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<p style="font-family:Times New Roman, Times, serif;font-size:18pt;margin:0pt;text-align:center;"><b>UNITED STATES<br>
<font style="font-family:Times New Roman, Times, serif;font-size:18pt;">SECURITIES AND EXCHANGE COMMISSION</font></b><br>
<font style="font-family:Times New Roman, Times, serif;font-size:12pt;">WASHINGTON, D.C. 20549</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:18pt;margin:0pt;text-align:center;"><b>FORM 10-Q</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:18pt;margin:0pt;text-align:center;"><i><b>&nbsp;</b></i><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">(Mark One)</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE<br>
<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">ACT OF 1934</font></b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>FOR THE QUARTERLY PERIOD ENDED </b><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><b>DECEMBER 31</b><b>, </b><b>201</b><b>6</b><b>.</b></font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;text-indent:0pt;"><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">OR</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT<br>
<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">OF 1934</font></b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>FOR THE TRANSITION FROM _______ TO ________.</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><i>COMMISSION FILE NUMBER 0-28353</i></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:18pt;margin:0pt;text-align:center;"><b>INTEGRAL TECHNOLOGIES, INC. </b></p>

<p style="font-size: 10pt; margin: 0pt; text-align: center;"><b>&nbsp;</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;">(Exact Name of Registrant as Specified in its Charter)</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:13.5pt;margin-top:0pt;text-align:center;"><u>Nevada </u></p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:31.5pt;margin-top:0pt;text-align:center;">98-0163519</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:13.5pt;margin-top:0pt;text-align:center;">(State or other jurisdiction of</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:31.5pt;margin-top:0pt;text-align:center;">(I.R.S. Employer</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:13.5pt;margin-top:0pt;text-align:center;">incorporation or organization)</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:31.5pt;margin-top:0pt;text-align:center;">Identification No.)</p>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:36pt;margin-top:0pt;text-align:center;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:155.9pt;"><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">2605 Eastside Park Road Suite 1, Evansville, Indiana 47715</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:36pt;margin-top:0pt;text-align:center;">&nbsp;<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">(Address of principal executive offices) (Zip Code)</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;">Issuer&#39;s telephone number: (<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">812) 550-1770</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0.05pt;margin-right:0pt;margin-top:0pt;text-align:left;">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 <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&#9746;</font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">No &#9744;</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0.05pt;margin-right:0pt;margin-top:0pt;text-align:left;">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 <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&#9746;</font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">No &#9744;</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">company. See the definitions of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b-2 of the Exchange Act.</font></p>

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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:5.4pt;margin-right:0pt;margin-top:0pt;text-align:center;">&nbsp;<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Large accelerated filer &#9744;</font></p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:5.4pt;margin-right:0pt;margin-top:0pt;text-align:center;">Accelerated filer <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&#9744;</font></p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:5.4pt;margin-right:0pt;margin-top:0pt;text-align:center;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:5.4pt;margin-right:0pt;margin-top:0pt;text-align:center;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:5.4pt;margin-right:0pt;margin-top:0pt;text-align:center;">Non-accelerated filer <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&#9744;</font></p>
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			<td style="vertical-align:middle;width:50%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:23.4pt;margin-right:0pt;margin-top:0pt;text-align:center;">Smaller reporting <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">company&nbsp;&#9746;</font></p>
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<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Indicate by check mark whether the registrant is a shell <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">State the number of shares outstanding of each of the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">issuer&#39;s classes of common equity, as of the latest practicable date: As of February 10, 2017, there were 140,402,603</font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">outstanding shares of the Registrant&#39;s Common Stock, $0.001 par value. </font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

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<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>INTEGRAL TECHNOLOGIES, INC. </b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>DECEMBER 31</b><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><b>, </b><b>201</b><b>6</b><b> </b><b>QUARTERLY REPORT ON FORM 10-Q</b></font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>TABLE OF CONTENTS </b></p>

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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;"><b>Page</b></p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;"><b>PART I - FINANCIAL INFORMATION</b></p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:right;">&nbsp;</p>
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			<td style="vertical-align: top; width: 90%;">Item 1. Financial Statements</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
		</tr>
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			<td style="vertical-align: top; width: 90%;">&nbsp;</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Consolidated Balance Sheets</p>
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			<td style="vertical-align: top; width: 5%;">F-1</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">Consolidated Statement<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">s of Operations</font></td>
			<td style="vertical-align: top; width: 5%;">F-2</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">&nbsp;</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">Consolidated Statement<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">s of Cash Flows</font></td>
			<td style="vertical-align: top; width: 5%;">F-3</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">&nbsp;</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">Notes to Consolidated Financial Statements</td>
			<td style="vertical-align: top; width: 5%;">F-4</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">&nbsp;</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
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			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 2. Management<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s Discussion and Analysis and Results of Operations</font></p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">1</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 3. Quantitative and Qualitative Disclosure About Market Risk</p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">5</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 4. Controls and Procedures</p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">5</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:justify;">&nbsp;</p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;"><b>PART II - OTHER INFORMATION</b></p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 1. Legal Proceedings</p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">7</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 1A. Risk Factors</p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">7</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">7</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 3. Defaults Upon Senior Securities</p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">7</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 4. <font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> Mine Safety Disclosures</font></p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">7</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Item 5. Other Information</p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">7</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:justify;">&nbsp;<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Item 6. Exhibits</font></p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">9</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="vertical-align: top; width: 90%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:justify;"><b>SIGNATURES</b></p>
			</td>
			<td style="vertical-align: top; width: 5%;">&nbsp;</td>
			<td style="vertical-align: bottom; width: 5%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:center;">10</p>
			</td>
		</tr>

</table>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;">&nbsp;</p>

<div id="PGBK" style="WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<hr style="PAGE-BREAK-AFTER: always; border: none; WIDTH: 100%; HEIGHT: 2px; COLOR: #000000; background-color: #000000">
<div id="PGHDR" style="TEXT-ALIGN: left; WIDTH: 100%">&nbsp;</div>
</div>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>PART I<br>
<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">FINANCIAL INFORMATION</font></b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>ITEM 1. FINANCIAL STATEMENTS </b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Consolidated Balance Sheets</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>As of December 31, 2016, (Unaudited) and June 30, 2016 (Audited)</b></p>

<p style="margin: 0pt;">&nbsp;</p>

<p style="margin: 0pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">&nbsp;</td>
			<td style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;"><b><b><b>December</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> </b><b>31</b><b>, 2016</b></font></b></b></td>
			<td style="border-image: none; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">&nbsp;</td>
			<td style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;"><b><b><b>June 30, 201</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>6</b></font></b></b></td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">ASSETS</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Current assets:</u></p>
			</td>
			<td id=".lead.B3" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B3" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B3" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B3" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Cash</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">43,615</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">47,350</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Accounts receivable</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">33,154</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">21,894</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Prepaid expense</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">63,762</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">90,329</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Total current assets</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">140,531</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">159,573</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Deposit</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">2,500</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">2,500</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Property and equipment, net</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">75,957</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">74,689</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Total Assets</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">218,988</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">236,762</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">LIABILITIES AND STOCKHOLDERS&#39; DEFICIT</p>
			</td>
			<td id=".lead.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B3" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;"><u>Current liabilities:</u></p>
			</td>
			<td id=".lead.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B3" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Accounts payable and <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">accrued expenses</font></p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">1,687,690</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">1,004,550</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Related party payable</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">127,500</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">30,000</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Loans payable</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">98,560</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">148,022</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Deferred revenue</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">50,000</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">50,000</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Convertible debentures</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">686,408</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">664,621</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Derivative liabilities</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">44,000</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">142,797</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Warrant liability</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">49,200</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">87,500</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Total current liabilities</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">2,743,358</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">2,127,490</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;"><u>Non-current liabilities:</u></p>
			</td>
			<td id=".lead.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B3" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Deferred revenue<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">, net of current portion</font></p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">295,833</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">320,833</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Total Liabilities</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">3,039,191</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">2,448,323</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Commitments and Contingencies</p>
			</td>
			<td id=".lead.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B3" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;"><u>Stockholders&#39; Deficit</u></p>
			</td>
			<td id=".lead.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B3" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B3" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; text-indent: -9pt; font-family: Times New Roman,Times,serif; font-size: 10pt;">Preferred stock and paid-in capital in excess of&nbsp; $0.001 par value,<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> 20,000,000 shares authorized, 0 (June 30, 2016 - 0) issued and outstanding</font></p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; text-indent: -9pt; font-family: Times New Roman,Times,serif; font-size: 10pt;">Common stock and paid in capital in excess of<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font> $<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0.001 par value, 150,000,000 shares authorized, 140,402,603 (June 30, 2016 - 133,506,044) issued and outstanding</font></p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">55,768,860</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">55,024,270</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Share subscriptions and obligations to issue shares</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">448,904</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">340,184</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Accumulated other comprehensive income</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">46,267</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">46,267</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="font-family: Times New Roman,Times,serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 9pt;">Accumulated deficit</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(59,084,234</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(57,622,282</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman,Times,serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Total stockholders&#39; deficit</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(2,820,203</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">)</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">(2,211,561</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman,Times,serif; font-size: 10pt;">Total Liabilities and Stockholders&#39; Deficit</p>
			</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
			<td id=".amt.3" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">218,988</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">&nbsp;</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; border-bottom: 3px double rgb(0, 0, 0);">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">236,762</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center;">The accompanying notes are an integral part of the consolidated financial statements.</p>

<p style="margin: 0pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-1</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Consolidated Statements of Operations</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>For the three and six months ended December 31, 2016 and 2015 (unaudited)</b></p>

<p style="margin: 0pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 52%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="6" id=".amt.D9" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>Three Months Ended </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>December</b><b> 31,</b></font></b></p>
			</td>
			<td id=".trail.D9" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D11" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="6" id=".amt.D11" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>Six</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> Months Ended </b><b>December</b><b> 31,</b></font></b></p>
			</td>
			<td id=".trail.D11" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 52%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D8" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>2016</b></b></p>
			</td>
			<td id=".trail.D8" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D9" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>2015</b></b></p>
			</td>
			<td id=".trail.D9" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D10" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D10" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>2016</b></b></p>
			</td>
			<td id=".trail.D10" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D11" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D11" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>2015</b></b></p>
			</td>
			<td id=".trail.D11" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Revenue</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> </b></font></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">$</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">27,841</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">$</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">29,743</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">$</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">51,086</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">$</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman,Times,serif; font-size: 10pt; margin-left: 0pt; border-bottom: thin solid rgb(0, 0, 0);">42,443</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Operating e</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>xpenses:</b></font></p>
			</td>
			<td id=".lead.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".amt.B8" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".trail.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".lead.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".amt.B9" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".trail.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".lead.B10" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B10" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".amt.B10" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".trail.B10" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".lead.B11" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B11" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".amt.B11" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
			<td id=".trail.B11" style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Selling, general, and administrative expenses</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">543,316</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">714,255</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">1,199,745</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">1,510,708</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Research and development</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">121,075</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">162,252</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">250,914</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">345,249</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> operating</b><b> expenses</b></font></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">664,391</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">876,507</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">1,450,659</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">1,855,957</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Fair value gain (loss) on derivative financial liabilities</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">4,900</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">17,351</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">34,138</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(39,499</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Fair value gain on warrant liability</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">5,500</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">38,300</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">(Loss) gain <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">on extinguishment of convertible debenture</font></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(33,906</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(33,906</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">1,927</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">income</font></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">97</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">157</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">109</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">183</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest expense</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(71,218</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(164,159</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(101,020</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(224,897</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net Loss</b></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(731,177</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(993,415</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(1,461,952</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(2,075,800</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net loss per share </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&ndash;</b><b> basic</b><b> and diluted</b></font></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(0.01</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(0.01</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(0.01</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">(0.02</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 52%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
			<td id=".lead.B10">&nbsp;</td>
			<td id=".symb.B10">&nbsp;</td>
			<td id=".amt.B10">&nbsp;</td>
			<td id=".trail.B10">&nbsp;</td>
			<td id=".lead.B11">&nbsp;</td>
			<td id=".symb.B11">&nbsp;</td>
			<td id=".amt.B11">&nbsp;</td>
			<td id=".trail.B11">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 52%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Weighted average number of common</b>&nbsp;<b>shares outstanding</b></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".amt.8" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">137,839,288</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".amt.9" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">117,022,424</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.10" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".amt.10" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">136,591,909</td>
			<td id=".trail.10" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.11" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".amt.11" style="width: 9%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">115,613,819</td>
			<td id=".trail.11" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">The accompanying notes are integral part of the consolidated financial statements.</p>

<p style="margin: 0pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-2</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Consolidated Statements of Cash Flows</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>For the six months ended December 31, 2016 and 2015 (unaudited)</b></p>

<p style="margin: 0pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="6" id=".amt.D5" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>Six</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> Months Ended </b><b>December 31</b><b>,</b></font></b></p>
			</td>
			<td id=".trail.D5" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D4" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>2016</b></b></p>
			</td>
			<td id=".trail.D4" style="font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".lead.D5" style="font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td colspan="2" id=".amt.D5" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>2015</b></b></p>
			</td>
			<td id=".trail.D5" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Cash flows from operating activities:</u></p>
			</td>
			<td id=".lead.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B5" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net loss</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(1,461,952</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(2,075,800</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Items not involving cash</p>
			</td>
			<td id=".lead.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B5" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Depreciation</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">2,232</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">2,291</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Amortization of debt issuance costs</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">61,060</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Deferred revenues</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(25,000</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(25,000</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Fair value gain on warrant liability</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(38,300</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Fair value <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">(gain) loss on derivative financial liabilities</font></p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(34,138</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">39,499</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest on convertible debentures</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">37,167</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">204,304</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Loss (gain) <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">on extinguishment of convertible debentures</font></p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">33,906</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(1,927</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Obligation to issue shares for consulting services</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">12,720</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">18,060</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Stock-based compensation</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">89,790</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">89,792</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Settlement of debt</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">6,220</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Changes in working capital</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">795,947</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">278,693</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash used in operating activities:</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(526,568</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(1,463,868</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
			<td id=".lead.B5">&nbsp;</td>
			<td id=".symb.B5">&nbsp;</td>
			<td id=".amt.B5">&nbsp;</td>
			<td id=".trail.B5">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Cash flows from </u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>investing</u><u> activities:</u></font></p>
			</td>
			<td id=".lead.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B5" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Purchase of property and equipment</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(3,500</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(13,756</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash used in investing activities:</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(3,500</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(13,756</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
			<td id=".lead.B5">&nbsp;</td>
			<td id=".symb.B5">&nbsp;</td>
			<td id=".amt.B5">&nbsp;</td>
			<td id=".trail.B5">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Cash flows from financing activities:</u></p>
			</td>
			<td id=".lead.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B5" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Proceeds from loans</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">92,000</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Repayment of loans</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(110,022</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(32,335</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Proceeds from issuance of common stock</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">530,355</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">28,000</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Proceeds from <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">warrants exercised</font></p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">882,271</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Subscriptions received</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">14,000</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Proceeds from convertible debentures</p>
			</td>
			<td id=".lead.4" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">-</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">763,950</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash provided Financing activities:</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">526,333</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">1,641,886</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%;">&nbsp;</td>
			<td id=".lead.B4">&nbsp;</td>
			<td id=".symb.B4">&nbsp;</td>
			<td id=".amt.B4">&nbsp;</td>
			<td id=".trail.B4">&nbsp;</td>
			<td id=".lead.B5">&nbsp;</td>
			<td id=".symb.B5">&nbsp;</td>
			<td id=".amt.B5">&nbsp;</td>
			<td id=".trail.B5">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">(Decrease) increase in cash</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,735</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">164,262</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash, beginning of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">year</font></p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">47,350</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">117,307</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash, end of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">year</font></p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">43,615</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">281,569</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 70%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Supplemental cash flow information:</p>
			</td>
			<td id=".lead.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B4" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B4" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B5" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B5" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 70%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest paid</p>
			</td>
			<td id=".lead.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.4" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.4" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">2,793</td>
			<td id=".trail.4" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".lead.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".symb.5" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.5" style="width: 12%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">13,110</td>
			<td id=".trail.5" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">The accompanying notes are integral part of the consolidated financial statements.</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-3</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 1 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>NATURE OF OPERATIONS</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Integral Technologies, Inc. (the &ldquo;Company&rdquo; or &ldquo;Integral&rdquo;) was incorporated under the laws of the state of Nevada on February 12, 1996 and <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">has recently relocated its head office to Evansville, Indiana, USA. The Company is in the business of researching, developing and commercializing new electrically-conductive resin-based materials called ElectriPlast.</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company will be devoting all of its resources to the research, development and commercialization of its ElectriPlast technology.</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 2 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>SIGNIFICANT ACCOUNTING POLICIES</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (&ldquo;US GAAP&rdquo;) and are presented in United States dollars.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> We have prepared the consolidated financial statements included herein, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (&ldquo;SEC&rdquo;). The consolidated financial statements include the Company&rsquo;s wholly owned subsidiaries. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (&ldquo;GAAP&rdquo;) have been condensed from the accompanying consolidated financial statements. The accompanying comparative year end consolidated balance sheet was derived from the audited financial statements included in the annual financial statements. The accompanying interim financial statements are unaudited, and reflect all adjustments which are in the opinion of management, necessary for a fair statement of the Company&rsquo;s consolidated financial position, results of operations, and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. All intercompany transactions and balances have been eliminated in consolidation. The Company&rsquo;s results of operations and cash flows for the interim periods are not necessarily indicative of the results of operations and cash flows that it may achieve in future periods. Nevertheless, we believe that the disclosures are adequate to ensure the information presented is not misleading. These unaudited consolidated financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended June 30, 2016 included in the Company&rsquo;s 10-K filed with the SEC on January 17, 2017.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Principles of consolidation</u></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Integral Operating, LLC (&ldquo;Operating&rdquo;), Integral Vision Systems, Inc. (&quot;IVSI&quot;), Integral Systems Corporation (formerly Antek Wireless Inc.), Electriplast Corp. (formerly Plastenna, Inc.) (&ldquo;Electriplast&rdquo;), Integral Technologies Asia, Inc. (&ldquo;Asia&rdquo;) and its 76.625%-owned subsidiary, Emergent Technologies Corp. (&quot;ETC&quot;), which is currently inactive. ETC&#39;s non-controlling interest balance is immaterial to the financial statements. All intercompany balances and transactions have been eliminated.</font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Basic and </u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>d</u><u>iluted </u><u>n</u><u>et </u><u>l</u><u>oss </u><u>p</u><u>er </u><u>s</u><u>hare</u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">year. Diluted net loss per common share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. Because the Company has reported a net loss for all years presented, diluted net loss per common share is the same as basic net loss per common share for those years. </font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-4</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 2 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>SIGNIFICANT ACCOUNTING POLICIES (</b></u><u><b>CONTINUED</b></u><u><b>)</b></u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Stock issued in exchange for services</u></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The valuation of common stock issued in exchange for services<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> to non-employees is valued at an estimated fair market value of the Company&rsquo;s stock price based upon trading, sales and other issuances of the Company&#39;s common stock. Stock-based compensation expense related to awards to non-employees is recognized based on the then-current fair value at each measurement date over the associated service period of the award, which is generally the vesting term, using the accelerated attribution method. The fair value of non-employee stock options is estimated using the Black-Scholes valuation model with assumptions generally consistent with those used for employee stock options, with the exception of the expected term, which is the remaining contractual life at each measurement date. Restricted shares are issued or become issuable when they vested and are measured at their grant date and recorded evenly over the vesting period.</font></p>

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<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Revenue recognition</u></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company has not generated significant revenue since inception. Although the Company has begun to receive revenue from the sale of material for commercial applications<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> and a services contract, the Company continues to devote substantially all its efforts to developing the business. </font></p>

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<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company recognizes revenues from a contract with a plastics technology company for which it provides se<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">rvices and products, on a net basis. Fees are recognized monthly as services and products are provided. This is the point that revenues are considered realizable and earned.</font></p>

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<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As discussed in Note 14<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">, the Company signed a ten-year license agreement with Hanwha Advanced Materials Co., Ltd., (&ldquo;Hanwa&rdquo;), of South Korea. For license agreements that the Company enters into, revenue is recognized when all four of the following criteria are met: (i) a contract is executed, (ii) the contract price is fixed and determinable, (iii) delivery of the service or products has occurred, and (iv)&nbsp;collectability of the contract amounts is reasonably assured. </font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s license agreements can provide for upfront license fees, maintenance payments, and/or substantive milestone payments. In accordance with revenue recognition guidance, the Company identifies all of the deliverables at the inception of the agreement. License fees which are nonrefundable fees will be evaluated for standalone value to the licensor and may be recognized upon delivery pursuant to terms of the agreement. Upfront nonrefundable fees associated with license and development agreements where the Company has continuing involvement that does not meet the requirement of a separate deliverable are recorded as deferred revenue and recognized over the estimated service period. The Company may also enter into agreements to provide engineering services. The Company recognizes revenue from engineering services as the service has been performed and amounts are reasonably assured of collection.</font></p>

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<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Foreign currency translation</u></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s functional and reporting currency is the US dollar. Transactions and balances for the Company&rsquo;s operations that are not in US dollars are translated into US dollars at the exchange rates in effect at the balance sheet dates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Revenues and expenses are translated at the rate of exchange on the date of the transaction, except for amortization and depreciation, which are translated on the same basis as the related assets. Resulting translation gains or losses are included in the consolidated statements of operations. The foreign currency impact on the consolidated financial statements is immaterial.</font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; background-color: rgb(255, 255, 255);"><u>Advertising</u></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; background-color: rgb(255, 255, 255);">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Advertising costs are char<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">ged to operations when incurred. Advertising expense was $4,837 and $31,083 for the six months ended December 31, 2016 and 2015, respectively. Advertising expense was $901 and $14,166 for the three months ended December 31, 2016 and 2015, respectively.</font></p>

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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 2 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Research and development</u></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company expenses all r<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">esearch and development expenditures as incurred. </font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Use of estimates</u></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates include valuation allowance for deferred income tax assets, the determination of the assumptions used in calculating the fair value of stock-based compensation and the determination of the assumptions used in calculating the fair value of derivative financial liabilities<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> and the warrant liability. Actual results could differ from those estimates and could impact future results of operations and cash flows.</font></p>

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<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>F</u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>inancial instruments</u></font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">We have issued financial instruments that contain embedded conversion features that qualify as derivatives and are therefore accounted for as liabilities<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">. The derivative liabilities are initially recorded at fair value, with gains and losses arising from changes in fair value recognized in the consolidated statements of operations at each period end while such instruments are outstanding. The derivative liabilities relating to the convertible debt is valued using a binomial lattice model and the Black-Scholes Model where appropriate. The fair value of the warrants issued with reset provisions are measured using the Monte Carlo method.</font></p>

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<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Fair value measurements</u></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Assets and liabilities recorded at fair value in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. For certain of the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s financial instruments including cash and accounts payable, the carrying values approximate fair value due to their short-term nature.</font></p>

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<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">ASC 820 <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>Fair Value Measurements and Disclosures </i>specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820, these inputs are summarized in the three broad levels listed below:</font></p>

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			<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">Level 1 <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&ndash; Quoted prices in active markets for identical securities;</font></p>
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			<td style="width: 54pt;">&nbsp;</td>
			<td style="width: 18pt; vertical-align: top;">
			<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
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			<td style="vertical-align: top;">
			<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">Level 2 <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&ndash; Other significant observable inputs that are observable through corroboration with market data (including quoted prices in active markets for similar securities); and</font></p>
			</td>
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			<td style="width: 54pt;">&nbsp;</td>
			<td style="width: 18pt; vertical-align: top;">
			<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">Level 3 <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&ndash; Significant unobservable inputs that reflect management&rsquo;s best estimate of what market participants would use in pricing the asset or liability.</font></p>
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<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The fair value measurement of the derivative liability <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">and warrants with reset provisions are classified as a Level 3 measurement as further discussed under Fair Value Measurements.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 2 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>SIGNIFICANT ACCOUNTING POLICIES (</b></u><u><b>CONTINUED</b></u><u><b>)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Income</u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u> taxes</u></font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company uses the asset and liability approach in its method of accounting for income taxes that requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. A valuation allowance against deferred tax assets is recorded if, based upon weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority is recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained.</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Stock-based compensation</u></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company accounts for stock-based compensation expense associated with stock options and other<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> forms of equity compensation by estimating the fair value of share-based payment awards on the date of grant using the market price of common stock or the Black-Scholes option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company&rsquo;s consolidated statements of operations. The Company uses the straight-line single-option method to recognize the value of stock-based compensation expense for all share-based payment awards. Stock-based compensation expense recognized in the consolidated statements of operations is reduced for estimated forfeitures, as it is based on awards ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Property and Equipment</u></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Property and equipment are recorded at cost and depreciated over the estimated useful lives using the straight-line method of depreciation. <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Amortization of the leasehold improvements is computed using the straight-line method over the lesser of the estimated useful lives of the underlying assets and the term of the related lease.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Reclassifications:</u></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">For comparability, certain <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016 fiscal year amounts have been reclassified to conform to classifications adopted in the 2017 fiscal year. These reclassifications did not have an impact on stockholders&rsquo; deficit or net loss on the 2016 fiscal year consolidated financial statements. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Recent Accounting Pronouncement</u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>s</u><u> not yet adopted</u></font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The requirements are effective for annual reporting periods beginn<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">ing after December 15, 2017. Early adoption is not permitted. We are evaluating the impact of the amended revenue recognition guidance on our financial statements. </font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 2 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)</b></u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Recent Accounting Pronouncement</u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>s not yet adopted (Continued)</u></font></p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s Ability to Continue as a Going Concern (&ldquo;ASU 2014-15&rdquo;).&nbsp; ASU 2014-15 provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements.&nbsp; The new standard requires management to perform interim and annual assessments of an entity&rsquo;s ability to continue as a going concern within one year of the date the financial statements are issued.&nbsp; An entity must provide certain disclosure if conditions or events raise substantial doubt about the entity&rsquo;s ability to continue as a going concern.&rdquo;&nbsp; ASU 2014-15 applies to all entities and is effective for annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted.&nbsp; The adoption of this standard is not expected to have a material impact on the Company&rsquo;s financial position, results of operations or cash flows.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In March 2016, the FASB issued ASU 2016-09, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>Compensation &ndash; Stock Compensation:&nbsp; Improvements to Employee Share-Based P</i><i>ay</i><i>ment Accounting, </i>which relates to the accounting for employee share-based payments.&nbsp; This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows.&nbsp; This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years.&nbsp; The Company is currently evaluating the impact the adoption of this ASU will have on our financial statements.</font></p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In February 2016, FASB issued ASU 2016-2, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>Leases</i>, under which lessees will recognize most leases on the balance sheet. This will generally increase reported assets and liabilities. For public entities, this ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2018. ASU 2016-2 mandates a modified retrospective transition method for all entities. We are in the process of determining the impact that the updated accounting guidance will have on our financial statements.</font></p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.7pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Recent accountin</u><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>g</u><u> pronouncements adopted</u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In April 2015, the FASB issued Update No. 2015-03<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> &ndash; Interest &ndash; Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt issuance costs. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company&rsquo;s financial position, results of operations or cash flows.</font></p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 3</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> - </b><u><b>GOING CONCERN</b></u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">These <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">consolidated financial statements have been prepared on a 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.&nbsp;The Company&rsquo;s operations have resulted in a net loss of $1,461,952 for the six months ended December 31, 2016 (2015 - $2,075,800), and an accumulated deficit as of December 31, 2016, $59,084,234 (June 30, 2016 - $57,622,282) and a working capital deficiency of $2,602,827 as of December 31, 2016, (June 30, 2016 - $1,967,917). The Company does not have sufficient revenue-producing activities to fund its expenditure requirements to continue to advance researching, developing and commercializing its conductive plastics technology, ElectriPlast. Subsequent to period end, the Company raised $9,800 pursuant to private placements (note 12). The Company estimates that, without further funding, it will deplete its cash resources within three months. These factors raise substantial doubt about the Company&rsquo;s ability to continue as a going concern.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-8</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 3 - </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>GOING CONCERN</b></u><u><b> (CONTINUED)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">These <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">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 and debt issuances to finance operations. If none of these events occur, there is a risk that the business will fail.</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>4</b><b> - </b><u><b>STOCKHOLDERS&rsquo; DEFICIT</b></u></font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Common stock</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, the Company completed the following private placements:</font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB8" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 57pt;">&nbsp;</td>
			<td style="width: 28pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(i)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On July 27, 2016, the Company <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">raised $226,355 for the issuance of 1,968,304 units. Each unit consisted of one common share at $0.115 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 492,076 </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">common shares on or before April 30, 2017 at an exercise price of $0.30 per warrant. </font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 85.05pt; text-align: justify; text-indent: -28.35pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB9" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 57pt;">&nbsp;</td>
			<td style="width: 28pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(ii)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">August 22, 2016, the Company raised $94,000 for the issuance of 817,391 units. Each unit consisted of one common share at $0.115 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 204,348 </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">common shares on or before May 31, 2017 at an exercise price of $0.30 per warrant. </font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB10" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 57pt;">&nbsp;</td>
			<td style="width: 28pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(iii)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">During December, 2016, the Company completed private placements amounting to $210,000 for the issuance of 3,000,000 units. <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Each unit consisted of one common share at $0.07 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 750,000 </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">common shares on or before October 1, 2017 at an exercise price of $0.20 per warrant. </font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to a promissory note agreement, 75,000 common shares were issued on<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> October 24, 2016 (note 10(d)).</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 35.45pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, the Company issued shares of common stock pursuant to debt agreements: </font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB11" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 57pt;">&nbsp;</td>
			<td style="width: 28pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(i)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On September 21, 2016, the Company issued 1,035,864 shares to settle the remaining balance of $69,649, the first convertible debt note with JMJ Financial (note <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">9).</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 85.05pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB12" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 57pt;">&nbsp;</td>
			<td style="width: 28pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(ii)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On October 11, 2016, the Company issued 75,000 shares pursuant to a debt agreement, measured at a fair value of the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s common shares on that date of $10,500, recorded as interest expense (note 10).</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">year ended June 30, 2016, the Company completed the following private placement:</font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB13" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 57pt;">&nbsp;</td>
			<td style="width: 28pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(i)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">Completed a private placement amounting to $28,000 for the issuance of 56,000 shares of common stock at $0.50 per share.</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Preferred stock</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, and June 30, 2016 there are no outstanding preferred shares of stock.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-9</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>4</b><b> - </b><u><b>STOCKHOLDERS&rsquo; DEFICIT</b></u><u><b> (CONTINUED)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Stock-based compensation</b></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, the Company recorded stock-based compensation expense with respect to vesting stock options, restricted stock and warrants and modified stock options of $89,790 (2015 - $89,792). During the three months ended December 31, 2016, the Company recorded stock-based compensation expense with respect to vesting restricted stock of $44,894 (2015 - $44,896), respectively. Stock-based compensation expense is included in selling, general, and administrative expenses.</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Stock-based compensation not yet recognized at <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 relating to non-vested stock options was $106,785 (June 30, 2016 - $196,575), which will be recognized over a period of 1 year (2016 &ndash; 1 year).</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Stock options</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> and restricted shares</b></font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company is reviewing several alternatives to<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;replace its 2001, 2003, and 2009 Stock Option Plans with a new omnibus stock&nbsp;option plan&nbsp;(the &ldquo;New Plan&rdquo;). &nbsp; In certain cases, we have made contractual&nbsp;commitments to provide shares or stock option grants in anticipation&nbsp;of putting&nbsp;in place the New Plan. &nbsp;The New Plan will allow us to&nbsp;attract and retain key employees or service providers as we continue to develop&nbsp;our&nbsp;business.&nbsp;&nbsp;We will obtain the&nbsp;necessary approvals based on the attributes of the plan.&nbsp;&nbsp;We anticipate that this New Plan will be implemented&nbsp;prior to June 30, 2017.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In January 2001, the Company adopted the Integral Technologies, Inc. 2001 Stock Plan (the &quot;2001 Plan&quot;), a non-qualified stock option plan under which the Company may issue up to 2,500,000 stock options and bonuses of common stock of the Company to provide incentives to officers, directors, key employees and other persons who contribute to the success of the Company. This plan was amended during December 2001 to increase the number of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">common stock options that may be granted from 2,500,000 to 3,500,000 stock options. As of December 31, 2016, there were no (June 30, 2016 - nil) common stock options available under this plan.</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In April 2003, the Company adopted the Integral Technologies, Inc. 2003 Stock Plan (the &quot;2003 Plan&quot;), a non-qualified stock option plan under which the Company may issue up to 1,500,000 stock options. As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, there were no (June 30, 2016 - nil) common stock options available under this plan.</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the fiscal year ended June 30, 2010, the Company adopted the Integral Technologies, Inc. 2009 Stock Plan (the &quot;2009 Plan&quot;), a non-qualified stock option plan under which the Company may issue up to 4,000,000 common stock options. As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> December 31, 2016, there were no (June 30, 2016 - nil) common stock options available under this plan.</font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-10</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 4</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> - </b><u><b>STOCKHOLDERS&rsquo; DEFICIT</b></u><u><b> (</b></u><u><b>CONTINUED</b></u><u><b>)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Stock option activity</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">The following summarizes information about the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s options outstanding:</font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL14" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 38%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Number of Options</b></p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="3" rowspan="1" style="width: 66%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Price Per Option</b></p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Weighted Average Exercise Price</b></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Outstanding, June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</font></p>
			</td>
			<td style="width: 18%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1,15<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0,000</font></p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.25</p>
			</td>
			<td style="width: 6%; text-align: center; vertical-align: bottom;">to</td>
			<td style="width: 6%; vertical-align: bottom;">$ <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0.85</font></td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">37</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Granted</p>
			</td>
			<td style="width: 18%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cancelled</p>
			</td>
			<td style="width: 18%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">(150,000)</p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; text-align: center; vertical-align: bottom;">$ 0.50</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.50</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Expired</font></p>
			</td>
			<td style="width: 18%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">(100,000)</p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 6%; text-align: center; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">$ 0.85</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 38%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Outstanding, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016</font></p>
			</td>
			<td style="width: 18%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">9<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">00,000</font></p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.25</p>
			</td>
			<td style="width: 6%; text-align: center; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">to</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$ <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0.31</font></td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.3<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Exercisable, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016</font></p>
			</td>
			<td style="width: 18%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">8<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</font></p>
			</td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.25</p>
			</td>
			<td style="width: 6%; text-align: center; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">to</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$ <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0.31</font></td>
			<td style="width: 3%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">30</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">A summary of the status of non-vested options as of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, is as follows:</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL15" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Number of Options</b></p>
			</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Weighted Average Grant Date Fair Value</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 45.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Non-vested at June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</font></p>
			</td>
			<td style="width: 25.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">,000</font></p>
			</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.25</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="1" style="width: 42.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Options granted</p>
			</td>
			<td style="width: 25.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="1" style="width: 42.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Options forfeited</p>
			</td>
			<td style="width: 25.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="1" style="width: 42.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Options vested</p>
			</td>
			<td style="width: 25.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3.7%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 45.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Non-vested at <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016</font></p>
			</td>
			<td style="width: 25.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">5<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0,000</font></p>
			</td>
			<td style="width: 2.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 25.9%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">25</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The weighted average remaining contractual lives for options outstanding and exercisable at <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 are 0.79 years and 0.54 years (June 30, 2016 - 1.13 and 0.93 years), respectively. </font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">following summarizes the options outstanding and exercisable:</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL16" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 30%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="3" style="width: 39.5%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Number of Options</p>
			</td>
		</tr>
		<tr>
			<td style="width: 30%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Expiry Date</p>
			</td>
			<td style="width: 8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 3.8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Exercise Price</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">, 2016&nbsp;</font></p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016&nbsp;</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 1, 2016</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.85</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">100,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 1, 2016</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.50</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">75,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">February 19, 2017</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.31</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">750,000</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">750,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 30%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 1, 2017</p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.50</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">75,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">January 13, 2019</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.25</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">January 13, 2020</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.25</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">January 13, 2021</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.25</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total outstanding</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">9<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">00,000</font></p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1,150,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 38%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total exercisable</p>
			</td>
			<td style="width: 3.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 16.8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">8<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">50,000</font></p>
			</td>
			<td style="width: 2.5%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1,100,000</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-11</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 4</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> - </b><u><b>STOCKHOLDERS&rsquo; DEFICIT (</b></u><u><b>CONTINUED</b></u><u><b>)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Stock option activity</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> (continued)</b></font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The aggregate intrinsic value of options outstanding and exercisable as <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">of December 31, 2016 was $nil and $nil (June 30, 2016 - $nil and $nil), respectively. The aggregate intrinsic values exclude options having a negative aggregate intrinsic value due to awards with exercise prices greater than market value. The intrinsic value is the difference between the market value of the shares and the exercise price of the award.</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the year ended June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2014, the Company entered into employment agreements, whereby the employees would be granted restricted shares. The holder of a restricted share award is generally entitled at all times on and after the date of the agreement to exercise the rights of a shareholder of the Company, including the right to vote and the right to receive dividends on the shares. These shareholders do not have the ability to sell, transfer or otherwise encumber the restricted shares awards until they fully vest. The restricted shares granted vest over three or four-year periods and the grant date fair value of the awards is recognized as expense over the vesting period. </font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, the Company issued nil shares (year ended June 30, 2016 - 377,500) and is obligated to issue an additional 937,500 shares pursuant to the employment agreements.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">A summary of the status of non-vested restricted shares as of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, is as follows:</font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 80%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-right: 10%; margin-left: 10%;">

		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D2" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D2" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b><b>Number of </b></b></b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b><b>Restricted Stock </b></b></b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b><b>Awards</b></b></b></p>
			</td>
			<td id=".trail.D2" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D3" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D3" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b><b>Weighted Average </b></b></b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b><b>Grant Date Fair </b></b></b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b><b>Value</b></b></b></p>
			</td>
			<td id=".trail.D3" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 62%;">&nbsp;</td>
			<td id=".lead.B2">&nbsp;</td>
			<td id=".symb.B2">&nbsp;</td>
			<td id=".amt.B2">&nbsp;</td>
			<td id=".trail.B2">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Non-vested at June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016 </font></p>
			</td>
			<td id=".lead.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.2" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">337,500</td>
			<td id=".trail.2" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.3" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">0.38</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Awards granted</p>
			</td>
			<td id=".lead.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.2" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.2" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Awards forfeited</p>
			</td>
			<td id=".lead.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.2" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.2" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Awards vested</p>
			</td>
			<td id=".lead.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.2" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">(337,500</td>
			<td id=".trail.2" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">$</td>
			<td id=".amt.3" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">0.38</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%;">&nbsp;</td>
			<td id=".lead.B2">&nbsp;</td>
			<td id=".symb.B2">&nbsp;</td>
			<td id=".amt.B2">&nbsp;</td>
			<td id=".trail.B2">&nbsp;</td>
			<td id=".lead.B3">&nbsp;</td>
			<td id=".symb.B3">&nbsp;</td>
			<td id=".amt.B3">&nbsp;</td>
			<td id=".trail.B3">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Non-vested at <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016</font></p>
			</td>
			<td id=".lead.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.2" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td id=".amt.2" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">-</td>
			<td id=".trail.2" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.3" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.3" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">-</td>
			<td id=".trail.3" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-12</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 4</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> - </b><u><b>STOCKHOLDERS&rsquo; DEFICIT</b></u><u><b> </b></u><u><b>(</b></u><u><b>CONTINUED</b></u><u><b>)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Stock purchase warrants</b></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The following summarizes information about the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s stock purchase warrants outstanding:</font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL18" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 23%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 11%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Number of Warrants </b></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="3" rowspan="1" style="width: 64%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Price Per Share</b></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Weighted Average Exercise Price</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 23%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 11%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 23%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Balance, June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016&nbsp;</font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">12,506,309</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">08</font></p>
			</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">-</td>
			<td style="width: 6%; vertical-align: bottom;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.50</font></td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">32</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 23%; vertical-align: bottom;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Granted</font></p>
			</td>
			<td style="width: 11%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1,446,424</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.20</p>
			</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">-</td>
			<td style="width: 6%; vertical-align: bottom;">$0.30</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.25</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 23%; vertical-align: bottom;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Expired</font></p>
			</td>
			<td style="width: 11%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">(8,046,844)</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.30</p>
			</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">-</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.50</font></td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">37</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 23%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 11%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 23%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Balance, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016</font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">5,905,889</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">08</font></p>
			</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">-</td>
			<td style="width: 6%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.30</font></td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">24</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL19" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 15.9%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="3" style="width: 40.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Number of Warrants</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 15.9%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Expiry Date</p>
			</td>
			<td style="width: 19.4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Exercise Price</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: top; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">, 2016</font></p>
			</td>
			<td style="width: 2.8%; vertical-align: top; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2016&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 15.9%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 19.4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: top;">&nbsp;</td>
			<td style="width: 2.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">November 25, 2016</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.30</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">8,501,786</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">November 25, 2016</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.5<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0</font></p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2,754,523</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">April 30, 2017</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.30</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">492,076</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">May 31, 2017</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.30</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">204,348</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">October 31, 2017*</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.30</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">3,209,465</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">October 31, 2017</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.20</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">750,000</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">May 5, 2020</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.08</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1,250,000</p>
			</td>
			<td style="width: 2.8%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1,250,000</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 35.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">outstanding and exercisable</font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 17.2%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 2.8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 19.3%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">5,905,889</p>
			</td>
			<td style="width: 2.8%; vertical-align: top; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">12,506,309</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 23.1pt; text-align: left; text-indent: -0.7pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">* <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">During the six months ended December 31, 2016, 3,209,465 warrants expiring November 25, 2016 were extended to October 31, 2017. </font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Share obligations</b></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to a consulting agreement <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">with the CFO dated August 19, 2013, the Company is obligated to pay $5,000 to $12,500 per month based on the number of hours worked and to issue 6,000 shares of common stock per month beginning September 1, 2013. </font></p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> December 31, 2016, no shares have been issued. As such, a total of 240,000 shares of common stock are issuable. The obligation to issue shares of common stock was measured at a weighted average fair value of $0.38 per share on the date each series of shares became issuable. During the six months ended December 31, 2016, $4,320 (2015 - $18,060) was recorded as an obligation to issue shares</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">. During the three months ended December 31, 2016, $2,040 (2015 - $8,340) was recorded as an obligation to issue shares.</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> As of December 31, 2016, a total balance of $91,260 (June 30, 2016 - $86,940) remains as an obligation to issue the shares within equity, as this obligation can only be satisfied in shares of common stock.</font></p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> a separation agreement with the previous CFO, the Company will issue 36,000 shares of common stock and settle all unpaid fees from July 1, 2016 to February 10, 2017 (effective date of resignation). The Company is currently in the process of negotiating a compensation settlement agreement</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-13</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 4</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> - </b><u><b>STOCKHOLDERS&rsquo; DEFICIT, CONTINUED</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Share obligations</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> (continued)</b></font></p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">P<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">ursuant to director&rsquo;s agreements, the Company is obligated to issue 65,000 shares of common stock. As at December 31, 2016, these shares have not been issued and as such, the grant date fair value of $29,250 has been recognized in obligation to issue shares within equity. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to amended debt agreements, the Company is obligated to issue 725,000 shares of common stock (note 10). As at December 31, 2016, these shares have not been issued and as such, the grant date fair value of $82,000 has been recognized in obligation to issue shares within equity.</p>

<p style="margin: 0pt 0pt 0pt 56.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>5</b><b> - </b><u><b>INCOME TAXES</b></u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">There are no current or deferred tax expenses for the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, due to the Company&#39;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&#39;s ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion to provide a full valuation allowance for financial reporting purposes.&nbsp; As of December 31, 2016, the Company had a net operating loss carry-forward of $43,927,000.</font></p>

<hr align="left" style="border: currentColor; border-image: none; width: 0%; color: rgb(0, 0, 0); background-color: rgb(0, 0, 0);">
<p><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE</b><b> 6</b><b> - </b><u><b>SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION</b></u></font></p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 80%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-right: 10%; margin-left: 10%;">

		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D8" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>Six</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> Months Ended </b></font></b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>December 31</b><b>, </b><b>2016</b><b> </b></font></b></p>
			</td>
			<td id=".trail.D8" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D9" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>Six </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Months Ended </b></font></b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>December 31</b><b>, </b><b>2015</b></font></b></p>
			</td>
			<td id=".trail.D9" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Changes in working capital</p>
			</td>
			<td id=".lead.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B8" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B9" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Prepaid expenses</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">26,567</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">22,716</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accounts receivable</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(11,260</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">(5,420</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">)</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accounts payable and accruals</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">683,140</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">261,397</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Related party payable</p>
			</td>
			<td id=".lead.8" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">97,500</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">-</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">795,947</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">278,693</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Shares issued for:</p>
			</td>
			<td id=".lead.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B8" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.B9" style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".trail.B9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Subscriptions received in prior year</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">114,000</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Settlement of debt</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">6,220</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> debt agreements</font></p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">10,500</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Settlement of convertible debenture</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">113,945</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">222,141</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>7</b><b> - </b><u><b>RELATED PARTY TRANSACTIONS</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">of December 31, 2016, $127,500 (June 30, 2016 - $30,000) was owed to the Company&#39;s executives for outstanding managements fees, consulting fees and business related reimbursements, and are without interest or stated terms of repayment.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 8</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> - </b><u><b>SEGMENT INFORMATION</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company operates primarily in one business segment, the development of electronically-conductive resin-based materials, with operations located in the US.</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-14</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>9</b><b> - </b><u><b>CONVERTIBLE DEBENTURES</b></u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, $69,649 (three months ended December 31, 2016 - $nil) of the face value of debentures were extinguished by issuing 1,035,000 shares of common stock of the Company. As a result, $113,945 representing the market value of the shares issued was included in additional paid in capital and a loss on extinguishment of $33,906. The loss represents the difference between fair value of the derivative liabilities and the amortized cost of convertible debentures of $80,039 and the market value of the shares. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, the total amortized value of the outstanding convertible debentures were $686,408 (June 30, 2016 - $664,621), the total fair value of the outstanding derivative liabilities were $44,000 (June 30, 2016 - $142,797) and the fair value of the warrant liability was $49,200 (June 30, 2016 - $87,500).</font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, a fair value gain on the derivative liability of $34,138 (2015 fair value loss - $56,850) was recognized. During the three months ended December 31, 2016, a fair value gain on the derivative liability of $4,900 (2015 fair value loss - $56,850) was recognized. As of December 31, 2016, $34,179 of the fair value gain relates to the conversion features associated with the outstanding debentures with the remaining fair value loss of $41 relating to the conversion feature associated with the debenture that was settled and extinguished.</font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, 10,822,723 (June 30, 2016 &ndash; 1,374,041) common shares of the Company would be required to settle the remaining tranches of convertible debt at a weighted average conversion price of $0.065 (June 30, 2016 - $0.11) per common share.</font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">of December 31, 2016, the face value of convertible debentures is $703,477 (June 30, 2016&nbsp;- $1,189,649), which includes accrued interest of $120,000 (June 30, 2016&nbsp;- $146,087).</font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, debt discount amortization of $37,167 (2015 - $204,304) was recorded as interest expense. During the three months ended December 31, 2016, debt discount amortization of $12,562 (2015 - $152,664) was recorded as interest expense. </font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The fair value of the derivative financial liability is calculated using <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">a binomial lattice valuation method at inception and the balance sheet date. The fair value of the warrant liability is calculated using the Monte Carlo Model at inception and the balance sheet date.</font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The following assumptions were used in determining the fair value of the derivative liabilit<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">ies at inception during the six months ended:</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 80%; text-indent: 0px; font-size: 10pt; margin-right: 10%; margin-left: 10%;">

		<tr style="vertical-align: bottom;">
			<td style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="3" id=".amt.D3" rowspan="1" style="width: 6%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>December 31</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>, 2016</b></font></p>
			</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Share price</p>
			</td>
			<td id=".symb.3" style="width: 6%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;0.16</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">-&nbsp;</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">0.50</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Conversion price</p>
			</td>
			<td id=".symb.3" style="width: 6%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;0.11</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;-</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">0.37</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Expected life (years)</p>
			</td>
			<td id=".symb.3" style="width: 6%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;0.78</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;-</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">2.00</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Interest rate</p>
			</td>
			<td id=".symb.3" style="width: 6%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;0.42</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;-</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">0.63%</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Volatility</p>
			</td>
			<td id=".symb.3" style="width: 6%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;76.39</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;-</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">101.5%</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Dividend yield</p>
			</td>
			<td id=".symb.3" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">N/A</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 80%; font-family: Times New Roman, Times, serif; font-size: 10pt;">
			<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">Estimated forfeitures</p>
			</td>
			<td id=".symb.3" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".amt.3" style="width: 4%; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">N/A</td>
			<td id=".trail.3" nowrap="true" style="width: 6%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 54pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-15</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>9</b><b> - </b><u><b>CONVERTIBLE DEBENTURES (CONTINUED)</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">following assumptions were used in determining the fair value of the derivative financial liabilities as of: </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL22" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 46%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>December 31</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>, 2016</b></font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td colspan="3" rowspan="1" style="width: 8%; text-align: center; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;"><b>June</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> 3</b><b>0</b><b>, </b><b>2016</b></font></td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Share price</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">09</font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">0.16</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Conversion price</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.06</p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">0.11</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Expected life (years)</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">34</font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; text-align: right; vertical-align: bottom;">0.850</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">-</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">1.25</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest rate</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.50%</p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; text-align: right; vertical-align: bottom;">0.45</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">-</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">0.50%</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Volatility</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">91.50<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">%</font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; text-align: right; vertical-align: bottom;">91.50</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">-</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">122.29%</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Dividend yield</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">N/A</p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">N/A</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 46%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Estimated forfeitures</p>
			</td>
			<td style="width: 6%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">N/A</p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 4%; text-align: center; vertical-align: bottom;">N/A</td>
			<td style="width: 8%; vertical-align: bottom;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">following assumptions were used in determining the fair value of the derivative warrant liability as of: </font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL23" style="margin: 0pt 10%; width: 80%; text-indent: 0px; font-family: Times New Roman; font-size: 10pt;">

		<tr>
			<td style="width: 56%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>December 31</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>, 2016</b></font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>June</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> 3</b><b>0, 2016</b></font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Share price</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">09</font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.16</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Conversion price</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">06</font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">$0.09</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Expected life (years)</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.34</font></p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">1.85</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest rate</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.58%</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.58<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">%</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Volatility</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">92%</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">92<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">%</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Dividend yield</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">N/A</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">N/A</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 56%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Estimated forfeitures</p>
			</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">N/A</p>
			</td>
			<td style="width: 4%; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 20%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">N/A</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 1</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>0</b><b> &ndash; </b><u><b>LOAN</b></u><u><b>S</b></u><u><b> PAYABLE</b></u></font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 21.3pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">During the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016, the Company had the following loan agreements outstanding, summarized as follows:</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB24" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 36pt;">&nbsp;</td>
			<td style="width: 35pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(a)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On Jan 1, 2016, the Company entered into a new financing arrangement to <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">cover directors&rsquo; and officers&rsquo; liability insurance for the period December 31, 2015 to December 31, 2016. The amount financed was $73,176, which bears interest at 3.189% annually.&nbsp;Monthly payments of $8,131 are required to settle amounts owing.&nbsp;The balance outstanding as of December 31, 2016, was $nil (June 30, 2016 - $32,522).</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, $nil (June 30, 2016 &ndash; $45,609), representing the unamortized portion of prepaid insurance related to this policy, is included in prepaid expenses on the consolidated balance sheet.</font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-16</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 10</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> &ndash; </b><u><b>LOANS PAYABLE (CONTINUED)</b></u></font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB25" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 36pt;">&nbsp;</td>
			<td style="width: 36pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(b)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On January 1, 2016, the Company entered into a <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">short-term loan agreement with an original maturity date of July 1, 2016, for $110,000. A one-time interest charge of 5% or $5,500 is due as of July 1, 2016. The loan was entered into to settle marketing fees payable. As of June 30, 2016, the loan balance on the consolidated balance sheet is $115,500.</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On July 2, 2016<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">, the maturity date of the loan was revised to include the following loan repayment dates: </font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB26" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 72pt;">&nbsp;</td>
			<td style="width: 36pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(i)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$5,500 on July 5, 2016 (paid)</p>
			</td>
		</tr>

</table>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB27" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 72pt;">&nbsp;</td>
			<td style="width: 36pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(ii)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$25,000 on July 18, 2016 (paid)</p>
			</td>
		</tr>

</table>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB28" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 72pt;">&nbsp;</td>
			<td style="width: 36pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(iii)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$25,000 on July 29, 2016 (paid)</p>
			</td>
		</tr>

</table>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB29" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 72pt;">&nbsp;</td>
			<td style="width: 36pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(iv)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$25,000 on August 8, 2016 (<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">partially repaid); and</font></p>
			</td>
		</tr>

</table>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB30" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 72pt;">&nbsp;</td>
			<td style="width: 36pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(v)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$35,000 on August 22, 2016<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> </font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In the event of a default on the loan, the unpaid principal amount together with the interest shall immediately increase by 130% and the lender will have the right to convert the outstanding balance into shares of the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s common stock. </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">The outstanding balance will have a variable conversion price equal to 65% of the market price. The market price is defined as the lowest trading price in the 15 days prior to the conversion date. The lender is limited to 4.99% of the issued and outstanding common stock at the time of conversion unless the market capitalization of the Company falls below $2,500,000, then the limit will increase to 9.99%.</font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On September 9, 2016, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">the lender agreed to waive its right to conversion of the loan until January 31, 2017. The Company is in the process of amending the terms of repayment. The Company expects to settle the debt with cash, as such, no consideration for the default conversion feature has been accounted for. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB31" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 36pt;">&nbsp;</td>
			<td style="width: 35pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(c)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On September 2, 2016, the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Company entered into a promissory note agreement and received a total of $80,000, net of $8,000 in fees. The $88,000 plus a one-time interest charge of 10% is due December 13, 2016. In the event of default (non-payment), the balance of the promissory note will increase by 140%. </font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 70.9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 13, 2016, the maturity date of the promissory note was extended to January 30, 2017. As consideration for the extension, the Company agreed to issue 500,000 shares. The shares were measured at the fair value on the agreement date and as such, $55,000 was recognized as an obligation to issue shares and the value of debt. During the six months ended December 31, 2016, $20,625 of the fair value of the share obligation was amortized and recognized in interest expense.</font></p>

<p style="margin: 0pt 0pt 0pt 70.9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 70.9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">January 29, 2017, the maturity date of the promissory note was extended to March 2, 2017. As consideration for the extension, the Company agreed to issue 600,000 shares. </font></p>

<p style="margin: 0pt 0pt 0pt 70.9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB32" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 36pt;">&nbsp;</td>
			<td style="width: 35pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">(d)</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">On <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">October 24, 2016, the Company entered into a promissory note agreement and received a total of $12,000. The note is Due November 9, 2016. In addition, the Company issued 75,000 common shares within 14 days of the start of the note. In the event of default (non-payment), the balance of the promissory note will increase by 140%. These shares were measured at the agreement date fair value with $10,500 recognized as interest expense and additional paid in capital.</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 70.9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 70.9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">November 29, 2016, the maturity date of the promissory note was extended to January 30, 2017. As consideration for the extension, the Company agreed to issue 225,000 shares. The shares were measured at the fair value on the agreement date and as such, $27,000 was recognized as an obligation to issue shares and the value of debt. During the six months ended December 31, 2016, $13,935 of the fair value of the share obligation was amortized and recognized in interest expense. The Company is in the process of amending the terms of repayment.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-17</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Integral Technologies, Inc</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Notes to the Consolidated Financial Statements</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE 1</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>1</b><b> - </b><u><b>DEFERRED </b></u><u><b>REVENUE</b></u></font></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On June 21, 2013, the Company signed a <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">ten-year license agreement with Hanwha Advanced Materials Co., Ltd, of South Korea. The agreement grants Hanwha exclusive rights to sell, distribute and manufacture Integral&#39;s patented line of conductive plastics, ElectriPlast, in South Korea, as well as non-exclusive sales and distribution rights to ElectriPlast for Japan, Taiwan and the China markets. </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The agreement called for license fees as follows:</p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB33" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 36pt;">&nbsp;</td>
			<td style="width: 18pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$250,000 (received) to be paid to the Company within 15 business days; and</p>
			</td>
		</tr>

</table>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB34" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 36pt;">&nbsp;</td>
			<td style="width: 18pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">$250,000 (received) payment to be paid to the Company no later than one year after signing the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">agreement.</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">payments have been recorded as deferred revenue, which will be recognized as license fee revenue in the consolidated statements of operations over the life of the ten-year contract. During the three months ended December 31, 2016, $25,000 (2015 - $25,000) has been recognized as revenue</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">. </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and June 30, 2016, the remaining deferred revenue was as follows:</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 80%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-right: 10%; margin-left: 10%;">

		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D8" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D8" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>December 31</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>, </b><b>2016</b></font></b></p>
			</td>
			<td id=".trail.D8" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.D9" style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td colspan="2" id=".amt.D9" style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><b>June 30, 2016</b></b></p>
			</td>
			<td id=".trail.D9" style="padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom;">
			<td colspan="1" style="width: 62%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Current</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">50,000</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">50,000</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Non-current</p>
			</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">295,833</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">&nbsp;</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">320,833</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 1px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);">
			<td colspan="1" style="width: 62%;">&nbsp;</td>
			<td id=".lead.B8">&nbsp;</td>
			<td id=".symb.B8">&nbsp;</td>
			<td id=".amt.B8">&nbsp;</td>
			<td id=".trail.B8">&nbsp;</td>
			<td id=".lead.B9">&nbsp;</td>
			<td id=".symb.B9">&nbsp;</td>
			<td id=".amt.B9">&nbsp;</td>
			<td id=".trail.B9">&nbsp;</td>
		</tr>
		<tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);">
			<td colspan="1" style="width: 62%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".lead.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.8" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.8" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">345,833</td>
			<td id=".trail.8" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
			<td id=".lead.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</td>
			<td id=".symb.9" style="width: 1%; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">$</td>
			<td id=".amt.9" style="width: 16%; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">370,833</td>
			<td id=".trail.9" nowrap="true" style="width: 1%; padding-bottom: 3px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0pt;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>NOTE </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>12</b><b> - </b><u><b>SUBSEQUENT EVENTS</b></u></font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">During January 2017, the Company completed a private placement amounting to $23,800 for the issuance of 340,000 units. <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Each unit consisted of one common share at $0.07 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 85,000 </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">common shares on or before October 1, 2017 at an exercise price of $0.20 per warrant. As of December 31, 2016, $14,000 had been received and recorded as share subscriptions and obligations to issue shares.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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<div id="PGNUM" style="text-align: center; width: 100%; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">F-18</div>

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<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>&nbsp;</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 2. MANAGEMENT&#39;S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS </b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;text-indent:36pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Forward Looking Statements</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>&nbsp;</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">This quarterly report on Form 10-Q and other reports (collectively, the &ldquo;Filings&rdquo;) filed by <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Integral Technologies, Inc. (&ldquo;Integral&rdquo; or the &ldquo;Company&rdquo;) from time to time with the U.S. Securities and Exchange Commission (the &ldquo;SEC&rdquo;) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company&rsquo;s management as well as estimates and assumptions made by Company&rsquo;s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;estimate,&rdquo; &ldquo;expect,&rdquo; &ldquo;future,&rdquo; &ldquo;intend,&rdquo; &ldquo;plan,&rdquo; or the negative of these terms and similar expressions as they relate to the Company or the Company&rsquo;s management identify forward-looking statements. Statements contained herein that are not historical facts are forward-looking statements. </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. 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 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, 2016 as filed with the Securities and Exchange Commission on January 17, 2017, and available at </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">www.sec.gov. </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">This discussion and analysis should be read in conjunction with our <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">consolidated 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, except as required by law.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>&nbsp;</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Overview</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>&nbsp;</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Integral focuses the majority of its resources on researching, developing and commercializing its ElectriPlast&reg; technologies. The technology possesses a multitude of applications in a myriad of industries. These include the auto industry, the aerospace, consumer electronics, and commercial aviation industries, among others. One key factor that could drive demand for ElectriPlast is the need for light-weighting. Automotive and aerospace are leading the way to achieve reduced emissions and increased fuel economy. Light-weighting involves the substitution of lighter materials, often times using carbon-fiber based, for heavier (aluminum and other metals) materials.</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">In addition, Integral allocates resources to expand and protect the extensive intellectual property holdings surrounding its ElectriPlast&reg; technology. Integral<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s business strategy focuses on the leveraging of its intellectual property rights and our strength in product design and material innovation. Integral is focusing its business development and marketing efforts on securing licensing and/or joint development agreements in areas for which it currently hold patents covering specific materials, components, parts, applications or end-products incorporating conductive resins and ElectriPlast technology. Integral collaborates with suppliers, Tier1 vendors, OEM&#39;s and manufacturers of products who would benefit from the incorporation of any of the ElectriPlast&reg; applications.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">ElectriPlast&reg; is an innovative, electrically and thermally conductive resin-based material. The ElectriPlast&reg; 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, is non-corrosive, and can serve as an electrically conductive alternative</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Various examples of applications for ElectriPlast&reg; where Integral holds patent protection are: batteries, antennas, electronics shielding, lighting/LED circuitry, motors, switch actuators, resistors, medical devices, thermal management, toys and cable connector bodies, among others. We have been working to introduce these new applications and the ElectriPlast&reg; technology on a global scale.</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">During the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">year ended June 30, 2016, several steps were taken by the Company to mature certain client relationships and applications while also addressing on-going funding requirements. The Company signed a global Reseller and Marketing Agreement with a leading nickel-plating carbon fiber manufacturer dated March 1, 2016. The agreement provides exclusivity for certain major customer(s) with a provision for expanding the exclusivity rights to the Company. Nickel-plated carbon fiber is a key conductive material in the making of ElectriPlast&reg; and the Company will pursue other opportunities that strengthens its relationship with key suppliers. Earlier in 2015, the Company filed non-provisional patents associated with its bipolar battery technology and bipolar plate products. The Company believes the bipolar battery plate and associated power storage technology provides long-sought breakout weight savings and performance benefits for the lead-acid battery market. The company intends to develop the power storage technology as an Integral Technologies business unit and will seek partners to fully develop batteries for consumer and industrial consumption. The first prototype battery utilizing the ElectriPlast bipolar technology was produced in 2015. The battery was produced by Advanced Battery Concepts. Based on the initial prototype and a series of discussion during the quarter, the Company announced on April 26, 2016 a Joint Technology Assessment Program with Advanced Battery Concepts, an industry leader in large format bi-polar battery design and manufacture. Working under the JTAP, the parties produced a second, more advanced bipolar battery which it showcased at the 2016 North America Battery Show in Novi, Michigan and at the Company&rsquo;s special shareholders meeting in Evansville, Indiana in November 2016.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">During the quarter, the Company continued its efforts to expand its <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">antistatic and static dissipative product line. The expansion of the product line addresses the needs of a much larger segment of the global conductive plastics market, including materials for electrostatic dissipation (ESD) and antistatic applications.&nbsp; The new product line enables the Company to offer a more complete line of conductive plastics serving both the needs of lower conductive applications, while continuing to offer its more highly conductive line of plastics, all part of the </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">ElectriPlast&reg; family of conductive plastics. The Company believes the antistatic and static dissipative line holds significant revenue potential. The Company is currently fulfilling commercial orders to multiple customers with its new product line. </font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt 0.1pt;text-align:justify;">Companies continue to incorporate ElectriPlast in their on-going product development evaluations. On March 30, 2016, the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Company announced that LeddarTech includes ElectriPlast material to produce lens barrels in its latest release of its LeddarOne Sensing Module, a compact and low-cost lidar that provides valuable presence detection and distance measurement capabilities to a wide range of finished products. In the announcement, LeddarTech highlighted the superior qualities of ElectriPlast in the key areas of weight-reduction, cost, and robustness in the demanding environment of drone aircraft. </font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt 0.1pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">In Asia, the Company, through its newly signed reseller agreement, provided conductive material containing nickel-plated carbon fiber material to Hanwha for prototype development for a major auto manufacturer based in Asia that is developing six (6) new applications. The Company continues to support Chang Rim Eng Inc. (&ldquo;Chang Rim&rdquo;) as it readies to commercialize ElectriPlast&reg; in South Korea. The Company announced on October 8, 2014 that Chang Rim had successfully completed its prototype phase for a motor casing targeting the domestic Asia automotive market. On August 20, 2015, the Company announced with Chang Rim the largest ElectriPlast order in the Company<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s history. </font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The company continues to make progress in shielding in the electric vehicle market. During the year, the Company provided ElectriPlast material and applications support to a Tier 1 company for finalizing an application for an electric vehicle. The company has been approved as a supplier for the domestic Tier 1 for the purpose of supplying ElectriPlast for a specific electric vehicle platform expected to go into production in 2017. The company expects initial commercial orders to be produced in the second half of 2017. <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">The Company completed its first order in December 2016. The Company has also received initial pre-production orders from this Tier 1 for a 2018 European Electric vehicle.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">In January<font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> 2016, the Company and a Tier 1 partner reached a technical milestone when its wire shielding application currently under development obtained the highest shielding effectiveness to date. The Company believes the level of shielding effectiveness validates the commercial viability of the technology. The companies have completed subsequent trials and continue to work towards commercialization for an effective alternative in replacing the more-costly metal, braided shielding. </font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company entered into a term<font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> sheet dated April 19, 2015 with a conductive plastics compounder (the &ldquo;Compounder&rdquo;) for the purpose of acquiring all the assets of the Compounder, with the Compounder remaining a separate entity. The Compounder is a niche supplier with an international customer base. The Company&rsquo;s strategic interest in the Compounder is its equipment and expertise in conductive material compounding, as well as its customer base. The term sheet contemplated that upon the closing, all sales and marketing would be performed by the Company, and the Compounder would become the sole manufacturer for the Company. In October 2015, the founder and majority shareholder of the Compounder died from an accident before the transaction could be completed. A Special Administrator has been assigned to the estate, but due to the complexity of the deceased&rsquo;s estate, the final disposition of the Compounder is unclear. Subsequently, all manufacturing employees left the Compounder and its customers turned to other suppliers.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Funding remains a priority for the Company, and during <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">the six months ended December 31, 2016, $526,333 was raised through a combination of debt and private placements, net of loan repayments. </font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Pursuant to<font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> a separation agreement with the previous CFO, the Company will issue 36,000 shares of common stock and settle all unpaid fees from July 1, 2016 to February 10, 2017 (effective date of resignation). The Company is currently in the process of negotiating a compensation settlement agreement</font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-left: 0pt; margin-right: 0pt">
<div id="PGNUM" style="text-align: center; width: 100%; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">2</div>

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<div id="PGHDR" style="text-align: left; width: 100%">&nbsp;</div>
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<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Patents/Trademarks on Technologies </b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Our intellectual property portfolio consists of over fourteen years of accumulated research and design knowledge and trade secrets.<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&nbsp; We have sought United States (&ldquo;US&rdquo;) patent protection for many of our ideas related to our ElectriPlast<sup>&reg;</sup> technologies.&nbsp; Currently, we have filed 117 non-provisional US patent applications, 55 of which have been issued as patents, with 51 of those issued patents not yet expired.&nbsp; No assurances can be given that all patent applications will be approved; however, to the extent that patents are not granted, we will continue to attempt to commercialize these technologies without the protection of patents.&nbsp; As patents are issued, we will have the exclusive right to use and license the design(s) described in each issued patent for the life of the patent in the US.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Of the 117 non-provisional applications filed that have not issued as patents, 9 are currently pending, and 53 are no longer pending.<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&nbsp; Integral continues to pursue intellectual property protection through its patent and trademark portfolio while constantly evaluating its filings to judiciously apply resources to our most critical technologies.&nbsp; Integral has filed 12 Canadian patent applications, 2 of which have issued, with 10 no longer being active.&nbsp; Integral has filed an International patent application, which published on September 25, 2014, claiming features of the Company&rsquo;s capsule.&nbsp; Subsequent to the year end the Company filed national stage applications based on this PCT on September 15, 2015 in Canada, Mexico, Brazil, China, Japan, South Korea, Europe, Malaysia, Saudi Arabia, India, Thailand, Philippines, Singapore and Australia.&nbsp;On August 10, 2015, the Company also filed new US and PCT patent applications for a Bipolar Plate and Method of Making and Using Same&nbsp;&nbsp;&nbsp;with a US publication date of November 3, 2016 and a PCT publication date of November 10, 2016.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Integral has a registered US trademark for ELECTRIPLAST<font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><sup>&reg;</sup>, a registered US trademark for INTEGRAL (with design)<sup>&reg;</sup>, and a registered US trademark application for WHERE LIGHTWEIGHTING STARTS<sup>TM</sup>.&nbsp; In addition, Integral has a registered mark for ELECTRIPLAST<sup>&reg;</sup> in China, Japan, Korea, Europe<b> </b>and<b> </b>Taiwan.&nbsp; In addition, Integral has a registered mark for WHERE LIGHTWEIGHTING STARTS<sup>&reg;</sup> in Europe, Japan and Korea.&nbsp; These applications and registrations establish rights for the use of these marks in commerce.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Financial Condition</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company has not generated significant revenue since inception. Although the Company has begun to receive some revenue from the sale of material for commercial applications, the Company is devoting substantially all its efforts to developing the business<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">. From inception on February 12, 1996 through June 30, 2016, we have accrued an accumulated deficit of approximately $59 million.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">As of <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, our assets were $218,988, consisting of cash of $43,615, accounts receivable of $33,154, prepaid expense of $63,762, deposit of $2,500 and property and equipment of $75,957.</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">As of <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, current liabilities of $2,743,358 consisting of accounts payable and accruals of $1,687,690, related party payables of $127,500, a loan payable of $98,560, deferred revenues of $50,000, convertible debentures of $686,408, derivative liabilities of $44,000 and warrant liability of $49,200. Non-current liabilities consist of deferred revenues of $295,833.</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">As of <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, total stockholders&#39; deficit was $2,820,203.</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Results of Operations of the Six Months Ended December 31, 2016</b><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><b>, C</b><b>ompared to the </b><b>Six</b><b> Months Ended December 31, 2015</b></font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Our net loss for the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">six months ended December 31, 2016, was $1,461,952 compared to a net loss of $2,075,800 for the six months ended December 31, 2015, representing a decrease of $613,848. Significant changes for the six months ended December 31, 2016, compared to the corresponding period of the prior period have been described as follows:</font></p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0.1pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Total r<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">evenues increased by $8,643 to $51,086 for the six months ended December 31, 2016. The increase is a result of new services revenue stream related to the antistatic and dissipative products which has generated $20,249 in new revenues, which is offset by a slight decrease in sales of the higher conductive line of ElectriPlast of $11,606.</font></p>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Operating expense for the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">six months ended December 31, 2016, were $1,450,659 compared to operating expense of $1,855,957 for the six months ended December 31, 2015, representing a decrease of $405,298. Significant changes for the six months ended December 31, 2016, compared to the corresponding period of the prior fiscal year have been described as follows:</font></p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Consulting fees decreased by $<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">200,342 to $302,283 for the six months ended December 31, 2016. Consulting fees include non-cash share obligations for the six months ended December 31, 2016 of $4,320 compared to non-cash shares issued for services of $18,060 for the six months ended December 31, 2015. The decrease is due to implementing cost saving strategies and reduction in use of external consultants. As described in the notes to the financial statements, the fair value of the share obligations were measured in reference to their market value on the date each series of shares became issuable;</font></p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Research and development costs decreased by $<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">94,335 to $250,914 for the six months ended December 31, 2016. The decrease is due to the Company&rsquo;s focus on further developing nascent revenue streams and from reduced research and development requirements for the quarter.</font></p>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Significant changes for other income and expenses for the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">six months ended December 31, 2016, compared to the six months ended December 31, 2015, have been described as follows:</font></p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Fair value <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">gain on derivative financial liabilities for the six months ended December 31, 2016 was $34,138 compared to a loss of $39,499 for the six months ended December 31, 2015. During the six months ending December 31, 2016, the Company primarily used equity financing to fund operations; whereas, in the corresponding period of the prior fiscal year, the Company primarily funded operations through debt. Further, the reduction drop in the share price has resulted in a drop in the fair value of debt resulting in a gain on the decrease in the derivative liability obligation. As described in the notes to the financial statements, the </font><font style="font-size:10pt;font-family:Times New Roman, Times, serif;">fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Black-Sholes option pricing model and a binomial lattice model where appropriate.</font></p>
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			<td style="width:18pt;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Fair value <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">gain on warrant liability for the six months ended December 31, 2016 was $38,300 compared to $nil for the six months ended December 31, 2015. During the six months ending December 31, 2016, the Company had warrants outstanding giving rise to a liability due to the nature of the conversion features of the warrant; whereas there were no such warrants outstanding during the six months ended December 31, 2015. The gain in the warrant liability is due to a reduction in the share price resulting in a corresponding drop in the fair value of debt. As described in the notes to the financial statements, the </font><font style="font-size:10pt;font-family:Times New Roman, Times, serif;">fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Monte Carlo method.</font></p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Loss <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">on extinguishment of convertible debenture was $33,906 compared to a gain of $1,927 for the six months ended June 30, 2015. During the six months ended December 31, 2016, the Company issued shares with a lower market value resulting in a loss on extinguishment. In the prior year, the Company transferred its convertible debt to a new lender with more favorable terms resulting in an extinguishment gain of $1,927 for accounting purposes. </font></p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Interest expense decreased by $<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">123,877 for the six months ended December 31, 2016, due to the decrease in convertible debt transactions. Included in interest expense is the a</font><font style="font-size:10pt;font-family:Times New Roman, Times, serif;">mortization of the convertible debt discount of $37,167 (2015 - $204,304). Remaining change in interest expense is due to decrease in the amount of loans outstanding at the end of the period. </font></p>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>&nbsp;</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>&nbsp;</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Results of Operations of the Three Months Ended </b><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><b>December 31</b><b>, 2016</b><b> compared to the Three Months Ended </b><b>December 31</b><b>, </b><b>201</b><b>5</b></font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Our net loss for the three months ended <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, was $731,177 compared to a net loss of $993,415 for the three months ended December 31, 2015, representing a decrease of $262,238. Significant changes for the three months ended December 31, 2016, compared to the corresponding period of the prior period have been described as follows:</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0.1pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0.1pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Total r<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">evenues decreased by $1,902 to $27,841 for the three months ended December 31, 2016. The increase is primarily a result of a decrease of $11,406 in sales of the higher conductive line of ElectriPlast products which has been offset by $9,504 generated from services revenue associated with the antistatic and static dissipative line.</font></p>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Operating expense for the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">three months ended December 31, 2016, were $664,391 compared to operating expense of $876,507 for the three months ended December 31, 2015, representing a decrease of $212,116. Significant changes for the three months ended December 31, 2016, compared to the corresponding period of the prior fiscal year have been described as follows:</font></p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Consulting fees decreased by $<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">112,488 to $146,503 for the three months ended December 31, 2016. Consulting fees include non-cash share obligations for the three months ended December 31, 2016 of $8,340 compared to non-cash shares issued for services of $9,240 for the three months ended December 31, 2015. The decrease is due to implementing cost saving strategies and reduction in use of external consultants. As described in the notes to the financial statements, the fair value of the share obligations were measured in reference to their market value on the date each series of shares became issuable;</font></p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Research and development costs decreased by $<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">41,177 to $121,075 for the three months ended December 31, 2016. The decrease is due to the Company&rsquo;s focus on further developing nascent revenue streams and from reduced research and development requirements for the quarter.</font></p>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Significant changes for other income and expenses for the three months ended <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, compared to the three months ended December 31, 2015, have been described as follows:</font></p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Fair value <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">gain on derivative financial liabilities for the three months ended December 31, 2016 was $4,900 compared to a gain of $17,351 for the three months ended December 31, 2015. During the three months ending December 31, 2016, the Company primarily used equity financing to fund operations; whereas, in the corresponding period of the prior fiscal year, the Company primarily funded operations through debt. As described in the notes to the financial statements, the </font><font style="font-size:10pt;font-family:Times New Roman, Times, serif;">fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Black-Sholes option pricing model and a binomial lattice model where appropriate.</font></p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Fair value <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">gain on warrant liability for the three months ended December 31, 2016 was $5,500 compared to $nil for the three months ended December 31, 2015. During the three months ending December 31, 2016, the Company had warrants outstanding giving rise to a liability due to the nature of the conversion features of the warrant; whereas there were no such warrants outstanding during the three months ended December 31, 2015. The gain in the warrant liability is due to a reduction in the share price resulting in a corresponding drop in the fair value of debt. As described in the notes to the financial statements, the </font><font style="font-size:10pt;font-family:Times New Roman, Times, serif;">fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Monte Carlo method.</font></p>
			</td>
		</tr>

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<p style="margin: 0pt;">&nbsp;</p>

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<p style="margin: 0pt;">&nbsp;</p>

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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Loss <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">on extinguishment of convertible debenture was $33,906 (three months ended December 31, 2015 - $nil). During the three months ended December 31, 2016, the Company recognized a loss on the difference between the market value of shares issued to settle debt. There were no such extinguishments for the comparative period.</font></p>
			</td>
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			<td style="width:18pt;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
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			<p style="font-family:Times New Roman, Times, serif;margin-right:0pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">Interest expense <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">decreased by $92,941 for the three months ended December 31, 2016, due to the decrease in convertible debt transactions. Included in interest expense is the non-cash a</font><font style="font-size:10pt;font-family:Times New Roman, Times, serif;">mortization of the convertible debt discount of $37,167 (2015 - $152,935). Remaining change in interest expense is due to an increase in the amount of loans and cost of debt outstanding at the end of the period. </font></p>
			</td>
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</table>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Critical Accounting Policies and Estimates</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>&nbsp;</b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><u>Revenue recognition</u></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">The Company recognizes revenues from a contract with a plastics technology company for which it provides se<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">rvices and products, on a net basis. Fees are recognized monthly as services and products are provided. This is the point that revenues are considered realizable and earned.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">The Company signed a ten-<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">year license agreement with Hanwha Advanced Materials Co., Ltd., (&ldquo;Hanwa&rdquo;), of South Korea. For license agreements that the Company enters into, revenue is recognized when all four of the following criteria are met: (i) a contract is executed, (ii) the contract price is fixed and determinable, (iii) delivery of the service or products has occurred, and (iv)&nbsp;collectability of the contract amounts is reasonably assured.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s license agreements can provide for upfront license fees, maintenance payments, and/or substantive milestone payments. In accordance with revenue recognition guidance, the Company identifies all of the deliverables at the inception of the agreement. License fees, which are nonrefundable fees, will be evaluated for standalone value to the licensor and may be recognized upon delivery pursuant to terms of the agreement. Upfront nonrefundable fees associated with license and development agreements where the Company has continuing involvement that does not meet the requirement of a separate deliverable are recorded as deferred revenue and recognized over the estimated service period. The Company may also enter into agreements to provide engineering services. The Company recognizes revenue from engineering services as the service has been performed and amounts are probable of collection.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">There have been no material changes to our critical accounting policies as described in <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Item 9 of our most recent annual report on Form 10-K for the year ended June 30, 2016, as filed with the Securities and Exchange Commission on January17, 2017.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Management does not believe that any new accounting pronouncements not yet effective will have any material effect on the <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Company&rsquo;s consolidated financial statements if adopted</font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:justify;"><b>Liquidity and Capital Resources</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">As of <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, we had $43,615 in cash on hand, and we estimate that we will continue to require $3 million annually of additional financing to fund our ongoing operating and capital expenditures in order to carry out our business plan and to continue to operate during our fiscal year ending June 30, 2017. </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">The Company has historically funded this requirement through a combination of debt and equity proceeds. Until such time as the Company launches material product-based manufacturing operations, we believe our funding need will remain approximately $3 million annually, and we will disclose promptly any changes to that estimate.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Based on our current cash and cash equivalents levels and expected cash flow from operations, we believe our current cash position is not sufficient to fund our cash requirements during the next twelve months, including operations and capital expenditures. We intend to license our proprietary technology and services or obtain equity and/or debt financing to support our current and proposed operations and capital expenditures. There can be no assurance, however, that any such opportunities may arise, or that any such acquisitions may be consummated. Additional financing may not be available on satisfactory terms when required. In addition, the trading price of our common stock and a downturn in the equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. We currently have no firm commitments for any additional capital. There is no guarantee that we will be successful in raising the funds required. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s cash usage since inception in 1996 has been funded primarily from proceeds from the issuance of common stock. The company has issued warrants which have the potential to yield $1,321,767 calculated as 3,905,889 warrants exercisable at $0.30 per share and 750,000 warrants exercisable at $0.20 per share. In the event the stock price rises to certain levels in the future and that some or all of the warrant holders elect to acquire Common Stock shares by exercising their warrants, prior to the expiry date, the Company may raise additional funds from warrant holders. We have no ability to forecast future stock price movements nor are we able to determine how many warrant holder would elect to acquire shares by exercising their warrants. Subsequent to year end the company has raised $9,800 through equity financing.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">We are currently in limited manufacturing operations. As demand continues to grow and our need to increase capacity, reduce manufacturing costs and to improve margins, we would consider directly entering into the manufacturing business, including the possibility of acquiring existing assets or an operating company to help us accelerate this process, however this will only be possible through additional capital.</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:justify;"><b>&nbsp;</b></p>

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<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:justify;"><b>Off-Balance Sheet Arrangements</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:justify;">We had no off-balance sheet arrangements as of <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;">As a &ldquo;smaller reporting company,&rdquo; as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>ITEM 4.<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&nbsp;CONTROLS AND PROCEDURES</font></b></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="background-color:#FFFFFF;font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Disclosure Controls and Procedures</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">As at <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">December 31, 2016, the Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="background-color:#FFFFFF;font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Management<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s Report on Internal Control Over Financial Reporting</font></b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. These rules refer to the controls and other procedures of a company that are designed 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. Internal control over financial reporting includes these policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the end of the period covered by this report. Our evaluation was based on the criteria for smaller <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">public companies set forth in <i>Internal Control&mdash;Integrated Framework </i>issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013). Based on our evaluation under those criteria, our management concluded that, as of December 31, 2016, our internal control over financial reporting </font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">is ineffective due to the material weakness described below.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">The primary factor contributing to the material weakness, which relates to our financial statement close process, was as follows:</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

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			<td style="width:18pt;vertical-align:top;">
			<p style="font-family:Times New Roman, Times, serif;margin-right:0.1pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
			</td>
			<td style="vertical-align:top;">
			<p style="font-family:Times New Roman, Times, serif;margin-right:0.1pt;margin-top:0pt;text-align:justify;margin-bottom:0pt;font-size:10pt;">From time to time we experience delays in receiving, reviewing and accounting for complex transactions including financings.<font style="font-size:10pt;font-family:Times New Roman, Times, serif;">&nbsp; As a result of these delays, we were not able to file our 10-Q timely, which is evidence that we have a material weakness in internal controls.</font></p>
			</td>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="background-color:#FFFFFF;font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">W<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">hile management believes that the Company&rsquo;s financial statements previously filed in the Company&rsquo;s SEC reports have been properly recorded and disclosed in accordance with US GAAP, based on the material weakness identified above, we have already implemented, the specific remediation initiative described below:</font></p>

<p style="background-color:#FFFFFF;font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

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			<td style="width:18pt;">&nbsp;</td>
			<td style="width:18pt;vertical-align:top;">
			<p style="font-family:Times New Roman, Times, serif;margin-right:0.2pt;margin-top:0pt;text-align:left;margin-bottom:0pt;font-size:10pt;">&#9679;</p>
			</td>
			<td style="vertical-align:top;">
			<p style="font-family:Times New Roman, Times, serif;margin-right:0.2pt;margin-top:0pt;text-align:left;margin-bottom:0pt;font-size:10pt;">Management <font style="font-size:10pt;font-family:Times New Roman, Times, serif;">contracted the services of a third-party firm to create and conduct the required sophisticated analysis for the complex transactions impacting the June 30, 2016 10-K, and may continue to use their services for quarterly reporting as required.</font></p>
			</td>
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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:36.1pt;margin-right:0.2pt;margin-top:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">Management believes the action<font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> described above will remediate the material weakness we have identified and strengthen our internal control over financial reporting.</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt 0.1pt;text-align:left;">&nbsp;</p>

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<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="background-color:#FFFFFF;font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s report was not subject to attestation by the Company&rsquo;s registered public accounting firm pursuant to the exemption provided to issuers that are neither &ldquo;large accelerated filers&rdquo; nor &ldquo;accelerated filers&rdquo; under the Dodd-Frank Wall Street Reform and Consumer Protection Act.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Limitations on the Effectiveness of Internal Controls</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">There are inherent limitations to the effectiveness of any system of internal control over financial reporting, such as resource constraints, judgments used in decision-making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to the preparation and presentation of financial statements in accordance with accounting principles generally accepted in the United States. Moreover, projections of any evaluation of effectiveness in future periods are subject to the risk that controls may be inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate over time. Our management, including our chief executive officer and chief financial officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or fraud.</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>PART II</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:center;"><b>OTHER INFORMATION<font style="font-family:Times New Roman, Times, serif;font-size:10pt;"> </font></b><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><b>COMPANY</b><b> CONFIRM OR UPDATE AS NEEDED</b></font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 1 - LEGAL PROCEEDINGS</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.9pt;margin-top:0pt;text-align:justify;">From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse affect on business, financial condition or operating results.</p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 1A. RISK FACTORS</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.9pt;margin-top:0pt;text-align:justify;">The <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Company is a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and is not required to provide information required under this Item. </font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The securities sold were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">(a)(2) and Regulation D (Rule 506) under the Securities Act and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. Each investor is an &quot;accredited investor&quot; as such term is defined in Regulation D promulgated under the Securities Act.&nbsp;&nbsp; </font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>ITEM 3 - DEFAULTS UPON SENIOR SECURITIES </b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;">None.</p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 4 - </b><font style="font-family:Times New Roman, Times, serif;font-size:10pt;"><b>MINE SAFETY DISCLOSURES</b></font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;">Not Applicable<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">.</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:72pt;margin-top:0pt;text-align:left;"><b>ITEM 5 - OTHER INFORMATION</b></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.9pt;margin-top:0pt;text-align:justify;">On October 12, 2016, the Board of Directors of Integral Technologies, Inc. (the &ldquo;Company&rdquo;) approved and recommended for stockholder approval an amendment to the Company<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s Articles of Incorporation to increase the number of authorized shares of common stock to 250,000,000 from 150,000,000 (the &ldquo;Charter Amendment&rdquo;). On November 28, 2016, the Company&rsquo;s stockholders approved the Charter Amendment. The final voting results at the Company&rsquo;s special meeting of stockholders with respect to the Charter Amendment were 70,311,541shares voted for, 8,343,794 shares voted against and 167,670 shares abstaining. The Charter Amendment was filed with the Nevada Secretary of State and became effective on November 28, 2016. A copy of the Charter Amendment is attached to this Current Report as Exhibit 3.1 and is incorporated by reference herein.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.9pt;margin-top:0pt;text-align:justify;">On November 28, 2016, at the Company<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&rsquo;s special meeting of stockholders, the Company&rsquo;s stockholders approved the Charter Amendment described in Item 5.03 above.</font></p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.9pt;margin-top:0pt;text-align:justify;">As of the record date for the meeting of October 24, 2016, 137,413,603 shares of common stock, constituting all of the outstanding capital stock of the Company, were issued and outstanding, of which a total of 78,823,005 shares were voted at the special meeting.</p>

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<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>ITEM 6. Exhibits</b></p>

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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">31.1</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">31.2</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<td style="vertical-align:top;border-bottom:solid 1px #000000;;width:85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">32.1</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<td style="vertical-align:top;border-bottom:solid 1px #000000;;width:85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.</p>
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			<td style="vertical-align:top;border-bottom:solid 1px #000000;;width:12.6%;">&nbsp;</td>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">32.2</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">XBRL Taxonomy Extension Calculation Linkbase Document</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">XBRL Taxonomy Extension Definition Linkbase Document</p>
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			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">EX-101.LAB</p>
			</td>
			<td style="vertical-align:top;width:2%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align:top;width:85.9%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">XBRL Taxonomy Extension Labels Linkbase Document</p>
			</td>
		</tr>
		<tr>
			<td style="vertical-align:top;width:12.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align:top;width:2%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align:top;width:85.9%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td style="vertical-align:top;width:12.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">EX-101.PRE</p>
			</td>
			<td style="vertical-align:top;width:2%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align:top;width:85.9%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">XBRL Taxonomy Extension Presentation <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Linkbase&nbsp;Document</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-left: 0pt; margin-right: 0pt">
<div id="PGNUM" style="text-align: center; width: 100%; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">8</div>

<hr style="PAGE-BREAK-AFTER: always; border: none; width: 100%; height: 2px; color: #000000; background-color: #000000">
<div id="PGHDR" style="text-align: left; width: 100%">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>SIGNATURES</b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">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.</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" style="text-indent: 0; width: 100%;FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">

		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td colspan="2" valign="top" width="38%">
			<p style="margin-top: 0; margin-bottom: 0;"><b>Integral Technologies, Inc.</b></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td align="left" nowrap="nowrap" valign="bottom" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td align="left" style="text-align: left;" valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td style="text-align: left" valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">By: </font></p>
			</td>
			<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">/s/&nbsp;</font>Doug<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">las Bathauer</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;">Doug<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">las Bathauer, Chief Executive Officer</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;">(<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Principal Executive Office)</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>

</table>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" style="text-indent: 0; width: 100%;FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">

		<tr>
			<td align="left" style="text-align: left;" valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td style="text-align: left" valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">By: </font></p>
			</td>
			<td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">/s/&nbsp;</font><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Eli Dusenbury</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">Eli Dusenbury, Chief Financial Officer</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="50%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="3%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
			<td valign="top" width="35%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="font-family:Times New Roman, Times, serif;font-size:10pt;">(Principal Financial and Accounting Officer)</font></p>
			</td>
			<td valign="top" width="12%">
			<p style="margin-top: 0; margin-bottom: 0;"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&nbsp;</font></p>
			</td>
		</tr>

</table>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:216pt;margin-right:0pt;margin-top:0pt;text-align:left;">&nbsp;</p>

<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">Date: <font style="font-family:Times New Roman, Times, serif;font-size:10pt;">February 17, 2017</font></p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-left: 0pt; margin-right: 0pt">
<div id="PGNUM" style="text-align: center; width: 100%; font-family: &quot;Times New Roman&quot;; font-size: 10pt;">9</div>

<hr style="PAGE-BREAK-AFTER: always; border: none; width: 100%; height: 2px; color: #000000; background-color: #000000">
<div id="PGHDR" style="text-align: left; width: 100%">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:72pt;margin-right:0pt;margin-top:0pt;text-align:center;text-indent:-72pt;">EXHIBIT INDEX</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL22" style="width: 100%; text-indent: 0px; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-collapse: collapse; border: 1px solid rgb(0, 0, 0);">

		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">&nbsp;</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td style="vertical-align: top; width: 85.1%;">&nbsp;</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">31.1</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">31.2</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">32.1</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">32.2</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">&nbsp;</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">EX-101.INS</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">XBRL Instance Document</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">EX-101.SCH</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">XBRL Taxonomy Extension Schema Document</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">EX-101.CAL</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">XBRL Taxonomy Extension Calculation Linkbase Document</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">EX-101.DEF</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">XBRL Taxonomy Extension Definition Linkbase Document</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">EX-101.LAB</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">XBRL Taxonomy Extension Labels Linkbase Document</p>
			</td>
		</tr>
		<tr style="border-bottom: 1px solid rgb(0, 0, 0);">
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td style="vertical-align: top; width: 12.6%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">EX-101.PRE</p>
			</td>
			<td style="vertical-align: middle; width: 2.2%; border-left: 1px solid rgb(0, 0, 0); border-right: 1px solid rgb(0, 0, 0);">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">&nbsp;</p>
			</td>
			<td style="vertical-align: top; width: 85.1%;">
			<p style="font-family:Times New Roman, Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:0pt;margin-right:1.6pt;margin-top:0pt;text-align:left;">XBRL Taxonomy Extension Presentation Linkbase<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&nbsp; Document</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt;">&nbsp;</p>

<p style="margin: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center;">10</p>
</body>
</html>
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rdgf20170216c_10k.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
DECEMBER 31
,
201
6
.
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER 0-28353
INTEGRAL TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada
98-0163519
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
2605 Eastside Park Road Suite 1, Evansville, Indiana 47715
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (
812) 550-1770
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
☒
No ☐
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
☒
No ☐
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 ☐
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting
company ☒
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] 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 February 10, 2017, there were 140,402,603
outstanding shares of the Registrant's Common Stock, $0.001 par value.
INTEGRAL TECHNOLOGIES, INC.
DECEMBER 31
,
201
6
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
F-1
Consolidated Statement
s of Operations
F-2
Consolidated Statement
s of Cash Flows
F-3
Notes to Consolidated Financial Statements
F-4
Item 2. Management
's Discussion and Analysis and Results of Operations
1
Item 3. Quantitative and Qualitative Disclosure About Market Risk
5
Item 4. Controls and Procedures
5
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
7
Item 1A. Risk Factors
7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
7
Item 3. Defaults Upon Senior Securities
7
Item 4.
Mine Safety Disclosures
7
Item 5. Other Information
7
Item 6. Exhibits
9
SIGNATURES
10
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Integral Technologies, Inc
.
Consolidated Balance Sheets
As of December 31, 2016, (Unaudited) and June 30, 2016 (Audited)
December
31
, 2016
June 30, 201
6
ASSETS
Current assets:
Cash
$
43,615
$
47,350
Accounts receivable
33,154
21,894
Prepaid expense
63,762
90,329
Total current assets
140,531
159,573
Deposit
2,500
2,500
Property and equipment, net
75,957
74,689
Total Assets
$
218,988
$
236,762
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and
accrued expenses
$
1,687,690
$
1,004,550
Related party payable
127,500
30,000
Loans payable
98,560
148,022
Deferred revenue
50,000
50,000
Convertible debentures
686,408
664,621
Derivative liabilities
44,000
142,797
Warrant liability
49,200
87,500
Total current liabilities
2,743,358
2,127,490
Non-current liabilities:
Deferred revenue
, net of current portion
295,833
320,833
Total Liabilities
3,039,191
2,448,323
Commitments and Contingencies
Stockholders' Deficit
Preferred stock and paid-in capital in excess of  $0.001 par value,
20,000,000 shares authorized, 0 (June 30, 2016 - 0) issued and outstanding
-
-
Common stock and paid in capital in excess of
$
0.001 par value, 150,000,000 shares authorized, 140,402,603 (June 30, 2016 - 133,506,044) issued and outstanding
55,768,860
55,024,270
Share subscriptions and obligations to issue shares
448,904
340,184
Accumulated other comprehensive income
46,267
46,267
Accumulated deficit
(59,084,234
)
(57,622,282
)
Total stockholders' deficit
(2,820,203
)
(2,211,561
)
Total Liabilities and Stockholders' Deficit
$
218,988
$
236,762
The accompanying notes are an integral part of the consolidated financial statements.
F-1
Integral Technologies, Inc
.
Consolidated Statements of Operations
For the three and six months ended December 31, 2016 and 2015 (unaudited)
Three Months Ended
December
31,
Six
Months Ended
December
31,
2016
2015
2016
2015
Revenue
$
27,841
$
29,743
$
51,086
$
42,443
Operating e
xpenses:
Selling, general, and administrative expenses
543,316
714,255
1,199,745
1,510,708
Research and development
121,075
162,252
250,914
345,249
Total
operating
expenses
664,391
876,507
1,450,659
1,855,957
Fair value gain (loss) on derivative financial liabilities
4,900
17,351
34,138
(39,499
)
Fair value gain on warrant liability
5,500
-
38,300
-
(Loss) gain
on extinguishment of convertible debenture
(33,906
)
-
(33,906
)
1,927
Other
income
97
157
109
183
Interest expense
(71,218
)
(164,159
)
(101,020
)
(224,897
)
Net Loss
$
(731,177
)
$
(993,415
)
$
(1,461,952
)
$
(2,075,800
)
Net loss per share
–
basic
and diluted
$
(0.01
)
$
(0.01
)
$
(0.01
)
$
(0.02
)
Weighted average number of common
shares outstanding
137,839,288
117,022,424
136,591,909
115,613,819
The accompanying notes are integral part of the consolidated financial statements.
F-2
Integral Technologies, Inc
.
Consolidated Statements of Cash Flows
For the six months ended December 31, 2016 and 2015 (unaudited)
Six
Months Ended
December 31
,
2016
2015
Cash flows from operating activities:
Net loss
$
(1,461,952
)
$
(2,075,800
)
Items not involving cash
Depreciation
2,232
2,291
Amortization of debt issuance costs
61,060
-
Deferred revenues
(25,000
)
(25,000
)
Fair value gain on warrant liability
(38,300
)
-
Fair value
(gain) loss on derivative financial liabilities
(34,138
)
39,499
Interest on convertible debentures
37,167
204,304
Loss (gain)
on extinguishment of convertible debentures
33,906
(1,927
)
Obligation to issue shares for consulting services
12,720
18,060
Stock-based compensation
89,790
89,792
Settlement of debt
-
6,220
Changes in working capital
795,947
278,693
Net cash used in operating activities:
(526,568
)
(1,463,868
)
Cash flows from
investing
activities:
Purchase of property and equipment
(3,500
)
(13,756
)
Net cash used in investing activities:
(3,500
)
(13,756
)
Cash flows from financing activities:
Proceeds from loans
92,000
-
Repayment of loans
(110,022
)
(32,335
)
Proceeds from issuance of common stock
530,355
28,000
Proceeds from
warrants exercised
-
882,271
Subscriptions received
14,000
-
Proceeds from convertible debentures
-
763,950
Net cash provided Financing activities:
526,333
1,641,886
(Decrease) increase in cash
(3,735
)
164,262
Cash, beginning of
year
47,350
117,307
Cash, end of
year
$
43,615
$
281,569
Supplemental cash flow information:
Interest paid
$
2,793
$
13,110
The accompanying notes are integral part of the consolidated financial statements.
F-3
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 1 -
NATURE OF OPERATIONS
Integral Technologies, Inc. (the "Company" or "Integral") was incorporated under the laws of the state of Nevada on February 12, 1996 and
has recently relocated its head office to Evansville, Indiana, USA. The Company is in the business of researching, developing and commercializing new electrically-conductive resin-based materials called ElectriPlast.
The Company will be devoting all of its resources to the research, development and commercialization of its ElectriPlast technology.
NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and are presented in United States dollars.
We have prepared the consolidated financial statements included herein, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). The consolidated financial statements include the Company's wholly owned subsidiaries. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed from the accompanying consolidated financial statements. The accompanying comparative year end consolidated balance sheet was derived from the audited financial statements included in the annual financial statements. The accompanying interim financial statements are unaudited, and reflect all adjustments which are in the opinion of management, necessary for a fair statement of the Company's consolidated financial position, results of operations, and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. All intercompany transactions and balances have been eliminated in consolidation. The Company's results of operations and cash flows for the interim periods are not necessarily indicative of the results of operations and cash flows that it may achieve in future periods. Nevertheless, we believe that the disclosures are adequate to ensure the information presented is not misleading. These unaudited consolidated financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended June 30, 2016 included in the Company's 10-K filed with the SEC on January 17, 2017.
Principles of consolidation
These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries,
Integral Operating, LLC ("Operating"), Integral Vision Systems, Inc. ("IVSI"), Integral Systems Corporation (formerly Antek Wireless Inc.), Electriplast Corp. (formerly Plastenna, Inc.) ("Electriplast"), Integral Technologies Asia, Inc. ("Asia") and its 76.625%-owned subsidiary, Emergent Technologies Corp. ("ETC"), which is currently inactive. ETC's non-controlling interest balance is immaterial to the financial statements. All intercompany balances and transactions have been eliminated.
Basic and
d
iluted
n
et
l
oss
p
er
s
hare
Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the
year. Diluted net loss per common share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. Because the Company has reported a net loss for all years presented, diluted net loss per common share is the same as basic net loss per common share for those years.
F-4
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES (
CONTINUED
)
Stock issued in exchange for services
The valuation of common stock issued in exchange for services
to non-employees is valued at an estimated fair market value of the Company's stock price based upon trading, sales and other issuances of the Company's common stock. Stock-based compensation expense related to awards to non-employees is recognized based on the then-current fair value at each measurement date over the associated service period of the award, which is generally the vesting term, using the accelerated attribution method. The fair value of non-employee stock options is estimated using the Black-Scholes valuation model with assumptions generally consistent with those used for employee stock options, with the exception of the expected term, which is the remaining contractual life at each measurement date. Restricted shares are issued or become issuable when they vested and are measured at their grant date and recorded evenly over the vesting period.
Revenue recognition
The Company has not generated significant revenue since inception. Although the Company has begun to receive revenue from the sale of material for commercial applications
and a services contract, the Company continues to devote substantially all its efforts to developing the business.
The Company recognizes revenues from a contract with a plastics technology company for which it provides se
rvices and products, on a net basis. Fees are recognized monthly as services and products are provided. This is the point that revenues are considered realizable and earned.
As discussed in Note 14
, the Company signed a ten-year license agreement with Hanwha Advanced Materials Co., Ltd., ("Hanwa"), of South Korea. For license agreements that the Company enters into, revenue is recognized when all four of the following criteria are met: (i) a contract is executed, (ii) the contract price is fixed and determinable, (iii) delivery of the service or products has occurred, and (iv) collectability of the contract amounts is reasonably assured.
The Company
's license agreements can provide for upfront license fees, maintenance payments, and/or substantive milestone payments. In accordance with revenue recognition guidance, the Company identifies all of the deliverables at the inception of the agreement. License fees which are nonrefundable fees will be evaluated for standalone value to the licensor and may be recognized upon delivery pursuant to terms of the agreement. Upfront nonrefundable fees associated with license and development agreements where the Company has continuing involvement that does not meet the requirement of a separate deliverable are recorded as deferred revenue and recognized over the estimated service period. The Company may also enter into agreements to provide engineering services. The Company recognizes revenue from engineering services as the service has been performed and amounts are reasonably assured of collection.
Foreign currency translation
The Company
's functional and reporting currency is the US dollar. Transactions and balances for the Company's operations that are not in US dollars are translated into US dollars at the exchange rates in effect at the balance sheet dates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Revenues and expenses are translated at the rate of exchange on the date of the transaction, except for amortization and depreciation, which are translated on the same basis as the related assets. Resulting translation gains or losses are included in the consolidated statements of operations. The foreign currency impact on the consolidated financial statements is immaterial.
Advertising
Advertising costs are char
ged to operations when incurred. Advertising expense was $4,837 and $31,083 for the six months ended December 31, 2016 and 2015, respectively. Advertising expense was $901 and $14,166 for the three months ended December 31, 2016 and 2015, respectively.
F-5
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Research and development
The Company expenses all r
esearch and development expenditures as incurred.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates include valuation allowance for deferred income tax assets, the determination of the assumptions used in calculating the fair value of stock-based compensation and the determination of the assumptions used in calculating the fair value of derivative financial liabilities
and the warrant liability. Actual results could differ from those estimates and could impact future results of operations and cash flows.
F
inancial instruments
We have issued financial instruments that contain embedded conversion features that qualify as derivatives and are therefore accounted for as liabilities
. The derivative liabilities are initially recorded at fair value, with gains and losses arising from changes in fair value recognized in the consolidated statements of operations at each period end while such instruments are outstanding. The derivative liabilities relating to the convertible debt is valued using a binomial lattice model and the Black-Scholes Model where appropriate. The fair value of the warrants issued with reset provisions are measured using the Monte Carlo method.
Fair value measurements
Assets and liabilities recorded at fair value in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. For certain of the Company
's financial instruments including cash and accounts payable, the carrying values approximate fair value due to their short-term nature.
ASC 820
Fair Value Measurements and Disclosures
specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820, these inputs are summarized in the three broad levels listed below:
●
Level 1
– Quoted prices in active markets for identical securities;
●
Level 2
– Other significant observable inputs that are observable through corroboration with market data (including quoted prices in active markets for similar securities); and
●
Level 3
– Significant unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability.
The fair value measurement of the derivative liability
and warrants with reset provisions are classified as a Level 3 measurement as further discussed under Fair Value Measurements.
F-6
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES (
CONTINUED
)
Income
taxes
The Company uses the asset and liability approach in its method of accounting for income taxes that requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. A valuation allowance against deferred tax assets is recorded if, based upon weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority is recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained.
Stock-based compensation
The Company accounts for stock-based compensation expense associated with stock options and other
forms of equity compensation by estimating the fair value of share-based payment awards on the date of grant using the market price of common stock or the Black-Scholes option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations. The Company uses the straight-line single-option method to recognize the value of stock-based compensation expense for all share-based payment awards. Stock-based compensation expense recognized in the consolidated statements of operations is reduced for estimated forfeitures, as it is based on awards ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Property and Equipment
Property and equipment are recorded at cost and depreciated over the estimated useful lives using the straight-line method of depreciation.
Amortization of the leasehold improvements is computed using the straight-line method over the lesser of the estimated useful lives of the underlying assets and the term of the related lease.
Reclassifications:
For comparability, certain
2016 fiscal year amounts have been reclassified to conform to classifications adopted in the 2017 fiscal year. These reclassifications did not have an impact on stockholders' deficit or net loss on the 2016 fiscal year consolidated financial statements.
Recent Accounting Pronouncement
s
not yet adopted
In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The requirements are effective for annual reporting periods beginn
ing after December 15, 2017. Early adoption is not permitted. We are evaluating the impact of the amended revenue recognition guidance on our financial statements.
F-7
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncement
s not yet adopted (Continued)
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity
's Ability to Continue as a Going Concern ("ASU 2014-15").  ASU 2014-15 provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements.  The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued.  An entity must provide certain disclosure if conditions or events raise substantial doubt about the entity's ability to continue as a going concern."  ASU 2014-15 applies to all entities and is effective for annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted.  The adoption of this standard is not expected to have a material impact on the Company's financial position, results of operations or cash flows.
In March 2016, the FASB issued ASU 2016-09,
Compensation – Stock Compensation:  Improvements to Employee Share-Based P
ay
ment Accounting,
which relates to the accounting for employee share-based payments.  This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows.  This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years.  The Company is currently evaluating the impact the adoption of this ASU will have on our financial statements.
In February 2016, FASB issued ASU 2016-2,
Leases
, under which lessees will recognize most leases on the balance sheet. This will generally increase reported assets and liabilities. For public entities, this ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2018. ASU 2016-2 mandates a modified retrospective transition method for all entities. We are in the process of determining the impact that the updated accounting guidance will have on our financial statements.
Recent accountin
g
pronouncements adopted
In April 2015, the FASB issued Update No. 2015-03
– Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt issuance costs. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company's financial position, results of operations or cash flows.
NOTE 3
-
GOING CONCERN
These
consolidated financial statements have been prepared on a 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 $1,461,952 for the six months ended December 31, 2016 (2015 - $2,075,800), and an accumulated deficit as of December 31, 2016, $59,084,234 (June 30, 2016 - $57,622,282) and a working capital deficiency of $2,602,827 as of December 31, 2016, (June 30, 2016 - $1,967,917). The Company does not have sufficient revenue-producing activities to fund its expenditure requirements to continue to advance researching, developing and commercializing its conductive plastics technology, ElectriPlast. Subsequent to period end, the Company raised $9,800 pursuant to private placements (note 12). The Company estimates that, without further funding, it will deplete its cash resources within three months. These factors raise substantial doubt about the Company's ability to continue as a going concern.
F-8
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 3 -
GOING CONCERN
(CONTINUED)
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 and debt issuances to finance operations. If none of these events occur, there is a risk that the business will fail.
NOTE
4
-
STOCKHOLDERS' DEFICIT
Common stock
During the
six months ended December 31, 2016, the Company completed the following private placements:
(i)
On July 27, 2016, the Company
raised $226,355 for the issuance of 1,968,304 units. Each unit consisted of one common share at $0.115 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 492,076
common shares on or before April 30, 2017 at an exercise price of $0.30 per warrant.
(ii)
On
August 22, 2016, the Company raised $94,000 for the issuance of 817,391 units. Each unit consisted of one common share at $0.115 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 204,348
common shares on or before May 31, 2017 at an exercise price of $0.30 per warrant.
(iii)
During December, 2016, the Company completed private placements amounting to $210,000 for the issuance of 3,000,000 units.
Each unit consisted of one common share at $0.07 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 750,000
common shares on or before October 1, 2017 at an exercise price of $0.20 per warrant.
Pursuant to a promissory note agreement, 75,000 common shares were issued on
October 24, 2016 (note 10(d)).
During the
six months ended December 31, 2016, the Company issued shares of common stock pursuant to debt agreements:
(i)
On September 21, 2016, the Company issued 1,035,864 shares to settle the remaining balance of $69,649, the first convertible debt note with JMJ Financial (note
9).
(ii)
On October 11, 2016, the Company issued 75,000 shares pursuant to a debt agreement, measured at a fair value of the Company
's common shares on that date of $10,500, recorded as interest expense (note 10).
During the
year ended June 30, 2016, the Company completed the following private placement:
(i)
Completed a private placement amounting to $28,000 for the issuance of 56,000 shares of common stock at $0.50 per share.
Preferred stock
As of
December 31, 2016, and June 30, 2016 there are no outstanding preferred shares of stock.
F-9
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE
4
-
STOCKHOLDERS' DEFICIT
(CONTINUED)
Stock-based compensation
During the
six months ended December 31, 2016, the Company recorded stock-based compensation expense with respect to vesting stock options, restricted stock and warrants and modified stock options of $89,790 (2015 - $89,792). During the three months ended December 31, 2016, the Company recorded stock-based compensation expense with respect to vesting restricted stock of $44,894 (2015 - $44,896), respectively. Stock-based compensation expense is included in selling, general, and administrative expenses.
Stock-based compensation not yet recognized at
December 31, 2016 relating to non-vested stock options was $106,785 (June 30, 2016 - $196,575), which will be recognized over a period of 1 year (2016 – 1 year).
Stock options
and restricted shares
The Company is reviewing several alternatives to
replace its 2001, 2003, and 2009 Stock Option Plans with a new omnibus stock option plan (the "New Plan").   In certain cases, we have made contractual commitments to provide shares or stock option grants in anticipation of putting in place the New Plan.  The New Plan will allow us to attract and retain key employees or service providers as we continue to develop our business.  We will obtain the necessary approvals based on the attributes of the plan.  We anticipate that this New Plan will be implemented prior to June 30, 2017.
In January 2001, the Company adopted the Integral Technologies, Inc. 2001 Stock Plan (the "2001 Plan"), a non-qualified stock option plan under which the Company may issue up to 2,500,000 stock options and bonuses of common stock of the Company to provide incentives to officers, directors, key employees and other persons who contribute to the success of the Company. This plan was amended during December 2001 to increase the number of
common stock options that may be granted from 2,500,000 to 3,500,000 stock options. As of December 31, 2016, there were no (June 30, 2016 - nil) common stock options available under this plan.
In April 2003, the Company adopted the Integral Technologies, Inc. 2003 Stock Plan (the "2003 Plan"), a non-qualified stock option plan under which the Company may issue up to 1,500,000 stock options. As of
December 31, 2016, there were no (June 30, 2016 - nil) common stock options available under this plan.
During the fiscal year ended June 30, 2010, the Company adopted the Integral Technologies, Inc. 2009 Stock Plan (the "2009 Plan"), a non-qualified stock option plan under which the Company may issue up to 4,000,000 common stock options. As of
December 31, 2016, there were no (June 30, 2016 - nil) common stock options available under this plan.
F-10
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 4
-
STOCKHOLDERS' DEFICIT
(
CONTINUED
)
Stock option activity
The following summarizes information about the Company
's options outstanding:
Number of Options
Price Per Option
Weighted Average Exercise Price
Outstanding, June 30,
2016
1,15
0,000
$ 0.25
to
$
0.85
$ 0.
37
Granted
-
-
-
Cancelled
(150,000)
$ 0.50
$ 0.50
Expired
(100,000)
$ 0.85
-
-
Outstanding,
December 31, 2016
9
00,000
$ 0.25
to
$
0.31
$ 0.3
0
Exercisable,
December 31, 2016
8
50,000
$ 0.25
to
$
0.31
$ 0.
30
A summary of the status of non-vested options as of
December 31, 2016, is as follows:
Number of Options
Weighted Average Grant Date Fair Value
Non-vested at June 30,
2016
50
,000
$ 0.25
Options granted
-
-
Options forfeited
-
-
Options vested
-
-
Non-vested at
December 31, 2016
5
0,000
$ 0.
25
The weighted average remaining contractual lives for options outstanding and exercisable at
December 31, 2016 are 0.79 years and 0.54 years (June 30, 2016 - 1.13 and 0.93 years), respectively.
The
following summarizes the options outstanding and exercisable:
Number of Options
Expiry Date
Exercise Price
December 31
, 2016
June 30,
2016
December 1, 2016
$0.85
-
100,000
December 1, 2016
$0.50
-
75,000
February 19, 2017
$0.31
750,000
750,000
June 1, 2017
$0.50
-
75,000
January 13, 2019
$0.25
50,000
50,000
January 13, 2020
$0.25
50,000
50,000
January 13, 2021
$0.25
50,000
50,000
Total outstanding
9
00,000
1,150,000
Total exercisable
8
50,000
1,100,000
F-11
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 4
-
STOCKHOLDERS' DEFICIT (
CONTINUED
)
Stock option activity
(continued)
The aggregate intrinsic value of options outstanding and exercisable as
of December 31, 2016 was $nil and $nil (June 30, 2016 - $nil and $nil), respectively. The aggregate intrinsic values exclude options having a negative aggregate intrinsic value due to awards with exercise prices greater than market value. The intrinsic value is the difference between the market value of the shares and the exercise price of the award.
During the year ended June 30,
2014, the Company entered into employment agreements, whereby the employees would be granted restricted shares. The holder of a restricted share award is generally entitled at all times on and after the date of the agreement to exercise the rights of a shareholder of the Company, including the right to vote and the right to receive dividends on the shares. These shareholders do not have the ability to sell, transfer or otherwise encumber the restricted shares awards until they fully vest. The restricted shares granted vest over three or four-year periods and the grant date fair value of the awards is recognized as expense over the vesting period.
During the
six months ended December 31, 2016, the Company issued nil shares (year ended June 30, 2016 - 377,500) and is obligated to issue an additional 937,500 shares pursuant to the employment agreements.
A summary of the status of non-vested restricted shares as of
December 31, 2016, is as follows:
Number of
Restricted Stock
Awards
Weighted Average
Grant Date Fair
Value
Non-vested at June 30,
2016
337,500
$
0.38
Awards granted
-
-
Awards forfeited
-
-
Awards vested
(337,500
)
$
0.38
Non-vested at
December 31, 2016
-
$
-
F-12
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 4
-
STOCKHOLDERS' DEFICIT
(
CONTINUED
)
Stock purchase warrants
The following summarizes information about the Company
's stock purchase warrants outstanding:
Number of Warrants
Price Per Share
Weighted Average Exercise Price
Balance, June 30,
2016
12,506,309
$0.
08
-
$0.50
$0.
32
Granted
1,446,424
$0.20
-
$0.30
$0.25
Expired
(8,046,844)
$0.30
-
$0.50
$0.
37
Balance,
December 31, 2016
5,905,889
$0.
08
-
$0.30
$0.
24
Number of Warrants
Expiry Date
Exercise Price
December 31
, 2016
June 30,
2016
November 25, 2016
$0.30
-
8,501,786
November 25, 2016
$0.5
0
-
2,754,523
April 30, 2017
$0.30
492,076
-
May 31, 2017
$0.30
204,348
-
October 31, 2017*
$0.30
3,209,465
-
October 31, 2017
$0.20
750,000
-
May 5, 2020
$0.08
1,250,000
1,250,000
Total
outstanding and exercisable
5,905,889
12,506,309
*
During the six months ended December 31, 2016, 3,209,465 warrants expiring November 25, 2016 were extended to October 31, 2017.
Share obligations
Pursuant to a consulting agreement
with the CFO dated August 19, 2013, the Company is obligated to pay $5,000 to $12,500 per month based on the number of hours worked and to issue 6,000 shares of common stock per month beginning September 1, 2013.
As of
December 31, 2016, no shares have been issued. As such, a total of 240,000 shares of common stock are issuable. The obligation to issue shares of common stock was measured at a weighted average fair value of $0.38 per share on the date each series of shares became issuable. During the six months ended December 31, 2016, $4,320 (2015 - $18,060) was recorded as an obligation to issue shares
. During the three months ended December 31, 2016, $2,040 (2015 - $8,340) was recorded as an obligation to issue shares.
As of December 31, 2016, a total balance of $91,260 (June 30, 2016 - $86,940) remains as an obligation to issue the shares within equity, as this obligation can only be satisfied in shares of common stock.
Pursuant to
a separation agreement with the previous CFO, the Company will issue 36,000 shares of common stock and settle all unpaid fees from July 1, 2016 to February 10, 2017 (effective date of resignation). The Company is currently in the process of negotiating a compensation settlement agreement
.
F-13
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 4
-
STOCKHOLDERS' DEFICIT, CONTINUED
Share obligations
(continued)
P
ursuant to director's agreements, the Company is obligated to issue 65,000 shares of common stock. As at December 31, 2016, these shares have not been issued and as such, the grant date fair value of $29,250 has been recognized in obligation to issue shares within equity.
Pursuant to amended debt agreements, the Company is obligated to issue 725,000 shares of common stock (note 10). As at December 31, 2016, these shares have not been issued and as such, the grant date fair value of $82,000 has been recognized in obligation to issue shares within equity.
NOTE
5
-
INCOME TAXES
There are no current or deferred tax expenses for the
six months ended December 31, 2016, 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 to provide a full valuation allowance for financial reporting purposes.  As of December 31, 2016, the Company had a net operating loss carry-forward of $43,927,000.
NOTE
6
-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Six
Months Ended
December 31
,
2016
Six
Months Ended
December 31
,
2015
Changes in working capital
Prepaid expenses
$
26,567
$
22,716
Accounts receivable
(11,260
)
(5,420
)
Accounts payable and accruals
683,140
261,397
Related party payable
97,500
-
$
795,947
$
278,693
Shares issued for:
Subscriptions received in prior year
$
-
$
114,000
Settlement of debt
-
6,220
Pursuant to
debt agreements
10,500
-
Settlement of convertible debenture
113,945
222,141
NOTE
7
-
RELATED PARTY TRANSACTIONS
As
of December 31, 2016, $127,500 (June 30, 2016 - $30,000) was owed to the Company's executives for outstanding managements fees, consulting fees and business related reimbursements, and are without interest or stated terms of repayment.
NOTE 8
-
SEGMENT INFORMATION
The Company operates primarily in one business segment, the development of electronically-conductive resin-based materials, with operations located in the US.
F-14
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE
9
-
CONVERTIBLE DEBENTURES
During the
six months ended December 31, 2016, $69,649 (three months ended December 31, 2016 - $nil) of the face value of debentures were extinguished by issuing 1,035,000 shares of common stock of the Company. As a result, $113,945 representing the market value of the shares issued was included in additional paid in capital and a loss on extinguishment of $33,906. The loss represents the difference between fair value of the derivative liabilities and the amortized cost of convertible debentures of $80,039 and the market value of the shares.
As of
December 31, 2016, the total amortized value of the outstanding convertible debentures were $686,408 (June 30, 2016 - $664,621), the total fair value of the outstanding derivative liabilities were $44,000 (June 30, 2016 - $142,797) and the fair value of the warrant liability was $49,200 (June 30, 2016 - $87,500).
During the
six months ended December 31, 2016, a fair value gain on the derivative liability of $34,138 (2015 fair value loss - $56,850) was recognized. During the three months ended December 31, 2016, a fair value gain on the derivative liability of $4,900 (2015 fair value loss - $56,850) was recognized. As of December 31, 2016, $34,179 of the fair value gain relates to the conversion features associated with the outstanding debentures with the remaining fair value loss of $41 relating to the conversion feature associated with the debenture that was settled and extinguished.
As of
December 31, 2016, 10,822,723 (June 30, 2016 – 1,374,041) common shares of the Company would be required to settle the remaining tranches of convertible debt at a weighted average conversion price of $0.065 (June 30, 2016 - $0.11) per common share.
As
of December 31, 2016, the face value of convertible debentures is $703,477 (June 30, 2016 - $1,189,649), which includes accrued interest of $120,000 (June 30, 2016 - $146,087).
During the
six months ended December 31, 2016, debt discount amortization of $37,167 (2015 - $204,304) was recorded as interest expense. During the three months ended December 31, 2016, debt discount amortization of $12,562 (2015 - $152,664) was recorded as interest expense.
The fair value of the derivative financial liability is calculated using
a binomial lattice valuation method at inception and the balance sheet date. The fair value of the warrant liability is calculated using the Monte Carlo Model at inception and the balance sheet date.
The following assumptions were used in determining the fair value of the derivative liabilit
ies at inception during the six months ended:
December 31
, 2016
Share price
0.16
-
0.50
Conversion price
0.11
-
0.37
Expected life (years)
0.78
-
2.00
Interest rate
0.42
-
0.63%
Volatility
76.39
-
101.5%
Dividend yield
N/A
Estimated forfeitures
N/A
F-15
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE
9
-
CONVERTIBLE DEBENTURES (CONTINUED)
The
following assumptions were used in determining the fair value of the derivative financial liabilities as of:
December 31
, 2016
June
3
0
,
2016
Share price
0.
09
0.16
Conversion price
0.06
0.11
Expected life (years)
0.
34
0.850
-
1.25
Interest rate
0.50%
0.45
-
0.50%
Volatility
91.50
%
91.50
-
122.29%
Dividend yield
N/A
N/A
Estimated forfeitures
N/A
N/A
The
following assumptions were used in determining the fair value of the derivative warrant liability as of:
December 31
, 2016
June
3
0, 2016
Share price
0.
09
0.16
Conversion price
0.
06
$0.09
Expected life (years)
1
.34
1.85
Interest rate
0.58%
0.58
%
Volatility
92%
92
%
Dividend yield
N/A
N/A
Estimated forfeitures
N/A
N/A
NOTE 1
0
–
LOAN
S
PAYABLE
During the
six months ended December 31, 2016, the Company had the following loan agreements outstanding, summarized as follows:
(a)
On Jan 1, 2016, the Company entered into a new financing arrangement to
cover directors' and officers' liability insurance for the period December 31, 2015 to December 31, 2016. The amount financed was $73,176, which bears interest at 3.189% annually. Monthly payments of $8,131 are required to settle amounts owing. The balance outstanding as of December 31, 2016, was $nil (June 30, 2016 - $32,522).
As of
December 31, 2016, $nil (June 30, 2016 – $45,609), representing the unamortized portion of prepaid insurance related to this policy, is included in prepaid expenses on the consolidated balance sheet.
F-16
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 10
–
LOANS PAYABLE (CONTINUED)
(b)
On January 1, 2016, the Company entered into a
short-term loan agreement with an original maturity date of July 1, 2016, for $110,000. A one-time interest charge of 5% or $5,500 is due as of July 1, 2016. The loan was entered into to settle marketing fees payable. As of June 30, 2016, the loan balance on the consolidated balance sheet is $115,500.
On July 2, 2016
, the maturity date of the loan was revised to include the following loan repayment dates:
(i)
$5,500 on July 5, 2016 (paid)
(ii)
$25,000 on July 18, 2016 (paid)
(iii)
$25,000 on July 29, 2016 (paid)
(iv)
$25,000 on August 8, 2016 (
partially repaid); and
(v)
$35,000 on August 22, 2016
In the event of a default on the loan, the unpaid principal amount together with the interest shall immediately increase by 130% and the lender will have the right to convert the outstanding balance into shares of the Company
's common stock.
The outstanding balance will have a variable conversion price equal to 65% of the market price. The market price is defined as the lowest trading price in the 15 days prior to the conversion date. The lender is limited to 4.99% of the issued and outstanding common stock at the time of conversion unless the market capitalization of the Company falls below $2,500,000, then the limit will increase to 9.99%.
On September 9, 2016,
the lender agreed to waive its right to conversion of the loan until January 31, 2017. The Company is in the process of amending the terms of repayment. The Company expects to settle the debt with cash, as such, no consideration for the default conversion feature has been accounted for.
(c)
On September 2, 2016, the
Company entered into a promissory note agreement and received a total of $80,000, net of $8,000 in fees. The $88,000 plus a one-time interest charge of 10% is due December 13, 2016. In the event of default (non-payment), the balance of the promissory note will increase by 140%.
On
December 13, 2016, the maturity date of the promissory note was extended to January 30, 2017. As consideration for the extension, the Company agreed to issue 500,000 shares. The shares were measured at the fair value on the agreement date and as such, $55,000 was recognized as an obligation to issue shares and the value of debt. During the six months ended December 31, 2016, $20,625 of the fair value of the share obligation was amortized and recognized in interest expense.
On
January 29, 2017, the maturity date of the promissory note was extended to March 2, 2017. As consideration for the extension, the Company agreed to issue 600,000 shares.
(d)
On
October 24, 2016, the Company entered into a promissory note agreement and received a total of $12,000. The note is Due November 9, 2016. In addition, the Company issued 75,000 common shares within 14 days of the start of the note. In the event of default (non-payment), the balance of the promissory note will increase by 140%. These shares were measured at the agreement date fair value with $10,500 recognized as interest expense and additional paid in capital.
On
November 29, 2016, the maturity date of the promissory note was extended to January 30, 2017. As consideration for the extension, the Company agreed to issue 225,000 shares. The shares were measured at the fair value on the agreement date and as such, $27,000 was recognized as an obligation to issue shares and the value of debt. During the six months ended December 31, 2016, $13,935 of the fair value of the share obligation was amortized and recognized in interest expense. The Company is in the process of amending the terms of repayment.
F-17
Integral Technologies, Inc
.
Notes to the Consolidated Financial Statements
NOTE 1
1
-
DEFERRED
REVENUE
On June 21, 2013, the Company signed a
ten-year license agreement with Hanwha Advanced Materials Co., Ltd, of South Korea. The agreement grants Hanwha exclusive rights to sell, distribute and manufacture Integral's patented line of conductive plastics, ElectriPlast, in South Korea, as well as non-exclusive sales and distribution rights to ElectriPlast for Japan, Taiwan and the China markets.
The agreement called for license fees as follows:
●
$250,000 (received) to be paid to the Company within 15 business days; and
●
$250,000 (received) payment to be paid to the Company no later than one year after signing the
agreement.
The
payments have been recorded as deferred revenue, which will be recognized as license fee revenue in the consolidated statements of operations over the life of the ten-year contract. During the three months ended December 31, 2016, $25,000 (2015 - $25,000) has been recognized as revenue
.
As of
December 31, 2016 and June 30, 2016, the remaining deferred revenue was as follows:
December 31
,
2016
June 30, 2016
Current
$
50,000
$
50,000
Non-current
295,833
320,833
$
345,833
$
370,833
NOTE
12
-
SUBSEQUENT EVENTS
During January 2017, the Company completed a private placement amounting to $23,800 for the issuance of 340,000 units.
Each unit consisted of one common share at $0.07 per share and one quarter share purchase warrant at $0.001 per warrant to purchase 85,000
common shares on or before October 1, 2017 at an exercise price of $0.20 per warrant. As of December 31, 2016, $14,000 had been received and recorded as share subscriptions and obligations to issue shares.
F-18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
Forward Looking Statements
This quarterly report on Form 10-Q and other reports (collectively, the "Filings") filed by
Integral Technologies, Inc. ("Integral" or the "Company") from time to time with the U.S. Securities and Exchange Commission (the "SEC") contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by Company's management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions as they relate to the Company or the Company's management identify forward-looking statements. Statements contained herein that are not historical facts are forward-looking statements.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. 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 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, 2016 as filed with the Securities and Exchange Commission on January 17, 2017, and available at
www.sec.gov.
Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
This discussion and analysis should be read in conjunction with our
consolidated 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, except as required by law.
Overview
Integral focuses the majority of its resources on researching, developing and commercializing its ElectriPlast® technologies. The technology possesses a multitude of applications in a myriad of industries. These include the auto industry, the aerospace, consumer electronics, and commercial aviation industries, among others. One key factor that could drive demand for ElectriPlast is the need for light-weighting. Automotive and aerospace are leading the way to achieve reduced emissions and increased fuel economy. Light-weighting involves the substitution of lighter materials, often times using carbon-fiber based, for heavier (aluminum and other metals) materials.
In addition, Integral allocates resources to expand and protect the extensive intellectual property holdings surrounding its ElectriPlast® technology. Integral
's business strategy focuses on the leveraging of its intellectual property rights and our strength in product design and material innovation. Integral is focusing its business development and marketing efforts on securing licensing and/or joint development agreements in areas for which it currently hold patents covering specific materials, components, parts, applications or end-products incorporating conductive resins and ElectriPlast technology. Integral collaborates with suppliers, Tier1 vendors, OEM's and manufacturers of products who would benefit from the incorporation of any of the ElectriPlast® applications.
ElectriPlast® is an innovative, electrically and thermally 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, is non-corrosive, and can serve as an electrically conductive alternative
Various examples of applications for ElectriPlast® where Integral holds patent protection are: batteries, antennas, electronics shielding, lighting/LED circuitry, motors, switch actuators, resistors, medical devices, thermal management, toys and cable connector bodies, among others. We have been working to introduce these new applications and the ElectriPlast® technology on a global scale.
During the
year ended June 30, 2016, several steps were taken by the Company to mature certain client relationships and applications while also addressing on-going funding requirements. The Company signed a global Reseller and Marketing Agreement with a leading nickel-plating carbon fiber manufacturer dated March 1, 2016. The agreement provides exclusivity for certain major customer(s) with a provision for expanding the exclusivity rights to the Company. Nickel-plated carbon fiber is a key conductive material in the making of ElectriPlast® and the Company will pursue other opportunities that strengthens its relationship with key suppliers. Earlier in 2015, the Company filed non-provisional patents associated with its bipolar battery technology and bipolar plate products. The Company believes the bipolar battery plate and associated power storage technology provides long-sought breakout weight savings and performance benefits for the lead-acid battery market. The company intends to develop the power storage technology as an Integral Technologies business unit and will seek partners to fully develop batteries for consumer and industrial consumption. The first prototype battery utilizing the ElectriPlast bipolar technology was produced in 2015. The battery was produced by Advanced Battery Concepts. Based on the initial prototype and a series of discussion during the quarter, the Company announced on April 26, 2016 a Joint Technology Assessment Program with Advanced Battery Concepts, an industry leader in large format bi-polar battery design and manufacture. Working under the JTAP, the parties produced a second, more advanced bipolar battery which it showcased at the 2016 North America Battery Show in Novi, Michigan and at the Company's special shareholders meeting in Evansville, Indiana in November 2016.
1
During the quarter, the Company continued its efforts to expand its
antistatic and static dissipative product line. The expansion of the product line addresses the needs of a much larger segment of the global conductive plastics market, including materials for electrostatic dissipation (ESD) and antistatic applications.  The new product line enables the Company to offer a more complete line of conductive plastics serving both the needs of lower conductive applications, while continuing to offer its more highly conductive line of plastics, all part of the
ElectriPlast® family of conductive plastics. The Company believes the antistatic and static dissipative line holds significant revenue potential. The Company is currently fulfilling commercial orders to multiple customers with its new product line.
Companies continue to incorporate ElectriPlast in their on-going product development evaluations. On March 30, 2016, the
Company announced that LeddarTech includes ElectriPlast material to produce lens barrels in its latest release of its LeddarOne Sensing Module, a compact and low-cost lidar that provides valuable presence detection and distance measurement capabilities to a wide range of finished products. In the announcement, LeddarTech highlighted the superior qualities of ElectriPlast in the key areas of weight-reduction, cost, and robustness in the demanding environment of drone aircraft.
In Asia, the Company, through its newly signed reseller agreement, provided conductive material containing nickel-plated carbon fiber material to Hanwha for prototype development for a major auto manufacturer based in Asia that is developing six (6) new applications. The Company continues to support Chang Rim Eng Inc. ("Chang Rim") as it readies to commercialize ElectriPlast® in South Korea. The Company announced on October 8, 2014 that Chang Rim had successfully completed its prototype phase for a motor casing targeting the domestic Asia automotive market. On August 20, 2015, the Company announced with Chang Rim the largest ElectriPlast order in the Company
's history.
The company continues to make progress in shielding in the electric vehicle market. During the year, the Company provided ElectriPlast material and applications support to a Tier 1 company for finalizing an application for an electric vehicle. The company has been approved as a supplier for the domestic Tier 1 for the purpose of supplying ElectriPlast for a specific electric vehicle platform expected to go into production in 2017. The company expects initial commercial orders to be produced in the second half of 2017.
The Company completed its first order in December 2016. The Company has also received initial pre-production orders from this Tier 1 for a 2018 European Electric vehicle.
In January
2016, the Company and a Tier 1 partner reached a technical milestone when its wire shielding application currently under development obtained the highest shielding effectiveness to date. The Company believes the level of shielding effectiveness validates the commercial viability of the technology. The companies have completed subsequent trials and continue to work towards commercialization for an effective alternative in replacing the more-costly metal, braided shielding.
The Company entered into a term
sheet dated April 19, 2015 with a conductive plastics compounder (the "Compounder") for the purpose of acquiring all the assets of the Compounder, with the Compounder remaining a separate entity. The Compounder is a niche supplier with an international customer base. The Company's strategic interest in the Compounder is its equipment and expertise in conductive material compounding, as well as its customer base. The term sheet contemplated that upon the closing, all sales and marketing would be performed by the Company, and the Compounder would become the sole manufacturer for the Company. In October 2015, the founder and majority shareholder of the Compounder died from an accident before the transaction could be completed. A Special Administrator has been assigned to the estate, but due to the complexity of the deceased's estate, the final disposition of the Compounder is unclear. Subsequently, all manufacturing employees left the Compounder and its customers turned to other suppliers.
Funding remains a priority for the Company, and during
the six months ended December 31, 2016, $526,333 was raised through a combination of debt and private placements, net of loan repayments.
Pursuant to
a separation agreement with the previous CFO, the Company will issue 36,000 shares of common stock and settle all unpaid fees from July 1, 2016 to February 10, 2017 (effective date of resignation). The Company is currently in the process of negotiating a compensation settlement agreement
.
2
Patents/Trademarks on Technologies
Our intellectual property portfolio consists of over fourteen years of accumulated research and design knowledge and trade secrets.
We have sought United States ("US") patent protection for many of our ideas related to our ElectriPlast
®
technologies.  Currently, we have filed 117 non-provisional US patent applications, 55 of which have been issued as patents, with 51 of those issued patents not yet expired.  No assurances can be given that all patent applications will be approved; however, to the extent that patents are not granted, we will continue to attempt to commercialize these technologies without the protection of patents.  As patents are issued, we will have the exclusive right to use and license the design(s) described in each issued patent for the life of the patent in the US.
Of the 117 non-provisional applications filed that have not issued as patents, 9 are currently pending, and 53 are no longer pending.
Integral continues to pursue intellectual property protection through its patent and trademark portfolio while constantly evaluating its filings to judiciously apply resources to our most critical technologies.  Integral has filed 12 Canadian patent applications, 2 of which have issued, with 10 no longer being active.  Integral has filed an International patent application, which published on September 25, 2014, claiming features of the Company's capsule.  Subsequent to the year end the Company filed national stage applications based on this PCT on September 15, 2015 in Canada, Mexico, Brazil, China, Japan, South Korea, Europe, Malaysia, Saudi Arabia, India, Thailand, Philippines, Singapore and Australia. On August 10, 2015, the Company also filed new US and PCT patent applications for a Bipolar Plate and Method of Making and Using Same   with a US publication date of November 3, 2016 and a PCT publication date of November 10, 2016.
Integral has a registered US trademark for ELECTRIPLAST
®
, a registered US trademark for INTEGRAL (with design)
®
, and a registered US trademark application for WHERE LIGHTWEIGHTING STARTS
TM
.  In addition, Integral has a registered mark for ELECTRIPLAST
®
in China, Japan, Korea, Europe
and
Taiwan.  In addition, Integral has a registered mark for WHERE LIGHTWEIGHTING STARTS
®
in Europe, Japan and Korea.  These applications and registrations establish rights for the use of these marks in commerce.
Financial Condition
The Company has not generated significant revenue since inception. Although the Company has begun to receive some revenue from the sale of material for commercial applications, the Company is devoting substantially all its efforts to developing the business
. From inception on February 12, 1996 through June 30, 2016, we have accrued an accumulated deficit of approximately $59 million.
As of
December 31, 2016, our assets were $218,988, consisting of cash of $43,615, accounts receivable of $33,154, prepaid expense of $63,762, deposit of $2,500 and property and equipment of $75,957.
As of
December 31, 2016, current liabilities of $2,743,358 consisting of accounts payable and accruals of $1,687,690, related party payables of $127,500, a loan payable of $98,560, deferred revenues of $50,000, convertible debentures of $686,408, derivative liabilities of $44,000 and warrant liability of $49,200. Non-current liabilities consist of deferred revenues of $295,833.
As of
December 31, 2016, total stockholders' deficit was $2,820,203.
Results of Operations of the Six Months Ended December 31, 2016
, C
ompared to the
Six
Months Ended December 31, 2015
Our net loss for the
six months ended December 31, 2016, was $1,461,952 compared to a net loss of $2,075,800 for the six months ended December 31, 2015, representing a decrease of $613,848. Significant changes for the six months ended December 31, 2016, compared to the corresponding period of the prior period have been described as follows:
●
Total r
evenues increased by $8,643 to $51,086 for the six months ended December 31, 2016. The increase is a result of new services revenue stream related to the antistatic and dissipative products which has generated $20,249 in new revenues, which is offset by a slight decrease in sales of the higher conductive line of ElectriPlast of $11,606.
Operating expense for the
six months ended December 31, 2016, were $1,450,659 compared to operating expense of $1,855,957 for the six months ended December 31, 2015, representing a decrease of $405,298. Significant changes for the six months ended December 31, 2016, compared to the corresponding period of the prior fiscal year have been described as follows:
●
Consulting fees decreased by $
200,342 to $302,283 for the six months ended December 31, 2016. Consulting fees include non-cash share obligations for the six months ended December 31, 2016 of $4,320 compared to non-cash shares issued for services of $18,060 for the six months ended December 31, 2015. The decrease is due to implementing cost saving strategies and reduction in use of external consultants. As described in the notes to the financial statements, the fair value of the share obligations were measured in reference to their market value on the date each series of shares became issuable;
●
Research and development costs decreased by $
94,335 to $250,914 for the six months ended December 31, 2016. The decrease is due to the Company's focus on further developing nascent revenue streams and from reduced research and development requirements for the quarter.
3
Significant changes for other income and expenses for the
six months ended December 31, 2016, compared to the six months ended December 31, 2015, have been described as follows:
●
Fair value
gain on derivative financial liabilities for the six months ended December 31, 2016 was $34,138 compared to a loss of $39,499 for the six months ended December 31, 2015. During the six months ending December 31, 2016, the Company primarily used equity financing to fund operations; whereas, in the corresponding period of the prior fiscal year, the Company primarily funded operations through debt. Further, the reduction drop in the share price has resulted in a drop in the fair value of debt resulting in a gain on the decrease in the derivative liability obligation. As described in the notes to the financial statements, the
fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Black-Sholes option pricing model and a binomial lattice model where appropriate.
●
Fair value
gain on warrant liability for the six months ended December 31, 2016 was $38,300 compared to $nil for the six months ended December 31, 2015. During the six months ending December 31, 2016, the Company had warrants outstanding giving rise to a liability due to the nature of the conversion features of the warrant; whereas there were no such warrants outstanding during the six months ended December 31, 2015. The gain in the warrant liability is due to a reduction in the share price resulting in a corresponding drop in the fair value of debt. As described in the notes to the financial statements, the
fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Monte Carlo method.
●
Loss
on extinguishment of convertible debenture was $33,906 compared to a gain of $1,927 for the six months ended June 30, 2015. During the six months ended December 31, 2016, the Company issued shares with a lower market value resulting in a loss on extinguishment. In the prior year, the Company transferred its convertible debt to a new lender with more favorable terms resulting in an extinguishment gain of $1,927 for accounting purposes.
●
Interest expense decreased by $
123,877 for the six months ended December 31, 2016, due to the decrease in convertible debt transactions. Included in interest expense is the a
mortization of the convertible debt discount of $37,167 (2015 - $204,304). Remaining change in interest expense is due to decrease in the amount of loans outstanding at the end of the period.
Results of Operations of the Three Months Ended
December 31
, 2016
compared to the Three Months Ended
December 31
,
201
5
Our net loss for the three months ended
December 31, 2016, was $731,177 compared to a net loss of $993,415 for the three months ended December 31, 2015, representing a decrease of $262,238. Significant changes for the three months ended December 31, 2016, compared to the corresponding period of the prior period have been described as follows:
●
Total r
evenues decreased by $1,902 to $27,841 for the three months ended December 31, 2016. The increase is primarily a result of a decrease of $11,406 in sales of the higher conductive line of ElectriPlast products which has been offset by $9,504 generated from services revenue associated with the antistatic and static dissipative line.
Operating expense for the
three months ended December 31, 2016, were $664,391 compared to operating expense of $876,507 for the three months ended December 31, 2015, representing a decrease of $212,116. Significant changes for the three months ended December 31, 2016, compared to the corresponding period of the prior fiscal year have been described as follows:
●
Consulting fees decreased by $
112,488 to $146,503 for the three months ended December 31, 2016. Consulting fees include non-cash share obligations for the three months ended December 31, 2016 of $8,340 compared to non-cash shares issued for services of $9,240 for the three months ended December 31, 2015. The decrease is due to implementing cost saving strategies and reduction in use of external consultants. As described in the notes to the financial statements, the fair value of the share obligations were measured in reference to their market value on the date each series of shares became issuable;
●
Research and development costs decreased by $
41,177 to $121,075 for the three months ended December 31, 2016. The decrease is due to the Company's focus on further developing nascent revenue streams and from reduced research and development requirements for the quarter.
Significant changes for other income and expenses for the three months ended
December 31, 2016, compared to the three months ended December 31, 2015, have been described as follows:
●
Fair value
gain on derivative financial liabilities for the three months ended December 31, 2016 was $4,900 compared to a gain of $17,351 for the three months ended December 31, 2015. During the three months ending December 31, 2016, the Company primarily used equity financing to fund operations; whereas, in the corresponding period of the prior fiscal year, the Company primarily funded operations through debt. As described in the notes to the financial statements, the
fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Black-Sholes option pricing model and a binomial lattice model where appropriate.
●
Fair value
gain on warrant liability for the three months ended December 31, 2016 was $5,500 compared to $nil for the three months ended December 31, 2015. During the three months ending December 31, 2016, the Company had warrants outstanding giving rise to a liability due to the nature of the conversion features of the warrant; whereas there were no such warrants outstanding during the three months ended December 31, 2015. The gain in the warrant liability is due to a reduction in the share price resulting in a corresponding drop in the fair value of debt. As described in the notes to the financial statements, the
fair value loss on derivative financial liabilities is non-cash fair value measurement calculated using the Monte Carlo method.
4
●
Loss
on extinguishment of convertible debenture was $33,906 (three months ended December 31, 2015 - $nil). During the three months ended December 31, 2016, the Company recognized a loss on the difference between the market value of shares issued to settle debt. There were no such extinguishments for the comparative period.
●
Interest expense
decreased by $92,941 for the three months ended December 31, 2016, due to the decrease in convertible debt transactions. Included in interest expense is the non-cash a
mortization of the convertible debt discount of $37,167 (2015 - $152,935). Remaining change in interest expense is due to an increase in the amount of loans and cost of debt outstanding at the end of the period.
Critical Accounting Policies and Estimates
Revenue recognition
The Company recognizes revenues from a contract with a plastics technology company for which it provides se
rvices and products, on a net basis. Fees are recognized monthly as services and products are provided. This is the point that revenues are considered realizable and earned.
The Company signed a ten-
year license agreement with Hanwha Advanced Materials Co., Ltd., ("Hanwa"), of South Korea. For license agreements that the Company enters into, revenue is recognized when all four of the following criteria are met: (i) a contract is executed, (ii) the contract price is fixed and determinable, (iii) delivery of the service or products has occurred, and (iv) collectability of the contract amounts is reasonably assured.
The Company
's license agreements can provide for upfront license fees, maintenance payments, and/or substantive milestone payments. In accordance with revenue recognition guidance, the Company identifies all of the deliverables at the inception of the agreement. License fees, which are nonrefundable fees, will be evaluated for standalone value to the licensor and may be recognized upon delivery pursuant to terms of the agreement. Upfront nonrefundable fees associated with license and development agreements where the Company has continuing involvement that does not meet the requirement of a separate deliverable are recorded as deferred revenue and recognized over the estimated service period. The Company may also enter into agreements to provide engineering services. The Company recognizes revenue from engineering services as the service has been performed and amounts are probable of collection.
There have been no material changes to our critical accounting policies as described in
Item 9 of our most recent annual report on Form 10-K for the year ended June 30, 2016, as filed with the Securities and Exchange Commission on January17, 2017.
Management does not believe that any new accounting pronouncements not yet effective will have any material effect on the
Company's consolidated financial statements if adopted
.
Liquidity and Capital Resources
As of
December 31, 2016, we had $43,615 in cash on hand, and we estimate that we will continue to require $3 million annually of additional financing to fund our ongoing operating and capital expenditures in order to carry out our business plan and to continue to operate during our fiscal year ending June 30, 2017.
The Company has historically funded this requirement through a combination of debt and equity proceeds. Until such time as the Company launches material product-based manufacturing operations, we believe our funding need will remain approximately $3 million annually, and we will disclose promptly any changes to that estimate.
Based on our current cash and cash equivalents levels and expected cash flow from operations, we believe our current cash position is not sufficient to fund our cash requirements during the next twelve months, including operations and capital expenditures. We intend to license our proprietary technology and services or obtain equity and/or debt financing to support our current and proposed operations and capital expenditures. There can be no assurance, however, that any such opportunities may arise, or that any such acquisitions may be consummated. Additional financing may not be available on satisfactory terms when required. In addition, the trading price of our common stock and a downturn in the equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. We currently have no firm commitments for any additional capital. There is no guarantee that we will be successful in raising the funds required. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.
The Company
's cash usage since inception in 1996 has been funded primarily from proceeds from the issuance of common stock. The company has issued warrants which have the potential to yield $1,321,767 calculated as 3,905,889 warrants exercisable at $0.30 per share and 750,000 warrants exercisable at $0.20 per share. In the event the stock price rises to certain levels in the future and that some or all of the warrant holders elect to acquire Common Stock shares by exercising their warrants, prior to the expiry date, the Company may raise additional funds from warrant holders. We have no ability to forecast future stock price movements nor are we able to determine how many warrant holder would elect to acquire shares by exercising their warrants. Subsequent to year end the company has raised $9,800 through equity financing.
We are currently in limited manufacturing operations. As demand continues to grow and our need to increase capacity, reduce manufacturing costs and to improve margins, we would consider directly entering into the manufacturing business, including the possibility of acquiring existing assets or an operating company to help us accelerate this process, however this will only be possible through additional capital.
5
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements as of
December 31, 2016.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a "smaller reporting company," as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.
ITEM 4.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As at
December 31, 2016, the Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Management
's Report on Internal Control Over Financial Reporting
The Company
's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. These rules refer to the controls and other procedures of a company that are designed 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. Internal control over financial reporting includes these policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the end of the period covered by this report. Our evaluation was based on the criteria for smaller
public companies set forth in
Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013). Based on our evaluation under those criteria, our management concluded that, as of December 31, 2016, our internal control over financial reporting
is ineffective due to the material weakness described below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
The primary factor contributing to the material weakness, which relates to our financial statement close process, was as follows:
●
From time to time we experience delays in receiving, reviewing and accounting for complex transactions including financings.
As a result of these delays, we were not able to file our 10-Q timely, which is evidence that we have a material weakness in internal controls.
W
hile management believes that the Company's financial statements previously filed in the Company's SEC reports have been properly recorded and disclosed in accordance with US GAAP, based on the material weakness identified above, we have already implemented, the specific remediation initiative described below:
●
Management
contracted the services of a third-party firm to create and conduct the required sophisticated analysis for the complex transactions impacting the June 30, 2016 10-K, and may continue to use their services for quarterly reporting as required.
Management believes the action
described above will remediate the material weakness we have identified and strengthen our internal control over financial reporting.
6
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management
's report was not subject to attestation by the Company's registered public accounting firm pursuant to the exemption provided to issuers that are neither "large accelerated filers" nor "accelerated filers" under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Limitations on the Effectiveness of Internal Controls
There are inherent limitations to the effectiveness of any system of internal control over financial reporting, such as resource constraints, judgments used in decision-making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to the preparation and presentation of financial statements in accordance with accounting principles generally accepted in the United States. Moreover, projections of any evaluation of effectiveness in future periods are subject to the risk that controls may be inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate over time. Our management, including our chief executive officer and chief financial officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or fraud.
PART II
OTHER INFORMATION
COMPANY
CONFIRM OR UPDATE AS NEEDED
ITEM 1 - LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse affect on business, financial condition or operating results.
ITEM 1A. RISK FACTORS
The
Company is a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and is not required to provide information required under this Item.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The securities sold were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4
(a)(2) and Regulation D (Rule 506) under the Securities Act and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. Each investor is an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Act.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -
MINE SAFETY DISCLOSURES
Not Applicable
.
7
ITEM 5 - OTHER INFORMATION
On October 12, 2016, the Board of Directors of Integral Technologies, Inc. (the "Company") approved and recommended for stockholder approval an amendment to the Company
's Articles of Incorporation to increase the number of authorized shares of common stock to 250,000,000 from 150,000,000 (the "Charter Amendment"). On November 28, 2016, the Company's stockholders approved the Charter Amendment. The final voting results at the Company's special meeting of stockholders with respect to the Charter Amendment were 70,311,541shares voted for, 8,343,794 shares voted against and 167,670 shares abstaining. The Charter Amendment was filed with the Nevada Secretary of State and became effective on November 28, 2016. A copy of the Charter Amendment is attached to this Current Report as Exhibit 3.1 and is incorporated by reference herein.
On November 28, 2016, at the Company
's special meeting of stockholders, the Company's stockholders approved the Charter Amendment described in Item 5.03 above.
As of the record date for the meeting of October 24, 2016, 137,413,603 shares of common stock, constituting all of the outstanding capital stock of the Company, were issued and outstanding, of which a total of 78,823,005 shares were voted at the special meeting.
ITEM 6. Exhibits
31.1
Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
31.2
Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
32.1
Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.
32.2
Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.
EX-101.INS
XBRL Instance Document
EX-101.SCH
XBRL Taxonomy Extension Schema Document
EX-101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
EX-101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
EX-101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
EX-101.PRE
XBRL Taxonomy Extension Presentation
Linkbase Document
8
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.
Integral Technologies, Inc.
By:
/s/
Doug
las Bathauer
Doug
las Bathauer, Chief Executive Officer
(
Principal Executive Office)
By:
/s/
Eli Dusenbury
Eli Dusenbury, Chief Financial Officer
(Principal Financial and Accounting Officer)
Date:
February 17, 2017
9
EXHIBIT INDEX
31.1
Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
31.2
Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act is filed herewith.
32.1
Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.
32.2
Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code is filed herewith.
EX-101.INS
XBRL Instance Document
EX-101.SCH
XBRL Taxonomy Extension Schema Document
EX-101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
EX-101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
EX-101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
EX-101.PRE
XBRL Taxonomy Extension Presentation Linkbase
Document
10