Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 60

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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 respectively. We have reduced our expenditure substantially
while we actively seek other revenue generating opportunities

We had no investing
activities during the current period. In the prior period we had invested $0.2 million in Business Warrior while we were still
pursuing merger discussions with them.

We generated cash of $0.2
million from convertible debt during the current period. In the prior period we generated $0.4 million and repaid $0.1 million of convertible
debt.

35

At March 31, 2025, we had
outstanding convertible debt, including interest thereon of $5.2 million, net of unamortized debt discount of $0.1 million and outstanding
notes payable, including interest thereon of $1.8 million, net of unamortized debt discount of $0.05 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 24.51% per annum. and are convertible into our common stock at conversion prices ranging
from fixed conversion prices of $0.001105 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar
events), to variable conversion prices of 65% 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 in a manner necessary to sustain us for an extended period of time.
If adequate funds are not available to us when needed, we may be required to continue with