SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 30, 2006
SCIENTIFIC INDUSTRIES, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 000-6658 04-2217279
_______________ ____________ __________________
(State or other (Commission (IRS Employer No.)
jurisdiction of File Number)
incorporation)
70 Orville Drive
Bohemia, New York 11716
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(Address of principal executive offices)
(631) 567-4700
______________________________________________________
Registrant's telephone number, including area code
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 2.01 Completion of Acquisition or Disposition of Assets
On November 30, 2006, Scientific Industries Inc., (the "Company")
acquired the outstanding capital stock of Altamira Instruments,
Inc., a Delaware corporation ("Altamira"), a privately held company
engaged from its facility in Pittsburgh, Pennsylvania, in the
production and sale of a variety of custom catalyst research
instruments. The acquisition was pursuant to a Stock Purchase
Agreement dated as of November 30, 2006 (the "Agreement")
between the Company and the sellers - Grace Morin (90.36%),
Heather H. Haught (4.82%) and William D. Chandler (4.82%).
Pursuant to the Agreement, the Company in the foregoing
proportions paid the Sellers an aggregate of $400,000
in cash, issued an aggregate of 125,000 shares of Common Stock and
agreed to make additional cash payments equal to five percent (5%) in
the aggregate, subject to possible adjustment, of the net sales of
Altamira for each of five periods - the first period is December 1,
2006 through June 30, 2007, the next three are to be each of the years
ending June 30, 2008, June 30, 2009 and June 30, 2010 and the fifth
period is to be July 1, 2010 through November 30, 2010.
For Altamira's fiscal year ended December 31, 2005 and the six months
ended June 30, 2006, net sales were $1,365,712 and $881,469,
respectively, and its pre-tax net income was $99,717 and $123,085,
respectively.
The Company agreed to have Altamira continue to employ Ms. Morin, who
was founder and President of Altamira, for up to 90 days at her current
salary of $78,000 per annum and as a consultant on an hourly basis at
$65 per hour for the time required by Altamira within the period
thereafter through November 30, 2008. Pursuant to the Agreement, the
Company had Altamira enter into an employment agreement with Brookman
P. March, who was its Vice President and a Director and is the husband
of Ms. Morin, employing him as Director of Marketing and Sales. The
employment agreement provides for a two-year term with the Company
having two one-year renewal options, at a salary of $110,000 per annum
during the initial two-year term to be increased by 2% during each of
the two-year extension periods plus adjustments based on annual increase
in the consumer price index. The Agreement and the employment agreement
contain non-competition and non-solicitation covenants.
The Sellers agreed that the Shares of the Company's Common Stock were
being acquired for investment purposes only without any intention to
sell, pledge or distribute them and that the certificates for the
Shares bear a legend restricting their disposition without being
registered under the Securities Act of 1933, as amended, (the "Act") or
exempt from registration. The Company agreed to provide the Sellers
with rights to register under the Act, the shares of Common Stock for
reoffering in a registration statement being filed on behalf of a
Company offering or offering on behalf of other stockholders.
The issuance of the Shares was exempt from registration under the Act
pursuant to Section 4(2) thereof.
The shares are held by the Company in escrow to secure indemnification
obligations to the Company of the Sellers with respect to any claim
made pursuant to the Agreement within one year following the Closing.
As a result of the issuance, there are 1,125,352 shares of Common
Stock outstanding.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
See relevant information under Item 2.01 with respect to the
issuance of an aggregate of 125,000 shares of Common Stock by the
Company as partial consideration for its acquisition of the outstanding
capital stock of Altamira Instruments, Inc.
ITEM 5.01 ELECTION OF DIRECTORS
At the Annual Meeting of the Board of Directors the Company held
on December 4, 2006, the Board increased the number of Directors from
five to six and pursuant to the Stock Purchase Agreement, dated November
30, 2006 between the Company and Grace Morin, then President, Director
and holder of 90.36% of the outstanding capital stock of Altamira
Instruments, Inc. and the two other holders of its capital stock
(see Item 2.01) elected Ms. Morin as the second Class B Director to
serve until the next Annual Meeting of Stockholders following the year
ended June 30, 2007.
Ms. Morin (age 58) has been the President and Director of Altamira
since December 2003. Prior thereto she was a general business consultant
for two years and had been prior thereto a member of senior management of
a designer of glass flow environmental engineered products for
approximately four years.
In consideration for the sale of her shares, Ms. Morin received
$361,440 and 112,950 shares of Common Stock and will receive 90.36% of
future cash payments made pursuant to the Stock Purchase Agreement.
See Item 2.01 for information as to (i) Ms. Morin's engagement
by Altamira post-acquisition, and (ii) the employment agreement between
Altamira and Mr. Brookman P. March, who had been Vice President and
Secretary since November 2004 and a Director since October 2004 of
Altamira and is the husband of Ms. Morin.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The Company intends to file the financial statements of the business
acquired under cover of a Form 8-K/A no later than 71 calendar days
after the date this Report was required to be filed.
(b) Pro Forma Financial Information
The Company intends to file pro forma financial information under
cover of Form 8-K/A no later than 71 calendar days after the date
this Report was required to be filed.
(c) Exhibits
Exhibit No. Exhibit
__________ _________________________
2.1 Copy of Stock Purchase Agreement dated as of November 30, 2006 *
10(a) Copy of Escrow Agreement relating to above Stock Purchase Agreement
10(b) Copy of Registration Rights Agreement relating to above Stock
Purchase Agreement
10(c) Copy of Employment Agreement between Altamira Instruments Inc.,
and Brookman P. March
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*Disclosure Schedules to this Exhibit have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. The Company agrees to furnish
supplemental copies of any of the omitted Disclosure Schedules to
the SEC upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
SCIENTIFIC INDUSTRIES, INC.
(Registrant)
Date: December 5, 2006
By: /s/ Helena R. Santos
________________________
Helena R. Santos,
President and Chief Executive
Officer