Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 244

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 244
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 recorded at either the fair value of the services rendered or the
fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded
in operating expenses in the consolidated statement of operations.

Prior
to the Company’s reverse merger which took place on May 12, 2016, all share-based payments were based on management’s estimate
of market value of the Company’s equity. The factors considered in determining managements estimate of market value includes, assumptions
of future revenues, expected cash flows, market acceptability of our technology and the current market conditions. These assumptions are
complex and highly subjective, compounded by the business being in its early stage of development in a new market with limited data available.

Where
equity transactions with arms-length third parties, who had applied their own assumptions and estimates in determining the market value
of our equity, had taken place prior to and within a reasonable time frame of any share-based payments, the value of those share transactions
have been used as the fair value for any share-based equity payments.

Where
equity transactions with arms-length third parties, included both shares and warrants, the value of the warrants have been eliminated
from the unit price of the securities using a Black-Scholes valuation model to determine the value of the warrants. The assumptions used
in the Black Scholes valuation model includes market related interest rates for risk-free government issued treasury securities with similar
maturities; the expected volatility of the Company’s common stock based on companies operating in similar industries and markets;
the estimated stock price of the Company; the expected dividend yield of the Company and; the expected life of the warrants being valued.

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.

p)Marketing and Advertising
costs

Marketing
and advertising expenditure incurred on promoting the Company’s previous products were expensed as incurred. Marketing and
advertising costs amounted to $154,864 and $428,909 for the years ended December 31, 2024 and 2023, respectively. 

q)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.