Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 148

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 148
---
905
and $857,284 for the nine months ended September 30, 2025 and 2024, respectively.

The
Cavalry and Mercer convertible notes have variable conversion prices based on a discount to market price of trading activity over a specified
period of time. The variable conversion features were valued using a Black Scholes valuation model. The difference between the fair market
value of the Common Stock and the calculated conversion price on the issuance date was recorded as a debt discount with a corresponding
credit to derivative financial liability.

Cavalry
and Mercer December 2022 Note Amendment Transaction

The
Company twice extended its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date
of the Cavalry/Mercer Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional
maturity date extension to November 16, 2022. In consideration for the second extension, the Company agreed to (i) increase the principal
amount outstanding and due to Cavalry and Mercer under the Cavalry/Mercer Notes by twenty percent (20%) and (ii) issue to each of Cavalry
and Mercer a new five-year warrant (each, an “Extension Warrant”) to purchase an additional 100,000 shares of Common
Stock at an exercise price of $4.50 per share. The Extension Warrant contains the same terms and provisions in all material respects
as the Original Warrants, except for the difference in exercise price.

17

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

8CONVERTIBLE
DEBT (continued)

Cavalry and Mercer December 2022
Note Amendment Transaction (continued)

On
December 30, 2022, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to December 30, 2023. Each of Cavalry
and Mercer entered into Note Amendment Letter Agreement with the Company (the “Note Amendment”) pursuant to which the parties
agreed to the following:

(1)The
conversion price of the Cavalry/Mercer Notes was reduced from $4.50 to $0.345 per share (such reduced conversion price being
the current conversion price of the Notes give the passage of the November 16, 2022 maturity date of the Caval