# EDGAR Filing Document

**Accession Number:** 0001591913
**File Stem:** 0001213900-26-057675
**Filing Date:** 2026-5
**Character Count:** 159401
**Document Hash:** a6bb2dc694113e4d417ccdcbfb9d5045
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-057675.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001213900-26-057675

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 78

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260515

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Innovative Payment Solutions, Inc.
- **CENTRAL INDEX KEY:** 0001591913
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-55648
- **FILM NUMBER:** 26986678

**BUSINESS ADDRESS:**
- **STREET 1:** 56B 5TH AVENUE, LOT 1 #AT
- **CITY:** CARMEL BY THE SEA
- **STATE:** CA
- **ZIP:** 93921
- **BUSINESS PHONE:** (866) 477-4729

**MAIL ADDRESS:**
- **STREET 1:** 56B 5TH AVENUE, LOT 1 #AT
- **CITY:** CARMEL BY THE SEA
- **STATE:** CA
- **ZIP:** 93921

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** QPAGOS
- **DATE OF NAME CHANGE:** 20160615

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Asiya Pearls, Inc.
- **DATE OF NAME CHANGE:** 20131113

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended March 31, 2026**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from ____________ to ____________**

**Commission file number 000-55648**

---

| |
|:---|
| **INNOVATIVE PAYMENT SOLUTIONS, INC.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **Nevada** | **33-1230229** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **732 S 6<sup>th</sup> St. #4621, Las Vegas, Nevada** | **89101** |
| (Address of Principal Executive Office) | (Zip Code) |

---

---

| |
|:---|
| **(707) 609-4797** |
| (Registrant's telephone number, including area code) |

---

---

| |
|:---|
| **n/a** |
| (Former name, former address and former fiscal year, if changed since last report) |

---

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 15, 2026, there were 950,362,723 shares of the Company's Common Stock issued and outstanding.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Form 10-Q**

**For the Quarter Ended March 31, 2026**

**Index**

---

| | | |
|:---|:---|:---|
|  |  | **Page No.** |
| [Cautionary Note Regarding Forward-Looking Statements](#a_001) | [Cautionary Note Regarding Forward-Looking Statements](#a_001) | ii |
| **[Part I. Financial Information](#a_002)** | **[Part I. Financial Information](#a_002)** | 1 |
| Item 1. | [Financial Statements (Unaudited)](#a_003) | 1 |
|  | [Condensed Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025](#a_004) | 1 |
|  | [Condensed Statements of Operations for the three months ended March 31, 2026 and 2025 (Unaudited)](#a_005) | 2 |
|  | [Condensed Statements of Changes in Stockholders' Equity for the three months ended March 31, 2026 and 2025 (Unaudited)](#a_006) | 3 |
|  | [Condensed Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (Unaudited)](#a_007) | 4 |
|  | [Notes to the Condensed Financial Statements (Unaudited)](#a_008) | 5 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_009) | 31 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_010) | 35 |
| Item 4. | [Controls and Procedures](#a_011) | 35 |
| **[Part II. Other Information](#a_012)** | **[Part II. Other Information](#a_012)** | 36 |
| Item 1. | [Legal Proceedings](#a_013) | 36 |
| Item 1A. | [Risk Factors](#a_014) | 37 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_015) | 37 |
| Item 3. | [Defaults Upon Senior Securities](#a_016) | 38 |
| Item 4. | [Mine Safety Disclosures](#a_017) | 38 |
| Item 5. | [Other Information](#a_018) | 38 |
| Item 6. | [Exhibits](#a_019) | 38 |
| [Signatures](#a_020) | [Signatures](#a_020) | 39 |

---

i

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q (this "Report") contains "forward-looking statements" (as defined in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that reflect our current expectations and views of future events. The forward-looking statements are contained principally in the section of this Report entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations." Readers are cautioned that significant known and unknown risks, uncertainties and other important factors (including those over which we may have no control and others listed in this Report and in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K")) may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. You can identify some of these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:

● our ability to implement our business plan, including our ability to launch and generate revenue from our joint ventures or other digital payment solutions we may seek to develop or commercialize in the future;

● acceptance by the marketplace of our products and services;

● our ability to formulate, implement and modify as necessary effective sales, marketing, and strategic initiatives to drive revenue growth;

● the viability of our current intellectual property and intellectual property created in the future;

● our ability to comply with currently applicable laws and government regulations and those that may be applicable in the future;

● our ability to retain key employees and third-party service providers;

● adverse changes in general market conditions for payment solutions and other products and services we offer;

● our ability to generate cash flow and profitability and continue as a going concern;

● our future financing plans and ability to repay outstanding indebtedness; and

● our ability to adapt to changes in market conditions which could impair our operations and financial performance.

These forward-looking statements involve numerous and significant risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results of operations or the results of other matters that we anticipate herein could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in the "Management's Discussion and Analysis of Financial Condition and Results of Operation," section contain in this Report and in the "Business," "Risk Factors" and other sections of the 2025 Form 10-K. You should thoroughly read this Report and the documents that we refer to with the understanding that our actual future results may be materially different from, and worse than, what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements made in this Report relate only to events or information as of the date of this Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this Report completely and with the understanding that our actual future results may be materially different from what we expect.

ii

**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**CONDENSED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2026** | **December 31,**<br>**2025** |
|  | **(Unaudited)** | |
| **Assets** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $11602 | $29804 |
| &nbsp;&nbsp;&nbsp;Other current assets | 45821 | 41669 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 57423 | 71473 |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Plant and equipment | 2359 | 2689 |
| &nbsp;&nbsp;&nbsp;Equity method investment | 4200001 | 4200001 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Non-Current Assets | 4202360 | 4202690 |
| **Total Assets** | $**4259783** | $**4274163** |
| **Liabilities and Stockholders' Deficit** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $2345311 | $2510541 |
| &nbsp;&nbsp;&nbsp;Related party payables | - | 7832 |
| &nbsp;&nbsp;&nbsp;Federal relief loans – current portion | 11840 | 11184 |
| &nbsp;&nbsp;&nbsp;Notes payable | 2060228 | 1997040 |
| &nbsp;&nbsp;&nbsp;Convertible debt, net of unamortized discount of $191,847 and $200,769, respectively | 5734682 | 5356624 |
| &nbsp;&nbsp;&nbsp;Convertible debt – related party | 258253 | 253519 |
| &nbsp;&nbsp;&nbsp;Derivative liability | 563437 | 1581520 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 10973751 | 11718260 |
| **Non-Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Federal relief loans | 150000 | 150000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Non-Current Liabilities | 150000 | 150000 |
| **Total Liabilities** | **11123751** | **11868260** |
| **Stockholders' Deficit** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 100,000,000 and 25,000,000 shares authorized, and 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively. | - | - |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value; 5,000,000,000 and 1,500,000,000 shares authorized 806,872,547 and 710,872,547 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively. | 80687 | 71087 |
| &nbsp;&nbsp;&nbsp;Additional paid-in-capital | 62639001 | 61333014 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (69583656) | (68998198) |
| &nbsp;&nbsp;&nbsp;**Total Stockholders' Deficit** | **(6863968)** | **(7594097)** |
| **Total Liabilities and Stockholders' Deficit** | $**4259783** | $**4274163** |

---

See accompanying notes to the unaudited condensed financial statements.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Condensed Statements of Operations**

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | **Three months ended <br> March 31,** | **Three months ended <br> March 31,** |
|  | **2026** | **2025** |
| Net Revenue | $- | $- |
| Cost of Goods Sold | - | - |
| **Gross loss** | **-**  | **-**  |
| General and administrative | 1144963 | 254308 |
| Depreciation and amortization | 330 | 542 |
| **Total Expense** | **1145293** | **254850** |
| **Loss from Operations** | **(1145293)** | **(254850)** |
| Loss on settlement and repricing of convertible notes | (138008) | (2487213) |
| Fair value adjustment to price protected warrants | - | (1618545) |
| Interest expense | (226110) | (212743) |
| Interest income | - | 12607 |
| Amortization of debt discount | (94130) | (118056) |
| Derivative liability movements | 1018083 | 928979 |
| **Loss before Income Taxes** | **(585458)** | **(3749821)** |
| Income Taxes | - | - |
| **Net loss** | **(585458)** | **(3749821)** |
| Deemed dividend | - | (350364) |
| **Net loss attributable to common stockholders** | $**(585458)** | $**(4100185)** |
| **Basic and diluted loss per share** | $**(0.00)** | $**(0.12)** |
| &nbsp;&nbsp;&nbsp;**Weighted Average Number of Shares Outstanding – Basic and diluted** | **765505880** | **34821561** |

---

See accompanying notes to the unaudited condensed financial statements.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Condensed Statements of Changes in Stockholders' Equity (Deficit)**

(Unaudited)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred<br> Stock<br> Shares** | **Amount** | **Common<br> Stock<br> Shares** | **Amount** | **Additional<br> Paid-in<br> Capital** | **Accumulated<br> Deficit** | **Total<br> Stockholders'<br> Equity<br> (Deficit)** |
| **Balance at December 31, 2025** |  | $&nbsp;&nbsp;&nbsp;&nbsp;- | 710872547 | $71087 | $61333014 | $(68998198) | $(7594097) |
| Conversion of convertible debt |  | - | 13000000 | 1300 | 154700 | - | 156000 |
| Fair value of common stock issued for services |  | - | 83000000 | 8300 | 1020700 | - | 1029000 |
| Fair value of warrants issued to convertible debt holders |  | - |  | - | 85208 | - | 85208 |
| Fair value of convertible debt extinguishment |  | - |  | - | 44008 | - | 44008 |
| Stock based compensation |  | - |  | - | 1371 | - | 1371 |
| Net loss |  | - | - | - | - | (585458) | (585458) |
| **Balance at March 31, 2026** |  | $**-**  | **806872547** | $**80687** | $**62639001** | $**(69583656)** | $**(6863968)** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred<br> Stock<br> Shares** | **Amount** | **Common<br> Stock<br> Shares** | **Amount** | **Additional<br> Paid-in<br> Capital** | **Accumulated<br> Deficit** | **Total<br> Stockholders'<br> Equity<br> (Deficit)** |
| **Balance at December 31, 2024** |  | $&nbsp;&nbsp;&nbsp;&nbsp;- | 19081446 | $1908 | $52202117 | $(62788766) | $(10584741) |
| Conversion of convertible debt |  | - | 54807989 | 5481 | 331821 | - | 337302 |
| Fair value of securities anti-dilution deemed dividend |  | - |  | - | 350364 | (350364) | - |
| Fair value of warrants issued to convertible debt holders |  | - |  | - | 52735 | - | 52735 |
| Stock based compensation |  | - |  | - | 17815 | - | 17815 |
| Net loss |  | - | - | - | - | (3749821) | (3749821) |
| **Balance at March 31, 2025** |  | $**-**  | **73889435** | $**7389** | $**52954852** | $**(66888951)** | $**(13926710)** |

---

See accompanying notes to unaudited condensed financial statements.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Condensed Statements of Cash Flows**

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | **Three months ended <br> March 31,** | **Three months ended <br> March 31,** |
|  | **2026** | **2025** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(585458) | $(3749821) |
| **Adjustment to reconcile net loss to net cash used in operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Derivative liability movements | (1018083) | (928979) |
| &nbsp;&nbsp;&nbsp;Depreciation | 330 | 542 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount | 94130 | 118056 |
| &nbsp;&nbsp;&nbsp;Loss on settlement and repricing of convertible notes | 138008 | 2487213 |
| &nbsp;&nbsp;&nbsp;Fair value of shares issued for services | 1029000 | - |
| &nbsp;&nbsp;&nbsp;Fair value of price protected warrants | - | 1618545 |
| &nbsp;&nbsp;&nbsp;Deemed interest income | - | (9056) |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 1371 | 17815 |
| **Changes in Assets and Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Other current assets | (4152) | 4495 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (175094) | 3675 |
| &nbsp;&nbsp;&nbsp;Related party payables | (7832) | 5106 |
| &nbsp;&nbsp;&nbsp;Interest receivable | - | (3551) |
| &nbsp;&nbsp;&nbsp;Interest accruals | 224578 | 212340 |
| **CASH USED IN OPERATING ACTIVITIES** | **(303202)** | **(223620)** |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from bank overdraft | - | 151 |
| Proceeds from notes payable and convertible debt | 285000 | 223000 |
| **NET CASH PROVIDED BY FINANCING ACTIVITIES** | 285000 | 223151 |
| NET DECREASE IN CASH | (18202) | (469) |
| CASH AT BEGINNING OF YEAR | 29804 | 526 |
| **CASH AT END OF PERIOD** | $**11602** | $**57** |
| **CASH PAID FOR INTEREST AND TAXES:** |  |  |
| Cash paid for income taxes | $- | $- |
| Cash paid for interest | $(1533) | $(404) |
| **NON-CASH INVESTING AND FINANCING ACTIVITIES** |  |  |
| Fair value of warrants issued with convertible debt | $85208 | $52735 |
| Conversion of convertible debt to equity | $62000 | $230798 |

---

See notes to the unaudited condensed financial statements.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **1** | **ORGANIZATION AND DESCRIPTION OF BUSINESS** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Organizational History** 

On May 12, 2016, Innovative Payment Solutions, Inc., a Nevada corporation ("IPSI" or the "Company") (originally formed on September 23, 2013 under the name "Asiya Pearls, Inc."), entered into an Agreement and Plan of Merger (the "Qpagos Merger Agreement") with Qpagos Corporation, a Delaware corporation ("Qpagos Corporation"), and Qpagos Merge, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("Merger Sub"). Pursuant to the Qpagos Merger Agreement, on May 12, 2016, the merger was consummated, and Qpagos Corporation and Merger Sub merged (the Qpagos "Merger"), with Qpagos Corporation continuing as the surviving corporation of the Merger. On May 27, 2016, the Company's name was changed from "Asiya Pearls, Inc." to "QPAGOS".

Pursuant to the Qpagos Merger Agreement, upon consummation of the Qpagos Merger, each share of Qpagos Corporation's capital stock issued and outstanding immediately prior to the Merger was converted into the right to receive two shares of the Company's common stock, par value $0.0001 per share (the "Common Stock"). Additionally, pursuant to the Qpagos Merger Agreement, upon consummation of the Merger, the Company assumed all of Qpagos Corporation's warrants issued and outstanding immediately prior to the Merger, which were exercisable for an aggregate of approximately 621,920 shares of Common Stock as of the date of the Qpagos Merger. Prior to and as a condition to the closing of the Qpagos Merger, a then-current holder of 500,000 shares of Common Stock agreed to return 497,500 shares of Common Stock held by such holder to the Company and such holder retained an aggregate of 2,500 shares of Common Stock. The other stockholders of the Company retained 500,000 shares of Common Stock. Therefore, immediately following the Qpagos Merger, Qpagos Corporation's former stockholders held 4,992,900 shares of Common Stock which represented approximately 91% of the outstanding Common Stock.

The Qpagos Merger was treated as a reverse acquisition of the Company, then a public shell company, for financial accounting and reporting purposes. As such, Qpagos Corporation was treated as the acquirer for accounting and financial reporting purposes while the Company was treated as the acquired entity for accounting and financial reporting purposes.

Qpagos Corporation was incorporated on May 1, 2015 under the laws of the state of Delaware to effectuate a reverse merger transaction with Qpagos, S.A.P.I. de C.V. ("Qpagos Mexico") and Redpag Electrónicos S.A.P.I. de C.V. ("Redpag"). Each of the entities were incorporated in November 2013 in Mexico. Qpagos Mexico was formed to process payment transactions for service providers it contracts with, and Redpag was formed to deploy and operate kiosks as a distributor.

On June 1, 2016, the board of directors of the Company (the "Board") changed the Company's fiscal year end from October 31 to December 31.

On November 1, 2019, the Company changed its corporate name from "QPAGOS" to "Innovative Payment Solutions, Inc." Additionally, and immediately following the name change, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to effect a reverse split of the then outstanding Common Stock at a ratio of 1-for-10, effective on November 1, 2019 (the "Reverse Stock Split"). As a result of the Reverse Stock Split, each ten pre-split shares of Common Stock outstanding automatically combined into one new share of Common Stock without any further action on the part of the holders, and the number of outstanding shares of Common Stock was reduced from 320,477,867 shares to 32,047,817 after rounding for fractional shares.

On December 31, 2019, the Company consummated the disposal of Qpagos Corporation, Qpagos Mexico and Redpag in exchange for 2,250,000 shares (the "Vivi Shares") of common stock of Vivi Holdings, Inc. ("Vivi. or "Vivi Holdings") pursuant to a Stock Purchase Agreement dated August 5, 2019 (the "SPA"). Of the 2,250,000 shares of Vivi, nine percent (9%) was allocated as follows: Gaston Pereira (5%), Andrey Novikov (2.5%), and Joseph Abrams (1.5%). The transactions contemplated by the SPA closed on December 31, 2019 after the satisfaction of customary conditions, the receipt of a final fairness opinion and the approval of the Company's shareholders. As a result, the Company no longer has any business operations in Mexico and has retained its U.S. operations, currently based in Carmel By The Sea, California.

On June 21, 2021, the Company acquired a 10% strategic interest in Frictionless Financial Technologies, Inc. ("Frictionless"). Frictionless delivered to the Company, a live fully compliant financial payment Software as a Service solution for use by the Company as a digital payment platform (which was subsequently branded as IPSIPay) that enabled payments within the United States and abroad, including Mexico, together with a service agreement providing a full suite of product services to facilitate the Company's anticipated product offerings. The Company had an irrevocable right to acquire up to an additional 41% of the outstanding common stock of Frictionless at a purchase price of $300,000 for each 1% acquired.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **1** | **ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Organizational History (continued)** 

On August 26, 2021, the Company formed a new subsidiary, Beyond Fintech, Inc. ("Beyond Fintech"), in which it owns a 51% stake, with Frictionless owning the remaining 49%. Beyond Fintech acquired an exclusive license to a product known as Beyond Wallet, to further its objective of providing virtual payment services allowing U.S. persons to transfer funds to Mexico and other countries.

On May 12, 2023, the Company entered into an Agreement with Frictionless (the "May 2023 Frictionless Agreement") to unwind the equity ownership stakes that the Company and Frictionless have in each other and in Beyond Fintech. Pursuant to the May 2023 Frictionless Agreement: (i) the Company assigned to Frictionless all common stock of Frictionless owned by the Company; (ii) the warrant to purchase 1,000,000 shares of Common Stock previously issued by the Company to Frictionless as of December 30, 2022 was cancelled; (iii) the Company assigned to Frictionless all shares of common stock of Beyond Fintech owned by the Company (the "Beyond Fintech Shares"); and (iv) the rights previously granted to the Company to (a) acquire additional equity interests in Frictionless, (b) participate in future financings of Frictionless and (c) appoint a board member of Frictionless, were terminated. The consideration to the Company for the assignment of the Beyond Fintech Shares to Frictionless was a credit against potential future services to be provided by Frictionless to the Company in an amount up to $250,000. As a result of the novation agreement with Frictionless discussed below, the Company no longer utilizes, and does not expect to utilize, the services of Frictionless for the foreseeable future. The collectability of the remaining credit receivable of $231,431 was impaired.

On August 30, 2023, the Company implemented a 1 for 30 reverse stock split of its Common Stock. Unless the context expressly requires otherwise, as used in this Report, all share and per share numbers reflect such reverse stock split.

On September 5, 2023, the Company's entered into a novation agreement whereby it assigned all its rights and interest in its e-wallet product, IPSIPay, and its receivables and payables due from and to Frictionless, related to IPSIPay, to a third party in order to concentrate all of its efforts on the IPSIPay Express LLC ("IPSIPay Express") joint venture. See note 1(b) for further information.

On October 29, 2025, the Company formed a limited liability corporation, Jetties Partners, LLC ("Jetties"), d/b/a IPSIPAY. Jetties was formed to develop, market, distribute and operate a merchant processing payment solution, with an initial focus on the gaming industry. Jetties consists of two 50% partners, the Company and Brant Point Solutions, LLC ("BP"). The Company issued 200,000,000 shares for its 50% interest in the joint venture, while BP will provide access to and full utilization of technology that may be owned, licensed or controlled by BP, including but not limited to all agreements between BP and United Payment Systems LLC, as well as its presence in the gaming markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b)** **Description of current business** 

The Company is a fintech provider of digital payment solutions presently focused on credit card processing services for undeveloped and underserved markets. We have in the past (under the name IPSIPay) and may in the future develop and operate "e-wallets" that enable consumers to deposit cash, convert it into a digital form and remit funds quickly and securely.

We expect that revenue will be generated by Jetties through fees derived from merchant processing fees, money transfer fees, and commissions on international bill payment processing.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **2** | **ACCOUNTING POLICIES AND ESTIMATES** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Basis of Presentation** 

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, these unaudited condensed financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments (consisting only of normal recurring adjustments), which the Company considers necessary, for a fair presentation of those financial statements. The results of operations and cash flows for the three months ended March 31, 2026 may not necessarily be indicative of results that may be expected for any succeeding quarter or for the entire fiscal year. The information contained in this Report should be read in conjunction with the audited financial statements of IPSI for the year ended December 31, 2025, included in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the "SEC") on March 31, 2026.

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. GAAP.

All amounts referred to in the notes to the unaudited condensed financial statements are in United States Dollars ($) unless stated otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b)** **Use of Estimates** 

The preparation of unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect the amounts reported in the unaudited condensed financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to, the estimated useful lives for plant and equipment, the fair value of long-lived investments, the fair value of warrants and stock options granted for services, debt extinguishments or compensation, convertible debt and amendments thereto, derivative liabilities, the valuation allowance for deferred tax assets due to continuing operating losses and the allowance for doubtful accounts.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c)** **Contingencies** 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

The Company's management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's unaudited condensed financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **2** | **ACCOUNTING POLICIES AND ESTIMATES (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d)** **Fair Value of Financial Instruments** 

The Company adopted the guidance of Accounting Standards Codification ("ASC") 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 - Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash, accounts receivable, notes receivable, other current assets, other assets, accounts payable, accrued liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company has identified the short-term convertible debt and certain warrants attached to certain of the notes that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

ASC 825-10 "*Financial Instruments*" allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We evaluate the fair value of variably priced derivative liabilities on a quarterly basis and report any movements thereon in earnings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e)** **Risks and Uncertainties** 

The Company's operations and prospects are and will be subject to significant risks and uncertainties including financial, operational, regulatory, and other risks, including the potential risk of business failure. In particular, there is a risk that that the Company may never generate revenue for the Company. Further, the recent war in the Middle East, with direct involvement of the U.S., and the ongoing wars in Ukraine and between Israel, Hamas and Hezbollah and uncertainties regarding the global energy supply and the impact on the economic environment which may result in a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These conditions may not only limit the Company's access to capital, but also make it difficult for its customers, vendors and the Company to accurately forecast and plan future business activities, which may have an adverse impact on its business and financial condition and may hamper the Company's ability to generate revenue and access usual sources of liquidity on reasonable terms.

The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **2** | **ACCOUNTING POLICIES AND ESTIMATES (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f)** **Recent accounting pronouncements** 

 ****

The Financial Accounting Standards Board ("FASB") issued additional updates during the quarter ended March 31, 2026. None of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the Company's unaudited condensed financial statements upon adoption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**g)** **Reporting by Segment** 

The Company adopted FASB issued ASU 2023-07, "Segment Reporting (ASC Topic 280) for the annual reporting period ended December 31, 2024. The most significant provision was for the Company to disclose significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), who is the CEO. All expense categories on the Statements of Operations are significant and there are no other significant segment expenses that would require disclosure. The Company's CODM, reviews financial information presented on an aggregated basis for the purpose of making operating decisions, allocating resources, assessing financial performance and making strategic decisions related to headcount and capital expenditures. The CODM regularly reviews net loss as reported on the Company's statements of operations. The CODM uses net loss as the measure of profit or loss to allocate resources and assess performance.

Since the Company operates as one reportable segment, all financial information required by "Segment Reporting" can be found in the accompanying financial statements. The CODM does not review segment assets at a level other than that presented in the Company's balance sheets. There are no intra-entity sales or transfers, and no significant expense categories regularly provided to the CODM beyond those disclosed in the Statements of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**h)** **Cash and Cash Equivalents** 

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At March 31, 2026 and December 31, 2025, respectively, the Company had no cash equivalents.

The Company minimizes credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution in the United States. The balance at times may exceed federally insured limits. At March 31, 2026 and December 31, 2025, the balance did not exceed federally insured limits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i)** **Accounts Receivable and Allowance for Doubtful Accounts** 

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Revisions to the allowance for doubtful accounts estimates are recorded as an adjustment to bad debt expense. Receivables deemed uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. There were no recoveries during the period ended March 31, 2026 and 2025.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **2** | **ACCOUNTING POLICIES AND ESTIMATES (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**j)** **Investments** 

The Company's non-marketable equity securities are investments in privately held companies without readily determinable market values. The carrying value of our non-marketable equity securities is adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period are classified within Level 3 in the fair value hierarchy because the Company estimates the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities the Company holds. The cost method is used when the Company has a passive, long-term investment that doesn't result in influence over the Company. The cost method is used when the investment results in an ownership stake of less than 20%, and there is no substantial influence. Under the cost method, the stock purchased is recorded on the balance sheet as a non-current asset at the historical acquisition/purchase price, and is not modified unless shares are sold, additional shares are purchased or there is evidence of the fair market value of the investment declining below carrying value. Any dividends received are recorded as income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**k)** **Plant and Equipment** 

Plant and equipment is stated at cost, less accumulated depreciation. Plant and equipment with costs greater than $1,000 are capitalized and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

---

| | |
|:---|:---|
| **Description** | **Estimated <br> Useful Life** |
| Computer equipment | 3 years |
| Office equipment | 10 years |

---

The cost of repairs and maintenance is expensed as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**l)** **Long-Term Assets** 

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **2** | **ACCOUNTING POLICIES AND ESTIMATES (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**m)** **Revenue Recognition** 

The Company's revenue recognition policy is consistent with the requirements of FASB ASC 606, Revenue.

The Company's revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. allocate the transaction price to performance obligations in the contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. recognize revenue as the performance obligation is satisfied.

The Company had no revenues for the three months ended March 31, 2026 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**n)** **Share-Based Payment Arrangements** 

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards' grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are 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 statement of operations.

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**o)** **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. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**p)** **Marketing and advertising expenses** 

Marketing and advertising expenditure incurred on promoting the Company's previous products were expensed as incurred. Marketing and advertising costs amounted to $2,655 and $0 for the three months ended March 31, 2026 and 2025, respectively.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **2** | **ACCOUNTING POLICIES AND ESTIMATES (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**q)** **Income Taxes** 

The Company is based in the U.S. and currently enacted U.S. tax laws are used in the calculation of income taxes.

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company's policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of March 31, 2026 and December 31, 2025, there have been no interest or penalties incurred on income taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**r)** **Comprehensive income** 

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. The Company does not have any comprehensive income (loss) for the periods presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**s)** **Reclassification of prior year presentation** 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

---

| | |
|:---|:---|
| **3** | **LIQUIDITY MATTERS AND GOING CONCERN** |

---

The Company's financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. For and as of the three months ended March 31, 2026, the Company had a net loss of $0.6 million. In connection with preparing the unaudited condensed financial statements for the three months ended March 31, 2026, management evaluated the risks described in Note 2(e) above on the Company's business and its future liquidity for the next twelve months from the date of issuance of these financial statements.

The accompanying financial statements for the period ended March 31, 2026 have been prepared assuming the Company will continue as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and, ultimately, becomes profitable. Management's plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay and reduce the scope of the Company's development and operations. Continuing as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying unaudited condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company has determined that there is substantial doubt about its ability to continue as a going concern.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **4** | **NOTES RECEIVABLE** |

---

We have declared the notes receivable with business Warrior to be in default and negotiations regarding the repayment of these notes is ongoing. The Company has been unsuccessful in securing repayment of these notes and accordingly has provided against the collectability of these notes as of March 31, 2026.

Loans receivable consists of the following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Description** | **Interest<br> Rate** | **Maturity<br> date** | **Principal** | **Accrued<br> interest** | **March 31,<br> 2026<br> Amount,<br> net** | **December 31,<br> 2025<br> Amount,<br> net** |
| Business Warrior Corporation | 0.0% | December 31, 2025 | $226190 | $- | $226190 | $226190 |
|  | 8.0% | November 1, 2024 | 30000 | 3682 | 33682 | 33682 |
|  | 8.0% | January 1, 2025 | 35000 | 3905 | 38905 | 38905 |
|  | 8.0% | February 1, 2025 | 50000 | 5271 | 55271 | 55271 |
|  | 8.0% | February 1, 2025 | 15000 | 1568 | 16568 | 16568 |
|  | 8.0% | April 27, 2025 | 50000 | 4373 | 54373 | 54373 |
| **Total Notes receivable** |  |  | **406190** | **18799** | **424989** | **424989** |
| **Less: impairment provision** |  |  | **(406190)** | **(18799)** | **(424989)** | **(424989)** |
|  |  |  | $**-**  | $**-**  | $**-**  | $**-**  |

---

Discount amortized to income as deemed interest during the three months ended March 31, 2026 and 2025, was $0 and $9,056, respectively.

Interest earned for the three months ended March 31, 2026 and 2025 was $0 and $3,551, respectively.

---

| | |
|:---|:---|
| **5** | **EQUITY METHOD INVESTMENT** |

---

On April 28, 2023, the Company formed IPSIPay Express with OpenPath and EfinityPay (see note 1(b) above). As described in note 1(b), the Company has agreed to make the IPSI Capital Contributions to IPSIPay Express. As of December 31, 2023, the initial Tranche of $500,000 and the second Tranche of $500,000 of capital contributions was paid by the Company to or on behalf of IPSIPay Express.

On October 29, 2025, the Company entered into a Limited Liability Company Operating Agreement with Brant Point Solutions, LLC to form a new Delaware limited liability company, Jetties Partners, LLC (d/b/a IPSIPAY) (the "Joint Venture").

The purpose of the Joint Venture is to develop, market, distribute, and operate real-time financial technology merchant processing payment solutions branded as IPSIPay or PayzliPlus, initially targeting gaming, sportsbook, and casino entertainment markets.

The Agreement outlines the parties' respective contributions, governance structure, management rights, and other material terms relating to the operation of the Joint Venture. The Company believes that this collaboration will expand its reach within the real-time payments and gaming merchant processing industries through the integration of complementary technologies and market relationships.

The Company issued 200,000,000 shares of common stock valued at $4,200,000, the fair market value of the common stock at issuance date, to induce Brant Point Solutions to utilize its existing contracts and arrangements to provide the payment solution technology to the joint venture.

The Company is expecting to finalize two revenue generating contracts with customers during the second quarter, however, there has been no business activity since inception of the joint venture.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **5** | **EQUITY METHOD INVESTMENT (continued)** |

---

The Company accounts for its investment in joint ventures in accordance with ASC 323, Investments – Equity Method and Joint Ventures, the movement in equity method investments for the three months ended March 31, 2026 and the year ended December 31, 2025 is as follow:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2026** | **December 31,**<br>**2025** |
| **Equity method Investment** |  |  |
| &nbsp;&nbsp;&nbsp;**IPSIPay Express** |  |  |
| &nbsp;&nbsp;&nbsp;Cash contribution to IPSIPay Express | $999500 | $999500 |
| &nbsp;&nbsp;&nbsp;Fair value of warrants issued to third party joint venture partners | 108220 | 108220 |
|  | 1107720 | 1107720 |
| &nbsp;&nbsp;&nbsp;Equity loss from joint venture | (404101) | (404101) |
|  | 703619 | 703619 |
| &nbsp;&nbsp;&nbsp;Receivable from IPSIPay Express | 1524 | 1524 |
|  | 705143 | 705143 |
| &nbsp;&nbsp;&nbsp;Impairment of investment | (705142) | (705142) |
| **Net Investment in IPSIPay Express** | $**1** | $**1** |
| &nbsp;&nbsp;&nbsp;**Jetties Partners, LLC** |  |  |
| &nbsp;&nbsp;&nbsp;Fair value of equity issued to joint venture partners | $4200000 | $4200000 |
| &nbsp;&nbsp;&nbsp;Equity loss from joint venture | - | - |
| **Net Investment in Jetties Partners, LLC** | $**4200000** | $**4200000** |
| &nbsp;&nbsp;&nbsp;**Equity method investments** | $**4200001** | $**4200001** |

---

Financial information from the Jetties Partners, LLC Joint venture is not available as the joint venture, although formed on November 4, 2025, has not commenced operating. Therefore, no summary information is available.

---

| | |
|:---|:---|
| **6** | **FEDERAL RELIEF LOANS** |

---

**Small Business Administration Disaster Relief loan**

On July 7, 2020, the Company received a Small Business Economic Injury Disaster loan amounting to $150,000, bearing interest at 3.75% per annum and repayable in monthly installments of $731 commencing twelve months after inception with the balance of interest and principal repayable on July 7, 2050. The loan is secured by all tangible and intangible assets of the Company. The proceeds are to be used for working capital purposes to alleviate economic injury caused by the COVID-19 pandemic.

The company has accrued interest of $11,840 and $11,184 on this loan as of March 31, 2026 and December 31, 2025, respectively.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **7** | **NOTES PAYABLE** |

---

Notes payable consists of the following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Description** | **Interest<br> Rate** | **Maturity date\*** | **Principal** | **Accrued<br> Interest** | **March 31,<br> 2026** | **December 31,<br> 2025** |
| Cavalry Fund I LP | 18.0% | Matured | $482000 | $211303 | $693303 | $671613 |
| Mercer Street Global Opportunity Fund, LLC | 18.0% | Matured | 482000 | 211303 | 693303 | 671613 |
| 2024 notes | 0.0 to 18.0% | February 28, 2025 to October 10, 2025 | 577778 | 95844 | 673622 | 653814 |
| **Total notes payable** |  |  | $**1541778** | $**518450** | $**2060228** | $**1997040** |

---

Interest expense totaled $63,188 and $53,578 for the three months ended March 31, 2026 and 2025, respectively.

 ****

Amortization of debt discount totaled $0 and $46,195 for the three months ended March 31, 2026 and 2025, respectively,

***Cavalry Fund I LP and Mercer Street Global Opportunity Fund, LLC***

On February 16, 2021, the Company entered into separate Securities Purchase Agreements (the "SPAs"), with each of Cavalry Fund I LP ("Cavalry") and Mercer Street Global Opportunity Fund, LLC ("Mercer"), pursuant to which the Company received $500,500 and $500,500 from Cavalry and Mercer, respectively, in exchange for the issuance of: (i) Original Issue Discount 12.5% Convertible Notes (the "Notes" and each a "Note") in the principal amount of $572,000 to each of Cavalry and Mercer; and (ii) five-year warrants (the "Original Warrants") issued to each of Cavalry and Mercer to purchase 2,486,957 shares of Common Stock at an exercise price of $0.24 per share.

In terms of the December 30, 2022 Note Amendment Transaction, described in more detail in note 8 below, the Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the "Exchange Notes") to each of Cavalry and Mercer. This exchange caused the cancellation of the Original Warrants for all purposes. The Company accounted for the aggregate value of the notes issued of $964,000, less the fair value of the warrants exchanged for these notes of $43,608, totaling $920,392 as a component of the loss on convertible debt.

The Exchange Notes had a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%).

On February 27, 2024, the maturity date of the notes was extended to April 30, 2024 with an automatic one-month extension each month until such time as the note is declared to be in default, all other terms remain the same as the previous notes. The automatic extension of the maturity date may not extend past November 27, 2024, thereafter all amounts due under the note are immediately due and payable. The Company performed an analysis in terms of ASC 470 and it was determined that the extension was a debt modification, in addition, no additional consideration was paid for the maturity date extension.

With effect from November 27, 2024, the notes accrue interest at 18% per annum, the default interest rate per the note agreement.

On March 30, 2026, effective December 31, 2025, Cavalry and Mercer entered into a forbearance agreement with the Company whereby the notes will forbear until May 1, 2026. The forbearance period has expired and the notes are in default.

***2024 Notes***

The 2024 Notes matured between February 28, 2025 and October 10, 2025 and bear interest at rates ranging from 0.0% to 18.0% per annum.

The 2024 Notes have restrictions relating to fundamental transactions which require the approval of the note holder, in addition the note holder has an optional redemption right on subsequent transactions that may require the Company to redeem all or part of the Note, at a premium of 120% of the cash amount of the Note, at the note holder's discretion.

As of March 31, 2026, the 2024 Notes with an aggregate amount outstanding of $355,038, have matured and have not entered into forbearance agreements, are technically in default.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT** |

---

Convertible debt payable consists of the following:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Description** | **Interest<br> Rate** |  | **Maturity<br> date\*\*** | **Principal** | **Accrued<br> Interest** | **Unamortized<br> debt discount** | **March 31,<br> 2026<br> Amount,<br> net** | **December 31,<br> 2025<br> Amount,<br> net** |
| Cavalry Fund I LP | 18.00 | %\* | Matured | $819371 | $154063 | $- | $973434 | $936563 |
| Mercer Street Global Opportunity Fund, LLC | 18.00 | %\* | Matured | 1042701 | 207027 |  | 1249728 | 1202806 |
| 2023, 2024, 2025 and 2026 convertible notes | 8.00 to 12.00 | % | Matured to March 19, 2027 | 3227019 | 476348 | (191847) | 3511520 | 3217255 |
| **Total convertible notes payable** |  |  |  | $**5089, 091** | $**837438** | $**(191847)** | $**5734682** | $**5356624** |

---

\* The Cavalry Fund LLP and Mercer Street Global Opportunity Fund, LLC, notes are accruing interest at the default interest rate of 18% with effect from November 27, 2024, prior to November 27, 2024, interest was accrued at 10% per annum.

\*\* All convertible notes payable are technically in default due the default on a 2024 convertible note for which a default was declared. The Company is in the process of obtaining forbearance agreements from certain convertible note holders. If the Company is unsuccessful the convertible debt would be in default.

Interest expense totaled $146,136 and $157,594 for the three months ended March 31, 2026 and 2025, respectively.

Amortization of debt discount totaled $94,130 and $71,862 for the three months ended March 31, 2026 and 2025, respectively.

The Cavalry, Mercer, and certain of the 2025 convertible notes have variable conversion prices based on a discount to market price of trading activity over a specified period of time. The variable conversion features were valued using a Black Scholes valuation model. The difference between the fair market value of the Common Stock and the calculated conversion price on the issuance date was recorded as a debt discount with a corresponding credit to derivative financial liability.

***Cavalry and Mercer December 2022 Note Amendment Transaction***

The Company twice extended its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date of the Cavalry/Mercer Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional maturity date extension to November 16, 2022. In consideration for the second extension, the Company agreed to (i) increase the principal amount outstanding and due to Cavalry and Mercer under the Cavalry/Mercer Notes by twenty percent (20%) and (ii) issue to each of Cavalry and Mercer a new five-year warrant (each, an "Extension Warrant") to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. The Extension Warrant contains the same terms and provisions in all material respects as the Original Warrants, except for the difference in exercise price.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT (continued)** |

---

***Cavalry and Mercer December 2022 Note Amendment Transaction (continued)***

On December 30, 2022, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to December 30, 2023. Each of Cavalry and Mercer entered into Note Amendment Letter Agreement with the Company (the "Note Amendment") pursuant to which the parties agreed to the following:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The conversion price of the
Cavalry/Mercer Notes was reduced from $4.50 to $0.345 per share (such reduced conversion price being the current conversion
price of the Notes give the passage of the November 16, 2022 maturity date of the Cavalry/Mercer Notes). As a result of this change in
conversion price, under the existing terms of the Cavalry/Mercer Notes, the 100,000 shares of Common Stock underlying the Extension
Warrants was increased to 1,304,348 shares;

&nbsp;&nbsp;&nbsp;&nbsp;(2) The Original Warrants issued
on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the "Exchange
Notes"). This exchange caused the cancellation of the Original Warrants for all purposes. The Exchange Notes have a maturity date
of December 30, 2023 and carry an interest rate of ten percent (10%). The Company shall have the right, but not the obligation,
in lieu of a cash payment upon maturity of the Exchange Notes, to issue a total 1,730,058 shares of Common Stock, as adjusted
for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under the Exchange Notes (or
any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no legal obligation
to reserve such number of shares for future issuance;

&nbsp;&nbsp;&nbsp;&nbsp;(3) Each of Cavalry and Mercer
agreed (i) not to convert all or any portion of the Cavalry/Mercer Notes until after March 30, 2023 and (ii) waive any events of default
under the Cavalry/Mercer Notes and the Cavalry/Mercer SPAs;

&nbsp;&nbsp;&nbsp;&nbsp;(4) Certain other warrants held
by Cavalry and Mercer which contain a mandatory exercise provision allowing us to force exercise of such warrants if the price of the
Common Stock is $1.80 per share or above were amended effective December 30, 2022 to reduce such forced exercise price to $1.20 per
share; and

&nbsp;&nbsp;&nbsp;&nbsp;(5) The Company was obligated to
register the shares of Common Stock underlying the Cavalry/Mercer Notes and the shares underlying all warrants held by Cavalry and Mercer
for resale with the Securities and Exchange Commission and the Company filed the registration statement to satisfy such registration
obligation.

As a result of the reduction in the conversion price of the Cavalry/Mercer Notes, certain other warrants held by third parties have their exercise price of such warrants reduced to $0.345 per share. All of the shares of our Common Stock underlying the Cavalry/Mercer Notes as amended and all warrants held by Cavalry and Mercer as adjusted were registered for resale pursuant to a registration statement that was declared effective on February 6, 2023.

The amendments to the Cavalry/Mercer Notes were evaluated in terms of ASC 470, *Debt*, to determine if the amendments to the Cavalry/Mercer Notes were considered a modification of the debt or an extinguishment of the debt. Based on the penalty interest incurred on the convertible notes of $836,414, the reduction in the conversion price of the Cavalry/Mercer Notes from $4.50 to $0.345 per share, which was valued at $1,499,577 using a Black-Scholes valuation model, the issuance of additional warrants to the Cavalry and Mercer valued at $238,182 using a Black-Scholes valuation model and the conversion of certain warrants held by Cavalry and Mercer to notes payable, resulting in an additional charge of $920,392, consisting of a mark-to-market warrant cost of $(43,608) and the value of the notes of $964,000 (see note 12 above) and the value of full rachet provisions of certain of the warrants issued to the Cavalry and Mercer amounting to $841,003 (see note 14 below), the amendment of the Cavalry/Mercer Notes was determined to be a debt extinguishment.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT (continued)** |

---

***Cavalry and Mercer December 2022 Note Amendment Transaction (continued)***

Effective December 30, 2023 on February 27, 2024, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to April 30, 2024 with an automatic one-month extension each month until such time as the note is declared to be in default, all other terms remain the same as the previous notes. The automatic extension of the maturity date may not extend past November 27, 2024, thereafter all amounts due under the note are immediately due and payable. The Company performed an analysis in terms of ASC 470 and it was determined that the extension was a debt modification, in addition, no additional consideration was paid for the maturity date extension.

***Cavalry Fund LLP***

 ****

On February 16, 2021, the Company closed a transaction with Cavalry pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022. The Note was convertible into shares of Common Stock at an initial conversion price of $0.23 per share, in addition, the Company issued a warrant exercisable for 82,899 shares of Common Stock at an initial exercise price of $7.20 per share.

As described more fully above, the maturity date of the note was extended to August 16, 2022, additionally to November 16, 2022, additionally to December 30, 2023 and again to April 30, 2024, with an automatic one-month extension each month until such time as the note is declared to be in default, all other terms remain the same as the previous notes. The automatic extension of the maturity date may not extend past November 27, 2024, thereafter all amounts due under the note are immediately due and payable. The Company is currently negotiating with Cavalry to place the note into forbearance, currently interest is being accrued at the default interest rate of 18% per annum in terms of the agreement.

In consideration for the November 16, 2022 extension, the Company agreed to (i) increase the principal amount outstanding and due to Cavalry by twenty percent (20%) and (ii) issue a new five-year warrant to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. In consideration of the December 30, 2022 extension, the Company agreed to the following terms; (i) the conversion price of the Note was reduced from $4.50 to $0.345 per share; (ii) Cavalry agreed (a) not to convert all or any portion of the Notes until after March 30, 2023 and (b) waive any events of default under the Note and the SPA; (iii) the Company agreed to and registered the shares of Common Stock underlying the Note and the shares underlying all warrants held by Cavalry for resale with the Securities and Exchange Commission and filed the registration statement to satisfy the Company's registration obligation.

Between August 24, 2023 and November 20, 2023, Cavalry converted $139,726 of interest and $192,774 of principal into 963,769 shares of Common Stock at a conversion price of $0.345 per share realizing a loss on conversion of $42,210.

Between September 5, 2024 and November 11, 2024, Cavalry converted an aggregate of $79,608 of principal and $88,876 of interest into 2,005,762 shares of Common Stock at a conversion price of $0.084 per share realizing a loss on conversion of $37,490. Such conversion caused a reduction in the $0.345 conversion price of the notes described above to $0.084 (see Derivative liability note below).

Between January 14, 2025 and August 12, 2025, Cavalry converted an aggregate $49,915 of interest into 58,163,177 shares of common stock at an average conversion price of $0.00086 per share. The Company realized a loss on conversion of $162,365.

In terms of the agreement with Cavalry, the conversion price of the convertible note will be adjusted downwards on any dilutive issuances. The conversion price of the convertible debt has been adjusted to $0.0005, the lowest conversion price of conversions executed during the year ended December 31, 2025.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT (continued)** |

---

***Cavalry Fund LLP (continued)***

On August 13, 2025, the Company entered into an agreement to modify the conversion price of the Cavalry convertible debt from $0.0005 to a conversion price of $0.01 per share of common stock, thereby reducing the number of shares of common stock that the aggregate convertible debt at December 31, 2025 is convertible into from 1,873,126,639 to 93,656,332. This is subject to certain conditions, including i) if the shares of common stock trade above $0.04 during the period expiring on December 31, 2025, the investors may convert up to 10% of the aggregate debt outstanding, ii) if the common stock trades below $0.01 and/or the Company generates no revenue by December 31, 2025, then the conversion price reverts to the original conversion price per common stock, iii) the Company has to produce revenues of at least $250,000 prior to December 31, 2025, and iv) the Company will seek approval to increase it authorized common stock by October 31, 2025, by a number to be determined by the management of the Company, failing which the original terms of the convertible note would prevail. On October 3, 2025, the Company increased its authorized shares of common stock to 1,500,000,000 shares.

The Company was not able to maintain its stock price above $0.01 per share and had not generated any revenues as of December 31, 2025, not meeting the terms of the agreement. However, on March 30, 2026, effective December 31, 2025, the Company entered into a forbearance agreement with Cavalry and Mercer to forbear the convertible notes until May 1, 2026 and to retain the conversion price of $0.01 per share, unless the Company's common stock trades at or above $0.04 per share at any time during the forbearance period, Cavalry will be eligible to convert an aggregate of 10% of the total outstanding debt, failing which the original terms of the convertible note will prevail. The forbearance agreement expired on May 1, 2026, placing the notes into a technical default, although no default has been declared as yet. The conversion price reverted to $0.0005 per share on May 1, 2026, a new agreement has not been reached with Cavalry

The balance of the Cavalry Note plus accrued interest at March 31, 2026 was $973,434.

***Mercer Street Global Opportunity Fund, LLC***

 ****

On February 16, 2021, the Company closed a transaction with Mercer, pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022. The Note is convertible into shares of Common Stock at an initial conversion price of $6.90 per share, in addition, the Company issued a warrant exercisable for 82,899 shares of Common Stock at an initial exercise price of $7.20 per share.

As described more fully above, the maturity date of the note was extended to August 16, 2022, additionally to November 16, 2022, additionally to December 30, 2023 and again to April 30, 2024, with an automatic one-month extension each month until such time as the note is declared to be in default, all other terms remain the same as the previous notes. The automatic extension of the maturity date may not extend past November 27, 2024, thereafter all amounts due under the note are immediately due and payable. The Company is currently negotiating with Mercer to place the note into forbearance, currently interest is being accrued at the default interest rate of 18% per annum in terms of the agreement.

In consideration for the November 16, 2022 extension, the Company agreed to (i) increase the principal amount outstanding and due to Mercer by twenty percent (20%) and (ii) issue a new five-year warrant to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. In consideration of the December 30, 2022 extension, the Company agreed to the following terms; (i) the conversion price of the Note was reduced from $4.50 to $0.345 per share; (ii) Mercer agreed (a) not to convert all or any portion of the Notes until after March 30, 2023 and (b) waive any events of default under the Note and the SPA; (iii) the Company agreed to and registered the shares of Common Stock underlying the Note and the shares underlying all warrants held by Mercer for resale with the Securities and Exchange Commission and filed the registration statement to satisfy the Company's registration obligation.

Between May 19, 2023 and August 30, 2023, Mercer converted an aggregate of $100,000 into 289,856 shares of common stock at a conversion price of $0.345 per share, realizing a loss on conversion of $48,551.

Between August 20, 2024 and November 11, 2024, Mercer converted an aggregate of $197,348 of interest into 2,349,380 shares of Common Stock at a conversion price of $0.084 per share, realizing a loss on conversion of $89,527. Such conversion caused a reduction in the $0.345 conversion price of the notes described above to $0.084 (see derivative liability note below).

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT (continued)** |

---

***Mercer Street Global Opportunity Fund, LLC (continued)***

Between January 14, 2025 and August 12, 2025, Mercer converted an aggregate $52,548 of interest into 61,933,790 shares of common stock at an average conversion price of $0.00085 per share. The Company realized a loss on conversion of $184,992.

In terms of the agreement with Cavalry, the conversion price of the convertible note will be adjusted downwards on any dilutive issuances. The conversion price of the convertible debt has been adjusted to $0.0005, the lowest conversion price of conversions executed during the year ended December 31, 2025.

On August 13, 2025, the Company entered into an agreement to modify the conversion price of the Mercer convertible debt from $0.0005 to a conversion price of $0.01 per share of common stock, thereby reducing the number of shares of common stock that the aggregate convertible debt at December 31, 2025 is convertible into from 2,405,612,206 to 120,280,610 shares. This is subject to certain conditions, including i) if the shares of common stock trade above $0.04 during the period expiring on December 31, 2025, the investors may convert up to 10% of the aggregate debt outstanding, ii) if the common stock trades below $0.01 and/or the Company generates no revenue by December 31, 2025, then the conversion price reverts to the original conversion price per common stock, iii) the Company has to produce revenues of at least $250,000 prior to December 31, 2025, and iv) the Company will seek approval to increase it authorized common stock by October 31, 2025, by a number to be determined by the management of the Company, failing which the original terms of the convertible note would prevail. On October 3, 2025, the Company increased its authorized shares of common stock to 1,500,000,000 shares.

The Company was not able to maintain its stock price above $0.01 per share and had not generated any revenues as of December 31, 2025, not meeting the terms of the agreement. However, on March 30, 2026, effective December 31, 2025, the Company entered into a forbearance agreement with Cavalry and Mercer to forbear the convertible notes until May 1, 2026 and to retain the conversion price of $0.01 per share, unless the Company's common stock trades at or above $0.04 per share at any time during the forbearance period, Mercer will be eligible to convert an aggregate of 10% of the total outstanding debt, failing which the original terms of the convertible notes will prevail. The forbearance agreement expired on May 1, 2026, placing the notes into a technical default, although no default has been declared as yet. The conversion price reverted to $0.0005 per share on May 1, 2026, a new agreement has not been reached with Mercer.

The balance of the Mercer Note plus accrued interest at March 31, 2026 was $1,249,728.

***2023, 2024, 2025 and 2026 Convertible Notes***

Between February 13, 2023 and November 27, 2023, the Company entered into Securities Purchase Agreements with 30 accredited investors to purchase convertible notes (the "2023 Convertible Notes"), receiving an aggregate of $2,026,666 in gross proceeds from the 2023 convertible notes.

Between February 6, 2024 and October 23, 2024, the Company entered into Securities Purchase Agreements with 9 accredited investors to purchase convertible notes (the "2024 Convertible Notes"), receiving an aggregate of $575,002 in gross proceeds from the 2024 Convertible Notes.

Between January 7, 2025 and December 5, 2025, the Company entered into Securities Purchase Agreements with 6 accredited investors to purchase convertible notes (the "2025 Convertible Notes"), receiving an aggregate of $817,000 in gross proceeds from the 2025 Convertible Notes, net of original issue discount of $43,500.

On April 18, 2025, the Company entered into a debt exchange agreement with our previous CFO, Mr. Rosenblum, whereby $210,000 of accrued payroll was exchanged for a convertible note with an exercise price of $0.02 per share, maturing on January 6, 2026. The note bears interest at 8% per annum. On April 29, 2025, the board of directors amended the exercise price to $0.005 per share.

Between February 27, 2026 and March 19, 2026, the Company entered into Securities Purchase Agreements with 6 accredited investors to purchase convertible notes (the "2026 Convertible Notes"), receiving an aggregate of $285,000 in gross proceeds from the 2026 Convertible Notes, net of debt discount of $85,208.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT (continued)** |

---

***2023, 2024, 2025 and 2026 Convertible Notes (continued)***

In terms of the above private placements through the issuance of :

● the 2023 Convertible Notes, the 2024 Convertible Notes, the 2025 Convertible notes, the 2026 convertible notes; and

● five-year warrants to purchase an aggregate 5,696,586 shares of Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), associated with the 2023 Convertible Notes (the "2023 Warrants"), five year warrants to purchase an aggregate of 579,711 shares of Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), associated with the 2024 Convertible Notes (the "2024 Warrants"), five year warrants to purchase an aggregate of 55,204,761 shares of common stock at exercise prices ranging from $0.0005 to $0.084 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), associated with the 2025 Convertible Notes (the "2025 Warrants") and three year to purchase an aggregate of 1,250,000 shares of common stock at exercise price of $0.02 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events) and five year to purchase an aggregate of 16,000,000 shares of common stock at exercise price of $0.01 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), associated with the 2026 Convertible Notes (collectively, the "2026 Warrants") warrants. Certain of the warrants have price protection which reduces the exercise price of the warrant for any subsequent stock issuances lower than the current exercise price.

The 2023 Convertible Notes, the 2024 Convertible Notes, the 2025 Convertible Notes and the 2026 convertible notes bear interest at rates ranging from 8.0% to 18.0% per annum, are convertible into shares of common stock at a conversion price ranging from $0.0005 to $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events).

Convertible notes with a principal balance outstanding of $187,500 have a variable priced component to its conversion feature. The conversion price is the lower of $0.01 per share and 90% of the volume weighted lowest average share price over a 20-day trading period, this gives rise to a derivative liability as disclosed in the derivative liability note below.

The 2023 Convertible Notes, the 2024 Convertible Notes, the 2025 Convertible Notes and the 2026 Convertible notes may be prepaid at any time without penalty.

The Company is under no obligation to register the shares of Common Stock underlying the 2023 Convertible Notes, the 2024 Convertible Notes, the 2025 Convertible Notes, the 2026 Convertible notes, or the 2023 Warrants, the 2024 Warrants, the 2025 Warrants and the 2026 Warrants, for public resale.

The 2023 Convertible Notes, the 2024 Convertible Notes, the 2025 Convertible Notes, the 2026 Convertible notes and the 2023 Warrants, the 2024 Warrants, the 2025 Warrants and the 2026 Warrants, contain conversion limitations providing that a holder thereof may not convert or exercise such securities to the extent that, if after giving effect to such conversion or exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the "Maximum Percentage") of the outstanding shares of the Common Stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

On December 14, 2023, two notes totaling $225,000 ($200,000 and $25,000, respectively) which matured on December 31, 2023 were extended for an additional 3 months to March 30, 2024. In exchange for the extension, the Company issued the note holders additional warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share. On May 4, 2024, the maturity date of the $200,000 note was further extended to June 14, 2024, and the maturity date of the $25,000 note was further extended to June 30, 2024. In exchange for the maturity date extension, the Company issued to the note holders additional warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **8** | **CONVERTIBLE DEBT (continued)** |

---

***2023, 2024, 2025 and 2026 Convertible Notes (continued)***

On March 14, 2024, the Company extended the maturity date of 11 convertible notes maturing between February 13, 2024 and February 23, 2024 by an additional six months and as consideration for the extension, the note holders were issued additional warrants exercisable for 387,673 shares of Common Stock at an exercise price of $0.345 per share. The modification was assessed in terms of ASC 470 and determined to be a debt extinguishment, resulting in the warrant value of $66,047 being expensed as a loss on convertible debt.

On June 2, 2025, a 2024 convertible note holder converted principal of $2,138 and interest of $2,162, totaling $4,300 into 8,600,000 shares of common stock at a conversion price of $0.0005, realizing a loss on conversion of 54,180.

On September 30, 2025, a 2023 convertible note holder converted principal of $250,000 and interest of $40,500 into 14,525,000 shares of common stock at a conversion price of $0.02 per share, realizing a loss on conversion of $50,838.

On October 9, 2025, a 2023 convertible note holder converted principal of $315,000 and interest of $72,712 into 19,385,616 shares of common stock at a conversion price of $0.02 per share, realizing a loss on conversion of $191,918.

On October 6, 2025, a 2025 convertible note holder with an aggregate principal amount outstanding of $210,000 assigned his note to a third party. On October 15, 2025, the third party converted principal and interest outstanding of $85,000 into 17,000,000 shares of common stock at a conversion price of $0.005 per share, in addition, on December 22, 2025, the third party converted an additional $50,000 of principal and interest into 10,000,000 shares of common stock at a conversion price of $0.005 per share, realizing a total loss on conversion of $301,200.

On February 9, 2026, the third party converted an additional $62,000 of principal and interest into 13,000,000 shares of common stock at a conversion price of $0.005 per share, realizing a loss on conversion of $94,000.

The 2023 convertible notes have an aggregate outstanding balance of $1,792,558. 2023 Convertible Notes with an aggregate amount outstanding of $1,322,740 have matured, have not entered into forbearance agreements, and are technically in default, none of the 2023 Convertible Note investors have declared a default.

The 2024 Convertible Notes have an aggregate amount outstanding of $685,237. 2024 Convertible Notes with an aggregate amount outstanding of $343,238 have matured, have not entered into forbearance agreements and are technically in default. One noteholder with an aggregate amount outstanding of $19,951 declared a default, none of the other investors have declared a default, this investor has not demanded payment as yet.

The 2025 Convertible Notes have an aggregate amount outstanding of $830,144, net of unamortized debt discount of $109,288. 2025 Convertible Notes with an aggregate amount outstanding of $294,906 have matured, have not entered into forbearance agreements and are technically in default.

The 2026 Convertible Notes have an aggregate amount outstanding of $203,581, net of unamortized debt discount of $82,558.

---

| | |
|:---|:---|
| **9** | **DERIVATIVE LIABILITY** |

---

The convertible debt and warrants issued by the Company to Cavalry, Mercer, Quick Capital and certain of the 2025 Convertible Note holders, as described in Note 8 have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time and certain notes and warrants have fundamental transaction clauses which might result in cash settlement, due to these factors, all convertible debt and any warrants attached thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible debt using a Black-Scholes valuation model.

In addition, certain convertible notes and warrants have anti-dilution price protection which results in a reduction in the conversion price of the convertible note and in the case of certain warrants an increase in the amount of shares issuable upon a reduction in exercise price, a Triggering event. There were no triggering events during the quarter ended March 31, 2026.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **9** | **DERIVATIVE LIABILITY (continued)** |

---

The net mark-to-market movement of the derivative liability for the three months ended March 31, 2026 was a net mark-to-market credit of $1,018,083, determined by using a Black-Scholes valuation model.

The following assumptions were used in the Black-Scholes valuation model:

---

| | | |
|:---|:---|:---|
|  | **Three months <br> ended<br> March 31,<br> 2026** | **Year ended<br> December 31,<br> 2025** |
| Conversion price | $0.004739 to 0.01 | $0.0005 to 0.01 |
| Risk free interest rate | 3.70 to 3.72% | 3.54 to 4.44% |
| Expected life of derivative liability | 3 to 6 months | 3 to 29 months |
| Expected volatility of underlying stock | 186.99 to 189.60% | 189.8 to 443.26 |
| Expected dividend rate | 0% | 0% |

---

The movement in derivative liability is as follows:

---

| | | |
|:---|:---|:---|
|  | **Three months <br> ended<br> March 31,<br> 2026** | **Year ended<br> December 31,<br> 2025** |
| Opening balance | $1581520 | $1138204 |
| Derivative financial liability arising from convertible notes and warrants | - | 150000 |
| Derivative liability arising on anti-dilutive convertible notes and warrants | - | 13220310 |
| Fair value of derivative liability on cancelled warrants | - | (12794203) |
| Fair value adjustment to derivative liability | (1018083) | (132791) |
| Closing balance | $**563437** | $**1581520** |

---

---

| | |
|:---|:---|
| **10** | **STOCKHOLDERS' EQUITY** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Common Stock** 

On January 14, 2026, the Board of directors authorized the amendment to the articles of incorporation of the Company to increase the authorized shares of common stock from 1,500,000,000 to 5,000,000,000 shares of common stock. The amendment was registered on January 21, 2026.

The Company has total authorized Common Stock of 5,000,000,000 shares with a par value of $0.0001 each. The Company had 806,872,547 and 710,872,547 shares of Common Stock issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

On February 9, 2026, in terms of a conversion notice received from a convertible note holder, the Company issued 13,000,000 shares of common stock for the conversion of principal and interest of $62,000 of convertible debt at a conversion price of $0.005, per share, realizing a loss on conversion of $94,000.

On February 3, 2026, in terms of a board resolution the company issued 50,000,000 shares of common stock to its board of directors and CEO. See Restricted stock below.

On February 3, 2026, the Board approved the issuance of 30,000,000 shares of common stock to a consultant, at a fair market price of $0.0126 per share for a total consideration of $378,000.

On March 12, 2026, the Company entered into a management consulting agreement and granted 3,000,000 shares to the consultant at a fair market price of $0.007 per share, totaling $21,000.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **10** | **STOCKHOLDERS' EQUITY (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Restricted stock awards** 

On February 3, 2026, The Board of Directors authorized the issue of 50,000,000 shares of common stock, 10,000,000 to each of our two directors and 30,000,000 shares to Mr. Corbett, the Company CEO. The fair value of the shares on the date of grant was $0.0126 per share, totaling $630,000.

A summary of restricted stock activity during the period January 1, 2025 to March 31, 2026 is as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Total<br> restricted<br> shares** | **Weighted<br> average<br> fair market<br> value per<br> share** | **Total<br> unvested<br> restricted<br> shares** | **Weighted<br> average<br> fair market<br> value per<br> share** | **Total<br> vested<br> restricted<br> shares** | **Weighted<br> average<br> fair market<br> value per share** |
| **Outstanding January 1, 2025** | 783167 | $1.5000 |  | $- | 783167 | $1.50 |
| Granted and issued | 67500000 | 0.0037 |  | - | 67500000 | 0.0037 |
| Forfeited/Cancelled | - | - |  | - | - | - |
| Vested | - | - |  | - | - | - |
| **Outstanding December 31, 2025** | 68283167 | $0.0207 |  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | 68283167 | $0.0207 |
| Granted and issued | 50000000 | 0.0126 |  | - | 50000000 | 0.0126 |
| Forfeited/Cancelled | - | - |  | - | - | - |
| Vested | - | - |  | - | - | - |
| **Outstanding March 31, 2026** | 118283167 | $0.0173 |  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | 118283167 | $0.0173 |

---

The restricted stock granted, issued and exercisable at March 31, 2026 is as follows:

---

| | | |
|:---|:---|:---|
| | **Restricted Stock<br> Granted and Vested** | **Restricted Stock<br> Granted and Vested** |
|<br>**Grant date Price** | **Number Granted** | **Weighted Average<br> Fair Value per Share** |
| $0.0037 | 67500000 | 0.0037 |
| $0.0126 | 50000000 | 0.0126 |
| $1.4700 | 683167 | $1.4700 |
| $1.5000 | 33333 | 1.5000 |
| $1.6500 | 66667 | 1.6500 |
|  | 118283167 | $0.0173 |

---

The Company has recorded an expense and settled outstanding liabilities as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Grant date** | **Number of<br> shares<br> granted**  | **Vesting<br> terms** | **Grant<br> date<br> fair value** | **Expensed<br> during<br> the<br> period**  | **Liability<br> settled** |
| February 3, 2026 | 50000000 | Immediate | $630000 | $553000 | $77000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Preferred Stock** 

The Company has authorized 100,000,000 shares of preferred stock with a par value of $0.0001 authorized. No preferred stock was issued and outstanding as of March 31, 2026 and December 31, 2025.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **10** | **STOCKHOLDERS' EQUITY (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Warrants** 

Between March 16 and March 19, 2026, the Company entered into a Securities Purchase Agreement with three accredited investors. In terms of the Securities Purchase Agreement, the Company issued three-year warrants to purchase an aggregate of 1,250,000 shares of common stock at an exercise price of $0.02 per share and five-year warrants to purchase an aggregate of 16,000,000 shares of Common Stock at an exercise price of $0.01 per share. These warrants have price protection which reduces the exercise price of the warrant for any securities issued at a lower exercise or conversion price, subsequent to the issue date of the warrant as well as adjustments for stock splits, stock combinations, dilutive issuances and similar events). The Company is under no obligation to register the shares of Common Stock underlying the warrants for public resale.

The 2023, 2024, 2025 and 2026 Warrants contain exercise limitations providing that a holder thereof may not exercise the Warrants to the extent that, if after giving effect to such exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the "Maximum Percentage") of the outstanding shares of the Common Stock immediately after giving effect to such exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61<sup>st</sup> day after such notice.

The fair value of the warrants granted and issued, as described above, were determined by using a Black Scholes valuation model using the following assumptions:

---

| | | |
|:---|:---|:---|
|  | **Three months <br> ended<br> March 31,<br> 2026** | **Year ended<br> December 31,<br> 2025** |
| Exercise price | $0.01 to 0.02 | $0.0005 to 0.084 |
| Risk free interest rate | 3.79 to 3.80% | 3.77 to 4.46% |
| Expected life of derivative liability | 3 to 5 years | 1 to 5 years |
| Expected volatility of underlying stock | 197.25 to 211.22% | 183.1 to 352.45% |
| Expected dividend rate | 0% | 0% |

---

A summary of warrant activity during the period January 1, 2025 to March 31, 2026 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Shares<br> Underlying<br> Warrants** | **Exercise<br> price per<br> share** | **Weighted <br> average<br> exercise<br> price** |
| **Outstanding January 1, 2025** | 22011614 | $0.084 – 5.625 | $0.319900 |
| Granted | 55204761 | 0.005 to 0.084 | 0.00474 |
| Increase in warrants issued due to anti-dilution price protection | 2157367790 | 0.0005 | 0.00050 |
| Forfeited | (1853425066) | 0.0005 to $4.50 | 0.00149 |
| Exercised | (531165) | 0.0005 to 1.035 | 0.97430 |
| **Outstanding December 31, 2025** | 380627934 | $0.0005 – 5.625 | $0.01052 |
| Granted | 17250000 | 0.01 to 0.02 | 0.01072 |
| Forfeited | (552438) | 0.0005 to 5.625 | 2.22652 |
| Exercised | - | - | - |
| **Outstanding March 31, 2026** | 397325496 | $0.0005 – 1.5000 | $0.00745 |

---

The warrants outstanding and exercisable at March 31, 2026 are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Exercisable** | **Warrants Exercisable** | **Warrants Exercisable** |
|<br>**Exercise Price\*** | **Number<br> Outstanding** | **Weighted<br> Average<br> Remaining<br> Contractual<br> life in years** | **Weighted<br> Average<br> Exercise<br> Price** | **Number<br> Exercisable** | **Weighted<br> Average<br> Exercise Price** | **Weighted<br> Average<br> Remaining<br> Contractual<br> life in years** |
| $0.000500 | 370285776 | 3.01 |  | 370285776 |  | 3.01 |
| $0.010000 | 18550000 | 4.90 |  | 18550000 |  | 4.90 |
| $0.020000 | 1250000 | 2.97 |  | 1250000 |  | 2.97 |
| $0.345000 | 6939718 | 2.45 |  | 6939718 |  | 2.45 |
| $0.450000 | 266668 | 2.23 |  | 266668 |  | 2.23 |
| $1.500000 | 33334 | 2.37 |  | 33334 |  | 2.37 |
|  | 397325496 | 3.08 | $0.00745 | 397325496 | $0.00745 | 3.08 |

---

The warrants outstanding have an intrinsic value of $2,443,886 and $4,528,023 as of March 31, 2026 and December 31, 2025, respectively.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **10** | **STOCKHOLDERS' EQUITY (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **Stock options** 

On June 18, 2018, the Company established its 2018 Stock Incentive Plan (the "Plan"). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in June 2028.

The Plan is administered by the Board or a committee appointed by the Board, who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

The maximum number of securities available under the Plan is 26,667 shares of Common Stock. The maximum number of shares of Common Stock awarded to any individual during any fiscal year may not exceed 100,000 shares of Common Stock.

On October 22, 2021, the Company established its 2021 Stock Incentive Plan ("2021 Plan"). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants, advisors and service providers of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in August 2031.

The 2021 Plan is administered by the Board or a Compensation Committee appointed by the Board, who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

The maximum number of securities available under the 2021 Plan is 1,766,667 shares of Common Stock.

Under the 2021 Plan the Company may award the following: (i) non-qualified stock options; (ii)) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock unit; and (vi) other stock-based awards.

A summary of option activity during the period January 1, 2025 to March 31, 2026 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Shares<br> Underlying<br> options** | **Exercise<br> price per<br> share** | **Weighted<br> average<br> exercise<br> price** |
| **Outstanding January 1, 2025** | 1513335 | $1.20 to 12.00 | $4.47 |
| Granted | 600000 | 0.09 | 0.09 |
| Forfeited/Cancelled | (333334) | 4.50 | 4.50 |
| Exercised | - | - | - |
| **Outstanding December 31, 2025** | 1780001 | $0.09 to 12.00 | $2.989 |
| Granted | - | - | - |
| Forfeited/Cancelled | - | - | - |
| Exercised | - | - | - |
| **Outstanding March 31, 2026** | 1780001 | $0.09 to 12.00 | $2.989 |

---

The options outstanding and exercisable at March 31, 2026 are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Options Outstanding** | **Options Outstanding** | **Options Outstanding** | **Options Exercisable** | **Options Exercisable** | **Options Exercisable** |
|<br>**Exercise Price\*** | **Number<br> Outstanding** | **Weighted<br> Average<br> Remaining<br> Contractual<br> life in years** | **Weighted<br> Average<br> Exercise<br> Price** | **Number<br> Exercisable** | **Weighted<br> Average<br> Exercise<br> Price** | **Weighted<br> Average<br> Remaining<br> Contractual<br> life in years** |
| $0.09 | 600000 | 8.78 |  | 425000 |  | 8.78 |
| $1.20 | 13334 | 6.46 |  | 13334 |  | 6.46 |
| $4.50 | 1166667 | 5.77 |  | 1166667 |  | 5.77 |
|  | 1780001 | 6.79 | $2.989 | 1605001 | $3.305 | 6.79 |

---

The options outstanding have an intrinsic value of $0 as of March 31, 2026 and December 31, 2025.

The option expense was $1,371 and $17,815 for the three months ended March 31, 2026 and 2025, respectively.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **11** | **LOSS ON SETTLEMENT AND REPRICING OF CONVERTIBLE NOTES** |

---

The loss on settlement and repricing of convertible notes consists of the following:

---

| | | |
|:---|:---|:---|
|  | **Three months ended <br> March 31,** | **Three months ended <br> March 31,** |
|  | **2026** | **2025** |
| Penalty on convertible debt | - | (39229) |
| Loss on conversion of convertible debt | (94000) | (106504) |
| Loss on repriced convertible debt | - | (2341480) |
| Loss on debt extinguishment | (44008) | - |
|  | $**(138008)** | $**(2487213)** |

---

***Penalty on convertible debt***

Between January 7, 2025 and March 28, 2025, $39,229 of additional conversion penalties on convertible debt conversions were charged to the Company.

***Loss on conversion of convertible debt***

Between January 7, 2025 and March 28, 2025, in terms of conversion notices received from 5 convertible note holders, the Company issued 54,807,989 shares of common stock for the conversion of $230,798 of convertible debt at a weighted average conversion price of $0.004211 (conversion prices ranging from $0.0325 to $0.001105), realizing an aggregate loss on conversion of $106,504.

On February 9, 2026, in terms of conversion notices received from a convertible note holder, the Company issued 13,000,000 shares of common stock for the conversion of $62,000, plus fees of $3,000 at a conversion price of $0.005 per share, realizing a loss on conversion of $94,000.

***Loss on repriced convertible debt***

 ****

In the prior year, as a result of the conversion of the convertible debt, in 2025, referred to in the paragraph above, all other outstanding convertible debt of the Company that contain price-based anti-dilution protection had the conversion prices of such notes adjusted to $0.001105 per share (the "Triggering Event").

In the prior year, the value of the derivative liability related to the anti-dilution price protected convertible debt was evaluated immediately prior to the Triggering Event and immediately after the Triggering Event, resulting in an additional derivative liability and loss on convertible debt of $2,341,480.

***Loss on debt extinguishment***

 ****

Between February 27, 2026 and March 4, 2026, the Company and certain convertible note holders entered into forbearance agreements, extending the maturity date of the convertible debt to December 31, 2026 in exchange for a reduction in the conversion price of the convertible debt to between $0.02 and $0.04 per share. This was evaluated in terms of ASC 470, debt modifications and extinguishments, and determined to be a debt extinguishment. The loss realized on the convertible debt repricing was an aggregate of $44,008.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **12** | **NET LOSS PER SHARE** |

---

Basic loss per share is based on the weighted-average number of Common Stock outstanding during each period. Diluted loss per share is based on basic shares as determined above plus Common Stock equivalents. The computation of diluted net loss per share does not assume the issuance of Common Stock that have an anti-dilutive effect on net loss per share. For the three months ended March 31, 2026 and 2025 all warrants options and convertible debt securities were excluded from the computation of diluted net loss per share.

Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive for the three months ended March 31, 2026 and 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **Three months ended<br> March 31,** | **Three months ended<br> March 31,** |
|  | **2026**<br>**(Shares)** | **2025**<br>**(Shares)** |
| Convertible debt | 669844166 | 1978891288 |
| Stock options | 1780001 | 2113335 |
| Warrants to purchase shares of Common Stock | 397325496 | 993777942 |
|  | 1068949663 | 2974782565 |

---

---

| | |
|:---|:---|
| **13** | **RELATED PARTY TRANSACTIONS** |

---

The following transactions were entered into with related parties:

**William Corbett**

The option expense for options still vesting for Mr. Corbett was $1,371 and $17,815 for the three months ended March 31, 2026 and 2025, respectively.

On February 3, 2026, the board of directors granted Mr. Corbett 30,000,000 shares of common stock with a fair market value of $0.0126 per share, totaling $378,000.

As of March 31, 2026 and December 31, 2025, the company owed Mr. Corbett $0 and $7,832, respectively. Mr. Corbett paid certain operating expenses on behalf of the Company.

**Madisson Butler**

On February 3, 2026, the board of directors granted Ms. Butler 10,000,000 shares of common stock as directors fees with a fair market value of $0.0126 per share, totaling $126,000.

**David Rios**

On February 3, 2026, the board of directors granted Mr. Rios 10,000,000 shares of common stock as directors fees with a fair market value of $0.0126 per share, totaling $126,000.

---

| | |
|:---|:---|
| **14** | **COMMITMENTS AND CONTINGENCIES** |

---

The Company has notes payable and convertible debt, disclosed under Notes 7 and 8 above, of which $355,038 and $1,960,883, respectively, have already matured, have not entered into forbearance agreements and are technically in default. Should the convertible debt not be converted to Common Stock prior to their maturity dates, the Company may need to repay the principal and interest outstanding on this convertible debt.

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **15** | **SUBSEQUENT EVENTS** |

---

**Employment Agreement entered into by joint venture partner**

On April 14, the Company issued 10,000,000 shares of common stock to an individual, in terms of a March 20, 2026 employment agreement entered into by Brant Point Solutions, the company's Jetties joint venture partner, for the position of Vice President of payments. In terms of the employment agreement, the Company issued 10,000,000 shares of common stock to the individual and is committed to issue an additional 10,000,000 shares of common stock and 5,000,000 shares of common stock on March 30, 2027 and March 30, 2029, respectively, provided the individual remains employed by the Company.

**Conversion of convertible debt**

On April 20, 2026, in terms of a conversion notice received from a convertible note holder, the Company issued 1,491,353 shares of common stock for the conversion of principal and interest of $29,827 of convertible debt at a conversion price of $0.02 per share, realizing a gain on conversion of $22,370.

On April 29, 2026, in terms of a conversion notice received from a convertible note holder, the Company issued 7,818,000 shares of common stock for the conversion of principal and interest of $36,090 of convertible debt, plus a fee of $3,000 at a conversion price of $0.005 per share, realizing a loss on conversion of $2,818.

**Settlement of legal liability**

In terms of the settlement agreement entered into with Voloshin, et al on March 4, 2025, the Company issued an aggregate of 27,180,823 shares of common stock on April 6, 2026 to settle the outstanding liability of $543,616, including a liquidated damages penalty of $100,000 for not adhering to the original settlement terms, thereby extinguishing the legal settlement liability. The company realized a net gain on settlement of the legal liability of $247,915, including the liquidated damages penalty.

**Amendment to convertible debt agreements**

Between April 29, 2026 and May 7, 2026, the Company received agreements signed by investors authorizing the forbearance of convertible debt until December 31, 2026 with a principal amount outstanding of $570,000. In exchange for the forbearance, the conversion price was reduced to $0,04 per share.

**License Agreement with Fintechnology Asia Pacific Lanka**

Effective April 27, 2026, the Company entered into a joint venture operating agreement with FINAP Worldwide Co. W.L.L ("FINAP"), to form a joint venture company, Finap USA, LLC ("Finap USA"), owned 50% by the Company and 50% by FINAP, the sole purpose of which is to hold the Intellectual; Property License Agreement, between the licensors, Fintechnology Asia Pacific Lanka, Ltd ("FAPL") and Cixor (Private) limited ("Cixor"), both of which are wholly owned subsidiaries of FINAP.

FAPL is the owner of certain financial technology platforms, software systems, and associated intellectual property and Cixor is the owner of certain payment technology platforms, software systems and associated intellectual property. FAPL and Cixor have agreed to license their technology platforms and payment technology platforms to Finap USA, on an exclusive, perpetual basis for the United States of America, including all fifty states, the District of Columbia, and all US territories and possessions; and Canada and Mexico.

The licensed products include the following:

---

| | |
|:---|:---|
| **ECORU (FAPL)** | **Core Banking platform**<br> Enterprise-grade core banking system providing multi-entity, multi-currency general ledger, loan management, regulatory reporting, and full API connectivity. Serves as the institutional ledger backbone for financial service providers. |
| **OCEANUS (FAPL)** | **Neo-Banking Platform**<br> Next-generation digital banking platform providing mobile wallet, digital account opening and management, bank-to-bank transfers, merchant ecosystem connectivity, and open banking API layer. Deployed across 10+ international markets. |
| **MULA (FAPL)** | **Field Agent Application**<br> Mobile field agent banking application enabling on-ground agent onboarding, KYC verification, compliance workflows, and customer management. Applicable to multi-location operator environments. |

---

**INNOVATIVE PAYMENT SOLUTIONS, INC.**

**Notes to the Unaudited Condensed Financial Statements**

---

| | |
|:---|:---|
| **15** | **SUBSEQUENT EVENTS (continued)** |

---

**License Agreement with Fintechnology Asia Pacific Lanka (continued)**

---

| | |
|:---|:---|
| **iPayLater (FAPL)** | **Buy Now Pay Later**<br> Closed-loop consumer and B2B Buy Now Pay Later platform. Enables customers to split purchases installments within the operator ecosystem using in-ecosystem spending behavior. B2B functionality enables operators to finance inventory and operational expenses in installments. |
| **CLORI (FAPL)** | **Asset Finance Platform**<br> Asset finance and leasing management platform providing end-to-end lifecycle management of asset-backed financing, including origination, drawdown, repayment scheduling, and regulatory reporting. |

---

---

| | |
|:---|:---|
| **CIXOR PAYDAY (Cixor)** | **Earned Wage Access**<br> Patent-pending WageTech platform, providing dual-sided earned wage access. Employer-integrated payroll system allows employees to view accrued wages in real time and withdraw a portion before scheduled payday via the CIXOR PayDay mobile application. Employer rollover options of 7, 14, and 21 days supported. |
| **Cixor CashDay (Cixor)** | **Merchant Liquidity / Invoice Finance** <br> Invoice-linked business liquidity platform providing real-time working capital advances against confirmed receivables within the closed-loop ecosystem. No external credit bureau dependency. Repayment automated from incoming settlements. Solves acute cash flow gaps for compliance-intensive operators. |
| **CIXOR PayNow (Cixor)** | **Closed Loop Payments**<br> Closed-loop payment platform and RFID-enabled payment card (formerly known as CIXOR PayCard) operating entirely within the FINAP Inc USA ecosystem without dependence on open card network scheme providers. Eliminates scheme provider fee barriers (typically 3–5% for compliance-intensive operators). Zero chargeback exposure. Enables wage disbursement to employees (linked to CIXOR PayDay) and consumer payment at merchant locations. Supports both mobile and physical card-based transactions. |

---

Finap USA will pay a one-time license fee of $600,000 for the licenses granted to it, to be paid by applying 10% of gross monthly revenue to the fee after all operational costs of Finap USA have been met, before making any distributions to the members.

The Company will manage the Finap USA joint venture and will be responsible for marketing, sales and distribution of the technology platforms.

The Company was obligated to issue 100,000,000 common shares to FINAP in terms of the operating agreement. These shares were issued on April 30, 2026.

**Convertible debt funding**

On May 7, 2026, the Company entered into Securities Purchase Agreements with an accredited investor to purchase a convertible note for gross proceeds of $50,000, bearing interest at 8% per annum and maturing on May 7, 2027. The note is convertible into shares of common stock at an exercise price of $0.01 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The Company also issued a five-year warrant to purchase an aggregate of 5,000,000 shares of common stock at exercise price of $0.01 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), associated with the Convertible Note. The warrant has price protection which reduces the exercise price of the warrant for any subsequent stock issuances lower than the current exercise price.

Other than disclosed above, the Company has evaluated subsequent events through the date of the financial statements were available to be issued and has concluded that no such events or transactions took place that would require disclosure herein.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

 

*All references to "we," "us," "our" and the "Company" refer to Innovative Payment Solutions, Inc., a Delaware corporation unless the context requires otherwise.*

 

**Overview**

We are a fintech provider of digital payment solutions presently focused on credit card processing services for undeveloped and underserved markets. We have in the past (under the name IPSIPay) and may in the future develop and operate "e-wallets" that enable consumers to deposit cash, convert it into a digital form and remit funds quickly and securely.

**Known Trends, Demands, Commitments, Events or Uncertainties Impacting Our Business**

***Development of Jetties Partners, LLC (d/b/a IPSIPAY)("IPSIPAY")***

 **

On October 29, 2025, we formed a limited liability corporation, Jetties Partners, LLC ("Jetties"), d/b/a IPSIPAY. The Company was formed to develop, market, distribute and operate a merchant processing payment solution, with an initial focus on the gaming industry. The Company consists of two 50% partners, the Company and Brant Point Solutions, LLC ("BP"). The Company issued 200,000,000 shares for its 50% interest in the joint venture, while BP will provide access to and full utilization of technology that may be owned, licensed or controlled by BP, including but not limited to all agreements between BP and United Payment Systems LLC, as well as its presence in the gaming markets.

***Inflation***

Macro-economic conditions could affect consumer spending adversely and consequently our future operations when we fully launch our e-wallet products commercially. The recent war in Iran and uncertainty and volatility in energy markets may have a ripple effect on 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.

 ****

***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.

***Dilution Risk***

 ****

Our shareholders face significant dilution risk due to the fixed price convertible debt and variable price convertible debt totaling $5,734,682, net of debt discount of $191,847 and convertible debt due to a related party of $258,253, as of March 31, 2026.

As of March 31, 2026, we calculated that the potential dilutive impact of conversion of the convertible notes is a total of 669,844,166 shares of common stock. However, a forbearance agreement with certain significant convertible note holders expired on May 1, 2026, resulting in a fixed conversion price reverting to $0.0005 per share which will increase the potential number of dilutive shares by 3,776,481,230.

The dilutive risk will also be effected by any increases or decreases of our stock price due to the variable nature of the conversion price of certain notes with a total outstanding balance of $2,418,961 as of March 31, 2026. Any decreases in stock price below $0.01 per share increases the dilutive potential of these convertible notes, which have a maximum conversion price of $0.01 per share.

**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. The conversion feature of these convertible notes and warrants are recorded as derivative liabilities which are valued at each reporting date.

The derivative liability is valued using the following inputs:

● Conversion prices;

● Current market prices of our equity

● Risk free interest rates;

● Expected remaining life of the derivative liability;

● Expected volatility of the underlying stock; and expected dividend rates

Any change in the above factors such as a change in risk free interest rates, a significant increase or decrease in our current stock prices and a change in the volatility of our Common Stock may result in a significant increase or decrease in the derivative liability.

**Results of Operations**

**Results of Operations for the Three Months Ended March 31, 2026 and 2025**

 ****

***Net revenue***

We had no revenues for the three months ended March 31, 2026 and 2025. We pivoted to focus our attention on the Jetties IPSIPay joint venture and potential payment processing opportunities to generate revenues, however there can be no guarantees that we will be successful in our endeavors.

 ****

The Company will, through its joint venture operations, earn a commission percentage of the gross amount of transactions processed through the payment processing platforms its owns or licenses from third parties. The income will be disclosed as equity investment income earned from our joint ventures and will be net of operating expenses incurred in those joint ventures. We expect that the joint venture operations will distribute the excess cash flow to the joint venture parties on a regular basis.

 ****

***Cost of goods sold***

We had no cost of goods sold for the three months ended March 31, 2026 and 2025.

***General and administrative expenses***

General and administrative expenses were $1,144,963 and $254,308 for the three months ended March 31, 2026 and 2025, respectively, an increase of $890,655 or 350.2%. The increase is primarily due to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Salaries and wages were $350,912 and $111,548 for the three months ended March 31, 2026 and 2025, respectively, an increase of $239,364 or 214.6%. The increase is primarily due the issue of restricted stock to our CEO valued at $378,000, offset by a credit to payroll taxes and accrued payroll of $97,444, accrued in previous periods and no longer payable, a reduction in stock based compensation of $16,444, primarily due to the immediate vesting of a portion of options granted in the prior year, and a reduction in payroll expenses of $31,500 due to the to the resignation of our CFO and administrative personnel in the prior year.

(ii) Consulting fees were $416,343 and $17,000 for the three months ended March 31, 2026 and 2025, respectively, an increase of $399,343 or 2,349.1%. The increase is primarily due to a stock award to a consultant, valued at $378,000, and a further increase in administrative consulting expenses of $21,343.

(iii) Directors fee were $184,000 and $9,000 for the three months ended March 31, 2026 and 2025, respectively, an increase of $175,000 or 1,944.4%. The increase is due to an additional accrual for legal fees as restricted stock was awarded to our directors valued at $252,000 which was offset against our existing directors fee accrual of $77,000 and the additional $175,000 accrual.

(iv) Legal fees were $91,000 and $3,805 for the three months ended March 31, 2026 and 2025, respectively, an increase of $87,195 or 2,291.6%. The increase is primarily due to arbitration expenses and legal fees for the settlement of the unfair dismissal matters which were claimed in prior years by several individuals.

(v) Audit fees were $70,000 and $95,500 for the three months ended March 31, 2026 and 2025, a decrease of $25,500 or 26.7%, primarily due to the timing of invoices received from our auditors.

(vi) The balance of the general and administrative expenses was $32,708 and $17,455 for the three months ended March 31, 2026 and 2025, respectively, an increase of $15,253 or 87.4%. The increase is made up of several individually insignificant items.

***Depreciation and amortization***

Depreciation was $330 and $543 for the three months ended March 31, 2026 and 2025. Depreciation is on small office related equipment.

***Loss on settlement and repricing of convertible debt***

Loss on settlement and repricing of convertible debt was $138,008 and $2,487,213 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $2,349,205 or 94.5%. The decrease is primarily due to the prior year loss of $2,341,480 realized on an anti-dilution adjustment to the conversion feature of certain convertible debt; (ii) a prior year penalty on conversion of 39,229 of convertible debt which is in default; and (iii) a decrease in loss of $12,504 realized on conversion of certain convertible debt at prices lower than market prices; and (iv) a debt extinguishment charge of $44,008 during the current year, due to forbearance agreements entered into with certain convertible noteholders to modify the conversion price of convertible notes in exchange for an extension of the maturity date to December 31, 2026.

***Fair value on price protected warrants***

Fair value on price protected warrants was $0 and $1,618,545 for the three months ended March 31, 2026 and 2025, respectively. During the prior year, 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 $0.001105. This resulted in a Black -Scholes derived valuation difference related to those certain warrants.

***Interest expense, net***

Interest expense was $226,110 and $212,743 for the three months ended March 31, 2026 and 2025, respectively, an increase of $13,367 or 6.3%. The increase is primarily related to additional convertible notes issued during the current year, offset by convertible notes converted into equity in the prior year.

***Interest income***

 ****

Interest income was $0 and $12,607 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $12,607 or 100.0%. The interest income in the prior year relates to funds advanced to Business Warrior prior to the cessation of our merger plans with them.

***Amortization of debt discount***

Amortization of debt discount was $94,130 and $118,056 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $23,926 or 20.3%. The decrease is primarily due to convertible note funding significantly lower than the prior year.

***Derivative liability movements***

Derivative liability movements were $1,018,083 and $928,979 for the three months ended March 31, 2026 and 2025, respectively, a net movement of $89,104 or 9.6%. The derivative liability arose primarily due to the revaluation of certain repriced conversion features on convertible debt and the subsequent mark-to-market of these derivatives due to a declining stock price and the expiration of certain warrants subject to derivative liability.

***Net loss***

Net loss was $585,458 and $3,749,821 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $3,164,363 or 84.4%. The decrease is primarily due to the decrease in the Loss on settlement and repricing of convertible debt, and the decrease in the fair value adjustment on price protected warrants, offset by the increase in general and administrative expenses, as discussed in detail above.

***Deemed dividend***

 ****

Deemed dividend was $0 and $350,364 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $350,364 or 100.0%. the deemed dividend in the prior year related to a full rachet anti-dilution adjustment to certain fixed exercise price warrants issued to a convertible note holder during the prior year. The deemed dividend was recorded as a component of additional paid in capital.

***Net loss attributable to common stockholders***

Net loss attributable to common stockholders was $585,458 and $4,100,185 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $3,514,727 or 85.7%. The decrease is primarily due to the decrease in net loss and the decrease in deemed dividend as discussed in detail above.

**Liquidity and Capital Resources**

To date, our primary sources of cash have been funds raised primarily from the sale of our debt and equity securities.

We have an accumulated deficit of $69.6 million at March 31, 2026 and incurred negative cash flow from operations of $0.3 million for the three months ended March 31, 2026. Our primary focus is on our Jetties IPSIPay joint venture to develop and market real-time payment platform initially focused on the fast-growing online gaming and entertainment sectors. To date, this joint venture has not generated revenue, but we believe much of the background work necessary to commence revenue generating operations from payment processing has been completed, we are also actively seeking alternative payment processing opportunities. No assurances can be given, however, that such revenue generation will commence or be meaningful to us.

At March 31, 2026, we had cash of $11,602 and working capital deficit of $10.9 million, including a derivative liability of $0.5 million. After eliminating the derivative liability our working capital deficit is $10.4 million.

We used cash of $0.3 million and $0.2 million in operations for the three months ended March 31, 2026 and 2025, respectively. We maintain minimal expenditure while we actively seek other revenue generating opportunities

We generated cash of $0.3 million from convertible debt during the current year. In the prior year we generated $0.2 million of convertible debt.

At March 31, 2026, we had outstanding convertible debt, including interest thereon of $5.7 million, net of unamortized debt discount of $0.2 million and outstanding notes payable, including interest thereon of $2.1 million. The notes contain certain covenants, such as restrictions on: (i) distributions on capital stock, (ii) stock repurchases, and (iii) sales and the transfer of assets. The notes bear interest at a rates ranging from 8% to 18% per annum. and are convertible into our common stock at conversion prices ranging from fixed conversion prices of $0.005 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), to variable conversion prices of 90% of the two lowest volume weighted average prices over a 20-trading day period. Should the investors choose not to convert these convertible notes, we may need to repay these notes together with interest thereon which will impact on our liquidity.

Given our losses and negative cash flows, we will be required to raise significant additional funds by issuing equity or equity-linked securities to progress our existing business model. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and require significant debt service payments, which diverts resources from other activities. Moreover, there is a risk that financing may be unavailable to support our operations on favorable terms, or at all.

There is also a significant risk that none of our plans to raise financing will be implemented in a manner necessary to sustain us for an extended period of time. If adequate funds are not available to us when needed, we may be required to continue with reduced or discontinued operations or to obtain funds through arrangements that may require us to relinquish rights to technologies or potential markets, any of which could have a material adverse effect on our Company. In addition, our inability to secure additional funding when needed could cause our business to fail or become bankrupt or force us to wind down or discontinue operations, accordingly, there is substantial doubt relating to our ability to continue as a going concern.

We do not have any off-balance sheet financing arrangements as of the date of this Report.

**Capital Expenditures**

Our capital expenditure is dependent on our cash resources, currently we are not forecasting any capital expenditure for the 2026 fiscal year.

**Item 3. Quantitative and Qualitative Disclosures About Market Risks**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

**Item 4. Controls and Procedures**

(a) Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, our management carried out an evaluation, with the participation of our Chief Executive Officer ("CEO") who also fulfils the role of our President and Chief Financial Officer ("CFO"), of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based upon that evaluation, our CEO concluded that our disclosure controls and procedures as of March 31, 2026 are not effective due to a lack of written policies and procedures to address all material transactions and developments impacting our financial statements.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our fiscal quarter ended March 31, 2026.

 

Our management is committed to improving our controls and procedures by, among other matters, continuing to consider and adopt appropriate policies and procedures to address all material transactions and developments impacting our financial statements. However, our management does not expect that our disclosure controls and procedures and our internal control processes, even if improved, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that the breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

**Part II. Other Information**

**Item 1. Legal Proceedings.**

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Below is a description of outstanding pending litigation matters. As also noted previously, litigation is subject to inherent uncertainties and an adverse result in the below described or other matters may arise from time to time that may harm our business. Other than as set forth below, we are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows.

*Voloshin, et al., v. Innovative Payment Solutions, Inc., et al.*

On March 4, 2025, the Company and Mr. Corbett, entered into a settlement agreement with Naum Voloshin, Andrey Novikov, Frank Perez, Yulia Rey and Alexander Voloshin (the "Plaintiff Group"), whereby the Company agreed to pay $500,000 in settlement and full and final resolution of all claims and causes of action that the Plaintiff Group, or any member thereof, holds or has asserted (or could have asserted) against the Company and Mr. Corbett.

Within 5 days of March 4, 2025, the Company agreed to pay $100,000 (the "First Payment") and within 60 days the Company agreed to pay a further $100,000 including interest thereon at 10% per annum from March 5, 2025, and within 240 days, a final payment of $300,000, including interest thereon at 10% per annum from March 5, 2025. The initial payment of $100,000 was made on March 24, 2025. The Company had not made any further payments in terms of the settlement agreement.

Any breach of the terms of the settlement agreement will result in a payment to the Plaintiffs of liquidated damages of $25,000 for each event of default.

On April 6, 2026, the Company issued an aggregate of 27,180,823 shares of common stock to settle the outstanding liability of $543,616, including interest and a liquidated damages penalty of $100,000 for not adhering to the original settlement terms, thereby extinguishing the legal settlement liability. The company realized a net gain on settlement of $247,915, including the liquidated damages penalty.

*Minkovich v. Corbett, et al.*

 

On May 26, 2022, Mr. Jan Minkovich ("Minkovich") filed a lawsuit in California Superior Court in Los Angeles County (Minkovich v. Corbett, et al., CASE NO. 22CHCV00377) against the Company and its Chairman and Chief Executive Officer William Corbett. The complaint asserts six causes of action for: (i) breach of contract; (ii) nonpayment of wages; (iii) waiting time penalties; (iv) failure to indemnify for alleged employee business expenses; (v) violation of Section 17200 of the California Business and Professional Code; and (vi) wrongful termination of employment in violation of public policy. Minkovich seeks $570,000 in damages, penalties, and attorneys' fees plus shares equal to five percent (5%) ownership of our company.

Mr. Minkovich bases his claim in part on the unilateral expectation that he receive 2.7 million shares of the company. Assuming he is owed any shares, a claim which we dispute, after the reverse 30-1 split he would receive only 90,000 shares.

Through prior counsel, the Company and Mr. Corbett filed a motion to compel arbitration. The motion was denied on October 4, 2022. Again, through prior counsel, the Company and Mr. Corbett then appealed that decision to the California Court of Appeal. As a result of the appeal, the court case was stayed until the appeal was decided. As a result of the stay, the demurrer (the equivalent of a motion to dismiss) filed through prior counsel was not decided.

On February 27, 2024, the California Court of Appeal, Second District, reversed the Superior Court's decision denying our motion to compel arbitration. The Court of Appeal remanded the case to the Superior Court with directions to issue a new order compelling to arbitration the parties' dispute regarding the enforceability of the arbitration clause. As the prevailing parties, the Company and Mr. Corbett were awarded costs on appeal. This firm timely filed the cost bill on appeal, which value is less than $2,000.

The plaintiff then initiated arbitration before the American Arbitration Association ("AAA") based on the appellate ruling (AAA case number Case 01-24-0005-5191). Management vigorously defended the claims, and intends to continue to do so. After a lull in activity during which the Arbitrator weighed several issues, the new date for commencement of arbitration was set: May 26-29, 2026.

Discovery re-opened. The parties remain engaged in informal efforts to resolve the matter but to date have been unable to agree on a resolution. Recent changes in California law may impact the Court's previous decision that sent this case to arbitration in February 2024.

Mr. Minkovich's attorney, Paul Cullen, took leave the entire month of March 2026 for surgery. This informal "stay," while a legitimate exercise, seriously impeded our preparation for the arbitration set at the end of May.

**Item 1A. Risk Factors.**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

**Unregistered Sales of Equity Securities**

On February 9, 2026, in terms of conversion notices received from a convertible note holder, the Company issued 13,000,000 shares of common stock for the conversion of $62,000 of convertible debt plus fees of $3,000 at a conversion price of $0.005 realizing a loss on conversion of $94,000.

Between February 27, 2026 and March 19, 2026, the Company entered into Securities Purchase Agreement pursuant to which the Company issued 6 convertible promissory notes and warrants to certain noteholders to 6 accredited investors for total gross proceeds of $285,000. The notes are unsecured, mature 12 months from issuance date and bear interest at a rate of 8% per annum based on a 360-day trading-year, and are convertible into shares of common stock of the Company at a conversion prices ranging from $0.01 to $0.02 per share (as adjusted for stock splits, stock combinations, and similar events). The Notes may be prepaid at any time without penalty. The Note contains customary events of default. The Company is under no obligation to register the shares of Common Stock underlying the Notes for public resale. In terms of the Securities Purchase Agreement, the Company issued one three-year warrant and two five-year warrants to purchase an aggregate of 17,250,000 shares of Common Stock at exercise prices ranging from $0.01 to $0.02 per share (as adjusted for stock splits, stock combinations, and similar events). The warrants have price protection which allows for the exercise price to decrease for any issuances below the exercise price. The Company is under no obligation to register the shares of Common Stock underlying the Note or the Warrant, for public resale.

On October 1, 2025, the Company entered into a securities purchase agreement pursuant to which the Company issued a convertible promissory note for $50,000 and a five year warrant exercisable for 2,500,000 shares of common stock at an exercise price of $0.04 per share. The note is unsecured and matures on September 30, 2026, bearing interest at 8% per annum based on a 360 day trading-year, and are convertible into shares of common stock of the Company at a conversion price of $0.01 (as adjusted for stock splits, stock combinations, and similar events), unless there is an event of default, as defined in the agreement, whereby the conversion price will be 75% of the lowest volume weighted average prices for the 30 days prior to conversion. The Notes may be prepaid at any time without penalty. The Note contains customary events of default. The Company is under no obligation to register the shares of Common Stock underlying the Notes for public resale. The warrants are price protected and any subsequent equity transaction at a lower exercise price will reduce the exercise price of the warrant, to that lower price.

On October 3, 2025, the Company entered into a convertible promissory note agreement for $25,000. The note is unsecured and matures on October 3, 2026, bearing interest at 8% per annum based on a 360-day trading-year, and are convertible into shares of common stock of the Company at a conversion price of $0.01 (as adjusted for stock splits, stock combinations, and similar events). The Note contains customary events of default. The Company is under no obligation to register the shares of Common Stock underlying the Notes for public resale.

**Use of Proceeds from Public Offering of Common Stock**

Not applicable.

**Item 3. Defaults upon Senior Securities.**

Certain of the convertible debt and notes payable of the Company are technically in default, although no default has been declared, except for one investor with a balance due of $19,951. Where the notes in default provide for default penalties or interest, these have been accrued.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

None.

**Item 6. Exhibits**

---

| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Description** |
| 3.1 | [Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-192877) filed with the Securities and Exchange Commission on December 16, 2013)](http://www.sec.gov/Archives/edgar/data/1591913/000116552713001052/ex3-1.txt) |
| 3.2 | [Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2021)](http://www.sec.gov/Archives/edgar/data/1591913/000121390021024871/ea140451ex3-1_innovative.htm) |
| 3.3 | [Certificate of Amendment to Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 2, 2016)](http://www.sec.gov/Archives/edgar/data/1591913/000161577416005742/s103389_ex3-1.htm) |
| 3.4 | [Certificate of Amendment to Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2018)](http://www.sec.gov/Archives/edgar/data/1591913/000161577418001633/s109256_ex3-1.htm) |
| 3.5 | [Certificate of Amendment to the Articles of Incorporation of the Company (Name Change) (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 4, 2019)](http://www.sec.gov/Archives/edgar/data/1591913/000121390019021864/f8k110119ex3-1_innovative.htm) |
| 3.6 | [Certificate of Correction to the Certificate of Amendment to the Articles of Incorporation of the Company, dated August 24, 2023, to effect a 1-for-30 reverse stock split (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 30, 2023)](http://www.sec.gov/Archives/edgar/data/1591913/000121390023072170/ea184327ex3-1_innovative.htm) |
| 31.1\* | [Certification of William Corbett, Chief Executive Officer, President and Chief Financial Officer, pursuant to Rule 13a-14(a) or Rule15d-14(a)](ea029028401ex31-1.htm) |
| 32.1\* | [Certification of William Corbett, Chief Executive Officer, President and Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002](ea029028401ex32-1.htm) |
| 101.INS | Inline XBRL Instance Document.\* |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document.\* |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.\* |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.\* |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.\* |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.\* |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).\* |

---

\* Filed herewith

**SIGNATURES**

Pursuant to the requirements of the Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **INNOVATIVE PAYMENT SOLUTIONS, INC.** | **INNOVATIVE PAYMENT SOLUTIONS, INC.** |
| Date: May 15, 2026 | By: | */s/ William Corbett* |
|  |  | William Corbett |
|  |  | Principal Officer, Chief Executive Officer,<br> President & Chief Financial Officer |
|  |  | (Principal Executive Officer, Principal<br> Financial and Accounting Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION PURSUANT TO RULE 13a-14 OR RULE**

**15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, William Corbett, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
have reviewed this Quarterly Report on Form 10-Q of Innovative Payment Solutions, Inc.:

&nbsp;&nbsp;&nbsp;&nbsp;2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. I
am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and.

&nbsp;&nbsp;&nbsp;&nbsp;5. I
have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.

---

| | |
|:---|:---|
| Date: May 15, 2026 | /s/ William Corbett |
|  | William Corbett |
|  | Chief Executive Officer, President and<br> Chief Financial Officer |
|  | (Principal Executive Officer and<br> Principal Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Innovative Payment Solutions, Inc. (the "Registrant") on Form 10-Q for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William Corbett, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section. 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) To
my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Registrant.

---

| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | /s/ *William Corbett* |
|  |  | William Corbett |
|  |  | Chief Executive Officer, President and<br> Chief Financial Officer |
|  |  | (Principal Executive Officer and<br> Principal Accounting Officer) |

---