Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 140

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 140
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 shall have the right, but
not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue a total 1,730,058 shares of Common
Stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under the
Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no
legal obligation to reserve such number of shares for future issuance;

(3)Each
of Cavalry and Mercer agreed (i) not to convert all or any portion of the Cavalry/Mercer Notes until after March 30, 2023 and (ii) waive
any events of default under the Cavalry/Mercer Notes and the Cavalry/Mercer SPAs;

(4)Certain
other warrants held by Cavalry and Mercer which contain a mandatory exercise provision allowing us to force exercise of such warrants
if the price of the Common Stock is $1.80 per share or above were amended effective December 30, 2022 to reduce such forced exercise
price to $1.20 per share; and

(5)The
Company was obligated to register the shares of Common Stock underlying the Cavalry/Mercer Notes and the shares underlying all warrants
held by Cavalry and Mercer for resale with the Securities and Exchange Commission and the Company filed the registration statement to
satisfy such registration obligation.

As
a result of the reduction in the conversion price of the Cavalry/Mercer Notes, certain other warrants held by third parties have their
exercise price of such warrants reduced to $0.345 per share. All of the shares of our Common Stock underlying the Cavalry/Mercer
Notes as amended and all warrants held by Cavalry and Mercer as adjusted were registered for resale pursuant to a registration statement
that was declared effective on February 6, 2023.

The
amendments to the Cavalry/Mercer Notes were evaluated in terms of ASC 470, Debt, to determine if the amendments to the Cavalry/Mercer
Notes were considered a modification of the debt or an extinguishment of the debt. Based on the penalty interest incurred on the convertible
notes of $836,414, the reduction in the conversion price of the Cavalry/Mercer Notes from $4.50 to $0.345 per share, which was
valued at $1,499,