, Inc.(7)
6400 Congress Ave
Suite 200
Boca Raton, FL 33487
Matthew T. Haltom 200,000 200,000 -0- N/A
2044 Saddlehorn
Katy, TX 77494
Ken Iulo 45,835(8) 36,947 8,888 N/A
165 Prospect Avenue
Passaic, NJ 07055
James F. Kenefick 40,000 40,000 -0- N/A
1985 South Ocean Drive
Apt. 4A
Hallendale, FL 33309
Irving Kraut 615,859 180,000 435,859 2.9%
625 Farnsworth Avenue
Bordentown, NJ 08505-2028
</TABLE>
- 11 -
<PAGE>
<TABLE>
<CAPTION>
Shares that
Shares of may be offered Shares of
Common Stock pursuant to Common Stock % of Class
Selling owned prior to this owned after owned after
Securityholders this offering Prospectus offering(1) offering(2)
- --------------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Shih-Hsiang Lee 20,000 20,000 -0- N/A
18003 Cortney Court
Industry, CA 91748
Melvin E. Liston 70,000 70,000 -0- N/A
RFD #1 Box 210
Barnstead, NH 03218
Lyons Community Property 200,000 200,000 -0- N/A
Trust
5000 Birch Street
Suite 5500
Newport Beach, CA 92660
William J. McSherry, Jr.(9) 35,000(10) 20,000 15,000 N/A
2 Summit Avenue
Larchmont, NY 10538
Ronald Messinger 40,000 40,000 -0- N/A
c/o Concepts in Design
212 North Sangamon
Suite #1B
Chicago, IL 60607
Steven and Carol Reiss 20,000 20,000 -0- N/A
58 Reyam Road
Lynbrook, NY 11563
Martin Rothstein 60,000 60,000 -0- N/A
400 East 56th Street
New York, NY 10022
Achyut Sahasra 20,000 20,000 -0- N/A
410 West 1st Avenue
Roselle, NJ 07067
Robert P. Schmick 70,000 70,000 -0- N/A
2540 Riva Road
Annapolis, MD 21401
Phillip D. Schwiebert(11) 1,361,360 80,000 1,281,360 8.5%
1263 Echo Valley Drive
San Jose, CA 95120
Joseph Tesseo 20,000(12) 20,000 -0- N/A
152 Flamingo Street
Atlantic Beach, NY 11509
Totals 5,619,928 1,311,656 4,308,272
--------- --------- ---------
</TABLE>
- -------------
(1) Assuming all shares being offered pursuant to this Prospectus are
sold.
(2) If 1% or more. Percentages are based upon there being 15,459,498
- 12 -
<PAGE>
shares of Common Stock issued and outstanding as of June 1, 1996
(after giving effect to the exercise of Series I and Series III
Warrants contemplated hereby).
(3) This figure includes 15,000 shares issuable upon the exercise of
Series III Warrants to purchase Common Stock at $.35 per share.
Such Warrants are to be exercised prior to the effective date of the
Company's Registration Statement of which this Prospectus is a part.
(4) This figure includes 15,000 shares issuable upon the exercise of
Series III Warrants to purchase Common Stock at $.35 per share.
Such Warrants are to be exercised prior to the effective date of the
Company's Registration Statement of which this Prospectus is a part.
(5) This figure includes 18,473 shares issuable upon the exercise of
7,360 Series I Warrants, each exercisable for the purchase of 2.51
shares of Common Stock at a price of $1.80 per share. Such Warrants
are to be exercised prior to the effective date of the Company's
Registration Statement of which this Prospectus is a part.
(6) This figure consists of 9,236 shares issuable upon the exercise of
3,680 Series I Warrants, each exercisable for the purchase of 2.51
shares of Common Stock at a price of $1.80 per share. Such Warrants
are to be exercised prior to the effective date of the Company's
Registration Statement of which this Prospectus is a part.
(7) Gulfstream Financial Group, Inc. ("Gulfstream") is a private company
of which Dominic A. Polimeni, Chairman, President and Chief
Executive Officer of the Company, and Joan R. Gubitosi, the wife of
Robert V. Gubitosi, a director of the Company, are executive
officers and stockholders. Mr. Polimeni and Mrs. Gubitosi share
voting and investment power with respect to these shares. Pursuant
to a Management Advisory and Consulting Agreement, dated as of
November 29, 1994, between the Company and Gulfstream, Gulfstream
may be entitled to be awarded as incentive compensation warrants to
purchase up to 10.0% of the Company's Common Stock outstanding at
March 31, 1995 (for purposes of such calculation, the common stock
outstanding at March 31, 1995 assumes the conversion of all
outstanding warrants, options and preferred stock), at a price of
$.10 per share, upon the attainment of certain earnings targets.
(8) This figure includes 36,947 shares issuable upon the exercise of
14,720 Series I Warrants, each exercisable for the purchase of 2.51
shares of Common Stock at a price of $1.80 per share. Such Warrants
are to be exercised prior to the effective date of the Company's
Registration Statement of which this Prospectus is a part.
(9) Mr. McSherry is a director of the Company.
(10) Includes Options to purchase 15,000 shares of Common Stock at $1.906
per share granted pursuant to the 1994 Director Non-Qualified Stock
Option Plan.
- 13 -
<PAGE>
(11) Mr. Schwiebert is the President and Chief Operating Officer of Quest
Electronic Hardware, Inc., a wholly-owned subsidiary of the Company.
Pursuant to an Employment Agreement, dated as of November 29, 1994,
between Quest and Mr. Schwiebert, Mr. Schwiebert may be entitled to
be awarded as incentive compensation warrants to purchase up to 5.0%
of the Company's Common Stock outstanding at March 31, 1995 (for
purposes of such calculation, the common stock outstanding at March
31, 1995 assumes the conversion of all outstanding warrants, options
and preferred stock), at a price of $.10 per share, upon the
attainment of certain earnings targets.
(12) This figure includes 10,000 shares issuable upon the exercise of
Series III Warrants to purchase Common Stock at $.35 per share.
Such Warrants are to be exercised prior to the effective date of the
Company's Registration Statement of which this Prospectus is a part.
PLAN OF DISTRIBUTION
Any and all of the Securities registered hereby may be sold from time to
time to purchasers directly by the Selling Securityholders. Alternatively, the
Selling Securityholders may from time to time sell the Securities through
brokers, underwriters, dealers or agents, who may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Securityholders and/or the purchasers of Securities for whom they may act as
agent. The Selling Securityholders and any such underwriters, dealers or agents
that participate in the distribution of the Securities may be deemed to be
underwriters, and any profit on the sale of Securities by them and any
discounts, commissions or concessions received by any such underwriters, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended (the "Securities Act"). The Selling
Securityholders may also from time to time dispose of Securities pursuant to
available exemptions under the Securities Act, including sales under Rule 144 to
the extent permitted under such rule. The Securities may be sold at varying
prices determined at the time of sale or negotiated prices. Such prices will be
determined by the Selling Securityholders, or by agreement between the Selling
Securityholders and underwriters or dealers. The Securities issued in the March
1995 private placement are being registered at the request of the Selling
Securityholders. The remaining securities are being registered pursuant to
certain "piggyback" registration rights of the holders of these shares.
At the time a particular sale of Securities is made, to the extent
required, a Prospectus Supplement will be prepared and distributed by the
Company based on information provided by the Selling Securityholders of the
Securities, which will set forth the number of dealers or agents, any discounts,
commissions or concessions allowed or paid to dealers, including the proposed
selling price to the public.
In order to comply with certain states' securities laws, if applicable, the
Securities will be sold in certain jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Securities may
not be sold unless the Securities have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
such sale is made in compliance with the exemption.
- 14 -
<PAGE>
The Securities may not be sold until thirteen (13) months from the date of
this Prospectus, subject to earlier release at the sole discretion of Biltmore
Securities, Inc. ("Biltmore") which acted as the placement agent with respect to
the March 1995 private placement. In other offerings involving similar
restrictions, Biltmore has released such restrictions prior to the expiration of
the lock-up period and in some cases immediately after the effective date of the
Registration Statement.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock,
$0.0001 par value per share, of which 15,354,842 shares were issued and
outstanding as of June 1, 1996. Upon the exercise of warrants contemplated under
this Prospectus, there will be 15,459,498 shares issued and outstanding.
Holders of Common Stock are entitled to receive, as, when and if declared
by the Board of Directors, from time to time, such dividends and other
distributions in cash, stock or property of the Company out of assets or funds
of the Company legally available therefor, subject to the rights of holders of
preferred stock having a dividend preference over the Common Stock. The Company
has not paid any dividends on its Common Stock to date. The Company anticipates
that for the foreseeable future it will follow a policy of retaining earnings,
if any, in order to finance the expansion and development of its business.
Payment of dividends will depend upon the earnings, capital requirements and the
operating and financial condition of the Company, among other factors.
In the event of the liquidation, dissolution or winding up of the Company,
stockholders will be entitled to share ratably in the assets remaining after
creditors and holders of preferred stock having a liquidation preference over
the Common Stock have been paid in full.
Each share of Common Stock entitles the holder thereof to one (1) vote on
all matters submitted to stockholders. There are no preemptive, conversion,
redemption or cumulative voting rights applicable to the Common Stock. The
outstanding shares of the Common Stock are fully paid and non-assessable.
The transfer agent and registrar for the Company's Common Stock is American
Stock Transfer & Trust Company, New York, New York.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of Preferred Stock,
par value $.01 per share. No shares of Preferred Stock are outstanding.
- 15 -
<PAGE>
Series I Warrants
Each Series I Warrant entitles the registered holder to purchase 2.51
shares of Common Stock at a price of $1.80 per share on or before July 1, 1996.
Any warrant not exercised by that date will be null and void. As of June 1,
1996, there were 25,760 Series I Warrants outstanding.
Series III Warrants
Each Series III Warrant entitles the registered holder to purchase one
share of Common Stock at a price of $.35 per share on or before November 14,
2004. Any warrant not exercised by that date will be null and void. As of June
1, 1996, there were 40,000 Series III Warrants outstanding.
LEGAL MATTERS
The legality of the Securities will be passed upon for the Company by Gould
& Wilkie.
EXPERTS
The Company's Consolidated Financial Statements as of December 31, 1995 and
1994 and for the years then ended incorporated by reference in this Prospectus
and the Registration Statement have been incorporated herein in reliance on the
report of Mortenson and Associates, P.C., independent certified public
accountants, given on the authority of such firm as experts in accounting and
auditing.
- 16 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses of the registration of the Common Stock concerned
herein which are payable by the Registrant are as follows:
SEC Registration Fee $ 650.00
Legal Expenses 5,000.00
Miscellaneous Expenses 1,350.00
---------
Total $7,000.00
Item 15. Indemnification of Directors and Officers
The Company's Certificate of Incorporation and By-laws contain provisions
which reduce the potential personal liability of directors for certain monetary
damages and provide for indemnity of directors and other persons. The Company is
unaware of any pending or threatened litigation against the Company or its
directors that would result in any liability for which such director would seek
indemnification or similar protection.
The provisions affecting personal liability do not abrogate a director's
fiduciary duty to the Company and its shareholders, but eliminate personal
liability for monetary damages for breach of that duty. The provisions do not,
however, eliminate or limit the liability of a director for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a
law, for authorizing the illegal payment of a dividend or repurchase of stock,
for obtaining an improper personal benefit, for breaching a director's duty of
loyalty (which is generally described as the duty not to engage in any trans-
action which involves a conflict between the interests of the Company and those
of the director) or for violations of the federal securities laws. The
provisions also limit liability resulting from grossly negligent decisions
including grossly negligent business decisions relating to attempts to change
control of the Company.
The provisions regarding indemnification provide, in essence, that the
Company will indemnify its directors against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding arising out of the
director's status as a director of the Company, including actions brought by or
on behalf of the Company (shareholder derivative actions). In the opinion of the
Securities and Exchange Commission, indemnification for liabilities arising
under the Securities Act of 1933 is contrary to public policy and, therefore, is
unenforceable.
The Company also maintains directors and officers liability insurance for
the benefit of its officers and directors.
-II-1-
<PAGE>
Item 16. Exhibits
Exhibit No. Description
4.1 a. Certificate of Incorporation of Judicate,
Inc. filed August 1, 1983*
b. Certificate of Amendment of Judicate, Inc. filed
September 29, 1983*
c. Certificate of Amendment of Judicate, Inc. filed March
20, 1985*
d. Certificate of Amendment of Judicate, Inc. filed June 5,
1987*
e. Certificate of Amendment of Judicate, Inc. filed June 9,
1989*
f. Certificate of Designation of Judicate, Inc. filed
August 20, 1990*
g. Certificate of Designation of Judicate, Inc. filed
February 20, 1991*
h. Certificate of Correction of Judicate, Inc. filed May
17, 1991*
i. Certificate of Amendment of Judicate, Inc. filed
December 20, 1993*
j. Certificate of Designation of Judicate, Inc. filed
December 22, 1993*
k. Certificate of Amendment of Judicate, Inc. filed
December 22, 1993*
l. Certificate of Amendment of Judicate, Inc. filed July
19, 1994*
4.2 Certificate of Amendment of Judicate, Inc. filed April
2, 1996**
4.3 By-Laws of Questron Technology, Inc.*
4.4 Form of Series I Warrant Agreement***
4.5 Form of Series III Warrant Agreement****
5.0 Form of Opinion of Gould & Wilkie
23.1 Consent of Mortenson and Associates, P.C.
23.2 Consent of Gould & Wilkie (see Exhibit 5.0)
- ---------------
* Filed with Registration Statement on Form S-3, File No. 33-84222.
** Filed with Report on Form 10-KSB for the fiscal year ended December
-II-2-
<PAGE>
31, 1995, File No. 0-13324.
*** Filed with Report on Form 10-KSB for the fiscal year ended December
31, 1993, File No. 0-13324.
**** Filed with Report on Form 10-KSB for the fiscal year ended December
31, 1994, File No. 0-13324.
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 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.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, 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 hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference into the 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 of 1933 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by 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 Act and will be governed by the final
adjudication of such issue.
-II-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Boca Raton, State of Florida on June 27, 1996.
QUESTRON TECHNOLOGY, INC.
By :/s/DOMINIC A. POLIMENI
--------------------------
Dominic A. Polimeni
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/DOMINIC A. POLIMENI Chairman, President, June 27, 1996
- ------------------------ Chief Executive Officer
Dominic A. Polimeni and Director (Principal
Executive Officer)
/s/MILTON M. ADLER Treasurer, Secretary, June 27, 1996
- ------------------------ Controller and Director
Milton M. Adler (Principal Financial and
Accounting Officer)
/s/ROBERT V. GUBITOSI Director June 27, 1996
- --------------------------
Robert V. Gubitosi
/s/MITCHELL HYMOWITZ Director June 27, 1996
- --------------------------
Mitchell Hymowitz
/s/WILLIAM J. McSHERRY, JR Director June 27, 1996
- --------------------------
William J. McSherry, Jr.
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
4.1 a. Certificate of Incorporation filed August 1, 1983*
b. Certificate of Amendment filed September 29, 1983*
c. Certificate of Amendment filed March 20, 1985*
d. Certificate of Amendment filed June 5, 1987*
e. Certificate of Amendment filed June 9, 1989*
f. Certificate of Designation filed August 20, 1990*
g. Certificate of Designation filed February 20, 1991*
h. Certificate of Correction filed May 17, 1991*
i. Certificate of Amendment filed December 20, 1993*
j. Certificate of Designation filed December 22, 1993*
k. Certificate of Amendment filed December 22, 1993*
l. Certificate of Amendment filed July 19, 1994*
4.2 Certificate of Amendment filed April 2, 1996**
4.3 By-Laws*
4.4 Form of Series I Warrant Agreement***
4.5 Form of Series III Warrant Agreement****
5.0 Form of Opinion of Gould & Wilkie
23.1 Consent of Mortenson and Associates, P.C.
23.2 Consent of Gould & Wilkie (see Exhibit 5.0)
- -------------
* Filed with Registration Statement on Form S-3, File No. 33-84222.
** Filed with Report on Form 10-KSB for the fiscal year ended December 31,
1995, File No. 0-13324.
*** Filed with Report on Form 10-KSB for the fiscal year ended December 31,
1993, File No. 0-13324.
**** Filed with Report on Form 10-KSB for the fiscal year ended December 31,
1994, File No. 0-13324.
<PAGE>
<PAGE>
June , 1996
Questron Technology, Inc.
6400 Congress Avenue
Suite 200
Boca Raton, Florida 33487
Re: Questron Technology, Inc.
Registration Statement on Form S-3
Gentlemen:
Questron Technology, Inc., a Delaware corporation ("Company"), has filed with
the Securities and Exchange Commission ("Commission") a Registration Statement
on Form S-3 with respect to which this opinion is to be an exhibit, relating to
the proposed sale by the selling securityholders named therein of up to
1,311,656 shares of its Common Stock, $.0001 par value per share ("Common
Stock").
Said Registration Statement is herein referred to as the "Registration
Statement".
We have acted as counsel for the Company in connection with the Registration
Statement and are familiar with the various corporate proceedings related
thereto. In connection with the Registration Statement, we have examined such
corporate records of the Company and such other instruments, documents and
certificates as we have deemed necessary as a basis for our opinion. For
purposes of this opinion, we have assumed (i) the accuracy and completeness of
all data supplied by the Company, its officers, directors, or agents, (ii) that
the transactions set forth in the Registration Statement are consummated as set
forth therein, (iii) that the Commission shall have issued an order under the
Securities Act of 1933, as amended, declaring effective the Registration
Statement, and (iv) that all requisite authorizations, approvals, consents or
exemptions under the securities laws of the various states and other
jurisdictions of the United States of America shall have been obtained.
Based on the foregoing, we are of the opinion that the Common Stock to be sold
in accordance with the Registration Statement is duly authorized, legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to be named in the Registration
Statement and in the Prospectus which constitutes a legal part thereof as the
counsel that will pass upon certain legal matters for the Company in connection
with the sale of the Company's securities.
Very truly yours,
GOULD & WILKIE
Enclosures
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Registration Statement on Form
S-3 and in the Prospectus forming part of such Registration Statement of our
report dated April 2, 1996, on our audits of the consolidated financial
statements of Questron Technology, Inc. We also consent to the reference to our
firm under the caption "Experts."
MORTENSON AND ASSOCIATES, P.C.
Certified Public Accountants
Cranford, New Jersey
June 26, 1996
