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): November 13, 2006
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 November 13, 2006, the Registrant posted the following announcement on its
website (www.sonexresearch.com):
LOCAL LITIGATION SETTLED
ANNAPOLIS, MARYLAND, November 13, 2006 - SONEX RESEARCH, INC. (OTC SONX)
announced that it has settled two lawsuits filed by Global Equity Consultants,
Inc. ("GECI") of Arnold, Maryland. Under the terms of the settlement, both cases
have been dismissed with prejudice, meaning that GECI is barred from refiling
its claims, and the parties have granted mutual releases from all potential
claims against each other through the date of the settlement.
In September 2005 GECI filed a Complaint in the Circuit Court in Anne Arundel
County, Maryland, subsequently amended in October 2006, demanding delivery of
750,000 shares of Sonex common stock or, in the alternative, $1 million in
damages, pursuant to an April 30, 2004 Consulting Agreement with Sonex executed
by GECI's president, James A. Rose, II. Sonex denied the allegations and
asserted that the Consulting Agreement was procured by negligent and/or
intentional concealment of certain facts by Mr. Rose and that GECI failed to
properly perform all the services set forth in the Consulting Agreement. GECI
filed a Motion for Summary Judgment which was denied by the Court in July 2006.
In July 2006 GECI also filed a Stockholder Derivative Complaint in the Circuit
Court for Anne Arundel County against Dr. Andrew A. Pouring, Sonex Chairman of
the Board, CEO and President, and George E. Ponticas, CFO, Secretary and
director, challenging the grant by Sonex in early 2005 of security interests in
its patents to its officers and directors to secure payment of compensation
being deferred on an ongoing and future basis as well as new loans and other
financial obligations. GECI claimed that the transaction "is unfair and
unreasonable" to the Company. Sonex believes that the allegations in the
Stockholder Derivative Complaint are without merit and that the grant of the
security interests, which also were granted to other shareholders who had made
loans to the Company, benefited the Company and meets the legal standard for
interested director transactions that requires such transactions to be fair and
reasonable to a corporation. Three local shareholders had previously filed a
lawsuit in April 2005 challenging the grant of the security interests, but after
court-ordered mediation in July 2005, the matter was settled through an
agreement to stay the case, and voluntarily dismissed by those plaintiffs in
March 2006.
In order to minimize the expense and disruption to its business of continuing to
litigate both actions filed by GECI, Sonex entered into settlement discussions
with Mr. Rose in early August 2006. Last week the parties executed a settlement.
In addition to the dismissal of both lawsuits with prejudice and the mutual
releases from all claims, as part of the settlement GECI agreed to accept, and
Sonex has delivered to GECI, 200,000 shares of common stock in full satisfaction
of GECI's claim for shares.
Contact: George E. Ponticas, CFO, Sonex Research, Inc., tel: 410-266-5556,
email: george.ponticas@sonex-na.com, website: www.sonexresearch.com.
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 UASs (unmanned aerial systems).
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.
RISK FACTORS
Additional information regarding the risks faced by Sonex is provided in the
Company's periodic filings with the Securities and Exchange Commission (SEC)
under the heading "Risk Factors". Such filings are available upon request from
the Company or online in the SEC's EDGAR database at www.sec.gov. The Company,
however, is delinquent in its filings with the SEC. It has not filed Annual
Reports on Form 10-KSB for the years ended December 31, 2004 and 2005 primarily
because it lacks the financial resources to engage an independent registered
public accounting firm to conduct an audit of the related financial statements
and because it lacks the staffing to prepare the Forms 10-KSB due in large part
to the amount of time management has devoted and the amount of funds the Company
has spent in responding to litigation. For the same reasons, the Company has
been unable to file its Quarterly Reports on Form 10-QSB for 2005 and 2006. The
Company is unable to predict when it will be able to make these filings, and
there can be no assurance that the filings will be made at all or that a public
market for the Company's Common Stock will continue to exist
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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.
November 13, 2006
SONEX RESEARCH, INC.
Registrant
/s/ George E. Ponticas
----------------------
George E. Ponticas
Chief Financial Officer and Secretary