Here is a rather lengthy excerpt from quadrax sec filing on 11-27 concerning convertible debentures regulation s shares. If you read Barrons on 1-6-97 page 17 "Pirates Play" you will see that these are definitely reg s conv. deb. offerings. It does make you wonder what is really going on? I suppose there are legitimate conv deb. out there lets hope that qdrx is one of them. Who knows? Not me, but someone does. I put asterisks in front of the parts I found most interesting. HERE IT IS ----------
The distribution of the Selling Shareholder Shares may be
effected from time to time in one or more transactions. Any of
the Selling Shareholder Shares may be offered for sale, from time
to time, by the Selling Shareholders, or by permitted transferees
or successors of the Selling Shareholders, on the NASDAQ SmallCap
Market, or otherwise, at prices and on terms then obtainable, at
fixed prices, at prices then prevailing at the time of sale, at
prices related to such prevailing prices, or in negotiated
transactions at negotiated prices or otherwise. The Selling
Shareholder Shares offered hereby may be sold by one or more of
the following: (i) through underwriters, or through underwriting
syndicates; (ii) through one or more dealers or agents (which may
include one or more underwriters), including, but not limited to:
(a) block trades in which the broker or dealer block as principal
to facilitate the transactions; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage
transactions; and (d) transactions in which the broker solicits
purchasers; (iii) directly to one or more purchasers; or (iv) a
combination of these methods. The names of any underwriters or
agents involved in the sale of the Selling Shareholder Shares
will be set forth in a Prospectus Supplement. ****** In connection with the distribution of the Selling Shareholder Shares or otherwise,
the Selling Shareholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection
with such transactions, broker-dealers or other financial
institutions may engage in short sales of Common Stock in the
course of hedging the positions they assume with the Selling
Shareholders. The Selling Shareholders may also sell Common
Stock short and redeliver the shares to close out such short
positions.******* The Selling Shareholders may also enter into options
or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealers or
other financial institutions of the Selling Shareholder Shares,
which shares such broker-dealers or financial institutions may
resell pursuant to this Prospectus (as supplemented or amended to
reflect this transaction). The Selling Shareholders may also
pledge the Selling Shareholder Shares registered hereunder to a
broker-dealer or other financial institution and, upon a default,
such broker-dealer or other financial institution may effect
sales of the pledged shares pursuant to this Prospectus (as
supplemented or amended to reflect such transaction). In
addition, any Selling Shareholder Shares covered by this
Prospectus that qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than pursuant to
this Prospectus.
The Selling Shareholders or its underwriters, dealers or
agents may sell the Selling Shareholder Shares to or through
underwriters, dealers or agents, and such underwriters, dealers
or agents may receive compensation in the form of discounts or
concessions allowed or reallowed. Underwriters, dealers, brokers
or other agents engaged by the Selling Shareholders may arrange
for other such persons to participate. Any fixed public offering
price and any discounts and concessions may be changed from time
to time. Underwriters, dealers and agents who participate in the
distribution of the Selling Shareholder Shares may be deemed to
be underwriters within the meaning of the Securities Act, and any
discounts or commissions received by them or any profit on the
resale of shares by them may be deemed to be underwriting
discounts and commissions thereunder. The proposed amounts of
Selling Shareholder Shares, if any, to be purchased by
underwriters and the compensation, if any, of underwriters,
dealers or agents will be set forth in a Prospectus Supplement.
Unless granted an exemption by the Commission from Rule 10b-
6 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or unless otherwise permitted under
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Rule 10b-6A, the Selling Shareholders will not engage in any
stabilization activity in connection with the Company's
securities, will furnish each broker or dealer engaged by the
Selling Shareholders and each other participating broker or
dealer the number of copies of this Prospectus required by such
broker or dealer, and will not bid for or purchase any securities
of the Company or attempt to induce any person to purchase any of
the Company's securities other than as permitted under the
Exchange Act. Selling Shareholders who may be "affiliated
purchasers" of the Company as defined in Rule 10b-6 have been
advised that pursuant to Exchange Act Release 34-23611 (September
11, 1986), they must coordinate their sales under this Prospectus
with each other and the Company for purposes of Rule 10b-6.
The Company will not receive any proceeds from any sales of
the Selling Shareholder Shares, but will receive the proceeds
from the exercise of the Class C Warrants and from the exercise
of the other warrants held by the Selling Shareholders, which
proceeds, if any, will be used for general corporate purposes.
In connection with the registration by the Company, the
Company shall use its best efforts to prepare and file with the
Commission such amendments and supplements to the registration
statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to
the disposition of the Shares covered by the registration
statement for the period required to effect the distribution of
such Shares.
The Company is paying certain expenses (other than
commissions and discounts of underwriters, dealers or agents)
incident to the offering and sale of the Shares to the public,
which are estimated to be approximately $50,950. 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
registration or qualification is available and is complied with.
DESCRIPTION OF SECURITIES
The Company is authorized to issue 90,000,000 shares of
Common Stock, $0.000009 par value per share. As of October 25,
1996, there were 28,112,875 shares of Common Stock issued and
outstanding and held of record by approximately 1,500 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
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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 outstanding
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.
******* The Company is authorized to issue 10,000,000 shares of
Class A Preferred Stock, par value $.01 per share. 7,000 of
these shares are designated "Series B Convertible Preferred
Stock" ("Series B"). Each share of Series B ("Series B Share")
is convertible into an amount of shares of Common Stock equal to
the "Stated Value" of such share of Series B, which is $1,000,
divided by (i) the average bid prices of the Common Stock (the
"Average Closing Price"), as reported by the Nasdaq SmallCap
Market or NASDAQ Electronic Bulletin Board during the period of
five trading days immediately preceding the date of conversion
(the "Conversion Date"), discounted by 25 percent (the
"Conversion Price").****** As an example, if the Average Closing Bid
Price on the Conversion Date is $2.00 and 3,500 Series B Shares
are being converted, the Stated Value for which is $3,500,000,
then the Conversion Price would be $1.50 per share of Common
Stock ($2.00 x .75), and the 3,500 Series B Shares would be
convertible into 2,333,333 shares of Common Stock ($3,500,000
divided by $1.50 equals 2,333,333). |
