<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the fiscal year ended June 30, 2001

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
     For the transition period from:               to
                                    --------------    --------------
                         Commission file number: 0-28353
                                                 -------

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

<TABLE>
<S>                                                                    <C>
                             Nevada                                                98-0163519
--------------------------------------------------------------         ---------------------------------
(State or other jurisdiction of incorporation or organization)         (IRS Employer Identification No.)


      805 W. Orchard Drive, Suite 3, Bellingham, Washington                          98225
      -----------------------------------------------------                        ----------
              (Address of principal executive offices)                             (Zip Code)
</TABLE>

Issuer's telephone number:   (360) 752-1982
                             --------------

Securities registered under Section 12(b) of the Exchange Act:   None
                                                                 ----

Securities registered under Section 12(g) of the Exchange Act:   Common Stock
                                                                 ------------

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         State issuer's revenues for its most recent fiscal year.   $15,209.
                                                                    -------

         As of September 28, 2001, the aggregate market value of the voting
stock held by non-affiliates, approximately 24,560,696 shares of Common Stock,
was approximately $17.4 million based on an average of the bid and ask prices of
approximately $.71 per share of Common Stock on such date.

         The number of shares outstanding of the issuer's Common Stock, $.001
par value, as of September 28, 2001 was 28,132,562 shares.

         DOCUMENTS INCORPORATED BY REFERENCE:        None.

         Transitional Small Business Disclosure Format (check one):

         Yes  [ ];  No  [X]


<PAGE>


                                     PART I

               CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS
                THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO
            DIFFER FROM THOSE PROJECTED IN FORWARD LOOKING STATEMENTS

         Readers of this document and any document incorporated by reference
herein, are advised that this document and documents incorporated by reference
into this document contain both statements of historical facts and forward
looking statements. Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially for those
indicated by the forward looking statements. Examples of forward looking
statements include, but are not limited to (i) projections of revenues, income
or loss, earning or loss per share, capital expenditures, dividends, capital
structure and other financial items, (ii) statements of the plans and objectives
of the Company or its management or Board of Directors, including the
introduction of new products, or estimates or predictions of actions by
customers, suppliers, competitors or regulatory authorities, (iii) statements of
future economic performance, and (iv) statements of assumptions underlying other
statements and statements about the Company or its business.

         This document and any documents incorporated by reference herein also
identify important factors which could cause actual results to differ materially
from those indicated by forward looking statements. These risks and
uncertainties include price competition, the decisions of customers, the actions
of competitors, the effects of government regulation, possible delays in the
introduction of new products and services, customer acceptance of products and
services, the Company's ability to secure debt and/or equity financing on
reasonable terms, and other factors which are described herein and/or in
documents incorporated by reference herein.

         The cautionary statements made above and elsewhere by the Company
should not be construed as exhaustive or as any admission regarding the adequacy
of disclosures made by the Company. Forward looking statements are beyond the
ability of the Company to control and in many cases the Company cannot predict
what factors would cause results to differ materially from those indicated by
the forward looking statements.


ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT

         Integral Technologies, Inc. ("Integral," the "Company" or the
"Registrant") is a development stage company, incorporated under the laws of the
State of Nevada on February 12, 1996. Integral is in the business of
researching, developing and commercializing new antenna technologies directly
and through its wholly owned subsidiary, Antek Wireless, Inc.

         To date, Integral, directly and through its subsidiaries, has expended
its resources on the research and development of four types of technologies:

(1) Flat Panel Antennas;

(2) Contrawound Toroidal Helical Antennas;

(3) Three Dimensional ("3D") Color Machine Vision;

(4) Two Dimensional ("2D") Color Machine Vision (Counterfeit Currency/Document
    Detection); and

(5) RF Plasma Injection System (New Spark Plug).


         Each of these technologies are described later in this section.

         Through its wholly owned subsidiary Antek Wireless, Inc. ("Antek"),
Integral has been researching and developing six new flat panel antenna
technologies.



                                       1
<PAGE>


         Through its subsidiary Emergent Technologies. Corp., Integral had been
researching and developing the Contrawound Toroidal Helical Antenna ("CTHA")
technology, initially developed by West Virginia University.

         Through its subsidiary Integral Vision Systems, Inc. ("Integral
Vision"), Integral had been researching and developing the 3D and 2D Color
Machine Vision technology.

         Integral had directly been researching and developing the RF Plasma
Injection System technology.

EMPLOYEES

         Integral and its subsidiaries currently employ a total of seven people
on a full-time basis. Research and development activities are conducted
primarily by two employees. However, Integral also relies on the expertise of
several technical advisors who are consulted as needed on a part-time, contract
basis.

RECENT DEVELOPMENTS - FOCUS ON FLAT PANEL ANTENNA PRODUCTS

         As a result of the developments with Antek and the commercial interest
in its antenna products, Integral presently intends to focus substantially all
of its resources on the commercialization and sales of the Antek flat panel
antenna products.

SUBSIDIARIES

                        SUBSIDIARY - ANTEK WIRELESS, INC.

         Antek Wireless, Inc. ("Antek"), a wholly-owned subsidiary of Integral,
was incorporated in the State of Delaware on November 2, 1999 as
NextAntennas.Com, Inc. The change of name to Antek became effective July 7,
2000. Antek develops and commercializes new flat panel antenna technologies. The
focus of Antek will be to continue to develop and commercialize new flat panel
antenna technologies designed to meet the needs of the wireless
telecommunications industry.

Antenna Products

         Antek has developed six new flat panel antenna designs for use in
different wireless technology markets:

o    the "GPS" antenna is used in radio receivers on the ground to receive 1.5
     GHz signals from global positioning satellites orbiting the earth at an
     altitude of approximately 23,000 miles;

o    the "LEO" antenna is used for the VHF function in radio
     transmitters/receivers on the ground, to transmit/receive signals in the
     145 MHz frequency range to Low Earth Orbit satellites, orbiting the earth
     at an approximate altitude of 450 miles;

o    the "GPS/LEO" antenna, as the name indicates is a dual purpose antenna;

o    the "CDPD" antenna is used in transmission/reception of signals in the
     824-894MHz/1.5MHz range.  The Cellular Digital Packet Data network is
     currently one technology on the market today which facilitates wireless
     internet access;

o    the "GPS/CDPD" antenna, as the name indicates is a dual purpose antenna;
     and

o    the "portable phone" antenna is used in cellular and cordless phones,
     transmitting and receiving signals in the 820 MHz to 960 MHz range as well
     as the 1.5 GHz frequency range.



                                       2
<PAGE>


         The GPS antenna is for use with asset "tracking" and/or location
identification technologies. The FCC has mandated that by 2002, US wireless
carriers provide their subscribers with the technology that will enable the
carrier to identify the subscriber's location in the event of an emergency such
as a vehicle crash in which the occupant is injured and possibly rendered
unconscious.

         The LEO antenna is for use with asset tracking systems which handles
short bursts of data from such assets as shipping containers, tractor trailers
and electricity meters. As opposed to the GPS technology which only identifies
location, the LEO technology allows for the transmission of data. Such data
would indicate such things as to whether a tractor trailer is full, the doors
are open, or even that a refrigeration unit on a trailer is malfunctioning.

         The CDPD antenna is for use in wireless internet access technologies.

         The "portable phone" antenna is for use in digital cordless phones and
cellular phones operating in the 920MHz and 820-890MHz frequency ranges
respectively.

Patents on Antek Antenna Products

         Integral has completed a patent review of the antenna technologies and
has filed eight U.S. patent applications, five of which are currently
provisional patents, one is pending approval, and two have been approved. No
assurances can be given that all patent applications will be approved; however,
to the extent that patents are not granted, Integral will continue to attempt to
commercialize these technologies through Antek without the protection of
patents. As patents are issued, Integral will have the exclusive right to use in
the U.S. the antenna design(s) described in each issued patent for the 20-year
life of the patent.

Product Manufacturing and Distribution

         Antek is not in the manufacturing business. Antek relies on third-party
manufacturing companies to manufacture Antek's antenna products.

         Antek antenna products will not be sold directly to the general public,
but rather to businesses and manufacturers who will use the antennas in their
products.

Barriers to Entry into Market Segment

         In the antenna market, Integral will be competing with other
established antenna providers that are much larger and better capitalized than
Integral. In order to compete, management believes that Integral must
demonstrate to potential users that the Antek antenna products have an advantage
over other antennas on the market in terms of performance and cost.


                    SUBSIDIARY - EMERGENT TECHNOLOGIES CORP.

         Emergent Technologies Corp. ("Emergent") was incorporated in the State
of West Virginia on September 29, 1995 for the purpose of developing the
Contrawound Toroidal Helical Antenna ("CTHA") for commercialization to
government and/or military applications worldwide. Emergent's rights to
commercialize the CTHA technology is limited to these applications.

         The CTHA technology was created at the Center for Industrial Research
Applications ("CIRA"), a research center run by West Virginia University
Research Corporation ("WVURC"), which is a subsidiary of West Virginia
University ("WVU"). The technology was developed by students at WVU under the
direction of Dr. James Smith, who is a Director of CIRA and a professor at WVU
and was also a co-founder of Integral. The exclusive rights to commercialize the
CTHA technology were licensed by WVURC to a private company called Integral
Concepts, Inc., which is wholly-owned by Dr. Smith. On January 2, 1996, Integral
Concepts sublicensed the exclusive, worldwide rights to commercialize the CTHA
technology for governmental and military applications to Emergent, which was at
that time owned by Dr. Smith and Denzel Jack Parsons (a former director of
Integral). Pursuant to the sublicense agreement, a modest annual minimum royalty
payment is due from Emergent to Integral Concepts.



                                       3
<PAGE>


         On March 1, 1996, Integral acquired a 10% equity interest in Emergent
from Emergent in exchange for $100,000. By an agreement dated December 10, 1997,
Integral acquired an additional 70% equity interest in Emergent from Messrs.
Smith and Parsons (which represented 100% of their ownership of Emergent) in
exchange for 1,800,000 shares of common stock of Integral (see "Item 12. Certain
Relationships and Related Transactions" below for additional details), which
resulted in Integral owning 80% of Emergent. Presently, Integral owns 76.625% of
Emergent, as a result of the conversion of promissory notes into shares of
common stock of Emergent by non-affiliated minority shareholders of Emergent.

         Emergent's rights to commercialize the CTHA technology are limited to
government and/or military applications worldwide. While several U.S.
governmental agencies and military contractors have tested prototypes of the
CTHA for various applications, the time delays caused by the requirement to
comply with governmental and military specifications and procedures have been
significant, and there is no way for Integral to predict when or if revenue will
be realized. There is also the possibility that additional research and
development will be required.

         Presently, Integral is not pursuing further development of CTHA
technology and is focusing its research and development resources on other
antenna technologies.


                    SUBSIDIARY - INTEGRAL VISION SYSTEMS INC.

         Integral Vision Systems Inc. ("Integral Vision") was incorporated in
the State of West Virginia on January 20, 1994, for the purpose of researching,
developing and commercializing Color Machine Vision technology, which is
described below.

         The Color Machine Vision technology was created at the Center for
Industrial Research Applications ("CIRA"), a research center run by West
Virginia University Research Corporation ("WVURC"), which is a subsidiary of
West Virginia University ("WVU"). This technology was developed by students at
WVU under the direction of Dr. James Smith, who is a Director of CIRA and a
professor at WVU and was also a co-founder of Integral. The exclusive rights to
commercialize this technology was licensed by WVURC to a private company called
Integral Concepts, Inc., which is wholly owned by Dr. Smith. On February 5,
1994, Integral Concepts sublicensed the exclusive, worldwide (excluding Canada)
rights to commercialize this technology to Integral Vision, which was at that
time owned by Mr. Smith and two other persons. Pursuant to the sublicense
agreement, a modest annual minimum royalty payment is due from Integral Vision
to Integral Concepts.

         In March 1997, Integral acquired a 100% equity interest in Integral
Vision from Dr. Smith and two other persons in exchange for 100,000 shares of
common stock of Integral (see "Item 12. Certain Relationships and Related
Transactions" below for additional details).

A.       3D MACHINE VISION COLORIMETRY (ENSURES COLOR QUALITY CONTROL IN A
         MANUFACTURING ENVIRONMENT).

         Originally licensed to Integral Concepts from WVU on January 19, 1993,
all worldwide (excluding Canada) commercialization rights to the 3D machine
vision colorimetry technology were sub-licensed to Integral Vision on February
15, 1994.

         The 3D Machine Vision Colorimetry technology is a system whereby
computers can be given three-dimensional "eyesight" to look for specific colors
and physical characteristics to ensure quality control in a manufacturing
environment. The technology is protected by US patent number 5,485,429 issued on
February 27, 1996.

         Presently, Integral is not pursuing further development of 3D Machine
Vision Colorimetry technology and is focusing its research and development
resources on antenna technologies.


                                       4
<PAGE>


B.       2D COLOR MACHINE VISION (COUNTERFEIT CURRENCY/DOCUMENT DETECTION)

         Originally licensed to Integral Concepts from WVU, on January 19, 1993,
all worldwide (excluding Canada) commercialization rights were sub-licensed to
Integral on February 15, 1994.

         The 2D Color Machine Vision technology is a system whereby computers
can be programmed to scan and authenticate currency and other types of documents
and to detect counterfeits.

         Presently, Integral is not pursuing further development of the 2D Color
Machine Vision technology and is focusing its research and development resources
on antenna technologies.


            TECHNOLOGY UNDER LICENSE DIRECTLY BY INTEGRAL - RF PLASMA
                       INJECTION SYSTEM (NEW SPARK PLUG)

         Integral has directly (rather than through subsidiaries) acquired the
rights to commercialize the RF Plasma Ignition System technology, which is
described below. This technology was created at the Center for Industrial
Research Applications ("CIRA"), a research center run by West Virginia
University Research Corporation ("WVURC"), which is a subsidiary of West
Virginia University ("WVU"). This technology was developed by students at WVU
under the direction of Dr. James Smith, who is a Director of CIRA and a
professor at WVU and was also a co-founder of Integral. The exclusive rights to
commercialize this technology were licensed by WVURC to a private company called
Integral Concepts, Inc., which is wholly owned by Dr. Smith. On February 15,
1996, Integral Concepts sublicensed the exclusive, worldwide rights to
commercialize these technologies to Integral. Pursuant to the sublicense
agreements, a modest annual minimum royalty payment is due from Integral to
Integral Concepts.

         The RF Plasma Injection System technology is a system whereby microwave
radio frequency emissions create a plasma (a small cloud of ions) in a
clean-burning combustion cylinder. A potential application for the system could
be to replace conventional spark plugs used in electronic ignition systems. The
technology is protected by US patent number 5,361,737 issued on November 8,
1994.

     Presently, Integral is not pursuing further development of the RF Plasma
Ignition System technology and is focusing its research and development
resources on antenna technologies.


                 INVESTMENT IN CONTINENTAL DIVIDE ROBOTICS, INC.

         On July 21, 2000, Integral executed a Stock Purchase Agreement with
Continental Divide Robotics, Inc. ("CDR") related to the acquisition of a
minority interest in CDR. CDR has developed certain proprietary hardware and
software systems that use the radio-navigation, satellite-based Global
Positioning System to track individuals. The technology is currently being
field-tested in the criminal justice system for the purpose of tracking
parolees. Future implementations of the technology include consumer and military
applications.

         Pursuant to the agreement, Integral invested an aggregate of
$1,250,000, which currently represents a 20.3309% equity interest in CDR.

              INVESTMENT AGREEMENT WITH SWARTZ PRIVATE EQUITY, LLC

         On May 11, 2000, the Company entered into an Investment Agreement and a
Registration Rights Agreement with Swartz Private Equity, LLC ("Swartz").
Pursuant to the terms of the Investment Agreement, the Company may, in its sole
discretion and subject to certain restrictions, periodically sell ("Put") shares
of its common stock for up to $25,000,000 to Swartz, beginning on the effective
registration of such Put shares and continuing for a period of thirty-six (36)
months thereafter. The Investment Agreement allows the Company to choose to sell
common stock to Swartz at times which it decides is advantageous. The Investment
Agreement is not a debt instrument. Any Put exercised by the Company is a sale
of common stock and not a loan.


                                       5
<PAGE>


PUT RIGHTS. An advance put notice must be delivered to Swartz at least ten
business days prior to the date that the Company intends to sell the common
stock to Swartz. The advance put notice must state the put date as well as the
number of shares of common stock that the Company intends to put to Swartz. At
the Company's option, the notice may also state a minimum purchase price per
share which cannot be greater than 80% of the closing bid price of its common
stock on the date of the advance put notice.

         After the registration statement is declared effective, the number of
shares of common stock sold to Swartz in a put may not exceed the lesser of (i)
the maximum put amount set forth in the Company's Advance Put Notice; (ii)
$2,000,000 worth of common stock; (iii) 15% of the aggregate reported trading
volume of the Company's common stock, excluding block trades of 20,000 or more
shares of its common stock, during the 20 business days after the date of the
Company's put notice, excluding any trading days in which the common stock
trades below a minimum price, if any, that the Company specifies in its put
notice; (iv) 15% of the aggregate daily reported trading volume of the Company's
common stock, excluding block trades of 20,000 or more shares of its common
stock, during the 20 business days before the put date; or (v) a number of
shares that, when added to the number of shares acquired by Swartz under the
investment agreement during the 31 days preceding the put date, would exceed
9.99% of the Company's total number of shares of common stock outstanding (as
calculated under Section 13(d) of the Securities Exchange Act of 1934).

PUT PRICE. The purchase price for the Put Shares will be equal to the lesser of
the Market Price for such Put minus $.25 or 91% of the Market Price (lowest
closing bid price for the Common Stock on the principal market during the twenty
day pricing period following the date of the Put Notice), but in no event can it
be less than our designated minimum put share price, if any, as set forth in the
Advance Put Notice.

PURCHASE WARRANTS. At the time of each Put, Swartz will be issued a Purchase
Warrant which will give the holder the right to purchase up to ten percent (10%)
of the number of Put shares issued to Swartz in that Put. Each Purchase Warrant
will be exercisable at a price equal to 110% of the Market Price for such put.
Each Purchase Warrant will be immediately exercisable and will terminate on a
date which is five years after the date of issuance. The terms of the Purchase
Warrants allow for a non-cash exercise (so long as the shares underlying the
warrants are not registered pursuant to an effective registration statement).
Each Purchase Warrant contain a reset provision, whereby the exercise price may
be lowered to 110% percent of the five-day average of the Market Price on every
six-month anniversary of the issuance date. The shares underlying the Purchase
Warrants are registered pursuant to the registration statement.

COMMITMENT WARRANTS. In partial consideration of the Investment Agreement, we
issued warrants to Swartz (the "Commitment Warrants") to purchase 495,000 shares
of our Common Stock. The Commitment Warrants are initially exercisable at the
price of $1.306 per share. Each Commitment Warrant is immediately exercisable
and terminates five years after the date of issuance. Each Commitment Warrant
contain a reset provision, whereby the exercise price may be lowered to 110%
percent of the five-day average of the Market Price on every six-month
anniversary of the issuance date. The shares underlying the Commitment Warrants
are registered pursuant to the registration statement.

SHORT SALES. Swartz and its affiliates are prohibited from engaging in short
sales of our Common Stock unless they have received a Put Notice and the amount
of shares involved in a short sale does not exceed the number of shares
specified in the Put Notice.

CANCELLATION OF PUTS. The Company must cancel a particular put if between the
date of the advance put notice and the last day of the pricing period:

o    The Company discovers an undisclosed material fact relevant to a
     shareholder's investment decision;

o    the registration statement registering resales of the Common Shares becomes
     ineffective; or

o    shares are delisted from the then primary exchange.




                                       6
<PAGE>


The pricing period for that Put shall end as of the preceding business day, and
the Put shall remain effective for the shortened pricing period.

NON-USAGE FEE. If the Company has not put a minimum of $1,000,000 in aggregate
Put Dollar Amount during any six month period of time during the term of the
Investment Agreement, the Company will be required to pay Swartz a non-usage fee
equal to the difference of $100,000 minus 10% of the aggregate Put Dollar Amount
of the Put Shares put to Swartz during such six month period. In the event that
the Company delivers a termination notice to Swartz or an automatic termination
occurs, the Company must pay Swartz a termination fee the greater of the
non-usage fee for the applicable period or the difference of $200,000 minus 10%
of the aggregate Put Dollar Amount of the Put Shares put to Swartz during all
Puts to such date. The non-usage fee for the period prior to August 3, 2001 has
been waived by Swartz.

SHAREHOLDER APPROVAL. The Company may issue more than 20% of our outstanding
shares. If the Company becomes listed on the Nasdaq Small Cap Market or Nasdaq
National Market, then it must get shareholder approval to issue more than 20% of
its outstanding shares. Since the Company is currently a bulletin board company,
it does not need shareholder approval.

TERMINATION OF INVESTMENT AGREEMENT. The Company may also terminate its right to
initiate further puts or terminate the Investment Agreement by providing Swartz
with notice of such intention to terminate; however, any such termination will
not affect any other rights or obligations the Company has concerning the
Investment Agreement or any related agreement.

RESTRICTIVE COVENANTS. During the term of the Investment Agreement and for a
period of six months thereafter, the Company is prohibited from certain
transactions. These include the issuance of any equity securities in a private
transaction, or any debt in a private transaction which are convertible or
exercisable into shares of Common Stock at a price based on the trading price of
the Common Stock. The Company is also prohibited from entering into any private
equity line type agreements similar to the Investment Agreement without
obtaining Swartz's prior written approval.

RIGHT OF FIRST REFUSAL. Swartz has a right of first refusal to purchase equity
securities offered by the Company in a private transaction or any debt
securities in a private transaction which closes on or prior to six (6) months
after the termination of the Investment Agreement.

SWARTZ'S RIGHT OF INDEMNIFICATION. The Company is obligated to indemnify Swartz
(including their stockholders, officers, directors, employees and agents) from
all liability and losses resulting from any misrepresentations or breaches the
Company made in connection with the Investment Agreement, its Registration
Rights Agreement and other related agreements or the registration statement.

         As required under the Registration Rights Agreement with Swartz, in
July 2000, the Company filed a registration statement to register for resale
shares of its common stock by Swartz and certain other selling shareholders who
had similar registration rights. This registration statement was declared
effective by the U.S. Securities and Exchange Commission on August 9, 2000.


ITEM 2.  DESCRIPTION OF PROPERTY.

         Neither the Company nor its subsidiaries own any real property. The
Company and its subsidiaries lease office space in Vancouver, B.C., Canada, and
Bellingham, Washington.


ITEM 3.  LEGAL PROCEEDINGS.

A.       On September 24, 2001, by Court Order dated September 24, 2001, the
U.S. District Court Judge adopted the recommendation of the Magistrate Judge and
dismissed with prejudice the case filed by IAS Communications, Inc. against the
Company and its subsidiaries. The Magistrate's recommendation was made after IAS
failed to appear at prior court hearings and failed to




                                       7
<PAGE>


provide information ordered to be produced, which prompted the Magistrate Judge
to order IAS to pay certain costs and attorneys' fees to the Company.
Accordingly, no further claims exist in the litigation, and IAS is precluded
from pursuing its claims.

         IAS had filed the lawsuit against Integral, NextAntennas.com, Inc. (now
"Antek Wireless, Inc."), Emergent Technologies Corporation and Jack Parsons in
May 2000 in the United States District Court for the Northern District of West
Virginia, alleging damages for claims relating primarily to license rights to
the contrawound toroidal helical antenna technology.

B.       Possible claim: a dispute exists between WVU and Integral with respect
to the development work performed by WVU on the Plasma Ignition System and
Counterfeit Detection Technology. The dispute in the amount of $354,244 relates
to the following:

o    WVU advised Integral that development work had been halted as of August 1,
     1997, but continued to bill Integral for $127,442 in costs for the period
     August 1, 1997 to December 31, 1999;

o    WVU billed Integral $226,802 for equipment related to the development work
     done for Integral. WVU claims that it is entitled to retain ownership of
     the equipment while Integral believes that title to the equipment should be
     transferred to Integral if Integral is to pay for the equipment; and

o    To date Integral has paid $398,434 for development work to WVU, but WVU has
     failed to deliver required prototypes.

         Included in current liabilities is the amount of $397,296 alleged to be
owing to WVU for the development of the Plasma Ignition System and the
Counterfeit Detection Technology. For the reasons described above, it is the
opinion of management of Integral that the balance owing to West Virginia
University as reflected in these financial statements of $397,296 should be
reduced by at least $354,244 (the amount in dispute), to an amount no greater
than $43,052.

         No lawsuit has been filed, and Integral is engaged in negotiations with
WVU. Integral intends to continue its efforts to resolve this matter without
resorting to litigation unless necessary.

C.       Arbitration: On August 9, 2000, the Company filed a Petition for Order
to Compel Arbitration against Joffre Rolland in the District Court of Clark
County, State of Nevada. The purpose of the Petition for Order to Compel
Arbitration was to require Joffre Rolland, a former employee, to arbitrate
employment issues that had arisen under contracts he had entered into with the
Company. On November 3, 2000, the Nevada State Court ordered Joffre Rolland to
arbitrate the dispute in the State of Nevada. Instead of arbitrating as required
by the Nevada State Court Order, Joffre Rolland and Robin Rolland (the
"Rollands") filed suit against the Company and Emergent Technologies in October
2000 in the Circuit Court of Harrison County, West Virginia. The Rollands'
Complaint alleges that the Rollands suffered damages due to the breach of two
employment contracts. The Company has denied the allegations and maintains that
the lawsuit is improper because (1) it violates the Nevada State Court Order
requiring arbitration; and (2) it violates the employment contracts, which
require the parties to arbitrate any dispute. The Company filed a petition in
the U.S. District Court, District of Nevada, for an order compelling
arbitration. On June 6, 2001, the U.S. District Court in Nevada order the
dispute between the parties be arbitrated in Nevada, and that the action pending
before the West Virginia State Court be stayed pending completion of the
arbitration. The parties are beginning the process of arbitration.


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

         No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended June 30, 2001.




                                       8
<PAGE>


                                     PART II

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

(a)      Market Information

         There is a limited public market for the common stock of the Company.
The Company's common stock is quoted on the NASD OTC Bulletin Board under the
symbol "ITKG."

         The following table sets forth the range of high and low bid quotations
for the Company's common stock on the OTC Bulletin Board for each quarter of the
fiscal years ended June 30, 2000 and 2001.

<TABLE>
<CAPTION>

                  Quarter Ended                       Low Bid          High Bid
                  -------------                       -------          --------
                  <S>                                 <C>              <C>
                  September 30, 1999                  $0.234            $0.438
                  December 31, 1999                   $0.34             $1.47
                  March 31, 2000                      $0.687            $8.25
                  June 30, 2000                       $1.50             $5.50

                  September 30, 2000                  $1.25             $2.593
                  December 31, 2000                   $0.296            $1.812
                  March 31, 2001                      $0.359            $1.48
                  June 30, 2001                       $0.406            $0.60
</TABLE>

         The source of this information is the OTC Bulletin Board and other
quotation services. The quotations reflect inter-dealer prices, without retail
markup, markdown or commission and may not represent actual transactions.

(b)      Holders

         As of September 28, 2001 there were approximately 126 holders of record
of the Company's common stock (this number does not include beneficial owners
who hold shares at broker/dealers in "street-name").

(c)      Dividends

         To date, the Company has not paid any dividends on its common stock and
does not expect to declare or pay any dividends on such common stock in the
foreseeable future. Payment of any dividends will be dependent upon future
earnings, if any, the financial condition of the Company, and other factors as
deemed relevant by the Company's Board of Directors.

(d)      Recent Sales of Unregistered Securities

         Set forth below is information regarding the issuance and sales of
securities of the Company without registration within the past three fiscal
years.

         (a) In August 1998, the Company issued 50,000 shares of its common
         stock to one person who was not an affiliate of the Company for
         consulting services rendered to the Company and valued at $10,000. This
         transaction did not involve any public offering, no sales commissions
         were paid, and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes this transaction was exempt
         from registration pursuant to Section 4(2) of the Securities Act.

         (b) In November 1998, the Company issued 200,000 shares to two persons
         who were not affiliates of the Company as compensation for services
         rendered, valued at $39,000. This transaction did not involve any
         public offering and the offering was conducted in accordance with
         Regulation D of the Securities Act of 1933, as amended. No sales
         commissions were paid. The Company believes that this transaction was
         exempt from registration under Section 504 of Regulation D.



                                       9
<PAGE>


         (c) In December 1998, the Company sold 200,000 shares to one person who
         was not an affiliate of the Company for $50,000 cash. This transaction
         did not involve any public offering and the offering was conducted in
         accordance with Regulation D of the Securities Act of 1933, as amended.
         No sales commissions were paid. The Company believes that this
         transaction was exempt from registration under Section 504 of
         Regulation D.

         (d) In January 1999, the Company issued and sold 1,683,788 shares of
         common stock to one person in consideration of a $250,000 promissory
         note. The promissory note was fully-secured, paid interest at the rate
         of 6% per annum, and was due in two years. By December 1999, the note
         had been pre-paid in full. This transaction did not involve any public
         offering and the offering was conducted in accordance with Regulation D
         of the Securities Act of 1933, as amended. No sales commissions were
         paid. The Company believes that this transaction was exempt from
         registration under Section 504 of Regulation D.

         (e) Between January 1999 and March 1999, the Company issued and sold
         Convertible Debentures totaling $600,000. A management fee of 6%
         ($36,000) was paid in connection with the sale of the Debentures. By
         July of 1999, the Debentures and all accrued interest had been
         converted into 4,316,212 shares of common stock. This transaction did
         not involve any public offering and the offering was conducted in
         accordance with Regulation D of the Securities Act of 1933, as amended.
         The Company believes that this transaction was exempt from registration
         under Section 504 of Regulation D.

         (f) In April 1999, the Company issued a total of 666,666 shares of its
         common stock, 333,333 each to William S. Robinson and William A. Ince
         in consideration of management fees owing in the amount of $50,000 each
         to William S. Robinson and William A. Ince. Messrs. Robinson and Ince
         are officers and directors of the Company and are therefore considered
         accredited investors under applicable securities laws. This transaction
         did not involve any public offering, no sales commissions were paid,
         and a restrictive legend was placed on each certificate evidencing the
         shares. The Company believes this transaction was exempt from
         registration pursuant to Section 4(2) of the Securities Act.

         (g) In April 1999, the Company issued a total of 150,000 shares of its
         common stock, valued at $15,000, jointly to two persons who were not
         affiliates of the Company in settlement of a litigation matter. This
         transaction did not involve any public offering, no sales commissions
         were paid and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes this transaction was exempt
         from registration pursuant to Section 4(2) of the Securities Act.

         (h) In May 1999, the Company issued a total of 445,000 shares of its
         common stock to members of its employee benefit and consulting services
         plan who exercised, in April, their options which were previously
         granted under the plan. The exercise price of the issued shares was
         between $.15 and $.25 per share and each person paid the exercise price
         in cash of an aggregate amount of $80,500. This transaction did not
         involve any public offering, the securities were issued under a Plan
         structured in compliance with Rule 701 of the Securities Act, no sales
         commissions were paid and a restrictive legend was placed on each
         certificate evidencing the shares. The Company believes that
         transaction was exempt from registration pursuant to Rule 701 of the
         Securities Act.

         (i) In July 1999, the Company issued 50,000 shares of its common stock
         to one person for consulting services rendered to the Company which
         were valued at $12,500. This transaction did not involve any public
         offering, no sales commissions were paid and a restrictive legend was
         placed on each certificate evidencing the shares. The Company believes
         this transaction was exempt from registration pursuant to Section 4(2)
         of the Securities Act.

         (j) In September 1999, the Company issued an aggregate 654,401 shares
         of its Series A Convertible Preferred Stock ("Series A Stock") to its
         officers and directors. William S. Robinson received 175,000 shares of
         Series A Stock in lieu of $175,000 in accrued salaries through
         September 30, 1999 and 267,197 shares of Series A Stock as repayment of
         $267,197 in loans made to the Company. William A. Ince received 175,000
         shares of Series A Stock in lieu of $175,000 in accrued salaries
         through September 30,




                                       10
<PAGE>


         1999 and 47,213 shares of Series A Stock in repayment of $47,213 in
         loans made to the Company. Messrs. Robinson and Ince as officers and
         directors of the Company are therefore considered accredited investors
         under applicable securities laws. This transaction did not involve any
         public offering, no sales commissions were paid and a restrictive
         legend was placed on each certificate evidencing the shares. The
         Company believes this transaction was exempt from registration pursuant
         to Section 4(2) of the Securities Act.

         (k) In November 1999, the Company issued a total of 405,000 shares of
         its common stock to members of its employee benefit and consulting
         services plan who exercised, in July and September 1999, their options
         previously granted under the plan. The exercise price of the issued
         shares ranged between $.15 and $.20 per share. One person paid the
         exercise price in the form of services rendered which was valued at
         $11,250 and the other persons paid the exercise price in cash in an
         aggregate amount of $65,750. This transaction did not involve any
         public offering, the securities were issued under a plan structured in
         compliance with Rule 701 of the Securities Act, no sales commissions
         were paid and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes that the transaction was
         exempt from registration pursuant to Rule 701 of the Securities Act.

         (l) In February 2000, the Company issued 50,000 shares of its common
         stock pursuant to its employee benefit and consulting services plan to
         one person. The exercise price of the issued shares was $.15 per share
         and the exercise price was paid in cash. The transaction did not
         involve any public offering, the securities were issued under a plan
         structured in compliance with Rule 701 of the Securities Act, no sales
         commissions were paid and a restrictive legend was placed on each
         certificate evidencing the shares. The Company believes that the
         transaction was exempt from registration pursuant to Rule 701 of the
         Securities Act.

         (m) In February 2000, the Company issued 200,000 shares of its common
         stock pursuant to its employee benefit and consulting services plan to
         one person. The exercise price of the issued shares was $.20 per share
         and the exercise price was paid in cash. The transaction did not
         involve any public offering, the securities were issued under a plan
         structured in compliance with Rule 701 of the Securities Act, no sales
         commissions were paid and a restrictive legend was placed on each
         certificate evidencing the shares. The Company believes that the
         transaction was exempt from registration pursuant to Rule 701 of the
         Securities Act.

         (n) In March 2000, the Company issued 87,500 shares of its common stock
         pursuant to its employee benefit and consulting services plan to one
         person. The exercise price of the issued shares was $.23 per share and
         the exercise price was paid in the form of services rendered and valued
         at $20,125. The transaction did not involve any public offering, the
         securities were issued under a plan structured in compliance with Rule
         701 of the Securities Act, no sales commissions were paid and a
         restrictive legend was placed on each certificate evidencing the
         shares. The Company believes that the transaction was exempt from
         registration pursuant to Rule 701 of the Securities Act.

         (o) In March 2000, the Company completed a private placement with 10
         investors and sold 2,650,000 shares of its common stock and warrants in
         order to purchase 1,325,000 shares of its common stock at an exercise
         price of $1.80 per share. Aggregate proceeds were $3,976,325. The
         transaction did not involve any public offering, no sales commissions
         were paid and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes that the transaction was
         exempt from registration pursuant to Section 4(2) and Section 4(6) of
         the Securities Act and/or Rule 506 of Regulation D.

         (p) In April 2000, the Company issued 287,500 shares of its common
         stock pursuant to its employee benefit and consulting services plan to
         one person. The exercise price of the shares ranged between $.15 and
         $.40 per share and the exercise price was paid in the form of services
         rendered and valued at $65,000. The transaction did not involve any
         public offering, the securities were issued under a plan structured in
         compliance with Rule 701 of the Securities Act, no sales commissions
         were paid and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes that the transaction was
         exempt from registration pursuant to Rule 701 of the Securities Act.




                                       11
<PAGE>


         (q) In April 2000, the Company issued 80,000 shares of its common stock
         pursuant to its employee benefit and consulting services plan to one
         person. The exercise price of the shares was $.20 per share and the
         exercise price was paid in cash. The transaction did not involve any
         public offering, the securities were issued under a plan structured in
         compliance with Rule 701 of the Securities Act, no sales commissions
         were paid and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes that the transaction was
         exempt from registration pursuant to Rule 701 of the Securities Act.

         (r) In May 2000, the Company entered into an Investment Agreement and a
         Registration Rights Agreement with Swartz Private Equity, LLC
         ("Swartz"). Pursuant to the terms of the Investment Agreement, the
         Company may, in its sole discretion and subject to certain
         restrictions, periodically sell shares of common stock to Swartz for up
         to $25,000,000. The Company believes that the transaction was exempt
         from registration pursuant to Section 4(2) of the Securities Act and/or
         Rule 506 of Regulation D.

         (s) In June 2000, the Company issued 135,000 shares pursuant to its
         employee benefit and consulting services plan to two individuals in
         consideration for two one year promissory notes bearing an 8% interest
         rate. The exercise price was $.20 per share. One promissory note is in
         the amount of $20,000 and the other is in the amount of $7,500. These
         transactions did not involve any public offering, the securities were
         issued under a plan structured in compliance with Rule 701 of the
         Securities Act, no sales commissions were paid and a restrictive legend
         was placed on each certificate evidencing the shares. The Company
         believes that transactions were exempt from registration pursuant to
         Rule 701 of the Securities Act.

         (t) On December 28, 2000, the Company issued 20,000 shares of its
         common stock to one person upon exercise of options pursuant to the
         Employee Benefit and Consulting Services Compensation Plan. The Company
         issued the shares in consideration for the payment of $3,000. This
         transaction did not involve any public offering, the securities were
         issued under a plan structured in compliance with Rule 701 of the
         Securities Act, no sales commissions were paid, and a restrictive
         legend was placed on each certificate evidencing the shares. The
         Company believes that the transaction was exempt from registration
         pursuant to Rule 701 of the Securities Act.

         (u) In January 2001, the Company issued an aggregate of 517,000 shares
         of its common stock to six persons upon exercise of options pursuant to
         the Employee Benefit and Consulting Services Compensation Plan. The
         options had various exercise prices, ranging from $0.15 to $1.16 per
         share. The Company issued the shares in consideration for an aggregate
         of $91,500. These transactions did not involve any public offering, the
         securities were issued under a plan structured in compliance with Rule
         701 of the Securities Act, no sales commissions were paid, and a
         restrictive legend was placed on each certificate evidencing the
         shares. The Company believes that each transaction was exempt from
         registration pursuant to Rule 701 of the Securities Act.

         (v) In April 2001, Integral issued 100,000 shares of its common stock
         to one person upon exercise of options pursuant to the Employee Benefit
         and Consulting Services Compensation Plan. The exercise price of the
         shares was $.40 per share, and the exercise price was paid in the form
         of services rendered (valued at $40,000). The transaction did not
         involve any public offering, the securities were issued under a plan
         structured in compliance with Rule 701 of the Securities Act, no sales
         commissions were paid, and a restrictive legend was placed on each
         certificate evidencing the shares. Integral believes that the
         transaction was exempt from registration pursuant to Rule 701 of the
         Securities Act.

         (w) In August 2001, the Company issued an aggregate of 858,500 shares
         of its common stock to 3 persons (including two officers) upon exercise
         of options pursuant to the Employee Benefit and Consulting Services
         Compensation Plan. The options had various exercise prices, ranging
         from $0.15 to $.33 per share. The Company issued the shares in
         consideration for an aggregate of $52,305 in cash and $124,200 in lieu
         of accrued salaries payable. These transactions did not involve any
         public offering, the securities were issued under a plan structured in
         compliance with Rule 701 of the Securities Act, no sales commissions
         were paid, and a restrictive legend was placed on each certificate
         evidencing the shares. The Company believes that each transaction was
         exempt from registration pursuant to Rule 701 of the Securities Act.



                                       12
<PAGE>


         (x) In September 2001, the Company issued an aggregate of 325,000
         shares to eight persons pursuant to the exercise of warrants previously
         issued in connection with a private placement in March 2000, for
         aggregate proceeds of $130,000. In August 2001, the exercise price of
         the warrants had been temporarily reduced from $1.80 to $.40 per share
         through September 2001. The transaction did not involve any public
         offering, no sales commissions were paid and a restrictive legend was
         placed on each certificate evidencing the shares. The Company believes
         that the transaction was exempt from registration pursuant to Section
         4(2) and Section 4(6) of the Securities Act and/or Rule 506 of
         Regulation D.


ITEM 6.  MANAGEMENT'S PLAN OF OPERATION.

         To date the Company has recorded nominal revenues from operations. The
Company is still considered a development stage company for accounting purposes.
From inception on February 12, 1996 through June 30, 2001, the Company has
accrued an accumulated deficit of approximately $9.2 million.

         For the fiscal year ended June 30, 2001, the Company incurred a
one-time write-down of approximately $1.4 million, which represents all
previously capitalized costs associated with the acquisition of a controlling
interest in its subsidiary, Emergent Technologies Corp., and its rights to the
Contrawound Toriodal Helical Antenna technology. This write-down was required
under applicable generally accepted accounting principals because the Company
does not intend to further develop or market this technology in the foreseeable
future.

         As a result of the commercial interest in the antenna products of the
company's subsidiary, Antek Wireless, Inc., the Company presently intends to
focus substantially all of its resources on the commercialization and sales of
the Antek antenna products. As a result, the Company does not anticipate
devoting any of its resources on the research, development and commercialization
of its other technologies during the next twelve months.

         The Company's ability to fully-implement its plan of operation over the
past 16 months was disrupted due to the burden of defending the lawsuit filed
against the Company by IAS Communications, Inc. in May 2000. The lawsuit was
dismissed with prejudice in September 2001, which means that the litigation has
ended and IAS is precluded from pursuing its claims.

         The Company expects to now be able to focus on its marketing efforts
through to the end of calendar 2002 on several wireless market segments through
its wholly-owned subsidiary, Antek Wireless, Inc. The primary wireless segment
that the Company will focus on will be mobile asset tracking, facilitated
through the Orbcomm LLC constellation of 35 low-earth orbit ("LEO") satellites.
Potential customers include trucking companies, railway operators and boat/ship
owners. Marketing efforts will also be focused on the wireless office ("local
area network" or "LAN"), cellular and global positioning system ("GPS") markets
utilizing the Company's new line of flat panel antennas.

         The Company anticipates spending approximately $250,000 over the next
twelve months on ongoing research and development of the different applications
and uses Antek antenna products.

         The Company is not in the manufacturing business and does not expect to
make any capital purchases of a manufacturing plant or significant equipment in
the next twelve months. The Company will be relying on contract manufacturers to
produce the antenna products.

         In April 2000, Antek opened a sales and operations facility in San
Jose, California. In June 2001, the Company determined that these functions
could be handled from the Bellingham, Washington office and the facility was
closed. As a result, the Company has reduced its monthly operating costs by
approximately $80,000 through the elimination of the San Jose facility.

         During the next twelve months, the Company's subsidiary, Antek,
anticipates increasing its staff by approximately two to four people in order to
further enhance its management team.




                                       13
<PAGE>


         To date, the Company has relied on loans from management and
management's ability to raise capital through debt and equity private placement
financings to fund its operations. During the past two fiscal years, the Company
completed the following financing transactions:

         1. In March 2000, the Company completed a private placement of common
stock and common stock purchase warrants which resulted in aggregate cash
proceeds to the Company of nearly $4 million.

         2. In May 2000, the Company entered into an Investment Agreement with
Swartz Private Equity, LLC ("Swartz"). Pursuant to the terms of the Investment
Agreement, the Company may, in its sole discretion and subject to certain
restrictions, periodically sell ("Put") shares of common stock to Swartz for up
to $25,000,000. Pursuant to the terms of the Investment Agreement, the Put share
price will be determined and paid to the Company twenty business days after the
date of the Put. The terms of the Investment Agreement are more fully described
in Item 1 (Description of Business) under the subsection entitled "Investment
Agreement with Swartz Private Equity, LLC." The Company received net proceeds of
$102,356 from a Put of 81,885 shares to Swartz during the fiscal year ended June
30, 2001.

         The Company does not currently have adequate funds available to fund
its operations over the next twelve months. If the Company does not earn
adequate revenues to sufficiently fund operations during this time period, the
Company will attempt to raise capital through the sale of its securities
pursuant to the Investment Agreement with Swartz. There can be no assurance,
however, that market conditions will permit the Company to raise sufficient
funds pursuant to the Investment Agreement with Swartz or that additional
financing will be available when needed or on terms acceptable to the Company.


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The information required by Item 7 and an index thereto commences on
the index to the financial statements, which page follows this page.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.




                                       14
<PAGE>
         INTEGRAL TECHNOLOGIES, INC.
         (A DEVELOPMENT STAGE COMPANY)

         CONSOLIDATED FINANCIAL STATEMENTS
         JUNE 30, 2001 AND 2000
         (U.S. DOLLARS)






<Table>
<Caption>
         INDEX                                                            PAGE
         -----                                                            ----
<S>                                                                 <C>
         REPORT OF INDEPENDENT ACCOUNTANTS                                 F-1

         FINANCIAL STATEMENTS

         Consolidated Balance Sheets                                       F-2

         Consolidated Statements of Operations                             F-3

         Consolidated Statements of Stockholders' Equity             F-4 - F-6

         Consolidated Statements of Cash Flows                             F-7

         Notes to Consolidated Financial Statements                 F-8 - F-23
</Table>



<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS


TO THE DIRECTORS AND STOCKHOLDERS OF
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)

We have audited the accompanying consolidated balance sheets of Integral
Technologies, Inc. (A Development Stage Company) as of June 30, 2001 and 2000
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the years ended June 30, 2001, 2000 and 1999 and the
cumulative totals for the development stage of operations from February 12, 1996
(inception) through June 30, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The financial
statements of Integral Technologies Inc. from February 12, 1996 (inception)
through June 30, 1996 were audited by other auditors whose report dated November
20, 1996, expressed an unqualified opinion on those statements. Our opinion
insofar as it relates to the cumulative totals for development stage operations
from February 12, 1996 (inception) through June 30, 1996, is based solely on the
report of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Company as at June
30, 2001 and 2000 and the consolidated results of its operations and its cash
flows for each of the years ended June 30, 2001, 2000 and 1999 and the
cumulative totals for the development stage of operations from February 12, 1996
(inception) through June 30, 2001 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 2 to the
consolidated financial statements, the Company has minimal capital resources
available and has incurred substantial losses to June 30, 2001. The Company must
obtain additional financing to meet its cash flow requirements. These matters
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plan in regard to these matters is also described in note
2. These financial statements do not include any adjustments that may result
from the outcome of these uncertainties.


"Pannell Kerr Forster"

Chartered Accountants

Vancouver, Canada
September 7, 2001, except as to note 12(b)
  which is as of September 24, 2001


                                                                             F-1
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2001 AND 2000
(U.S. DOLLARS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                                         2001          2000
                                                                      -----------   -----------
<S>                                                                   <C>           <C>
ASSETS

CURRENT
  Cash                                                                $    69,556   $ 2,908,700
  Accounts receivable                                                      27,344        75,641
  Inventory                                                                46,842        25,000
  Prepaid expenses                                                            165         5,395
                                                                      -----------   -----------

TOTAL CURRENT ASSETS                                                      143,907     3,014,736
PROPERTY AND EQUIPMENT (note 5)                                            89,566        41,580
LICENSE AGREEMENTS AND INTANGIBLES
  (notes 1, 4(a), 6 and 12)                                                     0     1,462,781
INVESTMENTS (note 4(b))                                                 1,250,000       300,000
                                                                      -----------   -----------

TOTAL ASSETS                                                          $ 1,483,473   $ 4,819,097
                                                                      ===========   ===========

LIABILITIES

CURRENT
  Accounts payable and accruals (note 9)                              $   746,530   $   372,441
  Due to West Virginia University Research
    (note 12(a))                                                          397,296       397,296
  Customer deposits                                                        13,232        13,232
  Short-term loan                                                               0        45,000
                                                                      -----------   -----------

TOTAL CURRENT LIABILITIES                                               1,157,058       827,969
                                                                      -----------   -----------

CONTINGENCIES (note 12)

STOCKHOLDERS' EQUITY (note 7)

PREFERRED STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
  20,000,000      Shares authorized
     564,410      (2000 - 664,410) Issued and
                      outstanding (note 7(c))                             564,410       664,410
COMMON STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001 PAR VALUE
  50,000,000      Shares authorized
  26,949,062      (2000 - 26,032,062)
                      Issued and outstanding                            8,900,983     8,384,781
PROMISSORY NOTES RECEIVABLE (note 7(g))                                   (58,500)      (58,500)
SHARE SUBSCRIPTIONS                                                        50,000             0
OTHER COMPREHENSIVE INCOME                                                 46,267        46,293
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                       (9,176,745)   (5,045,856)

TOTAL STOCKHOLDERS' EQUITY                                                326,415     3,991,128

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $ 1,483,473   $ 4,819,097
                                                                      ===========   ===========
</Table>


See notes to consolidated financial statements                               F-2
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999 AND PERIOD FROM FEBRUARY 12, 1996
  (INCEPTION) THROUGH JUNE 30, 2001
(U.S. DOLLARS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                                                          PERIOD FROM
                                                                                         FEBRUARY 12,
                                                                                              1996
                                                                                          (INCEPTION)
                                                        YEAR ENDED JUNE 30,                 THROUGH
                                             2001            2000            1999        JUNE 30, 2001
                                         ------------    ------------    ------------    -------------
<S>                                      <C>             <C>             <C>             <C>
REVENUE                                  $     15,209    $    172,417    $          0    $     187,626
COST OF SALES                                   5,360         197,188               0          202,548
                                         ------------    ------------    ------------    -------------

                                                9,849         (24,771)              0          (14,922)
                                         ------------    ------------    ------------    -------------

EXPENSES
  Salaries                                  1,273,094         454,630         280,600        2,242,083
  Legal and accounting                        390,034         217,336         106,051          855,271
  Travel and entertainment                    173,242          86,259          34,085          526,891
  Research and development                    171,756         155,250          64,521        1,235,120
  Consulting                                  151,108         282,426         214,068        1,046,529
  Advertising                                 139,961          24,455           7,615          248,547
  General and administrative                  115,428          94,679          20,656          351,444
  Rent                                         73,578          44,746          18,905          187,678
  Bad debts                                    48,750           2,568               0           51,318
  Telephone                                    45,842          44,468          26,341          194,239
  Interest on beneficial
    conversion feature (note 11)                    0               0         566,456          566,456
  Bank charges and
    interest, net                             (53,971)         13,932          55,760           96,304
  Write-down of license
    and operating assets (note 1)           1,382,046               0               0        1,806,700
  Depreciation and
    amortization                               99,150          91,882           8,963          225,366
                                         ------------    ------------    ------------    -------------
                                            4,010,018       1,512,631       1,404,021        9,633,946
                                         ------------    ------------    ------------    -------------

LOSS BEFORE EXTRAORDINARY ITEM             (4,000,169)     (1,537,402)     (1,404,021)      (9,648,868)
EXTRAORDINARY ITEM
  Cancellation of debt                              0               0               0          602,843
                                         ------------    ------------    ------------    -------------

NET LOSS FOR PERIOD                      $ (4,000,169)   $ (1,537,402)   $ (1,404,021)   $  (9,046,025)
                                         ============    ============    ============    =============

LOSS PER COMMON
  SHARE
  EXTRAORDINARY
  ITEM                                   $      (0.15)   $      (0.07)   $      (0.08)
EXTRAORDINARY ITEM
  PER COMMON SHARE                               0.00            0.00            0.00
                                         ------------    ------------    ------------    -------------
NET LOSS PER
  COMMON SHARE                           $      (0.15)   $      (0.07)   $      (0.08)
                                         ============    ============    ============    =============
WEIGHTED AVERAGE
  NUMBER OF
  COMMON SHARES OUTSTANDING                26,499,533      23,133,541      17,285,785
                                         ============    ============    ============    =============
</Table>

See notes to consolidated financial statements                               F-3
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
PERIOD FROM FEBRUARY 12, 1996 (INCEPTION) THROUGH JUNE 30, 2001
(U.S. DOLLARS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                  COMMON                        PREFERRED
                                                 STOCK AND                      STOCK AND
                                   SHARES         PAID-IN        SHARES OF       PAID-IN
                                  OF COMMON       CAPITAL         PREFERRED      CAPITAL       PROMISSORY
                                    STOCK         IN EXCESS        STOCK        IN EXCESS        NOTES          SHARE
                                    ISSUED         OF PAR          ISSUED         OF PAR       RECEIVABLE    SUBSCRIPTIONS
                                 ------------   ------------    ------------   ------------   ------------   -------------
<S>                              <C>            <C>             <C>            <C>            <C>            <C>
SHARES ISSUED FOR
  Cash                              1,000,000   $     10,000               0   $          0   $          0   $           0
  Property and equipment
    (to officers
    and directors)                  1,500,000         15,000               0              0              0               0
  Services (provided by
    officers and directors)         2,000,000         20,000               0              0              0               0
  Services                          1,500,000         15,000               0              0              0               0
Foreign currency
  translation                               0              0               0              0              0               0
Net loss for year                           0              0               0              0              0               0
                                 ------------   ------------    ------------   ------------   ------------   -------------
BALANCE, JUNE 30, 1996              6,000,000         60,000               0              0              0               0
SHARES ISSUED FOR
  Cash                              5,086,000        865,514               0              0              0               0
  Share issue costs                         0        (48,920)              0              0              0               0
  Services                            564,000         63,036               0              0              0               0
  Acquisition of
    subsidiary                        100,000        275,000               0              0              0               0
Foreign currency
  translation                               0              0               0              0              0               0
Net loss for year                           0              0               0              0              0               0
                                 ------------   ------------    ------------   ------------   ------------   -------------
BALANCE, JUNE 30, 1997             11,750,000      1,214,630               0              0              0               0
SHARES ISSUED FOR
  Cash                                825,396        650,000               0              0              0               0
  Share issue costs                         0        (78,000)              0              0              0               0
Foreign currency
  translation                               0              0               0              0              0               0
Net loss for year                           0              0               0              0              0               0
                                 ------------   ------------    ------------   ------------   ------------   -------------
BALANCE, JUNE 30, 1998             12,575,396   $  1,786,630               0   $          0   $          0   $           0
                                 ------------   ------------    ------------   ------------   ------------   -------------
<Caption>
                                               DEFICIT
                                             ACCUMULATED
                                  OTHER      DURING THE       TOTAL
                              COMPREHENSIVE  DEVELOPMENT  STOCKHOLDERS'
                                  INCOME        STAGE         EQUITY
                              -------------  -----------  -------------
<S>                           <C>            <C>          <C>
SHARES ISSUED FOR
  Cash                        $           0  $         0  $      10,000
  Property and equipment
    (to officers
    and directors)                        0            0         15,000
  Services (provided by
    officers and directors)               0            0         20,000
  Services                                0            0         15,000
Foreign currency
  translation                        (1,226)           0         (1,226)
Net loss for year                         0     (344,843)      (344,843)
                              -------------  -----------  -------------
BALANCE, JUNE 30, 1996               (1,226)    (344,843)      (286,069)
SHARES ISSUED FOR
  Cash                                    0            0        865,514
  Share issue costs                       0            0        (48,920)
  Services                                0            0         63,036
  Acquisition of
    subsidiary                            0            0        275,000
Foreign currency
  translation                        12,601            0         12,601
Net loss for year                         0     (822,217)      (822,217)
                              -------------  -----------  -------------
BALANCE, JUNE 30, 1997               11,375   (1,167,060)        58,945
SHARES ISSUED FOR
  Cash                                    0            0        650,000
  Share issue costs                       0            0        (78,000)
Foreign currency
  translation                        24,860            0         24,860
Net loss for year                         0     (937,373)      (937,373)
                              -------------  -----------  -------------
BALANCE, JUNE 30, 1998        $      36,235  $(2,104,433) $    (281,568)
                              -------------  -----------  -------------
</Table>

See notes to consolidated financial statements                               F-4
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
PERIOD FROM FEBRUARY 12, 1996 (INCEPTION) THROUGH JUNE 30, 2001
(U.S. DOLLARS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                       COMMON                      PREFERRED
                                                      STOCK AND                   STOCK AND
                                        SHARES OF      PAID-IN       SHARES OF     PAID-IN
                                         COMMON        CAPITAL       PREFERRED     CAPITAL      PROMISSORY
                                         STOCK        IN EXCESS        STOCK       IN EXCESS       NOTES           SHARE
                                         ISSUED        OF PAR          ISSUED       OF PAR      RECEIVABLE     SUBSCRIPTIONS
                                       -----------   -----------    -----------   -----------   -----------    -------------
<S>                                    <C>           <C>            <C>           <C>           <C>            <C>
BALANCE, JUNE 30, 1998                  12,575,396   $ 1,786,630              0   $         0   $         0    $           0
SHARES ISSUED FOR
  Cash                                     200,000        50,000              0             0             0                0
  Exercise of stock options                445,000        80,500              0             0             0                0
  Promissory note                        1,683,789       252,568              0             0      (284,068)               0
  Settlement of lawsuit                    150,000        15,000              0             0             0                0
  Services (provided by
    officers and directors)                666,666       100,000              0             0             0                0
  Share issue costs                              0      (100,500)             0             0             0                0
  Services                                 250,000        50,000              0             0             0                0
  Conversion of convertible
    debentures                           3,869,120       525,813              0             0             0                0
  Acquisition of subsidiary              1,800,000       619,200              0             0             0                0
  Held in escrow                           447,091             0              0             0             0                0
  Stock option benefit                           0        70,600              0             0             0                0
  Beneficial conversion feature                  0       566,456              0             0             0                0
Foreign currency translation                     0             0              0             0             0                0
Net loss for year                                0             0              0             0             0                0
                                       -----------   -----------    -----------   -----------   -----------    -------------
BALANCE JUNE 30, 1999                   22,087,062     4,016,267              0             0      (284,068)               0
SHARES ISSUED FOR
  Cash on private placement              2,650,000     3,975,000              0             0             0                0
  Exercise of options                    1,245,000       256,700              0             0             0                0
  Release from escrow                            0        75,558              0             0             0                0
  Services                                  50,000        13,000              0             0             0                0
On settlement of debt                            0             0        664,410       664,410             0                0
Stock option benefit                             0        48,256              0             0             0                0
Promissory note repayment                        0             0              0             0       225,568                0
Foreign currency translation                     0             0              0             0             0                0
Net loss for year                                0             0              0             0             0                0
                                       -----------   -----------    -----------   -----------   -----------    -------------

BALANCE, JUNE 30, 2000                  26,032,062   $ 8,384,781        664,410   $   664,410   $   (58,500)   $           0
                                       -----------   -----------    -----------   -----------   -----------    -------------
<Caption>
                                                        DEFICIT
                                                       ACCUMULATED
                                           OTHER       DURING THE        TOTAL
                                       COMPREHENSIVE   DEVELOPMENT    STOCKHOLDERS'
                                           INCOME         STAGE          EQUITY
                                       -------------   -----------    -------------
<S>                                    <C>             <C>            <C>
BALANCE, JUNE 30, 1998                 $      36,235   $(2,104,433)   $    (281,568)
SHARES ISSUED FOR
  Cash                                             0             0           50,000
  Exercise of stock options                        0             0           80,500
  Promissory note                                  0             0          (31,500)
  Settlement of lawsuit                            0             0           15,000
  Services (provided by
    officers and directors)                        0             0          100,000
  Share issue costs                                0             0         (100,500)
  Services                                         0             0           50,000
  Conversion of convertible
    debentures                                     0             0          525,813
  Acquisition of subsidiary                        0             0          619,200
  Held in escrow                                   0             0                0
  Stock option benefit                             0             0           70,600
  Beneficial conversion feature                    0             0          566,456
Foreign currency translation                   8,444             0            8,444
Net loss for year                                  0    (1,404,021)      (1,404,021)
                                       -------------   -----------    -------------
BALANCE JUNE 30, 1999                         44,679    (3,508,454)         268,424
SHARES ISSUED FOR
  Cash on private placement                        0             0        3,975,000
  Exercise of options                              0             0          256,700
  Release from escrow                              0             0           75,558
  Services                                         0             0           13,000
On settlement of debt                              0             0          664,410
Stock option benefit                               0             0           48,256
Promissory note repayment                          0             0          225,568
Foreign currency translation                   1,614             0            1,614
Net loss for year                                  0    (1,537,402)      (1,537,402)
                                       -------------   -----------    -------------

BALANCE, JUNE 30, 2000                 $      46,293   $(5,045,856)   $   3,991,128
                                       -------------   -----------    -------------
</Table>

See notes to consolidated financial statements                               F-5
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
PERIOD FROM FEBRUARY 12, 1996 (INCEPTION) THROUGH JUNE 30, 2001
(U.S. DOLLARS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                       COMMON                      PREFERRED
                                                      STOCK AND                   STOCK AND
                                        SHARES OF      PAID-IN       SHARES OF     PAID-IN
                                         COMMON        CAPITAL       PREFERRED     CAPITAL      PROMISSORY
                                         STOCK        IN EXCESS        STOCK       IN EXCESS       NOTES           SHARE
                                         ISSUED        OF PAR          ISSUED       OF PAR      RECEIVABLE     SUBSCRIPTIONS
                                       -----------   -----------    -----------   -----------   -----------    -------------
<S>                                    <C>           <C>            <C>           <C>           <C>            <C>
BALANCE, JUNE 30, 2000                  26,032,062   $ 8,384,781        664,410   $   664,410   $   (58,500)   $           0
SHARES ISSUED FOR
  Private placement                         81,885       112,480              0             0             0                0
  Exercise of options                      517,000        91,515              0             0             0                0
  For services                             100,000        40,000              0             0             0                0
  Held in escrow
    (note 7(b))                            218,115             0              0             0             0                0
Stock option benefit                             0       272,207              0             0             0                0
Dividends on preferred
  shares                                         0             0              0             0             0                0
Share subscriptions                              0             0              0             0             0           50,000
Redeemed shares                                  0             0       (100,000)     (100,000)            0                0
Foreign currency
  translation                                    0             0              0             0             0                0
Net loss for the period                          0             0              0             0             0                0
                                       -----------   -----------    -----------   -----------   -----------    -------------
BALANCE, JUNE 30, 2001                  26,949,062   $ 8,900,983        564,410   $   564,410   $   (58,500)   $      50,000
                                       ===========   ===========    ===========   ===========   ===========    =============
<Caption>
                                                  DEFICIT
                                                 ACCUMULATED
                                    OTHER        DURING THE          TOTAL
                                COMPREHENSIVE    DEVELOPMENT     STOCKHOLDERS'
                                    INCOME          STAGE            EQUITY
                                -------------   -------------    -------------
<S>                             <C>             <C>              <C>
BALANCE, JUNE 30, 2000          $      46,293   $  (5,045,856)   $   3,991,128
SHARES ISSUED FOR
  Private placement                         0               0          112,480
  Exercise of options                       0               0           91,515
  For services                              0               0           40,000
  Held in escrow
    (note 7(b))                             0               0                0
Stock option benefit                        0               0          272,207
Dividends on preferred
  shares                                    0         (30,720)         (30,720)
Share subscriptions                         0               0           50,000
Redeemed shares                             0        (100,000)        (200,000)
Foreign currency
  translation                             (26)              0              (26)
Net loss for the period                     0      (4,000,169)      (4,000,169)
                                -------------   -------------    -------------
BALANCE, JUNE 30, 2001          $      46,267   $  (9,176,745)   $     326,415
                                =============   =============    =============
</Table>


See notes to consolidated financial statements                               F-6
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999 AND PERIOD FROM FEBRUARY 12, 1996
  (INCEPTION) THROUGH JUNE 30, 2001
(U.S. DOLLARS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                                                                        PERIOD FROM
                                                                                                      FEBRUARY 12, 1996
                                                                                                         (INCEPTION)
                                                                   YEAR ENDED JUNE 30,                     THROUGH
                                                         2001             2000           1999           JUNE 30, 2001
                                                      ------------    ------------    ------------    -----------------
<S>                                                   <C>             <C>             <C>             <C>
OPERATING ACTIVITIES
  Net loss                                            $ (4,000,169)   $ (1,537,402)   $ (1,404,021)   $      (9,046,025)
  Adjustments to reconcile net loss to
  net cash used by operating activities
    Extraordinary item                                           0               0               0             (602,843)
    Consulting services and financing fees                  55,389         113,683         150,000              417,108
    Depreciation and amortization                           99,150         104,388          13,466              242,375
    Stock option compensation                              272,207          48,256          70,600              391,063
    Interest on beneficial conversion                            0               0         566,456              566,456
    Settlement of lawsuit                                        0               0          15,000               15,000
    Write-down of license and operating assets           1,382,046               0               0            1,806,700
   Changes in non-cash working capital
     Due from affiliated company                                 0               0               0             (116,000)
     Notes and accounts receivable                          48,297         176,926        (284,068)             (58,845)
     Inventory                                             (21,842)        (25,000)              0              (46,842)
     Prepaid expenses                                        5,230          (5,395)              0                 (165)
     Deferred revenue                                            0          13,232               0               13,232
     Other                                                       0               0               0               (2,609)
     Accounts payable and accruals                         143,369         236,171         217,967              924,051
     Due to West Virginia University

     Research Corporation                                        0               0               0              397,296
     Due to affiliated companies                                 0               0               0                    0
     Due to officers and directors                               0               0         (33,229)                   0
NET CASH USED BY OPERATING ACTIVITIES                   (2,016,323)       (875,141)       (687,829)          (5,100,048)
                                                      ------------    ------------    ------------    -----------------
INVESTING ACTIVITIES
  Purchase of property, equipment and
    intangibles assets                                     (66,401)        (22,995)        (33,908)            (200,935)
  Assets acquired and liabilities assumed
    on purchase of subsidiary                                    0               0        (129,474)            (129,474)
  Investment in and advances to affiliated
    companies                                             (950,000)       (300,000)              0           (2,000,000)
  License agreements                                             0               0               0             (124,835)
NET CASH USED BY INVESTING ACTIVITIES                   (1,016,401)       (322,995)       (163,382)          (2,455,244)
                                                      ------------    ------------    ------------    -----------------
FINANCING ACTIVITIES
  Repayment of loan                                        (45,000)              0               0              (45,000)
  Advances from stockholders                                     0               0          79,412            1,078,284
  Repayments to stockholders                                     0               0         (94,046)             (94,046)
  Subscriptions received                                    50,000               0         (25,000)              50,000
  Proceeds from issuance of common stock                   188,606       4,104,575         383,068            6,216,763
  Proceeds from convertible debentures                           0               0         600,000              600,000
  Share issue costs                                              0               0        (100,500)            (227,420)
                                                      ------------    ------------    ------------    -----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                  193,606       4,104,575         842,934            7,578,581
                                                      ------------    ------------    ------------    -----------------
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH                 (26)          1,614           8,444               46,267
                                                      ------------    ------------    ------------    -----------------
INCREASE (DECREASE) IN CASH                             (2,839,144)      2,908,053             167               69,556
CASH, BEGINNING OF PERIOD                                2,908,700             647             480                    0
                                                      ------------    ------------    ------------    -----------------

CASH, END OF PERIOD                                   $     69,556    $  2,908,700    $        647    $          69,556
                                                      ============    ============    ============    =================
</Table>

Supplemental cash flow information (note 8)


See notes to consolidated financial statements                               F-7
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)

--------------------------------------------------------------------------------

1.       INCORPORATION AND NATURE OF OPERATIONS

         The Company was incorporated under the laws of the State of Nevada on
         February 12, 1996 and has its head office in Bellingham, Washington,
         U.S.A. The Company is in the development stage as more fully defined in
         Statement No. 7 of the Financial Accounting Standards Board. The
         Company is in the business of researching, developing and
         commercializing new antenna technologies directly and through its
         wholly-owned subsidiary Antek Wireless, Inc. ("Antek").

         Integral had previously been developing three other technologies which
         it had acquired from West Virginia University, through sub-license
         agreements. During the year ended June 30, 2001, the Company did not
         expend any of its resources on the development of those technologies.

         (a)      Through its subsidiary Emergent Technologies Corp. ("ETC"),
                  Integral had been researching and developing the Contrawound
                  Toroidal Helical Antenna technology, initially developed by
                  West Virginia University.

         (b)      Through another subsidiary, Integral Vision Systems, Inc.
                  ("IVSI"), Integral had been researching and developing the 3D
                  and 2D Color Machine Vision technology, initially developed by
                  West Virginia University.

         (c)      Integral had directly been researching and developing the RF
                  Plasma Injection System technology, initially developed by
                  West Virginia University.

         The Company will be devoting all of its resources to the research,
         development and commercialization of its antenna technologies as
         developed by its wholly-owned subsidiary, Antek. As a consequence, the
         value for the license of the technologies in note 6 above have been
         written off in 2001 for an amount aggregating $1,382,046.

2.       GOING CONCERN

         These consolidated financial statements have been prepared by
         management in accordance with generally accepted accounting principles
         on a going concern basis. This presumes funds will be available to
         finance on-going development, operations and capital expenditures and
         the realization of assets and the payment of liabilities in the normal
         course of operations for the foreseeable future.

         The Company has minimal capital resources presently available to meet
         obligations which normally can be expected to be incurred by similar
         companies and has an accumulated deficit during the development stage
         of $9,176,745 (2000 - $5,045,856). These factors raise substantial
         doubt about the Company's ability to continue as a going concern and is
         dependent on its ability to obtain and maintain an appropriate level of
         financing on a timely basis and to achieve sufficient cash flows to
         cover obligations and expenses. Management is continuously working to
         obtain financing (note 7). The outcome of these matters cannot be
         predicted. These consolidated financial statements do not give effect
         to any adjustments to the amounts and classification of assets and
         liabilities which might be necessary should the Company be unable to
         continue its operations as a going concern.



                                                                             F-8
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)

--------------------------------------------------------------------------------

3.       SIGNIFICANT ACCOUNTING POLICIES

         (a)      Principles of consolidation

                  These financial statements include the accounts of Integral
                  Technologies, Inc. (a development stage company), its
                  wholly-owned subsidiaries, IVSI and Antek and its 76.625%
                  owned subsidiary ETC. All intercompany balances and
                  transactions have been eliminated. Investment in Continental
                  Divide Robotics, Inc. ("CDRI") is accounted for using the cost
                  method since the Company exerts no significant influence.

         (b)      Inventories

                  Inventories are stated at the lower of cost and market. Cost
                  is determined using the first-in-first-out method.

         (c)      Depreciation

                  Depreciation is provided using the straight-line method based
                  on the following estimated useful lives:

<Table>
<S>                                                                 <C>
                           Machinery, furniture and equipment   -   5 Years
                           Computer hardware and software       -   5 Years
                           Molds                                -   5 Years
</Table>

                  The Company reviews long-term assets to determine if the
                  carrying amount is recoverable based on the estimate of future
                  cash flow expected to result from the use of the asset and its
                  eventual disposition. If in this determination there is an
                  apparent shortfall, the loss will be recognized as a current
                  charge to operations.

         (d)      Loss per share

                  Loss per share computations are based on the weighted average
                  number of common shares outstanding during the period. Common
                  share equivalents consisting of stock options and warrants are
                  not considered in the computation because their effect would
                  be anti-dilutive.

         (e)      Stock issued in exchange for services

                  The valuation of the common stock issued in exchange for
                  services is valued at an estimated fair market value as
                  determined by officers and directors of the Company based upon
                  other sales and issuances of the Company's common stock within
                  the same general time period.

                                                                             F-9
<PAGE>



INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------

3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         (f)      Revenue recognition

                  As the Company is continuing development of its technologies,
                  no significant revenues have been earned to date. The Company
                  recognizes revenues at the time of delivery of the product to
                  the customers.

         (g)      Foreign currency translation

                  Amounts recorded in foreign currency are translated into
                  United States dollars as follows:

                  (i)      Monetary assets and liabilities are translated at the
                           rate of exchange in effect at the balance sheet date;
                           and,

                  (ii)     Revenues and expenses, at the average rate of
                           exchange for the year.

                  Gains and losses arising from this translation of foreign
                  currency are excluded from net loss for the period and
                  accumulated as a separate component of stockholders' equity.

         (h)      License agreements and intangibles

                  The Company is in the development stage with respect to the
                  technologies acquired pursuant to the license agreements. At
                  such time as commercial production commences, those costs will
                  be charged to operations using the straight-line method over a
                  20 year period. When there is little prospect of further
                  development of the technology by the Company, the costs of
                  that license agreement will be charged to operations.

         (i)      Research and development

                  Research and development expenditures are charged to
                  operations as incurred.

         (j)      Use of estimates

                  The preparation of financial statements in conformity with
                  accounting principles generally accepted in the United States
                  of America requires management to make estimates and
                  assumptions that affect the reported amounts of assets and
                  liabilities and disclosures of contingent assets and
                  liabilities at the date of the financial statements and the
                  reported amounts of revenues and expenses during the reporting
                  period. Actual results could differ from those estimates and
                  would impact future results of operations and cash flows.

         (k)      Financial instruments

                  The Company's financial instruments include cash, accounts
                  receivable, promissory notes receivable, investments, accounts
                  payable and accruals, due to West Virginia University Research
                  Corporation (note 12(a)), and short-term loan. Unless
                  otherwise noted, in the opinion of management, the carrying
                  value of these financial instruments approximates their fair
                  market values and the Company is not exposed to significant
                  credit, interest or currency risk.


                                                                            F-10
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         (l)      Income taxes

                  The Company uses the asset and liability approach in its
                  method of accounting for income taxes which requires the
                  recognition of deferred tax liabilities and assets for
                  expected future tax consequences of temporary differences
                  between the carrying amounts and the tax basis of assets and
                  liabilities. A valuation allowance against deferred tax assets
                  is recorded if, based upon weighted available evidence, it is
                  more likely than not that some or all of the deferred tax
                  assets will not be realized.

         (m)      Stock based compensation

                  The Company applies APB Opinion No. 25 and related
                  interpretations in accounting for its employee stock option
                  plans. Compensation expense is recorded when options are
                  granted to management at discounts to market.

         (n)      Interest on beneficial conversion

                  The beneficial conversion features relating to the 2%
                  convertible debenture (note 11) and promissory note are
                  accounted for as interest. This policy conforms to the
                  accounting for these transactions announced by the SEC staff
                  in March, 1997.

         (o)      Recent accounting pronouncements

                  (i)      Beginning July 1, 2000 the Company adopted Statement
                           of Financial Accounting Standards ("SFAS") No. 133,
                           "Accounting for Derivative Instruments and Hedging
                           Activities" ("SFAS 133"), and the corresponding
                           amendments under SFAS No. 138, "Accounting for
                           Certain Derivative Instruments and Certain Hedging
                           Activities - an amendment of SFAS No. 133" ("SFAS
                           138"), establishes accounting and reporting standards
                           for derivative instruments. It requires a company to
                           recognize all derivatives as either assets or
                           liabilities in the statement of financial position
                           and to measure those instruments at fair value.
                           Additionally, the fair value adjustments will effect
                           either stockholders' equity or net income depending
                           on whether the derivative instrument qualifies as a
                           hedge for accounting purposes and, if so, the nature
                           of the hedging activity. Adoption of this standard
                           did not change the Company's existing accounting
                           policies or disclosures.

                  (ii)     In December 1999, the SEC issued Staff Accounting
                           Bulletin ("SAB") 101, "Revenue Recognition," which
                           outlines the basic criteria that must be met to
                           recognize revenue and provides guidance for
                           presentation of revenue and for disclosure related to
                           revenue recognition policies in financial statements
                           filed with the SEC. The Company believes the adoption
                           of SAB 101 will not have a material impact on the
                           Company's financial position and results of
                           operations.



                                                                            F-11
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------

3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  (iii)    In March 2000 the Financial Accounting Standards
                           Board issued "Interpretation #44, Accounting for
                           Certain Transactions Involving Stock Compensation".
                           Among other issues, this interpretation clarifies:

                           (a)      The definition of employee for purposes of
                                    applying APB Opinion No. 25.

                           (b)      The criteria for determining whether a plan
                                    qualifies as a noncompensatory plan.

                           (c)      The accounting consequence of various
                                    modifications of the terms of a previously
                                    fixed stock option award, and

                           (d)      The accounting for an exchange of stock
                                    compensation awards in a business
                                    combination.

                           In relation to (c) the interpretation states, "if the
                           exercise price of a fixed stock option award is
                           reduced, the award shall be accounted for as a
                           variable from the date of the modification to the
                           date the award is exercised, is forfeited, or expired
                           unexercised, the exercise price of an option award
                           has been reduced if the fair value of the
                           consideration required to be remitted pursuant to the
                           award's original terms."

                  (iv)     In March 2000, the Emerging Issues Task Force
                           ("EITF") of the FASB reached a consensus on EITF
                           Issue 00-2, "Accounting for Web Site Development
                           Costs." This consensus provides guidance on what
                           types of costs incurred to develop Web sites should
                           be capitalized or expensed. The Company adopted this
                           consensus for the year ended June 30, 2001.

                  (v)      In September 2000, the EITF reached a final consensus
                           on EITF Issue 00-10, "Accounting for Shipping and
                           Handling Fees and Costs." This consensus requires
                           that all amounts billed to a customer in a sale
                           transaction related to shipping and handling, if any,
                           represent revenue and should be classified as
                           revenue. Adoption of this consensus did not change
                           the Company's existing accounting policies or
                           disclosures.

                  (vi)     In July 2001, FASB Issued Financial Accounting
                           Standard No. 142, Goodwill and Other Intangible
                           Assets. This statement includes requirements to test
                           good will and indefinite lived intangible assets for
                           impairment rather than amortization. This statement
                           will be effective for years beginning December 15,
                           2001. Early adoption is permitted for companies with
                           fiscal years beginning after March 15, 2001. The
                           Company will adopt this statement effective July 1,
                           2001. This statement will have minimal impact on the
                           Company's operations.


                                                                            F-12
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


4.       ACQUISITIONS

         (a)      In September 1996, the Company entered into a letter agreement
                  to acquire a 10% interest in ETC (a development stage company)
                  from two related parties of the Company for consideration of
                  $100,000. The Company had an option to acquire the remaining
                  90% interest in ETC by issuing 1,800,000 shares of common
                  stock of the Company and by funding ETC's research and
                  development of the Contrawound Toroidal Helical Antenna for
                  government and military applications to a minimum of
                  $1,200,000 (of which the Company advanced a total of
                  $650,000). The Company issued 1,800,000 shares which at the
                  1998 year-end were held by ETC's attorney in escrow subject to
                  the closing of the final agreement (which was closed March 11,
                  1999). The shares were released from escrow and are recorded
                  in these financial statements at $0.344 per share, the closing
                  market trading price on the NASD market on March 11, 1999. The
                  1,800,000 shares and the $650,000 advanced entitles the
                  Company to a further 70% interest in ETC.

                  During the year ended June 30, 1999, third party investors
                  contributed $470,588 in cash for a 20% interest in ETC. The
                  same investors contributed a further $79,412 which they
                  converted into common stock of ETC during the year ended June
                  30, 2000. This amount was recorded as due to minority interest
                  at June 30, 1999. This transaction diluted the Company's
                  ownership interest in ETC to 76.625%. No gain or loss was
                  recorded on the transaction. Any change resulting from this
                  transaction was recorded as an adjustment to the cost of
                  license.

         (b)      During the year ended June 30, 2000 the Company entered into a
                  stock purchase agreement with CDRI, whereby the Company would
                  acquire a total of 17,610 shares in common stock of CDRI
                  representing a 30% ownership interest. Consideration for this
                  acquisition is as follows:

                  (i)      Upon payment of $500,000 issuance of 8,407 shares. As
                           at June 30, 2000 the Company had paid $300,000.
                           During the year ended June 30, 2001, the Company paid
                           additional $200,000 and obtained the 8,407 shares of
                           CDRI.

                  (ii)     As at June 30, 2001 the Company had paid a total of
                           $1,250,000 shares representing 21% ownership of CDRI.
                           With a 21% ownership interest, the Company does not
                           exert significant influence.

5.       PROPERTY AND EQUIPMENT

<Table>
<Caption>
                                                      2001          2000
                                                   ----------    ----------
<S>                                                <C>           <C>
         Machinery, furniture and equipment        $  148,940    $   79,577
         Computer hardware and software                21,419        21,419
         Mould                                          4,800             0
                                                   ----------    ----------
                                                      175,159       100,996
         Less:  Accumulated depreciation              (85,593)      (59,416)
                                                   ----------    ----------
                                                   $   89,566    $   41,580
                                                   ==========    ==========
</Table>


                                                                            F-13
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


6.       LICENSE AGREEMENTS

         (a)      Toroidal Helical Antenna

                  ETC was formed to develop, commercialize, market and
                  manufacture certain proprietary Toroidal Helical Antenna
                  Technology ("the Technology"). The Company obtained an
                  exclusive sub-license to the technology from Integral
                  Concepts, Inc. ("ICI"), a company 100% controlled by a former
                  shareholder of ETC (note 4(a)), a significant shareholder of
                  the Company, and an employee of West Virginia University
                  Research Corporation ("WVURC") of its right, title and
                  interest in and to all worldwide government and military
                  applications and resulting procurement interests in the
                  Technology. ICI obtained the license to the Technology from
                  WVURC. WVURC has the proprietary interest in and holds the
                  patents to the technology.

                  Pursuant to an agreement dated January 2, 1996 with ICI, ETC
                  acquired the right to manufacture and market the Toroidal
                  Helical Antenna Technology. The Company is obligated to pay a
                  $3,000 minimum annual royalty to WVURC to maintain the license
                  in good standing. In addition, a further 10% royalty of any
                  net revenues is payable to WVURC on behalf of ICI, such
                  royalties to be reduced by the $3,000 minimum annual royalty
                  payment. To date there have been no net revenues.

                  The license is automatically renewed for one year periods each
                  December 31 as long as the required minimum royalty payments
                  described above are paid to WVURC on behalf of ICI.

                  Either party may terminate this agreement upon 90 days written
                  notice. The Company is responsible for the reimbursement of
                  project development costs incurred by WVURC.

                  The Company does not intend to further develop this technology
                  in the foreseeable future. All costs associated with the
                  acquisition of this technology have been written off.

         (b)      Plasma Ignition System

                  Pursuant to an agreement dated February 15, 1996 with ICI, the
                  Company acquired the rights to manufacture and market the
                  Plasma Ignition System, an ignition system for internal
                  combustion engines, for a license fee of $8,251. The Company
                  is obligated to pay a $3,000 minimum annual royalty to WVURC
                  on behalf of ICI to maintain the license in good standing. In
                  addition, a further 10% royalty of any net revenues is payable
                  to WVURC on behalf of ICI and a 1% royalty of any gross
                  revenues is payable to ICI. Such royalties are to be reduced
                  by the $3,000 minimum annual royalty. To date there have been
                  no net revenues.

                  The license is automatically renewed for one year periods each
                  December 31 as long as the required minimum royalty payments
                  described above are paid to WVURC on behalf of ICI.

                  Pursuant to an agreement dated February 9, 1996 with WVURC,
                  the Company is responsible for the reimbursement of project
                  development costs which are incurred by WVURC. To June 30,
                  2001, $445,570 (2000 - $445,570) of project development costs
                  has been paid or is payable to WVURC (note 12). Either party
                  may terminate this agreement upon 90 days written notice.


                                                                            F-14
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


6.       LICENSE AGREEMENTS (Continued)

                  The Company does not intend to further develop this technology
                  in the foreseeable future. All costs associated with the
                  acquisition of this technology have been written off.

         (c)      2D Machine Vision Colorimetry

                  Pursuant to an agreement dated February 9, 1996 with ICI, the
                  Company acquired through IVSI, the right to manufacture and
                  market the 2D Machine Vision Colorimetry, a counterfeit
                  currency determination software. The Company is obligated to
                  pay a $3,000 minimum annual royalty to WVURC to maintain the
                  license in good standing. In addition, a further 10% royalty
                  of any net revenues is payable to WVURC on behalf of ICI, such
                  royalties to be reduced by the $3,000 minimum annual royalty
                  payment. To date there have been no net revenues.

                  The license is automatically renewed for one year periods each
                  December 31 as long as the required minimum royalty payments
                  described above are paid to WVURC on behalf of ICI.

                  Pursuant to an agreement dated February 9, 1996 with WVURC,
                  the Company is responsible for the reimbursement of project
                  development costs incurred by WVURC. To June 30, 2000,
                  $350,151 (1999 - $350,151) of project development costs has
                  been paid or is payable to WVURC (note 12). Either party may
                  terminate this agreement upon 90 days written notice.

                  The Company does not intend to further develop this technology
                  in the foreseeable future. All costs associated with the
                  acquisition of this technology have been written off.

         (d)      3D Machine Vision Colorimetry

                  The Company's subsidiary, IVSI, acquired the right to
                  manufacture and market the 3D Machine Vision Colorimetry, a
                  color quality control software. IVSI is obligated to pay a
                  $3,000 minimum annual royalty to WVURC to maintain the license
                  in good standing. In addition, a further 10% royalty of any
                  net revenues is payable to WVURC on behalf of ICI, such
                  royalties to be reduced by the $3,000 minimum annual royalty
                  payment. To date there have been no net revenues.

                  The license is automatically renewed for one year periods each
                  December 31 as long as the required minimum royalty payments
                  described above are paid to WVURC on behalf of ICI. Either
                  party may terminate this agreement upon 90 days written
                  notice.

                  The operations of IVSI have ceased. The Company does not
                  intend to further develop this technology in the foreseeable
                  future. All costs associated with the acquisition of this
                  technology have been written off.


                                                                            F-15
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


7.       STOCKHOLDERS' EQUITY

         (a)      Common stock

                  During the year ended June 30, 2000, the Company completed a
                  private placement whereby 2,650,000 shares of common stock
                  were issued at a price of $1.50 per share and 1,325,000 share
                  purchase warrants for $0.001 per warrant exercisable into
                  common stock at a price of $1.80 for a period of two years.
                  The warrants may be redeemed by the Company at $0.01 per
                  warrant if the market value of the common stock of the Company
                  trades above $10.00 for 10 consecutive days.

         (b)      During the year ended June 30, 2000, the Company entered into
                  a private placement agreement with Swartz Private Equity, LLC
                  ("Swartz") which calls for periodic purchases over the next
                  three years of up to $25,000,000 of the Company's common
                  stock. Each periodic purchase ("put") will have a purchase
                  price equal to the lesser of the market price minus $0.25, or
                  91% of the market price, but no less than a stated minimum
                  purchase price which cannot be greater than 80% of the market
                  price on that date.

                  Each put cannot exceed:

                  (i)      $2,000,000 worth of common stock;

                  (ii)     15% of the aggregate reported trading volume of the
                           Company's common stock during the 20 business days
                           before and after the date of notice to exercise each
                           put; and,

                  (iii)    a number of shares acquired in a 31 day period would
                           exceed 9.99% of the Company's total number of shares
                           of common stock outstanding at that time.

                  At the time of each put, the Company will issue Swartz a
                  purchase warrant which will give Swartz the right to purchase
                  up to 10% of the number of shares issued in the put, each
                  warrant will be immediately exercisable for a five year period
                  for a price equal to 110% of the market price for such put.

                  Pursuant to this agreement the Company issued 300,000 shares
                  to be held in escrow to exercise a put. Of these, 81,885
                  shares were released on the exercise of the put and 218,115
                  are held in escrow for future put exercises.

                  As partial consideration of the investment agreement the
                  Company issued warrants to Swartz to purchase 495,000 shares
                  of common stock (note 7(e)(ii)).

         (c)      Authorized preferred stock

                  The preferred stock may be issued in one or more series. The
                  distinguishing features of each series including preference,
                  rights and restrictions are to be determined by the Company's
                  Board of Directors upon the establishment of each such series.


                                                                            F-16
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


7.       STOCKHOLDERS' EQUITY (Continued)

                  During the year ended June 30, 2000, the Company designated
                  1,000,000 of its authorized 20,000,000 preferred shares as
                  Series A Convertible Preferred Stock with a par value of
                  $0.001 each and a stated value and liquidation preference of
                  $1.00 per share. Cumulative dividends are accrued at the rate
                  of 5% annually, payable at the option of the Company. The
                  shares may be converted to restricted shares of common stock
                  at the average trading price ten days prior to conversion, and
                  entitled to votes equal to the number of shares of common
                  stock into which each series of preferred stock may be
                  converted. Each Series A Convertible Preferred Stock may be
                  redeemed by the Company for $1.50 each within one year after
                  the date of issue, and for $2.00, $2.50, $3.00 per share and
                  $3.50 in each of the subsequent four years after date of
                  issue.

                  During the year ended June 30, 2000, the Company agreed to
                  settle $383,228 of accounts payable and $281,182 of long-term
                  debt, both amounts owed to officers and directors of the
                  Company, by issuing 664,410 shares of Series A convertible
                  preferred stock at a par value of $0.001 and a stated value of
                  $1.00 per share.

                  During the year ended June 30, 2001 the Company redeemed
                  100,000 preferred shares for $200,000.

         (d)      Stock options

                  Pursuant to the Company's 1996 Incentive Compensation Plan as
                  subsequently amended in 1997, the Company may issue stock
                  options and stock bonuses for common stock of the Company to
                  provide incentives to officers, directors, key employees and
                  other persons who contribute to the success of the Company.

                  In January 2001 the Company adopted a non-qualified stock
                  option plan. "Integral Technologies, Inc. 2001 Stock Plan"
                  (the "2001 Plan") under which the Company may issue up to
                  2,500,000 stock options and stock bonuses of common stock of
                  the Company to provide incentives to officers, directors, key
                  employees and other persons who contribute to the success of
                  the Company.


                                                                            F-17
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


7.       STOCKHOLDERS' EQUITY (Continued)

                  The following table summarizes the Company's stock option
                  activity for the years ended June 30, 2001, 2000 and 1999:

<Table>
<Caption>
                                                                                           Weighted
                                                                       Exercise            Average
                                                       Number            Price             Exercise
                                                     of Shares         Per Share            Price
                                                    ------------    ----------------       --------
<S>                                                 <C>             <C>                    <C>
                  BALANCE JUNE 30, 1998                1,990,000    $ 0.15 to $ 2.00       $   0.24
                    AND 1997
                  Granted during the year
                    June 30,1999                       1,635,000    $ 0.15 to $ 0.25       $   0.17
                  Cancelled                           (1,260,000)        $ 0.15            $   0.15
                  Exercised                             (445,000)   $ 0.15 to $ 0.25       $   0.18
                                                    ------------    ----------------       --------
                  BALANCE JUNE 30, 1999                1,920,000    $ 0.15 to $ 2.00       $   0.26
                  Granted during the
                    year June 30, 2000                   960,000    $ 0.15 to $ 0.40       $   0.19
                  Cancelled                              (25,000)        $ 0.15            $   0.15
                  Exercised                           (1,245,000)   $ 0.15 to $ 0.40       $   0.21
                                                    ------------    ----------------       --------
                  BALANCE JUNE 30, 2000                1,610,000    $ 0.15 to $ 2.00       $   0.27
                  Granted during the
                    year June 30, 2001                   689,500    $ 0.15 to $ 0.65       $   0.50
                  Cancelled                             (209,000)        $ 0.15            $   0.15
                  Expired                               (235,000)   $ 0.15 to $ 2.00       $   0.66
                  Exercised                             (517,000)   $ 0.15 to $ 0.20       $   0.17
                                                    ------------    ----------------       --------
                  BALANCE,
                    JUNE 30, 2001                      1,338,500    $ 0.15 to $ 0.65       $   0.35
                                                    ============    ================       ========
</Table>

                  The following summarizes the options outstanding at June 30,
                  2001 and 2000 all of which were fully vested at these dates:

<Table>
<Caption>
                                           Exercise                     Number of Shares
                  Expiry Date                Price                2001                2000
                  -----------------     ----------------        --------           ----------
<S>                                     <C>                     <C>                <C>
                  January 30, 2001           $ 0.20                    0              240,000
                  February 7, 2001           $ 2.00                    0              100,000
                  January 30, 2002      $ 0.15 to $ 0.33         858,500            1,270,000
                  December 30, 2005          $ 0.65              480,000                    0
                                        ================        ========           ==========
</Table>

                  Pursuant to the Company's 1996 Incentive Compensation plan as
                  subsequently amended in 1997, the Company granted 368,000
                  (2000 - 460,000) stock options, and at the same time cancelled
                  368,000 stock options previously granted. The 368,000 new
                  stock options were granted to consultants and have been
                  recognized applying SFAS 123 using the Black-Scholes option
                  pricing model which resulted in additional legal and
                  consulting fees of $53,007 (2000 - $37,455)


                                                                            F-18
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


7.       STOCKHOLDERS' EQUITY (Continued)

                  The Company extended the expiration date for 700,000 stock
                  options expiring January 30, 2001 to January 30, 2002. As a
                  result of this change, these options became variable and an
                  additional compensation expense of $251,120 was charged to
                  operations.

                  Pursuant to the 2001 Plan, the Company granted a total of
                  480,000 fully vested stock options to two directors of the
                  Company at an exercise price of $0.65 per share which will
                  expire December 31, 2005. Subsequent to June 30, 2001 the
                  Company granted 1,600,000 options to employees at exercise
                  prices ranging from $0.40 to $1.20, expiring August 31, 2003.

                  The Company applies APB Opinion No. 25 and related
                  interpretations in accounting for its stock options granted to
                  employees, and accordingly, compensation expense of $219,200
                  (2000 - $10,800; 1999 - $9,200) was recognized as salaries
                  expense. Had compensation expense been determined as provided
                  in SFAS 123 using the Black-Scholes option - pricing model,
                  the pro-forma effect on the Company's net loss and per share
                  amounts would have been as follows:

<Table>
<Caption>
                                                             2001                      2000
                                                          -----------              -----------
<S>                                                       <C>                      <C>
                  Net loss, as reported                   $(4,000,169)             $(1,537,402)
                  Net loss, pro-forma                      (4,172,969)              (1,568,842)
                  Net loss per share, as reported         $     (0.15)             $     (0.07)
                  Net loss per share, pro-forma           $     (0.16)             $     (0.07)
                                                          ===========              ===========
</Table>

                  The fair value of each option grant is calculated using the
                  following weighted average assumptions:

<Table>
<Caption>
                                                             2001                      2000
                                                          -----------              -----------
<S>                                                       <C>                      <C>
                  Expected life (years)                             5                        3
                  Interest rate                                  5.00%                    6.00%
                  Volatility                                    61.04%                   81.19%
                  Dividend yield                                 0.00%                    0.00%
                                                          ===========              ===========
</Table>

         (e)      Subsequent to June 30, 2001, officers and directors exercised
                  700,000 options for a total of $124,200 for settlement of debt
                  and 158,500 options to a consultant for $52,300.


                                                                            F-19
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


7.       STOCKHOLDERS' EQUITY (Continued)

         (f)      At June 30, 2001, the following stock purchase warrants were
                  outstanding:

                  (i)      1,325,000 (2000 - 1,325,000) with an exercise price
                           of $1.80 expiring March 15, 2002. During the year,
                           the exercise price was reduced to $0.40 per share if
                           exercised prior to September 30, 2001 and exercisable
                           at $1.80 per share from October 1, 2001 to March 15,
                           2002. Subsequent to June 30, 2001, 325,000 warrants
                           were exercised at $0.40 per share to net the Company
                           $130,000;

                  (ii)     495,000 (2000 - 495,000) with an exercise price of
                           $1.306 exercisable on or before November 10, 2005;
                           and

                  (iii)    8,189 (2000 - Nil) with an exercise price of $1.44
                           exercisable on or before November 10, 2005.

                  Both (ii) and (iii) above have reset provisions, whereby the
                  exercise price is adjusted to 110% of the five day average on
                  every month's anniversary of the warrants.

         (g)      Promissory notes receivable includes:

                  (i)      $31,500 due on exercise of 210,000 stock options,
                           interest at 10% per annum, due November 1, 2002; and,

                  (ii)     $27,000 due on exercise of 135,000 stock options,
                           interest at 8% per annum, due June 6, 2002.

8.       SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<Table>
<Caption>
                                                                                                        PERIOD FROM
                                                                                                        FEBRUARY 12,
                                                                                                         (INCEPTION)
                                                                   YEAR ENDED JUNE 30,                     THROUGH
                                                         2001             2000           1999           JUNE 30, 2001
                                                      ------------    ------------    ------------    -----------------
<S>                                                   <C>             <C>             <C>             <C>
         SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
           Issue of common stock
             For property and equipment               $          0    $          0    $          0    $          15,000
             For services (provided by
               officers and directors)                           0               0         100,000              120,000
            For settlement of lawsuit                            0               0          15,000               15,000
             For services                                   45,265         113,125          50,000              261,161
             For acquisition of subsidiary                       0               0         619,200              894,200
         SUPPLEMENTAL CASH FLOW INFORMATION
             Interest paid                                       0               0               0               81,111
            Income tax paid                                      0               0               0                    0
                                                      ============    ============    ============    =================
</Table>



                                                                            F-20
<PAGE>



INTEGRAL TECHNOLOGIES, INC.
A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


9.       RELATED PARTY TRANSACTIONS

         (a)      Accounts payable at June 30, 2001 include $228,722 (2000 -
                  $23,001) due to two directors and officers of the Company.

         (b)      The Company incurred $276,000 (2000 - $240,000; 1999 -
                  $290,000) for wages to two directors and officers of the
                  Company and $nil (2000 - $42,000; 1999 - $93,500) for interest
                  for amounts owed to these directors. Of the 1999 amount,
                  $100,000 was settled by issue of 666,666 shares of common
                  stock.

10.      INCOME TAXES

         Deferred income taxes reflect the tax effects of the temporary
         differences between the carrying amount of assets and liabilities for
         financial reporting purposes and the amounts used for tax purposes. The
         components of the net deferred income tax assets are as follows:

<Table>
<Caption>
                                             2001            2000            1999
                                         ------------    ------------    ------------
<S>                                      <C>             <C>             <C>
         Deferred income tax assets
           Net operating loss
             and credit
             carryforwards               $  3,000,000    $  1,933,000    $  1,460,000
           Temporary differences
             on property and
             equipment depreciation            (1,000)           (600)          2,600
                                         ------------    ------------    ------------

         Gross deferred tax assets          2,999,000       1,932,400       1,462,600
         Valuation allowance               (2,999,000)     (1,932,400)     (1,462,600)
                                         ------------    ------------    ------------

                                         $          0    $          0    $          0
                                         ============    ============    ============
</Table>

         As at June 30, 2001 the Company's net operating loss carryforwards for
         income tax purposes were approximately $8,500,000. If not utilized,
         they will start to expire in 2017.

11.      INTEREST ON BENEFICIAL CONVERSION

         During the year ended June 30, 1999 the Company converted debt into
         common stock. The difference between the market value of the Company's
         shares on the date of conversion and the conversion rate pursuant to
         $525,000 of the convertible debenture issued during the year ended June
         30, 1999 was $398,077.

         During the year ended June 30, 1999 the Company issued 1,683,789 shares
         of common stock for a promissory note in the amount of $252,568. The
         difference between the market value of the Company's shares and the
         issue price of 1,683,789 shares for a promissory note in the amount of
         $252,568 was $168,379. These amounts have been recorded as interest
         expense in the statements of operations.


                                                                            F-21
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


12.      CONTINGENCIES

         (a)      A dispute exists between WVURC and the Company with respect to
                  the development work performed by WVURC on the Plasma Ignition
                  System and the Counterfeit Detection Technology. The Company
                  has included in its accounts the amount alleged by WVURC to be
                  owing to WVURC of $397,296, however, it is the opinion of
                  management that this amount should be reduced to an amount not
                  greater than $43,052. Management intends to defend this
                  position. As the actual outcome cannot be determined at this
                  time, any adjustments required will be recorded by the Company
                  when settlement occurs.

         (b)      Integral Technologies, Inc., Antek, ETC. and Jack Parsons, a
                  director of the Company, were defendants in a lawsuit filed in
                  May 2000 in the United States District Court for the Northern
                  District of West Virginia by IAS Communications, Inc. ("IAS").
                  IAS claimed that, pursuant to agreement by and among IAS, ICI
                  and ETC, IAS acquired the exclusive right to commercial
                  applications of certain patented and proprietary antenna
                  technology developed at West Virginia University and ETC
                  acquired exclusive rights to military applications of such
                  technology. IAS claimed that ETC breached its agreement by
                  pursuing commercial applications of the technology. IAS
                  further claimed that all defendants misappropriated certain
                  trade secrets and interfered with IAS's economic relations. In
                  addition, IAS claimed that Jack Parsons breached certain
                  fiduciary duties. IAS sought injunctive relief prohibiting the
                  defendants from disclosing certain information related to the
                  technology; an order requiring defendants to account for any
                  profits from the alleged conduct, return any proprietary
                  materials to IAS and destroy all devices created in violations
                  of IAS's rights; and a money judgement in an amount to be
                  determined at trial, but no less than $15,000,000.

                  On September 6, 2001, the United States District Court
                  Magistrate Judge recommended that the action filed by IAS
                  against the Company and its subsidiaries be dismissed with
                  prejudice. The Magistrate Judge entered his order after IAS
                  failed to appear at prior court hearings, failed to provide
                  information ordered to be produced by the Magistrate Judge and
                  ordered IAS to pay certain costs and attorney's fees to the
                  Company and its subsidiaries. By Court Order dated September
                  24, 2001, the U.S. District Court Judge adopted the Magistrate
                  Judge's recommendation and ordered the case be dismissed with
                  prejudice from the Court's docket. Accordingly, no further
                  claims by IAS Communications against the Company and its
                  subsidiaries exist in this litigation.

         (c)      On October 12, 2000, Joffre J. Rolland and Robin L. Rolland
                  filed a suit against the Company and its subsidiary ETC
                  seeking to recover damages for various claims involving an
                  alleged breach of two written employment contracts. Management
                  intends to vigorously defend against these claims. As the
                  outcome of this litigation cannot be determined at this time,
                  any adjustments required will be recorded by the Company when
                  the outcome becomes determinable.


                                                                            F-22
<PAGE>


INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001, 2000 AND 1999
(U.S. DOLLARS)
--------------------------------------------------------------------------------


13.      COMPREHENSIVE LOSS

<Table>
<Caption>
                                                                                         PERIOD FROM
                                                                                        FEBRUARY 12,
                                                                                           1996
                                                                                         (INCEPTION)
                                                                                          THROUGH
                                               YEAR ENDED JUNE 30,                        JUNE 30,
                                 2001                 2000                 1999             2001
                              -----------          -----------         -----------      ------------
<S>                           <C>                  <C>                 <C>              <C>
         Net loss             $(4,000,169)         $(1,537,402)        $(1,404,021)     $ (9,046,025)
         Other
           comprehensive
           income (loss)              (26)               1,614               8,444            46,267
                              -----------          -----------         -----------      ------------
         Comprehensive
           loss               $(4,000,195)         $(1,535,788)        $(1,395,577)     $ (8,999,758)
                              ===========          ===========         ===========      ============
</Table>


                                                                            F-23


<PAGE>


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

Directors and Executive Officers of Registrant. The Company has a Board of
Directors which is currently comprised of two members. Each director holds
office until the next annual meeting of shareholders or until a successor is
elected or appointed. The members of the Board and the executive officers of the
Company and their respective age and position are as follows:

<TABLE>
<CAPTION>
                                                                                                        Director of
Name                                  Age        Position with Registrant                            Registrant Since
-----------------------------------------------------------------------------------------------------------------------
<S>                                   <C>        <C>                                                 <C>
William S. Robinson                   44         Chairman, CEO and Treasurer                           February 1996

William A. Ince                       50         Director, President, Secretary and Chief              February 1996
                                                 Financial Officer
</TABLE>

Directors and Executive Officers of Antek. Integral's subsidiary, Antek, has a
Board of Directors which is comprised of four members who hold office until the
next annual meeting of shareholders or until a successor is elected or
appointed. The members of the Board and the executive officers of Antek and
their respective age and position are as follows:

<TABLE>
<CAPTION>
                                                                                                      Director of
Name                                  Age        Position with Antek                                  Antek Since
--------------------------------------------------------------------------------------------------------------------
<S>                                   <C>        <C>                                                 <C>
William S. Robinson                   44         Chairman, CEO and Treasurer                         November 1999

William A. Ince                       50         Director, President, Secretary and Chief            November 1999
                                                 Financial Officer

Abraham Wei                           41         Director                                              July 2000

Joseph Jeng                           46         Director                                              July 2000
</TABLE>

(b)  Family Relationships.  None.

(c)  Involvement in Certain Legal Proceedings.  None.


                  DIRECTORS AND EXECUTIVE OFFICERS OF INTEGRAL

WILLIAM ROBINSON
(Chairman, CEO and Treasurer)

As a co-founder and significant shareholder of Integral, Mr. Robinson has been
responsible since the inception of Integral for securing funding in order to
ensure the ongoing operations of Integral and its subsidiaries. Together with
Mr. Ince, he has been responsible for the development and implementation of
corporate strategies.

During the period 1988 to 1996, Mr. Robinson was President of Achieva
Development Corporation, a mining company which is publicly traded on the
Canadian Venture Exchange.




                                       15
<PAGE>


Mr. Robinson brings many years of management experience in finance, banking and
corporate development. Previously, he acted as a director of a number of
companies involved in natural resources, sales and marketing, and computer
technologies.

WILLIAM A. INCE
(Director, President, Secretary and Chief Financial Officer)

Mr. Ince, a co-founder and significant shareholder of the Company, is
responsible, along with Mr. Robinson, for the development and implementation of
corporate strategies. He is also responsible for the accounting and financial
systems and record-keeping of Integral and its subsidiaries.

Prior to his engagement with the Company, Mr. Ince was a self-employed
management consultant for a period of five years.

Mr. Ince brings with him a background as a professional accountant and
experience from management positions in finance and operations in several
private companies. He has consulted to both private and public companies in the
areas of marketing and finance, as well as turn-around situations. Mr. Ince has
been responsible for "team building" efforts to ensure that each project is
brought to fruition on a timely basis.

SIGNIFICANT EMPLOYEES OF THE COMPANY AND ITS SUBSIDIARIES

ABRAHAM WEI
(Director of Antek)

Mr. Wei, chairman of the board of Antek, serves as an advisor to the Company on
a variety of issues relating to market opportunities, product manufacturing and
ongoing corporate development of the company.

As the CEO and founder of Vpacket Communications, Inc., Mr. Wei brings 15 years
of diverse business experience in engineering, manufacturing and sales in the
networking industry. Mr. Wei has held various positions with increasing scope
and responsibility over the past seven years at Ascend Communications, Inc.,
most recently as Vice President, Worldwide Sales Operations. Prior to that
position, Mr. Wei was Vice President of Manufacturing Operations and managed
Ascend Communication's manufacturing operations throughout the Company's
astronomical growth from $40.0 million in sales in 1994 to $1.2 billion in sales
in 1997. As a former Director of Ascend Communications, Mr. Wei maintains a
personal and professional relationship with the executive management of Ascend
Communications.

Mr. Wei holds an MBA from Pepperdine University and B.S. in Computer Science
from the University of California, Berkley.

DANIEL HARRELL
(Vice President Product Development and Operations of Antek)

Mr. Harrell is responsible for directing the daily activities of the development
team, in its research and development activities, in order to meet the market
needs. In addition, he is responsible for identification of new products, and
subsequently moving them from the conceptual to production stage.

Mr. Harrell enjoyed a 17 year career with the US Army. In his 8 year engagement
with HQ US Southcom, he was stationed in Panama. During his engagement as Site
Commander, Project Officer and Intelligence Collector, he received the Joint
Merious Service medal for outstanding performance during "Operation Just Cause"
in Panama.

During his last 4 years in the military, Mr. Harrell was Director of
Operations/Program Manager at HQ USA INSCOM, Ft. Belvoir, Virginia. In his
capacity, he planned, executed and managed a $4 million annual budget to include
a $1 million operational budget. He significantly improved resource utilization
during a period of fiscal reduction and reduced manpower.



                                       16
<PAGE>


JOSEPH JENG
(Director of Antek)

Mr. Jeng, a member of Antek's board of directors, serves as an advisor to the
Company on a variety of issues, including electronic commerce and strategic
planning. Mr. Jeng is a general partner at Atrix Investment, LLC, a private
equity investment firm, where he specializes in electronic commerce and enabling
technology sectors.

Mr. Jeng has several years of leadership experience in the technology sector,
including global strategic planning. Mr. Jeng has founded or co-founded numerous
companies, including Altatron, Inc., a leading electronics contract
manufacturer, Ultron Inc., a PC workstation and component company, and Kentek
Corporation. In addition, Mr. Jeng was the president of Digital Optics Inc. and
was an executive at Spectra-Physics, Inc.

In addition to serving on Antek's board of directors, Mr. Jeng serves as the
chairman of the board at Kentek, Altatron and eTrons and Uhere, which are
electronic commerce companies. Mr. Jeng is a member of the board of Cashfac
Ltd., a banking software and electronics communications network company,
Advanced Telecommunication Components Ltd, Vista Land Development Corporation
and vpacket.com.

Mr. Jeng received his B.S. from National Taiwan University. He received an M.A.
in Physics and an M.B.A. from Harvard University.

THOR LARSEN
(Consultant)

Mr. Larsen continues to advise the Company regarding the potential roles of the
new antenna technologies in the telecommunications industry and the
possibilities for their technological "marriage" with other evolving wireless
technologies. Another role of Mr. Larsen is to assist in protecting the
proprietary nature of the new antenna technologies developed by Integral and its
subsidiaries by drafting documents for patent applications.

Mr. Larsen's career with IBM began in 1962 after his graduation from Columbia
University with a Masters of Science in Electrical Engineering. During his
career with IBM, he has been involved in a variety of projects with the focus
being on developing and implementing leading edge technologies which provide for
advancements in the data communication industry. He has been granted eleven US
patents. Since 1986, Mr. Larsen held the position of Senior Technical Staff
Member at IBM. From 1995 until his retirement from IBM on February 28, 1999, he
has been responsible for developing new application for IBM's silicon germanium
technology in wireless and wired communications.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors, and greater than 10% shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on its review of copies of such reports received or
written representations from certain reporting persons, the Company believes
that, during the year ended June 30, 2001, all Section 16(a) filing requirements
applicable to its officers, directors and ten percent shareholders were complied
with by such persons, except as follows: 1) the Company cannot determine whether
Denzel Jack Parsons, a former director of the Company who resigned in December
2000, filed the required forms to report sales of common stock; and 2) The
Annual Statement of Changes in Beneficial Ownership of Form 5 for both Messrs.
Ince and Robinson were due August 14, 2001 but have not been filed as of the
date of this report.



                                       17
<PAGE>


ITEM 10. EXECUTIVE COMPENSATION.

(a)      General

         The following information discloses all plan and non-plan compensation
awarded to, earned by, or paid to the executive officers of the Company, and
other individuals for whom disclosure is required, for all services rendered in
all capacities to the Company and its subsidiaries.

(b)      Summary Compensation Table

         The following table sets forth all compensation, including bonuses,
stock option awards and other payments, paid or accrued by Integral and/or its
subsidiaries, during the fiscal years ended June 30, 2001, 2000 and 1999 to or
for Integral's Chief Executive Officer and each of the other executive officers
of Integral, and two individuals who are not executive officers but for whom
disclosure is required due to the amount of compensation they received.


<TABLE>
<CAPTION>
                                                               Annual Compensation
                                              ------------------------------------------------------
              (a)                    (b)            (c)              (d)                (e)
             Name                                                                      Other
              And                   Year                                              Annual
           Principal                Ended         Salary            Bonus          Compensation
           Position                June 30          ($)              ($)                ($)
----------------------------------------------------------------------------------------------------
<S>                                <C>           <C>                <C>            <C>
William S. Robinson, Director,      2001         $156,000            -0-                -0-
Chairman, CEO, Treasurer (n1)       2000         $120,000            -0-                -0-
                                    1999         $105,000            -0-                -0-

William A. Ince,                    2001         $156,000            -0-                -0-
Director, President, Secretary      2000         $120,000            -0-                -0-
(n2)                                1999         $105,000            -0-                -0-

Daniel Harrell,                     2001         $115,600            -0-                -0-
Vice President of Antek             2000          $81,830            -0-                -0-
(subsidiary) (n3)                   1999          $66,000            -0-                -0-

Jeffry Phillips, former Vice        2001         $120,000            -0-                -0-
President of Antek                  2000          $30,000            -0-                -0-
(subsidiary) (n4)                   1999            N/A              N/A                N/A
</TABLE>






                                       18
<PAGE>


<TABLE>
<CAPTION>
                                                                 Long Term Compensation
                                                  -----------------------------------------------------
                                                                Awards                     Payouts
                                                  -----------------------------------------------------
              (a)                       (b)              (f)               (g)              (h)               (i)
              Name                                   Restricted
              And                     Year              Stock             Shares            LTIP           All Other
           Principal                  Ended           Award(s)          Underlying        Payouts         Compensation
            Position                 June 30             ($)             Options            ($)               ($)
--------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>             <C>                <C>                <C>            <C>
William S. Robinson,                  2001               -0-             240,000             -0-           $50,000(n6)
Chairman, CEO, Treasurer (n1)         2000               -0-             120,000             -0-               -0-
                                      1999               -0-             230,000(n5)         -0-               -0-

William A. Ince,  Director,           2001               -0-             240,000             -0-           $50,000(n6)
President, Secretary (n2)             2000               -0-             120,000             -0-               -0-
                                      1999               -0-             230,000(n5)         -0-               -0-

Daniel Harrell,                       2001               -0-               -0-               -0-               -0-
Vice President of Antek               2000               -0-             100,000             -0-               -0-
(subsidiary) (n3)                     1999               -0-               -0-               -0-               -0-

Jeffry Phillips, former Vice          2001               -0-               -0-               -0-               -0-
President of Antek                    2000               -0-               -0-               -0-               -0-
(subsidiary) (n4)                     1999               N/A               N/A               N/A               N/A
</TABLE>


         (n1)    Pursuant to an employment agreement entered into between
                 Integral and William Robinson, accrued salary for the fiscal
                 year end June 30, 2000 was $120,000, of which no payments were
                 made; accrued salary for the fiscal year ended June 30, 1999
                 was $105,000 of which no payments were made; and accrued salary
                 for the fiscal year end June 30, 1998 was $90,000, of which no
                 payments were made. Portions of Mr. Robinson's accrued salary
                 were converted into shares common stock of Integral. In April
                 1999, Mr. Robinson received 333,333 shares of common stock in
                 lieu of $50,000 salaries accrued in fiscal year ending June 30,
                 1998. In September 1999, Mr. Robinson received 175,000 shares
                 of Series A Convertible Preferred Stock in lieu of $175,000 in
                 accrued salaries ($40,000 from 1998, $105,000 from 1999, and
                 $30,000 from 2000). As of June 30, 2000, an aggregate of
                 $90,000 remained accrued and payable to Mr. Robinson, and was
                 paid in the fiscal year ended June 30, 2001. In January 2001, a
                 new employment agreement was executed, which provided for an
                 annual salary of $156,000; however, only $18,000 of salary was
                 actually paid in the fiscal year ended June 30, 2001, leaving
                 an aggregate of $138,000 accrued and payable as of June 30,
                 2001. In August 2001, Mr. Robinson exercised an aggregate of
                 350,000 options, and the aggregate exercise price of $62,100
                 was paid by reducing the accrued salary payable to Mr. Robinson
                 by that amount. Simple interest on salaries owed has been
                 accruing at a rate of 10% per annum, but has not been paid and
                 is therefore not included in the table.

         (n2)    Pursuant to an employment agreement entered into between
                 Integral and William Ince, accrued salary for the fiscal year
                 end June 30, 2000 was $120,000, of which no payments were made;
                 accrued salary for the fiscal year ended June 30, 1999 was
                 $105,000 of which no payments were made; and accrued salary for
                 the fiscal year end June 30, 1998 was $90,000, of which no
                 payments were made. Portions of Mr. Ince's accrued salary were
                 converted into shares common stock of Integral. In April 1999,
                 Mr. Ince received 333,333 shares of common stock in lieu of
                 $50,000 salaries accrued in fiscal year ending June 30, 1998.
                 In September 1999, Mr. Ince received 175,000 shares of Series A
                 Convertible Preferred Stock in lieu of $175,000 in accrued
                 salaries ($40,000 from 1998, $105,000 from 1999, and




                                       19
<PAGE>


                 30,000 from 2000). As of June 30, 2000, an aggregate of $90,000
                 remained accrued and payable to Mr. Ince; and was paid in the
                 fiscal year ended June 30, 2001. In January 2001, a new
                 employment agreement was executed, which provided for an annual
                 salary of $156,000; however, only $18,000 of salary was
                 actually paid in the fiscal year ended June 30, 2001, leaving
                 an aggregate of $138,000 accrued and payable as of June 30,
                 2001. In August 2001, Mr. Ince exercised an aggregate of
                 350,000 options, and the aggregate exercise price of $62,100
                 was paid by reducing the accrued salary payable to Mr. Ince by
                 that amount. Simple interest on salaries owed has been accruing
                 at a rate of 10% per annum, but has not been paid and is
                 therefore not included in the table.

         (n3)    Mr. Harrell is not considered an executive officer of Integral
                 or its subsidiaries.

         (n4)    Mr. Phillips is not considered an executive officer of Integral
                 or its subsidiaries.  Mr. Phillips' employment ended in August
                 2001.

         (n5)    1999 option figures include options previously granted in 1997
                 with an original exercise price of $.50 per share that were
                 repriced in 1999 to provide for an exercise price of $.15 per
                 share.

         (n6)    In December 2000, the Company redeemed an aggregate of 100,000
                 shares of Series A Preferred Stock from Mr. Robinson (50,000
                 shares) and Mr. Ince (50,000 shares) at a predetermined
                 redemption price of $2.00 per share. The stated value of the
                 Series A Preferred Stock is $1.00 per share, which resulted in
                 a redemption premium of $1.00 per share over the stated value.
                 A 5% dividend on the Series A Preferred Stock, payable in cash
                 or shares of common stock at the election of the Company, has
                 been accrued but not paid and is therefore not reflected in the
                 table. For the year ended June 30, 2000, interest of $16,582
                 was accrued to Mr. Robinson and $8,332 to Mr. Ince. For the
                 year ended June 30, 2001, additional interest of $20,860 was
                 accrued to Mr. Robinson and $9,860 to Mr. Ince.

(c)      Option/SAR Grants in Last Fiscal Year

         The information provided in the table below provides information with
respect to individual grants of stock options for the year ended June 30, 2001
to each of the persons named in the Summary Compensation Table above. Integral
did not grant any stock appreciation rights for the year ended June 30, 2001.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                       Individual Grants

               (a)                        (b)                 (c)                 (d)                (e)
                                                           % of Total
                                       Number of          Options/SARS
                                       Securities          Granted to
                                       Underlying          Employees          Exercise or
                                      Options/SARs         in Fiscal           Base Price         Expiration
              Name                    Granted (#)          Year (n1)             ($/Sh)              Date
----------------------------------------------------------------------------------------------------------------
<S>                                   <C>                 <C>                 <C>                 <C>
William S. Robinson, Chairman,        240,000(n2)             50%                 $.65             12/31/05
CEO, Treasurer

William A. Ince, Director,            240,000(n3)             50%                 $.65             12/31/05
President, Secretary

Daniel Harrell,                           -0-                 -0-                 N/A                N/A
Vice President of Antek
(subsidiary) (n4)

Jeffry Phillips, former Vice              -0-                 -0-                 N/A                N/A
President of Antek (subsidiary)
(n5)
</TABLE>


                                       20
<PAGE>


         (n1)    The percentage of total options granted (480,000) in the
                 fiscal year is based upon all options granted to eligible
                 participants, which includes officers, directors, employees,
                 consultants and advisors, under Integral's 2001 Stock Plan
                 during the year ended June 30, 2001.

         (n2)    William S. Robinson:  On January 2, 2001, Mr. Robinson was
                 granted 240,000 options under Integral's 2001 Stock Plan. The
                 options have an exercise price of $.65 per share, became fully
                 vested on February 1, 2001, and expire on December 31, 2005.

         (n3)    William A. Ince: On January 2, 2001, Mr. Ince was granted
                 240,000 options under Integral's 2001 Stock Plan. The options
                 have an exercise price of $.65 per share, became fully vested
                 on February 1, 2001, and expire on December 31, 2005.

         (n4)    Mr. Harrell is not considered an executive officer of Integral
                 or its subsidiaries. Subsequent to the end of the fiscal year
                 ended June 30, 2001, in August 2001, Mr. Harrell was granted
                 options to acquire 300,000 shares of common stock, at an
                 exercise price of $.40 per share, until December 31, 2003.

         (n5)    Mr. Phillips is not considered an executive officer of Integral
                 or its subsidiaries. Mr. Phillips' employment ended in August
                 2001.


(d)      Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values

         The information provided in the table below provides information with
respect to each exercise of stock options during most recent fiscal year ended
June 30, 2001 by the persons named in the Summary Compensation Table and the
fiscal year end value of unexercised options.

<TABLE>
<CAPTION>
           (a)                  (b)             (c)                 (d)                         (e)
                                                                 Number of                    Value of
                                                           Securities Underlying            Unexercised
                                                                Unexercised                 In-the-Money
                                                              Options/SARs at             Options/SARs at
                               Shares          Value             FY-End (#)                  FY-End($)
                            Acquired on      Realized           Exercisable/                Exercisable/
          Name              Exercise (#)      ($)(n1)          Unexercisable             Unexercisable(n1)
-----------------------------------------------------------------------------------------------------------------
<S>                         <C>              <C>           <C>                           <C>
William S. Robinson             -0-             -0-             590,000/-0-                 $253,700/-0-
Director, Chairman, CEO,
Treasurer (n2)

William A. Ince                 -0-             -0-             590,000/-0-                 $253,700/-0-
Director, President,
Secretary (n3)

Daniel Harrell,                 -0-             -0-               -0-/-0-                       -0-
Vice President of Antek
(subsidiary) (n4)

Jeffry Phillips, former         -0-             -0-               -0-/-0-                       -0-
Vice President of Antek
(subsidiary) (n5)
</TABLE>



                                       21
<PAGE>


         (n1)    The aggregate dollar values in columns (c) and (e) are
                 calculated by determining the difference between the fair
                 market value of the common stock underlying the options and the
                 exercise price of the options at exercise or fiscal year end,
                 respectively.

         (n2)    Subsequent to the end of the fiscal year ended June 30, 2001,
                 in August 2001, Mr. Robinson exercised options to acquire
                 120,000 shares at an exercise price of $.23 per share, and
                 230,000 shares at $.15 per share.

         (n3)    Subsequent to the end of the fiscal year ended June 30, 2001,
                 in August 2001, Mr. Ince exercised options to acquire 120,000
                 shares at an exercise price of $.23 per share, and 230,000
                 shares at $.15 per share.

         (n4)    Mr. Harrell is not considered an executive officer of Integral
                 or its subsidiaries. Subsequent to the end of the fiscal year
                 ended June 30, 2001, in August 2001, Mr. Harrell was granted
                 options to acquire 300,000 shares of common stock, at an
                 exercise price of $.40 per share, until December 31, 2003.

         (n5)    Mr. Phillips is not considered an executive officer of Integral
                 or its subsidiaries. Mr. Phillips' employment ended in August
                 2001.


(e)      Long-Term Incentive Plans ("LTIP") - Awards in Last Fiscal Year

         This table has been omitted, as no executive officers named in the
Summary Compensation Table above received any awards pursuant to any LTIP during
the fiscal year ended June 30, 2001.

(f)      Compensation of Directors

         No compensation was paid by Integral to its Directors for any service
provided as a Director during the fiscal year ended June 30, 2001. There are no
other formal or informal understandings or arrangements relating to
compensation; however, Directors may be reimbursed for all reasonable expenses
incurred by them in conducting Integral's business. These expenses would include
out-of-pocket expenses for such items as travel, telephone, and postage.

(g)      Employment Contracts and Termination of Employment and
Change-in-Control Arrangements

         On January 2, 2001, Integral executed employment agreements with
William S. Robinson, the Chairman, CEO and Treasurer of Integral and William A.
Ince, a director and the President, Secretary and CFO of Integral. Each
employment agreement provides for a two year term, an annual salary of $156,000
and options to purchase 240,000 shares of Integral's common stock at an exercise
price of $0.65 per share, which fully-vested on February 1, 2001.

         Pursuant to the employment agreements, in the event Integral terminates
the employment of the executive without cause, then the executive shall be
entitled to severance pay equal to twelve month's base salary based on the base
salary then in effect at the termination. In addition, the employment agreements
provide that in the event Integral is indebted to the executive for a minimum of
three months salary, the executive shall have the option to convert such unpaid
salary into shares of common stock of Integral at market price (average daily
closing over the previous month).

         Integral's Board of Directors has complete discretion as to the
appropriateness of (a) key-man life insurance, (b) obtaining officer and
director liability insurance, (c) employment contracts with and compensation of
executive officers and directors, (d) indemnification contracts, and (e)
incentive plan to award executive officers and key employees.



                                       22
<PAGE>


         Integral's Board of Directors is responsible for reviewing and
determining the annual salary and other compensation of the executive officers
and key employees of Integral. The goals of Integral are to align compensation
with business objectives and performance and to enable Integral to attract,
retain and reward executive officers and other key employees who contribute to
the long-term success of Integral. Integral intends to provide base salaries to
its executive officers and key employees sufficient to provide motivation to
achieve certain operating goals. Although salaries are not specifically tied
into performance, incentive bonuses may be available to certain executive
officers and key employees. In the future, executive compensation may include
without limitation cash bonuses, stock option grants and stock reward grants.

Employee Benefit and Consulting Services Compensation Plans

         The Company currently has two Employee Benefit and Consulting Services
Compensation Plans in effect:

         1. On February 20, 1997, the Company adopted an employee benefit and
consulting services compensation plan (the "Plan"), which, as amended, covers up
to 15% of the shares of Integral's outstanding common stock on any given date.
Under the Plan, Integral may issue common stock and/or options to purchase
common stock to certain officers, directors and employees and consultants of
Integral and its subsidiaries. The purpose of the Plan is to promote the best
interests of Integral and its shareholders by providing a means of non-cash
remuneration to eligible participants who contribute to operating progress and
earning power of Integral. The Plan is administered by Integral's Board of
Directors or a committee thereof which has the discretion to determine from time
to time the eligible participants to receive an award; the number of shares of
stock issuable directly or to be granted pursuant to option; the price at which
the option may be exercised or the price per share in cash or cancellation of
fees or other payment which Integral or its subsidiaries is liable if a direct
issue of stock and all other terms on which each option shall be granted. No
options may be granted on or after the effective date of the Company's
registration statement on Form 10-SB (February 1, 2000). As of the fiscal year
ended June 30, 2001, options to acquire 958,500 shares covered by the Plan were
outstanding, all at exercise prices ranging from $.15 to $2.00 per share, and
are fully vested. Subsequent to the end of the fiscal year, in August 2001,
858,500 of these options were exercised, leaving 100,000 options outstanding.

         Shares of common stock issued pursuant to the Plan are deemed to be
issued pursuant to Rule 701 of the Securities Act of 1933 and are restricted
securities as defined in Rule 144(a)(3) of the Securities Act of 1933. Pursuant
to Rule 701, participants in the Plan, including affiliates, may sell their
shares in accordance with the exemption provided by Rule 701 without being bound
by the one year holding period under Rule 144(d).

         2. On January 2, 2001, Integral adopted a new employee benefit and
consulting services compensation plan entitled the Integral Technologies, Inc.
2001 Stock Plan (the "2001 Plan"), which covers up to 2,500,000 shares of common
stock. Under the 2001 Plan, Integral may issue common stock and/or options to
purchase common stock to certain officers, directors and employees and
consultants of Integral and its subsidiaries. The purpose of the 2001 Plan is to
promote the best interests of Integral and its shareholders by providing a means
of non-cash remuneration to eligible participants who contribute to operating
progress and earning power of Integral. The 2001 Plan is administered by
Integral's Board of Directors or a committee thereof which has the discretion to
determine from time to time the eligible participants to receive an award; the
number of shares of stock issuable directly or to be granted pursuant to option;
the price at which the option may be exercised or the price per share in cash or
cancellation of fees or other payment which Integral or its subsidiaries is
liable if a direct issue of stock and all other terms on which each option shall
be granted. As of the fiscal year ended June 30, 2001, options to acquire
480,000 shares covered by the 2001 Plan were outstanding, all at an exercise
price of $.65 per share.





                                       23
<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

A.       Common Stock

         The following table sets forth, as of September 28, 2001 the stock
ownership of each person known by Integral to be the beneficial owner of five
percent or more of Integral's common stock, each Officer and Director
individually and all Directors and Officers of Integral as a group. Each person
is believed to have sole voting and investment power over the shares except as
noted.

<TABLE>
<CAPTION>
=================================================================================================================
Name and Address of                                Amount and Nature of Beneficial
Beneficial Owner (1)                                       Ownership(1)(2)               Percent of Class (3)
-----------------------------------------------------------------------------------------------------------------
<S>                                                <C>                                   <C>
William S. Robinson (4)
#3 1070 West Pender St.                                       2,048,533                         7.2%
Vancouver, B.C.  V6E 2N7
-----------------------------------------------------------------------------------------------------------------
William A. Ince (5)
805 W. Orchard Dr., Suite #3
Bellingham, WA  98225                                         2,003,333                         7.1%
-----------------------------------------------------------------------------------------------------------------
James Smith
Route 4, Box E36
Bruceton Mills, WV  26330                                     1,857,140                         6.6%
=================================================================================================================
All officers and directors of Integral as a
group (2 persons)                                             4,051,866                        14.2%
=================================================================================================================
</TABLE>

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

(2)      Includes vested options beneficially owned but not yet exercised and
         outstanding. The table does not include the effects of conversion by
         Mr. Robinson and Mr. Ince of their shares of Series A Convertible
         Preferred Stock, which are convertible into shares of common stock at a
         conversion rate that varies with the market price of the common stock
         at the time of conversion. The conversion rate is determined by
         dividing the number of shares of Series A being converted by the
         average of the high and low bid prices of Integral's common stock
         reported by the OTC Bulletin Board over the ten trading days preceding
         the date of conversion. Mr. Robinson owns 392,197 shares of Series A
         and Mr. Ince owns 172,213 shares of Series A The actual number of
         shares of common stock receivable by Messrs. Robinson and Ince upon
         conversion of the Series A would depend on the actual conversion rate
         in effect at the time of conversion.

(3)      Based upon 28,132,562 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.

(4)      Mr. Robinson is an officer and director of Integral and each of its
         subsidiaries. Beneficial ownership figure includes 240,000 shares
         underlying options granted but not yet exercised.

(5)      Mr. Ince is an officer and director of Integral and each of its
         subsidiaries. Beneficial ownership figure includes 240,000 shares
         underlying options granted but not yet exercised.



                                       24
<PAGE>


B.       Series A Convertible Preferred Stock

         The following table sets forth, as of September 28, 2001, the stock
ownership of each person known by Integral to be the beneficial owner of five
percent or more of Integral's Series A Convertible Preferred Stock, each Officer
and Director individually and all Directors and Officers of Integral as a group.
Each person is believed to have sole voting and investment power over the shares
except as noted.

<TABLE>
<CAPTION>
=================================================================================================================
Name and Address of                                   Amount and Nature of
Beneficial Owner (1)                                Beneficial Ownership(1)           Percent of Class (2)
-----------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                               <C>
William S. Robinson (3)
#3 1070 West Pender St.
Vancouver, B.C.  V6E 2N7                                    392,197                            69.5%
-----------------------------------------------------------------------------------------------------------------
William A. Ince (4)
805 W. Orchard Dr., Suite #3
Bellingham, WA  98225                                       172,213                            30.5%
=================================================================================================================
All officers and directors of Integral as a
group (2 persons)                                           564,410                             100%
=================================================================================================================
</TABLE>

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

(2)      Based upon 564,410 Series A Convertible Preferred shares issued and
         outstanding.

(3)      Mr. Robinson is an officer and director of Integral and each of its
         subsidiaries.

(4)      Mr. Ince is an officer and director of Integral and each of its
         subsidiaries.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


(a)      On February 16, 1996, in connection with the formation of Integral, the
following affiliates were issued shares of common stock.

<TABLE>
<CAPTION>
         Name                           Shares                  Consideration Received
         ----                           ------                  ----------------------
         <S>                            <C>                     <C>
         William A. Ince                1,500,000               services valued at $15,000
         William S. Robinson            1,500,000               cash of $10,000 and services valued at $5,000
         Dr. James E. Smith             1,500,000               services valued at $15,000
</TABLE>


(b)      Between July 1996 and October 1996, Integral issued 175,000 shares to
each of Dr. James Smith and Denzel Jack Parsons, each being affiliates of
Integral. These shares were issued for cash at a price of approximately $.11 per
share. These transactions were exempt from Registration under Section 504 of
Regulation D of the Securities Act of 1933, as amended.

(c)      Pursuant to an agreement and plan of reorganization between Integral
and Integral Vision, dated March 11, 1997, pursuant to which Integral Vision
became a wholly-owned subsidiary of Integral, Dr. James Smith was issued 57,140
shares of common stock of Integral in exchange for his 57.14% interest in
Integral Vision.



                                       25
<PAGE>


(d)      In February 1997, in anticipation of Integral acquiring a controlling
interest in Emergent, Integral issued 1,800,000 shares of Common Stock, all of
which were held in escrow. Prior to closing, Integral agreed to release to
Denzel Jack Parsons 300,000 shares. Upon closing of the acquisition in April
1999, 300,000 shares were delivered to Dr. James E. Smith, and 1,200,000 shares
were delivered to Denzel Jack Parsons.

(e)      Dr. James E. Smith is a significant shareholder of Integral. He is a
professor of West Virginia University ("WVU"). Dr. Smith is also the sole
shareholder of Integral Concepts. Integral is a party to various agreements with
Integral Concepts, WVU and the West Virginia University Research Corporation
("WVURC").

         On April 12, 1994, WVURC granted an exclusive license to Integral
Concepts: (1) to manufacture CTHAs and to license others to do so; and (2) to
sublicense others to manufacture, market, sell copies of, license and distribute
CTHAs. The consideration for the license was: (1) $1.00 and (2) a royalty of
$3,000 per year or 10% of the net revenues received by Integral Concepts
whichever is greater.

         On January 2, 1996, Integral Concepts entered into a sublicense with
Registrant's subsidiary, Emergent, wherein Integral Concepts granted to Emergent
the exclusive worldwide right to manufacture, sell copies of, sublicense to and
distribute the process and equipment related to the design, construction and
operation of the CTHA and to further sublicense to others the rights to
manufacture, sell copies of, license and distribute the same, to military and
government applications worldwide. The term of the license agreement granted by
Integral Concepts is perpetual and requires the payment of a minimum annual
royalty of $3,000. Further, Emergent will pay a minimum annual royalty of 10% of
the net royalties derived from sales, licenses or sublicenses of the CTHA
technology with a credit for the minimum royalty.

(f)      In April 1999, Integral issued a total of 666,666 shares of its common
stock, 333,333 to each of William S. Robinson and William A. Ince, in
consideration of management fees owing in the amount of $50,000 to each of them.
Messrs. Robinson and Ince are officers and directors of Integral.

(g)      In September 1999, Integral issued an aggregate 654,401 shares of its
Series A Convertible Preferred Stock to officers and directors of Integral.
William S. Robinson received 175,000 shares of Series A in lieu of $175,000 in
accrued salaries through September 30, 1999 and 267,197 shares of Series A in
repayment of $267,197 in loans made to Integral. William A. Ince received
175,000 shares of Series A in lieu of $175,000 in accrued salaries through
September 30, 1999 and 47,213 shares of Series A in repayment of $47,213 in
loans made to Integral.

(h)      In December 2000, Integral redeemed an aggregate of 100,000 shares of
Series A Preferred Stock from Mr. Robinson (50,000 shares) and Mr. Ince (50,000
shares) at a predetermined redemption price of $2.00 per share. The stated value
of the Series A Preferred Stock is $1.00 per share, which resulted in a
redemption premium of $1.00 per share over the stated value. A 5% dividend on
the Series A Preferred Stock, payable in cash or shares of common stock at the
election of the Company, has been accrued but not paid. For the year ended June
30, 2000, $16,582 was accrued to Mr. Robinson and $8,332 to Mr. Ince. For the
year ended June 30, 2001, an additional $20,860 was accrued to Mr. Robinson and
an additional $9,860 to Mr. Ince.

(i)      In August 2001, the Company issued an aggregate of 700,000 shares of
its common stock to Mr. Robinson (350,000) and Mr. Ince (350,000) upon exercise
of options pursuant to the Employee Benefit and Consulting Services Compensation
Plan. The options had exercise prices of $0.15 to $.23 per share. The Company
issued the shares in consideration for a reduction of an aggregate of $124,200
of accrued salaries payable ($62,100 for Mr. Robinson and $62,100 for Mr. Ince).




                                       26
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      List of Exhibits.

<TABLE>
<CAPTION>
Exhibit Number    Description
--------------    -----------
<S>               <C>
    2.1           Agreement and Plan of Reorganization between Integral and
                  Integral Vision Systems, Inc. dated March 11, 1997.
                  (Incorporated by reference to Exhibit 2.1 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    2.2           Agreement and Plan of Reorganization between Integral and
                  Emergent Technologies Corporation dated December 10, 1997.
                  (Incorporated by reference to Exhibit 2.2 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    3.1           Articles of Incorporation, as amended and currently in effect.
                  (Incorporated by reference to Exhibit 3.1 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    3.2           Bylaws, as amended and restated on December 31, 1997.
                  (Incorporated by reference to Exhibit 3.2 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    4.1           Form of Securities Purchase Agreement between Integral and
                  certain parties related to the purchase of Integral common
                  stock to be registered pursuant to this offering.
                  (Incorporated by reference to Exhibit 4.1 of Integral's
                  registration statement on Form SB-2 (file no. 333-41938) filed
                  July 21, 2000.)

    4.2           Form of Common Stock Purchase Warrant related to the offering
                  of securities described in Exhibit 4.1. (Incorporated by
                  reference to Exhibit 4.1 of Integral's registration statement
                  on Form SB-2 (file no. 333-41938) filed July 21, 2000.)

    4.3           Investment Agreement dated May 11, 2000, by and between
                  Integral and Swartz Private Equity, LLC. (Incorporated by
                  reference to Exhibit 4.1 of Integral's registration statement
                  on Form SB-2 (file no. 333-41938) filed July 21, 2000.)

    4.4           Warrant to purchase common stock issued to Swartz Private
                  Equity, LLC on May 11, 2000, exercisable to purchase an
                  aggregate of 495,000 shares of common stock at $1.306 per
                  share (subject to adjustment) until December 13, 2004, granted
                  to Swartz in connection with the offering of securities
                  described in Exhibit 4.3. (Incorporated by reference to
                  Exhibit 4.1 of Integral's registration statement on Form SB-2
                  (file no. 333-41938) filed July 21, 2000.)

    4.5           Registration Rights Agreement, dated May 11, 2000, by and
                  between Integral and Swartz Private Equity, LLC, related to
                  the registration of the common stock to be sold pursuant to
                  Exhibit 4.3. (Incorporated by reference to Exhibit 4.1 of
                  Integral's registration statement on Form SB-2 (file no.
                  333-41938) filed July 21, 2000.)

    4.6           Warrant to Purchase Common Stock to be issued from time to
                  time in connection with the offering of securities described
                  in Exhibit 4.3. (Incorporated by reference to Exhibit 4.1 of
                  Integral's registration statement on Form SB-2 (file no.
                  333-41938) filed July 21, 2000.)

    4.7           Warrant Side Agreement dated May 11, 2000 between Integral and
                  Swartz related to the offering of securities described in
                  Exhibit 4.3. (Incorporated by reference to Exhibit 4.1 of
                  Integral's registration statement on Form SB-2 (file no.
                  333-41938) filed July 21, 2000.)

    4.9           Form of Addendum Letter dated August 16, 2001 sent by Integral
                  to the ten holders of warrants issued March 31, 2000 in
                  connection with the offering described in Exhibits 4.1 and
                  4.2. (Filed herewith.)

    5.1           Legal opinion of Futro & Trauernicht LLC.  (Incorporated by
                  reference to Exhibit 5.1 of Integral's registration statement
                  on Form SB-2 (file no. 333-41938).)

    10.1          Sublicense Agreement between Integral's subsidiary, Emergent
                  Technologies Corporation, and Integral Concepts, Inc., dated
                  January 2, 1996, relating to the Toroidal Helical Antenna.
                  (Incorporated by reference to Exhibit 10.1 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)
</TABLE>
                                       27
<PAGE>


<TABLE>
<CAPTION>
Exhibit Number    Description
--------------    -----------
<S>               <C>
    10.2          Agreement between Integral and West Virginia University
                  Research Corporation on Behalf of West Virginia University
                  dated February 9, 1996, relating to RF Quarter-Wave Coaxial
                  Cavity Resonator. (Incorporated by reference to Exhibit 10.2
                  of Integral's registration statement on Form 10-SB (file no.
                  0-28353) filed December 2, 1999.)

    10.3          Agreement between Integral and West Virginia University
                  Research Corporation on Behalf of West Virginia University
                  dated February 9, 1996, relating to Counterfeit Currency
                  Determination Prototype. (Incorporated by reference to Exhibit
                  10.3 of Integral's registration statement on Form 10-SB (file
                  no. 0-28353) filed December 2, 1999.)

    10.4          Sublicense Agreement between Integral Concepts, Inc. and
                  Integral dated February 15, 1996, relating to the design,
                  construction and operation of a Plasma Ignition System.
                  (Incorporated by reference to Exhibit 10.4 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    10.7          Employee Benefit and Consulting Services Compensation Plan, as
                  restated January 10, 1999. (Incorporated by reference to
                  Exhibit 10.7 of Integral's registration statement on
                  Form 10-SB (file no. 0-28353) filed December 2, 1999.)

    10.8          Sublicense Agreement between Integral's subsidiary, Integral
                  Vision Systems, Inc., and Integral Concepts, Inc., dated
                  February 15, 1994, relating to vision system technologies.
                  (Incorporated by reference to Exhibit 10.8 of Integral's
                  registration statement on Form 10-SB/A-1 (file no. 0-28353)
                  filed February 8, 2000.)

    10.9          Employment Agreement between Integral and William S. Robinson
                  dated January 2, 2001. (Incorporated by reference to Exhibit
                  10.9 on Integral's Form 10-QSB for the quarter ended December
                  31, 2000 filed February 14, 2001.)

    10.10         Employment Agreement between Integral and William A. Ince
                  dated January 2, 2001. (Incorporated by reference to Exhibit
                  10.10 on Integral's Form 10-QSB for the quarter ended December
                  31, 2000 filed February 14, 2001.)

    10.11         Integral Technologies, Inc. 2001 Stock Plan dated January 2,
                  2001. (Incorporated by reference to Exhibit 10.11 on
                  Integral's Form 10-QSB for the quarter ended December 31, 2000
                  filed February 14, 2001.)

    21.3          List of Subsidiaries.  (Filed herewith).
</TABLE>



(b)      Reports on Form 8-K.

         No current reports on Form 8-K were filed during the last quarter of
the fiscal year ended June 30, 2001.




                                       28
<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended, the Registrant caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                             INTEGRAL TECHNOLOGIES, INC


Dated:  October 11, 2001                     /s/ William S. Robinson
                                             -----------------------------------
                                             William S. Robinson, CEO

                                             /s/ William A. Ince
                                             -----------------------------------
                                             William A. Ince, CFO


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
         Name                                     Title                                       Date
         ----                                     -----                                       ----
<S>                                         <C>                                         <C>
/s/ William S. Robinson                     Chairman, CEO and                           October 11, 2001
-----------------------                     Treasurer
William S. Robinson

/s/ William A. Ince                         Director, President, Secretary              October 11, 2001
-------------------                         and CFO
William A. Ince
</TABLE>





                                       29
<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number    Description
--------------    -----------
<S>               <C>
    2.1           Agreement and Plan of Reorganization between Integral and
                  Integral Vision Systems, Inc. dated March 11, 1997.
                  (Incorporated by reference to Exhibit 2.1 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    2.2           Agreement and Plan of Reorganization between Integral and
                  Emergent Technologies Corporation dated December 10, 1997.
                  (Incorporated by reference to Exhibit 2.2 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    3.1           Articles of Incorporation, as amended and currently in effect.
                  (Incorporated by reference to Exhibit 3.1 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    3.2           Bylaws, as amended and restated on December 31, 1997.
                  (Incorporated by reference to Exhibit 3.2 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    4.1           Form of Securities Purchase Agreement between Integral and
                  certain parties related to the purchase of Integral common
                  stock to be registered pursuant to this offering.
                  (Incorporated by reference to Exhibit 4.1 of Integral's
                  registration statement on Form SB-2 (file no. 333-41938) filed
                  July 21, 2000.)

    4.2           Form of Common Stock Purchase Warrant related to the offering
                  of securities described in Exhibit 4.1. (Incorporated by
                  reference to Exhibit 4.1 of Integral's registration statement
                  on Form SB-2 (file no. 333-41938) filed July 21, 2000.)

    4.3           Investment Agreement dated May 11, 2000, by and between
                  Integral and Swartz Private Equity, LLC. (Incorporated by
                  reference to Exhibit 4.1 of Integral's registration statement
                  on Form SB-2 (file no. 333-41938) filed July 21, 2000.)

    4.4           Warrant to purchase common stock issued to Swartz Private
                  Equity, LLC on May 11, 2000, exercisable to purchase an
                  aggregate of 495,000 shares of common stock at $1.306 per
                  share (subject to adjustment) until December 13, 2004, granted
                  to Swartz in connection with the offering of securities
                  described in Exhibit 4.3. (Incorporated by reference to
                  Exhibit 4.1 of Integral's registration statement on Form SB-2
                  (file no. 333-41938) filed July 21, 2000.)

    4.5           Registration Rights Agreement, dated May 11, 2000, by and
                  between Integral and Swartz Private Equity, LLC, related to
                  the registration of the common stock to be sold pursuant to
                  Exhibit 4.3. (Incorporated by reference to Exhibit 4.1 of
                  Integral's registration statement on Form SB-2 (file no.
                  333-41938) filed July 21, 2000.)

    4.6           Warrant to Purchase Common Stock to be issued from time to
                  time in connection with the offering of securities described
                  in Exhibit 4.3. (Incorporated by reference to Exhibit 4.1 of
                  Integral's registration statement on Form SB-2 (file no.
                  333-41938) filed July 21, 2000.)

    4.7           Warrant Side Agreement dated May 11, 2000 between Integral and
                  Swartz related to the offering of securities described in
                  Exhibit 4.3. (Incorporated by reference to Exhibit 4.1 of
                  Integral's registration statement on Form SB-2 (file no.
                  333-41938) filed July 21, 2000.)
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
Exhibit Number    Description
--------------    -----------
<S>               <C>
    4.9           Form of Addendum Letter dated August 16, 2001 sent by Integral
                  to the ten holders of warrants issued March 31, 2000 in
                  connection with the offering described in Exhibits 4.1 and
                  4.2. (Filed herewith.)

    5.1           Legal opinion of Futro & Trauernicht LLC.  (Incorporated by
                  reference to Exhibit 5.1 of Integral's registration statement
                  on Form SB-2 (file no. 333-41938).)

    10.1          Sublicense Agreement between Integral's subsidiary, Emergent
                  Technologies Corporation, and Integral Concepts, Inc., dated
                  January 2, 1996, relating to the Toroidal Helical Antenna.
                  (Incorporated by reference to Exhibit 10.1 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    10.2          Agreement between Integral and West Virginia University
                  Research Corporation on Behalf of West Virginia University
                  dated February 9, 1996, relating to RF Quarter-Wave Coaxial
                  Cavity Resonator. (Incorporated by reference to Exhibit 10.2
                  of Integral's registration statement on Form 10-SB (file no.
                  0-28353) filed December 2, 1999.)

    10.3          Agreement between Integral and West Virginia University
                  Research Corporation on Behalf of West Virginia University
                  dated February 9, 1996, relating to Counterfeit Currency
                  Determination Prototype. (Incorporated by reference to Exhibit
                  10.3 of Integral's registration statement on Form 10-SB (file
                  no. 0-28353) filed December 2, 1999.)

    10.4          Sublicense Agreement between Integral Concepts, Inc. and
                  Integral dated February 15, 1996, relating to the design,
                  construction and operation of a Plasma Ignition System.
                  (Incorporated by reference to Exhibit 10.4 of Integral's
                  registration statement on Form 10-SB (file no. 0-28353) filed
                  December 2, 1999.)

    10.7          Employee Benefit and Consulting Services Compensation Plan, as
                  restated January 10, 1999. (Incorporated by reference to
                  Exhibit 10.7 of Integral's registration statement on
                  Form 10-SB (file no. 0-28353) filed December 2, 1999.)

    10.8          Sublicense Agreement between Integral's subsidiary, Integral
                  Vision Systems, Inc., and Integral Concepts, Inc., dated
                  February 15, 1994, relating to vision system technologies.
                  (Incorporated by reference to Exhibit 10.8 of Integral's
                  registration statement on Form 10-SB/A-1 (file no. 0-28353)
                  filed February 8, 2000.)

    10.9          Employment Agreement between Integral and William S. Robinson
                  dated January 2, 2001. (Incorporated by reference to Exhibit
                  10.9 on Integral's Form 10-QSB for the quarter ended December
                  31, 2000 filed February 14, 2001.)

    10.10         Employment Agreement between Integral and William A. Ince
                  dated January 2, 2001. (Incorporated by reference to Exhibit
                  10.10 on Integral's Form 10-QSB for the quarter ended December
                  31, 2000 filed February 14, 2001.)

    10.11         Integral Technologies, Inc. 2001 Stock Plan dated January 2,
                  2001. (Incorporated by reference to Exhibit 10.11 on
                  Integral's Form 10-QSB for the quarter ended December 31, 2000
                  filed February 14, 2001.)

    21.3          List of Subsidiaries.  (Filed herewith).
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