Integrated Environmental Technologies, Ltd. Reports Third Quarter and Nine Months 2016 Financial Results

The Company reported a net loss of approximately $643,000 (less than $0.01 per basic share) for the third quarter of 2016.  This compares to a net loss of approximately $628,000 for the third quarter of 2015 and a net loss of approximately $575,000 for the second quarter of 2016.  IET incurred a loss from operations of approximately $496,000 for the third quarter of 2016 compared to a loss from operations of approximately $617,000 in the same period of 2015 and $507,000 in the second quarter of 2016.

IET's gross profit on revenue in the third quarter of 2016 was approximately $36,000, yielding a gross margin of 64%, during which the Company incurred start-up costs totaling approximately $7,000 for its operations at a new satellite facility in Sonora, Texas.  This area in the southeast Permian Basin is located close to a distributor to which IET has begun to sell product, in order to serve additional smaller oil and gas operators that are not a direct focus for IET.  It is estimated that this satellite production facility could achieve break-even operating results at 28 wells (approximately 5,600 gallons of fluid sold monthly) under the Excelyte^® maintenance program. This compares to a gross profit of approximately $88,000 and gross margin of 62% for the third quarter of 2015 and gross profit of approximately $49,000 and a gross margin of 62% for the second quarter of 2016.  IET targets gross margin in excess of 70% as it achieves optimal production levels at its five facilities.

Operating expenses for the third quarter of 2016 totaled approximately $532,000, a decrease of approximately $173,000 (25%) over the same period of 2015 and a decrease of approximately $25,000 (5%) compared to the second quarter of 2016.  The substantial reduction in year-over-year operating expenses was primarily attributed to a 16% decrease in sales and marketing expenses due to a $49,000 decrease in employee payroll & benefits and a $9,000 decrease in travel, offset by a $14,000 increase in rent expense and maintenance expenses related to additional facilities, and a 35% decrease in general and administrative expenses as the Company reduced its costs with a $57,000 decrease in employee payroll and benefits, a $29,000 decrease in investor and public relations, a $39,000 reduction in travel and conference expenses as well as general office-related expenses.  The 2016 quarter-over-quarter operating expenses continued to decrease across all key areas. Most notably, sales and management compensation were shifted towards an incentive basis that includes profitability growth targets.  Subsequent to the end of the third quarter of 2016, IET further reduced costs by approximately $20,000 per month through an overhauling of the sales team.

Interest expense for the third quarter of 2016 totaled approximately $147,000, compared to approximately $11,000 incurred in the same period of 2015 and approximately $68,000 incurred in the second quarter of 2016.  The year-over-year increase of $135,000 in interest expense, $105,000 of which was accreted interest, was due, in part, to the issuance of 12% two-year convertible debentures with a face value of approximately $997,000 in November and December 2015.  In addition, affecting both the year-over-year and quarter-over-quarter comparisons, in July 2016 the Company issued 10% one-year secured convertible debentures (zero coupon) convertible at $0.01 per share with a face amount of $670,557. In connection with the issuance of these debentures, the Company issued warrants to purchase approximately 67.1 million shares of its common stock at $0.01 per share, consistent with the pricing of the convertible debentures.

For the nine months ended September 30, 2016, the Company reported revenue of approximately $170,000 compared to revenue of approximately $449,000 for the same period in 2015. The 62% decrease in revenue was primarily the result of a decrease in Excelyte^® sales of $334,000 to two oil and gas customers who either reduced their well maintenance budgets and/or closed down low-producing wells, offset by an $88,000 increase in sales to an existing customer that has expanded Excelyte^® well maintenance treatments into two additional basins.  The Company's gross margin for the nine months ended September 30, 2016 was 62% compared to 64% for the prior nine month period.  The slight reduction in gross margin was due to the lower levels of revenue and the start-up costs associated with two new production facilities during the first and third quarters of 2016.

The Company reduced its selling, general and administrative (SG&A) expenses by approximately $706,000 or 30% to $1.7 million during the nine-months ended September 30, 2016 compared to the same period in 2015.  The decrease in expenses is primarily the result of a reduction in employee payroll, benefits and directors' compensation, including stock-based compensation, by approximately $386,000; a decrease in public relations and stockholder related expenses by approximately $200,000; and a reduction in office, corporate travel and conference expenses by approximately $105,000.  These expense reductions were partially offset by an increase in rent and maintenance expenses of approximately $14,000 related to the opening of additional facilities.  During the nine-months ended September 30, 2016, the Company's research and development expenses decreased by approximately 39% to $141,000 primarily due to an approximately $56,000 decrease in stock-based compensation expense for employees and an approximately $29,000 decrease in laboratory testing fees. 

Interest expense during the first nine months of 2016 increased by $248,000 to approximately $282,000 (of which accreted interest totaled $159,000) compared to the same period of 2015 due to the additional debt incurred by IET during the fourth quarter of 2015 and third quarter of 2016.  IET reported a net loss for the nine months ended September 30, 2016 of $2.0 million or $0.01 per basic share compared to a net loss of $2.4 million or $0.01 per basic share for the same period in 2015.

At September 30, 2016, the Company reported cash and cash equivalents of approximately $229,000, accounts receivable of approximately $27,000 and inventory of approximately $125,000.  At September 30, 2016, long-term debt totaled approximately $1.3 million, net of discount, and short-term debt totaled approximately $427,000.

On September 30, 2016, IET had approximately 320.6 million shares of common stock issued, consistent with the prior second quarter 2016.  The Company's fully diluted share count (inclusive of all options, warrants and convertible debt) increased by approximately 136.2 million to 508.2 million shares during the third quarter of 2016 reflecting predominately the issuance of the July 2016 convertible debentures which may be converted into approximately 67.1 million shares of common stock as well as the issuance of associated warrants, exercisable at $0.01 per share, to purchase approximately 67.1 million shares of common stock.  As of September 30, 2016, the Company had federal and state tax loss carry forwards of approximately $25.0 million, which expire 2021 through 2035.

Conference Call:  Given the Company's immediate focus on evaluating strategic alternatives as well as the next generation of executive leadership, a quarterly conference call will not be held at this time.

About Integrated Environmental Technologies, Ltd.

Integrated Environmental Technologies, Ltd. is a publicly-traded company that operates through its wholly-owned operating subsidiary, I.E.T., Inc.  All of the Company's products and services are marketed and sold under the umbrella brand name EcoTreatments™.  The Company markets and sells its anolyte disinfecting solution under the Excelyte^® brand name, which is produced by the Company's proprietary EcaFlo^® equipment that utilizes an electrolytic process known as electrochemical activation to reliably produce environmentally responsible solutions for cleaning, sanitizing and disinfecting.  Excelyte^® solutions are EPA-registered, non-porous, hard-surface disinfectants and sanitizers approved for hospital-level use and are also approved for use as a biocide in oil and gas drilling.  The Company's EcaFlo^® equipment also produces an industrial-grade surfactant that the Company markets under the Catholyte Zero^™ brand name.  Catholyte Zero^™ solutions are environmentally friendly cleansers and degreasers for oil and gas, janitorial, sanitation and food processing uses.  To learn more, visit www.ecotreatments.com.  

Statements about the Company's future expectations and all other statements in this press release other than historical facts are forward-looking statements.  Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results.  Among these risks, trends and uncertainties are economic conditions both generally and within the industries in which the Company may participate; competition within the Company's chosen industries, including competition from much larger competitors; technological advances; available capital; regulatory approval; and failure by the Company to successfully develop or acquire products and form new business relationships.  Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results.

*** Financial Statements Follow ***

Integrated Environmental Technologies, Ltd. Consolidated Condensed Balance Sheets (Unaudited)
			September 30,		December 31,
			2016		2015
Assets
Current assets:
	Cash		$       229,144		$        838,107
	Accounts receivable, net		26,575		36,223
	Prepaid expenses and other		65,452		14,948
	Inventory		124,942		103,220
	Total current assets		446,113		992,498
Property and equipment, net			204,198		245,621
	Total assets		$       650,311		$     1,238,119
Liabilities and Stockholders' Deficiency
Current liabilities:
	Accounts payable		$      540,568		$        209,774
	Accrued expenses		339,146		199,893
	Customer deposits		2,000		2,000
	Convertible debentures		411,035		501,125
	Notes payable		15,935		--
	Total current liabilities		1,308,684		912,792
Convertible debentures			1,346,236		788,501
	Total liabilities		2,654,920		1,701,293
Commitments and contingencies
Stockholders' deficiency:
	Common stock, $.001 par value; 600,000,000 shares authorized;    320,571,243 and 311,404,576 shares, respectively, issued    and outstanding		320,571		311,405
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