UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 2010.
OR
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER 0-28353
INTEGRAL TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada
|
98-0163519
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
805 W. Orchard Drive, Suite 7, Bellingham, Washington 98225
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (360) 752-1982
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes T No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
|
Accelerated filer o
|
|
|
Non-accelerated filer o
|
Smaller reporting company T
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of September 30, 2010, there were 55,346,463 outstanding shares of the Registrant's Common Stock, $0.001 par value.
September 30, 2010 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION |
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Item 1.
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INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
September 30, 2010
(U.S. Dollars)
(Unaudited)
|
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|
|
|
F-1
|
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F-2
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F-3
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F-4
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F-5
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Item 2.
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1
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Item 3.
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3
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Item 4.
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3
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PART II - OTHER INFORMATION
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Item 1.
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4
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Item 1A.
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4
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Item 2.
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4
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Item 3.
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4
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Item 4.
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4
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Item 5.
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4
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Item 6.
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4
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5
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FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
(A Development Stage Company)
Consolidated Balance Sheet
(US Dollars)
|
September 30,
2010
|
|
|
June 30,
2010
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
Cash
|
|
$ |
147,154 |
|
|
$ |
350,235 |
|
Prepaid expenses
|
|
|
1,003 |
|
|
|
7,544 |
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
148,157 |
|
|
$ |
357,779 |
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
Accounts payable and accruals
|
|
$ |
746,230 |
|
|
$ |
707,148 |
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
746,230 |
|
|
|
707,148 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock and Paid-in Capital in Excess of $0.001 Par Value
|
|
|
|
|
|
20,000,000 Shares authorized 308,538 (June 30, 2010 - 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 55,346,463 (June 30, 2010 - 54,838,921) issued and outstanding
|
|
|
33,540,432 |
|
|
|
33,224,263 |
|
Promissory Notes Receivable
|
|
|
(29,737 |
) |
|
|
(29,737 |
) |
Subscriptions Received (note 3(a)(iv))
|
|
|
45,000 |
|
|
|
11,250 |
|
Other Comprehensive Income
|
|
|
46,267 |
|
|
|
46,267 |
|
Deficit Accumulated During the Development Stage
|
|
|
(34,508,573 |
) |
|
|
(33,909,950 |
) |
|
|
|
|
|
|
|
|
|
Total Stockholders’ Deficit
|
|
|
(598,073 |
) |
|
|
(349,369 |
) |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Deficit
|
|
$ |
148,157 |
|
|
$ |
357,779 |
|
See notes to consolidated financial statements.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
(US Dollars)
|
|
Three Months Ended
September 30,
|
|
|
Period from
February 12,
1996
(Inception) to
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
249,308 |
|
Cost of Sales
|
|
|
0 |
|
|
|
0 |
|
|
|
216,016 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
33,292 |
|
Other Income
|
|
|
502 |
|
|
|
72 |
|
|
|
869,008 |
|
|
|
|
502 |
|
|
|
72 |
|
|
|
902,300 |
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
294,550 |
|
|
|
441,610 |
|
|
|
8,220,216 |
|
Salaries and benefits
|
|
|
110,000 |
|
|
|
378,502 |
|
|
|
10,669,316 |
|
Research and development
|
|
|
99,026 |
|
|
|
28,395 |
|
|
|
1,820,815 |
|
Legal and accounting
|
|
|
32,881 |
|
|
|
50,300 |
|
|
|
4,635,903 |
|
Travel and entertainment
|
|
|
23,906 |
|
|
|
15,243 |
|
|
|
1,443,220 |
|
General and administrative
|
|
|
17,232 |
|
|
|
19,813 |
|
|
|
1,295,610 |
|
Rent
|
|
|
12,465 |
|
|
|
10,904 |
|
|
|
546,766 |
|
Telephone
|
|
|
5,128 |
|
|
|
5,372 |
|
|
|
488,805 |
|
Bank charges and interest, net
|
|
|
72 |
|
|
|
546 |
|
|
|
207,353 |
|
Advertising
|
|
|
0 |
|
|
|
0 |
|
|
|
338,727 |
|
Settlement of lawsuit
|
|
|
0 |
|
|
|
0 |
|
|
|
45,250 |
|
Remuneration pursuant to proprietary, non-competition agreement
|
|
|
0 |
|
|
|
0 |
|
|
|
711,000 |
|
Financing fees
|
|
|
0 |
|
|
|
0 |
|
|
|
129,043 |
|
Write-off of investments
|
|
|
0 |
|
|
|
0 |
|
|
|
1,250,000 |
|
Interest on beneficial conversion feature
|
|
|
0 |
|
|
|
0 |
|
|
|
566,455 |
|
Write-down of license and operating assets
|
|
|
0 |
|
|
|
0 |
|
|
|
1,855,619 |
|
Bad debts
|
|
|
0 |
|
|
|
0 |
|
|
|
46,604 |
|
Amortization
|
|
|
0 |
|
|
|
0 |
|
|
|
324,386 |
|
|
|
|
595,260 |
|
|
|
950,685 |
|
|
|
34,595,088 |
|
Net Loss for Period
|
|
$ |
(594,758 |
) |
|
$ |
(950,613 |
) |
|
$ |
(33,692,788 |
) |
Loss Per Common Share
|
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
|
|
|
Weighted Average Number of Common Shares Outstanding
|
|
|
54,963,262 |
|
|
|
50,308,769 |
|
|
|
|
|
See notes to consolidated financial statements.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
(US Dollars)
|
|
Shares
of Common
Stock
Issued
|
|
|
Common
Stock and
Paid-in Capital
in Excess
of Par
|
|
|
Shares of
Preferred
Stock
Issued
|
|
|
Preferred
Stock and
Paid-in Capital
in Excess
of Par
|
|
|
Promissory
Notes
Receivable
|
|
|
Share
Subscriptions
|
|
|
Other
Comprehensive
Income
|
|
|
Deficit
Accumulated
During the
Development
Stage
|
|
|
Total
Stockholders'
Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2009
|
|
|
50,305,769 |
|
|
$ |
30,524,475 |
|
|
|
308,538 |
|
|
$ |
308,538 |
|
|
$ |
(29,737 |
) |
|
$ |
0 |
|
|
$ |
46,267 |
|
|
$ |
(30,964,751 |
) |
|
$ |
(115,208 |
) |
Shares Issued for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
270,000 |
|
|
|
81,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
81,000 |
|
Cash, net
|
|
|
4,263,152 |
|
|
|
1,393,637 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
1,393,637 |
|
Subscriptions received
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
11,250 |
|
|
|
0 |
|
|
|
0 |
|
|
|
11,250 |
|
Dividends on preferred shares
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(15,462 |
) |
|
|
(15,462 |
) |
Stock-based compensation
|
|
|
0 |
|
|
|
1,225,151 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
1,225,151 |
|
Net loss for year
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(2,929,737 |
) |
|
|
(2,929,737 |
) |
Balance, June 30, 2010
|
|
|
54,838,921 |
|
|
|
33,224,263 |
|
|
|
308,538 |
|
|
|
308,538 |
|
|
|
(29,737 |
) |
|
|
11,250 |
|
|
|
46,267 |
|
|
|
(33,909,950 |
) |
|
|
(349,369 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Issued for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
207,542 |
|
|
|
62,539 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
62,539 |
|
Warrants exercised
|
|
|
300,000 |
|
|
|
150,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
150,000 |
|
Share issue costs
|
|
|
0 |
|
|
|
(8,420 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(8,420 |
) |
Subscriptions received
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
33,750 |
|
|
|
0 |
|
|
|
0 |
|
|
|
33,750 |
|
Dividends on preferred shares
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(3,865 |
) |
|
|
(3,865 |
) |
Stock-based compensation
|
|
|
0 |
|
|
|
112,050 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
112,050 |
|
Net loss for period
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(594,758 |
) |
|
|
(594,758 |
) |
Balance, September 30, 2010 (unaudited)
|
|
|
55,346,463 |
|
|
$ |
33,540,432 |
|
|
|
308,538 |
|
|
$ |
308,538 |
|
|
$ |
(29,737 |
) |
|
$ |
45,000 |
|
|
$ |
46,267 |
|
|
$ |
(34,508,573 |
) |
|
$ |
(598,073 |
) |
See notes to consolidated financial statements.
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
(US Dollars)
|
|
Three Months Ended
September 30,
|
|
|
Period from
February 12,
1996
(Inception) to
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ |
(594,758 |
) |
|
$ |
(950,613 |
) |
|
$ |
(33,692,788 |
) |
Items not involving cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-down of investment
|
|
|
0 |
|
|
|
0 |
|
|
|
1,250,000 |
|
Proprietary, non-competition agreement
|
|
|
0 |
|
|
|
0 |
|
|
|
711,000 |
|
Amortization
|
|
|
0 |
|
|
|
0 |
|
|
|
349,941 |
|
Other income
|
|
|
0 |
|
|
|
0 |
|
|
|
(658,305 |
) |
Consulting services and financing fees
|
|
|
5,000 |
|
|
|
81,000 |
|
|
|
1,623,783 |
|
Stock-based compensation
|
|
|
112,050 |
|
|
|
527,228 |
|
|
|
7,170,559 |
|
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 |
|
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
|
|
|
6,541 |
|
|
|
1,570 |
|
|
|
(1,002 |
) |
Other
|
|
|
0 |
|
|
|
0 |
|
|
|
(2,609 |
) |
Accounts payable and accruals
|
|
|
87,936 |
|
|
|
19,464 |
|
|
|
1,037,194 |
|
Cash Used in Operating Activities
|
|
|
(383,231 |
) |
|
|
(321,351 |
) |
|
|
(19,926,322 |
) |
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and intangible assets
|
|
|
0 |
|
|
|
0 |
|
|
|
(200,935 |
) |
Assets acquired and liabilities assumed on purchase of subsidiary
|
|
|
0 |
|
|
|
0 |
|
|
|
(129,474 |
) |
Investment purchase
|
|
|
0 |
|
|
|
0 |
|
|
|
(2,000,000 |
) |
License agreement
|
|
|
0 |
|
|
|
0 |
|
|
|
(124,835 |
) |
Cash Used in Investing Activities
|
|
|
0 |
|
|
|
0 |
|
|
|
(2,455,244 |
) |
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of preferred shares
|
|
|
0 |
|
|
|
0 |
|
|
|
(50,000 |
) |
Repayment of loan
|
|
|
0 |
|
|
|
0 |
|
|
|
(11,000 |
) |
Repayments to stockholders
|
|
|
0 |
|
|
|
0 |
|
|
|
(91,283 |
) |
Proceeds from issuance of common stock
|
|
|
150,000 |
|
|
|
0 |
|
|
|
20,788,558 |
|
Advances from stockholders
|
|
|
0 |
|
|
|
0 |
|
|
|
1,078,284 |
|
Share issue cost
|
|
|
(3,600 |
) |
|
|
0 |
|
|
|
(380,271 |
) |
Subscriptions received
|
|
|
33,750 |
|
|
|
219,500 |
|
|
|
548,165 |
|
Proceeds from convertible debentures
|
|
|
0 |
|
|
|
0 |
|
|
|
600,000 |
|
Cash Provided by Financing Activities
|
|
|
180,150 |
|
|
|
219,500 |
|
|
|
22,482,453 |
|
Effect of Foreign Currency Translation on Cash
|
|
|
0 |
|
|
|
0 |
|
|
|
46,267 |
|
Outflow of Cash
|
|
|
(203,081 |
) |
|
|
(101,851 |
) |
|
|
147,154 |
|
Cash, Beginning of Period
|
|
|
350,235 |
|
|
|
535,231 |
|
|
|
0 |
|
Cash, End of Period
|
|
$ |
147,154 |
|
|
$ |
433,380 |
|
|
$ |
147,154 |
|
See notes to consolidated financial statements.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
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, 2010 Form 10-K.
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 September 30, 2010 and June 30, 2010 and the consolidated results of operations and cash flows for the three months ended September 30, 2010 and 2009. The results of operations for the three months ended September 30, 2010 and 2009 are not necessarily indicative of the results to be expected for the entire fiscal year.
These consolidated financial statements have been prepared on the going concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the ordinary course of business. The Company’s operations have resulted in a net loss of $594,758 (2009 - $950,613) for the three months ended September 30, 2010, an accumulated deficit of $34,508,573 (2009 - $33,909,950) and a working capital deficiency of $598,073 (2009 - $349,369) as at September 30, 2010. The Company has not yet commenced revenue-producing operations and has significant expenditure requirements to continue to advance its research, developing and commercializing new antenna technologies. The Company estimates that, subsequent to further funding received as described in note 7, it will deplete its cash resources in approximately five months. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
These consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate because management believes that the actions already taken or planned will mitigate the adverse conditions and events that raise doubts about the validity of the going concern assumption used in preparing these consolidated financial statements. Management intends to raise additional capital through stock issuances to finance operations. If none of these events occur, there is a risk that the business will fail.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
|
(i)
|
During the period ended September 30, 2010, the Company issued 202,542 shares of common stock as consideration for private placement commission costs.
|
Of these shares, 133,448 have been recorded at $33,357 and 69,094 have been recorded at $24,182, for a total of $57,539, representing the fair value of the consideration received.
$52,719 of the above value was accrued as at June 30, 2010. Other cash commission costs paid during the period amounted to $3,600.
The net of these costs total $8,420 and such amount is included as stock issue costs in the accompanying statement of stockholders’ deficit.
|
(ii)
|
During the period ended September 30, 2010, the Company issued 5,000 shares of common stock as consideration for consulting services. The shares were recorded at $5,000 representing the fair value of the consideration received.
|
|
(iii)
|
During the period ended September 30, 2010, the Company issued 300,000 shares of common stock upon exercise of 300,000 share purchase warrants at $0.50 per share, recording gross proceeds received of $150,000.
|
|
(iv)
|
During the period ended September 30, 2010, the Company received $33,750 for subscriptions of 45,000 units consisting of common stock at $0.75 per share and warrants at $0.001 per share of common stock underlying the warrant to purchase 45,000 shares of common stock on or before two years after the closing date at an exercise price of $1.00 per share (exercise of the investment warrant may be required in the event that the market price for the common stock exceeds $1.50 per share). These shares have not yet been issued and the Company determined that the warrants did not contain provisions that would preclude equity treatment.
|
(b) Stock-based compensation
During the period ended September 30, 2010, the Company recorded stock-based compensation expense with respect to vested and modified stock options of $112,050 (three months ended September 30, 2009 - $527,228). Of this amount, $112,050 (three months ended September 30, 2009 - $257,058) is included in consulting fees and $nil (three months ended September 30, 2009 - $270,170) is included in salaries.
Stock-based compensation not yet recognized at September 30, 2010 relating to non-vested stock options was $122,058, which will be recognized over a weighted average period of 0.75 years.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
3.
|
STOCKHOLDERS’ EQUITY (continued)
|
(b) Stock-based compensation (continued)
The fair value of the Company’s stock options was estimated on the date of grant or modification using the Black-Scholes option pricing model with the following weighted average assumptions:
|
|
September 30, 2010
|
|
|
September 30, 2009
|
|
|
|
|
|
|
|
|
Expected life (years)
|
|
|
1.42 |
|
|
|
1-3 |
|
Interest rate
|
|
|
0.56 |
% |
|
|
1.02 |
% |
Volatility
|
|
|
121.46 |
% |
|
|
184.10 |
% |
Dividend yield
|
|
|
0.00 |
% |
|
|
0.00 |
% |
Estimated forfeitures
|
|
|
0.00 |
% |
|
|
0.00 |
% |
(c) Stock options
The following summarizes information about the Company’s options outstanding:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
Number
|
|
|
Price
|
|
|
Exercise
|
|
|
|
of Options
|
|
|
per Option
|
|
|
Price
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, June 30, 2009
|
|
|
3,370,000 |
|
|
$ |
0.50 to $ 2.25 |
|
|
$ |
1.21 |
|
Granted
|
|
|
3,500,000 |
|
|
$ |
0.25 |
|
|
$ |
0.25 |
|
Expired
|
|
|
(300,000 |
) |
|
$ |
1.00 to $ 1.16 |
|
|
$ |
1.08 |
|
Forfeited
|
|
|
(2,445,000 |
) |
|
$ |
0.65 to $ 2.25 |
|
|
$ |
1.28 |
|
Outstanding, June 30, 2010 and September 30, 2010
|
|
|
4,125,000 |
|
|
$ |
0.25 to $ 1.00 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, September 30, 2010
|
|
|
3,125,000 |
|
|
$ |
0.25 to $ 1.00 |
|
|
$ |
0.40 |
|
The number of options granted during the year ended June 30, 2010, which did not vest immediately upon grant, was 2,000,000, of which 1,000,000 have vested and 1,000,000 remain unvested as at September 30, 2010.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
3.
|
STOCKHOLDERS’ EQUITY (continued)
|
(c) Stock options (continued)
The following summarizes the options outstanding and exercisable:
|
|
|
|
|
Number of Options
|
|
|
|
Exercise
|
|
|
September 30,
|
|
|
June 30,
|
|
Expiry Date
|
|
Price
|
|
|
2010
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
November 15, 2010
|
|
$ |
1.00 |
|
|
|
100,000 |
|
|
|
100,000 |
|
December 31, 2011
|
|
$ |
1.00 |
|
|
|
110,000 |
* |
|
|
110,000 |
|
December 31, 2012
|
|
$ |
0.25 |
|
|
|
2,500,000 |
|
|
|
2,500,000 |
|
July 31, 2014
|
|
$ |
0.25 |
|
|
|
415,000 |
|
|
|
415,000 |
|
December 31, 2014
|
|
$ |
0.25 |
|
|
|
1,000,000 |
|
|
|
1,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total outstanding
|
|
|
|
|
|
|
4,125,000 |
|
|
|
4,125,000 |
|
Total exercisable
|
|
|
|
|
|
|
3,125,000 |
|
|
|
2,925,000 |
|
|
*
|
During the period ended September 30, 2010, the expiry date of these options was extended from August 31, 2010 to December 31, 2011.
|
The weighted average remaining contractual lives for options outstanding and exercisable at September 30, 2010 were 2.82 and 3.00 years, respectively.
The weighted average grant date fair value of options modified during the period ended September 30, 2010 was $0.38 (three months ended September 30, 2009 - $nil), granted during the period ended September 30, 2010 was $nil (three months ended September 30, 2009 - $0.35) and vested during the period ended September 30, 2010 was $0.42 (three months ended September 30, 2009 - $0.47).
The total intrinsic value of options exercised during the period ended September 30, 2010 was $nil (three months ended September 30, 2009 - $nil).
The aggregate intrinsic value of options outstanding as at September 30, 2010 was $562,500 of which $342,500 related to options that were exercisable. The aggregate intrinsic values exclude options having a negative aggregate intrinsic value due to awards with exercise prices greater than market value. The intrinsic value is the difference between the market value of the shares and the exercise price of the award as of the measurement date.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
3.
|
STOCKHOLDERS’ EQUITY (continued)
|
|
(d)
|
Stock purchase warrants
|
The following summarizes information about the Company’s stock purchase warrants outstanding:
|
|
Number
of Warrants
|
|
|
Price
Per Share
|
|
|
Weighted
Average
Exercise
Price
|
|
Balance, June 30, 2009
|
|
|
4,500,800 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
Issued
|
|
|
4,263,152 |
|
|
$ |
0.70 |
|
|
$ |
0.70 |
|
Balance, June 30, 2010
|
|
|
8,763,952 |
|
|
|
|
|
|
$ |
0.60 |
|
Exercised
|
|
|
(300,000 |
) |
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2010
|
|
|
8,463,952 |
|
|
|
|
|
|
$ |
0.60 |
|
|
|
|
|
|
Number of Warrants
|
|
Expiry Date
|
|
Exercise Price
|
|
|
September 30, 2010
|
|
|
June 30,
2010
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2010
|
|
$ |
0.50 |
|
|
|
4,200,800 |
|
|
|
4,500,800 |
|
February 8, 2012
|
|
$ |
0.70 |
|
|
|
2,123,400 |
|
|
|
2,123,400 |
|
May 14, 2012
|
|
$ |
0.70 |
|
|
|
507,853 |
|
|
|
507,853 |
|
June 3, 2012
|
|
$ |
0.70 |
|
|
|
1,631,899 |
|
|
|
1,631,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total outstanding and exercisable
|
|
|
|
|
|
|
8,463,952 |
|
|
|
8,763,952 |
|
The Company has losses carried forward for income tax purposes to September 30, 2010. There are no current or deferred tax expenses for the three months ended September 30, 2010 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
5.
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
Three Months Ended
September 30,
|
|
|
Period from
February 12,
1996
(Inception) to
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
Shares Issued for
|
|
|
|
|
|
|
|
|
|
Redemption of preferred shares
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
415,000 |
|
Property and equipment
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
23,000 |
|
Proprietary agreement
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
711,000 |
|
Settlement of accounts payable
|
|
$ |
57,719 |
|
|
$ |
0 |
|
|
$ |
286,461 |
|
Services (provided by officers
|
|
|
|
|
|
|
|
|
|
|
|
|
and directors)
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
120,000 |
|
Settlement of lawsuit
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
15,000 |
|
Services
|
|
$ |
5,000 |
|
|
$ |
81,000 |
|
|
$ |
901,784 |
|
Subscriptions received
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
46,500 |
|
Acquisition of subsidiary
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
894,200 |
|
Interest paid
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
81,111 |
|
Income tax paid
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
Income (Numerator)
|
|
|
Weighted Average Number of Shares (Denominator)
|
|
|
Loss Per Share
|
|
September 30, 2010
|
|
|
|
|
|
|
|
|
|
Net loss for period
|
|
$ |
(594,758 |
) |
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(3,865 |
) |
|
|
|
|
|
|
Loss attributable to common shareholders
|
|
$ |
(598,623 |
) |
|
|
54,963,262 |
|
|
$ |
(0.01 |
) |
September 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for period
|
|
$ |
(950,613 |
) |
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(3,865 |
) |
|
|
|
|
|
|
|
|
Loss attributable to common shareholders
|
|
$ |
(954,478 |
) |
|
|
50,308,769 |
|
|
$ |
(0.02 |
) |
Common share equivalents consisting of stock options and warrants are not considered in the computation of diluted loss per share because their effect would be anti-dilutive.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Three Months Ended September 30, 2010
(Unaudited)
(US Dollars)
Subsequent to the quarter ended September 30, 2010, the Company received $542,446 for subscriptions of 834,532 units consisting of common stock at $0.65 per share and warrants at $0.001 per share of common stock underlying the warrant to purchase 417,266 shares of common stock on or before two years after the closing date at an exercise price of $1.00 per share (exercise of the investment warrant may be required in the event that the market price for the common stock exceeds $1.50 per share). These shares have not yet been issued and the Company determined that the warrants did not contain provisions that would preclude equity treatment.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
Forward Looking Statements
Statements contained herein that are not historical facts are forward-looking statements. 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, our ability to compete as a start-up company in a highly competitive market, our access to sources of capital, and other risks and uncertainties described in our annual report on Form 10-K for the fiscal year ended June 30, 2010 as filed with the Securities and Exchange Commission and available at www.sec.gov.
This discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Form 10-Q. Except for the historical information contained herein, the discussion in this Form 10-Q 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-Q should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q. Our actual results could differ materially from those discussed here. We undertake no obligation to update these forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.
Overview
Integral Technologies, Inc. (the “Company” or “we”) focuses the majority of our resources on researching, developing and commercializing our ElectriPlast™ technologies. Our business strategy focuses on leveraging our intellectual property rights and our strengths in product design and material innovation. We are focusing our marketing efforts on securing licensing agreements for applications of our ElectriPlast™ technologies with manufacturers of products which would benefit from the incorporation of any of the ElectriPlast™ applications.
ElectriPlast™ is an innovative, electrically-conductive resin-based material. The ElectriPlast™ polymer is a compounded formulation of resin-based materials, which are conductively loaded, or doped, with a proprietary-controlled, balanced concentration of micron conductive materials, then pelletized. The conductive loading or doping within this pellet is then homogenized using conventional molding techniques and conventional molding equipment. The end result is a product that can be molded into any of the infinite shapes and sizes associated with plastics and rubbers, and is non-corrosive, but which is as electrically conductive as if it were metal.
Various examples of applications for ElectriPlast™ are shielding, lighting circuitry, switch actuators, resistors, medical devices, thermal management and cable connector bodies, to name just a few. We have been working to introduce these new applications and the ElectriPlast™ technology to the marketplace.
Patents/Trademarks on Technologies
Our intellectual property portfolio consists of over eleven years of accumulated research and design knowledge and trade secrets. We have sought U.S. patent protection for many of our ideas related to our ElectriPlast™ technologies. Currently, we have filed 118 U.S. patent applications, 50 of which have been issued and allowed and awaiting issuance. No assurances can be given that all patent applications will be approved; however, to the extent that patents are not granted, we will continue to attempt to commercialize these technologies without the protection of patents. As patents are issued, we will have the exclusive right to use in the U.S. the design(s) described in each issued patent for the 18-year life of the patent.
Of the 71 U.S. patent applications that have not been approved, 56 have been rejected and 8 have received a non final action. Certain patent office applications have been rejected by the patent office due to more stringent requirements implemented by the patent office over 18 months ago. The Company has elected not to appeal those patent application rejected as the contents of those rejected applications have been incorporated into subsequent applications.
Recent developments in the law increase the challenge of obtaining US patent protection. In particular, the Supreme Court’s decision in KSR v. Teleflex (2007) makes it easier for the USPTO to sustain obviousness rejections. As a result, the USPTO is now more likely to reject applications by combining elements from the prior art – even where no motivation to combine can be shown in the art references. This new approach affects all applicants, including Integral, and has reduced the rate of patent issues. Nevertheless, Integral continues to pursue intellectual property protection through its patent and trademark portfolio while constantly evaluating its filings to judiciously apply resources to the most critical technologies.
While the number of rejections has been significant for reasons mentioned in the previous paragraph, we maintain patents on the core technology and over 49 applications thereon.
Patent License Agreement
Summary descriptions of our manufacturing agreement with Jasper Rubber Products, Inc. and our various patent license agreements are included in our annual report on Form 10-K for the year ended June 30, 2010.
We are not in the manufacturing business. Our manufacturing agreement with Jasper Rubber Products, Inc. provides for Jasper to manufacture ElectriPlast™ for us.
After twenty-three months of refining the manufacturing and molding process of ElectriPlast™, the Jasper facility is now capable of producing over 50,000 pounds of ElectriPlast™ pellets per month. We have entered into patent license agreements with several companies and we are in the process of producing prototypes of requested applications of ElectriPlast™ for these companies as well as other prospective customers.
In addition to its manufacturing capabilities, Jasper has a distribution network throughout the U.S. and Canada, allowing for ElectriPlast™ to be introduced to prospective customers and delivered to customers.
We anticipate that our technologies will not be sold directly to the general public, but rather to businesses and manufacturers who will incorporate our technologies as components in the design of their products.
Financial Position
To date we have recorded nominal revenues. We are still considered a development stage company for accounting purposes. From incorporation on February 12, 1996 through September 30, 2010, we have accrued an accumulated deficit of approximately $34.5 million.
At September 30, 2010, all of our assets of $148,157 were current consisting of cash of $147,154 and prepaid expenses of $1,003. All of our property and equipment has been fully depreciated.
At September 30, 2010 all of our liabilities of $746,230 were current, consisting of accounts payable and accruals. Of this amount, payables for legal fees (including associated filing fees) related to patent filings accounted for approximately $535,000 of the total.
At September 30, 2010, total stockholder’s deficit was $598,073.
Results of Operations for the Three Months Ended September 30, 2010 compared to the Three Months Ended September 30, 2009
Our net loss for the quarter ended September 30 2010, was $594,758, compared to a net loss of $950,613 for the corresponding period of the prior fiscal year, a decrease of $355,855 which was primarily a result of a decrease in stock based compensation of $415,178.
Total expenses for the quarter ended September 30, 2010, was $595,260 compared to total expenses of $950,685 for the corresponding period of the prior fiscal year, a decrease of $355,425 which was primarily a result of a decrease in stock based compensation of $415,178.
Total income for the quarter ended September 30, 2010, was comprised of “other income” of $502 compared to “other income” of $72 for the corresponding period of the prior fiscal year, an increase of $430. The category of “other income” consists of interest income and nominal license fees.
Consulting expenses during the quarter ended September 30, 2010, were $294,550 which included non-cash, issuance of shares in consideration for consulting services in the amount of $5,000 and $112,050 for non-cash stock based compensation charges for the vesting and modifications of options previously issued. In the corresponding period of the prior fiscal year, consulting expenses were $441,610 which included non-cash, issuance of shares in consideration for consulting services in the amount of $81,000 (representing the market value of the shares at the date when the shares were to be issued) and $257,058 for non-cash stock based compensation charges for the granting of options.
Salaries and benefits expenses during the quarter ended September 30, 2010, were $110,000 which included non-cash, stock based compensation charges of $0. In the corresponding period of the prior fiscal year, salaries and benefits expenses were $378,502 which included non-cash, stock based compensation charges (for the extension of the expiry date of options and the granting of options) of $270,170.
Research and development costs of $99,026 during the quarter ended September 30, 2010, are attributable to refining the manufacturing process of our ElectriPlast™ material
During the next twelve months, we do not anticipate increasing our staff.
Critical Accounting Policies and Estimates
The details of the critical accounting policies relevant to the Company are set out in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2010.There have been no material changes to our critical accounting policies as described in Item 7 of our annual report on Form 10-K for the year ended June 30, 2010.
Management does not believe that any new accounting pronouncement not yet effective will have any material effect on the Company’s financial statements as adopted.
Liquidity and Capital Resources
Since inception we have funded our operations through capital fundraising and loans from management. .As of September 30, 2010, we had $147,154 in cash on hand.
Subsequent to the quarter ended September 30, 2010, we received $542,446 pursuant to subscriptions for 834,532 units consisting of common stock at $0.65 per share and warrants at $0.001 per share of common stock underlying the warrants to purchase 417,266 shares of common stock on or before two years after the closing date at an exercise price of $1.00 per share (exercise of the investment warrant may be required in the event that the market price for the common stock exceeds $1.50 per share). These shares have not yet been issued.
Accordingly, management believes that there is adequate cash on hand to fund operations over the next five months and additional equity funding will be required thereafter. There can be no assurance that additional equity financing will be available on terms satisfactory to us or at all, and if funds are raised in the future through issuance of preferred stock, these securities could have rights, privileges or preference senior to those of our common stock. Further, any sale of newly issued equity securities could result in additional dilution to our current shareholders.
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.
Off-Balance Sheet Arrangements
We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options or non-financed assets.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
N/A.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act, amended) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon that evaluation, William S. Robinson, our Chief Executive Officer (“CEO”) and William A. Ince, our Chief Financial Officer (“CFO”) concluded that that as of September 30, 2010, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective in providing reasonable assurance of achieving their objectives for the three months ended September 30, 2010..
Changes in internal controls
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the quarter ended September 30, 2010. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the quarter ended September 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.
OTHER INFORMATION COMPANY CONFIRM OR UPDATE AS NEEDED
ITEM 1 - LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
Not applicable.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the period ended September 30, 2010, we issued 202,542 shares of common stock as consideration for private placement commission costs. The aggregate fair value of the consideration received was $57,539. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D for the issuance of these securities. The recipient took its securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of these securities.
During the period ended September 30, 2010, we issued 5,000 shares of common stock as consideration for consulting services. The aggregate fair value of the consideration received was $5,000. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D for the issuance of these securities. The recipient took its securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of these securities.
During the period ended September 30, 2010, we issued 300,000 shares of common stock upon exercise of 300,000 share purchase warrants at $0.50 per share, and received gross proceeds of $150,000. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D for the issuance of these securities. The recipient took its securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the acquisition of these securities.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - REMOVED AND RESERVED
None.
ITEM 5 - OTHER INFORMATION
None.
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10.01
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Engagement Agreement between Integral Technologies, Inc. and MBD Capital Group, Inc., dated October 1, 2010.(1)
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31.1
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Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act(2)
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31.2
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Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act(2)
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32.1
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Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code(2)
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(1) Incorporated by reference herein from Exhibit No. 10.01 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 7, 2010.
(2) Filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DATE: November 14, 2010
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Integral Technologies, Inc.
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By:
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/s/ William S. Robinson
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William S. Robinson, Chief Executive Officer
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and Principal Executive Officer
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By:
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/s/ William A. Ince
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William A. Ince, Chief Financial Officer and
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Principal Accounting Officer
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Date: November 14, 2010
10.01
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Engagement Agreement between Integral Technologies, Inc. and MBD Capital Group, Inc., dated October 1, 2010.(1)
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Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act(2)
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Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act(2)
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Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code(2)
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(1) Incorporated by reference herein from Exhibit No. 10.01 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 7, 2010.
(2) Filed herewith.