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

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

1ORGANIZATION
AND DESCRIPTION OF BUSINESS (continued)

a)Organizational
History (continued)

On August 26, 2021, the Company formed
a new subsidiary, Beyond Fintech, Inc. (“Beyond Fintech”), in which it owns a 51% stake, with Frictionless owning
the remaining 49%. Beyond Fintech acquired an exclusive license to a product known as Beyond Wallet, to further its
objective of providing virtual payment services allowing U.S. persons to transfer funds to Mexico and other countries.

On May 12, 2023, the Company entered
into an Agreement with Frictionless (the “May 2023 Frictionless Agreement”) to unwind the equity ownership stakes that the
Company and Frictionless have in each other and in Beyond Fintech. Pursuant to the May 2023 Frictionless Agreement: (i) the Company assigned
to Frictionless all common stock of Frictionless owned by the Company; (ii) the warrant to purchase 1,000,000 shares of Common
Stock previously issued by the Company to Frictionless as of December 30, 2022 was cancelled; (iii) the Company assigned to Frictionless
all shares of common stock of Beyond Fintech owned by the Company (the “Beyond Fintech Shares”); and (iv) the rights previously
granted to the Company to (a) acquire additional equity interests in Frictionless, (b) participate in future financings of Frictionless
and (c) appoint a board member of Frictionless, were terminated. The consideration to the Company for the assignment of the Beyond Fintech
Shares to Frictionless was a credit against potential future services to be provided by Frictionless to the Company in an amount up to
$250,000. As a result of the novation agreement with Frictionless discussed below, the Company no longer utilizes, and does not expect
to utilize, the services of Frictionless for the foreseeable future. The collectability of the remaining credit receivable of $231,431 was
impaired.

On August 30, 2023, the Company implemented
a 1 for 30 reverse stock split of its Common Stock. Unless the context expressly requires otherwise, as used in this Report,
all share and per share numbers reflect such