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~~OF THE ~~the~~SECURITIES ~~quarterly~~EXCHANGE ~~period~~ACT ~~ended~~OF ~~July 31, 2013 Commission file number 0-16416~~1934

For the quarterly period ended January 31, 2014

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)~~

(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 [ ] Smaller reporting company [X] (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 March ~~September 9~~12, ~~2013~~2014, there were 5,~~163~~411,~~027~~ 333 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheet as of July 31, 2013 (Unaudited) and October 31, 2012 (Audited)	3
	Condensed Consolidated Balance Sheet as of January 31, 2014 (Unaudited) and October 31, 2013 (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 Operations Three months ended January 31, 2014 and January 31, 2014 And the Cumulative Period November 1, 2005 to January 31, 2014 (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
	Condensed Consolidated Statements of Cash Flows Three months ended January 31, 2014 and January 31, 2014 And the Cumulative Period November 1, 2005 to January 31, 2014 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	67
Item 2.	Management’s Discussion and Analysis of Financial Condition and Plan of ~~Operations~~Operation	1918
Item 3.	Controls and Procedures	21
	PART II – OTHER INFORMATION
	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~~Omitted ofas ~~Matters~~not ~~to a Vote of Security Holders~~applicable	2322
Item 5.	Other Information	2322
Item 6.	Exhibits and Reports on Form 8-K	2322
SIGNATURES		2423

PART I –- FINANCIAL INFORMATION

Item 1. Financial Statements

Micro Imaging Technology, Inc. and Subsidiary

(A Development Stage Company)

Condensed Consolidated Balance Sheets

~~July~~ January 31, ~~2013~~2014 (Unaudited) and October 31, ~~2012~~2013 (Audited)

	July 31, 2013			October 31, 2012
	January 31, 2014			October 31, 2013
ASSETS
Current assets:
Cash	$	~~514~~-		$	905,~~132~~007
Related party receivables		—			15,269
Inventories		67,487			67,487
Inventories		67,487			25,600
Prepaid expenses		2,928			897
Prepaid expenses		4,720			31,120
Total current assets		70,415			73,391
Total current assets		72,721			162,121
Fixed assets, net		97,186			111,570
Fixed assets, net		91,679			123,041
Total assets	$	167,601		$	184,961
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
Bank overdraft	$	5,983		$	-
Convertible notes payable, net of unamortized discount of $40,513 and $3,202 in 2013 and 2012, respectively		66,855			74,166
Notes payable to stockholder, net of unamortized discount of $0 and $844 in 2014 and 2013, respectively		235,450			200,606
Accounts payable - trade		312,547			171,578
Convertible notes payable, net of unamortized discount of $57,394 and $60,050 in 2014 and 2013, respectively		109,973			89,818
Accounts payable to officers and directors		92,329			45,583
Accounts payable - trade		357,259			336,372
Accrued payroll		228,542			139,040
Accounts payable to officers and directors		155,989			131,472
Derivative liability		42,169			—
Accrued payroll		312,681			244,031
Anti-dilution liability		65,401			65,401
Derivative liability		87,136			75,557
Other accrued expenses		74,245			58,555
Anti-dilution liability		20,087			23,358
Total current liabilities		1,062,786			690,787
Other accrued expenses		87,590			81,016
Total current liabilities		1,372,148			1,182,230
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 January 31, 2014 and October 31, 2013, respectively		26,000			26,000
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			26,000
Total long term liabilities		26,000			72,106
Total liabilities		1,398,148			1,208,230
Total liabilities		1,088,786			762,893
Commitments and contingencies
Stockholders’ deficit:
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
Common stock, $0.01 par value; 25,000,000 shares authorized; 5,381,333 and 5,153,027 shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively		53,814			51,531
Additional paid-in capital		45,~~276~~699,~~631~~303			4445,~~889~~335,~~013~~031
Accumulated deficit from previous operating activities		(27,809,201	)		(27,809,201	)
Deficit accumulated during the development stage		(1819,~~442~~174,~~147~~463	)		(1718,~~602~~600,~~280~~630	)
Total stockholders’ deficit		(924,386	)		(477,731	)
Total stockholders’ (deficit)		(1,230,547	)		(1,023,269	)
Total liabilities and stockholders’ deficit	$	164,400		$	285,162
Total liabilities and stockholders’ (deficit)	$	167,601		$	184,961

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 ~~Months~~ Ended ~~July~~ January 31, ~~2013~~2014 and ~~July~~January 31, ~~2012~~2013

And the Cumulative Period November 1, 2005 to ~~July~~January 31, ~~2013~~ 2014

(Unaudited)

							Cumulative period						~~Cumulative period~~
							from						~~from~~
	Three months ended						~~Nine~~November ~~months~~1, ~~ended~~2005						~~November 1, 2005~~
	July 31,						July 31,						through
	January 31,						through
	2013			2012			2013			2012			July 31, 2013
	2014			2013			January 31, 2014
Sales	$	—-		$	—-		$	—58,000		$	—		$	~~58,000~~
Cost of Sales		—-			—-			—29,886			—			~~29,886~~
Gross profit		—-			—-			—28,114			—			~~28,114~~
Operating costs and expenses:
Research and development		~~102~~170,~~851~~135			~~141~~143,~~810~~310			~~351~~6,~~230~~012,478			~~323,785~~			~~5,782,558~~
Sales, general and administrative		~~121~~297,~~475~~789			~~177~~142,~~747~~236			~~458~~8,~~692~~775,752			~~565,917~~			~~8,369,772~~
Total operating expenses		~~224~~467,~~326~~924			~~319~~285,~~557~~546			~~809~~14,~~922~~788,230			~~889,702~~			~~14,152,330~~
Loss from operations		(~~224~~467,~~326~~924	)		(~~319~~285,~~557~~546	)		(~~809~~14,~~922~~760,116	)		~~(889,702~~	)		~~(14,124,216~~	)
Other income (expense):
Interest income		—-			4611			1311,464			48			~~11,464~~
Interest expense		(16116,~~038~~343	)		(547,~~835~~935	)		(285,~~053~~093,978	)		~~(362,470~~	)		~~(4,938,643~~	)
Gain on derivative instruments		28,~~311~~763			~~10,755~~-			2166,~~311~~820			~~55,195~~			~~151,615~~
Other income (expense), net		(2,616	)		254,779			(2,616	)		271,098			470,433
Gain on anti-dilution provision		3,271			-			45,314
Total other income (expense), net		(16,343	)		210,745			(28,345	)		(36,129	)		(4,305,131	)
Other income (expense), net		-			-			470,433
Loss from operations:
Total other income (expense), net		(104,309	)		(7,924	)		(4,399,947	)
Before provision for income tax		(240,669	)		(108,812	)		(838,267	)		(925,831	)		(18,429,347	)
Loss from operations:
Provision for income tax								(1,600	)		(1,600	)		(12,800	)
Before provision for income tax		(572,233	)		(293,470	)		(19,160,063	)
Net loss		(240,669	)		(108,812	)		(839,867	)		(927,431	)		(18,442,147	)
Provision for income tax		(1,600	)		(1,600	)		(14,400	)
Net loss attributable to:
Net loss		(573,833	)		(295,070	)		(19,174,463	)
Non-controlling interest		(16,038	)		6,267			(111,700	)		(50,760	)		(1,361,462	)
Net loss attributable to:
Micro Imaging Technology, Inc. stockholders		(238,358	)		(115,079	)		(728,167	)		(876,671	)		(17,080,685	)
Non-controlling interest		(48,657	)		(39,955	)		(1,430,140	)
Net loss	$	(254,396	)	$	(108,812	)	$	(839,867	)	$	(927,431	)	$	(18,442,147	)
Micro Imaging Technology, Inc. stockholders		(525,176	)		(255,115	)		(17,744,323	)
Net loss per share, basic and diluted	$	(0.05	)	$	(0.04	)	$	(0.17	)	$	(0.50	)
Net loss	$	(573,833	)	$	(295,070	)	$	(19,174,463	)
Shares used in computing net loss per share, basic and diluted		4,995,291			2,983,106			4,828,493			1,839,152
Net loss per share, basic and diluted	$	(0.11	)	$	(0.06	)
Shares used in computing net loss per share, basic and diluted		5,281,524			4,623,019

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~~ Three months Ended ~~July~~January 31, ~~2013~~ 2014 and ~~July~~January 31, ~~2012~~2013

And the Cumulative Period November 1, 2005 to ~~July~~January 31, ~~2013~~2014

(Unaudited)

							Cumulative period
							from
	Nine months ended						November 1, 2005
	Three months ended						November 1, 2005
	July 31,						to
	January 31,						to
	2013			2012			July 31, 2013
	2014			2013			January 31, 2014
Cash flows from operating activities:
Net loss	$	(~~839~~573,~~867~~833	)	$	(~~927~~295,~~431~~070	)	$	(1819,~~442~~174,~~147~~463	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		37,766			24,715			214,139
Depreciation and amortization		15,654			12,764			280,528
Gain on extinguishment of debt		—-			~~(273,371~~-	)		(288,192	)
Change in value of derivatives		(28,~~311~~763	)		~~(55,195~~-	)		~~151~~(166,~~615~~820	)
Amortization of costs and fees related to convertible debentures		11,798			232,656			1,018,106
Change in anti-dilution liability		(3,271	)		-			(45,314	)
Common stock issued for services		—			—			2,144,790
Amortization of costs and fees related to convertible debentures		35,114			5,057			1,377,651
Common stock issued to officers, directors and consultants for services		993			112,796			3,212,484
Common stock issued for services		-			-			2,144,790
Common stock issued for shares of subsidiary stock		—			—			254,000
Common stock issued to officers, directors and consultants for services		-			-			3,212,484
Common stock of subsidiary issued to employees and consultants		—			—			2,815
Common stock issued for shares of subsidiary stock		-			-			254,000
Common stock issued as a commission		—			—			3,000
Common stock of subsidiary issued to employees and consultants		-			-			2,815
Common stock issued for accounts payable		—			—			296,583
Common stock issued as a commission		-			-			3,000
Common stock issued to former licensee		—			—			41,319
Common stock issued for accounts payable		-			-			296,583
Common stock issued/recovered on cancelled agreements		—			—			20,478
Common stock issued to former licensee		-			-			41,319
Non-cash compensation for stock options and warrants		—			—			631,923
Common stock issued/recovered on cancelled agreements		-			-			20,478
Costs and fees related to issuance of convertible debt		—			3,288			542,540
Non-cash compensation for stock options and warrants		260,282			-			892,205
Interest expense related to beneficial conversion feature		(1,980	)		—			1,942,820
Costs and fees related to issuance of convertible debt		-			-			542,540
Interest paid with common stock		—			—			118,487
Interest expense related to beneficial conversion feature		-			-			1,942,820
Interest on notes receivable for common stock		—			—			(1,373	)
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~~-			—3,254			—-
Prepaid expenses		26(2,~~400~~031	)		~~(29~~14,~~138~~979	)		2022,~~871~~663
Inventories		~~(41,887~~-	)		(2541,~~600~~887	)		(143,275	)
Increase (decrease) in liabilities:
Trade accounts payable		~~161~~20,~~369~~887			~~(113~~57,~~628~~165	)		~~646~~690,~~263~~575
Accounts payable to officers and directors		4624,~~746~~517			7616,~~958~~635			~~799~~863,~~369~~029
Accrued payroll and other expenses		~~106~~75,~~490~~224			~~150~~20,~~431~~933			~~540~~637,~~139~~623
Net cash used in operating activities		(~~479~~156,~~214~~220	)		(~~823~~206,~~519~~170	)		(6,~~273~~475,~~246~~847	)
Cash flows from investing activities:
Purchase of fixed assets		(61,~~404~~270	)		(683,~~786~~500	)		(~~223~~260,~~547~~130	)
Net cash used in investing activities		(6,404	)		(68,786	)		(223,547	)
Capitalization of software		-			-			(35,313	)
Net cash used in investing activities		(1,270	)		(3,500	)		(295,443	)

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~~ Three months Ended ~~July~~January 31, ~~2013~~ 2014 and ~~July~~January 31, ~~2012~~2013

And the Cumulative Period November 1, 2005 to ~~July~~January 31, ~~2013~~2014

(Unaudited)

							Cumulative period
							from
	Nine months ended						November 1, 2005
	Three months ended						November 1, 2005
	July 31,						to
	January 31,						to
	2013			2012			July 31, 2013
	2014			2013			January 31, 2014
Cash flows from financing activities:
Principal payments on notes payable to stockholder		(24,400	)		(84,889	)		(1,297,900	)
Bank overdraft		5,983			-			5,983
Proceeds from issuance of notes payable to a related party		17,900			60,000			1,137,700
Principal payments on notes payable to stockholder		-			(22,500	)		(1,301,800	)
Proceeds from issuance of notes and convertible notes payable		42,500			75,000			1,646,734
Proceeds from issuance of notes payable to a related party		34,000			-			1,194,600
Proceeds from issuance of common stock		360,000			873,813			3,815,475
Proceeds from issuance of notes and convertible notes payable		32,500			-			1,721,734
Net cash provided by financing activities		396,000			923,924			5,302,009
Proceeds from issuance of common stock		80,000			145,000			3,955,475
Net change in cash		(89,618	)		31,619			(1,194,784	)
Net cash provided by financing activities		152,483			122,500			5,575,992
Cash at beginning of period		90,132			5,206			1,195,298
Net change in cash		(5,007	)		(87,170	)		(1,195,298	)
Cash at end of period	$	514		$	36,825		$	514
Cash at beginning of period		5,007			90,132			1,195,298
Cash at end of period	$	-		$	2,962		$	-
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	$	1215,~~500~~000		$	~~352,500~~-
Common stock issued in consideration for accounts payable and accrued payroll	$	~~20,400~~-		$	~~644~~12,~~177~~000
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)

1.	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~~ 2013 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~~January 31, ~~2013~~2014, 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 three ~~nine~~ months ended ~~July~~January 31, ~~2013~~2014. 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.

2.	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~~ January 31, ~~2013~~2014 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~~2013, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on ~~January~~February 2913, ~~2013~~2014.

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.

3.	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,~~MIT 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.Partners

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. At a March 7, 2013 hearing, the Texas court upheld the Company’s argument and dismissed the complaint against the Company for lack of jurisdiction.

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.

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. This lawsuit is currently in the discovery phase.

Michael W. Brennan

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. Due to lack of funds, the Company has not made payments due Mr. Brennan since February 2013, each in the amount of $7,500. As of January 31, 2014, the principal balance due under the agreement amounted to $113,450 and, although Mr. Brennan originally waived interest on the note, the Company has accrued $13,466 in interest on that amount as of January 31, 2014.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~The lawsuit also suggests that~~On ~~the~~or ~~Company’s~~about ~~Chairman~~October ~~and~~4, ~~Chief Executive Officer~~2013, ~~Jeffrey G~~Mr. ~~Nunez,~~Brennan ~~has~~filed a ~~history~~lawsuit ofin ~~regulatory~~the ~~and~~California ~~securities~~Superior ~~law~~Court ~~violations. The Company’s Board~~ of ~~Directors~~Los ~~has~~Angeles ~~researched~~for ~~the~~breach ~~matter~~of ~~and~~contract ~~understands that in January 2004, Mr. Nunez was requested~~for byfailure ~~the NASD~~ to ~~appear~~pay ~~and~~monies ~~provide~~due ~~testimony~~him ~~pursuant~~under tothe ~~NASD~~above ~~Rule~~2012 ~~8210~~agreement. ~~Mr.~~The ~~Nunez~~lawsuit ~~did~~seeks ~~not appear~~$123,509 ~~but agreed not to associate~~ in ~~any~~ ~~capacity~~principal damages, inplus ~~the future~~interest, costs ~~with~~and ~~NASD~~attorney ~~member firms~~fees. The Company’s ~~Board~~has offiled ~~Directors~~an ~~believes~~answer ~~this~~ to bethe ofcomplaint noand ~~consequence with~~is ~~respect~~contesting tothe amount due Mr. ~~Nunez’~~Brennan. ~~qualifications~~This tolawsuit is ~~serve~~currently asin ~~a board member and chief executive officer of~~ the ~~Company~~discovery phase.

~~The Company argued that the~~Other 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.Litigation

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~~November 2912, 2013, ~~the~~a ~~Company~~vendor filed suit ~~against Alpine MIT Partners, LLC~~ in the Orange County, California Superior Court ~~alleging,~~for ~~among~~non-payment ~~other~~of ~~claims~~$9,894 ~~that~~in ~~the~~fees for ~~UCC~~services ~~filing~~rendered. isIn ~~unauthorized.~~or ~~The~~around ~~lawsuit~~December ~~also~~2013, ~~names~~ the ~~managing~~vendor ~~director~~received ~~and~~a ~~managing~~default ~~member~~judgment ofin ~~Alpine~~the ascase ~~Defendants~~ and ~~alleges~~on ~~that~~January ~~they made false promises~~23, ~~intentional misrepresentations~~2014 ~~and~~filed ~~breached~~a ~~the~~lien ~~contract~~against ~~which is~~ the ~~subject~~Company ofwith the ~~Texas~~California ~~suit~~Secretary of State. The Company isanticipates ~~seeking~~negotiating ~~damages~~a ofpayment ~~$1.6~~schedule with ~~million~~this vendor.

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. Other than the above-described litigation, as of January 31, 2014, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

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~~While the ~~lawsuit~~consequences of ~~filed~~certain ~~against~~unresolved proceedings are not presently determinable, and an estimate of the ~~Company~~probable inand ~~Texas~~reasonably ~~has~~possible loss ~~been~~or ~~dismissed,~~range noof loss ~~contingency~~in ~~has~~excess ~~been~~of amounts accrued for such proceedings cannot be reasonably made, an adverse outcome from such proceedings could have a material adverse effect on its financial statements in any given reporting period. However, in the opinion of Management, after consulting with legal counsel, the ultimate liability related to the current outstanding litigation is not expected to have a material adverse effect on its financial statements.

Management is of the opinion that the ultimate resolution of such matters now pending will not have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. However, the outcome of legal proceedings cannot be predicted with any degree of certainty.

Antidilution Liability

The Company has recorded a $6520,~~401~~ 087 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. The liability is adjusted to reflect current fair market value at the end of each fiscal period. Due to the decline in the Company’s stock price, we recorded a gain of $42,043 and $3,271 at October 31, 2013 and January 31, 2014, respectively.

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. The Company recorded a total of $81,206 and $20,560 in federal and state payroll taxes due, respectively. Estimated federal penalties and interest on the late filings and payments, in the sum of $2724,~~446~~196, have been accrued as of ~~July~~October 31, 2013. On September 20, 2012 and May 14, 2013, 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~~$13, ~~2012~~605, inrespectively ~~the~~for ~~amount~~unpaid ~~of $8~~taxes,~~206,~~ ~~including~~penalties ~~penalty~~ and interest. The Company is ~~has been~~ in contact with the ~~respective~~Internal ~~tax~~Revenue ~~authorities in~~Service ~~an effort~~ to ~~negotiate~~work out a payment ~~arrangement~~schedule for the ~~taxes~~amounts due.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~Accrued Payroll and Benefits consist~~In ofNovember 2013, the ~~above~~Internal ~~payroll~~Revenue ~~taxes~~Service ~~and~~assessed ~~salaries,~~a ~~wages~~$36,414 ~~and~~penalty ~~vacation~~against ~~benefits~~the ~~earned~~Company’s byChief ~~employees~~Scientist, ~~but~~David ~~not~~Haavig, under ~~disbursed~~the asfederal ofTrust ~~July~~Fund ~~31,~~Recovery ~~2013 and~~Act ~~includes~~because ~~payroll~~the ~~earned,~~above ~~but~~payroll ~~unpaid~~taxes towere ~~various~~not ~~employees~~reported ~~between~~and ~~January~~paid ~~16,~~in ~~2013~~a ~~and~~timely ~~July 31, 2013~~manner. ~~Accrued~~The ~~Payroll also includes~~Company assumed the ~~above~~liability ~~estimated penalties~~ and ~~interest~~has ~~due~~provided onpayment ~~such~~to ~~unpaid~~the ~~payroll~~employee ~~taxes~~for indemnification. ~~Liability~~In ~~for~~addition, ~~vacation~~the ~~benefits~~Company ishas ~~accrued~~determined ~~when earned~~that ~~monthly~~it ~~and~~will ~~reduced~~indemnify ~~when~~its ~~taken.~~Chief AtFinancial ~~the~~Officer, ~~end~~Victor ~~of each fiscal period~~Hollander, ~~the balance~~ in the ~~accrued~~event ~~vacation~~he ~~benefits liability account~~ is ~~adjusted~~found toliable ~~reflect~~for ~~current~~a ~~pay~~similar ~~rates.~~penalty, ~~Annual~~which has ~~leave earned but~~ not ~~taken~~yet isbeen ~~considered~~determined. anAs ~~unfunded~~a ~~liability~~result, ~~since~~the ~~this~~Company ~~leave will~~has berecorded ~~funded~~an ~~from~~additional ~~future~~$34,632 ~~appropriations~~in ~~when~~interest itexpense isas ~~actually~~of ~~taken~~January ~~by employees~~31, 2014.

Estimated state penalties and interest of $4,316 on the above late filings were accrued. A Notice of Tax Lien for a portion of the taxes due was filed by the State of California on November 9, 2012 in the amount of $8,206, including penalty and interest. In October 2013, the California tax authority levied the Company’s account in the sum of $13,807 with an additional levy of $5,451 in November 2013. On December 17, 2013, the Company entered into an installment agreement with the California tax authority to pay $304 per month commencing January 27, 2014 until the remaining balance due has been satisfied.

Accrued Payroll and Benefits consist of the above payroll taxes, salaries, wages, and vacation benefits earned by employees, but not disbursed as of January 31, 2014 and includes payroll earned, but unpaid to various employees between January 16, 2013 and January 31, 2014. 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.

4.	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.

5.	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. The ~~Effective~~leasehold ~~October~~improvements ~~31, 2011,~~made to the Company’s ~~reclassified~~leased ~~and~~facility ~~capitalized~~are asbeing ~~machinery~~depreciated ~~and~~over ~~equipment~~an ~~eight~~expected ofuseful ~~its~~life ~~MIT~~of ~~1000~~5 years. ~~Systems~~Expenditures ~~that~~for itnormal ~~had~~maintenance ~~carried~~and ~~as finished~~repairs ~~goods~~are ~~valued~~charged atto ~~$75,788~~operations. AThe ~~revised~~cost ~~model~~and ofrelated ~~the~~accumulated ~~systems~~depreciation of ~~has~~assets ~~been~~are ~~designed~~removed ~~and~~from the ~~Company~~accounts ~~will~~upon ~~utilize~~retirement ~~these~~or ~~eight~~other ~~first generation~~disposition, ~~models~~and asthe ~~laboratory~~resulting ~~testing~~profit ~~equipment.~~or ~~Commencing~~loss ~~November~~is 1,reflected ~~2011,~~in the ~~these~~Statement ~~systems~~of ~~are~~Operations. ~~being~~Renewals ~~depreciated~~and ~~over~~betterments anthat ~~expected useful~~materially extend the life of 3the ~~years~~assets are capitalized.

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~~The ~~and~~Company ~~repairs~~capitalized ~~are~~$35,313 ~~charged~~in tofiscal ~~operations.~~2013 ~~The~~in ~~cost~~the ~~and~~development ~~related~~of ~~accumulated~~proprietary ~~depreciation~~software offor ~~assets~~the ~~are~~MIT ~~removed~~1000 ~~from~~rapid ~~the~~microbial ~~accounts upon~~identification ~~retirement~~system. orThe ~~other~~cost ~~disposition,~~of ~~and~~ the ~~resulting~~software ~~profit or loss~~ is ~~reflected~~being inamortized ~~the~~on ~~Statement~~a ofstraight-line ~~Operations.~~basis ~~Renewals~~over ~~and~~3 ~~betterments that materially extend the life of the assets are capitalized~~years.

6.	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~~2013 Annual Report on Form 10-K. The Company has not experienced any material change in its critical accounting policies since November 1, ~~2011~~ 2013. 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~~New ~~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.Pronouncements

OnFrom time ~~February~~to ~~28,~~time ~~2013,~~new ~~the~~accounting ~~FASB issued~~pronouncements ~~Accounting~~are ~~Standards~~issued ~~Update~~by ~~[ASU]~~the ~~2013-04,~~Financial ~~entitled~~Accounting ~~Obligations~~Standards ~~Resulting~~Board ~~from~~or ~~Joint~~other ~~and~~standard ~~Several~~setting ~~Liability Arrangements~~bodies ~~for~~that ~~Which~~may ~~the~~have ~~Total~~an ~~Amount~~impact ofon the ~~Obligation~~Company’s Isaccounting ~~Fixed~~and ~~at the Reporting Date~~reporting. The ~~ASU~~Company ~~2013-04~~believes ~~amendments~~that ~~add~~such torecently ~~the~~issued ~~guidance~~accounting inpronouncements ~~FASB~~and ~~Accounting~~other ~~Standards~~authoritative ~~Codification~~guidance ~~[FASB~~for ~~ASC]~~which ~~Topic~~the ~~405,~~effective ~~entitled~~date ~~Liabilities~~is ~~and~~in ~~require~~the ~~reporting~~future ~~entities to~~will ~~measure~~not ~~obligations~~have ~~resulting~~an ~~from~~impact ~~certain~~on ~~joint~~its ~~and~~accounting or ~~several~~reporting ~~liability~~or ~~arrangements~~that ~~where~~such ~~the~~impact ~~total~~will ~~amount~~not ofbe ~~the~~material ~~obligation is~~to ~~fixed~~its asfinancial ofposition, ~~the~~results ~~reporting~~of ~~date,~~operations asand ~~the~~cash ~~sum~~flows ofwhen ~~the following:~~implemented.

● 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).

NoThe Company ~~stock~~recognized share-based compensation ~~was~~expense of $260,282 for options granted to various employees and consultants in November ~~recognized~~2013, ~~during~~$80,348 ~~the~~of ~~nine~~which ~~months~~is ~~ended~~included ~~July~~in 31research and development expense and $179,934 ~~2013~~is recorded as sales, general and administrative expense.

On November ~~February 14~~19, ~~2012~~2013, the Board of Directors adopted the ~~2012~~2014 Employee Benefit Plan which is authorized to grant up to ~~120~~525,000 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~~On ~~January~~November 1619, 2013 ~~and February 22~~, ~~2013,~~ the Company issued 16three-year options to purchase 100,000 shares of common stock which vested immediately under the Plan to ~~legal~~the ~~counsel~~Company’s President, Jeffrey Nunez, for services rendered ~~and~~at ~~the~~an exercise price of $0.50 per share at a fair market value of $167,447.05 Additional three-year options to purchase 300,000 shares of common stock, in the aggregate, were issued to Mr. Nunez and three other employees of the Company on November 19, 2013 at an exercise price of $1.5000 per share., ~~The~~for an aggregate value of ~~the shares was~~ $20192,~~400~~835.

The following table summarizes information about options granted under the Company’s equity compensation plans through ~~July~~ January 31, ~~2013~~2014 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, options granted have contractual lives ranging from two to ten years and, in the case of an employee, vested options terminate 90 ~~when~~days after an employee leaves the Company. ~~The~~All of the options granted ~~have~~on ~~contractual~~November ~~lives~~19, ~~ranging~~2013 ~~from~~vested ~~two~~in totheir ~~ten~~entirety ~~years~~at the time of issuance.

	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~~MICRO ~~outstanding~~IMAGING ~~at July 31~~TECHNOLOGY, ~~2013 is set forth in the table below~~INC. ~~Options~~AND ~~outstanding at July 31, 2013 expire between August 2013 and January 2016.~~SUBSIDIARY

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

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at October 31, 2013		4,400	$	13.35		0.4	$	—
Granted		400,000		.88		2.8
Exercised		—		—
Expired		—		—
Canceled		—		—
Outstanding at January 31, 2014		404,400	$	1.01		2.8	$	—

Summary information about the Company’s options outstanding at January 31, 2014 is set forth in the table below. Options outstanding at January 31, 2014 expire between February 2014 and November 2016.

Range of Exercise Prices	Options Outstanding January 31, 2014		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Options Exercisable January 31, 2014		Weighted Average Exercise Price
$0.50-$1.00		400,000		2.8	$	0.88		400,000	$	0.88
$7.68-$70.00		4,400		0.2	$	13.35		4,400	$	13.35
TOTAL:		404,400						404,400

As of January 31, 2014, 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, 2013 and changes during the three months ended January 31, 2014:

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at October 31, 2013		240,000	$	0.90		1.9	$	—
Granted		30,000		1.00		0.3
Exercised		—		—
Expired		—		—
Canceled		—		—
Outstanding at January 31, 2014		270,000	$	0.91		1.5	$	—

Summary information about the Company’s warrants outstanding at January 31, 2014 is set forth in the table below. Warrants outstanding at January 31, 2014 expire between February 2014 and June 2016.

Range of Exercise Prices	Warrants Outstanding January 31, 2014		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Warrants Exercisable January 31, 2014		Weighted Average Exercise Price
$0.50 - $1.00		270,000		1.5	$	0.91		270,000	$	0.91
		270,000						270,000

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

7.	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 $1615,~~200~~500 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.

Between July 18, 2013 and January 9, 2014, the Company entered into three new Securities Purchase Agreements with the lender, for total proceeds of $117,500, and paid a total of $15,000 out of the proceeds of the notes to lender for legal fees and expenses related to the referenced agreements. The notes mature between April 22, 2014 and October 13, 2014 and are 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 Notes contain 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 Notes are 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 notes were recorded at fair value, using the Binomial valuation model, and a derivative liability of $87,136 has been recorded for the fiscal period ended January 31, 2014. This liability will be revalued each reporting period and gains and losses will be recognized in the statement of operations under “Other Income (Expense)”.

~~MICRO~~Pursuant to ~~IMAGING~~the ~~TECHNOLOGY~~terms of the Series I Notes, ~~INC~~the Company instructed its stock transfer agent to reserve 2,400,000 shares of the Company’s common stock to be issued if the notes are converted. ~~AND~~On ~~SUBSIDIARY~~January 27, 2014, the lender converted $15,000 of such notes and received 68,306 shares of common stock at a conversion price of $0.2196 per share. The balance of 2,331,694 shares has been reserved, but is not considered as issued and outstanding. If the remaining Series I Notes had been converted as of January 31, 2014, the Company would have issued a total of 466,768 shares of common stock the value of which would exceed, by $130,706 the principal balance due on the notes.

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.

MICRO IMAGING TECHNOLOGY, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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~~January 31, ~~2013~~2014, the assumptions used to measure fair value of the liability embedded in our outstanding Series I Note included an exercise price of $0.3126 per share, a common share price of $0.5143, a discount rate of 0.~~014~~02% or 0.06%, and a volatility of ~~151~~143%.

The anti-dilution liability is calculated by an approximate number of shares multiplied by the quoted market price of the Company’s common stock at the measurement date.

The following table sets forth, by level within the fair value hierarchy, our financial instrument liabilities as of January 31, 2014 (See also Note 7 – Convertible Debentures – “Series 1 Notes”):

	Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Anti-dilution liability	$	20,087	$	—	$	—	$	20,087
Derivative liability	$	—	$	—	$	87,136	$	87,136
Total	$	20,087	$	—	$	87,136	$	107,223

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, 2013 and for the three month period ended January 31, 2014:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance October 31, 2013	$	75,557
Additions		31,615
Net gain included in earnings		(8,763	)
Settlements		(11,273	)
Balance January 31, 2014	$	87,136

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~~was ~~been~~ fully amortized as of July 31, ~~2013~~2012. The Company has expensed $1720,~~665~~ 935 in accrued interest on the note as of ~~July~~January 31, ~~2013~~2014. If the note had been converted as of ~~July~~January 31, ~~2013~~2014, the Company would have issued a total of ~~219~~310,~~297~~ 670 shares of common stock the value of which would exceed, by $4668,~~973~~720 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~~At ~~borrowed~~January ~~$25~~31,~~000~~ ~~from~~2014 ~~an unaffiliated lender. In September 2011, the lender converted $12,500 of the principal~~ and ~~$2,876~~October 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~~without ~~lender converted~~taking ~~the remaining $12,500 principal plus $1,299 in accrued interest~~ into ~~23,998~~effect ~~shares~~any ofunamortized ~~common stock at a conversion rate of $0.575 per share. Because the original note carried a beneficial conversion feature~~discounts, ~~the~~convertible ~~Company~~debentures ~~amortized~~and ~~a total of $10,507~~Series as1 ~~the~~notes ~~intrinsic~~consisted ~~value~~ of the ~~note, including $3,202 which was expensed during fiscal 2013.~~following:

	January 31, 2014		October 31, 2013
Series 1 Notes, principal and interest at 8% maturing through October 13, 2014	$	102,500	$	85,000

Convertible note payable to stockholder; principal and interest at 10% due on May 31, 2012.		64,868		64,868
		167,368		149,868
Less current maturities		167,368		148,868

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

Of the above notes, $64,868 is currently due and payable. The Company’s outstanding notes mature as follows for the years ending October 31:

2014	$	167,368
Thereafter		—
	$	167,368

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	$	—	$	—

8.	Notes Payable

At January ~~July~~ 31, ~~2013~~2014 and October 31, ~~2012~~ 2013, 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
	January 31, 2014		October 31, 2013
			(Audited)
Unsecured, interest-free convertible notes payable to former officer/director of the Company; principal due on payment schedule through May 2014.	$	~~114~~113,450	$	~~136~~113,~~950~~450
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 convertible note payable to various stockholders; principal and interest at 6% due between December 9, 2010 and March 31, 2013.		52,000		52,000
Unsecured notes payable to officers and directors of the Company; principal and interest at 6% payable on demand		1670,000		—36,000
		182,450		188,950
		235,450		201,450
Less current maturities		~~182~~235,450		~~142~~201,~~000~~450
Long term portion of notes payable	$	—	$	~~46,950~~—

~~Concurrent~~Of the ~~with~~above ~~his~~notes ~~April~~payable, 13$113, ~~2012~~450 ~~resignation~~is ~~as Chairman of~~ the ~~Board~~subject of ~~Directors~~a ~~and~~lawsuit ~~Chief~~brought ~~Executive~~against ~~Officer,~~ the Company ~~agreed~~by toformer ~~repay~~officer ~~a total of $160,000 in principal loans, $24,339 in accrued interest~~ and ~~$13~~director,~~120~~ ~~in unpaid fees and expenses due~~ Michael ~~Brennan over a 25-month payment~~ ~~schedule commencing May 1, 2012~~Brennan. ~~Payments~~The ~~due~~Company ~~Mr.~~is ~~Brennan~~currently ~~since~~negotiating ~~February~~with ~~2013, each in~~ the ~~amount~~holders of $752,~~500,~~000 ~~have~~of ~~not been made per~~ the ~~payment~~above ~~schedule. As~~notes ofto ~~July~~either ~~31, 2013,~~extend the ~~principal~~maturity ~~balance~~date or ~~due~~convert tothe ~~Mr.~~notes ~~Brennan~~into ~~amounts~~shares toof ~~$114,450~~common ~~and, although Mr~~stock. ~~Brennan~~The ~~originally waived interest on the note, the~~ Company’s ~~has~~outstanding ~~accrued~~notes ~~$9,059~~mature ~~in interest on that amount~~ as offollows ~~July~~for ~~31,~~the ~~2013.~~years ending:

2014	$	235,450
Thereafter		—
	$	235,450

9.	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 has made no contributions to the IRA plan since January 2010.

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.

9. 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 November ~~May~~ 8, ~~2012~~2013, ~~Board~~the ~~member, Gregg~~Company ~~J. Newhuis,~~ entered into a Subscription Agreement, aswith ~~amended~~a onmajor ~~October~~stockholder ~~31, 2012,~~ to purchase ~~a total of 1~~20,~~800,~~000 shares of the Company’s common stock at $0.50 per share, ~~over~~for a ~~six-month~~total ~~period.~~of Mr$10,000. ~~Newhuis~~As ~~also~~additional ~~received~~consideration, the purchaser was granted a ~~one~~six-~~year~~month option to purchase ~~up to~~ an additional ~~266~~10,~~667~~000 shares of common stock at $1.5000 per share ~~in September 2012~~. ~~This~~On ~~option~~December ~~was~~13, ~~cancelled~~2013, inthis same ~~October~~stockholder ~~2012.~~purchased ~~The~~an ~~Company~~additional ~~received the final $100~~20,000 ~~from~~shares ~~Mr.~~of ~~Newhuis~~common onstock ~~November~~at ~~29,~~$0.50 ~~2012~~per ~~pursuant~~share toand ~~his~~received ~~May~~a ~~2012~~six-month ~~subscription arrangement.~~option ~~Giving effect~~ to ~~the~~purchase an ~~February~~additional 810, ~~2013 reverse stock split, the Company issued a total of 200,~~000 shares of common stock at $01.5000 per share ~~for the November 29, 2012 purchase~~.

On November ~~April 20~~13, ~~2012~~2013, the Company ~~granted~~’s ~~three-year~~Chief ~~warrants~~Scientist, toDavid ~~purchase 80~~Haavig,~~000~~ ~~shares~~purchased ~~of common stock to a major stockholder as part of a Subscription Agreement for the purchase of 80~~100,000 shares of common stock atfor $0.7550 per share~~. The warrants are exercisable at $1.00 per share within one~~, ~~year~~or ~~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 December ~~January 11~~19, 2013, ~~Victor Hollander,~~ a ~~Director~~major ~~and~~stockholder ~~the Company’s Chief Financial Officer,~~ purchased 320,~~333~~000 shares of common stock for proceeds of $510,000, ator ~~the~~$0.50 per share. He ~~fair~~received ~~market~~six-month ~~value~~warrants to purchase an additional 10,000 shares of common stock at $1.5000 per share as part of the purchase transaction.

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 February ~~August 7~~27, ~~2013~~2014, a ~~major~~member ~~stockholder~~of ~~purchased~~the ~~20,000~~Board ~~shares~~ of ~~common~~Directors ~~stock~~loaned ~~for~~the ~~proceeds~~Company of $1015,000~~, or $0~~.50 ~~per~~The ~~share.~~loan Hebears ~~received~~interest ~~a six-month warrant to purchase an additional 10,000 shares of common stock~~ at ~~$1.00~~6% per ~~share~~annum inand is ~~connection~~payable ~~with~~on ~~this transaction~~demand.

On February ~~August 7~~28, ~~2013~~2014, a ~~member~~major ofstockholder ~~the~~purchased ~~Board~~30,000 shares of ~~Directors~~common ~~loaned~~stock ~~the~~for ~~Company~~proceeds of $1015,000, or $0.50 ~~The~~per ~~loan~~share. ~~bears~~He received ~~interest~~a six-month warrant to purchase an additional 15,000 shares of common stock at 6%$1.00 per ~~annum~~share ~~and~~in isconnection ~~payable~~with ~~on demand~~this transaction.

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.17

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~~2014 and fiscal ~~2012~~2013 are for the ~~nine~~three month period ended ~~July~~January 31, ~~2013~~2014 and ~~2012~~2013, respectively.

The Company had no sales revenue during the ~~nine~~three months ended ~~July~~January 31, ~~2013~~2014 or ~~2012~~2013.

Research and development expenses for the ~~nine~~three month period ended ~~July~~January 31, ~~2013~~2014 increased by $2726,~~445~~825 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~~the ~~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~~issuance ~~program~~of ~~for~~options ~~the~~to ~~Company’s~~employees ~~technology.~~in ~~These~~November 2013 ~~increases~~which ~~were~~was partially offset by alower ~~decrease~~expenses infor consulting ~~expenses~~ inand ~~the~~temporary ~~current~~labor, ~~period~~with asmoderate ~~well~~decreases asin ~~the amount expended on R&D materials and supplies. Research and development expense~~expenditures for ~~the three months ended July 31~~marketing, ~~2013~~computer ~~decreased by $38~~supplies,~~959~~ inlicense ~~fiscal~~fees ~~2013 primarily in the areas of stockholder relations, travel, entertainment~~ and ~~consulting~~trade ~~expenses~~shows. ~~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~~increased by $56155,~~272~~553 ~~and $107,225~~ for the three ~~and nine~~ months ended ~~July~~January 31, ~~2013,~~2014 ~~respectively,~~ compared to the prior ~~year~~ year period. The ~~decrease~~increase ~~reflects~~resulted afrom ~~significant~~the ~~reduction~~expense inassociated ~~consulting~~with ~~costs~~the asissuance ~~well~~of asoptions ~~expenses~~to ~~associated~~various ~~with~~employees ~~stockholder relations~~in ~~and~~November ~~tax~~2013 ~~accounting. This decrease~~ and was partially offset, ~~however,~~ by ~~an increase in salaries and~~ a ~~substantial~~decrease ~~increase~~ in ~~legal~~expenditures ~~fees~~for ~~related~~advertising, totravel ~~the~~and ~~defense~~entertainment ~~of the Texas-based lawsuit brought against the Company by Alpine MIT Partners~~expenses.

The Company ~~realized~~had ~~negligible~~ no interest income during the ~~nine~~three months ended ~~July~~January 31, ~~2013~~2014 as all available capital was utilized to sustain operations. Interest expense for the three ~~and nine~~ month ~~periods~~period ended ~~July~~January 31, ~~2013~~2014 ~~decreased~~increased by $38108,~~797~~408 ~~and $334,417, respectively,~~ compared to the prior period reflecting payroll tax penalties and the ~~conversion~~cost of ~~outstanding~~borrowings ~~debt~~conducted toby ~~equity~~the inCompany ~~the~~commencing ~~past~~in ~~year~~July 2013.

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 2013.18

~~Components of other income and~~The ~~expense~~Company ~~reflected~~recognized ~~a gain (income) of~~ $~~254~~8,~~779~~763 and $~~271~~3,~~098~~271 ~~for~~in ~~the~~non-cash ~~three~~gains ~~and~~due ~~nine~~to ~~month~~certain ~~periods~~convertible ~~ended~~notes ~~July~~and 31anti-dilution provisions, ~~2012~~respectively. These ongains ~~writing off~~are ~~old~~a ~~debt.~~result Noof ~~such~~the ~~gains~~Company’s ~~were~~accounting ~~recorded~~for ~~during~~these ~~fiscal~~features ~~2013~~at each measurement period.

The Company recorded ~~the~~no ~~minimum state~~other income ~~tax~~or ~~provision~~expense infor ~~fiscal 2013 and 2012 as~~ the ~~Company~~three ~~had~~month ~~cumulative~~periods ~~net~~ended ~~operating~~January ~~losses~~31, in2014 ~~all~~and ~~tax jurisdictions~~2013.

The Company recorded the minimum state income tax provision in fiscal 2014 and 2013 as the Company had cumulative net operating losses in all tax jurisdictions.

Liquidity and Capital Resources

At January ~~July~~ 31, ~~2013~~2014, the Company had a working capital deficit of $~~990~~1,~~065~~301,733. This represents a working capital decrease of $~~461~~192,~~399~~ 894 compared to that reported at October 31, ~~2012~~2013. 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.

19Our only source of cash during the three months ended January 31, 2014 has been from the sale of common stock totaling $80,000 and $64,000 in net short term loans. Management estimates that it utilized $59,250 per month in working capital on operations for the three months ended January 31, 2014, compared to the approximate $64,600 per month expended during the three month period ended January 31, 2013.

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

We are 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 we will be able to raise sufficient capital to implement our plans or to continue operations.

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 oftwo ~~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~~In October 2013, the Company announced that it is ~~developing~~collaborating ~~its~~with the Northern Michigan University (NMU) Department of Biology ~~marketing~~to identify and ~~sales~~differentiate ~~strategies~~Staphylococcus aureus (S. aureus) and the “superbug,” Methicillin Resistant S. aureus (MRSA). The goal of this strategic research with ~~distributors~~NMU inis ~~Japan~~to rapidly and cost-effectively identify these two particular healthcare threats using the ~~ASEAN~~MIT ~~countries~~1000 ~~(Malaysia,~~System. ~~Singapore,~~Staph ~~Thailand,~~infections ~~Brunei,~~can ~~Indonesia,~~range from mild skin problems to potentially ~~Philippines~~fatal conditions if the bacteria invade deeper into the body. Most can be easily treated. Some Staphs, ~~Vietnam~~however, ~~Cambodia~~are drug-resistant. The faster the responsible disease causing bacteria is identified, ~~Laos~~the ~~and~~faster ~~Myanmar)~~the ~~which~~appropriate treatment can begin. This is the driving ~~Company~~goal ~~believes~~behind ~~will~~the ~~assist~~NMU/MIT incollaboration ~~generating~~using ~~sales~~the ~~revenues~~MIT in1000 to differentiate between the ~~near future~~common S. ~~The~~aureus ~~Company~~and ~~expects~~MRSA. At tothis ~~establish~~stage, ~~additional~~the ~~distributing~~collaboration ~~partners~~involves asscientists ~~its~~from ~~marketing~~MIT ~~plans~~and ~~develop~~NMU gathering preliminary data and developing collaborative research proposals seeking funding in support of continued research.

Also in October 2013, the Company announced a strategic research collaboration with Purdue University to prove the concept of faster, cheaper, and easier pathogen testing for Listeria and Listeria monocytogenes in foods using laser light scattering. The partnership pairs similar laser light scattering technologies developed independently by each contributor to demonstrate the speed and accuracy of using non-biological methods to provide a simple, rapid, and cost-effective solution to food pathogen testing.

In December 2013, the Company announced that its MIT 1000 System can now identify the potentially life-threatening bacteria Staphylococcus. Staph is one of the five most common causes of infections after injury or surgery and can lead to very serious complications with the lung (pneumonia), brain (meningitis), bone (osteopmyelitis), heart (endorcarditis), and blood (bacteremia and septicemia). The addition of this Identifier opens the door for the MIT 1000 Technology to enter the clinical pathogen detection and identification arena. The Identifier is available now and the Company plans to submit it for AOAC certification as soon as possible.

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. The Company also continues to develop promotional materials and enhance its website with a view toward generating sales in the near future.

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^TMfor 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~~ requirements through ~~September~~April ~~2013~~2014. 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

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.

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.

On or about October 4, 2013, Mr. Brennan filed a lawsuit in the California Superior Court of Los Angeles for breach of contract for failure to pay monies due him under an agreement executed in April 2012 at the time of his resignation. The lawsuit seeks $123,509 in principal damages, interest, costs and attorney fees. The Company has filed an answer to the complaint and is contesting the amount due Mr. Brennan.

On or about November 12, 2013, the Company was served with a Complaint brought in the Superior Court of Orange County, California by a vendor for non-payment of $9,894 in services performed. The Company has not contested the amount due and expects to negotiate a payment arrangement with the vendor in the near future.

Item 2.

Changes in Securities

On November 298, ~~2012~~2013, the Company issued ~~200~~20,000 shares of common stock and a six-month warrant to ~~Gregg~~purchase ~~Newhuis~~10,000 shares of common stock at $1.00 per share to a ~~Director~~major stockholder of the Company, for proceeds of $~~100~~10,000. And on December 13, or2013, this same stockholder purchased an additional 20,000 shares of common stock at $0.50 per share and received an additional six-month warrant to purchase 10,000 shares of common stock at $1.00 per share.

On November ~~January 11~~13, 2013, ~~a major stockholder of~~ the Company’s ~~exercised~~Chief aScientist ~~warrant~~purchased ~~to purchase 40~~100,000 shares of common stock atfor ~~$1.00~~proceeds ~~per~~of ~~share and the Company received~~ $4050,000 ~~pursuant~~, toor ~~the~~$0.50 per ~~exercise~~share.

On December ~~January 11~~19, 2013, the Company~~’s Chief~~ ~~Financial~~issued ~~Officer~~20,000 ~~Victor~~shares ~~Hollander,~~of ~~purchased~~common ~~3,333~~stock ~~shares~~and ofa ~~Common~~six-month ~~Stock~~warrant ~~for~~to ~~proceeds~~purchase ~~of $5~~10,000, orshares of common stock at $1.5000 per share to a major stockholder of the Company, for proceeds of $10,000.

On January 1627, ~~2013~~2014, ~~the~~a ~~Company issued~~lender 8converted $15,000 ~~shares~~ of ~~common~~a ~~stock~~$42,500 inprincipal ~~payment~~loan ~~for~~into ~~legal~~68,306 ~~services~~shares ~~rendered~~of ~~valued~~common stock at $~~12,000~~0.2196 per share.

OnItem ~~February~~3 ~~22,~~and ~~2013,~~4. ~~the~~Omitted ~~Company~~as ~~issued~~not ~~an additional 8,000 shares of common stock to legal counsel for services rendered in the sum of $8,400~~applicable.

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~~years ended October 31, 2012, ~~which were due to be filed (with an extension), by July 15,~~ and 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.

* Filed herewith

~~(b)~~** XBRL ~~Reports~~information onis ~~Form~~furnished ~~8-K.~~and ~~None~~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.

23(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.
Dated: March 17, 2014	MICRO IMAGING TECHNOLOGY, INC.
	By:	/s/ Victor A. Hollander
	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)

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