Issuance of Zero Coupon Secured Convertible Debentures

On July 14, 2016, Integrated Environmental Technologies, Ltd. (the “Company”) issued zero coupon secured convertible debentures to eight individual investors and one institutional investor (each a “Debenture” and collectively, the “Debentures”) in the aggregate principal amount of $670,577. In connection with the issuance of the Debentures, the Company issued warrants (the “Debenture Warrants”) to purchase an aggregate of 67,055,700 shares of its common stock, par value $.001 per share (“Common Stock”). The gross proceeds received in connection with this private placement were $603,500, which will be used for working capital purposes.

The Debentures have a one-year term maturing on July 14, 2017, contain an original issue discount of 10% and are secured by the Company’s assets. The entire principal amount of a Debenture is convertible at any time into shares of Common Stock at the option of the holder at a conversion price of $0.01 per share (the “Conversion Price”). If at any time subsequent to the issuance of the Debentures and prior to the conversion of the Debentures into shares of Common Stock, the Company closes on a financing involving the issuance of convertible debentures or shares of Common Stock with or at a per share conversion price or purchase price that is less than the Conversion Price (the “Subsequent Financing Per Share Price”), then the Conversion Price shall be reduced to seventy-five percent (75%) of the Subsequent Financing Per Share Price. The quoted market price of Common Stock on July 14, 2016 was $0.009 per share. An aggregate of 67,055,700 shares of Common Stock can be issued pursuant to the Debentures at the current conversion price of $0.01 per share.

The Debenture Warrants have a five-year term and provide the holders with the right to purchase an aggregate of 67,055,700 shares of Common Stock at $0.01 per share. All of the shares of Common Stock underlying the Debenture Warrants are fully vested. The Debenture Warrants contain a cashless exercise provision and are callable in the event the closing price of Common Stock averaged over a period of ten (10) consecutive trading days is equal to or greater than $0.04 per share. The exercise price of the Debenture Warrants is subject to adjustment for stock dividends, stock splits, or similar events.

Zanett Convertible Debenture

On August 21, 2012, the Company issued to Zanett Opportunity Fund, Ltd. an 8% convertible debenture in the amount of $476,125 (the “Zanett August 2012 Debenture”). The Zanett August 2012 Debenture had a three-year term maturing on August 21, 2015 and was originally convertible into 4,761,250 of Common Stock at a conversion price of $0.10 per share. Effective July 7, 2016, the Zanett August 2012 Debenture was amended to extend the maturity date to December 31, 2017 and reduce the conversion price to $0.07 per share. As a result of this amendment, the Zanett August 2012 Debenture is convertible into 6,801,786 shares of Common Stock.