Attached files
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EX-31.2 - EXHIBIT 31.2 - INTEGRAL TECHNOLOGIES INC | ex31_2.htm |
EX-32.1 - EXHIBIT 32.1 - INTEGRAL TECHNOLOGIES INC | ex32_1.htm |
EX-31.1 - EXHIBIT 31.1 - INTEGRAL TECHNOLOGIES INC | ex31_1.htm |
EX-10.01 - EXHIBIT 10.01 - INTEGRAL TECHNOLOGIES INC | ex10_01.htm |
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 March 31, 2011.
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
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98-0163519
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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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 x 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
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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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 December 31, 2010, there were 56,590,712 outstanding shares of the Registrant's Common Stock, $0.001 par value.
INTEGRAL TECHNNOLOGIES, INC.
March 31, 2011 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
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Item 1. |
Financial Statements
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
March 31, 2011
(U.S. Dollars)
(Unaudited)
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|||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
Item 2. |
1
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Item 3. |
4
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Item 4. |
4
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PART II - OTHER INFORMATION
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Item 1. |
4
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Item 1A. |
4
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Item 2. |
4
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Item 3. |
5
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Item 4. |
5
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Item 5. |
5
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Item 6. |
5
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SIGNATURES |
6
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PART I
ITEM 1. FINANCIAL STATEMENTS
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Balance Sheet
(US Dollars)
March 31,
2011
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June 30,
2010
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|||||||
(Unaudited)
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||||||||
Assets
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||||||||
Current
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||||||||
Cash
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$ | 418,608 | $ | 350,235 | ||||
Prepaid expenses
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0 | 7,544 | ||||||
Total Assets
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$ | 418,608 | $ | 357,779 | ||||
Liabilities
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||||||||
Current
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||||||||
Accounts payable and accruals
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$ | 723,833 | $ | 707,148 | ||||
Total Current Liabilities
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723,833 | 707,148 | ||||||
Stockholders’ Deficit
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||||||||
Preferred Stock and Paid-in Capital in Excess of $0.001 Par Value
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||||||||
20,000,000 Shares authorized 308,538 (June 30, 2010 - 308,538) issued and outstanding
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308,538 | 308,538 | ||||||
Common Stock and Paid-in Capital in Excess of $0.001 Par Value
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||||||||
150,000,000 Shares authorized 58,271,760 (June 30, 2010 – 54,838,921) issued and outstanding
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35,591,238 | 33,224,263 | ||||||
Promissory Notes Receivable
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(29,737 | ) | (29,737 | ) | ||||
Subscriptions Received
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0 | 11,250 | ||||||
Other Comprehensive Income
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46,267 | 46,267 | ||||||
Deficit Accumulated During the Development Stage
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(36,221,531 | ) | (33,909,950 | ) | ||||
Total Stockholders’ Deficit
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(305,225 | ) | (349,369 | ) | ||||
Total Liabilities and Stockholders’ Deficit
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$ | 418,608 | $ | 357,779 |
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
(US Dollars)
Period from
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||||||||||||||||||||
Three Months Ended
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Nine Months Ended
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February 12,
1996 |
||||||||||||||||||
March 31,
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March 31,
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March 31,
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||||||||||||||||||
2011
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2010
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2011
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2010
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2011
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Revenue
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$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 249,308 | ||||||||||
Cost of Sales
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0 | 0 | 0 | 0 | 216,016 | |||||||||||||||
Gross Profit
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0 | 0 | 0 | 0 | 33,292 | |||||||||||||||
Other Income
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7 | 8 | 792 | 141 | 865,298 | |||||||||||||||
Total Income
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7 | 8 | 792 | 141 | 902,590 | |||||||||||||||
Expenses
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Legal and accounting
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33,643 | 30,400 | 150,073 | 129,560 | 4,753,095 | |||||||||||||||
Salaries and benefits
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110,000 | 110,000 | 330,000 | 598,527 | 10,889,316 | |||||||||||||||
Consulting
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505,526 | 258,892 | 1,403,487 | 940,505 | 9,329,153 | |||||||||||||||
General and administrative
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25,066 | 25,221 | 75,359 | 78,398 | 1,353,737 | |||||||||||||||
Travel and entertainment
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29,817 | 12,181 | 84,124 | 46,376 | 1,503,438 | |||||||||||||||
Bank charges and interest, net
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330 | 499 | 566 | 1,218 | 207,847 | |||||||||||||||
Rent
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12,917 | 11,997 | 37,842 | 35,272 | 572,143 | |||||||||||||||
Telephone
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7,184 | 7,815 | 20,376 | 17,627 | 504,053 | |||||||||||||||
Advertising
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1,150 | 1,781 | 1,915 | 3,301 | 340,642 | |||||||||||||||
Research and Development
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50,489 | 76,886 | 197,036 | 174,475 | 1,918,825 | |||||||||||||||
Settlement of lawsuit
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0 | 0 | 0 | 0 | 45,250 | |||||||||||||||
Remuneration pursuant to proprietary, non-competition agreement
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0 | 0 | 0 | 0 | 711,000 | |||||||||||||||
Financing fees
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0 | 10,880 | 0 | 43,120 | 129,043 | |||||||||||||||
Write-off of investments
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0 | 0 | 0 | 0 | 1,250,000 | |||||||||||||||
Interest on beneficial conversion feature
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0 | 0 | 0 | 0 | 566,455 | |||||||||||||||
Write-down of license and operating assets
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0 | 0 | 0 | 0 | 1,855,619 | |||||||||||||||
Bad debts
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0 | 0 | 0 | 0 | 46,604 | |||||||||||||||
Amortization
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0 | 0 | 0 | 0 | 324,386 | |||||||||||||||
Total Expenses
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776,122 | 546,552 | 2,300,778 | 2,068,379 | 36,300,606 | |||||||||||||||
Net Loss for Period
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$ | (776,115 | ) | $ | (546,544 | ) | $ | (2,299,986 | ) | $ | (2,068,238 | ) | $ | (35,398,016 | ) | |||||
Loss Per Share
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||||||
Weighted Average Number of Common Shares Outstanding
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57,039,087 | 51,779,029 | 55,880,918 | 50,881,329 |
See notes to consolidated financial statements.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
(US Dollars)
Shares of
Common
Stock
Issued
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Common
Stock and
Paid-in Capital
in Excess
of Par
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Shares of
Preferred
Stock
Issued
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Preferred Stock and
Paid-in Capital
in Excess
of Par
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Promissory
Notes
Receivable
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Share
Subscriptions
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Other
Comprehensive
Income
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Deficit
Accumulated
During the
Development
Stage
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Total
Stockholders’
Equity (Deficit)
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Balance, June 30, 2009
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50,305,769 | $ | 30,524,475 | 308,538 | $ | 308,538 | $ | (29,737 | ) | $ | 0 | $ | 46,267 | $ | (30,964,751 | ) | $ | (115,208 | ) | |||||||||
Shares Issued for
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Services
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270,000 | 81,000 | 0 | 0 | 0 | 0 | 0 | 0 | 81,000 | |||||||||||||||||||
Cash, net
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4,263,152 | 1,393,637 | 0 | 0 | 0 | 0 | 0 | 0 | 1,393,637 | |||||||||||||||||||
Subscriptions received
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0 | 0 | 0 | 0 | 0 | 11,250 | 0 | 0 | 11,250 | |||||||||||||||||||
Dividends on preferred shares
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0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,462 | ) | (15,462 | ) | |||||||||||||||||
Stock-based compensation
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0 | 1,225,151 | 0 | 0 | 0 | 0 | 0 | 0 | 1,225,151 | |||||||||||||||||||
Net loss for year
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0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,929,737 | ) | (2,929,737 | ) | |||||||||||||||||
Balance, June 30, 2010
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54,838,921 | 33,224,263 | 308,538 | 308,538 | (29,737 | ) | 11,250 | 46,267 | (33,909,950 | ) | (349,369 | ) | ||||||||||||||||
Shares Issued for
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Services
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751,997 | 575,102 | 0 | 0 | 0 | 0 | 0 | 0 | 575,102 | |||||||||||||||||||
Cash
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1,820,042 | 1,101,720 | 0 | 0 | 0 | (11,250 | ) | 0 | 0 | 1,090,470 | ||||||||||||||||||
Share issue costs
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0 | (122,497 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (122,497 | ) | |||||||||||||||||
Warrants exercised
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860,800 | 430,400 | 0 | 0 | 0 | 0 | 0 | 0 | 430,400 | |||||||||||||||||||
Dividends on preferred shares
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0 | 0 | 0 | 0 | 0 | 0 | 0 | (11,595 | ) | (11,595 | ) | |||||||||||||||||
Warrant extension
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Deemed dividend (note 3(e))
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0 | 131,577 | 0 | 0 | 0 | 0 | 0 | 0 | 131,577 | |||||||||||||||||||
Deemed dividend (note 3(e))
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0 | (131,577 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (131,577 | ) | |||||||||||||||||
Stock-based compensation
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0 | 382,250 | 0 | 0 | 0 | 0 | 0 | 0 | 382,250 | |||||||||||||||||||
Net loss for period
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0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,299,986 | ) | (2,299,986 | ) | |||||||||||||||||
Balance, March 31, 2011 (unaudited) | 58,271,760 | $ | 35,591,238 | 308,538 | $ | 308,538 | $ | (29,737 | ) | $ | 0 | $ | 46,267 | $ | (36,221,531 | ) | $ | (305,225 | ) |
See notes to consolidated financial statements.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
(US Dollars)
Period from
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February 12,
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1996
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Nine Months Ended
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(Inception) to
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March, 31
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March 31,
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2011
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2010
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2011
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Operating Activities | ||||||||||||
Net loss
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$ | (2,299,986 | ) | $ | (2,068,238 | ) | $ | (35,398,016 | ) | |||
Items not involving cash
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Write-down of investment
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0 | 0 | 1,250,000 | |||||||||
Proprietary, non-competition agreement
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0 | 0 | 711,000 | |||||||||
Amortization
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0 | 0 | 349,941 | |||||||||
Other income
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0 | 0 | (658,305 | ) | ||||||||
Consulting services
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437,621 | 81,000 | 2,056,404 | |||||||||
Stock-based compensation
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382,250 | 734,679 | 7,440,759 | |||||||||
Interest on beneficial conversion feature
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0 | 0 | 566,456 | |||||||||
Settlement of lawsuit
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0 | 0 | 60,250 | |||||||||
Write-down of license and operating assets
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0 | 0 | 1,853,542 | |||||||||
Bad debts
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0 | 0 | 77,712 | |||||||||
Changes in Non-Cash Working Capital
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Due from affiliated company
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0 | 0 | (116,000 | ) | ||||||||
Notes and account receivable
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0 | 0 | (109,213 | ) | ||||||||
Inventory
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0 | 0 | (46,842 | ) | ||||||||
Prepaid expenses
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7,544 | 7,261 | 0 | |||||||||
Other
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0 | 0 | (2,609 | ) | ||||||||
Accounts payable and accruals
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57,809 | (54,508 | ) | 1,007,068 | ||||||||
Cash Used in Operating Activities
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(1,414,762 | ) | (1,299,806 | ) | (20,957,853 | ) | ||||||
Investing Activities
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Purchase of property, equipment and intangible assets
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0 | 0 | (200,935 | ) | ||||||||
Assets acquired and liabilities assumed on purchase of subsidiary
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0 | 0 | (129,474 | ) | ||||||||
Investment purchase
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0 | 0 | (2,000,000 | ) | ||||||||
License agreement
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0 | 0 | (124,835 | ) | ||||||||
Cash Used in Investing Activities
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0 | 0 | (2,455,244 | ) | ||||||||
Financing Activities
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Redemption of preferred shares
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0 | 0 | (50,000 | ) | ||||||||
Repayment of loan
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0 | 0 | (11,000 | ) | ||||||||
Repayments to stockholders
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0 | 0 | (91,283 | ) | ||||||||
Proceeds from issuance of common stock
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1,520,870 | 743,190 | 22,159,428 | |||||||||
Advances from stockholders
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0 | 0 | 1,078,284 | |||||||||
Share issue costs
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(37,735 | ) | 0 | (414,406 | ) | |||||||
Subscriptions received
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0 | 744,649 | 514,415 | |||||||||
Proceeds from convertible debentures
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0 | 0 | 600,000 | |||||||||
Cash Provided by Financing Activities
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1,483,135 | 1,487,839 | 23,785,438 | |||||||||
Effect of Foreign Currency Translation on Cash
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0 | 0 | 46,267 | |||||||||
Inflow (Outflow) of Cash
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68,373 | (188,033 | ) | 418,608 | ||||||||
Cash, Beginning of Period
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350,235 | 535,231 | 0 | |||||||||
Cash, End of Period
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$ | 418,608 | $ | 723,264 | $ | 418,608 |
Note 5 - Supplemental Disclosure of Cash Flow Information
See notes to consolidated financial statements.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
1.
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BASIS OF PRESENTATION
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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 March 31, 2011 and June 30, 2010, the consolidated results of operations for the three and nine months ended March 31, 2011 and 2010 and the consolidated cash flows for the nine months ended March 31, 2011 and 2010. The results of operations for the three and nine months ended March 31, 2011 and 2010 are not necessarily indicative of the results to be expected for the entire fiscal year.
2.
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GOING CONCERN
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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 $776,115 for the three months ended March 31, 2011 (2010 - $546,544), a net loss of $2,299,986 for the nine months ended March 31, 2011 (2010 - $2,068,238) and an accumulated deficit of $36,221,531 (June 30, 2010 - $33,909,950) and a working capital deficiency of $305,225 as at March 31, 2011 (June 30, 2010 - $349,369). 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, without further funding, it will deplete its cash resources in approximately three 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.
F-5
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3.
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STOCKHOLDERS’ EQUITY
|
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(a)
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Preferred stock
|
Cumulative dividends on preferred stock are accrued at a rate of 5% annually, payable at the option of the Company. Each holder has the right to convert preferred shares into common stock at the average trading price ten days prior to conversion. The Company has the right to redeem the preferred shares from date of issue as follows:
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.
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(b)
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Common stock
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(i)
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During the period ended March 31, 2011, the Company completed a private placement of 1,006,979 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 503,490 shares of common stock on or before December 31, 2012 at an exercise price of $1.00 per share (exercise of the investment warrant may be required in the event that the market price exceeds $1.50 per share).
|
Gross proceeds received during the period totalled $643,285, and gross proceeds received during the year ended June 30, 2010, previously shown as subscriptions received, totalled $11,250.
The Company determined that the warrants did not contain any provisions that would preclude equity treatment.
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(ii)
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During the period ended March 31, 2011, the Company completed a private placement of 813,063 units consisting of common stock at $0.55 per share and warrants at $0.001 per share of common stock underlying the warrant to purchase 813,063 shares of common stock on or before February 28, 2013, at an exercise price of $1.00 per share (exercise of the investment warrant may be required in the event that the market price exceeds $1.50 per share).
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The Company determined that the warrants did not contain any provisions that would preclude equity treatment.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3.
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STOCKHOLDERS’ EQUITY (continued)
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(b) Common stock (continued)
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(iii)
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During the period ended March 31, 2011, the Company issued 330,879 shares of restricted common stock, and paid cash of $ 37,735, as consideration for private placement commission costs payable. The shares have been recorded at an aggregate fair value of $137,481.
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Of the amounts above, $52,719 was accrued as share issue costs as at June 30, 2010.The net of these amounts total $122,497 and such amount is included as stock issue costs in the accompanying statement of stockholders’ deficit.
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(iv)
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During the period ended March 31, 2011, the Company issued 860,800 shares of common stock upon exercise of 860,800 share purchase warrants at $0.50 per warrant, recording gross proceeds of $430,400.
|
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(v)
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During the period ended March 31, 2011, the Company issued 21,118 shares of common stock as consideration for consulting services which were recorded at $17,000 representing the fair value of the consideration received.
|
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(vi)
|
During the period ended March 31, 2011, the Company entered into two contracts for consulting services which call for stock and option (note 3(c)) awards over the term of the contracts.
|
It was determined that these were non-employee awards which did not contain a performance commitment but all terms were known up-front. In accordance with ASC 505-50, “Equity-Based Payments to Non-Employees”, the fair value of these awards is measured at the grant date and as of each subsequent reporting period until the counterparty’s performance is complete, and the total fair value expense is recognized over the service period.
In accordance with the first contract, during the period ended March 31, 2011, the Company issued 50,000 shares of restricted common stock on execution of the agreement, 75,000 shares of restricted common stock thirty days from the execution date and 125,000 shares of restricted common stock ninety days from the execution date. On the six-month and nine-month anniversaries, 125,000 shares of restricted common stock are to be issued for a total of 500,000 shares of restricted common stock. Restrictions will be removed upon contract completion.
During the period ended March 31, 2011, a total fair value of $274,742 has been recorded and included within consulting fees.
In accordance with the second contract, during the period ended March 31, 2011, the Company issued 150,000 shares of common stock on execution of the agreement. On the six-month anniversary, 100,000 shares of common stock are to be issued.
During the period ended March 31, 2011, a total fair value of $145,879 has been recorded and included within consulting fees.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3.
|
STOCKHOLDERS’ EQUITY (continued)
|
(c) Stock-based compensation
During the period ended March 31, 2011, the Company recorded stock-based compensation expense with respect to employee stock options previously granted and vested and options modified during the current period of $252,587 (nine months ended March 31, 2010 - $734,679). Of this amount, $252,587 (nine months ended March 31, 2010 - $464,509) is included in consulting fees and $nil (nine months ended March 31, 2010 - $270,170) is included in salaries.
Stock-based compensation not yet recognized at December 31, 2010 relating to non-vested employee stock options was $31,945, which will be recognized over a weighted average period of 0.32 years.
The fair value of the Company’s modified employee stock options was calculated as the difference in the fair value of the options immediately before and after the modifications and was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:
|
Before
|
After
|
||||||
Expected life (years)
|
0.05 | 2.22 | ||||||
Interest rate
|
0.14 | % | 0.58 | % | ||||
Volatility
|
19.09 | % | 121.89 | % | ||||
Dividend yield
|
0.00 | % | 0.00 | % | ||||
Estimated forfeitures
|
0.00 | % | 0.00 | % |
During the period ended March 31, 2011, the Company recorded stock-based compensation expense with respect to fully vested non-employee stock options granted during the current period of $58,660 (nine months ended March 31, 2010 - $nil) which has been included in consulting fees.
The fair value of the Company’s fully vested non-employee stock options granted was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:
Expected life (years)
|
3.82 | |||
Interest rate
|
1.69 | % | ||
Volatility
|
115.05 | % | ||
Dividend yield
|
0.00 | % | ||
Estimated forfeitures
|
0.00 | % |
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3.
|
STOCKHOLDERS’ EQUITY (continued)
|
(c) Stock-based compensation (continued)
In accordance with a contract for consulting services which calls for option awards over the term of the contract (note 3(b)(vi)), during the period ended March 31, 2011, the Company recorded stock-based compensation expense with respect to un-vested non-employee stock options granted of $71,003 (nine months ended March 31, 2010 - $nil) which has been included in consulting fees.
The fair value of the Company’s un-vested non-employee stock options granted was estimated using the Black-Scholes option pricing model with the following weighted average assumptions at March 31, 2011:
Expected life (years)
|
4.42 | |||
Interest rate
|
1.77 | % | ||
Volatility
|
113.34 | % | ||
Dividend yield
|
0.00 | % | ||
Estimated forfeitures
|
0.00 | % |
When each tranche of options granted vests, costs previously recognized, based on the fair value at the end of each reporting period, will be adjusted so that the cost ultimately recognized is equivalent to the fair value on the date the vesting period is complete.
The weighted average fair value of employee options granted during the period ended March 31, 2011 was $nil (nine months ended March 31, 2010 - $0.35) and modified during the period ended March 31, 2011 was $0.44 (nine months ended March 31, 2010 - $nil).
The weighted average fair value of non-employee options granted and vested during the period ended March 31, 2011 was $0.47 (nine months ended March 31, 2010 - $nil).
The weighted average fair value of non-employee options granted and un-vested during the period ended March 31, 2011 was $0.46 (nine months ended March 31, 2010 - $nil).
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3.
|
STOCKHOLDERS’ EQUITY (continued)
|
(d) 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
|
4,125,000 | $ | 0.25 to $ 1.00 | $ | 0.36 | |||||||
Granted
|
725,000 | $ | 0.25 to $ 0.85 | $ | 0.75 | |||||||
Outstanding, March 31, 2011
|
4,850,000 | $ | 0.25 to $1.00 | $ | 0.42 | |||||||
Exercisable, March 31, 2011
|
3,650,000 | $ | 0.25 to $ 1.00 | $ | 0.38 |
Number of Options
|
||||||||||||
Exercise
|
March 31,
|
June 30,
|
||||||||||
Expiry Date
|
Price
|
2011
|
2010
|
|||||||||
December 31, 2011(*)
|
$ | 1.00 | 110,000 | 110,000 | ||||||||
December 31, 2012
|
$ | 0.25 | 2,500,000 | 2,500,000 | ||||||||
November 15, 2013(**)
|
$ | 1.00 | 100,000 | 100,000 | ||||||||
June 1, 2014
|
$ | 0.85 | 100,000 | 0 | ||||||||
July 31, 2014
|
$ | 0.25 | 415,000 | 415,000 | ||||||||
December 1, 2014
|
$ | 0.85 | 100,000 | 0 | ||||||||
December 31, 2014
|
$ | 0.25 | 1,125,000 | 1,000,000 | ||||||||
June 1, 2015
|
$ | 0.85 | 100,000 | 0 | ||||||||
December 1, 2015
|
$ | 0.85 | 100,000 | 0 | ||||||||
June 1, 2016
|
$ | 0.85 | 100,000 | 0 | ||||||||
December 1, 2016
|
$ | 0.85 | 100,000 | 0 | ||||||||
Total outstanding
|
4,850,000 | 4,125,000 | ||||||||||
Total exercisable
|
3,650,000 | 2,925,000 |
|
*
|
During the period ended March 31, 2011, the expiry date of these options was extended from August 31, 2010 to December 31, 2011.
|
|
**
|
During the period ended March 31, 2011 the expiry date of these options was extended from November 15, 2010 to November 15, 2013.
|
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3. STOCKHOLDERS’ EQUITY (continued)
(d) Stock options (continued)
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 1,400,000 have vested and 600,000 remain unvested as at March 31, 2011.
The number of options granted during the period ended March 31, 2011, which did not vest immediately upon grant, was 600,000, all of which remain unvested as at March 31, 2011.
The weighted average remaining contractual lives for options outstanding and exercisable at March 31, 2011 were 2.68 and 2.55 years, respectively.
The total intrinsic value of options exercised during the period ended March 31, 2011 was $nil (nine months ended March 31, 2010 - $nil).
The aggregate intrinsic value of options outstanding as at March 31, 2011 was $1,341,250 of which $1,119,250 related to options that were exercisable. The intrinsic value is the difference between the period end market value of the shares and the exercise price of the award as of the measurement date. The aggregate intrinsic values exclude options having a negative aggregate intrinsic value due to awards with exercise prices greater than period end market value.
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
3. STOCKHOLDERS’ EQUITY (continued)
|
(e)
|
Stock purchase warrants
|
The following summarizes information about the Company’s stock purchase warrants outstanding:
Weighted
|
||||||||||||
Average
|
||||||||||||
Number
|
Price
|
Exercise
|
||||||||||
of Warrants
|
Per Share
|
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 | |||||||||
Issued
|
1,316,553 | $ | 1.00 | $ | 1.00 | |||||||
Exercised
|
(860,800 | ) | $ | 0.50 | $ | 0.50 | ||||||
Expired
|
(2,970,000 | ) | $ | 0.50 | $ | 0.50 | ||||||
Balance, March 31, 2011
|
6,249,705 | $ | 0.74 |
Number of Warrants
|
||||||||||||
Expiry Date
|
Exercise Price
|
March 31, 2011
|
June 30, 2010
|
|||||||||
December 31, 2011
|
$ | 0.50 | 670,000 | 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 | ||||||||
December 31, 2012
|
$ | 1.00 | 503,490 | 0 | ||||||||
February 28, 2013
|
$ | 1.00 | 813,063 | 0 | ||||||||
Total outstanding and exercisable
|
6,249,705 | 8,763,952 |
During August 2010, the Company extended the term of 670,000 warrants which were originally issued in conjunction with equity issues during 2008. The modification resulted in a deemed dividend of $131,577 which was calculated as the difference in the fair value of the warrants immediately before and after the modification using the Black-Scholes option pricing model with the following significant assumptions:
Before
|
After
|
|||||||
Risk-free interest rate
|
0.16 | % | 0.25 | % | ||||
Dividend yield
|
0 | % | 0 | % | ||||
Volatility factor
|
55.58 | % | 119.04 | % | ||||
Remaining term (years)
|
0.35 | 1.35 |
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
4.
|
INCOME TAXES
|
The Company has losses carried forward for income tax purposes to March 31, 2011. There are no current or deferred tax expenses for the three months ended March 31, 2011 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.
5.
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
Period from
February 12,
1996
|
||||||||||||
Nine Months Ended
March 31,
|
(Inception) to
|
|||||||||||
December 31,
|
||||||||||||
2011
|
2010
|
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
|
$ | 0 | $ | 0 | $ | 228,742 | ||||||
Services (provided by officers and directors)
|
$ | 0 | $ | 0 | $ | 120,000 | ||||||
Settlement of lawsuit
|
$ | 0 | $ | 0 | $ | 15,000 | ||||||
Services and financing fees
|
$ | 440,231 | $ | 81,000 | $ | 1,337,015 | ||||||
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 | ||||||
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 2011
(Unaudited)
(US Dollars)
6.
|
LOSS PER SHARE
|
Income (Numerator)
|
Weighted Average Number of Shares (Denominator)
|
Loss Per Share
|
||||||||||
Three months ended March 31, 2011
|
||||||||||||
Net loss for period
|
$ | (776,115 | ) | |||||||||
Preferred stock dividends (note 3(a))
|
(3,865 | ) | ||||||||||
Loss attributable to common shareholders
|
$ | (779,980 | ) | 57,039,087 | $ | (0.01 | ) | |||||
Nine months ended March 31, 2011
|
||||||||||||
Net loss for period
|
$ | (2,299,986 | ) | |||||||||
Preferred stock dividends (note 3(a))
|
(11,595 | ) | ||||||||||
Loss attributable to common shareholders
|
$ | (2,311,581 | ) | 55,880,918 | $ | (0.04 | ) |
Common share equivalents consisting of convertible preferred stock, stock options and warrants are not considered in the computation of diluted loss per share because their effect would be anti-dilutive.
7.
|
RESEARCH & DEVELOPMENT
|
|
As the Company is considered to be in the development stage, all research and development costs are expensed as incurred.
|
During the nine months ended March 31, 2011, the Company sold sample products totalling $3,630 (nine months ended March 31, 2010 - $nil). This amount has been credited against research and development expenses.
8.
|
SUBSEQUENT EVENT
|
The Company has evaluated subsequent events for the period after March 31, 2011 and determined that, other than what is disclosed below, there were no material subsequent events to be disclosed in these financial statements.
Subsequent to March 31, 2011 the Company entered into a consultancy agreement, the significant terms of which are as follows:
·
|
a monthly fee of $14,000.
|
|
·
|
issue of 250,000 common shares - 150,000 common shares on the execution of the agreement (un-issued) and 100,000 common shares on the six-month anniversary of the execution of the agreement (un-issued).
|
|
·
|
grant of 600,000 options on execution of the agreement at an exercise price of $0.50 with vesting dates between October 15, 2011 and April 15, 2014 and expiry dates between October 15, 2014 and April 15, 2017.
|
|
·
|
grant of 1,250,000 options on the one-year anniversary of the agreement at an exercise price of $0.001 with vesting dates between April 15, 2012 and April 15, 2014 and expiry dates between April 15, 2015 and April 15, 2017.
|
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 development, design knowledge, and trade secrets.
We have aggressively pursued U.S. patent protection for developments related to our ElectriPlast™ technologies. To date, we have 51 issued U.S. patents. For these patents issued and maintained, we retain exclusive rights in the U.S. to manufacture, use, sell, and license articles and processes covered under the patent claims.
We continue to develop our portfolio by pursuing intellectual property protection for new technological developments through new patent filings. We continue to exploit existing patent filings through aggressive continuation practice. We presently have 12 U.S. patent applications pending. No assurances can be given that any these patent applications will be issued.
To date, we have elected to discontinue patent prosecution for 57 U.S. patent applications where the USPTO refused allowance and where, in our view, continued prosecution was no longer productive. However, where we have elected to discontinue patent prosecution for certain technologies, we continue to pursue commercialization activities as we see excellent market opportunities to exploit our expertise.
Developments in U.S. patent law since KSR v. Teleflex (2007) have made obtaining allowance of patent applications more difficult by easing of the standard applied for obviousness-type rejections. These developments have resulted in reduced rates of patent issuance for all applicants and assignees, including Integral Technologies, Inc. Nevertheless, we continue to pursue intellectual property protection through our patent and trademark portfolio while constantly evaluating new and existing filings to judiciously apply resources to the most critical technologies.
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 thirty-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 March 31, 2011, we have accrued an accumulated deficit of approximately $36.2 million.
At March 31, 2011, all of our assets of $418,608 were current and consist of cash of $418,608. All of our property and equipment has been fully depreciated.
At March 31, 2011 all of our liabilities of $723,833 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 March 31, 2011, total stockholder’s deficit was $305,225.
Results of Operations for the Three Months Ended March 31, 2011 compared to the Three Months Ended March 31, 2010
Our net loss for the quarter ended March 31 2011, was $776,115 compared to a net loss of $546,544 for the corresponding period of the prior fiscal year, an increase of $229,571 which was primarily a result of approximate increases in stock based compensation of $16,096, increases in non cash issuance of shares in consideration for services of $50,032, increases in consulting fees of $180,506 and decreases in R&D of $26,397.
Total expenses for the quarter ended March 31, 2011, were $776,122 compared to total expenses of $546,552 for the corresponding period of the prior fiscal year, an increase of $229,570 which was primarily a result of increases in stock based compensation of $16,096, increases in non cash issuance of shares in consideration for services of $50,032, increases in consulting fees of $180,506 and decrease in R&D of $26,394.
Total income for the quarter ended March 31, 2011, was comprised of “other income” of $7 compared to “other income” of $8 for the corresponding period of the prior fiscal year. The category of “other income” consists of interest income.
Consulting expenses during the quarter ended March 31, 2011, were $505,526 which included non-cash, issuance of shares in consideration for consulting services in the amount of $131,032 and $144,878 for non-cash stock based compensation charges. In the corresponding period of the prior fiscal year, consulting expenses were $258,892 which included $128,782 of non-cash stock based compensation charges. The remaining increase relates to additional fees incurred with respect to the new consultancy agreements entered into.
Salaries and benefits expenses during the quarter ended March 31, 2011, were $110,000. In the corresponding period of the prior fiscal year, salaries and benefits expenses were $110,000.
Research and development costs of $50,489 during the quarter ended March 31, 2011, are attributable to refining the manufacturing process of our ElectriPlast™ material. In the corresponding period of the prior fiscal year, the amount expensed under this category was $76,886.
During the next twelve months, we do not anticipate increasing our staff.
Results of Operations for the Nine Months Ended March 31, 2011 compared to the Nine Months Ended March 31, 2010
Our net loss for the nine months ended March 31 2011, was $2,299,986, compared to a net loss of $2,068,238 for the corresponding period of the prior fiscal year, a increase of $231,748 which was primarily a result of decreases in stock based compensation of $352,429 increases in salaries and consulting fees of $188,620, increases in R&D of $22,561 and increases in fair value of shares issued for services of $356,621.
Total expenses for the nine months ended March 31, 2011, were $2,300,778 compared to total expenses of $2,068,379 for the corresponding period of the prior fiscal year, an increase of $232,399 which was primarily a result of decreases in stock based compensation of $352,429 offset by increases in salaries and consulting fees of $188,620, increases in R&D of $22,561 and increases in fair value of shares issued for services of $356,621.
Total income for the nine months ended March 31, 2011, was comprised of “other income” of $792 compared to “other income” of $141 for the corresponding period of the prior fiscal year, an increase of $651. The category of “other income” consists of interest income.
Consulting expenses during the nine months ended March 31, 2011, were $1,403,487 which included non-cash, issuance of shares in consideration for consulting services in the amount of $437,621 and $382,250 for non-cash stock based compensation charges. In the corresponding period of the prior fiscal year, consulting expenses were $940,505 which included non-cash, issuance of shares in consideration for consulting services in the amount of $81,000 and $464,509 for non-cash stock based compensation charges. The remaining increase relates to additional fees incurred with respect to the new consultancy agreements entered into.
Salaries and benefits expenses during the nine months ended March 31, 2011, were $330,000 which included non-cash, stock based compensation charges of $0. In the corresponding period of the prior fiscal year, salaries and benefits expenses were $598,527 which included non-cash, stock based compensation charges of $270,170.
Research and development costs of $197,036 during the nine months ended March 31, 2011, are attributable to refining the manufacturing process of our ElectriPlast™ material. In the corresponding period of the prior fiscal year, the amount expensed under this category was $174,475.
For the nine months ended March 31, 2011, our cash used in operating activities was $1,414,762 compared to $1,299,806 used in the corresponding period of the prior fiscal year for an increase of $114,956.
For the nine months ended March 31, 2011, our cash provided by financing activities was $1,483,135 compared to $1,487,839 provided in the corresponding period of the prior fiscal year a decrease of $4,704.
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 March 31, 2011, we had $418,608 in cash on hand.
Management believes that there is adequate cash on hand to fund operations over the next three 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
In connection with the preparation of this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, our management, including our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). 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 and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2011.
Changes in Internal Control over Financial Reporting
During our most recent fiscal quarter, no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
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.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the period ended March 31, 2011, we issued 128,337 shares of common stock as consideration for satisfaction of $79,942 in unpaid private placement commission costs. 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 March 31, 2011, we issued 125,000 shares of common stock as consideration for consulting services. 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 March 31, 2011, we issued 560,800 shares of common stock upon exercise of 560,800 share purchase warrants at $0.50 per share, and received gross proceeds of $280,400. 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 March 31, 2011, we issued 866,911 shares of common stock for which we received gross proceeds of $482,998. 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.
ITEM 6. Exhibits
10.01
|
Consulting Agreement between Integral Technologies, Inc. and Herbert C. Reedman Jr. dated April 15, 2011.(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) Filed herewith.
(2) Filed herewith.
SIGNATURES
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: May 16, 2011
Integral Technologies, Inc. | |||
By:
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/s/ William S. Robinson | ||
William S. Robinson, Chief Executive Officer | |||
and Principal Executive Officer |
By:
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/s/ William A. Ince | ||
William A. Ince, Chief Financial Officer and | |||
Principal Accounting Officer |
Date: May 16, 2011
EXHIBIT INDEX
Consulting Agreement between Integral Technologies, Inc. and Herbert C. Reedman Jr. dated April 15, 2011.(1)
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||
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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) Filed herewith.
(2) Filed herewith.
6