---

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934. 
FOR THE QUARTER ENDED SEPTEMBER 30, 2005 
COMMISSION FILE NO. 000-24969

mPhase Technologies, Inc.

(Exact name of registrant as specified in its charter)NEW
      JERSEY
      22-2287503(State or other jurisdiction of
      (I.R.S.
      Employerincorporation or organization)
      Identification Number)


587 CONNECTICUT AVE., NORWALK, CT 06854-1711(Address of principal executive offices) (Zip Code)

ISSUER'S TELEPHONE NUMBER, (203) 838-2741

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED
ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, DURING THE PRECEDING 12 MONTHS (OR FOR SHORTER PERIOD THAT
THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORT), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES /X/ NO / /

THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK AS OF November 9, 2005 IS 163,903,277 SHARES, ALL OF ONE
CLASS OF $.01 PAR VALUE COMMON STOCK.

1

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mPHASE TECHNOLOGIES, INC.

INDEX

|               |                                                                                                                                                                           | PAGE
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|PART I         | FINANCIAL INFORMATION                                                                                                                                                     |     
|               |                                                                                                                                                                           |     
|ITEM 1         | FINANCIAL STATEMENTS                                                                                                                                                      |     
|               |                                                                                                                                                                           |     
|               | Consolidated Balance Sheets-June 30, 2005 and September 30, 2005, (Unaudited)                                                                                             | 3   
|               |                                                                                                                                                                           |     
|               | Unaudited Consolidated Statements of
    Operations-Three months ended September 30, 2004 and 2005 and from
    October 2, 1996 (Date of Inception) to September 30, 2005 | 4   
|               |                                                                                                                                                                           |     
|               | Unaudited Consolidated Statement of Changes
    in Shareholders' Deficit Three months ended September 30, 2005                                                            | 5   
|               |                                                                                                                                                                           |     
|               | Unaudited Consolidated Statements of Cash
    Flows-Three Months ended September 30, 2004 and 2005 and from
    October 2, 1996 (Date of Inception) to June 30, 2005      | 6   
|               |                                                                                                                                                                           |     
|               | Notes to Unaudited Consolidated Financial
    Statements                                                                                                                  | 7   
|               |                                                                                                                                                                           |     
|ITEM 2         | Management's Discussion and Analysis of
    Financial Condition and Condition and Results of Operations                                                                   | 14  
|               |                                                                                                                                                                           |     
|ITEM 3         | Quantitative and Qualitative Disclosures
    about market risk                                                                                                            | 24  
|               |                                                                                                                                                                           |     
|ITEM 4         | CONTROLS AND PROCEDURES                                                                                                                                                   | 24  
|               |                                                                                                                                                                           |     
|PART II        | OTHER INFORMATION                                                                                                                                                         | 25  
|               |                                                                                                                                                                           |     
|Item 1.        | Legal Proceedings                                                                                                                                                         | 25  
|               |                                                                                                                                                                           |     
|Item 2.        | Changes in Securities                                                                                                                                                     | 25  
|               |                                                                                                                                                                           |     
|Item 3.        | Defaults Upon Senior Securities                                                                                                                                           | 25  
|               |                                                                                                                                                                           |     
|Item 4.        | Submission of Matters to a Vote of Security
    Holders                                                                                                                   | 25  
|               |                                                                                                                                                                           |     
|Item 5.        | Other Information                                                                                                                                                         | 25  
|               |                                                                                                                                                                           |     
|Item 6.        | Exhibits on Reports on Form 8-K                                                                                                                                           | 26  
|               |                                                                                                                                                                           |     
|Signature Page | 27                                                                                                                                                                       
|               |                                                                                                                                                                           |     
|Certifications | 28                                                                                                                                                                       

2

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mPHASE TECHNOLOGIES, INC. 
(A Development Stage Company) Consolidated Balance Sheets

|                                                                                                                                                                                |   | June 30,      |   | September 30,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | - | -------------
|                                                                                                                                                                                |   | 2005          |   | 2005         
|                                                                                                                                                                                |   |               |   |              
|                                                                                                                                                                                |   |               |   | (Unaudited)  
|ASSETS                                                                                                                                                                          |   |               |   |              
|                                                                                                                                                                                |   |               |   |              
|CURRENT ASSETS                                                                                                                                                                  |   |               |   |              
|Cash and cash equivalents                                                                                                                                                       | $ | 351,185       | $ | 424,378      
|Accounts receivable, net of bad debt reserve of $0 for each period                                                                                                              |   | 533,841       |   | 330,752      
|Stock subscription receivable                                                                                                                                                   |   | 460,000       |   | 1,092,400    
|Inventories, net                                                                                                                                                                |   | 490,142       |   | 623,192      
|Prepaid expenses and other current assets                                                                                                                                       |   | 25,622        |   | 42,513       
|                                                                                                                                                                                |   |               |   |              
|Total Current Assets                                                                                                                                                            |   | 1,860,790     |   | 2,513,235    
|                                                                                                                                                                                |   |               |   |              
|Property and equipment, net                                                                                                                                                     |   | 162,692       |   | 165,399      
|Patents and licensing rights, net                                                                                                                                               |   | 141,451       |   | 124,819      
|Other Assets                                                                                                                                                                    |   | 67,250        |   | 50,000       
|                                                                                                                                                                                |   |               |   |              
|                                                                                                                                                                                |   |               |   |              
|TOTAL ASSETS                                                                                                                                                                    | $ | 2,232,183     | $ | 2,853,453    
|                                                                                                                                                                                |   |               |   |              
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                            |   |               |   |              
|                                                                                                                                                                                |   |               |   |              
|CURRENT LIABILITIES                                                                                                                                                             |   |               |   |              
|Accounts payable                                                                                                                                                                |   | 1,691,338     |   | 1,696,155    
|Accrued expenses                                                                                                                                                                |   | 431,765       |   | 673,149      
|Due to related parties                                                                                                                                                          |   | 721,569       |   | 900,812      
|Notes payable, related parties                                                                                                                                                  |   | 277,000       |   | 392,000      
|Current portion of long-term debt                                                                                                                                               |   | 413,537       |   | 368,057      
|                                                                                                                                                                                |   |               |   |              
|TOTAL CURRENT LIABILITIES                                                                                                                                                       |   | 3,535,208     |   | 4,030,173    
|                                                                                                                                                                                |   |               |   |              
|Long-term debt, net of current portion                                                                                                                                          |   | 100,000       |   | 100,000      
|Other Liabilities                                                                                                                                                               |   | 214,709       |   | 213,800      
|                                                                                                                                                                                |   |               |   |              
|COMMITMENTS AND CONTINGENCIES (Note 9)                                                                                                                                          |   | -             |   | -            
|                                                                                                                                                                                |   |               |   |              
|STOCKHOLDERS' DEFICIT                                                                                                                                                           |   |               |   |              
|                                                                                                                                                                                |   |               |   |              
|Common stock, par value $.01, 500,000,000 shares authorized 145,048,832 and 160,224,457 shares issued and outstanding at June 30, 2005 and September 30, 2005,
    respectively |   | 1,450,489     |   | 1,602,245    
|Additional paid in capital                                                                                                                                                      |   | 123,949,156   |   | 126,882,151  
|Deficit accumulated during development stage                                                                                                                                    |   | (127,009,407) |   | (129,966,943)
|Less-Treasury stock, 13,750 shares at cost                                                                                                                                      |   | (7,973)       |   | (7,973)      
|                                                                                                                                                                                |   |               |   |              
|TOTAL STOCKHOLDERS' DEFICIT                                                                                                                                                     |   | (1,617,735)   |   | (1,490,520)  
|                                                                                                                                                                                |   |               |   |              
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                     | $ | 2,232,183     | $ | 2,853,453    

The accompanying notes are an integral part of these consolidated balance
sheets.

3

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mPHASE TECHNOLOGIES, INC. 
(A Development Stage Company) Consolidated Statements of Operations(Unaudited)

|                                                                                                                              |   |                    |   |               | October 2, 1996
|----------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | - | ------------- | ---------------
|                                                                                                                              |   | Three Months Ended |   | (Date of     
|                                                                                                                              |   | September 30,      |   | Inception) to
|                                                                                                                              |   |                    |   |               |                
|                                                                                                                              |   | 2004               |   | 2005          |                
|                                                                                                                              |   |                    |   |               |                
|REVENUES                                                                                                                      | $ | 179,163            | $ | 380,594       | $              
|                                                                                                                              |   |                    |   |               |                
|COSTS AND EXPENSES                                                                                                            |   |                    |   |               |                
|Cost of Sales                                                                                                                 |   | 129,781            |   | 337,973       |                
|Research and
    development including non-cash stock related charges of $0, $0 and $2,117,669,
    respectively)             |   | 1,101,400          |   | 1,861,420     |                
|General and
    Administrative (including non-cash
    stock related charges of
    $0, $99,000 and $50,380,225 respectively) |   | 708,895            |   | 1,092,292     |                
|Depreciation and
    amortization                                                                                             |   | 1,021              |   | 20,269        |                
|                                                                                                                              |   |                    |   |               |                
|TOTAL COSTS AND
    EXPENSES                                                                                                  |   | 1,941,097          |   | 3,295,322     |                
|                                                                                                                              |   |                    |   |               |                
|LOSS FROM OPERATIONS                                                                                                          |   | (1,761,934)        |   | (2,931,360)   |                
|                                                                                                                              |   |                    |   |               |                
|OTHER INCOME                                                                                                                  |   |                    |   |               |                
|Gain (Loss) on
    extinguishments                                                                                            |   | (40,500)           |   | (11,975)      |                
|Minority interest loss
    in consolidated
    subsidiary                                                                     |   | -                  |   | -             |                
|Loss on Sale of
    Securities                                                                                                |   | -                  |   | -             |                
|Loss from
    unconsolidated subsidiary                                                                                       |   | -                  |   | -             |                
|Interest Income
    (expense), net                                                                                            |   | (29,428)           |   | (14,201)      |                
|                                                                                                                              |   |                    |   |               |                
|TOTAL OTHER INCOME (EXPENSE)                                                                                                  |   | (69,928)           |   | (26,176)      |                
|                                                                                                                              |   |                    |   |               |                
|NET LOSS                                                                                                                      | $ | (1,831,862)        | $ | (2,957,536)   | $              
|                                                                                                                              |   |                    |   |               |                
|LOSS PER COMMON SHARE, basic and diluted                                                                                      | $ | (.02)              | $ | (.02)         |                
|                                                                                                                              |   |                    |   |               |                
|WEIGHTED AVERAGE
    COMMON SHARES OUTSTANDING, basic and
    diluted                                                         |   | 87,719,962         |   | 152,291,645   |                

The accompanying notes are an integral part of these consolidated financial
statements.

4

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mPHASE TECHNOLOGIES, INC. 
  (A Development Stage Company) 
  Consolidated Statement of Changes in 
  Shareholders' Deficit (unaudited)

|                                                                                                   |             |                 |          |              |                | Total       
|-------------------------------------------------------------------------------------------------- | ----------- | --------------- | -------- | ------------ | -------------- | ------------
|                                                                                                   |             |                 |          | Additional   |                | Shareholders
|                                                                                                   |             | $.01
    Stated | Treasury | Paid-in      | Accumulated    | (Deficit)   
|                                                                                                   | Shares      | Value           | Stock    | Capital      | Deficit        | Equity      
|                                                                                                   |             |                 |          |              |                |             
|                                                                                                   |             |                 |          |              |                |             
|Balance June 30, 2005                                                                              | 145,048,832 | $1,450,489      | $(7,973) | $123,949,156 | $(127,009,407) | $(1,617,735)
|                                                                                                   |             |                 |          |              |                |             
|Issuance of common stock pursuant to the
    exercise of warrants                                  | 200,000     | 2,000           | -        | 43,000       | -              | 45,000      
|                                                                                                   |             |                 |          |              |                |             
|Issuance of common stock for services                                                              | 450,000     | 4,500           | -        | 94,500       | -              | 99,000      
|                                                                                                   |             |                 |          |              |                |             
|Issuance of common
    stock with warrants in private placements, net of cash expenses of $158,315 | 14,525,625  | 145,256         | -        | 2,794,495    | -              | 2,940,751   
|                                                                                                   |             |                 |          |              |                |             
|Net Loss                                                                                           | -           | -               | -        | -            | (2,957,536)    | (2,957,536) 
|                                                                                                   |             |                 |          |              |                |             
|Balance, September 30, 2005                                                                        | 160,224,457 | $1,602,245      | $(7,973) | $126,882,151 | $(129,966,943) | $(1,490,520)

5

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mPHASE TECHNOLOGIES, INC. (A Development Stage Company) Consolidated Statements of Cash Flows(Unaudited)

|                                                                                             |   |                    |   |               |   | October
    2,
|-------------------------------------------------------------------------------------------- | - | ------------------ | - | ------------- | - | --------------
|                                                                                             |   |                    |   |               |   | 1996          
|                                                                                             |   | Three Months Ended |   | (Date of     
|                                                                                             |   | September 30,      |   | Inception) to
|                                                                                             |   |                    |   |               |   | September 30, 
|                                                                                             |   | 2004               |   | 2005          |   | 2005          
|                                                                                             |   |                    |   |               |   |               
|                                                                                             |   |                    |   |               |   |               
|Cash Flow From
    Operating Activities:                                                     |   |                    |   |               |   |               
|Net Loss                                                                                     | $ | (
    1,831,862)   | $ | (2,957,536)   | $ | (129,966,943) 
|Adjustments to
    reconcile net loss to net cash used in operating
    activities:          |   |                    |   |               |   |               
|Depreciation and
    amortization                                                            |   | 15,384             |   | 38,151        |   | 6,648,980     
|Book Value of fixed
    assets disposed                                                      |   | --                 |   | -             |   | 74,272        
|Provision for doubtful
    accounts                                                          |   | --                 |   | -             |   | 32,124        
|(Gain) loss on debt
    extinguishments                                                      |   | 40,500             |   | -             |   | (772,216)     
|Loss on unconsolidated
    subsidiary                                                        |   | -                  |   | -             |   | 1,466,467     
|Impairment of note
    receivable                                                            |   | -                  |   | 17,250        |   | 250,000       
|Loss on Security                                                                             |   | -                  |   | -             |   | 48,669        
|Non-cash charges
    relating to issuance of common stock, common stock options and Warrants |   | -                  |   | 99,000        |   | 52,893,954    
|Changes in assets and
    liabilities:                                                       |   |                    |   |               |   |               
|Accounts receivable                                                                          |   | 50,191             |   | 203,089       |   | (362,876)     
|Inventories                                                                                  |   | 84,740             |   | (133,050)     |   | (627,753)     
|Prepaid expenses and
    other current assets                                                |   | (329,071)          |   | (16,891)      |   | 38,548        
|Other non-current
    assets                                                                 |   | (81,123)           |   | -             |   | (627,182)     
|Accounts payable                                                                             |   | 263,633            |   | 4,108         |   | 4,247,636     
|Accrued expenses                                                                             |   | (87,487)           |   | 241,384       |   | 1,909,664     
|Due to/from related
    parties                                                              |   |                    |   |               |   |               
|Microphase                                                                                   |   | 89,633             |   | 15,984        |   | 2,653,043     
|Janifast                                                                                     |   | 44,213             |   | 108,859       |   | 3,065,827     
|Officers                                                                                     |   | 10,820             |   | 54,400        |   | 557,356       
|Lintel                                                                                       |   | -                  |   | -             |   | 477,000       
|Others                                                                                       |   | (50,000)           |   | -             |   | 179,472       
|Receivables from
    Subsidiary                                                              |   | -                  |   | -             |   | (150,000)     
|Deferred revenue                                                                             |   | 110,820            |   | -             |   | -             
|                                                                                             |   |                    |   |               |   |               
|Net cash used in
    operating activities                                                    |   | (
    1,669,609)   |   | (2,325,252)   |   | (57,963,958)  
|                                                                                             |   |                    |   |               |   |               
|Cash Flow from
    Investing Activities:                                                     |   |                    |   |               |   |               
|Payments related to
    patents and licensing rights                                         |   | (32,451)           |   | -             |   | (450,780)     
|Purchase of fixed
    assets                                                                 |   | -                  |   | (24,226)      |   | (2,786,808)   
|Net Cash
    (used) in investing activities                                                  |   | (32,451)           |   | (24,226)      |   | (3,237,588)   
|                                                                                             |   |                    |   |               |   |               
|Cash Flow from
    Financing Activities:                                                     |   |                    |   |               |   |               
|Proceeds from issuance
    of common stock and                                               |   |                    |   |               |   |               
|exercises of options
    and warrants                                                        |   | 1,288,000          |   | 2,353,151     |   | 61,219,344    
|Payments of notes
    payable                                                                |   | (105,498)          |   | (45,480)      |   | (333,287)     
|Advances from
    Microphase                                                                 |   | 175,000            |   | -             |   | 347,840       
|Proceeds from notes
    payable - officers                                                   |   | 600,000            |   | 150,000       |   | 1,115,000     
|Repayments of notes
    payable - officers                                                   |   | (300,000)          |   | (35,000)      |   | (715,000)     
|Repurchase of treasury
    stock at cost                                                     |   | --                 |   | --            |   | (7,973)       
|                                                                                             |   |                    |   |               |   |               
|Net cash provided by
    financing activities                                                |   | 1,657,502          |   | 2,422,671     |   | 61,625,924    
|                                                                                             |   |                    |   |               |   |               
|Net increase
    (decrease) in cash                                                          |   | (44,558)           |   | 73,193        |   | 424,378       
|CASH AND CASH
    EQUIVALENTS, beginning  of period                                          |   | 90,045             |   | 351,185       |   | -             
|                                                                                             |   |                    |   |               |   |               
|CASH AND CASH
    EQUIVALENTS, end of  period                                                | $ | 45,487             | $ | 424,378       | $ | 424,378       

6

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mPHASE TECHNOLOGIES, INC. 
(A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS

mPhase Technologies, Inc. (the "Company") was organized on October 2, 1996.
On February 17, 1997, the Company acquired Tecma Laboratories, Inc. ("Tecma") in
a transaction accounted for as a reverse merger. On June 25, 1998, the Company
acquired Microphase Telecommunications, Inc. ("MicroTel"), through the issuance
of 2,500,000 shares of its common stock in exchange for all the issued and
outstanding shares of MicroTel. The assets acquired in this acquisition were
patents related to the mPhase line of DSL component products (e.g., POTS
Splitters) and patent applications utilized in the Company's legacy Traverser(TM)
Digital Video Data Delivery System ("Traverser"). The primary business of the
company is to design, develop, manufacture and market its software/middleware
solution that enables telephone service providers to deliver feature rich
broadcast television, high-speed internet and voice over any infrastructure that
utilizes internet protocol (the IPTV solution.).  Additionally, the Company
sells digital subscriber line (DSL) component products that include its new
Broadband Loop Watch product that enables telephone service providers to perform
loop diagnostic testing of its system for deployment and maintenance of DSL data
as well as microfilters and pots splitters. Since February of 2004, the Company
has also engaged Lucent Technologies Inc. to develop a battery with an extremely
long shelf life using the science of nanotechnology . In March of 2005 the
Company engaged Lucent Technologies to develop a magnetometer or electronic
sensor using the science of nanotechnology. The Company believes that both
products being developed using the science of nanotechnology will intitially
have military applications.

The Company is in the development stage, as defined by Statement of Financial
Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development
Stage Enterprises." and its present activities are focused on the commercial
deployment of its proprietary Traverser (TM) and associated DSL component
products. Since mPhase is in the development stage, the accompanying
consolidated financial statements should not be regarded as typical for normal
operating periods.

BASIS OF PRESENTATION-The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and pursuant to the regulations of
the Securities Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ending
September 30, 2005 are not necessarily indicative of the results that may be
expected for a full fiscal year. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 2005.

Through September 30, 2005, the Company had incurred cumulative (a)
development stage losses totaling approximately $129,966,943 and (b) negative
cash flow from operations equal to $57,963,958. At September 30, 2005, the
Company had approximately $424,378 of cash, cash equivalents and approximately
$330,752 of trade receivables to fund short-term working capital requirements.
The Company's ability to continue as a going concern and its future success is
dependent upon its ability to raise capital in the near term to: (1) satisfy its
current obligations, (2) continue its research and development efforts, and (3)
allow the successful wide scale development, deployment and marketing of its
products.

USE OF ESTIMATES-The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

RECLASSIFICATIONS-Certain reclassifications have been made in the prior
period consolidated financial statements to conform to the current period
presentation.

7

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mPHASE TECHNOLOGIES, INC. 
(A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

LOSS PER COMMON SHARE, BASIC AND DILUTED - The Company accounts for net loss
per common share in accordance with the provisions of SFAS No. 128, "EARNINGS
PER SHARE" ("EPS"). SFAS No. 128 requires the disclosure of the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. Common equivalent
shares have been excluded from the computation of diluted EPS for all periods
presented since their affect is antidilutive.

RESEARCH AND DEVELOPMENT-Research and development costs are charged to
operations as incurred.

REVENUE RECOGNITION-All revenue included in the accompanying consolidated
statements of operations for all periods presented relates to sales of mPhase's
line of POTS Splitter products and other related DSL component products. As
required, the Company adopted the Securities and Exchange Commission ("SEC")
Staff Accounting Bulletin ("SAB") No. 101, REVENUE RECOGNITION IN FINANCIAL
STATEMENTS, which provides guidance on applying generally accepted accounting
principles to revenue recognition based on the interpretations and practices of
the SEC. The Company recognizes revenue for its line of POTS Splitter products
and other DSL component products at the time of shipment, at which time, no
other significant obligations of the Company exist, other than normal warranty
support. In addition, the Company includes costs of shipping and handling billed
to customers in revenue and the related expenses of shipping and handling costs
is included in cost of sales.

STOCK-BASED COMPENSATION-mPhase has elected to continue to account for
stock-based compensation under APB Opinion No. 23, under which no compensation
expense has been recognized for stock options and certain compensating warrants
granted to employees at fair market value. In accordance with SFAS No. 148 the
Company has elected to implement the disclosure only provisions of this
statement. Had compensation expense for stock options granted under the Plan and
certain warrants granted to employees in 2004 and 2005 been determined based on
fair value at the grant dates, mPhase's net loss for the three months ended
September 30, 2004 and 2005 would have been increased to the pro forma amounts
shown below.

|                    |   | Three Months Ended
|------------------- | - | ------------------
|                    |   | September 30,     
|                    |   |                   
|                    |   | 2004              
|                    |   |                   
|Net Loss:           |   |                   
|As reported         | $ | ( 1,831,862)      
|                    |   |                   
|Pro forma           | $ | ( 1,831,862)      
|                    |   |                   
|Net Loss Per Share: |   |                   
|As reported         | $ | (.02)             
|Pro forma           | $ | (.02)             

8

---



mPHASE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

RECENT ACCOUNTING PRONOUNCEMENTS

FASB 150 - Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity

In May 2003, the FASB issues SFAS statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). This
statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except for mandatory redeemable financial
instruments of nonpublic entities, if applicable. It is to be implemented by
reporting the cumulative effect of a change in an accounting principle for
financial instruments created before the issuance date of the Statement and
still existing at the beginning of the interim period of adoption. The adoption
of this statement beginning with the quarter commencing August 1, 2003 did not
have a significant impact of the Company's results of operations or financial
position.

FASB 151 - Inventory Costs

In November 2004, the FASB issued FASB Statement No. 151, which revised ARB
No. 43, relating to inventory costs. This revision is to clarify the accounting
for abnormal amounts of idle facility expense, freight, handling costs and
wasted material (spoilage). This Statement requires that these items be
recognized as a current period charge regardless of whether they meet the
criterion specified in ARB 43. In addition, this Statement requires the
allocation of fixed production overheads to the costs of conversion be based on
normal capacity of the production facilities. This Statement is effective for
financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for inventory costs incurred during fiscal years
beginning after the date of this Statement is issued. Management believes this
Statement will have no impact on the financial statements of the Company once
adopted.

FASB 152 - Accounting for Real Estate Time-Sharing Transactions

In December 2004, the FASB issued FASB Statement No. 152, which amends FASB
Statement No. 66, Accounting for Sales of Real Estate, to reference the
financial accounting and reporting guidance for real estate time-sharing
transactions that is provided in AICPA Statement of Position (SOP) 04-2,
Accounting for Real Estate Time-Sharing Transactions. This Statement also amends
FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of
Real Estate Projects, to state that the guidance for (a) incidental operations
and (b) costs incurred to sell real estate projects does not apply to
real-estate time sharing transactions. The accounting for those operations and
costs is subject to the guidance in SOP 04-2. This Statement is effective for
financial statements for fiscal years beginning after June 15, 2005. Management
believes this Statement will have no impact on the fiscal statements of the
Company once adopted.

FASB 153 - Exchange of Nonmonetary Assets

In December 2004, the FASB issued FASB Statement No. 153. This Statement
addresses the measurement of exchanges of nonmonetary assets. The guidance in
APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the
principle that exchanges of nonmonetary assets should be measured based on the
fair value of the assets exchanged. The guidance in that Opinion, however,
included certain exceptions to that principle. This Statement amends Opinion 29
to eliminate the exception for nonmonetary exchanges of similar productive
assets and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. This Statement is effective
for financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for nonmonetary asset exchanges incurred during fiscal
years beginning after the date of this Statement is issued. Management believes
this Statement will have no impact on the financial statements of the Company
once adopted.

FASB 123 (revised 2004) - Share-Based Payments

In December, 2004, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123(R), "Share-Based Payment". Among other things, SFAS No. 123 (R)
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statements based on their fair
values. The Company is required to adopt the provisions of Statement No. 123(R)
in its interim period beginning February 1, 2006. Adoption of Standard No.
123(R) is not expected to have a material impact on the Company's financial
statements.

---



STATEMENT OF CASH FLOW SUPPLEMENTAL INFORMATION

|              | 2004 | 2005     
|------------- | ---- | ---------
|              |      |          
|Interest Paid | $  0 | $  14,201
|              |      |          
|Taxes Paid    | $  0 | $  0     

Non Cash Investing and Financing Activities:

|                                       | 2004          | 2005
|-------------------------------------- | ------------- | ----
|Conversion of accounts
    payable and |               |     
|accrued expenses to
    equity         | $
    129,000 | $ 0 
|                                       |               |     
|Conversion of accounts
    payable and |               |     
|accrued expenses to
    notes payable  | $
    460,000 | $  0

9

---



mPHASE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

2. RELATED PARTY TRANSACTIONS

mPhase's President, Chief Operating Officer and Chairman of the Board of the
Company are also officers of Microphase and mPhase's president and chairman of
the board are shareholders of Microphase. On May 1, 1997, the Company entered
into an agreement with Microphase, whereby it will use office space as well as
the administrative services of Microphase, including the use of accounting
personnel. This agreement was for $5,000 per month and was on a month-to-month
basis. In July 1998, the office space agreement was revised to $10,000, in
January 2000 to $11,050 per month, in July 2001 to $11,340 per month, in July
2002 to $12,200 per month, in January 2003 to $10,000 per month, and in July
2003 to $18,000 per month. Additionally, in July 1998, mPhase entered into an
agreement with Microphase, whereby mPhase reimburses Microphase $40,000 per
month for technical research and development. In January 2003 the technical
research and development agreement was revised to $20,000 per month, in July
2003 it was further revised to $5,000 per month for technical research and
development, $5,000 per month for administrative services and $5000 per month
under the office space agreement.

Microphase also charges fees for specific projects on a project-by-project
basis. During the three months ended September 30, 2004 and 2005 and from
inception (October 2, 1996) to September 30, 2005, $45,000, $45,000, and
$7,269,526 respectively, have been charged to expense or inventory under these
Agreements and is included in operating expenses in the accompanying
consolidated statements of operations.

The Company is obligated to pay a 3% royalty to Microphase on
revenues from its proprietary Traverser(TM) Digital Video and Data Delivery
System and DSL component products. For the three months ended September 30, 2004
and 2005, mPhase recorded royalties to Microphase totaling $5,670 and $0,
respectively.

As a result of the foregoing transactions as of September 30, 2005, the
Company had $168,883 payable to Microphase, which is included in amounts due to
related parties in the accompanying consolidated balance sheet. Additionally, at
September 30, 2005, there are no undelivered purchase orders that remain
outstanding to Microphase.

The Company purchases products and incurs certain research and development
expenses with Janifast Ltd., which is owned by U.S. Janifast Holdings, Ltd., a
company in which three directors of mPhase are significant shareholders and one
is an officer, in connection with the manufacturing of POTS Splitter shelves and
component products including cards and filters sold by the Company.

During the three months ended September 30, 2004 and 2005 and the period from
inception (October 2, 1996) to September 30, 2005, $160,684, $215,974 and
$15,217,079, respectively have been charged by Janifast to The Company for
components of inventory or cost of sales expense that is included in operating
expenses in the accompanying statements of operations.

As a result of the foregoing transactions as of September 30, 2005, the
Company had $629,002 payable to Janifast, which is included in amounts due to
related parties in the accompanying balance sheet. Additionally, at September
2005, approximately $693,911 of undelivered purchase orders remain outstanding
to Janifast Ltd.

On August 30, 2004, the Company paid $100,000 in cash to Piper
Rudnick LLP, outside legal counsel to the Company as part of a renegotiated
settlement agreement that was originally effective as of March 31, 2002. The
Company was in arrears with respect to payments due under the original
settlement agreement and as part of the renegotiated agreement agreed to make
the following payments:

1. $25,000 on each of
  December 1, 2004, March 1, 2005, June 1, 2005, September 1, 2005 and a $50,000
  payment on December 1, 2005. Thereafter the Company is obligated to pay
  $25,000 on each of March 1, 2006, June 1, 2006, and September 1, 2006 with a
  final payment of $75,000 on December 1, 2006.
2. The Company also delivered a 5 year
  cashless warrant to purchase $150,000 worth of common stock at $.25 per share.

As of September 30, 2005, the Company had made each payment owed to Piper
Rudnick LLP except the payment of $25,000 that was due on September 1, 2005.

10

---

mPHASE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
3. INVENTORIES
Inventory is stated at the lower of cost, determined on a first-in, first-out
basis, or market. Inventory consists mainly of the Company's POTS Splitter
shelves and cards. At September 30, 2005 inventory is comprised of the
following:

|Raw materials                  | $ | 515,465  
|------------------------------ | - | ---------
|Work in progress               |   | 85,938   
|Finished goods                 |   | 227,431  
|                               |   |          
|Total                          |   | 828,834  
|Less: Reserve for Obsolescence |   | (205,642)
|                               |   |          
|Net Inventory                  | $ | 623,192  

4. INCOME TAXES

The Company accounts for income taxes using the asset and liability method in
accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES". Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry-forwards. Because of the
uncertainty as to their future realizability, net deferred tax assets,
consisting primarily of net operating loss carry-forwards, have been fully
reserved for. Accordingly, no income tax benefit for the net operating loss has
been recorded in the accompanying consolidated financial statements.

Utilization of net operating losses generated through September 30, 2005 may
be limited due to changes in ownership that have occurred.

5. ACCRUED EXPENSES

At September 2005 accrued expenses consisting of administrative expenses were
$517,149 and accrued expenses for research and development expenses incurred
with Lucent Technologies, Inc. were $156,000, totaling $673,149.

6. JOINT VENTURE

In March 2000, mPhase acquired a 50% interest in mPhase Television.Net
pursuant to a Joint Venture Agreement (the "Agreement") for $20,000. The
agreement stipulates for mPhase's joint venture partner, AlphaStar
International, Inc., ("Alphastar"), to provide mPhase Television.Net right of
first transmission for its transmissions including MPEG-2 digital satellite
television. In addition, in March 2000, mPhase loaned the joint venture
$1,000,000 at 8% interest per annum. The loan is repayable to the Company from
equity infusions to the subsidiary, no later than such time that mPhase
Television.Net qualifies for a NASDAQ Small Cap Market Listing. During April
2000, the Company acquired an additional 6.5% interest in mPhase Television.Net
for $1,500,000 and presently the Company owns 56.5% of this venture.

11

---

mPHASE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
During the three months ended September, 2004 and ended September 30, 2005,
mPhaseTelevision.Net, Inc., was charged $0 and $0, respectively for fees and
costs by its joint venture partner and its affiliates.
Pursuant to an agreement dated as of June 18, 2002,
mPhaseTelevision.Net has terminated its lease of the earth station and Alphastar
and its affiliated entity have converted certain accounts payable into shares of
the Company's common stock. Additionally, under this Agreement, mPhase is
obligated to pay Alphastar and its affiliates $35,000, which is included in
amounts due to related parties in the accompanying consolidated balance sheet.
7. EQUITY TRANSACTIONS
During the quarter the Company issued 200,000 shares of its common stock
pursuant to the exercise of warrants, generating net proceeds of $45,000 to the
Company and 450,000 shares of common stock for services valued at $99,000.
In July , August
and September of 2005, the Company issued 14,525,625 shares of its common stock
together with a like amount of 5 year warrants to purchase one share each of the
Company's common stock, with an exercise price of $.25 per share and $.20 per
share respectively in two separate private placements generating net proceeds of
$2,940,751 which was collected during the three month period ended on September
30, 2005.
8. DEBT TRANSACTIONS/CONVERSIONS
During the three months ending September 30, 2005, a note payable in the
amount of $180,000 to Microphase Corporation, a related party, remained
outstanding. Such note was extended by Microphase from July 25, 2005 and now
matures on July 25, 2006. The notes carries an interest rate of 12% payable
quarterly in arrears and was extended effective June 30, 2004.The note is
convertible into Common Stock of mPhase at the rate of $.20 cents per share plus
a 5 year warrant for a like amount of common stock at $.25 per share.
On August 30, 2004, the Company paid $100,000 to Piper&Rudnick, LLP, its
outside counsel, in connection with the renegotiation of a Payment Agreement
effective June 30, 2004. Under the terms of the renegotiated Payment Agreement,
the Company agreed to payments of $25,000 each on December 1, 2004, March 1,
2005, June 1, 2005 and September 1, 2005 and a payment of $50,000 on December 1, 2005 plus $25,000 payments on March 1, 2006, June 1, 2006,
September 1, 2006 and a final payment of $75,000 payment on December 1, 2006. In
addition, Piper&Rudnick LLP agreed to convert $150,000 of such payable into a 5
year cashless warrant to purchase 600,000 shares of the Company's common stock valued at $.25 per share.
On August 30, 2004 the Company issued two demand promissory notes each in the
principal amount of $75,000 at 12% interest in consideration of loans of $75,000
to the Company from each of Mr. Dotoli, its COO and Mr. Smiley, its CFO and
General Counsel. In addition on September 30, 2004, the Company issued a demand
promissory note to Microphase Corporation, a related party, for a loan of
$175,000 to the Company with a 12% interest rate. Finally, the Company issued
demand promissory notes with an interest rate of 12% to Mr. Ronald Durando, CEO
of the Company for loans made to the Company dated August 30, 2004, as well as
demand promissory notes to Mr. Durando, its CEO, for loans to the Company of
$200,000 on August 30, 2004, $75,000 on September 28, 2004 and $175,000 on
September 30, 2004 respectively.
In July of 2005, Mr. Smiley was repaid a $35,000 interim advance to the
company made in June of 2005.  In September of 2005, Messrs Durando and
Smiley made interim advances of $50,000 and $100,000 respectively to the Company
that were repaid in October of 2005.
In September of 2005, as shareholder of the Company exercised a warrant to
purchase 200,000 shares of common stock generations $45,000 of net proceeds to
the Company.
12mPHASE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
9. COMMITMENTS AND CONTINGENCIES
The Company has entered into various agreements with Georgia Tech Research
Corporation ("GTRC"), pursuant to which the Company receives technical
assistance in developing the commercialization of its Digital Video and Data
Delivery System (DVDDS). The amounts incurred by the Company for GTRC technical
assistance with respect to its research and development activities and included
in the accompanying consolidated statement of operations for the three months
ending September 30, 2004 and 2005 and for the period from inception through
September 30, 2005 totaled approximately $0, $0 and $ 13,539,952, respectively.
If and when sales commence utilizing this particular technology, the Company
will be obligated to pay to GTRC a royalty of up to 5% of sales of the
Traverser(TM) DVDDS.
As of March of 2005, the Company extended for an additional 12 months a
Development Agreement with Lucent Technologies, Inc. relating to Micro-Power
Source Arrays Fabricated Using Nanotextured, Superhydrophobic Materials. The
first product expected to be completed through this exploratory research effort
is a battery with a very long shelf life for military field applications. Under
such contract the Company is obligated to pay Lucent a total of $1.2 million
payable in installments of $100,000 per month through February of 2006. In
addition in March of 2005 the Company entered into a second 12 month Development
Agreement with Lucent for the development of a magnetometer using the science of
nanotechnology at a total cost of $1.2 million payable through February of
2006..
In July of 2005, the Company entered into a 4 month extension
of a Development Agreement with Lucent Technologies, Inc. dated September 15, 2003 to complete development of
Version 3.0 of its IPTV or TV+ product requiring 4 payments each of $156,000 per
month for work to be completed in the months of September through December of
2005. Such payments are payable 60 days in arrears of completion of each of the
4 milestones set forth for such period.
As of September 30, 2005 the company owed Magpie a total of $89,000 which was
paid on October 12, 2005 and October 26, 2005 respectively. In addition as of
September 30, 2005 the company owed Espial a total of $82,733.32, which was paid
on October 5, and November 8, 2005. The Company has a remaining commitment under
a statement of work to pay a total of $136,250 through November 30, 2005 to
Magpie based upon attainment of certain project milestones.
13ITEM 2. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS

The following is management's discussion and analysis of certain significant
factors, which have affected mPhase's financial position and should be read in
conjunction with the accompanying financial statements, financial data, and the
related notes.CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
LITIGATION REFORM ACT OF 1995:

Some of the statements contained in or incorporated by reference in this Form
10-Q discuss the Company's plans and strategies for its business or state other
forward-looking statements, as this term is defined in the Private Securities
Litigation Reform Act of 1995. The words "anticipate," "believe," "estimate,"
"expect," "plan," "intend," "should," "seek," "will," and similar expressions
are intended to identify these forward-looking statements, but are not the
exclusive means of identifying them. These forward-looking statements include,
among others, statements concerning the Company's expectations regarding its
working capital requirements, gross margin, results of operations, business,
growth prospects, competition and other statements of expectations, beliefs,
future plans and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical facts. Any
forward-looking statements contained in this Quarterly Report on Form 10-Q are
subject to risks and uncertainties that could cause actual results to differ
materially from those results expressed in or implied by the statements
contained herein.RESULTS OF OPERATIONS
OVERVIEW

mPhase, a New Jersey corporation, founded in 1996 is a publicly-held company
with over 14,000 shareholders and approximately155 million shares of common
stock outstanding. The Company's common stock is traded on the Over the Counter
Bulletin Board under the ticker symbol XDSL. We are headquartered in Norwalk,
Connecticut with offices in Little Falls, NJ and New York, N.Y. mPhase shares
common office space with Microphase Corporation, a privately held company.
Microphase is a leader in the field of RF and filtering technologies within the
defense and telecommunications industry. It has been in operation for almost 50
years and supports mPhase with both engineering, administrative and financial
resources as needed.
mPhase Technologies, Inc. ("mPhase" or the "Company") is a development stage
technology company headquartered in Norwalk, Connecticut with offices in Little
Falls, New Jersey and New York, New York. The Company is a developer and seller
of broadband communications products, specifically middleware and set top boxes
and, in addition, provides systems integration solutions for delivery of
broadcast television (IPTV), video on demand, high-speed internet and voice
using internet protocol over the existing infrastructure of a telephone service
provider. The Company's TV+ solution is carrier class and standards based
middleware designed to operate with any IP based network. In fiscal year 2004,
the Company entered into the field of nanotechnology research and development of
micro power cell batteries of various voltages. In March of 2005, the Company
extended its research and development efforts with respect to power cell
batteries for another 12 months by renewing its Development Agreement with the
Bell Labs division of Lucent Technologies, Inc. In March of 2005 the Company
also expanded its product development efforts utilizing the science of
nanotechnology by entering into a 12 month Development Agreement with Bell Labs
to develop a micro electro mechanical system directional sensor. mPhase shares
common office space and common management with Microphase Corporation, a
privately-held company. Microphase is a seller of radio frequency and filtering
technologies to the defense and telecommunication industries. Microphase has
been in operation for 50 years and supports mPhase with engineering,
administrative and financial resources, as needed.
Since our inception in 1996, mPhase has been a development-stage company. Our
primary activities have consisted of designing, manufacturing and testing
innovative products and solutions designed to allow for the delivery of
broadcast television by telephone service providers over their existing
infrastructure. Such efforts have now evolved into Release 3.0 of our TV+
product that is a carrier class solution designed to allow telecommunications
service providers to deliver digital broadcast television, high speed internet
and voice over both copper and fiber infrastructure. We have not, as yet,
derived significant revenue from such system although we received our first
order for 1000 ports of Release 2.0 of our TV+ solution from a major
telecommunications provider located in Russia generating approximately $280,000
in revenue during fiscal year 2005. The Company's entry into the field of
nanotechnology began in February of 2004 and initially focused upon exploratory
development of batteries with significantly longer shelf lives and enhanced
capabilities. In March of 2005, we expanded such efforts in development of
innovative products through the science of nanotechnology with the commencement
of research to develop ultra sensitive magnetometers or magnetic field sensors
with the potential to have significant applications and impact in the field of
military electronics. The Company believes that such expansion into
nanotechnology product development is consistent with its strategy of being a
pioneer of high growth technology products and potentially diversifies its
product mix.
mPhase introduced its first TV over DSL platform, the Traverser Digital Video
and Data Delivery System ("DVDDS"), in 1998. The DVDDS is a patented end to end
system that enables a telecommunications service provider to deliver up to
several hundred channels of motion picture experts group two ("MPEG-2") standard
broadcast digital television, high speed internet and voice over copper
telephone lines between a central office facility of the provider and a
customer's premise. mPhase has not, as yet, derived any material revenues from
sales of the DVDDS. The DVDDS is a proprietary technology developed in
conjunction with Georgia Tech Research Corporation (GTRC) and is one of the
first systems of its kind developed.. The system is the only system on the
market that utilizes non- Internet Protocol ("IP") transmission over ADSL. The
DVDDS was originally installed at Hart Telephone Company in Hartwell, Georgia,
as a test system in fiscal year 2002. A DVDDS system is also installed at the
BMW manufacturing plant in Spartanburg, South Carolina for use as a television
broadcast system in a commercial setting. The Company has discontinued further
development of the Traverser DVDDS and replaced it with its TV+ solution.
The Company believes that the demand for the TV+ system will be greatest in
markets primarily outside of the United States that do not have a hybrid fiber
coaxial cable ("HFC") infrastructure necessary for cable TV or fiber to the
curb.. Release 3.0 of the TV+ solution, expected to occur by December of 2005,
will utilize a communications framework based upon Internet Protocol (IP)
instead of Asynchronous Transfer Mode (ATM) that was utilized by Releases 1.0
and 2.0 of the TV+ product. ATM is an industry standard for transportation of
data based upon a packaging of information into a fixed-size cell format for
transportation across networks. Many telecommunications service providers
currently deploy equipment that handles this protocol because it can support
voice, video, data and multimedia applications simultaneously with a high degree
of reliability. IP is another transport protocol that maintains network
information and routes packets across networks. IP packets are larger and can
hold more data than ATM cells. Historically, there have been concerns that
service providers would be unable to provide the same quality of service with IP
because it is not optimized for time-sensitive signals such as broadcast
television and voice. Nevertheless, there is a greater demand by
telecommunication service providers for IP systems for delivery of television,
voice and high-speed data because such systems are significantly more cost
effective to deploy based upon greater scalability.
Release 3.0 of the TV+ solution consists of middleware/software that will
operate with any IP based network including DSL, Ethernet, or fiber or any
combination thereof. The solution is transport agnostic and may be deployed with
any IP multicast router or DSLAM transportation method used for the delivery of
television and high-speed data over an IP network.
In those television markets in the United States that are not served by HFC,
we believe that the availability of programming content is essential to
facilitate potential sales of our systems enabling delivery of broadcast
television over ADSL. In March of 2000, we established mPhase Television net.,
Inc. (mPhase TV), a joint venture between mPhase and Alphastar International,
Inc. in which mPhase owns a 57% interest. Through such joint venture, mPhase has
gained significant experience in negotiation of contracts with television
programmers for delivery of television over DSL. Such experience should prove
useful in providing assistance especially to smaller U.S. telecommunications
service providers in obtaining programming content necessary to enter into the
delivery of broadcast television over DSL.
mPhase also has designed and markets a line of DSL component products ranging
from items such as Plain Old Telephone Service (POTS) splitters to innovative
loop management products. From our inception in 1996 to date virtually all of
mPhase's revenue has been derived from sales of our DSL products such as POTS
splitters and low pass filters.
Our newest innovation in our suite of DSL component products is ouri POTS or Intelligent POTS splitter product. This product enables telephone
service providers comprehensive remote and automated test access to all elements
of a DSL network. Thei
POTS, andi POTS3 (renamed
the Broadband Watch product) allows a telephone service provider to bypass POTS
splitters on a DSL network and avoid having to manually intervene and disrupt
line usage so a test signal can pass through a DSL network. This product marks
an advancement in automating DSL loop . The legacy Traverser DVDDS has been
replaced by mPhase's TV+ solution which has been developed by Lucent
Technologies Inc.

14

---



The legacy Traverser DVDDS system is installed at the BMW manufacturing plant
in Spartanburg, South Carolina for use as a telebroadcast system in a commercial
setting.

mPhase DSL Component Products - mPhase also has designed and markets a line
of DSL component products ranging from items such as Plain Old Telephone Service
(POTS) splitters to innovative loop management products. From our inception in
1996 to date virtually all of mPhase's revenue has been derived from sales of
our component DSL products such as POTS splitters and low pass filters. Our
newest innovation in our suite of DSL component products is our iPOTS or
Intelligent POTS splitter product. This product enables telephone service
providers comprehensive remote and automated test access to all elements of a
DSL network. The iPOTS1, and iPOTS3 allow a telephone service provider to bypass
POTS splitters on a DSL network and avoid having to manually intervene and
disrupt line usage so a test signal can pass through a DSL network. This product
marks an advancement in automating DSL loop management. As DSL deployments
increase, it is becoming more important for telecommunications service providers
to streamline the process for rolling-out and troubleshooting DSL services.
Additionally, as competition for high speed Internet expands, the market is
witnessing a reduction in the price for such service. Therefore, it has become
imperative that telecommunications service providers lower the operational costs
involved with supporting DSL services. Currently our iPOTS1 is designed for use
with the Lucent Stinger, whereas, the iPOTS3 (renamed the Broadband Loop Watch
product) is compatible with DSLAM's manufactured by other vendors. mPhase
currently has a non-exclusive worldwide distribution agreement with Corning
Cable Systems for the sale of the iPOTS products. The Company is also
aggressively pursuing direct efforts with respect to sales of the iPOTS product.

mPhase was organized on October 2, 1996. On February 17, 1997, the Company
acquired Tecma Laboratories, Inc., a public corporation in a reverse merger
transaction. This resulted in the Company's stock becoming publicly traded on
the NASDAQ Over-the-Counter Bulletin Board. On June 25, 1998, the Company
acquired Microphase Telecommunications, Inc. in a stock for stock exchange,
whose principal assets included patents and patent applications utilized in the
Company's Traverser(TM) product. On March 2, 2000, mPhase acquired an interest
in mPhaseTelevision.Net, Inc., a joint venture organized to provide digital
television programming content to service providers deploying television over
DSL.

From mPhase's inception, the operating activities related primarily to
research and development, establishing third-party manufacturing and
distribution relationships and developing product brand recognition among
telecommunications service providers. These activities included establishing
trials and field tests of the Traverser(TM) and IPTV products with Hart
Telephone Company in Georgia and with a major telecommunications service
provider in Russia respectively. In addition the Company has been establishing a
core administrative and sales organization.

In February of 2004, the Company entered into the business of developing a
new battery using the science of Nanotechnology initially targeted for military
applications. The Company entered into a Development Agreement with Lucent
Technology to develop such battery. In March of 2005 the Company expanded its
product line by entering into a second Development Agreement with Lucent to
develop a magnetometer or electronic sensor using the science of nanotechnology.

Revenues. To date, all material revenues have been generated from sales of
the POTS Splitter Shelves and other DSL component products to a small number of
telecommunications companies. During fiscal year 2005, the Company deployed 1000
ports of its TV+ solution to a major telecommunication service provider in
Russia generating revenues of $280,000. mPhase believes that future revenues are
difficult to predict because of the length and variability of the commercial
roll-out of its new IPTV TV+ solution to various telecommunications service
providers. Since the Company believes that there may be a significant
international market for IPTV involving many different countries, with different
regulations, certifications and commercial practices than the United States,
future revenues are highly subject to the changing variables and uncertainties.
Additionally, the recent instability of the telecommunications market evidenced
by reduction in capital spending across the whole telecom sector contributes to
our difficulty in accurately predicting future revenues.

Cost of revenues. The costs necessary to generate revenues from the sale of
POTS Splitter Shelves and other related DSL component products include direct
material, labor and manufacturing. mPhase paid these costs to Janifast Ltd.,
which has facilities in the People's Republic of China and is owned by and
managed by certain senior executives of the Company. The cost of revenues also
includes certain royalties paid to Microphase Corporation, a privately held
corporation organized in 1955, which shares certain common management with the
Company. Costs for future production of the IPTV product will consist primarily
of payments to manufacturers to acquire the necessary components and assemble
the products and a certain minor royalties payable to Espial, the development of
software for the set top box portion of the Company's TV+ solution..

16

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Research and development. Research and development expenses consist
principally of payments made to Lucent Technologies, Inc. for development of the
IPTV solution or Release 3.0 of the TV+ product which allow for the delivery of
broadcast TV, video on demand , plus high speed data delivery and voice over any
infrastructure of a telecommunications service provider. In addition, mPhase is
currently paying Lucent for R&D related to its nanotechnology products that
include a new battery with an extended shelf life and a magnetometer of
electronic sensor. All research and development costs are expensed as incurred.

General and administrative. Selling, general and administrative expenses
consist primarily of salaries and related expenses for personnel engaged in
direct marketing of the IPTV or TV+ solution, the POTS Splitter Shelves and
other DSL component products, as well as support functions including executive,
legal and accounting personnel. Certain administrative activities are outsourced
on a monthly fee basis to Microphase Corporation. Finally, mPhase leases the
principal office from Microphase Corporation.

Non cash compensation charge. The Company makes extensive use of stock
options and warrants as a form of compensation to employees, directors and
outside consultants. From inception (October 2, 1996) through September 30, 2005
the Company has incurred cumulative (a) development stage losses and has an
accumulated deficit of $129,966,943 and (b) negative cash flow from operations
of $57,963,958. The auditors report for the fiscal year ended June 30, 2005
includes the statement that "there is substantial doubt of the Company's ability
to continue as a going concern". Management estimates that the Company needs to
raise approximately $5-10 million during the next 12 months to continue its
present level of operations. As of September 30, 2005, the Company had a
negative net worth of $1,490,520 down from a negative net worth of $1,617,735 as
a result of equity capital raised through private placements that exceeded net losses incurred after June 30, 2005.

For the first three months of fiscal year 2006, sales of POTS splitters and
its IPOTS 1 products were $380,594 up from $179,163 for the three months ended
September 30, 2004. The Company believes its new Broadband Loop Watch product
will capture some of the existing DSL deployments, providing increases in
revenue in fiscal year 2006. Until such time such revenues are realized, the
Company intends on maintaining its reduced cost structure to minimize its
losses, which management believes will permit the Company to sustain its
development process and ultimately achieve profitability.

The Company believes that significant deployments and resulting revenues from
these deployments of its flagship products, the TV+ respectively, are not
expected until the second half of fiscal year 2006. The Company further believes
that an increase in capital expenditures in the telecommunications industry will
also increase sales and improve the Company's margins as well as increase the
probability that the Company will attain profitability.

17

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THREE MONTHS ENDED SEPTEMBER 30, 2005 VS. SEPTEMBER 30, 2004

REVENUE

Total revenues were $380,594 for the three months ended September 30, 2005
compared to  $179,163 for the three months ended September 30, 2004. The
increase was primarily attributable to a decreased demand of the Company's POTS
Splitter product line and a sale to its IPOTS-1 product.

COST OF REVENUES

Cost of sales were $337,973 for the three months ended September 30, 2005 as
compared to $129,781 in the prior period, representing 88% of gross revenues for
the quarter ended September 30, 2005 and 72.0% for the quarter ended September
30, 2004, respectively. Our margins have contracted dramatically over the past
four years as spending among the telecommunications providers has contracted,
coupled with downward pressures related to the supply and demand of
telecommunications products. Margins for the quarter ended September 30, 2005
increased by 16% over the margins for the same period ended September 30, 2004.
We are unable to determine whether such margins will continue for the remainder
of fiscal year 2006.

RESEARCH AND DEVELOPMENT

Research and development expenses were $1,861,420 for the three months ended
September 30, 2005 as compared to $1,104,400 during the comparable period in
2004 or an increase of $757,020. This increase consists of increased spending in
TV+ product development activity and Nanotechnology battery and magnetometer
exploratory research. The year over year quarterly spending has increased $0 for
the IPTV and $500,000 for our nanotechnology products, respectively. Both areas
represent activities contracted though Lucent Technologies and managed by mPhase.
Spending for research and development with Microphase Corporation was $45,000
for the three month period ended September 30,2005 as compared to $45,000 for
the same period ended September 30, 2004.

Research expenditures incurred with Microphase were related to
the continuing development of the Company's DSL component products, including
the Company's line of POTS Splitters and Microfilters and the Company's newest
products, the Broadband Loop Watch. We believe the mPhase Broadband Loop Watch
offers a much needed solution for the DSL industry; the Broadband Loop Watch
enables telecommunications service providers to remotely and cost-effectively
perform loop management and maintenance including line testing, qualification
and troubleshooting. Prior to the introduction of the Broadband Loop Watch
product, loop management could not be remotely performed without a dispatch of
personnel to the field. The Company anticipates future demand for this product,
as it significantly reduces the cost of deploying and maintaining DSL services.

18

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GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses were $1,092,292 for the three
months ending September 30, 2005 up from $708,895 or an increase of $383,397
from the comparable period in 2004. The increase in this expense is attributable
to the growth in salaries and related expense of $54,810 non-cash stock related
expenses to consultants of $99,000 and increased spending
on travel and trade shows of $65,099. This increased spending corresponds with a
ramp up of selling activities in anticipation of the planned release and
commercialization of the TV+ solution.

NET LOSS

The Company recorded a net loss of $2,957,536 for the three months ended
September 30, 2005 as compared to a loss of $1,831,862 for the three months
ended September 30, 2004. This represents a loss per common share of $.02 for
the three month period ended September 30, 2005 as compared to a loss per common
share of $.02 for the three months ending September 30, 2004; based upon
weighted average common shares outstanding of 89,719,962 and 152,291,645 during
the periods ending September 30, 2004 and 2005, respectively.

The Company believes the initial major deployments and the
resultant revenues of its TV+ solution are not expected until the third quarter
of fiscal year 2006, which along with any upturn of spending in the telephone
industry will also increase sales and improve the Company's margins and provide
the Company with the opportunities to attain profitability.

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION

All revenue included in the accompanying consolidated statements of
operations for all periods presented relates to sales of mPhase's POTS Splitter
Shelves and DSL component products.

As required, mPhase has adopted the Securities and Exchange Commission
("SEC") Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in
Financial Statements", which provides guidelines on applying generally accepted
accounting principals to revenue recognition based upon the interpretations and
practices of the SEC. The Company recognizes revenue for its POTS Splitter Shelf
and Other DSL component products at the time of shipment, at which time, no
other significant obligations of the Company exist, other than normal warranty
support.

RESEARCH AND DEVELOPMENT

Research and development costs are charged to operations as incurred in
accordance with Statement of Financial Accounting Standards ("SFAS"), No.2,
"Accounting for Research and Development Cost."

INCOME TAXES

mPhase accounts for income taxes using the asset and liability
method in accordance with SFAS No.109 "Accounting for Income Taxes." Under this
method, deferred tax assets and liabilities are measured using currently enacted
tax rates. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in results of operations in the period that includes the
enactment date. Because of the uncertainty as to their future realizability, net
deferred tax assets, consisting primarily of net operating loss carryforwards,
have been fully reserved for. Accordingly, no income tax benefit for the net
operating loss has been recorded in the accompanying financial statements.

19

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Utilization of net operating losses generated through June 30, 2005 may be
limited due to "changes in control" of our common stock that occurred.

STOCK-BASED COMPENSATION

The Company follows the disclosure-only provisions of SFAS No. 123
"Accounting for Stock-based Compensation". SFAS No 123 encourages, but does not
require companies to record compensation expense for stock-based employee
compensation at fair value. As permitted, the Company has elected to continue to
account for stock-based compensation to employees using the intrinsic value
method presented in Accounting Principles Board ("APB") Opinion No.25
"Accounting for Stock Issued to Employees" and provide pro forma net income and
pro forma earnings per share disclosures for employee stock option grants as if
the fair valued-based method, as defined, had been applied. Compensation expense
is generally measured on the date of grant only if the current market price of
the underlying stock exceeded the exercise price.

The Company accounts for non-employee stock based awards in
which goods or services are the consideration received for the equity
instruments issued based on the fair value of the consideration received or the
fair value of the equity instrument issued, whichever is more readily
determinable.

INVENTORY RESERVE AND VALUATION ALLOWANCE

The Company carries its inventory at the lower of cost, determined on a
first-in, first-out basis, or market. Inventory consists mainly of the Company's
POTS Splitter Shelf and Filters. In determining the lower of cost or market, the
Company periodically reviews and estimates a valuation allowance to reserve for
technical obsolescence and marketability. The allowance represents management's
assessment and reserve for the technical obsolescence based upon the
inter-operability of its component products, primarily filters and splitters,
with presently deployed and next generation DSL infrastructures as well as a
reserve for marketability based upon current prices and the overall demand for
the individual inventory items. Material changes in either the technical
standards of future DSL deployments or further erosion in the demand for
deployments of DSL infrastructures could affect the estimates and assumptions
resulting in the amounts reported. Actual results could differ from these
estimates.

MATERIAL RELATED PARTY TRANSACTIONS

The Company records material related party transactions. The Company incurs
costs for engineering, design and production of prototypes and certain
administrative functions from Microphase Corporation and the purchase of
finished goods, primarily consisting of DSL splitter shelves and filters, from
Janifast Limited. The Company has incurred costs for obtaining transmission
rights. This enabled the Company to obtain re-transmission accreditation to
proprietary television content that the Company plans to provide with its
flagship product, the TV+ solution within its incorporated joint venture mPhase
Television.net, in which the Company owns a 56.5% interest.

20

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Mr. Durando, the President and CEO of mPhase, owns a controlling
interest and is a director of Janifast Limited. Mr. Durando and Mr. Dotoli are
officers of Microphase Corporation. Mr. Ergul, the chairman of the board of
mPhase, owns a controlling interest and is a director of Microphase Corporation.
Microphase, Janifast, Hart Telephone and Lintel Corporation are significant
shareholders of mPhase. Microphase, Janifast and Hart Telephone have converted
significant liabilities to equity in fiscal years June 30, 2001, 2002 and 2003.
Management believes the amounts charged to the Company by Microphase, Janifast,
mPhase Television.net and Hart Telephone are commensurate to amounts that would
be incurred if outside parties were used. The Company believes Microphase,
Janifast and Hart Telephone have the ability to fulfill their obligations to the
Company without further support from the Company.

A member of the Company's Board of Directors, Mr. Abraham
Biderman through his company Eagle Advisers provided significant investment
banking services in connection with Private Placements of the Company's common
stock and warrants. Eagle Advisers received investment banking cash placement
fees equal to $101,000 for the three month period ended September 30, 2005
compared to fees of $100,000 for the three month period ended September 30,
2004.

21

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LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2005 mPhase had working capital deficit of $1,516,938 as
compared to working capital deficit of $1,674,419 at June 30, 2005. Through
September 30, 2005, the Company had incurred development stage losses totaling
approximately $129,966,943. At September 30, 2005, the Company had approximately
$424,378 of cash, cash equivalents and approximately $330,752 of trade
receivables to fund short-term working capital requirements. The Company's
ability to continue as a going concern and its future success is dependent upon
its ability to raise capital in the near term to: (1) satisfy its current
obligations, (2) continue its research and development efforts, and (3) the
successful wide scale development, deployment and marketing of its products.

Historically, mPhase has funded its operations and capital expenditures
primarily through private placements of common stock. Management expects that
its ongoing financial needs will be provided by financing activities and
believes that the sales of its line of POTS Splitter products and other related
DSL component products and new Broadband Loop Watch product will provide some
offset to cashflow used in operations, although there can be no assurance as to
the level and growth rate of such sales in future periods as seen with quarter
to quarter fluctuations in component sales. At September 30, 2005, the Company
had cash and cash equivalents of $424,378 compared to $351,385 at June 30, 2005,
accounts receivable of $330,752 and inventory of $623,192. This compared to
$533,841 of accounts receivable and $490,142 of inventory at June 30, 2005.

Cash used in operating activities was $2,325,252 during the three months
ending September 30, 2005. The cash used by operating activities principally
consists of the net loss, the net decrease in inventory, the net decrease in
accounts receivable offset by depreciation and amortization, and by non-cash
charges for common stock options and warrants issued for services and increased
accrued expenses.

The Company has entered into various agreements with GTARC, pursuant to which
the Company receives technical assistance in developing the Digital Video and
Data Delivery System. The Company has incurred expenses in connection with
technical assistance from GTARC totaling approximately $0, $0, for the three
month periods ended September 30, 2005 and 2004, respectively, and $13,539,952
from the period from inception through September 30, 2005. GTRC may receive a
royalty of up to 5% of product sales ,if any, from the legacy Traverser DVDDS
product.

As of September 30, 2005, mPhase is obligated to pay Lucent
Technologies, Inc., a total sum of $624,000 for completion of Version 3.0 of the
TV+ product in 4 increments of $156,000 against project milestones. In addition
in March of 2005, mPhase extended its Development Agreement with Lucent for
development of a micro cell battery using the science of Nanotechnology at a
total cost of $1.2 million payable in monthly installments of $100,000 each
through February of 2006 and also entered into a new Development Agreement for
development of a magnetometer or electronic sensor device using the science of
nanotechnology also for a total cost of $1.2 million payable in monthly
installments of $100,000 each through February of 2006.

22

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LOSSES DURING THE DEVELOPMENT STAGE AND MANAGEMENT'S PLANS

From inception (October 2, 1996) through September 30, 2005 the
Company had incurred development stage losses and has an accumulated deficit of
approximately $129,966,943 and a stockholder's deficit of $1,490,520.
For the three months ended September 30, 2005, and from inception through
September 30, 2005 respectively, the Company had negative cash flow from
operations of $2,325,252 and $57,963,958, respectively. The report of the
Company's outside auditor's, Rosenberg, Rich, Baker, Berman and Company with
respect to its latest audited 10k for the fiscal year ended June 30, 2005 stated
that "there is substantial doubt of the Company's ability to continue as a going
concern". Management estimates that the Company will need to raise approximately
$5-10 million during the next 12 months to continue its present level of
operations.

We continue our efforts to raise additional funds through
private placements of our common stock and strategic alliances, the proceeds of
which are required to fund continuing expenditures and the controlled
development stage rollout of our TV+ system. However, there can be no assurance
that mPhase will generate sufficient revenues to provide positive cash flows
from operations or that sufficient capital will be available, when needed or at
terms that we deem to be reasonable.

We have evaluated our cash requirements for fiscal year 2006
based upon certain assumptions, including our ability to raise additional
financing and increased sales of our POTS splitter. The Company anticipates that
it will need to raise approximately $5-10 million primarily in private
placements of its common stock with accredited investors, during the next 12
months, or alternatively we will need to curtail certain expenses as incurred at
the present levels including marketing and research and development expenses.
Additional investment in technology design to further enhance the capabilities
of the TV+ product will be necessary over the next 12 months. In the long-term,
the Company may also invest additional funds annually on research and
development of the Nanotechnology product line based upon sales levels, changes
to technology and the overall success of the Company attaining sufficient
financing until such time as it achieves profitable operations.

Should these cash flows not be available to us, we believe we
would have the ability to revise our operating plan and make certain further
reductions in expenses, so that our resources which were available at September
30, 2005, plus financing to be secured during fiscal year 2006, and expected
POTS splitter revenues, will be sufficient to meet our obligations until the end
of fiscal year 2006. We have continued to experience operating losses and
negative cash flows. To date, we have funded our operations with a combination
of component sales debt conversions with related parties and strategic vendors,
and private equity offerings. Management believes that we will be able to secure
the necessary financing in the short-term to fund our operations into our next
fiscal year. However, failure to raise additional funds, or generate significant
cash flows through revenues, could have a material adverse effect on our ability
to achieve our intended business objectives.

23

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to changes in interest rates as the Company has no
debt arrangements and no investments in certain held-to-maturity securities.
Under our current policies, we do not use interest rate derivative instruments
to manage exposure to interest rate changes. A hypothetical 100 basis point
adverse move in interest rates along the entire interest rate yield curve would
not materially affect the fair value of any financial instruments at September
30, 2005.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of management including the
Chief Executive Officer and Chief Financial Officer, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act

Rule 13a-14c and of the end of the period covered by this
report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that these disclosure controls and procedures
are effective. There were no changes in our internal control over financial
reporting during the quarter ended September 30, 2005 that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.

24

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

mPhase was advised in April 2002 that following an investigation by the staff
of the Securities and Exchange Commission, the staff intended to recommend that
the Commission file a civil injunctive action against Packetport.com, Inc. ("Packetport")
and its Officer's and Directors. Such recommendation related to alleged civil
violations by Packetport and such Officers and Directors of various sections of
the Federal Securities Laws. The staff has alleged civil violations of Sections
5 and 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(d) of the
Securities Exchanges Act of 1934. As noted in other public filings of mPhase,
the CEO and COO of mPhase also serve as Directors and Officers of Packetport. At
that time these persons advised mPhase that they deny any violation of law on
their part and intend to vigorously contest such recommendation or action, if
any. To date no action has been filed against Packetport, its Officers or
Directors. mPhase is not named as a party in connection with this matter.

From time to time mPhase may be involved in various legal proceedings and
other matters arising in the normal course of business.

ITEM 2. SALES UNREGISTERED OF EQUITY SECURITIES AND USE OF PROCEEDS

Effective for the three-month period ended September 30, 2005 the Company
issued the following unregistered securities:

The Company issued 4,648,625 shares together with 5 year warrants to purchase
4,648,625 shares at $.25 per share including 48,625 shares and warrants to
purchase 48, 625,000 as finder's fees in a private placement pursuant to Rule
506 of Regulation D of the Securities Act of 1933 generating $920,000 of gross
proceeds available to the Company to be used for general corporate purposes.

In addition the Company issued 200,000 shares of common stock pursuant to the
exercise of warrants issued prior to the 3 month period generating net cash
proceeds of $45,000.  The Company also issued 450,000 shares for services
valued at $99,000.

The Company issued 9,877,000 shares of its common stock together with 5 year
warrants to purchase a like amount of shares at $.20 per share in two private
placement pursuant to Rule 506 of Regulation D of the Securities Act of 1933
generating $2,167,400 of gross proceeds also to be used for general corporate
purposes.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

25

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ITEM 6. EXHIBITS

EXHIBITS AND REPORTS ON FORM 8K.

(a) EXHIBITS

31.1 Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

31.2. Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

32.1. Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

32.2. Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

(b) REPORTS ON FORM 8K.

On September 30, 2005, the Company filed a Form 8K in which the Company and
the Bell Labs division of Lucent Technologies, Inc. announced the development of
a prototype of an un-cooled metal detector or magnetometer using the science of
nanotechnology.

26

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SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant, has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

|                         | mPHASE TECHNOLOGIES, INC.  
|------------------------ | ---------------------------
|                         |                            
|                         |                            
|                         |                            
|Dated: November 14, 2005 | By: /s/ Martin S. Smiley   
|                         | Martin S. Smiley           
|                         | Executive Vice President   
|                         | Chief Financial Officer and
|                         | General Counsel            

27

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Exhibit 31.1

CERTIFICATIONS

I, Ronald A. Durando, certify that:

1. I have reviewed this quarterly report on Form 10-Q of mPhase Technologies,
  Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
  of a material fact or omit to state a material fact necessary to make the
  statements made, in light of the circumstances under which such statements
  were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
  information included in this report, fairly present in all material respects
  the financial condition, results of operations and cash flows of the
  registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are
  responsible for establishing and maintaining disclosure controls and
  procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
  registrant's and have:

> a. Designed such disclosure
>     controls and procedures, or caused such disclosure controls and procedures
>     to be designed under our supervision, to ensure that material information
>     relating to the registrant, including its consolidated subsidiaries, is made
>     known to us by others within those entities, particularly during the period
>     in which this report is being prepared;
>     b. Evaluated the effectiveness of the
>     registrant's disclosure controls and procedures and presented in this report
>     our conclusions about the effectiveness of the disclosure controls and
>     procedures, as of the end of the period covered by this report based on such
>     evaluation; and
>     c. Disclosed in this report any change in the
>     registrant's internal control over financial reporting that occurred during
>     the registrant's most recent fiscal quarter (the registrant's fourth fiscal
>     quarter in the case of an annual report) that has materially affected, or is
>     reasonably likely to materially affect, the registrant's internal control
>     over financial reporting; and

1. The registrant's other certifying officer and I have
  disclosed, based on our most recent evaluation of internal control over
  financial reporting, to the registrant's auditors and the audit committee of
  registrant's board of directors (or persons performing the equivalent
  functions):

> a. All significant deficiencies and
>     material weaknesses in the design or operation of internal control over
>     financial reporting which are reasonably likely to adversely affect the
>     registrant's ability to record, process, summarize and report financial
>     information; and
>     b. Any fraud, whether or not material, that
>     involves management or other employees who have a significant role in the
>     registrant's internal control over financial reporting.

/s/ Ronald A. DurandoRonald A. Durando 
Chief Executive Officer

November 14, 2005

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Exhibit 31.2
CERTIFICATIONS

I, Martin S. Smiley, certify that:
I have reviewed this quarterly report on Form 10-Q of mPhase
  Technologies, Inc.;
  Based on my knowledge, this report does not contain any untrue
  statement of a material fact or omit to state a material fact necessary to
  make the statements made, in light of the circumstances under which such
  statements were made, not misleading with respect to the period covered by
  this report;
  Based on my knowledge, the financial statements, and other
  financial information included in this report, fairly present in all material
  respects the financial condition, results of operations and cash flows of the
  registrant as of, and for, the periods presented in this report;
  The registrant's other certifying officer and I are
  responsible for establishing and maintaining disclosure controls and
  procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
  registrant's and have:a. Designed such disclosure
    controls and procedures, or caused such disclosure controls and procedures
    to be designed under our supervision, to ensure that material information
    relating to the registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during the period
    in which this report is being prepared;
    b. Evaluated the effectiveness of
    the registrant's disclosure controls and procedures and presented in this
    report our conclusions about the effectiveness of the disclosure controls
    and procedures, as of the end of the period covered by this report based on
    such evaluation; and
    c. Disclosed in this report any
    change in the registrant's internal control over financial reporting that
    occurred during the registrant's most recent fiscal quarter (the
    registrant's fourth fiscal quarter in the case of an annual report) that has
    materially affected, or is reasonably likely to materially affect, the
    registrant's internal control over financial reporting; and
The registrant's other certifying officer and I have
  disclosed, based on our most recent evaluation of internal control over
  financial reporting, to the registrant's auditors and the audit committee of
  registrant's board of directors (or persons performing the equivalent
  functions):a. All significant deficiencies and
    material weaknesses in the design or operation of internal control over
    financial reporting which are reasonably likely to adversely affect the
    registrant's ability to record, process, summarize and report financial
    information; and
    b. Any fraud, whether or not
    material, that involves management or other employees who have a significant
    role in the registrant's internal control over financial reporting.
/s/ Martin S. SmileyMartin S. Smiley 
Chief Financial Officer
November 14, 2005

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Exhibit 32.1MPHASE TECHNOLOGIES, INC.
CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of mPhase
Technologies, Inc., a New Jersey corporation (the "Company"), on Form 10Q for
the quarter ended September 30, 2005, as filed with the Securities and Exchange
Commission (the "Report"), I, Ronald A. Durando, Chief Executive Officer of the
Company certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. Section1350), that to his knowledge:
The Report fully complies with the requirements of Section 13(a) or 15(d)
  of the Securities Exchange Act of 1934; and
  The information contained in the Report fairly presents, in all material
  respects, the financial condition and results of operations of the Company./s/ Ronald A. DurandoRonald A. Durando 
Chief Executive Officer
November 14, 2005

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Exhibit 32.2MPHASE TECHNOLOGIES, INC.
CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002 (18 U.S.C. SECTION 1350)
In connection with the Quarterly Report of mPhase Technologies, Inc., a New
Jersey corporation (the "Company"), on Form 10Q for the quarter ended September
30, 2005, as filed with the Securities and Exchange Commission (the "Report"),
I, Martin S. Smiley, Chief Financial Officer of the Company, certify, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that
to his knowledge:
The Report fully complies with the requirements of Section 13(a) or 15(d)
  of the Securities Exchange Act of 1934; and
  The information contained in the Report fairly presents, in all material
  respects, the financial condition and results of operations of the Company./s/ Martin S. SmileyMartin S. Smiley 
Chief Financial Officer
November 14, 2005

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