Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 1094

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 1094
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 generating
operations from payment processing has been completed. No assurances can be given, however, that such revenue generation will commence
or be meaningful to us as an approximately 22% joint venture partner in IPSIPay Express.

At December 31, 2024,
we had cash of $526 and working capital deficit of $10.4 million, including a derivative liability of $1.1 million. After eliminating
the derivative liability our working capital deficit is $9.3 million.

We used cash of $0.65
million and $1.45 million in operations for the years ended December 31, 2024 and 2023, respectively. Overall cash used in operations
decreased by $0.8 million due to cost containment to preserve cash balances.

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