Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 987

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 987
---
.00 to 12.00%  Matured to October 22, 2025   2,623,890    287,234    (40,928)   2,870,196    1,591,735                                       Total convertible notes payable          $4,716,006   $381,170   $(80,971)  $5,016,205   $3,704,280  

   * 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 notes payable
are technically in default due the default on the outstanding Red Road Holdings Corporation and the Quick Capital LLC convertible notes
disclosed below. None of the convertible note payable lenders have formally declared a default to the Company. 

Interest
expense totaled $476,207 and $319,543 for the years ended December 31, 2024 and 2023, respectively.

Amortization
of debt discount totaled $982,531 and $770,372 for the years ended December 31, 2024 and 2023, respectively.

The
Cavalry, Mercer, Red Road Holdings Corporation 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 Company agreed to extend the maturity date
of the Cavalry/Mercer Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for