Washington, D.C. 20549
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.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:
170,408,769 shares of common stock, $0.005 par value per share, as of February 14, 2006.
The accompanying notes are an integral part of these financial statements.
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-X. 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 2005 Annual Report on Form 10-KSB for the year ended June 30, 2005, as filed with the Securities and Exchange Commission.
Stock-Based Compensation
The Company has stock-based employee compensation, which is described more fully in Note 12 to the audited financial statements of the Company as of June 30, 2005. The Company accounts for this compensation under the recognition and measurement principles of APB Opinion 25, “Accounting for Stock Issued to Employees”, and related Interpretations, and has adopted the disclosure-only provisions of SFAS 123, “Accounting for Stock-Based Compensation.” Accordingly, no compensation cost has been recognized in the financial statements, as all options granted had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant. No new stock options were granted during the six months ended December 31, 2005.
Had compensation cost for the Company’s stock option plans been determined based on the fair value at the grant date consistent with the provisions of SFAS 123, the Company’s net loss would have been reduced to the pro forma amounts indicated below:
| | | 2005 | | 2004 | |
| Net loss as reported | | $ | (1,043,026 | ) | | (529,451 | ) |
| Deduct: | | | | | | | |
| Total stock-based employee compensation expense | | | | | | | |
| determined under fair value based method for all | | | | | | | |
| awards, net of related tax effects | | | - | | | (64,205 | ) |
| | | | | | | | |
| Net loss pro forma | | $ | (1,043,026 | ) | | (593,656 | ) |
| | | | | | | | |
| Loss per share: | | | | | | | |
| Basic and diluted - as reported | | $ | (0.01 | ) | | - | |
| Basic and diluted - pro forma | | $ | (0.01 | ) | | - | |
Principles of Consolidation
The consolidated financial statements include the accounts of ITR and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Reclassifications
Certain accounts in the 2004 unaudited financial statements have been reclassified to conform with the presentation in the 2005 unaudited financial statements.
Note 2 - Going Concern
As of December 31, 2005, the Company has incurred a loss and has negative working capital and negative cash flows from operations. 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 entering into the agreement with Cornell Capital as discussed in the Capital Resources and Liquidity section below and Management has engaged an investment banking firm to obtain bond financing under a State of Idaho approved bond inducement resolution to expand operations and production capabilities. While activities continue on schedule for this bond financing, there can be no full assurance that such funds will be available to the Company nor that these efforts will be successful.
Note 3 - Supplemental Cash Flow Information
Actual amounts paid for interest and income taxes are approximately as follows:
| | | 2005 | | 2004 | |
| Interest | | $ | 5,380 | | | 2,120 | |
| | | | | | | | |
| Income taxes | | $ | - | | | - | |
During the six months ended December 31, 2005, the Company:
| | · | Issued 545,128 shares of common stock in exchange for accounts payable and accrued expenses of $21,008. |
| | · | Issued 4,545,455 shares of common stock in exchange for long-term debt of $250,000. |
During the six months ended December 31, 2004, the Company issued common stock in exchange for services, prepaid assets and debt of $541,590.
Note 4 - Standby Equity Distribution Agreement
On March 10, 2005, the Company entered into a new 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.
Note 5 - Issuance of Common Stock Warrants
The Company issued 5,000,000 warrants to Cornell Capital Partners on December 1, 2005 to release their security interest in the assets of the Company. The exercise price is $.055 per share. The warrants were effective on issue and expire five years from the date of issuance, or December 1, 2010.
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, 2005.
RESULTS OF OPERATIONS
Revenue
Revenue for the quarter ended December 31, 2005, increased 104% to $120,299 compared to $58,670 for the same period of 2004. Revenue for the six months ended December 31, 2005, increased 77% to $261,288 compared to $147,772 for the same six months ended December 31, 2004. This increase for both the three and six months ended December 31, 2005 was mainly the result of increased 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 at the Idaho National Laboratory and other government and private facilities to the extent that these opportunities do not significantly interfere with and the Company’s shift to designing and building of biogas facilities. The Company’s current principal focus is on the Biogas fuels facility, for which revenue will be minimal until the facility comes on line and is producing biofuels. For biofuels facilities that the Company designs, constructs and operates for others, it is anticipated that revenue will be recognized more rapidly, as such services are provided.
In both three month periods ending December 31, 2005 and 2004, the Company’s primary customers were Idaho National Laboratory (“INL”) at Idaho Falls, Idaho and Oak Ridge Associated Universities (ORAU). INL and ORAU both provided more than ten percent of the total revenue recognized by the Company in those periods.
Direct Operating Costs
Direct operating costs for the three months ending December 31, 2005 and 2004, were $129,448 and $55,380 respectively, representing a 134% increase. For the six months ended December 31, 2005 direct operating costs also increased to $215,695 from $138,839 in 2004. The increase is due to the increased general and administrative, research and development costs associated with ongoing research and optimization activities at the Company’s Whitesides Biogas Plant and design and construction activities at its West Point Biogas Plant. The Company continues its efforts to reduce direct costs by using less subcontracted services, eliminating certain rental fees, making better use of supplies, and exercising better management of direct payroll costs.
Gross Profit
The Company had net loss of $9,149 in the quarter ended December 31, 2005 compared to a profit of $3,490 for the same quarter in 2004. For the six months ended December 31, 2005 the Company had a gross profit of $45,593 compared to $8,934 for the same period in 2004. The overall increased profit for the six months ending December 31, 2005 is due to increased revenue from the sales of outside contracted work, but the net loss for the quarter is reflective of the major shift of resources into construction and operation of the Company-owned Whitesides Biogas Plant and the design and preliminary development of the Company-owned West Point Biogas Plant.
Selling General and Administrative Expenses
For the three months ended December 31, 2005, general and administrative expenses were $348,436 compared to $275,213 for the same quarter ended December 31, 2004. This 27% increase was the result of increased administrative expenses beyond those required for the previous engineering services work, adding expense as the Company increased efforts in expanding the Biogas operations. For the six months ended December 31, 2005, general and administrative expenses likewise increased 33% for the same reasons to $677,967 compared to $511,600 for the same period of 2004.
Interest Revenue
For the three and six months ended December 31, 2005, the Company received no interest income on investment capital. The Company received $323 and $993 of interest income on investment capital for the corresponding periods in 2004.
Interest Expense
For the three months ended December 31, 2005, the Company had interest expense of $226,996 compared to $11,883 for the same period ending December 31, 2004. For the six months ended December 31, 2005 the Company had interest expense of $278,106 compared to $15,034 for the same period ending December 31, 2004. The interest expense was for interest paid on the term loan, common stock warrants, debentures and interest accrued on notes payable to others and to officers and employees of the Company. With the anticipated bond offering to finance the first two biogas facilities, interest expense is likely to increase in future periods.
Net Loss
For the three months ended December 31, 2005, the Company had a net loss of $609,888 compared to a net loss of $283,283 for the same period ended December 31, 2004. For the six months ended December 31, 2005 the Company had a net loss of $1,043,026 compared to a net loss of $529,451 for the same period ended December 31, 2004. In 2004, the loss was due to a significant drop in engineering contract revenue, while the transition to the biofuels business was starting up. For 2005, the transition to the new biofuels business accelerated, but revenue will not be received until the first facility is online and biogas can be delivered to the customer.
MANAGEMENT'S PLAN OF OPERATION
Providing engineering and technical services has been the primary source of revenue, and hence the primary business focuses, in the past. The Company expects to continue providing such services in the future, but with decreased emphasis. In fiscal year 2006, the Company will continue its emphasis on becoming a significant producer and distributor of biogas products and facilities. The following discussion provides an overview of our progress in making the transition from being primarily a provider of engineering services.
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 |
| | · | Utilize off-the-shelf equipment for clean-up of the biogas to meet pipeline-quality specifications and produce liquid products |
| | · | Maintain equity positions on all biogas projects |
| | · | Begin operations in known territory (Idaho), and expand into other western states as resources allow |
| | · | 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
Over the next four years, the Company plans to place 250,000 head of dairy and beef cattle into biogas production. The Company will design, construct and operate these facilities consistent with the business model parameters described above.
The centerpiece of this development plan is an exclusive geographic and case-by-case national use and marketing agreement for a proprietary anaerobic digestion technology with several distinct and unique operational advantages when applied in agricultural settings and that has a successful 5+ year operational history with both cow and swine waste.
Our goal is to become the premier fully integrated biogas developer 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; (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 an operational biogas production plant in Rupert, Idaho that processes manure waste from 1000 cows. This plant is a commercial prototype facility that can be employed to demonstrate the economic viability of the four product lines listed above. It has been designed and built with a 4x scale-up capacity to accommodate planned expansion of the dairy on which it is located. Expansion of the plant will parallel expansion of the dairy and within a year will accommodate 4500 cows. The primary current focus at the plant is on producing clean gas for sale to a local gas utility and for providing combustion gas for heating water for dairy operations. Efforts are also underway to demonstrate use of biogas to provide process heat for a small-scale biodiesel facility with the objective of allowing for penetration into the biodiesel market.
The Development Plan involves discrete projects that will ultimately bring 250,000 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 50,000 dairy cows and will be executed in two distinct phases:
Phase I consists of 10,500 cows located on 2 different dairies and establishes the west anchor point to the Magic Valley Westside field as well as expands the Rupert plant to full capacity. Construction began in CY 2005 and will be complete in CY 2006.
Phase II consists of 40,000 cows located on 3-5 different dairies (depending on outcomes of individual dairymen’s current consolidation and expansion plans). Design will be initiated in CY 2006 and construction is anticipated to begin in CY-2007.
This project will be debt financed through the sale of bonds. Capital cost will be approximately $35 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 a local gas utility.
Additional Information
The Company also plans to increase sales and expand its engineering and scientific services base via new customer contracts. 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's main focus is now in the biofuels market, specifically the production of biogas. The Company has made two acquisitions for the vertical integration of the business and the ability to have a ready available access to sell the gas production into the market place. The Company believes that it has also taken the proper steps to sell certain assets including the mining and mineral rights of the Garnett mine in Montana to provide working capital to see the production through to completion. The Company is currently seeking other investment capital to support the existing and ongoing operations of the Company and these projects.
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 is in the process of obtaining bond financing. It is anticipated that approximately $10 million will be made available for these design and construction efforts. This debt will be payable over a 15 year period, starting after the anticipated commencement of full operations at these two facilities. Management believes that these funds will be adequate to complete these 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 still may not always be able to obtain funds under the Standby Equity Distribution Agreement (SEDA) or obtain sufficient amounts to satisfy the Company’s working capital or other capital needs. The Company finished the quarter ended December 31,2005 with cash available of $59,664 compared to $65,737 at June 30, 2005 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, net, on the balance sheet.
As of December 31, 2005, the Company had negative working capital of $718,789 compared to a deficit of $599,197 as of June 30, 2005. The current ratio at December 31, 2005 was: 0.23:1 and 0.30:1 at June 30, 2005. This increased deficit is due primarily to long-term debt related to construction expenses on the WestPoint Biogas Plant.
On November 30, 2005, the Company signed an unsecured Promissory Note with Zions First National Bank in the amount of $100,000. The note has a fixed rate of 8.00% and matures on March 5, 2006. A portion of the proceeds of this note were used to pay off the Company’s existing US Bank term loan balance of $91,338.52. As of December 31, 2005, the Promissory Note was in good standing. The Company also signed Promissory Notes in the amount of $75,000 each with two private individuals on October 31, 2005. These 8% APR notes are secured by the equipment owned by the Company at its Whitesides Biogas Facility and mature on March 1, 2006. In addition, the Company has shareholder notes payable from certain officers, employees or directors. The notes are unsecured demand notes. It is not anticipated by the Company that the notes will be called in the next year. The following are shareholder creditors to the company: Mr. Kenoyer has made two loans to the company and as of December 31, 2005, the total balance due him was $25,911. The first loan accrues interest at the rate of 10 percent and has a balance of $438. The second accrues interest at the rate of 7 percent and has a balance of $24,373. Mr. Dustin has also made two loans to the company and as of December 31, 2005, the total balance due him was $49,509. The first loan accrues interest at the rate of 10 percent and has a balance of $16,835. The second accrues interest at the rate of 7 percent and has a balance of $32,118.
During the six months ended December 31, 2005, the Company used net cash of $698,099 for operating activities, compared to $434,962 of net cash used in operating activities for the 2004 period. The increase of cash used by operating activities is mainly the result of bond offering costs for construction projects and interest expense on those debentures.
During the six months ended December 31, 2005, the Company used $326,384 in investing activities, primarily in adding equipment for the initial biogas generating facility, compared to $562,578 used in the year earlier period. In 2004 and 2005, the Company purchased property and equipment towards the Biogas production.
During the six months ended December 31, 2005, financing activities provided $1,018,410 in net cash, consisting of $1,012,848 net of costs from the issuance of common stock, plus $921,033 additional long-term debt, offset in part by payments on long-term debt of $859,471. In the comparable period for 2004, the Company had $1,059,451 of net cash provided by financing activities, which consisted of $428,832 in proceeds from stock sales and $622,476 additional long-term debt, offset in part by $26,857 payments on long-term debt.
Debenture Debt
The Company issued convertible debentures to Cornell Capital Partners, LP in the original principal amount of $750,000 in October 2004. The debentures are convertible at the holder’s option any time up to maturity at a fixed conversion price of $.055 per share. The debentures are secured by the assets of the Company. The debentures have a three-year term and accrue interest at 5% per year. At maturity, October 14, 2007, if not repaid, the debentures will automatically convert into shares of common stock at a fixed conversion price of $.055 per share. As of December 31, 2005 $250,000 of the debenture has been converted.
Standby Equity Distribution Agreement.
The Company has a Standby Equity Distribution Agreement (SEDA) with Cornell Capital Partners LP. Under this agreement, the Company has issued 22,517,955 shares, plus an initial issuance of $500,000 worth of the Company’s stock as a commitment fee for this commitment. Under this agreement, the Company may issue stock worth up to $25,000,000, through March 2007. As of December 31, 2005, an additional $23,000,000 was potentially available under this agreement. It is the Company’s intent to utilize this relationship only to the extent necessary to finance the transition of the Company’s operations to the biofuels business.
Issuance of Common Stock Warrants
The Company issued 5,000,000 warrants to Cornell Capital Partners on December 1, 2005 to release their security interest in the assets of the Company. The exercise price is $.055 per share. The warrants were effective on issue and expire five years from the date of issuance, or December 1, 2010.
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 periods beginning after June 15, 2005, and will require the Company to recognize compensation cost based on the grant date fair value of the equity instruments its awards. The Company currently accounts for those instruments under the recognition and measurement principles of APB Opinion 25, including the disclosure-only provisions of the original SFAS 123. Accordingly, no compensation cost from issuing equity instruments has been recognized in the Company’s financial statements. The Company estimates that the required adoption of SFAS 123 (R) will not have a negative impact on its consolidated financial statements.
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 and generate energy and gas to 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 raise 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 digester does not produce revenue 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 reduced, 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 enhancements could be made to improve our disclosure controls and procedures to provide more effective alerting on a timely basis to material information relating to our Company (including its consolidated subsidiaries) required to be included in our reports filed or submitted under the Exchange Act. Accordingly, management has implemented minor procedural changes to provide more timely information.
(b) These changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting are not considered so significant as to be materially affected or that 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 2, 2005. On the record date of October 7, 2005, there were 151,809,530 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, 2006 was ratified.
The voting on such items was as follows:
Election of Directors
Director’s Name | For | Against | Withheld Authority |
| Dennis D. Keiser | 20,414,142 | 361,915 | 29,417 |
| Jacob D. Dustin | 16,780,951 | 423,563 | 9,574 |
| Michael F. LaFleur | 12,375,107 | 520,986 | 71,685 |
| William R. Myers | 14,474,384 | 580,947 | 65,185 |
| D. Lynn Smith | 15,148,697 | 493,447 | 56,335 |
| Steven Whitesides | 18,652,372 | 364,934 | 14,339 |
| John W. Brockage | 9,323,704 | 730,897 | 144,168 |
| Michael W. Parker | 19,472,818 | 547,512 | 121,985 |
(2) Ratify Appointment of Independent Auditors of Jones Simkins PC.
For | Against | Withheld Authority |
| 130,495,970 | 0 | 940,711 |
Approximately 87% 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 | June 1, 2006 |
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer by Vice-President, Secretary and Treasurer | June 1, 2006 |
| 32 | Certification pursuant to 18 U.S.C. SECTION 1350 by Chairman and Chief Executive Officer and Vice-President, Secretary and Treasurer | June 1, 2006 |
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: June 1, 2006 | By: /s/ Dr. Dennis D. Keiser |
| | Chief Executive Officer & Acting Chief Financial Officer |
| | |
| | |
| Date: June 1, 2006 | By: /s/ Bradley J. Frazee, |
| | Vice President, Secretary, and Treasurer |
| | |
