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): February 12, 2007
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 February 12, 2007, the Registrant Sonex Research, Inc. ("Sonex") issued a
news release announcing that it intends to respond to a notice from the SEC by
entering into an offer of settlement to revoke the registration of its Common
Stock. The Registrant also posted the following announcement regarding this
subject to its website www.sonexresearch.com:
SONEX INTENDS TO RESPOND TO SEC NOTICE BY ENTERING INTO OFFER
OF SETTLEMENT WITH THE SEC TO REVOKE STOCK REGISTRATION
ANNAPOLIS, MARYLAND, February 12, 2007 - SONEX RESEARCH, INC. (OTC: SONX), a
leader in the field of combustion technology, announced today that it recently
received a letter from the Securities and Exchange Commission ("SEC") stating
that because Sonex is delinquent in its annual and quarterly reporting
requirements under Section 13(a) of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company may be subject, without further notice, to an
administrative proceeding under Section 12(j) of the Exchange Act to revoke its
registration under the Exchange Act if all required reports were not filed
within 15 days of the date of the letter.
Sonex is unable to file all required reports within the prescribed time period.
The Company has determined that the most prudent course of action is to submit
an Offer of Settlement (the "Offer") to the SEC in anticipation of the
proceedings that may be instituted against Sonex by the SEC. Sonex has been in
contact with the SEC (through counsel) and intends to submit the Offer to the
SEC within the next few days and, shortly thereafter, Sonex expects to enter
into a Consent Order with the SEC. The Consent Order is expected to state that
Sonex has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and
13a-13 thereunder while its Common Stock was registered with the Commission, and
to order that pursuant to Section 12(j) of the Exchange Act, registration of the
Common Stock of Sonex registered pursuant to Section 12 of the Exchange Act be
revoked. Additionally, upon the final order signed by the SEC, Sonex's common
stock will no longer be allowed to trade over the counter (the stock is
currently quoted on the Pink Sheets Electronic Quotation Service), which may
adversely affect the value and liquidity of the stock.
In making the decision to enter into the Offer, management considered a number
of factors and obtained advice of legal counsel. Management believes that had
Sonex failed to respond to the notice from the SEC rather than proposing to
submit an Offer of Settlement, the SEC's Division of Enforcement likely would
have issued an Order Instituting Proceedings before an Administrative Law Judge,
resulting in a default revocation of registration.
Sonex has not filed an Annual Report on Form 10-KSB for any year subsequent to
the year ending December 31, 2003, nor quarterly reports on Form 10-QSB for any
period subsequent to the quarter ending September 30, 2004. Sonex became
delinquent in its filings with the SEC primarily because of the lack of the
financial resources to engage an independent registered public accounting firm
to conduct audits of the related financial statements and the lack of staffing
to prepare the periodic reports, due in large part to the amount of time
management has devoted and the amount of funds Sonex has spent in responding to
litigation. Sonex has continued to file with the SEC, however, Current Reports
on Form 8-K to disclose all material events. The 8-K filings, as well as the
past Forms 10-KSB and 10-QSB, are available upon request from Sonex or on the
SEC's website at www.sec.gov. Additionally, Sonex intends to continue to report
on all material events by posting such information on its website at
www.sonexresearch.com.
Once the Company's registration is revoked and there is no longer a public
market for its Common Stock, stockholders will be prohibited from transferring
or selling their shares except in exempt transactions that are in compliance
with the United States and applicable state securities laws. For example,
shareholders may be able to sell or transfer their shares as long as the
shareholders consult with their own legal counsel and comply with the
requirements of Rule 144 and other applicable sections of the Securities Act of
1933. Further, the Company will only be able to raise additional capital through
the issuance of stock or debt in private offerings that are exempt from the
registration requirements of the Securities Act of 1933.
Should the Company be in a position in the future to have its securities once
again registered, it can do so by filing the appropriate form of registration
statement with the SEC. While there is considerable expense associated with a
registration statement, Sonex understands that it would not also have to incur
the costs of filing all previously delinquent reports.
Dr. Andrew A. Pouring, Sonex Chairman of the Board, CEO and President, said "The
consent to revocation of SEC registration is not expected to have any immediate
adverse effect on the operations of the Company. We look forward to building on
increased commercial interest in the Sonex Combustion System (SCS) for heavy
fuel engines (HFEs)."
In November 2006 (as previously disclosed on the Form 8-K filed with the SEC on
November 7, 2006), Sonex licensed a part of the SCS HFETM technology to Insitu,
Inc. (Bingen, WA, www.insitu.com), a pioneer developer of long-range, unmanned,
autonomous aircraft. Insitu is best known for its long endurance, low cost
unmanned aerial systems (UAS) such as the ScanEagle(R) UAS, developed in
partnership with Boeing [NYSE: BA]. ScanEagle is used to provide services for
the US Marine Corps, US Navy, and Australian Army, and has logged more than
30,000 hours of flight time since being deployed in 2004. In January 2007 Insitu
announced that it set an endurance flight mark for its ScanEagle by running its
engine modified with licensed HFE technology from Sonex, along with other
enhancements developed by Insitu engineers, on JP-5 heavy fuel. Insitu expects
to sell ScanEagles equipped with engines incorporating SCS HFETM technology
later this year. Sonex continues to provide services to Insitu for further
development of licensed SCS HFETM technology under a Collaboration Agreement
also signed in November 2006.
Dr. Pouring added that as word spreads of the Insitu license and successful HFE
flight, Sonex is fielding numerous inquiries for its HFE conversion process.
"Sonex expects to generate new funded projects for the continued development and
commercial application of the SCS HFETM technology. Our challenge will be to
expand the Company's capabilities, which may require additional funding. We are
assessing the future needs of the Company and will work to develop an
appropriate strategy for moving forward, including how best to maximize
shareholder value. Sonex seeks to attract qualified, capable assistance to
pursue commercialization not only of the SCS HFETM technology but also of its
piston-based technology for larger engines. It is possible, however, that
revocation of our SEC registration may make raising capital and attracting
qualified people more difficult."
"Management will continue to work hard towards the best result for our
shareholders" said Dr. Pouring. "I believe the commercial potential of the SCS
technology will permit shareholders to realize significant value from their
holdings, whether through a strategic corporate transaction of some form or
through future public trading of our stock."
Contact: George E. Ponticas, CFO, Sonex Research, Inc., tel: 410-266-5556,
email: george.ponticas@sonex-na.com, website: www.sonexresearch.com.
ScanEagle(R) is a registered trademark of the Boeing Company.
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 report, 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.
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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.
February 12, 2007
SONEX RESEARCH, INC.
Registrant
/s/ George E. Ponticas
----------------------
George E. Ponticas
Chief Financial Officer and Secretary