Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 1113

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 1113
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 value, and establishes a fair value hierarchy to classify the inputs
used in measuring fair value as follows:

Level
1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level
2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets
and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated
by observable market data.

Level
3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants
would use in pricing the asset or liability based on the best available information.

The
carrying amounts reported in the balance sheets for cash, accounts receivable, other current assets, other assets, accounts payable, accrued
liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company
has identified the short-term convertible notes and certain warrants attached to certain of the notes that are required to be presented
on the balance sheets at fair value in accordance with the accounting guidance.

ASC
825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities
at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless
a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should
be reported in earnings at each subsequent reporting date. We evaluate the fair value of variably priced derivative liabilities on a quarterly
basis and report any movements thereon in earnings.

f)Risks and Uncertainties

The Company’s
operations and prospects are and will be subject to significant risks and uncertainties including financial, operational, regulatory,
and other risks, including the potential risk of business failure. In particular, there is a risk that that IPSIPay Express business (the
commercial launch of which has taken longer than originally expected) may never generate revenue for the Company. Further, the ongoing
wars in Ukraine and between Israel, Hamas and more recently, Hezbollah and uncertainties regarding the global economic environment which
has resulted in a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy,
and extreme volatility in credit, equity and fixed income markets. These conditions may not only limit the Company’s access to capital,
but also make it