Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 59

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 the Joint Venture, in the prior period expenses were minimal and administrative in
nature.

Deemed dividend

Deemed dividend was $350,364
and $0 for the three months ended March 31, 2025 and 2024, respectively, an increase of $350,364 or 100.0%. the deemed dividend in the
current period related to a full rachet anti-dilution adjustment to certain fixed exercise price warrants issued to a convertible note
holder during the current year. The deemed dividend was recorded as a component of additional paid in capital.

Net loss

Net
loss was $3,749,821 and $331,465 for the three months ended March 31, 2025 and 2024, respectively, an increase of $3,418,356 or 1,031.3%.
The increase is primarily due to the increase in the loss on convertible debt and the increase in the fair value adjustment on price protected
warrants, offset by the decrease in general and administrative expenses, as discussed in detail above.

Liquidity and Capital Resources

To
date, our primary sources of cash have been funds raised primarily from the sale of our debt and equity securities.

We have an accumulated deficit
of $66.9 million through March 31, 2025 and incurred negative cash flow from operations of $0.2 million for the three months ended March
31, 2025. Our primary focus is on our IPSIPay Express LLC three-way joint venture to develop and market a proprietary consumer to
merchant real-time payment platform initially focused on the fast-growing online gaming and entertainment sectors. To date, this joint
venture has not generated revenue, but we believe much of the background work necessary for IPSIPay Express to commence revenue generating
operations from payment processing has been completed, we are also actively seeking alternative payment processing opportunities. 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 March 31, 2025, we had
cash of $57 and working capital deficit of $13.8 million, including a derivative liability of $4.2 million. After eliminating the derivative
liability our working capital deficit is $9.6 million.

We used cash of $0.2 million
and $0.2 million in operations for the three months ended March 31, 2025 and 2024,