Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 149

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 149
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 establishment of such systems and technology is still ongoing, which is the
primary reason why IPEX has not been commercially launched to date.

●Securing Customers. Our management
has also been working to secure potential customers for IPEX. These customers would include gaming and entertainment businesses.

No assurances can be
given that IPSIPay Express will be successfully launched or will generate revenues or otherwise have a positive impact on our results
of operations. We believe IPSIPay Express could be commercially launched and generate initial revenues during the current fiscal
year, but no assurances can be provided that this will be achieved or that (i) we will be able to raise funds satisfactory to fulfill
all of our capital contributions to IPSIPay Express or (ii) that we will ever receive distributions of free cash flow from IPSIPay Express.
Moreover, the IPSIPay Express product offering will be targeting so-called “high risk” sectors such as online gaming and entertainment,
which also carries certain risks.

Inflation

Macro-economic conditions could affect consumer
spending adversely and consequently our future operations when we fully launch our e-wallet products commercially. The U.S. has entered
a period of significant inflation, and this may impact consumer’s desire to adopt our products and services and may increase our
costs overall. However, as of the date of this report, we do not expect there to be any material impact on our liquidity as forecast in
our business plan due to recent inflationary concerns in the U.S.

Foreign Exchange Risks

We intend to operate in several foreign countries.
Changes and fluctuations in the foreign exchange rate between the US Dollar and other foreign currencies may in future have an effect
our results of operations.

32

Critical Accounting Estimates

Preparation of our financial
statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets,
liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. Significant accounting policies
are fundamental to understanding our financial condition and results as they require the use of estimates and assumptions which affect
the financial statements and accompanying notes. See Note 2 - Summary of Significant Accounting Policies of the Notes to the condensed
Financial Statements included in Part I, Item I of this Form 10-Q for further information.

The critical accounting policies
that involved significant estimation included the following:

Derivative liabilities

We have certain short-term
convertible debt and certain warrants which have fundamental transaction clauses which might result in cash settlement.