Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 27

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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debt lenders have formally declared a default to the Company, other than one investor with an aggregate balance outstanding of $22,704. 

Interest
expense totaled $157,594 and $110,769 for the three months ended March 31, 2025 and 2024, respectively.

Amortization
of debt discount totaled $71,862 and $319,899 for the three months ended March 31, 2025 and 2024, respectively.

The
Cavalry, Mercer, Red Road Holdings Corporation and Quick Capital convertible notes have variable conversion prices based on a discount
to market price of trading activity over a specified period of time. The variable conversion features were valued using a Black Scholes
valuation model. The difference between the fair market value of the Common Stock and the calculated conversion price on the issuance
date was recorded as a debt discount with a corresponding credit to derivative financial liability.

Cavalry
and Mercer December 2022 Note Amendment Transaction

The
Company twice extended its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date
of the Cavalry/Mercer Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional
maturity date extension to November 16, 2022. In consideration for the second extension, the Company agreed to (i) increase the principal
amount outstanding and due to Cavalry and Mercer under the Cavalry/Mercer Notes by twenty percent (20%) and (ii) issue to each of Cavalry
and Mercer a new five-year warrant (each, an “Extension Warrant”) to purchase an additional 100,000 shares of Common
Stock at an exercise price of $4.50 per share. The Extension Warrant contains the same terms and provisions in all material respects
as the Original Warrants, except for the difference in exercise price.

17

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

8CONVERTIBLE DEBT (continued)

Cavalry
and Mercer December 2022 Note Amendment Transaction (continued)

On
December 30, 2022, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to December 30, 2023. Each of Cavalry
and Mercer entered into Note Amendment Letter Agreement with the