For
the fiscal year ended June 30, 2009
|
For
the transition period from: ______________ to
______________
|
|
Commission
file number: 0-28353
|
Nevada
|
98-0163519
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
805
W. Orchard Drive, Suite 7, Bellingham, Washington
|
98225
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Page
|
||
PART
I
|
||
Item
1.
|
2
|
|
Item
1A.
|
6
|
|
Item
1B.
|
10
|
|
Item
2.
|
10
|
|
Item
3.
|
10
|
|
Item
4.
|
10
|
|
PART
II
|
||
Item
5.
|
11
|
|
Item
6.
|
12
|
|
Item
7.
|
12
|
|
Item
7A.
|
14
|
|
Item
8.
|
15
|
|
Item
9.
|
15
|
|
Item
9A.
|
15
|
|
Item
9B.
|
16
|
|
PART
III
|
||
Item
10.
|
17
|
|
Item
11.
|
19
|
|
Item
12.
|
24
|
|
Item
13.
|
27
|
|
Item
14.
|
28
|
|
Item
15.
|
29
|
|
|
·
|
has
a stated value and liquidation preference of
$1.00;
|
|
·
|
has
a 5% annual dividend, payable in cash or shares of common
stock;
|
|
·
|
may
be converted into shares of common stock (determined by dividing the
number of shares of Series A being converted by the average of the high
and low bid prices of our common stock reported by the OTC Bulletin Board
over the ten trading days preceding the date of
conversion);
|
|
·
|
may
be redeemed by us within one year after issue at $1.50, after one year but
less than two years at $2.00, after two years but less than three years at
$2.50, after three years but less than four years at $3.00, and after four
years but less than five years at
$3.50;
|
|
·
|
subsequent
to June 30, 2009, an amendment was made to the Series A convertible
preferred shares in which they may be redeemed after five years but less
than six years after the date of issue at a redemption price of $4.00 and
increasing $0.50 per year for each share of Series A Convertible Preferred
Stock so redeemed.
|
|
·
|
may
be voted on all matters on an as-converted basis;
and
|
|
·
|
may
be voted as a class on any merger, share exchange, recapitalization,
dissolution, liquidation or change in control of our
company.
|
|
·
|
announcements
of new products or sales offered by us or our
competitors;
|
|
·
|
actual
or anticipated variations in quarterly operating
results;
|
|
·
|
changes
in financial estimates by securities analysts, if
any;
|
|
·
|
changes
in the market’s perception of us or the nature of our business;
and
|
|
·
|
sales
of our common stock.
|
Quarter Ended
|
Low Bid
|
High Bid
|
||||||
September
30, 2007
|
$ | 1.22 | $ | 2.22 | ||||
December
31, 2007
|
$ | 0.92 | $ | 1.99 | ||||
March
31, 2008
|
$ | 0.73 | $ | 1.19 | ||||
June
30, 2008
|
$ | 0.63 | $ | 0.91 | ||||
September
30, 2008
|
$ | 0.50 | $ | 0.84 | ||||
December
31, 2008
|
$ | 0.18 | $ | 0.64 | ||||
March
31, 2009
|
$ | 0.21 | $ | 0.50 | ||||
June
30, 2009
|
$ | 0.35 | $ | 0.21 |
Index
|
Page
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated
Financial Statements
|
|
Consolidated
Balance Sheets
|
F-2
|
Consolidated
Statements of Operations
|
F-3
|
Consolidated
Statements of Stockholders' Equity (Deficit)
|
F-4
– F-9
|
Consolidated
Statements of Cash Flows
|
F-10
|
Notes
to Consolidated Financial Statements
|
F-11
– F-30
|
Pannell Kerr Forster | PKF |
2009
|
2008
|
|||||||
Assets
|
||||||||
Current
|
||||||||
Cash
|
$ | 535,231 | $ | 1,104,104 | ||||
Prepaid
expenses
|
11,353 | 30,575 | ||||||
Total
Assets
|
$ | 546,584 | $ | 1,134,679 | ||||
Liabilities
|
||||||||
Current
|
||||||||
Accounts
payable and accruals
|
$ | 661,792 | $ | 707,848 | ||||
Total
Liabilities
|
661,792 | 707,848 | ||||||
Stockholders'
Equity (Deficit) (note 4)
|
||||||||
Preferred
Stock and Paid-in Capital in Excess of $0.001 Par Value
|
||||||||
20,000,000 Shares
authorized
|
||||||||
308,538 Shares issued and outstanding
(note 4(b))
|
308,538 | 308,538 | ||||||
Common
Stock and Paid-in Capital in Excess of $0.001 Par Value
|
||||||||
150,000,000 Shares
authorized
|
||||||||
50,305,769 (2008 – 45,704,969) Shares issued
and outstanding (note
4(a))
|
30,524,475 | 29,219,711 | ||||||
Promissory Notes
Receivable (note 4(e))
|
(29,737 | ) | (29,737 | ) | ||||
Subscriptions Received
(note 4(f))
|
0 | 276,500 | ||||||
Other
Comprehensive Income
|
46,267 | 46,267 | ||||||
Deficit
Accumulated During the Development Stage
|
(30,964,751 | ) | (29,394,448 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(115,208 | ) | 426,831 | |||||
Total
Liabilities and Stockholders' Equity (Deficit)
|
$ | 546,584 | $ | 1,134,679 |
Period
From
|
||||||||||||||||
February
12,
|
||||||||||||||||
1996
|
||||||||||||||||
(Inception)
|
||||||||||||||||
Years
Ended June 30,
|
Through
|
|||||||||||||||
2009
|
2008
|
2007
|
June
30, 2009
|
|||||||||||||
Revenues
|
$ | 0 | $ | 0 | $ | 0 | $ | 249,308 | ||||||||
Cost
of Sales
|
0 | 0 | 0 | 216,016 | ||||||||||||
0 | 0 | 0 | 33,292 | |||||||||||||
Other
Income
|
8,511 | 57,975 | 138,720 | 865,607 | ||||||||||||
8,511 | 57,975 | 138,720 | 898,899 | |||||||||||||
Expenses
|
||||||||||||||||
Salaries
(note 4(c))
|
585,197 | 633,725 | 3,335,225 | 9,687,289 | ||||||||||||
Consulting
(note 4(c))
|
287,204 | 500,850 | 2,006,943 | 6,551,606 | ||||||||||||
Legal
and accounting
|
263,964 | 305,452 | 324,284 | 4,403,759 | ||||||||||||
Research
and development
|
230,060 | 287,109 | 106,335 | 1,470,963 | ||||||||||||
General
and administrative
|
70,184 | 95,706 | 119,043 | 1,182,824 | ||||||||||||
Travel
and entertainment
|
53,934 | 96,162 | 124,930 | 1,357,280 | ||||||||||||
Rent
|
43,170 | 46,659 | 40,486 | 487,670 | ||||||||||||
Telephone
|
24,993 | 29,605 | 38,442 | 459,295 | ||||||||||||
Bank
charges and interest, net
|
3,090 | 6,932 | 17,878 | 205,288 | ||||||||||||
Advertising
|
1,591 | 0 | 11,004 | 332,861 | ||||||||||||
Write-off
of investments
|
0 | 0 | 0 | 1,250,000 | ||||||||||||
Non-competition
agreement
|
0 | 0 | 0 | 711,000 | ||||||||||||
Write-down
of license and operating assets
|
0 | 0 | 0 | 1,855,619 | ||||||||||||
Interest
on beneficial conversion feature
|
0 | 0 | 0 | 566,455 | ||||||||||||
Settlement
of lawsuit
|
0 | 0 | 0 | 45,250 | ||||||||||||
Financing
fees, net
|
0 | 0 | 0 | 129,043 | ||||||||||||
Bad
debts (recovery)
|
0 | (6,009 | ) | 0 | 46,604 | |||||||||||
Depreciation
and amortization
|
0 | 0 | 0 | 324,386 | ||||||||||||
1,563,387 | 1,996,191 | 6,124,570 | 31,067,192 | |||||||||||||
Net
Loss
|
$ | (1,554,876 | ) | $ | (1,938,216 | ) | $ | (5,985,850 | ) | $ | (30,168,293 | ) | ||||
Loss Per Share (note
8)
|
$ | (0.03 | ) | $ | (0.04 | ) | $ | (0.13 | ) | |||||||
Weighted
Average Number of Common Shares
Outstanding
|
47,360,459 | 45,617,756 | 45,230,171 |
Common
|
Preferred
|
Deficit
|
||||||||||||||||||||||||||||||||||
Shares
|
Stock
and
|
Shares
of
|
Stock
and
|
Accumulated
|
||||||||||||||||||||||||||||||||
of
Common
|
Paid-in
Capital
|
Preferred
|
Paid-in
Capital
|
Promissory
|
Other
|
During
the
|
Total
|
|||||||||||||||||||||||||||||
Stock
|
in
Excess
|
Stock
|
in
Excess
|
Notes
|
Share
|
Comprehensive
|
Development
|
Stockholders'
|
||||||||||||||||||||||||||||
Issued
|
of
Par
|
Issued
|
of
Par
|
Receivable
|
Subscriptions
|
Income
|
Stage
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
1,000,000 | $ | 10,000 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 10,000 | ||||||||||||||||||||
Property
and equipment(to officers and directors)
|
1,500,000 | 15,000 | 0 | 0 | 0 | 0 | 0 | 0 | 15,000 | |||||||||||||||||||||||||||
Services
(provided by officers and directors)
|
2,000,000 | 20,000 | 0 | 0 | 0 | 0 | 0 | 0 | 20,000 | |||||||||||||||||||||||||||
Services
(others)
|
1,500,000 | 15,000 | 0 | 0 | 0 | 0 | 0 | 0 | 15,000 | |||||||||||||||||||||||||||
Foreign
currency translation
|
0 | 0 | 0 | 0 | 0 | 0 | (1,226 | ) | 0 | (1,226 | ) | |||||||||||||||||||||||||
Net
loss for period
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (344,843 | ) | (344,843 | ) | |||||||||||||||||||||||||
Balance,
June 30, 1996
|
6,000,000 | 60,000 | 0 | 0 | 0 | 0 | (1,226 | ) | (344,843 | ) | (286,069 | ) | ||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
5,086,000 | 865,514 | 0 | 0 | 0 | 0 | 0 | 0 | 865,514 | |||||||||||||||||||||||||||
Share
issue costs
|
0 | (48,920 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (48,920 | ) | |||||||||||||||||||||||||
Services
|
564,000 | 63,036 | 0 | 0 | 0 | 0 | 0 | 0 | 63,036 | |||||||||||||||||||||||||||
Acquisition
of subsidiary
|
100,000 | 275,000 | 0 | 0 | 0 | 0 | 0 | 0 | 275,000 | |||||||||||||||||||||||||||
Foreign
currency translation
|
0 | 0 | 0 | 0 | 0 | 0 | 12,601 | 0 | 12,601 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (822,217 | ) | (822,217 | ) | |||||||||||||||||||||||||
Balance,
June 30, 1997
|
11,750,000 | 1,214,630 | 0 | 0 | 0 | 0 | 11,375 | (1,167,060 | ) | 58,945 | ||||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
825,396 | 650,000 | 0 | 0 | 0 | 0 | 0 | 0 | 650,000 | |||||||||||||||||||||||||||
Share
issue costs
|
0 | (78,000 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (78,000 | ) | |||||||||||||||||||||||||
Foreign
currency translation
|
0 | 0 | 0 | 0 | 0 | 0 | 24,860 | 0 | 24,860 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (937,373 | ) | (937,373 | ) | |||||||||||||||||||||||||
Balance,
June 30, 1998
|
12,575,396 | $ | 1,786,630 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 36,235 | $ | (2,104,433 | ) | $ | (281,568 | ) |
Common
|
Preferred
|
Deficit
|
||||||||||||||||||||||||||||||||||
Shares
of
|
Stock
and
|
Shares
of
|
Stock
and
|
Accumulated
|
||||||||||||||||||||||||||||||||
Common
|
Paid-in
Capital
|
Preferred
|
Paid-in
Capital
|
Promissory
|
Other
|
During
the
|
Total
|
|||||||||||||||||||||||||||||
Stock
|
in
Excess
|
Stock
|
in
Excess
|
Notes
|
Share
|
Comprehensive
|
Development
|
Stockholders'
|
||||||||||||||||||||||||||||
Issued
|
of
Par
|
Issued
|
of
Par
|
Receivable
|
Subscriptions
|
Income
|
Stage
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||
Balance,
June 30, 1998
|
12,575,396 | $ | 1,786,630 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 36,235 | $ | (2,104,433 | ) | $ | (281,568 | ) | ||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
200,000 | 50,000 | 0 | 0 | 0 | 0 | 0 | 0 | 50,000 | |||||||||||||||||||||||||||
Exercise
of stock options
|
445,000 | 80,500 | 0 | 0 | 0 | 0 | 0 | 0 | 80,500 | |||||||||||||||||||||||||||
Promissory
note
|
1,683,789 | 252,568 | 0 | 0 | (284,068 | ) | 0 | 0 | 0 | (31,500 | ) | |||||||||||||||||||||||||
Settlement
of lawsuit
|
150,000 | 15,000 | 0 | 0 | 0 | 0 | 0 | 0 | 15,000 | |||||||||||||||||||||||||||
Services
(provided by officers and directors)
|
666,666 | 100,000 | 0 | 0 | 0 | 0 | 0 | 0 | 100,000 | |||||||||||||||||||||||||||
Share
issue costs
|
0 | (100,500 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (100,500 | ) | |||||||||||||||||||||||||
Services
|
250,000 | 50,000 | 0 | 0 | 0 | 0 | 0 | 0 | 50,000 | |||||||||||||||||||||||||||
Conversion
of convertible debentures
|
3,869,120 | 525,813 | 0 | 0 | 0 | 0 | 0 | 0 | 525,813 | |||||||||||||||||||||||||||
Acquisition
of subsidiary
|
1,800,000 | 619,200 | 0 | 0 | 0 | 0 | 0 | 0 | 619,200 | |||||||||||||||||||||||||||
Held
in escrow
|
447,091 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Stock-based
compensation
|
0 | 70,600 | 0 | 0 | 0 | 0 | 0 | 0 | 70,600 | |||||||||||||||||||||||||||
Beneficial
conversion feature
|
0 | 566,456 | 0 | 0 | 0 | 0 | 0 | 0 | 566,456 | |||||||||||||||||||||||||||
Foreign
currency translation
|
0 | 0 | 0 | 0 | 0 | 0 | 8,444 | 0 | 8,444 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,404,021 | ) | (1,404,021 | ) | |||||||||||||||||||||||||
Balance
June 30, 1999
|
22,087,062 | 4,016,267 | 0 | 0 | (284,068 | ) | 0 | 44,679 | (3,508,454 | ) | 268,424 | |||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
on private placement
|
2,650,000 | 3,975,000 | 0 | 0 | 0 | 0 | 0 | 0 | 3,975,000 | |||||||||||||||||||||||||||
Exercise
of options
|
1,245,000 | 256,700 | 0 | 0 | 0 | 0 | 0 | 0 | 256,700 | |||||||||||||||||||||||||||
Services
|
50,000 | 13,000 | 0 | 0 | 0 | 0 | 0 | 0 | 13,000 | |||||||||||||||||||||||||||
Settlement
of debt
|
0 | 0 | 664,410 | 664,410 | 0 | 0 | 0 | 0 | 664,410 | |||||||||||||||||||||||||||
Shares
released from escrow
|
0 | 75,558 | 0 | 0 | 0 | 0 | 0 | 0 | 75,558 | |||||||||||||||||||||||||||
Stock-based
compensation
|
0 | 48,256 | 0 | 0 | 0 | 0 | 0 | 0 | 48,256 | |||||||||||||||||||||||||||
Promissory
note repayment
|
0 | 0 | 0 | 0 | 225,568 | 0 | 0 | 0 | 225,568 | |||||||||||||||||||||||||||
Foreign
currency translation
|
0 | 0 | 0 | 0 | 0 | 0 | 1,614 | 0 | 1,614 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,537,402 | ) | (1,537,402 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2000
|
26,032,062 | $ | 8,384,781 | 664,410 | $ | 664,410 | $ | (58,500 | ) | $ | 0 | $ | 46,293 | $ | (5,045,856 | ) | $ | 3,991,128 |
Common
|
Preferred
|
Deficit
|
||||||||||||||||||||||||||||||||||
Shares
|
Stock
and
|
Shares
of
|
Stock
and
|
Accumulated
|
||||||||||||||||||||||||||||||||
of
Common
|
Paid-in
Capital
|
Preferred
|
Paid-in
Capital
|
Promissory
|
Other
|
During
the
|
Total
|
|||||||||||||||||||||||||||||
Stock
|
in
Excess
|
Stock
|
in
Excess
|
Notes
|
Share
|
Comprehensive
|
Development
|
Stockholders'
|
||||||||||||||||||||||||||||
Issued
|
of
Par
|
Issued
|
of
Par
|
Receivable
|
Subscriptions
|
Income
|
Stage
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||
Balance,
June 30, 2000
|
26,032,062 | $ | 8,384,781 | 664,410 | $ | 664,410 | $ | (58,500 | ) | $ | 0 | $ | 46,293 | $ | (5,045,856 | ) | $ | 3,991,128 | ||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
on private placement
|
81,885 | 112,480 | 0 | 0 | 0 | 0 | 0 | 0 | 112,480 | |||||||||||||||||||||||||||
Exercise
of options
|
517,000 | 91,515 | 0 | 0 | 0 | 0 | 0 | 0 | 91,515 | |||||||||||||||||||||||||||
Services
|
100,000 | 40,000 | 0 | 0 | 0 | 0 | 0 | 0 | 40,000 | |||||||||||||||||||||||||||
Held
in escrow
|
218,115 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Stock-based
compensation
|
0 | 272,207 | 0 | 0 | 0 | 0 | 0 | 0 | 272,207 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (30,720 | ) | (30,720 | ) | |||||||||||||||||||||||||
Share
subscriptions
|
0 | 0 | 0 | 0 | 0 | 50,000 | 0 | 0 | 50,000 | |||||||||||||||||||||||||||
Redeemed
shares
|
0 | 0 | (100,000 | ) | (100,000 | ) | 0 | 0 | 0 | (100,000 | ) | (200,000 | ) | |||||||||||||||||||||||
Foreign
currency translation
|
0 | 0 | 0 | 0 | 0 | 0 | (26 | ) | 0 | (26 | ) | |||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (4,000,169 | ) | (4,000,169 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2001
|
26,949,062 | 8,900,983 | 564,410 | 564,410 | (58,500 | ) | 50,000 | 46,267 | (9,176,745 | ) | 326,415 | |||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Proprietary
non-competition agreement
|
450,000 | 711,000 | 0 | 0 | 0 | 0 | 0 | 0 | 711,000 | |||||||||||||||||||||||||||
Held
in escrow
|
700,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Exercise
of options
|
2,263,500 | 971,200 | 0 | 0 | (15,000 | ) | (10,000 | ) | 0 | 0 | 946,200 | |||||||||||||||||||||||||
Exercise
of warrants
|
325,000 | 130,000 | 0 | 0 | 0 | 0 | 0 | 0 | 130,000 | |||||||||||||||||||||||||||
Subscriptions
|
100,000 | 40,000 | 0 | 0 | 0 | (40,000 | ) | 0 | 0 | 0 | ||||||||||||||||||||||||||
Stock-based
compensation
|
0 | 415,685 | 0 | 0 | 0 | 0 | 0 | 0 | 415,685 | |||||||||||||||||||||||||||
Shares
released from escrow
|
0 | 954,582 | 0 | 0 | 0 | 0 | 0 | 0 | 954,582 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (26,087 | ) | (26,087 | ) | |||||||||||||||||||||||||
Redeemed
shares
|
0 | 0 | (124,800 | ) | (124,800 | ) | 0 | 0 | 0 | (187,200 | ) | (312,000 | ) | |||||||||||||||||||||||
Write-off
of promissory note receivable
|
0 | (7,000 | ) | 0 | 0 | 7,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (3,836,191 | ) | (3,836,191 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2002
|
30,787,562 | $ | 12,116,450 | 439,610 | $ | 439,610 | $ | (66,500 | ) | $ | 0 | $ | 46,267 | $ | (13,226,223 | ) | $ | (690,396 | ) |
Common
|
Preferred
|
Deficit
|
||||||||||||||||||||||||||||||||||
Shares
|
Stock
and
|
Shares
of
|
Stock
and
|
Accumulated
|
||||||||||||||||||||||||||||||||
of
Common
|
Paid-in
Capital
|
Preferred
|
Paid-in
Capital
|
Promissory
|
Other
|
During
the
|
Total
|
|||||||||||||||||||||||||||||
Stock
|
in
Excess
|
Stock
|
in
Excess
|
Notes
|
Share
|
Comprehensive
|
Development
|
Stockholders'
|
||||||||||||||||||||||||||||
Issued
|
of
Par
|
Issued
|
of
Par
|
Receivable
|
Subscriptions
|
Income
|
Stage
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||
Balance,
June 30, 2002
|
30,787,562 | $ | 12,116,450 | 439,610 | $ | 439,610 | $ | (66,500 | ) | $ | 0 | $ | 46,267 | $ | (13,226,223 | ) | $ | (690,396 | ) | |||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
on private placement
|
1,684,000 | 842,050 | 0 | 0 | 0 | 0 | 0 | 0 | 842,050 | |||||||||||||||||||||||||||
Settlement
of debt
|
144,793 | 104,542 | 0 | 0 | 0 | 0 | 0 | 0 | 104,542 | |||||||||||||||||||||||||||
Services
|
200,000 | 196,000 | 0 | 0 | 0 | 0 | 0 | 0 | 196,000 | |||||||||||||||||||||||||||
Exercise
of options
|
52,500 | 43,750 | 0 | 0 | 0 | 0 | 0 | 0 | 43,750 | |||||||||||||||||||||||||||
Exercise
of warrants
|
55,000 | 27,500 | 0 | 0 | 0 | 0 | 0 | 0 | 27,500 | |||||||||||||||||||||||||||
Subscription
received
|
0 | 0 | 0 | 0 | 0 | 176,665 | 0 | 0 | 176,665 | |||||||||||||||||||||||||||
Stock-based
compensation
|
0 | 5,460 | 0 | 0 | 0 | 0 | 0 | 0 | 5,460 | |||||||||||||||||||||||||||
Settlement
of lawsuit
|
0 | 0 | 0 | 0 | 0 | 35,250 | 0 | 0 | 35,250 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (22,060 | ) | (22,060 | ) | |||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,346,833 | ) | (1,346,833 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2003
|
32,923,855 | 13,335,752 | 439,610 | 439,610 | (66,500 | ) | 211,915 | 46,267 | (14,595,116 | ) | (628,072 | ) | ||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
on private placement
|
6,609,336 | 6,042,935 | 0 | 0 | 0 | (211,915 | ) | 0 | 0 | 5,831,020 | ||||||||||||||||||||||||||
Cash
on exercise of options
|
25,000 | 25,000 | 0 | 0 | 0 | 0 | 0 | 0 | 25,000 | |||||||||||||||||||||||||||
Settlement
of lawsuit
|
37,500 | 35,250 | 0 | 0 | 0 | 0 | 0 | 0 | 35,250 | |||||||||||||||||||||||||||
Services
|
25,000 | 21,873 | 0 | 0 | 0 | 0 | 0 | 0 | 21,873 | |||||||||||||||||||||||||||
Redemption
of preferred shares
|
415,000 | 415,000 | (118,572 | ) | (118,572 | ) | 0 | 0 | 0 | (296,428 | ) | 0 | ||||||||||||||||||||||||
Exercise
of warrants
|
288,298 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Shares
returned to treasury for cancellation
|
(142,140 | ) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Stock-based
compensation
|
0 | 321,275 | 0 | 0 | 0 | 0 | 0 | 0 | 321,275 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (19,016 | ) | (19,016 | ) | |||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,543,848 | ) | (2,543,848 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2004
|
40,181,849 | $ | 20,197,085 | 321,038 | $ | 321,038 | $ | (66,500 | ) | $ | 0 | $ | 46,267 | $ | (17,454,408 | ) | $ | 3,043,482 |
Common
|
Preferred
|
Deficit
|
||||||||||||||||||||||||||||||||||
Shares
|
Stock
and
|
Shares
of
|
Stock
and
|
Accumulated
|
||||||||||||||||||||||||||||||||
of
Common
|
Paid-in
Capital
|
Preferred
|
Paid-in
Capital
|
Promissory
|
Other
|
During
the
|
Total
|
|||||||||||||||||||||||||||||
Stock
|
in
Excess
|
Stock
|
in
Excess
|
Notes
|
Share
|
Comprehensive
|
Development
|
Stockholders'
|
||||||||||||||||||||||||||||
Issued
|
of
Par
|
Issued
|
of
Par
|
Receivable
|
Subscriptions
|
Income
|
Stage
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||
Balance,
June 30, 2004
|
40,181,849 | $ | 20,197,085 | 321,038 | $ | 321,038 | $ | (66,500 | ) | $ | 0 | $ | 46,267 | $ | (17,454,408 | ) | $ | 3,043,482 | ||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Settlement
of debt
|
44,000 | 55,000 | 0 | 0 | 0 | 0 | 0 | 0 | 55,000 | |||||||||||||||||||||||||||
Cashless
exercise of warrants
|
1,713,300 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Services
|
500,000 | 270,000 | 0 | 0 | 0 | 0 | 0 | 0 | 270,000 | |||||||||||||||||||||||||||
Redemption
of preferred shares
|
0 | 0 | (12,500 | ) | (12,500 | ) | 0 | 0 | 0 | (37,500 | ) | (50,000 | ) | |||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,739 | ) | (15,739 | ) | |||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,812,265 | ) | (1,812,265 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2005
|
42,439,149 | 20,522,085 | 308,538 | 308,538 | (66,500 | ) | 0 | 46,267 | (19,319,912 | ) | 1,490,478 | |||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Exercise
of options
|
200,000 | 134,000 | 0 | 0 | 0 | 0 | 0 | 0 | 134,000 | |||||||||||||||||||||||||||
Cashless
exercise of warrants
|
35,115 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Services
|
269,000 | 191,510 | 0 | 0 | 0 | 0 | 0 | 0 | 191,510 | |||||||||||||||||||||||||||
Exercise
of warrants
|
1,291,168 | 1,080,669 | 0 | 0 | 0 | 0 | 0 | 0 | 1,080,669 | |||||||||||||||||||||||||||
Repayment
of promissory note
|
0 | 0 | 0 | 0 | 34,000 | 0 | 0 | 0 | 34,000 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,427 | ) | (15,427 | ) | |||||||||||||||||||||||||
Stock-based
compensation
|
0 | 107,219 | 0 | 0 | 0 | 0 | 0 | 0 | 107,219 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,104,189 | ) | (2,104,189 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2006
|
44,234,432 | 22,035,483 | 308,538 | 308,538 | (32,500 | ) | 0 | 46,267 | (21,439,528 | ) | 918,260 | |||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Exercise
of options
|
50,000 | 35,000 | 0 | 0 | 0 | 0 | 0 | 0 | 35,000 | |||||||||||||||||||||||||||
Services
|
50,000 | 105,000 | 0 | 0 | 0 | 0 | 0 | 0 | 105,000 | |||||||||||||||||||||||||||
Private
placement
|
1,180,537 | 2,361,641 | 0 | 0 | 0 | 0 | 0 | 0 | 2,361,641 | |||||||||||||||||||||||||||
Repayment
of promissory note
|
0 | 0 | 0 | 0 | 2,763 | 0 | 0 | 0 | 2,763 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,427 | ) | (15,427 | ) | |||||||||||||||||||||||||
Stock-based
compensation
|
0 | 4,225,648 | 0 | 0 | 0 | 0 | 0 | 0 | 4,225,648 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (5,985,850 | ) | (5,985,850 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2007
|
45,514,969 | $ | 28,762,772 | 308,538 | $ | 308,538 | $ | (29,737 | ) | $ | 0 | $ | 46,267 | $ | (27,440,805 | ) | $ | 1,647,035 |
Common
|
Preferred
|
Deficit
|
||||||||||||||||||||||||||||||||||
Shares
|
Stock
and
|
Shares
of
|
Stock
and
|
Accumulated
|
||||||||||||||||||||||||||||||||
of
Common
|
Paid-in
Capital
|
Preferred
|
Paid-in
Capital
|
Promissory
|
Other
|
During
the
|
Total
|
|||||||||||||||||||||||||||||
Stock
|
in
Excess
|
Stock
|
in
Excess
|
Notes
|
Share
|
Comprehensive
|
Development
|
Stockholders'
|
||||||||||||||||||||||||||||
Issued
|
of
Par
|
Issued
|
of
Par
|
Receivable
|
Subscriptions
|
Income
|
Stage
|
Equity
(Deficit)
|
||||||||||||||||||||||||||||
Balance,
June 30, 2007
|
45,514,969 | $ | 28,762,772 | 308,538 | $ | 308,538 | $ | (29,737 | ) | $ | 0 | $ | 46,267 | $ | (27,440,805 | ) | $ | 1,647,035 | ||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Exercise
of warrants
|
190,000 | 208,995 | 0 | 0 | 0 | 0 | 0 | 0 | 208,995 | |||||||||||||||||||||||||||
Subscriptions
received
|
0 | 0 | 0 | 0 | 0 | 276,500 | 0 | 0 | 276,500 | |||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,427 | ) | (15,427 | ) | |||||||||||||||||||||||||
Stock-based
compensation
|
0 | 247,944 | 0 | 0 | 0 | 0 | 0 | 0 | 247,944 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,938,216 | ) | (1,938,216 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2008
|
45,704,969 | 29,219,711 | 308,538 | 308,538 | (29,737 | ) | 276,500 | 46,267 | (29,394,448 | ) | 426,831 | |||||||||||||||||||||||||
Shares
Issued for
|
||||||||||||||||||||||||||||||||||||
Services
|
100,000 | 60,500 | 0 | 0 | 0 | (46,500 | ) | 0 | 0 | 14,000 | ||||||||||||||||||||||||||
Subscriptions
received
|
4,500,800 | 1,125,200 | 0 | 0 | 0 | (230,000 | ) | 0 | 0 | 895,200 | ||||||||||||||||||||||||||
Dividends
on preferred shares
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,427 | ) | (15,427 | ) | |||||||||||||||||||||||||
Stock-based
compensation
|
0 | 119,064 | 0 | 0 | 0 | 0 | 0 | 0 | 119,064 | |||||||||||||||||||||||||||
Net
loss for year
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,554,876 | ) | (1,554,876 | ) | |||||||||||||||||||||||||
Balance,
June 30, 2009
|
50,305,769 | $ | 30,524,475 | 308,538 | $ | 308,538 | $ | (29,737 | ) | $ | 0 | $ | 46,267 | $ | (30,964,751 | ) | $ | (115,208 |
Period
from
|
||||||||||||||||
February
12, 1996
|
||||||||||||||||
(Inception)
|
||||||||||||||||
Years
Ended June 30
|
Through
|
|||||||||||||||
2009
|
2008
|
2007
|
June
30, 2009
|
|||||||||||||
Operating
Activities
|
||||||||||||||||
Net
loss
|
$ | (1,554,876 | ) | $ | (1,938,216 | ) | $ | (5,985,850 | ) | $ | (30,168,293 | ) | ||||
Adjustments
to reconcile net loss to net cash used in operating
activities
|
||||||||||||||||
Write-down
of investment
|
0 | 0 | 0 | 1,250,000 | ||||||||||||
Other
income
|
0 | 0 | 0 | (658,305 | ) | |||||||||||
Proprietary,
non-competition agreement
|
0 | 0 | 0 | 711,000 | ||||||||||||
Consulting
services
|
14,000 | 0 | 199,790 | 1,537,783 | ||||||||||||
Depreciation
and amortization
|
0 | 0 | 0 | 349,941 | ||||||||||||
Stock-based
compensation
|
119,064 | 247,944 | 4,225,648 | 5,833,358 | ||||||||||||
Interest
on beneficial conversion feature
|
0 | 0 | 0 | 566,456 | ||||||||||||
Settlement
of lawsuit
|
0 | 0 | 0 | 60,250 | ||||||||||||
Write-down
of license and operating assets
|
0 | 0 | 0 | 1,853,542 | ||||||||||||
Bad
debt
|
0 | 0 | 0 | 77,712 | ||||||||||||
Changes
in non-cash working capital
|
||||||||||||||||
Due
from affiliated company
|
0 | 0 | 0 | (116,000 | ) | |||||||||||
Notes
and accounts receivable
|
0 | 0 | 0 | (109,213 | ) | |||||||||||
Inventory
|
0 | 0 | 0 | (46,842 | ) | |||||||||||
Prepaid
expenses
|
19,223 | 1,867 | (18,187 | ) | (11,352 | ) | ||||||||||
Deferred
revenue and other
|
0 | 0 | 0 | (2,609 | ) | |||||||||||
Accounts
payable and accruals
|
(61,484 | ) | 66,658 | (77,267 | ) | 919,364 | ||||||||||
Net
Cash Used in Operating Activities
|
(1,464,073 | ) | (1,621,747 | ) | (1,655,866 | ) | (17,953,208 | ) | ||||||||
Investing
Activities
|
||||||||||||||||
Purchase
of property, equipment and intangible assets
|
0 | 0 | 0 | (200,935 | ) | |||||||||||
Assets
acquired and liabilities assumed on purchase of subsidiary
|
0 | 0 | 0 | (129,474 | ) | |||||||||||
Investment
in and advances to affiliated companies
|
0 | 0 | 0 | (2,000,000 | ) | |||||||||||
License
agreements
|
0 | 0 | 0 | (124,835 | ) | |||||||||||
Net
Cash Used in Investing Activities
|
0 | 0 | 0 | (2,455,244 | ) | |||||||||||
Financing
Activities
|
||||||||||||||||
Redemption
of preferred shares
|
0 | 0 | 0 | (50,000 | ) | |||||||||||
Repayment
of loan
|
0 | 0 | 0 | (11,000 | ) | |||||||||||
Advances
from stockholders
|
0 | 0 | 0 | 1,078,284 | ||||||||||||
Repayments
from (to) stockholders
|
0 | 0 | 2,763 | (91,283 | ) | |||||||||||
Subscriptions
received
|
0 | 276,500 | 0 | 503,165 | ||||||||||||
Proceeds
from issuance of common stock
|
895,200 | 208,995 | 2,396,641 | 19,095,670 | ||||||||||||
Proceeds
from convertible debentures
|
0 | 0 | 0 | 600,000 | ||||||||||||
Share
issue costs
|
0 | 0 | 0 | (227,420 | ) | |||||||||||
Net
Cash Provided by Financing Activities
|
895,200 | 485,495 | 2,399,404 | 20,897,416 | ||||||||||||
Effect
of Foreign Currency Translation on Cash
|
0 | 0 | 0 | 46,267 | ||||||||||||
Inflow
(Outflow) of Cash
|
(568,873 | ) | (1,136,252 | ) | 743,538 | 535,231 | ||||||||||
Cash,
Beginning of Year
|
1,104,104 | 2,240,356 | 1,496,818 | 0 | ||||||||||||
Cash,
End of Year
|
$ | 535,231 | $ | 1,104,104 | $ | 2,240,356 | $ | 535,231 |
1.
|
INCORPORATION
AND NATURE OF OPERATIONS
|
2.
|
GOING
CONCERN
|
3.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
|
(a)
|
Principles
of consolidation
|
|
(b)
|
Loss
per share
|
|
(c)
|
Stock
issued in exchange for services
|
|
(d)
|
Revenue
recognition
|
|
(e)
|
Foreign
currency translation
|
|
(f)
|
Research
and development
|
3.
|
SIGNIFICANT ACCOUNTING
POLICIES (Continued)
|
|
(g)
|
Use
of estimates
|
|
(h)
|
Financial
instruments
|
|
(i)
|
Interest
rate risk
|
|
(ii)
|
Credit
risk
|
|
(iii)
|
Currency
risk
|
|
(i)
|
Income
taxes
|
|
(j)
|
Stock-based
compensation
|
|
(k)
|
Recently
adopted accounting pronouncements
|
|
(i)
|
In
May 2009, FASB issued Statement No. 165, Subsequent Events
(“SFAS 165”). SFAS 165 establishes
general standards of accounting for and disclosures of events that occur
after the balance sheet date but before financial statements are issued or
are available to be issued. It requires the disclosure of the date
through which an entity has evaluated subsequent events and the basis for
that date. The Company has evaluated subsequent events though
September 28, 2009, the date the financial statements were
issued. The adoption of this statement did not significantly
impact the Company’s disclosures. Events occurring after this
date have not been evaluated.
|
|
(ii)
|
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of
FASB Statement No. 115”. This statement permits entities
to choose to measure many financial instruments and certain other items at
fair value. Most of the provisions of SFAS No. 159 apply only
to entities that elect the fair value option. However, the
amendment to SFAS No. 115, “Accounting for Certain
Investments in Debt and Equity Securities”, applies to all entities
with available-for-sale and trading securities. SFAS No. 159 is effective
as of the beginning of an entity’s first fiscal year that begins after
November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provisions of SFAS No. 157,
“Fair Value
Measurements”. The adoption of this statement did not
significantly impact the Company’s financial position or results of
operations.
|
|
(iii)
|
In
September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements”. The objective of SFAS No. 157 is to
increase consistency and comparability in fair value measurements and to
expand disclosures about fair value measurements. SFAS No. 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosures about
fair value measurements. SFAS No. 157 applies under other
accounting pronouncements that require or permit fair value measurements
and does not require any new fair value measurements. The
provisions of SFAS No. 157 are effective for fair value measurements made
in fiscal years beginning after November 15, 2007. The adoption
of this statement did not significantly impact the Company’s financial
position or results of operations.
|
|
(l)
|
Recent
accounting pronouncements not yet
adopted
|
|
(i)
|
In
June 2009, the FASB issued SFAS No. 168, “The Hierarchy of Generally
Accepted Accounting Principles”. The new standard replaces SFAS
162 and establishes the “FASB Accounting Standards Codification” as the
source of authoritative accounting principles recognized by the FASB to be
applied by non-governmental entities in the preparation of financial
statements in conformity with US generally accepted accounting
principles. The Statement shall be effective for financial
statements issued for interim and annual periods ending after September
15, 2009.
|
|
(l)
|
Recent
accounting pronouncements not yet adopted
(Continued)
|
|
(ii)
|
In
June 2009, the FASB issued SFAS No. 167, “Amendments to FASB
Interpretation No. 46(R)”. The new standard is to improve
financial reporting by enterprises involved with variable interest
entities. SFAS 167 addresses the effects on certain provisions
of FASB Interpretation No. 46, “Consolidation of Variable Interest
Entities” (“Interpretation 46(R)”), as a result of the elimination of the
qualifying special-purpose entity concept in FASB Statement No. 166,
“Accounting for Transfers of Financial Assets”, and constituent concerns
about the application of certain key provisions of Interpretation 46(R),
including those in which the accounting and disclosures under the
Interpretation do not always provide timely and useful information about
an enterprise’s involvement in a variable interest entity. The
Statement shall be effective as of the beginning of each reporting
entity’s first annual reporting period that begin after November 15, 2009,
for interim periods within that first annual reporting period and for
interim and annual reporting periods
thereafter.
|
|
(iii)
|
In
June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets”. The new standard is intended to improve the
relevance, representational faithfulness and comparability of the
information that a reporting entity provides in its financial statements
about a transfer of financial assets; the effects of a transfer on its
financial position, financial performance and cash flows; and a
transferor’s continuing involvement, if any, in transferred financial
assets. This standard addresses the practices that developed
since the issuance of FASB Statement No. 140, “Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities”,
that are not consistent with the original intent and key requirements of
that Statement and the concerns of financial statement users that many of
the financial assets (and related obligations) that have been
de-recognized should continue to be reported in the financial statements
of transferors. The Statement must be applied as of the
beginning of each reporting entity’s first annual reporting period that
begins after November 15, 2009 for interim periods within that first
annual reporting period and for interim and annual reporting periods
thereafter.
|
|
(iv)
|
In
June 2008, the FASB ratified EITF Issue 07-5, Determining Whether an
Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock
(“EITF 07-5”). Paragraph 11(a) of SFAS 133 specifies that a
contract that would otherwise meet the definition of a derivative but is
both (a) indexed to our own stock and (b) classified in stockholders’
equity in the statement of financial position would not be considered a
derivative financial instrument. EITF 07-5 provides a new
two-step model to be applied in determining whether a financial instrument
or an embedded feature is indexed to an issuer’s own stock and thus able
to qualify for the SFAS 133 paragraph 11(a) scope
exemption. EITF 07-5 is effective on January 1,
2009. The Company is currently evaluating the impact of the
adoption in its financial position and results of
operations.
|
|
(v)
|
In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial
Guarantee Insurance Contracts – An interpretation of FASB Statement No.
60”. SFAS 163 requires that an insurance enterprise recognize a
claim liability prior to an event of default when there is evidence that
credit deterioration has occurred in an insured financial
obligation. It also clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement to be used to account for premium revenue and claim
liabilities, and requires expanded disclosures about financial guarantee
insurance contracts. It is effective for financial statements
issued for fiscal years beginning after December 15, 2008, except for some
disclosures about the insurance enterprise’s risk-management activities.
SFAS 163 requires that disclosure about the risk-management activities of
the insurance enterprise be effective for the first period beginning after
issuance. Except for those disclosures, earlier application is
not permitted.
|
|
(vi)
|
In
March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment to FASB Statement No.
133”. SFAS No. 161 is intended to improve financial
standards for derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance and cash
flows. Entities are required to provide enhanced disclosures
about: (a) how and why an entity uses derivative instruments; (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entity’s financial
position, financial performance and cash flows. It is effective
for financial statements issued for fiscal years beginning after November
15, 2008, with early adoption
encouraged.
|
|
(vii)
|
In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”, which, among other things,
provides guidance and establishes amended accounting and reporting
standards for a parent company’s non-controlling interest in a
subsidiary. This pronouncement is effective for fiscal years
beginning on or after December 15,
2008.
|
|
(viii)
|
In
December 2007, FASB Statement No. 141 (revised 2007), Business Combinations
(“SFAS 141”), was issued. SFAS 141 establishes principles and
requirements for how the acquirer (a) recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities
assumed, and non-controlling interest in the acquired entity; (b)
recognizes and measures the goodwill acquired in the business combination
or a gain from a bargain purchase; and (c) determines what information to
disclose to enable users of the financial statements to evaluate the
nature and financial effects of the business combination. The
provisions of SFAS 141 are effective for business combinations for which
the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15,
2008.
|
4.
|
STOCKHOLDERS' EQUITY
(DEFICIT)
|
|
(a)
|
Common
stock
|
|
(i)
|
During
the year ended June 30, 2007, the
Company:
|
|
(a)
|
Closed
a private placement on September 15, 2006 of 1,180,537 units consisting of
common stock at $2 per share and warrants to purchase 590,269 shares of
common stock within two years at an exercise price of $2.50 per share,
provided that in the event that the average closing bid price of a share
of the Company's common stock exceeds $4.50 for ten consecutive trading
days, the Company has the right to redeem the warrants for $0.01 per share
of common stock purchasable hereunder, upon thirty days’ written notice
(the holder shall have the right to exercise the warrant in accordance
with its terms prior to the expiration of the thirty-day
period). The purchase price attributable to the warrants was
$0.001 per share of common stock underlying the
warrants. Aggregate proceeds from the sale of the common stock
and the warrants were $2,361,641 ($2,361,051 for the common stock and $590
for the warrants). At any time commencing 60 days after the
close of the offering, the investors can require the Company prepare and
file a registration statement to register the common stock (including the
shares underlying the warrants) for resale by the
investors. The Company also reserves the right to file such a
registration statement at any time after the closing date on its own
initiative;
|
|
(b)
|
Issued
50,000 shares of common stock in the amount of $35,000 on the exercise of
options; and
|
|
(c)
|
Issued
50,000 shares of common stock as consideration for consulting services to
be provided over 12 months. These shares have been recorded at
a value of $105,000 representing the market value of the shares on the
date of issuance.
|
|
(ii)
|
During
the year ended June 30, 2008, the
Company:
|
|
(a)
|
Issued
190,000 shares of common stock for $208,995 on the exercise of
warrants. The Company approved a temporary adjustment to the
exercise price of stock purchase warrants dated September 15, 2006 by
reducing their exercise price from $2.50 per share to $1.10 per share in
consideration of overall market conditions in October 2007 as long as the
warrants were exercised prior to November 15,
2007.
|
|
(a)
|
Common
stock (Continued)
|
|
(iii)
|
During
the year ended June 30, 2009, the
Company:
|
|
(a)
|
Closed
a private placement for which it received $1,125,200 ($848,700 received
during 2009 (2008 - $276,500) (note 4(f)) for issuance of 4,500,800 units,
each unit consisting of one share of common stock at $0.25 per share and
one warrant at $0.001 per share. Each warrant entitles the
holder to purchase one share of common stock on or before December 31,
2010 at an exercise price of $0.50 per
share;
|
|
(b)
|
Issued
50,000 shares of common stock as consideration for consulting
services. These shares have been recorded at a value of $14,000
representing the market value of the shares on the date of issuance;
and
|
|
(c)
|
Issued
50,000 shares of common stock as consideration for consulting
services. These shares have been recorded at a value of $46,500
representing the market value of the shares on the date of
issuance.
|
|
(b)
|
Preferred
stock
|
|
(c)
|
Stock
options and stock-based
compensation
|
2009
|
2008
|
2007
|
||||||||||
Expected
life (years)
|
1 | 1 | 1 | |||||||||
Interest
rate
|
3.87 | % | 4.28 | % | 5.00 | % | ||||||
Volatility
|
84.24 | % | 87.75 | % | 106.90 | % | ||||||
Dividend
yield
|
0.00 | % | 0.00 | % | 0.00 | % | ||||||
Estimated
forfeitures
|
0.00 | % | 0.00 | % | 0.00 | % |
Weighted
|
||||||||||||
Average
|
||||||||||||
Number
|
Price
|
Exercise
|
||||||||||
of
Shares
|
Per
Share
|
Price
|
||||||||||
Balance,
June 30, 2006
|
2,295,000 | $ | 0.40 to $ 1.16 | $ | 0.76 | |||||||
Granted
|
1,475,000 | $ | 0.40 to $ 2.75 | $ | 2.14 | |||||||
Exercised
|
(50,000 | ) | $ | 0.40 to $ 1.00 | $ | 0.82 | ||||||
Balance,
June 30, 2007 and 2008
|
3,720,000 | $ | 0.50 to $ 2.75 | $ | 1.31 | |||||||
Expired
|
350,000 | $ | 1.00 to $ 2.75 | $ | 2.25 | |||||||
Balance,
June 30, 2009
|
3,370,000 | $ | 0.50 to $ 2.25 | $ | 1.21 |
Exercise
|
Number
of Shares
|
|||||||||||||||
Expiry
Date
|
Price
|
2009
|
2008
|
2007
|
||||||||||||
March
23, 2009
|
$ | 1.00 | 0 | 100,000 | 100,000 | |||||||||||
March
30, 2009
|
$ | 2.75 | 0 | 250,000 | 250,000 | |||||||||||
August
31, 2009
|
$ | 0.65 to $ 1.16 | 855,000 | * | 855,000 | 855,000 | ||||||||||
November
15, 2009
|
$ | 1.00 | 100,000 | 100,000 | 100,000 | |||||||||||
June
30, 2010
|
$ | 0.50 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||
June
30, 2010
|
$ | 2.25 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||
December
31, 2010
|
$ | 1.00 | 415,000 | 415,000 | 415,000 | |||||||||||
Total
outstanding
|
$ | 0.50 to $ 2.25 | 3,370,000 | 3,720,000 | 3,720,000 | |||||||||||
Total
exercisable
|
$ | 0.50 to $ 2.75 | 3,370,000 | 3,720,000 | 3,626,250 |
|
*
|
Subsequent
to June 30, 2009, the expiry date of 110,000 options was extended from
August 31, 2009 to August 31, 2010. The remaining 755,000
options expired unexercised.
|
|
(d)
|
Stock
purchase warrants
|
Weighted
|
||||||||||||
Average
|
||||||||||||
Number
|
Price
|
Exercise
|
||||||||||
of
Shares
|
Per
Share
|
Price
|
||||||||||
Balance,
June 30, 2006
|
0 | $ | 0.00 | $ | 0.00 | |||||||
Issued
|
590,629 | $ | 2.50 | $ | 2.50 | |||||||
Balance,
June 30, 2007
|
590,629 | $ | 2.50 | $ | 2.50 | |||||||
Exercised
|
(190,000 | ) | $ | 2.50 | $ | 2.50 | ||||||
Balance,
June 30, 2008
|
400,269 | $ | 2.50 | $ | 2.50 | |||||||
Issued
|
4,500,800 | $ | 0.50 | $ | 0.50 | |||||||
Expired
|
(400,269 | ) | $ | 2.50 | $ | 2.50 | ||||||
Balance,
June 30, 2009
|
4,500,800 | $ | 0.50 | $ | 0.50 |
Exercise
|
Number
of Shares
|
|||||||||||||||
Expiry
Date
|
Price
|
2009
|
2008
|
2007
|
||||||||||||
September
15, 2008
|
$ | 2.50 | 0 | 400,269 | 590,269 | |||||||||||
December
31, 2010
|
$ | 0.50 | 4,500,800 | 0 | 0 | |||||||||||
Total
outstanding
|
$ | 0.50 to 2.50 | 4,500,800 | 400,269 | 590,269 |
(e)
|
Promissory
notes receivable at June 30, 2009
includes:
|
|
(i)
|
$17,500
(2008 - $17,500) due on exercise of 210,000 stock options, interest at 10%
per annum, due November 1, 2002, subsequently extended to
June 30, 2003; and
|
|
(ii)
|
$12,237
(2008 - $12,237) due on exercise of 23,000 stock options, interest at 10%
per annum, due June 30, 2003.
|
|
(f)
|
Subscriptions
received
|
|
(i)
|
During
the year ended June 30, 2008, $230,000 was received for subscriptions of
333,333 units consisting of common stock at $0.69 per share and warrants
at $0.001 per share of common stock underlying the warrant to purchase
333,333 shares of common stock on or before two years after the closing
date at an exercise price of $0.75 per share (exercise of the investment
warrant may be required in the event that the market price for the common
stock exceeds $1.25 per share).
|
|
(ii)
|
At
June 30, 2008, the Company had an obligation to issue 50,000 shares of
common stock as consideration for consulting services. These
shares were recorded at a value of $46,500 representing the market value
of the shares at the date the shares were to have been
issued. During the year ended June 30, 2009, these shares have
been issued.
|
5.
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
Period
from
|
||||||||||||||||
February
12,
|
||||||||||||||||
1996
|
||||||||||||||||
(Inception)
|
||||||||||||||||
Years
Ended June 30,
|
Through
|
|||||||||||||||
2009
|
2008
|
2007
|
June
30, 2009
|
|||||||||||||
Supplemental
Disclosure of Non-Cash Transactions
|
||||||||||||||||
Shares
Issued for
|
||||||||||||||||
Redemption
of preferred shares
|
$ | 0 | $ | 0 | $ | 0 | $ | 415,000 | ||||||||
Property
and equipment
|
$ | 0 | $ | 0 | $ | 0 | $ | 23,000 | ||||||||
Proprietary
agreement
|
$ | 0 | $ | 0 | $ | 0 | $ | 711,000 | ||||||||
Settlement
of accounts payable
|
$ | 0 | $ | 0 | $ | 0 | $ | 228,742 | ||||||||
Services
(provided by officers and directors)
|
$ | 0 | $ | 0 | $ | 0 | $ | 120,000 | ||||||||
Settlement
of lawsuit
|
$ | 0 | $ | 0 | $ | 0 | $ | 15,000 | ||||||||
Services
|
$ | 14,000 | $ | 0 | $ | 105,000 | $ | 815,784 | ||||||||
Subscriptions
received
|
$ | 46,500 | $ | 0 | $ | 0 | $ | 46,500 | ||||||||
Acquisition
of subsidiary
|
$ | 0 | $ | 0 | $ | 0 | $ | 894,200 | ||||||||
Supplemental
Cash Flow Information
|
||||||||||||||||
Interest
paid
|
$ | 0 | $ | 0 | $ | 0 | $ | 81,111 | ||||||||
Income
tax paid
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 |
6.
|
RELATED
PARTY TRANSACTIONS
|
(a)
|
Accounts
payable at June 30, 2009 includes $3,685 (2008 - $3,685) due to two
directors and officers of the
Company.
|
(b)
|
The
Company recorded an expense of $420,000 (2008 - $420,000; 2007 -
$505,000) for wages paid to two directors and officers of the
Company.
|
(c)
|
Promissory
notes receivable at June 30, 2009 includes $29,737 (2008 - $29,737)
for advances made by the Company to an officer of the
Company.
|
7.
|
INCOME
TAXES
|
2009
|
2008
|
2007
|
||||||||||
Current
Expense
|
$ | 0 | $ | 0 | $ | 0 | ||||||
Deferred
Benefit
|
(528,000 | ) | (669,000 | ) | (2,994,000 | ) | ||||||
Increase
in valuation allowance
|
528,000 | 669,000 | 2,994,000 | |||||||||
Total
provision for income tax
|
$ | 0 | $ | 0 | $ | 0 |
2009
|
2008
|
2007
|
||||||||||
Provision
for income tax at the statutory rate of 34%
|
$ | (529,000 | ) | $ | (660,000 | ) | $ | (2,024,000 | ) | |||
Increase(Decrease)
in taxes due to
|
||||||||||||
Change
in valuation allowance
|
528,000 | 669,000 | 2,994,000 | |||||||||
Disallowed
expense
|
1,000 | 1,000 | 1,000 | |||||||||
True-up
of deferred tax assets
|
0 | (10,000 | ) | (971,000 | ) | |||||||
Total
provision for income tax
|
$ | 0 | $ | 0 | $ | 0 |
7.
|
INCOME TAXES
(Continued)
|
2009
|
2008
|
2007
|
||||||||||
Deferred
income tax assets
|
||||||||||||
Current
deferred tax assets
|
||||||||||||
Legal
dispute reserve
|
$ | 0 | $ | 182,000 | $ | 182,000 | ||||||
Accrued
Liabilities
|
12,000 | 14,000 | 7,000 | |||||||||
Total
current deferred tax assets
|
12,000 | 196,000 | 189,000 | |||||||||
Noncurrent
deferred tax assets
|
||||||||||||
Net
operating loss carryforwards
|
7,706,000 | 7,034,000 | 6,454,000 | |||||||||
Nonqualified
stock options
|
1,795,000 | 1,754,000 | 1,670,000 | |||||||||
Capital
loss carryforwards
|
425,000 | 425,000 | 425,000 | |||||||||
Investment
reserve
|
247,000 | 247,000 | 247,000 | |||||||||
Basis
difference of fixed assets
|
1,000 | 2,000 | 4,000 | |||||||||
Valuation
allowance
|
(10,186,000 | ) | (9,658,000 | ) | (8,989,000 | ) | ||||||
Total
noncurrent deferred tax assets
|
(12,000 | ) | (196,000 | ) | (189,000 | ) | ||||||
Noncurrent
deferred tax liabilities
|
0 | 0 | 0 | |||||||||
Total
noncurrent deferred tax liabilities
|
0 | 0 | 0 | |||||||||
Net
deferred tax asset/(liability)
|
$ | 0 | $ | 0 | $ | 0 |
7.
|
INCOME TAXES
(Continued)
|
Year
Ended
|
Expires
|
Amount
|
|||
June
30, 1996
|
June
30, 2011
|
$ | 346,000 | ||
June
30, 1997
|
June
30, 2012
|
1,405,000 | |||
June
30, 1998
|
June
30, 2018
|
999,000 | |||
June
30, 1999
|
June
30, 2019
|
1,361,000 | |||
June
30, 2000
|
June
30, 2020
|
1,091,000 | |||
June
30, 2001
|
June
30, 2021
|
2,002,000 | |||
June
30, 2002
|
June
30, 2022
|
2,527,000 | |||
June
30, 2003
|
June
30, 2023
|
1,364,000 | |||
June
30, 2004
|
June
30, 2024
|
2,162,000 | |||
June
30, 2005
|
June
30, 2025
|
2,208,000 | |||
June
30, 2006
|
June
30, 2026
|
2,373,000 | |||
June
30, 2007
|
June
30, 2027
|
1,177,000 | |||
June
30, 2008
|
June
30, 2028
|
1,676,000 | |||
June
30, 2009
|
June
30, 2029
|
1,974,000 | |||
Total
|
$ | 22,665,000 |
Year
Ended
|
Expires
|
Amount
|
|||
June
30, 2005
|
June
30, 2010
|
$ | 1,250,000 | ||
Total
|
$ | 1,250,000 |
7.
|
INCOME TAXES
(Continued)
|
8.
|
LOSS
PER SHARE
|
Income
(Numerator)
|
Weighted
Average Number of Shares (Denominator)
|
Loss
Per Share
|
||||||||||
2009
|
||||||||||||
Loss
for the year
|
$ | (1,554,876 | ) | |||||||||
Preferred
stock dividends
|
(15,427 | ) | ||||||||||
Loss
attributable to common shareholders
|
$ | (1,570,303 | ) | 47,360,459 | $ | (0.03 | ) | |||||
2008
|
||||||||||||
Loss
for the year
|
$ | (1,938,216 | ) | |||||||||
Preferred
stock dividends
|
(15,427 | ) | ||||||||||
Loss
attributable to common shareholders
|
$ | (1,953,643 | ) | 45,617,756 | $ | (0.04 | ) | |||||
2007
|
||||||||||||
Loss
for the year
|
$ | (5,985,850 | ) | |||||||||
Preferred
stock dividends
|
(15,427 | ) | ||||||||||
Loss
attributable to common shareholders
|
$ | (6,001,277 | ) | 45,230,171 | $ | (0.13 | ) |
Name
|
Age
|
Position
with Company
|
Director
of
Company
Since
|
William
S. Robinson
|
52
|
Director,
Chairman, CEO and Treasurer
|
February
1996
|
William
A. Ince
|
58
|
Director,
President, Secretary and Chief Financial
Officer
|
February
1996
|
Name and
Principal Position
|
Fiscal
Year Ended June 30
|
Salary ($)
|
Bonus
($)
|
Stock
Awards
|
Options
Awards ($) (n2)
|
Non-Equity
Incentive Plan Compensation ($)
|
Nonqualified
Deferred Compensation Earnings ($)
|
All Other
Compensation
($) (n3)
|
Total ($)
|
||||||||||||||||||||||||
William
S.
|
2009
|
$ | 210,000 | -0- | -0- | $ | -0- | -0- | -0- | $ | 28,282 | $ | 238,282 | ||||||||||||||||||||
Robinson
|
2008
|
$ | 210,000 | -0- | -0- | $ | -0- | -0- | -0- | $ | 28,282 | $ | 238,282 | ||||||||||||||||||||
Chief
Executive Officer, Treasurer, Chairman, Director
|
|||||||||||||||||||||||||||||||||
William
A.
|
2009
|
$ | 210,000 | -0- | -0- | -0- | -0- | -0- | $ | 23,145 | $ | 233,145 | |||||||||||||||||||||
Ince
|
2008
|
$ | 210,000 | -0- | -0- | -0- | -0- | -0- | $ | 23,145 | $ | 233,145 | |||||||||||||||||||||
Chief
Financial and Accounting Officer, President, Secretary,
Director
|
(n1)
|
Reflects
dollar amount expensed by the company during applicable fiscal year for
financial statement reporting purposes pursuant to FAS 123R. FAS
123R requires the company to determine the overall value of the options as
of the date of grant based upon the Black-Scholes method of valuation, and
to then expense that value over the service period over which the options
become exercisable (vest). As a general rule, for
time-in-service-based options, the company will immediately expense any
option or portion thereof which is vested upon grant, while expensing the
balance on a pro rata basis over the remaining vesting term of the
option. For a description FAS 123R and the assumptions used in
determining the value of the options under the Black-Scholes model of
valuation, see the notes to the consolidated financial statements included
with this report.
|
(n2)
|
On
July 1, 2002, Mr. Ince was granted an option to acquire 415,000 shares of
common stock at an exercise price of $1.00 per share. In
December 2005, the expiration date of these options was extended until
December 31, 2007. Then in June 2007, the expiration date of
these options was extended until December 31,
2010.
|
(n3)
|
William
S. Robinson and William A. Ince each own shares of Series A Preferred
Stock. A 5% dividend on the Series A Preferred Stock is payable
in cash or shares of common stock at the election of
Integral. For the year ended June 30, 2009, $10,282 was paid or
accrued for Mr. Robinson and $5,145 was paid or accrued for Mr.
Ince. For the year ended June 30, 2008, $10,282 was paid or
accrued for Mr. Robinson and $5,145 was paid or accrued for Mr.
Ince.
|
|
William
S. Robinson and William A. Ince each received an automobile expense
allowance of $18,000 in 2009 and $18,000 in
2008.
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||||||||||
Equity
Incentive Plan Awards:
|
Equity
Incentive Plan Awards:
|
Equity
Incentive Plan Awards:
|
|||||||||||||||||||||||||||||||
Name
|
Number of
Securities Underlying Unexercised Options(#) Exercisable
|
Number of
Securities Underlying Unexercised Options(#) Unexercisable
|
Number of
Securities Underlying Unexercised Unearned
Options (#)
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
Number of
Shares or Units of Stock That Have Not
Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not
Vested
|
Number
of Unearned Shares, Units or Other Rights That Have Not
Vested
|
Market or
Payout Value of Unearned Shares, Units or Other Rights
That Have Not Vested
|
||||||||||||||||||||||||
William
S. Robinson (n1)
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
William
A. Ince (n2)
|
415,000 | 0 | 0 | $ | 1.00 |
12/31/2010
|
0 | 0 | 0 | 0 | |||||||||||||||||||||||
(n1)
|
Mr.
Robinson holds the following options: Subsequent to the year end on July
14, 2009 Mr. Robinson was granted an option to acquire 500,000 shares of
common stock at an exercise price of $0.25 per share. These options are
exercisable after January 1, 2010 and expire on December 31,
2014.
|
(n2)
|
Mr.
Ince holds the following options: Subsequent to the year end on
July 1, 2002, Mr. Ince was granted an option to acquire 415,000 shares of
common stock at an exercise price of $1.00 per share. In June
2007, the expiration date of these options was extended until December 31,
2010. On July 14, 2009 Mr. Ince was granted an option to acquire 500,000
shares of common stock at an exercise price of $0.25 per share. These
options are exercisable after January 1, 2010 and expire on December 31,
2014.
|
(n2)
|
Mr.
Aisenbrey, Integral’s former Chief Technology Officer holds the following
options:
|
|
·
|
On
June 17, 2005, Mr. Aisenbrey was granted an option to acquire 1,000,000
share of common stock at an exercise price of $.50 per share, exercisable
in whole or in part at any time until June 30,
2010.
|
|
·
|
On
November 6, 2006, Mr. Aisenbrey was granted an option to acquire 1,000,000
shares of common stock at an exercise price of $2.25 per share,
exercisable in whole or in part at any time until June 30,
2010.
|
Name
and Address of
Beneficial
Owner (n1)
|
Amount
and Nature of Beneficial Ownership(n1)(n2)
|
Percent
of Class (n3)
|
Executive
Officers and Directors:
|
||
William
S. Robinson (n4)
#3
1070 West Pender St.
Vancouver,
B.C. V6E 2N7
|
3,030,781
|
5.8%
|
William
A. Ince (n5)
805
W. Orchard Dr., Suite #7
Bellingham,
WA 98225
|
2,723,544
|
5.3%
|
All
executive officers and directors as a group
|
5,754,325
|
11.1%
|
(n1)
|
Unless
otherwise indicated, all shares are directly beneficially owned and
investing power is held by the persons
named.
|
(n2)
|
Includes
vested options beneficially owned but not yet exercised and outstanding,
if any. The table does not include the effects of conversion by
Mr. Robinson and Mr. Ince of their shares of Series A Convertible
Preferred Stock (“Series A”), which are convertible into shares of common
stock at a conversion rate that varies with the market price of the common
stock at the time of conversion. The conversion rate is
determined by dividing the number of shares of Series A being
converted by the average of the high and low bid prices of Integral’s
common stock reported by the OTC Bulletin Board over the ten trading days
preceding the date of conversion. Mr. Robinson owns 204,975
shares of Series A and Mr. Ince owns 103,563 shares of
Series A. As of September 14, 2009, the conversion rate
was $0.42 per share, so Mr. Robinson’s 204,975 shares of Series A
were convertible into 488,035 shares of common stock, and Mr. Ince’s
103,563 shares of Series A were convertible into 246,578 shares of
common stock. The actual number of shares of common stock
receivable by Messrs. Robinson and Ince upon conversion of the
Series A would depend on the actual conversion rate in effect at the
time of conversion.
|
|
(n3)
|
Based
upon 50,305,769 shares issued and outstanding, plus the amount of shares
each person or group has the right to acquire within 60 days pursuant to
options, warrants, conversion privileges or other
rights.
|
(n4)
|
Mr.
Robinson is an executive officer and director of Integral and each of its
subsidiaries. Beneficial ownership figure includes an aggregate
of 150,000 shares held in the names of his spouse and his two minor
children and 500,000 underlying
options.
|
(n5)
|
Mr.
Ince is an executive officer and director of Integral and each of its
subsidiaries. Beneficial ownership figure includes 915,000 shares
underlying options.
|
Name
and Address
of
Beneficial
Owner (n1)
|
Amount
and Nature of Beneficial Ownership(n1)
|
Percent
of Class (n2)
|
William
S. Robinson
(n3) –
#3
1070 West Pender
St.
Vancouver,
B.C. V6E 2N7
|
204,975
|
66.4%
|
William
A. Ince
(n4) –
805
W. Orchard Dr., Suite
#3
Bellingham,
WA 98225
|
103,563
|
33.6%
|
All
officers and directors of Integral as a group (2 persons)
|
308,538
|
100%
|
(n1)
|
Unless
otherwise indicated, all shares are directly beneficially owned and
investing power is held by the persons
named.
|
(n3)
|
Mr.
Robinson is an executive officer and director of Integral and each of its
subsidiaries.
|
(n4)
|
Mr.
Ince is an executive officer and director of Integral and each of its
subsidiaries.
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of options, warrants and rights
|
Number
of securities available for future issuance under equity compensation
plans (excluding securities reflected in column (a))
|
Plan
category
|
(a)
|
(b)
|
(c)
|
Equity
compensation plans approved by security holders
|
N/A
|
N/A
|
N/A
|
Equity
compensation plans not approved by security holders
|
3,370,000
|
$1.21
|
1,839,500
|
Total
|
3,370,000
|
$1.21
|
1,839,500
|
|
·
|
On
June 17, 2005, Integral provided a Grant of Option to Thomas Aisenbrey.
Pursuant to the Grant of Option, Mr. Aisenbrey was granted an option to
acquire 1,000,000 share of common stock at an exercise price of $.50 per
share, exercisable in whole or in part at any time until June 30,
2010.
|
|
·
|
On
November 6, 2006, Integral provided a Grant of Option to Thomas Aisenbrey.
Pursuant to the Grant of Option, Mr. Aisenbrey was granted an option to
acquire 1,000,000 share of common stock at an exercise price of $2.25 per
share, exercisable in whole or in part at any time until June 30,
2010.
|
Exhibit No.
|
Description
|
|
3.03
|
Articles
of Incorporation, as amended and currently in
effect. (Incorporated by reference to Exhibit 3.03 of
Integral’s quarterly report on Form 10-QSB for the period ended March 31,
2006.)
|
|
3.04
|
Bylaws,
as amended and restated on December 31, 1997. (Incorporated by
reference to Exhibit 3.04 of Integral’s quarterly report on Form 10-QSB
for the period ended March 31, 2006.)
|
|
3.05 | Amendment to Series A Preferred Stock-July 14, 2009 | |
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).)
|
|
10.15
|
Integral
Technologies, Inc. 2003 Stock Plan dated April 4, 2003 (Incorporated by
reference to Exhibit 10.15 of Integral’s registration statement on Form
S-8 (file no. 333-104522).)
|
|
10.18
|
Grant
of Option dated June 17, 2005 between Integral and Thomas Aisenbrey.
(Incorporated by reference to Exhibit 10.18 of Integral’s Current Report
Form 8-K dated June 17, 2005 (filed June 23, 2005).)
|
|
10.19
|
Agreement
between the Company and The QuanStar Group, LLC dated June 20, 2005.
(Incorporated by reference to Exhibit 10.18 of Integral’s Current Report
Form 8-K dated June 17,2005 (filed June 23, 2005).)
|
|
10.20
|
Patent
License Agreement between the Company and Heatron, Inc. dated March 17,
2006. (Incorporated by reference to Exhibit 10.20 of Integral’s Current
Report Form 8-K dated March 17, 2006 (filed April 11,
2006).)
|
|
10.21
|
Patent
License Agreement between the Company and Jasper Rubber Products, Inc.
dated August 25, 2006. (Incorporated by reference to Exhibit 10.21 of
Integral’s Current Report Form 8-K dated August 25, 2006 (filed September
19, 2006).)
|
|
10.22
|
Grant
of Option dated November 6, 2006 between Integral and Thomas Aisenbrey.
(Incorporated by reference to Exhibit 10.22 of Integral’s Quarterly Report
on Form 10-QSB for the period ended September 30,
2006.)
|
|
10.23
|
Manufacturing
Agreement between Integral and Jasper Rubber Products, Inc. dated November
22, 2006. (Incorporated by reference to Exhibit 10.23 of Integral’s
Current Report on Form 8-K dated November 27, 2006 (filed December 4,
2006).)
|
|
10.24
|
Patent
License Agreement between Integral and ADAC Plastics, Inc. d/b/a ADAC
Automotive, dated November 28, 2006. (Incorporated by reference to Exhibit
10.24 of Integral’s Current Report on Form 8-K dated December 18, 2006
(filed December 20, 2006).)
|
|
10.25
|
Patent
License Agreement between Integral and Esprit Solutions Limited, dated
December 18, 2006. (Incorporated by reference to Exhibit 10.25 of
Integral’s Current Report on Form 8-K dated January 9, 2007 (filed January
19, 2007).)
|
|
10.26
|
Patent
License Agreement between Integral and Knowles Electronics, LLC, dated
January 18, 2007. (Incorporated by reference to Exhibit 10.26 of
Integral’s Quarterly Report on Form 10-QSB for the period ended December
31, 2006.)
|
10.27
|
Agreement
between Integral and Visionary Innovations, Inc., dated February 16, 2007.
(Incorporated by reference to Exhibit 10.27 of Integral’s Quarterly Report
on Form 10-QSB for the period ended March 31, 2007.)
|
|
10.28
|
Amendment
One to Manufacturing Agreement between Integral and Jasper Rubber
Products, Inc. dated July 19, 2007. (Incorporated by reference to Exhibit
10.28 of Integral’s Current Report on Form 8-K dated July 19, 2007 (filed
July 30, 2007).)
|
|
Integral
Technologies, Inc. 2009 Stock Option Plan dated July 14,
2009
|
||
Employment
Agreement between Integral and William Robinson dated July 14,
2009.
|
||
Employment
Agreement between Integral and William Ince dated July 14,
2009.
|
||
Consulting
Agreement between Integral and Mohamed Zeidan dated August 10,
2009.
|
||
14.1
|
Code
of Ethics adopted September 20, 2004. (Incorporated by reference to
Exhibit 14.1 of Integral’s annual report on Form 10-KSB for the period
ended June 30, 2004.)
|
|
21.4
|
List
of Subsidiaries. (Incorporated by reference to Exhibit 21.4 of Integral’s
annual report on Form 10-KSB for the period ended June 30,
2004.)
|
|
Section
302 Certification by the Corporation’s Chief Executive
Officer. (Filed herewith).
|
||
Section
302 Certification by the Corporation’s Chief Financial
Officer. (Filed herewith).
|
||
Section
906 Certification by the Corporation’s Chief Executive
Officer. (Filed herewith).
|
||
Section
906 Certification by the Corporation’s Chief Financial
Officer. (Filed
herewith).
|
INTEGRAL
TECHNOLOGIES, INC
|
||
Dated: September
28, 2009
|
/s/ William S.
Robinson
|
|
William
S. Robinson, Chief Executive Officer
|
||
/s/ William A.
Ince
|
||
William
A. Ince, Chief Financial Officer and Principal Accounting
Officer
|
Name
|
Title
|
Date
|
||
/s/ William S. Robinson
|
Director
|
September
28, 2009
|
||
William
S. Robinson
|
||||
/s/ William A. Ince
|
Director
|
September
28, 2009
|
||
William
A. Ince
|