Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 2331

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 8
Chunk 2331
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0 for the years ended December 31, 2024 and 2023, respectively.

F-17

INNOVATIVE PAYMENT
SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

12NOTES PAYABLE (continued)

Cavalry
Fund I LP and Mercer Street Global Opportunity Fund, LLC

On
February 16, 2021, the Company entered into separate Securities Purchase Agreements (the “SPAs”), with each of Cavalry Fund
I LP (“Cavalry”) and Mercer Street Global Opportunity Fund, LLC (“Mercer”), pursuant to which the Company received
$500,500 and $500,500 from Cavalry and Mercer, respectively, in exchange for the issuance of: (i) Original Issue Discount 12.5%
Convertible Notes (the “Notes” and each a “Note”) in the principal amount of $572,000 to each of Cavalry
and Mercer; and (ii) five-year warrants (the “Original Warrants”) issued to each of Cavalry and Mercer to purchase 2,486,957 shares
of Common Stock at an exercise price of $0.24 per share.

In
terms of the December 30, 2022 Note Amendment Transaction, described in more detail in note 13 below, the Original Warrants issued on
February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the “Exchange
Notes”) to each of Cavalry and Mercer. This exchange caused the cancellation of the Original Warrants for all purposes. The Company
accounted for the aggregate value of the notes issued of $964,000, less the fair value of the warrants exchanged for these notes of $43,608,
totaling $920,392 as a component of the loss on convertible debt.

The
Exchange Notes have a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%). The Company had the
right, but not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue a total of 1,730,058 shares
of Common Stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations
under the Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction