Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 43

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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Convertible debt with an aggregate
principal and interest balance outstanding on June 2, 2025 of $1,988,523 have such price-based anti-dilution protection. Based on
the lowest conversion price in the period January 7, 2025 to June 27, 2025, as described above, the conversion price of these notes was
reset to $0.0005. In addition, certain warrants exercisable for 982,029,937 shares of common stock at an exercise price of $0.001105 per
share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants
by 1,188,256,223 to a total number of shares of Common Stock exercisable for such warrants of 2,170,286,160. In addition
to this, certain warrants exercisable for 40,457,897 shares of common stock have exercise price protection which reduced the
exercise price of these warrants to between $0.0005 and $0.000585 per share from exercise prices ranging from $0.005 to $0.084 per
share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $179,427.

The value of the derivative liability
related to the anti-dilution price protected convertible debt and warrants was evaluated immediately prior to the Triggering Event and
immediately after the Triggering Event, resulting in an additional derivative liability of $16,925,719 on the convertible
debt and $8,250,569 on the warrants.

The net mark-to-market movement of
the derivative liability for the three months ended June 30, 2025 was a net mark-to-market credit of $1,706,229 and for the six months
ended June 30, 2025 was $2,635,208, determined by using a Black-Scholes valuation model.

The following assumptions were used
in the Black-Scholes valuation model:

    Six months ended June 30, 2025  
    Year ended December 31, 2024 

    Conversion price 
     $0.0005 to 0.0022  
     $0.0364 to 0.345 
  
    Risk free interest rate 
      3.72 to 4.44% 
     3.58