Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 39

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 39
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ized debt discount of $43,144.

9DERIVATIVE LIABILITY

The convertible debt and warrants issued
by the Company to Cavalry, Mercer, RRH and Quick Capital, as described in Note 8 have variable priced conversion rights with no fixed
floor price and will re-price dependent on the share price performance over varying periods of time and certain notes and warrants have
fundamental transaction clauses which might result in cash settlement, due to these factors, all convertible debt and any warrants attached
thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible debt
using a Black-Scholes valuation model.

Between January 7, 2025 and March 28,
2025, the Company received conversion notices from Cavalry, Mercer, RRH and Quick Capital, pursuant to which $230,798 of principal, penalty
and interest was converted into an aggregate of 54,807,989 shares of common stock at a weighted average conversion price of $0.004211
(conversion prices ranging from $0.0325 to $0.001105). as a result of these conversions, all of the outstanding convertible debt and warrants
of the Company that contain price based anti-dilution protection had the conversion prices of such notes and the exercise price of such
warrants adjusted to $0.001105 per share and certain warrants of the Company that contain “full-rachet” anti-dilution price
protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of
such warrants adjusted to $0.001105 per share (the “Triggering Event”).

22

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

9DERIVATIVE LIABILITY (continued)

Convertible debt with an aggregate
principal and interest balance outstanding on March 20, 2025 of $1,948,864 have such price-based anti-dilution protection. Based
on the lowest conversion price in the period January 7, 2025 to March 28, 2025, as described above, the conversion price of these notes
will reset to $0.001105. In addition, certain warrants exercisable for 12,918,370 shares of common stock at an exercise price
of $0.084 per share, have a full ratchet provision which results in an increase in the number of shares of Common Stock