Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 13

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 13
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under our indebtedness may limit our ability to operate our business.

Our outstanding convertible
notes contain, and our future indebtedness agreements may contain covenants that restrict our ability to finance future operations or
capital needs or to engage in other business activities. The Notes restrict our ability to:

    ●
    incur, assume or guarantee or suffer to exist any indebtedness
    for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now
    owned or hereafter acquired or any interest therein or any income or profits therefrom other than Permitted Indebtedness (as defined
    in the notes);

    ●
    repurchase capital stock;

    ●
    repay any Indebtedness (as defined in the notes) other
    than certain secured notes which are no longer outstanding or Permitted Indebtedness or make other restricted payments including,
    without limitation, paying dividends and making investments;

    ●
    create liens;

    ●
    sell or otherwise dispose of assets; and

    ●
    enter into transactions with affiliates.

In addition, the notes
contain price protection anti-dilution provisions that will discourage financing at prices below the conversion price of the notes and
will result in a decrease in the conversion price of the notes if we should issue securities below such price.

9

We have identified
material weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or
that additional material weaknesses will not occur in the future.

Our management is responsible
for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a- 15(f) under the Exchange
Act. In connection with our audited financial statements for the year ended December 31, 2024, we identified material weaknesses in our
internal controls which included (i) insufficient segregation of duties and oversight of work performed in our accounting and finance
function due to limited personnel with the appropriate skill sets and (ii) lack of written policies and procedures to address all material
transactions and developments impacting our financial statements. However, given the small size of our company and the current state
of our business, we are faced with the risk that we may not always be able to detect errors or omissions in our financial reporting and
we face internal control weaknesses in the future. If we fail to comply with the rules under Sarbanes-Oxley related to disclosure controls
and