0001493152-21-003657.txt : 20210212 0001493152-21-003657.hdr.sgml : 20210212 20210212163055 ACCESSION NUMBER: 0001493152-21-003657 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 51 CONFORMED PERIOD OF REPORT: 20201231 FILED AS OF DATE: 20210212 DATE AS OF CHANGE: 20210212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Voip-pal.com Inc CENTRAL INDEX KEY: 0001410738 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 980184110 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55613 FILM NUMBER: 21628169 BUSINESS ADDRESS: STREET 1: 10900 NE 4TH STREET STREET 2: SUITE 2300 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 253-219-9512 MAIL ADDRESS: STREET 1: 10900 NE 4TH STREET STREET 2: SUITE 2300 CITY: BELLEVUE STATE: WA ZIP: 98004 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended: December 31, 2020

 

or

 

[  ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

 

Commission File Number: 000-55613

 

VoIP-PAL.COM INC.

(Exact name of Registrant as specified in its charter)

 

Nevada   980184110
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification Number)
 

10900 NE 4th Street, Suite 2300

Bellevue, WA, 98004

(Address of principal executive offices)

 

954-495-4600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbol(s)   Name of each exchange on which registered
N/A   N/A   N/A

 

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 such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes [X] No [  ]

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ]   Accelerated filer [  ]   Non-accelerated filer [  ]
Smaller reporting company [X]   Emerging growth company [  ]    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes[  ] No [X]

 

As of February 11, 2021, the Registrant had 2,069,483,092 shares of Common Stock outstanding.

 

 

 

 
 

 

TABLE OF CONTENTS

 

PART I — FINANCIAL INFORMATION  
     
Item 1. Financial Statements. 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 20
Item 4. Controls and Procedures. 20
     
PART II — OTHER INFORMATION  
     
Item 1. Legal Proceedings. 22
Item 1A. Risk Factors. 25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 25
Item 3. Defaults Upon Senior Securities. 25
Item 4. Mine Safety Disclosures. 25
Item 5. Other Information. 25
Item 6. Exhibits. 25

 

2
 

 

PART I—FINANCIAL INFORMATION

 

Item 1.Financial Statements.

 

VOIP-PAL.com Inc.

INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited – prepared by management)

As at December 31, 2020

(Expressed in U.S. Dollars)

 

   December 31, 2020   September 30, 2020 
         
ASSETS          
           
CURRENT          
           
Cash  $28,132   $113,538 
Prepaid expense   5,000    13,750 
Retainer (Note 5)   35,610    52,085 
    68,742    179,373 
NON-CURRENT          
           
Fixed assets (Note 6)   8,342    8,907 
Intellectual VoIP communications patent properties, net (Note 7)   606,600    641,150 
           
TOTAL ASSETS  $683,684$  $829,430 
           
LIABILITIES          
           
CURRENT          
           
Accounts payable and accrued liabilities  $450,954$  $472,758 
           
TOTAL LIABILITIES   450,954    472,758 
           
STOCKHOLDERS’ equity          
           
SHARE CAPITAL (Note 10)   1,529,950    1,510,448 
ADDITIONAL PAID-IN CAPITAL (Note 10)   52,640,970    52,434,457 
SHARES TO BE ISSUED (Note 10)   61,320    477,320 
DEFICIT   (53,999,510)   (54,065,553)
    232,730    356,672 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $683,684  $829,430 

 

Nature and Continuance of Operations (Note 1)

Contingent Liabilities (Note 12)

 

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

 

3
 

 

VOIP-PAL.com Inc.

INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Unaudited – prepared by management)

(Expressed in U.S. Dollars)

 

   Three months ended December 31, 2020   Three months ended December 31, 2019 
         
EXPENSES          
           
Amortization (Note 6 & 7)  $35,115   $34,739 
Officers and Directors fees (Note 8)   57,600    82,080 
Legal fees   149,684    376,938 
Office & general   40,975    43,263 
Patent consulting fees   6,083    8,307 
Professional fees & services   150,500    429,100 
           
Total expenses   439,957    974,427 
           
Gain on settlement of accrued payables (Note 8)   (90,000)   - 
           
LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $  $(349,957)  $(974,427)
           
Basic and diluted loss per common share $  $(0.00)  $(0.00)
           
Weighted-average number of common shares outstanding:          
           
Basic and diluted   2,046,303,516    1,962,475,418 

 

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

 

4
 

 

VOIP-PAL.com Inc.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – prepared by management)

(Expressed in U.S. Dollars)

 

   Three Months Ended December 31, 2020   Three months Ended December 31, 2019 
         
Cash Flows from Operating Activities          
Loss  $(349,957)  $(974,427)
Add items not affecting cash:          
Shares issued for services   101,000    330,000 
Amortization   35,115    34,739 
Gain on settlement of accrued payables   (90,000)   - 
           
Changes in non-cash working capital:          
Retainer   16,475    520,139 
Accounts payable and accrued liabilities   68,196    (486,666)
Prepaid expense   8,750    5,750 
Cash Flows Used in Operations   (210,421)   (570,465)
           
Cash Flows from Financing Activities          
Proceeds from private placement   125,015    - 
Cash Flows Provided by Financing Activities   125,015    - 
           
Decrease in cash   (85,406)   (570,465)
           
Cash, beginning of the period   113,538    960,490 
           
Cash, end of the period  $28,132   $390,025 

 

Supplemental cash flow information (Note 9)

 

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

 

5
 

 

VOIP-PAL.com Inc.

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited – prepared by management)

(Expressed in U.S. dollars)

 

   Common Shares   Shares to be Issued   Additional
Paid-in
         
   Number   Par Value   Value   Capital   Deficit   Total 
Balance at September 30, 2019   1,956,377,592   $1,432,844   $477,320   $51,542,780   $(51,721,696)  $1,731,248 
Shares issued for services   13,000,000    13,000    -    317,000    -    330,000 
Loss for the period   -    -    -    -    (974,427)   (974,427)
Balance at December 31, 2019   1,969,377,592   $1,445,844   $477,320   $51,689,780   $(52,696,123)  $1,086,821 
Shares issued for private placement   44,354,000    44,354    -    254,956    -    299,310 
Shares issued for services   20,250,000    20,250    -    184,250    -    204,500 
Share-based compensation   -    -    -    135,471    -    135,471 
Loss for the period   -    -    -    -    (1,369,430)   (1,369,430)
Balance at September 30, 2020   2,033,981,592   $1,510,448   $477,320   $52,434,457   $(54,065,553)  $356,672 
Shares issued for private placement   14,501,500    14,502    -    110,513    -    125,015 
Shares issued for services   5,000,000    5,000    -    96,000    -    101,000 
Shares forgiven on termination of service   -    -    (416,000)   -    416,000    - 
Loss for the period   -    -    -    -    (349,957)   (349,957)
Balance at December 31, 2020   2,053,483,092   $1,529,950   $61,320   $52,640,970   $(53,999,510)  $232,730 

 

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

 

6
 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 1. NATURE AND CONTINUANCE OF OPERATIONS

 

VOIP-PAL.com, Inc. (the “Company”) was incorporated in the state of Nevada in September 1997 as All American Casting International, Inc. The Company’s registered office is located at 10900 NE 4th Street, Suite 2300, Bellevue, Washington in the United States of America.

 

Since March 2004, the Company has developed technology and patents related to Voice-over-Internet Protocol (VoIP) processes. All business activities prior to March 2004 have been abandoned and written off to deficit. The Company operates in one reportable segment being the acquisition and development of VoIP-related intellectual property including patents and technology. All intangible assets are located in the United States of America

 

In December 2013, the Company completed the acquisition of Digifonica (International) Limited, a private company controlled by the CEO of the Company, whose assets included several patents and technology developed for the VoIP market.

 

These consolidated financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business. The Company is in various stages of product development and continues to incur losses and, at December 31, 2020, had an accumulated deficit of $53,999,510 (September 30, 2020 - $54,065,553). The ability of the Company to continue operations as a going concern is dependent upon raising additional working capital, settling outstanding debts and generating profitable operations. These material uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. Should the going concern assumption not continue to be appropriate, further adjustments to carrying values of assets and liabilities may be required. There can be no assurance that capital will be available as necessary to meet these continued developments and operating costs or, if the capital is available, that it will be on the terms acceptable to the Company. The issuances of additional stock by the Company may result in a significant dilution in the equity interests of its current shareholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company’s liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, its business and future success may be adversely affected.

 

Additionally, as the Company’s stated objective is to monetize its patent suite through the licensing or sale of its intellectual property (“IP”), the Company being forced to litigate or to defend its IP claims through litigation casts substantial doubt on its future to continue as a going concern. IP litigation is generally a costly process, and in the absence of revenue the Company must raise capital to continue its own defense and to validate its claims – in the event of a failure to defend its patent claims, either because of lack of funding, a court ruling against the Company or because of a protracted litigation process, there can be no assurance that the Company will be able to raise additional capital to pay for an appeals process or a lengthy trial. The outcome of any litigation process may have a significant adverse effect on the Company’s ability to continue as a going concern.

 

COVID-19

 

In March 2020, the World Health Organization declared a global pandemic related to the COVID-19 coronavirus. Its impact on global economies has been far-reaching and businesses around the world are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the COVID-19 virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and significant declines. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions.

 

The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of the COVID-19 pandemic, nor its impact on the financial position and results of the Company in future periods. The Company is proceeding with its business activities as long as the work environment remains safe – at this point there has been minimal disruption to day-to-day operations resulting from health and safety measures. Disruptions and volatility in the global capital markets may increase the Company’s cost of capital and adversely impact access to capital.

 

7
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 2. BASIS OF PRESENTATION

 

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

These consolidated financial statements have been prepared on a consolidated basis and include the accounts of the Company and its wholly owned subsidiary Digifonica. All intercompany transactions and balances have been eliminated. As at December 31, 2020, Digifonica had no activities.

 

Use of Estimates

 

The preparation of these consolidated financial statements required management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. Where estimates have been used, financial results as determined by actual events could differ from those estimates.

 

Cash

 

Cash consists of cash on hand, cash held in trust, and monies held in checking and savings accounts. The Company had $28,132 in cash on December 31, 2020 (September 30, 2020 - $113,538).

 

Fixed Assets

 

Fixed assets are stated at cost less accumulated depreciation, and depreciated using the straight-line method over their useful lives; Furniture and computers – 5 years.

 

Intangible Assets

 

Intangible assets, consisting of VoIP communication patent intellectual properties (IP) are recorded at cost and amortized over the assets estimated life on a straight-line basis. Management considers factors such as remaining life of the patents, technological usefulness and other factors in estimating the life of the assets.

 

The carrying value of intangible assets are reviewed for impairment by management of the Company at least annually or upon the occurrence of an event which may indicate that the carrying amount may be less than its fair value. If impaired, the Company will write-down such impairment. In addition, the useful life of the intangible assets will be evaluated by management at least annually or upon the occurrence of an event which may indicate that the useful life may have changed.

 

Fair Value of Financial Instruments

 

FASB ASC 820, Fair Value Measurement, defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

 

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition, except for those arising from certain related party transactions which are accounted for at the transferor’s carrying amount or exchange amount.

 

Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized as other comprehensive income until realized, or if an unrealized loss is considered other than temporary, the unrealized loss is recorded in income.

 

8
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

 

Level 1: Quoted prices in active markets for identical assets and liabilities.

 

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3: Unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The fair value of cash is classified as Level 1 at December 31, 2020 and September 30, 2020.

 

The Company classifies its financial instruments as follows: Cash is classified as held for trading and is measured at fair value. Accounts payable and accrued liabilities are classified as other financial liabilities, and have a fair value approximating their carrying value, due to their short-term nature.

 

Income Taxes

 

Deferred income taxes have been provided for temporary differences between financial statement and income tax reporting under the asset and liability method, using expected tax rates and laws that are expected to be in effect when the differences are expected to reverse. A valuation allowance is provided when realization is not considered more likely than not.

 

The Company’s policy is to classify income tax assessments, if any, for interest expense and for penalties in general and administrative expenses. The Company’s income tax returns are subject to examination by the IRS and corresponding states, generally for three years after they are filed.

 

Loss per Common Share

 

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each period. Diluted income per share includes potentially dilutive securities such as outstanding options and warrants outstanding during each period. To calculate diluted loss per share the Company uses the treasury stock method and the If-converted method.

 

For the period ended December 31, 2020 and the year ended September 30, 2020 there were no potentially dilutive securities included in the calculation of weighted-average common shares outstanding.

 

Derivatives

 

We account for derivatives pursuant to ASC 815, Accounting for Derivative Instruments and Hedging Activities. All derivative instruments are recognized in the consolidated financial statements and measured at fair value regardless of the purpose or intent for holding them. We determine fair value of warrants and other option type instruments based on option pricing models. The changes in fair value of these instruments are recorded in income or expense.

 

Stock-based compensation

 

The Company recognizes compensation expense for all stock-based payments made to employees, directors and others based on the estimated fair values of its common stock on the date of issuance.

 

The Company determines the fair value of the share-based compensation payments granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either the date at which a commitment for performance to earn the equity instrument is reached or the date the performance is complete.

 

The Company recognizes compensation expense for stock awards with service conditions on a straight-line basis over the requisite service period, which is included in operations. Stock option expense is recognized over the option’s vesting period.

 

9
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

Concentrations of Credit Risk

 

The Company’s policy is to maintain cash with reputable financial institutions or in retainers with trusted vendors. The Company has at times had cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) Insurance Limit of $250,000, but has not experienced any losses to date as a result. As of December 31, 2020, the Company’s bank operating account balances did not exceed the FDIC Insurance Limit.

 

Recent Accounting Pronouncements and Adoption

 

In January 2016, FASB issued an ASU, Subtopic 825-10, to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in fair value of equity investments, with certain exceptions, to be recognized through profit or loss rather than other comprehensive income. The Company adopted the standard October 1, 2018. There was no impact on the Company’s financial statements from the adoption of this amendment.

 

Recent Accounting Pronouncements and Adoption

 

In February 2016 FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and the lessors. The new standard requires the lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard is effective for annual periods beginning after December 15, 2018, with early adoption permitted upon issuance. The adoption of this guidance had no material impact on the financial statements.

 

In June 2016, the FASB issued ASU 2016-13 to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available for sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective for the Company beginning October 1, 2020, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to deficit as of the effective date. The adoption of this guidance had no material impact on the financial statements.

 

NOTE 4. PURCHASE OF DIGIFONICA

 

The Company acquired Digifonica in December 2013. Pursuant to the terms in the Share Purchase Agreement (the “SPA”) the Company acquired 100% of Digifonica from the seller, the CEO of the Company (the “Seller”), for a cash payment of $800,000 and 389,023,561 common shares of the Company. The assets acquired through the acquisition were VoIP-related patented technology, including patents for Lawful Intercept, routing, billing and rating, mobile gateway, advanced interoperability solutions, intercepting voice over IP communications, and uninterrupted transmission of internet protocol transmissions during endpoint changes.

 

The SPA included an anti-dilution clause (the “Anti-Dilution Clause”) that requires the Company to maintain the Seller’s percentage ownership of the Company at 40% by issuing the Seller a proportionate number of common shares of any future issuance of the Company’s common shares. Shares issued pursuant to the Anti-Dilution Clause are recorded as a share issuance cost within the Additional Paid-in Capital account (Notes 8 and 10).

 

NOTE 5. RETAINER

 

The Company has retainers with several of its professional service providers. The balance due on these prepaid retainers was $35,610 as of December 31, 2020 and $52,085 for the year ended September 30, 2020. The Company recognizes the expense from these retainers as they are invoiced and the invoiced charges are deducted from the various providers’ prepaid retainer balances..

 

10
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 6. FIXED ASSETS

 

A summary of the Company’s fixed assets as of December 31, 2020 and September 30, 2020 is as follows:

 

  

December 31,

2020

   September 30,
2020
 
Office furniture & computers  $11,917   $11,917 
Accumulated depreciation   (3,575)   (3,010)
Net book value  $8,342   $8,907 

 

There were no retirements of any fixed assets in the periods presented.

 

NOTE 7. INTANGIBLE ASSETS

 

The Company acquired certain patents and technology from Digifonica in December 2013 (see Note 4). These assets have been recorded in the financial statements as intangible assets. These assets are being amortized over twelve (12) years on a straight-line basis. A summary of intangible assets as of December 31, 2020 and September 30, 2020 is as follows:

 

   December 31, 2020   September 30,
2020
 
VoIP Intellectual property and patents  $1,552,416   $1,552,416 
Accumulated amortization   (945,816)   (911,266)
Net book value  $606,600   $641,150 

 

There were no disposals of any intangible assets in the periods presented.

 

NOTE 8. RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION

 

The Company compensates certain of its key management personnel to operate its business in the normal course. Key management includes the Company’s executive officers and members of its Board of Directors.

 

Compensation paid or accrued to key management for services during the three-month period ended December 31, 2020 includes:

 

  

December 31,

2020

   December 31,
2019
 
Management fees paid or accrued to the CEO  $36,000   $36,000 
Management fees paid or accrued to the CFO   21,600    28,080 
Fees paid or accrued to Directors   -    18,000 
   $57,600   $82,080 

 

During the three-month period ended December 31, 2020 the Company accrued $50,400 (2019 - $54,000) and paid cash of $7,200 (2019 - $28,080) for key management compensation totaling $57,600 (2019 - $82,080) as shown in the above table. At December 31, 2020, included in accounts payable and accrued liabilities is $318,531 (September 30, 2020 - $358,131) owed to current officers and directors.

 

During the three-month period ended December 31, 2020, two members of the Board of Directors resigned and forgave $90,000 of accrued directors’ fees and $416,000 of shares to be issued for unpaid director fees (Note 10). Included in shares to be issued is $Nil (September 30, 2020 - $416,000) for unpaid director fees.

 

As at December 31, 2020, 70,335,333 (September 30, 2020 – 57,334,333) common shares are accrued to the Seller of Digifonica for the Anti-Dilution Clause. Nil common shares were issued during the period ended December 31, 2020 (September 30, 2020 – Nil) to the Seller of Digifonica pursuant to the Anti-Dilution Clause (Notes 4 and 10).

 

11
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 9. SUPPLEMENTAL CASH FLOW INFORMATION

 

During the period ended December 31, 2020, the Company paid $Nil (September 30, 2020 - $Nil) in interest or income taxes.

 

Non-cash transactions included the settlement of shares to be issued for $416,000 (September 30, 2020 - $Nil)

 

NOTE 10. SHARE CAPITAL

 

Capital Stock Authorized and Issued:

 

  - 3,000,000,000 (September 30, 2020 – 3,000,000,000) common voting shares authorized with a par value of $0.001 each, of which 2,053,483,092 (September 30, 2020 – 2,033,981,592) shares are issued.
     
  -

1,000,000 convertible preferred shares authorized with a par value of $0.01 each, of which Nil (2019 – Nil) shares are issued.

 

  Issues during the three-month period ended December 31, 2020

 

During the three-month period ended December 31, 2020, the Company issued:

 

  - 14,501,500 common shares priced between $0.005 and $0.01 per share for cash proceeds of $125,015 from a private placement of common shares; and
  - 5,000,000 common shares for services with a value of $101,000.

 

Issues during the year ended September 30, 2020

 

During the year ended September 30, 2020, the Company issued:

 

  - 44,354,000 common shares priced between $0.005 and $0.015 per common share for cash proceeds of $299,310 from private placements of common shares; and
  - 33,250,000 common shares priced between $0.005 and $0.03 per common share for services with an aggregate value of $534,500.

 

Subsequent Issues

 

Subsequent to the period ended December 31, 2020, the Company issued 16,000,000 common shares priced at $0.005 per share for cash proceeds of $80,000 from a private placement of common shares.

 

Shares to be Issued

 

As at December 31, 2020, there are 1,977,523 (September 30, 2020 – 12,817,523) common shares to be issued that are accrued for services provided to the Company valued at $61,320 (September 30, 2020 – $477,320). During the period ended December 31, 2020, shares to be issued of $416,000 to management and related parties was forgiven (see Note 8). As at December 31, 2020, Nil (September 30, 2020 – 10,840,000) common shares valued at $Nil (September 30, 2020 - $416,000) are accrued to management and related parties.

 

As at December 31, 2020, there are 70,335,333 (September 30, 2020 – 57,334,333) common shares to be issued that are accrued to the seller of Digifonica pursuant to the Anti-Dilution Clause (see Notes 4 and 8).

 

Warrants

 

As of December 31, 2020, there were Nil (September 30, 2020 – Nil) outstanding warrants to be exercised.

 

12
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 11. STOCK-BASED COMPENSATION

 

Stock Option Plan

 

In order to provide incentive to directors, officers, management, employees, consultants and others who provide services to the Company or any subsidiary (the “Service Providers”) to act in the best interests of the Company, and to retain such Service Providers, the Company has in place an incentive Stock Option Plan (the “Plan”) whereby the Company is authorized to issue up to 10% of its issued and outstanding share capital in options to purchase common shares of the Company. The maximum term of options granted under the Plan cannot exceed ten years, with vesting terms determined at the discretion of the Board of Directors.

 

The following table summarizes the Company’s stock option transactions:

 

   Number of options  

Weighted average

exercise price

 
Balance September 30, 2018   39,850,000   $0.058 
Granted   10,000,000    0.065 
Cancelled   -    - 
Balance September 30, 2019   49,850,000   $0.059 
Granted   15,000,000    0.010 
Cancelled   30,000,000    0.062 
Balance September 30, 2020 and December 31, 2020   34,850,000   $0.036 

 

The following table summarizes the stock options outstanding at December 31, 2020:

 

Options Outstanding  

Exercise

Price

  

Remaining Contractual

Life (Yrs)

   Number of Options Currently Exercisable 
 4,000,000   $0.060    0.48    4,000,000 
 4,000,000    0.060    0.68    4,000,000 
 3,450,000    0.060    0.82    3,450,000 
 8,400,000    0.050    1.30    8,400,000 
 15,000,000    0.010    4.73    15,000,000 
 34,850,000   $0.037    2.56    34,850,000 

 

There were no stock options granted, exercised or that vested during the three-month period ended December 31, 2020 and 2019.

 

13
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 12. CONTINGENT LIABILITIES

 

Patent Litigation

 

The Company is party to patent and patent-related litigation cases as follows:

 

i)VoIP-Pal.com Inc. v. Apple, Inc. (Case No. 2:16-CV-00260) & Verizon Wireless Services, LLC, Verizon Communications Inc., AT&T Corp. (Case No. 2:16-CV-00271) in the United States District Court, District of Nevada

 

In February 2016 the Company filed patent infringement lawsuits in the United States District Court, District of Nevada against Apple, Inc, (Case No. 2:16-CV-00260), Verizon Wireless Services, LLC, Verizon Communications Inc., and AT&T Corp. (Case No. 2:16-CV-00271). These cases are seeking a combined $7,024,377,876 in damages. On May 9, 2016, the lawsuits were officially served to these companies (collectively, the “Defendants”).

 

In August, 2018, the cases were consolidated under one lawsuit, and transferred to the U.S. District Court for the Northern District of California, where they were renamed as Case Nos. 5:18-cv-06217-LHK, 5:18-cv-06054-LHK and 5:18-cv-06177-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘005 and ‘815 patents do not claim patentable subject matter.

 

On March 25, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the US Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the district court’s decision.

 

On April 15, 2020, the Company filed a combined petition for rehearing and rehearing en banc, which was denied by the Court.

 

ii)VoIP-Pal.com Inc. v. Twitter, Inc. (Case No. 2:16-CV-02338) in the United States District Court, District of Nevada

 

On October 6, 2016, the Company filed a lawsuit in the United States District Court, District of Nevada against Twitter, Inc, (Case No. 2:16- CV-02338) in which Voip-Pal.com alleges infringement of U.S. Patent No. 8,542,815 and its continuation patent, U.S. Patent No. 9,179,005, This case is seeking $3,200,000,000 in damages. On December 28, 2016, the lawsuit was officially served to Twitter, Inc. On February 28, 2018, Twitter filed a motion to transfer its case based on improper venue and the case was subsequently transferred to the U.S. District Court for the Northern District of California, where it was renamed as Case No. 5:18-cv-4523 and consolidated with Case Nos. 5:18-cv-06217-LHK and 5:18-cv-066054-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘005 and ‘815 patents do not claim patentable subject matter. On March 25, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the district court’s decision.

 

On April 15, 2020, the Company filed a combined petition for rehearing and rehearing en banc, which was denied by the Court.

 

iii)VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. (Case No. 2:18-CV-01076) in the United States District Court, District of Nevada

 

In June 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549. In November 2018, the case was transferred to the U.S. District Court for the Northern District of California, where it was renamed Case No. 5:18-cv-07020-LHK and consolidated with Case No. 5:18-cv-06216-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘762, ‘330, ‘002, and ‘549 patents do not claim patentable subject matter. On November 1, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit, who affirmed the district court’s decision.

 

During the period ended December 31, 2020, the Company filed a petition for rehearing of this case, which was subsequently denied by the Federal Circuit on January 26, 2021.

 

14
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 12. CONTINGENT LIABILITIES (CONT’D)

 

Patent Litigation (cont’d)

 

iv)VoIP-Pal.com Inc. v. Apple, Inc. et al. (Case No. 2:18-CV-00953) in the United States District Court, District of Nevada

 

In May 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Apple, Inc., alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549. In November 2018, the case was transferred to the U.S. District Court for the Northern District of California, where it was renamed Case No. 5:18-cv-06216-LHK and consolidated with Case No. 5:18-cv-07020. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘762, ‘330, ‘002, and ‘549 patents do not claim patentable subject matter. On November 1, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit, who affirmed the district court’s decision.

 

During the period ended December 31, 2020, the Company filed a petition for rehearing of this case, which was subsequently denied by the Federal Circuit on January 26, 2021.

 

During the year ended September 30, 2020, the following patent litigation cases were filed:

 

v)VoIP-Pal.com Inc. v. Facebook, Inc. et al. Case No. 6-20-cv-00267 in the United States District Court, Western District of Texas

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Facebook, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

vi)VoIP-Pal.com Inc. v. Google, LLC fka Google, Inc. Case No. 6-20-cv-00269 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Google, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

vii)VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. Case No. 6-20-cv-00272 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

viii)VoIP-Pal.com Inc. v. Apple, Inc. Case No. 6-20-cv-00275 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Apple, Inc. alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

ix)VoIP-Pal.com Inc. v. AT&T, Inc. et al. Case No. 6-20-cv-00325 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against AT&T, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

x)VoIP-Pal.com Inc. v. Verizon Communications, Inc. et al. Case No. 6-20-cv-00327 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Verizon Communications, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

xi)Twitter, Inc. VoIP-Pal.com Inc. Case No. 5-20-cv-02397 in the United States District Court, Northern District of California.

 

In April 2020, Twitter filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

15
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 12. CONTINGENT LIABILITIES (CONT’D)

 

Patent Litigation (cont’d)

 

xii)Apple, Inc. v. VoIP-Pal.com Inc. Case No. 5:20-cv-02460 in the United States District Court, Northern District of California.

 

In April 2020, Apple filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent Nos. 9,935,872 and 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

xiii) AT&T Corp., et al. v. VoIP-Pal.com Inc. Case No. 5:20-cv-02995 in the United States District Court, Northern District of California.

 

In April 2020, AT&T filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

 

xiv) Cellco Partnership dba Verizon Wireless, v. VoIP-Pal.com Inc. Case No. 5:20-cv-03092 in the United States District Court, Northern District of California.

 

In April 2020, Verizon filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

Inter Partes Reviews

 

In additional legal actions related to the above cases, several of the Company’s patents have been subject to challenge in Inter Partes Review (“IPR”) petitions filed before the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”). An IPR is a post-grant patent review process allowing the PTAB to consider the validity of issued patents. There are no damages awarded, but a portion or all of a patent’s claims instituted for IPR may be invalidated as a result of the review.

 

Through 2016 and 2017, eight IPRs filed against Patents No. 8,542,815 and No. 9,179,005 by either Apple Inc., AT&T Inc. or Unified Patents Inc. as Petitioner(s) were resolved by the PTAB by denial of their institution. Subsequent to those rulings, in December 2017, Apple filed a post-judgment motion in IPR2016-01198 and IPR2016-01201, seeking invalidation of the challenged claims as sanctions against the Company for its having participated in ex parte communications during the PTAB proceedings.

 

During the year ended September 30, 2019, on December 21, 2018, the PTAB ruled on Apple’s sanctions motion, declining to grant Apple’s request to invalidate the challenged claims and declining to grant Apple’s request for entirely new proceedings to replace the existing panel of judges with a new panel or with judges that would consider any request for rehearing by Apple as a sanction against VoIP-Pal. On January 23, 2019, Apple appealed the PTAB’s final written decision upholding the validity of the ‘815 and ‘005 patents to the U.S. Court of Appeals for the Federal Circuit. During the year ended September 30, 2020, on September 25, 2020, the Federal Circuit affirmed the PTAB’s decision.

 

During the year ended September 30, 2019, Apple Inc. petitioned the PTAB to have an additional four IPRs instituted against the Company’s patents numbered 9,537,762, 9,813,330 B2, 9,826,002 B2, and 9,948,549 B2. During the year ended September 30, 2020, all four Apple petitions were denied institution by the PTAB.

 

16
 

 

VOIP-PAL.COM INC.

Notes to the Interim Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2020

 

NOTE 12. CONTINGENT LIABILITIES (CONT’D)

 

Non-Patent Litigation

 

The Company is party to the following non-patent litigation case:

 

i)Locksmith Financial Corporation, Inc. et al. (Plaintiff) v VoIP-Pal.com Inc. et al. (Defendant(s)) (Case No A-15-717491-C) filed in Clark County District Court

 

On March 24, 2014, the Company resolved to freeze 95,832,000 common shares that were issued to a company controlled by a former director in fiscal 2013 and accounted for at a cost of $1,443,000. The Company froze the shares as it believes they were issued as settlement of a line of credit that the Company believes was not legally supported. The Plaintiff alleged that the freeze and the Company’s actions constituted fraud and a breach of securities laws. The Company denied any wrongdoing.

 

In August, 2019, the case was heard in Nevada District Court in a jury trial. In a judgment rendered August 26, 2019, the jury ruled that certain of the Defendants (namely the directors of the Company in 2014) had breached their fiduciary duty to the shareholder and awarded monetary relief to the Plaintiff in the amount of $355,000, plus pre-judgment interest in the amount of $91,306. On a concurrent counter-claim, the jury found a claim of Unjust Enrichment against Third-Party Plaintiff TK Investment, Ltd. to be unsubstantiated and awarded monetary relief to the Third-Party Plaintiff of $84,000 plus pre-judgment interest of $3,459.

 

During the year ended September 30, 2020, the Plaintiff and the Defendant waived their rights to appeal in this case. Following such waiver, both of the above-noted judgments and accrued interest were paid in full.

 

ii)Locksmith Financial Corporation, Inc. et al. (Plaintiff(s)) v VoIP-Pal.com Inc. et al. (Defendant(s)) (Case No A-20-807745-C) filed in Clark County District Court

 

During the year period ended September 30, 2020, the Plaintiff filed suit in Nevada District Court claiming that the Defendants had prevented the Plaintiffs from re-registering and/or transferring certain share certificates. The Defendants filed a Motion to Dismiss the claims, which Motion was granted on June 1, 2020. It is unclear whether Plaintiffs will appeal the ruling. The case is pending.

 

Performance Bonus Payable

 

In 2016, the board of directors authorized the Company to provide a performance bonus (the “Performance Bonus”) of up to 3% of the capital stock of the Company by way of the issuance of Common shares from its treasury to an as yet undetermined group of related and non-related parties upon the occurrence of a bonusable event, defined as the successful completion of a sale of the Company or substantially all its assets, or a major licensing transaction. In order to provide maximum flexibility to the Company with respect to determining the level of Performance Bonus payable, and who may qualify to receive a pro-rata share of such a Performance Bonus, the Company authorized full discretion to the Board in making such determinations.

 

During the year ended September 30, 2019, the board of directors authorized the increase of the Performance Bonus to up to 10% of the capital stock of the Company. Concurrently, the directors authorized 66.67% of the Performance Bonus to be issued in an advance payment of an aggregate 127,000,000 Common shares (“Bonus Shares”) (Note 10) to a group of related and non-related parties, which included members of management, a director and several consultants. 94,000,000 of the Bonus Shares are restricted from trading under Rule 144 and are also subject to voluntary lock-up agreements, pursuant to which they cannot be traded, pledged, hypothecated, transferred or sold by the holders until such time as the Company has met the requirements of the bonusable event as described above.

 

As at December 31, 2020, no bonusable event had occurred and there was no Performance Bonus payable.

 

17
 

 

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following management’s discussion and analysis (MD&A) should be read in conjunction with our interim consolidated financial statements for the three-month period ended December 31, 2020 and notes thereto appearing elsewhere in this report, and our audited consolidated financial statements for the year ended September 30, 2020 and notes thereto.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

This MD&A for the period ending December 31, 2020 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amending, and Section 21E of the Securities Exchange Act of 1934, as amending. Forward-looking statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management based on assumptions made by management and are considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

 

The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements

 

CORPORATE HISTORY, OVERVIEW AND PRINCIPAL BUSINESS

 

VoIP-PAL.com Inc. (the “Company”) was incorporated in the state of Nevada in September 1997 as All American Casting International, Inc. and changed its name to VOIP MDI.com in 2004 and subsequently to Voip-Pal.Com Inc. in 2006. Since March 2004, the Company has been in the development stage of becoming a Voice-over-Internet Protocol (“VoIP”) re-seller, a provider of a proprietary transactional billing platform tailored to the points and air mile business, and a provider of anti-virus applications for smartphones. All business activities prior to March 2004 have been abandoned and written off to deficit.

 

In 2013, the Company acquired Digifonica International (DIL) Limited (“Digifonica”), to fund and co-develop Digifonica’s patent suite. Digifonica had been founded in 2003 with the vision that the internet would be the future of all forms of telecommunications - a team of twenty top engineers with expertise in Linux and Internet telephony developed and wrote a software suite with applications that provided solutions for several core areas of internet connectivity. In order to properly test the applications, Digifonica built and operated three production nodes in Vancouver, Canada (Peer 1), London, UK (Teliasonera), and Denmark. Upon successfully developing the technology, Digifonica filed for patents with the United States Patent and Trademark Office (“USPTO”).

 

The Digifonica patents formed the basis for the Company’s current intellectual property, now a worldwide portfolio of twenty-six issued and pending patents primarily designed for the broadband VoIP market.

 

The Company’s intellectual property value is derived from its issued and pending patents. The inventions described in these patents, among other things, provide the means to integrate VoIP services with legacy telecommunications systems such as the public switched telephone network (PSTN) to create a seamless service using either legacy telephone numbers or IP addresses, and enhance the performance and value of VoIP implementations worldwide.

 

VoIP has been and continues to be a green field for innovation that has spawned numerous inventions, greatly benefitting consumers large and small across the globe. VoIP is used in many places and by every modern telephony system vendor, network supplier, and retail and wholesale carrier.

 

18
 

 

Results of Operations

 

The Company’s operating costs consist of expenses incurred to monetizing, selling and licensing its VoIP patents. Other operating costs include expenses for legal, accounting and other professional fees, financing costs, and other general and administrative expenses.

 

Comparison of the Three Months Ending December 31, 2020 and 2019

 

  

Three months ending

December 31

   Increase/     
   2020   2019   (Decrease)   Percent 
Revenue  $-   $-   $-    - 
Cost of Revenue   -    -    -    - 
Gross Margin   -    -    -    - 
General and administrative expenses   (404,842)   (939,688)   (534,846)   -57%
Amortization & depreciation   (35,115)   (34,739)   376    0%
Other items   90,000    -    90,000    100%
Net loss  $(349,957)  $(974,427)  $(624,470)   -64%

 

REVENUES, COST OF REVENUES AND GROSS MARGIN

 

The Company had no revenues, cost of revenues or gross margin for the three months ending December 31, 2020 and 2019.

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

General and administrative expenses for the three months ending December 31, 2020 totaled $404,842 compared to $939,688 during the same period in 2019. The decrease in general and administrative expenses of $534,846, or 57% less than the previous year, was primarily due to a decrease in legal and professional fees and services.

 

AMORTIZATION AND DEPRECIATION

 

Amortization of intellectual VoIP communications patent properties and depreciation of capital equipment for the three months ending December 31, 2020 totaled $35,115 compared to $34,739 during the same period in 2019.

 

The Company follows GAAP (FAS 142) and is amortizing its intangibles over the remaining patent life of twelve (12) years. The Company evaluates its intangible assets annually and determines if the fair market value is less than its historical cost. If the fair market value is less, then impairment expense is recorded on the Company’s financial statements. The intangible assets on the financial statements of the Company relate primarily to the Company’s acquisition of Digifonica (International) Limited.

 

INTEREST EXPENSE

 

The Company had no financing or interest costs for the three months ending December 31, 2020 and 2019.

 

NET LOSS

 

The Company reported a net loss of $349,957 for the three months ending December 31, 2020 compared to a net loss of $974,427 for the same period in 2019. The net loss increase of $624,470, or 64% more than the same period in 2019, was primarily due to write offs of accrued payables and shares to be issued on resignation of certain directors and a decrease in legal and professional fees and services.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of December 31, 2020, the Company had an accumulated deficit of $53,999,510 as compared to an accumulated deficit of $52,696,123 at December 31, 2019. As of December 31, 2020, the Company had a working capital deficit of $382,212 as compared to a working capital surplus of $331,045 at December 31, 2019. The decrease in the Company’s working capital of $713,257 is due to a decrease in equity raised during the three month period ended December 31, 2020.

 

Net cash used by operations for the three months ending December 31, 2020 and 2019 was $210,421 and $570,465 respectively. The decrease is due to a gain on write off of accrued payables settled, gain on forgiveness of shares to be issued and the Company curtailing operations during the current period.

 

19
 

 

Net cash used in investing activities for the three months ending December 31, 2020 and 2019 was $Nil and $Nil, respectively. Net cash provided in financing activities for the three months ending December 31, 2020 and 2019 was $125,015 and $Nil, respectively. The increase in net cash provided by financing activities of $125,015 was due to equity raised from private placements during the three months ending December 31, 2020.

 

Liquidity

 

The Company primarily finances its operations from cash received through the private placements of its common stock and the exercise of warrants from investors and through the payment of stock-based compensation. The Company believes its resources are adequate to fund its operations for the next 12 months.

 

Off Balance Sheet Arrangements

 

Performance Bonus Payable

 

In 2016, the board of directors authorized the Company to provide a performance bonus (the “Performance Bonus”) of up to 3% of the capital stock of the Company by way of the issuance of Common shares from its treasury to an as yet undetermined group of related and non-related parties upon the occurrence of a bonusable event, defined as the successful completion of a sale of the Company or substantially all its assets, or a major licensing transaction. In order to provide maximum flexibility to the Company with respect to determining the level of Performance Bonus payable, and who may qualify to receive a pro-rata share of such a Performance Bonus, the Company authorized full discretion to the Board in making such determinations.

 

During the year ended September 30, 2019, the board of directors authorized the increase of the Performance Bonus to up to 10% of the capital stock of the Company. Concurrently, the directors authorized 66.67% of the Performance Bonus to be issued in an advance payment of an aggregate 127,000,000 Common shares (“Bonus Shares”) (Note 10) to a group of related and non-related parties, which included members of management, a director and several consultants. 94,000,000 of the Bonus Shares are restricted from trading under Rule 144 and are also subject to voluntary lock-up agreements, pursuant to which they cannot be traded, pledged, hypothecated, transferred or sold by the holders until such time as the Company has met the requirements of the bonusable event as described above.

 

As at December 31, 2020, no bonusable event had occurred and there was no Performance Bonus payable.

 

Impact of Inflation

 

We believe that inflation has not had a material impact on our results of operations for the three months ending December 31, 2020. We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.

 

Impact of COVID-19

 

In March 2020, the World Health Organization declared a global pandemic related to the COVID-19 coronavirus. Its impact on global economies has been far-reaching and businesses around the world are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the COVID-19 virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and significant declines. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions.

 

The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of the COVID-19 pandemic, nor its impact on the financial position and results of the Company in future periods. The Company is proceeding with its business activities as long as the work environment remains safe – at this point there has been minimal disruption to day-to-day operations resulting from health and safety measures. Disruptions and volatility in the global capital markets may increase the Company’s cost of capital and adversely impact access to capital.

 

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

Item 4.Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of the end of the fiscal period covered by this Quarterly Report on Form 10-Q that our internal control over financial reporting has not been effective. The company intends, as the company’s finances improve, to hire additional accounting staff and implement additional controls.

 

20
 

 

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of December 31, 2020:

 

1)Lack of segregation of duties. At this time, our resources and size prevent us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management will periodically reevaluate this situation.

 

2)Lack of an independent audit committee. Although the Board of Directors serves as an audit committee it is not comprised solely of independent directors. We may establish an audit committee comprised solely of independent directors when we have sufficient capital resources and working capital to attract qualified independent directors and to maintain such a committee.

 

3)Insufficient number of independent directors. At the present time, our Board of Directors does not consist of a majority of independent directors, a factor that is counter to corporate governance practices as set forth by the rules of various stock exchanges.

 

Our management determined that these deficiencies constituted material weaknesses. Due to a lack of financial resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses. We will not be able to do so until we acquire sufficient financing to do so. We will implement further controls as circumstances, cash flow, and working capital permit. Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.

 

Limitations on the Effectiveness of Internal Controls

 

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2020 that have materially affected or are reasonably likely to materially affect such controls.

 

21
 

 

PART II—OTHER INFORMATION

 

Item 1.Legal Proceedings.

 

Other than noted below, there have been no material developments during the current quarter for our legal proceedings that were disclosed in our registration statement on Form 10 filed on April 22, 2016. For a full disclosure of legal proceedings, please reference our Form 10 registration or Note 12 of the Financial Statements contained in this report.

 

Patent Litigation

 

The Company is party to patent and patent-related litigation cases as follows:

 

i)VoIP-Pal.com Inc. v. Apple, Inc. (Case No. 2:16-CV-00260) & Verizon Wireless Services, LLC, Verizon Communications Inc., AT&T Corp. (Case No. 2:16-CV-00271) in the United States District Court, District of Nevada

 

In February 2016 the Company filed patent infringement lawsuits in the United States District Court, District of Nevada against Apple, Inc, (Case No. 2:16-CV-00260), Verizon Wireless Services, LLC, Verizon Communications Inc., and AT&T Corp. (Case No. 2:16-CV-00271). These cases are seeking a combined $7,024,377,876 in damages. On May 9, 2016, the lawsuits were officially served to these companies (collectively, the “Defendants”).

 

In August, 2018, the cases were consolidated under one lawsuit, and transferred to the U.S. District Court for the Northern District of California, where they were renamed as Case Nos. 5:18-cv-06217-LHK, 5:18-cv-06054-LHK and 5:18-cv-06177-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘005 and ‘815 patents do not claim patentable subject matter.

 

On March 25, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the US Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the district court’s decision.

On April 15, 2020, the Company filed a combined petition for rehearing and rehearing en banc, which was denied by the Court.

 

ii)VoIP-Pal.com Inc. v. Twitter, Inc. (Case No. 2:16-CV-02338) in the United States District Court, District of Nevada

 

On October 6, 2016, the Company filed a lawsuit in the United States District Court, District of Nevada against Twitter, Inc, (Case No. 2:16- CV-02338) in which Voip-Pal.com alleges infringement of U.S. Patent No. 8,542,815 and its continuation patent, U.S. Patent No. 9,179,005, This case is seeking $3,200,000,000 in damages. On December 28, 2016, the lawsuit was officially served to Twitter, Inc. On February 28, 2018, Twitter filed a motion to transfer its case based on improper venue and the case was subsequently transferred to the U.S. District Court for the Northern District of California, where it was renamed as Case No. 5:18-cv-4523 and consolidated with Case Nos. 5:18-cv-06217-LHK and 5:18-cv-066054-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘005 and ‘815 patents do not claim patentable subject matter. On March 25, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the district court’s decision.

On April 15, 2020, the Company filed a combined petition for rehearing and rehearing en banc, which was denied by the Court.

 

iii)VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. (Case No. 2:18-CV-01076) in the United States District Court, District of Nevada

 

In June 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549. In November 2018, the case was transferred to the U.S. District Court for the Northern District of California, where it was renamed Case No. 5:18-cv-07020-LHK and consolidated with Case No. 5:18-cv-06216-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘762, ‘330, ‘002, and ‘549 patents do not claim patentable subject matter. On November 1, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit, who affirmed the district court’s decision. During the period ended December 31, 2020, the Company filed a petition for rehearing of this case, which was subsequently denied by the Federal Circuitt on January 26, 2021.

 

iv)VoIP-Pal.com Inc. v. Apple, Inc. et al. (Case No. 2:18-CV-00953) in the United States District Court, District of Nevada

 

In May 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Apple, Inc., alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549. In November 2018, the case was transferred to the U.S. District Court for the Northern District of California, where it was renamed Case No. 5:18-cv-06216-LHK and consolidated with Case No. 5:18-cv-07020. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘762, ‘330, ‘002, and ‘549 patents do not claim patentable subject matter. On November 1, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit, who affirmed the district court’s decision. During the period ended December 31, 2020, the Company filed a petition for rehearing of this case, which was subsequently denied by the Federal Circuit on January 27, 2021.

 

22
 

 

During the year ended September, 2020, the following patent litigation cases were filed:

 

v)VoIP-Pal.com Inc. v. Facebook, Inc. et al. Case No. 6-20-cv-00267 in the United States District Court, Western District of Texas

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Facebook, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

vi)VoIP-Pal.com Inc. v. Google, LLC fka Google, Inc. Case No. 6-20-cv-00269 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Google, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

vii)VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. Case No. 6-20-cv-00272 in the United States District Court, Western District of Texas.

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

viii)VoIP-Pal.com Inc. v. Apple, Inc. Case No. 6-20-cv-00275 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Apple, Inc. alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

ix)VoIP-Pal.com Inc. v. AT&T, Inc. et al. Case No. 6-20-cv-00325 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against AT&T, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

x)VoIP-Pal.com Inc. v. Verizon Communications, Inc. et al. Case No. 6-20-cv-00327 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Verizon Communications, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is

pending.

 

xi)Twitter, Inc. VoIP-Pal.com Inc. Case No. 5-20-cv-02397 in the United States District Court, Northern District of California.

 

In April 2020, Twitter filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

xii)Apple, Inc. v. VoIP-Pal.com Inc. Case No. 5:20-cv-02460 in the United States District Court, Northern District of California.

 

In April 2020, Apple filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent Nos. 9,935,872 and 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

xiii) AT&T Corp., et al. v. VoIP-Pal.com Inc. Case No. 5:20-cv-02995 in the United States District Court, Northern District of California.

 

In April 2020, AT&T filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

23
 

 

xiv) Cellco Partnership dba Verizon Wireless, v. VoIP-Pal.com Inc. Case No. 5:20-cv-03092 in the United States District Court, Northern District of California.

 

In April 2020, Verizon filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

Inter Partes Reviews

 

In additional legal actions related to the above cases, several of the Company’s patents have been subject to challenge in Inter Partes Review (“IPR”) petitions filed before the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”). An IPR is a post-grant patent review process allowing the PTAB to consider the validity of issued patents. There are no damages awarded, but a portion or all of a patent’s claims instituted for IPR may be invalidated as a result of the review.

 

Through 2016 and 2017, eight IPRs filed against Patents No. 8,542,815 and No. 9,179,005 by either Apple Inc., AT&T Inc. or Unified Patents Inc. as Petitioner(s) were resolved by the PTAB by denial of their institution. Subsequent to those rulings, in December 2017, Apple filed a post-judgment motion in IPR2016-01198 and IPR2016-01201, seeking invalidation of the challenged claims as sanctions against the Company for its having participated in ex parte communications during the PTAB proceedings.

 

During the year ended September 30, 2019, on December 21, 2018, the PTAB ruled on Apple’s sanctions motion, declining to grant Apple’s request to invalidate the challenged claims and declining to grant Apple’s request for entirely new proceedings to replace the existing panel of judges with a new panel or with judges that would consider any request for rehearing by Apple as a sanction against VoIP-Pal. On January 23, 2019, Apple appealed the PTAB’s final written decision upholding the validity of the ‘815 and ‘005 patents to the U.S. Court of Appeals for the Federal Circuit. During the year ended September 30, 2020, on September 25, 2020, the Federal

Circuit affirmed the PTAB’s decision.

 

During the year ended September 30, 2019, Apple Inc. petitioned the PTAB to have an additional four IPRs instituted against the Company’s patents numbered 9,537,762, 9,813,330 B2, 9,826,002 B2, and 9,948,549 B2. During the year ended September 30, 2020, all four Apple petitions were denied institution by the PTAB.

 

Non-Patent Litigation

 

The Company is party to the following non-patent litigation cases:

 

iii)Locksmith Financial Corporation, Inc. et al. (Plaintiff) v VoIP-Pal.com Inc. et al. (Defendant(s)) (Case No A-15-717491-C) filed in Clark County District Court

 

On March 24, 2014, the Company resolved to freeze 95,832,000 common shares that were issued to a company controlled by a former director in fiscal 2013 and accounted for at a cost of $1,443,000. The Company froze the shares as it believes they were issued as settlement of a line of credit that the Company believes was not legally supported. The Plaintiff alleged that the freeze and the Company’s actions constituted fraud and a breach of securities laws. The Company denied any wrongdoing.

 

In August, 2019, the case was heard in Nevada District Court in a jury trial. In a judgment rendered August 26, 2019, the jury ruled that certain of the Defendants (namely the directors of the Company in 2014) had breached their fiduciary duty to the shareholder and awarded monetary relief to the Plaintiff in the amount of $355,000, plus pre-judgment interest in the amount of $91,306. On a concurrent counter-claim, the jury found a claim of Unjust Enrichment against Third-Party Plaintiff TK Investment, Ltd. to be unsubstantiated and awarded monetary relief to the Third-Party Plaintiff of $84,000 plus pre-judgment interest of $3,459.

 

During the year ended September 30, 2020, the Plaintiff and the Defendant waived their rights to appeal in this case. Following such waiver, both of the above-noted judgments and accrued interest were paid in full.

 

iv)Locksmith Financial Corporation, Inc. et al. (Plaintiff(s)) v VoIP-Pal.com Inc. et al. (Defendant(s)) (Case No A-20-807745-C) filed in Clark County District Court

 

During the year period ended September 30, 2020, the Plaintiff filed suit in Nevada District Court claiming that the Defendants had prevented the Plaintiffs from re-registering and/or transferring certain share certificates. The Defendants filed a Motion to Dismiss the claims, which Motion was granted on June 1, 2020. It is unclear whether Plaintiffs will appeal the ruling. The case is pending.

 

24
 

 

Item 1A.Risk Factors.

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

 

The transactions described in this section were exempt from securities registration as provided by Section 4(a)(2) of the Securities Act for transactions not involving a public offering for sales within the United States and by Regulation S of the Securities Act for sales made outside of the United States.

 

During the period ended December 31, 2020, the Company issued 14,501,500 common shares priced between $0.005 and $0.01 per share for cash proceeds of $125,015 from a private placement of common shares and 5,000,000 common shares for services with a value of $101,000.

 

Item 3.Defaults Upon Senior Securities.

 

None.

 

Item 4.Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

Exhibit Number   Description of Exhibits    
         
31.1   Rule 13a-14(a) Certification of CEO   Filed herewith
31.2   Rule 13a-14(a) Certification of CFO   Filed herewith
32.1   Section 1350 Certification   Filed herewith

 

25
 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

DATED: February 12, 2021 By: /s/Emil Malak
    Emil Malak
    Chief Executive Officer
     
DATED: February 12, 2021 By: /s/D. Barry Lee
    D. Barry Lee
    Chief Financial Officer

 

26

 

EX-31.1 2 ex31-1.htm

 

Exhibit 31.1

 

CERTIFICATION

PURSUANT TO SECTION 13a-14

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

I, Emil Malak, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of VoIP-Pal.com 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; and
   
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 officers 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) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles;
     
  (c) 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
     
  (d) 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.

 

5. The registrant’s other certifying officers 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.

 

Date: February 12, 2021

 

  /s/ Emil Malak
  Emil Malak
  Chief Executive Officer
   

 

 

 

EX-31.2 3 ex31-2.htm

 

Exhibit 31.2

 

CERTIFICATION

PURSUANT TO SECTION 13a-14

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

I, D. Barry Lee, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of VoIP-Pal.com 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; and
   
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 officers 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) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles;

 

  (c) 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
     
  (d) 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.

 

5. The registrant’s other certifying officers 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.

 

Date: February 12, 2021

 

  /s/ D. Barry Lee
  D. Barry Lee
  Chief Financial Officer

 

 

 

EX-32 4 ex32-1.htm

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. 1350

 

(As adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002)

 

For the Quarterly Report of VoIP-Pal.com Inc. (the “Company”) on Form 10-Q for the period ending December 31, 2020 (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies that:

 

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

 

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

 

Date: February 12, 2021

 

  By: /s/Emil Malak
    Emil Malak
    Chief Executive Officer

 

   
  By: /s/D. Barry Lee
    D. Barry Lee
    Chief Financial Officer
     

 

 

 

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Document and Entity Information - shares
3 Months Ended
Dec. 31, 2020
Feb. 11, 2021
Cover [Abstract]    
Entity Registrant Name Voip-pal.com Inc  
Entity Central Index Key 0001410738  
Document Type 10-Q  
Document Period End Date Dec. 31, 2020  
Amendment Flag false  
Current Fiscal Year End Date --09-30  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   2,069,483,092
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2021  
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Interim Consolidated Balance Sheets (Unaudited) - USD ($)
Dec. 31, 2020
Sep. 30, 2020
CURRENT    
Cash $ 28,132 $ 113,538
Prepaid expense 5,000 13,750
Retainer (Note 5) 35,610 52,085
TOTAL CURRENT ASSETS 68,742 179,373
NON-CURRENT    
Fixed assets (Note 6) 8,342 8,907
Intellectual VoIP communications patent properties, net (Note 7) 606,600 641,150
TOTAL ASSETS 683,684 829,430
CURRENT    
Accounts payable and accrued liabilities 450,954 472,758
TOTAL LIABILITIES 450,954 472,758
STOCKHOLDERS' equity    
SHARE CAPITAL (Note 10) 1,529,950 1,510,448
ADDITIONAL PAID-IN CAPITAL (Note 10) 52,640,970 52,434,457
SHARES TO BE ISSUED (Note 10) 61,320 477,320
DEFICIT (53,999,510) (54,065,553)
TOTAL STOCKHOLDERS' EQUITY 232,730 356,672
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 683,684 $ 829,430
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Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended
Dec. 31, 2020
Dec. 31, 2019
EXPENSES    
Amortization (Note 6 & 7) $ 35,115 $ 34,739
Officers and Directors fees (Note 8) 57,600 82,080
Legal fees 149,684 376,938
Office & general 40,975 43,263
Patent consulting fees 6,083 8,307
Professional fees & services 150,500 429,100
Total expenses 439,957 974,427
Gain on settlement of accrued payables (Note 8) (90,000)
LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (349,957) $ (974,427)
Basic and diluted loss per common share $ 0.00 $ 0.00
Weighted-average number of common shares outstanding:    
Basic and diluted 2,046,303,516 1,962,475,418
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Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Sep. 30, 2020
Sep. 30, 2020
Cash Flows from Operating Activities        
Loss $ (349,957) $ (974,427) $ (1,369,430)  
Add items not affecting cash:        
Shares issued for services 101,000 330,000    
Amortization 35,115 34,739    
Gain on settlement of accrued payables (90,000)    
Changes in non-cash working capital:        
Retainer 16,475 520,139    
Accounts payable and accrued liabilities 68,196 (486,666)    
Prepaid expense 8,750 5,750    
Cash Flows Used in Operations (210,421) (570,465)    
Cash Flows from Financing Activities        
Proceeds from private placement 125,015   $ 299,310
Cash Flows Provided by Financing Activities 125,015    
Decrease in cash (85,406) (570,465)    
Cash, beginning of the period 113,538 960,490 390,025 960,490
Cash, end of the period $ 28,132 $ 390,025 $ 113,538 $ 113,538
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.20.4
Interim Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Shares [Member]
Shares to be Issued Value [Member]
Additional Paid-In Capital [Member]
Deficit [Member]
Total
Beginning balance at Sep. 30, 2019 $ 1,432,844 $ 477,320 $ 51,542,780 $ (51,721,696) $ 1,731,248
Beginning balance, shares at Sep. 30, 2019 1,956,377,592        
Shares issued for services $ 13,000 317,000 330,000
Shares issued for services, shares 13,000,000        
Loss for the period (974,427) (974,427)
Ending balance at Dec. 31, 2019 $ 1,445,844 477,320 51,689,780 (52,696,123) 1,086,821
Ending balance, shares at Dec. 31, 2019 1,969,377,592        
Beginning balance at Sep. 30, 2019 $ 1,432,844 477,320 51,542,780 (51,721,696) 1,731,248
Beginning balance, shares at Sep. 30, 2019 1,956,377,592        
Shares issued for services         $ 534,500
Shares issued for services, shares         33,250,000
Ending balance at Sep. 30, 2020 $ 1,510,448 477,320 52,434,457 (54,065,553) $ 356,672
Ending balance, shares at Sep. 30, 2020 2,033,981,592        
Beginning balance at Dec. 31, 2019 $ 1,445,844 477,320 51,689,780 (52,696,123) 1,086,821
Beginning balance, shares at Dec. 31, 2019 1,969,377,592        
Shares issued for private placement $ 44,354 254,956 299,310
Shares issued for private placement, shares 44,354,000        
Shares issued for services $ 20,250 184,250 204,500
Shares issued for services, shares 20,250,000        
Share based compensation 135,471 135,471
Loss for the period (1,369,430) (1,369,430)
Ending balance at Sep. 30, 2020 $ 1,510,448 477,320 52,434,457 (54,065,553) 356,672
Ending balance, shares at Sep. 30, 2020 2,033,981,592        
Shares issued for private placement $ 14,502 110,513 125,015
Shares issued for private placement, shares 14,501,500        
Shares issued for services $ 5,000 96,000 $ 101,000
Shares issued for services, shares 5,000,000       5,000,000
Shares forgiven on termination of service (416,000) 416,000
Loss for the period (349,957) (349,957)
Ending balance at Dec. 31, 2020 $ 1,529,950 $ 61,320 $ 52,640,970 $ (53,999,510) $ 232,730
Ending balance, shares at Dec. 31, 2020 2,053,483,092        
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.20.4
Nature and Continuance of Operations
3 Months Ended
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature and Continuance of Operations
NOTE 1. NATURE AND CONTINUANCE OF OPERATIONS

 

VOIP-PAL.com, Inc. (the “Company”) was incorporated in the state of Nevada in September 1997 as All American Casting International, Inc. The Company’s registered office is located at 10900 NE 4th Street, Suite 2300, Bellevue, Washington in the United States of America.

 

Since March 2004, the Company has developed technology and patents related to Voice-over-Internet Protocol (VoIP) processes. All business activities prior to March 2004 have been abandoned and written off to deficit. The Company operates in one reportable segment being the acquisition and development of VoIP-related intellectual property including patents and technology. All intangible assets are located in the United States of America

 

In December 2013, the Company completed the acquisition of Digifonica (International) Limited, a private company controlled by the CEO of the Company, whose assets included several patents and technology developed for the VoIP market.

 

These consolidated financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business. The Company is in various stages of product development and continues to incur losses and, at December 31, 2020, had an accumulated deficit of $53,999,510 (September 30, 2020 - $54,065,553). The ability of the Company to continue operations as a going concern is dependent upon raising additional working capital, settling outstanding debts and generating profitable operations. These material uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. Should the going concern assumption not continue to be appropriate, further adjustments to carrying values of assets and liabilities may be required. There can be no assurance that capital will be available as necessary to meet these continued developments and operating costs or, if the capital is available, that it will be on the terms acceptable to the Company. The issuances of additional stock by the Company may result in a significant dilution in the equity interests of its current shareholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company’s liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, its business and future success may be adversely affected.

 

Additionally, as the Company’s stated objective is to monetize its patent suite through the licensing or sale of its intellectual property (“IP”), the Company being forced to litigate or to defend its IP claims through litigation casts substantial doubt on its future to continue as a going concern. IP litigation is generally a costly process, and in the absence of revenue the Company must raise capital to continue its own defense and to validate its claims – in the event of a failure to defend its patent claims, either because of lack of funding, a court ruling against the Company or because of a protracted litigation process, there can be no assurance that the Company will be able to raise additional capital to pay for an appeals process or a lengthy trial. The outcome of any litigation process may have a significant adverse effect on the Company’s ability to continue as a going concern.

 

COVID-19

 

In March 2020, the World Health Organization declared a global pandemic related to the COVID-19 coronavirus. Its impact on global economies has been far-reaching and businesses around the world are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the COVID-19 virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and significant declines. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions.

 

The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of the COVID-19 pandemic, nor its impact on the financial position and results of the Company in future periods. The Company is proceeding with its business activities as long as the work environment remains safe – at this point there has been minimal disruption to day-to-day operations resulting from health and safety measures. Disruptions and volatility in the global capital markets may increase the Company’s cost of capital and adversely impact access to capital.

XML 17 R7.htm IDEA: XBRL DOCUMENT v3.20.4
Basis of Presentation
3 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation
NOTE 2. BASIS OF PRESENTATION

 

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.20.4
Significant Accounting Policies
3 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Significant Accounting Policies
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

These consolidated financial statements have been prepared on a consolidated basis and include the accounts of the Company and its wholly owned subsidiary Digifonica. All intercompany transactions and balances have been eliminated. As at December 31, 2020, Digifonica had no activities.

 

Use of Estimates

 

The preparation of these consolidated financial statements required management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. Where estimates have been used, financial results as determined by actual events could differ from those estimates.

 

Cash

 

Cash consists of cash on hand, cash held in trust, and monies held in checking and savings accounts. The Company had $28,132 in cash on December 31, 2020 (September 30, 2020 - $113,538).

 

Fixed Assets

 

Fixed assets are stated at cost less accumulated depreciation, and depreciated using the straight-line method over their useful lives; Furniture and computers – 5 years.

 

Intangible Assets

 

Intangible assets, consisting of VoIP communication patent intellectual properties (IP) are recorded at cost and amortized over the assets estimated life on a straight-line basis. Management considers factors such as remaining life of the patents, technological usefulness and other factors in estimating the life of the assets.

 

The carrying value of intangible assets are reviewed for impairment by management of the Company at least annually or upon the occurrence of an event which may indicate that the carrying amount may be less than its fair value. If impaired, the Company will write-down such impairment. In addition, the useful life of the intangible assets will be evaluated by management at least annually or upon the occurrence of an event which may indicate that the useful life may have changed.

 

Fair Value of Financial Instruments

 

FASB ASC 820, Fair Value Measurement, defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

 

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition, except for those arising from certain related party transactions which are accounted for at the transferor’s carrying amount or exchange amount.

 

Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized as other comprehensive income until realized, or if an unrealized loss is considered other than temporary, the unrealized loss is recorded in income.

 

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

 

Level 1: Quoted prices in active markets for identical assets and liabilities.

 

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3: Unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The fair value of cash is classified as Level 1 at December 31, 2020 and September 30, 2020.

 

The Company classifies its financial instruments as follows: Cash is classified as held for trading and is measured at fair value. Accounts payable and accrued liabilities are classified as other financial liabilities, and have a fair value approximating their carrying value, due to their short-term nature.

 

Income Taxes

 

Deferred income taxes have been provided for temporary differences between financial statement and income tax reporting under the asset and liability method, using expected tax rates and laws that are expected to be in effect when the differences are expected to reverse. A valuation allowance is provided when realization is not considered more likely than not.

 

The Company’s policy is to classify income tax assessments, if any, for interest expense and for penalties in general and administrative expenses. The Company’s income tax returns are subject to examination by the IRS and corresponding states, generally for three years after they are filed.

 

Loss per Common Share

 

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each period. Diluted income per share includes potentially dilutive securities such as outstanding options and warrants outstanding during each period. To calculate diluted loss per share the Company uses the treasury stock method and the If-converted method.

 

For the period ended December 31, 2020 and the year ended September 30, 2020 there were no potentially dilutive securities included in the calculation of weighted-average common shares outstanding.

 

Derivatives

 

We account for derivatives pursuant to ASC 815, Accounting for Derivative Instruments and Hedging Activities. All derivative instruments are recognized in the consolidated financial statements and measured at fair value regardless of the purpose or intent for holding them. We determine fair value of warrants and other option type instruments based on option pricing models. The changes in fair value of these instruments are recorded in income or expense.

 

Stock-based compensation

 

The Company recognizes compensation expense for all stock-based payments made to employees, directors and others based on the estimated fair values of its common stock on the date of issuance.

 

The Company determines the fair value of the share-based compensation payments granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either the date at which a commitment for performance to earn the equity instrument is reached or the date the performance is complete.

 

The Company recognizes compensation expense for stock awards with service conditions on a straight-line basis over the requisite service period, which is included in operations. Stock option expense is recognized over the option’s vesting period.

 

Concentrations of Credit Risk

 

The Company’s policy is to maintain cash with reputable financial institutions or in retainers with trusted vendors. The Company has at times had cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) Insurance Limit of $250,000, but has not experienced any losses to date as a result. As of December 31, 2020, the Company’s bank operating account balances did not exceed the FDIC Insurance Limit.

 

Recent Accounting Pronouncements and Adoption

 

In January 2016, FASB issued an ASU, Subtopic 825-10, to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in fair value of equity investments, with certain exceptions, to be recognized through profit or loss rather than other comprehensive income. The Company adopted the standard October 1, 2018. There was no impact on the Company’s financial statements from the adoption of this amendment.

 

Recent Accounting Pronouncements and Adoption

 

In February 2016 FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and the lessors. The new standard requires the lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard is effective for annual periods beginning after December 15, 2018, with early adoption permitted upon issuance. The adoption of this guidance had no material impact on the financial statements.

 

In June 2016, the FASB issued ASU 2016-13 to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available for sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective for the Company beginning October 1, 2020, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to deficit as of the effective date. The adoption of this guidance had no material impact on the financial statements.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.20.4
Purchase of Digifonica
3 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Purchase of Digifonica
NOTE 4. PURCHASE OF DIGIFONICA

 

The Company acquired Digifonica in December 2013. Pursuant to the terms in the Share Purchase Agreement (the “SPA”) the Company acquired 100% of Digifonica from the seller, the CEO of the Company (the “Seller”), for a cash payment of $800,000 and 389,023,561 common shares of the Company. The assets acquired through the acquisition were VoIP-related patented technology, including patents for Lawful Intercept, routing, billing and rating, mobile gateway, advanced interoperability solutions, intercepting voice over IP communications, and uninterrupted transmission of internet protocol transmissions during endpoint changes.

 

The SPA included an anti-dilution clause (the “Anti-Dilution Clause”) that requires the Company to maintain the Seller’s percentage ownership of the Company at 40% by issuing the Seller a proportionate number of common shares of any future issuance of the Company’s common shares. Shares issued pursuant to the Anti-Dilution Clause are recorded as a share issuance cost within the Additional Paid-in Capital account (Notes 8 and 10).

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.20.4
Retainer
3 Months Ended
Dec. 31, 2020
Retainer  
Retainer
NOTE 5. RETAINER

 

The Company has retainers with several of its professional service providers. The balance due on these prepaid retainers was $35,610 as of December 31, 2020 and $52,085 for the year ended September 30, 2020. The Company recognizes the expense from these retainers as they are invoiced and the invoiced charges are deducted from the various providers’ prepaid retainer balances..

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.20.4
Fixed Assets
3 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Fixed Assets
NOTE 6. FIXED ASSETS

 

A summary of the Company’s fixed assets as of December 31, 2020 and September 30, 2020 is as follows:

 

   

December 31,

2020

    September 30,
2020
 
Office furniture & computers   $ 11,917     $ 11,917  
Accumulated depreciation     (3,575 )     (3,010 )
Net book value   $ 8,342     $ 8,907  

 

There were no retirements of any fixed assets in the periods presented.

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Intangible Assets
3 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets
NOTE 7. INTANGIBLE ASSETS

 

The Company acquired certain patents and technology from Digifonica in December 2013 (see Note 4). These assets have been recorded in the financial statements as intangible assets. These assets are being amortized over twelve (12) years on a straight-line basis. A summary of intangible assets as of December 31, 2020 and September 30, 2020 is as follows:

 

    December 31, 2020     September 30,
2020
 
VoIP Intellectual property and patents   $ 1,552,416     $ 1,552,416  
Accumulated amortization     (945,816 )     (911,266 )
Net book value   $ 606,600     $ 641,150  

 

There were no disposals of any intangible assets in the periods presented.

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.20.4
Related Party Transactions and Key Management Compensation
3 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions and Key Management Compensation

NOTE 8. RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION

 

The Company compensates certain of its key management personnel to operate its business in the normal course. Key management includes the Company’s executive officers and members of its Board of Directors.

 

Compensation paid or accrued to key management for services during the three-month period ended December 31, 2020 includes:

 

   

December 31,

2020

    December 31,
2019
 
Management fees paid or accrued to the CEO   $ 36,000     $ 36,000  
Management fees paid or accrued to the CFO     21,600       28,080  
Fees paid or accrued to Directors     -       18,000  
    $ 57,600     $ 82,080  

 

During the three-month period ended December 31, 2020 the Company accrued $50,400 (2019 - $54,000) and paid cash of $7,200 (2019 - $28,080) for key management compensation totaling $57,600 (2019 - $82,080) as shown in the above table. At December 31, 2020, included in accounts payable and accrued liabilities is $318,531 (September 30, 2020 - $358,131) owed to current officers and directors.

 

During the three-month period ended December 31, 2020, two members of the Board of Directors resigned and forgave $90,000 of accrued directors’ fees and $416,000 of shares to be issued for unpaid director fees (Note 10). Included in shares to be issued is $Nil (September 30, 2020 - $416,000) for unpaid director fees.

 

As at December 31, 2020, 70,335,333 (September 30, 2020 – 57,334,333) common shares are accrued to the Seller of Digifonica for the Anti-Dilution Clause. Nil common shares were issued during the period ended December 31, 2020 (September 30, 2020 – Nil) to the Seller of Digifonica pursuant to the Anti-Dilution Clause (Notes 4 and 10).

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.20.4
Supplemental Cash Flow Information
3 Months Ended
Dec. 31, 2020
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information
NOTE 9. SUPPLEMENTAL CASH FLOW INFORMATION

 

During the period ended December 31, 2020, the Company paid $Nil (September 30, 2020 - $Nil) in interest or income taxes.

 

Non-cash transactions included the settlement of shares to be issued for $416,000 (September 30, 2020 - $Nil)

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.20.4
Share Capital
3 Months Ended
Dec. 31, 2020
Equity [Abstract]  
Share Capital
NOTE 10. SHARE CAPITAL

 

Capital Stock Authorized and Issued:

 

  - 3,000,000,000 (September 30, 2020 – 3,000,000,000) common voting shares authorized with a par value of $0.001 each, of which 2,053,483,092 (September 30, 2020 – 2,033,981,592) shares are issued.
     
  -

1,000,000 convertible preferred shares authorized with a par value of $0.01 each, of which Nil (2019 – Nil) shares are issued.

 

  Issues during the three-month period ended December 31, 2020

 

During the three-month period ended December 31, 2020, the Company issued:

 

  - 14,501,500 common shares priced between $0.005 and $0.01 per share for cash proceeds of $125,015 from a private placement of common shares; and
  - 5,000,000 common shares for services with a value of $101,000.

 

Issues during the year ended September 30, 2020

 

During the year ended September 30, 2020, the Company issued:

 

  - 44,354,000 common shares priced between $0.005 and $0.015 per common share for cash proceeds of $299,310 from private placements of common shares; and
  - 33,250,000 common shares priced between $0.005 and $0.03 per common share for services with an aggregate value of $534,500.

 

Subsequent Issues

 

Subsequent to the period ended December 31, 2020, the Company issued 16,000,000 common shares priced at $0.005 per share for cash proceeds of $80,000 from a private placement of common shares.

 

Shares to be Issued

 

As at December 31, 2020, there are 1,977,523 (September 30, 2020 – 12,817,523) common shares to be issued that are accrued for services provided to the Company valued at $61,320 (September 30, 2020 – $477,320). During the period ended December 31, 2020, shares to be issued of $416,000 to management and related parties was forgiven (see Note 8). As at December 31, 2020, Nil (September 30, 2020 – 10,840,000) common shares valued at $Nil (September 30, 2020 - $416,000) are accrued to management and related parties.

 

As at December 31, 2020, there are 70,335,333 (September 30, 2020 – 57,334,333) common shares to be issued that are accrued to the seller of Digifonica pursuant to the Anti-Dilution Clause (see Notes 4 and 8).

 

Warrants

 

As of December 31, 2020, there were Nil (September 30, 2020 – Nil) outstanding warrants to be exercised.

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.20.4
Stock-Based Compensation
3 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation
NOTE 11. STOCK-BASED COMPENSATION

 

Stock Option Plan

 

In order to provide incentive to directors, officers, management, employees, consultants and others who provide services to the Company or any subsidiary (the “Service Providers”) to act in the best interests of the Company, and to retain such Service Providers, the Company has in place an incentive Stock Option Plan (the “Plan”) whereby the Company is authorized to issue up to 10% of its issued and outstanding share capital in options to purchase common shares of the Company. The maximum term of options granted under the Plan cannot exceed ten years, with vesting terms determined at the discretion of the Board of Directors.

 

The following table summarizes the Company’s stock option transactions:

 

    Number of options    

Weighted average

exercise price

 
Balance September 30, 2018     39,850,000     $ 0.058  
Granted     10,000,000       0.065  
Cancelled     -       -  
Balance September 30, 2019     49,850,000     $ 0.059  
Granted     15,000,000       0.010  
Cancelled     30,000,000       0.062  
Balance September 30, 2020 and December 31, 2020     34,850,000     $ 0.036  

 

The following table summarizes the stock options outstanding at December 31, 2020:

 

Options Outstanding    

Exercise

Price

   

Remaining Contractual

Life (Yrs)

    Number of Options Currently Exercisable  
  4,000,000     $ 0.060       0.48       4,000,000  
  4,000,000       0.060       0.68       4,000,000  
  3,450,000       0.060       0.82       3,450,000  
  8,400,000       0.050       1.30       8,400,000  
  15,000,000       0.010       4.73       15,000,000  
  34,850,000     $ 0.037       2.56       34,850,000  

 

There were no stock options granted, exercised or that vested during the three-month period ended December 31, 2020 and 2019.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.20.4
Contingent Liabilities
3 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Contingent Liabilities
NOTE 12. CONTINGENT LIABILITIES

 

Patent Litigation

 

The Company is party to patent and patent-related litigation cases as follows:

 

i) VoIP-Pal.com Inc. v. Apple, Inc. (Case No. 2:16-CV-00260) & Verizon Wireless Services, LLC, Verizon Communications Inc., AT&T Corp. (Case No. 2:16-CV-00271) in the United States District Court, District of Nevada

 

In February 2016 the Company filed patent infringement lawsuits in the United States District Court, District of Nevada against Apple, Inc, (Case No. 2:16-CV-00260), Verizon Wireless Services, LLC, Verizon Communications Inc., and AT&T Corp. (Case No. 2:16-CV-00271). These cases are seeking a combined $7,024,377,876 in damages. On May 9, 2016, the lawsuits were officially served to these companies (collectively, the “Defendants”).

 

In August, 2018, the cases were consolidated under one lawsuit, and transferred to the U.S. District Court for the Northern District of California, where they were renamed as Case Nos. 5:18-cv-06217-LHK, 5:18-cv-06054-LHK and 5:18-cv-06177-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘005 and ‘815 patents do not claim patentable subject matter.

 

On March 25, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the US Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the district court’s decision.

 

On April 15, 2020, the Company filed a combined petition for rehearing and rehearing en banc, which was denied by the Court.

 

ii) VoIP-Pal.com Inc. v. Twitter, Inc. (Case No. 2:16-CV-02338) in the United States District Court, District of Nevada

 

On October 6, 2016, the Company filed a lawsuit in the United States District Court, District of Nevada against Twitter, Inc, (Case No. 2:16- CV-02338) in which Voip-Pal.com alleges infringement of U.S. Patent No. 8,542,815 and its continuation patent, U.S. Patent No. 9,179,005, This case is seeking $3,200,000,000 in damages. On December 28, 2016, the lawsuit was officially served to Twitter, Inc. On February 28, 2018, Twitter filed a motion to transfer its case based on improper venue and the case was subsequently transferred to the U.S. District Court for the Northern District of California, where it was renamed as Case No. 5:18-cv-4523 and consolidated with Case Nos. 5:18-cv-06217-LHK and 5:18-cv-066054-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘005 and ‘815 patents do not claim patentable subject matter. On March 25, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the district court’s decision.

 

On April 15, 2020, the Company filed a combined petition for rehearing and rehearing en banc, which was denied by the Court.

 

iii) VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. (Case No. 2:18-CV-01076) in the United States District Court, District of Nevada

 

In June 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549. In November 2018, the case was transferred to the U.S. District Court for the Northern District of California, where it was renamed Case No. 5:18-cv-07020-LHK and consolidated with Case No. 5:18-cv-06216-LHK. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘762, ‘330, ‘002, and ‘549 patents do not claim patentable subject matter. On November 1, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit, who affirmed the district court’s decision.

 

During the period ended December 31, 2020, the Company filed a petition for rehearing of this case, which was subsequently denied by the Federal Circuit on January 26, 2021.

 

Patent Litigation (cont’d)

 

iv) VoIP-Pal.com Inc. v. Apple, Inc. et al. (Case No. 2:18-CV-00953) in the United States District Court, District of Nevada

 

In May 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Apple, Inc., alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549. In November 2018, the case was transferred to the U.S. District Court for the Northern District of California, where it was renamed Case No. 5:18-cv-06216-LHK and consolidated with Case No. 5:18-cv-07020. The Defendants filed a Motion to Dismiss the cases, asserting that Voip-Pal’s ‘762, ‘330, ‘002, and ‘549 patents do not claim patentable subject matter. On November 1, 2019, the U.S. District Court for the Northern District of California granted the Defendants’ Motion to Dismiss in all of the cases. The Company appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit, who affirmed the district court’s decision.

 

During the period ended December 31, 2020, the Company filed a petition for rehearing of this case, which was subsequently denied by the Federal Circuit on January 26, 2021.

 

During the year ended September 30, 2020, the following patent litigation cases were filed:

 

v) VoIP-Pal.com Inc. v. Facebook, Inc. et al. Case No. 6-20-cv-00267 in the United States District Court, Western District of Texas

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Facebook, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

vi) VoIP-Pal.com Inc. v. Google, LLC fka Google, Inc. Case No. 6-20-cv-00269 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Google, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

vii) VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. Case No. 6-20-cv-00272 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

viii) VoIP-Pal.com Inc. v. Apple, Inc. Case No. 6-20-cv-00275 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Apple, Inc. alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

ix) VoIP-Pal.com Inc. v. AT&T, Inc. et al. Case No. 6-20-cv-00325 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against AT&T, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

x) VoIP-Pal.com Inc. v. Verizon Communications, Inc. et al. Case No. 6-20-cv-00327 in the United States District Court, Western District of Texas.

 

In April 2020, the Company filed a lawsuit in the United States District Court, Western District of Texas, against Verizon Communications, Inc. and certain related entities, alleging infringement of U.S. Patent No. 10,218,606. The case is pending.

 

xi) Twitter, Inc. VoIP-Pal.com Inc. Case No. 5-20-cv-02397 in the United States District Court, Northern District of California.

 

In April 2020, Twitter filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

Patent Litigation (cont’d)

 

xii) Apple, Inc. v. VoIP-Pal.com Inc. Case No. 5:20-cv-02460 in the United States District Court, Northern District of California.

 

In April 2020, Apple filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent Nos. 9,935,872 and 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

xiii) AT&T Corp., et al. v. VoIP-Pal.com Inc. Case No. 5:20-cv-02995 in the United States District Court, Northern District of California.

 

In April 2020, AT&T filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

 

xiv) Cellco Partnership dba Verizon Wireless, v. VoIP-Pal.com Inc. Case No. 5:20-cv-03092 in the United States District Court, Northern District of California.

 

In April 2020, Verizon filed a declaratory judgment lawsuit against the Company in the United States District Court, Northern District of California, alleging non-infringement and invalidity of U.S. Patent No. 10,218,606. The case is pending.

 

On January 13, 2021, VoIP-Pal filed a Petition for Writ of Mandamus with the U.S. Court of Appeals for the Federal Circuit (Case No. 2021-00112) seeking to reverse the district court’s denial of VoIP-Pal’s motion to dismiss this action under the first-to-file rule. The petition is pending.

 

Inter Partes Reviews

 

In additional legal actions related to the above cases, several of the Company’s patents have been subject to challenge in Inter Partes Review (“IPR”) petitions filed before the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”). An IPR is a post-grant patent review process allowing the PTAB to consider the validity of issued patents. There are no damages awarded, but a portion or all of a patent’s claims instituted for IPR may be invalidated as a result of the review.

 

Through 2016 and 2017, eight IPRs filed against Patents No. 8,542,815 and No. 9,179,005 by either Apple Inc., AT&T Inc. or Unified Patents Inc. as Petitioner(s) were resolved by the PTAB by denial of their institution. Subsequent to those rulings, in December 2017, Apple filed a post-judgment motion in IPR2016-01198 and IPR2016-01201, seeking invalidation of the challenged claims as sanctions against the Company for its having participated in ex parte communications during the PTAB proceedings.

 

During the year ended September 30, 2019, on December 21, 2018, the PTAB ruled on Apple’s sanctions motion, declining to grant Apple’s request to invalidate the challenged claims and declining to grant Apple’s request for entirely new proceedings to replace the existing panel of judges with a new panel or with judges that would consider any request for rehearing by Apple as a sanction against VoIP-Pal. On January 23, 2019, Apple appealed the PTAB’s final written decision upholding the validity of the ‘815 and ‘005 patents to the U.S. Court of Appeals for the Federal Circuit. During the year ended September 30, 2020, on September 25, 2020, the Federal Circuit affirmed the PTAB’s decision.

 

During the year ended September 30, 2019, Apple Inc. petitioned the PTAB to have an additional four IPRs instituted against the Company’s patents numbered 9,537,762, 9,813,330 B2, 9,826,002 B2, and 9,948,549 B2. During the year ended September 30, 2020, all four Apple petitions were denied institution by the PTAB.

 

Non-Patent Litigation

 

The Company is party to the following non-patent litigation case:

 

i) Locksmith Financial Corporation, Inc. et al. (Plaintiff) v VoIP-Pal.com Inc. et al. (Defendant(s)) (Case No A-15-717491-C) filed in Clark County District Court

 

On March 24, 2014, the Company resolved to freeze 95,832,000 common shares that were issued to a company controlled by a former director in fiscal 2013 and accounted for at a cost of $1,443,000. The Company froze the shares as it believes they were issued as settlement of a line of credit that the Company believes was not legally supported. The Plaintiff alleged that the freeze and the Company’s actions constituted fraud and a breach of securities laws. The Company denied any wrongdoing.

 

In August, 2019, the case was heard in Nevada District Court in a jury trial. In a judgment rendered August 26, 2019, the jury ruled that certain of the Defendants (namely the directors of the Company in 2014) had breached their fiduciary duty to the shareholder and awarded monetary relief to the Plaintiff in the amount of $355,000, plus pre-judgment interest in the amount of $91,306. On a concurrent counter-claim, the jury found a claim of Unjust Enrichment against Third-Party Plaintiff TK Investment, Ltd. to be unsubstantiated and awarded monetary relief to the Third-Party Plaintiff of $84,000 plus pre-judgment interest of $3,459.

 

During the year ended September 30, 2020, the Plaintiff and the Defendant waived their rights to appeal in this case. Following such waiver, both of the above-noted judgments and accrued interest were paid in full.

 

ii) Locksmith Financial Corporation, Inc. et al. (Plaintiff(s)) v VoIP-Pal.com Inc. et al. (Defendant(s)) (Case No A-20-807745-C) filed in Clark County District Court

 

During the year period ended September 30, 2020, the Plaintiff filed suit in Nevada District Court claiming that the Defendants had prevented the Plaintiffs from re-registering and/or transferring certain share certificates. The Defendants filed a Motion to Dismiss the claims, which Motion was granted on June 1, 2020. It is unclear whether Plaintiffs will appeal the ruling. The case is pending.

 

Performance Bonus Payable

 

In 2016, the board of directors authorized the Company to provide a performance bonus (the “Performance Bonus”) of up to 3% of the capital stock of the Company by way of the issuance of Common shares from its treasury to an as yet undetermined group of related and non-related parties upon the occurrence of a bonusable event, defined as the successful completion of a sale of the Company or substantially all its assets, or a major licensing transaction. In order to provide maximum flexibility to the Company with respect to determining the level of Performance Bonus payable, and who may qualify to receive a pro-rata share of such a Performance Bonus, the Company authorized full discretion to the Board in making such determinations.

 

During the year ended September 30, 2019, the board of directors authorized the increase of the Performance Bonus to up to 10% of the capital stock of the Company. Concurrently, the directors authorized 66.67% of the Performance Bonus to be issued in an advance payment of an aggregate 127,000,000 Common shares (“Bonus Shares”) (Note 10) to a group of related and non-related parties, which included members of management, a director and several consultants. 94,000,000 of the Bonus Shares are restricted from trading under Rule 144 and are also subject to voluntary lock-up agreements, pursuant to which they cannot be traded, pledged, hypothecated, transferred or sold by the holders until such time as the Company has met the requirements of the bonusable event as described above.

 

As at December 31, 2020, no bonusable event had occurred and there was no Performance Bonus payable.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.20.4
Significant Accounting Policies (Policies)
3 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

These consolidated financial statements have been prepared on a consolidated basis and include the accounts of the Company and its wholly owned subsidiary Digifonica. All intercompany transactions and balances have been eliminated. As at December 31, 2020, Digifonica had no activities.

Use of Estimates

Use of Estimates

 

The preparation of these consolidated financial statements required management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. Where estimates have been used, financial results as determined by actual events could differ from those estimates.

Cash

Cash

 

Cash consists of cash on hand, cash held in trust, and monies held in checking and savings accounts. The Company had $28,132 in cash on December 31, 2020 (September 30, 2020 - $113,538).

Fixed Assets

Fixed Assets

 

Fixed assets are stated at cost less accumulated depreciation, and depreciated using the straight-line method over their useful lives; Furniture and computers – 5 years.

Intangible Assets

Intangible Assets

 

Intangible assets, consisting of VoIP communication patent intellectual properties (IP) are recorded at cost and amortized over the assets estimated life on a straight-line basis. Management considers factors such as remaining life of the patents, technological usefulness and other factors in estimating the life of the assets.

 

The carrying value of intangible assets are reviewed for impairment by management of the Company at least annually or upon the occurrence of an event which may indicate that the carrying amount may be less than its fair value. If impaired, the Company will write-down such impairment. In addition, the useful life of the intangible assets will be evaluated by management at least annually or upon the occurrence of an event which may indicate that the useful life may have changed.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

FASB ASC 820, Fair Value Measurement, defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

 

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition, except for those arising from certain related party transactions which are accounted for at the transferor’s carrying amount or exchange amount.

 

Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized as other comprehensive income until realized, or if an unrealized loss is considered other than temporary, the unrealized loss is recorded in income.

 

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

 

Level 1: Quoted prices in active markets for identical assets and liabilities.

 

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3: Unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The fair value of cash is classified as Level 1 at December 31, 2020 and September 30, 2020.

 

The Company classifies its financial instruments as follows: Cash is classified as held for trading and is measured at fair value. Accounts payable and accrued liabilities are classified as other financial liabilities, and have a fair value approximating their carrying value, due to their short-term nature.

Income Taxes

Income Taxes

 

Deferred income taxes have been provided for temporary differences between financial statement and income tax reporting under the asset and liability method, using expected tax rates and laws that are expected to be in effect when the differences are expected to reverse. A valuation allowance is provided when realization is not considered more likely than not.

 

The Company’s policy is to classify income tax assessments, if any, for interest expense and for penalties in general and administrative expenses. The Company’s income tax returns are subject to examination by the IRS and corresponding states, generally for three years after they are filed.

Loss Per Common Share

Loss per Common Share

 

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each period. Diluted income per share includes potentially dilutive securities such as outstanding options and warrants outstanding during each period. To calculate diluted loss per share the Company uses the treasury stock method and the If-converted method.

 

For the period ended December 31, 2020 and the year ended September 30, 2020 there were no potentially dilutive securities included in the calculation of weighted-average common shares outstanding.

Derivatives

Derivatives

 

We account for derivatives pursuant to ASC 815, Accounting for Derivative Instruments and Hedging Activities. All derivative instruments are recognized in the consolidated financial statements and measured at fair value regardless of the purpose or intent for holding them. We determine fair value of warrants and other option type instruments based on option pricing models. The changes in fair value of these instruments are recorded in income or expense.

Stock-based Compensation

Stock-based compensation

 

The Company recognizes compensation expense for all stock-based payments made to employees, directors and others based on the estimated fair values of its common stock on the date of issuance.

 

The Company determines the fair value of the share-based compensation payments granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either the date at which a commitment for performance to earn the equity instrument is reached or the date the performance is complete.

 

The Company recognizes compensation expense for stock awards with service conditions on a straight-line basis over the requisite service period, which is included in operations. Stock option expense is recognized over the option’s vesting period.

Concentrations of Credit Risk

Concentrations of Credit Risk

 

The Company’s policy is to maintain cash with reputable financial institutions or in retainers with trusted vendors. The Company has at times had cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) Insurance Limit of $250,000, but has not experienced any losses to date as a result. As of December 31, 2020, the Company’s bank operating account balances did not exceed the FDIC Insurance Limit.

Recent Accounting Pronouncements and Adoption

Recent Accounting Pronouncements and Adoption

 

In January 2016, FASB issued an ASU, Subtopic 825-10, to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in fair value of equity investments, with certain exceptions, to be recognized through profit or loss rather than other comprehensive income. The Company adopted the standard October 1, 2018. There was no impact on the Company’s financial statements from the adoption of this amendment.

 

Recent Accounting Pronouncements and Adoption

 

In February 2016 FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and the lessors. The new standard requires the lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard is effective for annual periods beginning after December 15, 2018, with early adoption permitted upon issuance. The adoption of this guidance had no material impact on the financial statements.

 

In June 2016, the FASB issued ASU 2016-13 to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available for sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective for the Company beginning October 1, 2020, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to deficit as of the effective date. The adoption of this guidance had no material impact on the financial statements.

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.20.4
Fixed Assets (Tables)
3 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Schedule of Fixed Assets

A summary of the Company’s fixed assets as of December 31, 2020 and September 30, 2020 is as follows:

 

   

December 31,

2020

    September 30,
2020
 
Office furniture & computers   $ 11,917     $ 11,917  
Accumulated depreciation     (3,575 )     (3,010 )
Net book value   $ 8,342     $ 8,907  
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.20.4
Intangible Assets (Tables)
3 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

A summary of intangible assets as of December 31, 2020 and September 30, 2020 is as follows:

 

    December 31, 2020     September 30,
2020
 
VoIP Intellectual property and patents   $ 1,552,416     $ 1,552,416  
Accumulated amortization     (945,816 )     (911,266 )
Net book value   $ 606,600     $ 641,150  
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.20.4
Related Party Transactions and Key Management Compensation (Tables)
3 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Schedule of Compensation Paid or Accrued to Key Management for Services

Compensation paid or accrued to key management for services during the three-month period ended December 31, 2020 includes:

 

   

December 31,

2020

    December 31,
2019
 
Management fees paid or accrued to the CEO   $ 36,000     $ 36,000  
Management fees paid or accrued to the CFO     21,600       28,080  
Fees paid or accrued to Directors     -       18,000  
    $ 57,600     $ 82,080  
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.20.4
Stock-Based Compensation (Tables)
3 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of Stock Options Transactions

The following table summarizes the Company’s stock option transactions:

 

    Number of options    

Weighted average

exercise price

 
Balance September 30, 2018     39,850,000     $ 0.058  
Granted     10,000,000       0.065  
Cancelled     -       -  
Balance September 30, 2019     49,850,000     $ 0.059  
Granted     15,000,000       0.010  
Cancelled     30,000,000       0.062  
Balance September 30, 2020 and December 31, 2020     34,850,000     $ 0.036  
Schedule of Stock Options Outstanding

The following table summarizes the stock options outstanding at December 31, 2020:

 

Options Outstanding    

Exercise

Price

   

Remaining Contractual

Life (Yrs)

    Number of Options Currently Exercisable  
  4,000,000     $ 0.060       0.48       4,000,000  
  4,000,000       0.060       0.68       4,000,000  
  3,450,000       0.060       0.82       3,450,000  
  8,400,000       0.050       1.30       8,400,000  
  15,000,000       0.010       4.73       15,000,000  
  34,850,000     $ 0.037       2.56       34,850,000  
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.20.4
Nature and Continuance of Operations (Details Narrative) - USD ($)
Dec. 31, 2020
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accumulated deficit $ (53,999,510) $ (54,065,553)
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.20.4
Significant Accounting Policies (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2020
Sep. 30, 2020
Cash $ 28,132 $ 113,538
Antidilutive securities
Cash, FDIC insured amount   $ 250,000
Furniture and Computers [Member]    
Property, plant and equipment, useful life 5 years  
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.20.4
Purchase of Digifonica (Details Narrative) - Share Purchase Agreement [Member]
1 Months Ended
Dec. 31, 2013
USD ($)
shares
Business acquisition, percentage of ownership acquired 100.00%
Business combination, cash transferred | $ $ 800,000
Business acquisition, equity interest issued, number of shares | shares 389,023,561
Anti-dilution clause, percentage of ownership 40.00%
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.20.4
Retainer (Details Narrative) - USD ($)
Dec. 31, 2020
Sep. 30, 2020
Retainer    
Prepaid retainers, value $ 35,610 $ 52,085
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.20.4
Fixed Assets - Schedule of Fixed Assets (Details) - USD ($)
Dec. 31, 2020
Sep. 30, 2020
Property, Plant and Equipment [Abstract]    
Office furniture & computers $ 11,917 $ 11,917
Accumulated depreciation (3,575) (3,010)
Net book value $ 8,342 $ 8,907
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.20.4
Intangible Assets (Details Narrative)
3 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Finite-lived intangible asset, useful life 12 years
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.20.4
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)
Dec. 31, 2020
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]    
VoIP Intellectual property and patents $ 1,552,416 $ 1,552,416
Accumulated amortization (945,816) (911,266)
Net book value $ 606,600 $ 641,150
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.20.4
Related Party Transactions and Key Management Compensation (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Sep. 30, 2020
Accrued fees $ 50,400 $ 54,000  
Value for compensation 7,200 28,080  
Fees paid or accrued, total 57,600 82,080  
Accounts payable and accrued liabilities 450,954   $ 472,758
Gain on settlement of accrued payables (90,000)  
Shares to be issued for unpaid director fees 416,000    
Shares to be issued $ 61,320   $ 477,320
Shares accrued during period, shares 50,400 54,000  
Seller of Digifonica [Member]      
Shares accrued during period, shares 70,335,333   57,334,333
Shares pursuant to anti-dilution clause  
Officers and Directors [Member]      
Accounts payable and accrued liabilities $ 318,531   $ 358,131
Two Members of Board of Directors [Member]      
Gain on settlement of accrued payables 90,000    
Management and Related Parties [Member]      
Shares to be issued   $ 416,000
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.20.4
Related Party Transactions and Key Management Compensation - Schedule of Compensation Paid or Accrued to Key Management for Services (Details) - USD ($)
3 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Fees paid or accrued, total $ 57,600 $ 82,080
Chief Executive Officer [Member]    
Fees paid or accrued, total 36,000 36,000
Chief Financial Officer [Member]    
Fees paid or accrued, total 21,600 28,080
Directors [Member]    
Fees paid or accrued, total $ 18,000
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.20.4
Supplemental Cash Flow Information (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2020
Sep. 30, 2020
Supplemental Cash Flow Elements [Abstract]    
Interest paid, net
Income taxes paid
Shares to be issued for settlement $ 416,000
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.20.4
Share Capital (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Feb. 11, 2021
Dec. 31, 2020
Dec. 31, 2019
Sep. 30, 2020
Sep. 30, 2020
Common stock, shares authorized   3,000,000,000   3,000,000,000 3,000,000,000
Common stock, par value   $ 0.001   $ 0.001 $ 0.001
Common stock, shares issued   2,053,483,092   2,033,981,592 2,033,981,592
Shares issued during period, shares   14,501,500     44,354,000
Cash proceeds from private placement   $ 125,015   $ 299,310
Shares issued for services during period, shares   5,000,000     33,250,000
Shares issued for services during period   $ 101,000 $ 330,000 $ 204,500 $ 534,500
Shares to be issued for unpaid director fees   $ 416,000      
Outstanding warrants exercised      
Share to be Issued [Member] | Management and Related Parties [Member]          
Shares to be issued for unpaid director fees   $ 416,000      
Common Shares [Member]          
Shares issued for services during period, shares   5,000,000 13,000,000 20,250,000  
Shares issued for services during period   $ 5,000 $ 13,000 $ 20,250  
Common Shares [Member] | Share to be Issued [Member]          
Shares issued for services during period, shares   1,977,523     12,817,523
Shares issued for services during period   $ 61,320     $ 477,320
Common Shares [Member] | Share to be Issued [Member] | Seller of Digifonica [Member]          
Shares issued for services during period, shares   70,335,333     57,334,333
Common Shares [Member] | Share to be Issued [Member] | Management and Related Parties [Member]          
Shares issued for services during period, shares       10,840,000
Shares issued for services during period       $ 416,000
Common Shares [Member] | Subsequent Event [Member] | Private Placement [Member]          
Shares issued during period, shares 16,000,000        
Share issued, price per share $ 0.005        
Cash proceeds from private placement $ 80,000        
Minimum [Member]          
Share issued, price per share   $ 0.005   $ 0.005 $ 0.005
Minimum [Member] | Common Shares [Member]          
Share issued, price per share       0.005 0.005
Maximum [Member]          
Share issued, price per share   $ 0.01   0.015 0.015
Maximum [Member] | Common Shares [Member]          
Share issued, price per share       $ 0.03 $ 0.03
Convertible Preferred Stock [Member]          
Preferred stock, shares authorized   1,000,000      
Preferred stock, par value   $ 0.01      
Preferred stock, shares issued      
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.20.4
Stock-Based Compensation - Schedule of Stock Options Transactions (Details) - $ / shares
3 Months Ended 12 Months Ended
Dec. 31, 2020
Sep. 30, 2020
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]      
Number of Options, Beginning balance 34,850,000 49,850,000 39,850,000
Number of Options, Granted 15,000,000 10,000,000
Number of Options, Cancelled 30,000,000
Number of Options, Ending balance 34,850,000 34,850,000 49,850,000
Weighted Average Exercise Price, Beginning balance $ 0.036 $ 0.059 $ 0.058
Weighted Average Exercise Price, Granted 0.010 0.065
Weighted Average Exercise Price, Cancelled 0.062
Weighted Average Exercise Price, Ending balance $ 0.036 $ 0.036 $ 0.059
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.20.4
Stock-Based Compensation - Schedule of Stock Options Outstanding (Details) - $ / shares
3 Months Ended
Dec. 31, 2020
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2018
Options Outstanding 34,850,000 34,850,000 49,850,000 39,850,000
Exercise Price $ 0.036 $ 0.036 $ 0.059 $ 0.058
Remaining Contractual Life (Yrs) 2 years 6 months 21 days      
Number of Options Currently Exercisable 34,850,000      
Range 1 [Member]        
Options Outstanding 4,000,000      
Exercise Price $ 0.060      
Remaining Contractual Life (Yrs) 5 months 23 days      
Number of Options Currently Exercisable 4,000,000      
Range 2 [Member]        
Options Outstanding 4,000,000      
Exercise Price $ 0.060      
Remaining Contractual Life (Yrs) 8 months 5 days      
Number of Options Currently Exercisable 4,000,000      
Range 3 [Member]        
Options Outstanding 3,450,000      
Exercise Price $ 0.060      
Remaining Contractual Life (Yrs) 9 months 25 days      
Number of Options Currently Exercisable 3,450,000      
Range 4 [Member]        
Options Outstanding 8,400,000      
Exercise Price $ 0.050      
Remaining Contractual Life (Yrs) 1 year 3 months 19 days      
Number of Options Currently Exercisable 8,400,000      
Range 5 [Member]        
Options Outstanding 15,000,000      
Exercise Price $ 0.010      
Remaining Contractual Life (Yrs) 4 years 8 months 23 days      
Number of Options Currently Exercisable 15,000,000      
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.20.4
Contingent Liabilities (Details Narrative)
1 Months Ended 3 Months Ended 12 Months Ended
Aug. 26, 2019
USD ($)
Oct. 06, 2016
USD ($)
Mar. 24, 2014
USD ($)
shares
Jun. 30, 2018
Integer
May 31, 2018
Integer
Feb. 29, 2016
USD ($)
Dec. 31, 2020
shares
Sep. 30, 2020
shares
Sep. 30, 2019
shares
Sep. 30, 2017
Sep. 30, 2016
Shares issued during period, shares | shares             14,501,500 44,354,000      
Board of Directors [Member]                      
Performance bonus percent                 66.67%   3.00%
Authorized the increase of performance bonus                 10.00%    
Director and Several Consultants [Member]                      
Bonus shares | shares                 127,000,000    
Director and Several Consultants [Member] | Restricted from Trading Under Rule 144 [Member]                      
Bonus shares | shares                 94,000,000    
Apple Inc, Verizon Wireless Services LLC, Verizon Communications Inc, AT&T Corp [Member]                      
Name of Plaintiff             VoIP-Pal.com Inc        
Name of Defendant             Apple, Inc.        
Legal suit, description           In February 2016 the Company filed patent infringement lawsuits in the United States District Court, District of Nevada against Apple, Inc, (Case No. 2:16-CV-00260), Verizon Wireless Services, LLC, Verizon Communications Inc., and AT&T Corp. (Case No. 2:16-CV-00271). These cases are seeking a combined $7,024,377,876 in damages. On May 9, 2016, the lawsuits were officially served to these companies (collectively, the “Defendants”).          
Damages sought value           $ 7,024,377,876          
Twitter, Inc [Member]                      
Name of Plaintiff             VoIP-Pal.com Inc.        
Name of Defendant             Twitter, Inc.        
Legal suit, description   On October 6, 2016, the Company filed a lawsuit in the United States District Court, District of Nevada against Twitter, Inc, (Case No. 2:16- CV-02338) in which Voip-Pal.com alleges infringement of U.S. Patent No. 8,542,815 and its continuation patent, U.S. Patent No. 9,179,005, This case is seeking $3,200,000,000 in damages. On December 28, 2016, the lawsuit was officially served to Twitter, Inc.                  
Damages sought value   $ 3,200,000,000                  
Amazon.com, Inc [Member]                      
Name of Plaintiff             VoIP-Pal.com Inc.        
Name of Defendant             Amazon.com, Inc.        
Legal suit, description       In June 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Amazon.com, Inc. and certain related entities, alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549.              
Number of patents alleging infringement | Integer       4              
Apple Inc [Member]                      
Name of Plaintiff             VoIP-Pal.com Inc        
Name of Defendant             Apple, Inc.        
Legal suit, description         In May 2018, the Company filed a lawsuit in the United States District Court, District of Nevada, against Apple, Inc., alleging infringement of U.S. Patent Nos. 9,537,762, 9,813,330, 9,826,002 and 9,948,549.       Petitioned the PTAB to have an additional four IPRs instituted against the Company's patents numbered 9,537,762, 9,813,330 B2, 9,826,002 B2, and 9,948,549 B2.    
Number of patents alleging infringement | Integer         4            
Apple Inc., At&T Inc. [Member]                      
Legal suit, description                   No. 9,179,005 No. 8,542,815
Locksmith Financial Corporation, Inc [Member]                      
Shares issued during period, shares | shares     95,832,000                
Number of issued shares value     $ 1,443,000                
State Case [Member]                      
Amount awarded monetary relief to the Plaintiff $ 355,000                    
Interest amount 91,306                    
State Case [Member] | Third-Party Plaintiff [Member]                      
Amount awarded monetary relief to the Plaintiff 84,000                    
Interest amount $ 3,459                    
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