Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 67

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 67
---
i) a loss of $16,925,718 realized on an anti-dilution
adjustment to the conversion feature of certain convertible debt; (ii) a penalty on conversion of $61,729 on conversion of convertible
debt which is in default; and (iii) a loss of $699,087 realized on conversion of certain convertible debt at prices lower than the current
market price during the current period. In the prior period, the loss on convertible debt related to the extension warrants issued to
certain noteholders to extend the maturity date of their notes by 6 months, the value of the warrants was determined to be a debt extinguishment
and were therefore expensed.

Fair value adjustment
to price protected warrants

Fair
value on price protected warrants was $8,250,469 and $0 for the six months ended June 30, 2025 and 2024, respectively. During the current
period, the exercise price of certain warrants was reset due to the anti-dilution price protection and in the case of certain warrants,
full ratchet price protection, from an exercise price of $0.084 to $0.0005. This resulted in a Black -Scholes derived valuation difference
related to those certain warrants.

Loss on disposal
of assets

Loss
on disposal of assets was $0 and $2,600 for the six months ended June 30, 2025 and 2024, respectively. The loss on disposal of assets
relates to costs incurred on disposing of our kiosks in the prior year.

Interest expense

Interest expense was $440,549
and $283,095 for the six months ended June 30, 2025 and 2024, respectively, an increase of $157,454 or 55.6%. The increase is primarily
related to the contractual increase in the interest rates on several matured notes which are currently in forbearance and additional notes
issued during the current period.

Interest income

Interest
income was $25,799 and $11,279 for the six months ended June 30, 2025 and 2024, respectively, an increase of $14,520 or 128.7%. The interest
income relates to funds advanced to Business Warrior prior to the cessation of our merger plans with them, we increased our investment
in Business Warrior over the second half of the prior year.

Amortization of debt discount

Amortization
of debt discount was $178,