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June 6, 2019 Conference Call PlaybackJun 11 2019
Integral Announces Binding Term Sheet with Pivotal Battery Corp. (“Pivotal”), a Delaware corporation, for the sale of its bipolar battery technology. The purchase is valued at $3,500,000 and expected to close no later than end of August 2019. The agreement also calls for an exclusive supplier agreement for Integral to provide ElectriPlast to Pivotal for production of bipolar plates. The agreement also sets aside a limited number of shares in Pivotal to provide Integral shareholders an opportunity to invest directly in Pivotal.
Integral Technologies Issues 8K for Disclosure of Material InformationJun 11 2019
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 11, 2019 (June 5, 2019)
Integral Technologies, Inc.
(Exact Name of Company as Specified in Charter)
Nevada 000-28353 98-0163519
(State or other jurisdiction of
(Commission File Number) (IRS Employer Identification No.)
412 Mulberry, Marietta, Ohio 45750
(Address of principal executive offices) (Zip Code)
Company’s telephone number, including area code: (812) 550-1770
(Former name or former address, if changed since last
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
commom itkg otc
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 DFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement.
On June 5, 2019, Integral Technologies, Inc. (the "Company") entered into a binding term sheet (the “Binding Term Sheet”) with Pivotal Battery Corp. (“Pivotal”).
Under the Binding Term Sheet, the Company agreed to terms to sell to Pivotal the Company’s patented (pending), bipolar plate technology for applications including but not
limited to battery and energy storage solutions. As consideration for the sale of the bipolar plate technology, Pivotal will make cash and stock payments valued at $3,500,000
to the Company. The Binding Term Sheet also requires Pivotal to pay the Company royalty fees based on sales of bipolar plates, and for the parties to enter into an exclusive
supplier agreement for Integral to supply its proprietary ElectriPlast conductive plastic to Pivotal for use in the manufacture of the bipolar plates. The Binding Term Sheet
requires the sale to close no later than August 30, 2019.
The foregoing description of the Binding Term Sheet is only a summary and is qualified in its entirety by reference to the Binding Term Sheet. A copy of the Term Sheet is
filed as Exhibit 10.1 hereto.
Item 9.01. Financial Statements and Exhibits.
10.1 Binding Term Sheet dated June 5, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
INTEGRAL TECHNOLOGIES, INC.
Dated: June 11, 2019 By: /s/ Doug Bathauer
Name: Doug Bathauer
Title: Chief Executive Officer
Pivotal Battery Corp.
6424 E. Greenway Parkway, Suite 100
Scottsdale, AZ 85254
June 5, 2019
Mr. Doug Bathauer
Chief Executive Officer
Integral Technologies, Inc.
Marietta, OH 45750
Re: BINDING TERM SHEET TO ACQUIRE INTEGRAL TECHNOLOGIES, INC’S BIPOLAR BATTERY TECHNOLOGY
Integral Technologies, Inc. (“Integral”) and Pivotal Battery Corp. (“Pivotal”) are parties to a non-binding term sheet dated March 11, 2019 setting forth the terms
under which Pivotal would acquire Integral’s proprietary bi-polar plate technology. The technology includes but is not limited to all prototypes, equipment, patents
(pending), patent applications, know-how, copyrights, and trademarks related to the technology owned by Integral (the “Technology”).
The parties now desire to make a formal commitment by entering into this binding term sheet (the “Binding Term Sheet”) setting forth the terms of the purchase
by Pivotal for the Technology owned by Integral.
BINDING TERM SHEET
1. Parties: Integral Technologies, Inc., a Nevada corporation, and Pivotal Battery Corp., a Delaware corporation.
2. Asset Pivotal will purchase 100% of the Technology from Integral (“Asset Purchase”).
3. Purchase Price The purchase price for the Asset Purchase shall be $2,000,000 in cash, plus Pivotal’s common stock (the“ Purchase Price”) as
4. Payment On the Closing Date of the Asset Purchase, Pivotal shall provide the following to Integral:
● $2,000,000 in cash, or in cash and a promissory note. The promissory note shall be convertible into shares of Pivotal
common stock at Integral’s sole discretion.
● The note shall be secured by a security interest in all the assets in the Asset Purchase. The note shall bear interest at the rate
of 7% per annum.
5. Equity Within 30 business days from the Closing Date, Pivotal shall provide Integral, the greater of 1,500,000 shares or 15%, on a fully
diluted bases at time of stock issuance, of Pivotal’s common stock.
6. Closing Date No later than 5PM, Eastern Daylight Savings Time, August 30, 2019.
7. Royalty Pivotal shall pay Integral the following royalties from sales generated from the Technology, including licensing revenue, and
sales of bipolar plates, if any, for a term of 10 years (the “Royalty Term”) based on gross sales (net sales minus returns). The
Royalty Term shall start upon the first commercial scale sale of bipolar plates and shall be the following royalty rate (“Royalty
● Years 1-4: 5%
● Years 5-7: 4%
● Years 8-10: 3%
8. Form of Purchase of the
A technology asset purchase agreement shall be entered into between Integral and Pivotal stating the terms of the Technology
purchase and the payment schedule (the “Technology Asset Purchase Agreement”).
9. Post-Closing Agreements Pivotal shall put in place consulting agreements for Slobodan Pavlovic and Mo Zeidan to continue the development of a bi-polar
lead acid battery. The time spent by Pavlovic and Zeidan on the bi-polar lead acid battery development shall not prohibit them
from performing their current roles for Integral’s current long fiber conductive business.
10. Supplier Agreement Integral and Pivotal shall enter into a supplier agreement where Integral shall be the exclusive supplier of conductive plastic
materials used by Pivotal for the manufacture of bi-polar plates for a period of ten (10) years (the “Exclusive Supplier Period”).
During the Exclusive Supplier Period, Integral shall supply its conductive materials at a mutually agreeable price. Upon the
expiration of the Exclusive Supplier Period, Integral shall have the right to match any third party supplier price to maintain its
exclusive supplier role with Pivotal.
11. Non-Compete For a period of five (5) years after the Closing Date of the Technology Asset Purchase, or as long as Integral remains a supplier to
Pivotal, whichever may be longer, Integral shall not, without the prior written consent of Pivotal, participate or engage in,
directly or indirectly, any business that is competitive with the Technology.
12. Board of Directors Any time after the Closing Date, Integral shall have the right to nominate one director to Pivotal’s board of directors, and Pivotal
shall take all necessary actions to add Integral’s nominee to Pivotal board within five (5) business days after the nomination.
Integral shall maintain its board representation as long as Integral owns 2.5% of Pivotal’s outstanding common stock, or the
promissory note remains outstanding.
13. Additional Terms A. Integral will receive 20% of net benefit from the pending DOD project that Pivotal is pursuing with its prospective UK
licensee, The Ultimate Battery Co. Net benefit equals the total funds received from DOD minus out of pocket expenses incurred
B. Assignment of the Joint Technology Assessment Agreement (“JTAP”) between Integral and Advanced Battery Concepts, LLC
(“ABC”) to Pivotal on the Closing Date. The JTAP provides ABC’s support and manufacturing resources in incorporating the
bipolar plates into ABC’s existing bipolar battery design, and also provides for prototyping and testing support.
14. Integral Shareholder
Allotment in the Share Offering
Pivotal is presently conducting a share offering of its common stock to fund the Asset Purchase (the “Share Offering”).
Pivotal shall set-aside an allotment of 1,000,000 shares of the Share Offering for Integral shareholders, with an overallotment of
1,500,000 shares if the initial allotment has been fully subscribed by June 27, 2019. Integral shareholders must be shareholders
of record, as of December 31, 2018. Rights are non nontransferable and non-assignable.
15. Press Release Except as required by law, the parties agree that this Binding Term Sheet and the transactions contemplated herein shall be kept
confidential and no public announcement of the transactions shall be made unless agreed upon in writing by both parties.
Notwithstanding the foregoing, Integral shall have the right to make any disclosure or filing that Integral is required by OTC
listing standards or under federal securities laws, including form 8K regarding the disposition of material assets.
16. Execution Agreements: The parties shall work together in drafting the necessary execution agreement(s) for the asset purchase. The execution agreements
and other related documentation customary for transactions of this type shall contain (among other things) customary
representations, warranties and indemnities. The parties will make best effort to negotiate and execute final agreements promptly
following the execution of the Binding Term Sheet.
17. Expenses: Pivotal shall pay up to $10,000 for Integral’s expenses, including its legal expenses, time and effort related to the development of
all necessary documentation and travel, if any, related to the transactions contemplated.
18. Governing Law; Enforcement: This letter agreement shall be governed by the laws of the State of Arizona. Any dispute or controversy arising under or related in
any way to this letter agreement shall be adjudicated by a court of competent jurisdiction located in the State of Arizona.
[Remainder of Page Intentionally Blank. Signature Page Follows]
If the terms set forth in this Binding Term Sheet are acceptable, please sign below.
Dated: June 5, 2019 By: /s/ Richard Bogan
Name: Richard Bogan
Title: Managing Director
Pivotal Battery Corp.
By: /s/ Doug Bathauer
Name: Doug Bathauer
Title: Chief Executive Officer
Integral Technologies, Inc.
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Safe Harbor Statement
These post may contain "forward-looking statements'' within the meaning of Section 27A of the 1933 Securities Act and Section 21E of the 1934 Securities Exchange Act. These statements include, without limitation, predictions and guidance relating to the company's future financial performance and the research, development and commercialization of its technologies. In some cases, you can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations, but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements, as the result of such factors, risks and uncertainties as (1) competition in the markets for the products and services sold by the company, (2) the ability of the company to execute its plans, (3) other factors detailed in the company's public filings with the SEC, including, without limitation, those described in the Company's annual report on Form 10-K for the year ended June 30, 2017 as filed with the Securities and Exchange Commission and available at www.sec.gov, and (4) the parties may be unable to agree upon definitive agreements. You are urged to consider these factors carefully in evaluating the forward-looking statements.