Intrepid Technology & Resources (ITRP) 10QSB 2007 Q1 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 September 30, 2006

o 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.

Yes X No __

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

241,513,075shares of common stock, $0.005 par value per share, as of November 10, 2006.

Transitional Small Business Disclosure Format (check one): Yes __ No X

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	9
		Results of Operations	9
		Capital Requirements	12
Item	3.	Controls and Procedures	14

Part II - OTHER INFORMATION

Item	1.	Legal Proceedings	15
Item	2.	Changes in Securities	15
Item	3.	Defaults Upon Senior Securities	15
Item	4.	Submission of Matters to a Vote of Security Holders	15
Item	5.	Other Information	15
Item	6.	Exhibits	15
		Signature Page	16
		Certifications	17

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTREPID TECHNOLOGY AND RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

	September 30,			June 30,
	2006			2006
ASSETS	(Unaudited)			(Audited)
Current assets:
Cash	$	235,332			716,203
Accounts receivable, net		40,282			53,252
Prepaid expenses		1,313			66,076
Bond offering costs		165,635			138,896
Other assets		1,945			2,245
Total current assets		444,507			976,672
Property, plant, and equipment, net		3,162,605			2,218,392
Total assets	$	3,607,112			3,195,064
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	224,337			187,140
Accrued expenses		272,727			271,089
Note payable		746,746			556,264
Total current liabilities		1,243,810			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, 240,418,590 and 230,100,973 shares
issued and outstanding, respectively		1,202,093			1,150,505
Additional paid-in capital		9,610,929			9,183,892
Stock subscription receivable		(16,200	)		(16,200	)
Accumulated deficit		(8,433,520	)		(8,137,626	)
Total stockholders' equity		2,363,302			2,180,571
Total liabilities and stockholders' equity	$	3,607,112			3,195,064

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

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INTREPID TECHNOLOGY AND RESOURCES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, 2006 and 2005

 

	2006			2005
Revenues, net	$	149,253			140,989
Costs of revenues		61,283			86,247
Gross profit		87,970			54,742
Operating expenses:
General and administrative		342,773			329,531
Research and development		45,097			107,239
Loss from operations		(299,900	)		(382,028	)
Other income (expense):
Interest income		4,010			-
Interest expense		(4	)		(51,110	)
Loss before provision for income taxes		(295,894	)		(433,138	)
Provision for income taxes		-			-
Net loss	$	(295,894	)		(433,138	)
Net loss per common share - basic and diluted	$	-			-
Weighted average common shares - basic and diluted		238,246,000			143,982,000

The accompanying notes are an integral part of these financial statements

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INTREPID TECHNOLOGY AND RESOURCES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended September 30, 2006 and 2005

 

	2006			2005
Cash flows from operating activities:
Net loss	$	(295,894	)		(433,138	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock compensation expense		31,000			46,336
Depreciation		15,724			13,499
Interest expense on debentures		-			9,480
(Increase) decrease in:
Accounts receivable		12,970			36,528
Prepaid expenses		7,763			4,157
Other assets		300			400
Increase (decrease) in:
Accounts payable		37,197			(52,866	)
Accrued expenses		1,638			9,258
Net cash used in operating activities		(189,302	)		(366,346	)
Cash flows from investing activities:
Purchases of property and equipment		(487,455	)		(23,905	)
Net cash used in investing activities		(487,455	)		(23,905	)
Cash flows from financing activities:
Proceeds from long-term debt		-			450,000
Payments on long-term debt		-			(483,998	)
Payments on note payable		(225,000	)
Bond offering costs		(26,739	)		-
Issuance of common stock		472,125			565,752
Common stock offering costs		(24,500	)		(30,250	)
Net cash provided by financing activities		195,886			501,504
Net increase (decrease) in cash		(480,871	)		111,253
Cash, beginning of period		716,203			65,737
Cash, end of period	$	235,332			176,990

The accompanying notes are an integral part of these financial statements

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INTREPID TECHNOLOGY AND RESOURCES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2006 and 2005

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 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 authorized 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 quarter ended September 30, 2006. 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.

Reclassifications

During the quarter ended September 30, 2006, the Company reclassified certain amounts on the balance sheets. The amounts payable to Cannon Builders were reclassified from the line item titled current portion of long-term debt at June 30, 2006, to the line item titled note payable

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Note 2 - Going Concern

As of September 30, 2006, the Company has negative working capital, has incurred a loss, and has 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 Note 4 below. Management has also engaged an investment banking firm to obtain bond financing under a State of Idaho approved bond inducement resolution to expand operations and production capabilities as discussed in Note 6 below.

Note 3 - Supplemental Cash Flow Information

Actual amounts paid for interest and income taxes for the three months ended September 30, 2006 and 2005, are approximately as follows:

	2006		2005
Interest	$	5,568		1,300
Income taxes	$	-		-

During the three months ended September 30, 2006, 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 $415,482.

During the three months ended September 30, 2005, the Company:

·   Issued 203,585 shares of common stock in exchange for accounts payable and accrued expenses of $5,479.

·   Issued 2,727,273 shares of common stock in exchange for long-term debt of $150,000.

Note 4 - 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 September 30, 2006, there remains 1,971,535 shares of common stock that are available to be issued under this agreement.

Note 5 - Note Payable

Note payable consists of a 7.5% convertible note payable to a contractor, due on demand, and secured by common stock.

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Note 6 - Subsequent Events

On November 7, 2006, the Company completed a transaction to enter into a bond agreement for the construction financing of its two solid waste disposal facilities. The bonds issued under the agreement will be issued by The Industrial Development Corporation of Gooding County, Idaho, a public corporation duly organized and existing under the constitution and the laws of the State of Idaho. The bonds have a face value of $7,640,000, an interest rate of 7.5%, and mature on November 1, 2024.

On November 7, 2006, the note payable discussed in Note 5 was paid in full.

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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 September 30, 2006, increased 6% to $149,253 compared to $140,989 for the same period of 2005. This increase was mainly the result of revenue from the Whitesides digester plant and 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 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 production in June 2007, with revenue streams beginning shortly thereafter. 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 the three month period ending September 30, 2006, the Company’s primary customers were Oak Ridge Associated Universities (ORAU) and Global Design-Build Solutions (GdbS). During the corresponding period in 2005, the primary customers were the Idaho National Laboratory (“INL”) and ORAU. ORAU and GdbS both provided more than ten percent of the total recognized revenue during the 2006 period and during the 2005 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 September 30, 2006 and 2005, were $61,283 and $86,247 respectively, representing a 29% decrease. The decrease is due to improved operating efficiencies of the Whitesides plant. 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 $87,970 in the quarter ended September 30, 2006 compared to gross profit of $54,742 for the same quarter in 2005. As discussed above, the favorable increase for the three months ending September 30, 2006 was due to increased revenues and improved operating efficiencies.

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General and Administrative Expenses

For the three months ended September 30, 2006, general and administrative expenses were $342,773 compared to $329,531 for the same quarter ended September 30, 2005. This 4% increase was largely the result of increased travel expenses related to marketing.

Interest Income

For the three months ended September 30, 2006, the Company received $4,010 of interest income on investment capital. The Company received $0 of interest income on investment capital for the corresponding period in 2005.

Interest Expense

For the three months ended September 30, 2006, the Company had interest expense of $4 compared to $51,110 for the same period ending September 30, 2005. The 2005 interest expense was for interest paid on debentures and notes that were subsequently paid in full. With the bond offering consummated on November 7, 2006 to finance the first two biogas facilities, interest expense is likely to increase in future periods.

Net Loss

For the three months ended September 30, 2006, the Company had a net loss of $295,894 compared to a net loss of $433,138 for the same period ended September 30, 2005. In 2005, the loss was due to a significant drop in engineering contract revenue, while the transition to the biofuels business was starting up. For 2006, the transition to the new biofuels business accelerated, but substantive revenues will not be generated until the first expanded facility is online and biogas is sold.

MANAGEMENT'S PLAN OF OPERATION

Providing engineering and technical services has been the primary source of revenue, and hence the primary business focus, in the past. 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

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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 include:

-   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 been in operation for over 18 months and is consistently producing 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 and for heating water for dairy operations.

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 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 30,000 cows located on 3-5 different dairies (depending on outcomes of individual dairymen’s current consolidation and expansion plans). Construction will be initiated in CY 2007 and conclude in CY-2008.

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 $40 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.

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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 believes that the terms of the Settlement Agreement relative to divestiture of its mining and mineral rights of the Garnett mine in Montana have the potential to provide moderate future working capital. 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 will be available for these design and construction efforts. This debt will be payable over a 18 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 September 30, 2006 with cash available of $235,332 compared to $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 September 30, 2006, the Company had negative working capital of $799,303 compared to a deficit of $37,821 as of June 30, 2006. The current ratio at September 30, 2006 was: 0.36:1 and 0.96:1 at June 30, 2006. This increased deficit is due primarily to $879,032 of increased capital expenditures.

During the three months ended September 30, 2006, the Company used net cash of $189,302 for operating activities, compared to $366,346 of net cash used in operating activities for the 2005 period. The decrease of cash used by operating activities is due mainly to the reduced net loss.

During the three months ended September 30, 2006, the Company used $487,455 in investing activities, primarily in biogas generating facility construction costs, compared to $23,905 used in the year earlier period.

During the three months ended September 30, 2006, financing activities provided $195,886 in net cash, including $472,125 received from the issuance of common stock and $225,000 paid on construction debt. In the comparable period for 2005, the Company had $501,504 of net cash provided by financing activities, of which $565,752 was proceeds from stock sales.

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Standby Equity Distribution Agreement. 

The Company has a Standby Equity Distribution Agreement (SEDA) with Cornell Capital Partners LP. As of September 30, 2006 the Company has 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. Under this agreement, the Company may issue stock worth up to $25,000,000, through March 2007. As of September 30, 2006 an additional $20,000,000 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.

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 2005, the FASB issued SFAS 123 (revised 2005), “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 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.

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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 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 our disclosure controls and procedures are effective in alerting them 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.

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

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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.

None

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	November 14, 2006
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer by Vice-President, Secretary and Treasurer	November 14, 2006
32	Certification pursuant to 18 U.S.C. SECTION 1350by Chairman and Chief Executive Officer and Vice-President, Secretary and Treasurer	November 14, 2006

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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: November 14, 2006	By: /s/ Dr. Dennis D. Keiser, Chief Executive Officer & Acting Chief Financial Officer
Date: Novmeber 14, 2006	By: /s/ Bradley J. Frazee, Vice President, Secretary, and Treasurer

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