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Contingencies
9 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

5. CONTINGENCIES

 

The Company had been in litigation with John Fife with respect to a Convertible Note originally issued on September 13, 2011 in the principal amount of $557,000. Fife sought damages on a Motion for Summary Judgment in an amount in excess of $1,300,000 and attorney’s fees. On December 15, 2014 the federal district court in the North East District of Illinois found in favor of Fife on a motion for Summary Judgment. The Company had entered into a Forbearance Agreement with Fife as a result of negotiations to settle such Judgment. The convertible provisions with respect to the Debt of Mr. Fife are no longer in effect and no shares of our common stock are eligible to be converted.

 

Judgement Settlement Agreement

 

The Company entered into a “Judgment Settlement Agreement” to satisfy, in full, the Forbearance Agreement with Mr. Fife discussed above, effective December 10, 2018, by and between John M. Fife, an individual (“Lender”), and mPhase Technologies, Inc. The Agreement supersedes all other prior oral or written agreements between the Company and Mr. Fife. The Company has reverted to the long term option under this Agreement, as revised, in full, by paying Mr. Fife the gross payments of $15,000 per month, which commenced in December 2018, and continue each month thereafter from January 2019 through December 2019 with a lump sum balloon payment of $195,000 due in January 2020. Through March 31, 2019 the Company has made payments of $45,000 towards this Agreement. The “Current Portion, liabilities in arears- Judgement Settlement Agreement” is $310,910 and $580,000 is included on the line item “Long term portion, liabilities in arears- Judgement Settlement Agreement” in the liabilities section of the Company’s Balance Sheet as of March 31, 2019.

 

Should the Company satisfy this Fife liability as described above of the Judgement Settlement Agreement we would realize a gain on such settlement of approximately $580,000 (see also note 3).

 

Amounts Contingent upon Certain Terms of Change in Control Agreements Effective January 11, 2019

 

To the extent Company does not eliminate the certain liabilities within six months of the effective Date, the Warrant Cap for warrants issued to Mr. Bhatnagar shall increase be increased by such number of shares at a pre-split price of $.00005, or $.25 on a post-split basis, equal to the amount of the remaining liability.

 

The Change in Control Agreements, effective January 11, 2019, also have certain provisions that may accelerate the warrant “earn out” formula contained in the Transition Agreement.