Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 42

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 42
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111 and convertible debt of $138,856 in the prior year from two investors who are in control of Business Warrior. We
intend to negotiate a global settlement whereby we will either collect the funds from Business Warrior or these two investors and utilize
the proceeds to settle our notes payable and convertible debt with these two investors, we do not expect to incur a loss or gain on a
negotiated settlement with these two investors.

The
2025 Convertible Notes have an aggregate amount outstanding of $563,233, net of unamortized debt discount of $82,925.

9DERIVATIVE
LIABILITY

The convertible debt and warrants issued
by the Company to Cavalry, Mercer, and Quick Capital, as described in Note 8 have variable priced conversion rights with no fixed floor
price and will re-price dependent on the share price performance over varying periods of time and certain notes and warrants have fundamental
transaction clauses which might result in cash settlement, due to these factors, all convertible debt and any warrants attached thereto
are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible debt using a
Black-Scholes valuation model.

Between January 7, 2025 and June 27,
2025, the Company received conversion notices from Cavalry, Mercer, RRH, certain RRH Assignees, Quick Capital and Seven Knots, pursuant
to which $439,108 of principal, penalty and interest was converted into an aggregate of 300,868,611 shares of common stock
at a weighted average conversion price of $0.00146 (conversion prices ranging from $0.0325 to $0.0005). as a result of these
conversions, all of the outstanding convertible debt and warrants of the Company that contain price based anti-dilution protection had
the conversion prices of such notes and the exercise price of such warrants adjusted to $0.0005 to $0.000585 per share and certain
warrants of the Company that contain “full-rachet” anti-dilution price protection had the number of shares exercisable for
such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.0005 per share (the
“Triggering Event”).

22

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

9DERIVATIVE
LIABILITY (continued)