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.
- -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
- -----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
- -----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------
(5) Total fee paid:
- -----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount previously paid:
- -----------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -----------------------------------------------------------------
(3) Filing Party:
- -----------------------------------------------------------------
(4) Date Filed:
- -----------------------------------------------------------------
<page>
October 22, 2004
Dear Fellow Stockholders:
You are cordially invited to attend the 2004 Annual
Meeting of Stockholders of Scientific Industries, Inc. which
will be held at 10:30 a.m. (New York time) on Thursday,
December 2, 2004 at the Princeton Club, 15 West 43rd Street,
New York, New York 10036.
Information concerning the matters to be considered
and voted upon at the Annual Meeting is set out in the
attached Notice of 2004 Annual Meeting of Stockholders and
Proxy Statement.
It is important that your shares be represented at
the 2004 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 I. Kesselman
_______________________
Joseph I. Kesselman
Chairman
<page>
SCIENTIFIC INDUSTRIES, INC.
70 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
_____________
NOTICE OF 2004 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, DECEMBER 2, 2004
Notice is hereby given that the 2004 Annual
Meeting of Stockholders (the "Annual Meeting") of Scientific
Industries, Inc., a Delaware Corporation (the "Company"),
will be held on Thursday, December 2, 2004, at 10:30 a.m.
(New York time) at the Princeton Club, 15 West 43rd Street,
New York, New York 10036, for the following purposes:
1. To elect a 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, 2007 and
until the election and qualification of his
respective successor.
2. To ratify the appointment of Nussbaum Yates &
Wolpow, P.C. as the Company's independent
auditors for the fiscal year ending June 30,
2005.
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 20, 2004, 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.
<page>
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 22, 2004
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
<page>
SCIENTIFIC INDUSTRIES, INC.
70 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
PROXY STATEMENT
_________________
FOR THE
2004 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 2, 2004
_________________
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 2004 Annual Meeting of Stockholders (the
"Annual Meeting") to be held at the Princeton Club, 15 West
43rd Street, New York, New York 10036, on Thursday, December
2, 2004, at 10:30 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, 2007, and
until the election and qualification of his respective
successor; (2) ratify the appointment of Nussbaum Yates &
Wolpow, P. C., the Company's independent accountants, as its
auditors for the fiscal year ending June 30, 2005; 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 20, 2004
(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 975,541 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.
<page>
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 abstain from voting. The proxies, when
properly executed and returned to the Company, unless
otherwise indicated, 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 nominee, Joseph I. Kesselman, as a Director of the
Company; and (2) the ratification of the appointment by the
Board of Directors of Nussbaum Yates & Wolpow, P.C.,
independent accountants, as the Company's auditors for the
fiscal year ending June 30, 2005.
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 a designated space 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 or against or to abstain from the proposal to
ratify the appointment of the Company's independent auditors.
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 26,
2004.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of October 20, 2004
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 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) 19.2
Lowell A. Kleiman 139,581 (2) 14.3
16 Walnut Street
Glen Head, NY 11545
Roger B. Knowles* 75,705 (3) 7.5
Joseph I. Kesselman* 63,520 (4) 6.3
Arthur M. Borden* 62,540 (5) 6.2
______________
* His address is c/o Scientific Industries, Inc., 70
Orville Drive, Bohemia, New York 11716.
<page>
** 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 in his Schedule
13(d) filed with the Securities and Exchange
Commission on October 30, 2002.
(3) Includes 44,158 shares owned by his wife,
1,337 shares owned by a trust of which he is
a trustee, beneficial ownership of which is
disclaimed by him, and 26,000 shares
issuable upon exercise of options.
(4) Includes 26,000 shares issuable upon exercise
of options and 735 shares of Common Stock
owned jointly with his wife.
(5) Includes 26,000 shares issuable upon exercise
of options.
<page>
PROPOSAL 1
ELECTION OF DIRECTOR
GENERAL INFORMATION
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
five members, of whom two are Class A Directors, one is a
Class B Director and two are Class C Directors. At the
Annual Meeting, 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, 2007, and until his
successor is duly elected and qualified. Shares of Common
Stock represented by 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 Director of the Company is 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
the 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 FOR ELECTION AS DIRECTOR
The Board of Directors has designated Mr. Joseph I.
Kesselman, currently a Class B Director, as its nominee for
election.
Joseph I. Kesselman (age 79), a Director since 1961
and Chairman of the Board since August 29, 2002, has been
for more than five years a consultant to various
corporations, and is a director of Nuclear and Environmental
Protection Inc., Hopare Holding, S.A. (A Swiss company), and
Infranor Inc., a developer and manufacturer of servo
systems.
DIRECTORS WHOSE TERMS DO NOT EXPIRE AT THIS ANNUAL MEETING
Messrs. Roger B. Knowles and Joseph G. Cremonese are
Class A Directors whose current terms expire at the annual
meeting with respect to the fiscal year ending June 30,
2005, and Messrs. Arthur M. Borden and James S. Segasture
are Class C Directors whose current terms expire at the
annual meeting with respect to the fiscal year ending June
30, 2006.
Roger B. Knowles (age 78), a Director since 1965, is
retired and during the past five years has been involved in
liquidating various real estate and manufacturing concerns.
Joseph G. Cremonese (age 69), a director since
November 2002, 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 engaged in the production and sale of products for
science and biotechnology. Since March 2003, Mr. Cremonese
has been a director of and consultant to Proteomics, Inc., a
producer of recombinant proteins for medical research. Mr.
Cremonese had been, prior to 1991, employed by Fisher
Scientific, the Company's largest customer.
<page>
Arthur M. Borden, Esq. (Age 84), a Director since
1974, has been counsel to the law firm of Katen Muchin Zavis
Rosenman (formerly Rosenman & Colin) during the past five
years.
James S. Segasture (Age 68), a Director since 1991,
has been a private investor since February 1990.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
DIRECTOR NOMINEE
The following table sets forth, as of October 20,
2004, the number of shares of Common Stock beneficially
owned by (i) each Director of the Company, including the
nominee for Director, (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 62,540(1) 6.2%
Joseph G. Cremonese 20,000(2) 2.0%
Joseph I. Kesselman 63,520(3) 6.3%
Roger B. Knowles 75,705(4) 7.5%
James S. Segasture 187,250(5) 19.2%
Helena R. Santos 21,000(6) 2.1%
All current directors and
executive officers as a
group (7 persons) 457,815(7) 41.5%
(1) Includes 26,000 shares issuable upon exercise
of options.
(2) Includes 15,000 shares owned jointly with his
wife and 5,000 shares issuable upon exercise
of options.
(3) Includes 26,000 shares issuable upon exercise
of options and 735 shares of Common Stock
owned jointly with his wife.
(4) Includes 44,158 shares owned by his wife,
1,337 shares owned by a trust of which he is
a trustee, beneficial ownership of which is
disclaimed by him, and 26,000 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 15,000 shares issuable upon exercise
of options.
(7) Includes 127,000 shares issuable upon
exercise of options.
COMMITTEES
The Company's Stock Option Committee consists of Messrs.
Joseph I. Kesselman and James S. Segasture.
The Board of Directors acts as the Company's Audit
Committee. Mr. Kesselman qualifies as the audit committee
financial expert.
<page>
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended June 30, 2004, the Board
of Directors held five meetings, at each of which all Directors
were present.
DIRECTORS' COMPENSATION
The Company's non-employee Board of Directors
(currently all the Directors ) are entitled to a quarterly retainer
of $750 and a fee of $500 for each meeting attended, plus
reimbursement 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. Joseph I. Kesselman,
as Chairman of the Board, has been entitled to receive in addition
since March 2003 a monthly fee, which increased to $750 on
February 24, 2004 from $500. During fiscal 2004, the Company paid
fees in the aggregate amount of $35,000 to non-employee Directors.
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,
the Board of Directors approved annual grants under the 1992 Plan
beginning in December 1997 of options to purchase 4,000 shares
of Common Stock for each non-employee Director exercisable at the
fair market value on the date of grant. Accordingly, as of
June 30, 2004, the Company had granted under the 1992 Plan to the
foregoing four non-employee Directors options to purchase 128,000
shares of Common Stock in the aggregate, 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, 2004,
options under the 1992 Plan with respect to 46,000 shares had been
exercised by the Directors. They had exercised options with
respect to 48,000 shares in the aggregate granted to them prior
to the adoption of the 1992 Plan.
Under the Company's 2002 Stock Option Plan ("2002
Plan"), none of the directors at the time of the Plan's adoption
by the Board of Directors, subsequently approved by the stockholders
in 2002 were eligible to receive option grants. Mr. Joseph
G. Cremonese who was elected a Director at the 2002 Annual Meeting,
was granted by the Board of Directors on December 1, 2003 an option
to purchase 5,000 shares of Common Stock at the fair market value of
$1.35 per share.
EXECUTIVE OFFICERS
The following are the Executive Officers of the Company:
Helena R. Santos, CPA (age 40), employed by the Company
since 1994, was appointed in August 2002 as President, Chief
Executive Officer and Treasurer. Prior to the appointment she served
as Vice President, Controller from 1997 and Secretary from May 2001.
She was an internal auditor with a major defense contractor from
March 1991 to April 1994. She had been previously employed in public
accounting.
Robert P. Nichols (age 43), employed by the Company
since February 1998, was appointed in August 2002 as Executive
Vice President. He had been, prior to his appointment, Vice
President, Engineering from May 2001. He was an Engineer Manager
with Bay Side Motion Group, a precision motion equipment
manufacturer from January 1996 to February 1998.
<page>
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 other person regarding election as an officer.
There are no family relationships between any Director and any
executive officer of the Company.
EXECUTIVE COMPENSATION
The following table summarizes all compensation paid
by the Company to its then Chief Executive Officer and President
with respect to each of the three fiscal years ended June 30, 2004.
No other executive officer earned in excess of $100,000 in any of
such fiscal periods.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Fiscal All Other
Name Year Salary Bonus Compensation
_________________ _________ ________ ______ ____________
Helena R. Santos (1) 2004 $100,000 $ - $ -
Helena R. Santos 2003 $ 76,000 $ - $ -
Lowell A. Kleiman (1) 2003 $ 53,300 $ - $ 19,500(2)
Lowell A. Kleiman 2002 $160,000 $ - $ -
(1) Ms. Santos was appointed Chief Executive Officer
and President on August 29, 2002 following the termination
of Mr. Kleiman's employment.
(2) Represents accrued benefits paid to Mr. Kleiman
upon the termination of his employment.
EMPLOYMENT AGREEMENTS
On September 1, 2004 the Company entered into new
employment agreements with Ms. Helena R. Santos and Mr. Robert P.
Nichols replacing employment agreements that were entered into in
January 2003. The new agreements increased their base salaries by
$10,000 each - to $110,000 for Ms. Santos and $105,000 for Mr. Nichols.
The new agreements also extended their employment period to
December 31, 2006. They otherwise contain substantially the
same provisions as the replaced agreements, including provisions for
their employment as executives of the Company, annual bonuses at the
discretion of the Board and non-competition and confidentiality
covenants.
OPTIONS
OPTION GRANTS IN FISCAL YEAR ENDED JUNE 30, 2004
There were no options granted to officers during fiscal
year 2004.
<page>
Ms. Santos was the only executive officer who exercised
options during the year ended June 30, 2004.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED JUNE 30, 2004 AND
FISCAL YEAR END OPTION VALUES
Number of
Shares of Securities Value of
Common Underlying Unexercised
Stock Unexercised in-the-money
Acquired Options Options
On Value at FY-End (#) at FY-End($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) (1) Unexercisable Unexercisable(1)
________________ _________ ________ _____________ _______________
Helena R. Santos 9,000 9,300 15,000/0 21,300/0
(1) Calculated by multiplying the number of shares of Common
Stock subject to options by the difference between the exercise
price per share and the market price on dates of exercise and
June 30, 2004, respectively.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 2003, the Company entered into a consulting
agreement with Mr. Joseph G. Cremonese, who was elected a Class
C Director at the Annual Meeting of Stockholders in November
2002 and has been providing the Company with consulting services
as an independent marketing consultant since 1996. The consulting
agreement provides that Mr. Cremonese and his affiliate,
Laboratory Innovation Company, Ltd. will, at the request of
the Company, render for the period January 1, 2003 through
December 31, 2004 marketing consulting services of at least
80, but not more than 96, days per year at the rate of $450
per day with a monthly cap of $3,000, with the Company's
obligation reduced to the extent the consulting services are
less than 80 days for a 12 month period. The agreement
contains confidentiality and non-competition covenants.
During fiscal 2004, the Company paid Mr. Cremonese an
aggregate of $33,200 for his consulting services.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
The Company believes that, for the year ended June 30, 2004,
all filing requirements of Section 16(a) of the Securities Act of
1934, as amended, applicable to its officers, directors and 10%
stockholders were complied with timely.
<page>
PROPOSAL 2
INDEPENDENT AUDITORS
The Board of Directors, subject to stockholders approval,
appointed Nussbaum Yates & Wolpow, P.C. ("NY&W") as independent
auditors of the Company for its financial statements for fiscal
year ending June 30, 2005. NY&W has audited the consolidated
financial statements of the Company since 1991. A representative
of that 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 accounting
firm at any time during the year if the Board of Directors
determines that such a change would be in the best interests
of the Company and its stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF NUSSBAUM YATES &
WOLPOW, P.C. AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING JUNE 30, 2005.
AUDITOR FEES
The following is a description of the fees incurred by the
Company to NY&W during the fiscal years ended June 30, 2004
and 2003:
Audit Fees: The Company incurred fees of approximately
$24,550 and $23,250 to NY&W in connection with its audit of the
Company's financial statements and review of the Company's interim
financial statements included in the Company's Quarterly Reports on
Form 10-QSB during the fiscal year ended June 30, 2004 and
2003, respectively.
Tax Fees: The Company incurred fees of approximately $4,000 to
NY&W for each of the fiscal years ended June 30, 2004 and 2003 in
connection with preparation of the corporate tax returns.
Financial Information Systems Design and Implementation Fees:
The Company did not engage NY&W during each of the two years to
provide advice to the Company regarding financial information
systems design and implementation.
Other Fees: NY&W did not perform other non-audit services in
the current fiscal year. The Company paid $1,700 to NY&W in
connection with the Company's 2002 Stock Option Plan registration
statement during the fiscal year ended June 30, 2003.
<page>
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, 2004, INCLUDES ITS ANNUAL
REPORT ON FORM 10-KSB WITHOUT EXHIBIT FOR THE YEAR WHICH WAS
FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON
SEPTEMBER 27, 2004. 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. A COPY
OF THE EXHIBIT TO THE ANNUAL REPORT ON FORM 10-KSB CAN BE
OBTAINED WITHOUT CHARGE BY WRITING TO THE SECRETARY OF THE
COMPANY AT THE COMPANY'S ADDRESS SET FORTH ELSEWHERE IN THIS
PROXY STATEMENT.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company
intended to be presented at the Company's 2004 Annual
Meeting of stockholders following the year ended June 30,
2005 must be received by the Secretary of the Company for
inclusion in the appropriate proxy materials no later than
June 20, 2005.
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 the Order of your Board of Directors,
/s/Robert P. Nichols
______________________
Robert P. Nichols
Secretary
Bohemia, New York
October 22, 2004
<page>
______________________________________________________________________
SCIENTIFIC INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
December 2, 2004
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph I. Kesselman and Arthur M.
Borden, 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 2004 Annual Meeting of Stockholders of the Company (the
"Annual Meeting"), to be held at the Princeton Club, 15 West 43rd
Street, New York, New York, on Thursday, December 2, 2004 at 10:30
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
nominee for Director named below and proposal 2.
1. Election of Director: JOSEPH I. KESSELMAN
FOR ( ) WITHHOLD ( )
2. Proposal to ratify the appointment of Nussbaum, Yates & Wolpow,
P.C., as independent auditors of the Company for the fiscal year
ending June 30, 2005.
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 THE NAMED NOMINEE AS 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 below.
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: , 2004
________________________
Signature
PLEASE COMPLETE, SIGN, DATE ___________________________
AND RETURN THE PROXY CARD Signature, if held by joint
PROMPTLY USING THE owners
ENCLOSED ENVELOPE.