Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 269

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 269
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ATED
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 457,897 shares of common stock have exercise price protection which will reduce 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.

The
value of the derivative liability related to the anti-dilution price protected convertible notes and warrants was evaluated immediately
prior to the Triggering Event and immediately after the Triggering Event, resulting in an additional derivative liability of $4,318,669 on
the convertible notes and $2,051,405 on the warrants. In addition, a payment was not made on a convertible note with a no notice
default clause, resulting in the triggering of a variable priced conversion feature, which gave rise to a derivative liability on the
payment due date, this gave rise to an additional derivative liability of $56,329, both determined using a Black-Scholes valuation model.

The
net mark-to-market movement of the derivative liability for the year ended December 31, 2024 was a net mark-to-market credit of $6,892,395,
determined by using a Black-Scholes valuation model.

The
following assumptions were used in the Black-Scholes valuation model:

    Year ended December 31, 2024  
    Year ended December 31, 2023 

    Conversion price 
    $0.0364 to 0.345  
    $0.104
to 0.345 
  
    Risk free interest rate