Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 170

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 170
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 the use of estimates and assumptions which affect
the financial statements and accompanying notes. See Note 2 - Summary of Significant Accounting Policies of the Notes to the condensed
Financial Statements included in Part I, Item I of this Form 10-Q for further information.

The critical accounting policies
that involved significant estimation included the following:

Derivative liabilities

We have certain short-term
convertible debt and certain warrants which have fundamental transaction clauses which might result in cash settlement. The conversion
feature of these convertible notes and warrants are recorded as derivative liabilities which are valued at each reporting date.

The derivative liability is
valued using the following inputs:

●Conversion
prices;

●Current
market prices of our equity

●Risk
free interest rates;

●Expected
remaining life of the derivative liability;

●Expected
volatility of the underlying stock; and expected dividend rates

Any change in the above factors
such as a change in risk free interest rates, a significant increase or decrease in our current stock prices and a change in the volatility
of our Common Stock may result in a significant increase or decrease in the derivative liability.

Results of Operations

Results of Operations for the Three Months Ended June 30, 2025 and
2024

Net revenue

We had no revenues for the
three months ended June 30, 2025 and 2024. We pivoted to focus our attention on the IPSIPay Express joint venture and potential payment
processing opportunities to generate revenues, however there can be no guarantees that we will be successful in our endeavors.

Cost of goods sold

We had no cost of goods sold
for the three months ended June 30, 2025 and 2024.

General and administrative expenses

General and administrative
expenses were $170,638 and $407,132 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $236,494 or 58.1%.
The decrease is primarily due to the following:

    i)
    Salaries and wages were $73,119 and $204,990 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $131,871 or 64.3%. The decrease is primarily due to the resignation of our CFO during the previous quarter, resulting in a saving of $49,500, a reduction in stock based compensation expense of $93,093 related to the amortization of stock options issued in the prior year, the reduction in administrative