MPHASE TECHNOLOGIES INC (Form: 8-K/A, Received: 09/16/2019 06:02:55)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K/A

(Amendment No. 1)

Current Report

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2019

mPHASE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

New Jersey

000-30202

22-2287503

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

9841 Washingtonian Boulevard, #390

Gaithersburg, MD 20878

(Address of principal executive offices) (zip code)

(301) 329-2700

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.01. Completion of Acquisition or Disposition of Assets.

On July 9, 2019, mPhase Technologies, Inc. (the “Company”) filed a Current Report on Form 8-K reporting that, on June 30, 2019, the Company completed the acquisition (“the Acquisition”) of 99% of the outstanding stock of Alpha Predictions, LLP, (“Alpha Predictions”) from Snehalkumar Santosh Kadam, Smita Dinakar Shinde, Anuj Kumar Saxena, and Dhananjay Rajendra Adik (collectively, the “Sellers”) in exchange for cash of approximately $1,400 (USD), (99,000 INR), pursuant to a Share Purchase Agreement (“SPA”) entered into on June 30, 2019. This Amendment No. 1 to the June 30, 2019 Current Report on Form 8-K contains the required financial statements and pro forma financial information which was not available at the time the Current Report on Form 8-K was filed.

The SPA was filed as Exhibit 10.1 to Current Report on Form 8-K filed by the Company on July 9, 2019 and incorporated herein by reference. The foregoing descriptions of the SPA do not purport to be complete and are qualified in its entirety by reference to the full text of the document.

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Item 9.01. Financial Statements and Exhibits.

(a)	Financial Statements of Businesses Acquired.

The following financial statements of Alpha Predictions are attached as Exhibit 99.1 to this Form 8-K/A and are incorporated herein by reference:

●

Audited balance sheets as of March 31, 2019 and 2018, and statements of operations for the years ended March 31, 2019 and 2018, including the Independent Auditor’s Reports, issued by Ashok Singh and Associates, Chartered Accountants.

The financial statements of Alpha Predictions are reported in the local currency of Indian Rupee (“INR”) and were prepared under Indian Generally Accepted Accounting Principles (“GAAP”). The Company noted no material differences between Indian GAAP and U.S. GAAP.

(b)	Pro Forma Financial Information.

The unaudited pro forma condensed combined balance sheet of the Company and Alpha Predictions as of March 31, 2019 and the related unaudited pro forma condensed combined statements of income for the nine months ended March 31, 2019 and for the year ended June 30, 2018 that give effect to the acquisition of Alpha Predictions, are attached as Exhibit 99.2 to this Form 8-K/A and are incorporated herein by reference.

(d)	Exhibits.

Exhibit No.		Description
99.1		Alpha Predictions audited financial statements for the years ended March 31, 2019 and 2018.

99.2		The unaudited pro forma condensed combined balance sheet of the Company and Alpha Predictions as of March 31, 2019 and the related unaudited pro forma condensed combined statements of income for the nine months ended March 31, 2019 and for the year ended June 30, 2018.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	mPhase Technologies, Inc.

Dated: September 13, 2019	/s/ Anshu Bhatnagar
	Anshu Bhatnagar
	Chief Executive Officer

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Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Acquisition of Alpha Predictions, LLP

On June 30, 2019, mPhase Technologies, Inc. (the “Company”) successfully completed its previously announced acquisition of 99% of the outstanding stock of Alpha Predictions, LLP, (“Alpha Predictions”) from Snehalkumar Santosh Kadam, Smita Dinakar Shinde, Anuj Kumar Saxena, and Dhananjay Rajendra Adik (collectively, the “Sellers”) in exchange for cash of approximately $1,400 (USD), (99,000 INR), pursuant to a Share Purchase Agreement (“SPA”) entered into on June 30, 2019.

Unaudited Pro Forma Consolidated Financial Information

The following unaudited pro forma consolidated financial statements were derived from the historical consolidated financial statements of the Company, which were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

The unaudited pro forma condensed combined balance sheet as of March 31, 2019 gives effect to the acquisition, as if it had occurred on that date. The unaudited pro forma condensed combined statements of operations for the nine months ended March 31, 2019 and for the fiscal year ended June 30, 2018, give effect to the acquisition, as if it had occurred on July 1, 2017, the first day of the previous fiscal year.

The assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed combined financial statements. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and the Company believes such assumptions are reasonable under the circumstances.

The following unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements of the Company, the accompanying notes to those financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018 and Quarterly Report on Form 10-Q for the third quarter of fiscal year 2019 ended March 31, 2019. The unaudited pro forma condensed combined financial statements have been presented for informational purposes only. The unaudited pro forma condensed combined financial statements are not necessarily indicative of what the Company’s results of operations or financial condition would have been had the transactions to which the pro forma adjustments relate actually occurred on the dates indicated, and they do not assert to project the Company’s results of operations or financial condition for any future period or as of any future date.

FORWARD LOOKING STATEMENT: The unaudited pro forma condensed combined financial statements and the accompanying notes to the financial statements contain forward-looking statements that involve risks and uncertainties. We use words such as “may,” “assumes,” “forecasts,” “positions,” “predicts,” “strategy,” “will,” “expects,” “estimates,” “anticipates,” “believes,” “projects,” “intends,” “plans,” “budgets,” “potential,” “continue” and variations thereof, and other statements contained in these pro forma condensed combined financial statements and the accompanying notes to the financial statements, regarding matters that are not historical facts and are forward-looking statements. Because these statements involve risks and uncertainties, as well as certain assumptions, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to risks inherent in: our early stage of development, including a lack of operating history, lack of profitable operations and the need for additional capital; the development and commercialization of largely novel and unproven technologies and products; our ability to protect, maintain and defend our intellectual property rights; uncertainties regarding our ability to obtain the capital resources needed to continue research and development operations; uncertainty regarding our overall ability to compete effectively in a highly complex, rapidly developing, [capital intensive] and competitive industry. See “Risk Factors” set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 for a more complete discussion of these factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements include our plans and objectives for future operations, including plans and objectives relating to our products and our future economic performance. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development and commercialization of our technologies, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, we cannot assure you that the results contemplated in any of the forward-looking statements contained herein will be realized. Based on the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of any such statement should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

mPHASE TECHNOLOGIES, INC.

Pro Forma Condensed Combined Balance Sheets

(Unaudited)

As of March 31, 2019

	Historical
	mPhase Technologies, Inc. (as reported)			Alpha Predictions, LLP (see Note (a))		Pro Forma Adjustments			Notes	Combined Pro Forma
ASSETS
CURRENT ASSETS
Cash	$	25,344		$	3,127	$	(1,438	)	(a)	$	27,033
Accounts receivable, net		-			26,953		-		(a)		26,953
Prepaid expenses		3,686			7,487		-		(a)		11,173
TOTAL CURRENT ASSETS		29,030			37,567		(1,438	)			65,159
Property and equipment, net		-			11,048		-		(a)		11,048
Intangible asset - internal-use software		-			2,905,668		-		(a)(b)		2,905,668
Other assets		800			2,180		(2,180	)	(a)(c)		800
TOTAL ASSETS	$	29,830		$	2,956,463		(3,618	)		$	2,982,675

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES
Accounts payable	$	359,713		$	4,538	$	-		(a)	$	364,251
Accrued expenses and other liabilities		235,864			2,907,199		-		(a)(b)		3,143,063
Provision for income taxes		-			7,713		-		(a)		7,713
Due to related parties		32,545			-		-				32,545
Notes payable, Officers		53,712			-		-				53,712
Notes payable, Director and Investor		4,478			-		-				4,478
Current Portion, Liabilities, in arrears, with convertible features		112,333			-		-				112,333
Current Portion, Liabilities, in arrears, - Judgement Settlement Agreement		310,910			-		-				310,910
Liabilities of discontinued operations		133,868			-		-				133,868
TOTAL CURRENT LIABILITIES		1,243,423			2,919,450		-				4,162,873

Long term portion, Liabilities, in arrears, - Judgement settlement agreement		580,000			-		-				580,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDER’S DEFICIT
Common stock		114,817			-		-				114,817
Additional Paid in Capital		211,466,587			-						211,466,587
Preferred stock		1			-		-				1
(Accumulated deficit) Retained earnings		(213,374,998	)		-		33,395		(a)		(213,341,603	)
Equity of acquiree		-			37,013		(37,013	)	(a)		-
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY		(1,793,593	)		37,013		(3,618	)			(1,760,198	)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	29,830		$	2,956,463	$	(3,618	)		$	2,982,675

mPHASE TECHNOLOGIES, INC.

Pro Forma Condensed Combined Statements of Operations

(Unaudited)

For the Nine Months Ended March 31, 2019

	Historical
	mPhase Technologies, Inc. (as reported)			Alpha Predictions, LLP		Pro Forma Adjustments			Notes		Combined Pro Forma
REVENUES	$	-		$	1,540,945	$	-				$	1,540,945
COST OF REVENUES		-			1,345,237		-					1,345,237
Gross profit		-			195,708		-					195,708

COSTS AND EXPENSES
Selling, general and administrative		1,541,960			174,314		-					1,716,274
Depreciation and amortization		-			2,986		726,417			(b)		729,403
Total costs and expenses		1,541,960			177,300		726,417					2,445,677

OPERATING (LOSS) INCOME		(1,541,960	)		18,409		(726,417	)				(2,249,968	)

OTHER (EXPENSE) INCOME
Interest Expense		(155,912	)		-		-					(155,912	)
Gain on debt extinguishments		16,279			-		-					16,279
Total other (expense) income		(139,633	)		-		-					(139,633	)

(LOSS) INCOME FROM CONTINUING OPERATIONS, BEFORE TAXES		(1,681,593	)		18,409		(726,417	)				(2,389,601	)

Income taxes		-			5,744		-					5,744

NET (LOSS) INCOME FROM CONTINUING OPERATIONS	$	(1,681,593	)	$	12,665	$	(726,417	)			$	(2,395,345	)

Basic and diluted (loss) per share from continuing operations	$	(0.22	)								$	(0.32	)

Weighted Average Number of Shares Outstanding:
Basic		7,496,294										7,496,294
Diluted		7,496,294										7,496,294

mPHASE TECHNOLOGIES, INC.

Pro Forma Condensed Combined Statements of Operations

(Unaudited)

For the Year Ended June 30, 2018

	Historical
	mPhase Technologies, Inc. (as reported)			Alpha Predictions, LLP		Pro Forma Adjustments			Notes		Combined Pro Forma
REVENUES	$	-		$	1,245,556	$	-				$	1,245,556
COST OF REVENUES		-			1,039,543		-					1,039,543
Gross profit		-			206,013		-					206,013

COSTS AND EXPENSES
Selling, general and administrative		734,343			184,023		-					918,366
Depreciation and amortization		683			4,307		968,556			(b)		973,546
Total costs and expenses		735,026			188,330		968,556					1,891,912

OPERATING (LOSS) INCOME		(735,026	)		17,684		(968,556	)				(1,685,898	)

OTHER (EXPENSE) INCOME
Interest Expense		(246,162	)		-		-					(246,162	)
Gain on debt extinguishments		1,107,922			-		-					1,107,922
Total other (expense) income		861,760			-		-					861,760

INCOME (LOSS) FROM CONTINUING OPERATIONS, BEFORE TAXES		126,734			17,684		(968,556	)				(824,138	)

Income taxes		-			5,517		-					5,517

NET INCOME (LOSS) FROM CONTINUING OPERATIONS	$	126,734		$	12,166	$	(968,556	)			$	(829,656	)

Income (Loss) per share from continuing operations
Basic	$	0.00									$	(0.00	)
Diluted	$	0.00									$	(0.00	)

Weighted Average Number of Shares Outstanding:
Basic		16,684,055,107										16,684,055,107
Diluted		18,000,000,000										16,684,055,107

mPHASE TECHNOLOGIES, INC.

Notes to the Pro Forma Condensed Combined Financial Statements

(Unaudited)

(a)	Historical balance sheet amounts for Alpha Predictions, LLP are as of June 30, 2019 (the acquisition date) and are representative of the estimated fair values of the assets acquired and liabilities assumed. The Company is currently evaluating the fair values of the assets acquired and liabilities assumed. The preliminary estimates and measurements are, therefore, subject to change during the measurement period for tax adjustments.

	The consideration transferred in the acquisition was cash of approximately $1,400 (USD), (99,000 INR). The Company was able to negotiate a bargain purchase because the acquisition was completed with motivated sellers who wish to concentrate on other areas of their business. Because of this, the fair value of identifiable assets acquired and liabilities assumed exceeded the fair value of the consideration transferred. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that all acquired assets and assumed liabilities were recognized and that the valuation procedures and resulting measures were appropriate. As a result, the Company recognized a gain of $33,395. The gain is included in retained earnings in the pro forma condensed combined balance sheets.

	The bargain purchase gain is omitted from the pro forma condensed combined statements of operations, as pro forma adjustments to income only include items that will have a continuing impact on the Company.

(b)	The estimated fair value of intangible asset - internal-use software is $2.9 million. The expected useful life assigned to it is 3 years, and amortization is recognized using a straight-line basis. The software was placed in service immediately following the acquisition.

	A corresponding liability of $2.9 million is recorded in accrued expenses and other liabilities, representing a third-party payable to the software vendor.

(c)	The existing lease of Alpha Predictions, LLP was not assumed as part of the acquisition. As such, the related security deposit was removed from the pro forma condensed combined balance sheets.