mPhase Technologies Raise $15m to Develop Nanotechnology Products

Published on May 31, 2007 at 11:59 PM

mPhase Technologies, Inc. announced today that its wholly-owned subsidiary AlwaysReady, Inc. has entered into a definitive agreement with Source Capital Group (SCG) for investment banking services to include a to-be-identified private placement of common stock of the company. mPhase had previously announced that it had formed Always Ready, Inc., to own and develop, as a separate company, its line of nanotechnology products.

Under terms of the agreement, SCG will use its best efforts to raise up to $15 million of financing for AlwaysReady Inc. The financing to be arranged by SCG is expected to provide AlwaysReady, Inc. with the financial resources to fund research and development with the Bell Labs' division of Lucent Technologies, Inc. as well as provide guidance on strategic acquisitions as the company exercises its business plan.

"This agreement represents implementation of the strategic decision by mPhase Technologies, Inc. to separate mPhase's nanotechnology product line into a new company said Ronald A. Durando, CEO and President of mPhase Technologies, Inc. "It will permit AlwaysReady, Inc. to continue in its mission of developing groundbreaking nanotechnology research and product development that will be truly life-changing for our society."

"The combined strengths of our innovative Smart Nanobattery and our Ultra Sensitive Magnetometer led us to the decision to keep these two businesses together in a compartmentalized manner in the AlwaysReady subsidiary," Mr. Durando said. "We firmly believe this strategy will unleash potentially hidden value to existent mPhase shareholders."

With the April announcement of the new AlwaysReady, Inc. subsidiary, Mr. Durando noted: "In the coming years, the nanotechnology category will evolve into a trillion dollar industry. We are re-structuring accordingly to be well-positioned in the marketplace, to streamline our operational activities and to leverage our existing synergistic relationships with such leading academic and research institutions as Rutgers, the State University of New Jersey; and such defense-oriented entities such as Lockheed Martin, Northrop Grumman and the U.S. Army Armament Research, Development, and Engineering Center (ARDEC) at Picatinny, New Jersey."

AlwaysReady, Inc. will continue in its evolution towards its becoming a separate, publicly traded nanotechnology company through the eventual filing of appropriate registration statements under the Securities Act of 1933,as amended and the Securities Exchange Act of 1934, as amended with the Securities and Exchange Commission.

A new management team for AlwaysReady, Inc. as previously announced will be identified to lead the new company, which will be able to focus on leveraging intellectual property created in mPhase's Smart Nanobattery and Magnetometer, potentially enabling acceleration to market.

The new Smart Nanobattery architecture promises an energy source that can be packaged in various configurations, with shelf life potentially lasting decades, yet still able to be activated almost instantaneously on demand. Various battery designs based on this technology may deliver a new and unique component for system design across many fields, including defense, industrial and consumer electronics.

mPhase Technologies' innovative magnetometer designs exhibit a level of sensitivity unparalleled by commercial magnetometers. Acting much like a miniature tuning fork or oscillator, with movements only perceptible under a microscope, the magnetometer prototype detects changes in magnetic fields, which is important in many applications that need to establish direction of movement of magnetic objects.

Initial applications for such magnetometers are centered on national defense and homeland security. Among civilian uses might be sporting venues, where physical bag searches could be eliminated to speed security screenings in high-traffic entrances. The technology also lends itself to enhancing mobile phone global positioning (GPS) capabilities with direction-finding applications.

"We are excited about this investment in AlwaysReady, Inc. and the opportunity to back Ronald A. Durando and his talented management and research team," said Vik Grover, Managing Director, Investment Banking, Source Capital Group. "AlwaysReady, Inc. and its parent, mPhase Technologies, Inc., are pioneering the nanotechnology industry and with this new investment will be well-positioned to take advantage of future growth opportunities. We look forward to supporting the Company with its strategic initiatives."

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