SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A - Number 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act Of 1934
Date of Report (Date of Earliest Event Reported) May 31, 1997
QUADRAX CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16052 05-0420158
(State or Other (Commission File Number (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
300 High Point Avenue, Portsmouth, RI 02871
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (401) 683-6600
Item 2. Acquisition or Disposition of Assets.
On June 4, 1997, Quadrax Corporation (the"Company") completed its
disposition of Lion Golf of Oregon, Inc., an Oregon corporation ("Lion
Golf"), pursuant to the terms of an Agreement for the sale of common
stock dated as of May 31, 1997.
Pursuant to the Lion Golf Stock Disposition Agreement, the Company
sold all of the outstanding stock of Lion Golf of Oregon, Inc. and
McManis Sports Associates, Inc. to Lion Golf's former principal
stockholder, Robert K. Cole. In connection therewith Mr. Robert Cole
and Lion Golf assumed the responsibility for approximately $1,200,000
of Lion Golf's indebtedness including the Bank of Cascades accounts
receivable/inventory working capital line with Lion Golf which had an
outstanding balance due of $449,838 at May 31, 1997. As additional
consideration, the Company's unrecorded unsecured promissory note
payable to Mr. Cole was canceled along with the Company's five year
employment agreements with Mr. Robert K. Cole as Chief Executive
Officer of Lion Golf and Mr. James Cole as President of Lion Golf and
the Company and Mr. Robert K. Cole agreed to mutual general releases.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not Required
(b) Pro Forma Financial Information.
On June 4, 1997, the Company completed its disposition of Lion Golf
of Oregon, Inc., an Oregon Corporation ("Lion Golf"), pursuant to
the terms of an Agreement for the sale of common stock as of May
31, 1997.
Attached as Appendix A is the Company's Unaudited Pro-Forma
Condensed Consolidated Balance Sheet as of March 31, 1997,
along with the related Unaudited Pro-Forma Condensed Consolidated
Statement of Operations for the three months ending March 31, 1997.
Attached as Appendix B is the Company's Unaudited Pro-Forma
Condensed Consolidated Statement of Operations for the year ended
December 31, 1996.
(c) Exhibits.
2.1 Stock Disposition Agreement dated May 31, 1997 between
Robert K Cole, the Chief Executive Officer of Lion Golf
of Oregon,Inc. and the Company.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Quadrax Corporation, a Delaware Corporation
December 22, 1997 By: /s/ James J. Palermo
---------------------- -------------------------
(Date) James J. Palermo, Chairman and
Chief Executive Officer
December 22, 1997 By: /s/ Brooks R. Herrick
----------------------- ---------------------------
(Date) Brooks R. Herrick, Executive
Vice President - Chief Financial
Officer and Principal Accounting Officer
--------------------------------------------------------------------
Appendix A
The Company's Unaudited Pro-Forma Condensed Consolidated Balance Sheet
as of March 31, 1997, along with the related Unaudited Pro-Forma Condensed
Consolidated Statement of Operations for the three months ending March 31,
1997.
---------------------------------------------------------------------
Quadrax Corporation
Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 1997
(Unaudited)
----------------------------------------------
As Pro-forma Disposition Pro-forma
Reported of Lion Golf March 31, 1997
------------ ------------------ ---------------
Cash $ 2,523,697 $ 2,523,697
Accounts receivable 913,797 (573,229) (1) 340,568
Inventories 1,372,491 (729,530) (1) 642,961
Other current assets 127,091 (20,625) (1) 106,466
----------- ------------- -----------
Total current assets 4,937,076 (1,323,384) 3,613,692
Property and equipment, cost:
Machinery & equipment 4,631,029 (19,906) (1) 4,611,123
Office equipment 919,245 (52,839) (1) 866,406
Leasehold improvements 1,090,087 (32,472) (1) 1,057,615
----------- ------------- ----------
6,640,361 (105,217) (1) 6,535,144
Less accumulated depreciation
& amortization (3,661,723) 40,004 (1) (3,621,719)
----------- ------------- -----------
Property and equipment, net 2,978,638 (65,213) (1) 2,913,425
Goodwill 108,630 (108,630) (1) -
Other assets 284,545 89,474 (1) 374,019
Deferred assets 229,472 - 229,472
--------- ------------- ----------
Total assets $ 8,538,361 $ (1,407,753) $ 7,130,608
============ ============ ===========
Notes payable, bank
working capital lines $ 836,863 $ (607,862) (1) $ 229,001
Accounts payable-trade & other 914,212 (261,714) (1) 652,498
Accrued expenses 891,905 (65,653) (1) 826,252
------------ ------------ ------------
Total current liabilities 2,642,980 (935,229) 1,707,751
Long-term debt 318,330 (275,538) (1) 42,792
Convertible debentures payable 3,960,000 - 3,960,000
------------ ------------- ------------
Total liabilities 6,921,310 (1,210,767) 5,710,543
Stockholders' Equity
Common & preferred stock 313 - 313
Additional paid-in capital 69,181,603 - 69,181,603
Retained earnings (deficit) (65,288,745) - (65,288,745)
Pro-forma loss on Lion Golf
Disposition (196,986) (1) (196,986)
Treasury stock and
deferred charges (2,276,120) - (2,276,120)
------------- ----------- --------------
Total stockholders' equity 1,617,051 (196,986) 1,420,065
------------- ----------- --------------
Total liabilities & equity $ 8,538,361 $ (1,407,753) $ 7,130,608
============ ============ ==============
Appendix A The accompanying notes are an integral part of this
Page 1 of 3 pro-forma condensed consolidated balance sheet.
-----------------------------------------------------------------------
Quadrax Corporation
Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended March 31, 1997
(Unaudited)
-------------------------------------------
As Pro-Forma Pro-Forma
Reported Lion Golf Adjustments March 31, 1997
---------- ----------- ------------ --------------
Net Sales $ 625,254 $ 422,223 $ - $ 203,031
Cost of Goods Sold 663,185 329,298 - 333,887
----------- ----------- ------------ --------------
Gross profit (37,931) 92,925 - (130,856)
----------- ----------- ------------ --------------
Operating Expenses:
Research and development 208,056 - 208,056
Selling, general and
administrative 1,287,316 200,599 2,020 (2) 1,084,697
----------- ---------- ----------- ---------------
Loss from operations (1,533,303) (107,674) (2,020) (1,423,609)
Other Income (Expense):
Interest expense (21,930) (15,483) - (6,447)
Interest income 24,247 - - 24,247
Other, net - - - -
----------- ----------- ----------- ---------------
Net (loss) $(1,530,986) $(123,157) $ 2,020) $ (1,405,809)
============ =========== ============ ===============
(/TABLE)
Appendix A The accompanying notes are an integral part of this
Page 2 of3 pro-forma condensed consolidated statement of operations.
----------------------------------------------------------------------------
Quadrax Corporation
Notes to the Pro-Forma Condensed Consolidated Balance Sheet
as of March 31, 1997 and Pro-Forma Condensed Consoldiated
Statement of Operations for the Three Months Ended March 31, 1997
------------------------------------------------------------
The pro-forma condensed consolidated balance sheet reflects
the pro-forma adjustments as if the disposition of Lion Golf occurred
on March 31, 1997. The pro-forma condensed statement of operations
for the three months ended March 31, 1997, represents the pro-forma
effects on the historical operating results as if the disposition
of Lion Golf occurred as of January 1, 1997.
The pro-forma adjustments include:
(1) the pro-forma disposition of certain assets and liabilities
of Lion Golf and the write-off of the remaining net goodwill
as of March 31, 1997.
(2) the related goodwill amortization expense charged to operations
during the three months ended March 31, 1997.
Appendix A
Page 3 of 3
--------------------------------------------------------------------------
Appendix B
The Company's Unaudited Pro-Forma Condensed Consolidated
Statement of Operations for the year ended
December 31, 1996.
-------------------------------------------------------------------------
Quadrax Corporation
Pro Forma Condensed Consolidated Statement of Operations
For the Three Year-Ended December 31, 1996
(Unaudited)
As Pro-Forma Pro-Forma
Reported Lion Golf Adjustments December 31, 1996
------------- -------------- ------------ -----------------
Net Sales $ 3,207,282 $ 2,601,387 $ - $ 605,895
Cost of Goods Sold 3,674,034 2,349,490 - 1,324,544
------------ ------------- ------------ ----------------
Gross profit (466,752) 251,897 - (718,649)
------------ ------------- ------------ ----------------
Operating Expenses:
Research and Development 503,388 - - 503,388
Selling, general and
administrative 5,743,939 1,309,500 7,903 (1) 4,426,536
------------ ------------- ------------ --------------
Loss from operations (6,714,079) (1,057,603) ( 7,903) (5,648,573)
Other Income (Expense):
Interest expense (1,880,774) (108,098) (300,500) (2) (1,472,176)
Interest income 69,637 - - 69,637
Other, net 290,648 265,000 - 25,648
Restructuring costs (1,325,000) - - (1,325,000)
-------------- -------------- ------------ -------------- Net (loss)
$ (9,559,568) $ (900,701) $ (308,403) $ (8,350,464)
Appendix B The accompanying notes are an integral part of this
Page 1 of 2 pro-forma condensed consolidated statement of operations
-------------------------------------------------------------------------
Quadrax Corporation
Notes to the Pro-Forma Condensed Statement of Operations
for the Year Ended December 31, 1996
The pro-forma statement of operations for the year ended
December 31, 1996, represents the pro-forma effects on the historical
combined operating results as if the disposition of Lion Golf
occurred as of January 1, 1996.
The pro-forma adjustments include:
(1) the reversal of the related goodwill amortization expense
charged to operations during the year ended December 31, 1996.
(2) the reversal of imputed interest expense incurred as a result
of funding Lion Golf operating losses during the year ended
December 31, 1996.
Appendix B
Page 2 of 2