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ANNAPOLIS, MARYLAND, March 11, 2008 – The Plaintiffs in the recently dismissed securities fraud lawsuit against Sonex Research, Inc. (“Sonex” or the “Company”) are appealing the dismissal. On January 31, 2008, the U.S. District Court for the Eastern District of Pennsylvania granted the Company’s Motion to Dismiss the lawsuit filed by investors seeking the return of $175,000 in equity investments made in Sonex during 2004. This lawsuit, originally filed in February 2005, was re-filed after initially being dismissed in July 2006. The Court dismissed the claims in their entirety with prejudice, meaning that the Plaintiffs would be barred from further amending and refiling their lawsuit.
On February 29, 2008, Plaintiffs Bruce W. Majer of Plymouth Meeting, PA, Allen W. Fortna of Whitehall, PA, and the Hermitage Partnership of Philadelphia, PA, filed a Notice of Appeal to the U.S. Court of Appeals for the Third Circuit. They seek to have the ruling of the dismissal overturned and have the case proceed to trial. Despite having both their original and amended lawsuits dismissed, the Plaintiffs continue to maintain they were induced to purchase securities based on a series of alleged misrepresentations and omissions. Their lawsuit was filed against Sonex, its former President, CEO and director Roger D. Posey, former director Jim Z.I. Williams, current CFO, Secretary and director George E. Ponticas, and Dr. Andrew A. Pouring, current Sonex Chairman of the Board, CEO and President. Mr. Majer is a former colleague of Mr. Posey, while Mr. Fortna is Mr. Majer's brother-in law.
Sonex plans to defend the appeal. The Court of Appeals has not yet issued a schedule with respect to the appeal process. Sonex management regrets the fact that the insistence of the Plaintiffs in refusing to accept the decision of the U.S. District Court for the Eastern District of Pennsylvania will continue to cost the Company money in legal fees. On February 14, 2008, the Company filed a Motion and supporting memorandum asking the Court to award to the Company legal fees and expenses incurred to date of approximately $108,500 as well as amounts continuing to be incurred in this action.
Sonex Research, Inc., a leader in the field of combustion technology, is developing its patented Sonex Combustion System (SCS) technology designed to increase fuel mileage and reduce emissions of internal combustion engines. The SCS achieves in-cylinder control of ignition and combustion through chemical/turbulent enhancement using patented combustion chamber designs. Sonex plans to complete development, commercialize and market its piston-based Sonex Controlled Auto Ignition (SCAI) combustion process to the automotive industry to improve fuel efficiency of gasoline powered vehicles. 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). Sonex has licensed the SCS heavy fuel engine (HFE) technology applicable to UAVs with HFEs that are twenty horsepower or less to Insitu, Inc. (www.insitu.com), a pioneer developer of long-range, unmanned, autonomous aircraft for military and commercial activities. Insitu has developed the long endurance, low cost ScanEagle® UAV in partnership with The Boeing Company. (ScanEagle® is a registered trademark of The Boeing Company.) ScanEagle has been used to provide services for the U.S. Marine Corps, U.S. Navy, and Australian Army in the Middle East.
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.