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EXCEL - IDEA: XBRL DOCUMENT - INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.Financial_Report.xls
EX-32.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.f10q0614ex32ii_integrated.htm
EX-31.1 - CERTIFICATION - INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.f10q0614ex31i_integrated.htm
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.f10q0614ex32i_integrated.htm
EX-31.2 - CERTIFICATION - INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.f10q0614ex31ii_integrated.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2014

 

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

 

Commission file number 000-26309

 

INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

(Exact name of registrant as specified in its charter)

 

Nevada   98-0200471

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

4235 Commerce Street    
Little River, South Carolina   29566
(Address of principal executive offices)   (Zip Code)
     
(843) 390-2500
(Registrant’s telephone number, including area code)

  

Indicate by check mark whether the registrant (1) 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 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes S    No £

 

Indicate by check mark whether the registrant is a large 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   £ (Do not check if a smaller reporting company) Smaller reporting company   S

 

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

 

As of August 4, 2014, there were 235,914,540 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

 

 

 

 
 

 

INTEGRATED ENVIRONMENTAL TECHNOLOGIES, LTD.

 

INDEX TO FORM 10-Q

    Page
PART I. FINANCIAL INFORMATION  
     
Item 1. Financial Statements 1
     
  Consolidated Balance Sheets (Unaudited) as of June 30, 2014 and December 31, 2013 2
     
  Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2014 and 2013 3
     
  Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2014 and 2013 4
     
  Notes to the Unaudited Consolidated Financial Statements 5
     
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 18
     
Item 4. Controls and Procedures 18
     
     
PART II. OTHER INFORMATION  
     
Item 1. Legal Proceedings 19
     
Item 1A. Risk Factors 19
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
     
Item 3. Defaults upon Senior Securities 19
     
Item 4. Mine Safety Disclosures 19
     
Item 5. Other Information 20
     
Item 6. Exhibits 20
     
Signatures   21
     
Index of Exhibits E-1

 
 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this quarterly report on Form 10-Q and other filings of the registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

 

Forward-looking statements may include the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this quarterly report on Form 10-Q. Except as may be required under applicable securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. You should, however, consult further disclosures we make in future filings of our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements because we are considered a penny stock issuer.

 

 
 

 

PART I – FINANCIAL INFORMATION

 

Item 1.  Financial Statements

The consolidated balance sheet as of June 30, 2014 and the related consolidated statements of operations and consolidated statements of cash flows for the three and six months ended June 30, 2014 and 2013 for Integrated Environmental Technologies, Ltd. and its wholly-owned subsidiary I.E.T., Inc. (collectively referred to herein as “IET” or the “Company”) included in this Item 1, have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the SEC.  The consolidated financial statements include our wholly-owned subsidiary and all significant inter-company transactions and balances have been eliminated. In the opinion of management, the accompanying consolidated financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly our financial position and results of operations. It is suggested that the following consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2013.

 

The results of operations for the three and six months ended June 30, 2014 and 2013 are not necessarily indicative of the results of the entire fiscal year or of any other period.

 

1
 

 

 Integrated Environmental Technologies, Ltd.

Consolidated Balance Sheets

(Unaudited)

   June 30,  December 31,
   2014  2013
Assets      
Current assets:          
Cash  $279,664   $1,049,399 
Accounts receivable   22,772    28,250 
Prepaid expenses   10,918    26,166 
Inventory   127,816    126,952 
   Total current assets   441,170    1,230,767 
           
Property and equipment, net   302,176    344,884 
   Total assets  $743,346   $1,575,651 
           
Liabilities and Stockholders’ (Deficiency) Equity          
Current liabilities:          
Accounts payable  $108,769   $41,320 
Accrued expenses   49,612    47,954 
Customer deposits   38,109    38,109 
Convertible debentures   25,000    25,000 
Note payable   84,469    75,513 
   Total current liabilities   305,959    227,896 
           
Convertible debentures   476,125    476,125 
Note payable   6,766    46,546 
   Total liabilities   788,850    750,567 
           
Commitments and contingencies          
Stockholders’ (deficiency) equity:          
Common stock, $.001 par value; 400,000,000 shares authorized; 230,778,176 and 229,971,926 shares issued and outstanding, respectively   230,778    229,972 
Additional paid-in capital   20,165,846    20,075,764 
Accumulated deficit   (20,442,128)   (19,480,652)
  Total stockholders' (deficiency) equity   (45,504)   825,084 
  Total liabilities and stockholders' (deficiency) equity  $743,346   $1,575,651 

 

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

 

2
 

Integrated Environmental Technologies, Ltd.

Consolidated Statements of Operations

(Unaudited)

 

  

Three Months Ended

June 30,

 

Six Months Ended

June 30,

   2014  2013  2014  2013
             
Revenues:                    
Sales  $42,382   $22,376   $54,444   $44,706 
Leasing and licensing fees   6,000    19,500    12,000    36,000 
    48,382    41,876    66,444    80,706 
Cost of sales   27,486    9,274    31,731    14,648 
                     
Gross profit   20,896    32,602    34,713    66,058 
                     
Operating expenses:                    
General and administrative   279,582    373,450    577,059    651,805 
Sales and marketing   121,855    110,216    282,222    215,323 
Research and development   51,001    51,349    111,891    99,391 
    452,438    535,015    971,172    966,519 
                     
Loss from operations   (431,542)   (502,413)   (936,459)   (900,461)
                     
Other income (expense):                    
Interest income   -      16    -      53 
Interest expense   (12,735)   (10,456)   (25,017)   (21,058)
Total other income (expense)   (12,735)   (10,440)   (25,017)   (21,005)
                     
Net loss  $(444,277)  $(512,853)  $(961,476)  $(921,466)
                     
Net loss per share, basic and diluted  $(0.00)  $(0.00)  $(0.00)  $(0.01)
                     
Weighted average shares outstanding, basic and diluted   230,778,176    171,255,129    230,602,520    163,836,087 

 

 

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

 

3
 

 

Integrated Environmental Technologies, Ltd.

Consolidated Statements of Cash Flows

(Unaudited) 

 

  

Six Months Ended
June 30,

   2014  2013
Cash flows from operating activities:          
Net loss  $(961,476)  $(921,466)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   42,708    77,163 
Stock-based compensation expense   49,188    81,065 
Stock issued as settlement of litigation   -    26,550 
Changes in operating assets and liabilities:          
Accounts receivable   478    (4,046)
Inventory   (864)   1,529 
Prepaid expenses   15,248    6,249 
Accounts payable   88,949    17,677 
Accrued expenses   1,659    1,438 
Customer deposits   -    2,000 
Net cash used in operating activities   (764,110)   (711,841)
Cash flows used in investing activity:          
Purchase of equipment   -    (56,887)
Cash flows from financing activities:          
Proceeds from sale of common stock, net of offering costs   25,200    756,250 
Repayment of note payable   (30,825)   - 
Net cash (used in) provided by financing activities   (5,625)   756,250 
Decrease in cash   (769,735)   (12,478)
Cash  - beginning of period   1,049,399    180,489 
Cash  - end of period  $279,664   $168,011 
Supplemental disclosure of cash flow information:          
Cash paid for interest  $4,119   $624 
Cash paid for income taxes  $700   $- 
Non-cash operating activity:          
Issuance of 206,250 and 1,485,714 shares of common stock, respectively, as payment of director fees  $16,500   $52,000 
Non-cash investing activity          
Issuance of note payable as payment of equipment  $-   $152,000 

 

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

 

4
 

 

Integrated Environmental Technologies, Ltd.

Notes to Consolidated Financial Statements

 

1.  Basis of Presentation

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant recurring operating losses and negative cash flows from operations. The Company had working capital of $135,211 and an accumulated deficit of $20,442,128 as of June 30, 2014. The Company also has no lending relationships with commercial banks and is dependent on the completion of financings involving the private placement of its securities in order to continue operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The Company does not anticipate establishing any lending relationships with commercial banks in the foreseeable future due to its limited operations and assets. The Company continues to execute its strategy of selling anolyte and catholyte solutions and leasing its EcaFlo™ equipment to fund its operations and is focused on obtaining additional capital through the private placement of its securities. The Company is pursuing potential equity and/or debt investors and, from time to time, has engaged placement agents to assist it in this initiative. While the Company is pursuing the opportunities and actions described above, there can be no assurance that it will be successful in its efforts. If the Company is unable to secure additional capital, it will explore other strategic alternatives, including, but not limited to, the sale of the Company. Any additional equity financing may result in substantial dilution to the Company’s stockholders.

 

2.  Inventory

 

As of June 30, 2014 and December 31, 2013, inventory consisted of parts and materials totaling $127,816 and $126,952, respectively.

 

3.  Property and Equipment

 

As of June 30, 2014 and December 31, 2013, property and equipment, on a net basis, consisted of the following (see note 7):

 

  

June 30,

2014

  December 31,
2013

Leasehold improvements  $328,977   $328,977 
Equipment   437,504    437,504 
    766,481    766,481 
Less:  Accumulated depreciation   (464,305)   (421,597)
   $302,176   $344,884 

 

5
 

 

4.  Accrued Expenses

 

As of June 30, 2014 and December 31, 2013, accrued expenses consisted of the following:

 

  

June 30,

2014

  December 31,
2013
Accrued interest  $45,230   $24,321 
Accrued auditing fees   2,750    22,000 
Accrued other expenses   1,632    1,633 
   $49,612   $47,954 

 

5.  Customer Deposits

 

On March 29, 2011, the Company issued a credit to purchase equipment to a consultant in the amount of $36,109 as payment to the consultant for consulting services rendered to the Company.

 

Effective January 1, 2013, the Company entered into a license agreement with a third party related to the use by the third party of the Company’s United States Environmental Protection Agency (the “EPA”) registration for its anolyte solution. The Company received a deposit of $2,000 pursuant to the terms of this agreement.

 

6. Convertible Debentures

 

April 2007 Convertible Debenture

 

On April 26, 2007, in a private placement, the Company issued a convertible debenture to an individual accredited investor in the principal amount of $25,000. This convertible debenture matured on January 2, 2009 and remains unpaid. The convertible debenture accrues interest at a rate of 12% per annum and is convertible at any time into shares of the Company’s common stock at the option of the holder at a conversion price of $0.40 per share. An aggregate of 62,500 shares of the Company’s common stock can be issued upon the conversion of the outstanding principal amount due on this convertible debenture at the current conversion price of $0.40 per share.

 

During each of the three and six months ended June 30, 2014 and 2013, the Company recorded $748 and $1,488, respectively, of interest expense related to this convertible debenture. As of June 30, 2014 and December 31, 2013, the outstanding principal on this convertible debenture was $25,000 and the accrued and unpaid interest was $11,929 and $10,441, respectively. The accrued and unpaid interest is included as a component of accrued expenses.

 

Zanett Convertible Debentures

 

On August 21, 2012, the Company issued to Zanett Opportunity Fund, Ltd. (“Zanett”) an 8% convertible debenture in the amount of $476,125 (the “Zanett August 2012 Debenture”). In connection with this private placement, the Company refinanced an 8% convertible debenture, in the principal amount of $376,125, issued to Zanett on July 7, 2011 (the “Zanett July 2011 Debenture”) and refinanced an 8% convertible secured promissory note, in the principal amount of $100,000, issued to Zanett on September 23, 2011 (the “Zanett September 2011 Note”). As a result of the issuance of the Zanett August 2012 Debenture, the Zanett July 2011 Debenture and the Zanett September 2011 Note were cancelled.

 

6
 

 

The Zanett August 2012 Debenture has a three-year term maturing on August 21, 2015 and bears interest at a rate of 8% per annum. Interest is payable in annual installments in cash or, at the option of the Company, in shares of the Company’s common stock. If the Company elects to pay the interest in shares of its common stock, the number of shares issued as payment will be equal to the quotient of the unpaid interest divided by the market price of the Company’s common stock, as defined in the Zanett August 2012 Debenture.

 

The entire principal amount of the Zanett August 2012 Debenture is convertible at any time into shares of the Company’s common stock at the option of the holder at a conversion price of $0.10 per share. In addition, at the option of the Company, the entire principal amount of the Zanett August 2012 Debenture is convertible into shares of the Company’s common stock at $0.10 per share upon the occurrence of the merger or acquisition of the Company or if the average closing price of the Company’s common stock for any period of ten consecutive trading days is greater than or equal to $0.15 per share. The quoted market price of the Company’s common stock on August 21, 2012 was $0.05 per share. An aggregate of 4,761,250 shares of the Company’s common stock can be issued upon the conversion of the outstanding principal amount due on the Zanett August 2012 Debenture at the current conversion price of $0.10 per share.

 

On August 22, 2013, the Company issued 400,947 shares of the Company’s common stock to Zanett as payment of $38,090 of accrued interest due on the Zanett August 2012 Debenture for the period commencing August 21, 2012 through August 20, 2013. The number of shares of the Company’s common stock issued as payment of the accrued interest was calculated based on the market price of the Company’s common stock ($0.095 per share) as defined in the Zanett August 2012 Debenture.

 

During the three and six months ended June 30, 2014, the Company recorded $9,496 and $18,888, respectively, of interest expense related to the Zanett August 2012 Debenture. During the three and six months ended June 30, 2013, the Company recorded $9,628 and $19,151, respectively, of interest expense related to the Zanett August 2012 Debenture. As of June 30, 2014 and December 31, 2013, the outstanding principal on the Zanett August 2012 Debenture was $476,125 and the accrued and unpaid interest was $32,768 and $13,880, respectively. The accrued and unpaid interest is included as a component of accrued expenses.

 

7.  Note Payable

 

On June 17, 2013, the Company and Benchmark Performance Group, Inc. (“Benchmark”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), whereby the Company purchased nineteen EcaFlo™ machines owned by Benchmark as well as the rights to the Excelyte™ trademark and certain other intangible assets. The purchase price for the nineteen EcaFlo™ machines, the Excelyte™ trademark and other intangible assets was $190,000.

 

The Company paid $38,000 in conjunction with the closing of the Asset Purchase Agreement and issued a promissory note with a principal balance of $152,000 (the “Benchmark Note”). The Benchmark Note bears interest at a rate of 7% per annum and requires the Company to make twenty-four monthly payments of $6,805 commencing August 1, 2013. The Benchmark Note is secured by the nineteen EcaFlo™ machines.

 

7
 

 

For the three and six months ended June 30, 2014, the Company recorded $1,706 and $3,735, respectively, of interest expense related to the Benchmark Note. As of June 30, 2014 and December 31, 2013, the outstanding principal on the Benchmark Note was $91,235 (current portion $84,469; long-term portion $6,766) and $122,059 (current portion $75,513; long-term portion $46,546), respectively.

 

8.  Stockholders’ Equity

 

Stock Options

The Company currently has two stock option/stock compensation plans in place: the 2010 Stock Incentive Plan and the 2012 Equity Incentive Plan (collectively, the “Equity Incentive Plans”).

 

The 2010 Stock Incentive Plan was approved by the stockholders in September 2010. The Company had reserved for issuance an aggregate of 10,000,000 shares of common stock under the 2010 Stock Incentive Plan. As of June 30, 2014, stock options to purchase 4,680,254 shares of the Company’s common stock were outstanding under the 2010 Stock Incentive Plan and 90,500 shares of the Company’s common stock had been issued under the 2010 Stock Incentive Plan. As a result of the adoption of the Company’s 2012 Equity Incentive Plan, no further awards are permitted under the 2010 Stock Incentive Plan.

 

The 2012 Equity Incentive Plan was approved by the stockholders in May 2012. The Company has reserved for issuance an aggregate of 14,000,000 shares of common stock under the 2012 Stock Incentive Plan. The 2012 Equity Incentive Plan is designed to encourage and enable employees and directors of the Company to acquire, or increase their holdings of, common stock and other proprietary interests in the Company. It is intended to promote these individuals’ interests in the Company, thereby enhancing the efficiency, soundness, profitability, growth and stockholder value of the Company. The 2012 Equity Incentive Plan provides for grants and/or awards in the form of incentive and non-qualified stock option grants, stock appreciation rights, restricted stock awards, performance share awards, phantom stock awards and dividend equivalent awards. As of June 30, 2014, no grants or awards had been made under the 2012 Equity Incentive Plan.

 

Common stock grants and stock option awards under the Equity Incentive Plans were granted or issued at prices as determined by the Company’s compensation committee; provided, however, that such prices were not less than the fair market value of the Company's common stock on the date of grant or issuance. Stock options granted and outstanding to date consist of both incentive stock options and non-qualified stock options.

8
 

A summary of stock option transactions under the Equity Incentive Plans during the six months ended June 30, 2014 is set forth below: 

  

Stock

Option Shares

  Weighted Average Exercise Price Per Common Share  Aggregate
Intrinsic Value
Outstanding at December 31, 2013   4,980,254   $0.18   $- 
Granted during the period   -    -    - 
Exercised during the period   -    -    - 
Terminated during the period   300,000   $0.08    - 
Outstanding at June 30, 2014   4,680,254   $0.19   $- 
Available for purchase at June 30, 2014   3,013,586   $0.13   $- 
Available for purchase at December 31, 2013   3,313,586   $0.12   $- 

 

Information with respect to stock options outstanding and stock options exercisable as of June 30, 2014 is as follows:

 

   Stock Options Outstanding  Stock Options Exercisable
Exercise
Price
  Number of Shares Available Under Outstanding Stock
Options
  Weighted Average Exercise Price Per Common Share  Weighted Average Remaining Contractual Life (Years)  Number of Shares Available for Purchase Under Outstanding Stock
Options
  Weighted Average Exercise Price Per Common Share  Weighted Average Remaining Contractual Life (Years)
$0.10    2,180,253   $0.10    4.7    2,180,253   $0.10    4.7 
$0.20    833,333   $0.20    7.8    833,333   $0.20    7.8 
$0.30    1,666,668   $0.30    7.8    -    -    - 
     4,680,254   $0.19    6.3    3,013,586   $0.13    5.5 

 

A summary of the non-vested shares subject to stock options granted under the Equity Incentive Plans as of June 30, 2014 is as follows:

 

  

Stock

Option Shares

 

Weighted Average Grant Date Fair Value

Per Share

Non-vested at December 31, 2013   1,666,668   $0.05 
Granted during the period   -    - 
Vested during the period   -    - 
Terminated during the period   -    - 
Non-vested at June 30, 2014   1,666,668   $0.05 

 

As of June 30, 2014, there was $14,734 of total unrecognized compensation cost related to non-vested, stock-based compensation arrangements granted under the Equity Incentive Plans. That cost is expected to be recognized over a weighted average period of six months.

 

9
 

 

Warrants to Purchase Common Stock

 

On June 30, 2014, the Company issued a warrant to purchase 500,000 shares of the Company’s common stock to an unaffiliated third party as payment of consulting services. The warrant is exercisable at $0.06 per share and has a term of two years. The warrant vested upon issuance. The fair value of the warrant on the date of issuance as calculated using the Black-Scholes model was $11,471, using the following weighted average assumptions: exercise price of $0.06 per share; common stock price of $0.055 per share; volatility of 134%; term of two years; dividend yield of 0%; interest rate of 0.47%; and risk of forfeiture of 35%.

 

A summary of warrant transactions during the six months ended June 30, 2014 is as follows:

   Warrant
Shares
  Weighted
Average
Exercise
Price Per
Common Share
  Aggregate Intrinsic
Value
Outstanding at December 31, 2013   36,844,565   $0.12   $- 
Issued during the period   500,000   $0.06    - 
Exercised during the period   -    -    - 
Terminated during the period   -    -    - 
Outstanding at June 30, 2014   37,344,565   $0.12   $- 
Available for purchase at June 30, 2014   37,344,565   $0.12   $- 
Available for purchase at December 31, 2013   36,844,565   $0.12   $- 

 

Warrants issued by the Company contain exercise prices that were approved by the Company’s board of directors. Such exercise prices are generally not less than the quoted market price of the Company's common stock on the date of issuance. Warrants currently issued either vested immediately or over a period of up to three years and have a maximum term of ten years from the date of issuance.

 

Information with respect to warrants outstanding and warrants exercisable at June 30, 2014 is as follows:

   Warrants Outstanding  Warrants Exercisable
Range of
Exercise Prices
  Number of Shares Available Under Outstanding Warrants  Weighted Average Remaining Contractual Life (Years)  Weighted Average Exercise Price Per Common Share  Number of Shares Available for Purchase Under Outstanding Warrants  Weighted Average Remaining Contractual Life (Years)  Weighted Average Exercise Price Per Common Share
$0.03 - 0.04    1,151,567    2.5   $0.04    1,151,567    2.5   $0.04 
$    0.06 - 0.10    23,556,061    3.4   $0.09    23,556,061    3.4   $0.09 
$0.20    12,636,937    0.7   $0.20    12,636,937    0.7   $0.20 
      37,344,565    2.5   $0.13    37,344,565    2.5   $0.13 

  

As of June 30, 2014, there were no non-vested shares subject to warrants and no unrecognized compensation cost related to warrants.

 

10
 

 

9.  Stock-Based Compensation

 

During the three and six months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense as follows:

  

Three Months Ended

June 30,

 

Six Months Ended

June 30,

   2014  2013  2014  2013
General and administrative  $15,111   $37,549   $41,948   $73,825 
Sales and marketing   2,548    2,548    5,068    5,068 
Research and development   1,092    1,092    2,172    2,172 
   $18,751   $41,189   $49,188   $81,065 

 

For the three and six months ended June 30, 2014, the Company recorded stock-based compensation expense related to stock options granted to employees and directors of $7,280 and $17,717, respectively. For the three and six months ended June 30, 2014, the Company recorded stock-based compensation expense related to common stock and warrants granted to non-employees of $11,471 and $31,471, respectively.

 

For the three and six months ended June 30, 2013, the Company recorded stock-based compensation expense related to stock options granted to employees and directors of $12,118 and $24,103, respectively. For the three and six months ended June 30, 2013, the Company recorded stock-based compensation expense related to common stock and warrants granted to non-employees of $29,071 and $56,962, respectively.

 

10.  Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants and conversion of convertible debt that are not deemed to be anti-dilutive. The dilutive effect of the outstanding stock options and warrants is computed using the treasury stock method.

For the three and six months ended June 30, 2014, diluted net loss per share did not include the effect of 4,680,254 shares of common stock issuable upon the exercise of outstanding stock options, 37,344,565 shares of common stock issuable upon the exercise of outstanding warrants and 4,823,750 shares of common stock issuable upon the conversion of convertible debt, as their effect would be anti-dilutive.

For the three and six months ended June 30, 2013, diluted net loss per share did not include the effect of 5,813,587 shares of common stock issuable upon the exercise of outstanding stock options, 46,377,998 shares of common stock issuable upon the exercise of outstanding warrants and 4,823,750 shares of common stock issuable upon the conversion of convertible debt, as their effect would be anti-dilutive.

11
 

 

11.  Commitments and Contingencies

Litigation with Former Executive Vice President - Operations

 

On June 17, 2014, a civil complaint was filed against the Company and one of its directors, E. Wayne Kinsey, III, in the Court of Common Pleas, County of Horry, State of South Carolina, by Marion Sofield, the Company’s former Executive Vice President - Operations. In her complaint, Ms. Sofield alleges breach of contract and fraudulent inducement by the Company against her with regard to her employment agreement and the termination of her employment. Ms. Sofield also alleges civil conspiracy, tortious interference and unfair trade practices. Ms. Sofield claims that she is owed additional compensation under her terminated employment agreement, and is seeking the recovery of such compensation as well as attorney’s fees and punitive damages.

 

On July 18, 2014, the Company filed a motion to dismiss this state court action due to the binding arbitration clause contained in Ms. Sofield’s employment agreement.

 

The Company does not believe there is any merit to Ms. Sofield’s allegations and will vigorously defend this action.

 

12.  Subsequent Events

From July 22, 2014 through July 31, 2014, the Company sold an aggregate of 4,850,000 shares of its common stock to five individual investors for an aggregate purchase price of $198,400. The Company incurred offering costs of $13,432 in connection with these transactions.

 

On July 31, 2014, the Company issued an aggregate of 286,364 shares of its common stock, at a per share price of $0.055, as settlement of $15,750 of director fees due certain members of the Company’s board of directors for services rendered for the period commencing January 1, 2014 through June 30, 2014. The quoted market price of the Company’s common stock on July 1, 2014, the date the issuance was approved by the Company’s board of directors, was $0.051 per share.

 

12
 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

General

 

IET was originally incorporated in Delaware on February 2, 1999 and is now a Nevada corporation. IET is headquartered in Little River, South Carolina and operates through its wholly-owned subsidiary, I.E.T., Inc., a Nevada corporation incorporated on January 11, 2002.

 

IET markets its products and equipment under the umbrella brand name, EcoTreatments™. IET produces and sells a hypochlorous acid solution (“Anolyte”) as well as an anti-oxidizing, mildly alkaline solution (“Catholyte” and, together with Anolyte, the “Solutions”), that provide an environmentally friendly and effective alternative for cleaning, sanitizing and disinfecting as compared to the hazardous chemicals traditionally prevalent in commercial use. IET sells its Anolyte under the brand name, Excelyte™ and sells its Catholyte under the brand name, Catholyte Zero™. IET manufactures proprietary equipment, which it markets under the brand name EcaFlo™, to produce the Solutions for distribution by IET and, under certain circumstances, such equipment is leased by IET to customers for use at a customer’s facility.

 

Products

 

IET produces Anolyte that is effective as a disinfectant, can be used safely anywhere there is a need to control bacteria, viruses, and germs and leaves no harmful residue. The non-toxic and less-corrosive nature of our Anolyte makes it an excellent replacement for quaternary ammonia, sodium hypochlorite (bleach) and other hazardous chemicals currently being used as disinfectants and sanitizers. Our Anolyte contains an active killing agent that is produced with a pH of 6.5 and contains a ratio of free available chlorine of approximately 92% hypochlorous acid to 8% hypochlorite. Our Anolyte kills various pathogens including, but not limited to, Mycobacterium bovis (Tuberculosis), Salmonella enterica, Pseudomonas aeruginosa, Staphylococcus aureus, methicillin-resistant Staphylococcus aureus (MRSA), H1NI influenza virus (swine flu) and B. anthracis spores (anthrax). Our Anolyte also kills hospital-acquired pathogens such as Clostridium difficile spores (C. diff) and vancomycin-resistant enterococci (VRE) as well as two carbapenem-resistant enterobacteriaceae (CRE) known as Klebsiella pneumoniae carbapenemase (KPC) and New Delhi Metallo-beta-lactamase (NDM). Further, the high-risk blood-borne pathogen human immunodeficiency virus (HIV) and the food-borne pathogens Listeria monocytogenes and Escherichia coli (E. coli) are killed by our Anolyte. We also produce Catholyte, an anti-oxidizing and mild alkaline solution that is effective as a degreaser and cleaner.

 

Our Anolyte is registered with the EPA as a tuberculocidal hospital-level surface disinfectant and as a biocide for use in oil and gas drilling (EPA Registration No. 82341-1). In addition, our Anolyte is registered with the EPA (EPA Registration No. 82341-4) as a disinfectant to prevent Canine distemper virus, Canine parvovirus and Bordetella bronchiseptica. We intend to market the canine product, in conjunction with a third-party partner, as Excelyte™ VET.

 

IET will also lease EcaFlo™ equipment to a customer when the customer’s business model or required volume of Solutions warrants such an arrangement. Under this type of arrangement, we would lease our EcaFlo™ equipment and provide service support for a fixed monthly price and, in certain circumstances, we would receive royalty payments for the Solutions produced by the customer. We also license to certain customers the right to utilize our intellectual property pursuant to which the customer is required to pay us a monthly fee based on the number of gallons of Solutions produced by our EcaFlo™ equipment.

 

13
 

 

Business Strategy

 

Our business model is focused on selling Solutions directly to customers. In situations where a customer desires to have EcaFlo™ equipment on-site, we lease the equipment and maintain ownership as opposed to selling the EcaFlo™ equipment outright.

 

We seek long-term contracts directly with our targeted customers and through a distributor network. In some circumstances, where the Solutions will be consumed by the customer in its commercial process, we will lease the EcaFlo™ equipment to that customer. We are currently focused on selling the Solutions in three markets: oil and gas production, healthcare facilities and food production.

 

Critical Accounting Policies and Estimates

 

The discussion and analysis of the Company’s financial condition and results of operations are based upon the interim consolidated financial statements contained elsewhere herein, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements required us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, income taxes, contingencies and litigation. We based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

The critical accounting estimates that we believe affect the more significant judgments and estimates used in preparation of the consolidated financial statements contained elsewhere herein are described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2013. There have been no material changes to the critical accounting policies.

 

Results of Operations

 

Revenue. For the three months ended June 30, 2014, revenue was $48,382, as compared to $41,876 for the three months ended June 30, 2013. The $6,506, or 16%, increase in revenue for the three months ended June 30, 2014 was primarily due to a $23,975 increase in sales of EcaFlo™ equipment parts, offset by a $13,500 decrease in EcaFlo™ equipment leasing revenue.

 

For the six months ended June 30, 2014, revenue was $66,444, as compared to $80,706 for the six months ended June 30, 2013. The $14,262, or 18%, decrease in revenue for the six months ended June 30, 2014 was primarily due to a $24,000 decrease in EcaFlo™ equipment leasing revenue, offset by an $11,549 increase in sales of EcaFlo™ equipment parts and related supplies.

 

14
 

 

Cost of Sales. For the three months ended June 30, 2014, cost of sales was $27,486, as compared to $9,274 for the three months ended June 30, 2013. The $18,212, or 196%, increase in cost of sales for the three months ended June 30, 2014 was primarily attributable to the increase in sales of EcaFlo™ equipment parts with higher cost of sales.

 

For the six months ended June 30, 2014, cost of sales was $31,731, as compared to $14,648 for the six months ended June 30, 2013. The $17,083, or 117%, increase in cost of sales for the six months ended June 30, 2014 was primarily attributable to the increase in sales of EcaFlo™ equipment parts with higher cost of sales.

 

Gross Profit. For the three months ended June 30, 2014 and 2013, gross profit margins were 43% and 78%, respectively. For the six months ended June 30, 2014 and 2013, gross profit margins were 52% and 82%, respectively.

 

General and Administrative Expenses. For the three months ended June 30, 2014, general and administrative expenses were $279,582, as compared to $373,450 for the three months ended June 30, 2013. The $93,868, or 25%, decrease in general and administrative expenses for the three months ended June 30, 2014 was primarily the result of a $45,349 decrease in legal fees primarily related to litigation, a $26,550 decrease in litigation settlement expense, a $17,600 decrease in stock-based compensation expense for consultants and a $17,972 decrease in depreciation expense, offset by a $15,000 increase in consulting fees related to investor and public relations and a $12,605 increase in travel expense related to business development activities.

 

For the six months ended June 30, 2014, general and administrative expenses were $577,059, as compared to $651,805 for the six months ended June 30, 2013. The $74,746, or 11%, decrease in general and administrative expenses for the six months ended June 30, 2014 was primarily the result of a $47,321 decrease in legal fees primarily related to litigation, a $34,454 decrease in depreciation expense, a $26,550 decrease in litigation settlement expense and a $25,491 decrease in stock-based compensation expense for consultants, offset by a $40,000 increase in consulting fees related to investor and public relations and a $15,114 increase in travel expense related to business development activities.

 

Sales and Marketing Expenses. For the three months ended June 30, 2014, sales and marketing expenses were $121,855, as compared to $110,216 for the three months ended June 30, 2013. The $11,639, or 11%, increase in sales and marketing expenses for the three months ended June 30, 2014 was primarily the result of a $12,605 increase in travel expenses related to sales activities.

 

For the six months ended June 30, 2014, sales and marketing expenses were $282,222, as compared to $215,323 for the six months ended June 30, 2013. The $66,899, or 31%, increase in sales and marketing expenses for the six months ended June 30, 2014 was primarily the result of a $52,218 increase in marketing expenses related to the re-design of the Company’s web-site and new product branding initiatives and a $15,114 increase in travel expenses related to sales activities.

 

Research and Development Expenses. For the three months ended June 30, 2014, research and development expenses were $51,001, as compared to $51,349 for the three months ended June 30, 2013. The $348, or 1%, decrease in research and development expenses for the three months ended June 30, 2014 was primarily the result of a $2,198 decrease in consulting fees primarily related to regulatory and patent consultants, offset by a $1,173 increase in office and research supplies.

 

15
 

 

For the six months ended June 30, 2014, research and development expenses were $111,891, as compared to $99,391 for the six months ended June 30, 2013. The $12,500, or 13%, increase in research and development expenses for the six months ended June 30, 2014 was primarily the result of a $9,008 increase in laboratory testing fees and a $2,593 increase in office and research supplies.

 

Loss from Operations. For the three months ended June 30, 2014, the loss from operations was $431,542, as compared to $502,413 for the three months ended June 30, 2013. The $70,871, or 14%, decrease in the loss from operations for the three months ended June 30, 2014 was primarily attributable to a $93,868 decrease in general and administrative expenses and a $6,506 increase in revenue, offset by an $18,212 increase in cost of sales and an $11,639 increase in sales and marketing expenses.

 

For the six months ended June 30, 2014, the loss from operations was $936,459, as compared to $900,461 for the six months ended June 30, 2013. The $35,998, or 4%, increase in the loss from operations for the six months ended June 30, 2014 was attributable to a $66,899 increase in sales and marketing expenses, a $17,083 increase in cost of sales, a $12,500 increase in research and development expenses and a $14,262 decrease in revenue, offset by a $74,746 decrease in general and administrative expenses.

 

Interest Expense. For the three months ended June 30, 2014, interest expense was $12,735, as compared to $10,456 for the three months ended June 30, 2013. The $2,278, or 22%, increase in interest expense for the three months ended June 30, 2014 was primarily attributable to an increase in interest expense on notes payable related to the Benchmark Note.

 

For the six months ended June 30, 2014, interest expense was $25,017, as compared to $21,058 for the three months ended June 30, 2013. The $3,959, or 19%, increase in interest expense for the three months ended June 30, 2014 was primarily attributable to an increase in interest expense on notes payable related to the Benchmark Note.

 

Net Loss. For the three months ended June 30, 2014, the Company’s net loss was $444,277, as compared to $512,853 for the three months ended June 30, 2013. The $68,576, or 13%, decrease in the net loss for the three months ended June 30, 2014 was primarily attributable to a $93,868 decrease in general and administrative expenses and a $6,506 increase in revenue, offset by an $18,212 increase in cost of sales and an $11,639 increase in sales and marketing expenses.

 

For the six months ended June 30, 2014, the Company’s net loss was $961,476, as compared to $921,466 for the six months ended June 30, 2013. The $40,010, or 4%, increase in the net loss for the six months ended June 30, 2014 was primarily attributable to a $66,899 increase in sales and marketing expenses, a $17,083 increase in cost of sales, a $12,500 increase in research and development expenses and a $14,262 decrease in revenue, offset by a $74,746 decrease in general and administrative expenses.

 

16
 

 

Liquidity and Capital Resources

 

As of June 30, 2014, IET had working capital of $135,211 and cash on hand of $279,664. The $769,735 decrease in cash on hand from December 31, 2013 was primarily due to $34,027 of principal and interest payments on the Benchmark Note and our continuing operating expenses, offset by the receipt of $25,200 of net proceeds from the sale of our common stock.

 

During the past several years, IET has generally sustained recurring losses and negative cash flows from operations. We currently do not generate sufficient revenue from the sale of our products to fund our operations and have funded this shortfall through the sale of our common stock.

 

On January 8, 2014, we received $25,200 of net proceeds related to the sale of our common stock. Subsequent to June 30, 2014, we received $184,968 of net proceeds related to the sale of our common stock.

 

On February 25, 2014, we issued an aggregate of 206,250 shares of our common stock as settlement of $16,500 of fees due certain members of our board of directors for services rendered for the period commencing September 1, 2013 through December 31, 2013. On March 14, 2014, we issued 250,000 shares of our common stock in connection with a consulting agreement with an unaffiliated third party for marketing services. The total expense associated with the issuance of these shares was $20,000, representing the fair market value of the shares on the date of issuance ($0.08 per share).

 

As of August 4, 2014, our cash position was approximately $350,000. If we are not able to generate profitable operations from the sale of our products or we are not able to obtain additional financing, we will only be able to continue our operations for approximately four months from the filing date of this quarterly report on Form 10-Q. The Company has no lending relationships with commercial banks and is dependent on its ability to attain profitable operations and raise additional capital through one or more equity and/or debt financings in order to continue operations. While we are working toward attaining profitability for our continuing operations and aggressively pursuing potential equity and/or debt investors, there can be no assurance that we will be successful in our efforts. From time to time, we engage placement agents to assist us in our financing initiatives. Any additional equity financing may result in substantial dilution to the Company’s stockholders. If the Company is unable to attain profitable operations or secure additional capital, it will explore strategic alternatives, including, but not limited to, the possible sale of the Company. Our independent registered public accounting firm included an emphasis of a matter paragraph in its report included in our annual report on Form 10-K for the year ended December 31, 2013, which expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements included herein do not include any adjustments related to this uncertainty.

 

17
 

  

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

 

IET is a smaller reporting company and is therefore not required to provide this information.

 

Item 4.  Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

As required by Rule 13a-15 under the Exchange Act, as of the end of the Company’s last fiscal quarter, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s current management, including the Company’s President and Chief Executive Officer and the Company’s Executive Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer), who concluded that the Company’s disclosure controls and procedures are effective.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s President and Chief Executive Officer and the Company’s Executive Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.

 

Changes in internal control over financial reporting.

 

Management reviews the Company’s system of internal control over financial reporting and makes changes to the Company’s processes and systems to improve controls and increase efficiency, while ensuring that the Company maintains an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities and migrating processes.

 

During the Company’s last fiscal quarter, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

18
 

  

PART II – OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

On June 17, 2014, a civil complaint was filed against the Company and one of its directors, E. Wayne Kinsey, III, in the Court of Common Pleas, County of Horry, State of South Carolina, by Marion Sofield, the Company’s former Executive Vice President - Operations. In her complaint, Ms. Sofield alleges breach of contract and fraudulent inducement by the Company against her with regard to her employment agreement and the termination of her employment. Ms. Sofield also alleges civil conspiracy, tortious interference and unfair trade practices. Ms. Sofield claims that she is owed additional compensation under her terminated employment agreement, and is seeking the recovery of such compensation as well as attorney’s fees and punitive damages.

 

On July 18, 2014, the Company filed a motion to dismiss this state action due to the binding arbitration clause contained in Ms. Sofield’s employment agreement.

 

The Company does not believe there is any merit to Ms. Sofield’s allegations and will vigorously defend this action.

 

Item 1A.  Risk Factors

 

IET is a smaller reporting company and is therefore not required to provide this information.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3.  Defaults Upon Senior Securities

 

On April 26, 2007, in a private placement, the Company issued a convertible debenture to an individual accredited investor in the principal amount of $25,000. This convertible debenture matured on January 2, 2009 and remains unpaid. The convertible debenture accrues interest at a rate of 12% per annum and is convertible at any time into shares of the Company’s common stock, at the option of the holder, at a conversion price of $0.40 per share. An aggregate of 62,500 shares of the Company’s common stock can be issued upon the conversion of the outstanding principal amount due on this convertible debenture. As of June 30, 2014, the accrued and unpaid interest on this convertible debenture was $11,929.

 

Item 4.  Mine Safety Disclosures

 

Not applicable.

 

19
 

  

Item 5.  Other Information

 

From July 22, 2014 through July 31, 2014, the Company sold an aggregate of 4,850,000 shares of its common stock to five individual investors for an aggregate purchase price of $198,400. The Company incurred offering costs of $13,432 in connection with these transactions.

 

On July 31, 2014, the Company issued an aggregate of 286,364 shares of its common stock, at a per share price of $0.055, as settlement of $15,750 of director fees due certain members of the Company’s board of directors for services rendered for the period commencing January 1, 2014 through June 30, 2014. The quoted market price of the Company’s common stock on July 1, 2014, the date the issuance was approved by the Company’s board of directors, was $0.051 per share.

 

In connection with the issuances of the Company’s common stock described above, the Company relied on the exemption from registration for a private transaction not involving a public distribution provided by Section 4(a)(2) of the Securities Act.

 

Item 6.  Exhibits

 

See Index of Exhibits Commencing on Page E-1.

 

20
 

 

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

INTEGRATED ENVIRONMENTAL

TECHNOLOGIES, LTD.

     
August 8, 2014 By:  /s/ David R. LaVance
    David R. LaVance
    President and Chief Executive Officer
     
August 8, 2014 By:  /s/ Thomas S. Gifford
    Thomas S. Gifford
    Executive Vice President,
    Chief Financial Officer and Secretary

  

21
 

  

INDEX OF EXHIBITS

 

Exhibit
No.

 

Description

3.1   Amended and Restated Articles of Incorporation of Integrated Environmental Technologies, Ltd. (the “Company”) (incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K that was filed with the Securities and Exchange Commission (the “SEC”) on May 22, 2012).
3.2   Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s current report on Form 8-K that was filed with the SEC on May 22, 2012).
4.1   Convertible Debenture Unit Purchase Agreement between the Company and L.J. Tichacek dated April 26, 2007 (incorporated by reference to Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2011 that was filed with the SEC on August 22, 2011).
4.2   10% Convertible Debenture in the principal amount of $25,000 issued to L.J. Tichacek dated April 26, 2007 (incorporated by reference to Exhibit 4.2 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2011 that was filed with the SEC on August 22, 2011).
4.3   8% Convertible Debenture, dated as of August 21, 2012, issued to Zanett Opportunity Fund, Ltd. Agreement (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K that was filed with the SEC on August 23, 2012).
4.4   7% Secured Promissory Note in the principal amount of $152,000 issued by I.E.T., Inc. to Benchmark Performance Group, Inc. dated June 17, 2013 (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K that was filed with the SEC on June 19, 2013).
10.1   Amended and Restated Registration Rights Agreement between the Company and E. Wayne Kinsey, III and Zanett dated September 23, 2011 (incorporated by reference to Exhibit 10.4 to the Company’s annual report on Form 10-K for the year ended December 31, 2011 that was filed with the SEC on March 30, 2012).
10.2   2010 Stock Incentive Plan of the Company (incorporated by reference to Exhibit 10.5 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2011 that was filed with the SEC on August 22, 2011).
10.3   2012 Equity Incentive Plan of the Company (incorporated by reference to Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2013 that was filed with the SEC on May 15, 2013).
10.4   Form of Warrant, dated April 21, 2011, issued by the Company to each of David R. LaVance (for the purchase of 1,818,182 shares of the Company’s common stock), Raymond C. Kubacki (for the purchase of 1,818,182 shares of the Company’s common stock) and Valgene L. Dunham (for the purchase of 969,697 shares of the Company’s common stock) (incorporated by reference to Exhibit 10.12 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2011 that was filed with the SEC on August 22, 2011).

 

E-1
 

 

Exhibit
No.
  Description
10.5   Form of Warrant, dated May 23, 2011, issued by the Company to each of David R. LaVance (for the purchase of 3,100,000 shares of the Company’s common stock) and Thomas S. Gifford (for the purchase of 3,100,000 shares of the Company’s common stock) (incorporated by reference to Exhibit 10.13 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2011 that was filed with the SEC on August 22, 2011).
10.6   Sales Management Services Agreement, dated as of December 6, 2011, by and between I.E.T., Inc. and TrueLogix, LLC (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K that was filed with the SEC on December 6, 2011).
10.6.1   Mutual Termination of Sales Management Services Agreement, dated as of August 31, 2012, among I.E.T., Inc., TrueLogix, LLC, Colby J. Sanders, Patrick T. Lewis and Howard B. Gee (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K that was filed with the SEC on September 25, 2012).
10.7   Warrant, dated October 27, 2011, issued by the Company to Raymond C. Kubacki for the purchase of 468,750 shares of the Company’s common stock (incorporated by reference to Exhibit 10.4 to the Company’s annual report on Form 10-K for the year ended December 31, 2011 that was filed with the SEC on March 30, 2012).
10.8   Form of Incentive Stock Option Agreement, dated March 27, 2012, issued by the Company to each of David R. LaVance (for the purchase of 3,000,000 shares of the Company’s common stock) and Thomas S. Gifford (for the purchase of 2,000,000 shares of the Company’s common stock) (incorporated by reference to Exhibit 10.14 to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2012 that was filed with the SEC on May 15, 2012).
10.9   Form of Non-Qualified Stock Option Agreement, dated March 27, 2012, issued by the Company to each of:  Raymond C. Kubacki (for the purchase of 541,860 shares of the Company’s common stock); David N. Harry (for the purchase of 309,640 shares of the Company’s common stock); Valgene L. Dunham (for the purchase of 340,600 shares of the Company’s common stock); and E. Wayne Kinsey, III  (for the purchase of 154,820 shares of the Company’s common stock) (incorporated by reference to Exhibit 10.15 to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2012 that was filed with the SEC on May 15, 2012).
10.10   Asset Purchase Agreement, dated as of June 17, 2013, by and between I.E.T., Inc. and Benchmark Performance Group, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K that was filed with the SEC on June 19, 2013).
31.1   Section 302 Certification of Principal Executive Officer.
31.2   Section 302 Certification of Principal Financial Officer.
32.1   Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2   Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.

 

E-2
 

 

Exhibit
No.
  Description
101*   The following materials from the Company’s quarterly report on Form 10-Q for the period ended June 30, 2014, formatted in Extensible Business Reporting Language (XBRL):  (i) consolidated balance sheets; (ii) consolidated statements of operations; (iii) consolidated statements of cash flows; and (iv) notes to the consolidated financial statements.

 

* Pursuant to Rule 406T of Regulation S-T, the interactive data files included as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 

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