NOTE

SUBSEQUENT EVENTS

Up to the date of this report, the Company issued a total of

1,350,000

common shares to settle convertible debt with a value of

$21,973

held by the Company.

December 10, 2018,

the Company issued

shares of the Series B Preferred Stock (the “Shares”) at a price of

$2,250,

for total proceeds of

$90,000.

Each Share carries an annual

12%

dividend compounded annually for

three

(

) consecutive years. The Company will pay dividends on a quarterly basis at the discretion of the Board to the extent cash or other assets are available. Dividends

may

be paid in cash or other property. The Shares have

voting rights.

The Shares are convertible into shares of common stock of the Company at the option of the holder on a

1:12,500

basis (subject to adjustments for stock dividends, splits, combinations and similar events) at any time within

months from the date of issuance of the Shares provided that the Company has enough authorized and unissued shares of common stock available for the conversion. Any accrued but unpaid interest or dividends related to the Shares

may

also be converted into common stock at the discretion of the Board of Directors.

The Company also has the option to call the Shares and purchase some or all of the Series B Preferred Stock owned by investors at any time at on a pro rata, nearest whole share basis. The redemption value of the Shares is

$2,500.00

per Share (subject to adjustments for stock dividends, splits, combinations and similar events) (the “Redemption Value”). On the date

months from the issuance date of the Shares, if

not

already converted to common, the Company shall redeem the Shares at the Redemption Value and pay all accrued but unpaid dividends and interest to the extent assets are available.

December 14, 2018,

Integral Technologies, Inc. (the “Company”) terminated its Management and Services Agreement with Integral Technologies Asia Inc. (“Integral Asia”) dated

February 28, 2014 (

the “Services Agreement”). A total of

$916,066

in amounts payable by the Company had accrued to Integral Asia for services rendered under the agreement. Integral Asia agreed to forgive a total of

$881,566

upon termination of the agreement and the employment agreements with Young Min Kim, President of Integral Asia, and Hyung Jin Song, Chief Executive Officer and a director of Integral Asia.

In connection with the termination of the Services Agreement, also on

December 14, 2018,

the Company and Integral Asia entered into separation and release agreements with Mr. Kim, and Mr. Song (collectively the Termination Agreements”). Mr. Kim has resigned from his position as President, and Mr. Song has resigned as Chief Executive Officer, but remains a director of Integral Asia.

Pursuant to their employment agreements, the Company and Integral Asia owed

$100,000

annually to Mr. Kim and

$150,000

annually to Mr. Song. The Termination Agreements released the Company of a total of

$881,566

in exchange for the following cash payments:

●

The Company will pay Mr. Kim a total of

$14,100,

of which

$7,350

is for out of pocket expenses.

●

The Company will pay Mr. Song a total of

$20,400,

of which

$13,650

is for out of pocket expenses.

Payments to Mr. Song and Mr. Kim will be made in

two

equal installments, the

first

of which is due

ten

days after execution of the Termination Agreements, and the

second

which is due

days after execution.

The Company is in the process of closing its Asia office as a cost savings measure and will initiate the process of winding up Integral Asia.