On September 12, 2008, mPhase Technologies, Inc (the "Company"), a New Jersey corporation, entered into a Securities Purchase Agreement with La Jolla Cove Investors pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended, in connection with the issuance of a 7.25% Convertible Debenture in the principal amount of $2,000,000. The maturity date of the Debenture is September 30, 2011. The Company will receive $200,000 of cash funding up front plus a $1,800,000 Secured Promissory Note with an interest rate of 8.25%. The Convertible Debenture is convertible into the Company’s common stock at a conversion price equal to the lesser of $.35 per share or 80% of the average of the 3 lowest Volume Weighted Average Prices during the 20 days prior to the holders election to convert.

Item 9.01 Financial Statements and Exhibits

The information set forth above is qualified in its entirety by reference to the actual terms of the Securities Purchase Agreement, Convertible Debenture and Secured Promissory Note attached hereto as Exhibit 99.1, and incorporated herein by reference.