File No. 33-61515
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
QUADRAX CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 05-0420158
(State of incorporation) (IRS Employer Identification Number)
300 High Point Avenue,
Portsmouth, Rhode Island 02871
(401) 683-6600
(Address and telephone number of registrant's
principal executive offices)
QUADRAX CORPORATION
1993 STOCK PLAN
(Full title of the Plan)
JAMES J. PALERMO
Chairman of the Board and Chief Executive Officer
Quadrax Corporation
300 High Point Avenue
Portsmouth, Rhode Island 02871
(401) 683-6600
(Address and telephone number of agent for service)
Please send copies of all communications to:
JOSEPH A. SMITH, Esq.
Campbell & Fleming, P.C.
250 Park Avenue, 12th Floor
New York, New York 10177
(Cover continued on next page)
<PAGE>
(Cover continued from previous page)
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
each Maximum Maximum Amount
class of Amount to offering aggregate of
securities be price offering registration
to be registered per Unit price fee
registered
--------------------------------------------------------------------------
Common Stock,
$.000009 par
value(1) 38,560 $1.43 $ 55,141 $ 20.00
Common Stock,
$.000009 par
value(2) 113,389 $1.81 $205,235 $ 71.00
Common
Stock,
$.000009 par
value(2) 330,000 $2.00 $660,000 $228.00
Common
Stock,
$.000009 par
value(2) 100,000 $0.10 $ 10,000 $ 4.00
Total $930,376 $323.00*
(1) Estimated pursuant to Rule 457(c) and (h) based upon the
average high and low prices of the Registrant's Common Stock
as reported on NASDAQ SmallCap Market on July 27, 1995.
(2) For shares issuable pursuant to stock options outstanding at
July 24, 1995, calculated pursuant to Rule 457(h) based on the
exercise price of such options.
* Previously paid
<PAGE>
REOFFER PROSPECTUS
581,949 Shares of Common Stock
QUADRAX CORPORATION
300 High Point Avenue
Portsmouth, RI 02817
The persons named or otherwise identified under "Selling
Shareholders" herein propose to sell an aggregate of 581,949 shares of
Common Stock (the "Shares") of Quadrax Corporation (the "Company") (i)
in one or more transactions (which may include block transactions) at
negotiated prices or at a price or prices related to the then current
market price of the Company's Common Stock, or (ii) to a broker (for
resale by such broker as principal) at a price or prices related to the
then current market price of the Company's Common Stock, less such
discount as shall be agreed upon by a Selling Shareholder and the Broker,
or (iii) by a combination of the methods described in clauses (i) and
(ii). Selling Shareholders may also make sales from time to time
pursuant to Rule 144 under the Securities Act of 1933, as amended, if
such Rule is otherwise available to such particular Selling Shareholder.
The 581,949 Shares offered hereby may be issued by the Company from
time to time upon the exercise of options to purchase the Shares pursuant
to the Company's 1993 Stock Plan. Sellers of "control securities" as
defined under Instruction C to Form S-8 promulgated by the Securities and
Exchange Commission, are indentified herein or in a supplement hereto by
name. Other selling shareholders may be identified by status as
employees of the Company.
The Selling Shareholders, and the brokers and dealers through which
the Shares may be offered, may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, as amended, in
which event any compensation received by such brokers and dealers may be
deemed to be underwriters' compensation under such Act.
The Common Stock is listed on the NASDAQ Small-Cap Market under the
symbol "QDRX". On April 30, 1996, the closing price for the Common Stock
on NASDAQ was $1.875 per share.
AN INVESTMENT IN THE SECURITIES OFFERED PURSUANT
TO THIS PROSPECTUS IS SPECULATIVE AND INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 5.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 28, 1996
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; Room 1204,
Everett McKinley Dirksen Building, 210 South Dearborn Street,
Chicago, Illinois 60604; 7 World Trade Center, New York, New York
10048; and Suite 500 East, Museum Square Building, 5757 Wilshire
Boulevard, Los Angeles, California 90036. Copies of such material
can be obtained from the Public Reference Section of the Commission
at 450 Fifth Street N.W., Washington, D.C. 20549 at prescribed
rates.
The Company has filed with the Commission in Washington, D.C.
a Registration Statement on Form S-8 (Registration No. 33-61515)
under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Shares of which this Prospectus is a
part. As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all the information set forth in
the Registration Statement, including the exhibits filed as part
thereof and otherwise incorporated therein to which reference is
hereby made. Copies of the Registration Statement and the exhibits
may be inspected at the offices of the Commission, and may be
obtained form the Public Reference Section of the Commission at 450
Fifth Street, N.W. Washington, D.C. 20549 upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1995.
(2) The Company's Annual Report on Form 10-QSB for the
quarter ended March 31, 1996.
(3) The description of the Company's Common Shares which
is contained in the registration statement on Form 8-A
filed by the Company to register such securities under
Section 12(g) of the Securities Exchange Act of 1934, as
amended, including any amendment or report filed for the
purpose of updating such description.
(4) The Company's Current Reports on Form 8-K dated
January 15, 1996 and March 15, 1996.
(5) The Company's Proxy Statement in connection with the
Annual Meeting of Stockholders held May 10, 1996.
(6) All documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the
termination of the Offering made hereby shall be deemed
to be incorporated by reference in this Prospectus and to
be a part hereof from the date of filing 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 any other subsequently
filed document which 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 will provide without charge to each person,
including any beneficial owners, to whom this Prospectus is
delivered, upon the written or oral request of any such person, a
copy of any and all of the information that has been incorporated
herein by reference, other than exhibits to such information
(unless such exhibits are specifically incorporated by reference
into the information that the Prospectus incorporates). Requests
for such information should be directed to the Secretary of the
Company at 300 High Point Avenue, Portsmouth, Rhode Island 02871,
(401) 683-6600.
THE COMPANY
The Company, which prior to fiscal year 1995 was a development
stage company, designs, develops, fabricates and sells fiber-
reinforced thermoplastic polymer composite materials ("Quadrax
Composites") and products manufactured from Quadrax Composites.
Quadrax Composites are synthetic materials made using patented and
other proprietary, as well as non-proprietary, chemical processes
and manufacturing technologies. Management believes that Quadrax
Composites are functionally superior to other structural substrates
for most applications in which abrasion resistance and extreme heat
tolerance are not critical. Quadrax Composites' functional
advantages include high strength-to-weigth ratios, chemical
stability in a variety of ambient conditions (imperviousness to
rust, rot or reaction with most commonly used chemical solvents),
ease and safety of manufacture using modified conventional heat and
compression molding techniques, virtually unlimited shelf life
without special storage or handling requirements, and recyclablity.
The Company commenced limited commercial production in mid-
1993. Although the Company historically was dedicated to the
formatting of composite materials for defense and aerospace
markets, it began redirecting its business in 1994 and 1995 to
focus on commercial and consumer markets for value-added, high-
performance products. The Company's independent accountants,
Livingston & Haynes, P.C., included a "going concern" qualification
in their report on the Company's financial statements for fiscal
1995, as they did for fiscal 1994 (the period from January 3, 1994
to December 31, 1994), reflecting the Company's history of losses
and its continuing dependence on financing activities to provide
the cash needed to meet its expenses.
The Company is organized in a holding company structure,
operating through two wholly owned subsidiaries: Quadrax Advanced
Materials Systems, Inc. and Lion Golf of Oregon, Inc. ("Lion
Golf"). It also wholly owns and operates Quadrax Sports, Inc. as
a marketing company.
The Company was incorporated under the laws of Delaware in
March 1986. Its principal executive offices are located at 300
High Point Avenue, Portsmouth, Rhode Island 02871, and its
telephone number is (401) 683-6600.
RISK FACTORS
In addition to the other information in this Prospectus, the
following risk factors should be considered carefully in evaluating
the Company and its business before purchasing any of the shares of
Common Stock offered hereby.
Operating Losses; Limited Revenues; Going Concern Qualification
Quadrax Corporation has not achieved profitability in any
fiscal quarter since its incorporation in March 1986. From
incorporation through December 31, 1995, the Company incurred a
cumulative net loss from continuing operations of approximately
$53,089,0000. During the fiscal years 1995, 1994, 1993 and 1992,
the Company incurred net losses from continuing operations of
approximately $8,998,000, $11,517,000, $5,713,000 and $7,266,000,
respectively.
The Company has generated only limited revenue to date. In
particular, Quadrax has recently redirected its development and
marketing efforts from aerospace and defense markets to consumer
markets and commenced limited production for these markets in mid-
1993. During fiscal years 1995, 1994, 1993 and 1992, the Company's
total revenue was approximately $4,635,000, $860,000, $1,555,000
and $850,000 respectively. There can be no assurance that sales of
the Company's products will generate significant revenue in the
future. Consequently, thee can be no assurance that the Company
will achieve or sustain profitability in the future. The future
operating results of the Company will depend on its ability to
develop and market new products in the commercial markets. The
Company's independent accountants have included a "going concern"
qualification in their reports on the Company's financial
statements for fiscal 1995 and 1994, reflecting the Company's
history of losses as a development stage company and its continuing
dependence on financing activities to provide the cash needed to
meet its expenses. Under the Company's current business plan,
management believes that the Company's revenues and earnings will
be sufficient to make the going concern qualification unnecessary
by December 31, 1996, although there can be no assurance that such
qualification will in fact be unnecessary by that date.
Dependence on New Products
The Company historically has marketed its products to the U.S.
Government. The Company began to apply its technology in consumer
markets in 1993, and since that time has taken a number of actions
aimed at entering the sporting goods and athletic equipment market.
The Company has only commenced limited commercial production of
consumer products and therefore has not yet had an opportunity to
fully determine the extent to which Quadrax Composites can be
successfully applied to the development and production of consumer
products. While management believes that Quadrax Composites are
functionally superior to other structural substrates for many
commercial applications, any failure of Quadrax Composites to
perform to standards anticipated by the Company would have a
material adverse affect on the Company's operations and financial
condition.
Although the Company has entered into several joint
development and exclusive manufacturing contracts to sell goods in
the consumer sporting goods market, the contracts are contingent on
the Company being able to meet contractual specifications in a
timely manner and there can be no assurance that the Company will
be able to do so in the future. A delay in the successful
development, completion or production of any of the Company's
sporting good products may result in the cancellation of existing
contracts and prevent the Company from entering into additional
contracts. This would have material adverse effect on the
Company's operations and financial condition.
In addition, selling Quadrax Composites and products
manufactured from Quadrax Composites to consumer and commercial
markets, the Company faces significant institutional resistance to
working with new materials and products and to investing in the re-
tooling needed to integrate these materials and products into
existing production and product lines. Successful entrance into
new markets will require substantial investments by the Company in
fabrication and marketing of Quadrax Composites and in the design,
development, fabrication and marketing of products manufactured
from Quadrax Composites. There can be no assurance that the
Company will be able to overcome such institutional resistance or
that it will have sufficient resources to make the necessary
investments in its new products.
Capital Requirements
The Company has not achieved profitability in any fiscal
quarter and has been required to raise substantial amounts of
capital in order to support its on-going development activities.
As the Company continues to focus on consumer markets and
progresses from the development of prototypes of products
manufactured from Quadrax Composites to the production of finished
goods, it will continue to be dependent on outside financing
sources.
From its incorporation in March 1986 through December 31,
1995, Quadrax raised a total of $37.9 million in equity capital.
The Company raised approximately $5.9 million of equity capital in
fiscal 1994 and an additional $7.3 million through sales of stock
and convertible debt during fiscal 1995. Management estimates that
its capital needs for the fiscal year 1996 will be between $2-10
million, subject to new product development programs, acquisitions,
and the expansion of sales and marketing programs. The Company is
seeking alternative sources of public and private equity financing
to meet its needs. While management believes that the funds raised
to date, together with cash provided by revenues, will be
sufficient to meet the Company's cash requirements for fiscal 1996,
there can be no assurance that such funds, if raised, will meet its
cash requirements. If the Company is unable to meet its cash
requirements, it may be required to defer for a period of time, or
indefinitely, the design, development, fabrication and marketing of
new products and the marketing of existing products and materials
in new markets.
In addition, the Company's capital requirements may increase
materially from those now planned depending on numerous factors,
including the level of its research and development expenses, the
rate of market acceptance of the Company's products, and the
success of the Company's sales, marketing and distribution
strategy. There can be no assurance that the Company will be
successful in raising such additional capital.
Limited Production and Sales Experience
Quadrax has limited experience producing Quadrax Composites
and fabricating finished products and components made from Quadrax
Composites. The Company has delivered significant quantities of
Quadrax Composites for evaluation and testing, but has completed
only one production contract to date, for a subcontractor to the
Department of the Navy, which it completed at a substantial loss.
Quadrax is currently performing several production contracts,
including one contract under which composite tape fabrication is
being performed at a third party's facility. While management
believes that significant technological barriers to full scale
production have been overcome, thee can be no assurance that
significant unforeseen difficulties will not be encountered at
commercial production levels.
Prior to 1994, Quadrax concentrated almost all its product
marketing and customer calling efforts on the sale of materials
within the defense contracting community. Efforts to move into
consumer applications were limited to attendance at trade shows
sponsored by various members of the plastics and advanced materials
industries. The Company currently has only a small sales and
marketing force. While initial efforts have been successful, there
can be no assurance that these successes can be duplicated and
expanded upon to the extent necessary for Quadrax to achieve a
profitable level of operation.
SEC Inquiry
The Company is involved in an ongoing, informal investigation
being conducted by the Staff of the Securities and Exchange
Commission. The following discussion is based on the information
learned by the Company as a result of its involvement in the
Commission's activities. There may be other significant
information regarding these matters of which the Company is, at
this time, not aware.
The inquiry, being conducted by the Commission's Denver
office, is believed to have as its principal focus, insofar as it
relates to the Company, activities by the Company's former Chairman
of the Board involving certain transactions in the Company's stock
and certain expenditures of Company funds, during his term as
Chairman, from July 1994 through February 1995.
The Company has cooperated fully with the inquiry described
above, providing documents and other information in response to the
Staff's requests. At this time, the Company does not know what
conclusions the Staff will reach or what action, if any, the Staff
will recommend to the Commission upon the termination of the
inquiry.
Competition
Quadrax Composites compete with conventional materials
(including wood, stone, steel and aluminum), less common metals
(such as titanium), and thermoset (epoxy-based) composites. While
Quadrax Composites offer several advantages over competing
materials, they are also more expensive. In addition, Quadrax
Composites also suffer from institutional resistance to working
with new materials and investing in the re-tooling needed to
integrate Quadrax Composites into existing product and production
lines.
The Company faces competition from three of the world's
largest multinational chemical companies-E.I. du Pont de Nemours &
Co., Imperial Chemical Industries PLC and Saint Gobain, S.A.-each
of which develops composite product offerings that may compete with
the Company's product offerings. In addition, the Company faces
potential competition from new companies as well as from
established companies that may migrate from related industries.
Many of the Company's current and prospective competitors,
including E.I. de Pont de Nemours & Co., Imperial Chemical
Industries PLC and Saint Gobain, S.A., have significantly greater
financial, manufacturing and marketing resources than the Company.
There can be no assurance that the Company's products will compete
effectively with products offered by established and new
competitors of the Company.
Competition in the sporting goods and athletic equipment
market is intense. The industry consists primarily of major
domestic and international companies that have financial,
technical, marketing, sales, manufacturing, distribution and other
resources substantially greater than those of the Company. Many of
the Company's competitors in this industry have entrenched market
positions and established trade names, trademarks and other
intellectual property rights. There can be no assurance that the
Company's competitors in this industry will not devote their
significantly greater financial, technical, marketing and other
resources to develop and market sporting goods and athletic
equipment more aggressively than the Company.
In general, management believes it can compete effectively by
offering products with superior performance characteristics to
products offered by other suppliers, at prices substantially
equivalent to those charged by other suppliers. The Company
believes that the success of its efforts will depend on a variety
of elements both within and outside its control, including the
success and timing of new product development and introduction by
the Company and its competitors, product performance and price,
distribution, and customer support. There can be no assurance that
the Company will be able to compete successfully with respect to
these factors. Although management believes that it has certain
technological advantages over its competitors, maintaining such
advantages will require continued investment by the Company in
design and development, sales and marketing, and customer service
and support. There can be no assurance that the Company will have
sufficient resources to make such investments or that the Company
will be able to make the technological advances necessary to
maintain its competitive advantages. In addition, as the Company
enters new markets, distribution channels, technical requirements
and levels and bases of competition may be different than those in
the Company's current markets and there can be no assurance that
the Company will be able to compete favorably.
Patents and Proprietary Technologies
The Company currently holds patents on its Quadrax Biaxial
Tape materials formats and on certain aspects of tennis racquets
manufactured from Quadrax aXial Tape. The Company either owns,
licenses or has applied for patents on certain aspects of the other
technology underlying the Company's products. The Company's
patents, patent rights and patent applications do not ensure a
competitive advantage to the Company, particularly inasmuch as
several of the patents are licensed on a non-exclusive basis. No
assurance can be given that any issued or licensed patents will not
be designed around, infringed or successfully challenged by others,
or that the Company will have sufficient resources to enforce any
proprietary protection afforded by its patents. Furthermore, there
can be no assurance that patents will issue with respect to any
pending patent application. Moreover, various of the Company's
actual and potential competitors have obtained patents and could
seek to enforce them against the Company. An infringement action,
if brought, would be costly to defend and there can be no assurance
that the Company would prevail. Failure to obtain or to be able to
enforce patent protection in favor of the Company, or failure to
defend successfully a patent infringement claim against the
Company, could have a material adverse effect on the Company's
business. In addition, despite the Company's precautions to the
contrary, there can be no assurance that the trade secrecy
protections which may be asserted by the Company to protect other
aspects of its intellectual property will not be breached or will
be enforceable.
Key Employees
The Company's success depends to a significant extent upon a
number of key management and technical personnel, including James
J. Palermo, the Company's Chief Executive Officer. Mr. Palermo has
signed an employment agreement with the Company that is effective
through December 1999. The loss of the services of a key employee
could have a material adverse effect on the Company's business and
financial condition. In addition, the Company's future success
will depend in part on its ability to attract and retain highly
skilled technical, managerial and marketing personnel. Competition
for such personnel is intense, and there can be no assurance that
the Company will be successful in hiring or retaining the personnel
it requires to continue to grow and operate profitably.
Potential Dilution
Quadrax has a complex capital structure that includes a number
of classes of outstanding warrants and options to purchase Common
Stock. If all of the warrants and options having exercise prices
less than the reported last sale price of the Common Stock on the
Nasdaq SmallCap Market on April 30, 1996 were to be exercised, an
aggregate of 1,648,039 shares of Common Stock would be issuable for
a total of $1,724,000, resulting in a reduction in the percentage
of voting rights and interest in profits represented by a share of
Common Stock.
In addition, the Company is authorized to issue up to a total
of 90,000,000 shares of Common Stock, of which fewer than
22,000,000 shares are outstanding as of the date hereof. Issuance
of a significant number of additional shares of Common Stock would
result in a substantial reduction in the percentage of voting
rights and interests in profits currently represented by a share of
Common Stock.
Technological Obsolescence
The structural composites market in which Quadrax competes is
characterized by rapid technological development. There can be no
assurance that Quadrax's products will not be rendered obsolete or
that Quadrax will be successful in developing new products to meet
changing market needs.
Product Liability
Sales of Quadrax Composites and parts manufactured therefrom
may expose the Company to liability for substantial damages in the
event of accident or injury shown to have been caused by defective
materials. Management believes that its limited product liability
insurance is currently adequate, but no assurance can be given that
such insurance is sufficient in scope and amount to cover any and
all damages that are incurred in the future. Further, the Company
expects that it will be necessary for the Company to increase its
product liability insurance coverage as shipments to commercial
markets increase, and there can be no assurance that such coverage
will be available or, if available, that it will be available on
terms that are economically acceptable to the Company.
Volatility of Stock Price; Depressive Effective of Future Sales of
Common Stock
The trading price of the Common Stock has been subject to wide
fluctuations for a number of reasons, including the financial
difficulties and subsequent cessation in 1991 of market-making
activities by its former principal market maker and changes in
control of the Company in 1994 and 1995. In addition, the stock
market has from time to time experienced extreme price and volume
fluctuations that particularly affected the market price for many
technology companies and that often have been unrelated to
operating performance of these companies. These broad market
fluctuations may adversely affect the market price of the Common
Stock. In addition, future sales by the Company of newly issued
Common Stock (or securities convertible into or exchangeable for
Common Stock) in the public market could place downward pressure on
the market price of the Common Stock.
Possible Delisting of Common Stock from Nasdaq SmallCap Market
The Common Stock is listed on the Nasdaq SmallCap Market.
Listing on the Nasdaq SmallCap Market permits a company's
securities to be quoted over the automated electronic quotation
system maintained by the National Association of Securities
Dealers, Inc., which makes current quotations of an issuer's
securities available to brokers and dealers nationwide. The
requirements for continued listing of common stock on the Nasdaq
SmallCap Market include (i) the presence of at least two registered
and active market makers for the stock, (ii) total assets of the
issuer of at lease $2,000,000, (iii) total capital and surplus of
the issuer of at least $1,000,000, (iv) a minimum bid price per
share of the stock of at least $1.00 (or, alternatively, $1,000,000
market value of public float and $2,000,000 in total capital and
surplus), (v) the existence of at least 300 record holders of the
stock, and (vi) the existence of at least 100,000 publicly-held
shares of the stock. The National Association of Securities
Dealers, Inc. also has discretionary power to delist companies for
other reasons in keeping with the integrity of the market system.
Although the Company believes it is currently in compliance with
each of these requirements with respect to the Common Stock, and
management is prepared to take steps to assure continued compliance
with the listing requirements for the Nasdaq SmallCap Market, no
assurance can be provided that management's efforts, if required,
would be successful or that the Common Stock will continue to be
listed on the Nasdaq SmallCap Market.
If the Common Stock were to be delisted from the Nasdaq
SmallCap Market, current information regarding the bid and asked
prices for the Common Stock would become less readily available to
brokers, dealers and their customers. As a result of the reduced
availability of current information, it is likely that there would
be a reduction in the liquidity of the market for the Common Stock
which could, in turn, result in decreased demand for the Common
Stock, a decrease in the price of the Common Stock, and an
increased spread between the bid and asked prices for the Common
Stock.
USE OF PROCEEDS
All proceeds from the sale of Shares offered hereby will be
received by the Selling Shareholders and not by the Company. To
the extent that any Shares represent unexercised options, the
Company will receive the exercise price thereof. Such proceeds, if
any, will be used for general corporate purposes.
SELLING SHAREHOLDERS
All of the Shares registered are to be offered for the account
of the following shareholders and their donees or pledgees (the
"Selling Shareholders"). The following sets forth certain
information with respect to the Selling Shareholders. The Company
has no knowledge of the intentions of any of the Selling
Shareholders to actually sell any of the shares listed under the
column "Shares to be Sold."
<TABLE>
<S> <C> <C> <C> <C>
Ownership Shares Ownership Percentage of
Prior to be After Class Owned
Selling Shareholder to Offering(1) Sold Offering After
Offering
James Palermo 740,000 430,000 310,000 1.38%
</TABLE>
(1) The column headed "Shares to be Sold" includes only shares
issued or issuable pursuant to options under the Company's
1993 Stock Plan registered by this Prospectus.
* Ownership is less than one percent of class.
PLAN OF DISTRIBUTION
Any or all of the Shares may be sold from time to time
directly to purchasers by the Selling Shareholders. The sale of
the Shares by the Selling Shareholders may be effected from time to
time in transactions (which may include block transactions) in the
NASDAQ market, in negotiated transactions, or a combination of such
methods of sale, at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling shares to or
through broker-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholder and/or the purchasers of
Shares for whom such broker-dealers may act as agent or to whom
they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary
commissions). Selling Shareholders may also make sales from time
to time pursuant to Rule 144 under the Securities Act, if such Rule
is otherwise available to such particular Selling Shareholder.
The Selling Shareholders and any broker-dealers that act in
connection with the sale of the Shares hereunder might be deemed to
be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any discounts, concessions or commissions
received by them and any profit on the resale of Shares as
principal might be deemed to be underwriting discounts and
commissions under the Securities Act.
At the time a particular offer of Shares is made, to the
extent required, a supplement to this Prospectus will be
distributed which will set forth the terms of the offering,
including the name or names of any underwriters, dealers or agents,
the purchase price paid by any underwriter for Shares purchased
from the Selling Shareholder and any discounts, concessions or
commissions and other items constituting compensation from the
Selling Shareholder and any discounts, concessions or commissions
allowed or reallowed or paid to dealers, including the proposed
selling price to the public.
The Company is paying certain expenses (other than commissions
and discounts of underwriters, dealers or agents) incident to the
offering and sale for the Shares to the public, which are estimated
to be approximately $5,000. If the Company is required to update
this Prospectus during such period, it may incur additional
expenses in excess of the amount estimated above.
In order to comply with certain states' securities laws, if
applicable, the Shares will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In certain
states the Shares may not be sold unless they have been registered
or qualify for sale in such state or an exemption from regulation
or qualification is available and is complied with.
DESCRIPTION OF SECURITIES
General
The Company is authorized to issue 90,000,000 shares of Common
Stock, $.000009 par value per share. As of April 1, 1996, there
were 21,737,842 shares of Common Stock issued and outstanding and
held as of record by approximately 1,469 holders.
The holders of the Common Stock have one vote for each share
held of record on all matters to be voted on by stockholders,
including the election of directors. Stockholders are not entitled
to cumulate their votes in the election of directors.
Holders of Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors out of funds
legally available therefor and upon liquidation of the Company, to
share ratably in the net assets available for distribution after
the payment of creditors and any liquidation preferences to the
holders of preferred stock. Shares of Common Stock are not
redeemable and have no preemptive, conversion or similar rights.
All outstadning shares of Common Stock are, and the Shares offered
hereby upon issuance and receipt of payment in full by the Company
will be, fully paid and non-assessable.
LEGAL MATTERS
The law firm of Campbell & Fleming, P.C., 250 Park Avenue, New
York, New York 10177 has acted as counsel for the Company in
connection with the validity of the Common Stock offered hereby.
EXPERTS
The consolidated financial statements of the Company appearing
in the Company's Annual Report (Form 10-KSB) for the year ended
December 31, 1995, have been audited by Livingston & Haynes, P.C.,
independent auditors, as set forth in its report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in
reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
No dealer, salesman or other person has been authorized to
give any information or to make any representation in connection
with this offering other than those contained in this Prospectus,
and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of these securities in any state to any
person to whom it is unlawful to make such offer or solicitation in
such state. The delivery of this Prospectus at any time does not
imply that information herein is correct as of any time subsequent
its date.
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . . . . . .. . 2
Incorporation of Certain Documents by Reference . . . . . . . . . .. . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . .. .13
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . .. .14
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . .. .14
Description of Securities. . . . . . . . . . . . . . . . . . . . . .. .16
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .. .16
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .16
Until July 5, 1996, all dealers effecting transactions in the
registered securities, whether or not participating in this
distribution, may be required to deliver a prospectus. This is in
addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments
or subscriptions.
581,949
Common Shares
QUADRAX CORPORATION
MAY __, 1996 PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by the Company with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1995.
(2) The Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1996.
(3) The description of the Company's Common Shares
which is contained in the registration statement on Form
8-A filed by the Company to register such securities
under Section 12(g) of the Securities Exchange Act of
1934, as amended, including any amendment or report filed
for the purpose of updating such description.
(4) The Company's Current Reports on Form 8-K dated
January 15, 1996 and March 15, 1996.
(5) The Company's Proxy Statement in connection with
the Annual Meeting of Stockholders held May 10, 1996.
(6) All documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the
termination of the Offering made hereby shall be deemed
to be incorporated by reference in this Prospectus and to
be a part hereof from the date of filing such documents.
Item 4. Not applicable.
Item 5. Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware (the
"GCL") authorizes and empowers the Company to indemnify the
directors, officers, employees and agents of the Company against
liabilities incurred in connection with, and related expenses
resulting from, any claim or suit brought against any such person
as a result of his relationship with the Company, provided that
such persons acted in accordance with a stated standard of conduct
in connection with the acts or events on which such claim, action
or suit is based. The finding of either civil or criminal
liability on the part of such persons in connection with such acts
or events in not necessarily determinative of the questions of
whether such persons have met the required standard of conduct and
are accordingly, entitled to be indemnified.
In addition, Section 10 of the Company's by-laws requires the
Company to indemnify its officers and directors to the fullest
extent permitted by the GCL, and permits the Company to indemnify
other persons as it chooses, to the same extent. Such indemnity
shall not extend to such persons, however, (i) for any breach of
the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for
actions contravening Section 174 of the GCL (relating to unlawful
dividend stock purchases or stock redemptions), or (iv) for any
transaction from which the director derived an improper personal
benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits
Exhibit No.
4.1 Relevant portion of Certificate of Incorporation of the
Company, as amended (1)
4.2 By-laws of the Company, as amended (2)
5.1 Opinion of Campbell & Fleming, P.C.
23.1 Consent of Livingston & Haynes, P.C.
23.2 Consent of Campbell & Fleming, P.C. (see Exhibit 5.1)
(1) Filed as an Exhibit to the Company's Quarterly Report on
Form 10-Q dated November 10, 1992, and incorporated
herein by reference.
(2) Filed as an Exhibit to the Company's Registration
Statement on Form S-1, File No. 33-14275 and incorporated
herein by reference.
Item 9. Undertakings.
The undersigned registrant hereby undertakes that it will:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of this
Registration Statement ( or the most recent post-
effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement
(or the most recent post-effective amendment
thereof); and notwithstanding the foregoing,
any increase or decrease in volume of securities
offered (if the total value of the securities
offered would not exceed that which was registered)
and any deviation from the low or high end of the
estimated maximum offering range may be reflected in
the form of prospects filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than
a 20% change in the maximum aggregate offering price
set forth in the Calculation of Registration
Fee table in the effective Registration Statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in this Registration Statement or any material
change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) shall not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of Exchange Act that are incorporated by reference
in this 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.
(e) 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 of expenses incurred or paid by a director, officer
or controlling person 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.
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 this post-
effective amendment to Form S-8 and has duly caused this post-
effective amendment to this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Portsmouth, Rhode Island.
QUADRAX CORPORATION
By:/S/JAMES J. PALERMO
James J. Palermo
Chairman of the Board of Directors,
and Chief Executive Officer
Date: May 28, 1996
Pursuant to the requirements of the Securities Act of 1933,
this post-effective amendment to this registration statement has
been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/S/JAMES J. PALERMO Chairman of the May 28, 1996
James J. Palermo Board of Directors,
and Chief
Executive Officer
(Principal Executive
Officer)
/S/EDWARD A. STOLTENBERG Senior Vice President May 28, 1996
Edward A. Stoltenberg and Chief Financial
Officer (Principal
Accounting and
Financial Officer)
/S/WILLIAM G. CONWAY Director May 28, 1996
William G. Conway
/S/SVEN KRAUMANIS Director May 28, 1996
Sven Kraumanis
/S/ALAN MILTON Director May 28, 1996
Alan Milton
/S/EUGENE L. SCOTT Director May 28, 1996
Eugene L. Scott
/S/GORDON WERNER Director May 28, 1996
Gordon Werner
June 6, 1996
Quadrax Corporation
300 High Point Avenue
Portsmouth, Rhode Island 02817
Re: Registration Statement on Form S-8
Quadrax Corporation
Ladies and Gentlemen:
We refer to the registration by the Company of up to 581,949
shares (the "Shares") of Common Stock (the "Common Stock") of
Quadrax Corporation, a Delaware corporation (the "Company"),
pursuant to the Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on or about August 2, 1995, File
No. 33-61515 (the "Registration Statement"), as amended by Post-
Effective Amendment No. 1 filed on or about June 6, 1996.
We have examined copies of said Registration Statement on Form
S-8 under the Securities Act of 1933, as amended. We have
conferred with officers of the Company and have examined the
originals, or photostatic, certified or conformed copies, of such
records of the Company, certificates of officers of the Company,
certificates of public officials, and such other documents as we
have deemed relevant and necessary, as a basis for the opinions set
forth herein. In connection with such examinations, we have
assumed the authenticity of all documents submitted to us as
originals or duplicate originals, the conformity to original
documents of all document copies, the authenticity of the
respective originals of such latter documents, and the correctness
and completeness of such certificates. Finally, we have obtained
from officers of the Company such assurances as we have considered
necessary for the purposes of this opinion.
Quadrax Corporation
June 6, 1995
Page 2
On the basis of the foregoing, and such other matters of fact
and questions of law as we have deemed relevant in the
circumstances, and in reliance thereon, it is our opinion that the
shares issuable upon the exercise of options authorized under the
Company's 1993 Stock Plan and registered by the Registration
Statement have been duly reserved for issuance, and upon exercise
in accordance with the terms of the individual option grants, the
shares issued will be duly authorized, validly issued, fully paid
and non-assessable.
The undersigned hereby consent to the use of their name in the
Registration Statement and in the Prospectus forming a part of the
Registration Statement, and to references to this opinion contained
therein under the caption of the Prospectus entitled "Legal
Matters".
This opinion is limited to the matters herein, and may not be
relied upon by any other person or for any other purpose other than
in connection with the corporate authority for and the validity of
the issuance of the Shares.
Very truly yours,
/S/CAMPBELL & FLEMING, P.C.
CAMPBELL & FLEMING, P.C.
INDEPENDENT AUDITORS' CONSENT
We consent to the inclusion by reference in this Registration Statement of
Quadrax Corporation on Form S-8 for the registration of 581,949 shares of its
common stock of our report dated March 26, 1996, (which contained an explanatory
paragraph with respect to the ability to continue as a going concern) referenced
in the Prospectus, which is part of such Registration Statement, and to the
reference to us under the captions "Experts" in such prospectus.
/S/LIVINGSTON & HAYNES, P.C.
Livingston & Haynes, P.C.
Wellesley Hills, Massachusetts
June 11, 1996
Consent of Campbell & Fleming, P.C.
See Exhibit 5.1
