QUESTRON TECHNOLOGY INC, S-3/A, 1997-12-19

QUESTRON TECHNOLOGY INC
S-3/A, 1997-12-19
LEGAL SERVICES

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<PAGE>

As filed with the Securities and Exchange Commission on December 19, 1997.
REGISTRATION NO. 333-40835

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 1

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

QUESTRON TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

DELAWARE 23-2257354
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

6400 CONGRESS AVENUE, SUITE 200A, BOCA RATON, FL 33487
(561) 241-5251
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)

DOMINIC A. POLIMENI
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
6400 CONGRESS AVENUE, SUITE 200A, BOCA RATON, FL 33487
(561) 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

Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per unit aggregate offering price registration fee(1)

<S> <C> <C> <C> <C>
Common Stock, 125,912 shares $8.78125 $1,105,664.75 $335.05
$.001 par value
</TABLE>

(1) Fee already paid.

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
DECEMBER 19, 1997

QUESTRON TECHNOLOGY, INC
125,912 SHARES OF COMMON STOCK
($.001 PAR VALUE)

This Prospectus relates to the possible resale on a continuous basis
of up to 125,912 shares of Common Stock, $.001 par value, of Questron
Technology, Inc. (the "Shares"), a Delaware corporation ("Questron" or the
"Company"). These Shares were issued in September 1997 by the Company in
connection with the acquisition by the Company of the issued and outstanding
shares of California Fasteners, Inc., a California corporation ("Calfast"). 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 OBLIGATION OF THE COMPANY TO REPURCHASE THE SHARES WILL BE
REDUCED BY ANY SALE OF THE SHARES UNDER THIS REGISTRATION STATEMENT. 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 are listed on the Nasdaq SmallCap Market under the symbol "QUST." On
December 18, 1997, the closing bid price per share of the Common Stock as
reported by Nasdaq was $7.9375. The Securities are being registered pursuant to
an agreement entered into in connection with the Company's acquisition of
Calfast. 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," WHICH BEGINS ON
PAGE 6, FOR IMPORTANT INFORMATION WHICH SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
==================

Underwriting Discounts Proceeds to Selling
Price to Public(1) and Commissions Securityholders(3)

Per Share $8.09375 (2) $8.09375

Total $1,019,100.25 (2) $1,019,100.25
================================================================================

(1) Based upon the average of the closing reported bid and asked prices on
December 18, 1997.
(2) Not known at this time.
(3) The expenses of this offering, estimated at $10,245 will be borne by the
Company.

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 December ___, 1997.

<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 in this Prospectus under the caption
"Risk Factors" and those included under the same caption in the Company's
reports filed pursuant to the Securities Exchange Act of 1934 ("Exchange Act").
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
Exchange Act, and, in accordance therewith, files periodic reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). As permitted by the rules and regulations of the
Commission, this Prospectus, which constitutes part of the Company's
Registration Statement on Form S-3 ("Registration Statement"), does not contain
all the information set forth in the Registration Statement and the exhibits
and undertakings contained therein, to which reference is hereby made.
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. Copies of such materials can also be
obtained from the Public Reference Section of the Commission, Washington, D.C.
20549 at prescribed rates. Registration statements and other documents and
reports that are filed electronically through the Electronic Data Gathering,
Analysis and Retrieval System (including the Registration Statement) are
publicly available through the Commission's web site on the Internet
(http://www.sec.gov).

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<PAGE>

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 into the Registration Statement:

(a) the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996;

(b) the Company's Quarterly Reports on Form 10-QSB dated November
14, 1997, August 14, 1997 and May 15, 1997, which include
unaudited financial statements for the nine month period
ended September 30, 1997, the six month period ended June 30,
1997 and the three month period ended March 31, 1997,
respectively; and

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 200A, 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 or incorporated herein by
reference.

THE COMPANY

The Company is a specialized value-added distributor of fasteners,
electronic hardware and related products sold to high-technology electronic
equipment manufacturers and other businesses through its subsidiaries Quest
Electronic Hardware, Inc., Webb Distribution, Inc. and California Fasteners,
Inc., a master distributor of fasteners through its subsidiary Integrated
Material Systems, Inc. and a distributor of lithium batteries and customized
battery packs and assemblies through its subsidiary Power Components, Inc. The
Company serves more than 3,000 customers, including leading computer,
telecommunications, semiconductor manufacturing equipment, medical
instrumentation and other industrial equipment manufacturing companies.

In March 1995, the Company acquired the fastener and electronic
hardware distribution business of Arrow Electronics, Inc., which now operates
as Quest Electronic Hardware, Inc. ("Quest"), a wholly-owned subsidiary of the
Company. Through this acquisition, the Company established its presence as a
distributor in California, Texas and Colorado where Quest's business is
concentrated.

In March 1997, the Company acquired Comp Ware, Inc. d/b/a Webb
Distribution, a Delaware corporation ("Webb"). Webb distributes electronic
hardware, fasteners and components to customers in the high-technology
electronic equipment manufacturing industry and other businesses.

In June 1997, the Company acquired Integrated Material Systems, Inc.,
an Arizona corporation ("IMS"). IMS is a master distributor of fasteners, which
brought to the Company expertise in sourcing products on a worldwide basis and
additional materials-management skills.

In September 1997, the Company acquired Power Components, Inc., a
Pennsylvania corporation ("PCI"). PCI, based in Philadelphia, is a distributor
of lithium batteries and customized battery packs and assemblies.

In September 1997, The Company acquired California Fasteners, Inc., a
California corporation ("Calfast"). Calfast is a distributor of fasteners and
related products, with stocking locations in Anaheim, San Diego and Phoenix.

The Company was incorporated in Delaware in 1983. The name was changed
to Questron Technology, Inc. in 1996 to better reflect its principal business
of supplying low-technology products to high-technology industries and other
industrial businesses. The Company, with its subsidiaries, has approximately
120 employees. The principal executive offices of the Company are located at
6400 Congress Avenue, Suite 200A, Boca Raton, Florida 33487 and its telephone
number is (561) 241-5251.

SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE
CONSIDERED IN EVALUATING THE COMPANY AND ITS BUSINESS.

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<PAGE>

THE OFFERING

<S> <C>
Securities Offered by Selling Securityholders............. 125,912 Shares. See "Selling Securityholders"

Use of Net Proceeds....................................... The Company will not receive any of the
proceeds from the sale of the Securities by the
Selling Securityholders. See "Use of Proceeds"

Nasdaq Symbols - Common Stock............................. QUST
- Preferred Stock.......................... QUSTP
- Series IV Warrants....................... QUSTW
</TABLE>

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<PAGE>

RISK FACTORS

Investment in the Securities involves a substantial degree of risk. Prospective
investors should carefully consider, in addition to matters set forth elsewhere
in this Prospectus, the following factors relating to the business of the
Company and this Offering. Prospective investors should carefully review all
risk factors. Such information is presented as of the date hereof and is
subject to change, completion or amendment without notice.

NO ASSURANCES THAT RECENT OR POSSIBLE FUTURE ACQUISITIONS WILL BE PROFITABLE

Prior to March 1997, the Company derived its revenues primarily
through its wholly-owned subsidiary, Quest Electronic Hardware, Inc. ("Quest").
Subsequent to March 1997, the Company has acquired a number of companies
engaged in the distribution of fasteners, electronic hardware and related
items. The Company can make no assurances that this combination of businesses
will be as successful as each business was independently. In addition, the
Company may enter into additional agreements for future acquisitions. The
Company can make no assurances that any such acquisitions can be successfully
completed or that future acquisitions will be profitable.

NO ASSURANCE OF FUTURE PROFITABILITY OR PAYMENT OF DIVIDENDS

No assurance can be given that the future operations of the Company or
its subsidiaries will be profitable. Should the operations of the Company or
its subsidiaries remain profitable, it is likely that the Company or its
subsidiaries would retain much or all of the earnings in order to finance
future growth and expansion. Therefore, the Company does not presently intend
to pay dividends on its Common Stock.

ECONOMIC FACTORS

The Company's business may be adversely affected by a downturn in the
economy as a whole or in the electronics industry in particular. The Company's
business would also be adversely affected in the event of a significant
increase in interest rates which would result in an increase in the Company's
borrowing costs.

DEPENDENCE UPON MAJOR CUSTOMERS

The Company has developed a customer base consisting of over 3,000
active customers. Over 95% of the Company's sales are recurring sales to
existing customers. For the fiscal year ended December 31, 1996 (on a pro forma
basis), the Company's 20 largest customers accounted for approximately 50% of
its sales, with no one customer contributing more than 14%.

These sales arrangements are terminable upon short notice and none of
these customers is obligated to continue to use the services of the Company at
all or at existing prices. The dependence on major customers subjects the
Company to significant financial risk in the operation of its business should a
major customer terminate, for any reason, its business relationship with the
Company. The continuing ability of the Company to maintain these customer
relationships and to build new relationships is dependent, among other things,
upon their ability to maintain the high quality standards demanded by its
customers.

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<PAGE>

POSSIBLE NEED FOR ADDITIONAL FINANCING

The Company intends to fund its operations and other capital needs
substantially from operations and available borrowings under the Company's
credit agreement with a bank; however there can be no assurance that such funds
will be sufficient for these purposes. In the event that the Company needs
additional financing to fund its operations and capital needs or to finance
future acquisitions, there can be no assurance that such financing will be
available, or that it will be available on acceptable terms.

SUBSTANTIAL COMPETITION

The market for the Company's products is highly competitive, and the
Company encounters substantial competition from domestic businesses. Some of
the Company's competitors have substantially greater financial resources and
technical expertise than the Company and may offer lower prices on competing
products. In addition, such competitors may have substantially greater
managerial capabilities than the Company and, consequently, the Company may be
at a substantial competitive disadvantage in the conduct of its business.
Increased competition could result in product price reductions, reduced margins
and loss of market share, all of which could have a material adverse effect on
the Company's results of operations and financial condition.

THE COMPANY

OVERVIEW

BACKGROUND

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<PAGE>

QUEST ELECTRONIC HARDWARE, INC. ("QUEST")

Quest is a specialized distributor of fasteners and electronic
hardware sold to electronic equipment manufacturers. The business serves
customers in the high-technology electronic equipment manufacturing industry,
including leading computer, telecommunications, semiconductor manufacturing
equipment 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.

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. Over 95% of Quest's sales are recurring sales to
existing customers. Currently, the business is concentrated in California,
Texas and Colorado.

WEBB DISTRIBUTION, INC. ("WEBB")

Webb Distribution, Inc. was incorporated in the State of Connecticut
in May 1989 as a distributor of electronic hardware fasteners and components.
In February 1995, Webb Distribution, Inc. was merged into Comp Ware, Inc., a
newly created Delaware corporation, in a migratory merger and currently
conducts business under the name Webb Distribution. The business is
concentrated in the New England area. The Company's principal executive offices
are located in Winchester, Massachusetts.

The business of Webb is substantially similar to the business of
Quest, serving customers in the high-technology equipment manufacturing
industry. Webb serves a variety of different markets on both a direct order
basis and in providing services such as bin stock replenishment. Along with
serving original equipment manufacturers, Webb also serves more than 800 active
customers in the industrial, military, sheet metal and metal fabrication
industries.

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<PAGE>

INTEGRATED MATERIAL SYSTEMS, INC. ("IMS")

Based in Scottsdale, Arizona, IMS is a wholly-owned subsidiary of the
Company. IMS is a master distributor of fasteners, which sources product on a
worldwide basis. The business supplements the skills and expertise of the
Company's fastener and electronic hardware distribution business.

POWER COMPONENTS, INC. ("PCI")

Power Components, Inc. is a wholly-owned subsidiary of the Company.
Based in Philadelphia, PCI distributes lithium batteries, and customized
battery packs and assemblies. PCI has grown its business by broadening its
customer base and expanding its value-added services.

CALIFORNIA FASTENERS, INC. ("CALFAST")

Calfast is a value-added distributor of fasteners and related
products, offering custom designed inventory management systems that conform to
an organization's needs, including in-plant bin-stock replenishment programs.
The business serves customers in the industrial, consumer and electronic
equipment manufacturing industries. The business is located in Anaheim,
California, Phoenix, Arizona and San Diego, California.

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of Securities
by the Selling Securityholders. The obligation of the Company to repurchase the
Shares, as referenced in Notes (3) and (4) under "Selling Securityholders",
will be reduced by any sale of the Shares under the Registration Statement of
which this Prospectus forms a part.

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<PAGE>

SELLING SECURITYHOLDERS

The following table sets forth certain information with respect to the
Selling Securityholders as of December 18, 1997. 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".

Shares that Shares of
Shares of Common may be offered Common Stock % of Class
Selling Stock owned prior to pursuant to owned after owned after
Securityholders this offering this Prospectus offering(1) offering(2)
- --------------- ------------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
Douglas D. Zadow(3) 361,065 95,678 265,387 12.57%
29 Trailridge Drive
Melissa, TX 75454

Terry Bastian(4) 114,041 30,234 83,807 3.97%
25101 Danacoral
Dana Point, CA 92629

</TABLE>

- -------------

(1) Assuming all Shares being offered pursuant to this Prospectus are
sold.

(2) Percentages are based upon there being 2,110,590 shares of Common
Stock issued and outstanding as of December 18, 1997.

(3) Mr. Zadow is President of Calfast, a subsidiary of the Company.
Pursuant to a Stock Purchase Agreement by and among the Company and
the shareholders of Calfast, dated as of August 29, 1997 (the
"Agreement"), Mr. Zadow was issued 361,065 shares of the Company's
Common Stock. Of these 361,065 shares, the 95,678 being offered
pursuant to the Registration Statement of which this Prospectus forms
a part are subject to a Serial Put Agreement dated September 22, 1997,
whereby Mr. Zadow has the option to put the 95,678 shares back to the
Company on a monthly basis during the five year period following
September 22, 1997.

(4) Mr. Bastian is Purchasing Manager of Calfast, a subsidiary of the
Company, and General Manager of the San Diego branch of Calfast.
Pursuant to a Stock Purchase Agreement by and among the Company and
the shareholders of Calfast, dated as of August 29, 1997 (the
"Agreement"), Mr. Bastian was issued 114,041 shares of the Company's
Common Stock. Of these 114,041 shares, the 30,234 shares being offered
pursuant to the Registration Statement of which this Prospectus forms
a part are subject to a Serial Put Agreement dated September 22, 1997,
whereby Mr. Bastian has the option to put the 30,234 shares back to
the Company on a monthly basis during the five year period following
September 22, 1997.

PLAN OF DISTRIBUTION

The Securities offered hereby may be sold from time to time directly
by the Selling Securityholders. Alternatively, the Selling Securityholders may
from time to time offer such securities through underwriters, dealers or
agents. The distribution of Securities by the Selling Securityholders may

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<PAGE>

be effected in one or more transactions that may take place on the
over-the-counter market, including ordinary broker's transactions,
privately-negotiated transactions or through sales to one or more
broker-dealers for resale of such Securities as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by the Selling Securityholders in
connection with such sales of Securities. The Securities offered by the Selling
Securityholders may be sold by one or more of the following methods, without
limitations: (a) a block trade in which a broker or dealer so engaged will
attempt to sell the Securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction; and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers, and (d) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Securityholders may
arrange for other brokers or dealers to participate. The Selling
Securityholders and intermediaries through whom such Securities are sold may be
deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act") with respect to the securities offered, and any
profits realized or commissions received may be deemed underwriting
compensation.

In order to comply with the securities laws of certain states, if
applicable, the Securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
securities may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with by the Company and
the Selling Securityholders.

The Selling Securityholders and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the shares may be deemed to be the "underwriters" within the
meaning of Section 2(11) of the Securities Act and any securities purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.

Pursuant to the requirements of Regulation M of the Exchange Act, any
person engaged in the distribution of the securities may not simultaneously
engage in market-making-activities with respect to the securities during such
solicitation and for a period of up to five days preceding such solicitation.

The Company has agreed to pay all fees and expenses incident to the
registration of the Shares, except selling commissions and fees and expenses of
counsel or any other professionals or other advisors, if any, to the Selling
Securityholders.

DESCRIPTION OF SECURITIES

COMMON STOCK

The authorized Common Stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value per share, of which 2,110,590 shares
were issued and outstanding as of December 18, 1997. Holders of the Common
Stock do not have preemptive rights to purchase additional shares of Common
Stock or other subscription rights. The Common Stock carries no conversion
rights and is not subject to redemption or to any sinking fund provisions. All
shares of Common Stock are entitled to share equally in dividends from sources
legally available therefor when, as and if declared by the Board of

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<PAGE>

Directors and, upon liquidation or dissolution of the Company, whether
voluntary or involuntary, to share equally in the assets of the Company
available for distribution to stockholders. All outstanding shares of Common
Stock are validly authorized and issued, fully paid and nonassessable, and all
shares to be sold and issued as contemplated hereby, will be validly authorized
and issued, fully paid and nonassessable. The Board of Directors is authorized
to issue additional shares of Common Stock, not to exceed the amount authorized
by the Company's Certificate of Incorporation, and to issue options and
warrants for the purchase of such shares, on such terms and conditions and for
such consideration as the Board may deem appropriate without further
stockholder action. The above description concerning the Common Stock of the
Company does not purport to be complete. Reference is made to the Company's
Certificate of Incorporation and By-laws which are available for inspection
upon proper notice at the Company's offices, as well as to the applicable
statutes of the State of Delaware for a more complete description concerning
the rights and liabilities of stockholders.

Each holder of Common Stock is entitled to one vote per share on all
matters on which such stockholders are entitled to vote. Since the shares of
Common Stock do not have cumulative voting rights, the holders of more than
fifty percent (50%) of the shares voting for the election of directors can
elect all the directors if they choose to do so and, in such event, the holders
of the remaining shares will not be able to elect any person to the Board of
Directors.

PREFERRED STOCK

The authorized Preferred Stock of the Company consists of 10,000,000
shares of Preferred Stock, $.01 par value per share, of which 1,150,000 shares
of Series B Convertible Preferred Stock were issued and outstanding as of
December 18, 1997.

Each share of Series B Preferred Stock shall be automatically
converted without any action on the part of the Company or the holder thereof
into 1.4375 shares of Common Stock on March 4, 1999. Annual dividends on the
Series B Preferred Stock will be paid in respect of the two year period prior
to conversion at the rate of $0.115 per share. Holders of Series B Preferred
Stock will be entitled to one vote for each share of Common Stock into which
such Preferred Stock is convertible. Each share of Series B Preferred Stock
will be entitled to a liquidation preference equal to $0.01 per share.

Up to 7,950,000 additional shares of Preferred Stock may be issued
from time to time in one or more series and the Board of Directors, without
further approval of the stockholders, is authorized to fix the dividend rights
and terms, conversion rights, voting rights, redemption rights, liquidation
preferences and other rights and restrictions relating to any such series.

SERIES IV WARRANTS

The Company currently has 3,900,000 Series IV Warrants outstanding.
Each Series IV Warrant entitles the holder to purchase one share of Common
Stock at an exercise price of $5.75 per share during the four year period
commencing March 4, 1998. The Series IV Warrants are redeemable by the Company
for $.05 per Series IV Warrant, at any time after March 4, 1998, upon 30 days'
prior notice, if the closing bid price of the Common Stock, as reported by the
Nasdaq SmallCap Market exceeds $8.50 per share, for any 20 consecutive trading
days ending within ten days of the notice of redemption.

The transfer agent and registrar for the Company is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005, telephone
number (212) 936-5100.

- 12 -

<PAGE>

LEGAL MATTERS

The legality of the Securities will be passed upon for the Company by
Gould & Wilkie, One Chase Manhattan Plaza, New York, New York 10005.

EXPERTS

The Company's Consolidated Financial Statements as of December 31,
1996 and 1995 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 Moore Stephens, P.C., independent certified public
accountants, given on the authority of such firm as experts in accounting and
auditing.

- 13 -

<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 $ 335
Legal Expenses 8,000
Accounting Expenses 250
Miscellaneous Expenses 1,660
--------
Total $10,245
========

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 transaction 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
- ----------- -----------
3.0 Certificate of Incorporation of the Registrant, incorporated by
reference to Exhibit 3(i) to the Registrant's Form 10-KSB filed with
the Securities and Exchange Commission for the fiscal year ended
December 31, 1987 (File No. 0-13324).
3.1 Certificate of Amendment, dated March 20, 1985, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
4.1 to Amendment No. 1 of the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on March 9,
1995 (File No. 33-44331).
3.2 Certificate of Amendment, dated June 9, 1989, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
4.1 to Amendment No. 1 of the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on March 9,
1995 (File No. 33-44331).
3.3 Certificate of Correction, dated May 17, 1991, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
4.1 to Amendment No. 1 of the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on March 9,
1995 (File No. 33-44331).
3.4 Certificate of Amendment, dated December 20, 1993, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
3(i) to the Registrant's Form 10-KSB filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1993 (File
No. 0- 13324).
3.5 Certificate of Amendment, dated December 22, 1993, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
3.3 to the Registrant's Form 10-KSB filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1993 (File
No. 0- 13324).
3.6 Certificate of Correction, dated July 19, 1994, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
4.1 to Amendment No. 1 to the Registrant's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on March 9,
1995 (File No. 33-44331).
3.7 Certificate of Amendment, dated April 2, 1996, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
3.5 to the Registrant's Form 10-KSB filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1995 (File
No. 0-13324).
3.8 Certificate of Amendment, dated December 31, 1996, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit
3.10 of the Registrant's Registration Statement on Form SB-2 filed
with the Securities and Exchange Commission on March 4, 1997 (File No.
333- 18243).
3.9 By-Laws of the Registrant, incorporated by reference to Exhibit 3b(ii)
to the Registrant's Form 10- KSB filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1987 (File
No. 0-13324).
3.10 Amendment to By-Laws of the Registrant, incorporated by reference to
Exhibit 3.4 of the Registrant's Form 10-KSB filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 1992
(File No. 0-13324).

5.0 Opinion of Gould & Wilkie.*
10.0 Serial Put Agreement dated as of September 22, 1997.*
24.1 Consent of Moore Stephens, P.C.
24.2 Consent of Gould & Wilkie (see Exhibit 5.0).*

- -------------
*Previously filed.

-II-2-

<PAGE>

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
amendment to this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Boca Raton, Florida on December 18,
1997.

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
amendment to 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, December 18, 1997
- ---------------------------- Chief Executive Officer
Dominic A. Polimeni and Director (Principal
Executive Officer)

/s/ Milton M. Adler Treasurer, Secretary, December 18, 1997
- ----------------------------- Controller and Director
Milton M. Adler (Principal Financial and
Accounting Officer)

/s/ Robert V. Gubitosi Director December 18, 1997
- -----------------------------
Robert V. Gubitosi

/s/ Mitchell Hymowitz Director December 18, 1997
- -----------------------------
Mitchell Hymowitz

/s/ William J. McSherry, Jr. Director December 18, 1997
- -----------------------------
William J. McSherry, Jr.

<PAGE>

EXHIBIT INDEX
<TABLE>
<CAPTION>

EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
3.0 Certificate of Incorporation of the Registrant, incorporated by reference to Exhibit
3(i) to the Registrant's Form 10-KSB filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1987 (File No. 0-13324).
3.1 Certificate of Amendment, dated March 20, 1985, to Certificate of Incorporation
of the Registrant, incorporated by reference to Exhibit 4.1 to Amendment No. 1 of
the Registrant's Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on March 9, 1995 (File No. 33-44331).
3.2 Certificate of Amendment, dated June 9, 1989, to Certificate of Incorporation of
the Registrant, incorporated by reference to Exhibit 4.1 to Amendment No. 1 of the
Registrant's Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on March 9, 1995 (File No. 33-44331).
3.3 Certificate of Correction, dated May 17, 1991, to Certificate of Incorporation of the
Registrant, incorporated by reference to Exhibit 4.1 to Amendment No. 1 of the
Registrant's Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on March 9, 1995 (File No. 33-44331).
3.4 Certificate of Amendment, dated December 20, 1993, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit 3(i) to the
Registrant's Form 10-KSB filed with the Securities and Exchange Commission for
the fiscal year ended December 31, 1993 (File No. 0-13324).
3.5 Certificate of Amendment, dated December 22, 1993, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit 3.3 to the
Registrant's Form 10-KSB filed with the Securities and Exchange Commission for
the fiscal year ended December 31, 1993 (File No. 0-13324).
3.6 Certificate of Correction, dated July 19, 1994, to Certificate of Incorporation of the
Registrant, incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on March 9, 1995 (File No. 33-44331).
3.7 Certificate of Amendment, dated April 2, 1996, to Certificate of Incorporation of
the Registrant, incorporated by reference to Exhibit 3.5 to the Registrant's Form
10-KSB filed with the Securities and Exchange Commission for the fiscal year
ended December 31, 1995 (File No. 0-13324).
3.8 Certificate of Amendment, dated December 31, 1996, to Certificate of
Incorporation of the Registrant, incorporated by reference to Exhibit 3.10 of the
Registrant's Registration Statement on Form SB-2 filed with the Securities and
Exchange Commission on March 4, 1997 (File No. 333-18243).
3.9 By-Laws of the Registrant, incorporated by reference to Exhibit 3b(ii) to the
Registrant's Form 10-KSB filed with the Securities and Exchange Commission for
the fiscal year ended December 31, 1987 (File No. 0-13324).
3.10 Amendment to By-Laws of the Registrant, incorporated by reference to Exhibit 3.4
of the Registrant's Form 10-KSB filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1992 (File No. 0-13324).

5.0 Opinion of Gould & Wilkie.*
10.0 Serial Put Agreement dated as of September 22, 1997.*
24.1 Consent of Moore Stephens, P.C.
24.2 Consent of Gould & Wilkie (see Exhibit 5.0).*

- -------------------
* Previously filed.

</TABLE>

<PAGE>

EXHIBIT 24.1

CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated March 19, 1997 on our
audit of the consolidated financial statements of Questron Technology, Inc.
(the "Company") and its subsidiaries, for the year ended December 31, 1996
included in the Company's Annual Report on Form 10-KSB dated March 31, 1997. We
also consent to the reference to our firm under the caption "Experts."

MOORE STEPHENS, P.C.
Certified Public Accountants

Cranford, New Jersey
December 17, 1997