UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to______________
Commission file number: 0-28353
INTEGRAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in it charter)
NEVADA 98-0163519
-------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
805 W. ORCHARD DRIVE, SUITE 3, BELLINGHAM, WASHINGTON 98225
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(Address of principal executive offices)
(360) 752-1982
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(issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: AS OF FEBRUARY 10, 2003, THE ISSUER
-----------------------------------
HAD 32,616,355 SHARES OF $.001 PAR VALUE COMMON STOCK OUTSTANDING.
- ------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . F-1
ITEM 2. PLAN OF OPERATION. . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 3. CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . . . 2
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 3
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
i
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002
(U.S. DOLLARS)
(UNAUDITED)
INDEX PAGE
- ----- ----
FINANCIAL STATEMENTS
Consolidated Balance Sheets F-1
Consolidated Statements of Operations F-2
Consolidated Statements of Stockholders' Equity F-3
Consolidated Statements of Cash Flows F-4
Note to Consolidated Financial Statements F-5 - F-6
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(U.S. DOLLARS)
================================================================================================
DECEMBER 31, JUNE 30,
2002 2002
- ------------------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash $ 514,223 $ 267,795
Accounts receivable 1,894 15,767
Prepaid expenses 7,928 15,093
- ------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 534,045 298,655
PROPERTY AND EQUIPMENT 66,385 78,583
INVESTMENTS 1 1
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 600,431 $ 377,239
================================================================================================
LIABILITIES
CURRENT
Accounts payable and accruals $ 528,163 $ 657,107
Due to West Virginia University Research Corporation 397,296 397,296
Customer deposits 0 13,232
- ------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 925,459 1,067,635
- ------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
PREFERRED STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
20,000,000 Shares authorized
439,610 (June 30, 2002 - 439,610) issued and outstanding 439,610 439,610
COMMON STOCK AND PAID IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
50,000,000 Shares authorized
32,616,355 (June 30, 2002 - 30,787,562) issued and outstanding 13,062,991 12,116,450
PROMISSORY NOTES RECEIVABLE (66,500) (66,500)
OTHER COMPREHENSIVE INCOME 46,267 46,267
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (13,807,396) (13,226,223)
- ------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY (325,028) (690,396)
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 600,431 $ 377,239
================================================================================================
F-1
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(U.S. DOLLARS)
========================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------
REVENUE $ 12,351 $ 6,804 $ 16,749 $ 27,686
COST OF SALES 0 1,500 0 13,468
- ------------------------------------------------------------------------------------------------------------------------
12,351 5,304 16,749 14,218
- ------------------------------------------------------------------------------------------------------------------------
EXPENSES
Salaries and benefits 135,185 135,483 246,902 323,852
Legal and accounting 63,960 70,228 83,765 97,663
Consulting 46,712 204,548 94,748 417,804
General and administrative 32,224 36,708 58,958 46,853
Travel and entertainment 31,690 24,864 51,481 49,613
Rent 8,187 8,054 15,439 17,885
Telephone 6,618 9,338 13,778 17,225
Advertising 4,860 2,788 9,360 5,486
Research and development 196 1,818 646 6,509
Bank charges and interest, net 154 2,720 339 5,802
Bad debts 0 0 0 14,500
Interest on beneficial conversion feature 0 0 0 0
Remuneration pursuant to proprietary,
non-competition agreement 0 0 0 0
Financing fees 0 0 0 0
Write-off of investments 0 0 0 0
Write-down of license and operating assets 0 00 0 0
Depreciation and amortization 5,758 3,004 11,516 6,485
- ------------------------------------------------------------------------------------------------------------------------
335,544 499,553 586,932 1,009,677
- ------------------------------------------------------------------------------------------------------------------------
LOSS BEFORE EXTRAORDINARY ITEM 323,193 494,249 570,183 995,459
EXTRAORDINARY ITEM
Cancellation of debt 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
NET LOSS FOR PERIOD $ 323,193 $ 494,249 $ 570,183 $ 995,459
========================================================================================================================
NET LOSS PER COMMON SHARE $ (0.01) $ (0.02) $ (0.04) $ (0.02)
========================================================================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 31,494,108 28,236,958 30,961,779 27,650,331
========================================================================================================================
============================================================
PERIOD FROM
FEBRUARY 12,
1996
(INCEPTION) TO
DECEMBER 31,
2002
- ------------------------------------------------------------
REVENUE $ 232,061
COST OF SALES 216,016
- ------------------------------------------------------------
16,045
- ------------------------------------------------------------
EXPENSES
Salaries and benefits 3,036,257
Legal and accounting 1,108,283
Consulting 1,805,072
General and administrative 507,860
Travel and entertainment 701,270
Rent 237,219
Telephone 241,186
Advertising 271,255
Research and development 1,244,167
Bank charges and interest, net 106,696
Bad debts 65,818
Interest on beneficial conversion feature 566,456
Remuneration pursuant to proprietary,
non-competition agreement 711,000
Financing fees 104,542
Write-off of investments 1,249,999
Write-down of license and operating assets 1,855,619
Depreciation and amortization 258,588
- ------------------------------------------------------------
14,071,287
- ------------------------------------------------------------
LOSS BEFORE EXTRAORDINARY ITEM 14,055,242
EXTRAORDINARY ITEM
Cancellation of debt (602,843)
- ------------------------------------------------------------
NET LOSS FOR PERIOD $ 13,452,399
============================================================
NET LOSS PER COMMON SHARE
============================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
============================================================
See notes to consolidated financial statements.
F-2
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(U.S. DOLLARS)
=================================================================================================================================
COMMON PREFERRED
STOCK AND STOCK AND
SHARES OF PAID-IN SHARES OF PAID-IN
COMMON CAPITAL PREFERRED CAPITAL PROMISSORY OTHER
STOCK IN EXCESS STOCK IN EXCESS NOTES SHARE COMPREHENSIVE
ISSUED OF PAR ISSUED OF PAR RECEIVABLE SUBSCRIPTIONS INCOME
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2001 26,949,062 $ 8,900,983 564,410 $ 564,410 $ (58,500) $ 50,000 $ 46,267
Proprietary non-competition
Agreement 450,000 711,000 0 0 0 0 0
Held in escrow 700,000 0 0 0 0 0 0
Exercise of options 2,263,500 971,200 0 0 (15,000) (10,000) 0
Exercise of warrants 325,000 130,000 0 0 0 0 0
Subscriptions 100,000 40,000 0 0 0 (40,000) 0
Stock option compensation 0 415,685 0 0 0 0 0
Shares released from escrow 0 954,582 0 0 0 0 0
Dividends on preferred shares 0 0 0 0 0 0 0
Redeemed shares 0 0 (124,800) (124,800) 0 0 0
Write-off of promissory note
Receivable 0 (7,000) 0 0 7,000 0 0
Net loss for year 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2002 30,787,562 12,116,450 439,610 439,610 (66,500) 0 46,267
Shares issued on private
placement for cash 1,684,000 842,000 0 0 0 0 0
Settlement of debt 144,793 104,541 0 0 0 0 0
Dividends on Preferred Shares 0 0 0 0 0 0 0
Net Loss for Period 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2002 32,616,355 $13,062,991 439,610 $ 439,610 $ (66,500) $ 0 $ 46,267
=================================================================================================================================
===============================================================
DEFICIT
ACCUMULATED
DURING THE TOTAL
DEVELOPMENT STOCKHOLDERS'
STAGE EQUITY
- ---------------------------------------------------------------
BALANCE, JUNE 30, 2001 $ (9,176,745) $ 326,415
Proprietary non-competition
Agreement 0 711,000
Held in escrow 0 0
Exercise of options 0 946,200
Exercise of warrants 0 130,000
Subscriptions 0 0
Stock option compensation 0 415,685
Shares released from escrow 0 954,582
Dividends on preferred shares (26,087) (26,087)
Redeemed shares (187,200) (312,000)
Write-off of promissory note
Receivable 0 0
Net loss for year (3,836,191) (3,836,191)
- ---------------------------------------------------------------
BALANCE, JUNE 30, 2002 (13,226,223) (690,396)
Shares issued on private
placement for cash 0 842,000
Settlement of debt 0 104,541
Dividends on Preferred Shares (10,990) (10,990)
Net Loss for Period (570,183) (570,183)
- ---------------------------------------------------------------
BALANCE, DECEMBER 31, 2002 $(13,807,396) $ (325,028)
===============================================================
See notes to consolidated financial statements.
F-3
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(U.S. DOLLARS)
======================================================================================================
PERIOD FROM
FEBRUARY 12,
1996
SIX MONTHS ENDED (INCEPTION)
DECEMBER 31, THROUGH
2002 2001 DECEMBER 31, 2002
- ------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss $ (570,183) $ (995,459) $ (13,452,399)
Items not involving cash
Write-down of investment 0 0 1,249,999
Proprietary, non-competition agreement 0 0 711,000
Depreciation and amortization 12,198 10,121 283,556
Extraordinary item 0 0 (602,843)
Consulting services and financing fees 0 0 671,900
Stock option compensation benefit 0 349,910 806,748
Interest on beneficial conversion 0 0 566,456
Settlement of lawsuit 0 0 15,000
Write-down of license and operating assets 0 0 1,853,542
Bad debts 0 14,500 65,818
CHANGES IN NON-CASH WORKING CAPITAL
Due from affiliated company 0 0 (116,000)
Notes and account receivable 3,873 (3,193) (106,214)
Inventory 0 1,500 (46,842)
Prepaid expenses 7,165 (25,000) (7,928)
Other 0 0 (2,609)
Accounts payable and accruals (48,625) 158,502 792,756
Due to West Virginia University Research
Corporation 0 0 397,296
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CASH USED IN OPERATING ACTIVITIES (595,572) (489,119) (6,920,764)
- ------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of property, equipment and
intangible assets 0 0 (200,935)
Assets acquired and liabilities assumed on
purchase of subsidiary 0 0 (129,474)
Investment purchase 0 0 (2,000,000)
License agreement 0 0 (124,835)
- ------------------------------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES 0 0 (2,455,244)
- ------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of loan 0 0 (45,000)
Repayments to stockholders 0 0 (94,046)
Subscriptions received 0 242,192 50,000
Issuance of common stock 842,000 210,436 8,482,146
Advances from stockholders (net of repayments) 0 0 1,078,284
Share issue cost 0 0 (227,420)
Proceeds from convertible debentures 0 0 600,000
- ------------------------------------------------------------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES 842,000 452,628 9,843,964
- ------------------------------------------------------------------------------------------------------
EFFECT OF FOREIGN CURRENCY TRANSLATION
ON CASH 0 0 46,267
- ------------------------------------------------------------------------------------------------------
INFLOW (OUTFLOW) OF CASH 246,428 (36,491) 514,223
CASH, BEGINNING OF PERIOD 267,795 69,556 0
- ------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 514,223 $ 33,065 $ 514,223
======================================================================================================
See notes to consolidated financial statements.
F-4
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED DECEMBER 31, 2002
(UNAUDITED)
(U.S. DOLLARS)
================================================================================
1. BASIS OF PRESENTATION
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United
States for interim financial information. These financial statements are
condensed and do not include all disclosures required for annual financial
statements. The organization and business of the Company, accounting
policies followed by the Company and other information are contained in the
notes to the Company's audited consolidated financial statements filed as
part of the Company's June 30, 2002 Form 10-KSB.
In the opinion of the Company's management, these consolidated financial
statements reflect all adjustments necessary to present fairly the
Company's consolidated financial position at December 31, 2002 and June 30,
2002, the consolidated results of operations for the three months and six
months ended December 31, 2002 and 2001 and the consolidated cash flows for
the six months ended December 31, 2002 and 2001. The results of operations
for the three months and six months ended December 31, 2002 are not
necessarily indicative of the results to be expected for the entire fiscal
year.
2. STOCKHOLDERS' EQUITY
(a) During the six month period ended December 31, 2002, the Company
granted a total of 1,030,000 fully vested stock options to directors
and employees of the Company , pursuant to the 2001 Plan, at an
exercise price of $1.00 per share of which 200,000 stock options
expire on August 31, 2003 and 830,000 stock options expire on December
31, 2005.
(b) The following table summarizes the Company's stock option activity for
the period:
==================================================================
Weighted
Exercise Average
Number Price Exercise
of Shares Per Share Price
------------------------------------------------------------------
Balance, June 30, 2002 1,305,000 $0.40 to $1.50 $ 0.76
Granted during the period 1,030,000 $1.00 1.00
Cancelled during the period (250,000) $0.40 $ 0.40
------------------------------------------------------------------
Balance, December 31,
2002 2,085,000 $0.64 to $1.50 $ 0.87
==================================================================
F-5
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED DECEMBER 31, 2002
(UNAUDITED)
(U.S. DOLLARS)
================================================================================
2. STOCKHOLDERS' EQUITY (Continued)
(c) The Company applies APB Opinion No. 25 and related interpretations in
accounting for its stock options granted to employees, and
accordingly, compensation expense of $Nil was recognized as wages
expense. Had compensation expense been determined as provided in SFAS
123 using the Black-Scholes option pricing model, the pro-forma effect
on the Company's net loss and per share amounts would have been as
follows:
======================================================================
Net loss, as reported $(570,183)
Net loss, pro-forma $(797,337)
Net loss per share, as reported $ (0.04)
Net loss per share, pro-forma $ (0.04)
======================================================================
The fair value of each option grant is calculated using the following
weighted average assumption:
======================================================================
Expected life (years) 2.2
Interest rate 3.00%
Volatility 51.50%
Dividend yield 0.00%
======================================================================
(d) During the six month period ended December 31, 2002, the Company
entered into a private placement agreement with various investors
whereby the Company issued 1,684,000 units consisting of one share of
common stock and a one-half of a share purchase warrant at a price of
$0.50 per unit. Each whole warrant is exercisable at a price of $0.75
and expire two years after the date of grant.
(e) During the six month period ended December 31, 2002, the Company
settled the non-usage fee of $104,541 due to Swartz by issuing 144,793
shares of common stock.
F-6
ITEM 2. PLAN OF OPERATION.
To date the Company has recorded nominal revenues from operations. The
Company is still considered a development stage company for accounting purposes.
From inception on February 12, 1996 through December 31, 2002, the Company has
accrued an accumulated deficit of approximately $ 13.8 million.
As a result of the commercial interest in the Company's antenna
technologies, the Company presently intends to focus substantially all of its
resources on the commercialization and sales of antenna products. As a result,
the Company will not be devoting any of its resources on the further research,
development and commercialization of the other technologies in which it has an
interest.
The Company's business strategy focuses on leveraging its intellectual
property rights on its antenna technologies, its strengths in antenna design,
material innovation, and an understanding of the wireless marketplace.
The Company is not in the manufacturing business and does not expect to
make any capital purchases of a manufacturing plant or significant equipment in
the next twelve months. The Company will be relying on contract manufacturers
to produce the antenna products.
The Company expects to now be able to focus its marketing efforts through
to the end of calendar 2003 on two primary wireless market segments. The
Company's Plastenna technology will be marketed to manufacturers of such
wireless devices as cellular phones, portable phones, paging communicators,
satellite communications, global positioning systems (GPS) and wireless based
networks. The Company's GPS/LEO antenna is for use in mobile asset tracking and
fleet management, utilizing GPS satellite tracking and low earth orbit (LEO)
satellite data communications to trucking fleets, heavy equipment, marine
vessels, railway cars, shipping containers, transit vehicles, all via satellite
interface communications.
The Company anticipates spending approximately $250,000 over the next
twelve months on ongoing research and development of the different applications
and uses of its antenna technologies.
During the next twelve months, the Company does not anticipate increasing
its staff.
To date, the Company has relied on loans from management and management's
ability to raise capital through debt and equity private placement financings to
fund its operations. During the past two fiscal years, the majority of financing
was completed pursuant to an equity line of credit with the Swartz Private
Equity, LLC ("Swartz"). In May 2000, the Company entered into an Investment
Agreement with Swartz. Pursuant to the terms of the Investment Agreement, the
Company may, in its sole discretion and subject to certain restrictions,
periodically sell ("Put") shares of common stock to Swartz for up to
$25,000,000. Pursuant to the terms of the Investment Agreement, the Put share
price will be determined and paid to the Company twenty business days after the
date of the Put. The terms of the Investment Agreement are more fully described
in Item 1 (Description of Business) under the subsection entitled "Investment
Agreement with Swartz Private Equity, LLC." The Company received net proceeds of
$102,356 from a Put of 81,885 shares to Swartz during the fiscal year ended June
30, 2001. The Company received net proceeds of $954,582 from Puts totaling
775,975 shares to Swartz during the year ended June 30, 2002.
The Company does not currently have adequate funds available to fund its
operations over the next twelve months. If the Company does not earn adequate
revenues to sufficiently fund operations during this time period, the Company
will attempt to raise capital through the sale of its securities pursuant to the
Investment Agreement with Swartz. There can be no assurance, however, that
market conditions will permit the Company to raise sufficient funds pursuant to
the Investment Agreement with Swartz or that additional financing will be
available when needed or on terms acceptable to the Company.
1
Other Material Developments
In November 2002, the Company completed a private placement with eight
investors and sold 1,684,000 shares of its common stock at $.50 per share and
warrants to purchase 842,000 shares of its common stock within two years at an
exercise price of $.75 per share. Aggregate proceeds from the sale of the common
stock was $842,000. In connection with the offering, the Company agreed to use
its best efforts to register the shares of common stock (including the shares
underlying the warrants) for resale by the investors within 180 days after the
close of the offering. The transaction did not involve any public offering, no
sales commissions were paid and a restrictive legend was placed on each
certificate evidencing the shares.
ITEM 3. CONTROLS AND PROCEDURES
Based on their most recent evaluation, which was completed within 90 days of the
filing of this Form 10-QSB, the Company's Chief Executive Officer and Chief
Financial Officer believe the Company's disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) are effective to ensure that
information required to be disclosed by the Company in this report is
accumulated and communicated to the Company's management, including its
principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure. There were no significant
changes in the Company's internal controls or other factors that could
significantly affect these controls subsequent to the date of their evaluation
and there were no corrective actions with regard to significant deficiencies and
material weaknesses.
2
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There have been no material developments in any legal proceedings except as
previously described in the Company's periodic reports.
ITEM 2. CHANGES IN SECURITIES.
In October 2002, the Company issued 144,793 shares of restricted common
stock to Swartz Private Equity, LLC ("Swartz"), pursuant to an agreement to
settle a non-use fee of $104,541.84 that had accrued pursuant to the Investment
Agreement between the Company and Swartz. The transaction did not involve any
public offering, no sales commissions were paid and a restrictive legend was
placed on each certificate evidencing the shares. The Company believes that the
transaction was exempt from registration pursuant to Section 4(2) and Section
4(6) of the Securities Act and/or Rule 506 of Regulation D.
In November 2002, the Company completed a private placement with eight
investors and sold 1,684,000 shares of its common stock at $.50 per share and
warrants to purchase 842,000 shares of its common stock within two years at an
exercise price of $.75 per share. Aggregate proceeds from the sale of the common
stock was $842,000. In connection with the offering, the Company agreed to use
its best efforts to register the shares of common stock (including the shares
underlying the warrants) for resale by the investors within 180 days after the
close of the offering. The transaction did not involve any public offering, no
sales commissions were paid and a restrictive legend was placed on each
certificate evidencing the shares. The Company believes that the transaction was
exempt from registration pursuant to Section 4(2) and Section 4(6) of the
Securities Act and/or Rule 506 of Regulation D.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.
ITEM 5. OTHER INFORMATION - None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit Number Description
- -------------- -----------
3.1 Articles of Incorporation, as amended and currently in
effect. (Incorporated by reference to Exhibit 3.1 of
Integral's registration statement on Form 10-SB (file no.
0-28353) filed December 2, 1999.)
3.2 Bylaws, as amended and restated on December 31, 1997.
(Incorporated by reference to Exhibit 3.2 of Integral's
registration statement on Form 10-SB (file no. 0-28353)
filed December 2, 1999.)
4.3 Investment Agreement dated May 11, 2000, by and between
Integral and Swartz Private Equity, LLC. (Incorporated by
reference to Exhibit 4.1 of Integral's registration
statement on Form SB-2 (file no. 333-41938) filed July 21,
2000.)
3
10.12 Integral Technologies, Inc. 2001 Stock Plan dated January 2,
2001, as amended December 17, 2001. (Incorporated by
reference to Exhibit 10.12 of Integral's registration
statement on Form S-8 (file no. 333-76058).)
10.13 Employment Agreement between Integral and William S.
Robinson dated July 1, 2002. (Incorporated by reference to
Exhibit 10.13 of Integral's Form 10-KSB for the year ended
June 30, 2002.)
10.14 Employment Agreement between Integral and William A. Ince
dated July 1, 2002. (Incorporated by reference to Exhibit
10.14 of Integral's Form 10-KSB for the year ended June 30,
2002.)
(b) Reports on Form 8-K - None.
4
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTEGRAL TECHNOLOGIES, INC.
By: /s/ William S. Robinson
----------------------------------------------
William S. Robinson, Chairman, Chief Executive
Officer, Treasurer and Director
By: /s/ William A. Ince
----------------------------------------------
William A. Ince, President, Secretary,
Chief Financial Officer and Director
Date: February 13, 2003
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Solely for the purposes of complying with, and the extent required by 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the
undersigned certifies, in his capacity as the Chief Executive Officer of
Integral Technologies, Inc., that, to his knowledge, the Quarterly Report of the
company on Form 10-QSB for the period ended December 31, 2002, fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of 1934
and that the information contained in the report fairly presents, in all
material respects, the company's financial condition and results of operations.
February 13, 2003
/s/ William S. Robinson
- ----------------------------------------
William S. Robinson, Chief Executive Officer
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Solely for the purposes of complying with, and the extent required by 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the
undersigned certifies, in his capacity as the Chief Financial Officer of
Integral Technologies, Inc., that, to his knowledge, the Quarterly Report of the
company on Form 10-QSB for the period ended December 31, 2002, fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of 1934
and that the information contained in the report fairly presents, in all
material respects, the company's financial condition and results of operations.
February 13, 2003
/s/ William A. Ince
- ----------------------------------------
William A. Ince, Chief Financial Officer
5
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William S. Robinson, Chief Executive Officer of Integral Technologies,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Integral
Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
February 13, 2003
/s/ William S. Robinson
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William S. Robinson, Chief Executive Officer
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CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William A. Ince, Chief Financial Officer of Integral Technologies, Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Integral
Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
February 13, 2003
/s/ William A. Ince
- -------------------------------------
William A. Ince, Chief Financial Officer
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