Filed Pursuant to Rule 424(b)(3)
Registration No. 333-112767
Prospectus Supplement No. 1
Dated February 16, 2005 (to Prospectus dated December 3, 2004)
INTEGRAL TECHNOLOGIES, INC.
This Prospectus Supplement No. 1 is part of the Prospectus dated December 3,
2004 related to an offering of up to 11,556,938 shares of our common stock by
the persons identified as "selling securityholders" in the Prospectus.
A copy of our Quarterly Report on Form 10-QSB for the fiscal quarter ended
December 31, 2004 is attached hereto.
The date of this Prospectus Supplement No. 1 is February 16, 2005.
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file number: 0-28353
INTEGRAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in it charter)
NEVADA 98-0163519
- ----------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
805 W. ORCHARD DRIVE, SUITE 7, BELLINGHAM, WASHINGTON 98225
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(360) 752-1982
---------------------------
(issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: AS OF FEBRUARY 10, 2005, THE ISSUER
-----------------------------------
HAD 40,225,849 SHARES OF $.001 PAR VALUE COMMON STOCK OUTSTANDING.
- --------------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
INDEX
PAGE
----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . F-1
Item 2. Management's Plan of Operation. . . . . . . . . . . . . . . . . . 1
Item 3. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . 2
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Changes in Securities and Use of Proceeds . . . . . . . . . . . . 3
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . . . . 3
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . 3
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . 4
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
(U.S. DOLLARS)
(UNAUDITED)
INDEX PAGE
- ----- ----
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheet 1
Consolidated Statement of Operations 2
Consolidated Statement of Stockholders' Equity (Deficiency) 3
Consolidated Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5 - 6
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(U.S. DOLLARS)
=================================================================================================
DECEMBER 31, JUNE 30,
2004 2004
=================================================================================================
ASSETS
CURRENT
Cash $ 2,821,907 $ 3,905,773
Prepaid expenses 22,765 26,091
- -------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,844,672 3,931,864
PROPERTY AND EQUIPMENT 19,742 31,250
INVESTMENTS 1 1
- -------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 2,864,415 $ 3,963,115
=================================================================================================
LIABILITIES
CURRENT
Accounts payable and accruals $ 294,382 $ 522,337
Due to West Virginia University Research Corporation (note 4) 397,296 397,296
- -------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 691,678 919,633
- -------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
PREFERRED STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
20,000,000 Shares authorized
321,038 (June 30, 2004 - 321,036) issued and outstanding 321,038 321,038
Common Stock and Paid-in Capital in Excess of $0.001 Par Value
50,000,000 Shares authorized
40,225,849 (June 30, 2004 - 40,181,849) issued and outstanding 20,252,085 20,197,085
PROMISSORY NOTES RECEIVABLE (66,500) (66,500)
OTHER COMPREHENSIVE INCOME 46,267 46,267
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (18,380,153) (17,454,408)
- -------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 2,172,737 3,043,482
- -------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 2,864,415 $ 3,963,115
=================================================================================================
F -1
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(U.S. DOLLARS)
============================================================================================================================
PERIOD FROM
FEBRUARY 12,
1996
THREE MONTHS ENDED SIX MONTHS ENDED (INCEPTION) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2004 2003 2004 2003 2004
- ----------------------------------------------------------------------------------------------------------------------------
REVENUE $ 0 $ 0 $ 0 $ 676 $ 238,150
COST OF SALES 0 0 0 0 216,016
- ----------------------------------------------------------------------------------------------------------------------------
0 0 0 676 22,134
OTHER INCOME (NOTE 3) 33,969 0 33,969 0 636,812
- ----------------------------------------------------------------------------------------------------------------------------
33,969 0 33,969 676 658,946
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES
Legal and accounting 217,323 112,114 386,194 166,254 2,471,761
Salaries and benefits 120,156 130,750 250,899 207,500 4,192,370
Consulting 58,948 40,266 136,462 165,825 2,828,707
General and administrative 49,981 21,903 74,855 42,013 704,868
Travel and entertainment 27,613 25,587 56,779 50,431 933,579
Rent 7,212 6,706 14,444 14,985 301,693
Telephone 4,195 8,296 12,952 16,611 308,627
Bank charges and interest, net 7,406 198 7,595 693 170,824
Advertising 0 1,000 0 1,000 277,255
Research and development 0 0 0 0 1,244,755
Interest on beneficial conversion feature 0 0 0 0 566,456
Settlement of lawsuit 0 0 0 0 45,250
Bad debts 0 0 0 0 52,613
Remuneration pursuant to proprietary,
non- competition agreement 0 0 0 0 711,000
Financing fees 0 0 0 0 129,542
Write-off of investments 0 0 0 0 1,249,999
Write-down of license and operating assets 0 0 0 0 1,855,619
Depreciation and amortization 5,750 5,758 11,508 11,516 304,644
- ----------------------------------------------------------------------------------------------------------------------------
498,584 352,578 951,688 676,828 18,349,562
- ----------------------------------------------------------------------------------------------------------------------------
NET LOSS FOR PERIOD $ 464,615 $ 352,578 $ 917,719 $ 676,152 $ 17,690,616
============================================================================================================================
NET LOSS PER COMMON SHARE $ (0.01) $ (0.01) $ (0.02) $ (0.01)
============================================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 40,225,849 33,734,495 40,210,545 33,722,312
============================================================================================================================
F -2
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(UNAUDITED)
(U.S. DOLLARS)
====================================================================================================
COMMON PREFERRED
STOCK AND STOCK AND
SHARES OF PAID-IN SHARES OF PAID-IN
COMMON CAPITAL PREFERRED CAPITAL PROMISSORY
STOCK IN EXCESS STOCK IN EXCESS NOTES
ISSUED OF PAR ISSUED OF PAR RECEIVABLE
- ----------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2003 32,923,855 $13,335,752 439,610 $ 439,610 $ (66,500)
SHARES ISSUED FOR
Cash on private placement 6,609,336 6,042,935 0 0 0
Cash on exercise of options 25,000 25,000 0 0 0
Settlement of lawsuit (note 9(b)) 37,500 35,250 0 0 0
Services 25,000 21,873 0 0 0
Redemption of preferred shares 415,000 415,000 (118,572) (118,572) 0
Exercise warrants 288,298 0 0 0 0
Shares returned to treasury for
cancellation (142,140) 0 0 0 0
Stock option compensation 0 321,275 0 0 0
Dividends on preferred shares 0 0 0 0 0
Net loss for year 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2004 40,181,849 20,197,085 321,038 321,038 (66,500)
SHARES ISSUED FOR
Settlement of debt 44,000 55,000 0 0 0
Dividends on preferred shares 0 0 0 0 0
Net loss for period 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2004 40,225,849 $20,252,085 321,038 321,038 $ (66,500)
====================================================================================================
DEFICIT
ACCUMULATED
OTHER DURING THE TOTAL
SHARE COMPREHENSIVE DEVELOPMENT STOCKHOLDERS'
SUBSCRIPTIONS INCOME STAGE EQUITY
- ----------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2003 $ 211,915 $ 46,267 $(14,595,116) $ (628,072)
SHARES ISSUED FOR
Cash on private placement (211,915) 0 0 5,831,020
Cash on exercise of options 0 0 0 25,000
Settlement of lawsuit (note 9(b)) 0 0 0 35,250
Services 0 0 0 21,873
Redemption of preferred shares 0 0 (296,428) 0
Exercise warrants 0 0 0 0
Shares returned to treasury for
cancellation 0 0 0 0
Stock option compensation 0 0 0 321,275
Dividends on preferred shares 0 0 (19,016) (19,016)
Net loss for year 0 0 (2,543,848) (2,543,848)
- ----------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2004 0 46,267 (17,454,408) 3,043,482
SHARES ISSUED FOR
Settlement of debt 0 0 0 55,000
Dividends on preferred shares 0 0 (8,026) (8,026)
Net loss for period 0 0 (917,719) (917,719)
- ----------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2004 $ 0 $ 46,267 $(18,380,153) $ 2,172,737
====================================================================================================
F -3
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(U.S. DOLLARS)
=============================================================================================================
PERIOD FROM
FEBRUARY 12,
1996
SIX MONTHS ENDED (INCEPTION) TO
DECEMBER 31, DECEMBER 31,
2004 2003 2004
=============================================================================================================
OPERATING ACTIVITIES
Net loss $ (917,719) $(676,152) $(17,690,616)
Items not involving cash
Write-down of investment 0 0 1,249,999
Proprietary, non-competition agreement 0 0 711,000
Depreciation and amortization 11,508 11,516 330,199
Write-off of accounts payable (note 3) (33,969) 0 (636,812)
Consulting services and financing fees 0 40,000 957,273
Stock-option compensation 0 0 1,133,483
Interest on beneficial conversion feature 0 0 566,456
Settlement of lawsuit 0 0 60,250
Write-down of license and operating assets 0 0 1,853,542
Bad debts 0 0 77,712
CHANGES IN NON-CASH WORKING CAPITAL
Due from affiliated company 0 0 (116,000)
Notes and account receivable 0 0 (109,213)
Inventory 0 0 (46,842)
Prepaid expenses 3,326 (28,859) (22,765)
Other 0 0 (2,609)
Accounts payable and accruals (147,012) 22,124 599,883
Due to West Virginia University Research Corporation 0 0 397,296
- -------------------------------------------------------------------------------------------------------------
CASH USED IN OPERATING ACTIVITIES (1,083,866) (631,371) (10,687,764)
- -------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of property, equipment and intangible assets 0 0 (200,935)
Assets acquired and liabilities assumed on purchase of subsidiary 0 0 (129,474)
Investment purchase 0 0 (2,000,000)
License agreement 0 0 (124,835)
- -------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 0 0 (2,455,244)
- -------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of loan 0 0 (45,000)
Repayments to stockholders 0 0 (94,046)
Subscriptions received 0 0 226,665
Issuance of common stock 0 482,962 14,380,165
Advances from stockholders, net of repayments 0 0 1,078,284
Share issue cost 0 0 (227,420)
Proceeds from convertible debentures 0 0 600,000
- -------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES 0 482,962 15,918,648
- -------------------------------------------------------------------------------------------------------------
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH 0 0 46,267
- -------------------------------------------------------------------------------------------------------------
INFLOW (OUTFLOW) OF CASH (1,083,866) (148,409) 2,821,907
- -------------------------------------------------------------------------------------------------------------
CASH, BEGINNING OF PERIOD 3,905,773 174,210 0
CASH, END OF PERIOD $ 2,821,907 $ 25,801 $ 2,821,907
=============================================================================================================
F -4
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 2004
(UNAUDITED)
(U.S. DOLLARS)
================================================================================
1. BASIS OF PRESENTATION
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United
States for interim financial information. These financial statements are
condensed and do not include all disclosures required for annual financial
statements. The organization and business of the Company, accounting
policies followed by the Company and other information are contained in the
notes to the Company's audited consolidated financial statements filed as
part of the Company's June 30, 2004 Form 10-KSB.
In the opinion of the Company's management, these consolidated financial
statements reflect all adjustments necessary to present fairly the
Company's consolidated financial position at December 31, 2004 and June 30,
2004, the consolidated results of operations, stockholders' equity and
consolidated statements of cash flows for the three and six months ended
December 31, 2003 and 2004. The results of operations for the three and six
months ended December 31, 2004 are not necessarily indicative of the
results to be expected for the entire fiscal year.
2. STOCKHOLDERS' EQUITY
(a) During the period ended December 31, 2004, the Company issued 44,000
shares to settle $55,000 of debt.
(b) During the period ended December 31, 2004, the Company extended the
expiry date of 790,000 options. In accordance with FIN 44, this
results in a new measurement of compensation cost. Since both the fair
value as well as the intrinsic value at the new measurement date
resulted in a value lower than the original amount recorded, no
additional compensation expense is required.
3. OTHER ITEMS
During the period, the Company reversed $33,968 payable to a company which
became bankrupt.
F -5
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 2004
(UNAUDITED)
(U.S. DOLLARS)
================================================================================
4. SUBSEQUENT EVENTS
Subsequent to December 31, 2004, the Company settled all past and present
claims that the Company and Mr. James Smith and his personal company,
Integral Concepts, Inc., have against each other. All parties will release
all claims against each other. In addition, Mr. Smith will return to the
Company 40,000 shares of its common stock.
As part of a global settlement, the Company, West Virginia University (WVU)
and West Virginia Research Corp. (WVRUC) have mutually agreed to release
all past and present claims that each has against each other under the
following terms:
1. WVU and WVRUC release all past and present claims it has against
the Company, including $397,296 in claimed amounts, vigorously
contested by the Company for past development work performed by
WVURC on the Plasma Ignition Technology, the Colorvision
Technology, and the CTHA Technology.
2. Cancellation of the licensing agreements between WVU and Integral
Concepts, Inc, for the Plasma Ignition Technology, the
Colorvision Technology, and the CTHA Technology, which had been
previously sub-licensed by Integral Concepts, Inc. to the Company
or its subsidiaries.
3. WVU will issue new licensing agreements for the aforementioned
technologies, directly to the Company.
In return, the Company agrees to issue 40,000 restricted shares of its
common stock to WVU.
As a result of this settlement, the Company will in the next quarter
reverse an accrual of $397,296 presently recorded in its accounts.
F -6
ITEM 2. PLAN OF OPERATION.
The following discussion and analysis should be read in conjunction with
our financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. Our actual results could differ
materially from those discussed here.
To date we have recorded nominal revenues from the sales of prototypes. We
are still considered a development stage company for accounting purposes. From
inception on February 12, 1996 through December 31, 2004, we have accrued an
accumulated deficit of approximately $18.4 million.
For the six month period ended December 31, 2004, cash has decreased by
$1,083,866, from $3,905,773 on June 30, 2004, to $2,821,907 on December 31,
2004.
Our net loss for the quarter ended December 31, 2004 was $464,615, compared
to a net loss of $352,578 in the corresponding period of the prior fiscal year.
The primary expenses during the quarter were salaries ($120,156), consulting
fees ($58,948) and legal and accounting ($217,323). Legal fees were
exceptionally high and primarily related to costs associated with pursuing and
maintaining technology patent filings (approximately $138,000) and costs
incurred in defending a lawsuit (approximately $59,000). The lawsuit was settled
in January 2005 (see Part II, Item 1, for a description of the settlement).
We continue to focus substantially all of our resources on the research,
development, and commercialization of its Plastenna and Electriplast
technologies. We will not be devoting any of our resources on the further
research, development and commercialization of the other technologies in which
we have an interest during the next twelve months.
Plastenna is a radio frequency conductive antenna made of resin-based
material. Plastenna can be molded and used in wireless handheld devices such as
cellular phones and PDAs, enabling the antenna to be molded into the device or
being the device's molded body itself, replacing the traditional detachable
metal antenna. Plastennas can also add covertness to numerous other antenna
applications by concealing them to be handles, buttons, racks, mirror housings,
moldings and or many other parts within vehicles, boats, aircraft, etc.
Electriplast is an electrically conductive composite polymer technology.
The Electriplast polymer is a compounded, pelletized formulation of resin-based
materials, which are combined with a proprietary controlled, balanced
concentration of micron conductive materials contained within the manufactured
pellet. The pellets can then be formed, like plastic or rubber, using
conventional molding techniques and conventional molding equipment. Electriplast
can be molded into infinite shapes and sizes and is electrically conductive as
if it were metal.
We have filed over 85 patent submissions for a variety of applications of
Electriplast such as; antennas, shielding, lighting circuitry, switch actuators,
resistors, medical devices and cable connectors.
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. We will be relying on contract manufacturers to produce
products.
We anticipate spending approximately $250,000 over the next twelve months
on ongoing research and development (primarily salaries) of the different
applications and uses of our technologies.
During the next twelve months, we do not anticipate increasing staff.
1
To date, we have relied on loans from management and management's ability
to raise capital through debt and equity private placement financings to fund
its operations. During the last fiscal year, we raised capital through two
private placements by selling common stock and common stock purchase warrants:
1. In September 2003, we completed a private placement with ten
investors and sold 898,336 shares of our common stock at $.75 per share and
warrants to purchase 449,168 shares of common stock within two years at an
exercise price of $1.00 per share. Aggregate proceeds from the sale of the
common stock was $673,752. Pursuant to the terms of the offering, we filed a
registration statement to register the shares of common stock (including the
shares of common stock underlying the warrants), for resale by the investors.
2. On January 14, 2004, we completed a private placement of our
securities and raised $5,711,000 in gross proceeds. The transaction was
completed pursuant to a Securities Purchase Agreement dated December 26, 2003,
with Wellington Management Company, LLP, for a private offering of 57,115 units
("Units") of equity securities, each Unit consisting of 100 shares of common
stock (the "Common Stock"), and one warrant (the "Warrant") convertible into 30
shares of Common Stock, at a purchase price of $100.00 per Unit. Wellington
Management Company, LLP acted as an investment advisor on behalf of eleven
institutional investors. By mutual agreement with the Investors, closing
occurred on January 14, 2004. Each Warrant may be exercised in whole or in part
at any time, and from time to time, during the period commencing on April 30,
2004 and expiring on December 31, 2009, and entitles the holder to receive
shares of common stock for no additional consideration. Pursuant to the
Securities Purchase Agreement, we filed a registration statement to register the
shares of Common Stock (including the share of common stock underlying the
Warrants), for resale by the investors. Wells Fargo Securities, LLC, served as
placement agent for us and was paid a fee of six percent of the gross proceeds
raised from the offering.
As a result of the private placement financing that was completed in
January 2004, we will have adequate funds available to fund our operations over
the next twelve months.
ITEM 3. CONTROLS AND PROCEDURES
Based on their most recent evaluation, which was completed as of the end of the
period covered by this periodic report on Form 10-QSB, the Company's Chief
Executive Officer and Chief Financial Officer believe the Company's disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are
effective to ensure that information required to be disclosed by the Company in
this report is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. During the
fiscal quarter to which this report relates, there were no changes in the
Company's internal controls or other factors that could significantly affect
these controls subsequent to the date of their evaluation and there were no
corrective actions with regard to deficiencies and material weaknesses.
2
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company has settled the legal proceeding that was originally filed against
the Company by James E. Smith in April 2003, in West Virginia.
Pursuant to a settlement agreement executed in January 2005, the Company and Mr.
Smith agreed to a mutual release in full of all claims that each had against
each other and their respective affiliates In addition, Mr. Smith will return to
the Company 40,000 shares of common stock within 60 days. The lawsuit will be
dismissed with prejudice within 20 days after the shares are returned to the
Company.
As part of a global settlement, pursuant to a settlement agreement executed in
February 2005, the Company, West Virginia University ("WVU") and West Virginia
Research Corp. ("WVRUC") have agreed to a mutual release in full of all claims
that each had against each other. In addition:
1. WVU and WVRUC released all claims it has against the Company, including
$397,296 alleged due for past development work performed by WVURC on the Plasma
Ignition Technology, the Colorvision Technology, and the CTHA Technology.
2. WVU and WVRUC cancelled licensing agreements between WVU and Mr. Smith's
private company, Integral Concepts, Inc., for the Plasma Ignition Technology,
the Colorvision Technology, and the CTHA Technology, which had been previously
sub-licensed by Integral Concepts, Inc. to the Company and its subsidiaries.
3. WVU issued new licensing agreements for the aforementioned technologies
directly to the Company.
4. The Company agreed to issue 40,000 restricted shares of its common stock to
WVU within 30 days after the Company receives 40,000 shares from Mr. Smith,
pursuant the Company's settlement agreement with Mr. Smith.
ITEM 2. CHANGES IN SECURITIES - None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.
ITEM 5. OTHER INFORMATION - None.
3
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Exhibits.
Exhibit No. Description
- ------------ -----------
3.1 Articles of Incorporation, as amended and currently in effect.
(Incorporated by reference to Exhibit 3.1 of Integral's
registration statement on Form 10-SB (file no. 0-28353) filed
December 2, 1999.)
3.2 Bylaws, as amended and restated on December 31, 1997.
(Incorporated by reference to Exhibit 3.2 of Integral's
registration statement on Form 10-SB (file no. 0-28353) filed
December 2, 1999.)
10.12 Integral Technologies, Inc. 2001 Stock Plan dated January 2, 2001,
as amended December 17, 2001. (Incorporated by reference to
Exhibit 10.12 of Integral's registration statement on Form S-8
(file no. 333-76058).)
10.15 Integral Technologies, Inc. 2003 Stock Plan dated April 4,
2003 (Incorporated by reference to Exhibit 10.15 of Integral's
registration statement on Form S-8 (file no. 333-104522).)
10.16 Securities Purchase Agreement dated December 26, 2003, between
the Registrant and Wellington Management Company, LLP.
(Incorporated by reference to Exhibit 10.16 of Integral's Current
Report on Form 8-K dated January 14, 2004 (filed January 28,
2004).)
10.17 Form of Common Stock Purchase Warrant related to the offering
of securities described in Exhibit 10.16. (Incorporated by
reference to Exhibit 10.17 of Integral's Current Report on Form
8-K dated January 14, 2004 (filed January 28, 2004).)
31.1 Section 302 Certification by the Corporation's Chief Executive
Officer. (Filed herewith).
31.2 Section 302 Certification by the Corporation's Chief Financial
Officer. (Filed herewith).
32.1 Section 906 Certification by the Corporation's Chief Executive
Officer. (Filed herewith).
32.2 Section 906 Certification by the Corporation's Chief Financial
Officer. (Filed herewith).
(b) Reports on Form 8-K - None.
4
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTEGRAL TECHNOLOGIES, INC.
By: /s/ William S. Robinson
--------------------------------------------
William S. Robinson, Chief Executive Officer
By: /s/ William A. Ince
--------------------------------------------
William A. Ince, Chief Financial Officer and
Principal Accounting Officer
Date: February 14, 2005
5
EXHIBIT INDEX
Exhibit No. Description
- ------------ -----------
3.1 Articles of Incorporation, as amended and currently in effect.
(Incorporated by reference to Exhibit 3.1 of Integral's
registration statement on Form 10-SB (file no. 0-28353) filed
December 2, 1999.)
3.2 Bylaws, as amended and restated on December 31, 1997.
(Incorporated by reference to Exhibit 3.2 of Integral's
registration statement on Form 10-SB (file no. 0-28353) filed
December 2, 1999.)
10.12 Integral Technologies, Inc. 2001 Stock Plan dated January 2, 2001,
as amended December 17, 2001. (Incorporated by reference to
Exhibit 10.12 of Integral's registration statement on Form S-8
(file no. 333-76058).)
10.15 Integral Technologies, Inc. 2003 Stock Plan dated April 4,
2003 (Incorporated by reference to Exhibit 10.15 of Integral's
registration statement on Form S-8 (file no. 333-104522).)
10.16 Securities Purchase Agreement dated December 26, 2003, between
the Registrant and Wellington Management Company, LLP.
(Incorporated by reference to Exhibit 10.16 of Integral's Current
Report on Form 8-K dated January 14, 2004 (filed January 28,
2004).)
10.17 Form of Common Stock Purchase Warrant related to the offering
of securities described in Exhibit 10.16. (Incorporated by
reference to Exhibit 10.17 of Integral's Current Report on Form
8-K dated January 14, 2004 (filed January 28, 2004).)
31.1 Section 302 Certification by the Corporation's Chief Executive
Officer. (Filed herewith).
31.2 Section 302 Certification by the Corporation's Chief Financial
Officer. (Filed herewith).
32.1 Section 906 Certification by the Corporation's Chief Executive
Officer. (Filed herewith).
32.2 Section 906 Certification by the Corporation's Chief Financial
Officer. (Filed herewith).
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William S. Robinson, Chief Executive Officer of Integral Technologies, Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB for the period ended
December 31, 2004 of Integral Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
February 14, 2005
/s/ William S. Robinson
- --------------------------------------------
William S. Robinson, Chief Executive Officer
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William A. Ince, Chief Financial Officer of Integral Technologies, Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB for the period ended
December 31, 2004 of Integral Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
February 14, 2005
/s/ William A. Ince
- ----------------------------------------
William A. Ince, Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Solely for the purposes of complying with, and the extent required by 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the
undersigned certifies, in his capacity as the Chief Executive Officer of
Integral Technologies, Inc., that, to his knowledge, the quarterly report of the
company on Form 10-QSB for the period ended December 31, 2004, fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 and that the information contained in the report fairly presents, in all
material respects, the company's financial condition and results of operations.
February 14, 2005
/s/ William S. Robinson
- --------------------------------------------
William S. Robinson, Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Solely for the purposes of complying with, and the extent required by 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the
undersigned certifies, in his capacity as the Chief Financial Officer of
Integral Technologies, Inc., that, to his knowledge, the quarterly report of the
company on Form 10-QSB for the period ended December 31, 2004, fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 and that the information contained in the report fairly presents, in all
material respects, the company's financial condition and results of operations.
February 14, 2005
/s/ William A. Ince
- ----------------------------------------
William A. Ince, Chief Financial Officer