STOCK-BASED COMPENSATION

3 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

NOTE 11. STOCK-BASED COMPENSATION

Common Share Purchase Warrants

As of December 31, 2024, there are 3,161,893,999 (September 30, 2024 - 2,799,028,550) outstanding share purchase warrants to be exercised.

The following table summarizes the Company’s warrant transactions:

SCHEDULE OF STOCK WARRANT TRANSACTIONS

	Number of warrants			Weighted average exercise price
Balance September 30, 2023		1,862,937,461		$	0.0019
Issued		985,091,089			0.004
Exercised		(45,000,000	)		0.005
Cancelled		(4,000,000	)		0.005
Balance September 30, 2024		2,799,028,550		$	0.0027
Issued		369,865,449			0.001
Cancelled		(7,000,000	)		0.005
Balance December 31, 2024		3,161,893,999		$	0.0025

The following table summarizes the share purchase warrants outstanding at December 31, 2024:

Grant Date	Warrants Outstanding		Exercise Price		Remaining Contractual Life (Years)		Number of Warrants Currently Exercisable
4/12/2021		621,470,562	$	0.001		6.28		621,470,562
5/30/2022		365,000,000		0.005		2.41		365,000,000
6/30/2023		831,466,899		0.001		8.50		831,466,899
1/12/2024		137,091,089		0.001		9.04		137,091,089
4/25/2024		203,000,000		0.005		9.32		203,000,000
6/12/2024		10,000,000		0.005		9.45		-
8/18/2024		50,000,000		0.005		9.64		50,000,000
8/18/2024		447,000,000		0.005		9.64		-
9/6/2024		45,000,000		0.005		4.68		45,000,000
9/12/2024		54,000,000		0.005		4.70		54,000,000
9/17/2024		28,000,000		0.005		4.72		28,000,000
10/09/2024		357,865,449		0.001		9.78		357,865,449
10/29/2024		3,000,000		0.005		4.83		3,000,000
11/13/2024		5,000,000		0.005		4.87		5,000,000
12/02/2024		1,000,000		0.005		4.92		1,000,000
12/20/2024		3,000,000		0.005		4.97		5,000,000
		3,161,893,999	$	0.003		7.60		2,704,893,999

During the three-month period ended December 31, 2024, on December 20, 2024, the Company issued 3,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.04%, expected life of 5 years, annualized historical volatility of 118.43% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.006. During the three-month period ended December 31, 2024, share-based compensation expenses of $16,862 (2023 - $nil) was recorded within the additional paid-in capital account, which was included as “Professional fees and services” in the consolidated statements of loss and comprehensive loss.

During the three-month period ended December 31, 2024, on December 2, 2024, the Company issued 1,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 2.92%, expected life of 5 years, annualized historical volatility of 119.69% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.006. During the three-month period ended December 31, 2024, share-based compensation expenses of $5,642 (2023 - $nil) was recorded within the additional paid-in capital account, which was included as “Professional fees and services” in the consolidated statements of loss and comprehensive loss.

During the three-month period ended December 31, 2024, on November 13, 2024, the Company issued 5,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.12%, expected life of 5 years, annualized historical volatility of 120.79% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.007. During the three-month period ended December 31, 2024, share-based compensation expenses of $32,558 (2023 - $nil) was recorded within the additional paid-in capital account, which was included as “Professional fees and services” in the consolidated statements of loss and comprehensive loss.

During the three-month period ended December 31, 2024, on October 29, 2024, the Company issued 3,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.02%, expected life of 5 years, annualized historical volatility of 122.87% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.007. During the three-month period ended December 31, 2024, share-based compensation expenses of $19,649 (2023 - $nil) was recorded within the additional paid-in capital account, which was included as “Professional fees and services” in the consolidated statements of loss and comprehensive loss.

VOIP-PAL.COM INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2024

During the three-month period ended December 31, 2024, as of October 9, 2024, the Company issued 357,865,449 common share purchase warrants to purchase 357,865,449 common shares of the Company at a price of $0.001 per share, to be issued to the Seller of Digifonica pursuant to the Anti-Dilution Clause of the amended SPA. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.27%, expected life of 10 years, annualized historical volatility of 126.80% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.01. During the three-month period ended December 31, 2024, share issuance cost of $3,577,476 (2023 - $nil) was recorded within the additional paid-in capital account.

During the year ended September 30, 2024, on September 17, 2024, the Company issued 29,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.44%, expected life of 5 years, annualized historical volatility of 144.95% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.010.

During the year ended September 30, 2024, on September 12, 2024, the Company issued 60,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its officers, employees and consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.47%, expected life of 5 years, annualized historical volatility of 145.06% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.010.

During the year ended September 30, 2024, on September 6, 2024, the Company issued 45,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 5 years from the date of issue to its consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 2.75%, expected life of 5 years, annualized historical volatility of 129.71% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.011.

During the year ended September 30, 2024, on August 18, 2024, the Company issued 50,000,000 compensation warrants to purchase common shares at a price of $0.005 per share for a period of 10 years from the date of issue to the CEO and Chairman of Board of the Company, as appropriate compensation for exemplary and indispensable services performed over the last three years. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.06%, expected life of 10 years, annualized historical volatility of 131.99% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.016.

During the year ended September 30, 2024, on August 18, 2024, the Company issued 451,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 10 years from the date of issue to its directors, officers, employees and consultants. Vesting of the warrants is contingent on the occurrence of certain events.

During the year ended September 30, 2024, on June 12, 2024, the Company issued 10,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of 10 years from the date of issue to a consultant for professional services received. Vesting of the warrants is contingent on the occurrence of certain events.

During the year ended September 30, 2024, on April 25, 2024, the Company issued 203,000,000 warrants to purchase common shares at a price of $0.005 per share for a period of ten years from the date of issue to its directors, officers, employees and consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 4.70%, expected life of 10 years, annualized historical volatility of 136.81% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.013.

VOIP-PAL.COM INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2024

During the year ended September 30, 2024, on January 12, 2024, the Company issued 137,091,089 warrants to purchase common shares at a price of $0.001 per share for a period of 10 years from the date of issue to the Seller of Digifonica pursuant to the Anti-Dilution Clause of the amended SPA. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 4.21%, expected life of 10 years, annualized historical volatility of 144.84% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.018. During the year ended September 30, 2024, share issuance cost of $2,431,780 (2023 - $nil) was recorded within the additional paid-in capital account.

During the year ended September 30, 2023, on June 30, 2023, the Company issued 831,466,899 warrants recorded as a share issuance cost to purchase common shares at a price of $0.001 per share for a period of ten years from the date of issue to its directors, officers, employees and consultants. The following assumptions were used for the Black-Scholes valuation of these warrants on grant date as follows: risk-free rate of 3.81%, expected life of 10 years, annualized historical volatility of 143.75% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The weighted-average fair value per warrant is $0.046.

During the year ended September 30, 2022, on May 30, 2022, the Company issued 410,000,000 warrants to purchase common shares at a price of $0.025 per share for a period of five years from the date of issue to its directors, officers, employees and consultants. On April 24, 2023, 410,000,000 warrants granted on May 30, 2022, were modified to become fully vested and re-priced all such warrants from $0.025 to $0.005. The following assumptions were used for the Black-Scholes valuation of these warrants on modification date as follows: risk-free rate of 3.60%, expected life of 4.10 years, annualized historical volatility of 174.16% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The fair market value that was recorded as additional paid-in capital was $15,995,229. The weighted-average fair value per warrant is $0.039.

On April 23, 2023, 621,470,562 warrants issued on April 12, 2021 were re-priced from $0.021 to $0.005. For the incremental cost on these warrants modification, the following assumptions were used for the Black-Scholes valuation of warrants issued during the year ended September 30, 2023: risk-free rate of 4.78%, expected life of 7.99 years, annualized historical volatility of 169.15% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The incremental cost that has been recorded as additional paid-in capital from the modification of these warrants was $130,000. The weighted-average fair value of these warrants issued was $0.036.

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 10% of its issued and outstanding share capital in options to purchase common shares of the Company. The maximum term of options granted under the Plan cannot exceed ten years, with vesting terms determined at the discretion of the Board of Directors.

VOIP-PAL.COM INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2024

NOTE 11.

STOCK-BASED COMPENSATION (CONT’D)

Common Share Purchase Options (cont’d)

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, 2022		182,000,000		$	0.024
Granted		75,000,000			0.005
Exercised		(32,500,000	)		0.005
Cancelled / Expired		(15,000,000	)		0.010
Balance September 30, 2023		209,500,000		$	0.005
Granted		115,000,000			0.005
Exercised		(45,000,000	)		0.005
Balance September 30, 2024		279,500,000		$	0.005
Granted		-			-
Balance December 31, 2024		279,500,000		$	0.005

The following table summarizes the stock options outstanding at December 31, 2024:

SCHEDULE OF STOCK OPTIONS OUTSTANDING

Options Outstanding		Exercise Price		Remaining Contractual Life (Years)		Number of Options Currently Exercisable
	40,000,000	$	0.005		1.31		40,000,000
	64,500,000		0.005		2.41		64,500,000
	65,000,000		0.005		3.42		65,000,000
	110,000,000		0.005		4.04		110,000,000
	279,500,000	$	0.005		3.13		279,500,000

During the three-month period ended December 31, 2024, there were no issues, cancellations, expirations, vesting, or exercises of options in the capital stock of the Company.

During the year ended September 30, 2024, the Company:

- on January 12, 2024, granted 115,000,000 options to purchase 115,000,000 common shares at a price of $0.005 to its consultants and advisors. The options are exercisable for a period of five years from the date of grant, with 112,500,000 options vesting on the date of the option grant, 2,500,000 options vesting on July 12, 2024. The following assumptions were used for the Black-Scholes valuation of stock options on grant date as follows: risk-free rate of 4.21%, expected life of 5 years, annualized historical volatility of 144.84% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors.

During the year ended September 30, 2023, the Company:

- on April 24, 2023, re-priced all its previously issued outstanding options to be exercisable at $0.005 per share; and

- on May 31, 2023, granted 75,000,000 options to purchase 75,000,000 common shares at a price of $0.005 per share to its directors, consultants and advisors.

During the year ended September 30, 2023, on May 31, 2023, the Company granted 75,000,000 options to purchase 75,000,000 common shares at a price of $0.005 to its consultants and advisors. The options are exercisable for a period of five years from the date of grant, with 68,500,000 options vesting on the date of the option grant, 3,500,000 options vesting on May 31, 2024, and 3,000,000 options vesting on May 31, 2025. The vesting period was amended on June 1, 2024 that all options were vested on grant date. The following assumptions were used for the Black-Scholes valuation of stock options on grant date as follows: risk-free rate of 3.74%, expected life of 5 years, annualized historical volatility of 148.52% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors.

During the year ended September 30, 2022, on May 30, 2022, the Company granted 77,000,000 options to purchase 77,000,000 common shares at a price of $0.025 to its consultants and advisors. The options are exercisable for a period of five years from the date of grant, with the first 50% vesting on the date of the option grant and the remaining 50% vesting on May 30, 2023. On April 24, 2023, the stock options issued on May 30, 2022 were re-priced from $0.025 to $0.005. For the incremental cost on the option modification, the following assumptions were used for the Black-Scholes valuation: risk-free rate of 3.60%, expected life of 4.1 years, annualized historical volatility of 174.16% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors. The incremental cost that has been recorded as additional paid-in capital from the modification of these options was $105,571 (2022 - $nil).

VOIP-PAL.COM INC.

Notes to the Interim Condensed Consolidated Financial Statements

(Unaudited – prepared by management)

(Expressed in United States Dollars)

December 31, 2024

NOTE 11.

STOCK-BASED COMPENSATION (CONT’D)

Common Share Purchase Options (cont’d)

During the year ended September 30, 2021, on April 23, 2021, the Company granted 90,000,000 options to purchase 90,000,000 common shares at a price of $0.025 to its directors, officers, employees, consultants and advisors. The options are exercisable for a period of five years from the date of grant and are all now fully vested. On April 24, 2023, the stock options issued on April 23, 2021 were re-priced from $0.025 to $0.005. For the incremental cost on the option modification, the following assumptions were used for the Black-Scholes valuation: risk-free rate of 3.84%, expected life of 3 years, annualized historical volatility of 169.15% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors.

During the year ended September 30, 2023, 15,000,000 stock options were replaced. For the incremental cost on the option replacement, the following assumptions were used for the Black-Scholes valuation: risk-free rate of 3.74%, expected life of 5 years, annualized historical volatility of 148.52% and a dividend rate of 0%. Expected volatilities are based on the historical volatility of the Company’s stock and other factors.

Preferred Share

During the three-month period ended December 31, 2024, 138,522 series A preferred shares were issued pursuant to the Anti-Dilution Clause of the SPA (Note 4) with a value of $1,385 in order to bring total series A preferred share ownership to 926,438. During the three-month period ended December 31, 2024, share issued cost of $1,385 (2023 - $nil) was charged against income from preferred shares issued.

During the year ended September 30, 2024, 52,885 series A preferred shares were issued pursuant to the Anti-Dilution Clause of the SPA (Note 4) with a value of $529 in order to bring total series A preferred share ownership to 787,916. During the year ended September 30, 2024, share issued cost of $476 (2023 - $nil) was charged against income from preferred shares issued.

During the year ended September 30, 2023, 138,420 preferred shares issued pursuant to the Anti-Dilution Clause of the SPA with a value of $138 which is recorded as stock-based compensation.

During the three-month period ended December 31, 2024, total stock-based compensation cost of $74,711 (2023 - $77,861) was charged against income from all options issued and vested, including the incremental cost resulting from the option modifications.

As at December 31, 2024, the aggregate intrinsic value of the Company’s stock options is $559,000 (September 30, 2024 - $1,173,900), and the total intrinsic value of options exercised during the period ended December 31, 2024 was $nil (September 30, 2024 - $189,000).

Voip-pal.com Inc 10-Q