(Expressed in U.S. Dollars)
Nature and Continuance of Operations (Note 1)
Contingent Liabilities (Note
10)
The
accompanying notes are an integral part of these consolidated financial statements
INTERIM CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
For the Three and Six Months Ended March
31,
(Unaudited – prepared by management)
(Expressed in U.S. Dollars)
|
|
Three Months Ended
March 31, 2016
|
|
Three Months Ended
March 31, 2015
|
|
Six Months Ended March 31, 2016
|
|
Six Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization (Note 5)
|
|
$
|
25,186
|
|
|
|
27,718
|
|
|
$
|
50,371
|
|
|
$
|
50,954
|
|
Officers and Directors Fees (Note 6)
|
|
|
24,429
|
|
|
|
28,500
|
|
|
|
42,429
|
|
|
|
75,028
|
|
Legal fees (Note 6)
|
|
|
216,678
|
|
|
|
97,071
|
|
|
|
230,636
|
|
|
|
125,108
|
|
Office & general
|
|
|
28,522
|
|
|
|
20,252
|
|
|
|
110,141
|
|
|
|
51,683
|
|
Patent application expense
|
|
|
175,314
|
|
|
|
—
|
|
|
|
175,314
|
|
|
|
—
|
|
Professional fees & services (Note 6)
|
|
|
65,957
|
|
|
|
13,749
|
|
|
|
139,372
|
|
|
|
17,248
|
|
Acquisition expenses (Note 4)
|
|
|
—
|
|
|
|
—
|
|
|
|
500,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
536,086
|
|
|
|
187,290
|
|
|
|
1,248,263
|
|
|
|
320,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
|
|
$
|
(536,086
|
)
|
|
|
(187,290
|
)
|
|
$
|
(1,248,263
|
)
|
|
$
|
(320,021
|
)
|
Basic and diluted loss per common share
|
|
$
|
(0.00
|
)
|
|
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
1,040,455,868
|
|
|
|
990,660,711
|
|
|
|
1,040,455,868
|
|
|
|
990,660,711
|
|
The
accompanying notes are an integral part of these consolidated financial statements
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three and Six Months Ended March
31,
(Unaudited – prepared by management)
(Expressed in U.S. Dollars)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
March 31
|
|
March 31
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(536,086
|
)
|
|
$
|
(159,572
|
)
|
|
$
|
(1,248,263
|
)
|
|
$
|
(269,068
|
)
|
Add items not affecting cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
|
—
|
|
|
|
—
|
|
|
|
55,000
|
|
|
|
—
|
|
Amortization
|
|
|
25,186
|
|
|
|
27,718
|
|
|
|
50,372
|
|
|
|
50,954
|
|
Acquisition expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
500,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in non-cash working capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
39,710
|
|
|
|
9,782
|
|
|
|
17,825
|
|
|
|
(13,454
|
)
|
Subscriptions receivable
|
|
|
(157,875
|
)
|
|
|
—
|
|
|
|
(157,875
|
)
|
|
|
—
|
|
Cash Flows from Operations
|
|
|
(629,065
|
)
|
|
|
(122,072
|
)
|
|
|
(782,941
|
)
|
|
|
(231,568
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intellectual VoIP properties
|
|
|
—
|
|
|
|
—
|
|
|
|
(144,409
|
)
|
|
|
—
|
|
Cash Flows Used In Investing Activities
|
|
|
—
|
|
|
|
—
|
|
|
|
(144,409
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
7,858
|
|
|
|
3,497
|
|
|
|
9,698
|
|
|
|
4,160
|
|
Contributed surplus
|
|
|
385,018
|
|
|
|
173,876
|
|
|
|
476,178
|
|
|
|
210,028
|
|
Shares to be Issued
|
|
|
—
|
|
|
|
—
|
|
|
|
(87,000
|
)
|
|
|
—
|
|
Cash Flows Provided by Financing Activities
|
|
|
392,876
|
|
|
|
177,373
|
|
|
|
398,876
|
|
|
|
214,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash
|
|
|
(236,189
|
)
|
|
|
55,301
|
|
|
|
(528,474
|
)
|
|
|
(17,380
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of the period
|
|
|
480,990
|
|
|
|
10,070
|
|
|
|
773,275
|
|
|
|
82,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, end of the period
|
|
$
|
244,801
|
|
|
$
|
65,371
|
|
|
$
|
244,801
|
|
|
$
|
65,371
|
|
Supplemental cash flow information (Note 7)
The accompanying notes are an integral part
of these consolidated financial statements
INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY (DEFICIENCY)
(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
|
September 30, 2014
|
|
|
986,500.570
|
|
|
$
|
863,134
|
|
|
$
|
—
|
|
|
$
|
26,738,696
|
|
|
$
|
(26,550,270
|
)
|
|
$
|
1,051,560
|
|
Common shares issued for debt conversion
|
|
|
3,842,000
|
|
|
|
3,842
|
|
|
|
—
|
|
|
|
191,258
|
|
|
|
—
|
|
|
|
195,100
|
|
Common shares issued for services
|
|
|
318,141
|
|
|
|
318
|
|
|
|
—
|
|
|
|
18,770
|
|
|
|
—
|
|
|
|
19,088
|
|
Net loss for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(269,067
|
)
|
|
|
(269,067
|
)
|
Balance at March 31, 2015
|
|
|
990,660,711
|
|
|
$
|
867,294
|
|
|
$
|
759,721
|
|
|
$
|
26,948,724
|
|
|
$
|
(26,819,337
|
)
|
|
$
|
996,681
|
|
Common shares issued for debt conversion
|
|
|
22,188,930
|
|
|
|
22,189
|
|
|
|
91,721
|
|
|
|
1,075,894
|
|
|
|
—
|
|
|
|
1,189,804
|
|
Common shares issued for services
|
|
|
6,808,727
|
|
|
|
6,809
|
|
|
|
755,000
|
|
|
|
332,992
|
|
|
|
—
|
|
|
|
1,094,801
|
|
Shares to be issued for Anti-dilution Clause (Note 4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net loss for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,342,701
|
)
|
|
|
(1,342,701
|
)
|
Balance at September 30, 2015
|
|
|
1,019,658,368
|
|
|
$
|
896,292
|
|
|
$
|
846,721
|
|
|
$
|
28,357,610
|
|
|
$
|
(28,162,038
|
)
|
|
$
|
1,938,585
|
|
Common shares issued for debt conversion
|
|
|
9,697,500
|
|
|
|
9,698
|
|
|
|
(87,000
|
)
|
|
|
476,178
|
|
|
|
—
|
|
|
|
398,876
|
|
Common shares issued for services
|
|
|
1,100,000
|
|
|
|
1,100
|
|
|
|
—
|
|
|
|
53,900
|
|
|
|
—
|
|
|
|
55,000
|
|
Shares to be issued for Anti-dilution Clause (Note 4)
|
|
|
10,000,000
|
|
|
|
10,000
|
|
|
|
—
|
|
|
|
490,000
|
|
|
|
—
|
|
|
|
500,000
|
|
Net loss for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,248,263
|
)
|
|
|
(1,248,263
|
)
|
Balance at March 31, 2016
|
|
|
1,040,455,868
|
|
|
$
|
917,090
|
|
|
$
|
759,721
|
|
|
$
|
29,377,687
|
|
|
$
|
(29,410,300
|
)
|
|
$
|
1,644,198
|
|
The accompanying notes are an integral part
of these consolidated financial statements
NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited – prepared by management)
March 31, 2016
(Expressed
in U.S. Dollars)
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 4
th
Street, Suite 2300, Bellevue, Washington in the United States of America.
Since March 2004, the Company has been developing
technology and patents related to VoIP related processes. All business activities prior to March 2004 have been abandoned and written
off to deficit.
In December 2013, the Company completed the
acquisition of Digifonica (International) Limited (“Digifonica”), a private company incorporated on September 7, 2004
in Gibraltar.
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 March
31, 2016, had an accumulated deficit of $29,410,300 (September 30, 2015 - $28,162,038). 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 may cast significant 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.
NOTE 2. BASIS OF PRESENTATION
The accompanying consolidated financial statements
have been prepared in accordance with accounting principles generally accepted 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 March 31, 2016, 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 and monies
held in checking and savings accounts. The Company had $244,801 and $773,275 in cash on March 31, 2016 and September 30, 2015,
respectively.
Intangible Assets
Intangible assets, consisting of Intellectual
VoIP communication patent properties 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 that are 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 March 31, 2016 and September 30, 2015.
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 expenses 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 March 31, 2016 and September
30, 2015 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 record our interest rate
and foreign currency swaps at fair value based on discounted cash flow analysis and for 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.
Concentrations of Credit Risk
The Company maintains cash at financial institutions,
which at times, may be in excess of insured limits. The Company has not experienced any losses to date as a result of this policy
and, in assessing its risk, the Companies’ policy is to maintain cash only with reputable financial institutions. One
of the operating accounts had a cash value of $244,801 as of March 31, 2016 which did not exceed the Federal Deposit Insurance
Corporation insurance limit of $250,000.
Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update(ASU) No. 2014-10, “Development Stage Entities (Topic 915):
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic
810, Consolidation”. This ASU does the following, among other things: a) eliminates the requirement to present inception-to-date
information on the statements of income, cash flows, and shareholders' equity, b) eliminates the need to label the financial statements
as those of a development stage entity, c) eliminates the need to disclose a description of the development stage activities in
which the entity is engaged, and d) amends FASB ASC 275, “Risks and Uncertainties”, to clarify that information on
risks and uncertainties for entities that have not commenced planned principal operations is required. The amendments in ASU No.
2014-10 related to the elimination of Topic 915 disclosures and the additional disclosure for Topic 275 are effective for public
companies for annual and interim reporting periods beginning after December 15, 2014. Early adoption is permitted. The Company
has evaluated this ASU and adopted it beginning with the period ended September 30, 2015.
In August 2014, the FASB issued ASU No. 2014-15
"Presentation of Financial Statements-Going Concern." The provisions of ASU No.2014-15 require management to assess an
entity’s liability to continue as a going concern by incorporating and expanding upon certain principles that are currently
in U.S. audit standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require evaluation
of every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s
plans, (5) require an express statement and other disclosures when substantial doubt in not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments
in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
The Company is currently assessing the impact of ASU No. 2014-15 on the Company’s consolidated financial statements.
Management does not believe that any other
recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying
interim consolidated financial statements.
NOTE 4. INVESTMENT IN DIGIFONICA (INTERNATIONAL)
LIMITED
The Company acquired Digifonica in December
2013. Pursuant to the terms in the Share Purchase Agreement (the “SPA”) the Company acquired 100% of Digifonica for
cash and common shares of the Company from the Seller (the “Seller”). The SPA included an Anti-Dilution Clause (the
“Anti-dilution Clause”) that requires the Company to maintain the Sellers 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.
The assets acquired through the acquisition
were VoIP related patented technology. This patented technology includes patents for Lawful Intercept, routing, billing, rating
mobile gateway, advanced interoperability solutions, intercepting voice over IP communications, and uninterrupted transmission
of internet protocol transmissions during endpoint changes.
Shares issued pursuant to the Anti-dilution
Clause are recorded as a share issuance cost within the Additional Paid-in Capital account. As at September 30, 2015, the Company
accrued 18,839,786 common shares to be issued at $0.05 per share, valued at $941,989 to the Seller of Digifonica pursuant to the
Anti-dilution Clause.
During the six months ended March 31, 2016
the Company issued 10,000,000 common shares at $0.05 per share, valued at $500,000 and had accrued 8,839,786 common shares at $0.05
per share, valued at $441,989 to the seller of Digifonica pursuant to the Anti-dilution Clause.
NOTE 5. 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 March 31, 2016 and September
30, 2015 is as follows:
|
|
March 31, 2016
|
|
September 30, 2015
|
VoIP Intellectual property and patents
|
|
$
|
1,582,426
|
|
|
$
|
1,438,018
|
|
Accumulated amortization
|
|
|
(279,478
|
)
|
|
|
(229,107
|
)
|
Net book value
|
|
$
|
1,302,948
|
|
|
$
|
1,208,911
|
|
There were no disposals of any intangible assets in the years presented.
There was a non-cash acquisition expense of
$500,000 related to the issuance of additional shares to the seller of Digifonica (See Note 4).
NOTE 6. RELATED PARTY TRANSACTIONS
During the six months ended March 31, 2016
the Company incurred $13,958 (2015 - $46,528) in legal fees paid to a Director in his capacity as legal counsel. Of this amount,
$5,000 was paid by the issuance of shares for services.
During the six months ended March 31, 2016
the Company paid $50,000 (2015 – Nil) for professional fees and services, issuing 1,000,000 Common shares in the capital
stock of the Company to an officer of the Company.
Included in Shares to be issued as at March
31, 2016 is $650,000 (2015 - $nil) for unpaid Officers and Directors fees and $90,000 (2015 - $nil) for professional fees &
services paid to a director for consulting services provided.
NOTE 7. SUPPLEMENTAL CASH FLOW INFORMATION
During the six months ended March 31, 2016
and 2015, the Company paid $nil income taxes and $nil in interest.
NOTE 8. CONVERTIBLE DEBENTURES
The Company routinely issues convertible debentures
with no interest rates that are due on demand. The convertible debentures are convertible at fixed conversion rates. See note 9
for details of common shares issued during the year from the conversion of convertible debentures.
NOTE 9. SHARE CAPITAL
Capital Stock Authorized:
1,101,000,000 common voting
shares with a par value of $0.001 each
1,000,000 convertible preferred
shares with a par value of $0.01 each
During the year ended September 30, 2015, the
Company issued 26,030,930 common shares valued between $0.05 - $0.08 per common share to convert $1,293,183 of convertible debentures.
During the year ended September 30, 2015, the
Company issued 7,126,868 common shares valued between $0.05 - $0.06 per common share for services received.
During the three months ended December 31,
2015, the Company issued 10,000,000 common shares at $0.05 per common share to the seller of Digifonica pursuant to the Anti-dilution
Clause.
During the three months ended December 31,
2015 the Company issued 1,840,000 common shares valued between $0.05 - $0.06 per common share to convert $1,800,000 of convertible
debentures.
During the three months ended December 31,
2015, the Company issued 1,100,000 common shares valued at $0.05 per common share for services received.
During the three months ended March 31, 2016,
the Company issued 7,857,500 common shares valued at $0.05 per common share to convert $392,875 of convertible debentures. As at
March 31, 2016 the Company has $759,721 to be settled through shares-to-be-issued at $0.05 per common share for services received
during the year ended September 30, 2015.
NOTE 10. CONTINGENT LIABILITIES
The Company is party to three pending litigation cases as follows:
i)
|
Locksmith
Financial Corporation, Inc. et al. v Voip-Pal.com Inc. (Case No A-15-717491-C) filed in Clark County District Court (the “State
Case”)
|
|
|
|
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 (the “defendant”) in fiscal 2013 and accounted for at a cost of $1,443,000. The Company resolved
to freeze the common shares as the Company believes that the shares were issued as settlement of a line of credit that the
Company believes to have been legally unsupported. The defendant alleges that the freeze and the Company’s actions constituted
fraud and a breach of securities laws. The Company denies any wrongdoing. Currently the State Case is entering
the discovery phase of litigation and the outcome is undeterminable.
|
|
|
ii)
|
Voip-Pal.com
Inc. v Richard Kipping, et al (Case No. 2:15-cv-01258-JAD-VCF) filed in United States District Court (the “Federal Case”)
|
|
|
|
On
July 2, 2015, the Company filed a case against a former director, a shareholder and the company controlled by a former director. The
Company alleges that the common shares issued in the State Case and an additional 7,200,000 common shares were fraudulently
obtained and that the shares have been unlawfully transferred to other entities. The proceedings in the Federal
Case have been stayed pending a final determination of the issues in the State Case. The outcome of the case is
undeterminable.
|
|
|
iii)
|
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-VC-00271)
|
|
|
|
In
February, 2016, the Company filed claims totaling $7 Billion in patent infringement lawsuits in the United States District
Court, District of Nevada against several major telephone and media-related companies. The Company followed the
filings by initiating discussions with the defendants in each suit.
|
|
|
|
Subsequent
to the period, on May 9, 2016 these lawsuits were officially served to the three defendant companies.
|
NOTE 11. SEGMENTED INFORMATION
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.