SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 2002
SONEX RESEARCH, INC.
(Exact name of registrant as specified in Charter)
Maryland 0-14465 52-1188993
(State or other (Commision file (IRS employer
jurisdiction of number) identification no.)
incorporation)
23 Hudson Street, Annapolis, MD 21401
(Address of principal executive offices)
(410) 266-5556
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
ITEM 5. - OTHER EVENTS
On September 3, 2002, Sonex Research, Inc. (the "Company") posted the
following notice to shareholders on its website (www.sonexresearch.com):
SONEX SCHEDULES 2002 ANNUAL MEETING;
LETTER TO SHAREHOLDERS POSTED TO WEBSITE
ANNAPOLIS, MARYLAND, September 3, 2002 - SONEX RESEARCH, INC. (OTC BB: SONX)
announced that the 2002 Annual Meeting of its shareholders will be held on
Wednesday, October 9, 2002, at 10:00 a.m. local time in the Dorsey Room in the
Hampton Inn & Suites, located in the ARINC Corporate Park, 124 Womack Drive,
Annapolis, Maryland. (Tel: 410-571-0200).
The Company indicated that shareholders could expect to receive related proxy
materials in mid-September. Following is the full text of the Letter to
Shareholders that will appear in the Sonex 2001 Annual Report included in the
proxy materials.
August 2002
Dear Fellow Shareholders:
Sonex will hold its Annual Meeting here in Annapolis on October 9, 2002, and I
look forward to seeing many of you at that time. In preparation for the meeting,
I offer this brief overview of the Company's recent activities and progress
toward the refinement and commercialization of the Sonex Combustion System (SCS)
for in-cylinder control of ignition and combustion in engines.
At the end of 2001, financial constraints resulted in a reduction in staffing
and Sonex officers voluntarily deferred receipt of all salaries for an extended
period. The Company also received substantial cooperation from its part-time
consultants and legal and auditing professionals in terms of flexible payment
arrangements. These reductions in cash outflows combined with additional
financial support from investors and modest contract revenue helped the Company
persevere. Today, Sonex finds itself with numerous business opportunities and is
increasing staffing to support new projects.
** In early August 2002 we announced the award of a $200,000 Department of
Defense (DoD) subcontract to begin the conversion of a gasoline engine to
start and operate on diesel-type, kerosene-based military fuels (also
referred to as "heavy fuels") for use in an unmanned aerial vehicle (UAV)
weapon system. The DoD prime contractor, Science Applications International
Corporation (SAIC), is a leader in the development of advanced gun weapon
systems including launchers and smart projectiles. Following the selection
of a commercially available 70hp to 80hp lightweight, spark-ignited,
two-stroke, gasoline engine, Sonex will begin development of an SCS
modified combustion chamber design and proprietary starting system to
permit the converted engine to start and operate on heavy fuels. This
initial funding permits a multi-phase heavy fuel engine (HFE) program to
begin immediately, while follow-on funding needed to complete the design
and testing process to achieve a prototype HFE is expected to be approved
by the DoD sponsor later this year. Sonex is pursuing additional
commercialization opportunities for HFEs as a result of U.S. and NATO
military directives for a single battlefield fuel that will eliminate
gasoline in favor of less volatile heavy fuels.
** Late in 2001 one the world's leading engine engineering and powertrain
consulting firms, Ricardo Consulting Engineers Ltd, confirmed the soot
reduction capability of the SCS "Low Soot" design. Ricardo published the
findings, plus additional results from a later Computational Fluid Dynamics
study of the combustion process, in a paper presented at the Society of
Automotive Engineers' May 2002 Fuels and Lubricants Conference. Ricardo is
introducing the SCS "Low Soot" design results to potential customers, and
is working with Sonex on securing joint commercialization projects with
engine manufacturers.
** This fall the Senate and House will resume debate on a national energy bill
that upon enactment is expected to include provisions assigning the
Department of Transportation (DOT) the task of issuing new fuel mileage
standards within two years of enactment. In response, Sonex plans to
complete development, commercialize and market its SCS Stratified Charge
Radical Ignition (SCRI) combustion process to the automotive industry.
Presently, high mileage five-passenger automobiles using gasoline direct
injected (GDI) engines are sold in Japan and Europe but are not available
in the U.S. due to high NOx (oxides of nitrogen) emissions. Sonex intends
to demonstrate that SCS-SCRI can lead to high mileage, emissions compliant,
GDI engined vehicles without sacrificing weight and vehicle safety. In
addition, the evolution of U.S. produced hybrid powered vehicles would be
accelerated since a major improvement in fuel mileage would provide
opportunities for tradeoff of vehicle weight versus power. The anticipated
passage of the national energy bill will provide Sonex the time needed to
continue SCRI technology maturation work for GDI engines. To date, Sonex
has provided specific input to the energy bill legislative process and
submitted supporting data, industry analyses and other materials to DOT.
** Additional anticipated contracts to Sonex from the government involve
development efforts that should provide definitive conclusions as to the
commercial viability of the patented SCS technology for in-cylinder control
of ignition and combustion. In particular, outcomes from these programs
will be useful to the development of the SCRI combustion process for high
mileage, low emissions GDI engined automobiles. Acceptance of our
technology by the government will enable Sonex to bring a third party
validation to any commercial discussions we may undertake, as well as
critical data and test results that support numerous applications of our
technology.
Sonex is poised to leverage its proprietary SCS technology against the demands
of government, as they impact the automotive industry and ongoing military
innovation. The Company is seeking business partners and strategic alliances
that will help bring SCS to commercialization. The Company already has begun
adding to its technical staff to meet the demands of the recent subcontract from
SAIC, and will need to continue hiring as new contracts are secured. Management
also recognizes that commercialization will require the hiring of additional
executives with industry experience. While revenue is expected to increase as
new contracts are signed, the Company may also need to raise capital to reach
its goals.
In anticipation of the contracts that have just begun to materialize and the
resulting expected change in the Company's profile in the automotive and defense
industries as well as the investment community, in June 2002 Sonex announced
that it had retained The Scottsdale Group (TSG) as its investor relations and
financial communications consultant. TSG is undertaking a financial
communications campaign that will bring Sonex to the attention of a broader
investor base, as well as institutional investors, as the Company continues to
grow. In the coming months, TSG will take our story to the media, existing and
potential investors, and specialists who follow the automotive and defense
industries. Sonex has endured serious hardships in the past year, but our
efforts are being rewarded in the form of the many opportunities described
above. Thanks to the dedication and hard work of our core personnel group and
the timely financial support from investors, the Company is about to emerge from
one of the most trying periods in its history. Finally, I extend my heartfelt
thanks to our shareholders for their continued patience and support. I look
forward to this year's Annual Meeting and to receiving your input, questions and
comments.
Sincerely,
Andrew A. Pouring, D.Eng.
Chief Executive Officer
Contact: Sonex Research, Inc.: George Ponticas, 410-266-5556, email:
sonex@erols.com, www.sonexresearch.com; Investor Relations: The Scottsdale
Group, Susan Ladue, 781-292-1050, email: info@thescottsdalegroup.com,
www.thescottsdalegroup.com.
**********************
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This announcement, as well as all publicly disseminated material about the
Company, contains information in the form of "forward-looking" statements within
the meaning of the Private Securities Litigation Act of 1995 (the "Act"). Such
statements are based on current expectations, estimates, projections and
assumptions by management with respect to, among other things, trends affecting
the Company's financial condition or results of operations and the impact of
competition. Such statements are not guarantees of future performance and
involve risks and uncertainties, all of which are difficult to predict and many
of which are beyond the control of the Company. In order to obtain the benefits
of the "safe harbor" provisions of the Act for any such forward-looking
statements, the Company cautions shareholders, investors and prospective
investors about significant factors which, among other things, have in some
cases affected the Company's actual results and are in the future likely to
affect the Company's actual results and cause them to differ materially from
those expressed in any such forward-looking statements. Accordingly, readers are
cautioned not to place undue reliance on such forward-looking statements.
Shareholders, investors and prospective investors should read this announcement
in conjunction with the Company's most recent Annual Report on Form 10-KSB,
Quarterly Report on Form 10-QSB, and other filings with the Securities and
Exchange Commission available online in the EDGAR database at www.sec.gov.
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 hereunto duly authorized.
September 3, 2002
SONEX RESEARCH, INC.
Registrant
/s/ George E. Ponticas
----------------------
George E. Ponticas
Chief Financial Officer