Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 162

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 162
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 convertible debt and any warrants attached thereto
are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible debt using a
Black-Scholes valuation model.

Between January 7, 2025 and August
12, 2025, the Company received conversion notices from Cavalry, Mercer, RRH, certain RRH Assignees, Quick Capital and Seven Knots, pursuant
to which $468,511 of principal, penalty and interest was converted into an aggregate of 351,130,485 shares of common stock
at a weighted average conversion price of $0.001334 (conversion prices ranging from $0.0325 to $0.0005). as a result of these
conversions, all of the outstanding convertible debt and warrants of the Company that contain price based anti-dilution protection had
the conversion prices of such notes and the exercise price of such warrants adjusted to $0.0005 to $0.000585 per share and certain
warrants of the Company that contain “full-rachet” anti-dilution price protection had the number of shares exercisable for
such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.0005 per share (the
“Triggering Event”).

22

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

9DERIVATIVE
LIABILITY (continued)

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 September 30, 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 50,457,897 shares of common stock have exercise price protection which