Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 97

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 97
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,901 have matured. Between
February 11, 2025 and February 19, 2025, convertible
note with a total balance outstanding of $772,669 had
maturity dates extended to December 31,2025 in exchange for a reduction in the conversion price of the convertible notes to $0.04 per
share. The Company will perform an analysis in terms of ASC 470 and determine whether the extension of the maturity date and the reduction
in the conversion price of the note is a debt modification or extinguishment. 

The
balance of the 2023 Convertible Notes and the 2024 Convertible Notes plus accrued interest at December 31, 2024 was $2,870,196, net of
unamortized debt discount of $40,928.

14DERIVATIVE LIABILITY

The
convertible notes and warrants issued by the Company to Cavalry, Mercer and RRH as described in Note 13 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 notes and
any warrants attached thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of
the convertible notes using a Black-Scholes valuation model.

Between
September 12, 2023 and December 20, 2023, and between April 2, 2024 and June 25, 2024, the Company entered into a convertible note agreement
with RRH which 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, which gave rise to a derivative financial liability, which was initially valued at inception of the convertible
notes at $416,317 and $268,873, respectively, but limited to the cash value of the convertible notes of $235,000 and $150,000,
respectively, using a Black-Scholes valuation model.

The
net movement on the derivative liability for the year ended December 31, 2023 was a net mark-to-market credit of $1,501,446 determined
by using a Black-Scholes valuation model.

On
August 6, 2024, the Company received a conversion notice from the holder of RRH Note 2 (see Note 13) pursuant to