Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 1523

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 8
Chunk 1523
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-based equity payments.

Where
equity transactions with arms-length third parties, included both shares and warrants, the value of the warrants have been eliminated
from the unit price of the securities using a Black-Scholes valuation model to determine the value of the warrants. The assumptions used
in the Black Scholes valuation model includes market related interest rates for risk-free government issued treasury securities with similar
maturities; the expected volatility of the Company’s common stock based on companies operating in similar industries and markets;
the estimated stock price of the Company; the expected dividend yield of the Company and; the expected life of the warrants being valued.

Subsequent
to the Company’s reverse merger which took place on May 12, 2016, the Company has utilized the market value of its common stock
as quoted on the OTCQB, as an indicator of the fair value of its common stock in determining share- based payment arrangements.

p)Marketing and Advertising
costs

Marketing
and advertising expenditure incurred on promoting the Company’s previous products were expensed as incurred. Marketing and
advertising costs amounted to $154,864 and $428,909 for the years ended December 31, 2024 and 2023, respectively. 

q)Derivative Liabilities

ASC
815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and
account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic
characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and
risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in
earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed
to be conventional, as described.

r)Income Taxes

The
Company is based in the US and currently enacted US tax laws are used in the calculation of income taxes.

Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax bases of assets