<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                  FORM 10-QSB/A

                                 Amendment No. 1


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the period ended September 30, 1996

[ ]  Transition Report Pursuant to Section 13 or 15(d) of The Securities
     Exchange Act of 1934

For the transition period from                       to
                              ----------------------    ----------------------

                         Commission File Number: 0-16052

                               Quadrax Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                            05-0420158
-------------------------------                          ---------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                           Identification Number)

              300 High Point Avenue Portsmouth, Rhode Island 02871
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (401) 683-6600
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

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 preceding 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
                                       --  --

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Class                                   Outstanding at October 25, 1996
-----------------------                 -------------------------------
Common Stock, par value                 28,112,875 shares
$.000009 per share


<PAGE>   2

                               QUADRAX CORPORATION

                             INDEX TO FORM 10-QSB/A

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                              PAGE
<S>                                                                                        <C>
    Item 1       Condensed Consolidated Financial Statements

                 Condensed Consolidated Balance Sheets at September 30, 1996 and at
                 December 31, 1995                                                          3-4

                 Condensed Consolidated Statements of Operations for the
                 three and nine months ended September 30, 1996 and                         5
                 September 30, 1995

                 Condensed Consolidated Statements of Cash Flows for the nine months
                 ended September 30, 1996 and September 30, 1995                            6-7

                 Notes to Condensed Consolidated Financial Statements                       8-9

    Item 2       Management's Discussion and Analysis of Financial Condition and Results
                 of Operations                                                              10-15


PART II - OTHER INFORMATION


    Item 6       Exhibits and Reports on Form 8-K                                           16

          Signatures                                                                        17
</TABLE>

                                       2
<PAGE>   3

                             QUADRAX CORPORATION
                                      
                         CONSOLIDATED BALANCE SHEETS
                                 (UNAUDITED)
                                      
                                    ASSETS

<TABLE>
<CAPTION>

                                                                     SEPTEMBER 30,                DECEMBER 31,
                                                                         1996                         1995
                                                                 ----------------------       ---------------------
<S>                                                              <C>                           <C>
Current assets:
     Cash and cash equivalents, including $100,000 and
       $481,146 of restricted cash, respectively                         $     653,672                 $ 2,613,555
     Accounts receivable, net of allowances for doubtful
       accounts of $24,000                                                   1,161,336                   1,265,301
     Inventories                                                             1,755,050                   1,466,813
     Other current assets                                                      208,470                     134,197
                                                                 ----------------------       ---------------------
                                            TOTAL CURRENT ASSETS             3,778,528                   5,479,866
                                                                 ----------------------       ---------------------

Property and equipment, at cost:
     Machinery and equipment                                                 3,431,302                   3,319,881
     Office equipment                                                          900,224                     851,160
     Leasehold improvements                                                  1,087,482                   1,071,532
     Construction-in-progress                                                1,284,389                           0
                                                                 ----------------------       ---------------------
                                                                             6,703,397                   5,242,573
Less accumulated depreciation and amortization                               3,455,004                   3,000,093
                                                                 ----------------------       ---------------------
                                      NET PROPERTY AND EQUIPMENT             3,248,393                   2,242,480
                                                                 ----------------------       ---------------------

Goodwill, net of amortization of $5,927 at
     September 30, 1996                                                        112,626                     118,553

Other assets                                                                   289,626                     267,855

License agreement, net of amortization of $210,000
     and $120,000, respectively                                                390,000                     480,000

Deferred assets, net of amortization of $68,428 and  $61,912,
     respectively                                                              233,452                     211,498
                                                                 ======================       =====================
                                                    TOTAL ASSETS            $8,052,625                  $8,800,252
                                                                 ======================       =====================
</TABLE>

                            See accompanying notes.


                                       3
<PAGE>   4

                               QUADRAX CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                       SEPTEMBER 30,                DECEMBER 31,
                                                                           1996                         1995
                                                                   ----------------------       ---------------------
<S>                                                              <C>                           <C>
Current liabilities:
     Accounts payable                                                        $   986,602                 $   870,988
     Accrued expenses                                                          1,011,552                   1,200,779
     Notes payable to related party                                                    0                     300,000
     Notes payable                                                             1,017,362                   1,114,301
                                                                   ----------------------       ---------------------
                                         TOTAL CURRENT LIABILITIES             3,015,516                   3,486,068

Long-term debt, less current portion                                             397,443                     356,034

Convertible debentures payable                                                        0                    2,250,000
                                                                   ----------------------       ---------------------
                                                 TOTAL LIABILITIES             3,412,959                   6,092,102
                                                                   ----------------------       ---------------------
Stockholders' equity:
     Original convertible preferred stock                                                                          6
     Class A Series B convertible preferred stock                              2,334,000                           0
     Common stock                                                                    254                         160
     Additional paid-in capital                                               62,733,544                  57,179,364
     Retained earnings (deficit)                                             (58,269,216)                (53,088,602)
                                                                   -----------------------      ----------------------
                                                                               6,798,582                   4,090,928
Less:
     Treasury stock, at cost                                                  (1,091,969)                (1,043,009)
     Unearned compensation and deferred expenses                                (545,587)                  (339,769)
     Notes receivable for the exercise of stock options                        (521,360)                           0
                                                                   ----------------------       ---------------------
                                        TOTAL STOCKHOLDERS' EQUITY             4,639,666                   2,708,150

                                                                   ======================       =====================
                        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $8,052,625                  $8,800,252
                                                                   ======================       =====================
</TABLE>

                             See accompanying notes.


                                       4
<PAGE>   5

                               QUADRAX CORPORATION



                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                            FOR THE NINE MONTHS ENDED
                    SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995




   Supplemental schedule of significant noncash transactions:

   1996:

          The Company issued 6,355,976 shares of its common stock in exchange
          for the cancellation of $3,916,666 of its convertible debentures.

          The Company issued 217,026 shares of its common stock for payment in
          full for $160,854 of accrued liabilities and expenses.

          The Company acquired 90,308 shares of common stock for the Treasury
          via the exercise of stock options.

          The Company issued 300,000 shares of its common stock for consulting
          services.

          The Company issued 1,355,132 shares of its common stock in exchange
          for the cancellation of $1,166,000 of its Series B Convertible
          Preferred Stock.

          The Company issued 522,738 shares of its common stock to the former
          shareholders of McManis Sports Associates, Inc. in settlement of a
          claim relating to the sale to the Company of all of the issued and
          outstanding shares of Common Stock of McManis Sports Associates, Inc.
          in 1994.


   1995:

          The Company assumed $750,000 of debt due its former chairman from
          Conagher & Co., Inc. for Conagher's purchase of the original preferred
          stock.

          The Company issued 1,489,946 shares of its common stock in exchange
          for the cancellation of $1,500,000 of its Series A Convertible
          Preferred Stock.


                                       5
<PAGE>   6

                               QUADRAX CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

1.   The unaudited condensed consolidated financial statements presented herein
     have been prepared in accordance with the instructions to Form 10-Q and do
     not include all of the information and note disclosures required by
     generally accepted accounting principles. In the opinion of management,
     such condensed consolidated financial statements include all adjustments,
     consisting only of normal recurring adjustments, necessary to present
     fairly the Company's financial position as of September 30, 1996 and the
     results of operations for the nine months ended September 30, 1996 and
     September 30, 1995. The results of operations for the nine month period
     ended September 30, 1996 may not be indicative of the results that may be
     expected for the year ending December 31, 1996. It is suggested that these
     Condensed Consolidated Financial Statements be read in conjunction with the
     Consolidated Financial Statements and the notes thereto included in the
     Company's latest annual report to the Securities and Exchange Commission on
     Form 10-KSB for the year ended December 31, 1995.


2.   Debt

     Long-term debt consists of the following:
<TABLE>
<CAPTION>
                                                          September 30,                December 31,
                                                               1996                        1995
                                                        -------------------          -----------------
       <S>                                               <C>                         <C>       
       Note payable - bank                                      $  732,000                  $  801,000
       Notes payable - former Lion shareholders                    331,493                     331,634
       Equipment financing notes payable                           101,312                      87,701
       Other non-interest bearing note                             250,000                     250,000
                                                        -------------------          ------------------
                                                                 1,414,805                   1,470,335

       Less current maturities                                  (1,017,362)                 (1,114,301)
                                                        -------------------          -----------------
                                                                $  397,443                  $  356,034
                                                        ===================         ===================
</TABLE>
     Note Payable - Bank

     The Company's wholly-owned subsidiary, Lion Golf of Oregon, Inc., an Oregon
     corporation ("Lion Golf"), has a $1,000,000 revolving line of credit with
     its bank. The line of credit is secured by substantially all of Lion Golf's
     assets and is guaranteed by the Company and the former majority shareholder
     of Lion Golf. The note was renewed January 2, 1996 and bears interest at
     10.75% per annum. Loan advances are limited to 75% of "eligible accounts
     receivable" plus 45% of "eligible inventories" up to a maximum of $500,000,
     as such terms are defined under the line of credit. The Company's current
     outstanding balance due on the line of credit is approximately $732,000.
     The bank has indicated that this line of credit when it expires 


                                       6
<PAGE>   7

     on December 15, 1996 will not be renewed. The Company is currently
     exploring alternative financing arrangements for its Lion Golf subsidiary
     to replace the current banking arrangement.


                               QUADRAX CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


     Notes Payable - Lion Shareholders

     Lion Golf has three unsecured notes bearing interest at the rate of 8% per
     annum, payable to its former shareholders. These notes are subordinated to
     the bank credit line. The first of the notes, for the principal amount of
     $270,000, has annual principal payments of $54,000 commencing March 31,
     1997. These annual payments can be limited to the extent of Lion Golf's
     pretax profits as defined in the Purchase Agreement among the Company, Lion
     Golf, and Lion Golf's former shareholders dated December 29, 1995 (the
     "Purchase Agreement"). The second note for the principal amount of $50,200,
     has monthly principal payments of $2,400 until paid-in-full. The third note
     is a demand note in the principal amount of $10,500.


3.   Shareholders Equity

     The Company's capital shares are as follows:

     Original Convertible Preferred Stock, $0.01 par value, -0- shares
     authorized at September 30, 1996 and 1,172 shares authorized at December
     31, 1995. There were 318 shares of the Original Convertible Preferred Stock
     issued and outstanding at December 31, 1995. Subsequent to December 31,
     1995 all shares of Original Convertible Preferred Stock were converted into
     common stock which were then redeemed by the Company for a nominal
     consideration.

     Class A, Series B Convertible Preferred Stock, $0.01 par value, 7,000
     shares and -0- shares were authorized at September 30, 1996 and December
     31, 1995, respectively. There were 2,334 shares and -0- shares of Series B
     Convertible Preferred Stock issued and outstanding at September 30, 1996,
     and December 31, 1995, respectively.

     Common Stock, $.000009 par value, 90,000,000 shares were authorized at
     September 30, 1996 and December 31, 1995. 27,663,451 and 17,772,812 shares
     were outstanding at September 30, 1996 and December 31, 1995, respectively.


4.   Earnings Per Share

     For the fiscal quarters ending September 30, 1996 and September 30, 1995,
     the net loss per share was computed using the weighted number of average
     shares outstanding during the respective 


                                       7
<PAGE>   8

     periods. Common Stock equivalents did not enter into the computation
     because the impact would have been anti-dilutive.


                                       8
<PAGE>   9

       Item II



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain matters discussed in this
section and elsewhere in this Form 10-Q are forward-looking statements. These
forward-looking statements involve risks and uncertainties including, but not
limited to, economic conditions, product demand and industry capacity,
competition, and other risks.

     Competition. As the Company enters the sporting goods and recreational
equipment market, it faces competition from other materials used in the
manufacture of such goods and equipment, and from other suppliers of
thermoplastic composites. The Company's success in entering this market will
depend largely upon its ability to displace other materials currently in use. If
the Company is unsuccessful in creating a niche within the sporting goods and
recreational equipment market by convincing the market of the strategic benefits
of thermoplastic composites, the Company would be adversely affected. Many of
the companies whose product offerings compete with the Company's product
offerings have significantly greater financial, manufacturing and marketing
resources than the Company.

     Development of Distribution Channels. Success in the sporting goods and
recreational equipment market will also hinge on the Company's ability to
develop distribution channels, including both retailers and distributors, and
there can be no assurance that the Company will be able to effectively develop
such channels.

     Continued Investment. Maintaining the Company's technological and strategic
advantages over its competitors 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.

     Technological Advances. The Company's ability to maintain a competitive
edge by making technological advances ahead of its competition will have a
significant impact on the success of the Company.

     Outside Financing. The Company believes that it will need significant
outside financing over the next five years. There can be no assurance that it
will be able to obtain such financing.



Results of Operations for Quarter Ended September 30, 1996 as Compared to
Quarter Ended September 30, 1995

     The Company's net loss from operations for the quarter ended September 30,
1996 ("1996 third quarter") of $1,922,000 was approximately $2,196,000 less than
its net loss from operations of approximately $4,118,000 for the quarter ended
September 30, 1995 ("1995 third quarter").


                                       9
<PAGE>   10

     Total revenue recognized during the 1996 third quarter was $746,620
compared to $1,170,935 in the 1995 third quarter, a decrease of $424,315. An
increase in sales of approximately $236,000 for the 1996 third quarter for the
Company's Consumer Products Group, which includes Lion Golf, was more than
offset by a decline in sales for the Company's Advanced Materials Systems
division ("AMS") of approximately $684,000. The decrease in the AMS division
reflects the completion of the defense programs late in 1995 with no
corresponding increase in consumer product shipments in 1996. The AMS 1996 third
quarter sales are thermoplastic tape of approximately $78,000 and development
contract revenues of $45,000.

     Interest income increased by approximately $7,000 in the three months ended
September 30, 1996, as compared to the same period one year ago because of the
greater amount of money the Company had on deposit in interest bearing paper in
1996.

     Other income increased approximately $6,000 in the 1996 third quarter. The
primary reason for this increase is that the Company was the beneficiary of debt
forgiven in a financing transaction for the purchase of equipment.

     Cost of goods sold for the third quarter of 1996 of $918,666 increased
approximately $150,000 in the three months ended September 30, 1996 vis-a-vis
the three months ended September 30, 1995. The reasons for this increase are the
reduction in gross margins in 1996 due to the Company's change in revenue source
from defense related products to consumer oriented products, along with
inventory product write-downs at the Company's Lion Golf subsidiary.

     Research and development expenses were $114,657 in the 1996 third quarter,
which is approximately $101,000 lower than in the 1995 third quarter. The reason
for this decrease is the Company's significant downsizing of its research and
development program. The majority of the Company's remaining research and
development expenditures have been dedicated to the development of a production
facility for golf shafts in Vista, California by the Company's AMS Division.
These development costs were capitalized in the 1996 third quarter. Production
will not commence at this facility until the fourth quarter of 1996.

     Selling, general and administrative expenses decreased by approximately
$128,000 to $1,389,135 in the three months ended September 30, 1996 over the
comparable period a year ago. The primary reason for this decrease is that
advertising and trade show expenditures are down, particularly, in the golf
area.

     Depreciation and amortization expense increased by approximately $7,000 to
$191,017 in the third quarter of 1996, an insignificant fluctuation.

     Interest expense for the third quarter of 1996 increased from approximately
$3,500 to $54,906. This reflects the Company's 1996 subordinated debt along with
the financing costs associated with the financing leases which the Company
entered into during the past year. Lastly, interest on the Lion Golf line of
credit is reflected in the 1996 third quarter, which was not present in the 1995
third quarter.

     Expenses related to restructuring costs decreased $2,600,000 to $-0- in the
1996 third quarter. The Company established this reserve in 1995 after
evaluating the carrying value of its assets and determining that certain of its
intangibles, in particular goodwill associated with the acquisition of McManis
Sports Associates, were overvalued. In addition, the Company decided that it
would not use the services of various executives. The restructuring costs in the
1995 third quarter relate to the reserve for these costs.


                                       10
<PAGE>   11

Results of Operations for Nine Months Ended September 30, 1996 as compared to
Nine Months Ended September 30, 1995


     The Company's net loss from operations for the nine months ended September
30, 1996 ("1996 period") of $5,104,193 was approximately $1,932,000 less than
its net loss from operations of approximately $7,036,000 for the nine months
ended September 30, 1995 ("1995 period"). The decrease in net loss was caused by
the reduction in gross margins which has resulted from the change in the
Company's primary source of revenues from defense related products to consumer
oriented products in the 1996 period offset by a reserve for restructuring costs
in the 1995 period.

     Total revenue recognized during the 1996 period was $2,748,870 compared to
$3,489,360 in the 1995 period. This decrease of approximately $740,000 from the
1995 period resulted from the Company shipping approximately $1,947,000 in
product to its defense related customers in 1995, while in the 1996 period,
there were inconsequential defense related sales. This decline in defense
related sales was somewhat offset by an increase in consumer product sales of
$1,426,000 in the 1996 period.

     Interest income in the 1996 period was approximately $48,000, an increase
of $29,000 from the 1995 period, due to the Company having a greater amount of
money invested in interest bearing paper in 1996.

     Other income increased by approximately $50,000 in the 1996 period. This
increase resulted primarily from Lion Golf's settlement of a product trademark
dispute with another golf equipment manufacturer pursuant to which Lion Golf
received a lump-sum settlement of $40,000.

     Costs of goods sold increased approximately $165,000 in the 1996 period to
$2,691,328. The reason for this increase is the reduction in gross margins in
1996 due to the Company's change in revenue source from defense related products
to consumer oriented products.

     Research and development expenses were $373,268 in the 1996 period, a
decrease of approximately $54,000 as compared to the 1995 period. The reason for
this decrease is that a significant portion of the Company's product development
costs in 1996, particularly in the second and third quarters of 1996, have been
capitalized into the Vista, California golf shaft manufacturing facility.

     Selling, general and administrative expenses decreased by approximately
$304,000 from $4,351,460 to $4,046,958 in the 1996 period. This decrease is the
result of a decline in advertising and trade show expenditures for the Wimbledon
and McManis product lines.

     Depreciation and amortization expense decreased by approximately $46,000 to
$561,056 in the 1996 period, primarily due to the one-time write-off in the 1995
period of machinery and equipment no longer utilized by the Company.

     Interest expense for the 1996 period was $180,453, while in the 1995 period
it was $12,895, an increase of approximately $168,000. This increase was caused
by the Company's payment of interest on Lion Golf's working capital line of
credit in 1996, along with the interest paid on the Company's convertible
debentures.


                                       11
<PAGE>   12

     Expenses related to restructuring costs decreased $2,600,000 to $-0- in the
1996 period. The Company established this reserve in 1995 after evaluating the
carrying value of its assets and determining that certain of its intangibles, in
particular goodwill associated with the acquisition of McManis Sports
Associates, were overvalued. In addition, the Company decided that it would not
use the services of various executives. The restructuring costs in the 1995
period relate to the reserve for these costs.


Financial Position, Liquidity and Capital Resources

     At September 30, 1996, the Company had total assets of $8,052,625 and
stockholders' equity of $4,639,666. Current assets were $3,778,528 and current
liabilities were $3,015,516 resulting in working capital of approximately
$750,000 which is a decrease of approximately $1,200,000 from December 31, 1995,
when working capital was approximately $2 million. This decrease in working
capital resulted from the Company's continued losses from operations in the
first nine months of calendar 1996.

     Cash and cash equivalents decreased by approximately $1,960,000 from
$2,613.555 at December 31, 1995 to $653,672 at September 30, 1996. This decrease
is due to the Company's use of approximately $4,920,000 to fund its operations
and approximately $1,461,000 to prepare and equip its golf shaft manufacturing
facility in Vista, California and to purchase hockey stick manufacturing
equipment from Vega, U.S.A. These $6,381,000 in expenditures were partially
offset by the Company's raising of additional capital of approximately
$4,500,000 in the 1996 period.

     The Company's total accounts receivable, net of allowance for doubtful
accounts at September 30, 1996, were $1,161,336. Accounts receivable decreased
by approximately $104,000. The primary reasons for this decrease are that the
Company collected its trade receivables from its defense customers which were
outstanding at December 31, 1995, and the decline in revenues in 1996. $4,000 of
the $1,161,336 of accounts receivable is related to defense business. The
balance is related to commercial and consumer business. None of the defense
contracting receivables were considered past due, while $140,000 of the
commercial and consumer receivables could be considered doubtful. Of this past
due amount, approximately $110,000 relates to the Wimbledon tennis receivables,
with respect to which the Company was in litigation on November 15, 1996.
Subsequent to November 15, 1996, the Company settled this dispute which resulted
in an over accrual of $75,000 for Wimbledon related liabilities. The over
accrual will be classified as an allowance for doubtful accounts in periods
subsequent to September 30, 1996.

     Inventories increased by approximately $288,000. This increase is due to
the build-up of product for the Company's consumer sales. The Company's
inventory products write-down at September 30, 1996, for its Consumer
Products/Lion Golf Division was approximately $230,000. This write-down was
based on a physical inventory taken by the Company at September 30, 1996, along
with a review for obsolete products included in the inventory at that date.

     Other current assets increased by approximately $74,000 between September
30, 1996 and December 31, 1995. This increase was primarily caused by the
Company's renewal of various insurance policies as of September 30, 1996, and
the prepayment of the premium.

     Notes payable decreased by approximately $77,000. This reflects the
Company's decreased usage of its line of credit with the Bank of the Cascades.


                                       12
<PAGE>   13

     Accounts payable and accrued expenses decreased approximately $74,000 from
$2,072,000 at December 31, 1995. This decrease was caused by payments made to
trade vendors and to former employees in 1996. The employee payments were
charged against the reserve for restructuring costs accrued as of December 31,
1995.

     Notes payable to related parties decreased $300,000 to zero at September
30, 1996. The reason for this decrease is that the Company paid Richard Fisher,
its former chairman and chief executive officer, in full in February 1996
pursuant to the December 1995 settlement agreement.

     Long term debt increased approximately $41,000 to $397,443 at September 30,
1996. The reason for this increase is the new equipment financing leases the
Company entered into in 1996.


     Convertible debentures decreased to $-0- at September 30, 1996 from
$2,250,000 at December 31, 1995. This reflects the debenture holder's conversion
of its debentures to common stock during the nine months ended September 30,
1996.

     In the first nine months of fiscal 1996, capital expenditures were
approximately $1,511,000. These capital expenditures are an integral part of the
Company's program to construct a golf shaft manufacturing line, a thermoplastic
tape manufacturing line, and a hockey stick manufacturing line. These equipment
acquisitions are expected to be paid for through equipment leasing programs and
from funds raised through the placement of the Company's securities.

     The Company generated revenues of approximately $2,750,000 in the first
nine months of fiscal 1996, and as a result, operations were not a source of
funds or liquidity for the Company. The Company continues to depend on outside
financing for the cash required to fund its operations. Net funds provided by
financing activities in the first nine months of fiscal 1996, after giving
effect to the repayment of debt, totaled approximately $4,500,000 during the
period ended September 30, 1996.

     The Company believes that funds provided by operations and cash on hand
(approximately $650,000 at September 30, 1996), will be sufficient to meet the
Company's near-term cash requirements. In addition, the Company believes that it
will be able to raise additional monies from the sale of convertible securities
prior to the end of fiscal 1996 and during fiscal 1997 of at least $5,000,000.
There can be no assurance, however, that the Company will be able to raise
additional funds, and that even if raised, that such funds will be sufficient to
satisfy the Company's cash requirements for the remainder of 1996 and 1997.

     The Company received a going concern qualification from its outside
independent auditors on its fiscal 1995 audited financial statements. While the
Company believes it has made and will continue to make substantial progress
towards achieving profitability, the results to date have not yet been
sufficient to negate the auditors' qualifications. During this transition,
management continues to redirect the Company's focus from the defense related
products to consumer oriented products. Management believes that the Company
will be able to continue to raise money from outside third parties in sufficient
amounts to support its operations until such time as which the Company's
consumer product programs generate sufficient revenues. There can be no
assurance, however, that the Company will be able to raise additional funds from
third parties, or even that if raised, such funds will be sufficient to fund the
Company's product programs until such programs are able to generate enough
revenue to support themselves. 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, 

                                       13
<PAGE>   14

fabrication and marketing of new products and the marketing of existing products
and materials in new markets.

     The Company believes that it can achieve viability and profitability by
continuing to expand sales of consumer sporting goods products, as well as other
products that employ its thermoplastic materials. Management believes that the
Company's acquisition of Lion Golf in late 1995 will further this strategy
because of Lion Golf's manufacturing expertise and access to new distribution
channels, such as golf and tennis pro shops. Management also expects sales of
composite based lacrosse sticks and continuing efforts to develop and market
other consumer products should contribute to the Company's viability and
profitability. There can be no assurances that the Company's transition to
consumer oriented products will succeed to the extent necessary to make the
Company profitable. Nor can there be any assurances that Lion Golf's
manufacturing expertise and access to distribution channels will be sufficient
for the Company to overcome institutional resistance to the use of thermoplastic
composite materials in sporting equipment products, or to the intense
competition in this field.

     There is no assurance that the Company's efforts to achieve viability and
profitability or to raise money will be successful or that the forecasts will be
achieved. It is difficult for the Company to predict with accuracy the point at
which the Company will be viable and profitable or whether it can achieve
viability or profitability at all, due to the difficulty of predicting
accurately the amount of revenues that the Company will generate, the amount of
expenses that will be required by its operations, and the Company's ability to
raise additional capital.


                                       14
<PAGE>   15

                               QUADRAX CORPORATION

PART II - OTHER INFORMATION



       Item 6 - Exhibits and Reports on Form 8-K

              (a)  Exhibits

                   None since Form 10-KSB for fiscal year ended December 31, 
                   1995 was filed on April 12, 1996.


                   27.1       Financial Data Schedule
                             (Electronic Filing Only)



              (b)  Reports on Form 8-K

                   The following Current Reports on Form 8-K were filed with
                   the Securities and Exchange Commission since August 14,
                   1996, the date the Company's Form 10-QSB for the quarter
                   ending June 30, 1996 was filed.

                   -    On September 10, 1996, the Company filed a Form
                        8-K with respect to its press release
                        announcing that it had signed a contract with Taylor
                        Made Golf Company to develop new golf products made
                        with Quadrax's thermoplastic composite materials.


                   -    On October 4, 1996, the Company filed a Form 8-K
                        with respect to its press release announcing a
                        reduction in the exercise price of its Class C Warrants
                        from $4.53 to $3.33 and an increase in the number of
                        shares of the Company's common stock purchasable upon
                        the exercise of each Class C Warrant, from 3.18 to
                        4.3262 shares.


                                       15
<PAGE>   16

                               QUADRAX CORPORATION



                                   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
                                        -------------------
                                           (Registrant)






     February 3, 1997                  /s/ James J. Palermo
----------------------------------      --------------------------------------
      (Date)                            James J. Palermo, Chairman and
                                        Chief Executive Officer



     February 3, 1997                  /s/ Edward A. Stoltenberg
----------------------------------      --------------------------------------
      (Date)                            Edward A. Stoltenberg,  Senior Vice
                                        President, and Chief Financial Officer
                                        (Principal Accounting Officer)



                                       16