<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from to
------------- ------------
Commission File Number 0-13324
-----------------
QUESTRON TECHNOLOGY, INC.
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 23-2257354
------------------------------- ----------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification Number)
6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487
------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(561) 241 - 5251
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes [X] No [ ]
As of November 10, 2000, there were 9,232,603 shares of the
Registrant's common stock outstanding.
<PAGE> 2
QUESTRON TECHNOLOGY, INC.
INDEX
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WHICH
INVOLVE CERTAIN RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER
MATERIALLY. EACH FORWARD-LOOKING STATEMENT THAT THE COMPANY BELIEVES IS MATERIAL
IS ACCOMPANIED BY A CAUTIONARY STATEMENT OR STATEMENTS IDENTIFYING IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
DESCRIBED IN THE FORWARD-LOOKING STATEMENT. IN THE CONTEXT OF FORWARD-LOOKING
INFORMATION PROVIDED IN THIS QUARTERLY REPORT ON FORM 10-Q AND IN OTHER REPORTS,
PLEASE REFER TO THE DISCUSSION OF RISK FACTORS DETAILED IN, AS WELL AS THE OTHER
INFORMATION CONTAINED IN, THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION DURING THE PAST 12 MONTHS.
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C> <C>
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet -
At September 30, 2000 (unaudited) and December 31, 1999 3
Consolidated Statement of Income (unaudited) -
Three Months and Nine Months Ended September 30, 2000 and 1999 4
Consolidated Statement of Cash Flows (unaudited) -
Nine Months Ended September 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 9 - 11
Item 3. Quantitative and Qualitative Disclosure About Market Risk 12
PART II. Other Information 13
Signature Page 14
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 979,068 $ 111,102
Accounts receivable, less allowances for
doubtful accounts of $217,572 in 2000 and $283,666 in 1999 26,265,933 16,827,678
Other receivables 110,522 253,057
Inventories 54,877,848 38,301,589
Other current assets 791,531 515,705
------------- -------------
Total current assets 83,024,902 56,009,131
Property and equipment - net 4,482,691 2,898,919
Cost in excess of net assets of businesses acquired,
less accumulated amortization of $4,003,650 in 2000 and $2,699,305 in 1999 73,556,534 71,650,585
Deferred income taxes 3,173,438 3,431,438
Other assets 3,887,969 4,007,768
------------- -------------
Total assets $ 168,125,534 $ 137,997,841
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,814,710 $ 9,668,171
Accrued expenses 1,830,516 1,958,596
Income taxes payable 2,997,892 750,333
Current portion of long-term debt 327,875 1,746,598
------------- -------------
Total current liabilities 23,970,993 14,123,698
Deferred income taxes payable 952,435 993,048
Long-term debt 94,190,696 87,808,934
------------- -------------
Total liabilities 119,114,124 102,925,680
------------- -------------
Commitments and contingencies:
Common stock subject to put option agreement 472,127 622,170
Stockholders' equity:
Preferred stock, $.01 par value; authorized 10,000,000 shares -- --
Common stock, $.001 par value; authorized 20,000,000
shares; issued 8,482,603 shares in 2000 and 7,164,522 in 1999 8,483 7,165
Additional paid-in capital 54,606,877 45,678,802
Accumulated deficit (6,076,077) (10,880,498)
------------- -------------
48,539,283 34,805,469
Less: treasury stock at cost, 11,849 shares -- (355,478)
------------- -------------
Total stockholders' equity 48,539,283 34,449,991
------------- -------------
Total liabilities and stockholders' equity $ 168,125,534 $ 137,997,841
============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE> 4
QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS AND NINE MONTHS
ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 41,919,379 $ 29,324,117 $119,624,652 $ 78,602,490
Cost of goods sold 25,030,829 17,973,180 72,208,391 48,254,253
------------ ------------ ------------ ------------
Gross Profit 16,888,550 11,350,937 47,416,261 30,348,237
Selling, general & administrative expenses 10,395,924 7,591,303 29,140,470 19,843,437
Depreciation and amortization 646,922 579,462 1,888,761 1,511,878
------------ ------------ ------------ ------------
Total operating expenses 11,042,846 8,170,765 31,029,231 21,355,315
------------ ------------ ------------ ------------
Operating income 5,845,704 3,180,172 16,387,030 8,992,922
Interest expense 3,161,558 2,545,279 8,960,402 5,587,962
------------ ------------ ------------ ------------
Income before income taxes and extraordinary items 2,684,146 634,893 7,426,628 3,404,960
Provision for income taxes 1,113,921 285,702 3,082,051 1,484,581
------------ ------------ ------------ ------------
Income before extraordinary items 1,570,225 349,191 4,344,577 1,920,379
Extraordinary gain (charge) in connection with the early
extinguishment of debt (less applicable income
taxes of $326,214 in 2000 and $1,187,604 in 1999) -- -- 459,844 (1,451,516)
------------ ------------ ------------ ------------
Net income $ 1,570,225 $ 349,191 $ 4,804,421 $ 468,863
============ ============ ============ ============
PER COMMON SHARE:
Income before extraordinary items $ .19 $ .05 $ .53 $ .33
Extraordinary gain (charge) -- -- .05 (.25)
------------ ------------ ------------ ------------
Net income $ .19 $ .05 $ .58 $ .08
============ ============ ============ ============
PER DILUTED COMMON SHARE:
Income before extraordinary items $ .18 $ .05 $ .44 $ .32
Extraordinary gain (charge) -- -- .05 (.24)
------------ ------------ ------------ ------------
Net income $ .18 $ .05 $ .49 $ .08
============ ============ ============ ============
Average number of common shares outstanding 8,415,862 6,672,054 8,198,516 5,864,741
============ ============ ============ ============
Average number of diluted common shares outstanding 8,899,231 6,736,699 9,807,160 5,932,467
============ ============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE> 5
QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,804,421 $ 468,863
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 1,888,761 1,511,878
Recognition of current year income tax benefit of net
operating loss carryforward 258,000 --
Extraordinary (gain) charge in connection with the early
extinguishment of debt (less applicable income taxes of
$326,214 in 2000 and $1,451,516 in 1999) (459,844) 1,451,516
Change in assets and liabilities:
Increase in accounts receivable (9,438,255) (1,281,776)
Decrease (increase) in other receivables 142,535 (203,812)
Increase in inventories (15,807,404) (6,329,473)
Increase in accounts payable 9,146,539 2,117,401
Decrease in accrued expenses (128,080) (898,978)
Increase (decrease) in income taxes payable 2,247,559 (1,828,941)
(Decrease) increase in deferred income taxes (40,613) 125,477
Increase in other assets (18,739) (377,606)
------------ ------------
Net cash used in operating activities (7,405,120) (5,245,451)
------------ ------------
Cash flows from investing activities:
Net cash consideration paid for acquired business (313,399) (29,719,345)
Acquisition of property and equipment (1,586,522) (339,310)
------------ ------------
Net cash used in investing activities (1,899,921) (30,058,655)
------------ ------------
Cash flows from financing activities:
Proceeds from borrowings under revolving facility 9,407,853 4,870,946
Proceeds from long-term debt financing -- 72,500,000
Repayment of long-term debt (277,119) (35,000,000)
Fees and expenses associated with long-term debt financing (233,083) (4,112,982)
Extraordinary gain (charge) in connection with the early
extinguishment of debt (less applicable income taxes of
$326,214 in 2000 and $1,451,516 in 1999) 459,844 (1,451,516)
Proceeds from exercise of options and warrants 1,213,201 --
Payments on capital leases (68,968) (105,867)
Payments in respect of exercise of put options (112,298) (67,939)
Payments on note issued for acquired business (216,423) (143,644)
------------ ------------
Net cash provided by financing activities 10,173,007 36,488,998
------------ ------------
Increase in cash and cash equivalents 867,966 1,184,892
Cash and cash equivalents at beginning of period 111,102 229,285
------------ ------------
Cash and cash equivalents at end of period $ 979,068 $ 1,414,177
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE> 6
QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
NOTE 1. BASIS OF PRESENTATION.
The accompanying unaudited consolidated financial statements include
the accounts of Questron Technology, Inc. (the "Company") and its subsidiaries.
The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the Securities and Exchange Commission's instructions for
Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
Management believes that all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended September 30, 2000
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. The consolidated balance sheet as of December 31, 1999
reflects the audited balance sheet at that date. For further information, refer
to the financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
NOTE 2. ACQUISITION OF RSD SALES COMPANY, INC.
Effective March 31, 2000, the Company acquired 100% of the issued and
outstanding stock of RSD Sales Company, Inc., a New York corporation ("RSD"), a
privately owned company.
The purchase price for RSD consisted of 394,619 shares of the Company's
common stock valued at $3,300,000.
The Company has accounted for such acquisition using the purchase
method of accounting. In connection with this acquisition, the Company recorded
$2,026,786 of cost in excess of net assets of the business acquired.
6
<PAGE> 7
QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
NOTE 3. ACQUISITIONS - PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma information for the three month and
nine month periods ended September 30, 2000 and 1999 presents the combined
operating results of the Company, Action Threaded Products, Inc. ("Action"),
Capital Fasteners, Inc. ("Capital"), Olympic Fasteners ("Olympic"), B&G Supply
Company, Inc. ("B&G") and RSD as though each of the acquisitions had been made
on January 1, 1999. The unaudited pro forma combined summary of operations
includes the additional interest expense on debt incurred in connection with the
acquisitions as if the debt had been outstanding since January 1, 1999. The pro
forma net income per common share and diluted common share assume that all
shares of common stock of the Company outstanding as of September 30, 2000 were
outstanding as of January 1, 1999. This pro forma information does not purport
to be indicative of what would have occurred had the acquisitions been completed
as of January 1, 1999 or results which may occur in the future:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
-------------------------------- --------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 41,919,000 $ 30,694,000 $120,320,000 $ 91,872,000
------------ ------------ ------------ ------------
Operating income 5,846,000 3,321,000 16,484,000 10,328,000
------------ ------------ ------------ ------------
Net income $ 1,570,000 $ 397,000 $ 4,402,000 $ 1,506,000
============ ============ ============ ============
Pro forma net income per common share $ .19 $ .06 $ .53 $ .21
============ ============ ============ ============
Pro forma net income per diluted common
share $ .18 $ .05 $ .44 $ .21
============ ============ ============ ============
Average number of common shares
outstanding 8,415,862 7,153,124 8,328,611 7,097,307
============ ============ ============ ============
Average number of diluted
common shares outstanding 8,899,231 7,316,748 9,937,255 7,198,026
============ ============ ============ ============
</TABLE>
7
<PAGE> 8
QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
NOTE 4. EARLY EXTINGUISHMENT OF DEBT.
On March 7, 2000, the Company reached agreements with the former
shareholders of Action, Capital and Olympic whereby notes payable aggregating
$5,000,000, plus accrued interest of $286,058 were settled in exchange for
450,000 shares of the Company's common stock. In connection with the early
extinguishment of these notes, the Company realized an extraordinary gain in an
amount equal to the difference between the fair market value of the common stock
issued and the face amount of the notes plus accrued interest. The amount of the
extraordinary gain was $459,844, net of applicable income taxes of $326,214.
NOTE 5. SUBSEQUENT EVENTS.
On October 20, 2000, the Company entered into an additional $4,000,000
senior secured credit facility with its existing senior lender, Ableco Finance,
L.L.C. and on November 10, 2000, the Company completed a $17,500,000 senior
subordinated debt private placement. The net proceeds of both of these
transactions were used to pay down the balance on the Company's revolving credit
facility.
The senior credit facility of $4,000,000 ("Note C") was structured to
be coterminous with the existing senior credit facility with Ableco Finance,
L.L.C. with the principal balance due on September 29, 2003. Interest on term
loan Note C is due monthly at the prime rate plus 2.5% with a minimum rate of
interest of 12% per annum.
Interest on the $17,500,000 senior subordinated debt is due quarterly
in arrears at a fixed rate of 12.5% payable in cash and 2.0% payable in kind.
Principal on the senior subordinated debt is payable in full on June 30, 2005.
In connection with the financing, the Company issued 750,000 shares of the
Company's common stock to the senior subordinated lenders.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2000 COMPARED TO THE
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999.
The Company's results of operations through September 30, 2000 include
the operating results of the Company's inventory logistics management business,
Questron Distribution Logistics, Inc. (formerly Quest Electronic Hardware, Inc.)
("QDL"), its master distribution of fasteners business, Integrated Material
Systems, Inc. ("IMS") and its battery distribution business, Power Components,
Inc. ("PCI").
QDL includes the operating results of Webb Distribution ("Webb"), and
California Fasteners, Inc. ("Calfast"), which were acquired in 1997; the
operating results of Fas-Tronics, Inc. ("Fas-Tronics"), Fortune Industries, Inc.
("Fortune") and AFCOM, which were acquired in 1998; the operating results of
Action, Capital, Olympic and B & G, which were acquired in 1999; and, for the
six months ended September 30, 2000, the operating results of RSD, which was
acquired on March 31, 2000. In 1999 the operations of Fas-Tronics and Fortune
began to operate as Questron Aerospace Logistics ("QAL"), a division of QDL,
providing inventory logistics management services to aerospace manufacturers.
The Company's revenues for the three month and nine month periods ended
September 30, 2000 amounted to $41,919,379 and $119,624,652, respectively,
compared with $29,324,117 and $78,602,490 for the comparable prior year periods.
The significant growth in the Company's revenues is due to the growth of QDL,
which had revenues of $39,935,682 and $112,345,621 during the three month and
nine month periods ended September 30, 2000, compared with $28,043,267 and
$74,902,774 for the comparable prior year periods. The significant growth in
QDL's revenues for the three month period ended September 30, 2000 as compared
with the comparable prior year period is principally a result of the internal
growth of QDL of 40%, as well as the additional revenues attributable to the
acquisitions of B&G and RSD. Revenues from B&G and RSD for the three month
period ended September 30, 2000 amounted to $1,420,056. The significant growth
in QDL's revenues for the nine month period ended September 30, 2000 as compared
with the comparable prior year period is a result of the acquisitions of Action,
Capital, Olympic, B&G and RSD, as well as the internal growth of the other QDL
branches of 31%. Revenues from Action, Capital, Olympic, B&G and RSD for the
nine month period ended September 30, 2000 amounted to $36,498,653 compared with
$18,904,535 for the comparable prior year period. The internal growth of QDL is
attributable to the implementation of inventory logistics management ("ILM")
programs to both new and existing customers.
The Company's operating income was $5,845,704 and $16,387,030,
respectively for the three month and nine month periods ended September 30,
2000, compared with operating income of $3,180,172 and $8,992,922 for the
comparable prior year periods. Operating income as a percentage of sales for the
three month and nine month periods ended September 30, 2000 amounted to 13.9%
and 13.7%, respectively, compared with 10.8% and 11.4% for the comparable prior
year periods. This improvement in operating income as a percentage of sales is
the result of increased gross profit margins, as well as the decrease in
operating
9
<PAGE> 10
expenses as a percentage of sales, as a result of the growth in sales and the
elimination of some of the redundant costs realized by the integration of
certain of the acquired businesses.
Interest expense, which reflects the cost of incremental borrowings
associated with acquisitions and QDL's working capital needs, for the three
month and nine month periods ended September 30, 2000 amounted to $3,161,558 and
$8,960,402, respectively. For the comparable prior year periods, the Company's
results include interest expense of $2,545,279 and $5,587,962, respectively. The
increase in interest expense principally reflects the costs of increased
borrowings to complete the acquisitions of Action, Capital and Olympic, as well
as the increased borrowings under the Company's revolving credit facility to
finance the working capital required to support the Company's growth.
The provision for income taxes for the three month and nine month
periods ended September 30, 2000 reflects a federal income tax provision at an
effective rate of 36.25% and a state income tax provision at an effective rate
of 5.25% for the states in which the Company does business. The provision for
income taxes for the three month and nine month periods ended September 30, 1999
reflects a federal income tax provision at an effective rate of 39.6% and 38.0%,
respectively, and a state income tax provision at an effective rate of 5.4% and
5.6%, respectively. The decrease in the Company's effective tax rate for the
three and nine month periods ended September 30, 2000, as compared to the
comparable prior year periods, is a result of the relationship of the Company's
permanent book to tax differences to the increased pre tax income of the
Company.
On March 7, 2000, the Company entered into an agreement with the former
shareholders of Action, Capital and Olympic to exchange $5,000,000 of debt, plus
accrued interest of $286,058 for 450,000 shares of the Company's common stock.
This exchange resulted in an extraordinary gain of $459,844, net of $326,214 in
applicable income taxes. In the second quarter of 1999, the Company incurred an
extraordinary charge in connection with the early extinguishment of debt of
$1,451,516, net of $1,187,604 in applicable income taxes. Income for the three
month and nine month periods ended September 30, 2000, before the extraordinary
item in connection with the early extinguishments of debt, amounted to
$1,570,225 and $4,344,577, respectively, compared with $349,191 and $1,920,379
for the comparable prior year periods. After the extraordinary item, the net
income for the three month and nine month periods ended September 30, 2000
amounted to $1,570,225 and $4,804,421, respectively, compared with net income of
$349,191 and $468,863 for the comparable prior year periods. The increase in
income before extraordinary item for the three months ended September 30, 2000
is primarily due to the internal growth of QDL. The increase in income before
extraordinary item for the nine months ended September 30, 2000 is principally
due to the acquisitions of Action, Capital and Olympic, as well as the internal
growth of the other QDL branches.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000, the Company had $979,068 in cash, compared to
$111,102 as of December 31, 1999. As of September 30, 2000, the Company had
working capital of $59,053,909, compared with working capital of $41,885,433 as
of December 31, 1999.
10
<PAGE> 11
For the nine months ended September 30, 2000, the net cash used in the
Company's operating activities amounted to $7,405,120, principally reflecting
increases in inventories and receivables, offset in part by profits of the
Company and increases in accounts payable and income taxes payable.
For the nine months ended September 30, 2000, the net cash used in the
Company's investing activities amounted to $1,899,921, including $313,399 of net
cash consideration paid for acquired businesses and $1,586,522 of capital
expenditures for the acquisition of fixed assets associated with the opening of
new branches, as well as the implementation of new ILM programs. The Company
does not have significant commitments for capital expenditures as of September
30, 2000 and no significant commitments are anticipated for the remainder of
2000, other than the expansion of the Company's computer system to complete the
integration of Fortune, Fas-Tronics, Action, B&G and RSD.
For the nine months ended September 30, 2000, the net cash provided by
the Company's financing activities amounted to $10,173,007, consisting
principally of $9,407,853 of bank borrowings under the Company's revolving
credit facility and $1,213,201 of proceeds from the exercise of options and
warrants.
On October 20, 2000, the Company entered into an additional $4,000,000
senior secured credit facility with its existing senior lender: Ableco Finance,
L.L.C. and on November 10, 2000, the Company completed a $17,500,000 senior
subordinated debt private placement. The net proceeds of both of these
transactions were used to pay down the balance on the Company's revolving credit
facility. The senior credit facility of $4,000,000 ("Note C") was structured to
be coterminous with the existing senior credit facility with Ableco Finance,
L.L.C. with the principal balance due on September 29, 2003. Interest on term
loan Note C is due monthly at the prime rate plus 2.5% with a minimum rate of
interest of 12% per annum. Interest on the $17,500,000 senior subordinated debt
is due quarterly in arrears at a fixed rate of 12.5% payable in cash and 2.0%
payable in kind. Principal on the senior subordinated debt is payable in full on
June 30, 2005. In connection with the financing, the Company issued 750,000
shares of the Company's common stock to the senior subordinated lenders.
The Company intends to continue to identify and evaluate potential
merger and acquisition candidates engaged in businesses complementary to its
business. While certain of such additional potential acquisition opportunities
are at various stages of consideration and evaluation, none is at any definitive
stage at this time. Management believes that its working capital, funds
available under its credit agreement, and funds generated from operations,
together with additional financing opportunities available to the Company, will
be sufficient to meet its obligations through 2001, exclusive of cash
requirements associated with any business acquisitions.
11
<PAGE> 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's interest expense is sensitive to changes in the general
level of U.S. interest rates. In this regard, changes in the U.S. rates may
effect the interest paid on a portion of its debt. The Company does not enter
into derivative financial instruments.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
The exhibits listed on the Exhibit Index immediately following the
signature page are filed as part of this Quarterly Report on
Form 10-Q.
b) Reports on Form 8-K:
None.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
QUESTRON TECHNOLOGY, INC.
(1) Principal Executive Officer:
Date: NOVEMBER 14, 2000 /s/ Dominic A. Polimeni
----------------------------------
Chairman and Chief Executive Officer
(2) Principal Financial and Accounting
Officer:
Date: NOVEMBER 14, 2000 /s/ Robert V. Gubitosi
----------------------------------
Robert V. Gubitosi
President and Chief Financial Officer
14
<PAGE> 15
INDEX TO EXHIBITS
The following exhibits are filed as part of this Quarterly Report on
Form 10-Q:
*3.0 Certificate of Incorporation, incorporated by reference to Exhibit 3(i)
to the Company'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 Company, incorporated by reference to Exhibit 4.1
to Amendment No. 1 of the Company'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 Company, incorporated by reference to Exhibit 4.1
to Amendment No. 1 of the Company'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 Company, incorporated by reference to Exhibit 4.1
to Amendment No. 1 of the Company'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 Company, incorporated by reference to Exhibit 3(i)
to the Company'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 Correction, dated December 22, 1993, to Certificate of
Incorporation of the Company, incorporated by reference to Exhibit 3.3
to the Company'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 Company, incorporated by reference to Exhibit 4.1
to Amendment No. 1 to the Company'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 Company, incorporated by reference to Exhibit 3.5
to the Company'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, filed December 31, 1996, to Certificate of
Incorporation of the Company, incorporated by reference to Exhibit 3.10
to Amendment No. 1 to the Company's Form SB-2 filed with the Securities
and Exchange Commission on February 25, 1997 (File No. 333-18243).
15
<PAGE> 16
*3.9 By-Laws of the Company, incorporated by reference to Exhibit 3b(ii) to
the Company'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 Company, incorporated by reference to
Exhibit 3.4 of the Company's Form 10-KSB filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1992 (File
No. 0-13324).
*4.0 Specimen Common Stock Certificate, incorporated by reference to Exhibit
4.0 to Amendment No. 1 to the Company's Form SB-2 filed with the
Securities and Exchange Commission on February 25, 1997 (File No.
333-18243).
*4.1 Form of Series IV Warrant Agreement, incorporated by reference to
Exhibit 4.3 to Amendment No. 1 to the Company's Form SB-2 filed with
the Securities and Exchange Commission on February 25, 1997 (File No.
333-18243).
*4.2 Form of Series III Warrant Agreement, dated as of November 7, 1994,
incorporated by reference to Exhibit 10.22 to the Company's Form 10-KSB
filed with the Securities and Exchange Commission for the fiscal year
ended December 31, 1994 (File No. 0-13324).
*4.3 Form of Underwriters' Purchase Option, incorporated by reference to
Exhibit 4.5 to Amendment No. 1 to the Company's Form SB-2 filed with
the Securities and Exchange Commission on February 25, 1997 (File No.
333-18243).
*4.4 Stock Purchase Warrant Certificate for Purchase of Common Stock of
Questron Technology, Inc., incorporated by reference to Exhibit 4.6 to
Amendment No. 1 to the Company's Form SB-2 filed with the Securities
and Exchange Commission on February 25, 1997 (File No. 333-18243).
*4.5 Amended Certificate of Designation Establishing Series of Preferred
Stock of Questron Technology, Inc., incorporated by reference to
Exhibit 4.7 to the Company's Quarterly Report on Form 10-QSB for the
three month period ended June 30, 1998 filed with the Securities and
Exchange Commission on May 15, 1998 (File No. 0-13324).
*4.6 Registration Rights Agreement, dated as of September 24, 1998, by and
between the Company and the persons listed on Schedule A thereto,
incorporated by reference to the Company's Current Report on Form 8-K,
filed with the Securities and Exchange Commission on October 8, 1998
(File No. 0-13324).
*4.7 Certificate of Designation of Series A Junior Participating Preferred
Stock of Questron Technology, Inc., incorporated by reference to the
Company's Quarterly Report on Form 10-QSB for the three month period
ended September 30, 1998, filed with the Securities and Exchange
Commission on November 16, 1998 (File No. 0-13324).
16
<PAGE> 17
*10.1 The Company's 1994 Director Non-Qualified Stock Option Plan,
incorporated by reference to Exhibit 10.28 of the Company's Report on
Form 10-KSB filed with the Securities and Exchange Commission for the
fiscal year ended December 31 1993 (File No. 0-13324).
*10.2 Employment Agreement, dated March 29, 1999 between Questron Technology,
Inc. and Dominic A. Polimeni incorporated by reference to Exhibit 10.2
of the Company's Report on Form 10-KSB filed with the Securities and
Exchange Commission for the fiscal year ended December 31 1998 (File
No. 0-13324).
*10.3 Employment Agreement, dated November 29, 1994, between Quest Electronic
Hardware, Inc. and Phillip D. Schwiebert, incorporated by reference to
Exhibit 10.25 to the Company's Form 10-KSB filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 1994
(File No. 0-13324).
*10.4 Employment Agreement dated October 1, 1999 between Questron Technology,
Inc. and Robert v. Gubitosi, incorporated by reference to Exhibit 10.4
of the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 1999
(File No. 0-13324).
*10.5 Non-Statutory Stock Option Agreement between Questron Technology and
Malcolm Tallmon dated Mach 6, 2000, incorporated by reference to
Exhibit 10.5 of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended December
31, 1999 (File No. 0-13324).
*10.6 Termination of Management Advisory and Consulting Agreement, dated as
of March 1, 1999, between Gulfstream Financial Group, Inc. and the
Company.
*10.7 Purchase of Assets Agreement, dated as of November 29, 1994, between
Quest Electronic Hardware, Inc. and Arrow Electronics, Inc.,
incorporated by reference to Exhibit 10.29 to the Company's Form 10-KSB
filed with the Securities and Exchange Commission for the fiscal year
ended December 31, 1994 (File No. 0-13324).
*10.8 1996 Stock Option Plan, incorporated by reference to Exhibit 10.19 to
Amendment No. 1 to the Company's Form SB-2 filed with the Securities
and Exchange Commission on February 25, 1997 (File No. 333-18243).
*10.9 Exchange Agreement, dated November 8, 1996 by and among the Company,
Gulfstream Financial Group, Inc. and Phillip D. Schwiebert,
incorporated by reference to Exhibit 10.21 to Amendment No. 1 to the
Company's Form SB-2 filed with the Securities and Exchange Commission
on February 25, 1997 (File No. 333-18243).
*10.10 Stock Purchase Agreement dated as of December 16, 1996 relating to Webb
Distribution, Inc., incorporated by reference to Exhibit 2.0 to
Amendment No. 1 to the Company's Form SB-2 filed with the Securities
and Exchange Commission on February 25, 1997 (File No. 333-18243).
17
<PAGE> 18
*10.11 Form of Underwriting Agreement, incorporated by reference to Exhibit
2.0 to Amendment No. 1 to the Company's Form SB-2 filed with the
Securities and Exchange Commission on February 25, 1997 (File No.
333-18243).
*10.12 Stock Option Grant Agreement between the Company and Phillip D.
Schwiebert made as of November 8, 1996, incorporated by reference to
Exhibit 10.20 to the Company's Form 10-KSB filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 1996
(File No. 0-13324).
*10.13 Stock Purchase Agreement between Questron Technology, Inc. and the
shareholders of California Fasteners, Inc. dated August 29, 1997,
incorporated by reference to Exhibit 2.0 to the Company's Form 8-K,
filed October 7, 1997 (File No. 0-13324).
*10.14 Serial Put Agreement between Questron Technology, Inc. and Douglas D.
Zadow and Terry Bastian dated September 22, 1997, incorporated by
reference to Exhibit 2.1 to the Company's Form 8-K, filed October 7,
1997 (File No. 0-13324).
*10.15 Stock Purchase Agreement, dated as of June 12, 1998, by and between the
Company, Fortune Industries, Inc. and the Stockholders of the Company
listed on Schedule 1.1 thereto (the "Fortune Stock Purchase
Agreement"), incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-QSB for the three-month period ended June
30, 1998 filed with the Securities and Exchange Commission on August
14, 1998 (File. No. 0-13324).
*10.16 Stock Purchase Agreement, dated as of June 12, 1998, by and between the
Company, Gregory Fitzgerald, Valerie Fitzgerald and Fas-Tronics, Inc.
(the "Fas-Tronics Stock Purchase Agreement"), incorporated by reference
to Exhibit 10.2 to the Company's Quarterly Report on Form 10-QSB for
the three-month period ended June 30, 1998 filed with the Securities
and Exchange Commission on August 14, 1998 (File. No. 0-13324).
*10.17 Letter Agreement, dated July 29, 1998, by and between the Company,
Fortune Industries, Inc. and the Stockholders listed on Schedule 1.1 to
the Fortune Stock Purchase Agreement, incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on Form 10-QSB for the
three-month period ended June 30, 1998 filed with the Securities and
Exchange Commission on August 14, 1998 (File. No. 0-13324).
*10.18 Letter Agreement, dated July 29, 1998 by and between the Company,
Gregory Fitzgerald, Valerie Fitzgerald and Fas-Tronics, Inc.,
incorporated by reference to Exhibit 10.4 to the Company's Quarterly
Report on Form 10-QSB filed with the Securities and Exchange Commission
on August 14, 1998 (File No. 0-13324).
*10.19 Second Amendment to the Fas-Tronics Stock Purchase Agreement,
incorporated by reference to the Company's Current Report on Form 8-K
filed with the Securities and Exchange Commission on October 8, 1998
(File No. 0-13324).
18
<PAGE> 19
*10.20 Settlement Agreement dated as of March 1, 2000, by and among Questron
Technology, Inc., a Delaware corporation, Gregory Fitzgerald and
Valerie Fitzgerald, incorporated by reference to Exhibit 10.20 of the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1999 (File
No. 0-13324).
*10.21 Second Amendment to the Fortune Stock Purchase Agreement, incorporated
by reference to the Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 8, 1998 (File No.
0-13324).
*10.22 Rights Agreement, dated as of October 23, 1998, between the Company and
American Stock Transfer & Trust Company, as Rights Agent, incorporated
by reference to the Company's Registration Statement on Form 8-A filed
with the Securities and Exchange Commission on November 6, 1998 (File
No. 0-13324).
*10.23 Loan and Security Agreement, dated as of September 24, 1998, by and
among the Company, Questron Distribution Logistics, Inc., Integrated
Material Systems, Inc., Power Components, Inc., California Fasteners,
Inc., Comp Ware, Inc., Fas-Tronics, Inc., Fortune Industries, Inc.,
each of the signatures which is a signatory thereto, Congress Financial
Corporation (Florida), as administrative agent, and Madeleine L.L.C.,
as collateral agent, incorporated by reference to Exhibit 10.17 to the
Company's Quarterly Report on Form 10-QSB for the three-month period
ended September 30, 1998, filed with the Securities and Exchange
Commission on November 16, 1998 (File No. 0-13324).
*10.24 Amendment Number One to the Loan and Security Agreement, dated November
2, 1998, by and among the Company, Questron Distribution Logistics,
Inc., Integrated Material Systems, Inc., Power Components, Inc.,
California Fasteners, Inc., Comp Ware, Inc., Fas-Tronics, Inc., Fortune
Industries, Inc., each of the signatures which is a signatory thereto,
Congress Financial Corporation (Florida), as administrative agent and
Madeleine L.L.C., as collateral agent, incorporated by reference to
Exhibit 10.18 to the Company's Quarterly Report on Form 10-QSB for the
three-month period ended September 30, 1998, filed with the Securities
and Exchange Commission on November 16, 1998 (File No. 0-13324).
*10.25 Asset Purchase Agreement, dated as of January 29, 1999, by and between
the Company, Questron Distribution Logistics, Inc. and AFCOM, Inc., and
each of the persons listed on Schedule 1.1 thereto and signatory
thereto, incorporated by reference to Exhibit 10.19 to the Company's
Quarterly Report on Form 10-Q for the three month period ended March
31, 1999 (File No. 0-13324).
*10.26 Asset Purchase Agreement, dated as of March 11, 1999, by and between
Questron Technology, Inc., Questron Distribution Logistics, Inc., and
Metro Form Corporation, d.b.a. Olympic Fasteners & Electronic Hardware,
and each of the persons listed on Schedule 1.1 thereto and signatory
thereto (the "Olympic Purchase Agreement"), incorporated by reference
to Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q for the
three-month period ended March 31, 1999 (File No. 0-13324).
19
<PAGE> 20
*10.27 Amendment to the Olympic Purchase Agreement, dated June 28, 1999,
incorporated by reference to Exhibit 2.2 to the Company's Current
Report on Form 8-K, dated June 30, 1999 (File No. 0-13324).
*10.28 Settlement Agreement in Connection with the Acquisition of Olympic
dated as of March 7, 2000, by and among Questron Finance Corp., a
Delaware corporation (ii) Questron Technology, Inc., a Delaware
corporation and Sheldon Enterprises, Inc (James Mraz as notified
party), incorporated by reference to Exhibit 10.28 of the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1999 (File No.
0-13324).
*10.29 Settlement Agreement in Connection with the Acquisition of Olympic
dated as of March 7, 2000, by and among Questron Finance Corp., a
Delaware corporation (ii) Questron Technology, Inc., a Delaware
corporation and Sheldon Enterprises, Inc (Rudolph M. Petric as notified
party), incorporated by reference to Exhibit 10.29 of the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1999 (File No.
0-13324).
*10.30 Stock Purchase Agreement, dated as of April 26, 1999, between Questron
Distribution Logistics, Inc., Questron Technology, Inc., James R.
Gilchrist and Capital Fasteners, Inc. (the "Capital Purchase
Agreement"), incorporated by reference to Exhibit 2.3 to the Company's
Current Report on Form 8-K, dated June 30, 1999 (File No. 0-13324).
*10.31 Amendment to the Capital Purchase Agreement, dated June 25, 1999,
incorporated by reference to Exhibit 2.4 to the Company's Current
Report on Form 8-K, dated June 30, 1999 (File No. 0-13324).
*10.32 Settlement Agreement in Connection with Capital Acquisition dated as of
March 7, 2000, by and among Questron Finance Corp., a Delaware
corporation, Questron Technology, Inc., a Delaware corporation and
James R. Gilchrist, Trustee of James R. Gilchrist Revocable Trust Under
Agreement Dated June 25, 1999, incorporated by reference to Exhibit
10.32 of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended December
31, 1999 (File No. 0-13324).
*10.33 Settlement Agreement in Connection with Capital Acquisition dated as of
March 7, 2000, by and among Questron Finance Corp., a Delaware
corporation, Questron Technology, Inc., a Delaware corporation and
James R. Gilchrist, incorporated by reference to Exhibit 10.33 of the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1999 (File
No. 0-13324).
*10.34 Letter Agreement, dated as of June 29, 1999, amending the Capital
Purchase Agreement, incorporated by reference to Exhibit 2.5 to the
Company's Current Report on Form 8-K, dated June 30, 1999 (File No.
0-13324).
20
<PAGE> 21
*10.35 Stock Purchase Agreement, dated as of May 7, 1999, by and between
Questron Technology, Inc, Questron Distribution Logistics, a Delaware
corporation, Action Threaded Products, Inc. and the persons signatory
thereto (the "Action Purchase Agreement"), incorporated by reference to
Exhibit 2.6 to the Company's Current Report on Form 8-K, dated June 30,
1999 (File No. 0-13324).
*10.36 Letter Agreement, dated as of June 29, 1999, amending the Action
Purchase Agreement, incorporated by reference to Exhibit 2.7 to the
Company's Current Report on Form 8-K, dated June 30, 1999 (File No.
0-13324).
*10.37 Settlement Agreement in Connection with the Action Acquisition dated as
of March 7, 2000, by and among Questron Finance Corp., a Delaware
corporation, Questron Technology, Inc., a Delaware corporation and
Gerald H. Ablan, incorporated by reference to Exhibit 10.37 of the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1999 (File
No. 0-13324).
*10.38 Settlement Agreement in Connection with the Action Acquisition dated as
of March 7, 2000, by and among Questron Finance Corp., a Delaware
corporation, Questron Technology, Inc., a Delaware corporation and
Robert A. Lehman, incorporated by reference to Exhibit 10.38 of the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1999 (File
No. 0-13324).
*10.39 Settlement Agreement in Connection with the Action Acquisition dated as
of March 7, 2000, by and among Questron Finance Corp., a Delaware
corporation, Questron Technology, Inc., a Delaware corporation and
William P. Hackett, incorporated by reference to Exhibit 10.39 of the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1999 (File
No. 0-13324).
*10.40 Settlement Agreement in Connection with the Action Acquisition dated as
of March 7, 2000, by and among Questron Finance Corp., a Delaware
corporation, Questron Technology, Inc., a Delaware corporation and
Charles W. Gozder, incorporated by reference to Exhibit 10.40 of the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1999 (File
No. 0-13324).
*10.41 Securities Purchase Agreement (identical agreement executed separately
with each of four purchasers), dated as of June 29, 1999, by and
between Questron Technology, Inc., Questron Operating Company, Inc.,
and, separately, each of Albion Alliance Mezzanine Fund, L.P., Alliance
Investment Opportunities Fund, L.L.C., The Equitable Life Assurance
Society of the United States and IBJ Whitehall Bank & Trust Company,
incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K, dated June 30, 1999 (File No. 0-13324).
*10.42 Note Agreement, dated as of June 29, 1999, among Questron Operating
Company, Inc. and Albion Alliance Mezzanine Fund, L.P., Alliance
Investment
21
<PAGE> 22
Opportunities Fund, L.L.C., The Equitable Life Assurance Society of
the United States and IBJ Whitehall Bank & Trust Company, incorporated
by reference to Exhibit 10.1 to the Company's Current Report on Form
8-K, dated June 30, 1999 (File No. 0-13324).
*10.43 Investors Rights Agreement, dated as of June 29, 1999, among Questron
Technology, Inc. and Albion Alliance Mezzanine Fund, L.P., Alliance
Investment Opportunities Fund, L.L.C., The Equitable Life Assurance
Society of the United States and IBJ Whitehall Bank & Trust Company,
incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K, dated June 30, 1999 (File No. 0-13324).
*10.44 Unconditional Guaranty, dated as of June 30, 1999, by Questron
Technology, Inc., Questron Finance Corp., Questron Distribution
Logistics, Inc., Integrated Material Systems, Inc., Power Components,
Inc., Fortune Industries, Inc., Fas-Tronics, Inc., California
Fasteners, Inc., Comp Ware, Inc., Action Threaded Products, Inc.,
Action Threaded Products of Georgia, Inc., Action Threaded Products of
Minnesota, Inc. and Capital Fasteners, Inc., in favor of each of Albion
Alliance Mezzanine Fund, L.P., Alliance Investment Opportunities Fund,
L.L.C., The Equitable Life Assurance Society of the United States and
IBJ Whitehall Bank & Trust Company, incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K, dated June
30, 1999 (File No. 0-13324).
*10.45 Amended and Restated Loan and Security Agreement, dated as of June 29,
1999, by and between Questron Technology, Inc. and its subsidiaries and
Congress Financial Corporation (Florida) and Ableco Finance LLC,
incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K, dated June 30, 1999 (File No. 0-13324).
*10.46 Amendment Number One to Amended and Restated Loan and Security
Agreement, dated as of October 1, 1999, by and among Questron
Technology, Inc., certain of its direct and indirect Subsidiaries
identified therein, each of the Lenders signatory thereto, Congress
Financial Corporation and Ableco Finance LLC,"), incorporated by
reference to Exhibit 10.26 to the Company's Quarterly Report on Form
10-Q for the three month period ended September 30, 1999 (File No.
0-13324).
*10.47 Amendment to Note Agreement, dated as of September 29, 1999, by and
among Questron Operating Company, Inc. and Albion Alliance Mezzanine
Fund, L.P., Alliance Investment Opportunities Fund, LLC, The Equitable
Life Assurance Society of the United States and IBJ Whitehall Bank &
Trust Company"), incorporated by reference to Exhibit 10.27 to the
Company's Quarterly Report on Form 10-Q for the three month period
ended September 30, 1999 (File No. 0-13324).
*21.1 Subsidiaries of the Company, as amended, incorporated by reference to
Exhibit 21.1 to the Company's Quarterly Report on Form 10-Q for the
three month period ended March 31, 2000 (File No. 0-13324).
22
<PAGE> 23
+27 Financial Data Schedule.
* previously filed
+ filed herewith
23
