Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 1165

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 1165
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 the effectiveness of disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report have concluded that our
disclosure controls are not effective due to a lack of written policies and procedures to address all material transactions and developments
impacting the financial statements.

Management’s
Annual Report on Internal Control over Financial Reporting

Our management is also
responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15.
Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed to provide
reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.
Management conducted an assessment of our internal control over financial reporting as of December 31, 2024 based on the framework and
criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework
2013 (“COSO”). The COSO framework requires rigid adherence to control principles that require sufficient and adequately trained
personnel to operate the control system. Our management has concluded that our internal control over financial reporting continued to
be ineffective as of December 31, 2024 as a result of continuing insufficient segregation of duties and oversight of work performed in
the finance and accounting function due to limited personnel with the appropriate skill sets. During 2025, our management plans to continue
to address these matters with a view towards remediating the weaknesses.

Our management, including
our Chief Executive Officer and President and Chief Financial Officer, does not expect that our disclosure controls and procedures and
our internal control processes, even if improved, will prevent all error and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of error or fraud, if any, within our company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that the breakdowns can occur because of simple error or