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, 2004

[_]  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)

                    Nevada                                     98-0163519
----------------------------------------------------     -----------------------
         (State or other jurisdiction of                     (IRS Employer
          incorporation or organization)                   Identification No.)


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

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. $1,483.
                                                              -------

     As  of  September  20, 2004, the aggregate market value of the voting stock
held  by  non-affiliates,  approximately  36,138,483 shares of Common Stock, was
approximately  $27.1  million  based  on an average of the bid and ask prices of
approximately  $.75  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  20,  2004  was  40,225,849  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.  To  date,  Integral,  directly and through its
subsidiaries,  has  expended  its  resources  on the research and development of
several  different  types  of  technologies.

     Presently,  Integral  is focusing substantially all of its resources on the
researching,  developing  and  commercializing  of  new antenna and electriplast
technologies,  directly and through its wholly-owned subsidiary, Antek Wireless,
Inc.

PRODUCTS
--------

     The  Company  is  focusing  its  marketing  efforts  through  to the end of
calendar  2004  on  wireless  market segments.  The Company's technology will be
marketed  to manufacturers of such wireless devices as cellular phones, portable
phones,  paging  communicators,  satellite  communications,  global  positioning
systems  (GPS) and wireless based networks. The Company's GPS/LEO antenna is for
use  in  mobile  asset  tracking  and  fleet management, utilizing GPS satellite
tracking  and  low  earth  orbit (LEO) satellite data communications to trucking
fleets,  heavy  equipment,  marine  vessels,  railway cars, shipping containers,
transit  vehicles,  all  via satellite interface communications.  Presently, the
Company  is  focusing  all  of  its resources on the researching, developing and
commercializing  its  Plastenna  and  Electriplast  technologies.


                                        1
<PAGE>
Plastenna

     The  Company  has  developed  and  prototyped a new antenna technology. The
pioneering aspect of the Plastenna technology is that it opens the doors to vast
new  horizons  in antenna design and manufacturing processes. The combination of
the  Company's  proprietary  recipe  of conductive materials, and a selection of
resins  from  various resin suppliers results in a covert moldable antenna, that
can  become  part  of  the  shell  or case of any wireless device, be it phones,
radios, or even body parts of vehicles, or new designs for conventional antennas
as  we  know  them  today.  Our research indicates that the Plastenna technology
vastly  improves  design  flexibility,  increases  signal  performance,  reduces
manufacturing  costs,  and  shows  a  marked  reduction  in  power  consumption.

GPS/LEOS Antenna

     Integral  has  recently finalized the development of a "ruggedized" GPS/LEO
antenna,  measuring only 13.25 inches by 9.90 inches, and .870 inches in height.
The  term  "ruggedized" is used to describe the durability of this antenna, that
is  to  say  it  can withstand the elements and yet endure significant shock and
vibration  effects.  This  antenna is for use in mobile asset tracking and fleet
management,  utilizing  GPS  satellite  tracking  and  LEO  satellite  data
communications  to  trucking  fleets,  heavy  equipment, marine vessels, railway
cars,  shipping  containers,  transit  vehicles,  all  via  satellite  interface
communications.

     Integral continues to advance to the next stage of the commercialization of
its  proprietary  antenna  technologies.  The  Company's  Plastenna  and GPS/LEO
antenna  technologies  are  currently undergoing pilot projects with a number of
wireless  companies  around  the  world.

Flat  Panel  Antennas

     The Company has also been developing several new flat panel antenna designs
for  use  in  different  wireless  technology  markets.

Electriplast

     The Company has recently developed a new family of innovative applications,
deemed  "Electriplast",  based  upon  the  Company's  extensive  research  and
development  of  its  Plastenna  technology.  Electriplast is the utilization of
Integral's proprietary recipe of conductive materials, combined with a selection
of  resins  from  various  resin  suppliers  to  conduct electricity in multiple
applications.

Patents  on  Technologies
-------------------------

     Integral  has completed a patent review of the antenna technologies and has
filed  80  U.S.  patent  applications,  47  of  which  are currently provisional
patents,  28  are pending final approval, and 5 have been granted. 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 without the protection of patents. As patents
are  issued,  Integral  will  have  the  exclusive  right to use in the U.S. the
design(s)  described  in  each issued patent for the 18-year life of the patent.

     The  Company's  intellectual property portfolio consists of over nine years
of  accumulated  research  and  design  knowledge  and trade secrets relating to
antenna  design  &  components  as  well as proprietary manufacturing processes.

Product  Manufacturing  and  Distribution
-----------------------------------------

     The  Company  is  not in the manufacturing business.  The Company relies on
third-party  manufacturing  companies  to  manufacture  antenna  products.

     The  Company's  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.


                                        2
<PAGE>
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 its antenna products have an advantage over other antennas
on  the  market  in  terms  of  performance  and  cost.


EMPLOYEES
---------

     Integral  and  its  subsidiaries  currently employ a total of 5 people on a
full-time  basis  and  one  person on a part-time basis.  However, Integral also
relies  on  the  expertise  of  several  technical advisors who are consulted as
needed  on  a  part-time,  contract  basis.


ITEM  2.  DESCRIPTION  OF  PROPERTY.
------------------------------------

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


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

In  April  2003,  James  E.  Smith, a shareholder and co-founder of the Company,
filed  suit  against  the Company and its transfer agent in the Circuit Court of
Monongalia  County,  West  Virginia.  The  Complaint alleges breach of contract,
negligence  and  fraud  claims, and alleges damages in excess of $1 million. The
Company  was  successful  in  having the case moved to federal court in the U.S.
District  Court for the Northern District of West Virginia. The Company filed an
Answer  denying  the  claims,  asserted  several affirmative defenses, and filed
Counterclaims  against  Mr.  Smith  for  the  following  claims  for relief: (1)
Intentional  Misrepresentation;  (2)  Breach  of  Oral  Contract;  (3) Breach of
Written  Contract;  (4)  Negligent  Misrepresentation;  and  (5)  Rescission and
Restitution.  On  August  30,  2004,  the Court dismissed Mr. Smith's claims for
fraud  and  negligence, and also dismissed the Company's counterclaim for breach
of  oral  contract and partially dismissed the counterclaims for intentional and
negligent misrepresentation. The case is scheduled to go to trial in March 2005.


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,  2004.


                                        3
<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,  2003  and  2004.

          Quarter Ended            Low Bid        High Bid
          ------------------       --------       ---------
          September 30, 2002       $   0.66       $    1.06
          December 31, 2002        $   0.49       $    0.88
          March 31, 2003           $   0.68       $    1.26
          June 30, 2003            $   0.72       $    1.05

          September 30, 2003       $   0.77       $    1.40
          December 31, 2003        $   1.04       $    1.50
          March 31, 2004           $   0.88       $    1.54
          June 30, 2004            $   0.71       $    1.26

     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 20, 2004 there were approximately 207 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)  Within the past three fiscal years the Company sold securities from time to
time  pursuant  to  an  Investment  Agreement  with  Swartz  Private Equity, LLC
("Swartz")  that  was executed in May 2000 and terminated in May 2003.  Pursuant
to  the terms of the Investment Agreement, the Company periodically sold ("put")
shares  of  common  stock  to Swartz. In partial consideration of the Investment
Agreement,  the  Company  issued  a  Commitment  Warrants  to Swartz to purchase
495,000  shares of Common Stock for five years, at an adjusted exercise price of
$.50  per  share.  The  Company believes that these transactions are exempt from
registration  pursuant  to Section 4(2) of the Securities Act and/or Rule 506 of
Regulation  D.  Following  is  a  summary  of  completed  put  transactions:


                                        4
<PAGE>

                        Price Per     Gross                       Warrant
Put Date    No. Shares    Share      Proceeds   No. Warrants   Exercise Price
                                                               (as adjusted)
------------------------------------------------------------------------------

09-28-2000      81,885  $     1.25  $  102,356         8,189  $         0.5126

09-26-2001      67,635  $     0.45  $   30,436         6,764  $          0.561

12-12-2001     547,865  $     1.34  $  734,139        54,787  $         1.0406

01-23-2002      51,000  $     1.30  $   66,300         5,100  $          0.814

02-28-2002     109,475  $     1.13  $  123,707        10,948  $          1.188

TOTALS         857,860              $1,056,938        85,788


(b)  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.

(c)  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.

(d)  In  January  2002,  the  Company  issued 100,000 shares of its common stock
pursuant  to  its  employee  benefit and consulting services plan to one person.
The  exercise  price of the shares was $.40 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.

(e) In January 2002, the Company issued an aggregate of 450,000 shares of common
stock  to  two  employees  in  consideration of the execution of a "Proprietary,
Non-Disclosure  and  Non-Solicitation  Agreement" by each person.  A restrictive
legend  was  placed  on  each  certificate  evidencing  the shares.  The Company
believes that the transactions were exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D.

(f)  In  October  2002,  the  Company issued 144,793 shares of restricted common
stock  to  Swartz  Private  Equity,  LLC ("Swartz"), pursuant to an agreement to
settle  a non-use fee of $104,541.84 that had accrued pursuant to the Investment
Agreement  between  the  Company and Swartz. 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.


                                        5
<PAGE>
(g)  In  November  2002,  the  Company  completed a private placement with eight
investors  and  sold  1,684,000 shares of its common stock at $.50 per share and
warrants  to  purchase 842,000 shares of its common stock within two years at an
exercise  price  of  $.75  per  share.  Aggregate  proceeds from the sale of the
common  stock was $842,000.  In connection with the offering, the Company agreed
to  use  its  best efforts to register the shares of common stock (including the
shares  underlying  the  warrants)  for  resale by the investors within 180 days
after  the  close  of  the offering.  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.

(h)  In February 2003, Swartz Private Equity, LLC ("Swartz") exercised a portion
of an outstanding warrant for $27,500 ($.50 per share) and the Company issued to
Swartz  55,000  shares  of  restricted  common  stock.  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.

(i) In May 2003 issued 200,000 shares of restricted common stock to The Investor
Relations  Group,  Inc.  pursuant to a one-year service agreement dated February
27,  2003.  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.

(j)  In  September  2003,  the  Company  completed  a private placement with ten
investors  and  sold  898,336  shares  of its common stock at $.75 per share and
warrants  to  purchase 449,168 shares of its common stock within two years at an
exercise  price  of  $1.00  per  share.  Aggregate proceeds from the sale of the
common  stock was $673,752.  In connection with the offering, the Company agreed
to  use  its  best efforts to register the shares of common stock (including the
shares  underlying  the  warrants)  for  resale by the investors within 180 days
after  the  close  of  the offering.  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.

(k)  In  September  2003,  the Company issued 37,500 shares of restricted common
stock  valued at $35,250 in connection with a settlement of a legal dispute with
Joffre  J. Rolland, Jr. and Robyn Rolland, pursuant to a mutual release executed
in  August  2003.  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) of the Securities Act and/or Rule 506
of  Regulation  D.

(l) In January 2004, Swartz Private Equity, LLC ("Swartz") exercised outstanding
warrants  pursuant  to  a  cashless exercise provision and the Company issued to
Swartz  170,648  shares  of  common  stock.  The transaction did not involve any
public  offering  and no sales commissions were paid.  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.

(m)  On  January  14,  2004,  the  Company  completed a private placement of its
securities  and  raised  $5,711,000  in  gross  proceeds.  The  transaction  was
completed  pursuant  to a Securities Purchase Agreement dated December 26, 2003,
between  the  Company  and  Wellington  Management  Company,  LLP, for a private
offering of 57,110 units ("Units") of equity securities, each Unit consisting of
100 shares of common stock (the "Common Stock"), and one warrant (the "Warrant")
convertible  at  no  cost into 30 shares of Common Stock, at a purchase price of
$100.00  per  Unit.  Wellington  Management  Company, LLP acted as an investment
advisor  on  behalf of eleven institutional investors.  By mutual agreement with
the  Investors,  closing  occurred  on  January  14,  2004.

     Each  Warrant  may  be  exercised in whole or in part at any time, and from
time  to  time,  during  the period commencing on April 30, 2004 and expiring on
December 31, 2009, and entitles the holder to receive shares of common stock for
no  additional  consideration.


                                        6
<PAGE>
     Pursuant  to  the  Securities  Purchase  Agreement,  the  Company  filed  a
registration  statement  to  register  the shares of common stock (including the
share  of  common  stock  underlying  the Warrants) for resale by the investors.

     Wells  Fargo Securities, LLC, served as placement agent for the Company and
received  a  fee  of six percent of the gross proceeds raised from the offering.

     The  transaction  did  not  involve  any public offering, and a restrictive
legend  was  placed  on each certificate evidencing the securities.  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.

(n) In June 2004, Swartz Private Equity, LLC ("Swartz") exercised an outstanding
warrant  pursuant  to  a  cashless  exercise provision and the Company issued to
Swartz  117,650  shares  of  common  stock.  The transaction did not involve any
public  offering  and no sales commissions were paid.  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.
----------------------------------------

     Statements  contained  herein  that  are  not  historical  facts  are
forward-looking  statements  as  that  term is defined by the Private Securities
Litigation  Reform  Act  of  1995.  Although  we  believe  that the expectations
reflected in such forward-looking statements are reasonable, the forward-looking
statements  are  subject  to  risks  and  uncertainties  that could cause actual
results  to  differ  from  those  projected.  We  caution  investors  that  any
forward-looking  statements  made by us are not guarantees of future performance
and  that actual results may differ materially from those in the forward-looking
statements.  Such  risks  and  uncertainties  include,  without  limitation:
well-established  competitors who have substantially greater financial resources
and longer operating histories, regulatory delays or denials, ability to compete
as  a  start-up company in a highly competitive market, and access to sources of
capital.

     The  following  discussion  and analysis should be read in conjunction with
our  financial  statements  and  notes  thereto  included elsewhere in this Form
10-KSB.  Except  for the historical information contained herein, the discussion
in  this  Form  10-KSB  contains certain forward-looking statements that involve
risks  and  uncertainties,  such  as  statements  of  our  plans,  objectives,
expectations  and intentions. The cautionary statements made in this Form 10-KSB
should  be  read  as  being applicable to all related forward-looking statements
wherever  they  appear  in  this Form 10-KSB. The Company's actual results could
differ  materially  from  those  discussed  here.

     To  date  the  Company  has  recorded  nominal  revenues  from the sales of
prototypes.  The  Company  is  still  considered a development stage company for
accounting  purposes. From inception on February 12, 1996 through June 30, 2004,
the  Company  has accrued an accumulated deficit of approximately $17.5 million.

     The  Company's  net  loss  for the year ended June 30, 2004 was $2,543,848,
compared  to  a  net  loss of $1,346,833 for the prior fiscal year.  The primary
expenses  during  the  year  ended  June  30,  2004  were  salaries  ($685,023),
consulting fees ($536,728) and legal and accounting ($909,398).  Legal fees were
exceptionally  high  and primarily related to costs associated with pursuing and
maintaining  technology  patent  filings  and  costs  incurred  in defending the
lawsuit  filed  by  James  E.  Smith  (described  above  in  Part  I,  Item  3).

     As  a  result  of  the  commercial  interest  in  the  Company's  antenna
technologies,  the  Company  presently intends to focus substantially all of its
resources  on  the  commercialization  and  sales  of Plastenna and Electriplast
technologies,  and  the Company will not be devoting any of its resources on the
further research, development and commercialization of the other technologies in
which  it  has  an  interest.

     The  Company's  business  strategy  focuses  on leveraging its intellectual
property  rights  on  its antenna technologies, its strengths in antenna design,
material  innovation,  and  an  understanding  of  the  wireless  marketplace.


                                        7
<PAGE>
     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.

     The  Company  is  focusing  its  marketing  efforts  through  to the end of
calendar  2004  on  wireless  market segments.  The Company's technology will be
marketed  to manufacturers of such wireless devices as cellular phones, portable
phones,  paging  communicators,  satellite  communications,  global  positioning
systems  (GPS) and wireless based networks. The Company's GPS/LEO antenna is for
use  in  mobile  asset  tracking  and  fleet management, utilizing GPS satellite
tracking  and  low  earth  orbit (LEO) satellite data communications to trucking
fleets,  heavy  equipment,  marine  vessels,  railway cars, shipping containers,
transit  vehicles,  all  via satellite interface communications.  Presently, the
Company  is  focusing  all  of  its resources on the researching, developing and
commercializing  its  Plastenna  and  Electriplast  technologies.

     The  Company  anticipates  spending  approximately  $250,000  over the next
twelve  months  on  ongoing research and development (primarily salaries) of the
different  applications  and  uses  of  its  antenna  technologies.

     During  the  next twelve months, the Company does not anticipate increasing
its  staff.

     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 current fiscal year, the Company raised capital
through two private placements by selling common stock and common stock purchase
warrants:

     1.     In  September  2003,  the Company completed a private placement with
ten  investors and sold 898,336 shares of its common stock at $.75 per share and
warrants  to  purchase 449,168 shares of its common stock within two years at an
exercise  price  of  $1.00  per  share.  Aggregate proceeds from the sale of the
common  stock  was  $673,752. Pursuant to the terms of the offering, the Company
filed a registration statement to register the shares of common stock (including
the share of common stock underlying the warrants), for resale by the investors.

     2.     On  January  14,  2004, the Company completed a private placement of
its  securities  and  raised  $5,711,000  in gross proceeds. The transaction was
completed  pursuant  to a Securities Purchase Agreement dated December 26, 2003,
between  the  Company  and  Wellington  Management  Company,  LLP, for a private
offering of 57,115 units ("Units") of equity securities, each Unit consisting of
100 shares of common stock (the "Common Stock"), and one warrant (the "Warrant")
convertible  into  30 shares of Common Stock, at a purchase price of $100.00 per
Unit.  Wellington  Management  Company,  LLP  acted  as an investment advisor on
behalf  of  eleven  institutional  investors.  By  mutual  agreement  with  the
Investors,  closing occurred on January 14, 2004.  Each Warrant may be exercised
in  whole  or  in  part  at  any  time, and from time to time, during the period
commencing on April 30, 2004 and expiring on December 31, 2009, and entitles the
holder  to  receive  shares  of  common  stock  for no additional consideration.
Pursuant  to the Securities Purchase Agreement, the Company filed a registration
statement  to register the shares of common stock (including the share of common
stock  underlying  the  Warrants),  for  resale  by  the investors.  Wells Fargo
Securities, LLC, served as placement agent for the Company and was paid a fee of
six  percent  of  the  gross  proceeds  raised  from  the  offering.

     As  a  result  of  the  private  placement  financing that was completed in
January  2004,  the  Company  will  have  adequate  funds  available to fund its
operations  over  the  next  twelve  months.


                                        8
<PAGE>
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.


ITEM 8A.  CONTROLS AND PROCEDURES.
----------------------------------

Based  on their most recent evaluation, which was completed as of the end of the
period  covered  by  this  annual  report  on  Form  10-KSB, the Company's Chief
Executive  Officer  and Chief Financial Officer believe the Company's disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are
effective  to ensure that information required to be disclosed by the Company in
this  report  is  accumulated  and  communicated  to  the  Company's management,
including  its  principal  executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. During the
last  fiscal  quarter  to  which  this report relates, there were no significant
changes  in  the  Company's  internal  controls  or  other  factors  that  could
significantly  affect  these controls subsequent to the date of their evaluation
and there were no corrective actions with regard to significant deficiencies and
material  weaknesses.


                                        9
<PAGE>
     INTEGRAL TECHNOLOGIES, INC.
     (A DEVELOPMENT STAGE COMPANY)

     CONSOLIDATED FINANCIAL STATEMENTS
     JUNE 30, 2004, 2003 AND 2002
     (U.S. DOLLARS)




     INDEX                                                              PAGE
     -----                                                              ----

     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            F-1

     FINANCIAL STATEMENTS

     Consolidated Balance Sheets                                        F-2

     Consolidated Statements of Operations                              F-3

     Consolidated Statements of Stockholders' Equity (Deficit)        F-4 - F-7

     Consolidated Statements of Cash Flows                              F-8

     Notes to Consolidated Financial Statements                       F-9 - F-25


<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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

We  have  audited the consolidated balance sheets of Integral Technologies, Inc.
(A  Development  Stage  Company)  as  of  June 30, 2004 and 2003 and the related
consolidated  statements  of operations, stockholders' equity (deficit) and cash
flows  for  each  of  the  years  ended  June  30,  2004,  2003 and 2002 and the
cumulative totals for the development stage of operations from February 12, 1996
(inception)  through  June  30,  2004.  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 standard of the Public
Company  Accounting Oversight Board (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  and  the report of the other auditors provide a reasonable basis for our
opinion.

In  our  opinion, based on our audit and the report of the other auditors, these
consolidated  financial statements present fairly, in all material respects, the
consolidated  financial position of the Company as at June 30, 2004 and 2003 and
the  consolidated  results  of its operations and its cash flows for each of the
years  ended  June  30,  2004,  2003  and 2002 and the cumulative totals for the
development  stage of operations from February 12, 1996 (inception) through June
30,  2004  in  conformity  with  accounting principles generally accepted in the
United  States  of  America.

"Pannell Kerr Forster"

Registered Independent
Chartered Accountants

Vancouver, Canada
September 23, 2004


                                      F-1
<PAGE>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
JUNE 30
(U.S. DOLLARS)

=================================================================================
                                                         2004           2003
---------------------------------------------------------------------------------
<S>                                                  <C>            <C>
ASSETS
CURRENT
  Cash                                               $  3,905,773   $    174,210
  Accounts receivable                                           0          1,141
  Prepaid expenses                                         26,091         11,844
TOTAL CURRENT ASSETS                                    3,931,864        187,195
---------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT (note 3)                            31,250         54,282
INVESTMENTS (note 4)                                            1              1
---------------------------------------------------------------------------------

TOTAL ASSETS                                         $  3,963,115   $    241,478
=================================================================================
LIABILITIES
CURRENT
  Accounts payable and accruals (note 7)             $    522,337   $    472,254
  Due to West Virginia University Research
    Corporation (note 9(a))                               397,296        397,296
---------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                 919,633        869,550
---------------------------------------------------------------------------------
CONTINGENCIES (note 9)
STOCKHOLDERS' EQUITY (DEFICIT) (note 5)
PREFERRED STOCK AND PAID-IN CAPITAL IN EXCESS
 OF $0.001 PAR VALUE
  20,000,000     Shares authorized
      321,038    (2003 - 439,610) Shares issued
                  and outstanding (note 5(b))             321,038        439,610
COMMON STOCK AND PAID-IN CAPITAL IN EXCESS
 OF $0.001 PAR VALUE
  50,000,000     Shares authorized
  40,181,849     (2003 - 32,923,855) Shares issued
                  and outstanding (note 5(a))          20,197,085     13,335,752
PROMISSORY NOTES RECEIVABLE (note 5(e))                   (66,500)       (66,500)
SHARE SUBSCRIPTIONS                                             0        211,915
OTHER COMPREHENSIVE INCOME                                 46,267         46,267
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE      (17,454,408)   (14,595,116)
---------------------------------------------------------------------------------

TOTAL STOCKHOLDERS' EQUITY(DEFICIT)                     3,043,482       (628,072)
---------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT          $  3,963,115   $    241,478
=================================================================================
</TABLE>

See notes to consolidated financial statements.


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. DOLLARS)

==================================================================================================
                                                                                     PERIOD FROM
                                                                                    FEBRUARY 12,
                                                                                        1996
                                                                                     (INCEPTION)
                                                    YEARS JUNE 30, ENDED               THROUGH
                                           2004            2003          2002       JUNE 30, 2004
--------------------------------------------------------------------------------------------------
<S>                                  <C>               <C>           <C>           <C>

REVENUE                              $         1,483   $    21,355   $    27,686   $      238,150
COST OF SALES                                      0             0        13,468          216,016
--------------------------------------------------------------------------------------------------
                                               1,483        21,355        14,218           22,134
--------------------------------------------------------------------------------------------------
EXPENSES
  Legal and accounting                       909,398       151,651       169,247        2,085,567
  Salaries                                   685,023       467,093       547,272        3,941,471
  Consulting                                 536,728       445,193       663,795        2,692,245
  Travel and entertainment                   133,132        93,879       122,898          876,800
  General and administrative                 123,596        57,515        97,458          630,013
  Telephone                                   38,375        29,892        33,169          295,675
  Rent                                        33,631        31,838        34,102          287,249
  Financing fees                              25,000             0       104,542          129,542
  Bank charges and
    interest, net                             55,374         1,498        10,053          163,229
  Advertising                                  6,000         9,360        13,348          277,255
  Settlement of lawsuit (note 9(b))                0        45,250             0           45,250
  Research and development                         0         1,234         8,401        1,244,755
  Remuneration pursuant to
    proprietary, non-competition
    agreement (note 5(a)(i))                       0             0       711,000          711,000
  Write-down of license
    and operating assets                           0             0        48,919        1,855,619
  Interest on beneficial
    conversion feature                             0             0             0          566,456
  Write-off of investments (note 4)                0             0     1,249,999        1,249,999
  Cancellation of debt                             0             0             0         (602,843)
  Bad debts (recovery)                       (23,958)       10,753        14,500           52,613
  Depreciation and
    amortization                              23,032        23,032        21,706          293,136
--------------------------------------------------------------------------------------------------
                                           2,545,331     1,368,188     3,850,409       16,795,031
--------------------------------------------------------------------------------------------------

NET LOSS FOR YEAR                    $    (2,543,848)  $(1,346,833)  $(3,836,191)  $  (16,772,897)
==================================================================================================

NET LOSS PER COMMON SHARE            $         (0.07)  $     (0.04)  $     (0.13)
==================================================================================================

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING               36,391,491    31,928,310    29,064,780
==================================================================================================
</TABLE>

See notes to consolidated financial statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(U.S. DOLLARS)

=====================================================================================================================
                                               COMMON                      PREFERRED
                                SHARES        STOCK AND      SHARES OF     STOCK AND
                              OF COMMON    PAID-IN CAPITAL   PREFERRED  PAID-IN 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 (others)            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
---------------------------------------------------------------------------------------------------------------------


===============================================================================
                                                 DEFICIT
                                                ACCUMULATED
                                   OTHER        DURING THE          TOTAL
                               COMPREHENSIVE    DEVELOPMENT     STOCKHOLDERS'
                                  INCOME           STAGE      EQUITY (DEFICIT)
-------------------------------------------------------------------------------
<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 (others)                        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>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(U.S. DOLLARS)

=================================================================================================================================
                                                          COMMON                      PREFERRED
                                         SHARES OF       STOCK AND      SHARES OF     STOCK AND
                                           COMMON     PAID-IN CAPITAL   PREFERRED  PAID-IN 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
  Services                                   50,000            13,000           0                 0            0                0
  Settlement of debt                              0                 0     664,410           664,410            0                0
Shares released from escrow                       0            75,558           0                 0            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
---------------------------------------------------------------------------------------------------------------------------------


=========================================================================================
                                                            DEFICIT
                                                          ACCUMULATED
                                             OTHER        DURING THE          TOTAL
                                         COMPREHENSIVE    DEVELOPMENT     STOCKHOLDERS'
                                             INCOME          STAGE      EQUITY (DEFICIT)
-----------------------------------------------------------------------------------------
<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
  Services                                            0             0             13,000
  Settlement of debt                                  0             0            664,410
Shares released from escrow                           0             0             75,558
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>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(U.S. DOLLARS)

============================================================================================================================
                                                 COMMON                        PREFERRED
                                  SHARES        STOCK AND      SHARES OF       STOCK AND
                                OF COMMON    PAID IN CAPITAL   PREFERRED    PAID- IN 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
  Cash on private placement         81,885           112,480           0                   0             0                0
  Exercise of options              517,000            91,515           0                   0             0                0
  Services                         100,000            40,000           0                   0             0                0
  Held in escrow
    (note 5(a)(ii)(b)(i))          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 year                        0                 0           0                   0             0                0
----------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2001          26,949,062         8,900,983     564,410             564,410       (58,500)          50,000
SHARES ISSUED FOR
  Proprietary non-competition
    agreement (note 5(a)(i))       450,000           711,000           0                   0             0                0
  Held in escrow                   700,000                 0           0                   0             0                0
  Exercise of options            2,263,500           971,200           0                   0       (15,000)         (10,000)
  Exercise of warrants             325,000           130,000           0                   0             0                0
  Subscriptions                    100,000            40,000           0                   0             0          (40,000)
Stock option compensation                0           415,685           0                   0             0                0
Shares released from escrow              0           954,582           0                   0             0                0
Dividends on preferred shares            0                 0           0                   0             0                0
Redeemed shares                          0                 0    (124,800)           (124,800)            0                0
Write-off of promissory
  note receivable                        0            (7,000)          0                   0         7,000                0
Net loss for year                        0                 0           0                   0             0                0
----------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2002          30,787,562  $     12,116,450     439,610   $         439,610   $   (66,500)  $            0
----------------------------------------------------------------------------------------------------------------------------


---------------------------------------------------------------------------------
                                                    DEFICIT
                                                  ACCUMULATED
                                     OTHER        DURING THE          TOTAL
                                 COMPREHENSIVE    DEVELOPMENT     STOCKHOLDERS'
                                    INCOME           STAGE      EQUITY (DEFICIT)
---------------------------------------------------------------------------------
<S>                             <C>              <C>            <C>
BALANCE, JUNE 30, 2000          $       46,293   $ (5,045,856)  $      3,991,128
SHARES ISSUED FOR
  Cash on private placement                  0              0            112,480
  Exercise of options                        0              0             91,515
  Services                                   0              0             40,000
  Held in escrow
    (note 5(a)(ii)(b)(i))                    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 year                            0     (4,000,169)        (4,000,169)
---------------------------------------------------------------------------------
BALANCE, JUNE 30, 2001                  46,267     (9,176,745)           326,415
SHARES ISSUED FOR
  Proprietary non-competition
    agreement (note 5(a)(i))                 0              0            711,000
  Held in escrow                             0              0                  0
  Exercise of options                        0              0            946,200
  Exercise of warrants                       0              0            130,000
  Subscriptions                              0              0                  0
Stock option compensation                    0              0            415,685
Shares released from escrow                  0              0            954,582
Dividends on preferred shares                0        (26,087)           (26,087)
Redeemed shares                              0       (187,200)          (312,000)
Write-off of promissory
  note receivable                            0              0                  0
Net loss for year                            0     (3,836,191)        (3,836,191)
---------------------------------------------------------------------------------
BALANCE, JUNE 30, 2002          $       46,267   $(13,226,223)  $       (690,396)
---------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.


                                      F-6
<PAGE>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(U.S. DOLLARS)

=================================================================================================================================
                                                        COMMON                       PREFERRED
                                        SHARES        STOCK AND      SHARES OF       STOCK AND
                                       OF COMMON   PAID-IN CAPITAL   PREFERRED    PAID IN-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, 2002                30,787,562   $     12,116,450    439,610   $        439,610   $   (66,500)  $            0
SHARES ISSUED FOR
  Cash on private placement            1,684,000            842,050          0                  0             0                0
  Settlement of debt                     144,793            104,542          0                  0             0                0
  Services                               200,000            196,000          0                  0             0                0
  Exercise of options                     52,500             43,750          0                  0             0                0
  Exercise of warrants                    55,000             27,500          0                  0             0                0
Subscription received note 6(a)(vi))           0                  0          0                  0             0          176,665
Stock option compensation                      0              5,460          0                  0             0                0
Settlement of lawsuit (note 9(b))              0                  0          0                  0             0           35,250
Dividends on preferred shares                  0                  0          0                  0             0                0
Net loss for year                              0                  0          0                  0             0                0
---------------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2003                32,923,855         13,335,752    439,610            439,610       (66,500)         211,915
SHARES ISSUED FOR
  Cash on private placement            6,609,336          6,042,935          0                  0             0         (211,915)
  Cash on exercise of options             25,000             25,000          0                  0             0                0
  Settlement of lawsuit (note 9(b))       37,500             35,250          0                  0             0                0
  Services                                25,000             21,873          0                  0             0                0
  Redemption of preferred shares         415,000            415,000   (118,572)          (118,572)            0                0
  Exercise warrants                      288,298                  0          0                  0             0                0
Shares returned to treasury for
    Cancellation                        (142,140)                 0          0                  0             0                0
Stock option compensation                      0            321,275          0                  0             0                0
Dividends on preferred shares                  0                  0          0                  0             0                0
Net loss for year                              0                  0          0                  0             0                0
---------------------------------------------------------------------------------------------------------------------------------

BALANCE, JUNE 30, 2004                40,181,849   $     20,197,085    321,038   $        321,038   $   (66,500)  $            0
---------------------------------------------------------------------------------------------------------------------------------


======================================================================================
                                                         DEFICIT
                                                       ACCUMULATED
                                          OTHER        DURING THE          TOTAL
                                      COMPREHENSIVE    DEVELOPMENT     STOCKHOLDERS'
                                          INCOME          STAGE      EQUITY (DEFICIT)
--------------------------------------------------------------------------------------
<S>                                   <C>             <C>            <C>
BALANCE, JUNE 30, 2002                $       46,267  $(13,226,223)  $       (690,396)
SHARES ISSUED FOR
  Cash on private placement                        0             0            842,050
  Settlement of debt                               0             0            104,542
  Services                                         0             0            196,000
  Exercise of options                              0             0             43,750
  Exercise of warrants                             0             0             27,500
Subscription received note 6(a)(vi))               0             0            176,665
Stock option compensation                          0             0              5,460
Settlement of lawsuit (note 9(b))                  0             0             35,250
Dividends on preferred shares                      0       (22,060)           (22,060)
Net loss for year                                  0    (1,346,833)        (1,346,833)
--------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2003                        46,267   (14,595,116)          (628,072)
SHARES ISSUED FOR
  Cash on private placement                        0             0          5,831,020
  Cash on exercise of options                      0             0             25,000
  Settlement of lawsuit (note 9(b))                0             0             35,250
  Services                                         0             0             21,873
  Redemption of preferred shares                   0      (296,428)                 0
  Exercise warrants                                0             0                  0
Shares returned to treasury for
    Cancellation                                   0             0                  0
Stock option compensation                          0             0            321,275
Dividends on preferred shares                      0       (19,016)           (19,016)
Net loss for year                                  0    (2,543,848)        (2,543,848)
--------------------------------------------------------------------------------------

BALANCE, JUNE 30, 2004                $       46,267  $(17,454,408)  $      3,043,482
--------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.


                                      F-7
<PAGE>
<TABLE>
<CAPTION>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. DOLLARS)

=====================================================================================================================
                                                                                                     PERIOD FROM
                                                                                                  FEBRUARY 12, 1996
                                                                YEARS ENDED JUNE 30,             (INCEPTION) THROUGH
                                                          2004          2003          2002          JUNE 30, 2004
---------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>           <C>           <C>           <C>
OPERATING ACTIVITIES
  Net loss                                            $(2,543,848)  $(1,346,833)  $(3,836,191)  $        (16,772,897)
  Adjustments to reconcile net loss to
  net cash used by operating activities
    Write-down of investment                                    0             0     1,249,999              1,249,999
    Cancellation of debt                                        0             0             0               (602,843)
    Proprietary, non-competition
      agreement (note 5(a)(i))                                  0             0       711,000                711,000
    Consulting services and financing fees                 61,873       223,500       254,792                957,273
    Depreciation and amortization                          23,032        24,302        28,983                318,691
    Stock option compensation                             321,275         5,460       415,685              1,133,483
    Interest on beneficial conversion                           0             0             0                566,456
    Settlement of lawsuit                                       0        45,250             0                 60,250
    Write-down of license and operating assets                  0             0        46,842              1,853,542
    Bad debt                                                1,141        10,752        14,500                 77,712
  Changes in non-cash working capital
    Due from affiliated company                                 0             0             0               (116,000)
    Notes and accounts receivable                               0         3,873        (2,923)              (109,213)
    Inventory                                                   0             0             0                (46,842)
    Prepaid expenses                                      (14,247)        3,249       (14,928)               (26,091)
    Deferred revenue and other                                  0       (13,232)            0                 (2,609)
    Accounts payable and accruals                          31,067      (112,371)      (95,852)               746,895
    Due to West Virginia University
      Research Corporation                                      0             0             0                397,296
---------------------------------------------------------------------------------------------------------------------
NET CASH USED BY OPERATING ACTIVITIES                  (2,119,707)   (1,156,050)   (1,228,093)            (9,603,898)
---------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
  Purchase of property, equipment and
    Intangibles assets                                          0             0             0               (200,935)
  Assets acquired and liabilities assumed
    on purchase of subsidiary                                   0             0             0               (129,474)
  Investment in and advances to affiliate companies             0             0             0             (2,000,000)
  License agreements                                            0             0             0               (124,835)
---------------------------------------------------------------------------------------------------------------------
NET CASH USED BY INVESTING ACTIVITIES                           0             0             0             (2,455,244)
---------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
  Repayment of loan                                             0             0             0                (45,000)
  Advances from stockholders                                    0             0             0              1,078,284
  Repayments to stockholders                                    0             0             0                (94,046)
  Subscriptions received                                        0       176,665             0                226,665
  Proceeds from issuance of common stock                5,851,270       885,800     1,426,332             14,380,165
  Proceeds from convertible debentures                          0             0             0                600,000
  Share issue costs                                             0             0             0               (227,420)
---------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES               5,851,270     1,062,465     1,426,332             15,918,648
---------------------------------------------------------------------------------------------------------------------
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH                  0             0             0                 46,267
---------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH                             3,731,563       (93,585)      198,239              3,905,773
CASH, BEGINNING OF YEAR                                   174,210       267,795        69,556                      0
---------------------------------------------------------------------------------------------------------------------
CASH, END OF YEAR                                     $ 3,905,773   $   174,210   $   267,795   $          3,905,773
=====================================================================================================================
</TABLE>
Supplemental cash flow information (note 6)

See notes to consolidated financial statements.


                                      F-8
<PAGE>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2004, 2003 AND 2002
(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.

     The  Company  will  be  devoting  all  of  its  resources  to the research,
     development  and  commercialization  of  its  antenna  technologies.  As  a
     consequence,  the  value  for  the  license  of  all other technologies was
     written  off  in  2001.

2.   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,  Integral  Vision Systems, Inc. ("IVSI"), Antek Wireless
          Inc.  ("Antek")  and  Plastenna,  Inc.  ("Plastenna")  a  Delaware
          corporation  and  its  76.625% owned subsidiary, Emergent Technologies
          Corp.  ("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  (note  4).

     (b)  Depreciation

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

               Machinery,  furniture  and  equipment     -   5  Years
               Computer  hardware  and  software         -   5  Years
               Molds                                     -   5  Years

          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.

     (c)  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.


                                      F-9
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (d)  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.

     (e)  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.

     (f)  Foreign  currency  translation

          Assets  and  liabilities  of  non-U.S.  subsidiaries that operate in a
          local  currency environment are translated to U.S. dollars at year-end
          exchange  rates.  Income  and  expense  items  are  translated  at
          weighted-average  rates  of  exchange  prevailing  during  the  year.
          Translation  adjustments  are recorded in accumulated gains and losses
          not  affecting  accumulated  deficit  within  stockholders'  equity
          (deficit).

          Property  and  equipment and other non-monetary assets and liabilities
          of non-U.S. subsidiaries and branches that operate in U.S. dollars, or
          whose  economic  environment is highly inflationary, are translated at
          approximate  exchange  rates  prevailing when the Company acquired the
          assets or liabilities. All other assets and liabilities are translated
          at  year-end  exchange  rates.  Cost  of  sales  and  depreciation are
          translated  at historical exchange rates. All other income and expense
          items  are  translated  at  the  weighted-average  rates  of  exchange
          prevailing  during  the  year.  Gains  and  losses  that  result  from
          translation  are  included  in  the  determination  of  net  loss.

          The  Company's transactions in foreign currencies have been minimal in
          the last few years, as a result foreign exchange gains and losses have
          been  immaterial.

     (g)  Research  and  development

          Research  and  development  expenditures  are charged to operations as
          incurred.

     (h)  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.


                                      F-10
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

2.   SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

     (i)  Financial  instruments

         (i)   Fair  value

               The carrying value of cash, accounts receivable, accounts payable
               and  accruals  and  due  to  West  Virginia  University  Research
               Corporation  approximate  their  fair  value because of the short
               maturity  of  these  financial  instruments.

         (ii)  Interest  rate  risk

               The  Company is not exposed to significant interest rate risk due
               to  the  short-term  maturity  of its monetary current assets and
               current  liabilities.

         (iii) Credit  risk

               The  Company's  financial  assets that are exposed to credit risk
               consist  primarily  of  cash which is placed with major financial
               institutions.

          (iv) Translation  risk

               The  Company  translates the results of non-US operations into US
               currency  using rates approximating the average exchange rate for
               the year. The exchange rate may vary from time to time. This risk
               is  considered  nominal  as  the  Company  does  not  incur  any
               significant  transactions  in  non-US  currency.

     (j)  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.


                                      F-11
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

2.   SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

     (k)  Stock-based  compensation

          The  Company applies APB Opinion No. 25 and related interpretations in
          accounting for its stock options granted to employees. During the year
          the  Company  extended the expiry date of some of its options and as a
          result  these  options  became  variable  options,  and  accordingly,
          compensation  expense  of  $136,750  (2003  -  Nil;  2002 -$7,800) 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>
===============================================================================
                                           2004          2003          2002
-------------------------------------------------------------------------------
<S>                                    <C>           <C>           <C>

Net loss, as reported                  $(2,543,848)  $(1,346,833)  $(3,836,191)
Add:  Stock-based employee
compensation expense under
intrinsic value method included in
reported net loss, net of related tax
effects                                    136,750             0         7,800

Deduct:  Total stock-based
compensation expense determined
under fair value based method for all
awards, net of related tax effects         (14,159)     (230,180)     (320,640)
-------------------------------------------------------------------------------

Net loss, pro-forma                    $(2,421,257)  $(1,577,013)  $(4,149,031)
===============================================================================

Net loss per share, as reported        $     (0.07)  $     (0.04)  $     (0.13)
Add:  Stock-based employee
compensation expense under
intrinsic value method included in
reported net loss, net of related tax
effects                                       0.00          0.00          0.00

Deduct:  Total stock-based
compensation expense determined
under fair value based method for all
awards, net of related tax effects            0.00         (0.01)        (0.01)
-------------------------------------------------------------------------------

Net loss per share, pro-forma          $     (0.07)  $     (0.05)  $     (0.14)
================================================================================
</TABLE>

The  Company  applies  SFAS  123  in accounting for its stock options granted to
non-employees, and accordingly, compensation expense of $184,525 (2003 - $5,460;
2002  -  $Nil)  was  recognized  as  consulting  expense  for fixed and variable
options.


                                      F-12
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

2.  SIGNIFICANT  ACCOUNTING  POLICIES  (continued)

     (k)  Stock  based  compensation  (Continued)

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

          ============================================================
                                       2004         2003         2002
          ------------------------------------------------------------

          Expected life (years)           1          2.2            2
          Interest rate                3.50%        3.00%        4.38%
          Volatility                  72.50%       51.50%       71.86%
          Dividend yield               0.00%        0.00%        0.00%
          ============================================================

     (l)  Comprehensive  income

          Other  comprehensive  income  includes  revenues  and  expenses  and
          unrealized gains and losses that under accounting principles generally
          accepted  in the United States of America are excluded from net income
          (loss)  and  are  recorded  directly as an adjustment to stockholders'
          equity,  net of tax. When the unrealized gains and losses are realized
          they  are reclassified from other comprehensive income and included in
          net  income.  The  Company's  other  comprehensive  income  (loss)  is
          composed  of  unrealized  gains  and  losses  from  foreign  currency
          translation  adjustments.  (see  note  10)

     (m)  Recent  accounting  pronouncements

          (i)  In  January  2003,  the  FASB  issued  Interpretation  No.  46,
               Consolidation of Variable Interest Entities, an interpretation of
               Accounting  Research  Bulletin  No.  51,  Consolidated  Financial
               Statements. Interpretation 46 establishes accounting guidance for
               consolidation  of  variable  interest  entities  that function to
               support the activities of the primary beneficiary. Interpretation
               46  applies  to  any business enterprise both public and private,
               that  has  a  controlling  interest,  contractual relationship or
               other  business relationship with a variable interest entity. The
               Company has no investment in or contractual relationship or other
               business  relationship  with  a  variable  interest  entity  and
               therefore  the  adoption did not have any impact on the Company's
               consolidated  financial  position,  results of operations or cash
               flows.


                                      F-13
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

2.   SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

     (m)  Recent  accounting  pronouncements  (Continued)

         (ii)  On  April  30,  2003, the FASB issued Statement No. 149,Amendment
               of  Statement  133  on  Derivative  Instruments  and  Hedging
               Activities.  Statement  149  is  intended  to  result  in  more
               consistent  reporting  of  contracts  as  either  freestanding
               derivative  instruments subject to Statement 133 in its entirety,
               or  as  hybrid  instruments with debt host contracts and embedded
               derivative  features.  In  addition,  Statement 149 clarifies the
               definition  of  a derivative by providing guidance on the meaning
               of  initial net investments related to derivatives. Statement 149
               is  effective  for  contracts entered into or modified after June
               30,  2003.  The adoption of Statement 149 did not have any effect
               on  the  Company's  consolidated  financial  position, results of
               operations  or  cash  flows.

         (iii) On  May  15,  2003, the FASB issued Statement No. 150, Accounting
               for  Certain  Financial  Instruments with Characteristics of both
               Liabilities  and  Equity. Statement 150 establishes standards for
               classifying  and  measuring  as  liabilities  certain  financial
               instruments  that  embody  obligations  of  the  issuer  and have
               characteristics  of  both  liabilities  and equity. Statement 150
               represents a significant change in practice in the accounting for
               a  number  of  financial  instruments,  including  mandatorily
               redeemable equity instruments and certain equity derivatives that
               frequently are used in connection with share repurchase programs.
               Statement  150 is effective for all financial instruments created
               or  modified  after  May 31, 2003, and to other instruments as of
               September  1,  2003. The Company adopted Statement 150 on July 1,
               2003.  The  effect  of  adopting  this statement did not have any
               effect  on the Company's consolidated financial position, results
               of  operations  or  cash  flows.

          (iv) On  April 2002, the FASB  issued  statement  No. 145,  Rescission
               of  FASB  No. 4 Reporting Gains and Losses from Extinguishment of
               Debt, and amendment of FASB No. 64 Extinguishment of Debt made to
               Satisfy  Sinking-Fund  Requirements. This statement also rescinds
               FASB  No.  44  Accounting for Intangible Assets of Motor Carriers
               and also amends FASB No. 13 Accounting for leases to eliminate an
               inconsistency  in  accounting  for  sale-leaseback.  The  Company
               adopted  this  statement  effective  July  1, 2002. The impact of
               adopting  this  statement is the reclassification of cancellation
               of  debt,  previously  recorded  as  extraordinary item, to other
               income.

3.   PROPERTY  AND  EQUIPMENT

     ===========================================================================
                                                        2004             2003
     ---------------------------------------------------------------------------

     Machinery, furniture and equipment              $ 148,940        $ 148,940
     Computer hardware and software                     39,419           39,419
     Molds                                               4,800            4,800
     ---------------------------------------------------------------------------
                                                       193,159          193,159
     Less:  Accumulated depreciation                  (161,909)        (138,877)
     ---------------------------------------------------------------------------
                                                     $  31,250        $  54,282
     ===========================================================================


                                      F-14
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

4.   INVESTMENTS

     In  July  2000,  the  Company  executed  a  Stock  Purchase  Agreement with
     Continental  Divide  Robotics Inc. ("CDRI") related to the acquisition of a
     minority  interest in CDRI. CDRI has developed certain proprietary hardware
     and  software  systems  that use a radio-navigation, satellite-based Global
     Positioning  System  to  track  individuals,  on  a  real  time  basis.

     Pursuant  to  the  agreement, the Company invested $1.25 million dollars to
     acquire 20.33% of the outstanding common stock of CDRI. Because the Company
     has  no  influence  or  control  over  CDRI,  and  no  ability  to exercise
     significant influence over CDRI, the Company's investment has been recorded
     at  cost  using  the  cost  method.

     CDRI  is  a  privately  held  company and there is no public market for its
     common  stock.  CDRI  has  a  working  capital deficiency and has sustained
     continued  significant  operating  losses.  Due  to  the  Company's lack of
     control  over  the  operations  of CDRI, lack of information concerning the
     business  prospects  of  CDRI, lack of financial information concerning the
     ability  of  CDRI to continue as a going concern, and lack of liquidity for
     the  Company's  investment in CDRI during the year ended June 30, 2002, the
     Company  wrote  down  its  investment  in CDRI from $1,250,000 to a nominal
     value  of $1. This decision was made in consideration of the foregoing, and
     in  order  to  conform with accounting principles generally accepted in the
     United  States of America. However, CDRI remains an active business entity,
     possessing  proprietary technology, and continues to market its technology.
     The  Company has no current information to suggest that the CDRI technology
     or  the  business  opportunity  for  such  technology  has  been negatively
     impacted.  The  Company continues to retain its ownership position in CDRI.

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)

     (a)  Common  stock

          (i)  During  the  year  ended  June 30, 2002, the Company entered into
               a proprietary, non-disclosure and non-solicitation agreement with
               two  of  its  employees  whereby,  for  a total of 450,000 common
               shares, these employees will not disclose any information that is
               defined  as  confidential  by  the Company in this agreement; the
               employees will work for the Company exclusively while employed by
               the Company and will not work for a competitor for a period of at
               least  three  years  after leaving the Company. These shares were
               recorded  at $1.58 per common share being the market price at the
               date  of  issue  for  a  total  charge to operations of $711,000.


                                      F-15
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)  (Continued)

     (a)  Common  stock  (Continued)

          (ii) Private  placement  agreement

               (a)  During  the  year  ended  June 30, 2000, the Company entered
                    into  a  private  placement  agreement  with  Swartz Private
                    Equity,  LLC  ("Swartz") which called for periodic purchases
                    over  a  three  year  period  of  up  to  $25,000,000 of the
                    Company's  common  stock.  This  agreement expired May 2003.

                    Each periodic purchase ("put") has a purchase price equal to
                    the  lesser  of  the market price minus $0.25, or 91% of the
                    market  price,  but  not less than a stated minimum purchase
                    price  as  set  in  the  advance put notice, which cannot be
                    greater  than  80%  of  the  market  price  on  that  date.

                    Each  put  cannot  exceed  the  lesser  of:

                    (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  that  would cause Swartz to
                              acquire in a 31 day period preceding the put date,
                              in total in excess of 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.

                    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 equal
                    to  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 year
                    ended June 30, 2003 was waived as the agreement expired. The
                    non-usage  fee  for the year ended June 30, 2002 of $104,542
                    was  settled in 2003 by issuance of 144,793 shares of common
                    stock.  The  non-usage fee for the period prior to August 3,
                    2001  was  waived  by  Swartz.


                                      F-16
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)  (Continued)

     (a)  Common  stock  (Continued)

          (ii) Private  placement  agreement  (Continued)

               (b)  Pursuant  to  this  agreement:

                    (i)       During  the  year ended June 30, 2001, 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.

                    (ii)      During  the  year ended June 30, 2002, the Company
                              issued  700,000  shares held in escrow to exercise
                              puts. 775,975 shares were released on the exercise
                              of  these  puts  for  total  proceeds of $954,582,
                              leaving 142,140 shares in escrow at June 30, 2002.
                              As part of these puts 85,788 warrants were issued.

                    (iii)     During  the  year ended June 30, 2003, the Company
                              settled  the  non-usage  fee  of  $104,542  due to
                              Swartz  by issuing 144,793 shares of common stock.

                    (iv)      Subsequent to June 30, 2003, the 142,140 shares in
                              escrow were returned to the Company and cancelled.

         (iii) During  the  year ended June 30, 2003, the Company entered into a
               private  placement  agreement  with various investors whereby the
               Company  issued 1,684,000 units consisting of one share of common
               stock  and  one-half a share purchase warrant at a price of $0.50
               per  unit.  Each whole warrant is exercisable at a price of $0.75
               per  share  and  expires  two  years  after  the  date  of grant.

         (iv)  During  the  year ended June 30, 2003, the Company entered into a
               letter of agreement whereby the Company will pay a monthly fee of
               $10,000  for  investor  relations and maintenance fees commencing
               March  7,  2003  for  a period of one year. For introductions for
               private placement money, the Company will pay a three percent fee
               for  every  one  million  dollars  raised through this agreement.

               As  part  of  this agreement, the Company agreed to issue 200,000
               common  shares  which  was  recognized  as  consulting expense at
               market  value  on  the  date  of  the  transaction for a total of
               $196,000.


                                      F-17
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)  (Continued)

     (a)  Common  stock  (Continued)

          (v)  During  the  year  ended June 30, 2003, the Company issued 55,000
               shares  at  a  price  of $0.50 per share on exercise of warrants.

          (vi) During  the  year  ended  June  30,  2004,  the  Company:

               (a)  entered  into a private placement whereby the Company issued
                    898,336  shares  at  a  price of $0.75 per share and 449,268
                    share purchase warrants exercisable within two years with an
                    exercise  price  of  $1.00 per share. Of which 20,000 shares
                    were  paid  for  with  services  valued  at  $15,000.

               (b)  received  for  cancellation 142,140 shares previously issued
                    and  held in escrow under the Swartz agreement which expired
                    during  the  year  ended  June  30,  2003.

               (c)  issued 37,500 shares as part of the mutual release agreement
                    in settlement of all claims related to the Joffre J. Rolland
                    and  Robin  L.  Rolland  claims.

               (d)  issued  25,000  shares  at  a  price  of  $1.00 per share on
                    exercise  of  options.

               (e)  redeemed  118,572  shares  of Series A convertible preferred
                    stock  from  an officer of the Company. The redemption price
                    of  $3.50  per  share  was  used  as  consideration  for the
                    exercise  of 415,000 options to purchase common stock of the
                    Company  at  a  price  of  $1.00  per  share.

               (f)  issued  288,298 shares upon the exercise of warrants held by
                    Swartz.  The  warrants  were  exercised  under  a  cashless
                    exercise  provision.  No  cash consideration was received by
                    the  Company.

               (g)  entered  into a private placement whereby the Company issued
                    57,110  units  at  $100  per  unit  for  gross  proceeds  of
                    $5,711,000  less  a  private  placement  fee  of 6% of gross
                    proceeds.  Each unit is comprised of 100 newly issued shares
                    of  the  Company's  common stock and one warrant convertible
                    into  30 additional shares of common stock. Each warrant may
                    be  exercised  in  whole  or in part at any time, during the
                    period commencing on April 30, 2004 and expiring on December
                    31,  2009,  and  entitles  the  holder  to receive shares of
                    common  stock  for  no  additional  consideration.

         (vii) Subsequent to June 30, 2004, the Company issued 44,000 shares  to
               settle  debt  for  $55,000.


                                      F-18
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)  (Continued)

     (b)  Preferred  stock

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

          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  and  $3.50 per share in each of the subsequent four years after
          the  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, 2004, the Company redeemed 118,572
          (2003  -  $Nil;  2002  -  124,800) preferred shares at a total cost of
          $415,000  (2003  -  $Nil;  2002  $312,000)


                                      F-19
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)  (Continued)

     (c)  Stock  options

          In  January  2001 the Company adopted the "Integral Technologies, Inc.
          2001  Stock Plan" (the "2001 Plan"), a non-qualified stock option 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. This plan was amended December 2001 to
          increase  the number of common share options which may be granted from
          2,500,000  to  3,500,000  stock  options.

          The following table summarizes the Company's stock option activity for
          the  years  ended  June  30,  2003,  2002  and  2001:

          ====================================================================
                                                                     Weighted
                                                        Exercise      Average
                                          Number         Price       Exercise
                                         of Shares     Per Share       Price
          --------------------------------------------------------------------

          Balance, June 30, 2001         1,338,500   $0.15 to $1.00  $    0.35
          Granted during the year
            June 30, 2002                2,430,000   $0.40 to $1.50  $    0.63
          Exercised                     (2,463,500)  $0.15 to $1.20  $    0.41
          --------------------------------------------------------------------
          Balance, June 30, 2002         1,305,000   $0.40 to $1.50  $    0.76
          Granted during the year
            June 30, 2003                1,230,000   $         1.00  $    1.00
          Exercised                        (52,500)  $0.69 to $1.50  $    0.83
          Cancelled                       (575,000)  $0.40 to $1.00  $    0.66
          -------------------------------------------------------------------
          Balance, June 30, 2003         1,907,500   $0.40 to $1.50  $    0.94
          Granted during the year
            June 30, 2004                  255,000   $         1.00  $    1.00
          Cancelled                       (175,000)  $0.65 to $1.50  $    0.77
          Exercised                       (440,000)  $         1.00  $    1.00
          --------------------------------------------------------------------

          Balance, June 30, 2004         1,547,500   $0.64 to $1.50  $    0.94
          ====================================================================

          The  following summarizes the options outstanding at June 30, 2004 and
          2003  all  of  which  were  fully  vested  at  these  dates:

          ======================================================================
                                          Exercise             Number of Shares
          Expiry Date                      Price              2004       2003
          ----------------------------------------------------------------------

          August 31, 2004              $0.40 to $1.50         877,500  1,077,500
          August 31, 2005              $         1.00         255,000          0
          December 31, 2005            $         1.00         415,000    830,000
          Total                        $0.40 to $1.50       1,547,500  1,907,500
          ======================================================================


                                      F-20
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)  (Continued)

     (c)  Stock  options  (Continued)

          Pursuant  to  the  2001  Plan:

          (i)       During  the year ended June 30, 2004, the Company granted  a
                    total of 255,000 stock options to consultants at an exercise
                    price  of  $1.00  per  common  share.  All options are fully
                    vested  at  the  date  of  grant and expire August 31, 2005.

          (ii)      During  the year ended June 30, 2003, the Company granted  a
                    total  of 1,230,000 stock options to officers, directors and
                    key  employees  at  an  exercise  price  of $1.00 per common
                    share. 400,000 of these options are fully vested at the date
                    of  grant  and  expire  August  31,  2003 and 830,000 vested
                    January  1,  2003  and  expire  December  31,  2005.

          (iii)     During the year ended June 30,  2004,  the  expiry  date  of
                    790,000  options was extended to August 31, 2004 as such the
                    options  became  variable options (note 2(k)). Subsequent to
                    year-end,  the  expiry  date of 730,000 of these options was
                    extended  again  to  August  31,  2005.

          In  April  2003,  the Company adopted the "Integral Technologies, Inc.
          2003  Stock Plan" (the "2003 Plan"), a non-qualified stock option plan
          under which the Company may issue up to 1,500,000 stock options. As of
          June 30, 2003, no options have been granted with respect to this plan.

     (d)  Stock  purchase  warrants

          At  June  30,  2004,  the  following  stock  purchase  warrants  were
          outstanding:

          (i)       Nil  (2003  -  440,000)  with an adjusted exercise price  of
                    $0.50  exercisable  before  November  10,  2005;

          (ii)      45,496 (2003 - 77,599) with  exercise  prices  ranging  from
                    $0.51  to  $1.18 exercisable on or before November 10, 2005;
                    and

          (iii)     842,000 with exercise  price  of  $0.75  exercisable  before
                    November  1,  2004.

          (iv)      449,170 with exercise  price  of  $1.00  exercisable  before
                    September  25,  2005.

          (v)       1,713,300 with exercise price  of  $Nil  exercisable  before
                    December  31,  2009.

          Both  (i)  and  (ii) 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.


                                      F-21
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

5.   STOCKHOLDERS'  EQUITY  (DEFICIT)(Continued)

     (e)  Promissory  notes  receivable  at  June  30,  2004  includes:

          (i)       $31,500 (2003  -  $31,500) due  on exercise of 210,000 stock
                    options,  interest  at  10% per annum, due November 1, 2002,
                    subsequently  extended  to  June  30,  2003.
          (ii)      $20,000  (2003  -  $20,000) due on exercise of 100,000 stock
                    options,  interest  at  8%  per  annum  due  June  6,  2002.
          (iii)     $15,000  (2003  -  $15,000)  due on exercise of 23,000 stock
                    options,  interest  at  10%  per  annum  due  June 30, 2003.

          As  at  September 3, 2004, these notes have not been collected. Shares
          issued  on  exercise  of  options  are  restricted  for trading by the
          Company.  The  restrictions  will  not be removed until the respective
          notes  are  paid  to  the  Company.

6.   SUPPLEMENTAL  DISCLOSURE  OF  CASH  FLOW  INFORMATION

<TABLE>
<CAPTION>
=============================================================================================
                                                                                PERIOD FROM
                                                                               FEBRUARY 12,
                                                                                   1996
                                                                                (INCEPTION)
                                                                                  THROUGH
                                           2004          2003         2002     JUNE 30, 2004
---------------------------------------------------------------------------------------------
<S>                                    <C>           <C>            <C>       <C>

SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
SHARES ISSUED
  For redemption of preferred shares   $    415,000  $           0  $      0  $       415,000
  For property and equipment                      0              0    18,000           23,000
  For proprietary agreement                       0              0   711,000          711,000
  For settlement of accounts payable              0        104,542   124,200          228,742
  For services (provided by officers
    and directors)                                0              0         0          120,000
  For settlement of lawsuit                       0              0         0           15,000
  For services                               61,873        223,500   150,250          696,784
  For acquisition of subsidiary                   0              0         0          894,200
SUPPLEMENT CASH FLOW INFORMATION
  Interest paid                                   0              0         0           81,111
  Income tax paid                                 0              0         0                0
=============================================================================================
</TABLE>

7.   RELATED  PARTY  TRANSACTIONS

     (a)  Accounts  payable  at June 30, 2004 includes $29,290 (2003 - $269,660)
          due  to  two  directors  and  officers  of  the  Company.

     (b)  The  Company  incurred $398,777 (2003 - $340,000; 2002 - $312,000) for
          wages  due  to  two  directors  and  officers  of  the  Company.

     (c)  The  Company  incurred $37,000 (2003 - $nil; 2002 - $nil) for interest
          paid  to  two  directors  and officers of the Company. This charge was
          authorized  by  the  board  of directors for amounts owed since fiscal
          year  ended  June  30,  2001.


                                      F-22
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

8.   INCOME  TAXES

     Deferred  income  taxes reflect the tax effect 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:

     =========================================================================
                                          2004          2003          2002
     -------------------------------------------------------------------------

     Deferred income tax assets
       Net operating loss
         and credit
         Carryforwards                $ 5,800,000   $ 4,900,000   $ 3,400,000
       Accrued liabilities                 40,000        40,000        40,000
       Temporary differences
         on property and
         equipment depreciation            (3,000)       (3,000)       (1,000)
     -------------------------------------------------------------------------

     Gross deferred tax assets          5,837,000     4,937,000     3,399,000
     Valuation allowance               (5,837,000)   (4,937,000)   (3,399,000)
     -------------------------------------------------------------------------

                                      $         0   $         0   $         0
     =========================================================================

     As  at  June  30,  2004  the Company's net operating loss carryforwards for
     income  tax purposes were approximately $16,700,000(2003 - $14,100,000). If
     not  utilized,  they  will  start  to  expire  in  2017.

9.   CONTINGENCIES

     (a)  A dispute exists between West Virginia University Research Corporation
          ("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.


                                      F-23
<PAGE>
INTEGRAL  TECHNOLOGIES,  INC.
(A  DEVELOPMENT  STAGE  COMPANY)
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2004,  2003  AND  2002
(U.S.  DOLLARS)
================================================================================

9.   CONTINGENCIES  (Continued)

     (b)  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 ETC in October 2000 in the Circuit Court of
          Harrison  County,  West Virginia. The Rollands' complaint alleges that
          they  suffered  damages  and  are  seeking in excess of $18 million in
          damages  (including at least $18 million for lost sales royalties) for
          their  claims  for  relief.  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 of Nevada
          ordered  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.

     In  a  mutual  release  in  full  of  all  claims dated August 5, 2003, the
     Rollands  received  the  following  consideration:

          (a)  Integral agreed to amend U.S. patent number 6,320,548 B1 and U.S.
               patent  number  6,329,950  B1  to  add  Joffre  Rolland Jr. as an
               inventor.

          (b)  Joffre  J.  Rolland  Jr.  will  be  entitled  to  receive  future
               royalties  on any sales of products covered by U.S. patent number
               6,320,548  B1  and  U.S.  patent  number  6,329,950  B1.

          (c)  Joffre  J. Rolland Jr. received $10,000 in cash and 37,500 shares
               of  Integral  common  stock,  issued  pursuant  to  Rule  144.

     The  settlement  has  been  recorded  in  the  accounts  at  June 30, 2003.

     (c)  On  April  4,  2003,  a suit was filed against the Company by James E.
          Smith  seeking damages in excess of one million dollars for claims for
          relief  of  Breach  of  Contract,  Quantum  Mervit  and/or  Promissory
          Estoppel,  Fraud,  Conversion  and  Negligence. The Company has denied
          these  allegations  and  asserted  several  Affirmative  Defenses.

          In  addition,  the Company filed counter-claims against James E. Smith
          for  relief  of  Intentional  Misrepresentation,  Breach  of  Contract
          Negligence,  Misrepresentation,  Rescission and Restitution. On August
          30,  2004,  the  Court dismissed James E. Smith's claims for fraud and
          negligence  by  way  of the Company's counter-claim for breach of oral
          contract  and  partially  dismissed the counter-claims for intentional
          and  negligent misrepresentation by way of James E. Smith's motion for
          summary  judgement.

          Trial  is  scheduled  to  commence  on  March  8,  2005.


                                      F-24
<PAGE>
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2004, 2003 AND 2002
(U.S. DOLLARS)
================================================================================

10.  COMPREHENSIVE LOSS

===============================================================================
                                                                  PERIOD FROM
                                                                 FEBRUARY 12,
                                                                     1996
                                                                  (INCEPTION)
                                                                    THROUGH
                          2004          2003          2002       JUNE 30, 2004
-------------------------------------------------------------------------------

     Net loss         $(2,543,848)  $(1,346,833)  $(3,836,191)  $  (16,772,897)
     Other
       comprehensive
       income                   0             0             0           46,267
-------------------------------------------------------------------------------


     Comprehensive
       loss           $(2,543,848)  $(1,346,833)  $(3,836,191)  $  (16,726,630)
===============================================================================


                                      F-25
<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   47  Chairman, CEO and Treasurer               February 1996

William A. Ince       53  Director, President, Secretary and Chief  February 1996
                          Financial Officer
</TABLE>


                  DIRECTORS AND EXECUTIVE OFFICERS OF INTEGRAL

WILLIAM ROBINSON
(Chairman, CEO and Treasurer)

As  a  co-founder of the Company (since 1996), 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.

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 of the Company (since 1996), 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.

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

TOM  AISENBREY,  General Manager and Chief Technology Officer, has been with the
Company since February 2001.  Mr. Aisenbrey is an accomplished executive program
manager  with 27 years of experience in a variety of electronic industries, with
design  &  development  of  multiple computer oriented products, specializing in
wireless  products.  Mr.  Aisenbrey  is  responsible  for the development of the
Company's  antenna  technologies.


                                       10
<PAGE>
AUDIT  COMMITTEE  AND  AUDIT  COMMITTEE  FINANCIAL  EXPERT  DISCLOSURE

The  Company  does  not have a separately-designated standing audit committee at
this  time  because  it is not required to do so.  Accordingly, the Company does
not  have  an  audit  committee  financial  expert.

CODE OF ETHICS

     On September 20, 2004, the Board of Directors established a written code of
ethics that applies to the Company's senior executive and financial officers.  A
copy  of  the  code  of  ethics is included as an exhibit to this annual report.

SECTION 16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     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,  2003, all Section 16(a) filing requirements
applicable to its officers, directors and ten percent shareholders were complied
with  by  such  persons.


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, to or for Integral's Chief Executive Officer and each of the other
executive  officers  of  Integral,  during the fiscal years ended June 30, 2004,
2003  and  2002.

                                          Annual Compensation
                                     ----------------------------------
(a)                          (b)        (c)       (d)          (e)
       Name                                                   Other
       And                   Year                            Annual
     Principal              Ended     Salary     Bonus    Compensation
     Position              June 30      ($)       ($)          ($)
-----------------------------------------------------------------------

William S. Robinson,         2004    $ 170,000  $ 57,110       -0-
Director, Chairman, CEO,     2003    $ 170,000       -0-       -0-
Treasurer                    2002    $ 156,000       -0-       -0-

William A. Ince,             2004    $ 170,000       -0-       -0-
Director, President,         2003    $ 170,000       -0-       -0-
Secretary, CFO               2002    $ 156,000       -0-       -0-


                                       11
<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,              2004          -0-          -0-       -0-  $368,943(n1,n2)
Chairman, CEO, Treasurer          2003          -0-      415,000       -0-             -0-
                                  2002          -0-          -0-       -0-  $   93,600 (n3)

William A. Ince,  Director,       2004          -0-          -0-       -0-  $   32,268 (n2)
President, Secretary, CFO         2003          -0-      415,000       -0-             -0-
                                  2002          -0-          -0-       -0-  $   93,600 (n3)
<FN>

     (n1) In  December 2003, the Company redeemed an aggregate of 118,572 shares
          of  Series  A  Preferred  Stock  from  Mr. Robinson at a predetermined
          redemption  price of $3.50 per share. The stated value of the Series A
          Preferred  Stock  is  $1.00  per share, which resulted in a redemption
          premium  of  $2.50  per  share  over the stated value (an aggregate of
          $296,430).  Mr.  Robinson  tendered  the  shares of Series A Preferred
          Stock  in  payment of the aggregate exercise price of $415,000 for the
          exercise  of 415,000 options to purchase common stock, and no cash was
          paid  to  Mr.  Robinson.

     (n2) A  5%  dividend  on  the  Series A Preferred Stock, payable in cash or
          shares  of  common  stock  at  the  election  of the Company, had been
          accrued  for  the period from September 30, 1999 (date of issuance) to
          June  30,  2003,  and was paid in cash during the fiscal year end June
          30, 2004, with $72,513 paid to William S. Robinson and $32,268 paid to
          William  A.  Ince.

     (n2) In  March 2002, the Company redeemed an aggregate of 124,800 shares of
          Series  A  Preferred  Stock  from Mr. Robinson (62,400 shares) and Mr.
          Ince  (62,400 shares) at a predetermined redemption price of $2.50 per
          share.  The  stated value of the Series A Preferred Stock is $1.00 per
          share,  which resulted in a redemption premium of $1.50 per share over
          the  stated  value.
</TABLE>

(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, 2004
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, 2004.


                                       12
<PAGE>
<TABLE>
<CAPTION>
                           OPTION/SAR GRANTS IN LAST FISCAL YEAR

                                       Individual Grants

    (a)                               (b)                 (c)           (d)           (e)
                                                      % of Total
                                                     Options/SARS
                                   Number of          Granted to
                             Securities 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,                            -0-            -0-           N/A          N/A
Chairman, CEO, Treasurer

William A. Ince, Director,                      -0-            -0-           N/A          N/A
President, Secretary, CFO
<FN>

     (n1) The  percentage  of total options granted (255,000) 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, 2004.
</TABLE>

(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,  2004  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         415,000  $  41,500                  -0-/-0-             -0-/-0-
Director, Chairman,
CEO, Treasurer

William A. Ince                 -0-        N/A              415,000/-0-  $       62,250/-0-
Director, President,
Secretary, CFO
</TABLE>


     (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.


                                       13
<PAGE>
(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,  2004.

(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, 2004.  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

     As  of the date of filing of this report, the current executive officers do
not  have  written  employment  contracts.

     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.

     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.

(h)  Employee  Benefit  and  Consulting  Services  Compensation  Plans

     As  of  June  30,  2004,  Integral  had two Employee Benefit and Consulting
Services  Compensation  Plans  in  effect.

     On  January  2,  2001,  Integral adopted an employee benefit and consulting
services  compensation  plan entitled the Integral Technologies, Inc. 2001 Stock
Plan (the "2001 Plan"), which was amended on December 17, 2001.  As amended, the
2001  Plan covers up to 3,500,000 shares of common stock.  The 2001 Plan has not
previously  been  approved  by  security  holders.

     On  April  4,  2003,  Integral  adopted  an employee benefit and consulting
services  compensation  plan entitled the Integral Technologies, Inc. 2003 Stock
Plan  (the  "2003 Plan").  The 2003 Plan covers up to 1,500,000 shares of common
stock.  The  2003  Plan  has  not  previously been approved by security holders.

     Under  both  Plans,  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 Plans 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  Plans  are  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.


                                       14
<PAGE>
ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
--------------------------------------------------------------------------------
RELATED  STOCKHOLDER  MATTERS..
-------------------------------

A.   Common  Stock

     The  following  table  sets  forth,  as  of  September  20,  2004 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.                                  2,373,533                      5.9%
Vancouver, B.C.  V6E 2N7
----------------------------------------------------------------------------------------------------
William A. Ince (5)
805 W. Orchard Dr., Suite #3                             2,128,833                      5.2%
Bellingham, WA  98225
====================================================================================================
All officers and directors of Integral as a
group (2 persons)                                        4,502,366                     11.1%
====================================================================================================
<FN>

(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,  if  any. The table does not include the effects of conversion
     by  Mr.  Robinson  and  Mr.  Ince  of  their shares of Series A Convertible
     Preferred  Stock  ("Series A"), 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  211,225  shares  of Series A and Mr. Ince owns 109,813
     shares  of Series A. As of September 20, 2004, the conversion rate was $.78
     per  share,  so  Mr. Robinson's 211,225 shares of Series A were convertible
     into  270,801  shares  of  common  stock,  and Mr. Ince's 109,813 shares of
     Series  A  were convertible into 140,786 shares of common stock. 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  40,225,849  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.

(5)  Mr.  Ince  is  an  officer  and  director  of  Integral  and  each  of  its
     subsidiaries.  Beneficial  ownership  figure  includes  415,000  shares
     underlying  options.
</TABLE>

                                       15
<PAGE>
B.   Series  A  Convertible  Preferred  Stock

     The  following  table  sets  forth,  as  of  September  20, 2004, 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.                                          211,225                 65.8%
Vancouver, B.C.  V6E 2N7
------------------------------------------------------------------------------------------------------
William A. Ince (4)                                  -
805 W. Orchard Dr., Suite #3                                                             34.2%
Bellingham, WA  98225                                            109,813
======================================================================================================
All officers and directors of Integral as a
group (2 persons)                                                321,038                  100%
======================================================================================================
<FN>

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

(2)  Based  upon  321,038  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.
</TABLE>

EQUITY COMPENSATION PLAN INFORMATION

     The following information concerning the Company's equity compensation
plans is as of the end of the fiscal year ended June 30, 2004:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                           Number of securities to be         Weighted-average             Number of securities
                             issued upon exercise of     exercise price of options,   available for future issuance
                              outstanding options,          warrants and rights         under equity compensation
                               warrants and rights                                     plans (excluding securities
                                                                                         reflected in column (a))

                                       (a)                          (b)                            (c)
Plan category
--------------------------------------------------------------------------------------------------------------------
<S>                        <C>                          <C>                           <C>
Equity compensation plans
approved by security
holders                                            N/A                          N/A                              N/A
--------------------------------------------------------------------------------------------------------------------
Equity compensation plans
not approved by security
holders                                      1,922,500  $                       0.94                       1,530,000
--------------------------------------------------------------------------------------------------------------------

Total                                        1,922,500  $                       0.94                       1,530,000
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       16
<PAGE>
     As  of  June  30,  2004,  Integral  had two Employee Benefit and Consulting
Services  Compensation  Plans  in  effect.

     On  January  2,  2001,  Integral adopted an employee benefit and consulting
services  compensation  plan entitled the Integral Technologies, Inc. 2001 Stock
Plan (the "2001 Plan"), which was amended on December 17, 2001.  As amended, the
2001  Plan covers up to 3,500,000 shares of common stock.  The 2001 Plan has not
previously  been  approved  by  security  holders.

     On  April  4,  2003,  Integral  adopted  an employee benefit and consulting
services  compensation  plan entitled the Integral Technologies, Inc. 2003 Stock
Plan  (the  "2003 Plan").  The 2003 Plan covers up to 1,500,000 shares of common
stock.  The  2003  Plan  has  not  previously been approved by security holders.

     Under  both  Plans,  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 Plans 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  Plans  are  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.


ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.
--------------------------------------------------------------

     During  the  last  two fiscal years, the Company entered into the following
transactions  in  with  its  officers  and  directors  have a material interest:

(a)     A 5% dividend on the Series A Preferred Stock, payable in cash or shares
of  common stock at the election of the Company, had been accrued for the period
from  September  30,  1999  (date of issuance) to June 30, 2003, and was paid in
cash  during  the fiscal year end June 30, 2004, with $72,513 paid to William S.
Robinson and $32,268 paid to William A. Ince.  For the year ended June 30, 2004,
$13,536  was  accrued  to  Mr.  Robinson  and  $5,491  was  accrued to Mr. Ince.

(b)     In  December  2003,  the  Company  redeemed  118,572  shares of Series A
Preferred  Stock  from Mr. Robinson at a predetermined redemption price of $3.50
per share.  The stated value of the Series A Preferred Stock is $1.00 per share,
which resulted in a redemption premium of $2.50 per share over the stated value.

(c)     During  the  fiscal  year  ended  June  30, 2004, the Board of Directors
authorized  the  payment  of  accrued interest on amounts since July 1, 2001 for
loans  made  to  the  Company  by  officers  and directors, at an average annual
interest  rate of 8%. A total of $15,000 was accrued to Mr. Robinson and a total
of  $22,000  was  accrued  to  Mr.  Ince.


                                       17
<PAGE>
ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.
-------------------------------------------------

(a)   List of Exhibits.

<TABLE>
<CAPTION>
Exhibit No.  Description
-----------  -----------
<C>          <S>
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.)

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

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

10.16        Securities Purchase Agreement dated December 26, 2003, between the Registrant and Wellington
             Management Company, LLP. (Incorporated by reference to Exhibit 10.16 of Integral's Current Report
             on Form 8-K dated January 14, 2004 (filed January 28, 2004).)

10.17        Form of Common Stock Purchase Warrant related to the offering of securities described in Exhibit
             10.16.  (Incorporated by reference to Exhibit 10.17 of Integral's Current Report on Form 8-K dated
             January 14, 2004 (filed January 28, 2004).)

14.1         Code of Ethics adopted September 20, 2004. (Filed herewith.)

21.4         List of Subsidiaries. (Filed herewith.)

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

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

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

32.2         Section 906 Certification by the Corporation's Chief Financial Officer.  (Filed herewith).
</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,  2004.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.
-------------------------------------------------

The  Company's  board  of  directors  reviews and approves audit and permissible
non-audit services performed by Pannell Kerr Forster, Vancouver, Canada ("PKF"),
as  well  as  the  fees  charged  by  PKF  for  such services.  In its review of
non-audit  service  fees and its appointment of PKF as the Company's independent
accountants,  the  board  of  directors considered whether the provision of such
services is compatible with maintaining PKF's independence.  All of the services
provided  and  fees  charged  by PKF in the fiscal year ended June 30, 2004 were
pre-approved  by  the  board  of  directors.


                                       18
<PAGE>
AUDIT FEES

The  aggregate  fees  billed  for  professional services rendered by PKF for the
audit  of  our  annual  financial  statements  and  the reviews of the financial
statements  included  in  our  quarterly reports on Form 10-QSB for fiscal years
ended  June  30,  2004  and  2003  were  $33,900  and  $25,500,  respectively.

AUDIT-RELATED  FEES

There  were  no  other  fees  billed by PKF during the last two fiscal years for
assurance  and  related services that were reasonably related to the performance
of  the  audit  or review of the Company's financial statements and not reported
under  "Audit  Fees"  above.

TAX  FEES

The  were  no  fees  billed  for  professional  services rendered by PKF for tax
compliance  services  in  fiscal  years  ended  June  30,  2004  and  2003.

ALL  OTHER  FEES

There  were  no  other  fees  billed by PKF during the last two fiscal years for
products  and  services  provided  by  PKF.


                                       19
<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 4, 2004              /s/ William S. Robinson
                                   --------------------------------------------
                                   William S. Robinson, Chief Executive Officer

                                     /s/ William A. Ince
                                   --------------------------------------------
                                   William A. Ince, Chief Financial Officer


     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.

     Name                                Title                        Date
     ----                                -----                        ----

/s/ William S. Robinson    Director, Chief Executive Officer     October 4, 2004

-----------------------
William S. Robinson

/s/ William A. Ince        Director, Chief Financial Officer     October 4, 2004
-----------------------
William A. Ince


                                       20
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.  Description
-----------  -----------
<C>          <S>
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.)

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

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

10.16        Securities Purchase Agreement dated December 26, 2003, between the Registrant and Wellington
             Management Company, LLP. (Incorporated by reference to Exhibit 10.16 of Integral's Current Report
             on Form 8-K dated January 14, 2004 (filed January 28, 2004).)

10.17        Form of Common Stock Purchase Warrant related to the offering of securities described in Exhibit
             10.16.  (Incorporated by reference to Exhibit 10.17 of Integral's Current Report on Form 8-K dated
             January 14, 2004 (filed January 28, 2004).)

14.1         Code of Ethics adopted September 20, 2004. (Filed herewith.)

21.4         List of Subsidiaries. (Filed herewith.)

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

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

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

32.2         Section 906 Certification by the Corporation's Chief Financial Officer.  (Filed herewith).
</TABLE>


<PAGE>