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 March 31, 2006
[_] 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.
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(Exact name of small business issuer as specified in it charter)
NEVADA 98-0163519
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
805 W. ORCHARD DRIVE, SUITE 7, BELLINGHAM, WASHINGTON 98225
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(Address of principal executive offices)
(360) 752-1982
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(issuer's telephone number)
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(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 [ ]
Indicate by check mark whether the issuer is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes [ ] No [X]
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 MAY 8, 2006, THE ISSUER HAD
---------------------------------
42,524,264 SHARES OF $.001 PAR VALUE COMMON STOCK OUTSTANDING.
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Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
INDEX
PAGE
----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
March 31, 2006
(U.S. Dollars)
(Unaudited)
Consolidated Balance Sheets . . . . . . . . . . . . . . . . F-1
Consolidated Statement of Operations. . . . . . . . . . . . F-2
Consolidated Statement of Stockholders' Equity (Deficiency) F-3
Consolidated Statement of Cash Flows. . . . . . . . . . . . F-4
Notes to Consolidated Financial Statements. . . . . . . . . F-5
Item 2. Management's Plan of Operation. . . . . . . . . . . . . . . 1
Item 3. Controls and Procedures . . . . . . . . . . . . . . . . . . 3
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 4
Item 2. Changes in Securities and Use of Proceeds . . . . . . . . . 4
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . 4
Item 4. Submission of Matters to a Vote of Security Holders . . . . 4
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 4
Item 6. Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
i
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(US DOLLARS)
================================================================================================
MARCH 31, JUNE 30,
2006 2005
================================================================================================
Assets
CURRENT
Cash $ 591,077 $ 1,791,442
Prepaid expenses 78,114 272,142
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TOTAL CURRENT ASSETS 669,191 2,063,584
PROPERTY AND EQUIPMENT 0 8,219
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$ 669,191 $ 2,071,803
================================================================================================
LIABILITIES
CURRENT
Accounts payable and accruals $ 464,338 $ 581,325
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TOTAL CURRENT LIABILITIES 464,338 581,325
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STOCKHOLDERS' EQUITY
PREFERRED STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
20,000,000 Shares authorized
308,538 (June 30, 2005 - 308,538) issued and outstanding 308,538 308,538
COMMON STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
150,000,000 Shares authorized
42,524,264 (June 30, 2005 - 42,439,149) issued and outstanding 20,554,085 20,522,085
PROMISSORY NOTES RECEIVABLE (66,500) (66,500)
OTHER COMPREHENSIVE INCOME 46,267 46,267
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (20,637,537) (19,319,912)
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TOTAL STOCKHOLDERS' EQUITY 204,853 1,490,478
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 669,191 $ 2,071,803
================================================================================================
See notes to consolidated financial statements
F-1
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(US DOLLARS)
=================================================================================================================
PERIOD FROM
FEBRUARY 12,
1996
THREE MONTHS NINE MONTHS (INCEPTION) TO
ENDED MARCH 31, ENDED MARCH 31, MARCH 31,
2006 2005 2006 2005 2006
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REVENUES 0 $ 0 0 $ 0 $ 249,308
COST OF SALES 0 0 0 0 216,016
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0 0 0 0 33,292
OTHER INCOME 0 33,969 2,095 33,969 660,400
LICENSE FEE (note 2) 1 0 1 0 1
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1 33,969 2,096 33,969 693,693
- -----------------------------------------------------------------------------------------------------------------
EXPENSES
Consulting 159,997 77,468 520,155 213,930 3,558,739
Salaries and benefits 136,149 176,637 383,523 427,536 4,913,924
Legal and accounting 88,211 142,923 172,777 529,117 3,225,925
Travel and entertainment 13,504 26,866 56,165 83,645 1,040,034
General and administrative 35,787 36,323 107,215 111,178 891,566
Rent 9,459 9,186 27,831 23,630 347,896
Telephone 13,651 8,088 29,172 21,040 354,159
Advertising 2,261 5,000 2,261 5,000 297,016
Bank charges and
interest, net 372 489 833 8,084 173,326
Research and development 0 (397,296) 0 (397,296) 847,459
Interest on beneficial
conversion rate 0 0 0 566,456
Write-down of license and
operating assets 0 0 0 0 1,855,619
Bad debts 0 0 0 0 52,613
Remuneration pursuant to
proprietary, non-competition 0 0 0 0 0
Agreement 0 0 0 0 711,000
Financing fees 0 0 0 0 129,542
Settlement of lawsuit 0 0 0 0 45,250
Write-off of investments 0 0 0 0 1,250,000
Depreciation and amortization 0 5,767 8,219 17,275 324,386
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459,391 91,451 1,308,151 1,043,139 20,584,899
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NET LOSS FOR PERIOD $ 459,390 $ 57,482 $ 1,306,055 $ 1,009,170 $ 19,891,217
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NET LOSS PER COMMON SHARE $ 0.01 $ 0.00 $ 0.03 $ 0.03
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WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 42,441,986 40,225,849 42,440,081 40,215,572
=================================================================================================================
See notes to consolidated financial statements
F-2
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
(US DOLLARS)
==================================================================================================================================
COMMON PREFERRED
STOCK AND STOCK AND DEFICIT
SHARES OF PAID-IN SHARES OF PAID-IN OTHER ACCUMULATED TOTAL
COMMON CAPITAL PREFERRED CAPITAL PROMISSORY COMPRE- DURING THE STOCK-
STOCK IN EXCESS STOCK IN EXCESS NOTES HENSIVE DEVELOPMENT HOLDERS'
ISSUED OF PAR ISSUED OF PAR RECEIVABLE INCOME STAGE EQUITY
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2004 40,181,849 $20,197,085 321,038 $ 321,038 $ (66,500) 46,267 $(17,454,408) $ 3,043,482
SHARES ISSUED FOR
Settlement of debt 44,000 55,000 0 0 0 0 0 55,000
Cashless exercise of
warrants 1,713,300 0 0 0 0 0 0 0
For services 500,000 270,000 0 0 0 0 0 270,000
Redemption of preferred
shares 0 0 (12,500) (12,500) 0 0 (37,500) (50,000)
Dividends on preferred
shares 0 0 0 0 0 0 (15,739) (15,739)
Net loss for year 0 0 0 0 0 0 (1,812,265) (1,812,265)
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BALANCE, JUNE 30, 2005 42,439,149 20,522,085 308,538 308,538 (66,500) 46,267 (19,319,912) 1,490,478
Exercise of options 50,000 32,000 0 0 0 0 0 32,000
Cashless exercise
of warrants (note 3(c)) 35,115 0 0 0 0 0 0 0
Dividends on preferred
shares 0 0 0 0 0 0 (11,570) (11,570)
Net loss for period 0 0 0 0 0 0 (1,306,055) (1,306,055)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE, MARCH 31, 2006 42,524,264 $20,554,085 308,538 $ 308,538 $ (66,500) $ 46,267 $(20,637,537) $ 204,853
==================================================================================================================================
See notes to consolidated financial statements
F-3
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(US DOLLARS)
======================================================================================================================
PERIOD FROM
FEBRUARY 12,
NINE MONTHS ENDED 1996
MARCH 31, (INCEPTION) TO
2006 2005 MARCH 31, 2006
======================================================================================================================
OPERATING ACTIVITIES
Net loss $ ( 1,306,055) $ (1,009,170) (19,891,217)
Adjustments to reconcile net loss to net cash used by
operating activities
Write-down of investment 0 0 1,250,000
Proprietary, non-competition agreement 0 0 711,000
Depreciation and amortization 8,219 17,275 349,941
Write-off of accounts payable 0 (33,969) (638,305)
Consulting and financing fees 202,500 0 1,167,273
Stock option compensation 0 0 1,133,483
Interest on beneficial conversion feature 0 0 566,456
Settlement of lawsuit 0 0 60,250
Write-down of license and operating assets 0 0 1,853,542
Bad debts 0 0 77,712
Dismissal of lawsuit 0 (397,296) 0
CHANGES IN NON-CASH WORKING CAPITAL
Due from affiliated company 0 0 (116,000)
Notes and account receivable 0 0 (109,213)
Inventory 0 0 (46,842)
Prepaid expenses (8,472) 7,380 (18,114)
Other 0 0 (2,609)
Accounts payable and accruals (128,557) (190,015) 772,049
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CASH USED IN OPERATING ACTIVITIES (1,232,365) (1,605,795) (12,900,594)
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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)
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CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 0 0 (2,455,244)
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FINANCING ACTIVITIES
Redemption of preferred shares 0 (50,000) (50,000)
Repayments to stockholders 0 0 (139,046)
Subscriptions received 0 0 226,665
Issuance of common stock 32,000 0 14,412,165
Advances from stockholders, net of repayments 0 0 1,078,284
Share issue costs 0 0 (227,420)
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CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 32,000 (50,000) 15,900,648
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EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH 0 0 46,267
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INFLOW (OUTFLOW) OF CASH (1,200,365) (1,655,795) 591,077
CASH, BEGINNING OF PERIOD 1,791,442 3,905,773 0
- ----------------------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 591,077 $ 2,249,978 591,077
======================================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Settlement of debt for shares 0 0 263,992
Services paid with shares 0 55,000 689,911
Preferred shares redeemed 0 0 927,000
Proceeds from convertible debentures 0 0 600,000
======================================================================================================================
See notes to consolidated financial statements
F-4
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 2006
(UNAUDITED)
(US 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, 2005 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 March 31, 2006 and June 30,
2005, and the consolidated results of operations, stockholders' equity and
the consolidated statements of cash flows for the three and nine months
ended March 31, 2006 and 2005. The results of operations for the three
months and nine months ended March 31, 2006 and 2005 are not necessarily
indicative of the results to be expected for the entire fiscal year.
2. LICENSE FEE
During the period ended March 31, 2006, the Company entered into a license
fee agreement whereby it granted Heaton, Inc. a non-exclusive,
non-sublicensable, non-assignable, worldwide license under the patent
rights to sell or import licensed products and internally use the
documentation and information provided for the purpose of developing and
manufacturing licensed products. Under this agreement, the Company granted
Heaton, Inc. exclusive rights for a period of two years. As consideration
Heaton, Inc. paid an execution fee of $1.
3. STOCKHOLDERS' EQUITY
During the period ended March 31, 2006,
a) The Company extended the expiry date of 775,000 options. In
accordance with FIN 44, this results in a new measurement of
compensation cost. Since both the fair value as well as the
intrinsic value at the new measurement date resulted in a value
lower than the original amount recorded, no additional
compensation expense is required.
b) The Company issued 50,000 common shares upon the exercise of
stock options.
c) The Company issued 35,115 shares upon the exercise of warrants
held by Swartz. The warrants were exercised under a cashless
exercise provision. The Company received no cash consideration.
Subsequent to March 31, 2006, the shareholders of the Company authorized an
increase in the number of shares of common stock authorized from 50,000,000
to 150,000,000. This change has been reflected in these financial
statements.
F-5
ITEM 2. PLAN OF OPERATION.
Statements contained herein that are not historical facts are
forward-looking statements as that term is defined by the Private Securities
Litigation Reform Act of 1995. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, the forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ from those projected. We caution investors that any
forward-looking statements made by us are not guarantees of future performance
and that actual results may differ materially from those in the forward-looking
statements. Such risks and uncertainties include, without limitation:
well-established competitors who have substantially greater financial resources
and longer operating histories, regulatory delays or denials, ability to compete
as a development stage company in a highly competitive market, and access to
sources of capital.
The following discussion and analysis should be read in conjunction with
our financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. Our actual results could differ
materially from those discussed here.
To date we have recorded nominal revenues from the sales of prototypes and
for license fees. We are still considered a development stage company for
accounting purposes. From inception on February 12, 1996 through March 31, 2006,
we have accrued an accumulated deficit of approximately $20.6 million.
For the nine month period ended March 31, 2006, cash has decreased by
$1,200,365, from $1,791,442 on June 30, 2005, to $591,077 on March 31, 2006.
Our net loss for the quarter ended March 31, 2006 was $459,390, compared to
a net loss of $57,482 in the corresponding period of the prior fiscal year, an
increase of $401,908. This difference is attributable to a reversal of an
accrual of $397,296 for research and development expenses in the prior period as
the result of a favorable settlement of a lawsuit. Comparing the quarter ended
March 31, 2006 to the corresponding period of the prior fiscal year, legal fees
were down substantially ($88,211 compared to $142,923, a decrease of $54,712)
because we are no longer involved in litigation and we have reduced the filing
of new patent applications; and salaries and benefits were down as well
($136,149 compared to $176,637, a decrease of $40,488). Offsetting these
reductions was an increase in consulting fees ($159,997 compared to $77,468, an
increase of $82,529), primarily due to the engagement of The QuanStar Group LLC
("QuanStar") in June 2005 (described below).
The primary expenses during the quarter were salaries and benefits
($135,155) and consulting fees ($159,997). Consulting fees consist primarily
of: $45,000 cash paid to QuanStar; a $67,500 non-cash expense for shares
previously issued to QuanStar (described below); and $30,000 cash paid to The
Investor Relations Group, Inc.
As further described in our annual report on Form 10-KSB for the year ended
June 30, 2005, in June 2005 we engaged QuanStar as an advisor to render
strategic and consulting services to us, primarily in connection with the
expected high growth worldwide commercialization of our ElectriPlast technology.
Pursuant to our agreement, during the quarter we paid to QuanStar a monthly
retainer of $15,000. We had also issued 500,000 shares of restricted common
stock (a non-cash expense) to QuanStar in June 2005. The shares were recorded
at a value of $270,000 (representing the market value of the shares on the date
of issuance) and are being expensed over a 12 month period at a rate of $22,500
per month, with $7,500 being expensed in fiscal 2005. During the quarter ended
March 31, 2006, $67,500 (of the $270,000) was expensed. At March 31, 2006,
$60,000 (of the $270,000) is included in Prepaid Expenses.
1
At March 31, 2006, current liabilities included $464,338 of accounts
payable and accruals, with payables for legal fees (including associated filing
fees) related to patent filings accounting for approximately $400,000 of the
total.
Presently, we are focusing all of our resources on the researching,
developing and commercializing of our PlasTenna and ElectriPlast technologies.
PlasTenna is a radio frequency conductive antenna made of resin-based
material. PlasTenna can be molded and used in wireless handheld devices such as
cellular phones and PDAs, enabling the antenna to be molded into the device or
being the device's molded body itself, replacing the traditional detachable
metal antenna. PlasTennas can also add covertness to numerous other antenna
applications by concealing them to be handles, buttons, racks, mirror housings,
moldings and or many other parts within vehicles, boats, aircraft, etc.
ElectriPlast is an electrically conductive composite polymer technology.
The ElectriPlast polymer is a compounded, pelletized formulation of resin-based
materials, which are combined with a proprietary controlled, balanced
concentration of micron conductive materials contained within the manufactured
pellet. The pellets can then be formed, like plastic or rubber, using
conventional molding techniques and conventional molding equipment.
ElectriPlast can be molded into infinite shapes and sizes and is electrically
conductive as if it were metal.
We have filed 107 patent applications in the U.S. (16 of which have been
issued and/or allowed and pending issuance and 91 are pending) for a variety of
applications of ElectriPlast such as; antennas, shielding, lighting circuitry,
switch actuators, resistors, medical devices and cable connectors. Our business
strategy is to focus on leveraging our intellectual property and our strengths
in product design and material innovation. We are focusing our marketing efforts
on securing licensing agreements for applications of our PlasTenna and
ElectriPlast technologies with manufacturers of products which would benefit
from the incorporation of any of the PlasTenna or ElectriPlast applications.
We are not in the manufacturing business and do not expect to make any
capital purchases of a manufacturing plant or significant equipment in the next
twelve months. If necessary, we will rely on contract manufacturers to produce
products.
Provided that we have adequate funds available, we anticipate spending
approximately $250,000 over the next twelve months on ongoing research and
development (primarily salaries and consulting fees) of the different
applications and uses of our technologies.
During the next twelve months, we do not anticipate increasing staff.
As of March 31, 2006, we had $591,077 in cash on hand. Although our cash
needs for the last two fiscal years has averaged approximately $2 million per
year, management expects a notable reduction in legal fees over the next 12
months due to the settlement of a lawsuit during the last fiscal year and an
anticipated significant decrease in patent filings in the foreseeable future.
Management currently estimates our cash needs to be approximately $1.4 million
over the next 12 months, unless additional cost-cutting measures are taken.
Without considering the possibilities of increasing cash on hand in future
periods from revenues or financing activities, management has assessed our
projected cash needs and determined that there is adequate cash on hand to fund
operations over the next six months. While management reasonably expects to
generate revenues before the end of the current calendar year, no assurances can
be given that cashflow from any revenues will be adequate to fund our ongoing
operations. If we do not earn adequate revenues to sufficiently fund
operations, we will need to attempt to raise additional funds through the sale
of debt or equity securities. There can be no assurance, however, that market
conditions will permit us to raise sufficient funds or that additional financing
will be available when needed or on terms acceptable to us.
2
ITEM 3. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report (the "Evaluation Date"),
we carried out an evaluation, under the supervision and with the participation
of management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, our disclosure controls and procedures were effective to ensure
that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act is (i) recorded, processed, summarized and
reported within the time periods specified in applicable rules and forms, and
(ii) accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, to allow timely decisions
regarding required disclosure. During the fiscal quarter to which this report
relates, there were no changes in our 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 deficiencies and
material weaknesses.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In preparation for the annual report of management regarding our evaluation
of our internal controls that is required to be included in our annual report
for the year ended June 30, 2008 by Section 404 of the Sarbanes-Oxley Act of
2002, we will need to assess the adequacy of our internal control, remediate any
weaknesses that may be identified, validate that controls are functioning as
documented and implement a continuous reporting and improvement process for
internal controls. We may discover deficiencies that require us to improve our
procedures, processes and systems in order to ensure that our internal controls
are adequate and effective and that we are in compliance with the requirements
of Section 404 of the Sarbanes-Oxley Act. If the deficiencies are not
adequately addresses, or if we are unable to complete all of our testing and any
remediation in time for compliance with the requirements of Section 404 of the
Sarbanes-Oxley Act and the SEC rules under it, we would be unable to conclude
that our internal controls over financial reporting are designed and operation
effectively, which could adversely affect our investor confidence in our
internal controls over financial reporting.
3
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On March 29, 2006, Swartz Private Equity, LLC ("Swartz") exercised the
remaining balances of outstanding warrants pursuant to a cashless exercise
provision and the Company issued to Swartz 35,115 shares of common stock. The
transaction did not involve any public offering and no sales commissions were
paid. 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.
Subsequent to the end of the quarter, on April 28, 2006, the Company held a
Special Meeting of Stockholders. Proxies were solicited pursuant to Regulation
14A under the Exchange Act. A quorum was present and the matter voted upon was
approved by a majority vote. The results were as follows:
On the proposal to amend our Articles of Incorporation to increase the
number of shares of common stock we have authorized to issue from
50,000,000 shares to 150,000,000 shares.
For Against Abstain
---------- --------- -------
Common votes 28,730,166 1,944,617 77,895
Preferred votes 233,741 -0- -0-
Total votes 28,963,907 1,944,617 77,895
ITEM 5. OTHER INFORMATION.
On May 10, 2006, the Company filed, with the Nevada Secretary of State, a
Certificate of Amendment to the Articles of Incorporation to reflect the
increase in the number of shares of common stock authorized, in accordance with
the vote of the shareholders at the special meeting described in Item 4, above.
ITEM 6. EXHIBITS.
Exhibit No. Description
- ----------- -----------
3.03 Articles of Incorporation, as amended and currently in effect. (Filed herewith.)
3.04 Bylaws, as amended and restated on December 31, 1997. (Filed herewith.)
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).)
4
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).)
31.1 Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
31.2 Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
32.1 Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
32.2 Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
5
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, Chief Executive
Officer
By: /s/ William A. Ince
---------------------------------------
William A. Ince, Chief Financial
Officer and Principal Accounting Officer
Date: May 12, 2006
6
EXHIBIT INDEX
Exhibit No. Description
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3.03 Articles of Incorporation, as amended and currently in effect. (Filed herewith.)
3.04 Bylaws, as amended and restated on December 31, 1997. (Filed herewith.)
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).)
31.1 Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
31.2 Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
32.1 Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
32.2 Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).