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Item
1.01
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Entry
into a Material Definitive Agreement.
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On
May 4, 2021 (the “Effective Date”), mPhase Technologies, Inc. (the “Company”), entered into a Securities Purchase
Agreement (the “SPA”) with two accredited investors (the “Investors”), pursuant to which the Company sold to
the Investors 15% OID convertible promissory notes with an aggregate principal amount of $2,264,706 (the “Notes”) and warrants
(the “Warrants”) to purchase up to 11,323,530 shares of the Company’s common stock, par value $0.01 per share (the
“Common Stock”) for proceeds of $1,925,000 (the “Purchase Price”).
The Purchase Price was funded on May 5, 2021.
If the Company files a Registration Statement
on Form S-1 for the sale of shares of its Common Stock in conjunction with an application to list the Company’s Common Stock on
a national securities exchange, the Investors will be obligated to purchase under the SPA, within three (3) business days, on a pro rata
basis, additional promissory notes in the aggregate principal amount of $735,294 and warrants to purchase up to 3,676,471 shares of the
Company’s common stock, for proceeds of $625,001.
The
Notes mature on May 5, 2022, bear interest at the rate of 5% per annum and are convertible at any time upon the option of the Investors
into shares of Common Stock at a conversion price equal to $0.20 per share. The Company has the right to prepay all or any portion of
the outstanding balance of the Notes in an amount equal to 115% or 120%, depending on whether such repayment is made before November
5, 2021 or after November 5, 2021, respectively, multiplied by the portion of the outstanding balance to be prepaid.
The
Warrants are exercisable at a purchase price of $0.20 per share at any time on or prior to May 5, 2025, and may be exercised on a cashless
basis, beginning on the six-month anniversary of the Effective Date, if the shares of Common Stock underlying the Warrants are not then
registered under the Securities Act of 1933, as amended (the “Securities Act”).
The
SPA contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations
of the Company, other obligations of the parties thereto, and termination provisions.
Item
1.01 of this Current Report on Form 8-K contains only a brief description of the material terms of the SPA, the Notes and the Warrants,
and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are
qualified in their entirety by reference to the full text of the SPA, the Notes and the Warrants, the forms of which are attached as
Exhibits 4.1, 4.2 and 10.1, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.