Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 45

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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 Financial Statements

9DERIVATIVE
LIABILITY (continued)

Convertible debt with an aggregate
principal and interest balance outstanding on June 2, 2025 of $1,988,523 have such price-based anti-dilution protection. Based on
the lowest conversion price in the period January 7, 2025 to September 30, 2025, as described above, the conversion price of these notes
was reset to $0.0005. In addition, certain warrants exercisable for 982,029,937 shares of common stock at an exercise price
of $0.001105 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 1,188,256,223 to a total number of shares of Common Stock exercisable for such warrants of 2,170,286,160.
In addition to this, certain warrants exercisable for 50,457,897 shares of common stock have exercise price protection which
reduced the exercise price of these warrants to between $0.0005 and $0.000585 per share from exercise prices ranging from $0.005
to $0.084 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $223,558.

The value of the derivative liability
related to the anti-dilution price protected convertible debt and warrants was evaluated immediately prior to the Triggering Event and
immediately after the Triggering Event, resulting in an additional derivative liability of $16,925,719 on the convertible
debt and $8,250,569 on the warrants.

On August 13, 2025, the Company entered
into an agreement to modify the conversion price of certain notes issued to Mercer, Cavalry and affiliated entities from conversion prices
ranging from $0.0005 to $0.084 per share, to a conversion price of $0.01 per share of common stock. A total of $2,009,024 of the convertible
debt is subject to derivative liability, resulting in a gain on repricing of convertible debt of $11,955,877. In addition convertible
debt with a fixed conversion price and not subject to derivative liability was repriced resulting in a deemed dividend expense of $33.378 and certain warrants were repriced resulting in a deemed dividend
expense of $704, resulting in