Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 30

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 30
---
 27, 2024, interest was accrued at 10% per annum.         ** The Red Road Holdings Corporation and Quick Capital LLC, interest rates are effective interest rates as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made. 

  *** All convertible debt is technically in default due to the default on a certain convertible note. None of the convertible debt lenders have formally declared a default to the Company, other than one investor with an aggregate balance outstanding of $19,195 

Interest
expense totaled $155,353 and $121,916 for the three months ended September 30, 2025 and 2024, respectively and $462,944 and $351,764 for
the nine months ended September 30, 2025 and 2024, respectively.

Amortization
of debt discount totaled $36,964 and $219,700 for the three months ended September 30, 2025 and 2024, respectively, and $138,905
and $857,284 for the nine months ended September 30, 2025 and 2024, respectively.

The
Cavalry and Mercer 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