Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 664

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 664
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We invested $0.3 million
in Business Warrior in the form of notes receivable for strategic purposes during the year ended December 31, 2024. In the prior year
we had invested $0.1million in our payment platforms which we subsequently disposed of or novated to other parties and we invested $1.0
million in our equity method investment.

We generated cash of
$1.3 million from promissory notes and convertible notes and repaid $0.4 million of convertible notes. In the prior year we generated
$2.4 million from convertible notes and repaid $0.3 million.

At December 31, 2024,
we had outstanding convertible notes, including interest thereon of $5.0 million, net of unamortized debt discount of $0.1 million and
outstanding promissory notes, including interest thereon of $1.7 million, net of unamortized debt discount of $0.1 million. The notes
contain certain covenants, such as restrictions on: (i) distributions on capital stock, (ii) stock repurchases, and (iii) sales and the
transfer of assets. The notes bear interest at a rates ranging from 8% to 24.98% per annum. and are convertible into our common
stock at conversion prices ranging from fixed conversion prices of $0.084 per share (as adjusted for stock splits, stock combinations,
dilutive issuances and similar events), to variable conversion prices of 60% to 70% of lowest trading prices over a 10 to 20-trading
day period. Should the investors choose not to convert these convertible notes, we may need to repay these notes together with interest
thereon which will impact on our liquidity.

Given our losses and
negative cash flows, we will be required to raise significant additional funds by issuing equity or equity-linked securities to progress
our existing business model with IPSIPay Express. Additional debt financing, if available, may involve covenants restricting our operations
or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are
not favorable to us or our stockholders and require significant debt service payments, which diverts resources from other activities.
Moreover, there is a risk that financing may be unavailable to support our operations on favorable terms, or at all.

There is also a significant
risk that none of our plans to raise financing will be implemented