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FOR FISCAL YEARSYEAR ENDED JUNE 30, 2008 AND JUNE 30, 2009
2013
A SpecialFEBRUARY 12, 2014
(2)
May 17, 2011
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MPHASE TECHNOLOGIES, INC. | Meeting Information |
Meeting Type: | |
For holders as of: | |
Date: | |
Time: 10:00 AM EST | |
Location: mPhase Technologies, Inc. | |
587 Connecticut Avenue | |
Norwalk, CT 06854 | |
You are receiving this communication because you hold shares in the above named company. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. See the reverse side of this notice to obtain proxy materials and voting instructions. |
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1. | Annual | |
2. | Notice and Proxy Statement | |
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3) |
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1. | Election of Directors |
Nominees |
01 Ronald A. Durando 02 Gustave T. Dotoli 03 Victor Lawrence 04 Abraham Biderman 05 Martin Smiley |
Approval of an amendment to our Amended Certificate of Incorporation authorizing an increase in authorized shares of common stock from 2 billion shares to 6 billion shares.
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2. | Approval of our independent accountants Demetrius Berkower L.L.C. for the fiscal year 2014 |
3. | Approval of an amendment to our Amended Certificate of Incorporation authorizing an increase in authorized shares of common stock from 6 billion to 18 billion shares. |
FEBRUARY 12, 2014
February 12, 2014.
After consulting with legal counsel, the Board of Directors of the Company determined that, given the lapse of time since the last Annual Meeting, it wasresulting in the best interestrecommended Board consisting of all shareholders to hold this Special Meeting of Shareholders.5 rather than 6 directors.
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The approximate date on which this Proxy Statement and the accompanying proxy card are first being sent or given to shareholders is May 17, 2011.
December 24, 2014.
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routine matter.
Name | Age | Positions | ||
Ronald A. Durando | 56 | Chief Executive Officer and Chairman of the Board of Directors | ||
Gustave T. Dotoli (2) | 78 | Chief Operating Officer and Director | ||
Abraham Biderman (1)(2) | 66 | Director | ||
Victor Lawrence | 64 | Director | ||
Martin S. Smiley | 66 | Director, EVP, General Counsel, CFO |
(1) | Member of Audit Committee. |
(2) | Member of Compensation Committee . |
III
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instruments as well as its equity line of credit to raise a minimum of $5 million in order to sustain minimal operations over the next 3 years.
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Common | Stock | ||||||||||||||
Additional | Subtotal | ||||||||||||||
Paid | Equity | ||||||||||||||
$ | .01 Par | Treasury | in | Capital | |||||||||||
Shares | Value | Stock | Capital | Elements | |||||||||||
Balance June 30, 2009 | 870,419,882 | $ | 8,704,197 | $ | (7,973 | ) | $ | 172,861,427 | $ | 181,557,651 | |||||
Conversions of Convertible Debentures plus accrued interest | 232,723,736 | 2,327,238 | - | 1,088,012 | 3,415,250 | ||||||||||
Conversions of Accounts Payable | 26,666,667 | 266,667 | - | (66,667 | ) | 200,000 | |||||||||
Issuance of common stock in private | 30,666,667 | 306,667 | - | (81,667 | ) | 225,000 | |||||||||
placements net of offering cost ($25,000) | |||||||||||||||
Issuance of Common Stock for Services | 1,575,000 | 15,750 | 18,563 | 34,313 | |||||||||||
Issuance of Common Stock for Reparations | 1,700,000 | 17,000 | 18,530 | 35,530 | |||||||||||
Beneficial Conversion feature of Officers' | |||||||||||||||
Notes Payable and conversion of accounts payable | - | - | - | 669,276 | 669,276 | ||||||||||
Cancelation of Capital Notes in Subsidiary Issued in connection with equity | - | - | - | 175,820 | 175,820 | ||||||||||
Balance June 30, 2010 | 1,163,751,952 | $ | 11,637,519 | ($7,973 | ) | $ | 174,683,294 | $ | 186,312,840 | ||||||
Conversions of Convertible Debentures plus accrued interest | 167,605,761 | 1,676,058 | (413,658 | ) | 1,262,400 | ||||||||||
Issuance of Common Stock for Services | 5,075,000 | 50,750 | 12,195 | 62,945 | |||||||||||
Issuance of Common Stock in Private | 25,000,000 | 250,000 | (137,500 | ) | 112,500 | ||||||||||
Placement net of offering cost | |||||||||||||||
Balance December 31, 2010 (Unaudited) | 1,361,432,713 | $ | 13,614,327 | $ | (7,973 | ) | $ | 174,144,331 | $ | 187,750,685 | |||||
Conversions of Convertible Debentures plus accrued interest | 172,847,328 | $ | 1,728,473 | - | (791,716 | ) | 936,758 | ||||||||
Issuance of Common Stock for Services | 10,000,000 | 100,000 | (36,000 | ) | (64,000 | ) | |||||||||
Balance March 18, 2011 (Unaudited) | 1,544,280,041 | $ | 15,442,800 | $ | (7,973 | ) | $ | 173,316,715 | $ | 188,751,553 |
December 3, 2013 (Unaudited)
Consolidated Statement of Changes in Stockholders' Equity (Deficit) (USD $) | Common Stock | Treasury Stock | Additional Paid in Capital | Deferred Compensation, Share-based Payments | Accumulated Deficit | Total | ||||||||||||||||||
Ending Balance at Jun. 30, 2011 | 1,628,502 | (7,973 | ) | 187,431,652 | (194,643,955 | ) | (5,591,774 | ) | ||||||||||||||||
Ending Balance (Shares) at Jun. 30, 2011 (Scenario, Previously Reported | 1,628,502,264 | |||||||||||||||||||||||
Ending Balance (Shares) at Jun. 30, 2011 | 1,628,502,264 | |||||||||||||||||||||||
Issuance of common stock for services | 1,035,000 | 5,485,500 | 6,520,500 | |||||||||||||||||||||
Issuance of common stock for services (Shares) | 1,035,000,000 | 6,520,500 | ||||||||||||||||||||||
Amortization of deferred stock compensation | 141,543 | 141,543 | ||||||||||||||||||||||
Conversions of Convertible Debentures plus accrued interest | 716,962 | 1,097,406 | 1,814,368 | |||||||||||||||||||||
Conversions of Convertible Debentures plus accrued interest (Shares) | 716,962,140 | |||||||||||||||||||||||
Deferred stock compensation | 339,700 | (339,700 | ) | |||||||||||||||||||||
Beneficial Conversion feature of Notes Payable, including $2,320 on Officers Notes Payable | 2,320 | 2,320 | ||||||||||||||||||||||
Issuance of Common Stock to accredited investors in private placement, net of $13,000 fees | 170,000 | (43,000 | ) | 127,000 | ||||||||||||||||||||
Issuance of Common Stock to accredited investors in private placement, net of $13,000 fees (Shares) | 170,000,000 | |||||||||||||||||||||||
Common Stock issued to cover Commitment and Transaction Fees of Equity Line of Credit | 26,000 | 98,800 | 124,800 | |||||||||||||||||||||
Common Stock issued to cover Commitment and Transaction Fees of Equity Line of Credit (Shares) | 26,000,000 | |||||||||||||||||||||||
Common Stock issued to cover the exercise of Put advances under Equity Line of Credit, net of $13,500 transaction fees | 89,587 | 55,841 | 145,428 | |||||||||||||||||||||
Common Stock issued to cover the exercise of Put advances under Equity Line of Credit, net of $13,500 transaction fees (Shares) | 89,587,447 | |||||||||||||||||||||||
Net Income (Loss) | (8,786,952 | ) | (8,786,952 | ) | ||||||||||||||||||||
Ending Balance at Jun. 30, 2012 | 3,666,051 | (7,973 | ) | 194,468,219 | (198,157 | ) | (203,430,907 | ) | (5,502,767 | ) | ||||||||||||||
Ending Balance (Shares) at Jun. 30, 2012 | 3,666,051,851 | |||||||||||||||||||||||
Amortization of deferred stock compensation | 169,852 | 169,852 | ||||||||||||||||||||||
Common Stock issued to cover the exercise of Put advances under Equity Line of Credit, net of $8,920 transaction fees | 42,412 | 37,641 | 80,053 | |||||||||||||||||||||
Common Stock issued to cover the exercise of Put advances under Equity Line of Credit, net of $8,920 transaction fees (Shares). | 42,412,553 | |||||||||||||||||||||||
Conversions of Convertible Debentures plus accrued interest | 40,451 | (1,451 | ) | 39,000 | ||||||||||||||||||||
Conversions of Convertible Debentures plus accrued interest (Shares) | 40,451,179 | |||||||||||||||||||||||
Beneficial Conversion feature of Notes Payable, including $2,320 on Officers Notes Payable | ||||||||||||||||||||||||
Common Stock issued to cover Commitment and Transaction Fees of Equity Line of Credit | ||||||||||||||||||||||||
Issuance of Common Stock to accredited investors in private placements, net of $28,500 fees and $92,000 of reparation expense | 1,322,250 | (743,250 | ) | 579,000 | ||||||||||||||||||||
Issuance of Common Stock to accredited investors in private placements, net of $28,500 fees and $92,000 of reparation expense (Shares) | 1,322,250,000 | |||||||||||||||||||||||
Net Income (Loss) | (260,634 | ) | (260,634 | ) | ||||||||||||||||||||
Ending Balance at Jun. 30, 2013 | $ | 5,071,164 | $ | (7,973 | ) | $ | 193,761,159 | $ | (28,305 | ) | $ | (203,691,541 | ) | $ | (4,895,496 | ) | ||||||||
Ending Balance (Shares) at Jun. 30, 2013 | 5,071,165,583 |
Consolidated Statement of Changes in Stockholders' Equity (Deficit) (USD $) | Common Stock | Treasury Stock | Additional Paid in Capital | Deferred Compensation, Share-based Payments | Accumulated Deficit | Total | ||||||||||||||||||
Beginning Balance at Jun. 30, 2013 | $ | 5,071,164 | $ | (7,973 | ) | $ | 193,761,159 | $ | (28,305 | ) | $ | (203,691,541 | ) | $ | (4,895,496 | ) | ||||||||
Beginning Balance (Shares) at Jun. 30, 2013 | 5,071,165,583 | |||||||||||||||||||||||
Issuance of Common Stock to accredited investors in private placements, net of $0 fees | 215,000 | (129,000 | ) | 86,000 | ||||||||||||||||||||
Issuance of Common Stock to accredited investors in private placements, net of $0 fees (Shares) | 215,000,000 | |||||||||||||||||||||||
Issuance of common stock for services | 58,800 | (5,880 | ) | 52,920 | ||||||||||||||||||||
Issuance of common stock for services (Shares) | 58,800,000 | |||||||||||||||||||||||
Conversions of Convertible Debentures plus accrued interest | 141,761 | (45,735 | ) | 96,026 | ||||||||||||||||||||
Conversions of Convertible Debentures plus accrued interest (Shares) | 141,761,066 | |||||||||||||||||||||||
Amortization of deferred stock compensation | 28,305 | 28,305 | ||||||||||||||||||||||
Net Income (Loss) | (1,073,195 | ) | (1,073,195 | ) | ||||||||||||||||||||
Ending Balance at Sep. 30, 2013 | $ | 5,486,725 | $ | (7,973 | ) | $ | 193,580,544 | $ | 0 | $ | (204,764,736 | ) | $ | (5,705,440 | ) | |||||||||
Ending Balance (Shares) at Sep. 30, 2013 | 5,486,726,649 |
mPHASE TECHNOLOGIES, INC. |
(A Development Stage Company) |
CONSOLIDATED STATEMENT OF CHANGES IN |
ELEMENTS OF SHAREHOLDERS' EQUITY |
FOR THE PERIOD FROM OCTOBER 1, 2013 TO DECEMBER 3, 2013 |
(Unaudited) |
Common | Stock | Treasury | Additional Paid in | |||||||||||||
Shares | $.001 Par Value | Stock | Capital | |||||||||||||
Balance September 30, 2013 | 5,486,726,649 | 5,486,725 | (7,973 | ) | 193,580,544 | |||||||||||
Shares Of Common Stock to Treasury for redistribution | (885,000,000 | ) | (885,000 | ) | 885,000 | |||||||||||
Issuance of Common Stock to accredited investors in private placements, net of $9,500 fees | 572,500,000 | 572,500 | (572,500 | ) | ||||||||||||
Balances at December 3, 2013 | 5,174,226,649 | 5,174,225 | (7,973 | ) | 193,008,044 |
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Smiley as described on page 14.
As further detailed below,
Potential Shares Issuable under Convertible Debt and Debenture Agreements Outstanding with the Company | |||||||||||||||||
as of December 3, 2013, Based upon the Actual (and 20% Changes in the) Market Price of the Company's Stock | |||||||||||||||||
Dollar Amounts of Funding Currently Convertible | Shares Issuable | Shares Issuable under Present Agreements at the Following Prices: | |||||||||||||||
& Convertible during Remainder of the Agreements | under Convertible | ||||||||||||||||
Outstanding as of December 3, 2013 | Agreements as of | Price Decline | Actual Price | Price Increase | |||||||||||||
(including Discounts & Interest Payable) | December 3, 2013 | Illustration-20% | December 3, 2013 | Illustration-20% | |||||||||||||
$ | 0.00136 | $ | 0.0017 | $ | 0.00204 | ||||||||||||
Amount Convertible for Funding Received through December 3, 2013 | $ | 2,291,512 | Shares Issuable for Amounts Funded as of December 3, 2013 | ||||||||||||||
Convertible upon Funding during Remainder of the Outstanding Agreements; (1) | $ | - | Shares Issuable for Amounts to be Funded during Remainder of the Agreements; (1) | 1,684,935,197 | 1,347,948,157 | 1,123,290,131 | |||||||||||
Total Amount Convertible under Outstanding Convertible Agreements if Funded in Full; (1) | $ | 2,291,512 | Total Shares Issuable under Outstanding Convertible Agreements if Funded in Full; (1) | 1,684,935,197 | 1,347,948,157 | 1,123,290,131 |
Nevertheless, it is possible such compliance could be challenged in the future by either regulatory agencies or shareholders. In particular, questions regarding the economic risk of JMJ Financial with respect to the collateral required under the secured note delivered by JMJ Financial in payment of the purchase price for the Company's convertible note could be raised since the secured note contains a prepayment provision allowing JMJ to prepay such note, in full, by returning the convertible note. If a court of law determines that any offer or sale of common stock of the Company received in a conversion by JMJ Financial was not in compliance with Rule 144 then JMJ could be deemed to be an underwriter. The result would be that the Company would have been engaged in a primary offering of common stock through an underwriter in violation of the registration requirements of the Securities Act of 1933, as amended.
The Securities Act of 1933, as amended, requires that any claim for rescission be brought within one year of the violation. The time periods within which claims for rescission must be brought under state securities laws vary and may be two years or more from the date of the violation. At March 18, 2011, approximately 395 million shares of our outstanding common stock issued in respect of our convertible note transactions with JMJ Financial could be subject to rescission with a potential liability approximating $3.94 million,debt including a liability of approximately $384,000 for interest at 10% per annum.
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The following table illustrates the shares issuable at a range of prices from $.00432 , $.00540 and $.00648 for obligations the Company has outstanding as of March 18, 2011.
Potential Shares Issuable under Convertible Debt and Debenture Agreements Outstanding with the Company | |||||||||||||||||||||
as of March 18, 2011, Based upon the Actual (and 20% Changes in the) Market Price of the Company's Stock | |||||||||||||||||||||
Dollar Amounts of Funding Received and | Dollar Amounts of Funding Currently Convertible | Shares Issuable | Shares Issuable under Present Agreements at the Following Prices: | ||||||||||||||||||
Receivable under Convertible Agreements, | & Convertible during Remainder of the Agreements | under Convertible | |||||||||||||||||||
Outstanding as of March 18, 2011 | Outstanding as of March 18, 2011 | Agreements as of | Price Decline | Actual Price | Price Increase | ||||||||||||||||
(including Interest Receivable) | (including Discounts & Interest Payable) | March 18, 2011 | Illustration-20% | March 18, 2011 | Illustration-20% | ||||||||||||||||
$ | 0.00432 | $ | 0.00540 | $ | 0.00648 | ||||||||||||||||
Amount of Funding Received through March 18, 2011 | $ | 2,593,600 | Amount Convertible for Funding Received through March 18, 2011 | $ | 1,208,762 | Shares Issuable for Amounts Funded as of March 18, 2011 | 372,881,790 | 298,305,432 | 248,587,860 | ||||||||||||
Funding Receivable during Remainder of the OutstandingAgreements; (1),(2) | $ | 3,228,600 | Convertible upon Funding during Remainder of theOutstanding Agreements; (1),(2) | $ | 3,535,255 | Shares Issuable for Amounts to be Funded duringRemainder of the Agreements; (1),(2) | 1,091,128,201 | 872,902,561 | 727,418,800 | ||||||||||||
Total Amount of Funding under Outstanding ConvertibleAgreements if Funded in Full; (1),(2) | $ | 5,822,200 | Total Amount Convertible under Outstanding ConvertibleAgreements if Funded in Full; (1),(2) | $ | 4,744,017 | Total Shares Issuable under Outstanding ConvertibleAgreements if Funded in Full; (1),(2) | 1,464,009,991 | 1,171,207,993 | 976,006,660 |
(1) Does not include funding receivable of $1,890,291 from, and convertible note payable of $1,884,175 to, La Jolla Cove Investors. The option to fund is not available to that holder when the Company’s stock is below $.04. Also does not include $250,000 each of funding receivable or $275,000 each of convertible notes payable to J. Fife under Arrangement #7 below in respect of the second and third convertible notes.(2) Amount of total funding under outstanding convertible agreements may be limited by the availability of authorized shares of the Company’s common stock.
CONVERTIBLE DEBENTURES OUTSTANDING BETWEEN JULY 1, 2010 and MARCH 18, 2011
Arrangement #1 (LaJolla Cove Investors Inc,)
On September 11, 2008, the Company issued a 7.25% convertible debenture in the principal amount of $2,000,000 to La Jolla Cove Investors, Inc. Interest only was payable monthly with any unpaid principal plus accrued interest payable at maturity on September 30, 2011. The Company received $200,000 in cash plus an 8.25% secured promissory note from the debenture holder in the principal amount of $1,800,000.
Conversion of outstanding debenturesthereon was converted into common shares was previously at the option of the holder at a price equal to the dollar amount of the debenture divided by the lesser of $.35 per share or 80% of the three lowest volume weighted average prices during a 20 day trading period. The holder converted $190,000 of the principal amount of the convertible debenture into 21,714,285141,761,066 shares of common stock asby holders of March 18, 2011.
If the price of the Company’s common stock was $.04 per share or greater priorConvertible Securities.
On March 16, 2011, the holder and the Company entered into a termination agreement whereby $1,800,000 of the principal of both the note receivable and the convertible debenture, plus $90,291 in accrued interest receivable and $84,175 in accrued interest payable was cancelled. Additionally in connection with the termination, the Company paid the holder $17,000 and assigned to a consultant engaged by the Company the unconverted portion of the convertible debenture in the amount of $10,000 which had been fully funded in cash and which remains outstanding at March 18, 2011. Based upon the price of the Company’s common stock on March 18, 2011 of $.0054 per share, the current holder could convert the remaining principal amount plus interest of this convertible note into approximately 2,314,815 shares of common stock.
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summarized below.
On August 19, 2009, the Company issued a 12% convertible note maturing on August 10, 2012 in the principal amount of $1,870,000 to JMJ Financial for a purchase price of $1,700,000. The Company initially received $250,000 in cash as partial payment of the purchase price for the convertible note plus a 13.2% secured promissory note maturing on August 10, 2012 in the amount of $1,450,000. To date the Company has received a total of $1,924,400 cash representing payment in full of the $1,700,000 purchase price and $224,400 in contract interest. The number of shares into which this convertible note can be converted is equal to the dollar amount of the debenture divided by 75% of the lowest trading price during the 20 day trading period prior to conversion. Through March 18, 2011, the Company has issued 176,092,858 shares of common stock to the holder upon conversions in respect of $2,094,400 representing satisfaction in full of the convertible note in the principal amount of $1,870,000 and $224,400 in contract interest. Accordingly, effective March 18, 2011, all obligations under this arrangement have been satisfied.
Arrangement #3 (JMJ Financial, Inc.
On September 30, 2009, the Company issued a 12% convertible note maturing on September 23, 2012 in the principal amount of $1,200,000 to JMJ Financial for a purchase price of $1,100,000. In payment of the purchase price for the convertible note, the Company initially received a 13.1% secured promissory note maturing on September 23, 2012 in the amount of $1,100,000, which outstanding principal amount was reduced immediately thereafter to $950,000 by receipt of a cash payment in the amount of $150,000. Conversion of outstanding principal into shares of common stock is at the option of the holder. The number of shares into which this note can be converted is equal to the dollar amount of the note divided by 75% of the lowest trade price during the 20 day trading period prior to conversion.
To date the Company has received a total of $1,244,100 of cash, representing the purchase price of $1,100,000 for the convertible note plus $144,000 of contract interest, in full and has issued 228,500,000 shares of common stock to the holder upon conversions of $1,305,750 of principal and interest through March 18, 2011. The remaining $41,250 due under the convertible note including interest to the holder may be converted by the holder into additional shares of common stock. Based upon the price of the Company’s common stock on March 18, 2011 of $.0054 per share, the holder could convert the remaining principal amount plus interest of this convertible note into approximately 10,185,185 shares of common stock.
Arrangement #4 (JMJ Financial, Inc.)
On November 17, 2009, the Company received a total of $186,000 of proceeds in connection with a new financing agreement with JMJ Financial. This transaction consistsconsisted of the following: 1) a convertible note in the amount of $1,200,000 plus a one-time interest factor of 12% ($144,000) and a maturity date of September 23, 2012 and (2) a secured promissory note in the amount of $1,100,000 plus a one-time interest rate factor of 13.2% ($144,000)144,000 each) and a maturity date of September 23, 2012 due from the holder of the convertible note. Conversion of outstanding principal into shares of common stock is at the option of the holder. The number of shares into which this note can be converted is equal to the dollar amount of the note divided by 75% of the lowest trade price during the 20 day trading period prior to conversion.
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To date the Company has received a total of $439,500$639,500 in cash and has issued no322,187,500 shares of common stock to the holder upon conversions.conversions of $325,440 of principle and $994,766 of conversion fees. The remaining $804,500$604,600 of cash which was to be received from the holder for the balance of the purchase price for the convertible note plus accrued and unpaid interest iswas to be convertible into shares of common stock at the option of the holder. Upon receipt,Advances under this agreement ceased in full, of cash by the Company equaling the purchase price of the convertible note plus interest or any portion thereof payable through maturity, the holder may convert such portion of the total amount of interest funded that would accrue to maturity into additional shares of common stock . April 2011.
Arrangement #5 (JMJstock at the full contract value; of which the derivative liability associated with this arrangement is calculated.
On December 15, 2009 the Company entered into a new financing agreement with JMJ Financial that consists of the following: 1) a convertible note issued by the Company in the amount of $1,500,000 plus a one timeone-time interest factor of 12% ($180,000) and a maturity date of December 15,December15, 2012 and (2) a secured promissory note in the amount of $1,400,000 plus a one timeone-time interest rate factor of 13.2% ($180,000 ) and a maturity date of December 15, 2012 due from the holder of the convertible note. Conversion of outstanding principal into shares of common stock is at the option of the holder. The number of shares into which this note can be converted is equal to the dollar amount of the note divided by 75% of the lowest trade price during the 20 day trading period prior to conversion.
To date the Company has received a total of $300,000 cash and has issued no shares of common stock to the holder upon conversions. The remaining $1,280,000 of cash to be received from the holder for the balance of the purchase price for the convertible note plus accrued and unpaid interest is convertible into shares of common stock at the option of the holder. Upon receipt,Advances under this agreement ceased in full,April 2011.
Arrangement #6 (JMJ
On April 5, 2010, the Company entered into a new financing agreement with JMJ Financial that consists of the following: 1) a convertible note issued by the Company in the principal amount of $1,200,000 plus a one timeone-time interest factor of 12% ($144,000) and a maturity date of December 15, 2012, and (2) a secured promissory note from the holder of the convertible note in the amount of $1,100,000 plus a onetimeone-time interest rate factor of 13.2% ($144,000)144,000 each) and a maturity date of December 15, 2012. Conversion of outstanding principal into shares of common stock is at the option of the holder. The number of shares into which this note can be converted is equal to the dollar amount of the note divided by 75% of the lowest trade price during the 20 day trading period prior to conversion.
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To date the Company has received a total of $100,000 cash and has issued no shares of common stock to the holder upon conversions. The remaining $1,144,000 of cash to be received from the holder for the balance of the purchase price for the convertible note plus accrued and unpaid interest is convertible into shares of common stock at the option of the holder. Upon receipt,Advances under this agreement ceased in full,April 2011.
Arrangement #7 (J. Fife)
On March 3, 2010,
The second and third convertible notes, each in the principal amount of $275,000, each bearing interestcumulative conversions, at the rate of 7.5%, and with maturity dates respectively of three and four years from the date of issuance were issued in exchange for two secured promissory notes issued by J. Fife in the amount of $250,000 each. These subsequent second and third convertible notes become executable upon the conversion or payment in full of the first note above.
Upon payment of all amounts owed under each of the secured promissory notes, the convertible notes are convertible into common stock of the Company at the option of the holder at a price equal to the dollar amount of the note being converted divided by 75% of the three lowest volume weighted average prices during the 20 day trading period immediately preceding the date of conversion.
On September 1, 2010 and September 16, 2010 the holder converted $75,000 and $90,000 of principal on the first convertible note into 8,086,253 and 9,847,285 shares respectively of common stock of the Company. On October 22, 2010, the Company entered into a Forbearance Agreement with J. Fife in which the lender agreed not to convert any additional amounts under the convertible notes until January 15, 2011 in exchange for increasing the original principal amount of those notes by 10%. On January 18, 2011, January 24, 2011 and March 18, 2011 the holder converted $65,000 and $64,008 and $31,600 of principal on the first convertible note into 9,923,664, 9,923,664 and 8,000,000 shares respectively of common stock of the Company.funded. Based upon the price of the Company’s common stock on March 18,June 30, 2011, the net liability of $.0054 per share, the holder could then convert the remaining principal amount plus interest of its fundedthis note is convertible note, as adjusted under the terms of the Forbearance Agreement, into approximately 80,189,47419,047,619 shares of common stock.
From At the commitment date, the derivative value of the embedded conversion feature of such security was $421,891 and the debt discount was valued at $521,891. As of June 30, 2011, this value was calculated to be $486,795. During the year ended June 30, 2011, amortization of debt discount amounted to $378,761, reducing the balance to $ 100,000.
18
were $29,500.
$127,000 of net proceeds. The aggregate fees for such placements were $13,000.
$579,000, that included $92,000 of reparations. The aggregate fees for such placements were $28,500.
In connection with private placements
None of the investors that have been issued reparation shares in the fiscal years ended June 30, 2008, June 30, 2009 and June 30, 2010 or forshares. During the period from July 1, 20102013 through the date hereof are “related persons” as defined in Item 404 of Regulation S-K.
During the fiscal year ended June 30, 2008,December 3, 2013 the Company issued 3,163,741no reparation shares valued at $230,923 to four investors unrelated to the Company that made new investments totaling $259,500 for the issuance of an aggregate of 3,550,000 additional restricted shares of common stock of the Company. The reparation shares were adjustments to private placements in which the four investors had made investments of an aggregate of $1,469,723 in previous fiscal years for the issuance of 10,859,412 restricted shares of common stock of the Company.
On April 1, 2008, the Company amended the terms of two warrants issued by the Company on December 12, 2006, to purchase 11,111,112 shares of the Company's common stock and also issued the warrant-holder a new replacement warrant at a fixed price of $.14 per share to purchase up to 11,111,112 shares of common stock that can be exercised at any time through April 1, 2013. The amendment revised the exercise prices of the two warrants previously issued by the Company. The increase in value of the amended warrants was estimated to be $161,111. This was recorded as reparation expense in respect of the unrelated warrant-holder who had made an investment of $722,222 for the issuance of 11,111,112 restricted shares of common stock of the Company upon the exercise of the revised warrants. Previously, on December 12, 2006, the warrant-holder made an investment of $750,000 for the issuance of 5,555,556 restricted shares of common stock of the Company and the two warrants which were amended. As a result of the reparation shares valued at $230,923 and the change in value of the amended warrants estimated to be $161,111, the Company recorded reparation expense of $392,034 for the fiscal year ended June 30, 2008. (Further details in respect of this investor are provided in the table below regarding reparation expense for the fiscal year ended June 30, 2008.)
19
During the fiscal year ended June 30, 2009, the Company issued 16,522,000 reparation shares valued at $380,172 to three investors unrelated to the Company that made new investments of $400,000 for the issuance of 24,000,000 additional restricted shares of common stock of the Company. The reparation shares were adjustments to private placements in which the three investors had made investments of an aggregate of $1,770,000 in previous fiscal years for the issuance of 15,232,500 restricted shares of common stock of the Company. Additionally, on each of April 15, 2009, May 15, 2009, and June 15, 2009, the Company issued 1,000,000, 1,000,000 and 1,000,000 reparation shares valued at an aggregate of $52,000 to a fourth unrelated investor to extend three short term notes that would otherwise have come due. Previously, during the fiscal years ended June 30, 2007 and 2008, the holder of these notes had made investments of $1,126,723 for the issuance of 13,000,000 restricted shares of common stock of the Company. As a result of the issuance of the reparation shares valued at $380,172 to the three investors that made new investments and the reparation shares valued at $52,000 to extend the three short term notes, the Company recorded reparation expense of $432,172 for the fiscal year ended June 30, 2009. (Further details in respect of each investor are provided in the table below regarding reparation expense for the fiscal year ended June 30, 2009.)
During the fiscal year ended June 30, 2010 the Company issued 1,700,000 reparation shares in November 2009 and recorded reparation expense of $35,530, the value of the shares on the issuance date, to a single unrelated investor. The reparation shares were an adjustment to a private placement in which this investor had made an investment of $100,000 on May 29, 2008 of fiscal year ended June 30, 2008 for an original issuance of 2,000,000 restricted shares of common stock of the Company at $.05 per share.
In prior years, reparation shares had been issued to Janifast, Ltd. and Microphase Corporation, which are “related persons” as defined in Item 404 of Regulation S-K. Mr. Durando, President and CEO of the Company, owns a controlling interest and is a director and President of Janifast Limited. Mr. Durando and Mr. Dotoli are officers of Microphase Corporation. Mr. Dotoli was also a shareholder of Janifast Limited prior to its discontinuing operations in March of 2009. Mr. Ergul owns a controlling interest and is a director of Microphase Corporation and a director and shareholder of Janifast Limited. Microphase Corporation is a significant shareholder of the Company. Janifast Limited had been a significant shareholder of the Company until September 19, 2009, when it transferred to Mr. Durando 11,735,584 shares, representing all the shares of the Company held by Janifast, in consideration of the cancellation of $181,901.57 in partial loan obligations to Mr. Durando in connection with the plan of its liquidation, which amount was derived based on a conversion price of $.0155 per share, the closing price of the Company's common stock on that date.During the fiscal year ended June 30, 2007, Janifast Ltd. was issued 769,231 shares valued at $138,462 for reparations of an investment of $171,000 for 950,000 shares made in fiscal year ended June 30, 2006, upon a new investment made by conversion of accounts payable concurrently with and based on substantially the same terms as private placements with unrelated accredited investors. During the fiscal year ended June 30, 2006, the Company issued 3,931,382 shares valued at $728,434 to Janifast Ltd and 4,504,542 shares valued at $834,633 to Microphase Corporations for reparations of investments made in prior years upon a new investment made by conversion of accounts payable concurrently with and based on substantially the same terms as private placements with unrelated accredited investors. In each instance, those prior investments were likewise effected by way of conversion of accounts payable concurrently with and upon terms comparable to private placements with unrelated accredited investors. Those prior investments were as follows: for fiscal year ended June 30, 2005, the Company issued 1,000,000 shares to Janifast Ltd valued at $200,000 and 1,250,000 shares to Microphase valued at $250,000; for the fiscal year ended June 30, 2003, the Company issued to Janifast Ltd 1,500,000 shares valued at $360,000 and the Company issued to Microphase Corporation 4,033,333 shares valued at $920,000; for the fiscal year ended June 30, 2002, the Company issued to Janifast Ltd. 3,450,000 shares valued at $720,000 and 2,700,000 shares to Microphase Corporation valued at $740,000; and for the fiscal year ended June 30, 2001, the Company issued to Janifast Ltd. 2,400,000 shares valued at $1,200,000 and issued to Microphase Corporation 1,278,000 shares valued at $639,000.
20
Details of reparation expense incurred in prior years with related parties is as follows:
mPhase Corporation Summary of Reparations Issued to Janifast, Ltd. And MicrophaseCorporation, Related Parties as Defined in Item 404 of Regulation S-K
Related Party | Fiscal year | New Investment | Prior Investment(s) | Common Stock Issued for Reparations | Total Reparations Expense to Related Parties | |||||||||||||||||||||||||||||||
Date | Amount | Shares | Date | Amount | Shares | Date | Value | Shares | ||||||||||||||||||||||||||||
FYE 6-07 | ||||||||||||||||||||||||||||||||||||
Janifast, Ltd. | June 30, 2007 | 3/31/2007 | $ | 108,000 | 830,769 | 12/31/2005 | $ | 171,000 | 950,000 | 3/31/2007 | $ | 138,462 | 769,231 | FYE 6-07 | $ | 138,462 | ||||||||||||||||||||
Sub-total Related Parties FYE June 30, 2007 | $ | 108,000 | 830,769 | $ | 171,000 | 950,000 | $ | 138,462 | 769,231 | $ | 138,462 | |||||||||||||||||||||||||
FYE 6-06 | ||||||||||||||||||||||||||||||||||||
Janifast, Ltd. | June 30, 2006 | 12/31/2005 | $ | 171,000 | 950,000 | 12/31/2004 | $ | 200,000 | 1,000,000 | 12/31/2005 | $ | 728,434 | 3,931,382 | FYE 6-06 | $ | 728,434 | ||||||||||||||||||||
9/16/2002 | $ | 360,000 | 1,500,000 | |||||||||||||||||||||||||||||||||
6/26/2002 | $ | 360,000 | 2,250,000 | |||||||||||||||||||||||||||||||||
12/28/2001 | $ | 360,000 | 1,200,000 | |||||||||||||||||||||||||||||||||
6/25/2001 | $ | 1,200,000 | 2,400,000 | |||||||||||||||||||||||||||||||||
Sub-total Janifast, ltd FYE June 30, 2006 | $ | 171,000 | 950,000 | $ | 2,480,000 | 8,350,000 | $ | 728,434 | 3,931,382 | $ | 728,434 | |||||||||||||||||||||||||
Microphase Corporation | June 30, 2006 | 12/31/2005 | $ | 369,000 | 2,050,000 | 12/31/2004 | $ | 250,000 | 1,500,000 | 12/31/2005 | $ | 834,633 | 4,504,542 | FYE 6-06 | $ | 834,633 | ||||||||||||||||||||
3/31/2003 | $ | 300,000 | 1,000,000 | |||||||||||||||||||||||||||||||||
9/16/2002 | $ | 620,000 | 3,033,333 | |||||||||||||||||||||||||||||||||
6/26/2002 | $ | 80,000 | 500,000 | |||||||||||||||||||||||||||||||||
12/28/2001 | $ | 600,000 | 2,000,000 | |||||||||||||||||||||||||||||||||
12/19/2001 | $ | 60,000 | 200,000 | |||||||||||||||||||||||||||||||||
6/25/2001 | $ | 639,000 | 1,278,000 | |||||||||||||||||||||||||||||||||
Sub-total Microphase Corp. FYE June 30, 2006 | $ | 369,000 | 2,050,000 | $ | 2,549,000 | 9,511,333 | $ | 834,633 | 4,504,542 | $ | 834,633 | |||||||||||||||||||||||||
Sub-total Related Parties FYE June 30, 2006 | $ | 540,000 | 3,000,000 | $ | 5,029,000 | 17,861,333 | $ | 1,563,067 | 8,435,924 | $ | 1,563,067 | |||||||||||||||||||||||||
Total Reparation Information for Related Parties From Inception To Date | $ | 648,000 | 3,830,769 | $ | 5,200,000 | 18,811,333 | $ | 1,701,529 | 9,205,155 | $ | 1,701,529 |
The reparations issued to related parties described in the above table were made for additional investments in the form of conversion of trade payables concurrent with and made on the same terms as private placements of equity with accredited investors.
The Company had no contractual or legal obligation to issue shares for reparations and determined the issuance of each on a case by case basis as negotiated with its investor. As of the date hereof, there are no current agreements for the issuance of any additional reparation shares. The Company is unable to predict whether conditions in the financial markets in the future may require it to issue additional reparation shares in order to attract monies in future private placements of its common stock.
The determination of the quantity of reparation shares for the corrective issuance of each reparation for selected prior investments in private placements of the Company’s common stock was negotiated with each accredited investor at the time the subsequent new investment was made. This quantity was based on several factors including: (i) the market value of the Company’s common stock at the time of the prior investment in relation to the market value at the date of the new investment; (ii) the dollar amount of the prior investment in relation to the dollar amount of the new investment; and (iii) the current terms of private placements of common stock being offered by the Company to other accredited investors. All reparation costs were valued as of the date of the new investment. In no case did the corrective issuance exceed the reduction in the market value of the prior issuance.
Details of reparation expenses for the last three fiscal years are as follows:
For the fiscal year ended June 30, 2008
ADDITIONAL NEW COMMON | TOTAL | ||||||||||||||||||||||||||||||||
NEW | common stock issued for | PRIOR | SHARES SUBJECT TO ISSUANCE | REPARATION | |||||||||||||||||||||||||||||
INVESTMENT FYE 6-30-08 | REPARATIONS FYE 6-30-08 | INVESTMENT | UNDER REPLACEMENT | EXPENSE | |||||||||||||||||||||||||||||
DATE | SHARES | AMOUNT | �� | SHARES | VALUE | DATE(S) | SHARES | AMOUNT | WARRANT(S) | VALUE | FYE 6-30-08 | ||||||||||||||||||||||
INVESTOR 1 | 9/30/2007 | 1,000,000 | $ | 100,000 | 1,349,842 | $ | 146,204 | fye 6-30-06 & fye 6-30-07,as follows: | 6,038,021 | $ | 1,026,723 | - | $ | - | $ | 146,204 | |||||||||||||||||
a) 1-19-2006 | 3,000,000 | $ | 600,000 | ||||||||||||||||||||||||||||||
b) 8-24-2006 | 2,268,790 | $ | 326,723 | ||||||||||||||||||||||||||||||
c) 5-28-2007 | 769,231 | 100,000 | |||||||||||||||||||||||||||||||
INVESTOR 2 | 9/30/2007 | - | $ | 50,000 | 444,444 | $ | 22,222 | fye 6-30-07 as follows | 769,231 | $ | 100,000 | - | $ | - | $ | 22,222 | |||||||||||||||||
a) 5-25-2007 | 769,231 | $ | 100,000 | ||||||||||||||||||||||||||||||
INVESTOR 3 | 12/31/2007 | 350,000 | $ | 24,500 | 792,857 | $ | 30,778 | fye 6-30-07 as follows : | 275,000 | $ | 55,000 | - | $ | - | $ | 30,778 | |||||||||||||||||
a) 11-30-2006 | 275,000 | $ | 55,000 | ||||||||||||||||||||||||||||||
INVESTOR 4 | 4/8/2008 | 1,700,000 | $ | 85,000 | 576,598 | $ | 31,719 | fye 6-30-06 & fye 6-30-07,as follows: | 2,153,846 | $ | 385,000 | - | $ | - | $ | 31,719 | |||||||||||||||||
a) 1-20-2006 | 1,500,000 | $ | 300,000 | ||||||||||||||||||||||||||||||
b) 5-15-2007 | 653,846 | $ | 85,000 | ||||||||||||||||||||||||||||||
INVESTOR 5 | 4/1/2008 | 11,111,112 | $ | 722,222 | - | $ | - | fye 6-30-07 as follows: | 5,555,556 | $ | 750,000 | 11,111,112 | $ | 161,111 | $ | 161,111 | |||||||||||||||||
a)12-12-2006 | 5,555,556 | $ | 750,000 | ||||||||||||||||||||||||||||||
TOTALS | *** | 14,661,112 | $ | 981,722** | 3,163,741 | $ | 230,923 | 14,791,654 | $ | 2,316,723 | 11,111,112* | $ | 161,111* | $ | 392,034 |
*** The date indicated was the execution and funding date of the new investment and the date the corresponding reparation shares or warrant(s) were issued.
** Proceeds received in cash and included in our statements of shareholders equity as proceeds of current year private placements and exercise of warrants.
* Issued as an inducement to an existing warrant-holder to make an investment of $722,222 based upon the exercise of previously issued warrants, as modified. Reparation costs associated with this warrant were measured at the difference between the original value of the warrants and the value of the warrant after modification, based upon the Black-Scholes model.
21
The warrant-holder exercised its right to purchase 11,111,112 shares of the Company's common stock under two previously issued warrants, at a price revised from each of the original prices in each of the two warrants. The previously outstanding warrants were fixed price warrants, each to purchase up to 555,555,556 shares of the Company's common stock at an exercise price of $.15 and $.18, respectively, through December 12, 2011. The revised prices of $.062 and $.067 per share, or approximately $.065 for all shares from both warrants, was based on 50% of the share price of the Company's common stock on March 28, 2009. As a condition to the re-pricing of the strike price of the warrants the warrant-holder was required to exercise such warrants by April 1, 2008 and the Company issued the warrant-holder a new replacement warrant at a fixed price of $.14 per share for 11,111,112 shares of common stock that can be exercised at any time through April 1, 2013.
For the fiscal year ended June 30, 2009
ADDITIONAL NEW COMMON | TOTAL | ||||||||||||||||||||||||||||||||
NEW | common stock issued for | PRIOR | SHARES SUBJECT TO ISSUANCE | REPARATION | |||||||||||||||||||||||||||||
INVESTMENT FYE 6-30-09 | REPARATIONS FYE 6-30-09 | INVESTMENT (s) | UNDER REPLACEMENT | EXPENSE | |||||||||||||||||||||||||||||
DATE | SHARES | AMOUNT | SHARES | AMOUNT | DATE(S) | SHARES | AMOUNT | WARRANT(S) | VALUE | FYE 6-30-09 | |||||||||||||||||||||||
INVESTOR 1 | 9/30/2008 | 4,000,000 | $ | 200,000 | 3,862,000 | $ | 216,689 | fye 6-30-07, as follows : | 6,232,500 | $ | 1,000,000 | - | $ | - | $ | 216,689 | |||||||||||||||||
a) 11-10-2006 | 2,732,500 | $ | 475,000 | ||||||||||||||||||||||||||||||
b) 12-28-2006 | 1,500,000 | $ | 225,000 | ||||||||||||||||||||||||||||||
c) 2-08-2007 | 2,000,000 | $ | 300,000 | ||||||||||||||||||||||||||||||
INVESTOR 2 | 3/25/2009 | 15,000,000 | $ | 150,000 | 7,660,000 | $ | 99,483 | fye 6-30-08 , as follows: | 4,000,000 | $ | 200,000 | - | $ | - | $ | 99,483 | |||||||||||||||||
a) 4-08-2008 | 4,000,000 | 200,000 | |||||||||||||||||||||||||||||||
INVESTOR 3* | 4/15/2009 | - | $ | - | 1,000,000 | $ | 12,000 | fye 6-30-08 & fye 6-30-07,as follows: | 13,000,000 | $ | 1,126,723 | - | $ | - | $ | 12,000 | |||||||||||||||||
a) 2-26-2007 | 4,000,000 | $ | 576,723 | ||||||||||||||||||||||||||||||
b) 10-31-2007 | 1,000,000 | $ | 100,000 | ||||||||||||||||||||||||||||||
c) 4-04-2008 | 8,000,000 | $ | 400,000 | ||||||||||||||||||||||||||||||
INVESTOR 3* | 5/15/2009 | - | $ | - | 1,000,000 | $ | 20,000 | $ | - | - | $ | - | $ | 20,000 | |||||||||||||||||||
INVESTOR 3* | 6/15/2009 | - | $ | - | 1,000,000 | $ | 20,000 | $ | - | - | $ | - | $ | 20,000 | |||||||||||||||||||
INVESTOR 4 | 6/29/2009 | 5,000,000 | $ | 50,000 | 5,000,000 | $ | 64,000 | fye 6-30-08, as follows | 5,000,000 | $ | 250,000 | - | $ | - | $ | 64,000 | |||||||||||||||||
a) 4-04-2008 | 5,000,000 | $ | 250,000 | $ | - | $ | - | ||||||||||||||||||||||||||
TOTALS | *** | 24,000,000 | $ | 400,000** | 19,522,000 | $ | 432,172 | 28,232,500 | $ | 2,576,723 | - | $ | 432,172 | $ | 432,172 |
*** The date indicated was the execution and funding date of the new investment and the date the corresponding reparation shares or warrant(s) were issued.
** Proceeds received in cash and included in our statements of shareholders equity as proceeds of current year private placements.
* Investor reparation of prior investments to extend a current loan. The loan bore an interest rate of 12% and was originally due on April 15, 2009. The loan was extended until April 15, 2010 and as of October 12, 2010, no amounts remained outstanding on this loan
As previously noted, during the fiscal year ended June 30, 2010 the Company issued 1,700,000 reparation shares in November 2009 and recorded reparation expense of $35,530, the value of the shares on the issuance date, to a single unrelated investor. The reparation shares were an adjustment to a private placement in which this investor had made an investment of $100,000 on May 29, 2008 of fiscal year ended June 30, 2008 for an original issuance of 2,000,000 restricted shares of common stock of the Company at $.05 per share.
22
Estimated Allocation of | |||||
Fully Diluted | Officer | Existing | |||
Outstanding Shares | Convertible | Convertible | Equity Compensation | ||
of Common Stock, | Notes on | Debt Arrangements | |||
Warrants and | based on | ||||
Options as of | price of | ||||
common | |||||
2013 | |||||
23
The following table sets forth as of April 12, 2011 certain information regarding the beneficial ownership of our shares:
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |||
1 | by each person who is known by us to be the beneficial owner of more than five percent (5%) of our outstanding common stock; | ||
2 | each of our directors; | ||
3 | by each executive officer named in the Summary Compensation Table; and | ||
4 | by all of our directors and executive officers as a group. |
AFFILIATES (1 & 2) | Shares | Warrants | Options | TOTAL | % |
Victor Lawrence | 0 | 0 | 0 | - | - |
Anthony Guerino | 0 | 0 | 765,000 | 765,000 | 0.05% |
Abraham Biderman | 5,868,131 | 0 | 1,065,000 | 6,933,131 | 0.44% |
Gustave Dotoli (4) | 23,157,805 | 33,049,649 | 35,775,000 | 91,982,454 | 5.56% |
Ron Durando (3) (4) | 56,043,992 | 52,553,259 | 61,175,000 | 169,772,251 | 9.99% |
Ned Ergul | 2,850,000 | 0 | 2,655,000 | 5,505,000 | 0.35% |
Martin Smiley (4) | 18,660,629 | 25,668,823 | 19,700,000 | 64,029,452 | 3.92% |
Microphase Corporation(5) (6) | 42,726,686 | 4,322,222 | 0 | 47,048,908 | 2.88% |
Total Affiliates | 149,307,243 | 115,593,953 | 121,135,000 | 386,036,196 | 23.19% |
(1) Unless otherwise indicated, the address of each beneficial owner is 587 Connecticut Avenue, Norwalk, Connecticut 06854-1711.
AFFILIATES (1 & 2) | Shares | Warrants/ conversion rights | Options | TOTAL | % | |||||||||||||||
Victor Lawrence | 10,100,000 | - | - | 10,100,000 | 0.20 | % | ||||||||||||||
Anthony Guerino | - | - | - | 0 | 0.00 | % | ||||||||||||||
Abraham Biderman | 45,226,890 | - | - | 45,226,890 | 0.87 | % | ||||||||||||||
Gustave Dotoli (3) | 23,107,805 | 103,710,948 | - | 126,818,753 | 2.40 | % | ||||||||||||||
Ron Durando (3)(6) | 157,241,922 | 149,101,495 | - | 306,343,417 | 5.75 | % | ||||||||||||||
Ned Ergul | 2,850,000 | - | - | 2,850,000 | 0.06 | % | ||||||||||||||
Martin Smiley (3) | 18,760,629 | 90,259,588 | - | 109,020,217 | 2.07 | % | ||||||||||||||
Microphase Corporation(4) (5) | 42,726,686 | - | - | 42,726,686 | 0.83 | % | ||||||||||||||
Total Affiliates | 300,013,932 | 343,072,031 | - | 643,085,963 | 12.18% |
(1) Unless otherwise indicated, the address of each beneficial owner is 587 Connecticut Avenue, Norwalk, Connecticut 06854–1711. |
(2) Unless otherwise indicated, mPhase believes that all persons named in the table have sole voting and investment power with respect to all shares of the Company beneficially owned by them. The percentage for each beneficial owner listed above is based on 5,174,226,649 shares outstanding on December 3, 2013, and, with respect to each person holding options or warrants to purchase shares that are exercisable within 60 days after December 3, 2013, the number of options and warrants are deemed to be outstanding and beneficially owned by the person for the purpose of computing such person's percentage ownership, but are not deemed to be outstanding for the purpose of computing the percentage ownership p of any other person. |
(3) Includes as warrants 149,101,495 shares, 103,710,948 shares and 90,259,588 shares issuable for loans plus accrued interest, if converted, for Messrs. Durando, Dotoli and Smiley respectively. Such conversions are subject to availability of authorized shares. On April 27, 2009, and amended as of August 25, 2011; the board of directors consolidated all amounts outstanding for all obligations to the officers, including unpaid compensation, and authorized the issuance of new notes with a term of five years, an interest rate of 12% and a conversion feature at a price of $.0040 on amounts outstanding plus accrued interest thereon. During the fiscal years ended June 30, 2009 , June 30, 2010 and in the three months ended September 30, 2011, the Company recorded $914,060 , $82,609 and $2,360, respectively, of beneficial interest expense with respect to the conversion feature. |
(4) Messrs. Ergul and Durando and certain members of their families may be deemed to exercise shared majority voting and dispositive power for Microphase Corporation through their indirect ownership interests in Microphase Holding Company, LLC which owns approximately 70.0% of Microphase common stock. The holding company is owned 43.9% by the Ergul Family Limited Partnership, which is wholly owned by Mr. Ergul, and his family, and 50% by Edson Realty Inc. which is 83% owned by Mr. Durando, 12% by Mr. Ergul and 5% by three unrelated shareholders. Mr. Durando owns an additional 1.0% of Microphase common stock. |
(5) Includes 26,666,667 shares issued in June 2009 in connection with which the Company, during the quarter ended September 30, 2009, recorded $586,667 in beneficial interest expense in respect of the conversion of $200,000 of accounts payable. |
(6) Includes 100,000 shares owned by Karen Durando, his wife. Does not include 42,726,666 shares owned by Microphase Corporation. |
(2) Unless otherwise indicated, mPhase believes that all persons named in the table have sole voting and investment power with respect to all shares of the Company beneficially owned by them. The percentage for each beneficial owner listed above is based on shares outstanding on April 12, 2011, and, with respect to each person holding options or warrants to purchase shares that are exercisable within 60 days after April 12, 2011, the number of options and warrants are deemed to be outstanding and beneficially owned by the person for the purpose of computing such person's percentage ownership, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
(3) Includes 1,816,148 shares held by Durando Investment LLC. Shares held by Janifast which Mr. Durando controls are stated separately.
(4) Includes as warrants 51,603,259 shares, 33,049,649 shares and 22,925,377 shares issuable for unpaid compensation and loans plus accrued interest, if converted, for Messrs. Durando, Dotoli and Smiley respectively. Such conversions are subject to availability of authorized shares. On April 27, 2009, the board of directors consolidated all amounts outstanding for all obligations to the officers, including unpaid compensation, and authorized the issuance of new notes with a term of five years, an interest rate of 12% and a conversion feature at a price of $.0075 on amounts outstanding plus accrued interest thereon. During the fiscal years ended June 30, 2009 and June 30, 2010, the Company recorded $914,060 and $82,609, respectively, of beneficial interest expense with respect to the conversion feature.
(5) Messrs. Ergul and Durando and certain members of their families may be deemed to exercise shared majority voting and dispositive power for Microphase Corporation through their indirect ownership interests in Microphase Holding Company, LLC which owns 88.4% of Microphase common stock. The holding company is owned 43.9% by the Ergul Family Limited Partnership, which is wholly owned by Mr. Ergul, his wife and daughters, and 50% by Edson Realty Inc. which is 83% owned by Mr. Durando, 12% by Mr. Ergul and 5% by three unrelated shareholders. Mr. Durando owns an additional 1.6% of Microphase common stock in his individual name.
(6) Includes 26,666,667 shares issued in June 2009 in connection with which the Company, during the quarter ended September 30, 2009, recorded $586,667 in beneficial interest expense in respect of the conversion of $200,000 of accounts payable.
25
Name of Individual | Age | Position with the Company and Subsidiaries | ||
Ronald A. Durando | 56 | Chief Executive Officer, Chairman of the Board | ||
Gustave T. Dotoli (2) | 78 | Chief Operating Officer, Director | ||
Victor | 64 | Director | ||
Anthony Guerino | 65 | Director | ||
Abraham Biderman (1)(2) | 66 | Director | ||
Martin Smiley | 66 | Executive Vice President, Chief Financial Officer, | ||
General Counsel, Director |
(1) | Member of Audit Committee |
(2) | Member of Compensation Committee |
26
SUMMARY EXECUTIVE COMPENSATION
NAME & | NON- | ||||||||||||||||||||||||||
PRINCIPAL | STOCK | OPTION | EQUITY | PENSION | |||||||||||||||||||||||
POSITION | YEAR | SALARY | BONUS | AWARDS | AWARDS | INCENTIVE | VALUE | OTHER | TOTAL | ||||||||||||||||||
RonaldDurando | |||||||||||||||||||||||||||
President | 2010 | $ | 200,000 | $ | 0 | $ | 0 | $ | 0 | N/A | N/A | $ | 56,483 | (4) | $ | 256,486 | |||||||||||
Chief | 2009 | $ | 275,718 | $ | 0 | $ | 1,541,700 | (5) | $ | 1,944,912 | (6) | N/A | N/A | $ | 61,473 | (4) | $ | 3,823,803 | |||||||||
Executive | 2008 | $ | 393,600 | $ | 0 | $ | 0 | $ | 0 | N/A | N/A | $ | 19,490 | (4) | $ | 413,090 | |||||||||||
Officer | 2007 | $ | 393,600 | $ | 0 | $ | 860,000 | (5) | $ | 196,000 | (6) | N/A | N/A | $ | 7,500 | (1) | $ | 1,457,100 | |||||||||
GustaveDotoli | 2010 | $ | 180,000 | $ | 0 | $ | 0 | $ | 0 | N/A | N/A | $ | 39,375 | (4) | $ | 219,375 | |||||||||||
Chief | 2009 | $ | 229,000 | $ | 0 | $ | 913,600 | (5) | $ | 1,166,947 | (6) | N/A | N/A | $ | 62,514 | (4) | $ | 2,372,061 | |||||||||
Operating | 2008 | $ | 282,000 | $ | 0 | $ | 0 | $ | 0 | N/A | N/A | $ | 4,156 | (4) | $ | 286,156 | |||||||||||
Officer | 2007 | $ | 282,000 | $ | 0 | $ | 450,000 | (5) | $ | 126,000 | (6) | N/A | N/A | $ | 7,538 | (2) | $ | 865,538 | |||||||||
MartinSmiley | |||||||||||||||||||||||||||
Executive | |||||||||||||||||||||||||||
V.President | 2010 | $ | 175,000 | $ | 0 | $ | 0 | $ | 0 | N/A | N/A | $ | 24,536 | (4) | $ | 199,536 | |||||||||||
CFO and | 2009 | $ | 182,292 | $ | 0 | $ | 571,000 | (5) | $ | 700,168 | (6) | N/A | N/A | $ | 21,048 | (4) | $ | 1,474,508 | |||||||||
General | 2008 | $ | 200,000 | $ | 0 | $ | 0 | $ | 0 | N/A | N/A | $ | 18,752 | (4) | $ | 218,752 | |||||||||||
Counsel | 2007 | $ | 200,000 | $ | 0 | $ | 262,500 | (5) | $ | 56,000 | (6) | N/A | N/A | $ | 8,550 | (3) | $ | 527,050 |
Footnotes
(1) Consists
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||||||||
Consulting / Salary | $ | 61,667 | $ | 61,667 | $ | 61,667 | $ | 185,001 | ||||||||||||||||
Interest | $ | 65,940 | $ | 46,138 | $ | 38,406 | $ | 150,484 | ||||||||||||||||
Rent | $ | 5,290 | $ | 5,290 | ||||||||||||||||||||
G&A | $ | 7,666 | $ | 7,666 | ||||||||||||||||||||
R&D | $ | 0 | ||||||||||||||||||||||
Finder’s Fees | $ | 28,500 | $ | 28,500 | ||||||||||||||||||||
Total compensation for the Twelve Months Ended June 30, 2013 | $ | 127,607 | $ | 107,805 | $ | 100,073 | $ | 28,500 | $ | 12,956 | $ | 376,941 |
(2) Consistscompensation to related parties for the Twelve Months Ended June 30, 2012
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||||||||
Consulting / Salary | $ | 110,000 | $ | 107,333 | $ | 106,667 | $ | 324,000 | ||||||||||||||||
Interest | $ | 54,681 | $ | 36,103 | $ | 26,744 | $ | 117,528 | ||||||||||||||||
Rent | $ | 43,560 | $ | 43,560 | ||||||||||||||||||||
G&A | $ | 7,225 | $ | 7,225 | ||||||||||||||||||||
R&D | $ | 0 | ||||||||||||||||||||||
Finder’s Fees | $ | 18,000 | $ | 18,000 | ||||||||||||||||||||
Stock based compensation (shares issued)* | $ | 2,488,5(0 | $ | 1,858,500 | $ | 1,858,500 | $ | 252,000 | $ | 63,000 | $ | 6,520,500 | ||||||||||||
Stock based compensation (options issued)* | $ | 173,316 | $ | 103,990 | $ | 62,394 | $ | 339,700 | ||||||||||||||||
Total compensation for the Twelve Months Ended June 30, 2012 | $ | 2,826,497 | $ | 2,105,926 | $ | 2,054,305 | $ | 270,000 | $ | 113,785 | $ | 7,370,513 |
Total Notes | ||||||||||||||||||||||||||||
Summary of payables to related parties as of June 30, 2013 | ||||||||||||||||||||||||||||
Durando | Dotoli | Smiley | Payable | Biderman | Microphase | Total | ||||||||||||||||||||||
Notes payable | $ | 449,523 | $ | 322,963 | $ | 276,426 | $ | 1,048,912 | $ | 1,048,912 | ||||||||||||||||||
Accrued Wages Officers | $ | 95,667 | $ | 95,667 | $ | 75,417 | $ | 266,751 | $ | 266,751 | ||||||||||||||||||
Due to Officers/ Affiliates | $ | 156,000 | $ | 56,084 | $ | 212,084 | ||||||||||||||||||||||
Interest Payable | $ | 124,712 | $ | 84,883 | $ | 67,029 | $ | 276,624 | $ | 276,624 | ||||||||||||||||||
Total Payable to Officers/ Affiliates as of June 30, 2013 | $ | 669,902 | $ | 503,513 | $ | 418,872 | $ | 1,592,287 | $ | 156,000 | $ | 56,084 | $ | 1,804,371 |
Total Notes | ||||||||||||||||||||||||||||
Summary of payables to related parties as of June 30, 2012 | ||||||||||||||||||||||||||||
Durando | Dotoli | Smiley | Payable | Biderman | Microphase | Total | ||||||||||||||||||||||
Notes payable | $ | 456,573 | $ | 333,663 | $ | 273,177 | $ | 1,063,413 | $ | 1,063,413 | ||||||||||||||||||
Accrued Wages Officers | $ | 29,167 | $ | 29,167 | $ | 10,417 | $ | 68,751 | $ | 68,751 | ||||||||||||||||||
Due to Officers/Affiliates | $ | 150,000 | $ | 53,128 | $ | 203,128 | ||||||||||||||||||||||
Interest Payable | $ | 58,771 | $ | 38,745 | $ | 28,623 | $ | 126,139 | $ | 126,139 | ||||||||||||||||||
Total Payable to Officers/ Affiliates as of June 30, 2012 | $ | 544,511 | $ | 401,575 | $ | 312,217 | $ | 1,258,303 | $ | 150,000 | $ | 53,128 | $ | 1,461,431 |
(3) Consists of directors fees of $3,750 plus $4,800 interest on loans to the Company.
(4) Interest on loans to the Company.
(5) Share grants are valued at the share price on the date the grant was authorized by the board of directors. The shares under the 2009 grant to officers are restricted from resale through August, 2010.
(6) The fair value of options granted in fiscal years ended June 30, 2007 and 2009 was estimated asoverall financial condition of the date of grant usingCompany. Messrs. Durando, Dotoli and Smiley have accrued and unpaid salaries totaling approximately $109,000,$ 109,000 and 88,750 respective covering the Black-Scholes stock option pricing model, based on the following weighted average assumptions: annual expected return of 0%, an average life of 5 years, annual volatility of 71% and 80.3% and a risk-free interest rate of 2.25% and 3.0% in the years 2007 and 2009 respectively.
27
2013.
OPTION AWARDS | STOCK AWARDS | |||||||||||
Number of | Number of | |||||||||||
shares | Value | shares | Value* | |||||||||
to be | realized | awarded | ||||||||||
acquired | on exercise | |||||||||||
Name | on exercise | |||||||||||
Ronald Durando President CEO | 50,000,000 | N/A | 27,000,000 | $ | 1,541,700 | |||||||
Gustave Dotoli COO | 30,000,000 | N/A | 16,000,000 | $ | 1,166,947 | |||||||
Martin Smiley Executive VP CFO Chief Legal Counsel | 18,000,000 | N/A | 10,000,000 | $ | 700,168 | |||||||
Abraham Biderman Director | 2,000,000 | N/A | 4,000,000 | $ | 228,400 | |||||||
Anthony Guerino Director | 100,000 | N/A | 100,000 | $ | 5,710 | |||||||
Victor Lawrence Director | 100,000 | N/A | 100,000 | $ | 5,710 |
* Share grants are valued at2012
During fiscal year ended June 30, 2008, mPhase did not compensate insideCompany. In addition such persons have loans or outside directors with any cash stipends,unpaid compensation convertible into common stock options, stock awards or other compensation for their service as directors of the Company.
28
Option ExercisesCompany at $.004 per share in the respective amounts of $596,406,$414,844 and Stock Vesting FYE June$361,038 convertible into 149,101,495, 103,710,948 shares of common stock respectively.
OPTION AWARDS | STOCK AWARDS | |||||||||||
Name | Number of | Value | Number of | Value | ||||||||
shares | realized | shares | ||||||||||
to be | on exercise | awarded | ||||||||||
acquired | ||||||||||||
on exercise | ||||||||||||
Ronald Durando President CEO | 0 | N/A | 0 | N/A | ||||||||
Gustave Dotoli COO | 0 | N/A | 0 | N/A | ||||||||
Martin Smiley Executive VP CFO Chief Legal Counsel | 0 | N/A | 0 | N/A | ||||||||
Abraham Biderman Director | 0 | N/A | 0 | N/A | ||||||||
Anthony Guerino Director | 0 | N/A | 0 | N/A | ||||||||
Victor Lawrence Director | 0 | N/A | 0 | N/A |
2013
Number of | Number of | Equity | Number of | |||||||||||||||
Securities | Securities | Incentive | shares of | |||||||||||||||
underlying | underlying | Plan | stock that | Market | ||||||||||||||
Unexercised | Unexercised | awards | Option | Option | has not | Value of | ||||||||||||
Options | Options | Number of | Exercise | Expiration | been | Shares not | Equity | |||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | vested | vested | Incentive | |||||||||||
Ronald Durando | 50,000,000 | $ | .004 | 9/16/2013 | ||||||||||||||
President CEO | ||||||||||||||||||
Gustave Dotoli | 30,000,000 | $ | .004 | 9/16/2013 | ||||||||||||||
COO | ||||||||||||||||||
Martin Smiley | 18,000,000 | $ | .004 | 9/16/2013 | ||||||||||||||
Executive VP | ||||||||||||||||||
CFO Chief Legal Council |
Number of | Number of | Equity | Number of | |||||||||||||||
Securities | Securities | Incentive | shares of | |||||||||||||||
underlying | underlying | Plan | stock that | Market | ||||||||||||||
Unexercised | Unexercised | awards | Option | Option | has not | Value of | ||||||||||||
Options | Options | Number of | Exercise | Expiration | been | Shares not | Equity | |||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | vested | vested | Incentive | |||||||||||
Ronald Durando | 50,000,000 | $ | .004 | 9/16/2013 | ||||||||||||||
President CEO | ||||||||||||||||||
Gustave Dotoli | 30,000,000 | $ | .004 | 9/16/2013 | ||||||||||||||
COO | ||||||||||||||||||
Martin Smiley | 18,000,000 | $ | .004 | 9/16/2013 | ||||||||||||||
Executive VP | ||||||||||||||||||
CFO Chief Legal | ||||||||||||||||||
Council |
Number of | Number of | Equity | |||||||||||||||||||||||||||
Securities | Securities | Incentive | Market | ||||||||||||||||||||||||||
Underlying | Underlying | Plan | Number of | Value of | |||||||||||||||||||||||||
Unexercised | Unexercised | Awards | Option | Option | Shares | Shares | |||||||||||||||||||||||
Options | Options | Number of | Exercise | Expiration | Not | Not | Equity | ||||||||||||||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | Vested | Vested | Incentive | ||||||||||||||||||||||
Ronald | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Durando | 3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
President | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
CEO | 3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
50,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | |||||||||||||||||||||
Gustave | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Dotoli | 1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
COO | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
30,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | |||||||||||||||||||||
Martin | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Smiley | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Executive VP | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
CFO Chief | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Legal | 400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Counsel | 18,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 |
Number of | Number of | Equity | Option | Option | Number | Market | Equity | |||||||||||||||||
Securities | Securities | Incentive | Exercise | Expiration | of | Value | Incentive | |||||||||||||||||
Underlying | Underlying | Plan | Price | Date | Shares | of | ||||||||||||||||||
Unexercised | Unexercised | Awards | Not | Shares | ||||||||||||||||||||
Options | Options | Number | Vested | Not | ||||||||||||||||||||
(Exercisable) | (Unexercisable) | of | Vested | |||||||||||||||||||||
Securities | ||||||||||||||||||||||||
Ronald | ||||||||||||||||||||||||
Durando | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
President | 3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
CEO | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | ||||||||||||||||
50,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | ||||||||||||||||
Gustave | ||||||||||||||||||||||||
Dotoli | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
COO | 1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | ||||||||||||||||
30,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | ||||||||||||||||
Martin | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
Smiley | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
Executive VP | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
CFO Chief | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||
Legal | 400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | �� | 0 | ||||||||||||||
Counsel | 18,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 |
29
Number of | Number of | Equity | Number | ||||||||||||||||||||||||||
Securities | Securities | Incentive | of shares | ||||||||||||||||||||||||||
underlying | underlying | Plan | of stock | Market | |||||||||||||||||||||||||
Unexercised | Unexercised | awards | Option | Option | that has | Value of | |||||||||||||||||||||||
Options | Options | Number of | Exercise | Expiration | not been | Shares not | Equity | ||||||||||||||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | vested | vested | Incentive | ||||||||||||||||||||||
Ronald Durando | 2,500,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | ||||||||||||||||||||
President CEO | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
50,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | |||||||||||||||||||||
Gustave Dotoli | 1,000,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | ||||||||||||||||||||
COO | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
30,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | |||||||||||||||||||||
Martin Smiley | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Executive VP | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
CFO Chief Legal | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Council | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||||||
400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
18,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 |
Number of | Number of | Equity | Option | Option | Number | Market | Equity | |||||||||||||||||
Securities | Securities | Incentive | Exercise | Expiration | of | Value | Incentive | |||||||||||||||||
Underlying | Underlying | Plan | Price | Date | Shares | of | ||||||||||||||||||
Unexercised | Unexercised | Awards | Not | Shares | ||||||||||||||||||||
Options | Options | Number | Vested | Not | ||||||||||||||||||||
(Exercisable) | (Unexercisable) | of | Vested | |||||||||||||||||||||
Securities | ||||||||||||||||||||||||
Ronald | 2,500,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | |||||||||||||||
Durando | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
President | 3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
CEO | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | ||||||||||||||||
50,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | ||||||||||||||||
Gustave | 1,000,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | |||||||||||||||
Dotoli | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
COO | 1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | ||||||||||||||||
30,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | ||||||||||||||||
Martin | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
Smiley | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
Executive VP | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
CFO Chief | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||
Legal | 400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | 0 | |||||||||||||||
Counsel | 18,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 |
30
Number of | Number of | Equity | |||||||||||||||||||||||||||
Securities | Securities | Incentive | Market | ||||||||||||||||||||||||||
Underlying | Underlying | Plan | Number of | Value of | |||||||||||||||||||||||||
Unexercised | Unexercised | Awards | Option | Option | Shares | Shares | |||||||||||||||||||||||
Options | Options | Number of | Exercise | Expiration | Not | Not | Equity | ||||||||||||||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | Vested | Vested | Incentive | ||||||||||||||||||||||
Ronald | 2,500,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | ||||||||||||||||||||
Durando | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
President | 3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
CEO | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
50,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | |||||||||||||||||||||
Gustave | 1,000,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | ||||||||||||||||||||
Dotoli | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
COO | 1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
�� | 750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
30,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 | |||||||||||||||||||||
Martin | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Smiley | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Executive VP | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
CFO Chief | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Legal | 400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Counsel | 18,000,000 | 0 | 0 | $ | 0.05 | 9/16/2013 | 0 | 0 | 0 |
Number of | Number of | Incentive | Market | |||||||||||||||||||||
Securities | Securities | Plan | Number | Value | ||||||||||||||||||||
Underlying | Underlying | Awards | of | of | ||||||||||||||||||||
Unexercised | Unexercised | Number | Option | Option | Shares | Shares | ||||||||||||||||||
Options | Options | of | Exercise | Expiration | Not | Not | Equity | |||||||||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | Vested | Vested | Incentive | |||||||||||||||||
Ronald Durando | 500,000 | 0 | 0 | $ | 0.45 | 6/19/2009 | 0 | 0 | 0 | |||||||||||||||
President CEO | 1,000,000 | 0 | 0 | $ | 0.45 | 6/19/2009 | 0 | 0 | 0 | |||||||||||||||
2,500,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | ||||||||||||||||
550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | ||||||||||||||||
Gustave Dotoli | 250,000 | 0 | 0 | $ | 0.45 | 6/19/2009 | 0 | 0 | 0 | |||||||||||||||
COO | 500,000 | 0 | 0 | $ | 0.35 | 6/19/2009 | 0 | 0 | 0 | |||||||||||||||
1,000,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | ||||||||||||||||
550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||
750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | ||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | ||||||||||||||||
Martin Smiley | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
Executive VP | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
CFO | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||
Chief Legal | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||
Council | 400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | 0 |
31
Number of | Number of | ||||||||||||||||||||||||||||
Securities | Securities | Incentive | Market | ||||||||||||||||||||||||||
Underlying | Underlying | Plan | Number of | Value of | |||||||||||||||||||||||||
Unexercised | Unexercised | Awards | Option | Option | Shares | Shares | |||||||||||||||||||||||
Options | Options | Number of | Exercise | Expiration | Not | Not | Equity | ||||||||||||||||||||||
(Exercisable) | (Unexercisable) | Securities | Price | Date | Vested | Vested | Incentive | ||||||||||||||||||||||
Ronald Durando | 500,000 | 0 | 0 | $ | 0.45 | 6/19/2009 | 0 | 0 | 0 | ||||||||||||||||||||
President CEO | 1,000,000 | 0 | 0 | $ | 0.45 | 6/19/2009 | 0 | 0 | 0 | ||||||||||||||||||||
2,500,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | |||||||||||||||||||||
550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
3,450,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
3,525,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,400,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
Gustave Dotoli | 250,000 | 0 | 0 | $ | 0.45 | 6/19/2009 | 0 | 0 | 0 | ||||||||||||||||||||
COO | 500,000 | 0 | 0 | $ | 0.35 | 6/19/2009 | 0 | 0 | 0 | ||||||||||||||||||||
1,000,000 | 0 | 0 | $ | 0.35 | 12/31/2009 | 0 | 0 | 0 | |||||||||||||||||||||
550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,250,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
1,325,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | |||||||||||||||||||||
750,000 | 0 | 0 | $ | 0.21 | 3/28/2011 | 0 | 0 | 0 | |||||||||||||||||||||
500,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
25,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | |||||||||||||||||||||
900,000 | 0 | 0 | $ | 0.21 | 8/24/2011 | 0 | 0 | 0 | |||||||||||||||||||||
Martin Smiley | 550,000 | 0 | 0 | $ | 0.18 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Executive VP | 475,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
CFO | 25,000 | 0 | 0 | $ | 0.21 | 2/23/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Chief Legal | 250,000 | 0 | 0 | $ | 0.25 | 6/14/2011 | 0 | 0 | 0 | ||||||||||||||||||||
Council | 400,000 | 0 | 0 | $ | 0.21 | 6/24/2011 | 0 | 0 | 0 |
32
comparable.
33
2013.
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||||||||
Consulting / Salary | $ | 61,667 | $ | 61,667 | $ | 61,667 | $ | 185,001 | ||||||||||||||||
Interest | $ | 65,940 | $ | 46,138 | $ | 38,406 | $ | 150,484 | ||||||||||||||||
Rent | $ | 5,290 | $ | 5,290 | ||||||||||||||||||||
G&A | $ | 7,666 | $ | 7,666 | ||||||||||||||||||||
R&D | $ | 0 | ||||||||||||||||||||||
Finder’s Fees | $ | 28,500 | $ | 28,500 | ||||||||||||||||||||
Total compensation for the Twelve Months Ended June 30, 2013 | $ | 127,607 | $ | 107,805 | $ | 100,073 | $ | 28,500 | $ | 12,956 | $ | 376,941 |
Summary of payables to related parties as of June 30, 2013 | ||||||||||||||||||||||||||||
Durando | Dotoli | Smiley | Payable | Biderman | Microphase | Total | ||||||||||||||||||||||
Notes payable | $ | 449,523 | $ | 322,963 | $ | 276,426 | $ | 1,048,912 | $ | 1,048,912 | ||||||||||||||||||
Accrued Wages Officers | $ | 95,667 | $ | 95,667 | $ | 75,417 | $ | 266,751 | $ | 266,751 | ||||||||||||||||||
Due to Officers/ Affiliates | $ | 156,000 | $ | 56,084 | $ | 212,084 | ||||||||||||||||||||||
Interest Payable | $ | 124,712 | $ | 84,883 | $ | 67,029 | $ | 276,624 | $ | 276,624 | ||||||||||||||||||
Total Payable to Officers/ Affiliates as of June 30, 2013 | $ | 669,902 | $ | 503,513 | $ | 418,872 | $ | 1,592,287 | $ | 156,000 | $ | 56,084 | $ | 1,804,371 |
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||||||||
Consulting / Salary | $ | 110,000 | $ | 107,333 | $ | 106,667 | $ | 324,000 | ||||||||||||||||
Interest | $ | 54,681 | $ | 36,103 | $ | 26,744 | $ | 117,528 | ||||||||||||||||
Rent | $ | 43,560 | $ | 43,560 | ||||||||||||||||||||
G&A | $ | 7,225 | $ | 7,225 | ||||||||||||||||||||
R&D | $ | 0 | ||||||||||||||||||||||
Finder’s Fees | $ | 18,000 | $ | 18,000 | ||||||||||||||||||||
Stock based compensation (shares issued)* | $ | 2,488,5(0 | $ | 1,858,500 | $ | 1,858,500 | $ | 252,000 | $ | 63,000 | $ | 6,520,500 | ||||||||||||
Stock based compensation (options issued)* | $ | 173,316 | $ | 103,990 | $ | 62,394 | $ | 339,700 | ||||||||||||||||
Total compensation for the Twelve Months Ended June 30, 2012 | $ | 2,826,497 | $ | 2,105,926 | $ | 2,054,305 | $ | 270,000 | $ | 113,785 | $ | 7,370,513 |
Total Notes | ||||||||||||||||||||||||||||
Summary of payables to related parties as of June 30, 2012 | ||||||||||||||||||||||||||||
Durando | Dotoli | Smiley | Payable | Biderman | Microphase | Total | ||||||||||||||||||||||
Notes payable | $ | 456,573 | $ | 333,663 | $ | 273,177 | $ | 1,063,413 | $ | 1,063,413 | ||||||||||||||||||
Accrued Wages Officers | $ | 29,167 | $ | 29,167 | $ | 10,417 | $ | 68,751 | $ | 68,751 | ||||||||||||||||||
Due to Officers/Affiliates | $ | 150,000 | $ | 53,128 | $ | 203,128 | ||||||||||||||||||||||
Interest Payable | $ | 58,771 | $ | 38,745 | $ | 28,623 | $ | 126,139 | $ | 126,139 | ||||||||||||||||||
Total Payable to Officers/ Affiliates as of June 30, 2012 | $ | 544,511 | $ | 401,575 | $ | 312,217 | $ | 1,258,303 | $ | 150,000 | $ | 53,128 | $ | 1,461,431 |
Summary of compensation to related parties for the Twelve Months Ended June 30, 2011 | ||||||||||||||||||||||||
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||||||||
Consulting / Salary | $ | 160,000 | $ | 144,000 | $ | 140,000 | $ | 444,000 | ||||||||||||||||
Interest | $ | 33,728 | $ | 18,610 | $ | 16,569 | $ | 68,907 | ||||||||||||||||
Rent | $ | $ | 36,000 | $ | 36,000 | |||||||||||||||||||
G&A | $ | $ | 9,356 | $ | 9,356 | |||||||||||||||||||
R&D | $ | 0 | ||||||||||||||||||||||
Finder’s Fees | $ | 24,500 | $ | 24,500 | ||||||||||||||||||||
Total compensation | $ | 193,728 | $ | 162,610 | $ | 156,569 | $ | 24,500 | $ | 45,356 | $ | 582,763 |
Total Notes |
Durando | Dotoli | Smiley | Payable | Biderman | Microphase | Total | ||||||||||||||||||||||
Notes payable | $ | 263,479 | $ | 148,306 | $ | 111,030 | $ | 522,815 | $ | 522,815 | ||||||||||||||||||
Due to Officers / Affiliates | $ | 150,000 | $ | 27,242 | $ | 177,242 | ||||||||||||||||||||||
Interest Payable | $ | 151,685 | $ | 120,498 | $ | 80,725 | $ | 352,909 | $ | 352,909 | ||||||||||||||||||
Total Payable to Officers / Affiliates | $ | 415,164 | $ | 268,804 | $ | 191,755 | $ | 875,724 | $ | 150,000 | $ | 27,242 | $ | 1,052,966 |
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||
Consulting / Salary | $ | 200,000 | $ | 180,000 | $ | 175,000 | $ | 555,000 | ||||||||||
Interest | $ | 56,483 | $ | 39,375 | $ | 24,356 | $ | 120,214 | ||||||||||
Rent | $ | 36,000 | $ | 36,000 | ||||||||||||||
G&A | *** | $ | 9,936 | $ | 9,936 | |||||||||||||
R&D | $ | 337,500 | $ | 337,500 | ||||||||||||||
Finders Fees | $ | 25,000 | $ | 25,000 | ||||||||||||||
Stock based compensation (shares issued) | $ | 0 | ||||||||||||||||
Stock based compensation (options issued) | $ | 0 | ||||||||||||||||
Total compensation | $ | 256,483 | $ | 219,375 | $ | 199,356 | $ | 25,000 $ | 382,896 | $ | 1,083,650 |
34
Durando | Dotoli | Smiley | Biderman | Microphase | Total | |||||||||||||||||||
Consulting / Salary | $ | 200,000 | $ | 180,000 | $ | 175,000 | $ | 555,000 | ||||||||||||||||
Interest | $ | 56,483 | $ | 39,375 | $ | 24,356 | $ | 120,214 | ||||||||||||||||
Rent | $ | 36,000 | $ | 36,000 | ||||||||||||||||||||
G&A | *** | $ | 9,936 | $ | 9,936 | |||||||||||||||||||
R&D | $ | 337,500 | $ | 337,500 | ||||||||||||||||||||
Finder’s Fees | $ | 25,000 | $ | 25,000 | ||||||||||||||||||||
Stock based compensation (shares issued) | $ | 0 | ||||||||||||||||||||||
Stock based compensation (options issued) | $ | 0 | ||||||||||||||||||||||
Total compensation | $ | 256,483 | $ | 219,375 | $ | 199,356 | $ | 25,000 | 382,896 | $ | 1,083,650 |
Summary of payables to related parties as of June 30, 2010
Total | Total | |||||||||||||||||
Notes | Amounts | |||||||||||||||||
Payable | Due to | |||||||||||||||||
& | Related | |||||||||||||||||
Durando | Dotoli | Smiley | Accrued | Microphase | Parties | |||||||||||||
Interest | ||||||||||||||||||
Notes payable | $ | 301,479 | $ | 166,306 | $ | 119,030 | $ | 586,815 | $ | 0 | $ | 586,815 | ||||||
Due to Officers / Affiliates | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 19,214 | $ | 19,214 | ||||||
Interest Payable | $ | 117,957 | $ | 101,888 | $ | 64,157 | $ | 284,001 | $ | 0 | $ | 284,001 | ||||||
Total Payable to related parties as ofJune 30, 2010 | $ | 419,436 | $ | 268,194 | $ | 183,187 | $ | 870,817 | $ | 19,214 | $ | 890,030 |
TOTAL | ||||||||||||||||||
Related | ||||||||||||||||||
Durando | Dotoli | Smiley | Biderman | Microphase | Parties | |||||||||||||
Consulting / Salary | $ | 275,718 | $ | 229,000 | $ | 182,292 | $ | 687,010 | ||||||||||
Interest | $ | 61,473 | $ | 62,514 | $ | 21,048 | $ | 145,035 | ||||||||||
G&A | $ | 16,773 | $ | 16,773 | ||||||||||||||
Rent | $ | 36,000 | $ | 36,000 | ||||||||||||||
R&D | $ | $ | 150,000 | $ | 150,000 | |||||||||||||
Finders Fees | $ | 80,000 | $ | 80,000 | ||||||||||||||
Stock based compensation (shares issued)* | $ | 1,541,700 | $ | 913,600 | $ | 571,000 | $ | 228,400 | $ | 3,254,700 | ||||||||
Stock based compensation (options issued)** | $ | 1,944,912 | $ | 1,166,947 | $ | 700,168 | $ | 77,796 | $ | 3,889,823 | ||||||||
Total Compensation | $ | 3,823,803 | $ | 2,372,061 | $ | 1,474,508 | $ | 386,196 | $ | 202,773 | $ | 8,259,341 | ||||||
Common Stock issued* | 27,000,000 | 16,000,000 | 10,000,000 | 4,000,000 | 57,000,000 | |||||||||||||
Options issued (5 years @ 5 cents)** | 50,000,000 | 30,000,000 | 18,000,000 | 2,000,000 | 100,000,000 |
TOTAL | ||||||||||||||||||||||||
Related | ||||||||||||||||||||||||
Durando | Dotoli | Smiley | Biderman | Microphase | Parties | |||||||||||||||||||
Consulting / Salary | $ | 275,718 | $ | 229,000 | $ | 182,292 | $ | 687,010 | ||||||||||||||||
Interest | $ | 61,473 | $ | 62,514 | $ | 21,048 | $ | 145,035 | ||||||||||||||||
G&A | $ | 16,773 | $ | 16,773 | ||||||||||||||||||||
Rent | $ | 36,000 | $ | 36,000 | ||||||||||||||||||||
R&D | $ | 150,000 | $ | 150,000 | ||||||||||||||||||||
Finder’s Fees | $ | 80,000 | $ | 80,000 | ||||||||||||||||||||
Stock based compensation (shares issued)* | $ | 1,541,700 | $ | 913,600 | $ | 571,000 | $ | 228,400 | $ | 3,254,700 | ||||||||||||||
Stock based compensation (options issued)** | $ | 1,944,912 | $ | 1,166,947 | $ | 700,168 | $ | 77,796 | $ | 3,889,823 | ||||||||||||||
Total Compensation | $ | 3,823,803 | $ | 2,372,061 | $ | 1,474,508 | $ | 386,196 | $ | 202,773 | $ | 8,259,341 | ||||||||||||
Common Stock issued* | 27,000,000 | 16,000,000 | 10,000,000 | 4,000,000 | 57,000,000 | |||||||||||||||||||
Options issued (5 years @ 5 cents)** | 50,000,000 | 30,000,000 | 18,000,000 | 2,000,000 | 100,000,000 |
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Summary of Transactions with Related Parties Twelve Months Ended June 30, 2009
RON | GUS | MARTIN | ||||||||||
DURANDO | DOTOLI | SMILEY | TOTAL | |||||||||
NOTES PAYABLE RELATED PARTIES | ||||||||||||
BALANCE 6/30/08 | $ | 0 | $ | 0 | $ | 204,038 | $ | 204,038 | ||||
July 2008 Advances (Payments) | $ | 0 | $ | 0 | $ | 2,500 | $ | 2,500 | ||||
August 2008 Advances | $ | 0 | $ | 0 | $ | 711 | $ | 711 | ||||
(Payments) | ||||||||||||
Sept 2008 Advances (Payments) | $ | 0 | $ | 8,000 | $ | 9,289 | $ | 17,289 | ||||
Oct 2007 Advances (Payments) | $ | 0 | $ | (8,000 | ) | $ | 478 | $ | (7,522 | ) | ||
Nov 2008 Advances (Payments) | $ | 0 | $ | 0 | $ | (10,000 | ) | $ | (10,000 | ) | ||
Dec 2008 Advances (Payments) | $ | 17,000 | $ | 23,000 | $ | 22,810 | $ | 62,810 | ||||
Jan 2009 Advances (Payments) | $ | (17,000 | ) | $ | (23,000 | ) | $ | (8,016 | ) | $ | (48,016 | ) |
Feb 2009 Advances (Payments) | $ | 0 | $ | 16,000 | $ | 10,000 | $ | 26,000 | ||||
Mar 2009 Advances (Payments) | $ | 0 | $ | (16,000 | ) | $ | 32,415 | $ | 16,415 | |||
Apr 2009 Advances (Payments) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||
May 2009 Advances (Payments) | $ | 55,000 | $ | 30,000 | $ | 0 | $ | 85,000 | ||||
June 2009 Advances (Payments) | $ | (55,000 | ) | $ | (30,000 | ) | $ | 0 | $ | (85,000 | ) | |
BALANCE Notes Payable Officers | $ | 0 | $ | 0 | $ | 264,225 | $ | 264,225 | ||||
Deferred Compensation Converted into Notes | $ | 278,000 | $ | 323,500 | $ | 0 | $ | 601,500 | ||||
Net Consulting Fees Converted into Notes | $ | 339,420 | $ | 127,256 | $ | 0 | $ | 466,676 | ||||
Total Notes Due to Officers | $ | 617,420 | $ | 450,756 | $ | 264,225 | $ | 1,332,400 | ||||
Due To Officers | ||||||||||||
BALANCE 6/30/08 | $ | 298,990 | $ | 102,256 | $ | 0 | $ | 401,246 | ||||
Consulting Fees & Expenses Incurred - 1st Qtr | $ | 98,400 | $ | 70,500 | $ | 0 | $ | 168,900 | ||||
Consulting Fees & Expenses Paid - 1st Qtr | $ | (101,500 | ) | $ | (84,000 | ) | $ | 0 | $ | (185,500 | ) | |
Consulting Fees & Expenses Incurred - 2nd Qtr | $ | 66,817 | $ | 58,000 | $ | 0 | $ | 124,817 | ||||
Consulting Fees & Expenses Paid - 2nd Qtr | $ | (35,000 | ) | $ | (32,500 | ) | $ | 0 | $ | (67,500 | ) | |
Consulting Fees & Expenses Incurred - 3rd Qtr | $ | 60,501 | $ | 55,500 | $ | 0 | $ | 116,001 | ||||
Consulting Fees & Expenses Paid - 3rd Qtr | $ | (31,626 | ) | $ | (25,500 | ) | $ | 0 | $ | (57,126 | ) | |
Converted into Notes | $ | (339,582 | ) | $ | (127,256 | ) | $ | 0 | $ | (466,838 | ) | |
Consulting Fees & Expenses Incurred - 4th Qtr | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||
Consulting Fees & Expenses Paid - 4th Qtr | $ | (17,000 | ) | $ | (11,450 | ) | $ | 0 | $ | (28,450 | ) | |
Other Adjustment | $ | 0 | $ | (5,550 | ) | $ | 0 | $ | (5,550 | ) | ||
Balance Due to Officers | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||
Total Due to Officers Before Interest | $ | 617,420 | $ | 450,756 | $ | 264,225 | $ | 1,332,400 | ||||
Interest Payable | $ | 61,473 | $ | 62,514 | $ | 9,605 | $ | 133,592 | ||||
Total Payable to Officers | $ | 678,892 | $ | 513,270 | $ | 273,830 | $ | 1,465,992 | ||||
COMPENSATION | ||||||||||||
Consulting / Salary Earned | $ | 275,718 | $ | 229,000 | $ | 182,292 | $ | 687,010 | ||||
Interest Earned | $ | 61,473 | $ | 62,514 | $ | 21,048 | $ | 145,035 | ||||
Stock Based Compensation - Shares | $ | 1,541,700 | $ | 913,600 | $ | 571,000 | $ | 3,026,300 | ||||
Stock Based Compensation - Options | $ | 1,944,912 | $ | 1,166,947 | $ | 700,168 | $ | 3,812,027 | ||||
Total Compensation Officers | $ | 3,823,803 | $ | 2,372,061 | $ | 1,474,508 | $ | 7,670,072 |
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TOTAL | ||||||||||||||||||
Durando | Dotoli | Biderman | Smiley | Microphase | RELATED | |||||||||||||
Consulting / Salary | $ | 393,600 | $ | 282,000 | $ | 200,000 | $ | 875,600 | ||||||||||
Interest | $ | 19,490 | $ | 4,156 | $ | 18,752 | $ | 42,398 | ||||||||||
Rent | $ | 60,000 | $ | 60,000 | ||||||||||||||
R&D | $ | 28,151 | $ | 28,151 | ||||||||||||||
Finders Fees | $ | 188,472 | $ | 188,472 | ||||||||||||||
Cost of Sales and SG&A | $ | 30,089 | $ | 30,089 | ||||||||||||||
Totals | $ | 413,090 | $ | 286,156 $ | 188,472 | $ | 218,752 | $ | 118,240 | $ | 1,224,710 |
TOTAL | ||||||||||||||||||||||||
Durando | Dotoli | Biderman | Smiley | Microphase | RELATED | |||||||||||||||||||
Consulting / Salary | $ | 393,600 | $ | 282,000 | $ | 200,000 | $ | 875,600 | ||||||||||||||||
Interest | $ | 19,490 | $ | 4,156 | $ | 18,752 | $ | 42,398 | ||||||||||||||||
Rent | $ | 60,000 | $ | 60,000 | ||||||||||||||||||||
R&D | $ | 28,151 | $ | 28,151 | ||||||||||||||||||||
Finder’s Fees | $ | 188,472 | $ | 188,472 | ||||||||||||||||||||
Cost of Sales and SG&A | $ | 30,089 | $ | 30,089 | ||||||||||||||||||||
Totals | $ | 413,090 | $ | 286,156 | 188,472 | $ | 218,752 | $ | 118,240 | $ | 1,224,710 |
Summary of Amounts due to Officers for the Year Ended June 30, 2008
RON | GUS | MARTIN | ||||||||||
DURANDO | DOTOLI | SMILEY | TOTAL | |||||||||
NOTES PAYABLE OFFICERS | ||||||||||||
BALANCE 6/30/07 | $ | 85,000 | $ | 75,000 | $ | 161,000 | $ | 321,000 | ||||
July 2007 Advances (Payments) | $ | (30,000 | ) | $ | (75,000 | ) | $ | (105,000 | ) | |||
August 2007 Advances (Payments) | $ | 35,000 | $ | 75,100 | $ | 35,000 | $ | 145,100 | ||||
Sept 2007 Advances (Payments) | $ | 110,000 | $ | 110,000 | ||||||||
Assumption of Note Payable- Sovereign | $ | 110,000 | $ | 110,000 | ||||||||
Oct 2007 Advances (Payments) | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 75,000 | ||||
Nov 2007 Advances (Payments) | $ | 76,000 | $ | 36,000 | $ | 11,000 | $ | 123,000 | ||||
Dec 2007 Advances (Payments) | $ | 25,000 | $ | 0 | $ | 0 | $ | 25,000 | ||||
Transferred to Deferred Comp | $ | (148,000 | ) | $ | (123,500 | ) | $ | (271,500 | ) | |||
Jan 2008 Advances (Payments) | $ | 2,000 | $ | 32,000 | $ | 34,000 | ||||||
Feb 2008 Advances (Payments) | $ | 0 | $ | 55,000 | $ | 72,038 | $ | 127,038 | ||||
Mar 2008 Advances (Payments) | $ | (180,000 | ) | $ | (47,500 | ) | $ | (40,000 | ) | $ | (267,500 | ) |
April 2008 Advances (Payments) | $ | (110,000 | ) | $ | (52,100 | ) | $ | (45,000 | ) | $ | (207,100 | ) |
May 2008 Advances (Payments) | $ | (15,000 | ) | $ | (15,000 | ) | ||||||
June 2008 Advances (Payments) | ||||||||||||
BALANCE Notes Payable Officers | $ | 0 | $ | 0 | $ | 204,038 | $ | 204,038 | ||||
Deferred Compensation | $ | 278,000 | $ | 323,500 | $ | 601,500 | ||||||
Due To Officers | ||||||||||||
BALANCE 6/30/07 | $ | 188,400 | $ | 75,500 | $ | 263,900 | ||||||
Consulting Fee Earned -1st Qtr | $ | 98,400 | $ | 70,500 | $ | 168,900 | ||||||
Consulting Fees Paid - 1st Qtr | $ | (39,500 | ) | $ | (32,500 | ) | $ | (72,000 | ) | |||
Consulting Fee Earned - 2nd Qtr | $ | 98,400 | $ | 70,500 | $ | 168,900 | ||||||
Consulting Fees Paid - 2nd Qtr | $ | (10,000 | ) | $ | (10,000 | ) | $ | (20,000 | ) | |||
Consulting Fee Earned - 3rd Qtr | $ | 98,400 | $ | 70,500 | $ | 168,900 | ||||||
Consulting Fees Paid - 3rd Qtr | $ | (12,000 | ) | $ | (8,500 | ) | $ | (20,500 | ) | |||
Consulting Fee Earned - 4th Qtr | $ | 98,400 | $ | 70,500 | $ | 168,900 | ||||||
Consulting Fees Paid - 4th Qtr | $ | (221,510 | ) | $ | (204,244 | ) | $ | (425,754 | ) | |||
Balance Due to Officers | $ | 298,990 | $ | 102,256 | $ | 401,246 | ||||||
Interest Payable | $ | 0 | $ | 0 | $ | 18,751 | $ | 18,751 | ||||
Totals Payable to Officers | $ | 576,990 | $ | 425,756 | $ | 222,789 | $ | 1,225,535 |
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June 30 ,2014.
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MPHASE TECHNOLOGIES, INC. C/O JERSEY TRANSFER 201 BLOOMFIELD AVE., SUITE 26 VERONA, NJ 07044 | VOTE BY INTERNET -www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
ELECTRONIC DELIVERY OF FUTURESHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by mPHASE TECHNOLOGIES, INC. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. | |
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to mPHASE TECHNOLOGIES, INC., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
MPHSE1 | KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY | |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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mPHASE TECHNOLOGIES, INC. |
Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark "FOR ALL EXCEPT" and write the nominee’s number on the line below. | |||||
For | Against | Abstain | ||||||
2. | Approval of our independent accountants, Demetrius Berkower, LLC for fiscal year 2014. | o | o | o |
For | Against | Abstain | ||||
3. | Approval of an amendment to our Amended Certificate of Incorporation authorizing an increase in authorized shares of common stock of the Company from | o | ||||
Note: Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full titles as such. | ||||||
For address changes/comments, please check this box and write them on the back where indicated. | ||||||
Yes | No | |||||
Please indicate if you plan to attend this meeting. | ||||||
HOUSEHOLDING ELECTION | ||||||
Please indicate if you consent to receive certain future investor communications in a single package per household. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
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43
Exhibit I
AMENDED AND RESTATED
BY-LAWS
OF
MPHASE TECHNOLOGIES, INC
ARTICLE I –OFFICES
The registered office of the corporation shall be 201 Bloomfield Avenue, Verona, New Jersey 07044
The registered agent of the corporation is Jersey Transfer & Trust Co. Attn: Jeffrey Manger, Vice President, with an office at 201 Bloomfield Avenue, Verona, New Jersey 07044.
The corporation may also have offices at such other places within or without the State of New Jersey as the board may from time to time determine or the business of the corporation may require.
ARTICLE II-SHAREHOLDERS
1. PLACE OF MEETINGS.
Meetings of shareholders shall be held at the principal office of the corporation or at such place within or without the State of New Jersey as the board shall authorize.
2. ANNUAL MEETING.
The annual meeting of the shareholders shall be held once a year on a date fixed by the board.
3. SPECIAL MEETINGS.
Special meetings of the shareholders may be called by the board or by the president and shall be called by the president or the secretary at the request, in writing, of a majority of the board or at the request, in writing, by shareholders owning a majority in amount of the shares issued and outstanding. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at a special meeting shall be confined to the purpose stated in the notice.
4. NOTICE OF MEETINGS OF SHAREHOLDERS.
Written notice of the time, place and purpose or purposes of every meeting of shareholders shall be given not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting.
When a meeting is adjourned to another time or place, it shall not be necessary, unless the bylaws otherwise provide, to give notice of the adjourned meeting, if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. However, if after adjournment the board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice.
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5. WAIVER OF NOTICE OR OF LAPSE OF TIME.
(a) Notice of meeting need not be given to any shareholder who signs a waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him.
(b) Whenever shareholders are authorized to take any action after the lapse of a prescribed period of time, the action may be taken without such lapse if such requirement is waived, in writing, in person or by proxy, before or after the taking of such action, by every shareholder entitled to vote thereon as at the date of the taking of such action.
6. ACTION BY SHAREHOLDERS WITHOUT A MEETING.
Any action required or permitted to be taken at a meeting of shareholders by statute, the certificate of incorporation, or by-laws, other than the annual election of directors, may be taken without a meeting upon the written consent of shareholders who would have been entitled to cast the minimum number of votes which would be necessary to authorize such action at a meeting at which all shareholders entitled to vote thereon were present and voting. The written consents of the shareholders consenting thereto shall be filed with the minutes of proceedings of shareholders.
7. QUORUM OF SHAREHOLDERS.
(a) Unless otherwise provided in the certificate of incorporation, the holders of shares entitled to cast a majority of the votes at a meeting shall constitute a quorum at such meeting. The shareholders present in person or by proxy at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Less than a quorum may adjourn.
(b) Whenever the holders of any class or series of shares are entitled to vote separately on a specified item of business, the provisions of paragraph (a) shall apply in determining the presence of a quorum of such class or series for the transaction of such specified item of business.
8. ORDER OF BUSINESS.
The order of business at all meetings of the shareholders shall be as follows:
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ARTICLE III-DIRECTORS
1. BOARD OF DIRECTORS.
Subject to any provision in the certificate of incorporation the business of the corporation shall be managed by its board of directors, each of whom shall be at least 18 years of age.
2. NUMBER OF DIRECTORS.
The number of directors shall be not less than 3 and no more than 11.
3. TERM OF DIRECTORS.
The directors named in the certificate of incorporation shall hold office until the first annual meeting of shareholders, and until their successors shall have been elected and qualified. At the first annual meeting of shareholders and at each annual meeting thereafter the shareholders shall elect directors to hold office until the next succeeding annual meeting, except as otherwise required by the certificate of incorporation or the by-laws in the case of classification of directors. Each director may resign by written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as shall be specified in the notice of resignation.
4. VACANCIES AND NEWLY CREATED DIRECTORSHIPS.
(a) Any directorship not filled at the annual meeting and any vacancy, however caused, occurring in the board may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum of the board, or by a sole remaining director. A director so elected by the board shall hold office until the next succeeding annual meeting of shareholders and until his successor shall have been elected and qualified.
(b) When one or more directors shall resign from the board effective at a future date, a majority of the directors then in office including those who have so resigned shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in the filling of other vacancies.
(c) Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose, unless the certificate of incorporation or a by-law adopted by the shareholders authorizes the board to fill such directorship. A director elected by the board to fill any such directorship shall hold office until the next succeeding annual meeting of shareholders for the election of directors and until his successor shall have been elected and qualified.
(d) If by reason of death, resignation or other cause the corporation has no directors in office, any shareholder or the executor or administrator of a deceased director may call a special meeting of shareholders for the election of directors and, over his own signature, shall give notice of said meeting in accordance with the by-laws.
5. REMOVAL OF DIRECTORS.
One or more or all the directors of the corporation may be removed for cause by the shareholders by the affirmative vote of the majority of the votes cast by the holders of shares entitled to vote for the election of directors.
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6. QUORUM OF BOARD OF DIRECTORS AND COMMITTEES; ACTION OF DIRECTORS WITHOUT A MEETING.
A majority of the entire board, or of any committee thereof, shall constitute a quorum for the transaction of business, unless the certificate of incorporation shall provide that a greater or lesser number shall constitute a quorum, which in no case shall be less than the greater of two persons or one-third of the entire board or committee, except that when a board of one director is authorized one director shall constitute a quorum. Any action required or permitted to be taken pursuant to authorization voted at a meeting of the board or any committee thereof may be taken without a meeting if, prior or subsequent to such action, all members of the board or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the board or committee. Such consent shall have the same effect as a unanimous vote of the board or committee for all purposes.
7. PLACE OF BOARD MEETINGS.
Meetings of the board may be held either within or without the State of New Jersey.
8. REGULAR ANNUAL MEETING.
A regular annual meeting of the board shall be held immediately following the annual meeting of shareholders at the place of such annual meeting of shareholders.
9. NOTICE OF MEETINGS OF THE BOARD; ADJOURNMENT.
(a) Regular meetings of the board may be held with or without notice as prescribed in the bylaws. Special meetings of the board shall be held upon such notice as is prescribed in the by-laws. Notice of any meeting need not be given to any director who signs a waiver of notice, whether before or after the meeting. The attendance of any director at a meeting without protesting prior to the conclusion of the meeting the lack of notice of such meeting shall constitute a waiver of notice by him. Neither the business to be transacted at, nor the purpose of, any meeting of the board need be specified in the notice or waiver of notice of such meeting unless required by the by-laws. Notice of an adjourned meeting need not be given if the time and place are fixed at the meeting adjourning and if the period of adjournment does not exceed ten days in any one adjournment.
(b) A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. Notice of the adjournment shall be given all directors who were absent at the time of the adjournment and, unless such time and place are announced at the meeting, to the other directors.
ARTICLE IV-OFFICERS
1. OFFICES, ELECTION TERM, SALARIES, SECURITY.
(a) The officers of a corporation shall consist of a president, a secretary, a treasurer, and, if desired, a chairman of the board, one or more vice presidents, and such other officers as may be prescribed by the by-laws. Unless otherwise provided in the by-laws, the officers shall be elected by the board.
(b) Any two or more offices may be held by the same person.
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(c) Any officer elected as herein provided shall hold office for the term for which he is so elected and until a successor is elected and has qualified, subject to earlier termination by removal or resignation.
(d) All officers of the corporation, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided in the bylaws, or as may be determined by resolution of the board not inconsistent with the by-laws.
(e) The salaries of all officers shall be fixed by the board.
(f) In case the board shall so require, any officer or agent of the corporation shall execute to the corporation a bond in such sum and with such surety or sureties as the board may direct, conditioned upon the faithful performance of his duties to the corporation and including responsibility for negligence and for the accounting for all property, funds or securities of the corporation which may come into his hands.
2. DELEGATION OF DUTIES.
In case of the absence of any officer of the corporation, or for any other reason that may seem sufficient to the board, the directors may, by a majority vote of the board, delegate the powers and duties of such officer, for the time being, to any other officer, or to a director.
3. REMOVAL AND RESIGNATION OF OFFICERS; FILLING OF VACANCIES.
(a) Any officer elected by the board may be removed by the board with or without cause. An officer elected by the shareholders may be removed, with or without cause, only by vote of the shareholders but his authority to act as an officer may be suspended by the board for cause. The removal of an officer shall be without prejudice to his contract rights, if any. Election of an officer shall not of itself create contract rights.
(b) An officer may resign by written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as shall be specified in the notice of resignation.
(c) Any vacancy occurring among the officers, however caused, shall be filled in the manner provided in the election of the board for the unexpired term.
4. PRESIDENT.
The president shall be the chief executive officer of the corporation; he shall preside at all meetings of the shareholders and of the board; he shall have the management of the business of the corporation and shall see that all orders and resolutions of the board are carried into effect.
5. VICE PRESIDENTS.
During the absence or disability of the president, the vice president, or if there are more than one, the executive vice president shall have all the powers and functions of the president. Each vice-president shall perform such other duties as the board shall prescribe.
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6. SECRETARY.
The secretary shall: attend all meetings of the board and of the shareholders; record all votes and minutes of all proceedings in a book to be kept for that purpose; give or cause to be given notice of all meetings of shareholders and of the special meetings of the board; keep in safe custody the seal of the corporation and affix it to any instrument when authorized by the board; when required, prepare a list of shareholders entitled to vote thereat, indicating the number of shares of each respective class held by each; keep all the documents and records of the corporation as required by law or otherwise in a proper and safe manner; and perform such other duties as may be prescribed by the board.
7. ASSISTANT-SECRETARIES.
During the absence or disability of the secretary, the assistant-secretary, or if there are more than one, the one so designated by the secretary or by the board, shall have all the powers and functions of the secretary.
8. TREASURER.
The treasurer shall: have the custody of the corporate funds and securities; keep full and accurate accounts or receipts and disbursements in the corporate books; deposit all money and other valuables in the name and to the credit of the corporation in such depositories as may be designated by the board; disburse the funds of the corporation as may be ordered or authorized by the board and preserve proper vouchers for such disbursements; render to the president and board at the regular meetings of the board, or whenever they require it, an account of all his transactions as treasurer and of the financial condition of the corporation; render a full financial report at the annual meeting of the shareholders if so requested; be furnished by all corporate officers and agents at his request, with such reports and statements as he may require as to all financial transactions of the corporation; and perform such other duties as are given to him by the by-laws or as from time to time are assigned to him by the board or the president.
9. ASSISTANT-TREASURER.
During the absence or disability of the treasurer, the assistant-treasurer, or if there are more than one, the one so designated by the secretary or by the board, shall have all the powers and functions of the treasurer.
ARTICLE V-CERTIFICATES FOR SHARES AND DIVIDENDS
1. CERTIFICATES REPRESENTING SHARES.
The shares of a corporation shall be represented by certificates signed by, or in the name of the corporation by, the chairman or vice-chairman of the board, or the president or a vice-president, and may be countersigned by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation and shall be sealed with the seal of the corporation or a facsimile thereof.
2. LOST OR DESTROYED CERTIFICATES.
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The board may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation, alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum and with such surety or sureties as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed.
3. TRANSFER OF SHARES.
(a) Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation which shall be kept at its principal office. No transfer shall be made within ten days next preceding the annual meeting of shareholders.
(b) The corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by New Jersey Statutes.
4. CLOSING TRANSFER BOOKS.
The board shall have the power to close the share transfer books of the corporation for a period of not more than ten days during the thirty-day period immediately preceding (a) any shareholders’ meeting, or (b) any date upon which shareholders shall be called upon to or have a right to take action without a meeting, or (c) any date fixed for the payment of a dividend or any other form of distribution, and only those shareholders of record at the time the transfer books are closed shall be recognized as such for the purpose of (a) receiving notice of or voting at such meeting, or (b) allowing them to take appropriate action, or (c) entitling them to receive any dividend or other form of distribution.
5. DIVIDENDS.
(a) Subject to any restrictions contained in the certificate of incorporation and to applicable law, the corporation may, from time to time, by resolution of its board, pay dividends on its shares in cash, in its own shares, in its bonds or in other property, including the shares or bonds of other corporations, except when the corporation is insolvent or would thereby be made insolvent.
(b) Dividends may be declared or paid and other distributions may be made out of surplus only, except as otherwise provided by statute.
ARTICLE VI-CORPORATE SEAL
The seal of the corporation shall be circular in form and bear the name of the corporation, the year of its organization and the words “Corporate Seal, New Jersey.” The seal may be used by causing it to be impressed directly on the instrument or writing to be sealed, or upon adhesive substance affixed thereto. The seal on the certificates for shares or on any corporate obligation for the payment of money may be a facsimile, engraved or printed.
ARTICLE VII –FISCAL YEAR
The fiscal year shall begin the first day of July each year.
ARTICLE VIII-BY-LAW CHANGES
AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.
(a) Except as otherwise provided in the certificate of incorporation the by-laws may be amended, repealed or adopted by vote of the holders of the shares at the time entitled to vote in the election of any directors. By-laws may also be amended, repealed or adopted by the board but any by-law adopted by the board may be amended by the shareholders entitled to vote thereon.
(b) If any by-law regulating an impending election of directors is adopted, amended or repealed by the board, there shall be set forth in the notice of the next meeting of shareholders for the election of directors the by-law so adopted, amended or repealed, together with a concise statement of the change made.
ARTICLE IX-INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
The corporation shall indemnify any directors, officers, employees, or agents to the full extent permitted by the New Jersey Business Corporation Act.
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