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| ☒ | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------|--------------------------------------------------------------------------------|

| ☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
|---------|-----------------------------------------------------------------|

| INTEGRAL TECHNOLOGIES, INC.                                 |
|-------------------------------------------------------------|
| (Name of small business issuer as specified in its charter) |

| Nevada                                                         |   | 98-0163519                        |
|----------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |
| 805 W. Orchard Drive, Suite 7, Bellingham, Washington |   | 98225      |
|-------------------------------------------------------|--------|------------|
| (Address of principal executive offices)              |   | (Zip Code) |

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|       |                                                                                            | Page   |
|------------|-------------------------------------------------------------------------------------------------|--------|
|       | PART I                                                                                          |   |
| Item 1.    | Business                                                                                        | 3      |
| Item 1A.   | Risk Factors                                                                                    | 11     |
| Item 1B.   | Unresolved Staff Comments                                                                       | 17     |
| Item 2.    | Properties                                                                                      | 18     |
| Item 3.    | Legal Proceedings                                                                               | 18     |
| Item 4.    | Mine Safety Disclosure                                                                          | 18     |
|       |                                                                                            |   |
|       | PART II                                                                                         |   |
| Item 5.    | Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 18     |
| Item 6.    | Selected Financial Data                                                                         | 19     |
| Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations.          | 19     |
| Item 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                      | 24     |
| Item 8.    | Financial Statements and Supplementary Data                                                     | 24     |
| Item 9.    | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure            | 24     |
| Item 9A.   | Controls and Procedures                                                                         | 24     |
| Item 9B.   | Other Information                                                                               | 26     |
|       |                                                                                            |   |
|       | PART III                                                                                        |   |
| Item 10.   | Directors, Executive Officers, and Corporate Governance                                         | 26     |
| Item 11.   | Executive Compensation                                                                          | 30     |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters  | 32     |
| Item 13.   | Certain Relationship and Related Transactions, and Director Independence                        | 34     |
| Item 14.   | Principal Accountant Fees and Services                                                          | 34     |
| Item 15.   | Exhibits                                                                                        | 35     |
|       |                                                                                            |   |
| SIGNATURES | 38                                                                                              |

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| ITEM 1. | BUSINESS. |
|---------|-----------|

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| ITEM 1A. | RISK FACTORS |
|----------|--------------|

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|  | · | announcements of new products or sales offered by us or our competitors; |
|--|--------|--------------------------------------------------------------------------|

|  | · | actual or anticipated variations in quarterly operating results; |
|--|--------|------------------------------------------------------------------|

|  | · | changes in financial estimates by securities analysts, if any; |
|--|--------|----------------------------------------------------------------|

|  | · | significant developments relating to our relationships with our customers or suppliers; |
|--|--------|-----------------------------------------------------------------------------------------|

|  | · | customer demand for our products; |
|--|--------|-----------------------------------|

|  | · | investor perceptions of our industry in general; |
|--|--------|--------------------------------------------------|

|  | · | announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures |
|--|--------|--------------------------------------------------------------------------------------------------------------------------|

|  | · | changes in the market’s perception of us or the nature of our business; and |
|--|--------|-----------------------------------------------------------------------------------|

|  | · | sales of our common stock. |
|--|--------|----------------------------|

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|  | • | make a special written suitability determination for the purchaser; |
|--|---------|---------------------------------------------------------------------|

|  | • | receive the purchaser’s written agreement to the transaction prior to sale; |
|--|---------|-----------------------------------------------------------------------------------|

|  | • | provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock” can be completed. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | delaying, deferring or preventing a change in corporate control; |
|--|---------|------------------------------------------------------------------|

|  | • | impeding a merger, consolidation, takeover or other business combination involving us; or |
|--|---------|-------------------------------------------------------------------------------------------|

|  | • | discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us. |
|--|---------|---------------------------------------------------------------------------------------------------------------|

| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

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| ITEM 2. | PROPERTIES |
|---------|------------|

| ITEM 3.  |  LEGAL PROCEEDINGS |
|---------------|-------------------------|

| ITEM 4. | MINE SAFETY DISCLOSURES |
|---------|-------------------------|

| ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS |
|---------|----------------------------------------------------------|

| Quarter Ended      |   | Low Bid |   |   | High Bid |   |
|--------------------|--------|---------|--------|--------|----------|--------|
|               |   |         |   |   |          |   |
| September 30, 2013 |   | $       | 0.35   |   |     | $      | 0.58 |   |
| December 31, 2013  |   | $       | 0.28   |   |     | $      | 0.47 |   |
| March 31, 2014     |   | $       | 0.24   |   |     | $      | 0.39 |   |
| June 30, 2014      |   | $       | 0.25   |   |     | $      | 0.39 |   |
|               |   |    |   |   |     |   |   |   |
| September 30, 2014 |   | $       | 0.28   |   |     | $      | 0.63 |   |
| December 31, 2014  |   | $       | 0.48   |   |     | $      | 0.70 |   |
| March 31, 2015     |   | $       | 0.64   |   |     | $      | 0.84 |   |
| June 30, 2015      |   | $       | 0.64   |   |     | $      | 0.84 |   |

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| ITEM 6. | SELECTED FINANCIAL DATA |
|---------|-------------------------|

| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
|---------|--------------------------------------------------------------------------------------------|

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|  | · | Revenues increased by $193,165. The increase is attributed to $150,000 (2014 - $nil) in engineering services revenue associated with the East Penn Manufacturing Co. (Deka) agreement and $50,000 (2014 - $25,000) of license revenue arising from the current year’s amortization of the $500,000 up-front license fee received from Hanwha. Remaining difference relates to revenues associated with sales of ElectriPlast. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Consulting fees decreased by $81,384. Consulting fees of $1,781,402 includes non-cash shares issued for services of $599,250 and obligations to issue shares of $45,720. This is compared to consulting fees of $1,862,786 provided in the corresponding period of the prior fiscal year that included non-cash shares issued for services of $828,283 and stock-based compensation from options granted of $266,243. As described in the notes to the financial statements, the fair value of options granted were valued using the Black-Scholes option pricing model; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Legal and accounting fees increased by $281,762. The increase is predominately attributed to legal fees associated with increased patent work. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Salaries and benefits increased by $302,141. Salaries and benefits incurred of $1,217,480 for the year ended, 2015, compared to $915,339 in the corresponding period of the prior fiscal year. Non-cash, Stock based compensation charges for the vesting of restricted shares were $184,622 compared to $nil in the corresponding period of the prior fiscal year. Remaining increase is due to hiring additional staff for assistance in commercialization of the ElectriPlast product; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Advertising expense increased by $49,832. The increase is attributed to management’s focus on accelerating commercial acceptance of its ElectriPlast product. The Company intends to continue advertising expenses at a rate above those expended in 2014; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Research and development costs increased by $393,804. The increase is primarily attributable to hiring a new engineer, a new consultant and obtaining a newly leased premises with manufacturing capabilities. The remaining increase is due to costs incurred to operate and support the manufacturing process by Jasper of our ElectriPlast material, independent testing of several of our ElectriPlast applications. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 7A. |  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|----------|------------------------------------------------------------------|

| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
|---------|---------------------------------------------|

| ITEM 9. |  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS AND PROCEDURES |
|----------|-------------------------|

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|  | - | On June 9, 2014 the Integral Board approved the retention of the Myriad CPA Group to provide all transactional bookkeeping and accounting services, perform a qualified, independent review over all significant transactions included in our financial reports as well as our period-end financial disclosures included in our periodic filings for our quarterly and annual SEC financial filing data. |
|--|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | - | We defined our cash disbursement process and established a two-stage approval and release process for all disbursements. |
|--|---|--------------------------------------------------------------------------------------------------------------------------|

|  | - | During the third fiscal quarter, we added Mr. Eli Dusenbury as our Controller to lead the internal accounting and SEC compliance initiatives on behalf of the company |
|--|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | - | Following the close of the fiscal year, we added Mr. Jeffrey Babka to our Board of Directors, and as the Audit Chair for the Board. |
|--|---|-------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 9B. | OTHER INFORMATION |
|----------|-------------------|

| ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS |
|----------|----------------------------------|

| Name              | Age    | Position with Company                  | Director of Company Since |
|-------------------|--------|----------------------------------------|---------------------------|
|              |   |                                   |                      |
| Doug Bathauer     | 50     | Director, CEO, President and Treasurer | November 2012             |
|              |   |                                   |                      |
| William A. Ince   | 64     | Director, Secretary                    | February 1996             |
|              |   |                                   |                      |
| James Eagan       | 52     | Director, Chairman                     | January 2011              |
|              |   |                                   |                      |
| W. Bartlett Snell | 63     | Chief Financial Officer                | February 2014             |
|              |   |                                   |                      |
| Richard Blumberg  | 65     | Independent Director                   | November 2012             |
|              |   |                                   |                      |
| Jeffrey Babka     | 62     | Independent Director                   | July 2015                 |

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| Section 16(a)  |  Beneficial Ownership Reporting Compliance (update) |
|---------------------|----------------------------------------------------------|

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| ITEM 11. | EXECUTIVE COMPENSATION |
|----------|------------------------|

| Name and Principal Position                                                       | Fiscal Year Ended June 30 |   | Salary ($) |    |   | Bonus ($) |   |   | Stock Awards(n1) |   |   | Options Awards ($) |   |   | Non-Equity Incentive Plan Compensation ($) |   |   | Nonqualified Deferred Compensation Earnings ($) |   |   | All Other Compensation ($) (n2) |   |   | Total ($) |   |
|----------------------------------------------------------------------------------------|--------------------------------|--------|-----------------|---------|--------|-----------|--------|--------|------------------|--------|--------|--------------------|--------|--------|-------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|---------------------------------|--------|--------|-----------|--------|
| James Eagan                                                                            | 2015                           |   | $               | 240,000 |   |      |        |   |             |   | -0-    |               |   |   | -0-                                             |   |   |                                            | -0-    |   |                            | $      | - -0-  |      |   | $ | 12,000- |   |   | $ | 252,000 |   |
| Chairman, Director Chief Executive Office of wholly owned subsidiary ElectriPlast Corp | 2014                           |   | $               | 198,000 |   |      |   | -0-    |             |   | $      | -0-                |   |   | $                                               | -0-    |   |                                            |   | 0-0-   |                            |   | $      | - -0-     |   |   | $ | -0- |   |   | $ | 198,000 |   |
|                                                                                   |                           |   |            |    |   |      |   |   |             |   |   |               |   |   |                                            |   |   |                                            |   |   |                            |   |   |      |   |   |   |   |   |   |   |   |   |
| Doug Bathauer                                                                          | 2015                           |   | $               | 240,000 |   |      |   | -0-    |             |   | $      | -0-                |   |   |                                            | -0-    |   |                                            |   | -0-    |                            |   |   | -0-       |   |   | $ | 12,000- |   |   | $ | 252,000 |   |
| Chief Executive Officer, Treasurer, Director                                           | 2014                           |   | $               | 198,000 |   |      |   | -0-    |             |   | $      | -0-                |   |   |                                            | -0-    |   |                                            |   | -0-    |                            |   |   | -0-       |   |   | $ | -0 |   |   | $ | 198,000 |   |
|                                                                                   |                           |   |            |    |   |      |   |   |             |   |   |               |   |   |                                            |   |   |                                            |   |   |                            |   |   |      |   |   |   |   |   |   |   |   |   |
| Bart Snell                                                                             | 2015                           |   | $               | 105,000 |   |      |   | -0-    |             |   | $      | -0-                |   |   |                                            | -0-    |   |                                            |   | -0-    |                            |   |   | -0-       |   |   |   | -0- |   |   | $ | 105,000 |   |
| Chief Financial Officer                                                                | 2014                           |   | $               | 62,500  |   |      |   | -0-    |             |   | $      | -0-                |   |   |                                            | -0-    |   |                                            |   | -0-    |                            |   |   | -0-       |   |   |   | -0- |   |   | $ | 62,500 |   |
|                                                                                   |                           |   |            |    |   |      |   |   |             |   |   |               |   |   |                                            |   |   |                                            |   |   |                            |   |   |      |   |   |   |   |   |   |   |   |   |
| William A. Ince                                                                        | 2015                           |   | $               | 216,333 |   |      |   | -0-    |             |   | $      | -0-                |   |   |                                            | -0-    |   |                                            |   | -0-    |                            |   |   | -0-       |   |   | $ | -0- |   |   | $ | 216,333 |   |
| Accounting Officer, Secretary, Director                                                | 2014                           |   | $               | 220,000 |   |      |   | -0-    |             |   | $      | -0-                |   |   |                                            | -0-    |   |                                            |   | -0-    |                            |   |   | -0-       |   |   | $ | 23,189 |   |   | $ | 243,189 |   |

| (n1) | Reflects dollar amount expensed by the company during applicable fiscal year for financial statement reporting purposes pursuant to ASC 718. ASC 718 requires the company to determine the overall value of the options as of the date of grant based upon the Black-Scholes method of valuation, and to then expense that value over the service period over which the options become exercisable (vest). As a general rule, for time-in-service-based options, the company will immediately expense any option or portion thereof which is vested upon grant, while expensing the balance on a pro rata basis over the remaining vesting term of the option. For a description ASC 718 and the assumptions used in determining the value of the options under the Black-Scholes model of valuation, see the notes to the consolidated financial statements included with this report. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (n2) | During the year ended June 30, 2015, James Eagan and Doug Bathauer received a medical allowance of $12,000 each and during the year ended June 30, 2014, William A. Ince received an automobile expense allowance of $18,000. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Option Awards | Stock Awards                                                                           |   |
|---------------|----------------------------------------------------------------------------------------|--------|
|               |                                                                                        |   |
|          |                                                                                        |   |  |   | Equity Incentive Plan Awards: |   |  |   |   |  |   |  |   | Equity Incentive Plan Awards: |   | Equity Incentive Plan Awards: |   |
|          |                                                                                        |   |  |   |  |   |  |   |   |  |   |  |   |  |   |  |   |
| Name          | Number of Securities Underlying Unexercised Options(#) Exercisable |   | Number of Securities Underlying Unexercised Options(#) Unexercisable |   | Number of Securities Underlying Unexercised Unearned Options (#) |   | Option Exercise Price ($) |   | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) |   | Market Value of Shares or Units of Stock That Have Not Vested |   | Number of Unearned Shares, Units or Other Rights That Have Not Vested |   | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |   |
| Doug Bathauer |                                                                                   |   | 250,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.25 |   | 12/31/2015 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|          |                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| James Eagan   |                                                                                   |   | 100,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.85 |   | 06/01/2015 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|          |                                                                                   |   | 100,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.85 |   | 12/01/2015 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|          |                                                                                   |   | 100,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.85 |   | 06/01/2016 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|          |                                                                                   |   | 100,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.85 |   | 06/01/2016 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|          |                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bart Snell    |                                                                                   |   | 250,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.31 |   | 02/19/2017 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|          |                                                                                   |   | 500,000 |   |   |   | 0 |   |   |   | 0 |   |   | $ | 0.31 |   | 02/19/2017 |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |

| Name             | Fees Earned or Paid in Cash ($) |   | Stock Awards ($) |   | Options Awards ($) |   | Non-Equity Incentive Plan Compensation ($) |   | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |   |
|------------------|---------------------------------|--------|------------------|--------|--------------------|--------|-------------------------------------------------|--------|-------------------------------------------------|----------------------------|-----------|--------|
|             |                                 |   |                  |   |                    |   |                                                 |   |                                            |                       |           |   |
| Richard Blumberg |                            | $      | 31,000           |   |               |   | -0-                                             |   |                                            |                       | -0-       |   |   |   | -0- |   |   |    |   | $ | 31,000 |   |

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| ITEM 12. |  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|----------|------------------------------------------------------------------------------------------------------|

| Name and Address ofBeneficial Owner (n1)                        | Amount and Nature of Beneficial Ownership(n2) | Percent of Class (n3) |
|-----------------------------------------------------------------|-----------------------------------------------|-----------------------|
| Executive Officers and Directors:                               |                                          |                  |
| Doug Bathauer805 West Orchard Dr. Suite #7Bellingham WA 98225   | 243,823                                       | 0.2%                  |
| William A. Ince805 W. Orchard Dr., Suite #7Bellingham, WA 98225 | 2,629,866                                     | 2.3%                  |
| Bart SnellP.O. Box1271Mac Lean VA 22101                         | 786,000                                       | 0.7%                  |
| James Eagan805 West Orchard Dr. Suite 7Bellingham WA 98225      | 2,150,000                                     | 1.9%                  |
| Richard P. Blumberg (n4)                                        | 7,731,142 (n4)                                | 6.7%                  |
| All executive officers and directors as a group (5 persons)     | 13,540,831                                    | 11.7%                 |

| (n1) | Unless otherwise indicated, all shares are directly beneficially owned and investing power is held by the persons named. |
|------|--------------------------------------------------------------------------------------------------------------------------|

| (n2) | Includes vested options beneficially owned but not yet exercised and outstanding, if any. |
|------|-------------------------------------------------------------------------------------------|

| (n3) | Based upon 115,420,094 shares issued and outstanding, plus the amount of shares each person or group has the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  (n4) | Based on information contained in Schedule 13G filed with the SEC on February 5, 2012, filed by Richard P. Blumberg whose address is 2357 Hobart Ave. S.W., Seattle, WA 98116. Richard P. Blumberg has sole voting power with respect to 4,940,667 and has shared voting power over 2,790,475 shares. |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Plan category                                              | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of options, warrants and rights | Number of securities available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|------------------------------------------------------------|---------------------------------------------------------------------------------------------|-----------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|
|                                                       | (a)                                                                                         | (b)                                                             | (c)                                                                                                                               |
| Equity compensation plans approved by security holders     | N/A                                                                                         | N/A                                                             | N/A                                                                                                                               |
| Equity compensation plans not approved by security holders | 5,250,000                                                                                   | $0.43                                                           | 0                                                                                                                                 |
| Total                                                      | 5,250,000                                                                                   | $0.43                                                           | 0                                                                                                                                 |

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| ITEM 13. |   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |
|----------|------------------------------------------------------------|

| ITEM 14. | DIRECTOR INDEPENDENCE |
|----------|-----------------------|

| ITEM 15. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
|----------|----------------------------------------|

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| ITEM 15. | **EXHIBITS** |
|----------|--------------|

| Exhibit No. | Description |
|-------------|-------------|

| 3.03 | Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to Exhibit 3.03 of Integral’s quarterly report on Form 10-QSB for the period ended March 31, 2006.) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.04 | Bylaws, as amended and restated on December 31, 1997. (Incorporated by reference to Exhibit 3.04 of Integral’s quarterly report on Form 10-QSB for the period ended March 31, 2006.) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.01 | Form of Warrant issued to the investors in the March 2014 private placement Incorporated by reference to Exhibit4.1 of Integral’s Current Report Form 8-K dated March 31, 2014 (filed April 7, 2014).) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Integral Technologies, Inc. 2001 Stock Plan dated January 2, 2001, as amended December 17, 2001. (Incorporated by reference to Exhibit 10.12 of Integral’s registration statement on Form S-8 (file no. 333-76058).) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15 | Integral Technologies, Inc. 2003 Stock Plan dated April 4, 2003 (Incorporated by reference to Exhibit 10.15 of Integral’s registration statement on Form S-8 (file no. 333-104522).) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18 | Grant of Option dated June 17, 2005 between Integral and Thomas Aisenbrey. (Incorporated by reference to Exhibit 10.18 of Integral’s Current Report Form 8-K dated June 17, 2005 (filed June 23, 2005).) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19 | Agreement between the Company and The QuanStar Group, LLC dated June 20, 2005. (Incorporated by reference to Exhibit 10.18 of Integral’s Current Report Form 8-K dated June 17, 2005 (filed June 23, 2005).) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Patent License Agreement between the Company and Heatron, Inc. dated March 17, 2006. (Incorporated by reference to Exhibit 10.20 of Integral’s Current Report Form 8-K dated March 17, 2006 (filed April 11, 2006).) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21 | Patent License Agreement between the Company and Jasper Rubber Products, Inc. dated August 25, 2006. (Incorporated by reference to Exhibit 10.21 of Integral’s Current Report Form 8-K dated August 25, 2006 (filed September 19, 2006).) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22 | Grant of Option dated November 6, 2006 between Integral and Thomas Aisenbrey. (Incorporated by reference to Exhibit 10.22 of Integral’s Quarterly Report on Form 10-QSB for the period ended September 30, 2006.) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.23 | Manufacturing Agreement between Integral and Jasper Rubber Products, Inc. dated November 22, 2006. (Incorporated by reference to Exhibit 10.23 of Integral’s Current Report on Form 8-K dated November 27, 2006 (filed December 4, 2006).) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24 | Patent License Agreement between Integral and ADAC Plastics, Inc. d/b/a ADAC Automotive, dated November 28, 2006. (Incorporated by reference to Exhibit 10.24 of Integral’s Current Report on Form 8-K dated December 18, 2006 (filed December 20, 2006).) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.25 | Patent License Agreement between Integral and Esprit Solutions Limited, dated December 18, 2006. (Incorporated by reference to Exhibit 10.25 of Integral’s Current Report on Form 8-K dated January 9, 2007 (filed January 19, 2007).) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26 | Patent License Agreement between Integral and Knowles Electronics, LLC, dated January 18, 2007. (Incorporated by reference to Exhibit 10.26 of Integral’s Quarterly Report on Form 10-QSB for the period ended December 31, 2006.) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27 | Agreement between Integral and Visionary Innovations, Inc., dated February 16, 2007. (Incorporated by reference to Exhibit 10.27 of Integral’s Quarterly Report on Form 10-QSB for the period ended March 31, 2007.) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.28 | Amendment One to Manufacturing Agreement between Integral and Jasper Rubber Products, Inc. dated July 19, 2007. (Incorporated by reference to Exhibit 10.28 of Integral’s Current Report on Form 8-K dated July 19, 2007 (filed July 30, 2007).) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.29 | Integral Technologies, Inc. 2009 Stock Option Plan dated July 14, 2009. (Incorporated by reference to Exhibit 10.29 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.30 | Employment Agreement between Integral and William Robinson dated July 14, 2009. (Incorporated by reference to Exhibit 10.30 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.31 | Employment Agreement between Integral and William Ince dated July 14, 2009. (Incorporated by reference to Exhibit 10.31 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.32 | Consulting Agreement between Integral and Mohamed Zeidan dated August 10, 2009. (Incorporated by reference to Exhibit 10.32 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.33 | Consulting Agreement between Integral and James Eagan dated December 1, 2010. (Incorporated by reference to Exhibit 10.33 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28, 2011)). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.34 | Consulting Agreement between Integral and Herbert C. Reedman dated April 15, 2011. . (Incorporated by reference to Exhibit 10.34 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28, 2011)). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.35 | Consulting Agreement between Integral and Stephen Neu dated June 1, 2011. (Incorporated by reference to Exhibit 10.35 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28, 2011)). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.36 | Consulting Agreement between Integral and Paul MacKenzie dated June 1, 2011. (Incorporated by reference to Exhibit 10.36 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28, 2011)). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.37 | Separation Agreement between Integral and William Robinson dated November 8, 2012. . (Incorporated by reference to Exhibit 10.37 of Integral’s Current report on Form 10-K for the fiscal year ended June 30, 2013 (filed September 30, 2013) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.38 | Separation Agreement between Integral and Steven Neu dated June 13, 2013.(Incorporated by reference to Exhibit 10.38 of Integral’s Current report on Form 10-K for the fiscal year ended June 30, 2013 (filed September 30, 2013) |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.39 | Consulting Agreement Extension between Integral and Mo Zeidan dated June 20,2013.(Incorporated by reference to Exhibit 10.38 of Integral’s Current report on Form 10-K for the fiscal year ended June 30, 2013 (filed September 30, 2013) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.40 | License Agreement between Integral and Hanwha dated June 19, 2013. † |
|-------|----------------------------------------------------------------------------|

| 10.41 | Separation Agreement between Integral and Herbert Reedman dated May 21, 2014. (filed September 30,2014) |
|-------|---------------------------------------------------------------------------------------------------------|

| 10.42 | Separation Agreement between Integral and Paul Mackenzie dated March 20, 2014. (filed September 30, 2014 ) |
|-------|------------------------------------------------------------------------------------------------------------|

| 10.43 | Manufacturing and Services Agreement between Integral and Integral Asia dated February 28, 2014 (filed September 30, 2014). |
|-------|-----------------------------------------------------------------------------------------------------------------------------|

| 10.44 | Amended Separation Agreement between Integral and William Robinson dated May 1, 2014. (filed September 30,2015) |
|-------|-----------------------------------------------------------------------------------------------------------------|

| 10.45 | Form of Subscription Agreement by and among Integral Technologies, Inc. and the investors in the March 2014 private placement. Incorporated by reference to Exhibit 10.1 of Integral’s Current Report Form 8-K dated March 31, 2014 (filed April 7, 2014).) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.46 | Report of Registered Independent Public Accounting Firm, Smythe Ratcliffe, LLP (filed September 30, 2014) |
|-------|-----------------------------------------------------------------------------------------------------------|

| 14.1 | Code of Ethics adopted September 20, 2004. (Incorporated by reference to Exhibit 14.1 of Integral’s annual report on Form 10-KSB for the period ended June 30, 2004.) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21.4 | List of Subsidiaries. (file herewith) |
|------|---------------------------------------|

| 31.1 | Section 302 Certification by the Corporation’s Chief Executive Officer. (Filed herewith). |
|------|-------------------------------------------------------------------------------------------------|

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| 31.2 | Section 302 Certification by the Corporation’s Chief Financial Officer. (Filed herewith). |
|------|-------------------------------------------------------------------------------------------------|

| 32.1 | Section 906 Certification by the Corporation’s Chief Executive Officer. (Filed herewith). |
|------|-------------------------------------------------------------------------------------------------|

| 32.2 | Section 906 Certification by the Corporation’s Chief Financial Officer. (Filed herewith). |
|------|-------------------------------------------------------------------------------------------------|

|                      | INTEGRAL TECHNOLOGIES, INC                                                  |   |
|---------------------------|-----------------------------------------------------------------------------|--------|
|                      |                                                                        |   |
| Dated: September 28, 2015 | /s/ Douglas Bathauer                                                        |   |
|                      | Douglas Bathauer, Chief Executive Officer                                   |   |
|                      |                                                                        |   |
|                      | /s/ W. Bartlett Snell                                                       |   |
|                      | W. Bartlett Snell, Chief Financial Officer and Principal Accounting Officer |   |

| Name                  |   | Title                | Date               |
|-----------------------|--------|----------------------|--------------------|
|                  |   |                 |               |
| /s/ Douglas Bathauer  |   | Director             | September 28, 2015 |
| Douglas Bathauer      |   |                 |               |
|                  |   |                 |               |
| /s/ W. Bartlett Snell |   | CFO                  | September 28, 2015 |
| W. Bartlett Snell     |   |                 |               |
|                  |   |                 |               |
| /s/ James Eagan       |   | Director             | September 28, 2015 |
| James Eagan           |   |                 |               |
|                  |   |                 |               |
| /s/ William A Ince    |   | Director             | September 28, 2015 |
| William A Ince        |   |                 |               |
|                  |   |                 |               |
| /s/ Richard Blumberg  |   | Independent Director | September 28, 2015 |
| Richard Blumberg      |   |                 |               |
|                  |   |                 |               |
| /s/ Jeffrey Babka     |   | Independent Director | September 28, 2015 |
| Jeffrey Babka         |   |                 |               |

----

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Table of Contents

| ASSETS                                                                                                                                                        |   | June 30, 2015 |        |   | June 30, 2014 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|---------------|--------|
| Current assets:                                                                                                                                               |   |               |        |   |               |   |
| Cash                                                                                                                                                          |   | $             | 117,307     |   |          | $      | 199,777 |   |
| Prepaid expenses                                                                                                                                              |   |          | 64,541      |   |          |   | 23,831 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total current assets                                                                                                                                          |   |          | 181,848     |   |          |   | 223,608 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Deposit                                                                                                                                                       |   |          | 2,500       |   |          |   | - |   |
| Property and equipment, net                                                                                                                                   |   |          | 65,514      |   |          |   | 27,821 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total Assets                                                                                                                                                  |   | $             | 249,862     |   |          | $      | 251,429 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                         |   |          |        |   |          |   |   |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Current liabilities:                                                                                                                                          |   |          |        |   |          |   |   |   |
| Accounts payable and accruals                                                                                                                                 |   | $             | 405,652     |   |          | $      | 973,220 |   |
| Loan payable                                                                                                                                                  |   |          | 32,335      |   |          |   | - |   |
| Notes payable                                                                                                                                                 |   |          | -           |   |          |   | 60,000 |   |
| Deferred revenue                                                                                                                                              |   |          | 50,000      |   |          |   | 50,000 |   |
| Convertible debentures                                                                                                                                        |   |          | 94,107      |   |          |   | - |   |
| Derivative liabilities                                                                                                                                        |   |          | 87,821      |   |          |   | - |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total current liabilities                                                                                                                                     |   |          | 669,915     |   |          |   | 1,083,220 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Non-current liabilities:                                                                                                                                      |   |          |        |   |          |   |   |   |
| Notes payable                                                                                                                                                 |   |          | -           |   |          |   | 229,500 |   |
| Deferred revenue, net of current portion                                                                                                                      |   |          | 370,833     |   |          |   | 420,833 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total non-current liabilities                                                                                                                                 |   |          | 370,833     |   |          |   | 650,333 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total Liabilities                                                                                                                                             |   |          | 1,040,748   |   |          |   | 1,733,553 |   |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Stockholders' Deficit                                                                                                                                         |   |          |        |   |          |   |   |   |
| Preferred stock and paid-in capital in excess of $0.001 par value, 20,000,000 shares authorized, 0 (2014 - 0) issued and outstanding                          |   |          | -           |   |          |   | - |   |
| Common stock and paid in capital in excess of $0.001 par value, 150,000,000 shares authorized,114,370,094 (June 30, 2014 - 98,985,442) issued and outstanding |   |          | 51,753,457  |   |          |   | 46,832,941 |   |
| Share subscriptions and obligations to issue shares                                                                                                           |   |          | 391,974     |   |          |   | 188,635 |   |
| Accumulated other comprehensive income                                                                                                                        |   |          | 46,267      |   |          |   | 46,267 |   |
| Accumulated deficit                                                                                                                                           |   |          | (52,982,584 | )      |          |   | (48,549,967 | ) |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total stockholders' deficit                                                                                                                                   |   |          | (790,886    | )      |          |   | (1,482,124 | ) |
|                                                                                                                                                          |   |          |        |   |          |   |   |   |
| Total Liabilities and Stockholders' Deficit                                                                                                                   |   | $             | 249,862     |   |          | $      | 251,429 |   |

----

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|                                                 |   | 2015   |        |   | 2014   |   |
|------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                 |   |        |        |   |        |   |
| Revenue                                              |   | $      | 222,332     |   |   | $      | 29,167 |   |
|                                                 |   |   |        |   |   |   |   |   |
| Operating expenses:                                  |   |   |        |   |   |   |   |   |
| Selling, general, and administrative expenses        |   |   | 3,695,838   |   |   |   | 3,266,272 |   |
| Research and development                             |   |   | 655,432     |   |   |   | 261,628 |   |
| Termination settlement agreement                     |   |   | -           |   |   |   | 675,000 |   |
|                                                 |   |   |        |   |   |   |   |   |
| Total operating expenses                             |   |   | 4,351,270   |   |   |   | 4,202,900 |   |
|                                                 |   |   |        |   |   |   |   |   |
| Other income                                         |   |   | 257         |   |   |   | 551 |   |
| Net (loss) gain on extinguishment of liabilities     |   |   | (139,400    | )      |   |   | 198,654 |   |
| Loss on extinguishment of convertible debt           |   |   | (6,577      | )      |   |   | (150,076 | ) |
| Interest expense                                     |   |   | (157,959    | )      |   |   | (401,904 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Net Loss                                             |   | $      | (4,432,617  | )      |   | $      | (4,526,508 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Preferred stock dividends                            |   |   | -           |   |   |   | (15,460 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Loss attributable to common shareholders             |   | $      | (4,432,617  | )      |   | $      | (4,541,968 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Net loss per share – basic and diluted         |   | $      | (0.04       | )      |   | $      | (0.05 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Weighted average number of common shares outstanding |   |   | 106,267,953 |   |   |   | 85,935,461 |   |

----

Table of Contents

|                                 |   | Number of Shares of Common Stock Issued |        |   | Common Stock and Paid-in Capital in Excess of Par |   |       | Number of Shares of Preferred Stock Issued |   |   | Preferred Stock and Paid-in Capital in Excess of Par |   |   | Promissory Notes Receivable From Shareholders |     |   | Shares Subscriptions and Obligations to Issue Shares |   |    | Accumulated Other Comprehensive Income |   |   | Accumulated Deficit |   |   | Total Stockholders' Deficit |   |
|--------------------------------------|--------|-----------------------------------------|-------------|--------|---------------------------------------------------|--------|------------|--------------------------------------------|--------|--------|------------------------------------------------------|--------|--------|-----------------------------------------------|----------|--------|------------------------------------------------------|--------|---------|----------------------------------------|--------|--------|---------------------|--------|--------|-----------------------------|--------|
| Balance June 30, 2013                |   |                                    | 76,748,839  |   |                                              | $      | 41,204,935 |                                       |   |   | 308,538                                              |   |   | $                                             | 237,950  |   |                                                 | $      | (29,737 | )                                      |   | $      | 13,400              |   |   | $                           | 46,267 |   |   | $ | (44,079,931 | ) |   | $ | (2,607,116 | ) |
| Shares issued for                    |   |                                    |        |   |                                              |   |       |                                       |   |   |                                                 |   |   |                                          |     |   |                                                 |   |    |                                   |   |   |                |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Services                             |   |                                    | 2,126,666   |   |                                              |   | 828,283    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 828,283 |   |
| Cash:                                |   |                                    |        |   |                                              |   |       |                                       |   |   |                                                 |   |   |                                          |     |   |                                                 |   |    |                                   |   |   |                |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Warrants exercised                   |   |                                    | 1,743,030   |   |                                              |   | 296,321    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 296,321 |   |
| Private placements                   |   |                                    | 8,171,250   |   |                                              |   | 1,399,375  |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | (13,400             | )      |   |                        | -      |   |   |   | - |   |   |   | 1,385,975 |   |
| Settlement of convertible debentures |   |                                    | 3,379,734   |   |                                              |   | 1,122,933  |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 1,122,933 |   |
| Settlement of debt                   |   |                                    | 6,433,772   |   |                                              |   | 1,809,031  |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 1,809,031 |   |
| Preferred shares converted           |   |                                    | 382,151     |   |                                              |   | 103,567    |                                       |   |   | (103,567                                             | )      |   |                                          | (103,567 | )      |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | - |   |
| Share issues costs                   |   |                                    | -           |   |                                              |   | (168,010   | )                                          |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | (168,010 | ) |
| Dividends on preferred stock         |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | (15,460 | ) |   |   | (15,460 | ) |
| Redeemable preferred stock           |   |                                    | -           |   |                                              |   | -          |                                       |   |   | (204,971                                             | )      |   |                                          | (134,383 | )      |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | 71,932 |   |   |   | (62,451 | ) |
| Subscriptions received               |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | 158,625             |   |   |                        | -      |   |   |   | - |   |   |   | 158,625 |   |
| Stock-based compensation             |   |                                    | -           |   |                                              |   | 266,243    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 266,243 |   |
| Promissory note written off          |   |                                    | -           |   |                                              |   | (29,737    | )                                          |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | 29,737  |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | - |   |
| Obligation to issue shares           |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | 30,010              |   |   |                        | -      |   |   |   | - |   |   |   | 30,010 |   |
| Net loss for year                    |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | (4,526,508 | ) |   |   | (4,526,508 | ) |
| Balance June 30, 2014                |   |                                    | 98,985,442  |   |                                              | $      | 46,832,941 |                                       |   |   | -                                                    |   |   | $                                             | -        |   |                                                 | $      | -       |                                   |   | $      | 188,635             |   |   | $                           | 46,267 |   |   | $ | (48,549,967 | ) |   | $ | (1,482,124 | ) |
| Shares issued for                    |   |                                    |        |   |                                              |   |       |                                       |   |   |                                                 |   |   |                                          |     |   |                                                 |   |    |                                   |   |   |                |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Services                             |   |                                    | 1,515,000   |   |                                              |   | 614,500    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | (15,250             | )      |   |                        | -      |   |   |   | - |   |   |   | 599,250 |   |
| Cash:                                |   |                                    |        |   |                                              |   |       |                                       |   |   |                                                 |   |   |                                          |     |   |                                                 |   |    |                                   |   |   |                |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Warrants exercised                   |   |                                    | 2,508,262   |   |                                              |   | 685,989    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 685,989 |   |
| Private placements                   |   |                                    | 9,968,709   |   |                                              |   | 2,906,005  |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | (158,625            | )      |   |                        | -      |   |   |   | - |   |   |   | 2,747,380 |   |
| Settlement of debt                   |   |                                    | 717,681     |   |                                              |   | 529,400    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 529,400 |   |
| Stock-based compensation             |   |                                    | 675,000     |   |                                              |   | 184,622    |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | - |   |   |   | 184,622 |   |
| Subscriptions received               |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | 107,500             |   |   |                        | -      |   |   |   | - |   |   |   | 107,500 |   |
| Obligation to issue shares           |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | 269,714             |   |   |                        | -      |   |   |   | - |   |   |   | 269,714 |   |
| Net loss for year                    |   |                                    | -           |   |                                              |   | -          |                                       |   |   | -                                                    |   |   |                                          | -        |   |                                                 |   | -       |                                   |   |   | -                   |   |   |                        | -      |   |   |   | (4,432,617 | ) |   |   | (4,432,617 | ) |
| Balance June 30, 2015                |   |                                    | 114,370,094 |   |                                              | $      | 51,753,457 |                                       |   |   | -                                                    |   |   | $                                             | -        |   |                                                 | $      | -       |                                   |   | $      | 391,974             |   |   | $                           | 46,267 |   |   | $ | (52,982,584 | ) |   | $ | (790,886 | ) |

----

Table of Contents

|                                                  |   | 2015   |       |   | 2014   |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash flows from operating activities:                 |   |        |       |   |        |   |
| Net loss                                              |   | $      | (4,432,617 | )      |   | $      | (4,526,508 | ) |
| Items not involving cash                              |   |   |       |   |   |   |   |   |
| Depreciation                                          |   |   | 3,254      |   |   |   | 417 |   |
| Stock issued for consulting services                  |   |   | 599,250    |   |   |   | 828,283 |   |
| Stock-based compensation                              |   |   | 184,622    |   |   |   | 266,243 |   |
| Interest on convertible debentures                    |   |   | 142,790    |   |   |   | 360,060 |   |
| Fair value gain on derivative financial liabilities   |   |   | (49,724    | )      |   |   | - |   |
| Net loss (gain) on extinguishment of liabilities      |   |   | 139,400    |   |   |   | (198,654 | ) |
| Loss on extinguishment of convertible debentures      |   |   | 6,577      |   |   |   | 150,076 |   |
| Obligation to issue shares for consulting services    |   |   | 45,720     |   |   |   | - |   |
| Deferred revenues                                     |   |   | (50,000    | )      |   |   | - |   |
| Termination settlement agreement                      |   |   | -          |   |   |   | 675,000 |   |
| Redemption of preferred stock                         |   |   | -          |   |   |   | 71,932 |   |
| Changes in working capital                            |   |   | (168,579   | )      |   |   | 84,639 |   |
| Net cash used in operating activities                 |   |   | (3,579,307 | )      |   |   | (2,288,512 | ) |
| Cash flows from investing activities:                 |   |   |       |   |   |   |   |   |
| Deposit                                               |   |   | (2,500     | )      |   |   | - |   |
| Purchase of property, equipment and intangible assets |   |   | (40,947    | )      |   |   | (28,238 | ) |
| Net cash used in investment activities                |   |   | (43,447    | )      |   |   | (28,238 | ) |
| Cash flows from financing activities:                 |   |   |       |   |   |   |   |   |
| Repayment of loan                                     |   |   | (58,370    | )      |   |   | - |   |
| Repayment of promissory notes                         |   |   | (24,500    | )      |   |   | (105,000 | ) |
| Proceeds from promissory notes                        |   |   | -          |   |   |   | 394,500 |   |
| Proceeds from issuance of common stock                |   |   | 2,747,380  |   |   |   | 1,695,696 |   |
| Proceeds from warrants exercised                      |   |   | 685,989    |   |   |   | - |   |
| Share issue costs                                     |   |   | -          |   |   |   | (168,010 | ) |
| Subscriptions received                                |   |   | 107,500    |   |   |   | 158,625 |   |
| Proceeds from convertible debentures                  |   |   | 245,000    |   |   |   | 345,000 |   |
| Repayment of convertible debentures                   |   |   | (162,715   | )      |   |   | (321,132 | ) |
| Preferred stock dividend                              |   |   | -          |   |   |   | (15,460 | ) |
| Net cash provided by financing activities             |   |   | 3,540,284  |   |   |   | 1,984,219 |   |
| Increase (decrease) in cash                           |   |   | (82,470    | )      |   |   | (332,531 | ) |
| Cash, beginning of year                               |   |   | 199,777    |   |   |   | 532,308 |   |
| Cash, end of year                                     |   | $      | 117,307    |   |   | $      | 199,777 |   |

----

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----

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|  | · | Level 1 – Quoted prices in active markets for identical securities; |
|--|--------|---------------------------------------------------------------------------|

|  | · | Level 2 – Other significant observable inputs that are observable through corroboration with market data (including quoted prices in active markets for similar securities); and |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Level 3 – Significant unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                           |   | June 30, 2015 |     |   | June 30, 2014 |   |
|--------------------------------|--------|---------------|----------|--------|---------------|--------|
| Equipment                      |   | $             | 104,924  |   |          | $      | 98,975 |   |
| Furniture and fixtures         |   |          | 96,279   |   |          |   | 96,279 |   |
| Leasehold improvements         |   |          | 64,565   |   |          |   | 29,567 |   |
|                           |   |          | 265,768  |   |          |   | 224,821 |   |
| Less: accumulated depreciation |   |          | (200,254 | )      |          |   | (197,000 | ) |
| Property and equipment, net    |   | $             | 65,514   |   |          | $      | 27,821 |   |

----

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|  | (i) | Completed a private placement amounting to $108,620 for the issuance of 638,940 units. Each unit consisted of one common share at $0.17 per share and one share purchase warrant at $0.001 per warrant to purchase 638,940 common shares on or before February 16, 2016 at an exercise price of $0.30 per share. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Completed a private placement amounting to $305,478 for the issuance of 1,796,927 units. Each unit consisted of one common share at $0.17 per share and one share purchase warrant issued at $0.001 per warrant to purchase 1,796,927 common shares on or before February 16, 2016 at an exercise price of $0.30 per share. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | Completed a private placement amounting to $160,622 for the issuance of 642,087 shares consisting of common stock at $0.25 per share. |
|--|-------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | Completed a private placement amounting to $247,875 for the issuance of 701,447 shares consisting of common stock at $0.35 per share. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | (v) | Completed a private placement amounting to $263,720 for the issuance of 694,377 shares consisting of common stock at $0.38 per share. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------|

|  | (vi) | Completed a private placement amounting to $25,000 for the issuance of 100,000 shares consisting of common stock at $0.25 per share. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | (vii) | Completed a private placement amounting to $48,500 for the issuance of 127,631 shares consisting of common stock at $0.38 per share. |
|--|-------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | (viii) | Completed a private placement amounting to $35,000 for the issuance of 100,000 shares consisting of common stock at $0.35 per share. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | (ix) | Completed a private placement amounting to $239,000 for the issuance of 796,667 shares consisting of common stock at $0.30 per share. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | (x) | Completed a private placement amounting to $1,002,190 for the issuance of 3,340,633 shares consisting of common stock at $0.30 per share. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | (xi) | Completed a private placement amounting to $70,000 for the issuance of 230,000 shares consisting of common stock at $0.30 per share. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | (xii) | Completed a private placement amounting to $400,000 for the issuance of 800,000 common shares issued at $0.50 per share. |
|--|-------|--------------------------------------------------------------------------------------------------------------------------|

----

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|  | (i) | 50,000 shares measured at a fair value of $0.31 per share resulting in a total value of $15,250 which was previously recorded as selling, general, and administrative expenses during the year ended June 30, 2014. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | 850,000 shares measured at a fair value of $0.33 per share resulting in a total value of $280,500 which was recorded as selling, general, and administrative expenses. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | 150,000 shares measured at a fair value of $0.48 per share resulting in a total value of $72,250 which was recorded as selling, general, and administrative expenses. |
|--|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | 15,000 shares measured at a fair value of $0.45 per share resulting in a total value of $6,750 which was recorded as selling, general, and administrative expenses. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (v) | 50,000 shares measured at a fair value of $0.68 per share resulting in a total value of $33,750 which was recorded as selling, general, and administrative expenses. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (vi) | 400,000 shares measured at a fair value of $0.52 per share resulting in a total value of $206,000 which was recorded as selling, general, and administrative expenses. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | Completed a private placement amounting to $13,400 for the issuance of 44,000 units. Each unit consisted of one common share and two share purchase warrants. 20,000 units were issued at $0.25 per unit and 24,000 units were issued at $0.35 per unit. Warrants were issued at $0.001 per warrant to purchase 88,000 shares of common stock on or before July 31, 2015 at an exercise price of $0.50 per share. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Completed a private placement amounting to $28,951 for the issuance of 144,757 units consisting of one common share at $0.20 per share and one share purchase warrant at $0.001 per warrant to purchase 144,757 shares of common stock on or before September 13, 2015 at an exercise price of $0.60 per share. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | Completed a private placement amounting to $1,147,024 for the issuance of 6,744,257 units. Each unit consisted of one common share at $0.17 per share and one share purchase warrants at $0.001 per warrant to purchase 6,744,251 shares of common stock on or before eighteen months after the closing date at an exercise price of $0.30 per share. |
|--|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | Completed a private placement amounting to $210,000 for the issuance of 1,238,236 units. Each unit consisted of one common share at $0.17 per share and one share purchase warrant at $0.001 per warrant to purchase 1,238,236 shares of common stock on or before December 1, 2015 at an exercise price of $0.30 per share. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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|  | (i) | 550,000 shares measured at a fair value of $0.50 per share resulting in a total value of $275,000 which was recorded as selling, general, and administrative expenses. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | 250,000 shares measured at a fair value of $0.36 per share resulting in a total value of $90,000 which was recorded as selling, general, and administrative expenses. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | 100,000 shares measured at a fair value of $0.30 per share resulting in a total value of $30,000 which was recorded as selling, general, and administrative expenses. |
|--|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | 500,000 shares measured at a fair value of $0.29 per share resulting in a total value of $145,000 which was recorded as selling, general, and administrative expenses. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (v) | 185,000 shares measured at a fair value of $0.27 per share resulting in a total value of $49,950 which was recorded as selling, general, and administrative expenses. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                       |   | Number of Options |       |   | Price Per Option |   |           | Weighted Average Exercise Price |   |
|----------------------------|--------|-------------------|------------|--------|------------------|--------|----------------|---------------------------------|--------|
| Outstanding, June 30, 2014 |   |              | 5,900,000  |   |             | $      | 0.25 to $ 1.00 |                            |   | $ | 0.42 |   |
| Granted                    |   |              | -          |   |             |   | -              |                            |   |   | - |   |
| Cancelled                  |   |              | (100,000   | )      |             | $      | 0.50           |                            |   | $ | 0.50 |   |
| Expired                    |   |              | (2,300,000 | )      |             | $      | 0.25 to $ 1.00 |                            |   | $ | 0.54 |   |
|                       |   |              | -          |   |             |   |           |                            |   |   |   |   |
| Outstanding, June 30, 2015 |   |              | 3,500,000  |   |             | $      | 0.25 to $ 0.85 |                            |   | $ | 0.34 |   |
| Exercisable, June 30, 2015 |   |              | 3,400,000  |   |             | $      | 0.25 to $ 0.85 |                            |   | $ | 0.34 |   |

----

Table of Contents

|                        |   | Number of Options |     |   | Weighted Average Grant Date Fair Value |   |
|-----------------------------|--------|-------------------|----------|--------|----------------------------------------|--------|
|                        |   |                   |     |   |                                        |   |
| Non-vested at June 30, 2014 |   |              | 650,000  |   |                                   | $      | 0.30 |   |
| Options granted             |   |              | -        |   |                                   |   | - |   |
| Options forfeited           |   |              | -        |   |                                   |   | - |   |
| Options vested              |   |              | (550,000 | )      |                                   |   | 0.30 |   |
|                        |   |              |     |   |                                   |   |   |   |
| Non-vested at June 30, 2015 |   |              | 100,000  |   |                                   | $      | 0.25 |   |

|              |   |                |   |   | Number of Options |   |
|-------------------|--------|----------------|--------|--------|-------------------|--------|
| Expiry Date       |   | Exercise Price |   |   | June 30, 2015     |   |   | June 30, 2014 |   |
| March 9, 2015     |   | $              | 0.25   |   |              |   | - |   |   |   | 125,000 |   |
| April 15, 2015    |   | $              | 0.50   |   |              |   | - |   |   |   | 100,000 |   |
| June 1, 2015      |   | $              | 0.50   |   |              |   | - |   |   |   | 75,000 |   |
| June 1, 2015      |   | $              | 0.85   |   |              |   | - |   |   |   | 200,000 |   |
| July 31, 2015     |   | $              | 1.00   |   |              |   | - |   |   |   | 415,000 |   |
| October 15, 2015  |   | $              | 0.50   |   |              |   | - |   |   |   | 100,000 |   |
| November 15, 2015 |   | $              | 1.00   |   |              |   | - |   |   |   | 100,000 |   |
| December 1, 2015  |   | $              | 0.50   |   |              |   | 75,000 |   |   |   | 150,000 |   |
| December 1, 2015  |   | $              | 0.85   |   |              |   | 100,000 |   |   |   | 200,000 |   |
| December 31, 2015 |   | $              | 1.00   |   |              |   | - |   |   |   | 110,000 |   |
| December 31, 2015 |   | $              | 0.25   |   |              |   | - |   |   |   | 1,000,000 |   |
| June 1, 2016      |   | $              | 0.50   |   |              |   | 75,000 |   |   |   | 75,000 |   |
| June 1, 2016      |   | $              | 0.85   |   |              |   | 100,000 |   |   |   | 100,000 |   |
| June 30, 2016     |   | $              | 0.25   |   |              |   | 2,000,000 |   |   |   | 2,000,000 |   |
| December 1, 2016  |   | $              | 0.50   |   |              |   | 75,000 |   |   |   | 75,000 |   |
| December 1, 2016  |   | $              | 0.85   |   |              |   | 100,000 |   |   |   | 100,000 |   |
| February 19, 2017 |   | $              | 0.31   |   |              |   | 750,000 |   |   |   | 750,000 |   |
| June 1, 2017      |   | $              | 0.50   |   |              |   | 75,000 |   |   |   | 75,000 |   |
| January 13, 2019  |   | $              | 0.25   |   |              |   | 50,000 |   |   |   | 50,000 |   |
| January 13, 2020  |   | $              | 0.25   |   |              |   | 50,000 |   |   |   | 50,000 |   |
| January 13, 2021  |   | $              | 0.25   |   |              |   | 50,000 |   |   |   | 50,000 |   |
| Total outstanding |   |           |   |   |              |   | 3,500,000 |   |   |   | 5,900,000 |   |
| Total exercisable |   |           |   |   |              |   | 3,400,000 |   |   |   | 5,250,000 |   |

----

Table of Contents

|                        |   | Number of Restricted Stock Awards |      |   | Weighted Average Grant Date Fair Value |   |
|-----------------------------|--------|-----------------------------------|-----------|--------|----------------------------------------|--------|
|                        |   |                                   |      |   |                                        |   |
| Non-vested at June 30, 2014 |   |                              | 1,412,500 |   |                                   | $      | 0.35 |   |
| Awards granted              |   |                              | -         |   |                                   |   | - |   |
| Awards forfeited            |   |                              | -         |   |                                   |   | - |   |
| Awards vested               |   |                              | (537,500  | )      |                                   | $      | 0.33 |   |
|                        |   |                              |      |   |                                   |   |   |   |
| Non-vested at June 30, 2015 |   |                              | 875,000   |   |                                   | $      | 0.35 |   |

----

Table of Contents

|                   |   | Number of Warrants |        |   | Price Per Share |   |         | Weighted Average Exercise Price |   |
|------------------------|--------|--------------------|-------------|--------|-----------------|--------|--------------|---------------------------------|--------|
|                   |   |                    |        |   |                 |   |         |                                 |   |
| Balance, June 30, 2014 |   |               | 39,749,999  |   |            | $      | 0.17 - $1.00 |                            |   | $ | 0.37 |   |
| Issued                 |   |               | 4,001,256   |   |            | $      | 0.25 - $0.30 |                            |   | $ | 0.30 |   |
| Expired                |   |               | (13,475,923 | )      |            | $      | 0.17 - $0.50 |                            |   | $ | 0.47 |   |
| Cancelled              |   |               | (2,725,002  | )      |            | $      | 0.50 - $0.70 |                            |   | $ | 0.52 |   |
| Exercised              |   |               | (2,508,262  | )      |            | $      | 0.17 - $0.50 |                            |   | $ | 0.34 |   |
|                   |   |               |        |   |            |   |         |                            |   |   |   |   |
| Balance, June 30, 2015 |   |               | 25,042,068  |   |            | $      | 0.25 - $0.50 |                            |   | $ | 0.33 |   |

|                              |   |                |   |   | Number of Warrants |   |
|-----------------------------------|--------|----------------|--------|--------|--------------------|--------|
| Expiry Date                       |   | Exercise Price |   |   | June 30, 2015      |   |   | June 30, 2014 |   |
|                              |   |                |   |   |                    |   |   |  |   |
| July 15, 2014                     |   | $              | 0.31   |   |               |   | - |   |   |   | 300,000 |   |
| August 31, 2014                   |   | $              | 0.17   |   |               |   | - |   |   |   | 549,020 |   |
| August 31, 2014                   |   | $              | 0.60   |   |               |   | - |   |   |   | 1,123,333 |   |
| August 31, 2014                   |   | $              | 0.70   |   |               |   | - |   |   |   | 756,854 |   |
| September 30, 2014                |   | $              | 0.50   |   |               |   | - |   |   |   | 1,954,604 |   |
| November 30, 2014                 |   | $              | 0.50   |   |               |   | - |   |   |   | 100,000 |   |
| January 31, 2015                  |   | $              | 0.50   |   |               |   | - |   |   |   | 2,550,000 |   |
| February 28, 2015                 |   | $              | 0.50   |   |               |   | - |   |   |   | 1,300,000 |   |
| February 28, 2015                 |   | $              | 0.17   |   |               |   | - |   |   |   | 301,500 |   |
| May 25, 2015                      |   | $              | 0.50   |   |               |   | - |   |   |   | 533,333 |   |
| June 30, 2015                     |   | $              | 0.50   |   |               |   | 125,000 |   |   |   | 4,850,000 |   |
| July 15, 2015                     |   | $              | 0.50   |   |               |   | 88,000 |   |   |   | 88,000 |   |
| September 13, 2015                |   | $              | 0.60   |   |               |   | 44,757 |   |   |   | 44,757 |   |
| September 13, 2015                |   | $              | 0.30   |   |               |   | - |   |   |   | 1,263,569 |   |
| October 1, 2015                   |   | $              | 0.30   |   |               |   | 11,191,410 |   |   |   | 11,153,721 |   |
| October 1, 2015                   |   | $              | 0.50   |   |               |   | 375,000 |   |   |   | 650,000 |   |
| December 1, 2015                  |   | $              | 0.30   |   |               |   | 848,530 |   |   |   | 1,351,093 |   |
| December 1, 2015                  |   | $              | 0.50   |   |               |   | 1,000,000 |   |   |   | 1,000,000 |   |
| December 31, 2015                 |   | $              | 0.30   |   |               |   | 157,000 |   |   |   | 157,000 |   |
| January 1, 2016                   |   | $              | 0.30   |   |               |   | 249,235 |   |   |   | - |   |
| February 16, 2016                 |   | $              | 0.25   |   |               |   | 302,117 |   |   |   | - |   |
| February 16, 2016                 |   | $              | 0.30   |   |               |   | 1,737,804 |   |   |   | - |   |
| November 25, 2016                 |   | $              | 0.30   |   |               |   | 6,168,692 |   |   |   | 6,668,692 |   |
| November 25, 2016                 |   | $              | 0.50   |   |               |   | 2,754,523 |   |   |   | 2,754,523 |   |
| November 29, 2016                 |   | $              | 0.70   |   |               |   | - |   |   |   | 300,000 |   |
| Total outstanding and exercisable |   |           |   |   |               |   | 25,042,068 |   |   |   | 39,749,999 |   |

----

Table of Contents

|  | · | 117,647 investor warrants exercisable at $0.60 were re-priced to $0.17 and were exercised for proceeds of $20,000. |
|--|--------|--------------------------------------------------------------------------------------------------------------------|

|  | · | 301,500 investor warrants exercisable at $0.50 were re-priced to $0.17 and exercised for proceeds of $51,255. |
|--|--------|---------------------------------------------------------------------------------------------------------------|

|  | · | 400,000 investor warrants exercisable at $0.50 were re-priced to $0.17 and exercised for proceeds of $68,000. |
|--|--------|---------------------------------------------------------------------------------------------------------------|

|  | · | 446,470 investor warrants exercisable at $0.30 were exercised for proceeds of $133,941. |
|--|--------|-----------------------------------------------------------------------------------------|

|  | · | 64,706 investor warrants exercisable at $0.70 were re-priced to $0.30 and exercised for proceeds of $19,411. |
|--|--------|--------------------------------------------------------------------------------------------------------------|

|  | · | 50,000 investor warrants exercisable at $0.30 were exercised for proceeds of $15,000. |
|--|--------|---------------------------------------------------------------------------------------|

|  | · | 1,250,000 investor warrants expiring January 31, 2015 and exercisable at $0.50 were extended to October 1, 2015 and re-priced to $0.30. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 1,000,000 investor warrants expiring February 28, 2015 were extended to December 1, 2015. |
|--|--------|-------------------------------------------------------------------------------------------|

|  | · | 50,000 investor warrants expiring February 28, 2015 and exercisable at $0.50 were extended to December 1, 2015 and re-priced to $0.30. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 25,000 investor warrants expiring February 28, 2015 and exercisable at $0.70 were extended to October 1, 2015 and re-priced to $0.50. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 1,000,000 investor warrants expiring February 28, 2015 and exercisable at $0.50 were extended to October 1, 2015 and re-priced to $0.30. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 350,000 investor warrants expiring February 28, 2015 and exercisable at $0.50 were extended to October 1, 2015. |
|--|--------|-----------------------------------------------------------------------------------------------------------------|

|  | · | 6,248,215 investor warrants expiring May 25, 2015 and exercisable at $0.50 were extended to November 25, 2016 and re-priced to $0.30. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 1,209,470 investor warrants expiring February 28, 2015 and exercisable at $0.30 were extended to October 1, 2015. |
|--|--------|-------------------------------------------------------------------------------------------------------------------|

|  | · | 2,000,000 investor warrants exercisable at $0.50 expiring February 28, 2015 were extended to November 25, 2016 and re-priced to $0.30. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 157,000 investor warrants exercisable at $0.70 were re-priced to $0.30. |
|--|--------|-------------------------------------------------------------------------|

|  | · | 2,425,000 investor warrants exercisable at $0.50 were re-priced to $0.30. |
|--|--------|---------------------------------------------------------------------------|

----

Table of Contents

|                   |   | June 30, 2015 |    |   | June 30, 2014 |   |
|------------------------|--------|---------------|---------|--------|---------------|--------|
|                   |   |               |    |   |               |   |
| Cash (US institution)  |   | $             | 116,655 |   |          | $      | 193,782 |   |
| Cash (CDN institution) |   |          | 652     |   |          |   | 5,995 |   |
|                   |   |          |    |   |          |   |   |   |
|                   |   | $             | 117,307 |   |          | $      | 199,777 |   |

----

Table of Contents

|                             |   | 2015   |     |   | 2014   |   |
|----------------------------------|--------|--------|----------|--------|--------|--------|
|                             |   |        |     |   |        |   |
| Current Expense                  |   | $      | 0        |   |   | $      | 0 |   |
| Deferred Expense/(Benefit)       |   |   | (482,000 | )      |   |   | (1,459,000 | ) |
| Inc/(Dec) in valuation allowance |   |   | 482,000  |   |   |   | 1,459,000 |   |
|                             |   |   |     |   |   |   |   |   |
| Total provision for income tax   |   | $      | 0        |   |   | $      | 0 |   |

----

Table of Contents

|                                                  |   | 2015   |       |   | 2014   |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Provision for income tax at the statutory rate of 34% |   | $      | (1,507,000 | )      |   | $      | (1,539,000 | ) |
|                                                  |   |   |       |   |   |   |   |   |
| Increase(Decrease) in taxes due to                    |   |   |       |   |   |   |   |   |
| Change in valuation allowance                         |   |   | 482,000    |   |   |   | 1,459,000 |   |
| Disallowed expense                                    |   |   | (14,000    | )      |   |   | 9,000 |   |
| Federal Tax Return True Ups                           |   |   | (30,000    | )      |   |   | 71,000 |   |
| Expired & Cancelled Stock Op                      |   |   | 729,000    |   |   |   | 0 |   |
| Expired Net Operating Loss                            |   |   | 340,000    |   |   |   | 0 |   |
| Total provision for income tax                        |   | $      | 0          |   |   | $      | 0 |   |

----

Table of Contents

|                                      |   | 2015   |        |   | 2014   |   |
|-------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Deferred income tax assets                |   |        |        |   |        |   |
| Current deferred tax assets               |   |        |        |   |        |   |
| Accrued Liabilities                       |   | $      | 0           |   |   | $      | 0 |   |
| Valuation allowance                       |        |        | 0           |   |   |   | 0 |   |
|                                      |   |   |        |   |   |   |   |   |
| Total current deferred tax assets         |   |   | 0           |   |   |   | 0 |   |
|                                      |   |   |        |   |   |   |   |   |
| Noncurrent deferred tax assets            |   |   |        |   |   |   |   |   |
| Net operating loss carryforwards          |   |   | 13,339,000  |   |   |   | 12,367,000 |   |
| Nonqualified stock options                |   |   | 390,000     |   |   |   | 1,056,000 |   |
| Deferred Revenue                          |   |   | 143,000     |   |   |   | 0 |   |
| Capital loss carryforwards                |   |   | 0           |   |   |   | 0 |   |
| Unrealized Loss on Stock Compensation     |        |        | 0           |        |        |        | 0 |  |
| Legal dispute reserve                     |   |   | 0           |   |   |   | 0 |   |
| Basis difference of fixed assets          |   |   | 0           |   |   |   | 0 |   |
| Valuation allowance                       |   |   | (13,859,000 | )      |   |   | (13,415,000 | ) |
|                                      |   |   |        |   |   |   |   |   |
| Total noncurrent deferred tax assets      |   |   | 13,000      |   |   |   | 8,000 |   |
|                                      |   |   |        |   |   |   |   |   |
| Noncurrent deferred tax liabilities       |   |   |        |   |   |   |   |   |
| Basis difference of fixed assets          |   |   | 13,000      |   |   |   | 8,000 |   |
|                                      |   |   |        |   |   |   |   |   |
| Total noncurrent deferred tax liabilities |   |   | 13,000      |   |   |   | 8,000 |   |
|                                      |   |   |        |   |   |   |   |   |
| Net deferred tax asset/(liability)        |   | $      | 0           |   |   | $      | 0 |   |

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| Year Ended    | Expires       |   | Amount |       |
|---------------|---------------|--------|--------|------------|
|          |          |   |        |       |
| June 30, 1999 | June 30, 2019 |   |   | 1,361,000  |   |
| June 30, 2000 | June 30, 2020 |   |   | 1,091,000  |   |
| June 30, 2001 | June 30, 2021 |   |   | 2,002,000  |   |
| June 30, 2002 | June 30, 2022 |   |   | 2,527,000  |   |
| June 30, 2003 | June 30, 2023 |   |   | 1,364,000  |   |
| June 30, 2004 | June 30, 2024 |   |   | 2,162,000  |   |
| June 30, 2005 | June 30, 2025 |   |   | 2,208,000  |   |
| June 30, 2006 | June 30, 2026 |   |   | 2,373,000  |   |
| June 30, 2007 | June 30, 2027 |   |   | 1,177,000  |   |
| June 30, 2008 | June 30, 2028 |   |   | 1,676,000  |   |
| June 30, 2009 | June 30, 2029 |   |   | 1,439,000  |   |
| June 30, 2010 | June 30, 2030 |   |   | 1,699,000  |   |
| June 30, 2011 | June 30, 2031 |   |   | 3,129,000  |   |
| June 30, 2012 | June 30, 2032 |   |   | 2,968,000  |   |
| June 30, 2013 | June 30, 2033 |   |   | 3,536,000  |   |
| June 30, 2014 | June 30, 2034 |   |   | 4,635,000  |   |
| June 30, 2015 | June 30, 2035 |   |   | 3,884,000  |   |
| Total         |          |   | $      | 39,231,000 |   |

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|                                |   | June 30, 2015 |     |   | June 30, 2014 |   |
|-------------------------------------|--------|---------------|----------|--------|---------------|--------|
| Changes in working capital          |   |               |     |   |               |   |
| Prepaid expenses                    |   | $             | 49,995   |   |          | $      | (3,599 | ) |
| Accounts payable and accruals       |   |          | (218,574 | )      |          |   | (382,595 | ) |
| Notes and accounts receivable       |   |          | -        |   |          |   | 250,000 |   |
| Deferred revenue and other          |   |          | -        |   |          |   | 220,833 |   |
|                                |   | $             | (168,579 | )      |          | $      | 84,639 |   |
|                                |   |          |     |   |          |   |   |   |
| Shares issued for:                  |   |          |     |   |          |   |   |   |
| Redemption of preferred shares      |   | $             | -        |   |          | $      | 103,567 |   |
| Settlement of debt                  |   |          | 529,400  |   |          |   | 1,809,031 |   |
| Settlement of convertible debenture |   |          | -        |   |          |   | 1,122,933 |   |
| Services and financing fees         |   |          | 599,250  |   |          |   | 828,283 |   |
|                                |   |          |     |   |          |   |   |   |
| Supplemental cash flow information: |   |          |     |   |          |   |   |   |
| Interest paid                       |   | $             | 15,169   |   |          | $      | 401,904 |   |
| Accrual of dividends                |   |          | -        |   |          |   | 15,460 |   |

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Table of Contents

|  | · | On October 22, 2014, a total of $120,000 (settled) was received, net of $4,000 in legal fees. The convertible debt is due July 24, 2015, roughly 9 months after issuance. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On January 5, 2015, a total of $125,000 was received, net of $4,000 in legal fees. The convertible debt is due October 8, 2015, roughly 9 months after issuance. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outstanding principal multiplied by 108% together with accrued interest and unpaid interest thereon if prepaid within a period of 30 days beginning on the date of issuance of the note; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outstanding principal multiplied by 113% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 31 days from the date of issuance of the note and ending on the date that is 60 days following the date of the note; |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outstanding principal multiplied by 118% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 61 days from the date of issuance of the note and ending on the date that is 90 days following the date of the note. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outstanding principal multiplied by 123% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 91 days from the date of issuance of the note and ending on the date that is 120 days following the date of the note. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outstanding principal multiplied by 128% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 121 days from the date of issuance of the note and ending on the date that is 150 days following the date of the note. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outstanding principal multiplied by 135% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 151 days from the date of issuance of the note and ending on the date that is 180 days following the date of the note. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                  |   | June 30, 2015 |   |   | June 30, 2014 |   |
|-----------------------|--------|---------------|--------|--------|---------------|--------|
| Expected life (years) |   |          | 0.76   |   |          |   | 0.87 |   |
| Interest rate         |   |          | 0.94   | %      |          |   | 1.10 | % |
| Volatility            |   |          | 94.34  | %      |          |   | 80.46 | % |
| Dividend yield        |   |          | N/A    |        |          |   | N/A |   |
| Estimated forfeitures |   |          | N/A    |   |          |   | N/A |   |
|                  |   | June 30, 2015 |   |   | June 30, 2014 |   |
|-----------------------|--------|---------------|--------|--------|---------------|--------|
| Expected life (years) |   |          | 0.27   |   |          |   | N/A |   |
| Interest rate         |   |          | 0.58   | %      |          |   | N/A |   |
| Volatility            |   |          | 58     | %      |          |   | N/A |   |
| Dividend yield        |   |          | N/A    |   |          |   | N/A |   |
| Estimated forfeitures |   |          | N/A    |   |          |   | N/A |   |

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Table of Contents

|  | (a) | On December 19, 2013 and December 24, 2013, the Company entered into one-month unsecured promissory notes payable totaling $25,000 and $35,000, respectively, which bore interest at 12% annually. Any unpaid principal and unpaid accrued interest is due January 19, 2014 and January 24, 2014, the maturity dates. In addition, the Company must issue 25,000 shares of common stock at each maturity date to settle the promissory notes. During the fiscal year ended June 30, 2014, the promissory notes payable were settled, therefore the outstanding balance was $nil.  The shares were issued during the year ended June 30, 2015. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | On October 1, 2013, the Company entered into an unsecured promissory note agreement with a consultant for unpaid fees of $215,000, which bears interest at 6% annually. On April 17, 2014 the Company issued 1,264,706 shares of common stock valued at the fair market price of $0.17 per share.  As of June 30, 2014, the outstanding balance on this note was $nil. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | On February 1, 2014, the Company entered into an unsecured promissory note agreement with a former director for unpaid consulting fees of $300,000, which bears interest at 6% annually. Any interest accrued on the outstanding balance is due at the maturity date, February 1, 2016. $5,000 is payable on the first of each month beginning March 1, 2014 through to March 1, 2015. The final payment of $272,234 consisting of principal and accrued interest is due on the maturity date.  On March 31, 2015, the remaining balance of this note of $265,000 was transferred to a non-related company and subsequently modified to include the following conversion options: |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | $100,000 of principal may be settled at a conversion price of $0.30 per common share (issued); and |
|--|-----|----------------------------------------------------------------------------------------------------|

|  | (ii) | $165,000 of principal may be settled at a conversion price of $0.50 per common share (issued) |
|--|------|-----------------------------------------------------------------------------------------------|

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|        |   | June 30, 2015 |   |   | June 30, 2014 |   |
|-------------|--------|---------------|--------|--------|---------------|--------|
|        |   |               |   |   |               |   |
| Current     |   | $             | -      |   |          | $      | 60,000 |   |
| Non-current |   |          | -      |   |          |   | 229,500 |   |
|        |   |          |   |   |          |   |   |   |
|        |   | $             | -      |   |          | $      | 289,500 |   |

|  | (a) | Accounts payable of $25,000 with a consultant was settled by issuing 54,347 shares of common stock measured at a fair value of $0.46 per share on the date of the agreement. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Legal fees included in accounts payable for a total of $200,000 were settled by a cash payment of $100,000 and a deposit in advance of services of $50,000 included in prepaid expenses. As a result, a gain on extinguishment of $100,000 was recognized in net loss on extinguishment of liabilities within the consolidated statement of operations. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | On November 8, 2012, a director of the Company resigned from his position as director and CEO of the Company. An agreement was signed indicating that all amounts owing at the agreement date would be waived resulting in payables of $228,897 recognized as a gain on extinguishment of debt charged to accumulated deficit. Further, the agreement indicated that the Company would redeem 70,588 shares of preferred stock held by the director at $4.25 per share for a total of $300,000 as follows: |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | Monthly installments of $7,500 would be paid on the fifteenth of each month starting November 15, 2012 until June 15, 2013; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Monthly installments of $10,000 would be paid on the fifteenth of each month starting July 15, 2013 until December 15, 2014; and |
|--|------|----------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | A lump sum payment of $60,000 on January 15, 2015. |
|--|-------|----------------------------------------------------|

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|  | (b) | On June 13, 2013, the Company signed a separation agreement with a consultant resulting in a termination of consulting services effective March 31, 2013. As a result of the termination, the Company was required to issue the following: |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | 541,666 shares of common stock pursuant to a restricted stock award agreement for options vesting prior to the agreement date. These shares were issued during the fiscal year ended June 30, 2014 and were measured at a fair value of $0.44 per share (note 5); and |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | 628,571 shares common stock in consideration for unpaid fees of $243,000. The modified consulting fees were recorded at the fair value of shares to be issued of $352,000 as at June 30, 2013 which were included in accounts payable and accruals. The increase in value of modified debt of $109,000 was recognized as a loss on extinguishment of liabilities in the consolidated statements of operations for the year ended June 30, 2013. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | In addition to the above, 600,000 options previously granted to a consultant were cancelled.  Of the granted options, 200,000 had not vested on the date of cancellation.  As such, stock-based compensation previously recorded on the unvested options of $23,375 was reversed through consulting expenses in the consolidated statement of operations for the fiscal year ended June 30, 2014. |
|--|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | During the fiscal year ended June 30, 2014, 628,571 shares were issued to settle the above mentioned consulting fees which were measured at a fair value of $0.44 per share on the share issuance date. A total of $276,571 was recorded as equity with the decrease in value of extinguished debt of $75,429 recorded as a recovery of loss on extinguishment of debt in the consolidated statements of operations. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | On March 20, 2014, the Company signed a separation agreement with a consultant resulting in a termination of consulting services effective January 2, 2014. As a result of the termination, the Company is required to perform the following: |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | 203,700 shares of common stock were issued to settle $55,000 in consulting fees included in accounts payable and accruals. These shares were issued during the fiscal year ended June 30, 2014 and were measured at a fair value of $0.27 per share; and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | 1,000,000 shares of common stock were issued in lieu of all stock options not granted per the original consulting agreement. The shares of common stock were measured at their fair value of $0.30 per share on the date of the separation agreement. A total of $300,000 was recorded as termination agreement expense in the consolidated statements of operations. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | (d) | On March 21, 2014, the Company signed a separation agreement with a director resulting in a termination of consulting services effective January 31, 2014. As a result of the termination, the Company is required to perform the following: |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | 241,666 shares of common stock were issued to settle $72,500 in consulting fees included in accounts payable and accruals. These shares were issued during the fiscal year ended June 30, 2014 and were measured at a fair value of $0.30 per share; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Grant 200,000 stock options at an exercise price of $0.50 per share of common stock and cancellation of 500,000 vested stock options and forfeiture of 100,000 un-vested stock options previously granted; and |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | 1,250,000 shares of common stock were issued in lieu of all stock options not granted per the original consulting agreement. The shares of common stock were measured at their fair value of $0.30 per share on the date of the separation agreement. A total of $375,000 was recorded as termination agreement expense in the consolidated statements of operations. |
|--|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | On December 30, 2013 the Company amended the terms of a promissory note to add a conversion option to settle the remaining balance of $51,040 through issuance of shares at a conversion price of $0.165 per share. On December 30, 2013, 309,332 shares of common stock were issued to settle the above mentioned promissory note which was measured at a fair value of $0.28 per share on the share issuance date. A total of $86,613 was recorded as equity with the loss on extinguishment of $35,573 recorded in the consolidated statement of operations. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (g) | On October 16, 2013 the Company settled $55,052 in legal fees through issuance of shares of common stock. 125,000 shares of common stock were issued to settle the above mentioned payable balance which was measured at a fair value of $0.38 per share on the share issuance date. A total of $47,500 was recorded as equity with the gain on extinguishment of $7,552 recorded in the consolidated statement of operations. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (h) | On October 25, 2013 the Company settled $11,726 in consulting fees through issuance of shares of common stock. 29,315 shares of common stock were issued to settle the above mentioned payable balance which was measured at a fair value of $0.37 per share on the share issuance date. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | On January 30, 2014 the Company settled $15,000 in consulting fees to a director through issuance of shares of common stock. 50,000 shares of common stock were issued to settle the above mentioned payable balance which was measured at a fair value of $0.30 per share on the share issuance date. A total of $15,000 was recorded as equity. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (j) | On March 31, 2014, legal fees included in accounts payable were derecognized as a result of becoming time barred due to the statute of limitations. A total of $150,367 has been recognized as a gain on extinguishment of liabilities in the consolidated statements of operations. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | $250,000 (received) to be paid to the Company within 15 business days; and |
|--|--------|----------------------------------------------------------------------------|

|  | · | $250,000 (received) payment to be paid to the Company no later than one year after signing the agreement. |
|--|--------|-----------------------------------------------------------------------------------------------------------|

|        |   | June 30, 2015 |    |   | June 30, 2014 |   |
|-------------|--------|---------------|---------|--------|---------------|--------|
|        |   |               |    |   |               |   |
| Current     |   | $             | 50,000  |   |          | $      | 50,000 |   |
| Non-current |   |          | 370,833 |   |          |   | 420,833 |   |
|        |   |          |    |   |          |   |   |   |
|        |   | $             | 420,833 |   |          | $      | 470,833 |   |
| 2016   |   | $      | 30,000 |   |
|--------|--------|--------|--------|--------|
| 2017   |   |   | 30,000 |   |
| 2018   |   |   | 30,000 |   |
|   |   | $      | 90,000 |   |

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Table of Contents

|  | (a) | An employment agreement with an employee, dated November 1, 2013, engaging the individual to provide certain business development services to the Company in Korea. The term of the agreement is for three years and the Company is to pay the employee an annual salary of $150,000. The Company agreed to issue 810,000 shares of the Company’s common stock vesting 25% on the grant date and each anniversary thereafter. As at June 30, 2015, 405,000 shares have vested and were issued during the year. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | An employment agreement with an employee, dated November 1, 2013, engaging the individual to provide certain consulting services to the Company in Korea. The term of the agreement is for three years and the Company is to pay the employee an annual salary of $100,000. The Company agreed to issue 540,000 shares of the Company’s common stock vesting 25% on the grant date and each anniversary thereafter. As at June 30, 2015, 270,000 shares have vested and were issued during the year. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | An employment agreement with an employee, dated January 13, 2014, engaging the individual to provide certain technical expertise to the Company in the USA. The term of the agreement is for three years and the Company is to pay the employee an annual salary of $200,000. The Company agreed to issue 500,000 shares of the Company’s common stock vesting 33% on the grant date and each anniversary thereafter. As at June 30, 2015, 333,333 shares have vested and are obligated to be issued. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | An employment agreement with an employee, dated January 1, 2014, engaging the individual to provide the expertise as that of the Chief Technical Officer.  The term of the agreement is for three years and the Company is to pay the employee an annual salary of $170,000 The Company agreed to issue 100,000 shares of the Company’s common stock vesting 33% on the grant date and each anniversary thereafter. As at June 30, 2015, 66,667 shares have vested and are obligated to be issued. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | Pursuant to a consulting agreement dated August 19, 2014, the Company is obligated to pay $5,000 to $12,500 per month based on the number of hours worked and to issue 6,000 shares of common stock per month beginning September 1, 2014. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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