Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 513

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1C
Chunk 513
---
 reset due to the anti-dilution price protection and in the case of certain warrants, full ratchet price
protection, from an exercise price of $0.345 to $0.084. This resulted in a Black -Scholes derived valuation difference related to those
certain warrants of $2,051,405.

Loss on novation

Loss on novation was
$0 and $1,066,165 for the years ended December 31, 2024 and 2023, respectively, a decrease of $1,066,165 or 100%. In the prior year,
the loss on novation arose due the novation of the IPSIPay platform and all rights and obligations associated with the service agreement
with Frictionless to a third party.

Fair value of
warrants issued

Fair value of warrants
issued was $0 and $14,176 for the years ended December 31, 2024 and 2023, respectively, a decrease of $14,176 or 100.0%. In the prior
year, we issued a replacement warrant exercisable for 33,334 shares to an investor.

Interest expense

Interest expense was
$603,588 and $424,117 for the years ended December 31, 2024 and 2023, respectively, an increase of $179,471 or 42.3%. The increase is
related to new convertible note funding of $885,502, less repayments of $381,832 and $577,778 of promissory note funding during the current
year for working capital purposes.

Interest income

Interest income was
$32,838 and $0 for the years ended December 31, 2024 and 2023, respectively, an increase of $32,838 or 100.0%. The interest income relates
to funds advanced to Business Warrior prior to the cessation of our merger plans with them.

25

Amortization of
debt discount

Amortization of debt discount was $1,037,914 and $770,372 for the
years ended December 31, 2024 and 2023, respectively, an increase of $267,542 or 34.7%. The increase is primarily due to the amortization
of debt discount on convertible notes carried over from the prior year and additional debt discount on new convertible notes issued during
the current year to fund working capital.

Derivative liability
movements

Derivative liability
movements were $