SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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SONO-TEK CORPORATION
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(Name of Registrant as Specified in its Charter)
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SONO-TEK CORPORATION
2012 Route 9W
Milton, New York 12547
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
AUGUST 18, 2005
The 2005 Annual Meeting of Shareholders of Sono-Tek Corporation (the "Company")
will be held at the Inn at Buttermilk Falls, 220 North Road, Milton, New York
12547 on August 18, 2005 at 10:00 a.m., local time, for the following purposes:
1. To elect three (3) Directors of the Company to serve until the 2007
Annual Meeting of Shareholders of the Company and one (1) Director
of the Company to serve until the 2006 Annual Meeting of
Shareholders of the Company.
2. To ratify the appointment of Sherb & Co., LLP as the Company's
independent auditors for the fiscal year ending February 28, 2006.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on June 24, 2005 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting or any adjournments thereof. A list of shareholders
entitled to vote will be available for examination by interested shareholders at
the offices of the Company, 2012 Route 9W, Milton, New York 12547 during
ordinary business hours until the meeting.
Claudine Y. Corda, Secretary
Dated: July 15, 2005
YOUR VOTE IS IMPORTANT. EVEN IF YOU DESIRE TO ABSTAIN,
PLEASE SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
POSTAGE PAID ENVELOPE.
SONO-TEK CORPORATION
2012 Route 9W
Milton, New York 12547
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 18, 2005
The accompanying proxy is solicited by the Board of Directors of SONO-TEK
CORPORATION, a New York corporation (the "Company"), for use at the 2005 Annual
Meeting of Shareholders of the Company to be held on August 18, 2005.
All proxies that are properly completed, signed and returned to the Company
prior to the Annual Meeting, and which have not been revoked, will be voted in
accordance with the shareholder's instructions contained in such proxy. In the
absence of contrary instructions, shares represented by such proxy will be voted
(i) FOR approval of the election of each of the individuals nominated as
Directors set forth herein and (ii) FOR the ratification of the appointment of
Sherb & Co., LLP as the Company's auditors for the fiscal year ending February
28, 2006. A shareholder may revoke his or her proxy at any time before it is
exercised by filing with the Secretary of the Company at its offices in Milton,
New York either a written notice of revocation or a duly executed proxy bearing
a later date, or by appearing in person at the 2005 Annual Meeting and
expressing a desire to vote his or her shares in person. All costs of this
solicitation are to be borne by the Company.
Abstentions will be treated as shares present and entitled to vote for quorum
purposes but as not voted for purposes of determining the approval of any
matters submitted to the shareholders for a vote. Except as otherwise provided
by law or by the Company's certificate of incorporation or bylaws, abstentions
will not be counted in determining whether a matter has received a majority of
votes cast. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to that matter. Broker non-votes are not counted for quorum purposes.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Shareholders, the Proxy, and the 2005 Annual Report to Shareholders are intended
to be mailed on or about July 15, 2005 to shareholders of record at the close of
business on June 24, 2005. At said record date, the Company had 11,045,777
outstanding shares of common stock.
ITEM 1. ELECTION OF DIRECTORS
The Board of Directors is divided into two classes. Except as provided below,
the Directors in each class are to serve for a term of two years, and until
their respective successors are duly elected and qualify. Three (3) Directors
will be elected at the Annual Meeting by plurality vote to hold office until the
Company's 2007 Annual Meeting of Shareholders and until their successors shall
be duly elected and shall qualify and one (1) Director will be elected at the
Annual Meeting by plurality vote to hold office until the Company's 2006 Annual
Meeting of Shareholders and until his successor shall be duly elected and shall
qualify.
Management intends to vote the accompanying Proxy FOR election as Directors of
the Company, the nominees named below, unless the Proxy contains contrary
instructions. Proxies that direct the Proxy holders to withhold voting in the
matter of electing Directors will not be voted as set forth above. Proxies
cannot be voted for a greater number of persons than the number of nominees
named in the Proxy Statement. On all matters that may properly come before the
2005 Annual Meeting, each share has one vote. Management has no reason to
believe that any of the nominees will not be a candidate or will be unable to
serve. However, in the event that any of the nominees should become unable or
unwilling to serve as a Director, the Proxy will be voted for the election of
such person or persons as shall be designated by the Directors.
NOMINEES FOR DIRECTORS
Nominees for election to term expiring 2007
The following three (3) persons are nominated for election as Directors of the
Company to hold office until the Company's 2007 Annual Meeting of Shareholders.
DR. HARVEY L. BERGER, 66, was appointed Chief Technologist in April 2001 and
Chief Technology Officer in August 2004 and has been a Director of the Company
since June 1975. He was President of the Company from November 1981 to September
1984 and from September 1985 until April 2001. From September 1986 to September
1988, he also served as Treasurer. He was Vice Chairman of the Company from
March 1981 to September 1985. Dr. Berger holds a Ph.D. in physics from
Rensselaer Polytechnic Institute and is a member of the Marist College Advisory
Board.
DR. CHRISTOPHER L. COCCIO, 64, was appointed President and Chief Executive
Officer of the Company on April 30, 2001 and has been a Director of the Company
since June 1998. From 1964 to 1996, he held various engineering, sales,
marketing and management positions at General Electric Company, with P&L
responsibilities for up to $100 million in sales and 500 people throughout the
United States. His business experience includes both domestic and international
markets and customers. He founded a management consulting business in 1996, and
worked with the New York State Assembly's Legislative Commission on Science and
Technology from 1996 to 1998. From 1998 to 2001, he worked with Accumetrics
Associates, Inc., a manufacturer of digital wireless telemetry systems, as Vice
President of Business Development and member of the Board of Advisors. Mr.
Coccio received a B.S.M.E. from Stevens Institute of Technology, a M.S.M.E. from
the University of Colorado, and a Ph.D. from Rensselaer Polytechnic Institute in
Chemical Engineering.
PHILIP STRASBURG, CPA, 66, has been a Director since August 2004. He is a
retired partner from the firm of Anchin Block and Anchin, LLP and has 40 years
of experience in auditing. He served as Audit Committee Chairman from August
2004 until February 2005, when he was elected Treasurer. In June 2005 he
resigned as Treasurer and resumed his duties as Audit Committee Chairman. He was
the lead partner on the Sono-Tek account from Fiscal 1994 to Fiscal 1996. Mr.
Strasburg is a certified public accountant in New York State. He has a Master of
Science in economics from The London School of Economics and Political Science
and a Bachelors of Science degree from Lehigh University, where he majored in
business administration. He is a member of the Board of Directors of the
Westchester Public/Private Partnership for Aging Services.
Nominee for election to term expiring 2006
The following person is nominated for election as a Director of the Company to
hold office until the Company's 2006 Annual Meeting of Shareholders.
EDWARD J. HANDLER, III, Esq, 68, is a retired partner in the law firm of Kenyon
& Kenyon, one of the Company's intellectual property counsels and became a
Director of the Company on October 1, 2004, coincident with his retirement from
his law firm. Mr. Handler has 40 years experience in all aspects of intellectual
property, including patents, trade secrets, trademarks and copyrights, including
litigation and other adversarial proceedings. He is a member of a number of
intellectual property Bar Associations and general Bar Associations. Mr. Handler
is past President of the West Point Society of New York and a past Trustee of
the Association of Graduates, U.S. Military Academy. He holds a J.D. degree from
the University of Virginia Law School in 1964 and a B.S. in Engineering Science
from the United States Military Academy in 1960.
DIRECTORS CONTINUING AS DIRECTORS
DR. DONALD F. MOWBRAY, 67, has been a Director since August 2003. He has been an
independent consultant since August 1997. From September 1992 to August 1997 he
was the Manager of the General Electric Company's Corporate Research and
Development Mechanical Engineering Laboratory. From 1962 to 1992 he worked for
the General Electric Company in a variety of engineering and managerial
positions. Dr. Mowbray received a B.S. in Aeronautical Engineering from the
University of Minnesota in 1960, a Master of Science in Engineering Mechanics
from the University of Minnesota in 1962 and a Ph.D. from Rensselaer Polytechnic
Institute in Engineering Mechanics in 1968.
SAMUEL SCHWARTZ, 85, has been a Director of the Company since August 1987, and
was Chairman of the Board from February 1993 to May 1999. In April 2001, he
accepted the position as Acting Chairman of the Board. He became Chairman in
August 2001. From 1959 to 1992, he was the Chairman and Chief Executive Officer
of Krystinel Corporation, a manufacturer of ceramic magnetic components used in
electronic circuitry. He received a B.Ch.E. from Rensselaer Polytechnic
Institute in 1941 and a M.Ch.E. from New York University in 1948.
Directors are presently paid no fee for their service as directors. Commencing
March 1, 2002, each non-employee Director is reimbursed $100 per Board of
Directors meeting they attend for travel expenses. In May 1999, the Company's
Board of Directors adopted a program pursuant to which its non-employee
directors are awarded 10,000 stock options per year in consideration of their
service.
2
The Board of Directors held eight meetings in the fiscal year ended February 28,
2005. All Directors attended at least 75% of the Company's Board Meetings. Each
member attended all of their committee meetings, with the exception of Donald
Mowbray missing one.
NOMINATING COMMITTEE
The Board of Directors does not maintain a separate nominating committee because
the Board of Directors believes that it can select prospective Director nominees
by acting on the basis of a consensus of the entire Board of Directors.
Accordingly, all Directors participate in the selection of candidates for
nomination as Directors of the Company. The Board identifies and deliberates on
the merits of candidates, based upon education, and experience in the following
areas: business, scientific, legal and financial. The Board of Directors does
not have a separate charter pertaining to nominations. The Company's Board of
Directors is comprised of three "independent directors", as that term is defined
under Nasdaq rules, and three directors who are not "independent directors". The
Company's "independent directors" are Samuel Schwartz, Donald Mowbray and Edward
Handler. Christopher Coccio and Harvey Berger are employees of the Company and
are therefore not independent. Philip Strasburg is not considered an independent
director under the Nasdaq rules as he is a former employee. All current nominees
for the Board of Directors are incumbent Directors and were nominated by the
entire Board for inclusion on the Company's proxy card. The Board of Directors
will consider nominees recommended by shareholders. No special procedure needs
to be followed in submitting such recommendation.
COMPENSATION COMMITTEE
The Company's Board of Directors has a Compensation Committee composed of
Messrs. Strasburg, Mowbray and Handler (Chairman). The compensation of the
executive officers of the Company is set by the Company's Board of Directors
based upon the recommendations of the Compensation Committee. Compensation is
set at levels believed to be competitive with executive officers with similar
qualifications, experience and responsibilities of similar businesses. Such
individuals receive a base salary and incentive compensation based on the
achievement of certain operating objectives. The Compensation Committee serves
an advisory function only. The Compensation Committee met once during Fiscal
Year 2005.
AUDIT COMMITTEE
The Company's Board of Directors has an Audit Committee composed of Messrs.
Handler and Mowbray as "independent directors" of the Company, and Philip
Strasburg as the Chairman. Philip Strasburg is not considered an "independent
director". The Board of Directors has adopted a charter for the Audit Committee.
The Audit Committee is responsible for (i) selecting an independent public
accountant for ratification by the stockholders, (ii) reviewing material
accounting items affecting the consolidated financial statements of the Company,
and (iii) reporting its findings to the Board of Directors. The Audit Committee
met twice during the fiscal year ended February 28, 2005.
CODE OF ETHICS
The Company has adopted a Code of Ethics for senior executives and financial
officers. The Board intends that this Code satisfy the requirements of the
Securities and Exchange Commission rules for a Code of Ethics that applies to
senior management. A copy of the Company's Code of Ethics is posted on the
"information for investors" web page located at www.sono-tek.com/investors/ and
is available in print to any shareholder who requests a copy.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee's job is one of oversight as set forth in its charter. It is
not the duty of the Audit committee to prepare the Company's financial
statements, to plan or conduct audits, or to determine that the Company's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles. The Company's management is
responsible for preparing the Company's financial statements and for maintaining
internal control and disclosure controls and procedures. The independent
auditors are responsible for auditing the financial statements and for
expressing an opinion as to whether those audited financial statements fairly
present the financial position, results of operations, and cash flows of the
Company in conformity with generally accepted accounting principles.
3
The Audit Committee has reviewed and discussed the Company's audited
consolidated financial statements with management and with Sherb & Co., LLP, the
Company's independent auditors for 2005. The Audit Committee also conducted a
preliminary discussion with management and Sherb & Co., LLP regarding the
initial discovery of certain unauthorized transactions made by a former employee
of the Company.
The Audit Committee has discussed with Sherb & Co., LLC the matters required to
be discussed by Statement on Auditing Standards No. 61.
The Audit Committee has received from Sherb & Co., LLC the written statements
required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees, and has discussed Sherb & Co., LLC's
independence with Sherb & Co., LLC, and has considered the compatibility of
non-audit services with the auditor's independence.
Based upon the review and discussions referred to above, the Audit Committee has
recommended to the Board of Directors that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-KSB for the
year ended February 28, 2005 for filing with the Securities and Exchange
Commission. The Audit Committee and the Board of Directors have also
recommended, subject to stockholder approval, the selection of Sherb & Co., LLC
as the Company's independent auditors for the Fiscal Year ending February 28,
2006.
This report of the Audit Committee shall not be incorporated by reference into
any of the Company's future filings made under the Exchange Act or the
Securities Act, and shall not be deemed to be soliciting material or to be filed
with the SEC under the Exchange Act or the Securities Act.
THE AUDIT COMMITTEE
Philip Strasburg (Chairman)
Donald Mowbray
Edward Handler
OTHER EXECUTIVE OFFICERS
In addition to Dr. Christopher L. Coccio, the following persons are executive
officers of the Company.
VINCENT F. DEMAIO, 67, has been Vice President of Manufacturing of the Company
since March 2003. He joined the Company in August 1991 as Production Manager and
has served as Field Service Manager and Director of Operations. Prior to joining
the Company Mr. DeMaio was an independent real estate developer from 1987 to
1991. From 1956 to 1987, Mr. DeMaio was employed by IBM Corporation in various
manufacturing positions the last being Manufacturing Supervisor over 600
employees.
R. STEPHEN HARSHBARGER, 37, has been Vice President of the Company since June
2000. He joined the Company in October 1993 as a Sales Engineer and served in
various sales management capacities from 1997 to 2000. Prior to joining the
Company, Mr. Harshbarger was the Sales and Marketing Coordinator at Plasmaco,
Inc., a developer and manufacturer of state-of-the-art flat panel displays. He
is a graduate of Bentley College, with a major in Finance and a minor in
Marketing.
STEPHEN J. BAGLEY, CPA, 42, has been Chief Financial Officer of the Company
since June 2005. Prior to joining the Company, from September 2003 to May 2005,
Mr. Bagley was Controller of A. Colarusso & Son, Inc., a highway and bridge
contractor. From April 2003 to September 2003, Mr. Bagley was Vice President of
Finance of Leschaco, Inc., an international freight forwarder. From April 1997
to April 2003, Mr. Bagley was Chief Financial Officer of Cloverleaf
Transportation, a short haul trucking company. Mr. Bagley earned a Bachelor of
Science degree from The State University of NY - College at Oneonta and an MBA
from Marist College.
4
EXECUTIVE COMPENSATION
The following table sets forth the aggregate remuneration paid or accrued by the
Company for Fiscal Years ended February 28, 2005, 2004 and 2003, for each named
officer of the Company. No other executive officer received aggregate
remuneration that equaled or exceeded $100,000 for the Fiscal Year ended
February 28, 2005.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation Awards
------------------- -------------------
Name and Other Securities Underlying
Principal Position Year Salary ($) Bonus ($) Compensation ($)(1) Options (#)
------------------------------------------------------------------------------------------------
Christopher L. Coccio 2005 $153,650 $60,000 $36,039 495,000
CEO, President and 2004 $129,970 $17,500 $1,244 0
Director 2003 $124,462 $7,500 $1,260 275,000
R.S. Harshbarger 2005 $152,985 $15,000 $1,598 10,000
Vice-President 2004 $105,854 $4,375 $927 0
2003 $88,196 $1,200 $996 20,000
(1) Dollar amounts for 2005 for Christopher L. Coccio include a non-cash gain
on non-qualified stock option exercise of $31,250, Company contributions
under the Company's retirement plan and a partial reimbursement of country
club membership fees. All other dollar amounts are for contributions under
the Company's retirement plan.
STOCK OPTION PLAN
As of June 30, 2005, the Company had in effect the 1993 Stock Incentive Plan, as
amended (the "1993 Plan") and the 2003 Stock Incentive Plan (the "2003 Plan). As
of June 30, 2005 there were outstanding options to purchase an aggregate of
901,062 shares of common stock at prices ranging from $.09 to $1.625 per share.
1993 Stock Incentive Plan
Under the 1993 Plan, options have been granted to officers, directors,
consultants and employees of the Company and its subsidiaries to purchase the
Company's common shares. Options granted under the 1993 Plan expire on various
dates through 2013. There can be no further grants under the 1993 Plan.
2003 Stock Incentive Plan
Under the 2003 Plan, options can be granted to officers, directors, consultants
and employees of the Company and its subsidiaries to purchase up to 1,500,000 of
the Company's common shares.
Under both the 1993 and 2003 Plans, option prices must be at least 100% of the
fair market value of the common stock at time of grant. For qualified employees,
except under certain circumstances specified in both the 1993 and 2003 Plans or
unless otherwise specified at the discretion of the Board of Directors, no
option may be exercised prior to one year after date of grant, with the balance
becoming exercisable in cumulative installments over a three year period during
the term of the option.
During Fiscal Year 2005 the Company granted options for 540,000 shares
exercisable at prices from $.95 to $1.75 to officers of the Company, options for
40,000 shares exercisable at $1.06 to Directors of the Company, options for
144,000 shares exercisable at prices from $.95 to $2.30 to employees of the
Company, and options for 50,000 shares exercisable at prices from $1.06 to $1.95
to consultants to the Company.
The following table sets forth information regarding option exercises during the
Fiscal Year ended February 28, 2005, as well as any unexercised options held as
of February 28, 2005 by each named executive who received in excess of $100,000
in salary and bonus.
5
Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
Number of Securities Underlying Value of Unexercised
Unexercised Options In-the Money Options
Shares at Fiscal Year End (#) At Fiscal Year End ($)
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
-----------------------------------------------------------------------------------------------------------------------------
(i) Christopher Coccio 372,915 0 485,000 10,000 $242,500 $5,000
(ii) R. Stephen Harshbarger 77,500 0 12,500 5,000 $18,875 $6,500
Description of 401 (k) Plan
Effective April 1, 2000, the Company instituted the Sono-Tek Corporation 401(k)
Plan ("401(k) Plan") for employees of the Company, its subsidiaries and
affiliates pursuant to the Internal Revenue Code. Under the 401(k) Plan an
eligible employee can elect to make a salary reduction of up to 20% of his
compensation as defined in the plan.
BENEFICIAL OWNERSHIP OF SHARES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following information is furnished as of June 30, 2005, to indicate
beneficial ownership of the Company's Common Stock by each Director, by each
named executive officer who has a salary and bonus in excess of $100,000, by all
Directors and executive officers as a group, and by each person known to the
Company to be the beneficial owner of more than 5% of the Company's outstanding
Common Stock. Such information has been furnished to the Company by the
indicated owners. Unless otherwise indicated, the named person has sole voting
and investment power.
Name (and address if Amount
more than 5%) of Beneficially
Beneficial owner Owned Percent
--------------------------------------------------------------------------------
Directors and Officers
*Harvey L. Berger 384,418(1) 2.6%
*Christopher L. Coccio 980,624(2) 6.63%
*Vincent F. DeMaio 75,303(3) **
*Edward J. Handler 93,158(4) **
*R. Stephen Harshbarger 90,000(3) **
*Donald F. Mowbray 47,500(5) **
*Samuel Schwartz 1,552,147(6) 10.5%
*Philip A. Strasburg 15,000 **
--------- -----
All Executive Officers and Directors as a Group (9) 3,238,150(7) 21.90%
Additional 5% owners
Herbert Spiegel 756,931 5.33%
425 East 58th Street
New York, NY 10022
Norwood Venture Corporation 1,064,672 7.50%
65 Norwood Avenue
Montclair, NJ 07043
* c/o Sono-Tek Corporation, 2012 Route 9W, Milton, NY 12547.
** Less than 1%
6
(1) Includes 49,500 shares in the name of Dr. Berger's wife and 30,000 options
currently exercisable issued under the Company's Stock Incentive Plans.
(2) Includes 2,000 shares owned jointly with Dr. Coccio's father, 2,000 shares
in the name of Dr. Coccio's wife and 495,000 options currently exercisable
issued under the Company's Stock Incentive Plans.
(3) Includes 12,500 options currently exercisable under the Company's Stock
Incentive Plans.
(4) Includes 61,579 shares owned jointly with Mr. Handler's wife, and 31,579
shares in the name of Mr. Handler's wife.
(5) Includes 10,000 options currently exercisable issued under the Company's
Stock Incentive Plans and 12,500 warrants.
(6) Includes 40,000 options currently exercisable issued under the Company's
Stock Incentive Plans.
(7) Includes 585,000 options currently exercisable issued under the Company's
Stock Incentive Plans and 12,500 warrants.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Norwood loans -
On April 30, 2001, in order to induce the advance of an additional $300,000 by
Norwood Venture Corporation, a principal stockholder of the Company, certain of
the Company's directors, an officer and an affiliate of the Company participated
in the amount of $216,750 in an additional mezzanine financing. Interest expense
of $103,617 was paid to Norwood and $26,571 was forwarded to these individuals
during Fiscal Year 2004. During February 2004, an officer of the Company
exercised 24,444 warrants to purchase the Company's common stock through
Norwood. Coincident with this transaction $10,000 of principal loaned by Norwood
was repaid and was in turn repaid to this officer.
On December 3, 2004, the Company sold 76,750 units each consisting of four
shares of common stock and one warrant to purchase one additional share of
common stock at $1.75 during the two year period ending December 3, 2006.
Proceeds of this offering of $530,000 were used to repay $450,000 of Norwood
Venture Corporation, a principal stockholder of the Company, outstanding debt
and the balance was used for working capital.
On December 15, 2004, Norwood Venture Corporation, a principal stockholder of
the Company, and the Company reached an agreement whereby the "Put" rights under
the Norwood Loan and Warrant Agreement were terminated for a sum of $188,000
paid by the Company to Norwood. Also, Norwood exercised all of its warrants to
purchase the Company's stock, resulting in the issuance of 2,022,017 shares of
common stock. The Chairman of the Company and a different principal stockholder
of the Company were participants in the Norwood Loan and, accordingly, they each
received 243,239 shares of the Company's common stock as the result of the
warrant exercise. Also, they each received $103,333.50 as part of the repayment
of the principal of the Norwood Loans.
Debt Exchange - related party
During February 2004 loans, accrued interest and prior year consulting fees due
to the Chairman of the Company in the amount of $123,827 were exchanged for
294,825 shares of common stock valued at $.42 per share. The debt to equity
conversion price was negotiated independently with other third party creditors
on an "arms length" basis.
Warrant issuance - related party
During February 2004 warrants to acquire 300,000 shares of the Company's common
stock were exercised at $.30 per share by the Chairman of the Company for
$90,000. The proceeds from this exercise were used to repay prior year loans due
to the Chairman.
Equity issuance - related party
In December 2004, a director of the Company acquired 25,000 shares of common
stock and 12,500 warrants to purchase common stock pursuant to a private
placement for $43,750.
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors, executive officers and persons who own more than ten percent of the
Company's common stock to file with the Securities and Exchange Commission
initial reports of beneficial ownership and reports of changes of beneficial
7
ownership of common stock. Such persons are also required by Securities and
Exchange Commission regulations to furnish the Company with copies of all such
reports. Based solely on a review of such filings, during the year ended
February 28, 2005, all of the Company's Directors and executive officers and
holders of more than ten percent of the Company's stock have made timely filings
of such reports except as follows: one report by Samuel Schwartz relating to one
transaction; three reports by Christopher Coccio relating to four transactions;
two reports by Harvey Berger relating to four transactions; two reports by
Philip Strasburg relating to one transaction; one report by Vincent DeMaio
relating to two transactions; five reports by Norwood Venture Corp. relating to
ten transactions; Edward Handler has not filed a Form 3.
ITEM 2. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Sherb & Co., LLP, Certified Public
Accountants, to audit the books of account and other records of the Company for
the fiscal year ending February 28, 2006. In the event of a negative vote, the
Board of Directors will reconsider its election. The Audit Committee of the
Company's Board of Directors determined the independence of the Company's
auditors and recommended their re-appointment to the Board of Directors. Fees
paid to the auditors were as follows:
Audit Services Tax Returns
-------------- -----------
Sherb & Co., LLP Fiscal year ended February 28, 2005 $28,500 $4,000
Radin, Glass & Co., LLP Fiscal year ended February 28, 2004 $27,500 $4,500
The Company did not pay any audit related fees or other fees to either
independent auditing firms during the past two fiscal years.
A representative of the auditors, Sherb & Co., LLP, is expected to be present at
our Annual Meeting, will have an opportunity to make a statement if he desires,
and will be available to respond to appropriate questions.
On March 21, 2005, the Company dismissed Radin, Glass & Co., LLP as its
independent registered public accounting firm. Radin, Glass & Co. LLP had been
the independent registered public accounting firm for and audited the
consolidated financial statements of the Company as of February 29, 2004, and
for two years then ended. The reports of Radin, Glass & Co., LLP on the
financial statements of the Company for the past two fiscal years contained no
adverse opinion or disclaimer of opinion, and were not qualified or modified as
to uncertainty, audit scope or accounting principles.
In connection with the audit for the two most recent fiscal years and in
connection with Radin, Glass & Co., LLP's review of the subsequent interim
periods preceding dismissal on March 21, 2005, there have been no disagreements
between the Company and Radin, Glass & Co., LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the satisfaction of Radin, Glass & Co.,
LLP, would have caused Radin, Glass & Co., LLP to make reference thereto in
their report on the Company's financial statements for these fiscal years.
During the two most recent fiscal years and prior to the date hereof, the
Company had no reportable events (as defined in Item 304(a)(1) of Regulation
S-B).
Radin, Glass & Co., LLP has furnished the Company with a letter addressed to the
Securities and Exchange Commission stating that it agrees with the above
statements.
On March 21, 2005, the Company engaged Sherb & Co., LLP as its independent
registered public accounting firm. The Company had not consulted with Sherb &
Co., LLP regarding the application of accounting principles to any contemplated
or completed transactions nor the type of audit opinion that might be rendered
on the Company's financial statements, and neither written nor oral advice was
provided that would be an important factor considered by the Company in reaching
a decision as to an accounting, auditing or financial reporting issues.
The change was approved by the Company's Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF SHERB & CO, LLP.
8
ITEM 3. OTHER MATTERS
The Board of Directors is not aware of any business to be presented at the
Annual Meeting except the matters set forth in the Notice and described in this
Proxy Statement. Unless otherwise directed, all shares represented by proxies
will be voted in favor of the proposals of the Board of Directors described in
this Proxy Statement. If any other matters come before the Annual Meeting, the
persons named in the accompanying Proxy will vote on those matters according to
their best judgment.
Expenses
The entire cost of preparing, assembling, printing and mailing this Proxy
Statement, the enclosed Proxy and other materials, and the cost of soliciting
Proxies with respect to the Annual Meeting will be borne by the Company. The
Company will request banks and brokers to solicit their customers who
beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expense of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone and facsimile by officers and other regular employees
of the Company but no additional compensation will be paid to such individuals.
Future Shareholders Proposals
Proposals of shareholders intended to be presented at the next annual meeting
(expected to be held in August 2006) under SEC Rule 14a-8 must be received by
the Company for inclusion in the Company's proxy statement and form of proxy
relating to that meeting (expected to be mailed in mid-July 2006) not later than
March 15, 2006.
Notice of shareholder matters intended to be submitted at the next annual
meeting outside the processes of Rule 14a-8 will be considered untimely if not
received by the Company by June 8, 2006. The discretionary authority described
above with respect to other matters coming before the meeting will be conferred
with respect to any such untimely matters.
Signed:
/s/ Claudine Y. Corda
---------------------
Claudine Y. Corda
July 15, 2005
9
FORM OF PROXY CARD Please mark your
votes as in this
example
FOR all nominees WITHHOLD AUTHORITY
listed at right to vote for
(except as marked) nominees listed at right
Nominees:
1. The election of four (4) Dr. Harvey Berger
Directors of the Company. Dr. Christopher L. Coccio
Philip Strasburg
Edward J. Handler
(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list to the right)
FOR AGAINST ABSTAIN
2. Ratification of the appointment of
Sherb & Co., LLP as the Company's
independent auditors.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting. This proxy, when properly executed,
will be voted in the manner directed herein by the undersigned shareholder.
If no direction is made, this proxy will be voted FOR Proposals 1 and 2.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Your signature on this proxy is your acknowledgment of receipt of the Notice of
Meeting and Proxy Statement, both dated July 15, 2005.
SIGNATURE(S): ___________________________ Date: ___________
(Signature)
SIGNATURE(S): ___________________________ Date: ___________
(Signature if held jointly)
NOTE: Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give title as such. If stockholder is a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
SONO-TEK CORPORATION
2012 Route 9W, Milton, New York 12547
This Proxy is solicited on behalf of the Board of Directors
The undersigned shareholder(s) of Sono-Tek Corporation, a corporation organized
under the laws of the State of New York, hereby appoints Claudine Y. Corda and
Christopher L. Coccio and as my (our) proxies, each with the power to appoint a
substitute, and hereby authorizes them, and each of them individually, to
represent and to vote, as designated on the reverse side hereof, all of the
shares of Sono-Tek Corporation, which the undersigned is or may be entitled to
vote at the Annual Meeting of Shareholders to be held at The Inn at Buttermilk
Falls, 220 North Road, Milton, New York 12547, at 10:00 A.M., New York time, on
August 18, 2005, or any adjournment thereof. The Board of Directors recommends a
vote FOR the proposals on the reverse side.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
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