VoIP-Pal.com Inc. (VPLM) posts larger quarterly loss and warns on going concern
VoIP-Pal.com Inc. reports results for the three months ended December 31, 2025, showing no revenue and a net loss of
Cash declined to
Positive
- None.
Negative
- Going concern risk: Management states that recurring losses, an accumulated deficit of
$110,504,588 , and dependence on new financing raise “substantial doubt” about VoIP-Pal’s ability to continue as a going concern. - Widening losses with no revenue: Quarterly net loss increased to
$919,653 from$511,740 year over year, with no revenue and rising professional fees and stock-based compensation. - High potential dilution: With 3.76 billion common shares outstanding, approximately 3.9 billion warrants and 274.5 million options at low exercise prices create significant dilution risk for existing shareholders.
Insights
Rising losses, heavy dilution tools, and a going-concern warning heighten risk for VoIP-Pal.
VoIP-Pal.com Inc. reported a quarterly net loss of
Liquidity is thin: cash stood at
Dilution risk is significant. There are 3.76 billion common shares outstanding and about 3.9 billion warrants plus 274.5 million options, many with low exercise prices and long lives. Future exercises and additional private placements, such as the recent
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended:
or
Commission
File Number:
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
(Address of principal executive offices)
(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.
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).
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 ☐ | |||
| Smaller
reporting company |
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.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☒
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As
of February 12, 2026, the Registrant had
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 | 23 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 25 |
| Item 4. | Controls and Procedures. | 25 |
| PART II—OTHER INFORMATION | ||
| Item 1. | Legal Proceedings. | 27 |
| Item 1A. | Risk Factors. | 29 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 29 |
| Item 3. | Defaults Upon Senior Securities. | 29 |
| Item 4. | Mine Safety Disclosures. | 29 |
| Item 5. | Other Information. | 29 |
| Item 6. | Exhibits. | 29 |
| 2 |
PART I—FINANCIAL INFORMATION
| Item 1. | Financial Statements. |
VOIP-PAL.com Inc.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited – prepared by management)
As at December 31, 2025
(Expressed in U.S. Dollars)
| December 31, | September 30, | |||||||
| 2025 | 2025 | |||||||
| ASSETS | ||||||||
| CURRENT | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Prepaid expense (Note 7) | ||||||||
| Retainer (Note 5) | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| CURRENT | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| SHARE CAPITAL (Note 9) Authorized | $ | $ | ||||||
| PREFERRED SHARE CAPITAL (Note 9) | ||||||||
| ADDITIONAL PAID-IN CAPITAL (Note 9) | ||||||||
| DEFICIT | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
Nature and Continuance of Operations (Note 1)
Contingent Liabilities (Note 11)
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
| 3 |
VOIP-PAL.com Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited – prepared by management)
(Expressed in U.S. Dollars)
Three months ended December 31, 2025 | Three months ended
| |||||||
| EXPENSES | ||||||||
| Officers and directors’ fees (Note 7) | $ | $ | ||||||
| Legal fees | ||||||||
| Office & general | ||||||||
| Patent consulting fees | ||||||||
| Professional fees & services | ||||||||
| LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ( | ) | $ | ( | ) | ||
| Weighted-average number of common shares outstanding, basic and diluted | ||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
| 4 |
VOIP-PAL.com Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited – prepared by management)
(Expressed in U.S. Dollars)
Three Months Ended December 31, 2025 | Three
months Ended December 31, 2024 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Loss | $ | ( | ) | $ | ( | ) | ||
| Add items not affecting cash: | ||||||||
| Preferred shares issued for anti-dilution | - | |||||||
| Shares issued for services | - | |||||||
| Stock-based compensation (Note 10) | ||||||||
| Changes in non-cash working capital: | ||||||||
| Retainer | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Prepaid expense | ( | ) | ||||||
| Cash Flows Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from private placement | - | |||||||
| Cash Flows Provided by Financing Activities | - | |||||||
| Decrease in cash | ( | ) | ( | ) | ||||
| Cash, beginning of the period | ||||||||
| Cash, end of the period | $ | $ | ||||||
Supplemental cash flow information (Note 9)
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
| 5 |
VOIP-PAL.com Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited – prepared by management)
(Expressed in U.S. Dollars)
Three Months Ended December 31, 2024
| Common Shares | Preferred Shares | Shares to be Issued | Additional
Paid-in | |||||||||||||||||||||||||||||
| Number | Par Value | Number | Par Value | Value | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||
| Shares issued for services | - | - | - | - | ||||||||||||||||||||||||||||
| Shares issued – preferred shares | - | - | - | - | - | |||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Shares issued for loss on settlement of litigation | - | - | ( | ) | - | - | ||||||||||||||||||||||||||
| Loss for the period | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||
Three Months Ended December 31, 2025
| Common Shares | Preferred Shares | Shares to be Issued | Additional
Paid-in | |||||||||||||||||||||||||||||
| Number | Par Value | Number | Par Value | Value | Capital | Deficit | Total | |||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | | $ | - | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Balance | $ | $ | | $ | - | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Shares issued for services | - | - | - | - | ||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||
| Return to treasury for cashless warrant exercise | ( | ) | ( | ) | - | - | - | - | - | |||||||||||||||||||||||
| Loss for the period | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||
| Balance | $ | $ | $ | - | $ | $ | ( | ) | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
| 6 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
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 7215 Bosque Blvd, Suite 102, Waco, Texas 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
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
interim condensed 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, as at December 31, 2025, had an accumulated deficit of $
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.
NOTE 2. BASIS OF PRESENTATION
The accompanying interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
| 7 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
These interim condensed 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, 2025, Digifonica had no activities.
Use of Estimates
The preparation of these interim condensed 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. Some of the more significant accounting estimates used in the preparation of the company’s financial statements include deferred income taxes, the valuation of equity-related instruments issued, and the useful life and impairment of intangible assets.
Cash
Cash
consists of cash on hand, cash held in trust, and monies held in checking and savings accounts. The Company had $
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 Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Fair Value of Financial Instruments (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 Company classifies its financial instruments as follows: Cash and restricted cash are classified as held to maturity and measured at amortized cost. 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 stock options and share purchase 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, 2025 and the year ended September 30, 2025, there were
Derivatives
We account for derivatives pursuant to ASC 815, Accounting for Derivative Instruments and Hedging Activities. All derivative instruments are recognized in the interim condensed 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.
Preferred Shares
Stock-based compensation
The Company recognizes compensation expenses 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 grant.
| 9 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Stock-based compensation (cont’d)
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
$
Recent Accounting Pronouncements and Adoption
Certain new standards, amendments and interpretations, and improvements to existing standards have been published by the FASB and United States Securities and Exchange Commission but are not yet effective and have not been adopted early by the Company. Management anticipates that all the relevant pronouncements will be adopted in the first reporting period following the date of application unless noted. Information on the new standards, amendments and interpretations, and improvements to existing standards which could potentially impact the Company’s financial statements are detailed as follows:
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023. The Company adopted this standard effective for the reporting period beginning on October 1, 2024. The adoption of this standard did not result in any additional disclosure as the Company only has one reportable segment and does not generate any revenue.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require disclosure, in the notes to financial statements, on disaggregated information about specific categories underlying certain income statement expense line items that are considered relevant which among other items include items such as the purchase of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. Adoption of this ASU will result in additional disclosure, but will not impact the Company’s condensed consolidated financial position, results of operations, or cash flows.
Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Company’s financial statements.
| 10 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
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
The
SPA included an anti-dilution clause (the “Anti-Dilution Clause”) that required the Company to maintain the Seller’s
percentage ownership of the Company at
During
the year ended September 30, 2021, on April 12, 2021, the SPA was amended to provide that: a) from its inception until March 31, 2021,
the Company would issue warrants to purchase common shares of the Company in an equivalent amount to and instead of the required shares
being issued pursuant to the Anti-Dilution Clause; and b) the Anti-Dilution Clause would be null and void from April 1, 2021 forward.
As a result of this amendment, the Seller returned
During
the year ended September 30, 2023, on April 23, 2023, the SPA was further amended to: a) retroactively reinstate the Anti-Dilution Clause
that had been nullified by the amendments made to the STA in April 2021 so that the Company is now required to issue warrants to purchase
common shares of the Company in an equivalent amount to and instead of the required shares being issued pursuant to the original Anti-Dilution
Clause; and b) require the Company to issue preferred shares with super-voting rights in a sufficient amount in order for the Seller
to maintain his
Pursuant
to the 2023 Amendments, during the year ended September 30, 2024, the Seller was issued
Pursuant
to the 2023 Amendments, during the year ended September 30, 2025, the Seller was issued
Pursuant to the 2023 Amendments, during the three months period ended December 31, 2025, the Seller was issued nil share purchase warrants and nil series A preferred shares. Shares and warrants issued pursuant to the Anti-Dilution Clause are recorded as a share issuance cost within the additional paid-in capital account.
NOTE 5. RETAINER
The
Company has retainers with certain of its professional service providers. The balance due on these prepaid retainers was $
| 11 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 6. INTANGIBLE ASSETS
The
Company acquired certain patents and technology from Digifonica in December 2013 (Note 4). These assets have been recorded in the consolidated
financial statements as intangible assets. These assets are being amortized over
As at September 30, 2024, the Company concluded that the carrying value of the intangible assets were fully impaired based on its estimate of fair value is lower than the carrying value of the intangible asset.
NOTE 7. 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 senior officers and members of its Board of Directors.
Compensation paid or accrued to key management for services during the interim periods ended December 31, 2025 and 2024 includes:
SCHEDULE OF COMPENSATION PAID OR ACCRUED TO KEY MANAGEMENT FOR SERVICES
December 31, 2025 | December 31, 2024 | |||||||
| Management fees paid to the officers | ||||||||
| Fees paid or accrued to directors | ||||||||
| Stock-based compensation (Note 11) | - | - | ||||||
| Total fees paid | $ | $ | ||||||
At
December 31, 2025, included in accounts payable and accrued liabilities is $nil (September 30, 2025 - $
At
December 31, 2025, included in prepaid expense is $
NOTE 8. SUPPLEMENTAL CASH FLOW INFORMATION
During the period ended December 31, 2025, the Company paid $Nil (September 30, 2025 - $Nil) in interest or income taxes.
There were no non-cash investing or financing transactions during the three-month periods ended December 31, 2025 and 2024.
| 12 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 9. SHARE CAPITAL
Capital Stock Authorized and Issued as at December 31, 2025:
| _ | ||
| _ |
Issues during the three-month period ended December 31, 2025
During the three-month period ended December 31, 2025, the Company issued:
| _ | ||
| _ | ||
| _ |
During the year ended September 30, 2025, the Company issued:
| _ | ||
| _ | ||
| _ | ||
| _ | ||
| _ | ||
| _ | ||
| _ |
Subsequent Issues
Subsequent
to the period ended December 31, 2025, on January 9, 2026, the Company issued
Subsequent
to the period ended December 31, 2025, on January 21, 2025, the Company issued
Subsequent
to the period ended December 31, 2025, on January 9, 2026, the Company issued
Subsequent
to the period ended December 31, 2025, on January 22, 2026, the Company issued
| 13 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION
Common Share Purchase Warrants
As
of December 31, 2025, there are
The following table summarizes the Company’s warrant transactions:
SCHEDULE OF STOCK WARRANT TRANSACTIONS
Number of warrants | Weighted average exercise price | |||||||
| Balance September 30, 2024 | $ | |||||||
| Issued | ||||||||
| Exercised | ( | ) | ||||||
| Cancelled | ( | ) | ||||||
| Balance September 30, 2025 | $ | |||||||
| Issued | ||||||||
| Exercised | ( | ) | ||||||
| Cancelled | ( | ) | ||||||
| Balance December 31, 2025 | $ | |||||||
The following table summarizes the share purchase warrants outstanding at December 31, 2025:
SCHEDULE OF PURCHASE WARRANTS OUTSTANDING
| Grant Date | Warrants Outstanding | Exercise Price | Remaining Contractual Life (Years) | Number of Warrants Currently Exercisable | ||||||||||||
| $ | | |||||||||||||||
| - | ||||||||||||||||
| - | ||||||||||||||||
| - | ||||||||||||||||
| - | ||||||||||||||||
| - | ||||||||||||||||
| $ | ||||||||||||||||
| 14 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION (CONT’D)
Common Share Purchase Warrants (cont’d)
During
the three-month period ended December 31, 2025, on December 30, 2025, the Company issued
During
the three-month period ended December 31, 2025, on December 22, 2025, the Company issued
During
the three-month period ended December 31, 2025, on November 3, 2025, the Company issued
During
the three-month period ended December 31, 2025, on October 6, 2025, the Company issued
During
the year ended September 30, 2025, on September 24, 2025, the Company issued
During
the year ended September 30, 2025, on August 23, 2025, the Company issued
| 15 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION (CONT’D)
Common Share Purchase Warrants (cont’d)
During
the year ended September 30, 2025, on July 16, 2025, the Company issued
During
the year ended September 30, 2025, on February 14, 2025, the Company issued
During
the year ended September 30, 2025, on January 22, 2025, the Company issued
During
the year ended September 30, 2025, on January 19, 2025, the Company issued
During
the year ended September 30, 2025, on January 16, 2025, the Company issued
During
the year ended September 30, 2025, on January 2, 2025, the Company issued
| 16 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION (CONT’D)
Common Share Purchase Warrants (cont’d)
During
the year ended September 30, 2025, on December 20, 2024, the Company issued
During
the year ended September 30, 2025, on December 2, 2024, the Company issued
During
the year ended September 30, 2025, on November 13, 2024, the Company issued
During
the year ended September 30, 2025, on October 29, 2024, the Company issued
During
the year ended September 30, 2025, as of October 9, 2024, the Company issued
During
the year ended September 30, 2024, on September 17, 2024, the Company issued
| 17 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION (CONT’D)
Common Share Purchase Warrants (cont’d)
During
the year ended September 30, 2024, on September 12, 2024, the Company issued
During
the year ended September 30, 2024, on September 6, 2024, the Company issued
During
the year ended September 30, 2024, on August 18, 2024, the Company issued
During
the year ended September 30, 2024, on August 18, 2024, the Company issued
During
the year ended September 30, 2024, on June 12, 2024, the Company issued
During
the year ended September 30, 2024, on April 25, 2024, the Company issued
During
the year ended September 30, 2024, on January 12, 2024, the Company issued
| 18 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION (CONT’D)
Common Share Purchase Options
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
The following table summarizes the Company’s stock option transactions:
SCHEDULE OF STOCK OPTIONS TRANSACTIONS
Number of options | Weighted average exercise price ($) | |||||||
| Balance September 30, 2024 | $ | |||||||
| Granted | - | - | ||||||
| Exercised | ( | ) | ||||||
| Balance September 30, 2025 | $ | |||||||
| Granted | - | - | ||||||
| Exercised | - | - | ||||||
| Balance December 31, 2025 | $ | |||||||
The following table summarizes the stock options outstanding at December 31, 2025:
SCHEDULE OF STOCK OPTIONS OUTSTANDING
Options Outstanding | Exercise Price | Remaining Contractual Life (Years) | Number of Options Currently Exercisable | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
During the three-month period ended December 31, 2025, no options in the capital stock of the Company were issued, and no options were exercised.
During
the year ended September 30, 2025, no options in the capital stock of the Company were issued, and
| 19 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 10. STOCK-BASED COMPENSATION (CONT’D)
Preferred Share
During
the three-month period ended December 31, 2025,
During
the year ended September 30, 2025,
During
the year ended September 30, 2024,
During
the three-month period ended December 31, 2025, total stock-based compensation cost of $
As
at December 31, 2025, the aggregate intrinsic value of the Company’s stock options is $
As
at December 31, 2025, the aggregate intrinsic value of the Company’s common share purchase warrants outstanding is $
NOTE 11. CONTINGENT LIABILITIES
Patent Litigation
The Company is party to patent and patent-related litigation cases as follows:
| i. | VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. Case No. 6-20-cv-00272 in the U.S. 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. On September 5, 2025, the Court granted the parties’ joint motion to dismiss. The case is closed.
| ii. | VoIP-Pal.com, Inc. v. Verizon Comms., Inc. et al. Case No. 6-21-cv-672 in the U.S. District Court, Western District of Texas |
On September 25, 2021, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against Verizon and related entities alleging infringement of U.S. Patent Nos. 8,630,234 and 10,880,721. On July 29, 2024, the Court issued an order granting T-Mobile’s motion for summary judgment of non-infringement. On August 15, 2024, the Court entered final judgment of non-infringement. On August 29, 2024, Verizon filed a motion for attorneys’ fees. On September 12, 2024, VoIP-Pal filed a motion for reconsideration of the final judgment. On September 19, Verizon filed a motion for entry of bill of costs. On August 8, 2025, the Court denied Verizon’s motion for attorneys’ fees and granted-in-part its motion for entry of bill of costs. On September 26, 2025, the parties filed a stipulation of dismissal with prejudice of all claims with each side to bear their own fees and costs. The case is closed.
| iii. | VoIP-Pal.com, Inc. v. T-Mobile US, Inc. et al. Case No. 6-21-cv-674 in the U.S. District Court, Western District of Texas |
On September 25, 2021, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against T-Mobile and related entities alleging infringement of U.S. Patent Nos. 8,630,234 and 10,880,721. On July 29, 2024, the Court issued an order granting T-Mobile’s motion for summary judgment of non-infringement. On August 15, 2024, the Court entered final judgment of non-infringement. On September 12, 2024, VoIP-Pal filed a motion for reconsideration of the final judgment. On September 12, 2024, T-Mobile filed a motion for attorneys’ fees and entry of bill of costs. On February 26, 2025, the Court denied VoIP-Pal’s motion for reconsideration of the final judgment. On August 8, 2025, the Court denied T-Mobile’s motion for attorneys’ fees and granted-in-part its motion for entry of bill of costs. On October 7, 2025, the parties filed a stipulation of dismissal with prejudice of all claims with each side to bear their own fees and costs. The case is closed.
| iv. | VoIP-Pal.com, Inc. v. Verizon Communications, Inc. 25-1602-IH |
On March 26, 2025, the Company filed a Notice of Appeal to the Federal Circuit in Case No. 6-21-cv-672. On April 28, 2025, the Court consolidated the appeal with appeal No. 25-1603. On September 26, 2025, the parties filed a Joint Stipulation of Voluntary Dismissal. On October 24, 2025, the Federal Circuit ordered that the appeal be voluntarily dismissed with each side to bear their own costs. The case is closed.
| 20 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 11. CONTINGENT LIABILITIES (CONT’D)
Patent Litigation (Cont’d)
| v. | Vo IP-Pal.com, Inc. v. T-Mobile USA, Inc. 25-1603-IH |
On March 26, 2025, the Company filed a Notice of Appeal to the Federal Circuit in Case No. 6-21-cv-674. On April 28, 2025, the Court consolidated the appeal with appeal No. 25-1602. On October 7, 2025, the parties filed a Joint Stipulation of Voluntary Dismissal. On October 24, 2025, the Federal Circuit ordered that the appeal be voluntarily dismissed with each side to bear their own costs. The case is closed.
| vi. | VoIP-Pal.com, Inc. v. T-Mobile USA, Inc. 25-2091-IH |
On September 9, 2025, T-Mobile filed a Notice of Appeal to the Federal Circuit in Case No. 6-21-cv-674 regarding the denial of its motion for attorney’s fees. On October 7, 2025, the parties filed a Joint Stipulation of Voluntary Dismissal. On October 24, 2025, the Federal Circuit ordered that the appeal be voluntarily dismissed with each side to bear their own costs. The case is closed.
| vii. | VoIP-Pal.com, Inc. v. T-Mobile USA, Inc. Case No. 6-24-cv-298 in the U.S. District Court, Western District of Texas |
On May 20, 2024, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against T-Mobile alleging infringement of U.S. Patent Nos. 8,542,815, 9,179,005, and 10,218,606. On October 15, 2024, the Court dismissed the case based on VoIP-Pal filing a Notice of Voluntary Dismissal.
| viii. | VoIP-Pal.com, Inc. v. Verizon Comms., Inc. et al. Case No. 6-21-cv-299 in the U.S. District Court, Western District of Texas |
On May 20, 2024, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against Verizon and related entities alleging infringement of U.S. Patent Nos. 8,542,815 and 9,179,005. On October 15, 2024, the Court dismissed the case based on VoIP-Pal filing a Notice of Voluntary Dismissal.
| ix. | VoIP-Pal v. AT&T, et al., 24-cv-02395-RC |
This was an antitrust litigation case filed on August 17, 2024. This case was voluntarily dismissed on October 25, 2024.
| x. | Leon, et al. v. AT&T, et al., 24-cv-02397-RDM |
This was a class action lawsuit filed on August 18, 2024. This case was voluntarily dismissed on October 25, 2024.
| xi. | VoIP-Pal v. AT&T, et al., 1:24-cv-03051-RDM |
This is an on-going antitrust litigation case filed on October 25, 2024. It was amended on December 17, 2024, and a second amended complaint was filed on August 22, 2025. The defendants have filed a motion to dismiss. That motion is fully briefed and we are waiting for the Court’s decision. It is too early in the litigation to predict the anticipated results.
| xii. | Inza, et al. v. AT&T, et al., 24-cv-03054-RDM |
This is a class action lawsuit filed on October 25, 2024. The complaint was amended on January 27, 2025 and again on April 22, 2025. The defendants filed a motion to compel arbitration. The motion is fully briefed and we are waiting for the Court’s decision. It is too early in the litigation to predict the anticipated results.
| xiii. | VoIP-Pal v. Apple, et al., 25-cv-01843-RDM |
This is an antitrust lawsuit filed on June 11, 2025, amended on September 21, 2025. The defendants have filed a motion to dismiss on January 30, 2026, and the parties are now briefing that motion. It is too early in the litigation to predict the anticipated results.
| xiv. | Inza, et al. v. Apple, et al., 25-cv-01970-RDM |
This is a class action lawsuit filed on June 24, 2025 and amended on September 21, 2025. The defendants have filed a motion to dismiss and a motion to compel arbitration on January 30, 2026, and the parties are now briefing those motions. It is too early in the litigation to predict the anticipated results.
| 21 |
VOIP-PAL.COM INC.
Notes to the Interim Condensed Consolidated Financial Statements
(Unaudited – prepared by management)
(Expressed in United States Dollars)
December 31, 2025
NOTE 11. CONTINGENT LIABILITIES (CONT’D)
Non-Patent Litigation
The Company is party to non-patent litigation cases as follows:
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.
On
January 1, 2020, the Plaintiffs filed suit in Nevada District Court claiming that they were owed
During the year ended September 30, 2022, the Court entered a judgment in favor of VoIP-Pal.com Inc. and co-defendants, dismissing the 2020 case. The Plaintiffs filed an appeal with the Nevada Supreme Court.
During the year ended September 30, 2023, following a hearing of the appeal, the Nevada Supreme Court ruled to reverse the lower court’s judgment and remanded the case back to the lower court for further proceedings. The Defendants (Voip-Pal et al) filed a motion to the Supreme Court for reconsideration, however that motion was denied, and a trial date was set for November 28, 2023.
During the year ended September 30, 2024, on November 30, 2023, after the completion of trial, the Eighth Judicial District Court for the State of Nevada rendered its decision in favor of VoIP-Pal upon all claims in the case, ruling that the Plaintiffs had not met their burden of proof with respect to any of its claims against VoIP-Pal et al, awarding no damages to Locksmith and specifically ruling that Locksmith take nothing as a result of the litigation.
During
the year ended September 30, 2024, on August 20, 2024, and then amended on September 10, 2024, the Company reached a settlement and release
agreement with the Plaintiff. Pursuant to the settlement and release agreement, the Company agreed to issue
Performance Bonus Payable
In
2016, the board of directors authorized the Company to provide a performance bonus (the “Performance Bonus”) of up to
In
2019, the board of directors authorized the increase of the Performance Bonus to up to
As at December 31, 2025 and September 30, 2025, no bonusable event had occurred and there was no Performance Bonus payable.
| 22 |
| 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 condensed consolidated financial statements for the three months ended December 31, 2024 and notes thereto appearing elsewhere in this report, and our audited consolidated financial statements for the year ended September 30, 2024 and notes thereto.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This MD&A for the period ending December 31, 2025 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-seven 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 benefiting 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.
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.
| 23 |
Comparison of the Three Months Ending December 31, 2025 and 2024
Three months ending December 31 |
Increase/ | |||||||||||||||
| 2025 | 2024 | (Decrease) | Percent | |||||||||||||
| General and administrative expenses | (919,653 | ) | (511,740 | ) | 407,913 | 80 | % | |||||||||
| Net loss | $ | (919,653 | ) | $ | (511,740 | ) | $ | 407,913 | 80 | % | ||||||
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, 2025 and 2024.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the three months ending December 31, 2025 totaled $919,653 compared to $511,740 during the same period in 2024. The increase in general and administrative expenses of $407,913 or 80% less than the previous period was primarily due to an increase in professional fees & services.
AMORTIZATION AND DEPRECIATION
Amortization of intellectual VoIP communications patent properties and depreciation of capital equipment for the three months ending December 31, 2025 totaled $nil compared to $nil during the same period in 2024.
The Company follows GAAP (ASC 350) 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.
OTHER ITEMS
Other items for the three months ending December 31, 2025, totaled $Nil, compared to $Nil during the same periods in 2024.
INTEREST EXPENSE
The Company had no financing or interest costs for the three months ending December 31, 2025 and 2024.
NET LOSS
The Company reported a net loss of $919,653 for the three months ending December 31, 2025 compared to a net loss of $511,740 for the same period in 2024. The increase in net loss of $407,913, or 80% more than the same period in 2024, was primarily due to an increase in professional fees & services.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2025, the Company had an accumulated deficit of $110,504,588 as compared to an accumulated deficit of $109,584,935 at September 30, 2025. As of December 31, 2025, the Company had a working capital of $552,247 as compared to a working capital of $969,267 at September 30, 2025. The decrease in the Company’s working capital of $417,020 is due to ongoing operating expenses during the period.
Net cash used by operations for the three months ending December 31, 2025 and 2024 was $518,872 and $576,181 respectively. The decrease in net cash used for operations for the three months ending December 31, 2025 as compared to the three months ending December 31, 2024 was primarily due to an increase in payment of accounts payable and accrued liabilities.
| 24 |
Net cash used in investing activities for the three months ending December 31, 2025 and 2024 was $Nil and $Nil, respectively.
Net cash provided from financing activities for the three months ending December 31, 2025 and 2024 was $45,000 and $nil, respectively. The increase in net cash provided by financing activities of $45,000 was due to $45,000 cash proceeds from private placements during the three months ending December 31, 2025 compared with no amounts of equity raised from private placements during the three months ending December 31, 2024.
Liquidity
The Company primarily finances its operations from cash received through the private placement of its common stock, settling outstanding debts, and the exercise of warrants from investors. There can be no assurance that capital will be available as necessary to meet continued developments and operating costs or, if the capital is available, that it will be on terms acceptable to the Company. As at December 31, 2025, the Company had cash of $626,877 and current liabilities of $142,079 and incurred net loss of $919,653 during the three month period ended December 31, 2025; accordingly the Company will require additional capital 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.
In 2019, the board of directors authorized the increase of the Performance Bonus to up to 10% of the capital stock of the Company, and also authorized 66.67% of the Performance Bonus to be issued in an advance payment of an aggregate 127,000,000 Common shares (“Bonus Shares”) to members of management, a director and several consultants. 30,000,000 of the issued Bonus Shares continue to be restricted from trading under Rule 144 as well as subject to a voluntary lock-up agreement under which the shares cannot be sold or transferred by the holders until such time as the Company has met the requirements of the bonusable event as described above.
As at December 31, 2025, no bonusable event has occurred and there is no Performance Bonus payable.
| 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
At the end of the period covered by this Report for the three-month period ended December 31, 2025, an evaluation was carried out under the supervision of, and with the participation of, the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act). During the evaluation, management identified material weaknesses as below.
Based on that evaluation, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed in reports filed or submitted under the Exchange Act is: (i) recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms; and (ii) accumulated and communicated to management, including the Company’s principal executive and principal financial officers, or other personnel performing similar functions, as appropriate to enable timely decisions regarding required disclosures. This conclusion reflects the compensating processes and oversight implemented by management, which management believes help mitigate, but do not eliminate, the material weaknesses.
Management’s Report on Internal Control over Financial Reporting
The Company’s management, including the Company’s CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s ICFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with US GAAP. The Company’s ICFR includes policies and procedures that: pertain to the maintenance of records that, in reasonable detail accurately and fairly reflect the transactions and disposition of assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with US GAAP, and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.
| 25 |
Because of their inherent limitations, ICFR can provide only reasonable assurance and may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Change in ICFR
In connection with the audit of our financials for the year ended September 30, 2025, the Company’s auditors noted material weaknesses and made certain recommendations to management regarding material weaknesses related to 1. no formal codes of conduct; 2. no dual authorization on bank disbursements; 2. Lack of reconciliation and reviews (the “2025 Material Weaknesses”).
In connection with the 2025 Material Weaknesses, the Company has allocated resources to its remediation plan and implemented additional controls this period.
As of December 31, 2025, management believes that we are making progress to remediate the 2025 Material Weaknesses relating to its lack of reconciliation and reviews. However, other than as described in the preceding paragraph, there were no changes in our internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of Effectiveness of ICFR
The Company’s management (with the participation of the CEO and the CFO) conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. 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 period covered by this Annual Report on Form 10-K that our internal control over financial reporting has not been effective.
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, 2025:
| - | No formal codes of conduct. | |
| - | No dual authorization on bank disbursements. | |
| - | Lack of reconciliation and reviews |
Based on this evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting, relating to no formal codes of conduct, no dual authorization on bank disbursements and lack of reconciliation and reviews.
Remediation
In response to the material weaknesses described above, the Company will be implementing a remediation plan to address these deficiencies. The plan will include measures to enhance its documentation of a formal code of conduct. Management is in the process of establishing dual authorization procedures for all bank disbursements and implementing a regular review process with clearly defined roles and responsibilities, along with reconciliation tools to ensure timely and accurate comparisons of financial data.
The Company will continue to monitor and evaluate the effectiveness of its internal control over financial reporting on an ongoing basis. If the remediation plan is not sufficient to eliminate the material weaknesses, management will consider what additional actions would be required.
| 26 |
PART II—OTHER INFORMATION
| Item 1. | Legal Proceedings. |
The Company is party to the following legal proceedings:
Patent Litigation
The Company is party to patent and patent-related litigation cases as follows:
| i. | VoIP-Pal.com Inc. v. Amazon.com, Inc. et al. Case No. 6-20-cv-00272 in the U.S. 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. On September 5, 2025, the Court granted the parties’ joint motion to dismiss. The case is closed.
| ii. | VoIP-Pal.com, Inc. v. Verizon Comms., Inc. et al. Case No. 6-21-cv-672 in the U.S. District Court, Western District of Texas |
On September 25, 2021, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against Verizon and related entities alleging infringement of U.S. Patent Nos. 8,630,234 and 10,880,721. On July 29, 2024, the Court issued an order granting T-Mobile’s motion for summary judgment of non-infringement. On August 15, 2024, the Court entered final judgment of non-infringement. On August 29, 2024, Verizon filed a motion for attorneys’ fees. On September 12, 2024, VoIP-Pal filed a motion for reconsideration of the final judgment. On September 19, Verizon filed a motion for entry of bill of costs. On August 8, 2025, the Court denied Verizon’s motion for attorneys’ fees and granted-in-part its motion for entry of bill of costs. On September 26, 2025, the parties filed a stipulation of dismissal with prejudice of all claims with each side to bear their own fees and costs. The case is closed.
| iii. | VoIP-Pal.com, Inc. v. T-Mobile US, Inc. et al. Case No. 6-21-cv-674 in the U.S. District Court, Western District of Texas |
On September 25, 2021, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against T-Mobile and related entities alleging infringement of U.S. Patent Nos. 8,630,234 and 10,880,721. On July 29, 2024, the Court issued an order granting T-Mobile’s motion for summary judgment of non-infringement. On August 15, 2024, the Court entered final judgment of non-infringement. On September 12, 2024, VoIP-Pal filed a motion for reconsideration of the final judgment. On September 12, 2024, T-Mobile filed a motion for attorneys’ fees and entry of bill of costs. On February 26, 2025, the Court denied VoIP-Pal’s motion for reconsideration of the final judgment. On August 8, 2025, the Court denied T-Mobile’s motion for attorneys’ fees and granted-in-part its motion for entry of bill of costs. On October 7, 2025, the parties filed a stipulation of dismissal with prejudice of all claims with each side to bear their own fees and costs. The case is closed.
| iv. | VoIP-Pal.com, Inc. v. Verizon Communications, Inc. 25-1602-IH |
On March 26, 2025, the Company filed a Notice of Appeal to the Federal Circuit in Case No. 6-21-cv-672. On April 28, 2025, the Court consolidated the appeal with appeal No. 25-1603. On September 26, 2025, the parties filed a Joint Stipulation of Voluntary Dismissal. On October 24, 2025, the Federal Circuit ordered that the appeal be voluntarily dismissed with each side to bear their own costs. The case is closed.
| v. | Vo IP-Pal.com, Inc. v. T-Mobile USA, Inc. 25-1603-IH |
On March 26, 2025, the Company filed a Notice of Appeal to the Federal Circuit in Case No. 6-21-cv-674. On April 28, 2025, the Court consolidated the appeal with appeal No. 25-1602. On October 7, 2025, the parties filed a Joint Stipulation of Voluntary Dismissal. On October 24, 2025, the Federal Circuit ordered that the appeal be voluntarily dismissed with each side to bear their own costs. The case is closed.
| vi. | VoIP-Pal.com, Inc. v. T-Mobile USA, Inc. 25-2091-IH |
On September 9, 2025, T-Mobile filed a Notice of Appeal to the Federal Circuit in Case No. 6-21-cv-674 regarding the denial of its motion for attorney’s fees. On October 7, 2025, the parties filed a Joint Stipulation of Voluntary Dismissal. On October 24, 2025, the Federal Circuit ordered that the appeal be voluntarily dismissed with each side to bear their own costs. The case is closed.
| vii. | VoIP-Pal.com, Inc. v. T-Mobile USA, Inc. Case No. 6-24-cv-298 in the U.S. District Court, Western District of Texas |
On May 20, 2024, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against T-Mobile alleging infringement of U.S. Patent Nos. 8,542,815, 9,179,005, and 10,218,606. On October 15, 2024, the Court dismissed the case based on VoIP-Pal filing a Notice of Voluntary Dismissal.
| 27 |
| viii. | VoIP-Pal.com, Inc. v. Verizon Comms., Inc. et al. Case No. 6-21-cv-299 in the U.S. District Court, Western District of Texas |
On May 20, 2024, the Company filed a lawsuit in the U.S. District Court, Western District of Texas, against Verizon and related entities alleging infringement of U.S. Patent Nos. 8,542,815 and 9,179,005. On October 15, 2024, the Court dismissed the case based on VoIP-Pal filing a Notice of Voluntary Dismissal.
| ix. | VoIP-Pal v. AT&T, et al., 24-cv-02395-RC |
This was an antitrust litigation case filed on August 17, 2024. This case was voluntarily dismissed on October 25, 2024.
| x. | Leon, et al. v. AT&T, et al., 24-cv-02397-RDM |
This was a class action lawsuit filed on August 18, 2024. This case was voluntarily dismissed on October 25, 2025.
| xi. | VoIP-Pal v. AT&T, et al., 1:24-cv-03051-RDM |
This is an on-going antitrust litigation case filed on October 25, 2024. It was amended on December 17, 2024, and a second amended complaint was filed on August 22, 2025. The defendants have filed a motion to dismiss. That motion is fully briefed and we are waiting for the Court’s decision. It is too early in the litigation to predict the anticipated results.
| xii. | Inza, et al. v. AT&T, et al., 24-cv-03054-RDM |
This is a class action lawsuit filed on October 25, 2024. The complaint was amended on January 27, 2025 and again on April 22, 2025. The defendants filed a motion to send the case to arbitration. The motion is fully briefed and we are waiting for the Court’s decision. It is too early in the litigation to predict the anticipated results.
| xiii. | VoIP-Pal v. Apple, et al., 25-cv-01843-RDM |
This is an antritrust lawsuit filed on June 11, 2025, amended on September 21, 2025. The defendants have filed a motion to dismiss on January 30, 2026, and the parties are now briefing that motion. It is too early in the litigation to predict the anticipated results.
| xiv. | Inza, et al. v. Apple, et al., 25-cv-01970-RDM |
This is a class action lawsuit filed on June 24, 2025 and amended on September 21, 2025. The defendants have filed a motion to dismiss and a motion to compel arbitration on January 30, 2026, and the parties are now briefing those motions. It is too early in the litigation to predict the anticipated results.
Non-Patent Litigation
The Company is party to non-patent litigation cases as follows:
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.
On January 1, 2020, the Plaintiffs filed suit in Nevada District Court claiming that they were owed 95,832,000 Voip-Pal common shares from a previous case involving the Plaintiff and the Defendant that had been through a jury trial in 2019, in which the jury had made an award to the Plaintiff that was monetary only, and did not include said shares - following the jury’s decision in the 2019 trial, the Plaintiff accepted the award and waived their right to appeal. Voip-Pal vigorously disputed the Plaintiff’s 2020 claims on the basis of claim preclusion (the 2020 claims were addressed in the previous action in 2019 and are now precluded); that Plaintiffs’ claims are untimely, and that the Plaintiffs no longer have standing to bring their claims.
During the year ended September 30, 2022, the Court entered a judgment in favor of VoIP-Pal.com Inc. and co-defendants, dismissing the 2020 case. The Plaintiffs filed an appeal with the Nevada Supreme Court.
| 28 |
During the year ended September 30, 2023, following a hearing of the appeal, the Nevada Supreme Court ruled to reverse the lower court’s judgment and remanded the case back to the lower court for further proceedings. The Defendants (Voip-Pal et al) filed a motion to the Supreme Court for reconsideration, however that motion was denied, and a trial date was set for November 28, 2023.
During the year ended September 30, 2024, on November 30, 2023, after the completion of trial, the Eighth Judicial District Court for the State of Nevada rendered its decision in favor of VoIP-Pal upon all claims in the case, ruling that the Plaintiffs had not met their burden of proof with respect to any of its claims against VoIP-Pal et al, awarding no damages to Locksmith and specifically ruling that Locksmith take nothing as a result of the litigation.
During the year ended September 30, 2024, on August 20, 2024, and then amended on September 10, 2024, the Company reached a settlement and release agreement with the Plaintiff. Pursuant to the settlement and release agreement, the Company agreed to issue 30,000,000 restricted common shares of the Company, with a value of $351,000, and in consideration of the agreement, the Plaintiff shall file a voluntary dismissal of its appeal immediately upon delivery of the certificates. During the year ended September 30, 2025, on October 1, 2024, a share certificate of 30,000,000 restricted common shares was issued to the Plaintiff.
| 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 Regulations of the Securities Act for sales made outside of the United States.
During the three-month period ended December 31, 2025, the Company issued:
| _ | 9,000,000 common shares priced at $0.005 per share for cash proceeds of $45,000 from a private placement of common shares. | ||
| _ | 5,000,000 common shares priced at $0.005 per share, offset by 2,358,491 shares returned to treasury resulting in the issuance of 2,641,509 shares pursuant to cashless option exercises with a net value of $2,642. | ||
| _ | 10,000,000 common shares priced at $0.005 per share, offset by 5,376,344 shares returned to treasury resulting in the issuance of 4,623,656 shares pursuant to cashless option exercises with a net value of $4,624. |
| 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 | ||
| 101.INS | Inline XBRL Instance Document | |||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| 29 |
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, 2026 | By: | /s/ Emil Malak |
| Emil Malak | ||
| Chief Executive Officer | ||
| DATED: February 12, 2026 | By: | /s/ Jin Kuang |
| Jin Kuang | ||
| Chief Financial Officer |
| 30 |
FAQ
How much did VoIP-Pal (VPLM) lose in the quarter ended December 31, 2025?
What is VoIP-Pal (VPLM)’s cash and working capital position as of December 31, 2025?
Does VoIP-Pal (VPLM) have a going concern warning in its December 31, 2025 10-Q?
How many VoIP-Pal (VPLM) shares are outstanding and what about warrants and options?
What drove the increase in expenses for VoIP-Pal (VPLM) in the latest quarter?
How is VoIP-Pal (VPLM) funding its operations given it has no revenue?
What is the status of VoIP-Pal (VPLM)’s patent litigation and legal contingencies?
