Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 139

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 139
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 expense resulting from share-based payments is recorded in operating
expenses in the statement of operations.

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.

o)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.

p)Marketing
and advertising expenses

Marketing and advertising expenditure
incurred on promoting the Company’s previous products were expensed as incurred. Marketing and advertising costs amounted to $325 and
$5,991 for the three months ended September 30, 2025 and 2024, respectively, and $325 and $154,864 for the nine months ended September
30, 2025 and 2024, respectively.

12

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

2ACCOUNTING
POLICIES AND ESTIMATES (continued)

q)Income Taxes

The Company is based in the U.S. and
currently enacted U.S. 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 and liabilities and are measured using the currently enacted tax rates
and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected
to be