Intrepid Technology & Resources 10QSB 2007 Q3 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the quarterly period ended March 31, 2007

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _____ to _______

Commission file number: 000-30065

INTREPID TECHNOLOGY & RESOURCES, INC., AND SUBSIDIARIES

(Exact name of registrant as specified in its charter)

Idaho

82-0230842

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

501 West Broadway, Suite 200,
Idaho Falls, Idaho 82304

(Address of principal executive offices)

(208) 529-5337
(Issuer's telephone number)

Idaho

(State or other jurisdiction of incorporation or organization)

Registrant's telephone number, including area code:

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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.

YesX No __

State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:

244,428,642 shares of common stock, $0.005 par value per share, as of May 14, 2007.

Transitional Small Business Disclosure Format (check one): Yes __ NoX

TABLE OF CONTENTS

Part I - FINANCIAL INFORMATION


Item	1.	Financial Statements
		Balance Sheets………………………………………….……………….…….	3
		Statements of Operations………………………………………………….…..	4
		Statements of Cash Flows……………………….……………….……………	5
		Notes to Unaudited Financial Statements……………….……………….……	6


Item	2.	Management’s Discussion and Analysis……………………………………...	10
		Results of Operations…………………………………….……………….…..	10
		Capital Resources and Liquidity……………………….……………….……..	13
Item	3.	Controls and Procedures……………………………….……………….……..	17

Part II - OTHER INFORMATION


Item	1.	Legal Proceedings………………………………….……………….…………	18
Item	2.	Changes in Securities………………………………….……………….……..	18
Item	3.	Defaults Upon Senior Securities………………………………….…………...	18
Item	4.	Submission of Matters to a Vote of Security Holders………………………...	18
Item	5.	Other Information………………………………….……………….…………	18
Item	6.	Exhibits. ……………………………………………………………………...	19
		Signature Page………………………………….……………….…………….	20

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


INTREPID TECHNOLOGY AND RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
		March 31,	June 30,
		2007	2006
ASSETS		(Unaudited)	(Audited)
Current assets:
Cash	$	1,956,973	716,203
Restricted cash		1,578,152	-
Accounts receivable, net		33,360	53,252
Prepaid expenses		18,936	66,076
Bond issuance costs		-	138,896
Other assets		3,380	2,245

Total current assets		3,590,801	976,672

Property, plant, and equipment, net		8,206,419	2,218,392
Restricted cash		1,090,040	-
Debt issuance costs, net		1,299,636	-

Total assets	$	14,186,896	3,195,064

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,440,765	187,140
Accrued expenses		718,709	271,089
Note payable		-	556,264

Total current liabilities		2,159,474	1,014,493

Long-term Liabilities:
Accrued interest payable		3,699	-
Long-term debt		7,658,265	-
Embedded derivative liability		2,230,252	-

Total long-term liabilities		9,892,216	-

Total liabilities		12,051,690	1,014,493

Commitments and contingencies

Stockholders' equity:
Preferred stock, $1 par value; 5,000,000 shares
authorized, no shares issued and outstanding		-	-
Common stock, $.005 par value; 350,000,000 shares
authorized, 243,919,568 and 230,100,973 shares
issued and outstanding, respectively		1,219,598	1,150,505
Additional paid-in capital		10,412,806	9,183,892
Stock subscription receivable		(16,200)	(16,200)
Accumulated deficit		(9,480,998)	(8,137,626)

Total stockholders' equity		2,135,206	2,180,571

Total liabilities and stockholders' equity	$	14,186,896	3,195,064

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


INTREPID TECHNOLOGY AND RESOURCES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



		Three Months Ended		Nine Months Ended
		March 31,		March 31,
		2007	2006	2007	2006

Revenues, net	$	48,437	97,592	245,000	358,880
Costs of revenues		13,370	73,049	102,766	288,744

Gross profit		35,067	24,543	142,234	70,136

Operating expenses:
General and administrative		76,905	415,399	968,937	1,093,366
Research and development		20,986	74,927	84,839	207,473

Loss from operations		(62,824)	(465,783)	(911,542)	(1,230,703)

Other income (expense):
Interest income		3,968	12	11,546	12
Interest expense		(46,123)	(20,046)	(59,124)	(298,152)
Loss on embedded derivative
liability		(384,252)	-	(384,252)	-

Loss before provision for
income taxes		(489,231)	(485,817)	(1,343,372)	(1,528,843)

Provision for income taxes		-	-	-	-

Net loss	$	(489,231)	(485,817)	(1,343,372)	(1,528,843)


Net loss per common share -
basic and diluted	$	-	-	(0.01)	(0.01)

Weighted average common
shares - basic and diluted		243,537,000	172,218,000	241,091,000	157,169,000

The accompanying notes are an integral part of these financial statements


INTREPID TECHNOLOGY AND RESOURCES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31, 2007 and 2006

		2007	2006
Cash flows from operating activities:
Net loss	$	(1,343,372)	(1,528,843)
Adjustments to reconcile net loss to net cash used in
operating activities:
Stock compensation expense		150,031	100,144
Common stock warrants-interest expense		-	199,764
Depreciation		33,454	42,022
Amortization of debt issuance costs		34,446	-
Interest expense on debentures		-	22,781
Accretion-debenture interest expense		18,265	-
Loss on embedded derivative liability		384,252	-
(Increase) decrease in:
Accounts receivable		19,892	58,788
Prepaid expenses		(9,860)	43,544
Debt issuance costs, net		-	(57,542)
Other assets		(1,135)	655
Increase (decrease) in:
Accounts payable		(24,774)	(8,585)
Accrued expenses		212,569	10,541

Net cash used in operating activities		(526,232)	(1,116,731)

Cash flows from investing activities:
Purchases of property and equipment		(3,569,098)	(576,952)

Net cash used in investing activities		(3,569,098)	(576,952)

Cash flows from financing activities:
Proceeds from long-term debt		10,140,000	1,102,681
Payments on long-term debt		-	(1,109,471)
Payments on note payable		(1,434,498)	(60,613)
Debt issuance costs		(1,180,686)	- ��
Issuance of common stock		503,976	2,087,848
Common stock offering costs		(24,500)	(115,750)

Net cash provided by financing activities		8,004,292	1,904,695

Net increase in cash		3,908,962	211,012

Cash, beginning of period		716,203	65,737

Cash, end of period	$	4,625,165	276,749

The accompanying notes are an integral part of these financial statements

INTREPID TECHNOLOGY AND RESOURCES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007 and 2006

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and with instructions to Form 10-QSB of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from estimates. In the opinion of management, all adjustments, which consist of normal and recurring adjustments, necessary for fair presentation have been included. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's 2006 Annual Report on Form 10 - -KSB for the year ended June 30, 2006, as filed with the Securities and Exchange Commission.

Stock-Based Compensation

The Company has stock-based employee compensation plans, which authorize the grant of stock options to eligible employees and directors. Effective July 1, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) 123R,Share-Based Payment, using the modified prospective method. This statement requires the Company to recognize compensation cost based on the grant date fair value of options granted to employees and directors. As of June 30, 2006, the Company’s issued and outstanding stock options were 100 percent vested, and the Company did not grant any stock options during the nine months ended March 31, 2007. Therefore, there was no compensation cost related to adoption of the statement. Prior to July 1, 2006, the Company accounted for its stock-based employee compensation plans under the recognition and measurement principles of APB Opinion 25,Accounting for Stock Issued to Employees, and related Interpretations, and had adopted the disclosure-only provisions of SFAS 123,Accounting for Stock-Based Compensation. Accordingly, no compensation cost, related to employee options, was recognized in the financial statements prior to July 1, 2006, as all options granted to employees under those plans had exercise prices equal to or greater than the market value of the underlying common stock on the date of grant.

Principles of Consolidation

The consolidated financial statements include the accounts of Intrepid Technology and Resources, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Note 2 – Going Concern

As of March 31, 2007, the Company has incurred a loss and has an accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has partially mitigated the going concern as a result of obtaining bond financing for the construction of its plant and equipment and entering into the agreement with Cornell Capital as discussed in Note 5 below.

Note 3 – Restricted Cash

Cash restricted in accordance with bond covenants is as follows:

Undistributed funds held for construction costs

1,339,402

Debt service reserve

764,000

Interest coverage reserve

564,790

2,668,192

Less current portion

(1,578,152)

Total restricted cash

1,090,040

Note 4 – Long-term Debt

Long-term debt consists of the following at March 31, 2007:

Solid Waste Disposal Revenue Bonds issued

November 07, 2006 through The Industrial

Development Corporation of Gooding County,

Idaho. The bonds total $7,640,000, accrue interest

at 7.5%, are secured by assets of the Company,

and are due on November 1, 2024. The Company

is required to maintain a minimum Debt Service

Coverage Ratio of 1.10:1 after the first full year

of operations.

7,640,000

Convertible debenture payable to Cornell Capital

Partners, L.P. of $2,500,000, bearing interest at 9%,

due on May 22, 2010, net of warrant discount of

$649,222 and embedded derivative discount of $1,832,513

(see Note 5).

18,265

7,658,265

Future maturities of long-term debt at March 31, 2007 (excluding discounts) are approximately as follows:


Year ending
December 31	Amount

2007	$ 0
2008	0
2009	265,000
2010	2,785,000
2011	305,000
Thereafter	6,785,000

	$ 10,140,000

Note 5 – Convertible Debenture, Warrant, and Embedded Derivative to Cornell Capital

Partners, L.P.

On March 23, 2007, the Company issued a Convertible Debenture (the Debenture) to Cornell Capital Partners, L.P. The Debenture accrues interest at 9%, is due on March 22, 2010, and is convertible into a variable number of shares (limited to no more than 4.99% of the Company’s issued and outstanding common stock). The per share conversion rate is defined as the lesser of (a) $.06, or (b) ninety percent of the lowest volume weighted average price during the thirty trading days immediately preceding the conversion date. In connection with the Debenture, the Company also issued a Warrant (the Warrant) to purchase the Company’s common stock. The Warrant is convertible anytime into 15,000,000 shares at a fixed price of $.055 per share and expires on March 22, 2012.

The Company analyzed the Debenture and Warrant based on the provisions of EITF 00-19 and determined that the conversion option of the Debenture qualifies as an embedded derivative and the Warrant qualifies for equity classification. Information related to the recognition of the Warrant and embedded derivative are as follows:

Warrant

The fair value of the Warrant was determined to be $885,000 and the assigned value was $654,000. The fair value was calculated using the Black-Scholes option pricing model with the following factors, assumptions and methodologies:

The fair value of the Company’s common stock was calculated to be $.064 per share on March 23, 2007.

A volatility of 149% was calculated by using the Company’s closing stock prices since June 2002.

The exercise price was $.055.

The estimated life was determined to be 5 years, which is equal to the contractual life of the Warrant.

The risk free interest rate was determined to be 4.5% based on the 5-year treasury rate.

Embedded Derivative

The fair value of the embedded derivative on March 23, 2007 was determined to be $2,350,188 and was recorded as an embedded derivative liability. The embedded derivative is revalued at the end of each reporting period and any resulting gain or loss is recognized as a current period charge to the statement of operations. The fair value was calculated using the Black-Scholes option pricing model with the following factors, assumptions and methodologies:

The fair value of the Company’s common stock was calculated to be $.064 per share on March 23, 2007.

A volatility of 149% was calculated by using the Company’s closing stock prices since June 2002.

The exercise price was $.056. This amount was determined based on the lesser of the fixed conversion price of $0.06, or 90% of the lowest daily volume weighted average trading price per share of the Company’s common stock during the 30 trading days immediately preceding March 23, 2007.

The estimated life was determined to be 3 years, which is equal to the contractual life of the embedded derivate.

The risk free interest rate was determined to be 4.5% based on the 3-year treasury rate.

During the three and nine months ended March 31, 2007, the Company recorded accretion expense related to the Warrant discount and embedded derivative discount of $4,778 and $13,487, respectively.

At March 31, 2007, the embedded derivative liability consists of the following:

Fair value at inception

2,350,188

Less gain

(119,936)

2,230,252

Note 6 - Supplemental Cash Flow Information

Actual amounts paid for interest and income taxes for the nine months ended March 31, 2007 and 2006, are approximately as follows:

2007

2006

Interest

58,684

26,469

Income taxes

During the nine months ended March 31, 2007, the Company:

Reclassified $57,000 of prepaid expense to property, plant and equipment.

Acquired property, plant, and equipment in exchange for an increase in the note payable of $878,234.

Acquired property, plant, and equipment in exchange for an increase in accounts payable of $1,278,399.

Capitalized accrued interest of $238,750.

Issued 250,000 shares of common stock in exchange for debt issuance costs of $14,500.

Recorded additional paid-in capital and a discount on the convertible debenture of $654,000 as a result of the issuance of a common stock warrant.

Recorded an embedded derivative liability of $2,350,188, recorded a discount on the convertible debenture of $1,846,000, and recognized a loss on the embedded derivative liability of $504,188.

Decreased the value of the embedded derivative liability and recognized a gain on the embedded derivative liability of $119,936.

During the nine months ended March 31, 2006, the Company:

Issued 545,128 shares of common stock in exchange for accounts payable and accrued expenses of $21,008.

Issued 6,363,637 shares of common stock in exchange for long-term debt of $350,000.

Note 7 – Standby Equity Distribution Agreement

On March 10, 2005, the Company entered into a Standby Equity Distribution Agreement (SEDA) with Cornell Capital Partners, LP (Cornell). Pursuant to the SEDA, the Company may, at its discretion, periodically sell to Cornell shares of common stock for a total purchase price of up to $25 million. For each share of common stock purchased under the SEDA, Cornell will pay the Company 99% of the lowest closing bid price of the common stock on the Over-the-Counter Bulletin Board or other principal market on which the Company's common stock is traded for the five days immediately following the notice date. Cornell will retain 5% of each advance under the SEDA. As of March 31, 2007, the SEDA had expired.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains forward-looking statements that involve known and unknown risks and uncertainties which may cause actual results in future periods to differ materially from those indicated herein as a result of a number of factors, including, but not limited to, those set forth under Legal Proceedings, and the discussion below. When the Company uses words like "may," "believes," "expects," "anticipates," "should," "estimate," "project," "plan," their opposites and similar expressions, the Company is making forward-looking statements. These expressions are most often used in statements relating to business plans, strategies, anticipated benefits or projections about the anticipated revenues, earnings or other aspects of our operating results. We make these statements in an effort to keep stockholders and the public informed about our business and have based them on our current expectations about future events. Such statements should be viewed with caution. These statements are not guarantees of future performance or events. As noted elsewhere in this report, all phases of our business are subject to uncertainties, risks and other influences, many of which the Company has no control over. Additionally, any of these factors, either alone or taken together, could have a material adverse effect on the Company and could change whether any forward-looking statement ultimately turns out to be true. The Company undertakes no obligation to publicly release updates or revisions to these statements. The following discussion should be read in conjunction with audited consolidated financial statements and the notes filed thereto on Form 10-KSB with the U.S. Securities and Exchange Commission for the year ending June 30, 2006.

RESULTS OF OPERATIONS

Revenue

Revenue for the quarter ended March 31, 2007, decreased 50% to $48,437 compared to $97,592 for the same period of 2006. Revenue for the nine months ended March 31, 2007 decreased 32% to $245,000 compared to $358,880 for the same nine months ended March 31, 2006. This decrease was mainly the result of decreased sales of contracted “work for others” over the corresponding periods of one year ago. The Company intends to continue to pursue opportunities for outside contracting with increased emphasis on providing technical expertise to other 3^rd party biofuels projects. The Company’s current principal focus is on the completion of the expansion and construction of its two major Biogas fuels facilities. Both facilities are scheduled to be in full operational by June 2007, with revenue streams beginning shortly thereafter. For biofuels facilities that the Company designs, constructs and operates for others, it is anticipate d that revenue will be recognized more rapidly, as such services are provided.

In the three month period ending March 31 2007, the Company’s primary customers were RealEnergy and Oak Ridge Associated Universities (ORAU). During the corresponding period in 2006, the primary customers were the Idaho National Laboratory (“INL”) and ORAU. RealEnergy and ORAU both provided more than ten percent of the total recognized revenue during the 2007 period; and during the 2006 period, both INL and ORAU provided more than ten percent of the total revenue recognized by the Company.

Direct Operating Costs

Direct operating costs for the three months ending March 31 2007 and 2006, were $13,370 and $73,049 respectively, representing a 82% decrease. For the nine months ended March 31, 2007, direct operating costs decreased to $102,766 for 2007 compared to $288,744 for the same period in 2006—a decrease of 64%. The decrease is due to lower subcontractor costs for contracted “work for others” as discussed above. The Company continues its efforts to reduce direct costs by streamlining costs, exercising greater fiscal restraint, and improved management.

Gross Profit

The Company generated a gross profit of $35,067 in the quarter ended March 31 2007 compared to $24,543 for the same quarter in 2006. For the nine months ended March 31, 2007 the Company had a gross profit of $142,234 compared to $70,136 for the same period in 2006. As discussed above, the favorable increases for the three month and nine month periods ending March 31, 2007 were due to reduced operating costs at the digester plants.

General and Administrative and Research and Development Expenses

For the three months ended March 31, 2007, general and administrative and research and development expenses were $97,891 compared to $490,326 for the same quarter ended March 31, 2006. This 80% decrease was largely the result of more G&A costs being allocated to the digesters assets. Professional fees and research & development decreased by $103,000 and $54,000 respectively. For the nine months ended March 31, 2007, general and administrative and research and development expenses likewise decreased 19% for the same reasons to $1,053,776 from $1,300,839 for the same period of 2006. Professional fees and research & development decreased by $91,000 and $123,000 respectively.

Interest Income

For the three and nine months ended March 31, 2007, the Company received interest income of $3,968 and $11,546 respectively. The Company received no interest income on investment capital for the corresponding periods in 2006.

Interest Expense

For the three months ended March 31, 2007, the Company had interest expense of $46,123 compared to $20,046 for the same period ending March 31, 2006. For the nine months ended March 31, 2007, the Company had interest expense of $59,124 compared to $298,152 for the same period ending March 31, 2006. The current interest expense was primarily amortization of capitalized Bond Issuance Costs to be amortized over the life of the bond and amortization of issuance costs and discounts on the Cornell convertible debenture. Interest accrued on the bond for the corresponding period was capitalized to the digester assets currently under construction. Interest expense on the bond will be recognized on the income statement as construction is completed and the plants come online.

Loss on Embedded Derivative Liability

The Company recognized a loss on the embedded derivative liability of $504,188 on March 23, 2007 at the inception of the Cornell convertible debenture agreement. The Company recognized a gain on the embedded derivative liability of $119,936 for the period from March 23, 2007 through March 31, 2007.

Net Loss

For the three months ended March 31, 2007, the Company had a net loss of ($489,231), compared to a net loss of ($485,817) for the same period ended March 31, 2006. For the nine months ended March 31, 2007, the Company had a net loss of ($1,343,372), compared to a net loss of ($1,528,843) for the same period ended March 31, 2006. Excluding the impact of recognizing loss and gain on embedded derivative liability, losses were decreased due primarily to reduced Research and Development costs as construction and processing issues have been corrected. For 2007, substantive revenues will not be generated until the first expanded facility is online and biogas products are sold.

MANAGEMENT'S PLAN OF OPERATION

In the past, providing engineering and technical services has been the primary source of revenue. The Company expects to continue providing such services in the future, but with a shift in emphasis toward providing consulting services to 3^rd party developers of biofuels projects. In fiscal year 2007, the Company will expand its efforts to become a significant producer and distributor of biogas products and a facilities service provider. The following discussion provides an overview of our progress in making the transition.

The fundamental aspects of the Company's business model are:

Utilize cutting edge, but established, technology for the production of biogas from large animal operations;

Maintain equity positions on all biogas projects;

Begin operations in known territory (Idaho), and expand into other western states as resources permit;

Maximize the utilization of our public company status in the financing of our projects;

Market biogas products to local gas utilities, industrial users, and transportation users;

Team with experienced companies for the marketing and distribution of biogas products.

DEVELOPMENT PLAN

The Company will design, construct and operate production facilities consistent with the business model described above.

The centerpiece of this development plan is an exclusive geographic and case-by-case national agreement for anaerobic digestion technology that produces biogas with a higher concentration of methane than competing processes. This technology has a successful 6-year operational history and has been demonstrated with both cow and swine waste.

Our goal is to become the premier biogas company in the United States. Our approach is to use superior technology and know-how to convert manure waste from dairy and feedlot operations into high BTU biogas that can be further processed to produce (1) pipeline quality gas for sale to a gas utility or a marketing and distribution company; (2) combustion gas to fuel boilers for processing materials; (3) liquid natural gas for transportation fuel, peaking, and/or remote community service; and, eventually, (4) hydrogen to energize fuel cells for transportation and distributed or non-distributed energy sources. Our range of services includes:

Designing, building, and operating biofuels facilities;

Performing value-added processing of raw biogas and residual products of digestion for various; applications;

Marketing, transportation and sales of processed gas.

ITR currently has a biogas production plant in Rupert, Idaho that has operated for nearly two years and has consistently produced 99% purity natural gas (methane) with a heating value in excess of 1000 Btu/cubic foot. This plant is a commercial prototype facility that can be employed to demonstrate the economic viability of the four product lines listed above. The plant is currently undergoing a 5-fold expansion to accommodate a corresponding expansion of the diary upon which it is located. The bulk of the gas produced at the plant is under contract for sale to the local gas utility via a 15-year Supply and Purchase Agreement. A small portion of the gas is used on-site for plant process heating.

The Development Plan involves discrete projects that will ultimately bring 200,000 Magic Valley dairy cows under production to create the “Magic Valley Biogas Field” in the Magic Valley area of south-central Idaho. The first project will provide facilities and infrastructure to process manure from 60,000-70,000 dairy cows and will be executed in two distinct phases:

Phase I consists of 10,500 cows located on two different dairies and establishes the west and east anchor points to the Magic Valley Westside field as well as expands the Rupert plant to full capacity. Construction is underway on both facilities and will be completed in CY 2007.

Phase II consists of 50,000-60,000 cows located on 3-5 different dairies (depending on outcomes of individual dairymen’s current consolidation and expansion plans). We anticipate that construction will be initiated in late CY-2007 or early CY-2008 and conclude in CY-2009.

This project will be financed through a combination of debt and equity. It is anticipated that the debt portion will be financed through the sale of bonds; and the equity will come from equity partners that will include dairymen, equity

capital group(s), or other private investors and from retained earnings generated through building biogas plants of third parties. Capital cost will be approximately $58 million, the first phase of which will be just over $10 million. These funds will provide for anaerobic digester plants constructed at participating dairies, gas conditioning clean-up equipment for processing the raw biogas to pipeline quality standards, and a supporting gas line gathering system to transport the clean gas to the gas utility distribution system. A majority of the costs (approximately 70%) is for construction of the digesters.

This project will provide over 1 billion cubic feet of biogas annually, which, in turn, will yield over 1 million mcf of clean gas for sale to the local gas utility or marketing and distribution company, 300,000 cubic yards of organic fertilizer, and 300,000 metric tones of carbon dioxide-equivalent carbon credits.

Additional Information

The Company plans to increase sales and expand its engineering and scientific services into the biofuels area. Revenue generated will be used to meet cash flow requirements with any excess being used to support and develop the Company’s biofuels production initiatives.

At the present time the Company does not anticipate paying dividends, cash or otherwise, on it’s Common Stock in the foreseeable future. Future dividends will depend on earnings, if any, of the Company, its financial requirements and other factors. The Company has obtained bond financing under a State of Idaho approved bond inducement resolution, and is seeking other investment capital to support these projects and the existing and ongoing operations of the Company.

CAPITAL RESOURCES AND LIQUIDITY

As the Company expands into the biofuels business, it will face continuing challenges to finance this growth. This is particularly true of Phase I of the Magic Valley development projects described above. To obtain the funds necessary to complete these capital assets, the Company has obtained bond financing as of November 7, 2006. The approximately $7 million is available for these design and construction efforts. This debt is payable over an 18 year period, starting after the anticipated commencement of full operations at these two facilities.

In addition to the capital expenditures for these first facilities, financing resources are needed to support operations. The Company has made reasonable efforts to meet cash flow demands from ongoing operations but the Company may not always be able to obtain sufficient funds to satisfy the Company’s working capital or other capital needs. The Company finished the quarter ended March 31 2007 with available cash of $1,956,973 and restricted cash of $2,668,192 compared to available cash of $716,203 at June 30, 2006. The Company believes that it will be necessary to continue to supplement the cash flow from operations with the use of outside resources such as investment capital by issuance of debenture notes and stock. The Company plans to use any additional funding to assist in the biogas production facility that is considered construction in progress, a component of Property, plant and equipment on the balance sheet.

As of March 31, 2007, the Company had positive working capital of $1,431,327 compared to a deficit of ($37,821) as of June 30, 2006. The current ratio at March 31, 2007 was: 1.66:1 and 0.96:1 at June 30, 2006.

During the nine months ended March 31, 2007, the Company used net cash of $526,232 for operating activities compared to $1,116,731 of net cash used in operating activities for the 2006 period. The decrease of cash used by operating activities is due mainly to the reduced net loss.

During the nine months ended March 31, 2007, the Company used $3,569,098 in investing activities, primarily in biogas generating facility construction costs, compared to $576,952 used in the year earlier period.

During the nine months ended March 31, 2007, financing activities provided $8,004,292 in net cash, including $503,976 received from the issuance of common stock and $10,140,000 from the issuance of long-term debt. Payments on the construction note totaled $1,434,498, while debt issuance costs totaled $1,180,686. In the comparable period for 2006, the Company had $1,904,695 of net cash provided by financing activities; of which $2,087,848 were proceeds from stock sales.

Standby Equity Distribution Agreement.

The Company had a Standby Equity Distribution Agreement (SEDA) with Cornell Capital Partners LP. As of March 31, 2007 the Company had issued 82,203,550 shares under this agreement, plus an initial issuance of $500,000 worth of the Company’s stock as a commitment fee for this commitment. As of March 31, 2007, the agreement had expired.

Convertible Debenture, Warrant, and Embedded Derivative to Cornell Capital

Partners, L.P.

Warrant

The fair value of the Company’s common stock was calculated to be $.064 per share on March 23, 2007.

A volatility of 149% was calculated by using the Company’s closing stock prices since June 2002.

The exercise price was $.055.

The estimated life was determined to be 5 years, which is equal to the contractual life of the Warrant.

The risk free interest rate was determined to be 4.5% based on the 5-year treasury rate.

Embedded Derivative

The fair value of the Company’s common stock was calculated to be $.064 per share on March 23, 2007.

A volatility of 149% was calculated by using the Company’s closing stock prices since June 2002.

The estimated life was determined to be 3 years, which is equal to the contractual life of the embedded derivate.

The risk free interest rate was determined to be 4.5% based on the 3-year treasury rate.

At March 31, 2007, the Debenture consists of the following:

Convertible debenture

2,500,000

Discount related to the Warrant

(649,222)

Discount related to derivative

(1,832,513)

18,265

During the three and nine months ended March 31, 2007, the Company recorded accretion expense related to the Warrant discount and embedded derivative discount of $4,778 and $13,487, respectively.

At March 31, 2007, the embedded derivative liability consists of the following:

Fair value at inception

2,350,188

Less gain

(119,936)

2,230,252

Seasonal Changes.

The Company’s operating revenue is generally not affected by seasonal changes.

RECENT ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs – an amendment of ARB No. 43, Chapter 4”, SFAS No. 152, “Accounting for Real Estate Time-Sharing Transactions – an amendment of FASB Statements No. 66 and 67”, SFAS No. 153, “Exchanges of Nonmonetary Assets – an amendment of APB Opinion No 29”, and SFAS No. 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3”, were recently issued. SFAS No 151, 152, 153, and 154 have no current applicability to the Company or their effect on the financial statements would not have been significant.

In December 2004, the FASB issued SFAS 123 (revised 2004), “Accounting for Stock Based Compensation.” This statement supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This revised statement establishes standards for the accounting of transactions in which an entity exchanges its equity instruments for goods and services, including the grant of stock options to employees and directors. The Statement is effective for the Company’s fiscal year beginning July 1, 2006, and requires the Company to recognize compensation cost based on the grant date fair value of the equity instruments it awards. The Company has stock-based employee compensation plans, which authorize the grant of stock options to eligible employees and directors. Effective July 1, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) 123R,Share-Based Payment, using the modified prospective method. This statem ent requires the Company to recognize compensation cost based on the grant date fair value of options granted to employees and directors. As of June 30, 2006, the Company’s issued and outstanding stock options were 100 percent vested, and the Company did not grant any stock options during the nine months ended March 31, 2007. Therefore, there was no compensation cost related to adoption of the statement. Prior to July 1, 2006, the Company accounted for its stock-based employee compensation plans under the recognition and measurement principles of APB Opinion 25,Accounting for Stock Issued to Employees, and related Interpretations, and had adopted the disclosure-only provisions of SFAS 123,Accounting for Stock-Based Compensation. Accordingly, no compensation cost, related to employee options, was recognized in the financial statements prior to July 1, 2006, as all options granted to employees under those plans had exercise prices equal to or greater than the market value of the underlying common stock on the date of grant.

RISK FACTORS

The Company’s current and primary focus is obtaining permits and developing favorable properties for alternative and renewable energy production, and providing the associated engineering design and construction management services required to support the construction and operation of related facilities, and cannot provide any guarantees of

profitability at this time. The Company will continue to expand its engineering services base, “work for others” to generate additional revenue to augment working capital requirements in support of its alternative and renewable energy efforts. The realization of profits is dependent upon successful execution of new business opportunities and the development of prototype digester models and implementation of the digester project for renewable energy. The Company is dependent upon inducing larger companies or private investors to purchase these “turn-key” alternative renewable energy generation and production facilities. These projects when developed and depending on their success will be the future of the Company. The Company may not be successful in these efforts.

Our operating results are difficult to predict in advance and may fluctuate significantly, and a failure to meet the expectations of analysts or our stockholders would likely result in a substantial decline in our stock price.

Factors that are likely to cause our results to fluctuate include the following:

The amount and timing of our operating expenses and capital expenditures;

The success or failure of the alternative energy and biofuels projects currently underway;

The timing, rescheduling or cancellation of engineering customer’s work orders;

Our ability to specify, develop, complete, introduce and market biofuels and bring them to volume production in a timely manner;

The rate of adoption and acceptance of new industry standards in our target markets;

Any other unforeseen activities or issues.

There is a limited public market for our common stock. Our common stock is listed on the OTC Bulletin Board, and there is a limited volume of sales, thus providing a limited liquidity into the market for our shares. As a result of the foregoing, stockholders may be unable to liquidate their shares.

We are subject to various risks associated with the development of the biofuels and alternative energy market place and if we do not succeed our business will be adversely affected.

Our performance will largely depend on our ability to develop and implement the anaerobic digester biogas field concept and generate gas and fiber co-products for sale. We intend to respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis however, we cannot predict if we will be effective or succeed in the development of the biofuels and alternative energy markets. If we are unable, for technical, legal, financial or other reasons, to adapt in a timely manner to develop and operate in the biofuels market, our business, results of operations and financial condition could be materially adversely affected.

If we need additional financing, we may not be able to obtain further financing or it may only be available on terms unfavorable to us or to our stockholders.

Available cash resources may not be sufficient to meet our anticipated working capital and capital expenditure requirements, if the anaerobic digesters do not produce sufficient revenues for at least 12 months. It may become necessary to raise additional funds to respond to business contingencies, which could include the need to:

Fund additional project expansion for the biofuels production;

Fund additional marketing expenditures;

Develop additional alternative energy projects or enhance the WOBF gas products;

Enhance our operating infrastructure;

Hire additional personnel;

Acquire other complementary businesses or technologies.

If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be diluted, and these newly issued securities might have rights, preferences or privileges senior to those of existing stockholders. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our products or otherwise respond to competitive pressures would be significantly limited.

ITEM 3. CONTROLS AND PROCEDURES

(a)

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our filings under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and to ensure that information required to be disclosed by us in the reports we file or submit under the Securities and Exchange Act is accumulated and communic ated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

(b)

There have been no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting during the last fiscal quarter that have materially affected or could materially affect these internal controls over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None

ITEM 2. CHANGES IN SECURITIES.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Company held its Annual Meeting of Stockholders on December 1, 2006. On the Record Date of October 6, 2006, there were 240,418,593 shares of common voting stock. At the meeting, Jacob D. Dustin, Dennis D. Keiser, William R Myers, Michael W. Parker, D. Lynn Smith, and Steven Whitesides were elected to serve as directors of the Company for the next year, and the appointment of Jones Simkins PC as independent auditors for the year ending June 30, 2007 was ratified.

The voting on such items was as follows:

(1) Election of Directors.


Director’s Name	For	Against	Withheld Authority
John Brockage	149,608,892	4,206,279	1,959,856
Jacob D. Dustin	161,610,748	2,598,138	95,912
Dennis D. Keiser	166,579,062	3,604,072	106,912
William R. Myers	161,243,311	2,414,450	534,914
Michael W. Parker	158,758,669	2,747,146	2,068,953
D. Lynn Smith	159,489,490	2,141,714	193,125
Steven Whitesides	165,933,600	1,955,014	95,912

(2) Ratify Appointment of Independent Auditors of Jones Simkins PC.


For	Against	Withheld Authority
182,260,719	387,900	1,368,660

Approximately 77% of the total voting shares were voted.

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS


Exhibit No.	Description	Incorporated by Reference from Registrant's
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer	May 14, 2007
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer by Vice-President, Secretary	May 14, 2007
32	Certification pursuant to 18 U.S.C. SECTION 1350by Chairman and Chief Executive Officer and Vice-President, Secretary	May 14, 2007
	Entry into a material definitive agreement with Cornell Capital Partners, L.P.	March 23, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	INTREPID TECHNOLOGY & RESOURCES, INC.
	(Registrant)


Date: May 14, 2007	By: /s/ Dr. Dennis D. Keiser,Chief Executive Officer & Acting Chief Financial Officer


Date: May 14, 2007	By: /s/ Bradley J. Frazee,Vice President, Secretary

Intrepid Technology & Resources (ITRP) Inactive 10QSB2007 Q3 Quarterly report (small business)