Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 182

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 182
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 or restricting
our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt
financing or additional equity that we may raise may contain terms, such as liquidation and other preferences, that are not favorable
to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be
necessary to relinquish valuable rights to our technologies, research programs or product candidates or grant licenses on terms that
may not be favorable to us.

If we are unable to
generate cash flow positive operations or achieve profitability, and if we are unable to raise additional funds on commercially reasonable
terms or at all, we may be required to significantly reduce or cease our operations, or our business could fail, which could result in
the loss to investors of their investment in our securities.

8

We have not generated
sufficient revenue or cash flow to pay our convertible notes, and conversion of such debt into shares of common stock, which would cause
significant dilution.

As of December 31, 2024,
we had outstanding convertible notes owed to institutional investors in the aggregate principal amount of approximately $5.02 million,
net of debt discount of $0.08 million, which has either matured or is maturing during 2025. To date, we have not generated sufficient
revenue or cash flows to pay the balances owed under these notes and provide sufficient working capital to run our business. The outstanding
principal amount of the notes is convertible at any time into shares of our common stock at prices ranging from 60% of historical trading
prices over a trading period to $0.345 per share, which has subsequently been adjusted to $0.04 per share. In addition, upon the occurrence
and during the continuation of an Event of Default (as defined in the notes), the notes each will become immediately due and payable
and we have agreed to pay additional default interest rates. We may not have sufficient cash resources or access to funding to repay
such notes. Moreover, upon conversion of these notes, our current shareholders will suffer dilution, which given the current conversion
price of the notes would be significant.

Servicing our
debt requires a significant amount of cash. Our ability to generate sufficient cash to service our debt depends on many factors beyond
our control.

Our ability to make
payments on and to refinance our debt, to fund planned capital expenditures and to maintain sufficient working capital depends on our
ability to generate