Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 874

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 3
Chunk 874
---
 CONSOLIDATED FINANCIAL STATEMENTS

16LOSS ON CONVERTIBLE NOTES
(continued)

Loss
on conversion of convertible notes

During the
prior year an aggregate amount of $432,500 of convertible debt was converted into equity at a fixed conversion price of $0.345 per share,
realizing an aggregate loss on conversion of $90,761.

Between
August 6, 2024 and December 6, 2024, in terms of conversion notices received from 4 convertible note holders, the Company issued 5,261,557
shares of common stock for the conversion of an aggregate amount of $441,971 of convertible debt at a conversion price of $0.084 per
share, realizing an aggregate loss on conversion of $170,246.

Loss on anti-dilution price
protection adjustment

As
a result of the conversion of the RRH Note 2 ( see note 13 above), included in the paragraph above, all other outstanding convertible
notes of the Company that contain price-based anti-dilution protection had the conversion prices of such notes adjusted to $0.084 per
share (the “Triggering Event”).

The
value of the derivative liability related to the anti-dilution price protected convertible notes was evaluated immediately prior to the
Triggering Event and immediately after the Triggering Event, resulting in an additional derivative liability and loss on convertible notes
of $4,318,669.

Loss on convertible
note default conversion feature

The
Company was unable to make a payment on a convertible note on July 28, 2024, which resulted in the triggering of a variable priced conversion
feature, giving rise to a derivative liability on the payment due date, this gave rise to an additional derivative liability and loss
on convertible notes of $56,329.

17INCOME TAXES

The
Company’s operations are based in the US and currently enacted tax laws in the US are used in the calculation of income taxes.

Federal
Income Tax - United States

On
December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law
by President Trump. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction
of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for
interest expense to 30