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0 = Black       8 = Gray
1 = Blue        9 = Light Blue
2 = Green       A = Light Green
3 = Aqua        B = Light Aqua
4 = Red         C = Light Red
5 = Purple      D = Light Purple
6 = Yellow      E = Light Yellow
7 = White       F = Bright White

I also had same problem, phones could not obtain IP address or they did and internet didn't work.
This works for me: (on Windows PC)

***Fixing Internet sharing***
1. Open mHotspot and start Hotspot.
2. On the keyboard press <Win-button> + <R>, this will open Run window.
Type ncpa.cpl and click ok. (This will open and show your network devices)
Click on the Wireless Network Connection with name of your router. We are gonna share now the Internet of this connection.
(you should see 2 wifi connection, with your router name and second, which is the new virtual name of mHotspot, we are focusing now on your router name's connection)
So double click it. It will open new window and on the bottom of that window click on "Properties".
Then click on the very very top on the 2nd tab called "Sharing".
Thick the top box saying "Allow other network users to connect through this computer's Internet connection."
Home network connection name in the box below should be "Wireless network connection 1 or 2 or 3 etc."
Then click Ok and close.
The Internet sharing is now fixed and working and should be as well always working for the future even after restarting the PC it should remember it all from now.

***Fixing Obtaining IP Address***
3. We are gonna set IP address on your phone device to Static IP (manually). (that is the opposite of DHCP)
It means the device is not going to obtain IP address from mHotspot (as this is not working), instead we are gonna tell to our phone or device what the IP address will be and basically set the static IP address for the phone device manually.
On new android devices you can advance configure each Wireless connection separate. So If you set this particular wifi connection to Static IP, then the other wifi connections will remain in DHCP mode and will still connect in other places to wifi automatically as before.
How to set the IP address manually:
On the Windows computer press again keyboard combination <Win-button> + <R>, this will open Run window.
Type ncpa.cpl and click ok. (This will open and show your network devices)
Now find and double click on the Wireless Network Connection with name of mHotspot. This is the computer's new virtual connection and can only be seen after you Start mHotspot, so make sure the mHotspot app is running on your PC.
After you double clicked this window, in the middle of this window you'll see "Details".
Click on "Details" and what we are looking for is "IPv4 Address 192.168.any number.1". (In my case it was 192.168.137.1.) This is the IP address of the mHotspot virtual router.
Now lets set your Phone's IP address.
On android click >Settings >Wi-Fi
You shoud see list of wifi connections.
Find the connection with your mHostpot name. (You can set or see this name on your computers running mHotspot app, its called "Hotspot Name" and its on the very top)
So find this name on your Phone's list wifi networks.
Tap and hold with your finger on this networks name until you'll see option "Modify network config".
Tap on "Modify network config" and this will give you to check "Show advanced options".
In this advanced options you'll see under IP settings "DHCP".
Click on it and change DHCP to "Static". This is our new setting now "Static".
It will give you then option the enter IP address, Gateway and DNS.
So lets enter these settings:
IP address: 192.168.any number from before.and this last number is your phones unique number lets say 80.
So in this and my case IP address of my phone will be 192.168.137.80
Numbers 192.168 stays always like this.
Following number 137 is what we saw in details of our virtual network connection for mHotspot.
Last number 80 is chosen by us. For one device is 80, if we setting up another phone or device we chose again new number lets say 81, or 82. etc.
So our phone will have 192.168.137.80, another phone will have 192.168.137.81 and so on..
IP address we will enter is unique for every device or phone and must be different on each phone or device. It will be your phone's unique signature.

Next fields will be exactly the same for all the devices or phones.
Next field "Gateway".
Gateway: 192.168.137.1 This is the full IPv4 address we saw in details of our virtual network connection for mHotspot. In my case it was 192.168.137.1.
This will be gateway for every device we want to use.

Network prefix lenght: 24

DNS1: 192.168.137.1 This is again the full IPv4 address we saw in details of our virtual network connection for mHotspot. In my case it was 192.168.137.1.

DNS2: 8.8.4.4

Thats it. Click "Save".
After you go back you should already be connected.

P.S.: If you going out of the range and back several times and the phone fails to see this your new virtual mHotspot network connection, its very easy quick fix.
Just stop and start again the mHotspot on the PC, takes only few seconds and you'll connect automatically again.