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. )
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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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SCIENTIFIC INDUSTRIES, INC.
(LOGO)
November 23, 2016
Dear Fellow Stockholders:
You are cordially invited to attend the 2016 Annual
Meeting of Stockholders of Scientific Industries, Inc. which
will be held at 11:00 a.m. (New York time) on Wednesday,
January 18, 2017 at La Quinta Inn & Suites, 10 Aero Road,
Bohemia, New York, 11716.
Information concerning the matters to be considered
and voted upon at the Annual Meeting is set out in the
attached Notice of 2016 Annual Meeting of Stockholders and
Proxy Statement.
It is important that your shares be represented at
the 2016 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.
80 Orville Drive, Suite 102
Bohemia, New York 11716
_____________
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
January 18, 2017
Notice is hereby given that the 2016 Annual
Meeting of Stockholders (the "Annual Meeting") of
Scientific Industries, Inc., a Delaware corporation
(the "Company"), will be held on Wednesday, January
18, 2017, at 11:00 a.m. (New York time) at La Quinta
Inn & Suites, 10 Aero Road, Bohemia, New York, 11716,
for the following purposes:
1. To elect one Class B Director 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, 2019 and the election and qualification of her
respective successor.
2. To ratify the appointment of Nussbaum Yates Berg
Klein & Wolpow, LLP as the Company's independent
registered public accounting firm for the fiscal year ending
June 30, 2017.
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 November 23, 2016, 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
November 23, 2016
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.
80 Orville Drive, Suite 102
Bohemia, New York 11716
PROXY STATEMENT
_________________
2016 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 18, 2017
_________________
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 2016 Annual Meeting of Stockholders (the "Annual
Meeting") to be held at La Quinta Inn & Suites, 10 Aero
Road, Bohemia, New York, 11716, on Wednesday, January 18,
2017, 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 one Director of the Company to
serve until the Company's annual meeting of stockholders with
respect to the fiscal year ending June 30, 2019, and the
election and qualification of her successor; (2) ratify the
appointment of Nussbaum Yates Berg Klein & Wolpow, LLP, as the
Company's independent registered public accounting firm for the
fiscal year ending June 30, 2017; 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 November 23, 2016 (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 1,489,112 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. In the determination
of the number of shares of Common Stock present at the Annual
Meeting for quorum purposes abstentions and broker "non-votes"
are included. 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 other
than with respect to broker "non-votes" will be voted FOR (1) the
election of the Board's nominee, Grace S. Morin as Class B
Director of the Company; and (2) the ratification of the
appointment by the Board of Directors of Nussbaum Yates Berg
Klein & Wolpow, LLP, as the Company's independent registered
public accounting firm for the fiscal year ending June 30, 2017.
1
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 nominee for Director, or to vote for,
against or to abstain from voting for the proposal to ratify the
appointment by the Board of Directors of the Company's independent
registered public accounting firm.
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 December 9, 2016.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of November 23, 2016
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:
Amount and
Name Nature of Beneficial Ownership % of Class
___________________ ______________________________ __________
Spectrum Laboratories, Inc. 127,986 (1) 8.6%
18617 Broadwick Street
Rancho Dominquez, CA 90220
Fulcrum, Inc. 126,449 (2) 8.5%
660 Kinderkamack Rd., Ste. 203
Oradell, NJ 07649
Lowell A. Kleiman 90,000 (3) 6.0%
16 Walnut Street
Glen Head, NY 11545
Joseph G. Cremonese* 104,597 (4) 6.9%
Roger B. Knowles* -
Grace S. Morin* 89,950 (5) 6.0%
James S. Segasture* 162,500 (6) 10.9%
Helena R. Santos* 15,779 1.1%
Robert P. Nichols* 20,397 (7) 1.4%
Brookman P. March* 89,950 (8) 6.0%
Karl D. Nowosielski* 11,000 (9) 0.8%
All directors and executive
officers as a group (8 persons) 404,223 (10) 26.4%
* His or her address is c/o Scientific Industries, Inc.,
80 Orville Drive, Suite 102, Bohemia, New York 11716.
2
** 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) Based on information reported on Form 3 filed with
the Securities and Exchange Commission on June 27, 2011.
(2) Stock issued in connection with the acquisition of the
Torbal division assets from Fulcrum, Inc. on February 26, 2014.
(3) Based on information reported in his Schedule 13D filed
with the Securities and Exchange Commission on December 10, 2015.
(4) 77,597 shares are owned jointly with his wife, 7,000
shares are owned by his wife, and 20,000 shares are issuable
upon exercise of options.
(5) Includes 7,000 shares issuable upon exercise of options
held by her husband, Mr. March.
(6) Shares owned jointly with his wife.
(7) Includes 2,000 shares issuable upon exercise of options.
(8) Represents 82,950 shares owned by Ms. Morin, his wife
and 7,000 shares issuable upon exercise of options.
(9) Represents shares issuable upon exercise of options.
(10) Includes 40,000 shares issuable upon exercise of options.
3
PROPOSAL 1
ELECTION OF DIRECTOR
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. Two are Class A Directors, one is a
Class B Director, and two are Class C Directors. At the
Annual Meeting, the one Class B Director is to be elected
to serve until the annual meeting of stockholders with
respect to the fiscal year ending June 30, 2019, and until
her successor is duly elected and qualified. During the
fiscal year ended June 30, 2016 ("fiscal 2016"), the Board
held four meetings, at each of which all Directors were
present, except for one director at one meeting. Shares
of Common Stock represented by executed and returned proxies
solicited by the Board of Directors will be voted for the
nominee hereinafter named if authority to do so is not
specifically withheld. If for any reason said nominee 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 nominee identified below to the
Board of Directors.
Nominee
The Board of Directors has designated Ms. Grace S.
Morin, currently a Class B director, as their nominee for
election.
Grace S. Morin (age 68), a Director since December 4,
2006, had been President, Director and principal stockholder
of Altamira Instruments, Inc. from December 2003 until its
acquisition in November 2006 by the Company. Ms. Morin had
been employed by Altamira to supervise its administrative
functions at the Pittsburgh, Pennsylvania facility as a full-
time employee through March 31, 2009 and since that date as a
part-time consultant. Prior to December 2003, she was a general
business consultant for two years, and prior thereto a member of
senior management of a designer of gas flow environmental
engineered products for approximately four years.
Other Directors
Helena R. Santos (age 52), a Director since 2009, has
been employed by the Company since 1994, and has served since
August 2002 as its President, Chief Executive Officer and
Treasurer. She had served as Vice President, Controller from
1997 and as 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.
James S. Segasture (age 80), a Director since 1991,
has been retired for the last five years.
Joseph G. Cremonese (age 81), a Director since
November 2002 and Chairman of the Board since February 2006,
has been, through his affiliate, a marketing consultant to
the Company since 1996. Mr. Cremonese has been since 1991,
President of his affiliate, Laboratory Innovation Company,
Ltd., which is a vehicle for technology transfer and consulting
services for companies, engaged in the production and sale of
products for science and biotechnology. Since March 2003, he
has been a director of Proteomics, Inc., a producer of
recombinant proteins for medical research.
4
Prior to 1991, he had been employed by Fisher Scientific,
the largest U.S. distributor of laboratory equipment.
Roger B. Knowles (age 91), a Director since 1965, has
been retired for the last five years.
Stock Ownership
The following table sets forth, as of November 23, 2016,
relevant information as to the shares of Common Stock beneficially
owned by (i) each Director of the Company, (ii) each executive
officer of the Company identified in the Summary Compensation
Table under "Executive Officers and Key Personnel," and (iii)
all directors and executive officers as a group.
Beneficial Owner Number Percentage
________________ ______ __________
Joseph G. Cremonese 104,597 (1) 6.9%
Roger B. Knowles - -
Grace S. Morin 89,950 (2) 6.0%
race S. Morin 87,783
James S. Segasture 162,500 (3) 10.9%
Helena R. Santos 15,779 1.1%
Robert P. Nichols 20,397 (4) 1.4%
Brookman P. March 89,950 (5) 6.0%
Karl D. Nowosielski 11,000 (6) 0.8%
All current directors and executive 404,223 (7) 26.4%
officers as a group (8 persons)
(1) 77,597 shares are owned jointly with his wife, 7,000
shares are owned by his wife, and 20,000 shares are issuable
upon exercise of options.
(2) Includes 7,000 shares issuable upon exercise of
options held by her husband, Mr. March.
(3) Shares owned jointly with his wife.
(4) Includes 2,000 shares issuable upon exercise of options.
(5) Represents 82,950 shares owned by Ms. Morin, his wife
and 7,000 shares issuable upon exercise of options.
(6) Represents shares issuable upon exercise of options.
(7) Includes 40,000 shares issuable upon exercise of options.
Board Committees
The Company's Stock Option Committee administers the
Company's 2012 Stock Option Plan. The members of the committee
are non-management Directors of the Company - James S.
Segasture and Joseph G. Cremonese. The members of the Committee
serve at the discretion of the Board. During fiscal 2016 the
Stock Option Committee did not hold any meetings.
Grace S. Morin and James S. Segasture are the current
members of the Company's Compensation Committee serving at the
discretion of the Board. The Committee administers the Company's
compensation policies. During fiscal 2016, the Compensation
Committee held one meeting.
5
The Board of Directors acts as the Company's Audit
Committee, which in its function as the Committee, held four
meetings during fiscal 2016. Ms. Santos and Ms. Morin, who are
not "independent" are "financial experts" as defined by the
Securities and Exchange Commission.
Directors' Compensation and Options
DIRECTORS' COMPENSATION
For the Year Ended June 30, 2016
_________________________________________________________________
Non-
Equity
Fees Incentive
Earned Plan
or Paid Stock Option Comp-
in Cash Awards Awards ensation
Name ($) ($) ($) ($)
(a) (b) (c) (d) (e)
__________________________________________________________________
Joseph G.
Cremonese 30,000 0 0 0
Roger B.
Knowles 13,900 0 0 0
Grace S.
Morin 13,900 0 0 0
James S.
Segasture 13,900 0 0 0
___________________________________________________________________
DIRECTORS' COMPENSATION (CONTINUED)
Changes
in
Pension
Value and
Non- Non-
qualified qualified
Deferred Deferred All
Compens- Comp- Other
ation ensation Comp-
Earnings Earnings ensation Total
Name ($) ($) ($) ($)
(a) (f) (g) (h) (i)
____________________________________________________________________
Joseph G.
Cremonese 0 0 43,200(1) 73,200
Roger B.
Knowles 0 0 0 13,900
Grace S.
Morin 0 0 5,800(2) 19,700
James S.
Segasture 0 0 0 13,900
____________________________________________________________________
(1) Represents amount paid to his affiliate pursuant to a marketing
consulting agreement.
(2) Represents compensation received for her administrative services
as a consultant for Altamira.
The Company pays each Director who is not an employee of
the Company or a subsidiary a quarterly retainer fee of $2,000 and
$1,500 for each meeting attended. In addition, the Company reimburses
each Director for out-of-pocket expenses incurred in connection with
attendance at board meetings. Mr. Cremonese, as Chairman of the
Board receives an additional fee of $1,400 per month. During fiscal
2016, total director compensation to non-employee Directors aggregated
$120,700, including the consulting fees paid to Mr. Cremonese's
affiliate, and to Ms. Morin.
Since December 1, 2003, Mr. Joseph G. Cremonese, has been
awarded a total of 45,000 stock options under the Company's 2002 and
2012 Stock Option Plans of which 20,000 remain unexercised. None of
the other directors have options outstanding.
Executive Officers and Key Personnel
See above for the employment history of Ms. Santos.
Robert P. Nichols (age 55), employed by the Company since
February 1998, has served since August 2002 as Executive Vice President.
Previously, he had been since May 2001 Vice President, Engineering.
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.
Brookman P. March (age 71) has been Director of Sales and
Marketing of Altamira, which has conducted the Catalyst Research
Instruments operations since November 30, 2006 and its President
since July 2008. He had been Vice President and a Director of Altamira
from December 2003 until it was acquired by the Company. Mr. March is
the husband of Ms. Morin, a Director of the Company.
Karl D. Nowosielski (age 37), is the President of the Torbal
division of the Benchtop Laboratory Equipment Operations and Director
of Marketing for the Company. He had been until February 2014 Vice
President of Fulcrum, Inc. (the seller of the Torbal division assets)
since 2004.
The executive officers of the Company are elected by the Board
of Directors of the corporation for which they serve as officers and
hold office until their respective successors are elected and qualified
or until their 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 Compensation Committee reviews and recommends to the Board
of Directors the compensation to be paid to each executive officer.
Executive compensation, in all instances except for the compensation
for the Chief Executive Officer ("CEO"), is based on recommendations
from the CEO. The CEO makes a determination by comparing the performance
of each executive being reviewed with objectives established at the
beginning of each fiscal year and with objectives established during the
business year with regard to the success of the achievement of such
objectives and the successful execution of management targets and goals.
With respect to the compensation of the CEO, the Committee
considers performance criteria, 50% of which is related to the direction,
by the CEO, of the reporting executives, the establishment of executive
objectives as components for the successful achievement of Company goals
and the successful completion of programs leading to the successful
completion of the Business Plan for the Company and 50% is based on the
achievement by the Company of its financial and personnel goals
tempered by the amount of the income or loss of the Company during the
fiscal year.
The compensation at times includes grants of options under its
stock option plan to the named executives. Each officer is employed
pursuant to a long-term employment agreement, containing terms proposed
by the Committee and approved as reasonable by the Board of Directors.
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 and grants of stock options to retain
qualified personnel.
Compensation for each of its executive officers provided by
their employment agreements were based on the foregoing factors and
the operating and financial results of the segments under their
management.
7
The following table summarizes all compensation paid by the
Company to each of its executive officers for the fiscal years ended
June 30, 2016 and 2015.
SUMMARY COMPENSATION TABLE
_____________________________________________________________________
Non- Non-
Equity Qualified
Incentive Deferred
Name Plan Comp-
and Stock Option Comp- ensation
Principal Fiscal Salary Bonus Awards Awards ensation Earnings
Position Year ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h)
_____________________________________________________________________
Helena R. 2016 157,100 0 0 0 0 0
Santos, 2015 154,000 0 0 0 0 0
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2016 141,800 0 0 1,200(2) 0 0
Nichols, 2015 139,000 0 0 1,200(2) 0 0
Exec.
V.P.
_____________________________________________________________________
Brookman 2016 142,800 0 0 1,200(3) 0 0
P. March, 2015 140,000 0 0 2,800(3) 0 0
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D. 2016 141,900 0 0 9,500(4) 0 0
Nowosielski2015 140,500 0 0 7,100(4) 0 0
President of
Torbal
Division
and Director
of Marketing
_____________________________________________________________________
SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________________
Changes
in
Pension
Value
and Non-
Qualified All
Name Deferred Other
and Comp- Comp-
Principal Fiscal ensation ensation Total
Position Year Earnings ($) ($)
(a) (b) (i) (j)
_____________________________________________________________________
Helena R. 2016 0 6,300(1) 163,400
Santos, 2015 0 6,200(1) 160,200
CEO,
President,
CFO
_____________________________________________________________________
Robert P. 2016 0 5,700(1) 148,700
Nichols, 2015 0 5,600(1) 145,800
Exec.
V.P.
_____________________________________________________________________
Brookman 2016 0 5,700(1) 149,700
P. March, 2015 0 5,600(1) 148,400
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D. 2016 0 5,700(1) 157,100
Nowosielski 2015 0 5,600(1) 153,200
President of
Torbal
Divsion
and Director
of Marketing
_____________________________________________________________________
(1) The amounts represent the Company's matching contribution under
the Company's 401(k) Plans.
(2) The amount represents compensation expense for stock options
granted valued utilizing the Black-Scholes-Merton options pricing model,
disregarding estimates of forfeitures related to service-based vesting
considerations. The fiscal 2014 option was valued at a total of $3,500
of which $1,200 was expensed as stock based compensation in fiscal 2016
and 2015.
(3) The amounts represent compensation expense for the 2014 stock options
granted valued utilizing the Black-Scholes-Merton options pricing model,
disregarding estimates of forfeitures related to service-based vesting
considerations. The 2014 option was valued at a total of $3,500 of which
$1,200 was expensed in fiscal 2016 and 2015.
(4) The amounts represent compensation expense for the 2016 and 2015
stock options granted as part of his employment agreement, valued
utilizing the Black-Scholes-Merton options pricing model, disregarding
estimates of forfeitures related to service-based vesting considerations.
The options were valued at a total of $9,500 and $7,100, respectively,
all of which was expensed as stock based compensation in the respective
periods.
8
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2016
All Other
Estimated Estimated Stock
Future Future Awards:
Payouts Payouts Number
Under Under Of
Non-Equity Equity Shares
Incentive Incentive Of Stock
Grant Plan Plan Or Units
Name Date $ $ (#)
(a) (b) (c) (d) (e)
________________________________________________________
Karl D. Nowosielski 02/26/16 0 0 0
________________________________________________________
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2016
(CONTINUED)
All Other
Option Grant
Awards: Date
Number Exercise Fair
Of Or Base Value of
Securities Price Stock
Underlying Of Option And
Options Awards Option
Name # ($/Sh) Awards
(a) (f) (g) (h)
_________________________________________________________
Karl D. Nowosielski 5,000 3.05 9,500
_________________________________________________________
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
______________________________________________________________
Option Awards
______________________________________________________________
Number Equity
Number of Incentive
of Securities Plan Awards:
Securities Under- Number of
Under- lying Securities
lying Un- Unexercised Underlying Option
exercised Options(#) Unexercised Exercise Option
Options(#) Unexerci- Unearned Price Expiration
Name Exercisable sable Options(#) ($) Date
(a) (b) (c) (d) (e) (f)
_____________________________________________________________________
Brookman P. 6,334 666 0 3.50-3.71 05/2022-12/2023
March
Robert P.
Nichols 1,334 666 0 3.50 12/2023
Karl D.
Nowosielski 2,667 8,333 0 3.05-4.05 02/2024-02/2026
_____________________________________________________________________
Employment Agreements
In May 2016, The Company extended the existing employment
agreements with Ms. Helena R. Santos and Robert P. Nichols to June
30, 2017. The agreements provide for annual base salaries for the
fiscal years ending June 30, 2017, for Ms. Santos of $162,000 and
$146,000 for Mr. Nichols. Bonuses, if any, are to be awarded at
the discretion of the Board of Directors for each of the fiscal
years. No bonuses were awarded for fiscal 2016 or 2015.
In May 2016, the Company extended the existing employment
agreement with Mr. March through June 30, 2017. The agreement
provides for an annual base salary of $147,000. Bonuses, if any,
may be awarded at the discretion of the Board of Directors. No
bonuses were awarded for fiscal 2016 or 2015. Mr. March is the
husband of Grace S. Morin, a Director of the Company and of Altamira
and a former principal stockholder of Altamira.
In February 2014 in conjunction with the acquisition of the
Torbal division assets from Fulcrum, Inc., the Company entered into
an employment agreement with Mr. Nowosielski providing for his
employment through February 2017, which may be extended by mutual
consent for another two years. The agreement provided for an annual
base salary of $140,000, subject to increases commencing with
9
the second year based on percentage increases in the Consumer Price
Index, plus discretionary bonuses. The agreement also provided for
the issuance of 2,000 stock options upon commencement of employment
and 4,000, 5,000, and 6,000 stock options in February 2015, 2016,
and 2017, respectively, subject to his continued employment. No
bonuses have been awarded under the agreement.
The employment agreements for Ms. Santos, Mr. Nichols, Mr.
March, and Mr. Nowosielski contain confidentiality and non-competition
covenants. The employment agreements for Ms. Santos, Mr. March, and
Mr. Nowosielski contain termination provisions stipulating that if
the Company terminates the employment other than for death, disability,
or cause (defined as (i) conviction of a felony or (ii) gross neglect
or gross misconduct (including conflict of interest), the Company shall
pay severance payments equal to one year's salary at the rate of the
compensation at the time of termination, and continue to pay the regular
benefits provided by the Company for a period of two years from
termination.
Related Transactions
Mr. Joseph G. Cremonese, a Director since November 2002,
through his affiliate, Laboratory Innovation Company, Ltd., has been
providing independent marketing consulting services to the Company since
January 1, 2003 pursuant to a consulting agreement expiring December 31,
2016. The agreement currently provides that Mr. Cremonese and his
affiliate shall render, at the request of the Company, marketing
consulting services for a monthly payment of $3,600. The agreement
contains confidentiality and non-competition covenants. The Company
paid fees of $43,200 pursuant to the agreement for each of fiscal 2016
and 2015.
Ms. Grace S. Morin, was elected a Director in December 2006
following the sale of her 90.36% ownership interest in Altamira to
the Company in November 2006. Up until March 31, 2009, Ms. Morin
had been employed by Altamira as an administrative employee. Since
April 1, 2009, she has provided consulting services on a part-time
basis pursuant to an agreement expiring December 31, 2016 at the
rate of $85 per hour, resulting in payments of $5,800 and $4,300 for
fiscal 2016 and fiscal 2015, respectively. The agreement contains
confidentiality and non-competition covenants.
Section 16(a) Reporting
The Company believes that, for the year ended June 30, 2016,
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.
10
PROPOSAL 2
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors, subject to stockholders' approval,
appointed Nussbaum Yates Berg Klein & Wolpow, LLP (the "Firm") as
the Company's independent registered public accounting firm for the
fiscal year ending June 30, 2017. 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 at any time during the year if the Audit Committee,
currently the entire 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 2016 and fiscal 2015.
The Company incurred for the services of the Firm fees of
approximately $67,000 and $65,000 for fiscal 2016 and 2015,
respectively, in connection with the audit of the Company's annual
financial statements and quarterly reviews; and $6,000 for each
fiscal year for the preparation of the Company's corporate tax
returns.
In approving the engagement of the independent registered
public accounting firm to perform the audit and non-audit services,
the Board of Directors as the Company's audit committee evaluates the
scope and cost of each of the services to be performed including a
determination that the performance of the non-audit services will not
affect the independence of the firm in the performance of the audit
services.
The Board of Directors unanimously recommends that the stockholders
vote FOR the ratification of the appointment of Nussbaum Yates Berg
Klein & Wolpow, LLP as the independent registered public accounting
firm of the Company for the fiscal year ending June 30, 2017.
11
OTHER MATTERS
The Board of Directors are 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, 2016, includes its Annual Report on Form 10-K
for the year which was filed with the U.S. Securities and Exchange
Commission on October 11, 2016. The Annual Report to Stockholders
on Form 10-K is not part of this proxy material, but is being mailed
to stockholders with this proxy solicitation. Certain information
included herein is incorporated in the Report by reference.
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, 2017 must be received by the Secretary of
the Company for inclusion in the appropriate proxy materials no later
than August 4, 2017.
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
November 23, 2016
12
____________________________________________________________________
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS January 18, 2017
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph G. Cremonese 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 Scienti?c
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 2016 Annual Meeting of Stockholders of
the Company (the "Annual Meeting"), to be held at La
Quinta Inn & Suites, 10 Areo Road, Bohemia, New York,
on Wednesday, January 18, 2017 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.
1. Election of Class B Director: GRACE S. MORIN
FOR nominee [ ] WITHHOLD for nominee [ ]
2. Ratify the appointment of Nussbaum Yates Berg Klein &
Wolpow, LLP, as the Company's independent registered public
accounting ?rm for the ?scal year ending June 30, 2017.
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.
The Board of Directors recommends the vote FOR the election
of the named nominee for Class B Director and proposal 2.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE, PLEASE VOTE,
SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY.
___________________________________________________________
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 THE NAMED NOMINEE AND TO APPROVE
PROPOSAL NO. 2.
You may revoke this proxy at any time before it is voted by
(i) ?ling 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 o?cer. If a
partnership, please sign in the partnership name by an
authorized person.)
Dated:
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
__________________________________
Signature
__________________________________
Signature, if held by joint owners