Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 138

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 138
---
 to 12.00%  Matured to April 29, 2026   3,254,752    408,176    (90,198)   3,572,730    2,870,196   Total convertible debt          $5,116,824   $543,566   $(90,198)  $5,570,192   $5,016,205  

  * The Cavalry Fund LLP and Mercer Street Global Opportunity Fund, LLC, notes are accruing interest at the default interest rate of 18% with effect from November 27, 2024, prior to November 27, 2024, interest was accrued at 10% per annum.         ** The Red Road Holdings Corporation and Quick Capital LLC, interest rates are effective interest rates as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.      

  *** All convertible debt is technically in default due to the default on a certain convertible note. None of the convertible debt lenders have formally declared a default to the Company, other than one investor with an aggregate balance outstanding of $18,812. 

Interest
expense totaled $149,997 and $119,079 for the three months ended June 30, 2025 and 2024, respectively and $307,591 and $229,848 for
the six months ended June 30, 2025 and 2024, respectively.

Amortization
of debt discount totaled $30,079 and $317,686 for the three months ended June 30, 2025 and 2024, respectively, and $101,941 and $637,585
for the six months ended June 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