UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement
[ ]Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Section 240.14a-12
SCIENTIFIC INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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SCIENTIFIC INDUSTRIES, INC.
October 27, 2008
Dear Fellow Stockholders:
You are cordially invited to attend the 2008 Annual Meeting of
Stockholders of Scientific Industries, Inc. which will be held at
11:00 a.m. (New York time) on Wednesday, December 3, 2008 at Reitler
Brown & Rosenblatt LLC, 800 Third Avenue, 21st Floor, New York, NY 10022.
Information concerning the matters to be considered and voted upon at
the Annual Meeting is set out in the attached Notice of 2008 Annual
Meeting of Stockholders and Proxy Statement.
It is important that your shares be represented at the 2008 Annual
Meeting, regardless of the number of shares you hold and whether or not
you plan to attend the meeting in person. Accordingly, please complete,
sign and date the enclosed proxy card and return it as soon as possible
in the accompanying business reply envelope so that your shares will be
represented at the Annual Meeting. This will not limit your right to
vote in person or to attend the meeting.
Thank you for your continued support.
Sincerely,
/s/ Joseph G. Cremonese
_______________________
Joseph G. Cremonese
Chairman
SCIENTIFIC INDUSTRIES, INC.
70 Orville Drive
Bohemia, New York 11716
_____________
NOTICE OF 2008 ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 3, 2008
Notice is hereby given that the 2008 Annual Meeting of Stockholders
(the "Annual Meeting") of Scientific Industries, Inc., a Delaware
corporation (the "Company"), will be held on Wednesday, December 3,
2008, at 11:00 a.m. (New York time) at Reitler Brown & Rosenblatt LLC,
800 Third Avenue, 21st Floor, New York, NY 10022, for the following
purposes:
1. To elect two Class C Directors to the Company's Board of
Directors to serve until the Company's annual meeting of
stockholders with respect to the year ending June 30, 2011 and
until the election and qualification of their respective
successors.
2. To ratify the appointment of the independent registered
public accounting firm of Nussbaum Yates Berg Klein & Wolpow, LLP
as the Company's auditor for the fiscal year ending June 30,
2009.
3. To transact such other business as may properly come
before the Annual Meeting and any adjournments or postponements
thereof.
The foregoing items of business are more fully described in the
accompanying proxy statement.
The Board of Directors has fixed the close of business on October
27, 2008, as the record date for determination of stockholders entitled
to notice of and to vote at, the Annual Meeting and at any adjournments
or postponements thereof.
A complete list of the stockholders entitled to vote at the Annual
Meeting will be available for inspection by any stockholder of the
Company at the Annual Meeting. In addition, the list will be open for
examination by any stockholder of the Company for any purpose germane to
the Annual Meeting during ordinary business hours for a period of ten
days prior to the Annual Meeting at the offices of the Company.
You are requested to fill in and sign the enclosed form of proxy,
which is being solicited by the Board of Directors of the Company,
and mail it promptly in the enclosed postage paid envelope. Any proxy
may be revoked by delivery of a later dated proxy.
By Order of your Board of Directors,
/s/ Robert P. Nichols
_____________________
Robert P. Nichols
Secretary
Bohemia, New York
October 27, 2008
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, WE KINDLY REQUEST
THAT YOU PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED
PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED. IF YOU ARE A
STOCKHOLDER OF RECORD AND YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE
IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY
CARD.
YOUR VOTE IS IMPORTANT
SCIENTIFIC INDUSTRIES, INC.
70 Orville Drive
Bohemia, New York 11716
PROXY STATEMENT
_________________
2008 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 3, 2008
_________________
Solicitation of Proxies
This proxy statement is furnished in connection with the solicitation
of proxies by and on behalf of the Board of Directors (the "Board") of
Scientific Industries, Inc., a Delaware corporation (the "Company"), for
use at the 2008 Annual Meeting of Stockholders (the "Annual Meeting") to
be held at Reitler Brown & Rosenblatt LLC, 800 Third Avenue, 21st Floor,
New York, NY 10022, on Wednesday, December 3, 2008, at 11:00 a.m. (New
York time), and at any adjournments or postponements thereof.
At the Annual Meeting, stockholders of the Company will be asked to:
(1) elect two Directors of the Company to serve until the Company's annual
meeting of stockholders with respect to the fiscal year ending June 30, 2011,
and the election and qualification of their respective successors; (2) ratify
the appointment of Nussbaum Yates Berg Klein & Wolpow, LLP, an independent
registered public accounting firm as the Company's auditor for the fiscal year
ending June 30, 2009; and (3) transact such other business as may properly
come before the Annual Meeting and any adjournments or postponements thereof.
Record Date, Voting Rights
Only stockholders of record of the Company's Common Stock, par value
$0.05 per share (the "Common Stock"), as of the close of business on October
27, 2008 (the "Record Date"), are entitled to notice of and to vote at the
Annual Meeting and any adjournments or postponements thereof. On the Record
Date, there were 1,181,352 shares of Common Stock issued and outstanding.
Each share of Common Stock is entitled to one vote.
The presence at the Annual Meeting, in person or by a properly
executed proxy, of the holders of a majority of the outstanding
shares of the Company's Common Stock as of the Record Date is necessary
to constitute a quorum. Abstentions and broker "non-votes" are
included in the determination of the number of shares of Common Stock
present at the Annual Meeting for quorum purposes. A broker
"non-vote" occurs when a nominee holding shares of Common Stock for
a beneficial owner does not vote on a particular proposal because
the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner.
Voting of Proxies, Revocation, Solicitation
All stockholders who deliver properly executed and dated proxies to
the Company prior to the Annual Meeting will be deemed present at the
Annual Meeting regardless of whether such proxies direct the proxy
holders to vote for or against, or to withhold or abstain from voting.
The proxies, when properly executed and returned to the Company, will
be voted in accordance with the instructions given therein by the
person executing the proxy. In the absence of instructions, properly
executed proxies will be voted FOR (1) the election of the Board's
nominees, Joseph G. Cremonese and Roger B. Knowles, as Directors of
the Company;
and (2) the ratification of the appointment by the Board of Directors of
Nussbaum Yates Berg Klein & Wolpow, LLP, an independent registered
public accounting firm as the auditor of the Company's annual financial
statements for the fiscal year ending June 30, 2009.
Any stockholder who executes and delivers a proxy may revoke it at any
time before it is voted by delivering a written notice of such revocation
to the Secretary of the Company at the address of the Company set forth
in this proxy statement, by submitting a properly executed proxy bearing
a later date, or by appearing at the Annual Meeting and requesting the
return of the proxy or by voting in person. In accordance with applicable
rules, boxes and designated spaces are provided on the proxy card for
stockholders to mark if they wish either to vote for or withhold authority
to vote for the nominees for Directors, or to vote for or against or to
abstain from voting for the proposal to ratify the appointment of the
Company's auditor.
A stockholder's attendance at the Annual Meeting will not, by itself,
revoke a proxy given by that stockholder. Stockholders vote at the
Annual Meeting by casting ballots (in person or by proxy), which are
tabulated by a person who is appointed by the Board of Directors before
the Annual Meeting to serve as inspector of election at the Annual Meeting
and who has executed and verified an oath of office.
It is anticipated that this proxy statement, the enclosed proxy card
and the Company's Annual Report will be mailed to the Company's
stockholders on or about October 31, 2008.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of October 27, 2008 certain
information as to each person who to the Company's knowledge, based
upon such person's representations or publicly available filings,
beneficially owned more than 5% of the outstanding shares of the
Company's Common Stock as of that date:
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned** Class***
------------------- ------------------- ----------
James S. Segasture* 187,250 (1) 15.8
Lowell A. Kleiman 139,581 (2) 11.8
16 Walnut Street
Glen Head, NY 11545
Grace S. Morin* 82,950 7.0
Joseph I. Kesselman* 64,120 (3) 5.4
Concentric Investment Mgmt. LLC 61,857 (4) 5.2
One International Place, Ste. 2401
Boston, MA 02110
Arthur M. Borden* 60,740 (5) 5.1
______________
* His or her address is c/o Scientific Industries, Inc., 70 Orville
Drive, Bohemia, New York 11716.
** Beneficial ownership, as such term is used herein, is determined
in accordance with Rule 13d-3(d)(1) promulgated under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and includes
voting and/or investment power with respect to shares of Common Stock
of the Company. Unless otherwise indicated, the named person
possesses
sole voting and investment power with respect to the shares. The
shares shown include shares issuable pursuant to options held by the
named person that may be exercised within 60 days of the date indicated
above.
*** Percentages of ownership are based upon the number of shares of
Common Stock issued and outstanding. Shares of Common Stock that may be
acquired pursuant to options that are exercisable within 60 days of the
date indicated above are deemed outstanding for computing the percentage
ownership of the person holding such options, but are not deemed
outstanding for the percentage ownership of any other person.
(1) Includes 4,000 shares issuable upon exercise of options and 493
shares owned by his wife.
(2) Based on information reported on Schedule 13(d) filed with the
Securities and Exchange Commission on October 30, 2002.
(3) Includes 12,000 shares issuable upon exercise of options, 735
shares of Common Stock owned jointly with his wife, and 4,000 shares
of Common Stock owned by his wife.
(4) Based on information reported on Schedule 13G filed with the
Securities and Exchange Commission on February 15, 2008.
(5) Includes 16,000 shares issuable upon exercise of options.
PROPOSAL 1
ELECTION OF DIRECTORS
General
The Company's Certificate of Incorporation provides for a classified
Board of Directors, consisting of three classes, each class serving a
three-year term on a staggered basis. The Board of Directors is currently
comprised of six members, of whom two are Class A Directors, two are a Class
B Directors and two are Class C Directors. At the Annual Meeting, two Class C
Directors are to be elected to serve until the annual meeting of stockholders
with respect to the fiscal year ending June 30, 2011, and until their successors
are duly elected and qualified. Shares of Common Stock represented by proxies
solicited by the Board of Directors will be voted for the nominees hereinafter
named if authority to do so is not specifically withheld. If for any reason
said nominees shall become unavailable for election, which is not now
anticipated, the proxies will be voted for a substitute nominee designated
by the Board of Directors.
The Directors of the Company are elected by the affirmative vote of the
holders of a plurality of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting and entitled to vote. A plurality
means that the nominee with the largest number of votes is elected as Director.
In tabulating the vote, abstentions and broker "non-votes" will be disregarded
and will have no effect on the outcome of the vote.
The Board of Directors recommends that stockholders vote FOR the election
of the nominees identified below to the Board of Directors.
Nominees
The Board of Directors has designated Mr. Joseph G. Cremonese and
Mr. Roger B. Knowles, both currently Class C Directors, as their nominees
for election.
Joseph G. Cremonese (age 72), a Director since November 2002 and
Chairman of the Board since February 2006, has been a marketing consultant to
the Company since 1996. Mr. Cremonese has been since 1991, President of
Laboratory Innovation Company, Ltd., which is a vehicle for technology transfer
and consulting services for companies, including the Company, engaged in the
production and sale of products for science and biotechnology. Since March
2003, he has been a director of and consultant to Proteomics, Inc., a producer
of recombinant proteins for medical research. Prior to 1991, he had been
employed by Fisher Scientific, the largest U.S. distributor of laboratory
equipment.
Roger B. Knowles (age 83), a Director since 1965, is retired. During
the past five years he has been involved in liquidating various real estate
and manufacturing concerns.
Other Directors
Class A Directors:
Arthur M. Borden, Esq. (age 88), a Director since 1974, has been
counsel to the law firm of Katten Muchin Rosenman LLP (formerly Rosenman &
Colin) during the past five years. He is a director of Supreme Industries,
Inc., a nationwide manufacturer of specialized truck bodies.
James S. Segasture (age 72), a Director since 1991, has been a
private investor since February 1990.
Class B Directors:
Joseph I. Kesselman (age 83), a Director since 1961 and Chairman of
the Board from August 2002 until his resignation in February 2006, has been
for more than five years a consultant to various corporations, including
Nuclear and Environmental Protection Inc. and Hopare Holding, S.A. (a Swiss
company), both companies of which he was previously a director.
Grace S. Morin (age 60 ), a Director since December 4, 2006, had
been President, Director and principal stockholder of Altamira Instruments,
Inc. from December 2003 until its acquisition by the Company on November
30, 2006. Ms. Morin has been engaged by Altamira to supervise its
administrative functions at the Pittsburgh, Pennsylvania facility. Prior to
December 2003, she was a general business consultant for two years, and
prior to that she was a member of senior management of a designer of gas
flow environmental engineered products for approximately four years.
Stock Ownership
The following table sets forth, as of October 27, 2008, the number
of shares of Common Stock beneficially owned by (i) each Director of the
Company, including the nominees for Directors, (ii) each executive officer
of the Company identified in the Summary Compensation Table under "Executive
Officers," and (iii) all directors and executive officers as a group.
Beneficial Owner Number Percentage
---------------- ------- ----------
Arthur M. Borden 60,740 (1) 5.1%
Joseph G. Cremonese 41,597 (2) 3.5%
Joseph I. Kesselman 64,120 (3) 5.4%
Roger B. Knowles 4,000 (4) .3%
Grace S. Morin 82,950 7.0%
James S. Segasture 187,250 (5) 15.8%
Helena R. Santos 18,000 (6) 1.5%
Robert P. Nichols 27,800 (7) 2.1%
Brookman P. March 82,950 (8) 7.0%
All current directors and
executive officers as a
group (8 persons) 483,657 (9) 38.8%
(1) Includes 16,000 shares issuable upon exercise of options.
(2) Includes 31,597 shares owned jointly with his wife and 10,000
shares issuable upon exercise of options.
(3) Includes 12,000 shares issuable upon exercise of options,
735 shares of Common Stock owned jointly with his wife, and 8,000 shares
of Common Stock owned by his wife.
(4) Represents shares issuable upon exercise of options.
(5) Includes 4,000 shares issuable upon exercise of options and 493
shares owned by his wife.
(6) Includes 5,000 shares issuable upon exercise of options.
(7) Includes 13,000 shares issuable upon exercise of options.
(8) Represents shares owned by his wife, Ms. Morin.
(9) Includes 64,000 shares issuable upon exercise of options.
Board Committees
Joseph I. Kesselman and James S. Segasture have been the sole
members of the Company's Stock Option Committee and serve at the
discretion of the Board. The Company administers the Company's 2002
Stock Option Plan ("2002 Plan").
Grace S. Morin, Joseph I. Kesselman, and James S. Segasture
have been the members of the Company's Compensation Committee and
serve at the discretion of the Board. The Company administers the
Company's compensation policies.
The Board of Directors acts as the Company's Audit Committee.
The Company does not have a financial expert on the Audit
Committee as defined by the Securities and Exchange Commission;
however, the Company believes that the members of the Audit Committee
have sufficient knowledge to properly evaluate and analyze the
Company's financial statements.
Meetings
During the fiscal year ended June 30, 2008 ("fiscal 2008"),
the Board of Directors held five meetings, at each of which all
persons who were Directors at the time were present.
Directors' Compensation and Options
DIRECTORS' COMPENSATION
FOR THE YEAR ENDED JUNE 30, 2008
_____________________________________________________________________
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
_____________________________________________________________________
Arthur M.
Borden 11,000 0 0 0
Joseph G.
Cremonese 23,000 0 0 0
Joseph I.
Kesselman 11,000 0 0 0
Roger B.
Knowles 11,000 0 0 0
Grace S.
Morin 0 0 0 0
James S.
Segasture 11,000 0 0 0
____________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Arthur M. 0 0 11,000
Borden
Joseph G.
Cremonese 0 36,000(1) 59,000
Joseph I.
Kesselman 0 0 11,000
Roger B.
Knowles 0 0 11,000
Grace S.
Morin 0 59,700(2) 59,700
James S.
Segasture 0 0 11,000
____________________________________________________________________
(1) Represents amount paid to his affiliate pursuant to a marketing
consulting agreement (see
"Related Transactions" below).
(2) Employee compensation received for her administrative services on
behalf of Altamira.
The Company pays to each non-employee Director a quarterly retainer
fee of $1,500 and $1,000 for each meeting attended. In addition, the
Company reimburses each Director for out-of-pocket expenses incurred in
connection with attendance at board meetings in the amount of $50 or the
Director's itemized expenses, whichever is greater. Mr. Cremonese, as
Chairman of the Board since February 2006, receives an additional fee of
$1,000 per month. During fiscal 2008, the fees to non-employee
Directors aggregated $103,000, including the consultant fee paid to
Mr. Cremonese's affiliate.
Pursuant to the Company's 1992 Stock Option Plan ("1992 Plan") options
to purchase 3,000 shares of Common Stock at the then fair market value
were granted to each non-employee director who was on the Board of
Directors on the first business day of each March, in 1993, 1994, 1995,
and 1996, namely Messrs. Borden, Kesselman, Knowles and Segasture. In
addition, in December 1997 and through December 2002 the Board of
Directors granted under the 1992 Plan annually options to purchase 4,000
shares of Common Stock to each of them exercisable at the fair market value
on the date of grant. Accordingly, as of June 30, 2008, the Company had
granted under the 1992 Plan to the foregoing four non-employee Directors
options to purchase an aggregate of 128,000 shares of Common Stock, or
options to purchase 32,000 shares of Common Stock for each. The fair market
value per share of Common Stock on the dates of grant ranged from $0.50 for
options granted in 1993 to $2.40 in 2002. As of June 30, 2008, options
under the 1992 Plan with respect to 92,000 shares had been exercised by
the Directors. In addition, they had exercised options with respect to
48,000 shares granted to them prior to the adoption of the 1992 Plan.
Under the Company's 2002 Plan, none of the Directors at the time of
the adoption by the Board of Directors of the 2002 Plan (subsequently
approved at the 2002 Annual Meeting of Stockholders by stockholders)
were eligible to receive option grants. Mr. Joseph G. Cremonese who
was elected Director at the 2002 Annual Meeting of Stockholders, was
granted on December 1, 2003 a five-year option to purchase 5,000 shares
of Common Stock at the fair market value of $1.35 per share. On
February 20, 2007, the Company granted him another five-year option
to purchase 5,000 shares of Common Stock at the fair market value of
$3.10 per share. The options had a fair value of $10,100 of which $3,000
was recognized as expense in fiscal 2008. Both options have not been
exercised.
Executive Officers and Key Personnel
Ms. Helena R. Santos and Mr. Robert P. Nichols are the executive
officers of the Company. Mr. Brookman P. March, is President and
Director of Sales and Marketing of the Company's subsidiary, Altamira
Instruments, Inc.
Ms. Santos, CPA (age 44), employed by the Company since 1994, was
appointed in August 2002 as President, Chief Executive Officer and
Treasurer. Previously she served as Vice President, Controller from
1997 and Secretary from May 2001. Ms. Santos was an internal auditor
with a major defense contractor from March 1991 to April 1994. She had
been previously employed in public accounting.
Mr. Nichols (age 47), employed by the Company since February 1998, was
appointed in August 2002 as Executive Vice President. He had been Vice
President, Engineering from May 2001. Prior to joining the Company,
Mr. Nichols was an Engineer Manager with Bay Side Motion Group, a
precision motion equipment manufacturer from January 1996 to February
1998.
Mr. March (age 63) has been Director of Sales and Marketing since
November 30, 2006 and President since July 2008 of Altamira, which
conducts the catalyst research instruments operation. He had been
Vice President and a Director of Altamira from December 2003 until it
was acquired on November 30, 2006 by the Company.
The executive officers of the Company are elected by the Board of
Directors and hold office until their respective successors are elected
and qualified or until his or her earlier resignation or removal.
None of the officers need to be Directors, and more than one office
may be held by the same person. There is no arrangement or understanding
between any executive officer and any person other than the Company
regarding election as an officer. The President of the Company's
subsidiary, Altamira Instruments, Inc. is the husband of Ms. Grace
S. Morin, a director of the Company.
Ms. Helena R. Santos and Mr. Robert P. Nichols are employed
pursuant to two-year employment agreements dated December 29, 2006.
The agreements provide for annual base salaries of $120,000 for Ms.
Santos and $115,000 for Mr. Nichols. They provide for annual bonuses
at the discretion of the Board and contain non-competition and
confidentiality covenants. The Board awarded bonuses to each of Ms.
Santos and Mr. Nichols of $10,000 paid in fiscal 2007 and fiscal 2008.
In connection with the Altamira acquisition during fiscal 2007,
Altamira entered into a two-year employment agreement dated November
30, 2006 with Mr. Brookman March, who had been Altamira's Vice President
and a Director, employing him currently as the subsidiary's Director
of Sales and Marketing. He was appointed, in addition, in July 2008
President of the subsidiary. A new employment agreement with Altamira
is currently being negotiated.
The Compensation Committee along with the other members of the
Board reviews and determines the compensation payable to executives.
In making a determination, the Committee and the Board give material
consideration to the Company's results of operations and financial
condition and competitive factors. The compensation at times includes
grants of options under its stock option plan to the named executives,
each subject to long-term employment agreements, containing terms which
the Board of Directors deemed reasonable. The Board is cognizant that
as a relatively small company, the Company has limited resources and
opportunities with respect to recruiting and retaining key executives.
Accordingly, the Company has relied upon long-term employment agreements
to retain qualified personnel.
The following table summarizes all compensation paid by the Company to
its Chief Executive Officer ("CEO"), who is also its Chief Financial
Officer ("CFO"), and President; and to its Executive Vice President and
since November 30, 2006, to the Director of Sales and Marketing of its
catalyst research instruments subsidiary with respect to each of the two
fiscal years ended June 30, 2008 and 2007. No other executive officer
earned in excess of $100,000 in any of such fiscal periods.
SUMMARY COMPENSATION TABLE
_____________________________________________________________
Non-
Equity
Incentive
Name Plan
and Stock Option Comp-
Principal Fiscal Salary Bonus Awards Awards ensation
Position Year ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g)
_____________________________________________________________
Helena R. 2008 120,000 10,000 0 0 0
Santos, 2007 115,000 10,000 0 0 0
CEO,
President,
CFO
Robert P. 2008 115,000 10,000 0 0 0
Nichols, 2007 110,000 10,000 0 0 0
Exec.
V. P.
Brookman 2008 110,000 0 0 0 0
P. March, 2007 64,200 0 0 0 0
Director
of Market-
ing and
Sales of
Altamira(2)
_____________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________
Non-
Qualified
Deferred All
Name Comp- Other
and ensation Comp-
Principal Earnings ensation Total
Position ($) ($) ($)
(a) (h) (i) (j)
_____________________________________________________________
Helena R. 2008 2,600(1) 132,600
Santos, 2007 2,500(1) 127,500
CEO,
President,
CFO
Robert P. 2008 2,500(1) 127,500
Nichols, 2007 2,400(1) 122,400
Exec.
V. P.
Brookman 2008 4,400(1) 114,400
P. March, 2007 2,600(1) 66,800
Director
of Market-
ing and
Sales of
Altamira(2)
(1)Represents the Company's matching contribution under the Company's
401(k) Plans.
(2)He was also appointed President of Altamira in July 2008.
Pursuant to the Altamira acquisition agreement, Altamira entered
into a long-term employment agreement on November 30, 2006 employing
Mr. Brookman P. March as Director of Marketing and Sales.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
_____________________________________________________________
Option Awards
_____________________________________________________________
Number Inactive
Number of Plan
of Securities Awards
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options ($) Date
(a) (b) (c) (d) (e) (f)
______________________________________________________________________
Helena R. 5,000 0 0 .84 5/2009
Santos
Robert P. 8,000 0 0 .84 5/2009
Nichols 5,000 0 0 1.25 10/2012
Brookman
P. March 0 0 0 0 -
______________________________________________________________________
Option Grants in Last Fiscal Year
There were no options granted to officers during fiscal 2008.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
________________________________________________________________________
Number of
Shares of Securities Value of
Common Underlying Unexercised
Stock Unexercised in-the-money
Acquired Options Options
On Value at FY-End (#) at FY-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($)(1) Unexercisable Unexercisable(1)
________________________________________________________________________
Robert P.
Nichols 12,000 22,300 13,000/0 37,700/0
________________________________________________________________________
(1) Calculated by multiplying the number of shares of Common Stock subject
to options by the difference between: (i) the market price on date of
exercise, and June 30, 2008, respectively, and (ii) the exercise price.
Related Transactions
Mr. Joseph G. Cremonese, who was first elected a Class C Director at
the Annual Meeting of Stockholders in November 2002 or his affiliate,
Laboratory Innovation Company, Ltd., have been providing independent
marketing consulting services to the Company for approximately nine
years. The services have been rendered since January 1, 2003 pursuant
to a consulting agreement which was amended and restated in March 2007.
The agreement as amended and restated provides that Mr. Cremonese and
his affiliate render, at the request of the Company, through December 31,
2008 marketing consulting services of at least 60, but not more than 96,
days per year at the rate of $600 per day with a monthly payment of $3,000,
with the Company's obligation reduced to the extent the consulting services
are less than 60 days for the 12 month period. The agreement contains
confidentiality and non-competition covenants. During fiscal 2008, the
Company paid an aggregate of $36,000 for the consulting services.
Ms. Grace S. Morin, was first elected a Class B Director in December
2006 in connection with the sale of her 90.36% ownership interest in
Altamira Instruments, Inc. to the Company in November 2006. Under the
purchase agreement the selling stockholders are to receive (in addition to
cash and stock) an amount in aggregate equal to 5% of net sales of Altamira
for each of five designated periods, subject to possible adjustment. The
first period ran from December 1, 2006 through June 30, 2007, the second,
third, and fourth periods are the 12 months ended June 30, 2008, June 30,
2009, and June 30, 2010 and the fifth period will be from July 1, 2010 to
November 30, 2010. Ms. Morin received $59,700 in contingent consideration
for the first period and $131,000 for the second period. She also received
$36,400 as an agreed upon reimbursement for the Company's treatment of the
transaction as a purchase of assets for tax purposes.
Section 16(a) Reporting
The Company believes that, for the year ended June 30, 2008, its
officers, directors and 10% stockholders timely complied with all filing
requirements of Section 16(a) of the Securities Exchange Act of 1934, as
amended.
PROPOSAL 2
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Board of Directors, subject to stockholders' approval, appointed
the independent registered public accounting firm of Nussbaum Yates Berg
Klein & Wolpow, LLP (the "Firm") as the Company's auditor for its financial
statements for fiscal year ending June 30, 2009. The Firm has audited the
consolidated financial statements of the Company since 1991. A representative
of the Firm is expected to be present at the Annual Meeting, and will have an
opportunity to make a statement to the stockholders and will be available to
respond to appropriate questions. The ratification of the appointment will
require the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or represented by proxy at the Annual
Meeting and entitled to vote. Abstentions will be included in determining the
number of shares of Common Stock present or represented and entitled to vote
for purposes of approval and will have the effect of votes "against" the
proposal. Broker "non-votes" will not be counted in determining the number
of shares of Common Stock present or represented and entitled to vote to
approve the proposal and will therefore not have the effect of votes either
"for" or "against".
Stockholder ratification of the appointment is not required by the
Company's Certificate of Incorporation or By-laws or otherwise. If the
stockholders fail to ratify the appointment, the Board of Directors will
reconsider whether to retain that firm. Even if the appointment is ratified,
the Board of Directors in its discretion may direct the appointment of a
different independent registered public accounting firm as the auditor at any
time during the year if the Board of Directors determines that such a change
would be in the best interest of the Company and its stockholders.
The following is a description of the fees incurred by the Company for
services by the Firm during fiscal 2008 and fiscal 2007.
Audit Fees: The Company incurred fees of the Firm of approximately
$37,000 and $35,000, respectively, in connection with its audit of the
Company's financial statements for fiscal 2008 and fiscal 2007, and $9,000
and $4,500, respectively, in connection with the review of the Company's
interim financial statements included in the Company's Quarterly Reports
on Form 10-QSB during fiscal 2008 and fiscal 2007.
Tax Fees: The Company incurred fees of the Firm of approximately
$4,000 for each of fiscal 2008 and fiscal 2007, in connection with preparation
of the corporate tax returns.
Financial Information Systems Design and Implementation Fees: The
Firm was not engaged by the Company during either fiscal 2008 or fiscal 2007
to provide advice regarding financial information systems design and
implementation.
Other Fees: The Company paid to the Firm $12,600 and $39,900 in
fiscal 2008 and 2007, respectively, primarily in connection with the
acquisition of Altamira.
The Board of Directors unanimously recommends that the stockholders vote
FOR the ratification of the appointment of the independent registered
public accounting firm of Nussbaum Yates Berg Klein & Wolpow, LLP as the
auditor of the Company's financial statements for the fiscal year ending
June 30, 2009.
OTHER MATTERS
The Board of Directors is not aware of any matters other than those
set forth in this proxy statement that will be presented for action at the
Annual Meeting; however, if any other matters properly come before the Annual
Meeting, the persons named as proxies intend to vote the shares of Common
Stock they represent in accordance with their judgment on such matters.
ADDITIONAL INFORMATION
The Company's Annual Report to Stockholders for the fiscal year
ended June 30, 2008, includes its Annual Report on Form 10-KSB for the year
which was filed with the U.S. Securities and Exchange Commission on
September 29, 2008. The Annual Report to Stockholders on Form 10-KSB is not
part of this proxy material, but is being mailed to stockholders with this
proxy solicitation.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company intended to be presented at
the Company's Annual Meeting of Stockholders following the year ending June
30, 2009 must be received by the Secretary of the Company for inclusion in
the appropriate proxy materials no later than June 29, 2009.
EXPENSES AND SOLICITATION
The entire cost of soliciting proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited by officers,
directors and regular employees of the Company personally or by telephone.
No additional compensation will be paid to such persons for any additional
solicitations. The Company will also request securities brokers, custodians,
nominees and fiduciaries who hold shares of Common Stock of record to forward
solicitation material to the beneficial owners of such shares, and will
reimburse them for their reasonable out-of-pocket expenses in forwarding
such soliciting materials.
By Order of your Board of Directors,
/s/ Robert P. Nichols
______________________
Robert P. Nichols
Secretary
Bohemia, New York
October 27, 2008
______________________________________________________________________
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
December 3, 2008
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints James S. Segasture and Helena R.
Santos, and each of them, with full power of substitution, to vote,
as a holder of the common stock, par value $0.05 per share
("Common Stock"), of Scientific Industries, Inc., a Delaware corporation
(the "Company"), all the shares of Common Stock which the undersigned is
entitled to vote, through the execution of a proxy with respect to the 2008
Annual Meeting of Stockholders of the Company (the "Annual Meeting"), to be
held at Reitler Brown & Rosenblatt LLC, 800 Third Avenue, 21st Floor, New
York, New York, on Wednesday, December 3, 2008 at 11:00 a.m. New York time,
and any and all adjournments or postponements thereof, and authorizes and
instructs said proxies to vote in the manner directed below.
The Board of Directors recommends the vote FOR the election of the
nominees for Class C Directors named below and proposal 2.
1. Election of Class C Directors: JOSEPH G. CREMONESE ROGER B. KNOWLES
FOR both nominees ( ) WITHHOLD for both nominees ( )
If you do not wish your shares voted FOR one of the two nominees, draw a line
through that person's name above.
2. Proposal to ratify the appointment of the independent registered public
accounting firm, Nussbaum Yates Berg Klein & Wolpow, LLP, as the Company's
auditor for the fiscal year ending June 30, 2009.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before such meeting or adjournment or
postponement thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE, PLEASE VOTE, SIGN AND DATE ON
REVERSE SIDE AND RETURN PROMPTLY.
__________________________________________________________________________
(BACK OF CARD)
PROPERLY EXECUTED AND RETURNED PROXY CARDS WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS TO THE
CONTRARY ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE
NAMED NOMINEES A DIRECTOR AND APPROVAL OF PROPOSAL NO. 2 LISTED ON THE
REVERSE SIDE OF THIS CARD.
You may revoke this proxy at any time before it is voted by (i) filing
a revocation with the Secretary of the Company, (ii) submitting a duly
executed proxy bearing a later date or time than the date or time of
the proxy being revoked; or (iii) attending the Annual Meeting and
voting in person. A stockholder's attendance at the Annual
Meeting will not by itself revoke a proxy given by the stockholder.
(Please sign exactly as the name appears
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign with full
corporate name by the president or other
authorized officer. If a partnership, please
sign in the partnership name by authorized
person.)
Dated:___________,2008 _______________________________
Signature
PLEASE COMPLETE, SIGN, DATE __________________________________
AND RETURN THE PROXY CARD Signature, if held by joint owners
PROMPTLY USING THE
ENCLOSED ENVELOPE.