UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Mark
One)
|
[X] |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
| |
|
| |
For
the quarterly period ended December 31, 2020 |
Or
|
[ ] |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
| |
|
| |
For
the transition period from _______________________ to
___________________ |
Commission
File Number 000-30202
mPHASE
TECHNOLOGIES, INC.
(Exact
name of registrant as specified in its charter)
|
New
Jersey |
|
22-2287503 |
(State
of incorporation) |
|
(I.R.S.
Employer
Identification
No.)
|
|
|
|
|
|
9841
Washingtonian Blvd #390
Gaithersburg,
MD
|
|
20878 |
|
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (301)
329-2700
Securities
registered pursuant to Section 12(b) of the Act: None.
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 the filing requirements for
the past 90 days.
[X]
Yes [ ] No
Indicate
by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
[X]
Yes [ ] No
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
|
Large
accelerated filer [ ] |
Accelerated
filer [ ] |
| Non-accelerated
filer [ ] |
Smaller
reporting company [X] |
| Emerging
growth company [ ] |
|
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.
[ ]
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act) [ ] Yes [X]
No
As of
February 15, 2021 there were 76,772,452 shares of the issuer’s
common stock, $0.01 par value per share, outstanding.
mPHASE
TECHNOLOGIES, INC.
QUARTERLY
REPORT ON FORM 10-Q
TABLE
OF CONTENTS
Cautionary
Note Regarding Forward-Looking Statements
This
Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). All
statements other than statements of historical fact could be deemed
forward-looking statements. Statements that include words such as
“may,” “will,” “might,” “projects,” “expects,” “plans,” “believes,”
“anticipates,” “targets,” “intends,” “hopes,” “aims,” “can,”
“should,” “could,” “would,” “goal,” “potential,” “approximately,”
“estimate,” “pro forma,” “continue” or “pursue” or the negative of
these words or other words or expressions of similar meaning may
identify forward-looking statements. For example, forward-looking
statements include any statements of the plans, strategies and
objectives of management for future operations; any statements
concerning proposed new products, services or developments; any
statements regarding future economic conditions or performance;
statements of belief and any statement of assumptions underlying
any of the foregoing.
These
forward-looking statements are found at various places throughout
this Quarterly Report on Form 10-Q and the other documents referred
to and relate to a variety of matters, including, but not limited
to, other statements that are not purely statements of historical
fact. These forward-looking statements are made on the basis of the
current beliefs, expectations and assumptions of management, are
not guarantees of performance and are subject to significant risks
and uncertainty. These forward-looking statements should not be
relied upon as predictions of future events and mPhase
Technologies, Inc. (the “Company”) cannot assure you that the
events or circumstances discussed or reflected in these statements
will be achieved or will occur. Furthermore, if such
forward-looking statements prove to be inaccurate, the inaccuracy
may be material. In light of the significant uncertainties in these
forward-looking statements, you should not regard these statements
as a representation or warranty by the Company or any other person
that the Company will achieve its objectives and plans in any
specified timeframe, or at all.
These
forward-looking statements should, therefore, be considered in
light of various important factors, including those set forth in
“Item 1A. Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2020, filed with the SEC on January 5,
2021 and elsewhere in this Quarterly Report on Form 10-Q. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Quarterly
Report on Form 10-Q. The Company disclaims any obligation to
publicly update or release any revisions to these forward-looking
statements, whether as a result of new information, future events
or otherwise, after the date of this Quarterly Report on Form 10-Q
or to reflect the occurrence of unanticipated events, except as
required by law.
PART I – FINANCIAL
INFORMATION
ITEM 1. FINANCIAL
STATEMENTS
mPhase Technologies,
Inc.
Consolidated
Balance Sheets
| |
|
December
31,
2020
|
|
|
June 30,
2020
|
|
| |
|
(Unaudited) |
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
|
|
| Cash |
|
$ |
2,143 |
|
|
$ |
142,413 |
|
| Accounts receivable,
net |
|
|
21,846,149 |
|
|
|
14,048,095 |
|
| Prepaid
expenses |
|
|
5,349 |
|
|
|
4,477 |
|
| Other
assets |
|
|
38,753 |
|
|
|
30,879 |
|
|
Total
Current Assets |
|
|
21,892,394 |
|
|
|
14,225,864 |
|
| Property and
equipment, net |
|
|
25,786 |
|
|
|
32,669 |
|
| Goodwill |
|
|
3,699 |
|
|
|
3,636 |
|
| Intangible assets -
purchased software, net |
|
|
2,527,325 |
|
|
|
2,835,117 |
|
| Other
assets |
|
|
4,136 |
|
|
|
11,670 |
|
|
Total
Assets |
|
$ |
24,453,340 |
|
|
$ |
17,108,956 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
|
|
|
|
|
| Accounts
payable |
|
$ |
11,650,554 |
|
|
$ |
7,897,887 |
|
| Accrued
expenses |
|
|
1,820,075 |
|
|
|
1,123,842 |
|
| Contract
liabilities |
|
|
299,329 |
|
|
|
219,652 |
|
| Due to related
parties |
|
|
86,076 |
|
|
|
84,485 |
|
| Note payable to
officer |
|
|
27,639 |
|
|
|
26,818 |
|
| Notes
payable |
|
|
31,725 |
|
|
|
20,469 |
|
| Convertible notes
payable, net |
|
|
304,826 |
|
|
|
189,641 |
|
| Liabilities in arrears
with convertible features |
|
|
109,000 |
|
|
|
109,000 |
|
| Liabilities in arrears
- judgement settlement agreement (Note 6) |
|
|
773,959 |
|
|
|
771,702 |
|
| Derivative
liability |
|
|
1,118,039 |
|
|
|
897,631 |
|
| Liabilities of
discontinued operations |
|
|
82,795 |
|
|
|
82,795 |
|
|
Total
Current Liabilities |
|
|
16,304,017 |
|
|
|
11,423,922 |
|
| |
|
|
|
|
|
|
|
|
| Notes payable, net of
current portion |
|
|
159,270 |
|
|
|
167,459 |
|
|
Total
Liabilities |
|
|
16,463,287 |
|
|
|
11,591,381 |
|
| |
|
|
|
|
|
|
|
|
| Commitments and
Contingencies (Note 11) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Stockholders’
Equity |
|
|
|
|
|
|
|
|
| Preferred stock, $0.01
par value; 1,000 shares authorized, issued and outstanding at
December 31, 2020 and June 30, 2020 |
|
|
10 |
|
|
|
10 |
|
| Common stock, $0.01
par value; 500,000,000 shares authorized, 75,907,563 shares issued
and 75,763,376 shares outstanding at December 31, 2020, and
19,318,679 shares issued and 19,174,492 outstanding at June 30,
2020 |
|
|
757,635 |
|
|
|
191,745 |
|
| Additional
paid-in-capital |
|
|
233,264,147 |
|
|
|
231,984,704 |
|
| Common stock to be
issued |
|
|
- |
|
|
|
955,466 |
|
| Accumulated other
comprehensive (loss) income |
|
|
(30,025 |
) |
|
|
113,070 |
|
| Accumulated
deficit |
|
|
(226,001,714 |
) |
|
|
(227,727,420 |
) |
|
Total
Stockholders’ Equity |
|
|
7,990,053 |
|
|
|
5,517,575 |
|
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
24,453,340 |
|
|
$ |
17,108,956 |
|
The
accompanying condensed notes are an integral part of these
unaudited condensed consolidated financial statements.
mPhase Technologies,
Inc.
Consolidated
Statements of Operations and Other Comprehensive Income
(Loss)
(Unaudited)
| |
|
For the
Three Months Ended |
|
|
For the
Six Months Ended |
|
| |
|
December
31, |
|
|
December
31, |
|
| |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
| Revenue |
|
$ |
7,636,436 |
|
|
$ |
7,561,967 |
|
|
$ |
15,223,300 |
|
|
$ |
15,131,579 |
|
| Cost of
revenue |
|
|
5,625,010 |
|
|
|
5,623,930 |
|
|
|
11,250,399 |
|
|
|
11,330,444 |
|
| Gross
Profit |
|
|
2,011,426 |
|
|
|
1,938,037 |
|
|
|
3,972,901 |
|
|
|
3,801,135 |
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Software development
costs |
|
|
- |
|
|
|
906,423 |
|
|
|
- |
|
|
|
2,110,037 |
|
| Salaries and
benefits |
|
|
268,859 |
|
|
|
6,602,821 |
|
|
|
788,632 |
|
|
|
16,976,103 |
|
|
General
and administrative expenses |
|
|
423,669 |
|
|
|
519,209 |
|
|
|
669,742 |
|
|
|
887,948 |
|
|
Total
Operating Expenses |
|
|
692,528 |
|
|
|
8,028,453 |
|
|
|
1,458,374 |
|
|
|
19,974,088 |
|
|
Operating
Income (Loss) |
|
|
1,318,898 |
|
|
|
(6,090,416 |
) |
|
|
2,514,527 |
|
|
|
(16,172,953 |
) |
| Other (Expense)
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
expense |
|
|
(31,776 |
) |
|
|
(56,787 |
) |
|
|
(117,739 |
) |
|
|
(95,653 |
) |
| Loss (Gain) on change
in fair value of derivative liability |
|
|
(108,188 |
) |
|
|
404,597 |
|
|
|
157,900 |
|
|
|
470,400 |
|
| Amortization of debt
discounts, deferred financing costs, and original issue
discounts |
|
|
(173,722 |
) |
|
|
(149,931 |
) |
|
|
(494,184 |
) |
|
|
(184,266 |
) |
| Initial derivative
liability expense |
|
|
- |
|
|
|
(42,227 |
) |
|
|
(366,068 |
) |
|
|
(257,803 |
) |
|
Gain on
debt extinguishments |
|
|
- |
|
|
|
- |
|
|
|
31,270 |
|
|
|
- |
|
|
Total
Other (Expense) Income |
|
|
(313,686 |
) |
|
|
155,652 |
|
|
|
(788,821 |
) |
|
|
(67,322 |
) |
| Income (Loss) from
continuing operations before income taxes |
|
|
1,005,212 |
|
|
|
(5,934,764 |
) |
|
|
1,725,706 |
|
|
|
(16,240,275 |
) |
|
Income
taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net income
(loss) |
|
$ |
1,005,212 |
|
|
$ |
(5,934,764 |
) |
|
$ |
1,725,706 |
|
|
$ |
(16,240,275 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
loss on currency translation adjustment |
|
|
(21,932 |
) |
|
|
(21,562 |
) |
|
|
(143,095 |
) |
|
|
- |
|
|
Comprehensive income
(loss) |
|
$ |
983,280 |
|
|
$ |
(5,956,326 |
) |
|
$ |
1,582,611 |
|
|
$ |
(16,240,275 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (Loss) per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) per
common share – basic |
|
$ |
0.01 |
|
|
$ |
(0.48 |
) |
|
$ |
0.03 |
|
|
$ |
(1.32 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) per
common share – diluted |
|
$ |
0.01 |
|
|
$ |
(0.48 |
) |
|
$ |
0.02 |
|
|
$ |
(1.32 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average
shares outstanding – basic |
|
|
73,996,275 |
|
|
|
12,473,865 |
|
|
|
68,591,025 |
|
|
|
12,294,895 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average
shares outstanding – diluted |
|
|
105,716,572 |
|
|
|
12,473,865 |
|
|
|
100,341,323 |
|
|
|
12,294,895 |
|
The
accompanying condensed notes are an integral part of these
unaudited condensed consolidated financial statements.
mPhase Technologies,
Inc.
Consolidated
Statements of Stockholders’ Equity
For
the Six Months Ended December 31, 2020 and 2019
(Unaudited)
| |
|
Preferred
Stock |
|
|
Common
Stock |
|
|
Additional |
|
|
Common |
|
|
Accumulated |
|
|
|
|
|
|
|
| |
|
Shares |
|
|
$0.01
Par Value |
|
|
Shares |
|
|
$0.01
Par Value |
|
|
Paid
in
Capital
|
|
|
Stock
to
be
Issued
|
|
|
Comprehensive
Income
(Loss)
|
|
|
Accumulated
Deficit
|
|
|
Stockholders’
Equity
|
|
|
Balance
June 30, 2020 |
|
|
1,000 |
|
|
$ |
10 |
|
|
|
19,174,492 |
|
|
$ |
191,745 |
|
|
$ |
231,984,704 |
|
|
$ |
955,466 |
|
|
$ |
113,070 |
|
|
$ |
(227,727,420 |
) |
|
$ |
5,517,575 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance
of common stock for conversions of convertible promissory
notes |
|
|
|
|
|
|
|
|
|
|
16,331,766 |
|
|
|
163,318 |
|
|
|
544,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
708,272 |
|
| Issuance
of common stock for exchange of warrants |
|
|
|
|
|
|
|
|
|
|
37,390,452 |
|
|
|
373,905 |
|
|
|
(220,604 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
153,301 |
|
| Stock-based
compensation for restricted shares under employment
agreement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,737 |
|
| Issuance
of common stock for vendor services |
|
|
|
|
|
|
|
|
|
|
200,000 |
|
|
|
2,000 |
|
|
|
4,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,820 |
|
| Other
comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(121,163 |
) |
|
|
|
|
|
|
(121,163 |
) |
| Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
720,494 |
|
|
|
720,494 |
|
| Balance
September 30, 2020 |
|
|
1,000 |
|
|
$ |
10 |
|
|
|
73,096,710 |
|
|
$ |
730,968 |
|
|
$ |
232,324,611 |
|
|
$ |
955,466 |
|
|
$ |
(8,093 |
) |
|
$ |
(227,006,926 |
) |
|
$ |
6,996,036 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance
of common stock for CloseComms acquisition |
|
|
|
|
|
|
|
|
|
|
2,666,666 |
|
|
|
26,667 |
|
|
|
928,799 |
|
|
|
(955,466 |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
| Stock-based
compensation for restricted shares under employment
agreement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,737 |
|
| Other
comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,932 |
) |
|
|
|
|
|
|
(21,932 |
) |
| Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,005,212 |
|
|
|
1,005,212 |
|
| Balance
December 31, 2020 |
|
|
1,000 |
|
|
$ |
10 |
|
|
|
75,763,376 |
|
|
$ |
757,635 |
|
|
$ |
233,264,147 |
|
|
$ |
- |
|
|
$ |
(30,025 |
) |
|
$ |
(226,001,714 |
) |
|
$ |
7,990,053 |
|
| |
|
Preferred
Stock |
|
|
Common
Stock |
|
|
Additional |
|
|
Common |
|
|
Accumulated |
|
|
|
|
|
|
|
| |
|
Shares |
|
|
$0.01 Par
Value |
|
|
Shares |
|
|
$0.01 Par
Value |
|
|
Paid in
Capital |
|
|
Stock to
be Issued
|
|
|
Comprehensive
Income |
|
|
Accumulated
Deficit |
|
|
Stockholders’
Equity |
|
|
Balance
June 30, 2019 |
|
|
1,000 |
|
|
$ |
10 |
|
|
|
11,689,078 |
|
|
$ |
116,890 |
|
|
$ |
214,007,203 |
|
|
$ |
115,388 |
|
|
$ |
- |
|
|
$ |
(213,633,853 |
) |
|
$ |
605,638 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance of common
stock to accredited investors in private placements |
|
|
|
|
|
|
|
|
|
|
380,000 |
|
|
|
3,800 |
|
|
|
91,200 |
|
|
|
(30,500 |
) |
|
|
|
|
|
|
|
|
|
|
64,500 |
|
| Issuance of common
stock for the conversion of related party debts and strategic
vendor payables |
|
|
|
|
|
|
|
|
|
|
294,654 |
|
|
|
2,947 |
|
|
|
70,716 |
|
|
|
(73,663 |
) |
|
|
|
|
|
|
|
|
|
|
- |
|
| Warrants earned under
employment contract |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,970,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,970,787 |
|
| Other comprehensive
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,694 |
|
|
|
|
|
|
|
54,694 |
|
| Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,305,511 |
) |
|
|
(10,305,511 |
) |
| Balance September 30,
2019 |
|
|
1,000 |
|
|
$ |
10 |
|
|
|
12,363,732 |
|
|
$ |
123,637 |
|
|
$ |
224,139,906 |
|
|
$ |
11,225 |
|
|
$ |
54,694 |
|
|
$ |
(223,939,364 |
) |
|
$ |
390,108 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance of common
stock to accredited investors in private placements |
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
100 |
|
|
|
2,400 |
|
|
|
130,000 |
|
|
|
|
|
|
|
|
|
|
|
132,500 |
|
| Issuance of common
stock for accrued services |
|
|
|
|
|
|
|
|
|
|
62,000 |
|
|
|
620 |
|
|
|
14,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,500 |
|
| Restricted shares
issued under employment contract |
|
|
|
|
|
|
|
|
|
|
57,909 |
|
|
|
579 |
|
|
|
106,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,657 |
|
| Warrants earned under
employment contract |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,231,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,231,742 |
|
| Other comprehensive
loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,562 |
) |
|
|
|
|
|
|
(21,562 |
) |
| Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,934,764 |
) |
|
|
(5,934,764 |
) |
| Balance December 31,
2019 |
|
|
1,000 |
|
|
$ |
10 |
|
|
|
12,493,641 |
|
|
$ |
124,936 |
|
|
$ |
230,495,006 |
|
|
$ |
141,225 |
|
|
$ |
33,132 |
|
|
$ |
(229,874,128 |
) |
|
$ |
920,181 |
|
The
accompanying condensed notes are an integral part of these
unaudited condensed consolidated financial statements.
mPhase Technologies,
Inc.
Consolidated
Statements of Cash Flows
(Unaudited)
| |
|
For the
Six Months Ended |
|
| |
|
December
31, |
|
| |
|
2020 |
|
|
2019 |
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
| Net income
(loss) |
|
$ |
1,725,706 |
|
|
$ |
(16,240,275 |
) |
| Adjustments to
reconcile net income (loss) to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
| Amortization of debt
discounts, deferred financing costs, and original issue
discounts |
|
|
494,184 |
|
|
|
184,266 |
|
| Depreciation and
amortization |
|
|
461,659 |
|
|
|
484,278 |
|
| Initial derivative
expense |
|
|
366,068 |
|
|
|
257,803 |
|
| Stock-based
compensation |
|
|
206,521 |
|
|
|
16,292,722 |
|
| Gain on extinguishment
of debt |
|
|
(31,270 |
) |
|
|
- |
|
| Gain on change in fair
value of derivative liability |
|
|
(157,900 |
) |
|
|
(470,400 |
) |
| Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
| Increase in accounts
receivable |
|
|
(15,298,054 |
) |
|
|
(4,054,825 |
) |
| (Increase) decrease in
prepaid expenses |
|
|
(7,692 |
) |
|
|
6,640 |
|
| Increase in other
assets |
|
|
(546 |
) |
|
|
(5,703 |
) |
| Increase in contract
liabilities |
|
|
79,677 |
|
|
|
115,166 |
|
| Increase in accounts
payable and accrued expenses |
|
|
11,833,599 |
|
|
|
2,769,479 |
|
| Net cash used in
operating activities |
|
|
(328,048 |
) |
|
|
(660,849 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
| Capital
expenditures |
|
|
(1,727 |
) |
|
|
- |
|
| Net cash used in
investing activities |
|
|
(1,727 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
| Proceeds from issuance
of convertible notes payable, net |
|
|
463,600 |
|
|
|
665,000 |
|
| Proceeds from sale of
common stock, net of finder’s fees |
|
|
- |
|
|
|
197,000 |
|
| Proceeds from notes
payable to related parties |
|
|
- |
|
|
|
37,800 |
|
| Repayments of notes
payable to related parties |
|
|
- |
|
|
|
(32,000 |
) |
| Repayments under
settlement agreement |
|
|
(15,000 |
) |
|
|
(90,000 |
) |
| Repayments of
convertible notes payable |
|
|
(116,000 |
) |
|
|
(78,000 |
) |
| Net cash provided by
financing activities |
|
|
332,600 |
|
|
|
699,800 |
|
| |
|
|
|
|
|
|
|
|
| Effect of foreign
exchange rates changes on cash |
|
|
(143,095 |
) |
|
|
33,132 |
|
| Net (decrease)
increase in cash |
|
|
(140,270 |
) |
|
|
72,083 |
|
| Cash at beginning of
period |
|
|
142,413 |
|
|
|
33,996 |
|
| Cash at end of
period |
|
$ |
2,143 |
|
|
$ |
106,079 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental
disclosure: |
|
|
|
|
|
|
|
|
| Cash paid for
interest |
|
$ |
52,681 |
|
|
$ |
35,053 |
|
| Cash paid for
taxes |
|
$ |
- |
|
|
$ |
- |
|
The
accompanying condensed notes are an integral part of these
unaudited condensed consolidated financial statements.
| |
|
For the
Six Months Ended |
|
| |
|
December
31, |
|
| |
|
2020 |
|
|
2019 |
|
| Supplemental
disclosure of non-cash operating activities: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Initial fair value of
derivative liability recorded as debt discount |
|
$ |
463,600 |
|
|
$ |
665,001 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental
disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Issuance of Common
Stock for services |
|
|
|
|
|
|
|
|
| Value |
|
$ |
6,820 |
|
|
$ |
15,000 |
|
| Shares |
|
|
200,000 |
|
|
|
62,000 |
|
| |
|
|
|
|
|
|
|
|
| Issuance of Common
Stock for the conversion of Related Party debts and Strategic
Vendor payables |
|
|
|
|
|
|
|
|
| Value |
|
$ |
- |
|
|
$ |
73,663 |
|
| Shares |
|
|
- |
|
|
|
294,654 |
|
| |
|
|
|
|
|
|
|
|
| Issuance of Common
Stock for conversions of convertible promissory notes and accrued
interest |
|
|
|
|
|
|
|
|
| Value |
|
$ |
708,272 |
|
|
$ |
- |
|
| Shares |
|
|
16,331,766 |
|
|
|
- |
|
The
accompanying condensed notes are an integral part of these
unaudited condensed consolidated financial statements.
mPHASE TECHNOLOGIES,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
1: NATURE OF BUSINESS AND BASIS OF PRESENTATION
Organization
and Nature of Business
mPhase
Technologies, Inc., including its wholly-owned subsidiaries, are
collectively referred to herein as “mPhase,” “XDSL”, “Company,”
“us,” or “we.”
The
Company was incorporated in the state of New Jersey in 1979 under
the name Tecma Laboratory, Inc. and has subsequently operated under
Tecma Laboratories, Inc., and Lightpaths TP Technologies, Inc.,
until June 2, 1997 when the Company changed its name to mPhase
Technologies, Inc.
On
January 11, 2019, the Company underwent a major change in
management and control. New management of the Company is
positioning the Company to be a technology leader in artificial
intelligence and machine learning while enabling a more rapid
commercial development of its patent portfolio and other
intellectual property. The Company believes there are significant
opportunities to embed artificial intelligence and machine learning
into business operations, platform architectures, business
services, and customer experiences, whereby its goal is to generate
significant revenue from its artificial intelligence and machine
learning technologies.
On
February 15, 2019, the Company acquired Travel Buddhi, a software
platform to enhance travel via ultra-customization tools that
tailor a planned trip experience in ways not previously
available.
On
June 30, 2019, the Company acquired 99% of the outstanding common
shares of Alpha Predictions LLP (“Alpha Predictions”). Alpha
Predictions is an India-based technology company that has developed
a suite of commercial data analysis products for use across
multiple industries. The Company expects the acquisition to result
in synergies with its other operating divisions, which will drive
revenue growth and innovation.
On
May 11, 2020, the Company acquired CloseComms Limited
(“CloseComms”), a patented, software application platform that can
be integrated into a retail customer’s existing Wi-Fi
infrastructure, giving the retailer important customer data and
enabling AI-enhanced, targeted promotions to drive store traffic
and sales.
Basis
of Presentation
The
consolidated unaudited financial information furnished herein
reflects all adjustments, consisting only of normal recurring
items, which in the opinion of management, are necessary to fairly
state the Company’s financial position, results of operations and
cash flows for the dates and periods presented and to make such
information not misleading. Certain information and footnote
disclosures normally included in annual financial statements
prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) have been
omitted pursuant to rules and regulations of the Securities and
Exchange Commission (the “SEC”); nevertheless, management of the
Company believes that the disclosures herein are adequate to make
the information presented not misleading.
The
consolidated unaudited financial statements for the three and six
months ended December 31, 2020 and 2019 include the operations of
mPhase and its wholly-owned subsidiaries, mPower Technologies,
Inc., Medds, Inc., mPhase Technologies India Private Limited
effective March 19, 2019, and Alpha Predictions LLP effective June
30, 2019. All significant intercompany accounts and transactions
have been eliminated in the consolidation.
These
consolidated unaudited financial statements should be read in
conjunction with the Company’s audited consolidated financial
statements for the year ended June 30, 2020, contained in the
Company’s Annual Report on Form 10-K filed with the SEC on January
5, 2021. The results of operations for the six months ended
December 31, 2020, are not necessarily indicative of results to be
expected for any other interim period or the fiscal year ending
June 30, 2021.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
Impact
of COVID-19 Pandemic
A
novel strain of coronavirus, COVID-19, surfaced during December
2019 and has spread around the world, including to the United
States. During March 2020, COVID-19 was declared a pandemic by the
World Health Organization. During certain periods of the pandemic
thus far, a number of U.S. states and various countries throughout
the world had been under governmental orders requiring that all
workers remain at home unless their work was critical, essential,
or life-sustaining. As a result of these governmental orders, the
Company temporarily closed its domestic and international offices
and required all of its employees to work remotely. Although these
temporary office closures created minor disruption to the Company’s
business operations, such disruptions to date have not been
significant.
The
full impact of the COVID-19 pandemic on the Company’s financial
condition and results of operations will depend on future
developments, such as the ultimate duration and scope of the
pandemic, its impact on the Company’s employees, customers, and
vendors, in addition to how quickly normal economic conditions and
operations resume and whether the pandemic impacts other risks
disclosed in Item 1A “Risk Factors” within the Company’s Annual
Report on Form 10-K. Even after the pandemic has subsided, the
Company may continue to experience adverse impacts to its business
as a result of any economic recession or depression that has
occurred as a result of the pandemic. Therefore, the Company cannot
reasonably estimate the impact at this time. The Company continues
to actively monitor the pandemic and may determine to take further
actions that alter its business operations as may be required by
federal, state, or local authorities or that it determines are in
the best interests of its employees, customers, vendors, and
shareholders.
NOTE
2: GOING CONCERN
The
accompanying unaudited consolidated financial statements have been
prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business.
The
Company has incurred negative cash flows from operations of
$328,048 for the six months ended December 31, 2020. At December
31, 2020, the Company had a working capital surplus of $5,588,377,
and an accumulated deficit of $226,001,714. It is management’s
opinion that these facts raise substantial doubt about the
Company’s ability to continue as a going concern for a period of
twelve months from the date of this report, without additional debt
or equity financing. The unaudited consolidated financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts nor to
the amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern.
In
order to meet its working capital needs through the next twelve
months and to fund the growth of the nanotechnology, artificial
intelligence, and machine learning technologies, the Company may
consider plans to raise additional funds through the issuance of
equity or debt. Although the Company intends to obtain additional
financing to meet its cash needs, the Company may be unable to
secure any additional financing on terms that are favorable or
acceptable to it, if at all. The Company’s ability to raise
additional capital will also be impacted by the recent COVID-19
pandemic, which such ability is highly uncertain, cannot be
predicted, and could have an adverse effect on the Company’s
business and financial condition.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain
reclassifications of prior year amounts have been made to enhance
comparability with the current year’s unaudited consolidated
financial statements, including, but not limited to, presentation
of certain items within the unaudited consolidated statements of
operations and comprehensive income (loss), unaudited consolidated
statements of cash flows, and certain notes to the unaudited
consolidated financial statements.
Foreign
Currency Translation and Transactions
The
functional currencies of our operations in India and the United
Kingdom are the Indian Rupee (“INR”) and the British Pound (“GBP”),
respectively. Assets and liabilities are translated into U.S.
dollars at the exchange rates in effect at the balance sheet date,
and income and expense items are translated at the average exchange
rates in effect during the applicable period. The aggregate effect
of foreign currency translation is recorded in accumulated other
comprehensive income (loss) in our consolidated balance sheets. Our
net investments in our Indian and United Kingdom operations are
recorded at the historical rates and the resulting foreign currency
translation adjustments, net of income taxes, are reported as other
comprehensive income and accumulated other comprehensive income
within stockholders’ equity in accordance with ASC 220 –
Comprehensive Income.
The
exchange rates used to translate amounts in INR (beginning March
19, 2019) and GBP (beginning May 11, 2020) into USD for the
purposes of preparing the consolidated financial statements were as
follows:
Balance
sheet:
| |
|
December
31, 2020 |
|
|
June
30,
2020
|
|
| Period-end INR: USD
exchange rate |
|
$ |
0.01367 |
|
|
$ |
0.01329 |
|
| Period-end GBP: USD
exchange rate |
|
$ |
1.35792 |
|
|
$ |
1.23244 |
|
Income
statement:
| |
|
For the
Three Months Ended |
|
|
For the
Six Months Ended |
|
| |
|
December
31, |
|
|
December
31, |
|
| |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
| Average Period INR:
USD exchange rate |
|
$ |
0.01362 |
|
|
$ |
0.01412 |
|
|
$ |
0.01351 |
|
|
$ |
0.01425 |
|
| Average Period GBP:
USD exchange rate |
|
$ |
1.32094 |
|
|
$ |
- |
|
|
$ |
1.29006 |
|
|
$ |
- |
|
Use
of Estimates
The
preparation of unaudited consolidated financial statements in
conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the unaudited consolidated financial statements and
reported amounts of revenues and expenses for the reporting period.
Actual results could differ from those estimates. If actual results
significantly differ from the Company’s estimates, the Company’s
financial condition and results of operations could be materially
impacted. Significant estimates include the collectability of
accounts receivable, valuation of intangible assets, accrued
expenses, valuation of derivative liabilities, stock-based
compensation, and the valuation reserve for income
taxes.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Concentrations
of Credit Risk
Credit
Risk
Financial
instruments which potentially subject the Company to concentrations
of credit risk consist principally of cash and cash equivalents and
accounts receivable. The Company maintains cash and cash
equivalents with four financial institutions. Deposits held with
the financial institutions may exceed the amount of insurance
provided by the Federal Deposit Insurance Corporation on such
deposits, but may be redeemed upon demand. The Company performs
periodic evaluations of the relative credit standing of the
financial institutions. With respect to accounts receivable, the
Company monitors the credit quality of its customers as well as
maintains an allowance for doubtful accounts for estimated losses
resulting from the inability of customers to make required
payments.
Revenue
Risk
Agreements
which potentially subject the Company to concentrations of revenue
risk consist principally of one customer agreement. For the six
months ended December 31, 2020 and 2019, this one customer
accounted for 100% and 99% of our total revenue, respectively. At
December 31, 2020 and June 30, 2020, this one customer accounted
for approximately 100% and 96% of our total accounts receivable,
respectively.
Supplier
Risk
Agreements
which potentially subject the Company to concentrations of supplier
risk consist principally of one supplier agreement. For the six
months ended December 31, 2020, this one supplier accounted for
approximately 100% of our total cost of revenue and accounted for
approximately 97% of our total accounts payable. For the six months
ended December 31, 2019, this one supplier accounted for
approximately 96% of our total cost of revenue and accounted for
approximately 83% of our total accrued expenses.
Cash
and Cash Equivalents
For
purposes of balance sheet presentation and reporting of cash flows,
the Company considers all unrestricted demand deposits, money
market funds and highly liquid debt instruments with an original
maturity of less than 90 days to be cash and cash equivalents.
There were no cash equivalents at December 31, 2020 and June 30,
2020. The Company places its cash and cash equivalents with
high-quality financial institutions. At times, balances in the
Company’s cash accounts may exceed the Federal Deposit Insurance
Corporation (“FDIC”) limit. At December 31, 2020 and June 30, 2020,
the Company’s cash balances did not exceed the FDIC
limit.
Accounts
Receivable
The
Company regularly reviews outstanding receivables and provides for
estimated losses through an allowance for doubtful accounts. In
evaluating the level of established loss reserves, the Company
makes judgments regarding its customers’ ability to make required
payments, economic events and other factors. As the financial
condition of these parties change, circumstances develop or
additional information becomes available, adjustments to the
allowance for doubtful accounts may be required. The Company
maintains reserves for potential credit losses, and such losses
traditionally have been within its expectations. Additionally, to
date, the Company has entered into three separate tri-party
settlement and offset agreements with its largest customer and
largest vendor, whereby the Company’s largest customer has agreed
to direct funds due the Company for certain outstanding invoices,
to the Company’s largest vendor to satisfy payment on behalf of the
Company for certain outstanding invoices. To date, the aggregate
amount of the three tri-party settlement and offset agreements has
totaled $22,500,000. At December 31, 2020 and June 30, 2020, the
Company determined there was no requirement for an allowance for
doubtful accounts.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Goodwill
and Intangible Assets
Goodwill
is recorded when the purchase price paid for an acquisition exceeds
the fair value of the net identified tangible and intangible assets
acquired. The Company evaluates goodwill for impairment annually or
more frequently when an event occurs or circumstances change that
indicate that the carrying value may not be recoverable. The
Company tests goodwill for impairment by first comparing the fair
value of the reporting unit to its carrying value. If the fair
value is determined to be less than the carrying value, a second
step is performed to measure the amount of impairment loss, if any.
On June 30, 2021, the Company will perform its annual evaluation of
goodwill impairment to determine if the estimated fair value of the
reporting unit exceeds its carrying value.
Patents
and licenses are capitalized when the Company determines there will
be a future benefit derived from such assets and are stated at
cost. Amortization is computed using the straight-line method over
the estimated useful life of the asset, generally five years. As of
December 31, 2020 and June 30, 2020, the book value of patents and
licenses of $214,383, has been fully amortized and no amortization
expense was recorded for the six months ended December 31, 2020 and
2019.
Capitalized
Software Development Costs
The
Company follows the provisions of ASC 350-40, “Internal Use
Software.” ASC 350-40 provides guidance for determining whether
computer software is internal-use software, and on accounting for
the proceeds of computer software originally developed or obtained
for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for
computer software developed or obtained for internal use. The
Company expenses all costs incurred during the preliminary project
stage of its development, and capitalizes the costs incurred during
the application development stage. Costs incurred relating to
upgrades and enhancements to the software are capitalized if it is
determined that these upgrades or enhancements add additional
functionality to the software. Costs incurred to improve and
support products after they become available are charged to expense
as incurred.
Capitalized
software development costs are amortized on a straight-line basis
over the estimated useful lives, currently three years. Management
evaluates the useful lives of these assets on an annual basis and
tests for impairment whenever events or changes in circumstances
occur that could impact the recoverability of these
assets.
At
December 31, 2020, the book value of purchased and developed
technology of $3,901,531, included three technology platforms, a
machine learning platform and two artificial intelligence
platforms. For the six months ended December 31, 2020 and 2019, the
Company incurred amortization expense of $450,302 and $484,278,
respectively.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Fair
Value of Financial Instruments
The
Company accounts for the fair value of financial instruments in
accordance with ASC topic 820, “Fair Value Measurements and
Disclosures” (ASC 820), formerly SFAS No. 157 “Fair Value
Measurements”. ASC 820 defines “fair value” as the price that would
be received for an asset or paid to transfer a liability (an exit
price) in the principal or most advantageous market for the asset
or liability in an orderly transaction between market participants
on the measurement date.
ASC
820 also describes three levels of inputs that may be used to
measure fair value:
Level
1: Observable inputs that reflect unadjusted quoted prices for
identical assets or liabilities traded in active
markets.
Level
2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or
indirectly.
Level
3: Inputs that are generally unobservable. These inputs may be used
with internally developed methodologies that result in management’s
best estimate of fair value.
Financial
instruments consist principally of cash, accounts receivable,
prepaid expenses, accounts payable, accrued liabilities, due to
related parties, and current and long-term debt. The carrying
amounts of such financial instruments in the accompanying balance
sheets approximate their fair values due to their relatively
short-term nature. The fair value of short and long-term debt is
based on current rates at which the Company could borrow funds with
similar remaining maturities. The carrying amounts approximate fair
value with the exception of the fair value of due to related
parties as the fair value cannot be determined due to a lack of
similar instruments available to the Company. It is management’s
opinion that the Company is not exposed to any significant currency
or credit risks arising from these financial instruments. At
December 31, 2020, the Company had a Level 3 financial instrument
related to its derivative liability.
Revenue
Recognition
The
Company recognizes revenue in accordance with the Financial
Accounting Standards Board’s (“FASB”), Accounting Standards
Codification (“ASC”) ASC 606, Revenue from Contracts with Customers
(“ASC 606”). Revenues are recognized when control is transferred to
customers in amounts that reflect the consideration the Company
expects to be entitled to receive in exchange for those goods.
Revenue recognition is evaluated through the following five steps:
(i) identification of the contract, or contracts, with a customer;
(ii) identification of the performance obligations in the contract;
(iii) determination of the transaction price; (iv) allocation of
the transaction price to the performance obligations in the
contract; and (v) recognition of revenue when or as a performance
obligation is satisfied.
Revenue
is derived from the sale of artificial intelligence and machine
learning focused technology products and related services. The
Company recognizes revenue when performance obligations under the
terms of a contract with the customer are satisfied. Product sales
occur once control is transferred upon delivery to the customer.
Revenue is measured as the amount of consideration the Company
expects to receive in exchange for transferring products. The
amount of consideration the Company receives and revenue the
Company recognizes varies with changes in customer incentives the
Company offers to its customers and their customers. In the event
any discounts, sales incentives, or similar arrangements are agreed
to with a customer, such amounts are estimated at time of sale and
deducted from revenue. Sales taxes and other similar taxes are
excluded from revenue (see Note 5).
Contract
liabilities include amounts billed to customers in excess of
revenue recognized and are presented as contract liabilities on the
consolidated balance sheets (see Note 5).
A
contract asset is recognized for incremental costs to obtain a
customer contract that are recoverable, otherwise such incremental
costs are expensed as incurred.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Share-Based
Compensation
The
Company computes share based payments in accordance with the
provisions of ASC Topic 718, Compensation – Stock
Compensation and related interpretations. As such, compensation
cost is measured on the date of grant at the fair value of the
share-based payments. Such compensation amounts, if any, are
amortized over the respective vesting periods of the grants. The
Company estimates the fair value of stock options and warrants by
using the Black-Scholes option pricing model.
Derivative
Instruments
The
Company enters into financing arrangements that consist of
freestanding derivative instruments or are hybrid instruments that
contain embedded derivative features. The Company accounts for
these arrangements in accordance with ASC Topic 815, Accounting
for Derivative Instruments and Hedging Activities as well as
related interpretations of this standard. In accordance with this
standard, derivative instruments are recognized as either assets or
liabilities in the balance sheet and are measured at fair values
with gains or losses recognized in earnings. Embedded derivatives
that are not clearly and closely related to the host contract are
bifurcated and are recognized at fair value with changes in fair
value recognized as either a gain or loss in earnings. The Company
determines the fair value of derivative instruments and hybrid
instruments based on available market data using appropriate
valuation models, considering all of the rights and obligations of
each instrument.
The
Company estimates fair values of derivative financial instruments
using various techniques (and combinations thereof) that are
considered consistent with the objective measuring fair values. In
selecting the appropriate technique, the Company considers, among
other factors, the nature of the instrument, the market risks that
it embodies and the expected means of settlement. Estimating fair
values of derivative financial instruments requires the development
of significant and subjective estimates that may, and are likely
to, change over the duration of the instrument with related changes
in internal and external market factors. In addition, option-based
techniques (such as Black-Scholes model) are highly volatile and
sensitive to changes in the trading market price of the Company’s
common stock. Since derivative financial instruments are initially
and subsequently carried at fair values, our income (expense) going
forward will reflect the volatility in these estimates and
assumption changes.
Convertible
Debt Instruments
The
Company records debt net of debt discount for beneficial conversion
features and warrants, on a relative fair value basis. Beneficial
conversion features are recorded pursuant to the Beneficial
Conversion and Debt Topics of the Financial Accounting Standards
Board (“FASB”) ASC. The amounts allocated to warrants and
beneficial conversion rights are recorded as debt discount and as
additional paid-in-capital. Debt discount is amortized to interest
expense over the life of the debt using the effective interest
method.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Income
Taxes
The
Company accounts for income taxes in accordance with Accounting for
Income Taxes, as clarified by ASC 740-10, Accounting for
Uncertainty in Income Taxes (“ASC 740”). Under this method,
deferred income taxes are determined based on the estimated future
tax effects of differences between the financial statement and tax
basis of assets and liabilities and net operating loss and tax
credit carryforwards given the provisions of enacted tax laws.
Deferred income tax provisions and benefits are based on changes to
the assets or liabilities from year to year. In providing for
deferred taxes, the Company considers tax regulations of the
jurisdictions in which the Company operates, estimates of future
taxable income, and available tax planning strategies. If tax
regulations, operating results or the ability to implement tax
planning strategies vary, adjustments to the carrying value of
deferred tax assets and liabilities may be required. Valuation
allowances are recorded related to deferred tax assets based on the
“more likely than not” criteria of ASC 740.
ASC
740 requires that the Company recognize the financial statement
benefit of a tax position only after determining that the relevant
tax authority would more likely than not sustain the position
following an audit. For tax positions meeting the
“more-likely-than-not” threshold, the amount recognized in the
consolidated financial statements is the largest benefit that has a
greater than 50 percent likelihood of being realized upon ultimate
settlement with the relevant tax authority. The Company’s tax
returns for its June 30, 2020, 2019, 2018, and 2017 tax years may
be selected for examination by the taxing authorities as the
statute of limitations remains open.
The
Company recognizes expenses for tax penalties and interest assessed
by the Internal Revenue Service and other taxing authorities upon
receiving valid notice of assessments. The Company has received no
such notices for the years ended June 30, 2020 and 2019.
Earnings
Per Share
In
accordance with the provisions of FASB ASC Topic 260, Earnings
per Share, basic earnings per share (“EPS”) is computed by
dividing earnings available to common shareholders by the weighted
average number of shares of common stock outstanding during the
period. Other potentially dilutive common shares, and the related
impact to earnings, are considered when calculating EPS on a
diluted basis.
In
computing diluted EPS, only potential common shares that are
dilutive, those that reduce EPS or increase loss per share, are
included. The effect of contingently issuable shares are not
included if the result would be anti-dilutive, such as when a net
loss is reported. For the three and six months ended December 31,
2020, as we incurred net income for those periods, dilutive shares
included 31,750,297 shares of the Company’s common stock related to
convertible promissory notes, assuming conversion of such
convertible promissory notes occurred at October 1, 2020 and July
1, 2020, respectively, as the conversion price of the convertible
promissory notes were less than the average market price of the
Company’s common stock for the three and six months ended December
31, 2020. Additionally, for dilutive EPS purposes for the three and
six months ended December 31, 2020, the assumed conversion of such
convertible promissory notes at October 1, 2020 and July 1, 2020,
increased the net income amount used in the dilutive EPS
computation by $742,537 and $751,482, respectively, as a result of
the net impact of interest that would not have been incurred during
the period as well as original issue discounts, deferred financing
costs, debt discounts, and derivative liability balances that would
not have been required at December 31, 2020. At December 31, 2020,
there were 115,817 restricted shares of the Company’s common stock
to be issued upon vesting pursuant to the terms of an employment
agreement with its Chief Financial Officer, which were not included
in computing dilutive EPS. For the three and six months ended
December 31, 2019, basic and diluted EPS are computed using the
same number of weighted average shares as we incurred a net loss
for those periods. At December 31, 2019, there were outstanding
warrants to purchase up to approximately 37,000,000 shares of the
Company’s common stock, approximately 703,726 shares of the
Company’s common stock to be issued, and notes payable held by
third parties with convertible features that if converted, would
total approximately 1,400,000 shares of the Company’s common stock,
which may dilute future EPS.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Modification/Extinguishment
of Debt
In
accordance with ASC 470, a modification or an exchange of debt
instruments that adds or eliminates a conversion option that was
substantive at the date of the modification or exchange is
considered a substantive change and is measured and accounted for
as extinguishment of the original instrument along with the
recognition of a gain or loss. Additionally, under ASC 470, a
substantive modification of a debt instrument is deemed to have
been accomplished with debt instruments that are substantially
different if the present value of the cash flows under the terms of
the new debt instrument is at least 10 percent different from the
present value of the remaining cash flows under the terms of the
original instrument. A substantive modification is accounted for as
an extinguishment of the original instrument along with the
recognition of a gain or loss.
Recently
Adopted Accounting Standards
Effective
July 1, 2020, the Company adopted Accounting Standards Update
(“ASU”) 2018-13, Fair Value Measurement (Topic 820):
Disclosure Framework – Changes to the Disclosure Requirements for
Fair Value Measurement. The standard modifies the disclosure
requirements on fair value measurements in Topic 820, Fair Value
Measurement, based on the concepts in the Concept Statement,
including the consideration of costs and benefits. The Company
determined the adoption of ASU 2018-13 did not have a material
impact on its consolidated financial statements.
Recently
Issued Accounting Standards Not Yet Adopted
During
August 2020, the FASB issued ASU 2020-06, to modify and simplify
the application of U.S. GAAP for certain financial instruments with
characteristics of liabilities and equity. The standard is
effective for the Company as of July 1, 2024, with early adoption
permitted. The Company is reviewing the impact of this guidance on
its consolidated financial statements.
Management
does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a
material impact on the accompanying unaudited consolidated
financial statements.
NOTE
4: INTANGIBLE ASSET – PURCHASED SOFTWARE, NET
Intangible
asset – Purchased Software, net, is comprised of the following
at:
| |
|
December
31, |
|
|
June
30, |
|
| |
|
2020 |
|
|
2020 |
|
| Purchased
software |
|
$ |
3,901,531 |
|
|
$ |
3,759,021 |
|
| Less: accumulated
amortization |
|
|
(1,374,206 |
) |
|
|
(923,904 |
) |
| Purchased software,
net |
|
$ |
2,527,325 |
|
|
$ |
2,835,117 |
|
Intangible
asset – Purchased Software consists of the following three software
technologies:
| Alpha Predictions
developed software |
|
$ |
1,367,007 |
|
| Travel Buddhi
developed software |
|
|
116,313 |
|
| CloseComms developed
software |
|
|
1,044,005 |
|
| Total developed
software |
|
$ |
2,527,325 |
|
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
4: INTANGIBLE ASSET – PURCHASED SOFTWARE, NET
(continued)
The
Alpha Predictions developed software was acquired on June 30, 2019,
through the acquisition of 99% of the outstanding common shares of
Alpha Predictions LLP, was valued at $2,905,668, and included all
rights, software, and code of the technology platform. The Travel
Buddhi developed software was acquired on February 15, 2019, for
$115,281 and included all rights, software, and code of the
technology platform. The CloseComms developed software was acquired
on March 11, 2020, valued at $954,918, and included all rights,
software, and code of the technology platform. At December 31,
2020, the Travel Buddhi and CloseComms technology platforms have
not been placed in service, but are expected to be during fiscal
year 2021.
Developed
software costs are amortized on a straight-line basis over three
years. Amortization of developed software costs is included in
general and administration expenses within the unaudited
consolidated statements of operations.
For
the three and six months ended December 31, 2020, amortization
expense was $226,469 and $450,302, respectively. For the three and
six months ended December 31, 2019, amortization expense was
$242,139 and $484,278, respectively.
Future
amortization expense related to the existing net carrying amount of
developed software at December 31, 2020 is expected to be as
follows:
| Remainder of fiscal
year 2021 |
|
$ |
649,055 |
|
| Fiscal year
2022 |
|
|
1,298,111 |
|
| Fiscal year
2023 |
|
|
386,773 |
|
| Fiscal year
2024 |
|
|
193,386 |
|
| |
|
$ |
2,527,325 |
|
NOTE
5: REVENUE FROM CONTRACTS WITH CUSTOMERS
The
following table presents our revenue disaggregated by category and
primary geographic regions within our single reporting
segment:
| |
|
For the
Three Months Ended |
|
|
For the
Six Months Ended |
|
| |
|
December
31, |
|
|
December
31, |
|
| |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
| Categories: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subscription |
|
$ |
6,180,000 |
|
|
$ |
6,180,000 |
|
|
$ |
12,360,000 |
|
|
$ |
12,360,000 |
|
| Service and
support |
|
|
906,756 |
|
|
|
874,979 |
|
|
|
1,804,020 |
|
|
|
1,745,068 |
|
| Application
development and implementation |
|
|
549,680 |
|
|
|
506,988 |
|
|
|
1,059,280 |
|
|
|
1,026,511 |
|
| Total
Revenue |
|
$ |
7,636,436 |
|
|
$ |
7,561,967 |
|
|
$ |
15,223,300 |
|
|
$ |
15,131,579 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Primary Geographic
Regions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| India |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
| |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
5: REVENUE FROM CONTRACTS WITH CUSTOMERS (continued)
The
following table presents our long-lived assets by primary
geographic regions within our single reporting segment:
| |
|
December
31, |
|
| |
|
2020 |
|
|
2019 |
|
| India |
|
$ |
1,492,390 |
|
|
$ |
2,466,998 |
|
| United
Kingdom |
|
|
1,068,556 |
|
|
|
- |
|
| Total long-lived
assets |
|
$ |
2,560,946 |
|
|
$ |
2,466,998 |
|
For
the six months ended December 31, 2020 and 2019, the Company was
subject to revenue concentration risk as one customer accounted for
100% and approximately 99% of our total revenue,
respectively.
Subscription
and Application Development and Implementation
Revenue
The
Company recognizes revenue when, or as, it satisfies a performance
obligation to a customer. The Company primarily has one performance
obligation, which includes the combined promise to develop,
implement, and license customized software. Payment terms for the
software include one-time application development and
implementation fees, which are generally billed on a
time-and-materials basis over the development and implementation
period, plus fixed license subscription fees, which may either be
billed in full upfront or in monthly installments over the license
period, which is generally three years. All of these fees are
allocated to the single performance obligation of providing
software to the customer.
The
performance obligation is fully satisfied at the point in time when
the customer has taken control of the completed software, which is
when physical possession of the software has transferred to the
customer, the customer is able to use and benefit from the
software, and the contractual license period has begun. Since the
Company has no further obligation to the customer once control of
the software has transferred, the Company recognizes revenue in
full for all of the development and implementation fees at that
point in time. Subscription fees are also recognized when control
of the software has transferred to the customer but only to the
extent such fees are contractually guaranteed to the Company. Any
future monthly subscription fees that the Company would not have a
contractually guaranteed right to collect in the event of early
termination of the contract are instead recognized as revenue on a
straight-line basis over the license period.
Service
and Support Revenue
Certain
contracts also contain a second performance obligation for service
and support. This performance obligation includes the promise to
provide future updates, upgrades, and enhancements to the software
over the license period, if and when they occur. Service and
support fees are fixed as a percentage of total contract value and
billed in monthly installments over the license period. The Company
recognizes service and support fee revenue over time, on a
straight-line basis over the license period, as the customer
receives such services on a generally uniform basis throughout the
license period.
Allocation
of the Transaction Price
Prices
allocated to each performance obligation generally correspond with
the contractually stated prices, since they equal standalone
selling price. In some cases, services may be discounted, which
requires the company to allocate the transaction price based on
relative standalone selling price. The Company estimates standalone
selling price based on comparable industry practices and the costs
and margins involved in providing services to its
customers.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
5: REVENUE FROM CONTRACTS WITH CUSTOMERS (continued)
Contract
Liabilities
Contract
liabilities include amounts billed to the customer in excess of
revenue recognized and are presented as contract liabilities on the
consolidated balance sheets. At December 31, 2020 and June 30,
2020, contract liabilities totaled $299,329 and $219,652,
respectively.
The
following table presents a reconciliation of the contract
liabilities from June 30, 2020 to December 31, 2020:
| June 30,
2020 |
|
$ |
219,652 |
|
| Contract liability
deferral |
|
|
143,519 |
|
| Amortization of
contract liability to revenue |
|
|
(63,842 |
) |
| December 31,
2020 |
|
$ |
299,329 |
|
Practical
Expedient
The
Company has elected a practical expedient to omit certain
disclosures about the transaction price allocated to remaining
performance obligations for contracts with terms of one year or
less.
NOTE
6: NOTES PAYABLE
Notes
payable is comprised of the following:
| |
|
December
31, |
|
|
June
30, |
|
| |
|
2020 |
|
|
2020 |
|
| Note
payable, SBA – Paycheck Protection Program [1] |
|
$ |
33,555 |
|
|
$ |
33,388 |
|
| Note
payable, SBA – Economic Injury Disaster Loan [2] |
|
|
157,440 |
|
|
|
154,540 |
|
| Note
payable, John Fife (dba St. George Investors)/Judgment Settlement
Agreement [3] |
|
|
773,959 |
|
|
|
771,702 |
|
| Total notes
payable |
|
$ |
964,954 |
|
|
$ |
956,630 |
|
| Less: current portion
of notes payable |
|
|
(805,684 |
) |
|
|
(792,171 |
) |
| Long-term portion of
notes payable |
|
$ |
159,270 |
|
|
$ |
167,459 |
|
[1]
effective April 28, 2020, the Company entered into a promissory
note with an approved lender in the principal amount of $33,333.
The note was approved under the provisions of the Coronavirus, Aid,
Relief and Economic Security Act (the “CARES Act”) and the terms of
the Paycheck Protection Program of the U.S. Small Business
Administration’s 7(a) Loan Program. The note accrues interest for
the first six months following the issuance date at a rate of 1%
per annum, (increasing to 6% per annum upon the occurrence of an
Event of Default (as defined in the note)), and beginning November
28, 2020, requires 18 monthly payments of $1,876 each, consisting
of principal and interest until paid in full on April 28, 2022. The
note may be prepaid by the Company at any time prior to the
maturity date with no prepayment penalties. Additionally, any
portion of the note up to the entire principal and accrued interest
balance may be forgiven in the event the Company satisfies certain
requirements as determined by the CARES Act. The Company expects to
satisfy the requirements for forgiveness of the entire principal
and accrued interest balance and will apply for such forgiveness by
the deadline. At December 31, 2020, $26,262 was recorded as a
current liability within notes payable and $7,293 was recorded as a
long-term liability within notes payable, net of current portion
with the consolidated balance sheets.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
6: NOTES PAYABLE (continued)
[2]
effective May 28, 2020, the Company entered into a promissory note
and security agreement with the U.S. Small Business Administration
(“SBA”) in the principal amount of $150,000. The note was approved
under the provisions of the Coronavirus, Aid, Relief and Economic
Security Act (the “CARES Act”) and the terms of the COVID-19
Economic Injury Disaster Loan (“EIDL”) program of the U.S. Small
Business Administration’s EIDL Program. The note accrues interest
at a rate of 3.75% per annum, and beginning May 28, 2021, requires
monthly payments of $731 each, consisting of principal and interest
until paid in full on May 28, 2050. The note may be prepaid by the
Company at any time prior to the maturity date with no prepayment
penalties. Additionally, this promissory note is collateralized by
certain of the Company’s property as specified within the security
agreement. Furthermore, on June 4, 2020, the Company received
$4,000 from the SBA, which it is currently working to obtain
details from the SBA regarding this amount. As such, at December
31, 2020, the Company recorded this amount as a current liability.
At December 31, 2020, $5,462 was recorded as a current liability
within notes payable and $151,978 was recorded as a long-term
liability within notes payable, net of current portion with the
consolidated balance sheets.
[3]
effective December 10, 2018, the Company entered into a “Judgment
Settlement Agreement” to satisfy in full the Forbearance Agreement
with Fife that was previously in effect. As a result, under the
Judgment Settlement Agreement, no shares of the Company’s common
stock are issuable or eligible to be converted into. Under the
terms of the Judgment Settlement Agreement, the Company was
required to pay $15,000 per month from January 15, 2019 through and
including February 15, 2020, with a final payment of $195,000 which
was due and payable in March of 2020. The Company made all required
payments with the exception of the final payment of $195,000 which
was due and payable in March of 2020. On August 17, 2020, the
Company entered into a second amendment (the “Second Amendment”) to
the Judgement Settlement Agreement, whereby the Company issued a
convertible promissory note in the principal amount of $300,000
(the “Note”) to repay the amounts still outstanding under the
Judgment Settlement Agreement. The Note matures on August 17, 2021,
bears interest at a rate of 10% per annum, requires certain monthly
minimum cash payments as specified in the Note, and is convertible
into shares of the Company’s common stock, par value $0.01 per
share, at a conversion price as specified in the Note. The Note may
be prepaid by the Company at any time prior to maturity without
penalty. Failure to make any of the payments, when due, will result
in an additional debt obligation, inclusive of principal and
interest at the date of default to be immediately due and payable
by the Company. The ultimate final payment amount is expected to be
less than the liability balance of $773,959 presented as
liabilities in arrears – judgement settlement agreement on the
consolidated balance sheets.
NOTE
7: Convertible Debt
Arrangements
JMJ
Financial
At
December 31, 2020 and June 30, 2020, the amount recorded in current
liabilities for this one convertible note and accrued interest
thereon due to JMJ Financial was $217,844 and $209,330,
respectively. During the six months ended December 31, 2020 and
2019 the Company recorded $8,514 and $7,861, respectively of
interest for the outstanding convertible note.
At
December 31, 2020 and June 30, 2020, the aggregate remaining amount
of convertible securities held by JMJ could be converted into
10,892 and 10,466 shares, respectively, with a conversion price of
$20.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
7: Convertible Debt
Arrangements (continued)
Accredited
Investors
On
July 24, 2020, the Company entered into a securities purchase
agreement with an accredited investor (“Lender 1”) and issued an 8%
convertible promissory note in the principal amount of $105,000
(including a $5,000 original issue discount) to the Lender 1 with a
maturity date of July 24, 2021. On July 27, 2020, the Company
received net proceeds in the amount of $95,000 as a result of
$5,000 being paid to reimburse the Lender 1 for legal and due
diligence fees incurred with respect to this securities purchase
agreement and convertible promissory note. This convertible
debenture converts at 60% of the lowest closing price during the 20
days prior to conversion. Due to the variable conversion provisions
contained in the convertible promissory note, the Company accounted
for this conversion feature as a derivative liability. In
connection herewith, the Company recorded a derivative liability of
$175,000, original issue discount of $5,000, deferred financing
costs of $5,000 and debt discount of $95,000. The original issue
discount, deferred financing costs and debt discount are being
amortized over the term of the note. The aggregate balance of the
convertible promissory note and accrued interest was $105,000 and
$3,705, respectively, at December 31, 2020. The aggregate balance
of the convertible promissory note, net of original issue discount,
deferred financing costs and debt discount at December 31, 2020 was
$46,315.
On
July 31, 2020, the Company entered into a securities purchase
agreement with an accredited investor (“Lender 2”) and issued an 8%
convertible promissory note in the principal amount of $68,000 to
the Lender 2 with a maturity date of July 31, 2021. On August 6,
2020, the Company received net proceeds in the amount of $65,000 as
a result of $3,000 being paid to reimburse the Lender 2 for legal
and due diligence fees incurred with respect to this securities
purchase agreement and convertible promissory note. This
convertible debenture converts at 62% of the lowest trading price
during the 20 days prior to conversion. Due to the variable
conversion provisions contained in the convertible promissory note,
the Company accounted for this conversion feature as a derivative
liability. In connection herewith, the Company recorded a
derivative liability of $102,228, deferred financing costs of
$3,000 and debt discount of $65,000. The deferred financing costs
and debt discount are being amortized over the term of the note.
The aggregate balance of the convertible promissory note and
accrued interest was $68,000 and $2,295, respectively, at December
31, 2020. The aggregate balance of the convertible promissory note,
net of deferred financing costs and debt discount at December 31,
2020 was $28,690.
On
August 19, 2020, the Company entered into a securities purchase
agreement with an accredited investor (“Lender 3”) and issued an 8%
convertible promissory note in the principal amount of $99,225
(including a $4,725 original issue discount) to the Lender 3 with a
maturity date of August 19, 2021. On August 20, 2020, the Company
received net proceeds in the amount of $90,000 as a result of
$4,500 being paid to reimburse the Lender 3 for legal and due
diligence fees incurred with respect to this securities purchase
agreement and convertible promissory note. This convertible
debenture converts at 60% of the lowest closing price during the 20
days prior to conversion. Due to the variable conversion provisions
contained in the convertible promissory note, the Company accounted
for this conversion feature as a derivative liability. In
connection herewith, the Company recorded a derivative liability of
$161,856, original issue discount of $4,725, deferred financing
costs of $4,500 and debt discount of $86,400. The original issue
discount, deferred financing costs and debt discount are being
amortized over the term of the note. The aggregate balance of the
convertible promissory note and accrued interest was $99,225 and
$2,936, respectively, at December 31, 2020. The aggregate balance
of the convertible promissory note, net of original issue discount,
deferred financing costs and debt discount at December 31, 2020 was
$36,700.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
7: Convertible Debt
Arrangements (continued)
On
August 20, 2020, the Company entered into a securities purchase
agreement with an accredited investor (“Lender 4”) and issued an 8%
convertible promissory note in the principal amount of $63,000 to
the Lender 4 with a maturity date of August 20, 2021. On August 21,
2020, the Company received net proceeds in the amount of $60,000 as
a result of $3,000 being paid to reimburse the Lender 4 for legal
and due diligence fees incurred with respect to this securities
purchase agreement and convertible promissory note. This
convertible debenture converts at 62% of the lowest trading price
during the 20 days prior to conversion. Due to the variable
conversion provisions contained in the convertible promissory note,
the Company accounted for this conversion feature as a derivative
liability. In connection herewith, the Company recorded a
derivative liability of $101,996, deferred financing costs of
$3,000 and debt discount of $60,000. The deferred financing costs
and debt discount are being amortized over the term of the note.
The aggregate balance of the convertible promissory note and
accrued interest was $63,000 and $1,850, respectively, at December
31, 2020. The aggregate balance of the convertible promissory note,
net of deferred financing costs and debt discount at December 31,
2020 was $23,129.
On
August 27, 2020, the Company entered into a securities purchase
agreement with an accredited investor (“Lender 5”) and issued an 8%
convertible promissory note in the principal amount of $105,000
(including a $5,000 original issue discount) to the Lender 5 with a
maturity date of August 27, 2021. On August 28, 2020, the Company
received net proceeds in the amount of $96,000 as a result of
$4,000 being paid to reimburse the Lender 5 for legal and due
diligence fees incurred with respect to this securities purchase
agreement and convertible promissory note. This convertible
debenture converts at the lower of i) $0.03 per share or ii) 62% of
the lowest closing price during the 20 days prior to conversion.
Due to the variable conversion provisions contained in the
convertible promissory note, the Company accounted for this
conversion feature as a derivative liability. In connection
herewith, the Company recorded a derivative liability of $176,129,
original issue discount of $5,000, deferred financing costs of
$4,000 and debt discount of $92,200. The original issue discount,
deferred financing costs and debt discount are being amortized over
the term of the note. The aggregate balance of the convertible
promissory note and accrued interest was $105,000 and $2,923,
respectively, at December 31, 2020. The aggregate balance of the
convertible promissory note, net of original issue discount,
deferred financing costs and debt discount at December 31, 2020 was
$36,534.
On
August 31, 2020, the Company entered into a securities purchase
agreement with an accredited investor (“Lender 6”) and issued an 8%
convertible promissory note in the principal amount of $68,000 to
the Lender 6 with a maturity date of August 31, 2021. On September
1, 2020, the Company received net proceeds in the amount of $65,000
as a result of $3,000 being paid to reimburse the Lender 6 for
legal and due diligence fees incurred with respect to this
securities purchase agreement and convertible promissory note. This
convertible debenture converts at 62% of the lowest trading price
during the 20 days prior to conversion. Due to the variable
conversion provisions contained in the convertible promissory note,
the Company accounted for this conversion feature as a derivative
liability. In connection herewith, the Company recorded a
derivative liability of $112,459, deferred financing costs of
$3,000 and debt discount of $65,000. The deferred financing costs
and debt discount are being amortized over the term of the note.
The aggregate balance of the convertible promissory note and
accrued interest was $68,000 and $1,833, respectively, at December
31, 2020. The aggregate balance of the convertible promissory note,
net of deferred financing costs and debt discount at December 31,
2020 was $22,915.
During
the six months ended December 31, 2020, the Company paid-off two
outstanding convertible promissory notes with an aggregate balance,
including accrued interest and prepayment amount of
$168,691.
At
December 31, 2020 and June 30, 2020, there was $694,225 and
$565,000 of convertible notes payable outstanding, net of discounts
of $389,399 and $375,359, respectively.
During
the six months ended December 31, 2020 and 2019, amortization of
original issue discount, deferred financing costs, and debt
discounts amounted to $494,184 and $184,266,
respectively.
During
the six months ended December 31, 2020, $288,182 of convertible
notes, including fees and interest, were converted into 16,331,766
shares of the Company’s common stock. During the six months ended
December 31, 2019, there were no conversions of convertible notes
into shares of the Company’s common stock.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
7: Convertible Debt
Arrangements (continued)
At
December 31, 2020, the Company was not in compliance with the terms
of the Accredited Investors convertible promissory notes due to the
Company being late in filing its Form 10-K for the year ended June
30, 2020 and its Form 10-Q for the three months ended September 30,
2020. On January 5, 2021, the Company filed its Form 10-K for the
year ended June 30, 2020, and on January 19, 2021, the Company
filed its Form 10-Q for the three months ended September 30, 2020.
As of January 19, 2021, the Company regained compliance with the
terms of the Accredited Investors convertible promissory
notes.
Notes
payable under convertible debt and debenture agreements, net is
comprised of the following:
| |
|
December
31, |
|
|
June
30, |
|
| |
|
2020 |
|
|
2020 |
|
| JMJ
Financial |
|
$ |
109,000 |
|
|
$ |
109,000 |
|
| Accredited
Investors |
|
|
694,225 |
|
|
|
565,000 |
|
| Unamortized OID,
deferred financings costs, and debt discounts |
|
|
(389,399 |
) |
|
|
(375,359 |
) |
| Total convertible debt
arrangements, net |
|
$ |
413,826 |
|
|
$ |
298,641 |
|
At
December 31, 2020 and June 30, 2020, the outstanding balances are
reflected as current liabilities within our consolidated balance
sheets. At December 31, 2020 and June 30, 2020, accrued interest on
these convertible notes of $133,040 and $116,619, respectively, is
included within accrued expenses of the consolidated balance
sheets.
NOTE
8: DERIVATIVE LIABILITY
The
Company evaluates its convertible instruments, options, warrants or
other contracts to determine if those contracts or embedded
components of those contracts qualify as derivatives to be
separately accounted for under ASC Topic 815, Derivatives and
Hedging. The result of this accounting treatment is that the
fair value of the derivative is marked-to-market each balance sheet
date and recorded as a liability. In the event that the fair value
is recorded as a liability, the change in fair value is recorded in
the statement of operation as other income (expense). Upon
conversion or exercise of a derivative instrument, the instrument
is marked to fair value at the conversion date then that fair value
is reclassified to equity. Equity instruments that are initially
classified as equity that become subject to reclassification under
ASC Topic 815 are reclassified to liabilities at the fair value of
the instrument on the reclassification date.
The
following table presents a reconciliation of the derivative
liability measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) from June 30, 2019 to
December 31, 2020:
| |
|
Conversion
feature
derivative liability
|
|
| June 30,
2019 |
|
$ |
133,669 |
|
| Initial fair value of
derivative liability recorded as debt discount |
|
|
1,115,000 |
|
| Initial fair value of
derivative liability charged to other expense |
|
|
1,610,913 |
|
| Gain on change in fair
value included in earnings |
|
|
(1,961,951 |
) |
| June
30, 2020 |
|
$ |
897,631 |
|
| Initial fair value of
derivative liability recorded as debt discount |
|
|
463,600 |
|
| Initial fair value of
derivative liability charged to other expense |
|
|
366,068 |
|
| Gain on change in fair
value included in earnings |
|
|
(157,900 |
) |
| Derivative liability
relieved by conversions of convertible promissory notes |
|
|
(451,360 |
) |
| December 31,
2020 |
|
$ |
1,118,039 |
|
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
8: DERIVATIVE LIABILITY (continued)
Total
derivative liability at December 31, 2020 and June 30, 2020
amounted to $1,118,039 and $897,631, respectively. The change in
fair value included in earnings of $157,900 is due in part to the
quoted market price of the Company’s common stock decreasing from
$0.08 at June 30, 2020 to $0.05 at December 31, 2020, coupled with
decreased conversion prices due to the effect of “ratchet”
provisions incorporated within the convertible notes
payable.
The
Company used the following assumptions for determining the fair
value of the convertible instruments granted under the binomial
pricing model with binomial simulations at December 31,
2020:
| Expected
volatility |
|
|
119.4%
- 239.5 |
% |
| Expected
term |
|
|
5.0
months – 8.0 months |
|
| Risk-free interest
rate |
|
|
0.09 |
% |
| Stock
price |
|
$ |
0.048 |
|
The
Company recognizes its derivative liabilities as Level 3 and values
its derivatives using the methods discussed below. While the
Company believes that its valuation methods are appropriate and
consistent with other market participants, it recognizes that the
use of different methodologies or assumptions to determine the fair
value of certain financial instruments could result in a different
estimate of fair value at the reporting date. The primary
assumptions that would significantly affect the fair values using
the methods discussed are that of volatility and market price of
the underlying common stock of the Company.
At
December 31, 2020, the Company did not have any derivative
instruments that were designated as hedges.
Items
recorded or measured at fair value on a recurring basis in the
accompanying consolidated financial statements consisted of the
following items as of December 31, 2020 and June 30,
2020:
| |
|
Quoted
Prices in Active Markets
for
Identical
Assets
(Level
1)
|
|
|
Significant
Other
Observable
Inputs
(Level
2)
|
|
|
Significant
Unobservable Inputs
(Level
3)
|
|
| Derivative liability,
December 31, 2020 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,118,039 |
|
| |
|
Quoted
Prices in Active Markets
for
Identical
Assets
(Level
1)
|
|
|
Significant
Other
Observable
Inputs
(Level
2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
| Derivative liability,
June 30, 2020 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
897,631 |
|
NOTE
9: STOCKHOLDERS’ EQUITY
At
December 31, 2020, the total number of shares of all classes of
stock that the Company shall have the authority to issue is
500,001,000 shares consisting of 500,000,000 shares of common
stock, $0.01 par value per share, of which 75,907,563 are issued
and 75,763,376 are outstanding, and 1,000 shares of preferred
stock, par value $0.01 per share of which 1,000 shares have been
designated as Series A Super Voting Preferred of which 1,000 are
issued and outstanding.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
9: STOCKHOLDERS’ EQUITY (continued)
On
August 27, 2019, the Company’s Board of Directors approved an
amendment to the Company’s Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of Incorporation”) to
increase the number of authorized shares of common stock of the
Company to 100,000,000 shares from 25,000,000 shares. On September
4, 2019, the Company filed a Certificate of Amendment to its
Certificate of Incorporation to increase its authorized common
stock from 25,000,000 shares to 100,000,000 shares.
On
June 10, 2020, the Company’s Board of Directors approved an
amendment to the Company’s Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of Incorporation”) to
increase the number of authorized shares of common stock of the
Company to 250,000,000 shares from 100,000,000 shares. On July 14,
2020, the Company filed a Certificate of Amendment to its
Certificate of Incorporation to increase its authorized common
stock from 100,000,000 shares to 250,000,000 shares.
On
August 3, 2020, the Company’s Board of Directors approved an
amendment to the Company’s Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of Incorporation”) to
increase the number of authorized shares of common stock of the
Company to 500,000,000 shares from 250,000,000 shares. On August 4,
2020, the Company filed a Certificate of Amendment to its
Certificate of Incorporation to increase its authorized common
stock from 250,000,000 shares to 500,000,000 shares.
Common Stock
Common
Stock Purchase Agreement
On
July 13, 2020, the Company entered into a common stock purchase
agreement (the “Purchase Agreement”) and a registration rights
agreement (the “Rights Agreement”) with White Lion Capital, LLC
(the “Investor”) pursuant to which the Investor agreed to invest up
to three million dollars ($3,000,000) to purchase the Company’s
common stock, par value $0.01 per share (the “Common Stock”), at a
purchase price of 95% of the market price of the Company’s Common
Stock during a valuation period as defined in the Purchase
Agreement. The shares of Common Stock to be issued and sold to the
Investor pursuant to the Purchase Agreement were issued in reliance
upon the exemption from registration under Section 4(a)(2) of the
Securities Act of 1933, as amended (the “Securities Act”), and Rule
506 of Regulation D promulgated thereunder. The Rights Agreement
was an inducement to the Investor to execute and deliver the
Purchase Agreement, whereby the Company agreed to provide certain
registration rights under the Securities Act with respect to the
shares of Common Stock issuable for Investor’s investment pursuant
to the Purchase Agreement.
On
August 14, 2020, the Company filed a preliminary registration
statement in accordance with the Rights Agreement entered into with
the Investor on July 13, 2020. On October 13, 2020, the preliminary
registration statement was withdrawn.
Private
Placements
During
the six months ended December 31, 2020, the Company did not issue
any shares of common stock under any private placements with
accredited investors. During the six months ended December 31,
2019, the Company received $197,000 of net proceeds from the
issuance of 788,000 shares of common stock in private placements
with accredited investors, incurring no finder’s fees, of which
530,000 shares of common stock were issued subsequent to December
31, 2019.
Stock
Award Payable
During
the six months ended December 31, 2020 and 2019, the Company did
not issue any shares of common stock to former officers, outside
directors, or strategic consultants.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
9: STOCKHOLDERS’ EQUITY (continued)
Stock
Based Compensation
During
the six months ended December 31, 2020, the Company entered into an
exchange agreement (the “Exchange Agreement”) with its Chief
Executive Officer, Anshu Bhatnagar (“Holder”), whereby earned and
issued warrants to purchase 37,390,452 shares of the Company’s
Common Stock (the “Cancelled Warrants”) pursuant to the terms of
that certain Transition Agreement (the “Transition Agreement”) and
Warrant Agreement (the “Warrant Agreement”) each between the
Company and Holder and dated as of January 11, 2019 were forfeited
and exchanged for (i) 37,390,452 shares of the Company’s Common
Stock (the “Shares”) and (ii) the cancellation and termination of
the Transition Agreement and Warrant Agreement. The Cancelled
Warrants had an exercise price of $0.50 per share and were not
subject to expiration. Such Exchange Agreement is intended to make
the Company’s capitalization more attractive to potential investors
and to remove the uncertainty associated with any future grants of
warrants under the Transition Agreement and Warrant Agreement,
although there can be no assurance of any future investments on
terms that are attractive to the Company, or at all. Immediately
prior to the Company’s entry into the Exchange Agreement, it was
determined that 5,650,708 additional warrants (the “Additional
Warrants”) to purchase the Company’s Common Stock were due to and
issued to the Holder in accordance with the terms and conditions of
the Transition Agreement as the Transition Agreement required
certain liabilities to be eliminated by the prior management team
within six months of the Transition Agreement’s effective date of
January 11, 2019. However, the Additional Warrants were immediately
cancelled and terminated with the intention of mitigating potential
liabilities arising from certain issuances of the Company’s Common
Stock below the minimum price of $0.50 per share as stated within
the Transition Agreement. The Shares to be issued and sold to the
Holder pursuant to the Exchange Agreement were issued in reliance
upon the exemption from registration under Section 4(a)(2) of the
Securities Act and Rule 506 of Regulation D promulgated thereunder.
For the six months ended December 31, 2020, the Company recorded
$153,301 of stock-based compensation expense related to the
Exchange Agreement. See Common Stock Warrants section below for
further details of the warrants.
Furthermore,
during the six months ended December 31, 2020 and 2019, the Company
recorded $21,474 and $90,193, respectively, of stock-based
compensation expense related to a June 1, 2019 grant of 231,635
shares of common stock to Mr. Cutchens, the Company’s Chief
Financial Officer, which vests 25% on the six month, 1 year, 2
year, and 3 year anniversaries of the grant date.
Vendor
Services
During
the six months ended December 31, 2020, the Company entered into a
consulting, public relations, and marketing agreement whereby the
Company issued 200,000 restricted shares of its common stock for
services to be performed during the agreement period of July 15,
2020 through October 15, 2020. During the six months ended December
31, 2020 and 2019, the Company recorded $6,820 and $0,
respectively, of expense.
During
the six months ended December 31, 2019, the Company issued 62,000
shares of common stock to a former officer who provided services to
the Company.
Conversion
of Debt Securities
During
the six months ended December 31, 2020, $288,182 of convertible
notes, including fees and interest, were converted into 16,331,766
shares of the Company’s common stock by accredited investors,
valued at $708,272. During the six months ended December 31, 2019,
there were no conversions of convertible notes into shares of the
Company’s common stock.
Reserved
Shares
At
December 31, 2020, the convertible promissory notes entered into
with the accredited investors require the Company to reserve
approximately 332,000,000 shares of its common stock for potential
future conversions under such instruments.
At
December 31, 2020, 7,202 shares of the Company’s common stock
remain subject to be returned to the Company’s treasury for
cancellation. Such shares were not sold as part of 8,000 shares of
the Company’s common stock that was advanced during fiscal year
2014 under an Equity Line of Credit.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
9: STOCKHOLDERS’ EQUITY (continued)
Common
Stock Warrants
Exchange
Agreement – Warrants Exchanged for Common Stock
During
the six months ended December 31, 2020, the Company entered into an
Exchange Agreement with its Chief Executive Officer, Anshu
Bhatnagar (“Holder”), whereby earned and issued warrants to
purchase 37,390,452 shares of the Company’s Common Stock (the
“Cancelled Warrants”) pursuant to the terms of that certain
Transition Agreement (the “Transition Agreement”) and Warrant
Agreement (the “Warrant Agreement”) each between the Company and
Holder and dated as of January 11, 2019 were forfeited and
exchanged for (i) 37,390,452 shares of the Company’s Common Stock
(the “Shares”) and (ii) the cancellation and termination of the
Transition Agreement and Warrant Agreement. The Cancelled Warrants
had an exercise price of $0.50 per share and were not subject to
expiration. Such Exchange Agreement is intended to make the
Company’s capitalization more attractive to potential investors and
to remove the uncertainty associated with any future grants of
warrants under the Transition Agreement and Warrant Agreement,
although there can be no assurance of any future investments on
terms that are attractive to the Company, or at all. Immediately
prior to the Company’s entry into the Exchange Agreement, it was
determined that 5,650,708 additional warrants (the “Additional
Warrants”) to purchase the Company’s Common Stock were due to and
issued to the Holder in accordance with the terms and conditions of
the Transition Agreement as the Transition Agreement required
certain liabilities to be eliminated by the prior management team
within six months of the Transition Agreement’s effective date of
January 11, 2019. However, the Additional Warrants were immediately
cancelled and terminated with the intention of mitigating potential
liabilities arising from certain issuances of the Company’s Common
Stock below the minimum price of $0.50 per share as stated within
the Transition Agreement. The Shares to be issued and sold to the
Holder pursuant to the Exchange Agreement were issued in reliance
upon the exemption from registration under Section 4(a)(2) of the
Securities Act and Rule 506 of Regulation D promulgated thereunder.
For the six months ended December 31, 2020, the Company recorded
$153,301 of stock-based compensation expense related to the
Exchange Agreement.
Warrant
Agreement – Earned Warrants
Mr.
Bhatnagar, the Company’s President and Chief Executive Officer, was
entitled to receive warrants to acquire 4% of the outstanding fully
diluted common stock of the Company (the “Earned Warrants”) each
time the Company’s revenue increases by $1,000,000. The exercise
price of the Earned Warrants was equal to $0.50 per share, and he
may not receive Earned Warrants to the extent that the number of
Signing Shares (as defined in the Warrant Agreement) and Earned
Warrants exceed 80% of the fully diluted common stock of the
Company (“Warrant Cap”).
For
the six months ended December 31, 2019, since the Company’s revenue
was $15,131,579, Mr. Bhatnagar earned warrants to acquire
32,405,058 shares of the Company’s common stock under the
provisions of the Warrant Agreement. At December 31, 2019, under
the current Warrant Cap, there remained no additional shares of the
Company’s common stock that Mr. Bhatnagar can earn.
For
the six months ended December 31, 2019, the Company recognized
$16,202,529 of stock-based compensation expense related to the
earned warrants. At December 31, 2019, there remained no additional
stock-based compensation expense that the Company expects to
recognize over the next six months.
The
Company estimated the fair value of each option award on the date
of grant using a black-scholes option valuation model that uses the
assumptions noted in the table below. Because black-scholes option
valuation models incorporate ranges of assumptions for inputs,
those ranges are disclosed. Expected volatilities are based on the
historical volatility of the Company’s stock. The Company used
historical data to estimate option exercise and employee
termination within the valuation model; separate groups of
employees that have similar historical exercise behavior are
considered separately for valuation purposes. The expected term of
options granted was derived from the output of the option valuation
model and represents the period of time that options granted are
expected to be outstanding; the range given below results from
certain groups of employees exhibiting different behavior. The
risk-free rate for periods within the contractual life of the
option was based on the U.S. Treasury yield curve in effect at the
time of grant. The following assumptions were utilized during the
six months ended December 31, 2019:
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
9: STOCKHOLDERS’ EQUITY (continued)
| Expected
volatility |
|
|
21,779.77 |
% |
| Weighted-average
volatility |
|
|
21,779.77 |
% |
| Expected
dividends |
|
|
0 |
% |
| Expected term (in
years) |
|
|
5.0 |
|
| Risk-free
rate |
|
|
2.52 |
% |
The
following table sets forth common stock purchase warrants
outstanding at December 31, 2019:
| |
|
Warrants |
|
|
Weighted
Average
Exercise Price |
|
|
Intrinsic
Value |
|
| Outstanding, June 30,
2019 |
|
|
4,985,394 |
|
|
$ |
0.50 |
|
|
$ |
- |
|
| Warrants
earned |
|
|
32,405,058 |
|
|
|
0.50 |
|
|
|
- |
|
| Warrants
forfeited |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Outstanding, December
31, 2019 |
|
|
37,390,452 |
|
|
$ |
0.50 |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock issuable
upon exercise of warrants |
|
|
37,390,452 |
|
|
$ |
0.50 |
|
|
$ |
- |
|
| |
|
|
Common
Stock Issuable Upon Exercise of
Warrants
Outstanding
|
|
|
Common
Stock Issuable Upon
Warrants Exercisable |
|
Range
of
Exercise
Prices |
|
|
Number
Outstanding at
December 31, 2019 |
|
|
Weighted
Average
Remaining
Contractual
Life (Years) |
|
|
Weighted
Average
Exercise
Price |
|
|
Number
Exercisable at
December 31, 2019 |
|
|
Weighted
Average
Exercise
Price |
|
|
$ |
0.50 |
|
|
|
37,390,452 |
|
|
|
4.80 |
|
|
$ |
0.50 |
|
|
|
37,390,452 |
|
|
$ |
0.50 |
|
| |
|
|
|
|
37,390,452 |
|
|
|
4.80 |
|
|
$ |
0.50 |
|
|
|
37,390,452 |
|
|
$ |
0.50 |
|
NOTE
10: RELATED PARTY TRANSACTIONS
Microphase
Corporation
At
December 31, 2020, the Company owed $32,545 to Microphase for
previously leased office space at its Norwalk location and for
certain research and development services and shared administrative
personnel from time to time, all through December 31,
2015.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
10: RELATED PARTY TRANSACTIONS (continued)
Transactions
With Officers
Note
Payable Issuances
At
various points during past fiscal years certain officers and former
officers of the Company provided bridge loans to the Company
evidenced by individual promissory notes and deferred compensation
so as to provide working capital to the Company. All of these notes
accrue interest at the rate of 6% per annum, and are payable on
demand. During the six months ended December 31, 2020 and 2019, the
officers and former officers advanced $0 and $48,052, respectively,
to provide working capital to the Company and $2,412 and $2,221 has
been charged for interest on loans from officers and former
officers.
On
October 22, 2020, the Company received a notice of event of default
and demand letter (“Demand Letter”) from a former officer and
promissory note holder ( the “Note Holder”). The promissory note
was issued on November 1, 2019, in the original principal amount of
$40,739.31, accrued interest at a rate of 6% per annum, and matured
on April 18, 2020. The Demand Letter stated an aggregate of
$51,940.09 of principal and interest was immediately due. The
promissory note does not have a convertible feature and is not
convertible into shares of the Company’s common stock.
Additionally, the promissory note does not contain any
cross-default provisions with any other promissory notes issued by
the Company. The Company expects to work with the Note Holder to
negotiate a repayment structure whereby the Company can repay the
Note Holder the balance due as quickly as possible based upon its
available capital.
At
December 31, 2020 and June 30, 2020, these outstanding notes
including accrued interest totaled $81,170 and $78,758,
respectively. At December 31, 2020, these promissory notes are not
convertible into shares of the Company common stock.
During
the six months ended December 31, 2019, the Company incurred
$10,500 of expense related to legal and consulting services
provided by Mr. Smiley, the Company’s former CFO and legal counsel.
During October 2019, the entire balance of $15,500 was converted
into 62,000 shares of common stock. During the six months ended
December 31, 2020, the Company did not incur any expense or utilize
any services by Mr. Smiley, the Company’s former CFO and legal
counsel.
Office
Lease
Effective
May 1, 2019, the Company relocated its corporate office to 9841
Washingtonian Blvd., Suite 390, Gaithersburg, MD 20878, and incurs
rent expense of $1,350 per month, which is payable to a related
party. The lease term with the related party is a month-to-month
arrangement. For the six months ended December 31, 2020 and 2019,
$8,100 and $8,100, respectively, was recognized as rent expense
under the terms of this month-to-month arrangement. At December 31,
2020 and June 30, 2020, $31,921 and $23,821, respectively, was
accrued as payable to the related party.
NOTE
11: COMMITMENTS AND CONTINGENCIES
Commitments
Office
Lease
Effective
May 1, 2019, the Company relocated its corporate office to 9841
Washingtonian Blvd., Suite 390, Gaithersburg, MD 20878, and incurs
rent expense of $1,350 per month, which is payable to a related
party. The lease term with the related party is a month-to-month
arrangement.
Judgement
Settlement Agreement
Effective
December 10, 2018, the Company entered into a “Judgment Settlement
Agreement” to satisfy in full the Forbearance Agreement with Fife
that was previously in effect. As a result, under the Judgment
Settlement Agreement, no shares of the Company’s common stock are
issuable or eligible to be converted into. Under the terms of the
Judgment Settlement Agreement, the Company was required to pay
$15,000 per month from January 15, 2019 through and including
February 15, 2020, with a final payment of $195,000 which was due
and payable in March of 2020. The Company made all required
payments with the exception of the final payment of $195,000 which
was due and payable in March of 2020. On August 17, 2020, the
Company entered into a second amendment (the “Second Amendment”) to
the Judgement Settlement Agreement, whereby the Company issued a
convertible promissory note in the principal amount of $300,000
(the “Note”) to repay the amounts still outstanding under the
Judgment Settlement Agreement. The Note matures on August 17, 2021,
bears interest at a rate of 10% per annum, requires certain monthly
minimum cash payments as specified in the Note, and is convertible
into shares of the Company’s common stock, par value $0.01 per
share, at a conversion price as specified in the Note. The Note may
be prepaid by the Company at any time prior to maturity without
penalty. Failure to make any of the payments, when due, will result
in an additional debt obligation, inclusive of principal and
interest at the date of default to be immediately due and payable
by the Company. The ultimate final payment amount is expected to be
less than the liability balance of $773,959 presented as
liabilities in arrears – judgement settlement agreement on the
consolidated balance sheets (see Note 6).
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
11: COMMITMENTS AND CONTINGENCIES (continued)
Contracts
and Commitments Executed Pursuant to the Transition
Agreement
In
the transaction whereby, Mr. Bhatnagar acquired control of the
Company on January 11, 2019, the Company entered into material
commitments including an employment agreement and a warrant
agreement (see Note 9).
Contingencies
Judgment
Settlement Agreement
Effective
December 10, 2018, the Company entered into a “Judgment Settlement
Agreement” to satisfy in full the Forbearance Agreement with Fife
that was previously in effect. As a result, under the Judgment
Settlement Agreement, no shares of the Company’s common stock are
issuable or eligible to be converted into. Under the terms of the
Judgment Settlement Agreement, the Company was required to pay
$15,000 per month from January 15, 2019 through and including
February 15, 2020, with a final payment of $195,000 which was due
and payable in March of 2020. The Company made all required
payments with the exception of the final payment of $195,000 which
was due and payable in March of 2020. On August 17, 2020, the
Company entered into a second amendment (the “Second Amendment”) to
the Judgement Settlement Agreement, whereby the Company issued a
convertible promissory note in the principal amount of $300,000
(the “Note”) to repay the amounts still outstanding under the
Judgment Settlement Agreement. The Note matures on August 17, 2021,
bears interest at a rate of 10% per annum, requires certain monthly
minimum cash payments as specified in the Note, and is convertible
into shares of the Company’s common stock, par value $0.01 per
share, at a conversion price as specified in the Note. The Note may
be prepaid by the Company at any time prior to maturity without
penalty. Failure to make any of the payments, when due, will result
in an additional debt obligation, inclusive of principal and
interest at the date of default to be immediately due and payable
by the Company. The ultimate final payment amount is expected to be
less than the liability balance of $773,959 presented as
liabilities in arrears – judgement settlement agreement on the
consolidated balance sheets (see Note 6).
Should
the Company satisfy the liability as described within the Judgement
Settlement Agreement above, the Company would realize a gain on
such settlement of approximately $444,000.
NOTE
12: DISCONTINUED OPERATIONS
The
Company has classified the operating results and associated assets
and liabilities from its Jump line of products, which ceased
generating material revenue during the first quarter of fiscal year
2017, as discontinued operations in the consolidated financial
statements for the three and six months ended December 31, 2020 and
2019.
The
assets and liabilities associated with discontinued operations
included in our consolidated balance sheets at December 31, 2020
and June 30, 2020 were only accounts payable with a balance of
$82,795 and $82,795, respectively.
For
the three and six months ended December 31, 2020 and 2019, there
were no revenue or expenses associated with discontinued operations
included in our consolidated statements of operations.
mPHASE
TECHNOLOGIES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(UNAUDITED)
NOTE
13: SUBSEQUENT EVENTS
Subsequent
to December 31, 2020, the Company paid-off four convertible
promissory notes with an aggregate principal balance of $339,000
and an aggregate accrued interest and prepayment amount of
$163,562.
Subsequent
to December 31, 2020, an aggregate of $81,120 of principal and
accrued interest have been converted into 3,352,066 shares of the
Company’s common stock. In conjunction with the issuance of these
shares, the Company’s Chief Executive Officer cancelled 3,352,066
of his shares of the Company’s common stock to avoid
dilution.
On
January 25, 2021, the Company entered into a Securities Purchase
Agreement with an accredited investor (“Lender”) and issued an 8%
Convertible Promissory Note in the principal amount of $140,000
(including a $14,000 original issue discount) to the Lender with a
maturity date of January 25, 2022. On January 26, 2021, the Company
received net proceeds in the amount of $120,000 as a result of
$6,000 being paid to reimburse the Lender for legal and due
diligence fees incurred with respect to this Securities Purchase
Agreement and Convertible Promissory Note. This convertible
debenture converts at 60% of the lowest closing price during the 15
days prior to conversion, subject to adjustment.
On
January 26, 2021, the Company entered into a Securities Purchase
Agreement with an accredited investor (“Lender”) and issued an 8%
Convertible Promissory Note in the principal amount of $118,500 to
the Lender with a maturity date of January 26, 2022. On January 27,
2021, the Company received net proceeds in the amount of $115,000
as a result of $3,500 being paid to reimburse the Lender for legal
and due diligence fees incurred with respect to this Securities
Purchase Agreement and Convertible Promissory Note. This
convertible debenture converts at 62% of the lowest trading price
during the 20 days prior to conversion, subject to
adjustment.
On
February 8, 2021, the Company entered into a Securities Purchase
Agreement with an accredited investor (“Lender”) and issued an 12%
Promissory Note in the principal amount of $362,250 (including a
$47,250 original issue discount) to the Lender with a maturity date
of February 8, 2022. On February 10, 2021, the Company received net
proceeds in the amount of $300,000 as a result of $15,000 being
paid to reimburse the Lender for legal and due diligence fees
incurred with respect to this Securities Purchase Agreement and
Promissory Note. Payments shall be made in eight (8) installments
each in the amount of $50,715 commencing on the fifth (5th) monthly
anniversary following the issue date and continuing thereafter each
thirty (30) days for eight (8) months. Notwithstanding the
forgoing, the final payment of principal and interest shall be due
on the Maturity Date. This Promissory Note only becomes convertible
in the event of a default. Upon the funding of
the Promissory Note, the Company issued 250,000 restricted shares
of its common stock (“Commitment Shares”), to the Lender as
additional consideration. In addition to the Commitment Shares, the
Company issued 200,000 shares of its common stock (“Returnable
Shares”), to the Lender. The Returnable Shares will be returned to
the Company by the Lender, if the Company makes the timely payments
as required under the Promissory Note.
On
February 10, 2021, the Company entered into a Securities Purchase
Agreement with an accredited investor (“Lender”) and issued an 8%
Convertible Promissory Note in the principal amount of $88,500 to
the Lender with a maturity date of February 10, 2022. On February
11, 2021, the Company received net proceeds in the amount of
$85,000 as a result of $3,500 being paid to reimburse the Lender
for legal and due diligence fees incurred with respect to this
Securities Purchase Agreement and Convertible Promissory Note. This
convertible debenture converts at 62% of the lowest trading price
during the 20 days prior to conversion, subject to
adjustment.
ITEM 2. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The
following discussion should be read in conjunction with the
attached unaudited consolidated financial statements and notes
thereto, and our audited consolidated financial statements and
related notes for our fiscal year ended June 30, 2020 found in our
Annual Report on Form 10-K filed with the Securities and Exchange
Commission (“SEC”) on January 5, 2021.
Overview
mPhase
Technologies, Inc., was incorporated in the state of New Jersey in
1979 under the name Tecma Laboratory, Inc. and has subsequently
operated under Tecma Laboratories, Inc., and Lightpaths TP
Technologies, Inc., until June 2, 1997 when the Company changed its
name to mPhase Technologies, Inc.
Since
January 11, 2019, when the Company underwent a complete change in
management and control, the new management has continued to broaden
the Company’s product mix to include artificial intelligence and
machine learning products.
Since
announcing the formation of mPhase Technologies India, Pvt, Ltd
during February 2019, the Company has expanded its focus on
software and technology development for new and existing projects
through the creation and expansion of its “Center of Excellence”
India division. This “Center of Excellence” consists of a team in
India of highly qualified software and technology experts in the
fields of artificial intelligence and machine learning.
In
addition to the foregoing, since our acquisition of Travel Buddhi
during February 2019, we have continued developing the software
platform which enhances travel via ultra-customization tools that
tailor a planned trip experience in ways not previously available
by making it “smart” and “connected” as part of the internet of
things.
Furthermore,
since our acquisition of CloseComms during May 2020, pursuant to
which we acquired certain assets and assumed certain liabilities,
we have continued advancing our patented, software application
platform that can be integrated into a retail customer’s existing
Wi-Fi infrastructure, giving the retailer important customer data
and enabling AI-enhanced, targeted promotions to drive store
traffic and sales.
Critical
Accounting Policies and Estimates
The
discussion and analysis of the Company’s financial condition and
results of operations are based upon its unaudited consolidated
financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of
America (“U.S. GAAP”). The preparation of these unaudited
consolidated financial statements requires management to make
estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of
contingent liabilities. On an on-going basis, management evaluates
past judgments and estimates, including those related to bad debts,
potential impairment of intangible assets, accrued liabilities and
contingencies. Management bases its estimates on historical
experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different
assumptions or conditions. The accounting policies and related
risks described in Note 3 above and the Company’s Annual Report on
Form 10-K as filed with the SEC on January 5, 2021, are those that
depend most heavily on these judgments and estimates. As of
December 31, 2020, there had been no material changes to any of the
critical accounting policies contained therein.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Results
of Operations
Three
months ended December 31, 2020 compared to three months ended
December 31, 2019
Continuing
Operations
Revenue
Our
revenue increased to $7,636,436 for the three months ended December
31, 2020, compared to $7,561,967 for the three months ended
December 31, 2019, an increase of $74,469. The consistent revenue
is the result of continued deployment of our artificial
intelligence enabled technology platforms and services which
generated $6,180,000 of subscription revenue, $906,756 of service
and support revenue and $549,680 of application development and
implementation revenue.
Cost of Revenue
Cost
of revenue totaled $5,625,010 for the three months ended December
31, 2020, compared to $5,623,930 for the three months ended
December 31, 2019.
Operating Expenses
Our
operating expenses decreased to $692,528 for the three months ended
December 31, 2020, compared to $8,028,453 for the three months
ended December 31, 2019, a decrease of $7,335,925, or 91%. The
decrease is primarily due to $6,253,875 of stock-based compensation
expense recognized during 2019 related to the Company’s Chief
Executive Officer and Chief Financial Officer, and lower operating
expenses of $1,082,050.
Other (Expense) Income
Our
other expense, net, increased by $469,338, or 302%, for the three
months ended December 31, 2020. The increase is primarily the
result of increases in the loss on the change in fair value of
derivative liability associated with the convertible promissory
notes and amortization of debt discounts, deferred financings
costs, and original issue discounts, partially offset by decreases
in initial derivative liability expense and interest
expense.
Net Income from Continuing Operations
We
had net income from continuing operations of $1,005,212 for the
three months ended December 31, 2020, compared to a net loss of
$5,934,764 for the three months ended December 31, 2019, an
increase of $6,939,976, or 117%. The increase in net income is
primarily driven by the increase in gross profit, coupled with the
decrease in operating expenses, and partially offset by the
increase in other expense, net, as disclosed above.
Discontinued
Operations
For
the three months ended December 31, 2020 and 2019, there are no
revenue, cost of revenue, operating expenses, other income
(expense), or net income from discontinued operations
comparatives.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Six
months ended December 31, 2020 compared to six months ended
December 31, 2019
Continuing
Operations
Revenue
Our
revenue increased to $15,223,300 for the six months ended December
31, 2020, compared to $15,131,579 for the six months ended December
31, 2019, an increase of $91,721. The consistent revenue is the
result of continued deployment of our artificial intelligence
enabled technology platforms and services which generated
$12,360,000 of subscription revenue, $1,804,020 of service and
support revenue and $1,059,280 of application development and
implementation revenue.
Cost of Revenue
Cost
of revenue totaled $11,250,399 for the six months ended December
31, 2020, compared to $11,330,444 for the six months ended December
31, 2019.
Operating Expenses
Our
operating expenses decreased to $1,458,374 for the six months ended
December 31, 2020, compared to $19,974,088 for the six months ended
December 31, 2019, a decrease of $18,515,714, or 93%. The decrease
is primarily due to $16,086,201 of stock-based compensation expense
recognized during 2019 related to the Company’s Chief Executive
Officer and Chief Financial Officer, and lower operating expenses
of $2,429,513.
Other (Expense) Income
Our
other expense, net, increased by $721,499 for the six months ended
December 31, 2020. The increase is primarily the result of
increases in the loss on the change in fair value of derivative
liability associated with the convertible promissory notes,
amortization of debt discounts, deferred financings costs, and
original issue discounts, initial derivative liability expense, and
interest expense, partially offset by an increase in the gain on
extinguishment of debt.
Net Income from Continuing Operations
We
had net income from continuing operations of $1,725,706 for the six
months ended December 31, 2020, compared to a net loss of
$16,240,275 for the six months ended December 31, 2019, an increase
of $17,965,981, or 111%. The increase in net income is primarily
driven by the increase in gross profit, coupled with the decrease
in operating expenses, and partially offset by the increase in
other expense, net, as disclosed above.
Discontinued
Operations
For
the six months ended December 31, 2020 and 2019, there are no
revenue, cost of revenue, operating expenses, other income
(expense), or net income from discontinued operations
comparatives.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources
At
December 31, 2020, we had $2,143 of cash on-hand, a decrease of
$140,270 from $142,413 at June 30, 2020.
Net cash
used in operating activities of continuing operations was $328,048
for the six months ended December 31, 2020, a decrease of $332,801
from $660,849 used during the six months ended December 31, 2019.
This decrease was primarily due to increases in accounts receivable
and by a net decrease in non-cash charges, partially offset by an
increase in accounts payable and accrued expenses.
Net
cash used in investing activities of continuing operations was
$1,727 for the six months ended December 31, 2020 as compared to no
net cash used in or provided by investing activities of continuing
operations for the six months ended December 31, 2019.
Financing
activities of continuing operations decreased by $367,200 to
$332,600 for the six months ended December 31, 2020, compared to
$699,800 for the six months ended December 31, 2019. This decrease
was primarily due to decreased proceeds from issuances of
convertible promissory notes, no proceeds from the sale of common
stock or notes payable to related parties, coupled with no
repayments of notes payable to related parties and decreased
repayments under settlement agreement, partially offset by
increased repayments of convertible promissory notes.
Going Concern
We
have generated net income of $1,725,706 and incurred a net loss of
$16,240,275, and have used cash in operating activities of $328,048
and $660,849 for the six months ended December 31, 2020 and 2019,
respectively. At December 31, 2020, we had a working capital
surplus of $5,588,377, and an accumulated deficit of $226,001,714.
It is management’s opinion that these facts raise substantial doubt
about our ability to continue as a going concern for a period of
twelve months from the date of this filing, without additional debt
or equity financing. The unaudited consolidated financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts nor to
the amounts and classification of liabilities that might be
necessary should we be unable to continue as a going
concern.
In
order to meet our working capital needs through the next twelve
months and to fund the growth of our nanotechnology, artificial
intelligence, and machine learning technologies, we may consider
plans to raise additional funds through the issuance of equity or
debt. Although we intend to obtain additional financing to meet our
cash needs, we may be unable to secure any additional financing on
terms that are favorable or acceptable to us, if at all. Our
ability to raise additional capital will also be impacted by the
recent COVID-19 pandemic, which such ability is highly uncertain,
cannot be predicted, and could have an adverse effect on our
business and financial condition.
Impact of COVID-19 Pandemic
A
novel strain of coronavirus, COVID-19, surfaced during December
2019 and has spread around the world, including to the United
States. During March 2020, COVID-19 was declared a pandemic by the
World Health Organization. During certain periods of the pandemic
thus far, a number of U.S. states and various countries throughout
the world had been under governmental orders requiring that all
workers remain at home unless their work was critical, essential,
or life-sustaining. As a result of these governmental orders, we
temporarily closed our domestic and international offices and
required all of our employees to work remotely. Although these
temporary office closures created minor disruption to our business
operations, such disruptions to date have not been
significant.
The
full impact of the COVID-19 pandemic on our financial condition and
results of operations will depend on future developments, such as
the ultimate duration and scope of the pandemic, its impact on our
employees, customers, and vendors, in addition to how quickly
normal economic conditions and operations resume and whether the
pandemic impacts other risks disclosed in Item 1A “Risk Factors”
within our Annual Report on Form 10-K for the fiscal year ended
June 30, 2020, filed with the SEC on January 5, 2021. Even after
the pandemic has subsided, we may continue to experience adverse
impacts to our business as a result of any economic recession or
depression that has occurred as a result of the pandemic.
Therefore, we cannot reasonably estimate the impact at this time.
We continue to actively monitor the pandemic and may determine to
take further actions that alter our business operations as may be
required by federal, state, or local authorities or that we
determine are in the best interests of our employees, customers,
vendors, and shareholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
As a
smaller reporting company, we are not required to provide
information required by this item.
ITEM 4. CONTROLS AND
PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Under
the supervision and with the participation of our management,
including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of December 31, 2020 to determine whether the
Company’s disclosure controls and procedures are effective to
provide reasonable assurance that the information required to be
disclosed in our reports under the Exchange Act, and the rules and
regulations thereunder, is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and
forms, and that such information is accumulated and communicated to
our management, including our principal executive officer and
principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well
designed and operated, cannot provide absolute assurance that the
objectives of the controls system are met, and no evaluation of
controls can provide absolute assurance that all control issues and
instances of fraud, if any, within a company have been
detected.
Based
on this evaluation, management concluded that our disclosure
controls and procedures were effective as of December 31,
2020.
Changes
in Internal Control Over Financial Reporting
There
were no changes in our internal control over financial reporting
that occurred during our most recently completed fiscal quarter
that have materially affected, or are reasonably likely to
materially affect, our internal control over financial
reporting.
PART II – OTHER
INFORMATION
Item 1. Legal
Proceedings
None.
Item 1A. Risk Factors.
None.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior
Securities
None.
Item 5. Other
Information
None.
Item 6. Exhibits.
*Filed
herewith.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
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mPhase
Technologies, Inc. |
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/s/
Anshu Bhatnagar |
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Anshu
Bhatnagar |
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Chief
Executive Officer (Principal Executive, Financial and Accounting
Officer) |
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February
22, 2021 |
