Nevada
|
|
98-0163519
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer o
|
Accelerated filer o
|
|
|
Non-accelerated filer o
|
Smaller reporting company T
|
PART I - FINANCIAL INFORMATION
|
||
|
|
Page
|
Item 1.
|
Financial Statements
|
|
|
INTEGRAL TECHNOLOGIES, INC.
|
|
|
(A Development Stage Company)
|
|
|
Consolidated Financial Statements
|
|
|
September 30, 2013
|
|
|
(U.S. Dollars)
|
|
|
(Unaudited)
|
|
|
|
|
|
F-1
|
|
|
|
|
|
F-2
|
|
|
|
|
|
F-3
|
|
|
|
|
|
F-4
|
|
|
|
|
|
F-5
|
|
|
|
|
Item 2
|
2
|
|
Item 3.
|
3
|
|
Item 4.
|
3
|
|
|
|
|
PART II - OTHER INFORMATION
|
||
|
|
|
Item 1.
|
4
|
|
Item 1A.
|
4
|
|
Item 2.
|
4
|
|
Item 3.
|
4
|
|
Item 4.
|
4
|
|
Item 5
|
4
|
|
Item 6.
|
4
|
|
|
5
|
|
September 30,
2013
|
June 30,
2013
|
||||||
|
(Unaudited)
|
|||||||
Assets
|
||||||||
|
||||||||
Current
|
||||||||
Cash
|
$
|
309,784
|
$
|
532,308
|
||||
Prepaid expenses
|
30,227
|
20,232
|
||||||
Account receivable (note 13)
|
0
|
250,000
|
||||||
|
||||||||
Total Assets
|
$
|
340,011
|
$
|
802,540
|
||||
|
||||||||
Liabilities
|
||||||||
|
||||||||
Current
|
||||||||
Accounts payable and accruals (note 15)
|
$
|
1,803,061
|
$
|
2,270,727
|
||||
Promissory note payable (note 12)
|
53,950
|
0
|
||||||
Deferred liability (note 13)
|
25,000
|
25,000
|
||||||
Loan payable (note 14)
|
20,189
|
0
|
||||||
Convertible debentures (note 11)
|
108,895
|
174,827
|
||||||
Derivative financial liabilities (note 11)
|
517,109
|
414,102
|
||||||
Redeemable preferred stock (note 5 and 15)
|
210,000
|
180,000
|
||||||
|
||||||||
Total Current Liabilities
|
2,738,204
|
3,064,656
|
||||||
Deferred Liability (note 13)
|
218,750
|
225,000
|
||||||
Redeemable Preferred Stock (note 5 and 15)
|
90,000
|
120,000
|
||||||
|
||||||||
Total Liabilities
|
3,046,954
|
3,409,656
|
||||||
|
||||||||
Stockholders’ Deficit (note 5)
|
||||||||
|
||||||||
Preferred Stock and Paid-in Capital in Excess of $0.001 Par Value
|
||||||||
20,000,000 shares authorized 308,538 issued and outstanding (note 5 and 15)
|
237,950
|
237,950
|
||||||
Common Stock and Paid-in Capital in Excess of $0.001 Par Value
|
||||||||
150,000,000 shares authorized 79,189,484 (June 30, 2013 – 76,748,839) issued and outstanding
|
42,396,607
|
41,204,935
|
||||||
Promissory Notes Receivable
|
(29,737
|
)
|
(29,737
|
)
|
||||
Share Subscriptions
|
0
|
13,400
|
||||||
Accumulated Other Comprehensive Income
|
46,267
|
46,267
|
||||||
Deficit Accumulated During the Development Stage
|
(45,358,030
|
)
|
(44,079,931
|
)
|
||||
|
||||||||
Total Stockholders’ Deficit
|
(2,706,943
|
)
|
(2,607,116
|
)
|
||||
|
||||||||
Total Liabilities and Stockholders’ Equity
|
$
|
340,011
|
$
|
802,540
|
|
Three Months Ended
September 30,
|
Period from
February 12,
1996
(Inception) to
September 30,
|
||||||||||
|
2013
|
2012
|
2013
|
|||||||||
Revenue
|
$
|
0
|
$
|
0
|
$
|
249,308
|
||||||
Cost of Sales
|
0
|
0
|
216,016
|
|||||||||
|
0
|
0
|
33,292
|
|||||||||
Other Income (note 13)
|
6,413
|
65
|
876,065
|
|||||||||
|
6,413
|
65
|
909,357
|
|||||||||
|
||||||||||||
Expenses
|
||||||||||||
Consulting
|
891,663
|
824,381
|
14,520,328
|
|||||||||
Legal and accounting
|
105,398
|
112,433
|
12,017,547
|
|||||||||
Salaries and benefits
|
55,000
|
110,000
|
5,471,297
|
|||||||||
Research and development (note 9)
|
27,196
|
78,104
|
2,322,731
|
|||||||||
General and administrative
|
40,282
|
58,528
|
1,848,088
|
|||||||||
Travel and entertainment
|
40,600
|
35,557
|
1,842,602
|
|||||||||
Bank charges and interest, net
|
62,088
|
25,879
|
474,164
|
|||||||||
Rent
|
21,888
|
19,632
|
743,886
|
|||||||||
Telephone
|
3,413
|
7,984
|
563,798
|
|||||||||
Advertising
|
4,706
|
7,000
|
374,267
|
|||||||||
Fair value loss on derivative financial liabilities (note 11)
|
103,842
|
6,340
|
513,705
|
|||||||||
Loss (recovery) on extinguishment of debt (note 15)
|
(75,429
|
)
|
0
|
33,571
|
||||||||
Net gain on settlement of convertible debentures
|
0
|
0
|
(26,189
|
)
|
||||||||
Gain on extinguishment of debt
|
0
|
0
|
(355,022
|
)
|
||||||||
Write-down of license and operating assets
|
0
|
0
|
1,855,619
|
|||||||||
Write-off of investments
|
0
|
0
|
1,250,000
|
|||||||||
Non-competition agreement
|
0
|
0
|
711,000
|
|||||||||
Interest on beneficial conversion feature
|
0
|
0
|
566,455
|
|||||||||
Bad debts
|
0
|
0
|
46,604
|
|||||||||
Financing fees
|
0
|
0
|
129,043
|
|||||||||
Settlement of lawsuit
|
0
|
0
|
45,250
|
|||||||||
Amortization
|
0
|
0
|
324,386
|
|||||||||
|
1,280,647
|
1,285,838
|
45,273,130
|
|||||||||
|
||||||||||||
Net Loss for Period
|
$
|
(1,274,234
|
)
|
$
|
(1,285,773
|
)
|
$
|
(44,363,773
|
)
|
|||
|
||||||||||||
Loss Per Common Share (note 8)
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
||||||
|
||||||||||||
Weighted Average Number of Common Shares Outstanding
|
77,057,027
|
62,461,528
|
|
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
|
Accumulated
Other
Comprehensive
Income
|
Deficit
Accumulated
During the
Development
Stage
|
Total
Stockholders'
Equity (Deficit)
|
|||||||||||||||||||||||||||
Balance, June 30, 2012
|
62,368,653
|
$
|
37,655,315
|
308,538
|
$
|
308,538
|
$
|
(29,737
|
)
|
$
|
191,600
|
$
|
46,267
|
$
|
(40,314,166
|
)
|
$
|
(2,142,183
|
)
|
|||||||||||||||||
Shares issued for
|
||||||||||||||||||||||||||||||||||||
Services
|
2,247,500
|
974,125
|
0
|
0
|
0
|
0
|
0
|
0
|
974,125
|
|||||||||||||||||||||||||||
Cash
|
11,202,304
|
2,191,360
|
0
|
0
|
0
|
(191,600
|
)
|
0
|
0
|
1,999,760
|
||||||||||||||||||||||||||
Settlement of convertible debentures
|
930,382
|
252,456
|
0
|
0
|
0
|
0
|
0
|
0
|
252,456
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,460
|
)
|
(15,460
|
)
|
|||||||||||||||||||||||||
Redeemable preferred stock (note 15)
|
0
|
0
|
0
|
(70,588
|
)
|
0
|
0
|
0
|
(229,412
|
)
|
(300,000
|
)
|
||||||||||||||||||||||||
Gain on extinguishment of debt (note 15)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
228,897
|
228,897
|
|||||||||||||||||||||||||||
Subscriptions received
|
0
|
0
|
0
|
0
|
0
|
13,400
|
0
|
0
|
13,400
|
|||||||||||||||||||||||||||
Stock-based compensation
|
0
|
131,679
|
0
|
0
|
0
|
0
|
0
|
0
|
131,679
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(3,749,790
|
)
|
(3,749,790
|
)
|
|||||||||||||||||||||||||
Balance, June 30, 2013
|
76,748,839
|
41,204,935
|
308,538
|
237,950
|
(29,737
|
)
|
13,400
|
46,267
|
(44,079,931
|
)
|
(2,607,116
|
)
|
||||||||||||||||||||||||
Shares issued for
|
||||||||||||||||||||||||||||||||||||
Services (note 5)
|
1,091,666
|
513,333
|
0
|
0
|
0
|
0
|
0
|
0
|
513,333
|
|||||||||||||||||||||||||||
Cash
|
44,000
|
13,400
|
0
|
0
|
0
|
(13,400
|
)
|
0
|
0
|
0
|
||||||||||||||||||||||||||
Settlement of convertible debentures (note 11)
|
676,408
|
300,053
|
0
|
0
|
0
|
0
|
0
|
0
|
300,053
|
|||||||||||||||||||||||||||
Settlement of debt (note 15)
|
628,571
|
276,571
|
0
|
0
|
0
|
0
|
0
|
0
|
276,571
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(3,865
|
)
|
(3,865
|
)
|
|||||||||||||||||||||||||
Stock-based compensation (note 5)
|
0
|
88,315
|
0
|
0
|
0
|
0
|
0
|
0
|
88,315
|
|||||||||||||||||||||||||||
Net loss for period
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,274,234
|
)
|
(1,274,234
|
)
|
|||||||||||||||||||||||||
Balance, September 30, 2013 (Unaudited)
|
79,189,484
|
$
|
42,396,607
|
308,538
|
$
|
237,950
|
$
|
(29,737
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(45,358,030
|
)
|
$
|
(2,706,943
|
)
|
|
Three Months Ended
September 30,
|
Period from
February 12, 1996
(Inception) to
September 30,
|
||||||||||
|
2013
|
2012
|
2013
|
|||||||||
Operating Activities
|
||||||||||||
Net loss
|
$
|
(1,274,234
|
)
|
$
|
(1,285,773
|
)
|
$
|
(44,363,773
|
)
|
|||
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
|
(6,250
|
)
|
0
|
(664,555
|
)
|
|||||||
Consulting services
|
513,333
|
349,125
|
3,622,998
|
|||||||||
Stock-based compensation
|
88,315
|
178,356
|
8,129,276
|
|||||||||
Interest on derivative financial liability
|
58,286
|
20,772
|
225,788
|
|||||||||
Fair value loss on derivative financial liabilities
|
103,842
|
6,340
|
513,705
|
|||||||||
Net gain on settlement of convertible debentures
|
0
|
0
|
(26,189
|
)
|
||||||||
Gain on extinguishment of debt
|
0
|
0
|
(355,022
|
)
|
||||||||
Loss (recovery) on extinguishment of debt
|
(75,429
|
)
|
0
|
33,571
|
||||||||
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 (note 7)
|
224,613
|
225,642
|
3,047,509
|
|||||||||
Net Cash Used in Operating Activities
|
(367,524
|
)
|
(505,538
|
)
|
(24,967,791
|
)
|
||||||
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
|
)
|
||||||||
Net Cash Used in Investing Activities
|
0
|
0
|
(2,455,244
|
)
|
||||||||
Financing Activities
|
||||||||||||
Redemption of preferred stock
|
0
|
0
|
(50,000
|
)
|
||||||||
Repayment of loan
|
0
|
0
|
(11,000
|
)
|
||||||||
Repayment of promissory note
|
(30,000
|
)
|
(44,235
|
)
|
(153,696
|
)
|
||||||
Repayments to stockholders
|
0
|
0
|
(91,283
|
)
|
||||||||
Loan payable
|
0
|
103,423
|
0
|
|||||||||
Proceeds from issuance of common stock
|
0
|
422,298
|
25,522,688
|
|||||||||
Advances from stockholders
|
0
|
0
|
1,078,284
|
|||||||||
Share issue costs
|
0
|
0
|
(629,991
|
)
|
||||||||
Subscriptions received
|
0
|
143,769
|
719,415
|
|||||||||
Proceeds from convertible debentures
|
175,000
|
30,000
|
1,423,000
|
|||||||||
Repayment of convertible debentures
|
0
|
0
|
(120,865
|
)
|
||||||||
Net Cash Provided by Financing Activities
|
145,000
|
655,255
|
27,686,552
|
|||||||||
Effect of Foreign Currency Translation on Cash
|
0
|
0
|
46,267
|
|||||||||
Inflow (Outflow) of Cash
|
(222,524
|
)
|
149,717
|
309,784
|
||||||||
Cash, Beginning of Period
|
532,308
|
172,173
|
0
|
|||||||||
Cash, End of Period
|
$
|
309,784
|
$
|
321,890
|
$
|
309,784
|
1. | NATURE OF OPERATIONS |
2. | BASIS OF PRESENTATION |
3. | USE OF ESTIMATES |
4. | GOING CONCERN |
5. | STOCKHOLDERS’ DEFICIT |
(a) | Preferred stock |
Within one year
|
$
|
1.50
|
||
2nd year
|
$
|
2.00
|
||
3rd year
|
$
|
2.50
|
||
4th year
|
$
|
3.00
|
||
5th year
|
$
|
3.50
|
||
6th year
|
$
|
4.00
|
||
increasing $0.50 per year thereafter.
|
(b) | Common stock |
5. | STOCKHOLDERS’ DEFICIT (Continued) |
(b) | Common stock (Continued) |
(c)
|
Stock-based compensation
|
(d)
|
Stock options
|
|
Number of
Options
|
Price Per
Option
|
Weighted
Average
Exercise Price
|
|||||||||
|
||||||||||||
Outstanding, June 30, 2013 and September 30, 2013
|
5,900,000
|
$
|
0.25 to $ 1.00
|
$
|
0.43
|
|||||||
Exercisable, September 30, 2013
|
5,450,000
|
$
|
0.25 to $ 1.00
|
$
|
0.42
|
5. | STOCKHOLDERS’ DEFICIT (Continued) |
(d)
|
Stock options (Continued)
|
Number of Options
|
||||||||||||
Expiry Date
|
Exercise
Price
|
September 30,
2013
|
June 30,
2013
|
|||||||||
|
||||||||||||
December 31, 2013(1)
|
$
|
0.25
|
500,000
|
500,000
|
||||||||
December 31, 2013
|
$
|
1.00
|
110,000
|
110,000
|
||||||||
December 31, 2012
|
$
|
1.00
|
100,000
|
100,000
|
||||||||
March 9, 2014
|
$
|
0.25
|
125,000
|
125,000
|
||||||||
June 1, 2014
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
October 15, 2014
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
July 31, 2014
|
$
|
1.00
|
415,000
|
415,000
|
||||||||
December 1, 2014
|
$
|
0.50
|
75,000
|
75,000
|
||||||||
December 1, 2014
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
December 31, 2014
|
$
|
0.25
|
1,000,000
|
1,000,000
|
||||||||
April 15, 2015
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
June 1, 2015
|
$
|
0.50
|
75,000
|
75,000
|
||||||||
June 1, 2015
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
October 15, 2015
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
December 1, 2015
|
$
|
0.50
|
75,000
|
75,000
|
||||||||
December 1, 2015
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
April 15, 2016
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
June 1, 2016
|
$
|
0.50
|
75,000
|
75,000
|
||||||||
June 1, 2016
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
June 30, 2016(2)
|
$
|
0.25
|
2,000,000
|
2,000,000
|
||||||||
October 15, 2016
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
December 1, 2016
|
$
|
0.50
|
75,000
|
75,000
|
||||||||
December 1, 2016
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
April 15, 2017
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
June 1, 2017
|
$
|
0.50
|
75,000
|
75,000
|
||||||||
Total outstanding
|
5,900,000
|
5,900,000
|
||||||||||
Total exercisable
|
5,450,000
|
5,450,000
|
(1) | During the year ended June 30, 2013, the expiry date of these options was extended from December 31, 2012 to December 31, 2013. |
(2) | During the year ended June 30, 2013, the expiry date of these options was extended from December 31, 2013 to June 30, 2016. |
5. | STOCKHOLDERS’ DEFICIT (Continued) |
(d)
|
Stock options (Continued)
|
(e) | Stock purchase warrants |
|
Number of
Warrants
|
Price Per
Share
|
Weighted
Average
Exercise
Price
|
|||||||||
|
||||||||||||
Balance, June 30, 2012
|
14,060,103
|
$
|
0.67
|
|||||||||
Issued
|
19,930,899
|
$
|
0.31 to $ 0.70
|
$
|
0.59
|
|||||||
|
||||||||||||
Balance, June 30, 2013
|
33,991,002
|
$
|
0.58
|
|||||||||
Issued
|
88,000
|
$
|
0.50
|
$
|
0.50
|
|||||||
|
||||||||||||
Balance, September 30, 2013
|
34,079,002
|
$
|
0.31 to $ 0.70
|
$
|
0.58
|
5. | STOCKHOLDERS’ DEFICIT (Continued) |
(e)
|
Stock purchase warrants (Continued)
|
Number of Warrants
|
||||||||||||
Expiry Date
|
Exercise
Price
|
September 30,
2013
|
June 30,
2013
|
|||||||||
|
||||||||||||
December 31, 2013
|
$
|
0.50
|
3,710,000
|
3,710,000
|
||||||||
December 31, 2013
|
$
|
0.70
|
3,963,152
|
3,963,152
|
||||||||
December 31, 2013
|
$
|
1.00
|
1,358,372
|
1,358,372
|
||||||||
January 3, 2014
|
$
|
0.70
|
856,692
|
856,692
|
||||||||
January 31, 2014
|
$
|
0.70
|
2,360,459
|
2,360,459
|
||||||||
February 14, 2014
|
$
|
0.70
|
300,000
|
300,000
|
||||||||
March 31, 2014
|
$
|
0.57
|
1,000,000
|
1,000,000
|
||||||||
November 29, 2016
|
$
|
0.70
|
511,428
|
511,428
|
||||||||
August 31, 2014
|
$
|
0.60
|
2,796,666
|
2,796,666
|
||||||||
August 31, 2014
|
$
|
0.70
|
799,708
|
799,708
|
||||||||
July 17, 2014
|
$
|
0.31
|
300,000
|
300,000
|
||||||||
February 28, 2014
|
$
|
0.70
|
21,421
|
21,421
|
||||||||
September 30, 2014
|
$
|
0.50
|
926,604
|
926,604
|
||||||||
January 31, 2015
|
$
|
0.50
|
4,150,000
|
4,150,000
|
||||||||
February 28, 2015
|
$
|
0.50
|
4,936,500
|
4,936,500
|
||||||||
May 25, 2015
|
$
|
0.50
|
6,000,000
|
6,000,000
|
||||||||
July 31, 2015
|
$
|
0.50
|
88,000
|
0
|
||||||||
|
||||||||||||
Total outstanding
|
34,079,002
|
33,991,002
|
||||||||||
|
||||||||||||
Total exercisable
|
34,079,002
|
33,916,002
|
6. | INCOME TAXES |
7. | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
Three Months Ended
September 30,
|
Period from
February 12,
1996
(Inception) to
September 30,
|
|||||||||||
|
2013
|
2012
|
2013
|
|||||||||
|
||||||||||||
Changes in non-cash working capital
|
||||||||||||
Prepaid expenses
|
$
|
10,194
|
$
|
(91,553
|
)
|
$
|
(10,037
|
)
|
||||
Accounts payable and accruals
|
(35,581
|
)
|
317,195
|
3,082,210
|
||||||||
Due from affiliated company
|
0
|
0
|
(116,000
|
)
|
||||||||
Notes and accounts receivable
|
250,000
|
0
|
140,787
|
|||||||||
Inventory
|
0
|
0
|
(46,842
|
)
|
||||||||
Deferred revenue and other
|
0
|
0
|
(2,609
|
)
|
||||||||
|
||||||||||||
|
$
|
224,613
|
$
|
225,642
|
$
|
3,047,509
|
Three Months Ended
September 30,
|
Period from
February 12,
1996
(Inception) to
September 30,
|
|||||||||||
|
2013
|
2012
|
2013
|
|||||||||
|
||||||||||||
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
|
$
|
276,571
|
$
|
0
|
$
|
228,742
|
||||||
Settlement of convertible debenture
|
$
|
300,053
|
$
|
0
|
$
|
789,435
|
||||||
Services (provided by officers and directors)
|
$
|
0
|
$
|
122,500
|
$
|
242,500
|
||||||
Settlement of lawsuit
|
$
|
0
|
$
|
0
|
$
|
15,000
|
||||||
Services and financing fees
|
$
|
513,333
|
$
|
226,625
|
$
|
2,915,980
|
||||||
Subscriptions received
|
$
|
0
|
$
|
143,769
|
$
|
0
|
||||||
Acquisition of subsidiary
|
$
|
0
|
$
|
0
|
$
|
894,200
|
||||||
Supplemental Cash Flow Information
|
||||||||||||
Interest paid
|
$
|
0
|
$
|
0
|
$
|
99,424
|
||||||
Income tax paid
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||
Accrual of liability for mandatory redeemable preferred shares
|
$
|
0
|
$
|
0
|
$
|
300,000
|
8. | LOSS PER SHARE |
|
Income (Loss)
(Numerator)
|
Weighted
Average
Number of
Shares
(Denominator)
|
Loss Per
Share
|
|||||||||
|
||||||||||||
Three months ended September 30, 2013
|
||||||||||||
Net loss for period
|
$
|
(1,274,234
|
)
|
|||||||||
Preferred stock dividends (note 5(a))
|
(3,865
|
)
|
|
|
||||||||
Loss attributable to common shareholders
|
$
|
(1,278,099
|
)
|
77,057,027
|
$
|
(0.02
|
)
|
|||||
|
||||||||||||
Three months ended September 30, 2012
|
||||||||||||
Net loss for period
|
$
|
(1,285,773
|
)
|
|||||||||
Preferred stock dividends (note 5(a))
|
(3,865
|
)
|
||||||||||
Loss attributable to common shareholders
|
$
|
(1,289,638
|
)
|
62,461,528
|
$
|
(0.02
|
)
|
9. | RESEARCH AND DEVELOPMENT |
10. | SEGMENT INFORMATION |
11. | CONVERTIBLE DEBENTURES |
(a) | Asher Enterprises Inc. |
(i)
|
August 9, 2011 received $53,000 (settled);
|
(ii)
|
September 15, 2011 received $50,000 (settled);
|
(iii)
|
October 15, 2011 received $35,500 (settled);
|
(iv)
|
April 18, 2012 received $53,500 (settled);
|
(v)
|
May 23, 2012 received $78,500 (settled);
|
(vi)
|
July 5, 2012 received $30,000, net of $2,500 in legal fees (settled);
|
(vii)
|
November 20, 2012 received $50,000, net of $3,000 in legal fees (settled);
|
(viii)
|
January 4, 2013 received $25,000, net of $2,500 in legal fees (settled);
|
(ix)
|
January 31, 2013 received $35,000, net of $2,500 in legal fees (settled);
|
(x)
|
April 5, 2013 received $50,000, net of $3,000 in legal fees;
|
(xi)
|
June 12, 2013 received $37,500; and
|
(xii)
|
July 15, 2013 received $25,000, net of $2,500 in legal fees.
|
· | Outstanding principal multiplied by 135% together with accrued interest and unpaid interest thereon if prepaid within a period of 90 days beginning on the date of issuance of the note; |
· | Outstanding principal multiplied by 145% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 91 days from the date of issuance of the note and ending on the date that is 150 days following the date of the note; and |
· | Outstanding principal multiplied by 150% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 151 days from the date of issuance of the note and ending on the date that is 180 days following the date of the note. |
11.
|
CONVERTIBLE DEBENTURES (Continued)
|
(a) | Asher Enterprises Inc. (Continued) |
(b) | JMJ Financial |
· | February 27, 2013 received $100,000, net of an upfront fee of $11,111; |
· | June 2, 2013 received $50,000, net of an upfront fee of $5,555; and |
· | September 30, 2013 received $150,000, net of an upfront fee of $16,666. |
11. | CONVERTIBLE DEBENTURES (Continued) |
|
September 30,
2013
|
June 30,
2013
|
||||
|
|
|
||||
Expected life (years)
|
0.94
|
0.76
|
||||
Interest rate
|
1.12%
|
0.71%
|
||||
Volatility
|
77.92%
|
62.80%
|
||||
Dividend yield
|
N/A
|
N/A
|
||||
Estimated forfeitures
|
N/A
|
N/A
|
|
September 30,
2013
|
June 30,
2013
|
||||
|
|
|
||||
Expected life (years)
|
0.45
|
0.20
|
||||
Interest rate
|
1.01%
|
0.66%
|
||||
Volatility
|
79.24%
|
72.76%
|
||||
Dividend yield
|
N/A
|
N/A
|
||||
Estimated forfeitures
|
N/A
|
N/A
|
11.
|
CONVERTIBLE DEBENTURES (Continued)
|
|
September 30,
2013
|
June 30,
2013
|
||||
|
|
|
||||
Expected life (years)
|
0.71
|
0.62
|
||||
Interest rate
|
1.00%
|
0.94%
|
||||
Volatility
|
74.74%
|
70.20%
|
||||
Dividend yield
|
N/A
|
N/A
|
||||
Estimated forfeitures
|
N/A
|
N/A
|
|
September 30,
2013
|
June 30,
2013
|
||||||
|
||||||||
Fair value of convertible debenture, beginning of period
|
$
|
174,827
|
$
|
93,356
|
||||
Fair value at inception of new tranches
|
0
|
166,922
|
||||||
Interest accrued
|
58,286
|
112,330
|
||||||
Loss on early repayment
|
0
|
44,489
|
||||||
Repayment on November 28, 2012 (cash)
|
0
|
(120,865
|
)
|
|||||
Settlement (issuance of common shares)
|
(124,218
|
)
|
(121,405
|
)
|
||||
Carrying amount of convertible debenture, end of period
|
$
|
108,895
|
$
|
174,827
|
|
September 30,
2013
|
June 30,
2013
|
||||||
|
||||||||
Fair value of derivative liability, beginning of period
|
$
|
414,102
|
$
|
84,718
|
||||
Fair value at inception of new tranches
|
175,000
|
210,576
|
||||||
Loss on fair value of derivative liability
|
103,842
|
320,537
|
||||||
Gain on early repayment
|
0
|
(70,678
|
)
|
|||||
Settlement (issuance of common shares)
|
(175,835
|
)
|
(131,051
|
)
|
||||
Fair value of derivative liabilities, end of period
|
$
|
517,109
|
$
|
414,102
|
12. | PROMISSORY NOTE PAYABLE |
12. | PROMISSORY NOTE PAYABLE (Continued) |
13. | DEFERRED LIABILITY |
· | $250,000 (received) to be paid to the Company within 15 business days; and |
· | A second payment is due to the Company no later than one year after signing the agreement. |
14. | LOAN PAYABLE |
15. | EXTINGUISHMENT OF DEBT |
(a) | On November 8, 2012, a director of the Company resigned from his position as director and CEO of the Company. An agreement was signed indicating that all amounts owing at the agreement date would be waived resulting in payables of $228,897 recognized as a gain on extinguishment of debt charged to accumulated deficit. Further, the agreement indicated that the Company would redeem 70,588 shares of preferred stock held by the director at $4.25 per share for a total of $300,000 as follows: |
(i) | Monthly installments of $7,500 would be paid on the 15th of each month starting November 15, 2012 until June 15, 2013; |
(ii) | Monthly installments of $10,000 would be paid on the 15th of each month starting July 15, 2013 until December 15, 2014; and |
(iii) | A lump sum payment of $60,000 on January 15, 2015. |
15. | EXTINGUISHMENT OF DEBT (Continued) |
(b) | On June 13, 2013, the Company signed a separation agreement with a consultant resulting in a termination of consulting services effective December 31, 2012. As a result of the termination, the Company was required to issue the following: |
(i) | 541,666 common shares pursuant to a restricted stock award agreement for options vesting prior to the agreement date. These shares were issued during the three months ended September 30, 2013 and were measured at a fair value of $0.44 per share. |
(ii) | 628,571 common shares in consideration for unpaid fees of $243,000. The modified consulting fees were recorded at the fair value of shares to be issued of $352,000 as at June 30, 2013 which were included in accounts payable and accruals. The increase in value of modified debt of $109,000 was recognized as a loss on extinguishment of liabilities in the consolidated statements of operations for the year ended June 30, 2013. During the three months ended September 30, 2013, 628,571 shares were issued to settle the above mentioned consulting fees which were re-measured at a fair value of $0.44 per share on the share issuance date. A total of $276,571 was recorded as equity with the decrease in value of extinguished debt of $75,429 recorded as a recovery of loss on extinguishment of debt in the consolidated statements of operations. |
16. | SUBSEQUENT EVENTS |
|
Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
|
|
|
|
|
31.2
|
|
Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
|
|
|
|
32.1
|
|
Certification by Chief Executive 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 is filed herewith.
|
32.2 |
Certification by 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 is filed herewith.
|
Integral Technologies, Inc.
|
|||
|
|
|
|
|
By:
|
/s/ Doug Bathauer
|
|
|
|
Doug Bathauer, Chief Executive Officer
|
|
|
|
and Principal Executive Officer
|
|
|
|
|
|
|
By:
|
/s/ William A. Ince
|
|
|
|
William A. Ince, Chief Financial Officer and
|
|
|
|
Principal Accounting Officer
|
|
|
|
|
|
Date: November 18, 2013
|
|
Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
|
|
|
|
|
|
Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith
|
|
|
|
|
|
Certification by Chief Executive 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 is filed herewith.
|
|
32.2 |
Certification by 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 is filed herewith.
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|