SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

  

 

 FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

  

For the quarterly period		Commission file number 0-16416
ended January 31, 2012

 

MICRO IMAGING TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

California		33-0056212
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

 

970 Calle Amanecer, Suite F, San Clemente, California 92673
(Address of principal executive offices)          (Zip Code)

 

Registrant’s telephone number, including area code:  (949) 388-4547

 

Securities registered pursuant to Section 12(b) of the Act:  None

 

Securities registered pursuant to Section 12(g) of the Act:

 

Common Stock, par value $0.01 per share

(Title of Class)

 

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  S    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. (Check one): 

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company þ

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes  o    No  ý.

 

At March 13, 2012, there were 731,328,129 shares of the Registrant’s common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE:  NONE

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

Micro Imaging Technology, Inc. and Subsidiary
(A Development Stage Company)
Condensed Consolidated Balance Sheet

 

January 31, 2012 and October 31, 2011

 

		January 31,				October 31,
		2012				2011
		(Unaudited)
ASSETS
Current assets:
Cash		$	4,288			$	5,206
Prepaid expenses			220				220
Total current assets			4,508				5,426
Fixed assets, net			72,032				79,177
Total assets		$	76,540			$	84,603
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable to stockholder		$	587,480			$	565,000
Convertible notes payable, net of unamortized discount of $117,636 and $123,207 in 2012 and 2011, respectively			231,732				224,161
Trade accounts payable			683,846				685,920
Accounts payable to officers and directors			418,177				355,628
Accrued payroll			264,767				241,479
Derivative liabilities			148,837				175,865
Other accrued expenses			140,491				132,934
Total current liabilities			2,475,330				2,380,987
Long term liabilities:
Convertible notes payable, net of unamortized discount of $0 and $11,461 in 2012 and 2011, respectively			-				1,039
Redeemable convertible preferred stock, $0.01 par value; 2,600,000 shares authorized, issued and outstanding at January 31, 2012 and October 31, 2011			26,000				26,000
Total long term liabilities			26,000				27,039
Total liabilities			2,501,330				2,408,026
Commitments and contingencies
Stockholders' deficit:
Common stock, $0.01 par value; 2,500,000,000 shares authorized; 542,419,525 and 487,342,466 shares issued and outstanding at January 31, 2012 and October 31, 2011, respectively			5,424,194				4,873,425
Additional paid-in capital			36,637,113				36,965,142
Common stock subscribed			(1,250	)			-
Accumulated deficit from previous operating activities			(27,809,201	)			(27,809,201	)
Deficit accumulated during the development stage			(16,675,646	)			(16,352,789	)
Total stockholders' deficit			(2,424,790	)			(2,323,423	)
Total liabilities and stockholders' deficit		$	76,540			$	84,603

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Operations

Three Months and Nine months Ended January 31, 2012 and January 31, 2011

And the Period November 1, 2005 to January 31, 2012

 (Unaudited)

 

										Cumulative period
										from
		Three months ended								November 1, 2005
		January 31,								through
		2012				2011				January 31, 2012
Sales		$	-			$	-			$	58,000
Cost of Sales			-				-				29,886
Gross profit			-				-				28,114
Operating costs and expenses:
Research and development			161,365				126,385				5,103,649
Sales, general and administrative			78,584				130,130				7,273,022
Total operating expenses			239,949				256,515				12,376,671
Loss from operations			(239,949	)			(256,515	)			(12,348,557	)
Other income (expense):
Interest income			-				3				11,359
Interest expense			(110,644	)			(91,237	)			(4,636,271	)
Gain on derivative instruments			28,574				-				121,131
Other income, net			762				-				187,892
Total other income (expense), net			(81,308	)			(91,234	)			(4,315,889	)
Loss from operations:
Before provision for income tax			(321,257	)			(347,749	)			(16,664,446	)
Provision for income tax			(1,600	)			(1,600	)			(11,200	)
Net loss			(322,857	)			(349,349	)			(16,675,646	)
Net loss attributable to:
Non-controlling interest			(30,818	)			(24,641	)			(1,188,171	)
Micro Imaging Technology, Inc. stockholders			(292,039	)			(324,708	)			(15,487,475	)
		$	(322,857	)		$	(349,349	)		$	(16,675,646	)
Net loss per share, basic and diluted		$	(0.00	)		$	(0.00	)
Shares used in computing net loss per share, basic and diluted			515,008,741				189,898,875

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

Three month Period Ended January 31, 2012 and January 31, 2011

And the Period November 1, 2005 to January 31, 2012

(Unaudited)

 

										Cumulative period
										from
		Three months ended								November 1, 2005
		January 31,								through
		2012				2011				January 31, 2012
Cash flows from operating activities:
Net loss		$	(322,857	)		$	(349,349	)		$	(16,675,646	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			7,145				6,704				147,593
Amortization of costs and fees related to convertible debentures			85,486				65,358				889,233
Common stock issued for services			-				750				2,144,790
Common stock issued to officers and directors for services			906				1,500				3,079,601
Common stock issued for shares of subsidiary stock			-				-				254,000
Common stock of subsidiary issued to employees and consultants			-				-				2,815
Common stock issued as a commission			-				-				3,000
Common stock issued for accounts payable			-				-				296,583
Common stock issued to former licensee			-				-				41,319
Common stock issued/recovered on cancelled agreements			-				-				20,478
Non-cash compensation for stock options and warrants			-				-				631,923
Costs and fees related to issuance of convertible debt			- `				6,420				539,252
Interest expense related to beneficial conversion feature			-				-				1,944,800
Interest paid with common stock			2,700				-				121,187
Interest on notes receivable for common stock			-				-				(1,373	)
(Increase) decrease in assets:
Prepaid expenses			-				50,411				25,371
Inventories			-				-				-
Increase (decrease) in liabilities:
Derivate liability			(27,028	)			-				148,837
Trade accounts payable			57,905				22,491				674,449
Accounts payable to officers and directors			62,549				46,529				722,631
Accrued payroll and other expenses			30,845				26,207				292,162
Net cash used in operating activities			(102,349	)			(122,979	)			(4,696,995	)
Cash flows from investing activities:
Purchase of fixed assets			-				-				(213,142	)
Net cash used in investing activities			-				-				(213,142	)

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows (Continued)

Three month Period Ended January 31, 2012 and January 31, 2011

And the Period November 1, 2005 to January 31, 2012

(Unaudited)

 

										Cumulative period
										from
		Three months ended								November 1, 2005
		January 31,								through
		2012				2011				January 31, 2012
Cash flows from financing activities:
Principal payments on notes payable to stockholders			-				-				(1,133,000	)
Proceeds from common stock subscription			(1,250	)			-				(1,250	)
Proceeds from issuance of notes payable to a related party			-				-				1,039,800
Proceeds from issuance of notes and convertible notes payable			32,500				101,869				1,561,734
Proceeds from issuance of common stock, net			70,181				33,928				2,251,843
Net cash provided by financing activities			101,431				135,797				3,719,127
Net change in cash			(918	)			12,818				(1,191,010	)
Cash at beginning of period			5,206				(7,876	)			1,195,298
Cash at end of period		$	4,288			$	4,942			$	4,288
Supplemental Disclosure of Cash Flow Information
Interest paid		$	-			$	664			$	10,321
Income taxes paid		$	1,600			$	1,600			$	18,640
Supplemental Schedule of Non-Cash Investing and Financing Activities
Conversion of convertible notes payable to shares of common stock		$	80,500			$	89,865

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1.        Nature of our Business, Development Stage Company and Continuance of Operations

 

These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applicable to a going concern which contemplated the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Since inception, the Company has incurred substantial losses and there is substantial doubt that the Company will generate sufficient revenues in the foreseeable future to meet its operating cash requirements. Accordingly, the Company’s ability to continue operations depends on its success in obtaining additional capital in an amount sufficient to meet its cash needs. This raises substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty.

 

Our independent registered public accounting firm has included an explanatory paragraph in its report on the financial statements for the year ended October 31, 2011 which raises substantial doubt about our ability to continue as a going concern.

 

Micro Imaging Technology, Inc. (the “Company”), a California corporation, is a holding company whose operations are conducted through its Nevada subsidiary, Micro Imaging Technology (“MIT”). As of January 31, 2012, the Company owns eighty point seven percent (80.7%) of the issued and outstanding stock of MIT.

 

The losses incurred to date which are applicable to the minority stockholders of the Company’s consolidated subsidiary, MIT, exceed the value of the equity held by the minority stockholders. Such losses have been allocated to the Company as the majority stockholder and are included in the net loss and accumulated deficit in the condensed consolidated financial statements for the three months ended January 31, 2012. Any future profits reported by our subsidiary will be allocated to the Company until the minority’s share of losses previously absorbed by the Company have been recovered.

 

In 1997, the Company began marketing a small, point-of-use water treatment product aimed at the high purity segment of commercial and industrial water treatment markets. In February 2000, the Company formed Electropure EDI, Inc. (EDI), a wholly-owned Nevada subsidiary, through which all manufacturing and sales of its proprietary water treatment products were then conducted. In October 2005, the Company sold the assets of the EDI subsidiary and discontinued operations.

 

The Company acquired, in October 1997, an exclusive license to patent and intellectual property rights involving laser light scattering techniques to be utilized in the detection and monitoring of toxicants in drinking water. In February 2000, the Company formed Micro Imaging Technology (MIT), a majority-owned Nevada subsidiary, to conduct research and development based upon advancements developed and patented from the licensed technology. The technology being developed is a non-biologically based system utilizing both proprietary hardware and software to rapidly (near real time) determine the specific specie of an unknown microbe present in a fluid with a high degree of statistical probability (“MIT system”). It will analyze a sample presented to it and compare its characteristics to a library of known microbe characteristics on file. At present, it is the Company’s only operation.

 

Effective with the sale of its EDI operation in October 2005, the Company’s planned principal operation, the further development and marketing of its remaining technology, has not produced any significant revenue and, as such, the Company, beginning with the fiscal year starting November 1, 2005, is considered a development stage enterprise.

 

2.

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting solely of normal recurring adjustments which management believes are necessary for a fair presentation of the Company’s financial position at January 31, 2012 and results of operations for the periods presented.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

 

Results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with our audited financial statements and footnotes as of and for the year ended October 31, 2011, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 13, 2012.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

3.

Concentration of Credit Risk and Other Risks and Uncertainties

 

As of January 31, 2012, the amounts due two former consultants to the Company represented 44% ($298,748) and 16% ($112,000) of the total amount due for accounts payable to non-affiliates.

 

4.

Inventories

 

Effective October 31, 2011, the Company expensed approximately $13,500 in raw materials and reclassified and capitalized as machinery and equipment eight of its MIT 1000 Systems that it had carried as finished goods valued at $75,788. A redesigned model of the systems is currently underway and the Company will utilize these eight first generation models as laboratory testing equipment. Commencing November 1, 2011, these systems are being depreciated over an expected useful life of 3 years.

 

5.        Summary of Significant Accounting Policies

 

The accounting policies followed are as set forth in Note 1 of the Notes to Financial Statements in the Company’s 2011 Annual Report on Form 10-K. The Company has not experienced any material change in its critical accounting policies since November 1, 2011. The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments regarding uncertainties that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates its estimates, which are based upon historical experience and on other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The Company considers the following accounting policies to be most critical in their potential effect on its financial position or results of operations.

 

New Accounting Pronouncements

 

The following accounting standards updates were recently issued and have not yet been adopted by us.  These standards are currently under review to determine their impact on our consolidated financial position, results of operations, or cash flows.

 

In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosure about Offsetting Assets and Liabilities, which requires an entity to include additional disclosures about financial instruments and transactions eligible for offset in the statement of financial position, as well as financial instruments subject to a master netting agreement or similar arrangement. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU is not expected to have a material impact on our financial statements.

 

June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which defers specific requirements to present reclassification adjustments for each component of accumulated other comprehensive income. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not expect the adoption of ASU 2011-05 to have a material effect on its operating results or financial position.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Earnings Per Share

 

Basic earnings per share is based on the weighted average number of shares outstanding for a period.  Diluted earnings per share is based upon the weighted average number of shares and potentially dilutive common shares outstanding.  Potential common shares outstanding principally include convertible notes payable and stock options under our stock plan.  Since the Company has incurred losses, the effect of any common stock equivalent would be anti-dilutive.

 

Stock Based Compensation

 

Stock-based compensation costs for stock options issued to employees is measured at the grant date, based on the fair value of the award using the Black Scholes Option Pricing Model, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

 

No stock-based compensation was recognized during the three months ended January 31, 2012.

 

On February 14, 2012, the Board of Directors adopted the 2012 Employee Benefit Plan which is authorized to grant up to Sixty (60) million shares of common stock or options to purchase common stock to eligible employees, directors, officers, consultants or advisors. Eligibility is determined by the Board of Directors. No shares or options have been granted under the Plan as of the date of this report.

 

The following table summarizes information about options granted under the Company’s equity compensation plans through January 31, 2012 and otherwise to employees, directors and consultants of the Company. Generally, options vest on an annual pro rata basis over various periods of time and are exercisable, upon proper notice, in whole or in part at any time upon vesting. Typically, in the case of an employee, vested options terminate when an employee leaves the Company. The options granted have contractual lives ranging from two to ten years.

 

		Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual  Term  (in years)				Aggregate Intrinsic  Value
Outstanding at October 31, 2011			3,000,000			$	0.09				2.1			$	—
Granted			—				—
Exercised			—				—
Expired			—				—
Canceled			—				—
Outstanding at January 31, 2012			3,000,000			$	0.09				1.9			$	—

 

Summary information about the Company’s options outstanding at January 31, 2012 is set forth in the table below. Options outstanding at January 31, 2012 expire between August 2012 and January 2016.

 

Range of Exercise Prices		Options Outstanding January 31,  2012				Weighted Average Remaining Contractual Life				Weighted Average Exercise Price				Options Exercisable January 31,  2012				Weighted Average Exercise Price
$ 0.02 - $0.14			2,300,000				2.1			$	0.03				2,300,000			$	0.03
$ 0.29 - $0.30			700,000				1.0			$	0.29				700,000			$	0.29
TOTAL:			3,000,000												3,000,000

 

As of January 31, 20121, all outstanding options had fully vested and there was no estimated unrecognized compensation from unvested stock options.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following table summarizes the information relating to warrants granted to non-employees as of October 31, 2011 and changes during the three months ended January 31, 2012:

 

		Number of Warrants				Weighted Average Exercise Price				Weighted Average Remaining Contractual  Term  (in years)				Aggregate Intrinsic  Value
Outstanding at October 31, 2011			5,000,000			$	0.015				0.9			$	—
Granted			—				—
Exercised			—				—
Expired			—				—
Canceled			—				—
Outstanding at January 31, 2012			5,000,000			$	0.015				0.6			$	—

 

Summary information about the Company’s warrants outstanding at January 31, 2012 is set forth in the table below. Warrants outstanding at January 31, 2012 expire between February and October 2012.

 

Range of Exercise Prices		Warrants Outstanding January 31,  2012				Weighted Average Remaining Contractual Life				Weighted Average Exercise Price				Warrants  Exercisable January 31,  2012				Weighted Average Exercise Price
$ 0.011- $0.03			5,000,000				0.6			$	0.015				5,000,000			$	0.015

 

6.

Convertible Debentures

 

Series 1 Notes

 

Under the provisions of ASC 815-40-15, “Derivatives and Hedging-Contracts in Entity’s Own Equity-Scope and Scope Exceptions,” a number of our outstanding Convertible notes are not considered indexed to our stock, as a result of an anti-dilution protection provision in these notes. The application of ASC 815-40-15, effective August 1, 2011, resulted in our accounting for these notes as derivative instruments, and they are recognized as liabilities in our consolidated balance sheets.

 

Between August 16, 2010 and January 4, 2012, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of ten (10) separate 8% convertible notes in various principal amounts, aggregating $345,000. The Company paid a total of $25,500 out of the proceeds of the notes to Asher for legal fees and expenses related to the referenced agreements. The notes generally mature in nine (9) months, commencing May 2011 through October 2012, and are convertible into shares of common stock at a discount ranging from 39% to 55% of the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date. The Series I Notes contain a provision requiring an adjustment to the conversion price of the note in the event the Company issues or sells any shares of common stock, or securities convertible into or exercisable for common stock, at a price per share lower than such conversion price. Accordingly, effective August 1, 2011, the Series I Notes have been accounted for as a derivative liability, measured at fair value, with changes in fair value recognized as gain or loss for each reporting period thereafter. Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing 180 days following the date of the Note. The notes are recorded at fair value, using the Binomial valuation model, and a derivative liability of $175,865 was recorded for the fiscal year ended October 31, 2011. This liability is revalued each reporting period and gains and losses are recognized in the statement of operations under “Other Income (Expense)”. As of the three months ended January 31, 2012, this derivative liability was $148,837.

 

As of January 31, 2012, Asher has converted a total of $222,500 and $8,900 in principal and accrued interest, respectively, on these notes and has received a total of 186,040,962 shares of common stock upon the conversions at prices ranging from $0.0004 to $0.004 per share. During the three months ended January 31, 2012, the Company expensed a total of $2,179 accrued interest and there remains an aggregate principal balance of $122,500 due on these notes. If such Series 1 notes were converted at January 31, 2012, the Company would issue an aggregate of 49,152,995 shares of common stock the value of which would exceed, by $72,222, the principal balance due on the notes.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

See also Note 10 – “Subsequent Events.”

 

Fair value of financial instruments

 

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash and other current assets and liabilities to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.

 

The Company has also adopted ASC 820-10 (formerly SFAS 157, “Fair Value Measurements”) which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

  

·

Level 1   inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

·

Level 2   inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

·

Level 3   inputs to the valuation methodology are unobservable and significant to the fair value.

 

The carrying amounts of our financial instruments, including cash, accounts payable and accrued expenses approximate fair value because of their generally short maturities.

 

We measured the fair value of the Series 1 Notes by using the Binomial Valuation model. As of January 31, 2012, the assumptions used to measure fair value of the liability embedded in our outstanding Series I Notes included an exercise price of $0.0026 per share, a common share price of $0.0047, a discount rate of 0.08%, and a volatility of 185%.

 

The following table sets forth, by level within the fair value hierarchy, our financial instrument liabilities as of January 31, 2012 (See also Note 5 – Convertible Debentures – “Series 1 Notes”) :

 

		Quoted Prices in Active Markets For Identical Assets				Significant Other Observable Inputs				Significant Unobservable Inputs				Total
		(Level 3)				(Level 3)				(Level 3)
Series 1 Notes		$	—			$	—			$	148,837			$	148,837
Total		$	—			$	—			$	148,837			$	148,837

 

The following table sets forth a summary of changes in the fair value of our Level 3 financial instrument liability for the fiscal year ended October 31, 2011 and for the three month period ended January 31, 2012:

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

  

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance October 31, 2011		$	175,865
Additions			53,239
Net gain included in earnings			(28,574	)
Settlements			(51,693	)
Balance January 31, 2012		$	148,837

 

Similar purchase and conversion transactions have occurred with Asher subsequent to January 31, 2012. See Note 10 – “Subsequent Events.”

 

Other Convertible Notes

 

On November 10, 2010, the Company borrowed $64,868 from the above unaffiliated party on terms similar to the Asher notes. The Note matures on May 31, 2012 and bears interest at the rate of ten percent (10%) per annum. The Note is convertible into shares of common stock at a forty two percent (42%) discount to the average of the lowest three (3) closing bid prices of the common stock during the ten (10) trading days prior to the conversion date. The noteholder may convert any or all of the unpaid principal note prior to the maturity date. The Company calculated the intrinsic value of the conversion feature to be $46,973 as of the date of issuance of the debentures using the same criteria as noted above and is amortizing the expense over the life of the loan. The Company has expensed $36,837 with regard to this beneficial conversion feature as well as $7,944 in accrued interest on the note as of January 31, 2012. If the note had been converted as of January 31, 2012, the Company would have issued a total of 22,670,703 shares of common stock and would have fully amortized the remaining expense of the conversion feature.

 

On March 16, 2009, the Company’s largest stockholder, Mr. Anthony Frank, purchased a $75,000 convertible debenture for which the Company has expensed $21,596 in accrued interest as of January 31, 2012. The debenture matures on March 16, 2012 and bears interest at the rate of ten percent (10%) per annum. The debenture is convertible at any time at the option of the holder into the Company’s common stock at a fair market value of 75% of the lowest closing bid price per share for the twenty (20) trading days immediately preceding conversion. The debentures are also redeemable by the Company: 1) if before six months at 120% of the principal value, plus interest; or 2) if after six months, at 131% of principal, plus interest. The intrinsic value of the beneficial conversion feature, $18,750, is being amortized over the three-year life of the debenture. If the note had been converted as of January 31, 2012, the Company would have issued a total of 20,833,333 shares of common stock and would have fully amortized the remaining expense of the conversion feature.

 

On November 27, 2009, the Company borrowed $25,000 from an unaffiliated lender. In September 2011, the lender converted $12,500 of the principal and $376 in accrued interest into 8,542,222 shares of common stock. The Company issued an Amended and Restated Convertible Note for the $12,500 principal balance of the loan. The amended note matures on December 31, 2012 and bears interest at 6% and is convertible into common shares at a 55% discount of the average of the lowest three (3) closing bid prices of the common stock during the ten (10) trading days prior to the conversion date. The Company calculated the intrinsic value of the conversion feature on the remaining balance to be $10,507 as of the date of issuance of the amended note and will amortize the cost over the life of the loans. As of January 31, 2012, the Company had expensed a total of $269 in accrued interest on the remaining principal balance of $12,500. If the $12,500 balance of the note had been converted as of January 31, 2012, the Company would have issued a total of 5,630,669 shares of common stock and would have fully amortized the remaining expense of the conversion feature.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On August 1, 2011, an unaffiliated party purchased a $50,000 convertible debenture for which the Company has accrued interest at the rate of 6% and has expensed $1,504 in accrued interest as of January 31, 2012. The debenture is convertible at any time at the option of the holder into the Company’s common stock at a 25% discount (but not more than $0.002 per share) to the average closing bid prices of the common stock for the three (3) trading days immediately preceding conversion. The intrinsic value of the beneficial conversion feature, $16,667, is being amortized over the one-year life of the debenture. If the note had been converted as of January 31, 2012, the Company would have issued a total of 13,513,605 shares of common stock and would have fully amortized the remaining expense of the conversion feature. The principal balance of this note was converted into common stock in February 2012. See Note 10 – “Subsequent Events.”

 

On January 12, 2012, the Company issued an Amended and Restated 6% Convertible Note for $37,500 to an unaffiliated lender for proceeds received in fiscal 2010. The note, which matures on December 31, 2012, was subsequently sold to Asher Enterprises which converted $13,000 of the principal balance due on January 12, 2012 for 8,125,000 shares of common stock at a conversion price of $0.0016 per share. The intrinsic value of the beneficial conversion feature, $37,500, is being amortized over the one-year life of the debenture. The Company has expensed $23,185 with regard to this beneficial conversion feature as well as $77 in accrued interest on the note as of January 31, 2012. If the $24,500 balance of the note had been converted as of January 31, 2012, the Company would have issued a total of 14,189,285 shares of common stock and would have fully amortized the remaining expense of the conversion feature. The principal balance of this note was converted into common stock in February 2012. See Note 10 – “Subsequent Events.”

 

At January 31, 2012 and October 31, 2011, convertible debentures and Series 1 notes consisted of the following:

  

		January 31,				October 31,
		2012				2011
Series 1 Notes, principal and interest at 8% maturing through May 25, 2012.		$	122,500			$	157,500
Convertible note payable to major stockholder; principal and interest at 10% due on March 16, 2012.			75,000				75,000
Convertible note payable to stockholder; principal and interest at 10% due on May 31, 2012.			64,868				64,868
Convertible notes payable to various stockholders; principal and interest at 6% maturing through December 31, 2012.			87,000				62,500
			349,368				359,868
Less current maturities			349,368				347,368
Long term portion of Convertible and Series 1 notes payable		$	—			$	12,500

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

7.

Notes Payable

 

At January 31, 2012 and October 31, 2011, notes payable to an officer and to stockholders consisted of the following:

 

		January 31,				October 31,
		2012				2011
Unsecured convertible note payable to major stockholder; principal and interest at 6% due on March 10,2010.		$	64,000			$	64,000
Unsecured convertible note payable to major stockholder; principal and interest at 6% due on October 15, 2010.			30,000				30,000
Unsecured convertible notes payable to officers/directors of the Company; principal and interest at 6% due on April 9, 2011.			250,000				250,000
Unsecured notes payable to officers/directors of the Company; principal and interest at 6% due on demand.			74,000				74,000
Unsecured convertible note payable to various stockholders (including $20,000 to major stockholder); principal and interest at 6% due between November 27, 2010 and March 12, 2012.			169,480				147,000
			587,480				565,000
Less current maturities			587,480				565,000
Long term portion of notes payable		$	—			$	—

 

With the exception of $74,000 in notes payable to officers and directors, which are payable on demand, and a note for $59,980 which is due in full on March 12, 2012, all of the above notes payable are past due. The Company is currently negotiating with the holders of those notes to either extend the maturity date or convert the note into shares of common stock.

 

8.

Employee Retirement Plan

 

Commencing on January 1, 2005, the Company sponsored a Simple IRA retirement plan which covers substantially all qualified full-time employees. Participation in the plan is voluntary and employer contributions are determined on an annual basis. Employer contributions would be made at the rate of three percent (3%) of the employees’ base annual wages. However, the Company made no contributions to the IRA plan during the three months ended January 31, 2012 and 2011.

 

9.

Securities Transactions

 

Common Stock issued to Officers and Directors

 

During the three months ended January 31, 2012, pursuant to his compensation arrangement, the Company issued 150,000 shares of common stock to its Chief Executive Officer, Michael W. Brennan, at prices ranging from $0.0055 to $0.0065 per share. The aggregate fair market value of the shares was determined to be $906.

 

Common Stock Issued in Private Placement Transactions

 

Between November 1, 2011 and January 31, 2012, Dutchess Opportunity Fund purchased 14,191,447 shares of common stock in three separate transactions at prices ranging from $0.004 to $0.0056 per share under the terms of the May 4, 2010 Securities Purchase Agreement. Net of $14,414 in fees and expenses, the Company received proceeds of $54,517 and a common stock subscription in the sum of $1,250 as of January 31, 2012.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Common Stock Issued in Cancellation of Debt

 

Between November 10, 2011 and January 30, 2012, the Company issued 40,735,526 shares of common stock to Asher Enterprises, Inc. upon conversion of $80,500 in convertible notes, plus $2,700 in accrued interest thereon, at prices ranging from $0.0015 to $0.003 per share.

 

10.

Subsequent Events

 

In accordance with his consulting arrangement, in February 2012, the Company issued 50,000 shares of common stock to its Chief Executive Officer, Michael Brennan.

 

On February 1, 2012, the holder of a $50,000 convertible note converted the principal balance of such note into twenty five (25) million shares of common stock at $0.002 per share.

 

On February 2, 2012, the Company sold 11,065,750 shares of common stock to an unaffiliated shareholder at $0.002711 per share, for a total of $30,000. On March 13, 2012, this same shareholder purchased an additional 10,553,442 shares of common stock for $31,660, or $0.003 per share.

 

On February 2, 2012, the Company issued its legal counsel a total of 4,200,000 shares of common stock in payment for $12,500 in legal services rendered, or $0.003 per share.

 

On February 2, 2012, the Company issued 3,571,429 shares of common stock to a consultant in payment of $25,000 in accrued fees. The conversion price was $0.007 per share.

 

During February 2012, the Company’s Chief Executive and Chief Financial Officers, Michael Brennan and Victor Hollander, respectively, exchanged $100,000 in accrued fees for services rendered in exchange for the issuance of fifty (50) million shares of common stock each. The shares were issued at a conversion price of $0.002 per share.

 

During February 2012 and March, Asher converted an additional $62,000 in principal loans and $1,000 in interest into 49,183,733 shares of common stock at prices ranging from $0.0011 to $0.0014 per share.

 

In February 2012, the Company issued 600,000 shares of common stock at $0.05 per share as partial consideration for a $30,000 loan.

 

On February 29, 2012, the Company received an additional $40,000, net of fees and expenses, from Asher Enterprises, Inc. pursuant to a Stock Purchase Agreement.

 

In late December 2011, the Company was served with an unlawful detainer action brought by the landlord for non-payment of back rent. On February 13, 2012, the Company paid all past due rent, totaling $27,355 through February 2012, and $4,983 in interest, fees and penalties. The Company remains at its San Clemente, California facility on a month-to-month rental basis.

 

On March 7, 2012, the Company entered into a Securities Purchase Agreement with Alpine MIT Partners, LLC (“Alpine’) to sell up to $2.0 million of 7% Senior Secured Convertible Debentures (the “Debentures). The Debentures will have a five-year term. The initial Debenture will be convertible into shares of common stock at a conversion rate of $.003 per share. The purchase and sale of the first $1.0 million Debenture is scheduled to close on or before April 7, 2012. The agreement provides that Alpine will be granted a 6-month “additional investment right” to purchase up to an additional $1.0 million of Debentures. If the additional investment right is exercised, the second Debenture will have a conversion rate of $0.00375 per share during the first six months, $0.005 per share during the following three months and $0.0075 per share thereafter. The Debentures will be secured by a first lien security interest in all the assets of the Company. The agreement provides that Alpine will have the right to have four of its nominees be appointed to the Company’s board of directors.

 

The sale of the Debentures is subject to several closing conditions, including the conversion at the closing of $1,240,906 of existing Company indebtedness, primarily held by affiliates, at a conversion rate of $.007 per share, the granting of a six month option by the Company’s three largest shareholders to Alpine to purchase an aggregate of 107,142,857 shares at $0.007 per share, and Alpine closing the necessary equity funding to consummate the transactions.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

  

Item 2.                 Management’s Discussion and Analysis of Financial Condition and Plan of Operation

 

Forward-Looking Statements

 

This Quarterly Report, including the Notes to the Condensed Consolidated Financial Statements and the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements. The words “believe,” “expect,” “anticipate,” “intends,” “projects,” and similar expressions identify forward-looking statements. Such statements may include, but are not limited to, projections regarding demand for the Company’s products, the impact of the Company’s development and manufacturing process on its research and development costs, future research and development expenditures, and the Company’s ability to obtain new financing as well as assumptions related to the foregoing. Readers are cautioned not to place undue reliance on forward-looking statements. They reflect opinions, assumptions, and estimates only as of the date they were made, and we undertake no obligation to publicly update or revise any forward-looking statements in this Quarterly Report, whether as a result of new information, future events or circumstances, or otherwise.

 

Results of Operations

 

References to fiscal 2012 and fiscal 2011 are for the three month period ended January 31, 2012 and 2011, respectively.

 

The Company had no sales revenue during the three months ended January 31, 2012 or 2011.

 

Research and development expenses for the three month period ended January 31, 2012 increased by $34,980 and compared to the prior year. These expenses arose from the program which we initiated in December 1997 to develop the micro imaging technology for detecting and identifying contaminants in fluids. The overall increase reflects additional expenditures for materials and supplies and increases legal and accounting expenses. The increase was offset by a sizable decrease in consulting expenses for the current period.

 

Sales, general and administrative expenses decreased by $51,546 for the three months ended January 31, 2012 compared to the prior year period due, primarily, to a decrease in consulting fees incurred during the current period.

 

The Company realized negligible interest income during the three months ended January 31, 2012 as all available capital was utilized to sustain operations. Interest expense for the three month period ended January 31, 2012 increased by $19,407 compared to the prior period and primarily reflects the costs of borrowing during the current and prior fiscal periods.

 

The Company recognized $28,574 in non-cash gain related to certain convertible notes with beneficial conversion features (the Series 1 Notes).

 

We recorded the minimum state income tax provision in fiscal 2012 and 2011 as we had cumulative net operating losses in all tax jurisdictions.

 

Equity Financing Arrangements

 

On May 4, 2010, the Company entered into an Investment Agreement (“Investment Agreement”) with Dutchess Opportunity Fund, II, LP (the “Investor”).  Pursuant to the Investment Agreement, the Investor committed to purchase up to $5,000,000 of the Company’s common stock over thirty-nine months (the “Equity Line”). The aggregate number of shares issuable by the Company and purchasable by Dutchess under the Investment Agreement is 125,000,000 (estimated using the last reported sale price of the Company’s common stock on the OTC Bulletin Board on May 4, 2010 of $0.04 per share).

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company may draw on the facility from time to time, as and when it determines appropriate in accordance with the terms and conditions of the Investment Agreement. The maximum amount that the Company is entitled to put in any one notice is the greater of (i) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days or (ii) $100,000. The purchase price shall be set at nine-five percent (95%) of the lowest daily VWAP of the Company’s common stock during the Pricing Period. However, if, on any trading day during a Pricing Period, the daily volume-weighted average price (VWAP) of the common stock is lower than the floor price specified by us in the put notice, then the Company reserves the right, but not the obligation, to withdraw that portion of the put amount for each such trading day during the Pricing Period, with only the balance of such put amount above the minimum acceptable price being put to Dutchess. There are put restrictions applied on days between the put notice date and the closing date with respect to that particular put. During such time, the Company is not entitled to deliver another put notice.

 

There are circumstances under which the Company will not be entitled to put shares to Dutchess, including the following:

 

•          the Company will not be entitled to put shares to Dutchess unless there is an effective registration statement under the Securities Act to cover the resale of the shares by Dutchess;

 

•          the Company will not be entitled to put shares to Dutchess unless its common stock continues to be quoted on the OTC Bulletin Board, or becomes listed on a national securities exchange;

 

•          the Company will not be entitled to put shares to Dutchess to the extent that such shares would cause Dutchess's beneficial ownership to exceed 4.99% of our outstanding shares; and

 

•          the Company will not be entitled to put shares to Dutchess prior to the closing date of the preceding put.

 

The Investment Agreement further provides that the Company and Dutchess are each entitled to customary indemnification from the other for any losses or liabilities we or it suffers as a result of any breach by the other of any provisions of the Investment Agreement or our registration rights agreement with Dutchess, or as a result of any lawsuit brought by a third-party arising out of or resulting from the other party's execution, delivery, performance or enforcement of the Investment Agreement or the registration rights agreement.

 

The Investment Agreement also contains representations and warranties of each of the parties. The assertions embodied in those representations and warranties were made for purposes of the Investment Agreement and are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Investment Agreement. In addition, certain representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from what a stockholder or investor might view as material, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts.   

 

The Company also entered into a Registration Rights Agreement with Dutchess on May 4, 2010.  Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file one or more registration statements with the SEC to register the resale by Dutchess of shares of common stock issued or issuable under the Investment Agreement. On May 7, 2010, the Company filed an initial registration statement on Form S-1 in order to access the credit line, covering the resale of  the 11,000,000 shares of common stock which is equal to eighteen point seven percent (18.7%) of the Company’s current public float (where "public float" shall be derived by subtracting the number of shares of common stock held by the Company’s officers, directors and "affiliates" (as such term is defined in Rule 144(a)(1) of the 1933 Act) from the total number of shares of our common stock then outstanding).  This Registration Statement was declared effective by the Securities and Exchange Commission on August 31, 2010. A second Registration Statement on Form S-1 was filed on July 1, 2011 and declared effective on July 20, 2011 to register the resale of an additional 40,000,000 shares. The Company anticipates filing a third Registration Statement on Form S-1 for the remaining 74,000,000 anticipated in the May 4, 2010 Agreement. This third filing is will be updated with the Company’s most recent financials and submitted to the Securities and Exchange Commission shortly after filing of this Quarterly Report. This registration process will continue until such time as all of the dollar amounts available under the credit line, using shares of common stock issuable under the Investment Agreement, have been registered for resale on effective registration statements. In no event will the Company be obligated to register for resale more than $5,000,000 in value of shares of common stock, or 125,000,000 shares (estimated using the last reported sale price of the Company’s common stock on the OTC Bulletin Board on May 4, 2010 of $0.04 per share). 

 

 

 MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Through September 2010 and October 2011, the Company issued eleven (11) puts under the investment agreement with Dutchess and sold 20,136,570 shares of common stock to Dutchess at prices ranging from $0.004 to $0.0225 per share for net proceeds of $114,497. During the three months ended January 31, 2012, the Company issued three (3) puts with Dutchess and sold an additional 14,191,447 shares of common stock at prices ranging from $0.004 to $0.0056 per share for net proceeds of $55,767. On January 30, 2012, the Company advanced Dutchess an additional 16,638,757 shares of common stock to cover forthcoming purchases under the terms of the May 2010 Investment Agreement and on February 10, 2012, the Company sold 2,570,000 of the advanced shares at $0.0038 per share to Dutchess for net proceeds of $7,766.

 

Liquidity and Capital Resources

 

At January 31, 2012, we had working capital deficit of $2,470,822. This represents a working capital decrease of $95,261 compared to that reported at October 31, 2011. The decrease primarily reflects additional borrowings during the current fiscal year as well as the accrual of payroll and accounts payable to officers, directors and employees of the Company.

 

Our only source of cash during the three months ended January 31, 2012 has been from the sale of common stock and convertible loans totaling $55,767 and $30,000, respectively. Management estimates that it utilized $28,500 per month in working capital on operations for the three months ended January 31, 2012, compared to the approximate $64,900 per month expended during the three month period ended January 31, 2011.

 

Plan of Operation

 

Our independent registered public accounting firm has included an explanatory paragraph in its report on the financial statements for the year ended October 31, 2011 which raises substantial doubt about our ability to continue as a going concern.

 

We are in the process of identifying commercial, technical and scientific partners that can aid in advancing the MIT expertise, provide external endorsements of the technology and accelerate introduction to the market. This strategy is dependent upon our ability to identify and attract the right customers and partners over the next six month period and to secure sufficient additional working capital in a timely manner. There can be no assurances that our efforts will be successful or that we will be able to raise sufficient capital to implement our plans or to continue operations.

 

During the three months ended January 31, 2012, we sold $55,757 in common stock, net of fees and expenses, and received $30,000 in loans which are convertible into common stock at any time prior to their maturity date and bear interest at eight percent (8%) per the agreement. The Company continues to seek additional loans.

 

During the latter part of 2008, we appointed an exclusive distributor to sell our MIT products in Taiwan and China. We have entered into similar arrangements with five other companies granting distribution rights in Turkey, Bulgaria, the United Kingdom, Ireland, Puerto Rico and the Caribbean. In October 2009, we entered into a distribution agreement with a Biotek Sdn Bhd, a Malaysian distributor of research and scientific products for the Association of Southeast Asian Nations (ASEAN) (namely Malaysia, Singapore, Thailand, Brunei, Indonesia, Philippines, Vietnam, Cambodia, Laos and Myanmar). All of our distribution agreements remain in effect at this time.

 

We are in the process of developing promotional materials and marketing and sales strategies with these and other future distributors which we believe will assist in generating sales revenues in the near future.

 

In the opinion of management, available funds and funds anticipated from forthcoming loans and equity sales are expected to satisfy our working capital requirements through March 2012. However, no assurances can be given that we will secure additional financing or revenues in a timely manner, if at all, or that such funds would be sufficient to achieve our intended business objectives.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

We will be required to raise substantial amounts of new financing in the form of additional equity investments, loan financings, or from strategic partnerships, to carry out our business objectives. There can be no assurance that we will be able to obtain additional financing on terms that are acceptable to us and at the time required by us, or at all. Further, any financing may cause dilution of the interests of our current stockholders. If we are unable to obtain additional equity or loan financing, our financial condition and results of operations will be materially adversely affected. Moreover, estimates of our cash requirements to carry out our current business objectives are based upon various assumptions, including assumptions as to our revenues, net income or loss and other factors, and there can be no assurance that these assumptions will prove to be accurate or that unbudgeted costs will not be incurred. Future events, including the problems, delays, expenses and difficulties frequently encountered by similarly situated companies, as well as changes in economic, regulatory or competitive conditions, may lead to cost increases that could have a material adverse effect on us and our plans. If we are not successful in obtaining financing for future developments, whether in the form of loans, licenses or equity transactions, it is unlikely that we will have sufficient cash to continue to conduct operations, particularly research and development programs, as currently planned. We believe that in order to raise needed capital, we may be required to issue debt at significantly higher interest rates or equity securities that are significantly lower than the current market price of our common stock.

 

No assurances can be given that currently available funds will satisfy our working capital needs for the period estimated, or that we can obtain additional working capital through the sale of common stock or other securities, the issuance of indebtedness or otherwise or on terms acceptable to us. Further, no assurances can be given that any such equity financing will not result in a further substantial dilution to the existing stockholders or will be on terms satisfactory to us.

 

Item 3.              Controls and Procedures

 

The Company’s management has carried out an evaluation, under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, (1) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

 

In addition, based on that evaluation, there has been no change in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II - OTHER INFORMATION

Item 1.             Legal Proceedings

 

None.

 

Item 2.             Changes in Securities

 

Between November 1, 2011 and January 31, 2012, the Company issued a total of 150,000 shares of common stock to the Chief Executive Officer, Michael Brennan, pursuant to his compensation arrangement. The shares were issued at prices ranging from $0.0055 to $0.0064 per share, for an aggregate compensation expense of $906 as of the three months ended January 31, 2012.

 

Between November 10, 2011 and January 30, 2012, the Company issued a total of 39,600,400 shares of common stock upon the conversion of $51,500 in convertible notes at prices ranging from $0.0011to $0.0014 per share.

 

 

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company sold 14,191,447 shares of common stock under the terms of a Securities Purchase Agreement to Dutchess Opportunity Fund during the three months ended January 31, 2012 for proceeds of $55,767, net of $14,414 in transfer fees, at prices ranging from $0.004 to $0.0056 per share.

 

Items 3 through 5.           Omitted as not applicable.

 

Item 6.             Exhibits and Reports on Form 8-K

 

                         (a)        Exhibits:

 

31.1		Certification of Chief Executive Officer *
31.2		Certification of Chief Financial Officer *
32.1		906 Certification of Chief Executive Officer *
32.2		906 Certification of Chief Financial Officer *
101**		Interactive Date Files of Financial Statements and Notes formatted in Extensible Business Reporting Language (XBRL).

 

 

*        Filed herewith

 

**     XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Exchange Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

(b)     Reports on Form 8-K.

 

On December 5, 2011, the Company filed Form 8-K to report that on November 30, 2011, at the annual meeting of shareholders, the shareholders of Micro Imaging Technology, Inc. ("Company") approved a proposal to amend the Company’s Articles of Incorporation to increase the total number of authorized shares from 500,000,000 to 2,500,000,000.

 

The Form 8-K also reported that at the Annual Meeting, the Company’s shareholders voted to re-elect Michael W. Brennan and Victor A. Hollander as Directors to hold office until the 2012 Annual Meeting of Shareholders of the Company and until their respective successors have been elected and qualified

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Dated:  March 13, 2012	MICRO IMAGING TECHNOLOGY, INC.
	By	/s/ Victor A. Hollander
		Victor A. Hollander
		(Chief Financial Officer with
		responsibility to sign on behalf of Registrant as a
		duly authorized officer and principal financial officer)