Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 2227

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7A
Chunk 2227
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ution 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 $0.084 per share. Certain warrants exercisable for 3,145,342 shares of common stock at an exercise price of $0.345 per
share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants
by 9,773,028 to a total number of shares of Common Stock exercisable for such warrants of 12,918,370 and a reduction
in the exercise price to $0.084 per share from $0.345 per share, In addition to this, certain warrants exercisable for 457,897 shares
of common stock have exercise price protection which reduced the exercise price of these warrants to $0.084 per share from $0.345 per
share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $119,511. This resulted in
a fair value adjustment charge of $2,478,211 of which $2,051,405 was recorded as a charge to the statement of comprehensive
loss as it related to warrants subject to derivative liability treatment and $426,807 was recorded as a deemed dividend expense,
as it related to a down round adjustment to the price of a warrant issued during the current year, which is not subject to derivative
liability treatment.

On
October 22, 2024, the Company entered into a Securities Purchase Agreements with an accredited investor, as disclosed in note 13 above.
In terms of the Securities Purchase Agreement, the Company issued five-year warrants to purchase an aggregate of 289,855 shares
of the Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances
and similar events). The Company is under no obligation to register the shares of Common Stock underlying the Note or the Warrant, for
public resale.

The
2023 and 2024 Warrants contain exercise limitations providing that a holder thereof may not exercise the Warrants to the extent that,
if after giving effect to such exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such exercise.