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): April 18, 2005
SONEX RESEARCH, INC.
(Exact name of registrant as specified in Charter)
Maryland 000-14465 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)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 - OTHER EVENTS
On April 18, 2005, the Registrant posted the following announcement on its
website (www.sonexresearch.com):
LOCAL SONEX SHAREHOLDERS FILE LAWSUIT;
COMPANY CALLS IT A MISUNDERSTANDING
ANNAPOLIS, MARYLAND, April 18, 2005 - SONEX RESEARCH, INC. (OTC BB: SONX), a
leader in the field of combustion technology, announced that it was served last
week with a lawsuit filed by three Maryland shareholders alleging the fraudulent
transfer of ownership of the Company's patents to its officers. Sonex vehemently
denies the allegations, and asserts instead that these shareholders have
misunderstood the facts concerning recent actions taken by management to keep
Sonex in operation during a period of cash flow difficulties, and that the
Company maintains title to its patents.
Plaintiffs Robert T. Emmet of Annapolis, Sidney L. Gulick, III of Adelphi, and
Robert Martin, Jr. of Myersville, filed a Complaint in the Circuit Court for
Anne Arundel County against Sonex, Dr. Andrew A. Pouring, Chairman of the Board,
CEO and President, and George E. Ponticas, CFO, Secretary and director. The
Plaintiffs seek a $1 million judgment in their favor for alleged violations of
Maryland law regarding actions by directors who have a financial interest in a
particular transaction or contract approved by the Board. Dr. Pouring and Mr.
Ponticas currently are the only officers and members of the Board of Directors
of Sonex, as a vacancy in the Board has existed since November 2004.
Sonex notes that the lawsuit seeks damages only for the three shareholders, not
for the benefit of any other shareholder or creditor.
At issue is the grant by the Company of a security interest in its patents to
Dr. Pouring, Mr. Ponticas, and Michael I. Keller, the consultant who serves as
the Company's Director of Business Development and technical program manager,
disclosed by Sonex in a Form 8-K filed with the SEC in March 2005. The Company
continues to experience cash flow problems and has been unable for an extended
period of time to keep current with its compensation payments to its officers
and Mr. Keller. Steps were needed to insure that key personnel would continue to
provide services and make loans to Sonex in order for the Company to remain in
operation. Thus, the Board of Directors took this action to secure payment of
compensation being deferred on an ongoing and future basis, new loans made to
the Company, and additional personal financial guaranties by Dr. Pouring of
Company credit card obligations.
Dr. Pouring states "We have acted for the mutual benefit of the Sonex, its
creditors, its shareholders, and ourselves, to keep the Company in operation. We
intend to see that Sonex fulfills its obligations under current military
contracts, and are doing everything we can to take advantage of potential
business opportunities and generate additional revenues to create shareholder
value and satisfy outside creditors. I regret that our fellow shareholders
thought it necessary to take legal action rather than permit us to address what
appears to be a misunderstanding, and I hope we will be able to resolve this
matter without damage to the Company." A response to the Complaint is currently
due by May 13, 2005.
Sonex reports that from January through March 2005, the first security interest
in the patents applies to total accumulated financial obligations of
approximately $157,000, consisting of loans received of $37,000 from Mr. Keller,
$5,000 from Dr. Pouring, and $5,000 from Mr. Ponticas, unpaid compensation of
approximately $92,000, and new personal guaranties of Company credit card
obligations of approximately $18,000.
About Sonex
Sonex Research, Inc., a leader in the field of combustion technology, is
developing its patented Sonex Combustion System (SCS) piston-based technology
for in-cylinder control of ignition and combustion, designed to increase fuel
mileage and reduce emissions of internal combustion engines. Sonex plans to
complete development, commercialize and market its Sonex Controlled Auto
Ignition (SCAI) combustion process to the automotive industry to improve fuel
efficiency of gasoline powered vehicles. Additionally, independent third-party
testing has confirmed the potential of the SCS application for direct-injected
diesel engines to significantly reduce harmful soot in-cylinder without
increasing fuel consumption. Other SCS designs are being used to convert
gasoline engines of various sizes to operate on safer, diesel-type "heavy fuels"
for use in military and commercial applications requiring light weight and safe
handling and storage of fuel, such as in UAVs (unmanned aerial vehicles).
Caution Regarding Forward-Looking Statements
"Forward-looking" statements contained in this announcement, as well as all
publicly disseminated material about the Company, are made pursuant to the "safe
harbor" provisions of the Private Securities Litigation Act. Such statements are
based on current expectations, estimates, projections and assumptions by
management with respect to matters such as commercial acceptance of the SCS
technology, the impact of competition, and the Company's financial condition or
results of operations. Readers are cautioned that such statements are not
guarantees of future performance and involve risks and uncertainties that could
cause actual results to differ materially from those expressed in any such
forward-looking statements. Additional information regarding the risks faced by
Sonex is provided in the Company's periodic filings with the Securities and
Exchange Commission under the heading "Risk Factors". Such filings are available
upon request from the Company or 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.
April 18, 2005
SONEX RESEARCH, INC.
Registrant
/s/ George E. Ponticas
----------------------
George E. Ponticas
Chief Financial Officer and Secretary