ElectriPlast -- Investment Exposure & Analysis

ChangeWave.com Spotlights Integral Technologies and their ElectriPlast prospects.


Featuring ElectriPlast as an investment opportunity, the newsletter highlights products potential, while acknowledging the uncertainties of new technologies emerging in today's marketplace.


In my opinion it gives a great baseline for overall knowledge surrounding the company--Integral Technologies--and their ElectriPlast innovations. Still, it would behoove you to conduct your own research, contact the company and ask questions, and consult your broker before making an investment in this or any company.

Cheers, and I hope you enjoy the read as presented on: http://www.changewave.com/microcap/, and for those desiring to subscribe to this investor site's services, please click the link.

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MOLDING A WINNER

March 9, 2006 -- ACTIONS -- EXTREME MICROCAP Integral Technologies Inc. (OTC BB: ITKG) -- Buy Up To $1

Dear MicroCap Investor subscribers,

As the tag line on the ad goes, "Sometimes you have to chase the dream before you are too tired to chase it."

For years, the dream of many engineers and product designers has been to have a moldable plastic, as strong as metal with the electrical properties of metal or semiconductor. If you had such a product, a design engineer could:

• Reduce the weight of a jet airplane or bus or truck or automobile by 10% or more -- saving cost and improving gas mileage.
  
• Create a cell phone case that is also an antennae, thereby increasing the range and quality of wireless phone calls 20%-40%.
  
• Substitute plastic for silicon in the making of semiconductors, RFID chips and diodes.
  
• And, substitute plastic for metal in about 100 other applications!
  

In the design-materials world, moldable plastic that is as strong and conductive as metal is the holy grail. Well folks, we've found a company that owns the patents and manufacturing formula for this crown jewel.

Integral Technologies, Inc. has developed an electrically conductive resin-based material called "ElectriPlast." It's a highly conductive recipe that can be molded into virtually any shape or dimension associated with the range of plastics, rubbers and other polymers.

Integral's intellectual property consists of ElectriPlast and over 90 applications of ElectriPlast in various industries. To date, ITKG has received 12 patents on ElectriPlast applications -- there are seven issued, five that are allowed and awaiting issuance, and 88 more that are pending.

ELECTRIPLAST IS A BLAST

Electriplast is a plastic material that can be used as a substitute for metal. The problem it solves is huge, if you know the story behind polymers.

Today's conductive polymers are more flexible and weigh less than metal, but their higher impedance (electricity doesn't flow through them easily) has made them suitable only for low-voltage, low-current applications. Now, we know you are dying to understand Ohm's law that is the basis of for electrical circuits and such -- but let's skip that.

The key to Integral's technology is this: Electriplast has the unique ability to be formulated to act like anything conductive, and that property is what is so unique and gives the material billion-dollar potential in annual sales.

Thomas Aisenbrey is the inventor of the material and vice president of product development at Integral. Here's what he has to say. "Ours is the world's only highly conductive polymer. It's conductive enough that you can run heavy current through it, either ac or dc."

ElectriPlast is derived from a material called Plastenna that Aisenbrey engineered to make moldable antennas for wireless telephone handsets. The company embedded metal filaments in the handset case to gather RF signals. Then it broadened the recipe for the material, so that now its process can be used to make nearly any currently available polymer conductive.

Plastenna, an inexpensive material, conducts heat, electricity and radio-frequency energy nearly as well as copper, yet it can be mixed with rigid or flexible plastics and formed into just about any shape plastic can take on.

We are talking about a plastic material with the ability to not only absorb radio signals, but more importantly, the ability to also conduct electricity.

The implications are enormous and it could eventually impact a range of products: LED Lighting, Cooler Computer Processors, Plastic Batteries, Plastic Solar Cells, and Plastic RFID Chips, to name only a portion of the possibilities. Integral has filed patents for all of these.

Speaking of patent filings, an interesting sidebar on Integral is that William Gates Sr., the lawyer father of Bill from Microsoft, is the man behind the patent protection process for ITKG. His firm has done most of the work on the patent filings, and have taken some of their fees is stock. Does that tell you something?

HIGHER MATH

We consulted an Alliance member who is involved in the materials industry and we can assure you the numbers are compelling. Here's a look at the analysis:

Let's start with the basic material. Polymers range from $2 a pound (crude stuff) to $500 a pound (pure plastics/optic stuff).

The highest volume demand is for the $5 lb polymer. Integral Technology takes the $5 cost and with wire/spool/pultrusion/pellet chopping will add a cost of $7 to it, raising the total cost to $12.

They will be able to sell this at $30 a pound. The cheap $2 polymer would be sold for $20 per pound after Electriplast is included.

Plastic wires can be manufactured by pultrusion -- a process of pulling a wire through a machine that coats it with polymer. Billions and billions of tons of plastic wire could be produced annually. (It's important to note that Integral plans to outsource either most or all of the manufacturing of its materials and will not have to bear the burden of large capital costs).

So the math roughly looks like this: We estimate 40% margins on gross sales of $3 million per 100,000 pounds of polymer, and figure that ITKG retains 10% of this as royalty. That equals $1.2 million per 100,000 pounds of polymer that is upgraded with Integral's Electriplast.

Now, that's a nice profit -- essentially a pure profit -- for a tiny company, which is staffed with only seven people.

So what do we think Integral Technology is really worth?

Truly, it's a tough call. However, once production hits 100,000 pounds per week, the company should generate more than $50 million in royalties. As a royalty-driven firm, ITKG should get valued at a minimum of 10 times gross royalties.

This revenue scenario would place a valuation of upwards of $500 million on a company that today is valued at about $40 million. Obviously, we've got some upside in this baby.

XTREMELY COMPELLING

Integral's shares have climbed steadily since the new year from about 30 cents to above 90 cents, but we think this is only a warm-up for the big game.

We recommend subscribers initiate at least a one-third position in ITKG at a Buy Up To price of $1. Thereafter, look to accumulate the balance of your position at prices under 80 cents.

Remember that ITKG is coming off a "spikey" past few months, so the stock will probably jump around and fill in the gaps, giving you the opportunity to make some excellent buys.

Like NeoMedia (NEOM), we think we're getting in ITKG at an opportune time before the company's technology is widely recognized by industry and investors. And like NEOM, we expect to enjoy another great ride!

Tobin Smith, Executive Editor