UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2013

Commission file number 0-16416

MICRO IMAGING TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

California		33-0056212
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

970 Calle Amanecer, Suite F, San Clemente, California 92673
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (949) 388-4547

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [ ].

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]
(Do not check if a smaller reporting company)

Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes [ ] No [X].

At September 9, 2013, there were 5,163,027 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheet as of July 31, 2013 (Unaudited) and October 31, 2012 (Audited)	3

	Condensed Consolidated Statements of Operations Nine months Ended July 31, 2013 and July 31, 2012 and the Cumulative Period November 1, 2005 to July 31, 2013 (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows Nine months ended July 31, 2013 and July 31, 2013 and the Cumulative Period November 1, 2005 to July 31, 2013 (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Plan of Operations	19

Item 3.	Controls and Procedures	21

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 2.	Changes in Securities	22

Item 3.	Omitted as not applicable	22

Item 4.	Submission of Matters to a Vote of Security Holders	23

Item 5.	Other Information	23

Item 6.	Exhibits and Reports on Form 8-K	23

SIGNATURES		24

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Balance Sheets

July 31, 2013 (Unaudited) and October 31, 2012 (Audited)

	July 31, 2013			October 31, 2012

ASSETS
Current assets:
Cash	$	514		$	90,132
Related party receivables		—			15,269
Inventories		67,487			25,600
Prepaid expenses		4,720			31,120
Total current assets		72,721			162,121

Fixed assets, net		91,679			123,041

Total assets	$	164,400		$	285,162

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities:
Current liabilities:
Notes payable to stockholder, net of unamortized discount of $1,752 and $5,536 in 2013 and 2012, respectively	$	180,698		$	136,464
Convertible notes payable, net of unamortized discount of $40,513 and $3,202 in 2013 and 2012, respectively		66,855			74,166
Accounts payable - trade		312,547			171,578
Accounts payable to officers and directors		92,329			45,583
Accrued payroll		228,542			139,040
Derivative liability		42,169			—
Anti-dilution liability		65,401			65,401
Other accrued expenses		74,245			58,555
Total current liabilities		1,062,786			690,787

Long-term liabilities:
Note payable to stockholder, net of unamortized discount of $10 and $844 in 2013 and 2012, respectively		—			46,106
Redeemable convertible preferred stock, $0.01 par value; 5,200 shares authorized, issued and outstanding at July 31, 2013 and October 31, 2012		26,000			26,000
Total long term liabilities		26,000			72,106

Total liabilities		1,088,786			762,893

Commitments and contingencies

Stockholders’ deficit:
Common stock, $0.01 par value; 25,000,000 shares authorized; 5,033,077 and 4,473,715 shares issued and outstanding at July 31, 2013 and October 31, 2012, respectively		50,331			44,737
Additional paid-in capital		45,276,631			44,889,013
Accumulated deficit from previous operating activities		(27,809,201	)		(27,809,201	)
Deficit accumulated during the development stage		(18,442,147	)		(17,602,280	)

Total stockholders’ deficit		(924,386	)		(477,731	)
Total liabilities and stockholders’ deficit	$	164,400		$	285,162

The accompanying notes are an integral part of the condensed consolidated financial statements.

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Operations

Three and Nine Months Ended July 31, 2013 and July 31, 2012

And the Cumulative Period November 1, 2005 to July 31, 2013

(Unaudited)

													Cumulative period
													from
	Three months ended						Nine months ended						November 1, 2005
	July 31,						July 31,						through
	2013			2012			2013			2012			July 31, 2013

Sales	$	—		$	—		$	—		$	—		$	58,000
Cost of Sales		—			—			—			—			29,886

Gross profit		—			—			—			—			28,114

Operating costs and expenses:
Research and development		102,851			141,810			351,230			323,785			5,782,558
Sales, general and administrative		121,475			177,747			458,692			565,917			8,369,772

Total operating expenses		224,326			319,557			809,922			889,702			14,152,330

Loss from operations		(224,326	)		(319,557	)		(809,922	)		(889,702	)		(14,124,216	)

Other income (expense):
Interest income		—			46			13			48			11,464
Interest expense		(16,038	)		(54,835	)		(28,053	)		(362,470	)		(4,938,643	)
Gain on derivative instruments		2,311			10,755			2,311			55,195			151,615
Other income (expense), net		(2,616	)		254,779			(2,616	)		271,098			470,433
Total other income (expense), net		(16,343	)		210,745			(28,345	)		(36,129	)		(4,305,131	)

Loss from operations:
Before provision for income tax		(240,669	)		(108,812	)		(838,267	)		(925,831	)		(18,429,347	)
Provision for income tax								(1,600	)		(1,600	)		(12,800	)
Net loss		(240,669	)		(108,812	)		(839,867	)		(927,431	)		(18,442,147	)
Net loss attributable to:
Non-controlling interest		(16,038	)		6,267			(111,700	)		(50,760	)		(1,361,462	)
Micro Imaging Technology, Inc. stockholders		(238,358	)		(115,079	)		(728,167	)		(876,671	)		(17,080,685	)
Net loss	$	(254,396	)	$	(108,812	)	$	(839,867	)	$	(927,431	)	$	(18,442,147	)

Net loss per share, basic and diluted	$	(0.05	)	$	(0.04	)	$	(0.17	)	$	(0.50	)

Shares used in computing net loss per share, basic and diluted		4,995,291			2,983,106			4,828,493			1,839,152

The accompanying notes are an integral part of the condensed consolidated financial statements.

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

Nine months Ended July 31, 2013 and July 31, 2012

And the Cumulative Period November 1, 2005 to July 31, 2013

(Unaudited)

							Cumulative period
							from
	Nine months ended						November 1, 2005
	July 31,						to
	2013			2012			July 31, 2013
Cash flows from operating activities:
Net loss	$	(839,867	)	$	(927,431	)	$	(18,442,147	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		37,766			24,715			214,139
Gain on extinguishment of debt		—			(273,371	)		(288,192	)
Change in value of derivatives		(2,311	)		(55,195	)		151,615
Amortization of costs and fees related to convertible debentures		11,798			232,656			1,018,106
Common stock issued for services		—			—			2,144,790
Common stock issued to officers, directors and consultants for services		993			112,796			3,212,484
Common stock issued for shares of subsidiary stock		—			—			254,000
Common stock of subsidiary issued to employees and consultants		—			—			2,815
Common stock issued as a commission		—			—			3,000
Common stock issued for accounts payable		—			—			296,583
Common stock issued to former licensee		—			—			41,319
Common stock issued/recovered on cancelled agreements		—			—			20,478
Non-cash compensation for stock options and warrants		—			—			631,923
Costs and fees related to issuance of convertible debt		—			3,288			542,540
Interest expense related to beneficial conversion feature		(1,980	)		—			1,942,820
Interest paid with common stock		—			—			118,487
Interest on notes receivable for common stock		—			—			(1,373	)

(Increase) decrease in assets:
Related party receivables		15,269			—			—
Prepaid expenses		26,400			(29,138	)		20,871
Inventories		(41,887	)		(25,600	)		(143,275	)
Increase (decrease) in liabilities:
Trade accounts payable		161,369			(113,628	)		646,263
Accounts payable to officers and directors		46,746			76,958			799,369
Accrued payroll and other expenses		106,490			150,431			540,139
Net cash used in operating activities		(479,214	)		(823,519	)		(6,273,246	)

Cash flows from investing activities:
Purchase of fixed assets		(6,404	)		(68,786	)		(223,547	)
Net cash used in investing activities		(6,404	)		(68,786	)		(223,547	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows (Continued)

Nine months Ended July 31, 2013 and July 31, 2012

And the Cumulative Period November 1, 2005 to July 31, 2013

(Unaudited)

							Cumulative period
							from
	Nine months ended						November 1, 2005
	July 31,						to
	2013			2012			July 31, 2013
Cash flows from financing activities:
Principal payments on notes payable to stockholder		(24,400	)		(84,889	)		(1,297,900	)
Proceeds from issuance of notes payable to a related party		17,900			60,000			1,137,700
Proceeds from issuance of notes and convertible notes payable		42,500			75,000			1,646,734
Proceeds from issuance of common stock		360,000			873,813			3,815,475
Net cash provided by financing activities		396,000			923,924			5,302,009

Net change in cash		(89,618	)		31,619			(1,194,784	)

Cash at beginning of period		90,132			5,206			1,195,298

Cash at end of period	$	514		$	36,825		$	514

Supplemental Disclosure of Cash Flow Information

Interest paid	$	271		$	—		$	11,256
Income taxes paid	$	1,600		$	1,600		$	21,840

Supplemental Schedule of Non-Cash Investing and Financing Activities

Conversion of convertible notes payable to shares of common stock	$	12,500		$	352,500

Common stock issued in consideration for accounts payable and accrued payroll	$	20,400		$	644,177

Notes converted by stockholders	$	—		$	315,500

Interest paid with common stock	$	1,299		$	126,282

Common stock issued in consideration for loan	$	—		$	3,288

The accompanying notes are an integral part of the condensed consolidated financial statements.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Nature of our Business, Development Stage Company and Continuance of Operations

These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applicable to a going concern which contemplated the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Since inception, the Company has incurred substantial losses and there is substantial doubt that the Company will generate sufficient revenues in the foreseeable future to meet its operating cash requirements. Accordingly, the Company’s ability to continue operations depends on its success in obtaining additional capital in an amount sufficient to meet its cash needs. This raises substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty.

Our independent registered public accounting firm has included an explanatory paragraph in its report on the financial statements for the year ended October 31, 2012 which raises substantial doubt about our ability to continue as a going concern.

Micro Imaging Technology, Inc. (the “Company”), a California corporation, is a holding company whose operations are conducted through its Nevada subsidiary, Micro Imaging Technology (“MIT”). As of July 31, 2013, the Company owned eighty point seven percent (80.7%) of the issued and outstanding stock of MIT.

The losses incurred to date which are applicable to the minority stockholders of the Company’s consolidated subsidiary, MIT, exceed the value of the equity held by the minority stockholders. Such losses have been allocated to the Company as the majority stockholder and are included in the net loss and accumulated deficit in the condensed consolidated financial statements for the nine months ended July 31, 2013. Any future profits reported by our subsidiary will be allocated to the Company until the minority’s share of losses previously absorbed by the Company have been recovered.

In 1997, the Company began marketing a small, point-of-use water treatment product aimed at the high purity segment of commercial and industrial water treatment markets. In February 2000, the Company formed Electropure EDI, Inc. (EDI), a wholly-owned Nevada subsidiary, through which all manufacturing and sales of its proprietary water treatment products were then conducted. In October 2005, the Company sold the assets of the EDI subsidiary and discontinued operations.

The Company acquired, in October 1997, an exclusive license to the patent and intellectual property rights involving laser light scattering techniques to be utilized in the detection and monitoring of toxicants in drinking water. In February 2000, the Company formed Micro Imaging Technology (MIT), a majority-owned Nevada subsidiary, to conduct research and development based upon advancements developed and patented from the licensed technology. The technology being developed is a non-biologically based system utilizing both proprietary hardware and software to rapidly (near real time) determine the specific specie of an unknown microbe present in a fluid with a high degree of statistical probability (“MIT system”). It will analyze a sample presented to it and compare its characteristics to a library of known microbe characteristics on file. At present, it is the Company’s only operation.

Effective with the sale of its EDI operation in October 2005, the Company’s planned principal operation, the further development and marketing of its remaining technology, has not produced any significant revenue and, as such, the Company, beginning with the fiscal year starting November 1, 2005, is considered a development stage enterprise.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting solely of normal recurring adjustments which management believes are necessary for a fair presentation of the Company’s financial position at July 31, 2013 and results of operations for the periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with our audited financial statements and footnotes as of and for the year ended October 31, 2012, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on January 29, 2013.

Changes in Capitalization and Reverse Stock Split

On February 8, 2013, the Company effectively amended its Articles of Incorporation and decreased the authorized number of shares of Common Stock from 2.5 billion to 25 million shares. At the same time, the Company underwent a five hundred-for-one (500:1) reverse stock split of its Common Stock and Redeemable Convertible Preferred Stock. For purposes of this Quarterly Report, all issuances of common stock and options or warrants to purchase common stock, if any, are reflected retroactively in post-reverse split amounts. As of July 31, 2013, the reverse split effected by the Company resulted in a reduction in capital stock and an increase in additional paid-in capital in the amount of $24,677,786.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

Going Concern

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has not generated revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has obtained funds from several stockholders and believes this funding will continue. Management believes the existing stockholders will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business.

Concentration of Credit Risk and Other Risks and Uncertainties

Accounts Payable – Trade

As of July 31, 2013, the amount due to a former consultant to the Company, $112,000, represented 36% of the total amount due for accounts payable to non-affiliates. As of July 31, 2013, the Company owes its current independent accounting firm $31,500, which represents 10% of the total amount due for accounts payable. An additional 21% of accounts payable, or $64,517, is due legal counsel in the Alpine MIT Partners litigation in Texas.

Litigation and Claims

On May 16, 2012, Alpine MIT Partners, LLC (Plaintiffs) filed a civil action against the Company and its Chairman and Chief Executive Officer, Jeffrey G. Nunez, (collectively, the Company), in the Texas District Court, Travis County. Plaintiffs alleged breach of contract and civil conspiracy, as well as tortious interference with contractual relations and prospective business relations. The lawsuit alleges that the Company breached certain provisions of a March 7, 2012 Securities Purchase Agreement the Company executed with the Plaintiff to sell up to $2.0 million of 7% Senior Secured five-year Convertible Debentures convertible into shares of common stock at a conversion rate of $.003 per share. The purchase and sale of the first $1.0 million Debenture was scheduled to close on or before April 6, 2012 and was subject to, among other things, Alpine closing the necessary equity funding to consummate the transactions. No money was ever received by the Company from Alpine.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The lawsuit also suggests that the Company’s Chairman and Chief Executive Officer, Jeffrey G. Nunez, has a history of regulatory and securities law violations. The Company’s Board of Directors has researched the matter and understands that in January 2004, Mr. Nunez was requested by the NASD to appear and provide testimony pursuant to NASD Rule 8210. Mr. Nunez did not appear, but agreed not to associate in any capacity, in the future, with NASD member firms. The Company’s Board of Directors believes this to be of no consequence with respect to Mr. Nunez’ qualifications to serve as a board member and chief executive officer of the Company.

The Company argued that the lawsuit was improperly filed in Texas and that the Texas court had no jurisdiction over the Company in this matter. At a hearing on March 7, 2013, the court upheld the Company’s position and dismissed the case against the Company. In August, 2013, Alpine filed an amended Complaint against Jeffrey Nunez in the Texas case alleging tortuous interference and conspiracy to terminate the March 7, 2012 Securities Purchase Agreement. Mr. Nunez believes that the allegations of the lawsuit against him have no merit and intends to vigorously defend the matter.

On January 10, 2013, the Company learned that Plaintiffs had filed a lien against the Company’s patents on May 8, 2012 with the California Secretary of State under the Uniform Commercial Code. On or about January 29, 2013, the Company filed suit against Alpine MIT Partners, LLC in the Orange County, California Superior Court alleging, among other claims, that the UCC filing is unauthorized. The lawsuit also names the managing director and managing member of Alpine as Defendants and alleges that they made false promises, intentional misrepresentations and breached the contract which is the subject of the Texas suit. The Company is seeking damages of $1.6 million.

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for its financial statements not to be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of its financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company discloses the nature of the loss contingencies, together with an estimate of the range of possible loss or a statement that such loss is not reasonably estimable. Since the lawsuit filed against the Company in Texas has been dismissed, no loss contingency has been accrued.

Antidilution Liability

The Company has recorded a $65,401 liability to allow for the possible dilutive impact of equity issuances that alter or effect conversion or exchange rates existing on the various dates of conversion or exercise of securities having adjustable conversion rates.

Accrued Payroll, Payroll Taxes and Benefits

From April 2010 through March 2012, payments made to two employees were recorded as reductions in accrued and unpaid payroll. In April 2012, the Company reclassified such payments as net payroll payments; calculated and recorded the employer and employee taxes that should have been withheld on such payment. Federal and state payroll tax returns have been filed for the last three quarters of 2010, all of 2011 and the first quarter of 2012. Estimated penalties and interest on the late filings and payments, in the sum of $27,446, have been accrued as of July 31, 2013. On September 20, 2012, the Internal Revenue Service filed a Notice of Federal Tax Lien against the Company assessing $58,858 for unpaid taxes, penalties and interest. A Notice of Tax Lien was also filed by the State of California on November 9, 2012 in the amount of $8,206, including penalty and interest. The Company has been in contact with the respective tax authorities in an effort to negotiate a payment arrangement for the taxes due.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Accrued Payroll and Benefits consist of the above payroll taxes and salaries, wages, and vacation benefits earned by employees, but not disbursed as of July 31, 2013 and includes payroll earned, but unpaid to various employees between January 16, 2013 and July 31, 2013. Accrued Payroll also includes the above estimated penalties and interest due on such unpaid payroll taxes. Liability for vacation benefits is accrued when earned monthly and reduced when taken. At the end of each fiscal period, the balance in the accrued vacation benefits liability account is adjusted to reflect current pay rates. Annual leave earned but not taken is considered an unfunded liability since this leave will be funded from future appropriations when it is actually taken by employees.

Inventory

Inventory is stated at the lower of cost or market and comprised entirely of finished goods. Cost is determined on a first-in, first-out (FIFO) basis. The Company’s management monitors inventory for excess and obsolete items and makes necessary valuation corrections when such adjustments are required.

Property and Equipment

Property and equipment are recorded at cost and are depreciated using the straight-line method over an expected useful life of 3 or 5 years. Effective October 31, 2011, the Company reclassified and capitalized as machinery and equipment eight of its MIT 1000 Systems that it had carried as finished goods valued at $75,788. A revised model of the systems has been designed and the Company will utilize these eight first generation models as laboratory testing equipment. Commencing November 1, 2011, these systems are being depreciated over an expected useful life of 3 years.

The production tooling for the Company’s revised MIT 1000 has been capitalized and the $14,000 cost is being amortized over an estimated useful life of 3 years.

Expenditures for normal maintenance and repairs are charged to operations. The cost and related accumulated depreciation of assets are removed from the accounts upon retirement or other disposition, and the resulting profit or loss is reflected in the Statement of Operations. Renewals and betterments that materially extend the life of the assets are capitalized.

Summary of Significant Accounting Policies

The accounting policies followed are as set forth in Note 1 of the Notes to Financial Statements in the Company’s 2011 Annual Report on Form 10-K. The Company has not experienced any material change in its critical accounting policies since November 1, 2011. The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments regarding uncertainties that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates its estimates, which are based upon historical experience and on other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The Company considers the following accounting policies to be most critical in their potential effect on its financial position or results of operations.

New Accounting Pronouncements

The following accounting standards updates were recently issued and have not yet been adopted by us. These standards are currently under review to determine their impact on our consolidated financial position, results of operations, or cash flows. There were various other updates recently issued which represented technical corrections to the accounting literature or application to specific industries. None of the other updates are expected to a have a material impact on our consolidated financial position, results of operations or cash flows.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On January 31, 2013, the FASB issued Accounting Standards Update [ASU] 2013-01, entitled Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The guidance in ASU 2013-01 amends the requirements in the FASB Accounting Standards Codification [FASB ASC] Topic 210, entitled Balance Sheet. The ASU 2013-01 amendments to FASB ASC 210 clarify that ordinary trade receivables and receivables in general are not within the scope of ASU 2011-11, entitled Disclosure about Offsetting Assets and Liabilities, where that ASU amended the guidance in FASB ASC 210. As those disclosures now are modified with the ASU 2013-01 amendments, the FASB ASC 210 balance sheet offsetting disclosures now clearly are applicable only where reporting entities are involved with bifurcated embedded derivatives, repurchase agreements, reverse repurchase agreements, and securities borrowing and lending transactions that either are offset using the FASB ASC 210 or 815 requirements, or that are subject to enforceable master netting arrangements or similar agreements. ASU 2013-01 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU is not expected to have a material impact on our financial statements.

On February 28, 2013, the FASB issued Accounting Standards Update [ASU] 2013-04, entitled Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The ASU 2013-04 amendments add to the guidance in FASB Accounting Standards Codification [FASB ASC] Topic 405, entitled Liabilities and require reporting entities to measure obligations resulting from certain joint and several liability arrangements where the total amount of the obligation is fixed as of the reporting date, as the sum of the following:

	●	The amount the reporting entity agreed to pay on the basis of its arrangement among co-obligors.
	●	Any additional amounts the reporting entity expects to pay on behalf of its co-obligors.

While early adoption of the amended guidance is permitted, for public companies, the guidance is required to be implemented in fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments need to be implemented retrospectively to all prior periods presented for obligations resulting from joint and several liability arrangements that exist at the beginning of the year of adoption. The adoption of ASU 2013-04 is not expected to have a material effect on the Company’s operating results or financial position.

On April 22, 2013, the FASB issued Accounting Standards Update [ASU] 2013-07, entitled Liquidation Basis of Accounting. With ASU 2013-07, the FASB amends the guidance in the FASB Accounting Standards Codification [FASB ASC] Topic 205, entitled Presentation of Financial Statements. The amendments serve to clarify when and how reporting entities should apply the liquidation basis of accounting. The guidance is applicable to all reporting entities, whether they are public or private companies or not-for-profit entities. The guidance also provides principles for the recognition of assets and liabilities and disclosures, as well as related financial statement presentation requirements. The requirements in ASU 2013-07 are effective for annual reporting periods beginning after December 15, 2013, and interim reporting periods within those annual periods. Reporting entities are required to apply the requirements in ASU 2013-07 prospectively from the day that liquidation becomes imminent. Early adoption is permitted. The adoption of ASU 2013-07 is not expected to have a material effect on the Company’s operating results or financial position.

On July 18, 2013, the FASB issued ASU 2013-11, which provides guidance on financial statement presentation of an unrecognized tax benefit² when a net operating loss (NOL) carryforward, a similar tax loss, or a tax credit carryforward exists. The FASB’s objective in issuing this ASU is to eliminate diversity in practice resulting from a lack of guidance on this topic in current U.S. GAAP. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. Under the ASU, an entity must present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward except when:

	●	An NOL carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position.
	●	The entity does not intend to use the deferred tax asset for this purpose (provided that the tax law permits a choice).

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset.

ASU 2013-11 is effective for public entities for fiscal years beginning after December 15, 2013, and interim periods within those years. The adoption of ASU 2013-11 is not expected to have a material effect on the Company’s operating results or financial position.

Earnings Per Share

Basic earnings per share are based on the weighted average number of shares outstanding for a period. Diluted earnings per share are based upon the weighted average number of shares and potentially dilutive common shares outstanding. Potential common shares outstanding principally include convertible notes payable and stock options under our stock plan. Since the Company has incurred losses, the effect of any common stock equivalent would be anti-dilutive.

Stock Based Compensation

Stock-based compensation costs for stock options issued to employees is measured at the grant date, based on the fair value of the award using the Black Scholes Option Pricing Model, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

No stock-based compensation was recognized during the nine months ended July 31, 2013.

On February 14, 2012, the Board of Directors adopted the 2012 Employee Benefit Plan which is authorized to grant up to 120,000 shares of common stock or options to purchase common stock to eligible employees, directors, officers, consultants or advisors. Eligibility and vesting, in the case of options, is determined by the Board of Directors. Between January 16, 2013 and February 22, 2013, the Company issued 16,000 shares of common stock which vested immediately under the Plan to legal counsel for services rendered and the fair market value of $1.05 and $1.50 per share. The aggregate value of the shares was $20,400.

The following table summarizes information about options granted under the Company’s equity compensation plans through July 31, 2013 and otherwise to employees, directors and consultants of the Company. Generally, options vest on an annual pro rata basis over various periods of time and are exercisable, upon proper notice, in whole or in part at any time upon vesting. Typically, in the case of an employee, vested options terminate when an employee leaves the Company. The options granted have contractual lives ranging from two to ten years.

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at October 31, 2012		5,600		$	40.00		1.2	$	—
Granted		—			—
Exercised		—			—
Expired		(1,000	)		145.00
Canceled		—			—
Outstanding at July 31, 2013		4,600		$	19.29		0.7	$	—

Summary information about the Company’s options outstanding at July 31, 2013 is set forth in the table below. Options outstanding at July 31, 2013 expire between August 2013 and January 2016.

Range of Exercise Prices		Options Outstanding July 31, 2013		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Options Exercisable July 31, 2013		Weighted Average Exercise Price
	$7.68-$70.00		4,400		0.7	$	13.35		4,400	$	13.35
	$150.00		200		0.1	$	150.00		200	$	150.00
TOTAL:			4,600						4,600

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

As of July 31, 2013, all outstanding options had fully vested and there was no estimated unrecognized compensation from unvested stock options.

The following table summarizes the information relating to warrants granted to non-employees as of October 31, 2012 and changes during the nine months ended July 31, 2013:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at October 31, 2012		146,667		$	1.00		1.78	$	—
Granted		150,000			0.66
Exercised		(40,000	)		1.00
Expired		—			—
Canceled		(66,667	)		1.50
Outstanding at July 31, 2013		190,000		$	0.87		2.6	$	—

Summary information about the Company’s warrants outstanding at July 31, 2013 is set forth in the table below. Warrants outstanding at July 31, 2013 expire between April 2015 and June 2016.

Range of Exercise Prices		Warrants Outstanding July 31, 2013		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Warrants Exercisable July 31, 2013		Weighted Average Exercise Price
	$0.50 - $1.00		190,000		2.6	$	0.87		190,000	$	0.87
			190,000						190,000

Convertible Debentures

Series 1 Notes

Under the provisions of ASC 815-40-15, “Derivatives and Hedging-Contracts in Entity’s Own Equity-Scope and Scope Exceptions,” a number of our outstanding Convertible notes are not considered indexed to our stock, as a result of an anti-dilution protection provision in these notes. The application of ASC 815-40-15, effective August 1, 2011, resulted in our accounting for these notes as derivative instruments, and they are recognized as liabilities in our consolidated balance sheets.

Between August 16, 2010 and February 21, 2012, the Company entered into a Securities Purchase Agreement with an unaffiliated lender in connection with the issuance of eleven (11) separate 8% convertible notes in various principal amounts, aggregating $387,500. As of September 14, 2012, the lender had converted all of the $387,500 in principal notes, plus $45,000 and $16,200 in principal penalties and accrued interest, respectively, on such notes and received a total of 663,219 shares of common stock upon the conversions at prices ranging from $0.20 to $1.95 per share.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On July 18, 2013, the Company entered into a new Securities Purchase Agreement with the lender in the sum of $42,500 and paid $2,500 out of the proceeds of the notes to lender for legal fees and expenses related to the referenced agreement. The note matures on April 22, 2014 and is convertible into shares of common stock at a discount of 39% of the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date. The Series I Note contains a provision requiring an adjustment to the conversion price of the note in the event the Company issues or sells any shares of common stock, or securities convertible into or exercisable for common stock, at a price per share lower than such conversion price. Accordingly, the Series I Note is accounted for as a derivative liability, measured at fair value, with changes in fair value recognized as gain or loss for each reporting period thereafter. The note was recorded at fair value, using the Binomial valuation model, and a derivative liability of $42,169 was recorded for the fiscal period ended July 31, 2013. This liability will be revalued each reporting period and gains and losses will be recognized in the statement of operations under “Other Income (Expense)”.

Pursuant to the terms of the Series I Note, the Company has instructed its stock transfer agent to reserve 780,000 shares of the Company’s common stock to be issued if the notes are converted. Such shares have been reserved, but are not considered as issued and outstanding.

Fair value of financial instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash and other current assets and liabilities to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.

The Company has also adopted ASC 820-10 (“Fair Value Measurements”) which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The carrying amounts of our financial instruments, including cash, accounts payable and accrued expenses approximate fair value because of their generally short maturities.

The Company measured the fair value of the Series 1 Note by using the Binomial Valuation model. As of July 31, 2013, the assumptions used to measure fair value of the liability embedded in our outstanding Series I Note included an exercise price of $0.31 per share, a common share price of $0.51, a discount rate of 0.014%, and a volatility of 151%.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table sets forth, by level within the fair value hierarchy, our financial instrument liabilities as of April 30, 2012 (See also Note 7 – Convertible Debentures – “Series 1 Notes”):

	Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(Level 3)		(Level 3)		(Level 3)
Series 1 Notes	$	—	$	—	$	42,169	$	42,169
Total	$	—	$	—	$	42,169	$	42,169

The following table sets forth a summary of changes in the fair value of our Level 3 financial instrument liability for the fiscal year ended October 31, 2012 and for the nine month period ended July 31, 2013:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance October 31, 2012	$	-
Additions		44,480
Net gain included in earnings		(2,311	)
Settlements		-
Balance July 31, 2013	$	42,169

Other Convertible Notes

On November 10, 2010, the Company entered into a convertible note for $64,868 with a stockholder. The Note matured on May 31, 2012 and bears interest at the rate of ten percent (10%) per annum. The Note is convertible into shares of common stock at a forty two percent (42%) discount to the average of the lowest three (3) closing bid prices of the common stock during the ten (10) trading days prior to the conversion date. The note holder may convert any or all of the unpaid principal note prior to the maturity date. The Company calculated the intrinsic value of the conversion feature to be $46,973 as of the date of issuance of the debentures using the same criteria as noted above, which amount has been fully amortized as of July 31, 2013. The Company has expensed $17,665 in accrued interest on the note as of July 31, 2013. If the note had been converted as of July 31, 2013, the Company would have issued a total of 219,297 shares of common stock the value of which would exceed, by $46,973 the principal balance due on the note. The Company is currently negotiating with the lender to settle or renegotiate the Note.

On November 27, 2009, the Company borrowed $25,000 from an unaffiliated lender. In September 2011, the lender converted $12,500 of the principal and $2,876 in accrued interest into 17,084 shares of common stock. The Company issued an Amended and Restated Convertible Note for the $12,500 principal balance of the loan bearing 6% annual interest. The amended note matured on December 31, 2012 and on June 15, 2013, the lender converted the remaining $12,500 principal plus $1,299 in accrued interest into 23,998 shares of common stock at a conversion rate of $0.575 per share. Because the original note carried a beneficial conversion feature, the Company amortized a total of $10,507 as the intrinsic value of the note, including $3,202 which was expensed during fiscal 2013.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

At July 31, 2013 and October 31, 2012, without taking into effect any unamortized discounts, convertible debentures consisted of the following:

	July 31, 2013		October 31, 2012
				(Audited)
Series 1 Note, principal and interest at 8% maturing on April 22, 2014		42,500		—

Convertible note payable to stockholder; principal and interest at 10% due on May 31, 2012.		64,868		64,868

Convertible notes payable to stockholder; principal and interest at 6% maturing on December 31, 2012.		—		12,500
		107,368		77,368
Less current maturities		107,368		77,368

Long term portion of Convertible and Series 1 notes payable	$	—	$	—

Notes Payable

At July 31, 2013 and October 31, 2012, without taking into effect any unamortized discounts, notes payable to an officer and to stockholders consisted of the following:

	July 31, 2013		October 31, 2012
			(Audited)
Unsecured, interest-free convertible notes payable to former officer/director of the Company; principal due on payment schedule through May 2014.	$	114,450	$	136,950

Unsecured convertible note payable to various stockholders; principal and interest at 6% due between December 9, 2010 and April 20, 2011.		52,000		52,000

Unsecured notes payable to officers and directors of the Company; principal and interest at 6% payable on demand		16,000		—
		182,450		188,950
Less current maturities		182,450		142,000

Long term portion of notes payable	$	—	$	46,950

Concurrent with his April 13, 2012 resignation as Chairman of the Board of Directors and Chief Executive Officer, the Company agreed to repay a total of $160,000 in principal loans, $24,339 in accrued interest and $13,120 in unpaid fees and expenses due Michael Brennan over a 25-month payment schedule commencing May 1, 2012. Payments due Mr. Brennan since February 2013, each in the amount of $7,500, have not been made per the payment schedule. As of July 31, 2013, the principal balance due to Mr. Brennan amounts to $114,450 and, although Mr. Brennan originally waived interest on the note, the Company has accrued $9,059 in interest on that amount as of July 31, 2013.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

With the exception of the demand notes due current officers and directors and the overdue payments due to Mr. Brennan, all of the above notes payable were past due as of July 31, 2013. The Company is currently negotiating with holders of the remaining notes to either extend the maturity date or convert the notes into shares of common stock.

Employee Retirement Plan

Commencing on January 1, 2005, the Company sponsored a Simple IRA retirement plan which covers substantially all qualified full-time employees. Participation in the plan is voluntary and employer contributions are determined on an annual basis. Employer contributions would be made at the rate of three percent (3%) of the employees’ base annual wages. However, the Company made no contributions to the IRA plan during the nine months ended July 31, 2013 and 2012.

10.

Securities Transactions

Common Stock Issued in Private Placement Transactions

On May 8, 2012, Board member, Gregg J. Newhuis, entered into a Subscription Agreement, as amended on October 31, 2012, to purchase a total of 1,800,000 shares of the Company’s common stock at $0.50 per share over a six-month period. Mr. Newhuis also received a one-year option to purchase up to an additional 266,667 shares of common stock at $1.50 per share in September 2012. This option was cancelled in October 2012. The Company received the final $100,000 from Mr. Newhuis on November 29, 2012 pursuant to his May 2012 subscription arrangement. Giving effect to the February 8, 2013 reverse stock split, the Company issued a total of 200,000 shares of common stock at $0.50 per share for the November 29, 2012 purchase.

On April 20, 2012, the Company granted three-year warrants to purchase 80,000 shares of common stock to a major stockholder as part of a Subscription Agreement for the purchase of 80,000 shares of common stock at $0.75 per share. The warrants are exercisable at $1.00 per share within one year of the subscription; $2.50 per share within two years; and at $5.00 per share during the third year of the warrant. On January 11, 2013, the warrant holder exercised his right to purchase one half of the warrants granted and paid $40,000. Giving effect to the February 8, 2013 reverse stock split, the Company issued 40,000 shares of common stock at $1.00 per share on this transaction.

On January 11, 2013, Victor Hollander, a Director and the Company’s Chief Financial Officer, purchased 3,333 shares of common stock for proceeds of $5,000, at the fair market value of $1.50 per share.

On May 21, 2012, the Company entered into a Subscription Agreement with a major stockholder to purchase a total of 400,000 shares of the Company’s common stock at $0.50 per share, for a total of $200,000 which the Company received during fiscal 2012. As additional consideration, the purchaser was granted a one-year option to purchase up to an additional 66,667 shares of common stock at $1.50 per share commencing on the date the final dollars are invested. On February 6, 2013, this stockholder surrendered his rights to the referenced warrants in full.

On February 6, 2013, the Company entered into a Subscription Agreement with a major stockholder to purchase up to $180,000 in shares of common stock at a purchase price of $0.85 per share over a three month period. Between February 6, 2013 and April 3, 2013, the stockholder purchased a total of 211,764 shares of common stock and paid $180,000.

Pursuant to an April 1, 2012 consulting arrangement, the Company agreed to pay Jeffrey Nunez a five percent (5%) transaction fee on all proceeds received by the Company during the one year term of such agreement. The fee is payable in shares of the Company’s common stock which are to be valued as the average closing price of the common stock for the five (5) trading days prior to the transaction which triggers the fee. Between April 20 and October 31, 2012, the Company issued Mr. Nunez a total of 35,512 shares of common stock valued at $53,000 pursuant to the transaction fee arrangement. As of January 31, 2013, an additional $7,000 was due Mr. Nunez under this arrangement at which time the transaction fee arrangement was terminated by mutual agreement. On April 26, 2013, $6,007 of the transaction fee due him was credited against a receivable that Mr. Nunez owed the Company and the remaining $993 balance was paid in the form of 435 and 196 shares of common stock at $1.63 and $1.45 per share, respectively.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On June 4, 2013, a major stockholder purchased 50,000 shares of common stock at $0.50 per share in a private transaction and received three-year warrants to purchase an additional 50,000 shares of common stock at $0.50 per share and another 100,000 shares of common stock at $1.00 per share.

On June 28, 2013, the Company sold 13,333 shares of common stock to a stockholder for proceeds of $10,000, or $0.75 per share.

Common Stock Issued in Cancellation of Debt

On January 16, 2013, the Company issued its legal counsel a total of 8,000 shares of common stock in payment for $12,000 in legal services rendered for $1.50 per share.

On February 22, 2013, the Company issued an additional 8,000 shares of common stock to legal counsel in payment of $8,400 in legal services rendered for $1.05 per share.

On June 15, 2013, a stockholder converted a $12,500 principal note, plus $1,299 in accrued interest, into 23,998 shares of common stock at $0.575 per share.

11.

Subsequent Events

On August 7, 2013, a major stockholder purchased 20,000 shares of common stock for proceeds of $10,000, or $0.50 per share. He received a six-month warrant to purchase an additional 10,000 shares of common stock at $1.00 per share in connection with this transaction.

On August 7, 2013, a member of the Board of Directors loaned the Company $10,000. The loan bears interest at 6% per annum and is payable on demand.

On August 13, 2013, a major stockholder purchased 60,000 shares of common stock for $0.50 per share, for proceeds of $30,000. The Company also issued a six-month warrant to purchase 30,000 shares of common stock to the purchaser at an exercise price of $1.00 per share.

On September 5, 2013, the Company sold 20,000 shares of common stock to an unaffiliated purchaser for net proceeds of $10,000, or $0.50 per share.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Plan of Operation

Forward-Looking Statements

This Quarterly Report, including the Notes to the Condensed Consolidated Financial Statements and the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements. The words “believe,” “expect,” “anticipate,” “intends,” “projects,” and similar expressions identify forward-looking statements. Such statements may include, but are not limited to, projections regarding demand for the Company’s products, the impact of the Company’s development and manufacturing process on its research and development costs, future research and development expenditures, and the Company’s ability to obtain new financing as well as assumptions related to the foregoing. Readers are cautioned not to place undue reliance on forward-looking statements. They reflect opinions, assumptions, and estimates only as of the date they were made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements in this Quarterly Report, whether as a result of new information, future events or circumstances, or otherwise.

Results of Operations

References to fiscal 2013 and fiscal 2012 are for the nine month period ended July 31, 2013 and 2012, respectively.

The Company had no sales revenue during the nine months ended July 31, 2013 or 2012.

Research and development expenses for the nine month period ended July 31, 2013 increased by $27,445 compared to the prior year. These expenses arose from the program which the Company initiated in December 1997 to develop the micro imaging technology for detecting and identifying contaminants in fluids. The overall increase mainly reflects additional expenditures for salaries and related costs, depreciation expense and marketing related expenses. There were also modest increases in overall operating costs, i.e., utilities, supplies and software related to the development program for the Company’s technology. These increases were partially offset by a decrease in consulting expenses in the current period as well as the amount expended on R&D materials and supplies. Research and development expense for the three months ended July 31, 2013 decreased by $38,959 in fiscal 2013 primarily in the areas of stockholder relations, travel, entertainment and consulting expenses. These decreases were partially offset by an increase in salaries and related expenses as the Company hired laboratory technicians during the current fiscal year.

Sales, general and administrative expenses decreased by $56,272 and $107,225 for the three and nine months ended July 31, 2013, respectively, compared to the prior year period. The decrease reflects a significant reduction in consulting costs as well as expenses associated with stockholder relations and tax accounting. This decrease was partially offset, however, by an increase in salaries and a substantial increase in legal fees related to the defense of the Texas-based lawsuit brought against the Company by Alpine MIT Partners.

The Company realized negligible interest income during the nine months ended July 31, 2013 as all available capital was utilized to sustain operations. Interest expense for the three and nine month periods ended July 31, 2013 decreased by $38,797 and $334,417, respectively, compared to the prior period reflecting the conversion of outstanding debt to equity in the past year.

The Company recognized $2,311 in non-cash gain for the three months ended July 31, 2012, related to the derivative nature of the beneficial conversion feature of the Series 1 convertible notes issued by the Company during July 2013.

Components of other income and expense reflected a gain (income) of $254,779 and $271,098 for the three and nine month periods ended July 31, 2012 on writing off old debt. No such gains were recorded during fiscal 2013.

The Company recorded the minimum state income tax provision in fiscal 2013 and 2012 as the Company had cumulative net operating losses in all tax jurisdictions.

Liquidity and Capital Resources

At July 31, 2013, the Company had working capital deficit of $990,065. This represents a working capital decrease of $461,399 compared to that reported at October 31, 2012. The decrease primarily reflects overall increases in current liabilities, i.e., accounts payable, accrued payroll, notes payable and derivative liabilities, while utilizing available cash for operating activities.

Our only source of cash during the nine months ended July 31, 2013 has been from the sale of common stock totaling $360,000, including $40,000 received upon the exercise of warrants, and $60,400 in short term loans. Management estimates that it utilized $47,000 per month in working capital on operations for the nine months ended July 31, 2013, compared to the approximate $72,100 per month expended during the nine month period ended July 31, 2012.

Plan of Operation

The Company is in the process of identifying commercial, technical and scientific partners that can aid in advancing the MIT expertise, provide external endorsements of the technology, and accelerate introduction to the market. This strategy is dependent upon our ability to identify and attract the right customers and partners over the next six month period and to secure sufficient additional working capital in a timely manner. There can be no assurances that our efforts will be successful or that the Company will be able to raise sufficient capital to implement our plans or to continue operations.

In April 2012, the Company commenced the production phase of its MIT 1000 Rapid Microbial Identification System with its Hawthorne, California-based manufacturing partner. The first of twenty Systems were received in July 2012, with three additional Systems received in November 2012. The Company has participated in several food safety conferences during 2012 and 2013 and brought significant attention to its MIT 1000 which has led to follow-up contacts from several high profile independent laboratories, multinational food and food safety industry leaders, as well as from prominent academic research institutes. The Company continues to develop promotional materials and enhance its website with a view toward generating sales in the near future.

The Company is developing its marketing and sales strategies with distributors in Japan and the ASEAN countries (Malaysia, Singapore, Thailand, Brunei, Indonesia, Philippines, Vietnam, Cambodia, Laos and Myanmar) which the Company believes will assist in generating sales revenues in the near future. The Company expects to establish additional distributing partners as its marketing plans develop.

In June 2009, the Company received Performance Test Method (PTM) Certification from the Association of Advanced Communities Research Institute (AOAC RI) for its Identifier^TM for the Listeria bacteria species, a rare but lethal food-borne infection. In 2012, the Company’s protocols for testing the pathogens E. Coli and Salmonella were accepted by the AOAC so that, once it has completed internal testing procedures (expected in early 2014), the Company will also apply for AOAC PTM Certification for those additional pathogens. When certified for the two additional pathogenic bacteria identification processes, the Company’s System will have the proven capability of identifying over 90 percent of all bacteria-causing, food-related illnesses. Concurrently, the Company is developing an Identifier^TM for Staphylococcus aureus, the potentially life-threatening, contagious bacterium that can cause widespread infections, particularly in hospitals and medical clinics.

In the opinion of management, available funds and funds anticipated from forthcoming loans and equity sales are expected to satisfy our working capital requirements through September 2013. However, no assurances can be given that the Company will secure additional financing or revenues in a timely manner, if at all, or that such funds would be sufficient to achieve our intended business objectives.

The Company will be required to raise substantial amounts of new financing in the form of additional equity investments, loan financings, or from strategic partnerships, to carry out our business objectives. There can be no assurance that the Company will be able to obtain additional financing on terms that are acceptable to us and at the time required by us, or at all. Further, any financing may cause dilution of the interests of our current stockholders. If the Company is unable to obtain additional equity or loan financing, our financial condition and results of operations will be materially adversely affected. Moreover, estimates of our cash requirements to carry out our current business objectives are based upon various assumptions, including assumptions as to our revenues, net income or loss and other factors, and there can be no assurance that these assumptions will prove to be accurate or that unbudgeted costs will not be incurred. Future events, including the problems, delays, expenses and difficulties frequently encountered by similarly situated companies, as well as changes in economic, regulatory or competitive conditions, may lead to cost increases that could have a material adverse effect on us and our plans. If the Company is not successful in obtaining financing for future developments, whether in the form of loans, licenses or equity transactions, it is unlikely that the Company will have sufficient cash to continue to conduct operations, particularly research and development programs, as currently planned. The Company believes that in order to raise needed capital, the Company may be required to issue debt at significantly higher interest rates or equity securities that are significantly lower than the current market price of our common stock.

No assurances can be given that currently available funds will satisfy our working capital needs for the period estimated, or that the Company can obtain additional working capital through the sale of common stock or other securities, the issuance of indebtedness or otherwise or on terms acceptable to us. Further, no assurances can be given that any such equity financing will not result in a further substantial dilution to the existing stockholders or will be on terms satisfactory to us.

Item 3.

Controls and Procedures

The Company’s management has carried out an evaluation, under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, (1) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

In addition, based on that evaluation, there has been no change in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

At a hearing on March 7, 2013, the court dismissed the lawsuit against the Company upholding its motion that the Texas court had no jurisdiction over the matter. In August, 2013, Alpine filed an amended Complaint against Jeffrey Nunez in the Texas case alleging tortuous interference and conspiracy to terminate the March 7, 2012 Securities Purchase Agreement. Mr. Nunez believes that the allegations of the lawsuit against him have no merit and intends to vigorously defend the matter.

Item 2.

Changes in Securities

On November 29, 2012, the Company issued 200,000 shares of common stock to Gregg Newhuis, a Director of the Company, for proceeds of $100,000, or $0.50 per share.

On January 11, 2013, a major stockholder of the Company exercised a warrant to purchase 40,000 shares of common stock at $1.00 per share and the Company received $40,000 pursuant to the exercise.

On January 11, 2013, the Company’s Chief Financial Officer, Victor Hollander, purchased 3,333 shares of Common Stock for proceeds of $5,000, or $1.50 per share.

On January 16, 2013, the Company issued 8,000 shares of common stock in payment for legal services rendered valued at $12,000.

On February 22, 2013, the Company issued an additional 8,000 shares of common stock to legal counsel for services rendered in the sum of $8,400.

Between February 6, 2013 and April 3, 2013, the Company issued 211,764 to a major stockholder for proceeds of $180,000, or $0.85 per share.

On April 26, 2013, the Company issued 435 and 196 shares of common stock to Jeffrey Nunez at $1.63 and $1.45 per share, respectively, in partial payment of a transaction fee due him pursuant to an April 2012 agreement whereby he received a 5% transaction fee on all monies received by the Company. See also Note 10 – “Securities Transactions – Common Stock Issued in Private Placement Transactions.”

On June 4, 2013, the Company sold 50,000 shares of common stock to a major stockholder for proceeds of $25,000, or $0.50 per share. As partial consideration for the transactions, the stockholder also receive three year warrants to purchase 50,000 shares of common stock at $0.50 per share and warrants to purchase 100,000 shares of common stock at $1.00 per share.

On June 15, 2013, a stockholder converted a $12,500 principal loan, plus $1,299 in accrued interest, into 23,998 shares of common stock at $0.575 per share. And on June 28, 2013, this same stockholder purchased 13,333 shares of common stock from the Company for proceeds of $10,000, at $0.75 per share.

Item 3.

Omitted as not applicable.

Item 4.

Submission of Matters to a Vote of Security Holders

On February 8, 2013, pursuant to a Written Consent of a Majority of Shareholders, the Company voted to amend its Articles of Incorporation to:

	●	Decrease the authorized number of Common Stock of the Company from 2.5 billion to 25 million shares; and

	●	Effect a 500-to-1 reverse split of all classes of its issued and outstanding shares of stock such that the following classes of shares would be reconstituted as of February 8, 2013 as follows:

	NUMBER OF SHARES ISSUED AND OUTSTANDING
TITLE OF SECURITIES		PRE-REVERSE SPLIT	POST-REVERSE SPLIT
Common Stock		2,397,818,199	4,795,636
Class B Common Stock		None	None
Convertible Preferred Stock		2,600,000	5,200
Preferred Stock		None	None

The total number of shares of common stock outstanding and entitled to vote on February 8, 2013 was 2,397,818,199 (each carrying one [l] vote per share), of which 1,630,849,811 common stock shares voted, with 68.01% shares voting in favor of and approving the amendment. The total number of shares of Convertible Preferred Stock outstanding and entitled to vote is 1,668,371 (each carrying one [1] vote per share), of which 6,663 shares voted, all in favor of and approving the amendment. The total number of shares voting in favor of the amendment equaled or exceeded the voting required for all classes entitled to vote, which percentage vote required was more than fifty percent (50%) of the outstanding shares entitled to vote.

Item 5.

Other Information

The Company has not yet completed its state and federal corporate income tax returns for the fiscal year ended October 31, 2012, which were due to be filed (with an extension), by July 15, 2013.

Item 6.

Exhibits and Reports on Form 8-K

(a)

Exhibits:

	31.1		Certification of Chief Executive Officer *
	31.2		Certification of Chief Financial Officer *
	32.1		906 Certification of Chief Executive Officer *
	32.2		906 Certification of Chief Financial Officer *
	101**		Interactive Data Files of Financial Statements and Notes formatted in Extensible Business Reporting Language (XBRL).

	*		Filed herewith
	**		XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Exchange Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

	(b)		Reports on Form 8-K.

			None.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: September 9, 2013	MICRO IMAGING TECHNOLOGY, INC.

	By:	/s/ Victor A. Hollander
		Victor A. Hollander
		(Chief Financial Officer with responsibility to sign on behalf of Registrant as a duly authorized officer and principal financial officer)

MICRO IMAGING TECHNOLOGY, INC. 10-Q