Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 2219

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7A
Chunk 2219
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 convertible
notes at $416,317 and $268,873, respectively, but limited to the cash value of the convertible notes of $235,000 and $150,000,
respectively, using a Black-Scholes valuation model.

The
net movement on the derivative liability for the year ended December 31, 2023 was a net mark-to-market credit of $1,501,446 determined
by using a Black-Scholes valuation model.

On
August 6, 2024, the Company received a conversion notice from the holder of RRH Note 2 (see Note 13) pursuant to which $13,833 of
the remaining principal, interest and late payment penalty under the RRH 2 Note was converted into 164,679 shares of Common
Stock at a conversion price of $0.084 per share. As a result of the conversion of the RRH Note 2, all other outstanding promissory
notes 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 $0.084 per share and certain warrants of the Company that contain “full ratchet” 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 $0.084 per share (the “Triggering Event”).

F-24

INNOVATIVE PAYMENT
SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

14DERIVATIVE LIABILITY (continued)

Convertible
notes with an aggregate principal and interest balance outstanding on August 6, 2024 of $2,165,578 have such price-based anti-dilution
protection. Based on the conversion by the RRH Note 2 as described above, the conversion price of these notes will reset to $0.084. In
addition, 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 resulted 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. In addition to this, certain warrants exercisable
for