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 ~~September~~March 3031, ~~2024~~ 2025

☐ 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 incorporation or organization)		(I.R.S. Employer Identification No.)

56B 5^th Avenue, Lot 1 #AT, Carmel By The Sea, CA		93921
(Address of Principal Executive Office)		(Zip Code)

(866) 477-4729

(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	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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 ~~November~~May 1214, ~~2024~~2025, there were 18 173,~~731~~227,~~446~~577 shares of the Company’s Common Stock issued and outstanding.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Form 10-Q

For the Quarter Ended March ~~September 30~~31, ~~2024~~2025

Index

		~~Page No.~~	Page No.
Cautionary Note Regarding Forward-Looking Statements		ii	ii
Part I. Financial Information		1	1
Item 1.	~~Financial Statements (Unaudited)~~	1Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	1
		Condensed Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	1
	Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2024 and 2023 (Unaudited)	2
		Condensed Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023 (Unaudited)	3
		Condensed Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (Unaudited)	5
		Condensed Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited)	4
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	6
		Notes to the Condensed Financial Statements (Unaudited)	5
Item 2.	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	35Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	~~Quantitative and Qualitative Disclosures About Market Risk~~	42Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	~~Controls and Procedures~~	42Controls and Procedures	36
Part II. Other Information		43	37
Item 1.	~~Legal Proceedings~~	43Legal Proceedings	37
Item 1A.	~~Risk Factors~~	44Risk Factors	39
Item 2.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	45Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	~~Defaults Upon Senior Securities~~	45Defaults Upon Senior Securities	39
Item 4.	~~Mine Safety Disclosures~~	45Mine Safety Disclosures	39
Item 5.	~~Other Information~~	45Other Information	39
Item 6.	~~Exhibits~~	46Exhibits	40
Signatures		47	41

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, ~~2023~~2024 (the “~~2023~~2024 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 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 IPSIPay Express joint venture or other digital payment solutions we may seek to develop or commercialize in the future;

●

acceptance by the marketplace of our products and services, notably IPSIPay Express;

● our proposed merger with Business Warrior Corporation;

●

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 such as IPSIPay Express 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 ~~2023~~2024 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.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

INNOVATIVE PAYMENT SOLUTIONS, INC.

~~Condensed Consolidated~~CONDENSED ~~Balance~~BALANCE ~~Sheets~~SHEETS

	September 30,			December 31,
	March 31,			December 31,
	2024			2023
	2025			2024
	(Unaudited)
Assets	(Unaudited)
Assets
Current Assets
Cash	$	~~1,033~~57		$	~~50,433~~526
Receivable from equity method investment		800			-
Other current assets		3,399			7,894
Notes receivable - current		131,405			-
Notes receivable – current portion		383,777			371,170
Other current assets		12,389			38,818
Total Current Assets		387,233			379,590
Total Current Assets		145,627			89,251
Non-current assets
Plant and equipment		54,~~400~~316			74,~~027~~858
Notes receivable, net of unamortized discount of $48,243		177,947			-
Equity method investment		1			1
Security deposit		5,000			5,000
Total Non-Current Assets		4,317			4,859
Equity method investment		703,778			703,938
Total Assets	$	391,550		$	384,449
Total Non-Current Assets		892,125			715,965
Liabilities and Equity (Deficit)
Total Assets	$	1,037,752		$	805,216
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable	$	2,595,191		$	2,023,375
Bank overdraft	$	151		$	-
Federal relief loans – current portion		7,670			9,369
Accounts payable		2,989,714			2,986,039
Notes payable, net of unamortized discount of $60,870 and $0, respectively		1,390,229			1,062,007
Related party payables		5,106			-
Convertible debt, net of unamortized discount of $184,626 and $687,503, respectively		4,916,822			3,704,280
Federal relief loans – current portion		10,036			8,869
Derivative liability		1,569,103			1,434,196
Notes payable, net of unamortized discount of $42,867 and $89,062, respectively		1,769,646			1,669,873
Total Current Liabilities		10,479,015			8,233,227
Convertible debt, net of unamortized discount of $61,845 and $80,971, respectively		5,224,357			5,016,205
Derivative liability		4,169,250			1,138,204
Total Current Liabilities		14,168,260			10,819,190
Non-Current Liabilities
Federal relief loans		150,000			150,000
Total Non-Current Liabilities		150,000			150,000
Total Liabilities		1014,~~629~~318,~~015~~260			810,~~383~~969,~~227~~190
Stockholders’ Equity (Deficit)
Stockholders’ (Deficit)
Preferred stock, $0.0001 par value, 25,000,000 shares authorized, and 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023.		-			-
Preferred stock, $0.0001 par value, 25,000,000 shares authorized, and 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024.		-			-
Common stock, $0.0001 par value; 750,000,000 shares authorized, 16,185,552 and13,819,889 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.		1,619			1,382
Common stock, $0.0001 par value; 750,000,000 shares authorized. 73,889,435 and 19,081,446 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.		7,389			1,908
Additional paid-in-capital		5152,~~926~~954,~~805~~852			5052,~~656~~202,~~225~~117
Accumulated deficit		(6166,~~519~~888,~~687~~951	)		(5862,~~235~~788,~~618~~766	)
Total Stockholders’ Equity (Deficit)		(9,591,263	)		(7,578,011	)
Total Stockholders’ (deficit)		(13,926,710	)		(10,584,741	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,037,752		$	805,216
Total Liabilities and Stockholders’ (Deficit)	$	391,550		$	384,449

See accompanying notes to the unaudited condensed ~~consolidated~~ financial statements.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Condensed ~~Consolidated~~ Statements of Operations

(Unaudited)

	Three months ended			Three months ended			~~Nine months ended~~			~~Nine months ended~~
	September 30,			September 30,			September 30,			September 30,
	March 31,			March 31,
	2024			2023			2024			2023
	2025			2024
Net Revenue	$	-		$	~~(28~~-	)	$	-		$	~~410~~
Cost of Goods Sold		-			~~387~~-			-			~~2,756~~
Gross loss		-			(415	)		-			(2,346	)
Gross profit		-			-
General and administrative		~~296~~254,~~438~~308			~~745~~626,~~688~~797			~~1,330,367~~			~~2,753,266~~
Depreciation and amortization		~~543~~542			~~100,387~~542			~~1,627~~			~~380,092~~
Total Expense		~~296~~254,~~981~~850			~~846~~627,~~075~~339			~~1,331,994~~			~~3,133,358~~
Loss from Operations		(~~296~~254,~~981~~850	)		(~~846~~627,~~490~~339	)		~~(1,331,994~~	)		~~(3,135,704~~	)
Loss on convertible notes		(4,534,491	)		(58,769	)		(4,636,843	)		(77,247	)
Loss on convertible debt		(2,487,213	)		(66,047	)
Fair value adjustment to price protected warrants		(2,051,405	)		-			(2,051,405	)		-
Fair value adjustments to price protected warrants		(1,618,545	)		-
Penalty on convertible notes		(6,611	)		(9,306	)		(6,611	)		(9,306	)
Interest income		12,607			3,282
Loss on novation		-			(1,066,165	)		-			(1,066,165	)
Interest expense		(212,743	)		(136,919	)
Fair value of warrants issued		-			(14,176	)		-			(14,176	)
Amortization of debt discount		(118,056	)		(319,899	)
Loss on disposal of assets		-			-			(2,600	)		-
Derivative liability movements		928,979			815,941
Interest expense		(152,376	)		(110,328	)		(435,471	)		(290,628	)
Loss before Income Taxes		(3,749,821	)		(330,981	)
Interest income		9,740			-			21,019			-
Income Taxes		-			-
Amortization of debt discount		(233,948	)		(303,042	)		(874,193	)		(414,696	)
Net Loss after income taxes		(3,749,821	)		(330,981	)
Derivative liability movements		5,538,008			1,795,642			6,461,496			1,483,710
Net loss from equity method investments		-			(484	)
Loss before Income Taxes		(1,728,064	)		(612,634	)		(2,856,602	)		(3,524,212	)
Net loss		(3,749,821	)		(331,465	)
Income Taxes		-			-			-			-
Deemed dividend		(350,364	)		-
Net Loss after income taxes		(1,728,064	)		(612,634	)		(2,856,602	)		(3,524,212	)
Net loss attributable to common stockholders	$	(4,100,185	)	$	(331,465	)
Net loss from equity method investments		(88	)		(402,509	)		(660	)		(403,890	)
Basic and diluted loss per share	$	(0.12	)	$	(0.02	)
Net loss from continuing operations		(1,728,152	)		(1,015,143	)		(2,857,262	)		(3,928,102	)
Weighted Average Number of Shares Outstanding – Basic and diluted		34,821,561			13,819,889
Discontinued operations
Operating loss from discontinued operations		-			-			-			(40,821	)
Loss on disposal of subsidiary and investment		-			-			-			(495,424	)
		-			-			-			(536,245	)
Net loss		(1,728,152	)		(1,015143	)		(2,857,262	)		(4,464,347	)
Net loss attributable to non-controlling interest		-			-			-			1,597
Deemed dividend		(426,807	)		-			(426,807	)
Net loss attributable to Innovative Payment Solutions, Inc., stockholders	$	(2,154,959	)	$	(1,015,143	)	$	(3,284,069	)	$	(4,462,750	)
Basic and diluted loss per share*
Continuing operations*	$	(0.15	)	$	(0.08	)	$	(0.23	)	$	(0.31	)
Discontinued operations*		-			-			-			(0.04	)
	$	(0.15	)	$	(0.08	)	$	(0.23	)	$	(0.35	)
Weighted Average Number of Shares Outstanding – Basic and diluted		14,546,060			12,789,493			14,063,713			12,650,758

*See ~~After~~accompanying ~~giving effect~~ notes to athe 1unaudited ~~for~~condensed financial ~~30 reverse stock split on August 30, 2023~~statements.

See accompanying notes to the unaudited condensed consolidated financial statements.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Condensed ~~Consolidated~~ Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

	Preferred Stock Shares		Amount		Common Stock Shares*		Amount*		Additional Paid-in Capital*		Accumulated Deficit			~~Non-~~Total ~~controlling~~Stockholders’ ~~shareholders~~Equity ~~interest~~(Deficit)			~~Total Stockholders’ Equity (Deficit)~~
Balance at December 31, 2023		-	$	-		13,819,889	$	1,382	$	50,656,225	$	(58,235,618	)	$	-		$	(7,578,011	)
Balance at December 31, 2024		-	$	-		19,081,446	$	1,908	$	52,202,117	$	(62,788,766	)	$	(10,584,741	)
Fair value of warrants issued to convertible debt holders		-		-		-		-		44,813		-			-			44,813
Conversion of convertible debt		-		-		54,807,989		5,481		331,821		-			337,302
Fair value of warrants issued on debt extinguishment		-		-		-		-		66,047		-			-			66,047
Fair value of warrants anti-dilution deemed dividend		-		-		-		-		350,364		(350,364	)		-
Fair value of warrants issued for services		-		-		-		-		36,207		-			-			36,207
Fair value of warrants issued to convertible debt holders		-		-		-		-		52,735		-			52,735
Stock based compensation		-		-		-		-		9417,~~464~~815		-			-17,815			~~94,464~~
Net loss		-		-		-		-		-		(~~331~~3,~~465~~749,821	)		-(3,749,821	)		~~(331,465~~	)
Balance at March 31, 2024		-	$	-		13,819,889	$	1,382	$	50,897,756	$	(58,567,083	)	$	-		$	(7,667,945	)
Balance at March 31, 2025		-	$	-		73,889,435	$	7,389	$	52,954,852	$	(66,888,951	)	$	(13,926,710	)
Fair value of warrants issued to convertible debt holders		-		-		-		-		42,863		-			-			42,863
Fair value of warrants issued on debt extinguishment		-		-		-		-		36,305		-			-			36,305
Fair value of warrants issued for services		-		-		-		-		36,207		-			-			36,207
Stock based compensation		-		-		-		-		94,464		-			-			94,464
Net loss		-		-		-		-		-		(797,645	)		-			(797,645	)
Balance at June 30, 2024		-	$	-		13,819,889	$	1,382	$	51,107,595	$	(59,364,728	)	$	-		$	(8,255,751	)
Conversion of convertible debt		-		-		2,365,663		237		357,972		-			-			358,209
Deemed dividend on warrant anti-dilution		-		-		-		-		426,807		(426,807	)		-			-
Fair value of warrants issued for services		-		-		-		-		2,943		-			-			2,943
Stock based compensation		-		-		-		-		31,488		-			-			31,488
Net loss		-		-		-		-		-		(1,728,152	)		-			(1,728,152	)
Balance at September 30, 2024		-	$	-		16,185,552	$	1,619	$	51,926,805	$	(61,519,687	)	$	-		$	(9,591,263	)

	Preferred Stock Shares		Amount		Common Stock Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance at December 31, 2023		-	$	-		13,819,889	$	1,382	$	50,656,225	$	(58,235,618	)	$	(7,578,011	)
Fair value of warrants issued to convertible debt holders		-		-		-		-		44,813		-			44,813
Fair value of warrants issued on debt extinguishment		-		-		-		-		66,047		-			66,047
Fair value of warrants issued for services		-		-		-		-		36,207		-			36,207
Stock based compensation		-		-		-		-		94,464		-			94,464
Net loss		-		-		-		-		-		(331,465	)		(331,465	)
Balance at March 31, 2024		-	$	-		13,819,889	$	1,382	$	50,897,756	$	(58,567,083	)	$	(7,667,945	)

See accompanying notes to unaudited condensed financial statements.

	Preferred Stock Shares		Amount		Common Stock Shares*		Amount*		Additional Paid-in Capital*		Accumulated Deficit			Non- controlling shareholders interest			Total Stockholders’ Equity (Deficit)
Balance at December 31, 2022		-	$	-		12,563,426	$	1,256	$	48,442,355	$	(52,399,858	)	$	1,597		$	(3,954,650	)
Fair value of warrants issued to convertible debt holders		-		-		-		-		251,856		-			-			251,856
Stock based compensation		-		-		-		-		130,671		-			-			130,671
Net loss		-		-		-		-		-		(273,390	)		(1,597	)		(274,987	)
Balance at March 31, 2023		-	$	-		12,563,426	$	1,256	$	48,824,882	$	(52,673,248	)	$	-		$	(3,847,110	)
Conversion of convertible debt		-		-		72,464		7		43,471		-			-			43,478
Fair value of warrants issued to convertible debt holders		-		-		-		-		130,025		-			-			130,025
Fair value of warrants issued for equity method investments		-		-		-		-		108,220		-			-			108,220
Stock based compensation		-		-		-		-		130,671		-			-			130,671
Net loss		-		-								(3,174,217	)		-			(3,174,217	)
Balance as of June 30, 2023		-	$	-		12,635,890	$	1,263	$	49,237,269	$	(55,847,465	)	$	-		$	(6,608,933	)
Conversion of convertible debt		-		-		391,306		40		193,729		-			-			193,769
Additional shares issued on reverse stock split		-		-		2,838		-		-		-			-			-
Fair value of warrants issued for services		-		-		-		-		14,176		-			-			14,176
Fair value of warrants issued to convertible debt holders		-		-		-		-		437,953		-			-			437,953
Stock based compensation		-		-		-		-		130,671		-			-			130,671
Net loss		-		-		-		-		-		(1,015,143	)		-			(1,015,143	)
Balance at September 30, 2023		-	$	-		13,030,034	$	1,303	$	50,013,798	$	(56,862,608	)	$	-		$	(6,847,507	)

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

See accompanying notes to unaudited condensed consolidated financial statements.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Condensed ~~Consolidated~~ Statements of Cash Flows

(Unaudited)

	Nine months ended			Nine months ended
	Three months ended			Three months ended
	September 30,			September 30,
	March 31,			March 31,
	2024			2023
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,~~857~~749,~~262~~821	)	$	(4331,~~464,347~~465	)
Net loss from discontinued operations		-			536,245
Adjustment to reconcile net loss to net cash used in operating activities:
Net loss from continuing operations		(2,857,262	)		(3,928,102	)
Derivative liability movements		(928,979	)		(815,941	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		542			542
Derivative liability movements		(6,461,496	)		(1,483,710	)
Amortization of debt discount		118,056			319,899
Depreciation		1,627			380,092
Loss on convertible debt		2,487,213			66,047
Amortization of debt discount		874,193			414,696
Fair value of price protected warrants		1,618,545			-
Loss on convertible debt		4,636,843			77,247
Fair value of warrants issued for services		-			36,207
Fair value adjustment to price protected warrants		2,051,405			-
Deemed interest income		(9,056	)		(3,282	)
Loss on novation		-			1,066,165
Unrealized loss on equity method investments		-			484
Penalty on convertible debt		6,611			9,306
Stock based compensation		17,815			94,464
Deemed interest income		(19,614	)		-
Unrealized loss on equity method investments		660			403,890
Warrants issued for services		75,357			122,797
Stock based compensation		220,416			283,392
Changes in Assets and Liabilities
Receivable from equity method investments		(800	)		-
Other current assets		4,495			26,221
Other current assets		25,024			47,628
Accounts payable and accrued expenses		3,675			283,679
Accounts payable and accrued expenses		571,816			1,150,919
Related party payables		5,106			-
Related party payables		-			50,000
Interest receivable		(3,551	)		-
Interest accruals		~~394~~212,~~374~~340			~~281~~120,~~383~~396
Cash used in operating activities – continuing operations		(480,846	)		(1,124,297	)
CASH USED IN OPERATING ACTIVITIES		(223,620	)		(202,749	)
Cash provided by operating activities – discontinued operations		-			35,286
CASH USED IN OPERATING ACTIVITIES		(480,846	)		(1,089,011	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in notes receivable		~~(288,333~~-	)		-(158,333	)
Investment in intangibles		-			(44,405	)
Investment in equity method investment		-			(500	)
Deposits refunded		-			4,800
NET CASH USED IN INVESTING ACTIVITIES		-			(158,833	)
Investment in equity method investment		(500	)		(1,000,000	)
Net cash used in investing activities – continuing operations		(288,833	)		(1,039,605	)
Net cash used in investing activities – discontinued operations		-			(36,230	)
CASH USED IN INVESTING ACTIVITIES		(288,833	)		(1,075,835	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		233,333			-
Proceeds from bank overdraft		151			-
Proceeds from convertible notes		785,502			2,001,666
Proceeds from notes payable and convertible debt		223,000			402,335
Repayment of convertible notes		(298,556	)		(189,326	)
Repayment of convertible debt					(84,311	)
Repayment of federal relief loans		-			~~(2,864~~-	)
Net cash provided by financing activities – continuing operations		720,279			1,809,476
NET CASH PROVIDED BY FINANCING ACTIVITIES		223,151			318,024
Net cash provided by financing activities – discontinued operations		-			-
NET DECREASE IN CASH		(469	)		(43,558	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		720,279			1,809,476
CASH AT BEGINNING OF YEAR		526			50,433
NET DECREASE IN CASH		(49,400	)		(355,370	)
CASH AT END OF PERIOD	$	57		$	6,875
Cash and cash included in assets held for sale at the beginning of the period		50,433			374,765
CASH AT END OF PERIOD	$	1,033		$	19,395
RECONCILIATION OF OPENING CASH WITHIN THE BALANCE SHEET TO THE STATEMENT OF CASH FLOWS
Cash	$	50,433		$	373,822
Cash included in assets held for sale		-			943
CASH AT THE BEGINNING OF THE PERIOD	$	50,433		$	374,765
RECONCILIATION OF CLOSING CASH WITHIN THE BALANCE SHEET TO THE STATEMENT OF CASH FLOWS
Cash	$	1,033		$	19,395
Cash included in assets held for sale		-			-
CASH AT THE END OF THE PERIOD	$	1,033		$	19,395
CASH PAID FOR INTEREST AND TAXES:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	~~41,096~~(404	)	$	9(16,~~245~~522	)
NON-CASH INVESTING AND FINANCING ACTIVITIES
Fair value of warrants issued with convertible notes	$	87,676		$	819,384
Fair value of warrants issued with convertible debt	$	52,735		$	44,813
Conversion of convertible debt to equity	$	~~198~~230,~~716~~798		$	~~160,000~~-
Fair value of warrants issued for equity method investments	$	-		$	108,220

See notes to the unaudited condensed financial statements.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

ORGANIZATION AND DESCRIPTION OF BUSINESS

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.

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.5

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

Organizational History (continued)

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.

Description of current business

The Company is currently a fintech provider of digital payment solutions presently focused on, through its participation in IPSIPay Express, developing a new account-to-account payment application called Instant Direct Payments as well as traditional credit card processing services. The Company has 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.

IPSIPay Express

On April 28, 2023, the Company formed a new company called IPSIPay Express. This entity was formed as a Delaware limited liability company joint venture with OpenPath, Inc. (“OpenPath”) and EfinityPay, LLC (“EfinityPay”, and the Company, collectively with OpenPath and EfinityPay, the “Members”) to develop and market a proprietary consumer to merchant real-time payment platform initially focused on the fast-growing online gaming and entertainment sectors.

On June 19, 2023, the Company entered into a Limited Liability Company Operating Agreement (the “Operating Agreement”) with OpenPath and EfinityPay to jointly provide for the governance of and rights of the Members with respect to IPSIPay Express. The effective date of the Operating Agreement is April 28, 2023.

IPSIPay Express was formed by the Members with the initial business purposes of providing credit card processing solutions and also a proprietary solution for real time bank-to-bank payment transactions in a manner that provides seamless and frictionless consumer and merchant experiences, with an initial focus on merchants operating in gaming and entertainment sectors. Such solutions are collectively referred to herein as “IPEX.”

Pursuant to the Operating Agreement, the Company agreed to contribute cash to or on behalf IPSIPay Express to be used for the IPEX business in the aggregate amount of up to $1,500,000 (the “IPSI Capital Contribution”). The Company was required to make the IPSIPay Capital Contribution in three tranches of $500,000 (each, a “Tranche”), or such lesser amounts as may be unanimously approved by the Board of Managers of IPSIPay Express. With the full funding of each Tranche, the Company will automatically receive an 11.11% membership interest in IPSIPay Express (or a pro rata portion thereof if less than a full Tranche is funded), and OpenPath and EfinityPay’s percentage interest in IPSIPay Express will be reduced pro rata accordingly. Should the Company contribute the full IPSI Capital Contribution, the Members will each own one-third (1/3) of the membership interests in IPSIPay Express. The IPSI Capital Contribution has been or will be made by the following dates and in the following amounts: (i) $200,000 of the initial Tranche was paid by the Company on June 21, 2023; (ii) the $300,000 balance of the initial Tranche was paid on August 4, 2023; (iii) the second $500,000 Tranche was paid in September 2023 and (iv) the third $500,000 Tranche was expected to be paid on or before November 30, 2023. In late 2023, the Company agreed with its joint venture partners that such investment was not required as IPEX is not operational. The need for any additional advances will be addressed with the joint venture partners once IPEX becomes operational and begins generating revenue, the Company’s current equity holding in IPSIPay Express remains at 22%.6

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

Description of current business (continued)

Simultaneously with the funding of the initial Tranche, the Company issued to each of OpenPath and EfinityPay a five-year Common Stock purchase warrant (the “IPEX Warrant”) to purchase 133,334 shares of Common Stock with an exercise price of $0.45 per share. We are still obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 199,999 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the initial Tranche. Simultaneously with the funding of the second Tranche, we are obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the second Tranche. Should we decide to fund a third Tranche, we will be obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock.

Merger Agreement with Business Warrior

OnBusiness ~~July~~Warrior ~~28,~~Corporation ~~2024,~~(“Business Warrior”) ~~the~~is ~~Company~~a ~~entered into~~publicly anlisted, ~~Agreement~~revenue ~~and~~generating ~~Plan~~fintech ofcompany ~~Merger~~that ~~(the~~offers PayPlan, ~~“BW~~a ~~Merger~~comprehensive ~~Agreement”),~~lending bysoftware ~~and~~platform that ~~among~~includes ~~the~~marketing ~~Company,~~services ~~IPSI~~for ~~Merger~~lenders ~~Sub,~~and ~~Inc~~businesses., We believed that a ~~Delaware corporation~~potential ~~and~~combination with a ~~newly~~fintech ~~formed,~~company ~~wholly~~that ~~owned~~generates some ~~subsidiary~~revenue ofmonthly would complement the ~~Company~~development ~~(“Merger~~and ~~Sub”)~~commercial launch of our IPSIPay ExpressTM products and ~~Business~~potentially other ~~Warrior~~product offerings.

~~Pursuant~~On toJuly ~~the~~28, ~~BW Merger Agreement~~2024, ~~subject~~ to the ~~terms~~Company ~~and~~entered into ~~conditions~~an ~~set~~Agreement ~~forth~~and ~~therein,~~Plan ~~at the closing~~ of ~~the~~Merger ~~transactions contemplated~~ by ~~the~~and BWamong ~~Merger Agreement (~~the ~~“Closing”)~~ Company, IPSI Merger Sub, ~~will~~Inc., ~~merge~~a ~~with~~Delaware corporation and ~~into~~a ~~Business~~newly ~~Warrior (the “BW Merger” and~~formed, ~~together with the other~~wholly ~~transactions~~owned ~~contemplated~~subsidiary byof the BWCompany (“Merger ~~Agreement, the “BW Transactions~~Sub”), ~~with~~and Business Warrior ~~continuing as the surviving Wyoming corporation in the BW Merger and a wholly owned subsidiary of the Company~~.

~~Subject~~On toJanuary ~~the~~22, ~~terms and conditions set forth in the BW Merger Agreement~~2025, at the ~~effective~~Company ~~time of the BW Merger (the “Effective Time”): (i) each outstanding~~and ~~share of common stock, par value $0.0001 per share, of~~ Business Warrior ~~(“Business~~mutually ~~Warrior~~agreed ~~Common Stock”), other than treasury shares and shares as~~ to ~~which~~terminate ~~appraisal rights have been exercised, will be automatically converted into~~ the ~~right~~Agreement toand ~~receive~~Plan ~~a number~~ of ~~shares of Common Stock equal to the Applicable Per Share Portion (as defined in the BW~~ Merger ~~Agreement)~~dated ofJuly ~~the BW Merger Consideration (as defined below)~~28, ~~(ii)~~2024. ~~each~~This ~~outstanding~~decision ~~share~~reflects ofour ~~preferred stock of Business Warrior (“Business Warrior Preferred Stock”),~~shared ~~other~~understanding ~~than treasury shares~~ and ~~shares~~agreement asthat todiscontinuing ~~which appraisal rights have been exercised, will be automatically converted into~~ the ~~right to~~merger ~~receive~~is ~~a number of shares of Common Stock equal to the Applicable Per Share Portion (as defined~~ in the BWbest ~~Merger~~interest ~~Agreement)~~ of ~~the BW~~both Merger Consideration (as defined below) had such share of Business Warrior Preferred Stock been converted into shares of Business Warrior Common Stock immediately prior to the Effective Time and (iii) any other options, warrants or rights to subscribe for or purchase any capital stock of Business Warrior or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of Business Warrior, if not exercised or converted prior to the Effective Time, shall be cancelled, retired and terminatedparties.

~~Merger Consideration~~ 7

Pursuant to the terms of the BW Merger Agreement, the consideration to be delivered to the holders of Business Warrior Common Stock and Business Warrior Preferred Stock in connection with the BW Merger Consideration (the “BW Merger Consideration”) will be a number of newly issued shares of Common Stock representing forty-five percent (45%) of the Common Stock outstanding immediately following the Closing, and after giving effect to the conversion, exercise or cancellation of the Business Warrior Preferred Stock and other Business Warrior securities referred to above.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~ Unaudited Condensed ~~Consolidated~~ Financial Statements

1 ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

c) Merger Agreement with Business Warrior (continued)

Representations and Warranties

The BW Merger Agreement contains representations and warranties of each of the Company, Merger Sub and Business Warrior that are customary for similar transactions and that include certain qualifications and customary exceptions, as applicable.

Covenants of the Parties

The BW Merger Agreement includes customary covenants of the parties with respect to, among others things, (i) operation of their respective businesses prior to consummation of the BW Merger and efforts to satisfy conditions to consummation of the BW Merger, (ii) access to information, (iii) cooperation in the preparation of the registration statement on Form S-4 (as may be amended or supplemented from time to time, the “Registration Statement”) which the Company is expected to file with the U.S. Securities and Exchange Commission (“SEC”) in connection with the BW Merger and the Transactions, (iv) use of reasonable best efforts to obtain regulatory approvals, (v) notification of the other party of certain breaches, (vi) Section 16 matters, (vii) indemnification of directors and officers and tail insurance and (viii) obtaining all requisite approvals of each party’s respective stockholders. Additionally, Business Warrior has agreed not to solicit or enter into a competing alternative transaction (an “Alternative Transactions”), subject to the fiduciary duties of the board of directors Business Warrior, in accordance with customary terms and provisions set forth in the BW Merger Agreement.

The parties agreed to take all necessary actions to cause the Company’s board of directors immediately after Closing to consist of five directors, including: (i) two persons who are designated by the Company prior to Closing, (ii) two persons who are designated by Business Warrior prior to Closing and (iii) one person mutually agreed upon by the Company and Business Warrior.

Conditions to Consummation of the Merger; Convertible Note Exchange

Each party’s obligation to consummate the BW Merger is conditioned upon, among other things: (i) approval by the Company stockholders of the amendment to its certificate of incorporation (“the Company Stockholder Approval”), (ii) approval by Business Warrior stockholders of the BW Merger and related transactions and matters (“Business Warrior Stockholder Approval”), (iii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and all other requisite regulatory approval, (iv) the absence of any applicable law or order that makes illegal, or prohibits or prevents, the Transactions and (v) the Registration Statement having become effective in accordance with the provisions of the Securities Act of 1933, as amended (“Securities Act”).

In addition, each party’s obligation to consummate the BW Merger is conditioned upon the following agreements being in full force and effect: (i) exchange agreements, to be entered into by and among the Company, Business Warrior and each holder of the outstanding convertible notes of the Company (the “Company Exchange Agreements”), pursuant to which each outstanding convertible note of the Company will be exchanged for shares of newly-issued shares of a newly designated Series A Convertible Preferred Stock of the Company (the “Company Series A Preferred”) and (ii) exchange agreements, to be entered into by and among the Company, Business Warrior and each holder of the outstanding convertible notes of Business Warrior (the “Business Warrior Exchange Agreements”), pursuant to which each outstanding convertible note of Business Warrior will be exchanged for shares of newly-issued shares of Company Series A Preferred. The designation of the Company Series A Preferred is subject to the Company Stockholder Approval. Further, as of the date of this Report, the terms of the Company Series A Preferred remain subject to negotiation between the Company, Business Warrior and the holders of such convertible notes. The Company and Business Warrior have certain convertible note holders in common.

In addition, the Company’s obligation to consummate the BW Merger is conditioned upon, among other things: (i) the representations and warranties of Business Warrior being true and correct on and as of the Closing Date (as defined in the Merger Agreement) as if made on the Closing Date (subject to certain exceptions and an overall “Material Adverse Effect” standard), (ii) Business Warrior having performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under the BW Merger Agreement to be performed or complied with by it on or prior to the Closing Date and (iii) receipt by the Company of each Lock-Up Agreement (as defined below) and Employment Agreement (as defined in the BW Merger Agreement).

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

1 ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

c) Merger Agreement with Business Warrior (continued)

Business Warrior’s obligation to consummate the BW Merger is further conditioned upon, among other things: (i) the representations and warranties of the Company being true and correct on and as of the Closing Date as if made on the Closing Date (subject to certain exceptions and an overall “Material Adverse Effect” standard) and (ii) the Company and Merger Sub having performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under the BW Merger Agreement to be performed or complied with by it on or prior to the Closing Date.

Termination

The BW Merger Agreement may be terminated at any time prior to the Effective Time by either the Company or Business Warrior if the BW Merger and related transactions are not consummated on or before the seven-month anniversary of the date of the Merger Agreement (the “Termination Date”), provided that the Termination Date shall be automatically extended to the nine-month anniversary of the BW Merger Agreement if the conditions to closing, other than receipt of the Company Stockholder Approval and Business Warrior Stockholder Approval, effectiveness of the Registration Statement and that the Company Exchange Agreements and Business Warrior Exchange Agreements are in full force and effect, have been satisfied.

The BW Merger Agreement may also be terminated under certain other customary and limited circumstances at any time prior the Closing, including, among other reasons (i) by mutual written consent of the Company and Business Warrior, (ii) by written notice by either the Company or Business Warrior if a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the BW Merger, and such order or other action has become final and non-appealable, (iii) by written notice by Business Warrior of the Company’s or Merger Sub’s uncured breach of a representation, warranty, or covenant contained in the BW Merger Agreement that would cause the related condition to closing to not be satisfied, (iv) by written notice by the Company of Business Warrior’s uncured breach of a representation, warranty, or covenant contained in the BW Merger Agreement that would cause the related Closing condition to not be satisfied or a material breach of a Business Warrior Voting and Support Agreement (as defined below), (v) by either the Company or Business Warrior if Business Warrior holds its stockholder meeting to approve the BW Merger Agreement and the BW Merger, and Business Warrior Stockholder Approval is not obtained, (vi) by the Company if Business Warrior’s board of directors has failed to recommend or shall have withdrawn, amended or modified in any respect materially adverse to the Company its recommendation of the BW Merger Agreement or shall have recommended another proposal for an Alternative Transaction or accepted a Superior Proposal (as defined in the BW Merger Agreement) and (vii) by Business Warrior if, prior to receipt of Business Warrior Stockholder Approval, Business Warrior accepts a Superior Proposal, subject to the terms and conditions of the BW Merger Agreement.

Governing Law

The Merger Agreement is governed by the laws of the State of New York and the parties are subject to the jurisdiction of any New York state court or any federal court sitting in the State of New York in any action arising out of or relating to the Merger Agreement.

Certain Agreements Related to the Merger Agreement

Business Warrior Voting and Support Agreements

In connection with the execution of the Merger Agreement, on July 29, 2024, certain stockholders of Business Warrior, including Rhett Doolittle and Jonathan Brooks, the Chief Executive Officer and President, respectively, of Business Warrior (the “Business Warrior Holders”) entered into support agreements with the Company (the “Business Warrior Voting and Support Agreements”), pursuant to which such Business Warrior Holders agreed, among other things, to vote all shares of capital stock of Business Warrior beneficially owned by the Business Warrior Holders (the “Business Warrior Shares”) in favor of the BW Merger and related transactions. Such Business Warrior Holders also agreed to take certain other actions in support of the BW Merger Agreement and related transactions (and any actions required in furtherance thereof) and refrain from taking actions that would adversely affect such Business Warrior Holders’ ability to perform their obligations under the Business Warrior Voting and Support Agreement. Pursuant to the Business Warrior Voting and Support Agreements, the Business Warrior Holders also agreed not to transfer the Business Warrior Shares during the period from and including the date of the Business Warrior Voting and Support Agreement and the first to occur of the Effective Time or the date on which the Business Warrior Support Agreement is terminated, except for certain permitted transfers where the recipient also agrees to comply with the Business Warrior Voting and Support Agreement.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

1 ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

c) Merger Agreement with Business Warrior (continued)

Certain Agreements Related to the Merger Agreement (continued)

Lock-Up Agreements

Concurrently with and effective upon the Closing, officers, directors and certain stockholders of Business Warrior (each, a “Significant Stockholder”) shall each enter into a Lock-Up Agreement with the Company (each, a “Lock-Up Agreement”). Pursuant to the Lock-Up Agreements, with respect to the shares received as BW Merger Consideration, each Significant Stockholder may not, with limited exceptions, transfer shares, or publicly disclose the intention to transfer shares until the twelve-month anniversary of the Closing.

ACCOUNTING POLICIES AND ESTIMATES

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~~ operations and cash flows for the three months ~~and nine months~~ ended ~~September~~March 3031, ~~2024~~2025 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, ~~2023~~2024, included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on March 2931, ~~2024 and amended on April 17, 2024~~2025.

~~All~~The ~~amounts~~accompanying ~~referred to in the notes to the~~ unaudited condensed ~~consolidated~~ financial statements ~~are~~have inbeen ~~United~~prepared ~~States~~in ~~Dollars~~accordance ~~($)~~with ~~unless~~U.S. ~~stated otherwise~~GAAP.

bAll amounts referred to in the notes to the unaudited condensed financial statements are in United States Dollars ($) ~~Principles~~unless ofstated ~~Consolidation~~otherwise.

~~The~~b) ~~unaudited~~Use ~~condensed consolidated financial statements as~~ of September 30, 2024, include the financial statements of the Company. The unaudited condensed consolidated financial statements as of September 30, 2023, include the financial statements of the Company and its subsidiary in which it has a majority voting interest, until May 12, 2023, the date of disposal of its Beyond Fintech subsidiary. Pursuant to the May 2023 Frictionless Agreement, the Company disposed of its 51% interest in Beyond Fintech. Therefore, the Company currently has no subsidiaries.Estimates

~~All~~The ~~significant~~preparation ~~inter-company~~of ~~accounts~~unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and ~~transactions~~assumptions, ~~have~~which ~~been~~are ~~eliminated~~evaluated on an ongoing basis, that affect the amounts reported in the unaudited condensed ~~consolidated~~ 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.

~~The~~Making ~~accompanying~~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 ~~consolidated~~ financial statements, ~~have~~which ~~been~~management ~~prepared~~considered in ~~accordance~~formulating its ~~with~~estimate Ucould change in the near term due to one or more future confirming events.S. ~~GAAP~~Accordingly, the actual results could differ significantly from our estimates.

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

c) Use of Estimates

The preparation of unaudited condensed consolidated 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 consolidated 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 notes 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 consolidated 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.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

d) 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~~ 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~~ liability would be accrued in the Company’s unaudited condensed ~~consolidated~~ 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.

~~e) Fair Value of Financial Instruments~~8

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited Condensed Financial Statements

2	ACCOUNTING POLICIES AND ESTIMATES (continued)

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 ~~notes~~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.

fe) Risks and Uncertainties

The Company’s operations and ~~prospects~~ prospects are and will be subject to significant risks and uncertainties including financial, operational, regulatory, and other risks, ~~including~~ including the potential risk of business failure. In particular, there is a risk that that IPSIPay Express business (the commercial launch of which has taken longer than originally expected) may never generate revenue for the Company. ~~There are also significant risks and uncertainties associated with the Company’s proposed merger with Business Warrior (see notes 1(c) and 6 for further information).~~ Further, the ongoing wars in Ukraine and between Israel, Hamas and more recently, Hezbollah and uncertainties regarding the global economic environment which has resulted 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~~ 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.

129

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

ACCOUNTING POLICIES AND ESTIMATES (continued)

gf) Recent accounting pronouncements

The Financial Accounting Standards ~~Board~~ Board (“FASB”) issued additional updates during the quarter ended ~~September~~March 3031, ~~2024~~2025. None of these standards are either ~~applicable~~ 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 ~~consolidated~~ financial statements upon adoption.

hg) Reporting by Segment

NoThe ~~segmental~~Company ~~information~~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 ~~required~~the asCEO. 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 ~~has~~CODM, reviews financial information presented on an aggregated basis for the purpose ~~only one~~ of making operating ~~segment~~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.

i)Since ~~Cash~~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 ~~Cash~~no ~~Equivalents~~significant expense categories regularly provided to the CODM beyond those disclosed in the Statements of Operations.

~~The~~h) ~~Company~~Cash ~~considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At September 30, 2024~~ and ~~December~~ ~~31,~~Cash ~~2023, respectively, the Company had no cash equivalents.~~Equivalents

The Company ~~minimizes~~considers ~~credit~~all ~~risk~~highly ~~associated~~liquid investments with ~~cash~~original bymaturities ~~periodically evaluating the credit quality~~ of ~~its~~three ~~primary~~months ~~financial~~or ~~institution~~less inat the ~~United~~time ~~States.~~of ~~The~~purchase ~~balance~~to atbe ~~times may~~cash ~~exceed federally insured limits~~equivalents. At ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively, the ~~balance~~Company ~~did~~had no cash ~~not exceed federally insured limits~~equivalents.

j)The ~~Accounts~~Company ~~Receivable~~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, 2025 and ~~Allowance~~December ~~for~~31, ~~Doubtful~~2024, ~~Accounts~~the balance did not exceed federally insured limits.

i) Accounts ~~receivable~~Receivable ~~are reported at realizable value, net of allowances for doubtful accounts, which is estimated~~ and ~~recorded~~Allowance 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~~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 September 30, 2024 and 2023.Accounts

k)Accounts ~~Investments~~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, 2025 and 2024.

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.10

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

ACCOUNTING POLICIES AND ESTIMATES (continued)

lj) ~~Plant and Equipment~~Investments

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 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.

ml) 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.

~~n) Revenue Recognition~~11

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited Condensed Financial Statements

ACCOUNTING POLICIES AND ESTIMATES (continued)

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:

identify the contract with a customer;

ii.

identify the performance obligations in the contract;

iii.

determine the transaction price;

iv.

allocate the transaction price to performance obligations in the contract; and

recognize revenue as the performance obligation is satisfied.

The Company had ~~minimal~~no revenues ~~of $0 and $410~~ for the three ~~nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively~~2024.

14n) Share-Based Payment Arrangements

~~INNOVATIVE~~Generally, ~~PAYMENT~~all ~~SOLUTIONS~~forms of share-based payments, ~~INC~~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.

Notes to the unaudited Condensed Consolidated Financial Statements

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

o) 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 consolidated statement of operations.

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

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

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

Subsequent to the Company’s reverse merger which took place on May 12, 2016, the Company has utilized the market value of its Common Stock as quoted on the OTCQB, as an indicator of the fair value of its Common Stock in determining share- based payment arrangements.

po) 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.

qp) ~~Income~~Marketing ~~Taxes~~and advertising expenses

~~The~~Marketing ~~Company~~and advertising isexpenditure incurred ~~based~~on inpromoting the ~~U.S.~~Company’s ~~and currently~~previous ~~enacted~~products Uwere expensed as incurred.S. ~~tax~~Marketing ~~laws~~and ~~are~~advertising ~~used~~costs inamounted to $0 and $75,707 for the ~~calculation~~three ofmonths ~~income~~ended ~~taxes~~March 31, 2025 and 2024, respectively.

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 September 30, 2024 and December 31, 2023, there have been no interest or penalties incurred on income taxes.12

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

ACCOUNTING POLICIES AND ESTIMATES (continued)

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, 2025 and December 31, 2024, there have been no interest or penalties incurred on income taxes.

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.

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.

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 ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, the Company had a net loss of $24.861 million., after deemed dividends. In connection with preparing the unaudited condensed ~~consolidated~~ financial statements for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~ 2025, management evaluated the risks described in Note 2(fe) 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 ~~September~~March 3031, ~~2024~~2025 have been prepared assuming the Company will continue as a going concern, but the ability of the ~~Company~~ Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a 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 ~~consolidated~~ 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.

~~4 DISPOSAL OF INVESTMENT IN FRICTIONLESS AND BEYOND FINTECH~~13

On May 12, 2023, the Company entered into 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 (representing a 10% ownership interest in Frictionless); (ii) the warrant to purchase 1,000,000 (30,000,000 pre-split) 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 (representing a 51% ownership interest in Beyond Fintech) (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 is $250,000, which will be paid by Frictionless exclusively in the form of 20% credits against invoices for work done by Frictionless for the Company for the 18-month period following the closing under the existing software services between the Company and Frictionless. The May 2023 Frictionless Agreement has customary representations, indemnification and mutual release provisions. The closing of the transactions contemplated by the May 2023 Frictionless Agreement occurred on May 12, 2023.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

4 ~~DISPOSAL~~NOTES ~~OF INVESTMENT IN FRICTIONLESS AND BEYOND FINTECH (continued)~~RECEIVABLE

On February 22, 2024, the Company (utilizing a portion of the proceeds from the issuance of convertible debt) loaned funds to Business Warrior in the principal amount of $226,190, which includes an original issue discount equal to $67,857, for net proceeds to Business Warrior of $158,333. The ~~assets~~loan is memorialized by a secured promissory note (the “Business Warrior Note”). The Business Warrior Note does not accrued interest, except in the case of an event of default, which case interest accrues at 15% per annum. The Business Warrior Note matures on the earlier to occur of December 31, 2025 and ~~liabilities~~the ~~disposed~~date that Business Warrior securities are listed on a national securities exchange. The Business Warrior Note may be prepaid at any time for an amount equal to 110% of ~~were~~the asthen ~~follows:~~principal and accrued interest. The Company has the right to exchange the Business Warrior Note for securities issued by Business Warrior in any subsequent private placement by Business Warrior. The principal and accrued interest under Business Warrior Note is convertible into common stock of Business Warrior at a price equal to $0.0036 per share, subject to certain adjustments and potential resets. Business Warrior’s obligations under the Business Warrior Note are guaranteed by Business Warrior’s subsidiaries and secured by a lien on Business Warrior’s accounts receivable.

	Amount
Assets
Current Assets
Cash	$	339
Non-current assets
Intangible assets		327,211
Security deposit		15,000
Investment		500,000
		842,211
Total assets		842,550
Liabilities
Current Liabilities
Accounts payable		97,126
Net assets sold		745,424
Proceeds due on disposal		(250,000	)
Net loss on disposal	$	495,424

5 DISCONTINUED OPERATIONS

In the prior year, effective May 12, 2023, the Company disposed of its investment in Beyond Fintech.

The statement of operations from discontinued operations is as follows:

	Three months ended		Three months ended		Nine months ended		Nine months ended
	September 30,		September 30,		September 30,		September 30,
	2024		2023		2024		2023
Net Revenue	$	-	$	-	$	-	$	-
Cost of Goods Sold		-		-		-		-
Gross loss		-		-		-		-
General and administrative		-		-		-		40,821
Depreciation and amortization		-		-		-		-
Total Expense		-		-		-		40,821
Loss from operations before income taxes		-		-		-		(40,821	)
Income Taxes		-		-		-		-
Loss from discontinued operations, net of taxation	$	-	$	-	$	-	$	(40,821	)

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

6 LOANS RECEIVABLE

On February 22, 2024, the Company (utilizing a portion of the proceeds from the issuance of convertible notes) loaned funds to Business Warrior in the principal amount of $226,190, which includes an original issue discount equal to $67,857, for net proceeds to Business Warrior of $158,333. The loan is memorialized by a secured promissory note (the “Business Warrior Note”). The Business Warrior Note does not accrued interest, except in the case of an event of default, which case interest accrues at 15% per annum. The Business Warrior Note matures on the earlier to occur of December 31, 2025 and the date that Business Warrior securities are listed on a national securities exchange. The Business Warrior Note may be prepaid at any time for an amount equal to 110% of the then principal and accrued interest. The Company has the right to exchange the Business Warrior Note for securities issued by Business Warrior in any subsequent private placement by Business Warrior. The principal and accrued interest under Business Warrior Note is convertible into common stock of Business Warrior at a price equal to $0.0036 per share, subject to certain adjustments and potential resets. Business Warrior’s obligations under the Business Warrior Note are guaranteed by Business Warrior’s subsidiaries and secured by a lien on Business Warrior’s accounts receivable.

The debt discount on the Business Warrior’s note is amortized as income utilizing the effective interest rate method.

Between June 19, 2024 and ~~September~~November 1027, 2024, the Company (utilizing a portion of the proceeds from the issuance of convertible debt and notes payable) loaned additional funds to Business Warrior in the aggregate principal amount of $~~130~~180,000 (the “2024 Business Warrior ~~Note~~ Notes”). The 2024 Business Warrior Notes accrues interest at 8% per annum and ~~matures~~ matured between November 1, 2024 and ~~February~~April 127, 2025. The 2024 Business Warrior Notes plus any accrued interest may be prepaid at any time without penalty.

We have declared the notes with maturity dates prior to the filing of these financial statements, to be in default with Business Warrior and are currently negotiating the repayment of these notes with them.

Loans receivable consists of the following:

Description	Interest Rate		~~Maturity date~~	~~Principal~~Maturity date		Principal		~~Accrued Interest~~		Accrued interest		~~Unamortized debt discount~~		Unamortized debt discount		~~September 30, 2024 Amount, net~~		March 31, 2025 Amount, net		December 31, 2024 Amount, net
Business Warrior Corporation	~~0.0%~~	0.0	~~December 31, 2025~~%	$December 31, 2025	~~226,190~~	$	226,190	$	-	$	-	$	~~(48,243~~	)$	(30,363	$)	~~177,947~~	$	195,827	$	186,771
	8.0%		November 1, 2024		30,000				677				-				30,677
		8.0	%	November 1, 2024			30,000				1,874				-				31,874		31,282
	8.0%		January 1, 2025		35,000				399								35,399
		8.0	%	January 1, 2025			35,000				1,795				-				36,795		36,105
	8.0%		February 1, 2025		50,000				263								50,263
		8.0	%	February 1, 2025			50,000				2,258				-				52,258		51,271
	8.0%		February 1, 2025		15,000				66								15,066
		8.0	%	February 1, 2025			15,000				664				-				15,664		15,368
Total convertible notes payable				$	356,190			$	1,405			$	(48,243	)		$	309,352
		8.0	%	April 27, 2025			50,000				1,359				-				51,359		50, 373
Disclosed as follows:
Total Notes receivable						$	406,190			$	7,950			$	(30,363	)		$	383,777	$	371,170
Current portion of notes receivable																$	131,405
Long-term portion of notes receivable																	177,947
																$	309,352

Discount ~~amortized~~ amortized to income as deemed interest during the three months ~~and nine months~~ ended ~~September~~March 3031, 2025 and 2024 was $89,~~407~~ 056 and $193,~~614~~282, respectively.

Interest ~~earned~~ earned for the three ~~and nine~~ months ended ~~September~~March 3031, 2025 and 2024 was $13,~~333~~551 and $10,~~405,~~ respectively.

~~7 INTANGIBLES~~14

On August 26, 2021, the Company formed Beyond Fintech to acquire a product known as Beyond Wallet from a third party for gross proceeds of $250,000, together with the logo, use of name and implementation of the product into the Company’s technology. The Company owned 51% of Beyond Fintech with the other 49% owned by Frictionless. Prior to the disposal of Beyond Fintech to Frictionless the Company spent an additional 77,211 on the software to further enhance the Beyond Wallet product offering. On May 12, 2023, Beyond Fintech was sold to Frictionless.

During the year ended December 31, 2021, the Company paid gross proceeds of $375,000 to Frictionless for the development of the IPSIPay wallet, prior to the novation of the rights and obligation to a third party, the Company spent an additional $1,171,805 to facilitate the functioning of the IPSIPay software in the cloud environment. On September 5, 2023, the Company novated all its rights and obligations to its IPSIPay wallet to a third party.

Amortization expense was $0 and $93,095 for the three months ended September 30, 2024 and 2023, respectively, and $0 and $347,298 for the nine months ended September 30, 2024 and 2023, respectively.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

85 EQUITY METHOD INVESTMENT

On April 28, 2023, the Company formed IPSIPay Express with OpenPath and ~~EFinityPay~~EfinityPay (see note 1(b) above). As described in ~~Note~~note 1(b), the Company has agreed to make the IPSI Capital Contributions to IPSIPay Express. As of ~~September~~March 3031, ~~2024~~2025, the initial Tranche of $500,000 and the second Tranche of $500,000 of ~~capital~~ capital contributions was paid by the Company to or on behalf of IPSIPay Express.

~~The~~On ~~Company~~December ~~accounts~~31, ~~for~~2024, ~~its~~the ~~investment~~company impaired inthe ~~IPSIPay~~equity ~~Express~~method ininvestment ~~accordance~~and ~~with ASC~~all ~~323, Investments~~receivables –from ~~Equity~~the ~~Method~~joint ~~and~~venture ~~Joint~~by ~~Ventures~~$705,142 ~~the~~due ~~movement~~to inuncertainty ~~equity method~~as ~~investments related~~ to ~~IPSIPay~~the ~~Express~~ability ~~for~~of the ~~period~~Joint venture ~~ended~~to ~~September~~generate ~~30,~~revenues ~~2024~~during ~~and~~the ~~December~~foreseeable ~~31, 2023 is as follows:~~future.

	September 30, 2024			December 31, 2023
Cash contribution to IPSIPay Express	$	999,500		$	999,000
Fair value of warrants issued to third party joint venture partners		108,220			108,220
		1,107,720			1,107,220
Prior period equity loss from joint venture		(403,282	)		(403,282	)
Current period equity income (loss) from joint venture		(660	)		-
	$	703,778		$	703,938

The Company accounts for its investment in IPSIPay Express in accordance with ASC 323, Investments – Equity Method and Joint Ventures, the equity method investments related to IPSIPay Express as of March 31, 2025 and December 31, 2024 is as follows:

9 LEASES

	March 31,			December 31,
	2025			2024
Equity method Investment
Cash contribution to IPSIPay Express	$	999,500		$	999,500
Fair value of warrants issued to third party joint venture partners		108,220			108,220
		1,107,720			1,107,720
Equity loss from joint venture		(404,101	)		(404,101	)
		703,619			703,619
Receivable from IPSIPay Express		1,524			1,524
		705,143			705,143
Impairment of investment		(705,142	)		(705,142	)
Equity method investment	$	1		$	1

~~On March 22, 2021, the Company entered into a real property lease for an office located at 56B 5th Street, Lot 1, #AT, Carmel By~~ The ~~Sea,~~loss ~~California. The lease~~from ~~commenced~~equity onmethod ~~April~~investments ~~1, 2021 and is~~ for ~~a twelve-month period, terminating on April 1, 2022. Following~~ the ~~expiry~~three ofmonths ~~the lease~~ended ~~term,~~March ~~the landlord has agreed to continue the lease on a month-to-month basis at $4~~31,~~800 per~~ ~~month.~~2025 Onand ~~January 1~~2024, ~~2023,~~is ~~the~~as ~~Company entered into a new month-to-month lease, with a 90-day termination clause, for a monthly rental of $5,088. The lease was terminated effective August 31, 2023.~~ follows:

The Company applied the practical expedient whereby operating leases with a duration of twelve months or less are expensed as incurred.

	Three months ended March 31,		Three months ended March 31,
	2025		2024
Loss from Equity method investment
Loss from joint venture	$	-	$	(484	)

~~Total~~6 ~~Lease~~FEDERAL ~~Cost~~RELIEF LOANS

Individual components of the total lease cost incurred by the Company is as follows:

		Nine months ended September 30, 2024				Nine months ended September 30, 2023
Operating lease expense		$	-			$	40,704

Other lease information:

	Nine months ended September 30, 2024		Nine months ended September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	-	$	(40,704	)
Remaining lease term – operating lease		-		Monthly

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

10 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 of $710,~~670~~ 036 and $98,~~369~~869 on this loan as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

~~11 NOTES PAYABLE~~15

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited Condensed Financial Statements

7	NOTES PAYABLE

Notes payable consists of the following:

Description	Interest Rate		~~Maturity date~~	~~Principal~~Maturity date*		Principal		~~Accrued Interest~~		Accrued Interest		~~Unamortized debt discount~~		Unamortized debt discount		~~September 30, 2024 Amount, net~~		March 31, 2025 Amount, net		~~December 31, 2023 Amount, net~~		December 31, 2024 Amount, net
Cavalry Fund I LP	~~10.00%~~	18.0	~~October 31, 2024~~%	$Matured	~~482,000~~	$	482,000	$	~~85,689~~	$	123,338	$	-	$	-	$	~~567,689~~	$	605,338	$	~~531,004~~	$	583,648
Mercer Street Global Opportunity Fund, LLC	~~10.00%~~	18.0	~~October 31, 2024~~%	Matured	~~482,000~~		482,000		~~85,689~~		123,338		-		-		~~567,689~~		605,338		~~531,003~~		583,648
2024 notes	~~8.5%~~	0.0 to 18.0	~~February 28, 2025 to May 5, 2025~~%	February 28, 2025 to October 10, 2025	~~311,111~~		577,778		~~4,609~~		24,059		~~(60,869~~	)	(42,867	)	~~254,851~~		558,970		-		502,577
Total notes payable				$	~~1,275,111~~	$	1,541,778	$	~~175,987~~	$	270,735	$	~~(60,869~~	)$	(42,867	$)	~~1,390,229~~	$	1,769,646	$	~~1,062,007~~	$	1,669,873

Interest expense totaled $2853,~~489~~ 578 and $24,~~635~~368 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $77,980 and $73,371 for the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively.

Amortization of debt discount totaled $1446,~~248~~ 195 and $0 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~, respectively, ~~and $16,908 and $0 for the nine months ended September 30, 2024 and 2023, respectively.~~

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

OnIn ~~February 16,~~terms ~~2021,~~ of the ~~Company~~December ~~entered~~30, ~~into~~2022 ~~separate~~Note ~~Securities~~Amendment ~~Purchase Agreements (the “SPAs”)~~Transaction, ~~with~~described ~~each~~in ofmore ~~Cavalry~~detail ~~Fund~~in Inote LP8 ~~(“Cavalry”) and Mercer Street Global Opportunity Fund~~below, ~~LLC~~the ~~(“Mercer”),~~Original ~~pursuant~~Warrants toissued ~~which~~on ~~the~~February ~~Company received $500~~16,~~500 and $500,500 from~~ ~~Cavalry~~2021 ~~and~~were ~~Mercer,~~irrevocably ~~respectively,~~exchanged ~~in exchange~~ for ~~the issuance of: (i) Original Issue Discount~~ 12~~.5%~~-month ~~Convertible~~notes ~~Notes~~payable ~~(the “Notes” and each a “Note”)~~ in the ~~principal~~ amount of $~~572~~482,000 ~~to each of Cavalry and Mercer; and~~ (~~ii) five-year warrants (~~the “~~Original~~Exchange ~~Warrants~~Notes”) ~~issued~~ to each of Cavalry and Mercer. toThis ~~purchase 2,486,957 shares~~exchange ofcaused ~~Common~~the ~~Stock~~cancellation atof anthe ~~exercise price~~Original ofWarrants ~~$0.24 per~~for ~~share~~all purposes.

InThe ~~terms~~Exchange ofNotes ~~the~~had a maturity date of December 30, ~~2022~~2023 and ~~Note~~carried ~~Amendment~~an ~~Transaction,~~interest ~~described~~rate inof ~~more~~10% ~~detail~~per inannum. ~~note~~The 12Company ~~below,~~had the ~~Original~~right, ~~Warrants~~but not ~~issued~~the ~~on February 16~~obligation, ~~2021~~in ~~were~~lieu ~~irrevocably~~of ~~exchanged~~a ~~for~~cash ~~12-month~~payment ~~non-convertible~~upon ~~promissory~~maturity ~~notes in the amount~~ of ~~$482,000 (~~the “Exchange Notes”), to ~~each~~issue a total of 1,730,058 shares of ~~Cavalry~~Common ~~and~~Stock, ~~Mercer.~~as ~~This~~adjusted ~~exchange~~for ~~caused~~any ~~the~~stock ~~cancellation~~splits, ofdividends ~~the~~or ~~Original~~other ~~Warrants~~similar ~~for~~corporate ~~all~~events, ~~purposes.~~in ~~The~~full ~~Company accounted~~satisfaction ~~for~~of its obligations under the ~~aggregate~~Exchange ~~value~~Notes of(or ~~the~~any ~~notes~~pro ~~issued~~rata portion of ~~$964,000,~~such ~~less~~number ~~the~~of ~~fair~~shares ~~value~~in partial satisfaction of ~~the~~such ~~warrants~~obligations). ~~exchanged~~The ~~for~~Company ~~these~~is under ~~notes~~no oflegal ~~$43,608, totaling~~obligation ~~$920,392 as~~to areserve ~~component~~such number of ~~the~~shares ~~loss~~for onfuture ~~convertible debt~~issuance.

~~The~~On ~~Exchange~~February ~~Notes~~27, ~~have~~2024, athe maturity date of ~~December~~ ~~30,~~the ~~2023 and~~notes ~~carry~~was anextended ~~interest~~to ~~rate~~April of30, ~~ten~~2024 ~~percent~~with ~~(10%).~~an ~~The~~automatic ~~Company~~one-month ~~shall~~extension ~~have~~each ~~the right,~~month ~~but~~until ~~not~~such time as the ~~obligation,~~note inis ~~lieu~~declared ofto abe ~~cash~~in ~~payment~~default, ~~upon~~all ~~maturity~~other ofterms remain the ~~Exchange~~same ~~Notes,~~as tothe ~~issue 51,901,711 shares~~previous ~~of Common~~notes. ~~Stock,~~The asautomatic ~~adjusted~~extension ~~for~~of ~~any~~the ~~stock~~maturity date ~~splits,~~may ~~dividends~~not orextend ~~other~~past ~~similar~~November ~~corporate~~27, ~~events~~2024, inthereafter ~~full~~all ~~satisfaction~~amounts ofdue ~~its obligations~~ under ~~each~~the ofnote ~~the~~are ~~Exchange~~immediately ~~Notes~~due ~~(or~~and ~~any~~payable. ~~pro~~The ~~rata~~Company ~~portion~~performed an ofanalysis ~~such~~in ~~number~~terms of ~~shares~~ASC in470 ~~partial~~and ~~satisfaction~~it ofwas ~~such~~determined ~~obligations).~~that ~~The Company~~the isextension ~~under~~was noa ~~legal~~debt ~~obligation~~modification, toin ~~reserve~~addition, ~~such~~no ~~number~~additional ofconsideration was ~~shares~~paid for ~~future~~the ~~issuance~~maturity date extension.

OnWith ~~February~~effect from November 27, 2024, the ~~maturity date of the~~ notes ~~was~~accrue ~~extended~~interest toat ~~April~~18% 30per annum, ~~2024 with an automatic one-month extension each month until such time as~~ the ~~note is declared to be in~~ default, ~~all~~interest ~~other~~rate ~~terms~~per ~~remain~~ the ~~same~~note ~~as the previous notes~~agreement. 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.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

11 NOTES PAYABLE (continued)

2024 Notes

Between May 29, 2024 and ~~September 9~~November 27, 2024, the Company entered into ~~five~~nine Securities Purchase Agreements with ~~three~~four accredited investors, pursuant to which the Company issued ~~five non-convertible promissory~~ nine notes payable (the “2024 Notes”) with an aggregate principal amount of $~~311~~577,~~111~~ 778 for gross proceeds of $~~233~~433,333, after taking into account an aggregate original issuance discount of $77144,~~778~~445.

The 2024 Notes mature between February 28, 2025 and ~~June~~October 610, 2025 and bear interest at rates ranging from 0.0% to 8.5% 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.

12As ~~CONVERTIBLE~~of March ~~NOTES~~31, ~~PAYABLE~~2025, notes with a principal amount of $1,097,333 and interest thereon of $256,903 are technically in default. None of these note holders have declared a default.

~~December 2022 Note Amendment Transaction~~16

~~The~~INNOVATIVE ~~Company~~PAYMENT ~~twice extended its indebtedness to each Cavalry and Mercer. On February 3~~SOLUTIONS, ~~2022, the Company agreed to extend the maturity date of the Cavalry/Mercer Notes to August 16, 2022~~INC. 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 difference in exercise price.

Notes to the Unaudited Condensed Financial Statements

8	CONVERTIBLE DEBT

Convertible debt payable consists of the following:

Description	Interest Rate			Maturity date***	Principal		Accrued Interest		Unamortized debt discount			March 31, 2025 Amount, net		December 31, 2024 Amount, net
Cavalry Fund I LP		18.00	%*	Matured	$	819,371	$	41,096	$	-		$	860,467	$	836,942
Mercer Street Global Opportunity Fund, LLC		18.00	%*	Matured		1,042,701		55,936		-			1,098,637		1,051,013
Red Road Holdings Corporation		24.98	%**	Matured		-		-		-			-		20,085
		24.51	%**	Matured		116,381		18,762		-			135,143		173,798
Quick Capital LLC		11.03	%**	Matured		-		-		-			-		64,171

2023, 2024 and 2025 convertible debt		8.00 to 12.00	%	Matured to February 20, 2026		2,846,890		345,065		(61,845	)		3,130,110		2,870,196
Total convertible debt					$	4,825,343	$	460,859	$	(61,845	)	$	5,224,357	$	5,016,205

*	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.
**	The Red Road Holdings Corporation and Quick Capital LLC, interest rates are effective interest rates as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.

***

All convertible debt is technically in default due to the default on the outstanding Red Road Holdings Corporation convertible notes disclosed below. None of the convertible debt lenders have formally declared a default to the Company, other than one investor with an aggregate balance outstanding of $22,704.

Interest expense totaled $157,594 and $110,769 for the three months ended March 31, 2025 and 2024, respectively.

Amortization of debt discount totaled $71,862 and $319,899 for the three months ended March 31, 2025 and 2024, respectively.

The Cavalry, Mercer, Red Road Holdings Corporation and Quick Capital 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

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:

(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.;

(2) The Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month ~~non-convertible promissory~~ notes payable 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,~~057~~058 shares of Common Stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under ~~each of~~ 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;

(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;

(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

(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.

21As 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.

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.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

128 CONVERTIBLE ~~NOTES~~DEBT ~~PAYABLE~~ (continued)

~~December~~Cavalry ~~2022~~Fund ~~Note Amendment Transaction (continued)~~LLP

The parties also acknowledged that the principal and accrued interest under the Cavalry/Mercer Notes as of December 28, 2022 is equal to an aggregate of $2,264,784, or $1,132,392 for each of Cavalry and Mercer. In addition, 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 11 above) and the value of full ratchet provisions of certain of the warrants issued to the Cavalry and Mercer amounting to $841,003, the amendment of the Cavalry/Mercer Notes was determined to be a debt extinguishment.

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, other than the maturity date all other terms remained the same. 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.

Convertible notes payable consists of the following:

Description	Interest Rate	Maturity date	Principal		Accrued Interest		Unamortized debt discount			September 30, 2024 Amount, net		December 31, 2023 Amount, net
Cavalry Fund I LP	10.0%	October 31, 2024	$	868,951	$	46,925	$	-		$	915,876	$	909,218
Mercer Street Global Opportunity Fund, LLC	10.0%	October 31, 2024		901,334		222,687		-			1,124,021		1,139,764
Red Road Holdings Corporation*	29.32%	-		-		-		-			-		41,771
	27.77%	-		-		-		-			-		18,683
	32.04%	September 30, 2024		7,900		181		-			8,081		3,109
	24.98%	December 30, 2024		88,500		11,657		(29,608	)		70,549		-
	24.51%	March 30, 2025		125,080		8,481		(81,437	)		52,124		-
Quick Capital, LLC*	11.12%	-		-		-		-			-		-
	11.03%	November 28, 2024		57,144		6,871		(2,406	)		61,609		-
2023 and 2024 convertible notes	8.0 to 12.0%	May 22, 2024 to May 9, 2025		2,523,890		231,847		(71,175	)		2,684,562		1,591,735
Total convertible notes payable			$	4,572,799	$	528,649	$	(184,626	)	$	4,916,822	$	3,704,280

* The Red Road Holdings Corporation and Quick Capital LLC, interest rates are an effective interest rate as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.

Interest expense totaled $121,916 and $83,829 for the three months ended September 30, 2024 and 2023, respectively, and $351,764 and $212,886 for the nine months ended September 30, 2024 and 2023, respectively.

Amortization of debt discount totaled $219,700 and $303,042 for the three months ended September 30, 2024 and 2023, respectively, and $857,284 and $414,696 for the nine months ended September 30, 2024 and 2023, respectively.

The Cavalry, Mercer and Red Road Holdings 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.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

12 CONVERTIBLE NOTES PAYABLE (continued)

Cavalry Fund LP

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, ~~and again~~ additionally to December 30, 2023. Inand ~~consideration for~~again ~~the~~to ~~November~~April 1630, ~~2022 extension~~2024, ~~the~~with ~~Company~~an ~~agreed~~automatic toone-month ~~(i)~~extension ~~increase~~each ~~the~~month ~~principal~~until ~~amount~~such ~~outstanding~~time ~~and~~as ~~due~~the tonote ~~Cavalry~~is ~~by twenty~~declared ~~percent (20%) and (ii) issue a new five-year warrant~~ to ~~purchase~~be anin ~~additional 100~~default,~~000 shares~~ ofall ~~Common~~other ~~Stock~~terms atremain ~~an exercise price of $4.50 per share. In consideration of~~ the ~~December~~same ~~30,~~as ~~2022 extension,~~ the ~~Company~~previous ~~agreed~~notes. toThe ~~the~~automatic ~~following~~extension ~~terms; (i) the conversion price~~ of the ~~Note~~maturity ~~was~~date ~~reduced~~may ~~from $4.50 to $0.345 per share; (ii) Cavalry agreed (a)~~ not toextend ~~convert all or any~~past ~~portion~~November of27, ~~the Notes until after March 30~~2024, ~~2023~~thereafter ~~and~~all ~~(b)~~amounts ~~waive~~due ~~any events of default~~ under the ~~Note~~note ~~and~~are ~~the~~immediately ~~SPA;~~due ~~(iii) the Company agreed to~~ and ~~registered~~payable. ~~the~~The ~~shares~~Company ofis ~~Common~~currently ~~Stock~~negotiating ~~underlying~~with Cavalry ~~the~~to ~~Note~~place ~~and~~ the ~~shares~~note ~~underlying~~into ~~all~~forbearance, ~~warrants~~currently ~~held~~interest byis ~~Cavalry~~being ~~for~~accrued ~~resale~~at ~~with~~ the ~~Securities~~default ~~and~~interest ~~Exchange~~rate ~~Commission~~of ~~and~~18% ~~filed~~per ~~the~~annum ~~registration~~in ~~statement~~terms of ~~to satisfy~~ the ~~Company’s registration obligation~~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.

~~On February~~Between 27September 5, 2024, ~~the~~and ~~maturity~~November ~~date of the notes was extended to April 30~~11, 2024, ~~with~~Cavalry converted an ~~automatic~~aggregate ~~one-month~~of ~~extension~~$79,608 of ~~each~~principal ~~month~~and ~~until~~$88,876 of ~~such time~~interest ~~as the note is declared to be in default~~into 2,005,762 shares of ~~all~~Common ~~other~~Stock ~~terms~~at ~~remain~~a ~~the~~conversion ~~same~~price asof ~~the previous notes~~$0.084 per ~~Based~~share onrealizing ana ~~analysis~~loss ~~performed in~~on ~~terms~~conversion of ~~ASC470~~$37,490. ~~the~~Such ~~amendment~~conversion tocaused ~~the agreement was determined to be~~ a ~~debt~~reduction in ~~modification,~~the ~~there~~$0.345 conversion ~~were~~price noof ~~expenses incurred on~~ the ~~amendment and~~notes ~~interest~~described ~~will~~above beto ~~accrued at the effective interest rate~~$0.084.

~~Between~~On ~~September~~January 514, ~~2024 and September 10~~2025, ~~2024,~~ Cavalry ~~converted~~ ~~$30,029 of~~converted ~~principal~~an ~~and~~aggregate $3113,~~527~~346 of interest into ~~732~~526,~~815~~ 474 shares of ~~Common~~common ~~Stock~~stock at a conversion price of $0.~~084~~ 0254 per ~~share~~ ~~realizing a loss on conversion of $32,253~~share. ~~Such~~The ~~conversion~~Company realized ~~caused~~ a ~~reduction~~gain inon ~~the $0.345~~ conversion ~~price~~ of ~~the notes described above to~~ $0184.~~084~~ ~~(see note 13).~~

~~The~~In ~~balance~~terms of the agreement with Cavalry, the ~~Note~~conversion ~~plus~~price of the convertible note will be adjusted downwards on any dilutive issuances. The conversion price of the convertible ~~accrued~~debt ~~interest~~has atbeen ~~September~~adjusted 30to $0.001105, ~~2024~~the ~~was~~lowest ~~$915~~conversion price of conversions executed during the three months ended March 31,~~876~~ 2025.

The balance of the Cavalry Note plus accrued interest at March 31, 2025 was $860,467.

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, ~~and again~~ additionally to December 30, 2023. Inand ~~consideration for~~again ~~the~~to ~~November~~April 1630, ~~2022 extension~~2024, ~~the~~with ~~Company~~an ~~agreed~~automatic toone-month ~~(i)~~extension ~~increase~~each ~~the~~month ~~principal~~until ~~amount~~such ~~outstanding~~time ~~and~~as ~~due~~the tonote ~~Mercer~~is ~~by twenty~~declared ~~percent (20%) and (ii) issue a new five-year warrant~~ to ~~purchase~~be anin ~~additional 100~~default,~~000 shares~~ ofall ~~Common~~other ~~Stock~~terms atremain ~~an exercise price of $4.50 per share. In consideration of~~ the ~~December~~same ~~30,~~as ~~2022 extension,~~ the ~~Company~~previous ~~agreed~~notes. toThe ~~the~~automatic ~~following~~extension ~~terms; (i) the conversion price~~ of the ~~Note~~maturity ~~was~~date ~~reduced~~may ~~from $4.50 to $0.345 per share; (ii) Mercer agreed (a)~~ not toextend ~~convert all or any portion~~past ofNovember ~~the~~27, ~~Notes until after March 30~~2024, ~~2023~~thereafter ~~and~~all ~~(b)~~amounts ~~waive~~due ~~any events of default~~ under the ~~Note~~note ~~and~~are ~~the~~immediately ~~SPA;~~due ~~(iii) the Company agreed to~~ and ~~registered~~ ~~the~~payable. ~~shares~~The ofCompany ~~Common~~is ~~Stock~~currently ~~underlying~~negotiating ~~the~~with Mercer ~~Note~~to ~~and~~place the ~~shares~~note ~~underlying~~into ~~all~~forbearance, ~~warrants~~currently ~~held~~interest byis ~~Mercer~~being ~~for~~accrued ~~resale~~at ~~with~~ the ~~Securities and~~default ~~Exchange~~interest ~~Commission~~rate ~~and~~of ~~filed~~18% ~~the~~per ~~registration~~annum ~~statement~~in toterms of ~~satisfy~~ the ~~Company’s registration obligation~~agreement.

~~Between~~In consideration ~~May~~for 19the November 16, ~~2023~~2022 extension, the Company agreed to (i) increase the principal amount outstanding and ~~August~~due ~~30, 2023,~~to Mercer by ~~converted~~twenty anpercent ~~aggregate~~(20%) ofand $(ii) issue a new five-year warrant to purchase an additional 100,000 ~~into 289,856~~ shares of Common Stock at aan 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,; ~~realizing~~(ii) Mercer agreed (a) ~~loss~~not onto ~~conversion~~convert all or any portion of ~~$48~~the Notes until after March 30,~~551~~ 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.

On February 27, 2024, Mercer entered into a note amendment with the Company extending the maturity date of the convertible note 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. Based on an analysis performed in terms of ASC 470, the amendment to the agreement was determined to be a debt modification, there were no expenses incurred on the amendment and interest will be accrued at the effective interest rate.19

Between August 20, 2024 and September 5, 2023, Mercer converted an aggregate principal amount of $90,420 into 1,076,433 shares of Common Stock at a conversion price of $0.084 per share, realizing a loss on conversion of $84,291. Such conversion caused a reduction in the $0.345 conversion price of the notes described above to $0.084 (see note 13).

The balance of the Mercer Note plus accrued interest at September 30, 2024 was $1,124,021.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

128 CONVERTIBLE ~~NOTES~~DEBT ~~PAYABLE~~ (continued)

Mercer Street Global Opportunity Fund, LLC (continued)

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.

On January 14, 2025, Mercer converted an aggregate $13,346 of interest into 526,474 shares of common stock at a conversion price of $0.0254 per share. The Company realized a gain on conversion of $184.

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 $0.001105, the lowest conversion price of conversions executed during the three months ended March 31, 2025.

The balance of the Mercer Note plus accrued interest at March 31, 2025 was $1,098,637.

Red Road Holdings Corporation

● On September 9, 2023, the Company closed a transaction with Red Road Holdings Corporation (“RRH”) pursuant to which the Company received net proceeds of $125,000, after an original issue discount and fees of $21,900 in exchange for the issuance of a $146,900 Convertible Note (“RRH Note 1”), bearing interest at 13%, which interest is earned on issuance of the note, an effective interest rate of 29.3%, and maturing on June 15, 2024. The RRH Note 1 has mandatory monthly repayments of $18,444 which commenced on October 14, 2023. The RRH Note 1 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion. The RRH note 1 was repaid in full during the quarter ended June 30, 2024. ● On October 19, 2023, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $60,000, after an original issue discount and fees of $13,450 in exchange for the issuance of a $73,450 Convertible Note (“RRH Note 2”), bearing interest at 13%, which interest is earned on issuance of the note, an effective interest rate of 27.8%, and maturing on July 30, 2024. The RRH Note 2 has mandatory monthly repayments of $9,222 which commenced on November 30, 2023. The RRH Note 2 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion. On August 6, 2024, RRH converted an aggregate of $13,833, including a penalty of $4,611 into 164,679 shares of Common Stock at a conversion price of $0.084 per share, realizing a loss on conversion of $28,984, thereby extinguishing the note. ● On December 20, 2023, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $13,250 in exchange for the issuance of a $63,250 Convertible Note (“RRH Note 3”), bearing interest at 15%, which interest is earned on issuance of the note, an effective interest rate of 32.0%, and maturing on September 30, 2024. The RRH Note 3 has mandatory monthly repayments of $8,082. The RRH Note 3 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion. The balance of the RRH Note 3 plus accrued interest at September 30, 2024 was $8,081. ● On April 2, 2024, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $70,000, after an original issue discount and fees of $18,500 in exchange for the issuance of a $88,500 Convertible Note (“RRH Note 4”), bearing interest at 15%, which interest iswas earned on issuance of the note, an effective interest rate of 24.98%, and ~~maturing~~matured on December 30, 2024. The RRH Note 4 ~~has~~had mandatory repayments of $61,065 on September 30, 2024 and $13,570 per month on October 30, 2024, November 30, 2024 and December 30, 2024. The RRH Note 4 is convertible into shares of Common Stock at a variable conversion rate of 65% of the lowest trading price ten trading days before conversion. ~~The~~During ~~balance of~~ the ~~RRH~~quarter ~~Note~~ended 4December ~~plus accrued interest at September 30~~31, 2024 ~~was $70~~,~~549,~~ ~~net of unamortized debt discount of $29,608. ● On June 25, 2024,~~ the Company ~~closed~~repaid ~~a transaction with RRH pursuant to which the Company received net proceeds of~~ $~~100~~88,~~000,~~385 ~~after~~of anthe ~~original~~principal ~~issue discount~~ and ~~fees~~interest ofoutstanding. ~~$25,080~~The infinal ~~exchange~~instalment ~~for~~was ~~the~~not ~~issuance~~made ofand a ~~$125,080~~penalty ~~Convertible~~charge ~~Note~~of ~~(“RRH Note 5”), bearing interest at 15~~150%, ~~which interest is earned on issuance~~ of the ~~note,~~total anbalance ~~effective interest rate of 24.51%~~outstanding, ~~and~~amounting ~~maturing~~to ~~on March 30~~$6,695 ~~2025.~~was ~~The~~recorded ~~RRH~~by ~~Note~~the 5Company ~~has mandatory repayments of $93,498~~ on December 30, 2024. ~~and~~On ~~$16,782 per month on~~ January 307, 2025, ~~February 28, 2025~~ and ~~March~~January 308, 2025., ~~The~~Red ~~RRH~~Road ~~Note~~Holdings 5converted isan ~~convertible~~aggregate of $20,085, into 652,654 shares of Common Stock at a ~~variable~~weighted average conversion ~~rate~~price of ~~65%~~$0.0308 of(conversion ~~the~~prices ~~lowest~~ranging ~~trading~~from ~~price~~$0.0325 ~~ten~~to ~~trading~~$0.02782), ~~days~~realizing ~~before~~a ~~conversion.~~loss ~~The~~on ~~balance~~conversion of ~~the RRH Note 5 plus accrued interest at September 30, 2024 was~~ $5213,~~124~~363, ~~net~~thereby ofextinguishing ~~unamortized~~the ~~debt discount of $81,437~~note.

●

On June 25, 2024, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $100,000, after an original issue discount and fees of $25,080 in exchange for the issuance of a $125,080 Convertible Note (“RRH Note 5”), bearing interest at 15%, which interest is earned on issuance of the note, an effective interest rate of 24.51%, and maturing on March 30, 2025. The RRH Note 5 has mandatory repayments of $93,498 on December 30, 2024 and $16,782 per month on January 30, 2025, February 28, 2025 and March 30, 2025. The RRH Note 5 is convertible into shares of Common Stock at a variable conversion rate of 65% of the lowest trading price ten trading days before conversion.

The first instalment was not made, automatically placing the note into default, with a penalty charge of 150% of the total balance outstanding of $71,921 recorded by the Company on December 30, 2024.

Between January 13, 2025 and March 21, 2025, RRH converted an aggregate of $112,120, including an aggregate penalty of $31,500 into 37,177,846 shares of common stock at a weighted average conversion price of $0.003 (conversion prices ranging from $0.02535 to $0.001105), realizing a loss on conversion of $63,868.

The balance owing on the RRH Note 5 plus accrued interest, at March 31, 2025 was $135,143.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited Condensed Financial Statements

CONVERTIBLE DEBT (continued)

Quick Capital, LLC

● On ~~March~~May 428, 2024, the Company closed a transaction with Quick Capital, ~~LLC (“Quick Capital”)~~ pursuant to which the Company received net proceeds of $9446,~~000~~500, after an original issue discount and fees of $2010,~~286~~644 in exchange for the issuance of a $~~114~~57,~~286~~144 Convertible Note (“Quick Cap Note 12”) , bearing interest at an effective interest rate of 11.1203% per annum, which interest is earned on issuance of the note, and maturing on ~~September~~November 428, 2024. The Quick Cap Note 12 has monthly 3015,~~875~~429 commencing on ~~May~~July 428, 2024. The Note ~~was~~is convertible into shares of Common Stock at an adjusted conversion price of $0.084 per share, in addition, the Company issued a warrant exercisable for ~~357~~178,~~764~~882 shares of Common Stock at an initial exercise price of $0.345 per share. The warrant has full ratchet price protection which has resulted in the number of shares exercisable under the warrant increasing to 1734,~~469,388~~694 and the exercise price being amended to $0.084 per share. ~~The~~No ~~Company~~repayments ~~had~~have ~~repaid~~been anmade ~~aggregate~~on ofthe ~~$92~~Quick Capital Note 2 which provides for a no notice default,~~523~~ ofwhereupon the ~~principal~~note ~~and~~accrued penalty interest at a rate of 24% per annum on the total balance outstanding. ~~and~~The ~~between~~note ~~September~~holder 6did not apply the penalty interest to the balance outstanding. On November 28, 2024, ~~and~~the ~~September~~maturity 17date of the note, a penalty charge of 150% of the balance outstanding of $30,856 was recorded by the Company as additional principal outstanding. On December 6, 2024, Quick Capital converted an aggregate of $3229,~~906~~400, including a penalty of $21,000 into ~~391~~350,~~736~~000 shares of Common Stock at a conversion price of $0.084 per share, realizing a loss on conversion of $13280. Between January 7,~~965~~ 2025 and March 28, 2025, Quick Capital converted an aggregate of 71,900, including a penalty of $7,729 into 15,924,541 shares of common stock at a weighted average conversion price of $0.0045 (conversion prices ranging from $0.0325 to $0.001105), realizing a loss on conversion of $29,641, thereby extinguishing the note.

242023, 2024 and 2025 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 February 20, 2025, the Company entered into Securities Purchase Agreements with 1 accredited investor to purchase convertible notes (the “2025 Convertible Notes”), receiving an aggregate of $223,000 in gross proceeds from the 2025 Convertible Notes.

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

●

the 2023 Convertible Notes, the 2024 Convertible Notes and the 2025 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”), and five year warrants to purchase an aggregate of 2,654,761 shares of common stock at an exercise price of $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”).

The 2023 Convertible Notes, the 2024 Convertible Notes, and the 2025 Convertible Notes bear interest at rates ranging from 8.0% to 12.0% per annum, and are convertible into shares of common stock at a conversion price of $0.001105 to $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The 2023 Convertible Notes, the 2024 Convertible Notes and the 2025 Convertible Notes may be prepaid at any time without penalty.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

128 CONVERTIBLE ~~NOTES~~DEBT ~~PAYABLE~~ (continued)

~~Quick Capital~~2023, 2024 ~~LLC~~and 2025 Convertible Notes (continued)

~~● On May 28, 2024, the~~ The Company ~~closed~~is aunder ~~transaction~~no ~~with~~obligation ~~Quick Capital pursuant~~ to ~~which~~register the Company received net proceeds of $46,500, after an original issue discount and fees of $10,644 in exchange for the issuance of a $57,144 Convertible Note (“Quick Cap Note 2”), bearing interest at an effective interest rate of 11.03% per annum, which interest is earned on issuance of the note, and maturing on November 28, 2024. The Quick Cap Note 2 has monthly 15,429 commencing on July 28, 2024. The Note is convertible into shares of Common Stock atunderlying ~~an adjusted conversion price of $0.084 per share, in addition,~~ the ~~Company~~2023 ~~issued~~Convertible ~~a warrant exercisable for 178~~Notes,~~882~~ ~~shares of Common Stock at an initial exercise price of $0.345 per share. The warrant has full ratchet price protection which has resulted in~~ the ~~number~~2024 ofConvertible ~~shares exercisable under the warrant increasing to 734~~Notes,~~694 and~~ the ~~exercise~~2025 ~~price~~Convertible ~~being~~Notes ~~amended~~or ~~to $0.084 per share. No repayments have been made on~~ the ~~Quick~~2023 ~~Capital Note 2 which provides for a no notice default~~Warrants, ~~whereupon~~ the ~~note accrues penalty interest at a rate of 24% per annum on the total balance outstanding. Penalty interest amounting to $2,597 has been accrued on the Quick Capital 2 note as at September 30,~~ 2024. ~~The~~Warrants ~~balance~~and of the ~~Quick~~2025 ~~Capital note plus accrued interest at September 30~~Warrants, ~~2024~~for ~~was~~public ~~$61,610, net of unamortized debt discount of $2,406~~resale.

The 2023 ~~and~~Convertible Notes, the 2024 Convertible Notes, the 2025 Convertible Notes and the 2023 Warrants, the 2024 Warrants and the 2025 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.

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”). Between February 6, 2024 and August 9, 2024, the Company entered into Securities Purchase Agreements with 8 accredited investors to purchase convertible notes (the “2024 Convertible Notes”). The Company received an aggregate of $2,026,666 from the 2023 Convertible Notes and $475,002 from the 2024 Convertible Notes, in gross proceeds in private placements through the issuance of:

● the 2023 Convertible Notes and the 2024 Convertible Notes; and

● five-year warrants to purchase an aggregate 5,696,586 shares of Common Stock associated with the 2023 Convertible Notes (the “2023 Warrants”) and an aggregate of 289,856 shares of Common Stock associated with the 2024 Convertible Notes (the “2024 Warrants”), at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events).

The 2023 Convertible Notes and the 2024 Convertible Notes mature between 3.5 months and 12 months, bear interest at rates between 8% and 12% per annum and are convertible into shares of Common Stock at a conversion price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The 2023 Convertible Notes and 2024 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 and the 2024 Convertible Notes or the 2023 Warrants and the 2024 Warrants, for public resale.

The 2023 Convertible Notes, the 2024 Convertible Notes and the 2023 Warrants and the 2024 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.

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 ~~notes~~debt.

~~At September 30, 2024, notes with a~~The ~~principal~~Company ~~amount~~attempted ~~of $1,676,666 and accrued interest thereon on $186,789 have matured. No further extensions on notes that have matured or are expected~~ to ~~mature~~extend ~~prior to and subsequent to~~ the maturity date of ~~this~~the ~~Report~~convertible ~~have~~debt ~~been requested or granted. Pursuant~~ to ~~the~~December ~~Merger~~31, ~~Agreement entered~~2025, ~~into~~however ~~with~~this ~~Business~~was ~~Warrior~~not onformally ~~July~~agreed ~~28,~~to ~~2024~~ and was asnot aapproved ~~condition~~by ~~precedent to~~ the ~~consummation~~Board of ~~the merger contemplated thereunder~~Directors, the Company is ~~negotiating~~still ~~with~~pursuing ~~all~~a ofglobal ~~its~~settlement with all convertible note holders toand ~~exchange~~note holders, ~~such~~no ~~convertible~~agreement ~~notes~~has ~~for~~been ~~shares~~reached ~~to be designated and issued~~ as ~~Series A Convertible Preferred Stock~~ of the ~~Company.~~date ~~The terms~~ of ~~the~~this ~~exchange and such Series A Convertible Preferred Stock are still to be determined and are subject to Company stockholder approval~~report.

The ~~balance of the~~ 2023 Convertible Notes ~~and~~have ~~the~~an ~~2024~~aggregate ~~Convertible~~amount ~~Notes~~outstanding ~~plus~~of ~~accrued~~$2,324,350 ~~interest~~have atall ~~September 30~~matured, ~~2024~~and ~~was~~are $2technically in default,~~684,562,~~ ~~net~~none of ~~unamortized~~the 2023 ~~debt~~Convertible ~~discount~~Note ofinvestors ~~$71,175~~have declared a default.

25The 2024 Convertible Notes have an aggregate amount outstanding of $622,748, net of unamortized debt discount of $18,702, of which convertible notes with an aggregate amount outstanding of $336,906 matured and are technically in default.

One noteholder with an aggregate amount outstanding of $22,704 declaring a default, none of the other investors have declared a default, this investor has not demanded payment as yet. The Company has advanced notes receivable to Business Warrior in an aggregate principal amount of $406,190 and accrued interest thereon of $7,950. These investments were made out of proceeds received on notes payable of $311,111 and convertible debt of $138,856 in the prior year from two investors who are in control of Business Warrior. We intend to negotiate a global settlement whereby we will either collect the funds from Business Warrior or these two investors and utilize the proceeds to settle our notes payable and convertible debt with these two investors, we do not expect to incur a loss or gain on a negotiated settlement with these two investors.

The 2025 Convertible Notes have an aggregate amount outstanding of $183,011, net of unamortized debt discount of $43,144.

DERIVATIVE LIABILITY

The convertible debt and warrants issued by the Company to Cavalry, Mercer, RRH and Quick Capital, 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.

Between January 7, 2025 and March 28, 2025, the Company received conversion notices from Cavalry, Mercer, RRH and Quick Capital, pursuant to which $230,798 of principal, penalty and interest was converted into an aggregate of 54,807,989 shares of common stock at a weighted average conversion price of $0.004211 (conversion prices ranging from $0.0325 to $0.001105). as a result of these conversions, all of the outstanding convertible debt and warrants of the Company that contain price based anti-dilution protection had the conversion prices of such notes and the exercise price of such warrants adjusted to $0.001105 per share and certain warrants of the Company that contain “full-rachet” anti-dilution price protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.001105 per share (the “Triggering Event”).

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

139 DERIVATIVE LIABILITY (continued)

~~The~~Convertible ~~convertible~~debt ~~notes~~with an aggregate principal and ~~warrants~~interest balance outstanding on March 20, 2025 of $1,948,864 have such price-based anti-dilution protection. Based ~~issued~~on bythe lowest conversion price in the ~~Company~~period toJanuary ~~Cavalry~~7, ~~Mercer~~2025 ~~and~~to ~~RRH~~March 28, 2025, as described inabove, ~~Note~~the 12conversion ~~have~~price ~~variable~~of ~~priced~~these ~~conversion~~notes will ~~rights~~reset ~~with~~to no$0.001105. ~~fixed~~In ~~floor~~addition, certain warrants exercisable for 12,918,370 shares of common stock at an exercise price ~~and~~of ~~will~~$0.084 per ~~re-price~~share, ~~dependent~~have ona ~~the~~full ~~share~~ratchet ~~price~~provision ~~performance~~which ~~over~~results ~~varying~~in ~~periods~~an increase in the number of ~~time~~shares ~~and~~of ~~certain~~Common ~~notes~~Stock ~~and~~exercisable for such warrants ~~have~~by 969,111,567 to ~~fundamental transaction~~a ~~clauses~~total ~~which~~number ~~might~~of ~~result~~shares inof ~~cash~~Common ~~settlement~~Stock exercisable for such warrants of 982,029,937. In ~~due~~addition to ~~these~~this, ~~factors~~certain warrants exercisable for 457,897 shares ~~all~~of ~~convertible~~common ~~notes~~stock ~~and~~have ~~any~~exercise ~~warrants~~price ~~attached~~protection ~~thereto~~which will ~~are~~reduce ~~valued~~the ~~and~~exercise ~~give~~price ~~rise~~of these warrants to a$0.001105 ~~derivative~~per ~~financial~~share ~~liability~~from $0.084 per share, ~~which~~resulting ~~was~~in ~~initially~~a ~~valued~~decrease atin ~~inception~~potential ofproceeds receivable from the ~~convertible~~exercise ~~notes~~price ~~using a~~of ~~Black-Scholes~~such ~~valuation~~warrants ~~model~~by $37,957.

~~Between~~The ~~September~~value ~~12,~~of ~~2023~~the ~~and~~derivative ~~December~~liability ~~20,~~related ~~2023,~~to ~~and between April 2, 2024 and June 25, 2024,~~ the ~~Company~~anti-dilution ~~entered~~price ~~into~~protected a convertible ~~note~~debt ~~agreement~~and ~~with~~warrants ~~RRH~~was ~~which~~evaluated ~~have~~immediately ~~variable priced~~prior ~~conversion~~to ~~rights~~the ~~with~~Triggering noEvent ~~fixed floor price~~ and immediately ~~will~~after ~~re-price dependent on~~ the ~~share~~Triggering ~~price performance over varying periods of time~~Event, ~~which~~resulting ~~gave~~in ~~rise~~an toadditional a derivative ~~financial~~ liability, ~~which was initially valued at inception~~ of ~~the convertible notes at~~ $~~416~~2,~~317 and $268~~341,~~873, respectively,~~480 ~~but~~on ~~limited to~~ the ~~cash value of the~~ convertible ~~notes~~debt ~~of $235,000~~ and $~~170~~1,~~000~~618,545 on ~~respectively,~~the ~~using a Black-Scholes valuation model~~warrants.

OnThe ~~August~~net ~~6, 2024, the Company received a conversion notice from the holder of RRH Note 2 (see Note 12) pursuant~~ mark-to-market ~~which~~movement ~~$13,833~~ of the ~~remaining~~derivative ~~principal,~~liability ~~interest~~for ~~and late payment penalty under~~ the ~~RRH~~ 2three ~~Note~~months ~~was~~ended ~~converted~~March ~~into 164~~31,~~679~~ ~~shares~~2025 ofwas ~~Common Stock at~~ a ~~conversion~~net ~~price of $0.084 per share. As a result of the conversion of the RRH Note 2, all other outstanding promissory notes and warrants of the Company that contain price~~mark-~~based anti~~to-~~dilution~~market ~~protection had~~credit ~~the conversion prices~~ of ~~such notes and the exercise price of such warrants adjusted to~~ $~~0.084~~928,978, ~~per~~determined ~~share~~by ~~and~~using ~~certain warrants of the~~a ~~Company that contain “full ratchet” anti~~Black-~~dilution~~Scholes ~~price~~valuation ~~protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0~~model.~~084 per share (the “Triggering Event”).~~

Convertible notes with an aggregate principal and interest balance outstanding on August 6, 2024 of $2,165,578 have such price-based anti-dilution protection. Based on the conversion by the RRH Note 2 as described above, the conversion price of these notes will reset to $0.084. In addition, certain warrants exercisable for 3,145,342 shares of common stock at an exercise price of $0.345 per share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants by 9,773,028 to a total number of shares of Common Stock exercisable for such warrants of 12,918,370. In addition to this, certain warrants exercisable for 457,897 shares of common stock have exercise price protection which will reduce the exercise price of these warrants to $0.084 per share from $0.345 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $119,511.

The value of the derivative liability related to the anti-dilution price protected convertible notes and warrants was evaluated immediately prior to the Triggering Event and immediately after the Triggering Event, resulting in an additional derivative liability of $4,318,669 on the convertible notes and $2,051,405 on the warrants. In addition, a payment was not made on a convertible note with a no notice default clause, resulting in the triggering of a variable priced conversion feature, which gave rise to a derivative liability on the payment due date, this gave rise to an additional derivative liability of $56,329, both determined using a Black-Scholes valuation model.

The net mark-to-market movement of the derivative liability for the three months ended September 30, 2024 was a net mark-to-market credit of $5,538,008 and for the nine months ended September 30, 2024 was a net mark-to-market credit of $6,461,496, determined by using a Black-Scholes valuation model.

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

	nine months ended September 30, 2024			Year ended December 31, 2023
	Three months ended March 31, 2025			Year ended December 31, 2024
Conversion price	$	0.~~0491 to $0.345~~0022		$	0.~~104~~0364 to $0.345
Risk free interest rate		3.5889 to 54.~~50 %~~33	%		3.6058 to 5.~~55%~~50	%
Expected life of derivative liability		13 to 3529 months			~~3.5~~1 to 4741 months
Expected volatility of underlying stock		24189.38 to ~~262~~219.~~09%~~4	%		~~158~~24.723 to ~~217~~262.~~01%~~09	%
Expected dividend rate		0%.0	%		0%.0	%

The movement in derivative liability is as follows:

	September 30, 2024			December 31, 2023
	Three months ended March 31, 2025			Year ended December 31, 2024
Opening balance	$	1,~~434~~138,~~196~~204		$	21,~~550~~434,~~642~~196
Derivative financial liability arising from convertible note and warrants		226,329			385,000
Derivative financial liability arising from convertible debt and warrants		-			226,329
Derivative liability arising on anti-dilutive convertible notes and warrants		6,370,074			-
Derivative liability arising on anti-dilutive convertible debt and warrants		3,960,025			6,370,074
Fair value adjustment to derivative liability		(6928,~~461,496~~979	)		(16,~~501~~892,~~446~~395	)
	$	1,569,103		$	1,434,196
Closing balance	$	4,169,250		$	1,138,204

2623

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1410 STOCKHOLDERS’ EQUITY

Common Stock

The Company has total authorized Common Stock of 750,000,000 shares with a par value of $0.0001 each. The Company had 1673,~~185~~889,~~552~~435 and ~~and13~~19,~~819~~081,~~889~~446 shares of Common Stock issued and outstanding as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~ 2024, respectively.

On May 19, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 72,464 shares of Common Stock for the conversion of $25,000 of convertible debt.

On August 16, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 72,464 shares of Common Stock for the conversion of $25,000 of convertible debt.

On August 24, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 173,914 shares of Common Stock for the conversion of $60,000 of interest on convertible debt.

On August 30, 2023, the Company effectuated a 1 for 30 reverse stock split, resulting in the issuance of an additional 2,838 shares to existing stockholders due to rounding of existing shareholdings. All share amounts disclosed in the unaudited condensed consolidated financial statements have been adjusted to reflect the Company’s 1 for 30 reverse stock split effectuated on August 30, 2023.

On August 31, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 144,928 shares of Common Stock for the conversion of $50,000 of convertible debt.

On November 8, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 289,855 shares of Common Stock for the conversion of $100,000 of convertible debt.

On November 20, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 500,000 shares of Common Stock for the conversion of $172,500 of convertible debt.

On August 6, 2024, the Company received a conversion notice from the holder of RRH Note 2 (see Note 12) pursuant to which $13,833 of the remaining principal, interest and late payment penalty under the RRH 2 Note was converted into 164,679 shares of Common Stock at a conversion price of $0.084 per share. As a result of the conversion of the RRH Note 2, a warrant, with full ratchet anti-dilution price protection, exercise price was reduced from $0.345 per share to $0.084 per share and the number of shares exercisable was increased from 3,145,342 shares to 12,918,370 shares, resulting in a deemed dividend charge and a credit to additional paid in capital of $426,807.

Between August 6, 2024 and September 17, 2024, in terms of conversion notices received from 4 convertible note holders, including the RRH Note 2 described above, the Company issued 2,365,663 shares of common stock for the conversion of $198,716 of convertible debt at a conversion price of $0.084 per share, realizing an aggregate loss on conversion of $159,493.

27Between 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.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the unaudited Condensed Consolidated Financial Statements

14 STOCKHOLDERS’ EQUITY (continued)

Restricted stock awards

AThe ~~summary of~~ restricted stock ~~activity~~granted, issued ~~during~~and ~~the~~exercisable ~~period~~at ~~January 1, 2023~~March ~~to September 30~~31, ~~2024~~2025 is as follows:

		Total restricted shares*				Weighted average fair market value per share*				Total unvested restricted shares*			Weighted average fair market value per share*			Total vested restricted shares*		Weighted average fair market value per share*
				Restricted Stock Granted and Vested
Outstanding January 1, 2023			783,167			$	1.50				170,792		$	1.47			612,375	$	1.50
Grant date Price				Number Granted				Weighted Average Fair Value per Share
Granted and issued			-				-				-			-			-		-
$	1.47				683,167			$	1.47
Forfeited/Cancelled			-				-				-			-			-		-
$	1.50				33,333				1.50
Vested			-				-				(170,792	)		(1.47	)		170,792		1.47
$	1.65				66,667				1.65
Outstanding December 31, 2023			783,167			$	1.50				-		$	-			783,167	$	1.50
					783,167			$	1.50
Granted and issued			-				-				-			-			-		-
Forfeited/Cancelled			-				-				-			-			-		-
Vested			-				-				-			-			-		-
Outstanding September 30, 2024			783,167			$	1.50				-		$	-			783,167	$	1.50

*The ~~After~~Company ~~giving~~has ~~effect~~recorded toan aexpense 1 of $0 for 30the ~~reverse~~three ~~stock~~ended ~~split~~March on31, ~~August~~2025 ~~30,~~and ~~2023~~2024.

The restricted stock granted, issued and exercisable at September 30, 2024 is as follows:

		Restricted Stock Granted and Vested
Grant date Price		Number Granted*		Weighted Average Fair Value per Share*
$	1.47		683,167	$	1.47
$	1.50		33,333		1.50
$	1.65		66,667		1.65
			783,167	$	1.50

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

The Company has recorded an expense of $0 for the three and nine months ended September 30, 2024 and 2023.

Preferred Stock

The Company has authorized 25,000,000 shares of preferred stock with a par value of $0.0001 authorized. No preferred stock was issued and outstanding as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024.

Warrants

~~Between~~On ~~February 13,~~March ~~2023 and November 27~~4, ~~2023~~ 2024, the Company entered into a Securities Purchase ~~Agreements~~Agreement with 30an accredited ~~investors~~investor. In terms of ~~these~~ the Securities Purchase ~~Agreements~~Agreement, the Company issued a five-year ~~warrants~~warrant to purchase an aggregate 5of 357,~~696,586~~764 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted 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 ~~2023~~Note ~~Notes~~ or the ~~2023~~Warrant, ~~Warrants~~ for public resale.

On ~~August~~March 1114, ~~2023~~ 2024, the Company ~~issued~~extended anthe ~~investor~~maturity adate ~~five-year~~of ~~replacement warrant~~11 ~~for~~convertible anotes ~~warrant~~maturing ~~that~~between ~~had~~February ~~expired~~13, on2024 and February 1323, ~~2023~~2024 ~~exercisable~~by an additional six months and as compensation for 33the extension,~~334~~ the note holders were issued warrants exercisable for 387,673 shares of Common Stock at an exercise price of $10.50345 per share.

2824

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1410 STOCKHOLDERS’ EQUITY (continued)

Warrants (continued)

InBetween ~~connection~~May ~~with~~3, ~~the~~2024 ~~formation~~and ofMay ~~IPSIPay~~28, ~~Express~~2024, the Company ~~issued~~entered tointo ~~each~~a ofSecurities ~~the~~Purchase ~~other~~Agreements ~~venture partners, OpenPath and EfinityPay, IPEX Warrants to purchase an aggregate of 133,334 shares of Common Stock~~ with anfour ~~exercise~~accredited ~~of $0~~investors.~~45 per~~ ~~share.~~In ~~The~~terms ~~Company is obligated to issue each~~ of ~~OpenPath and EfinityPay additional IPEX Warrants to purchase 199,999 shares of Common Stock at a price equal to~~ the ~~average public closing price of the Common Stock for the three trading days immediately prior to the funding of the remaining~~Securities ~~initial~~Purchase ~~Tranche. Simultaneously with the funding of the second Tranche in September 2023~~Agreement, the Company ~~became~~issued ~~obligated~~five-year towarrants ~~issue~~ to ~~each of~~purchase ~~OpenPath and EfinityPay~~ an ~~additional IPEX Warrant to purchase~~aggregate ~~166~~of 468,~~667~~738 shares of the Common Stock at ~~with~~ an exercise price ~~equal to the average public closing price~~ of ~~the Common Stock for the three trading days immediately prior to the funding of the second Tranche~~$0. ~~Simultaneously~~345 per ~~with~~share ~~the~~(as ~~funding~~adjusted offor ~~the~~stock ~~third Tranche~~splits, ~~the~~stock ~~Company~~combinations, ~~will~~dilutive ~~issue~~issuances ~~to each of OpenPath~~ and ~~EfinityPay~~similar ~~an additional IPEX warrant~~events). toThe ~~purchase 166,667 shares~~Company ofis ~~Common~~under ~~Stock~~no ~~with~~obligation ~~an exercise price equal~~ to ~~the~~register ~~average public closing price of~~ the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock. ~~See~~underlying ~~note~~the ~~1(b)~~Note ~~above. As~~or of the ~~date of this Report~~Warrant, itfor ispublic ~~not expected that the full IPSI Capital Contribution will be required to be funded~~resale.

On December 14, 2023, the maturity date of 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 maturity date extension, the Company issued the note holders five-year 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 note holders warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share.

During 2023, warrants exercisable for 33,334 shares expired as unexercised and an additional warrant exercisable for 1,000,000 shares of Common Stock was forfeited on the disposal of Frictionless and Beyond Fintech.

On March 4, 2024, the Company entered into a Securities Purchase Agreement with an accredited investor, as disclosed in note 12 above. In terms of the Securities Purchase Agreement, the Company issued a five-year warrant to purchase an aggregate of 357,764 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted 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 Note or the Warrant, for public resale.

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 compensation for the extension, the note holders were issued warrants exercisable for 387,673 shares of Common Stock at an exercise price of $0.345 per share.

Between May 3, 2024 and May 28, 2024, the Company entered into a Securities Purchase Agreements with four accredited investors, as disclosed in note 12 above. In terms of the Securities Purchase Agreement, the Company issued five-year warrants to purchase an aggregate of 468,738 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted 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 Note or the Warrant, for public resale.

On May 4, 2024, the maturity date of two notes totaling $225,000 which originally matured on December 31, 2023 and which maturity dates were extended to March 30, 2024, 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, on June 14, 2024, the Company issued to note holders warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share.

29On August 6, 2024, the Company received a conversion notice from the holder of RRH Note 2. As a result of the conversion of the RRH Note 2, all warrants of the Company that contain price-based anti-dilution protection had the exercise price of such warrants adjusted to $0.084 per share and certain warrants of the Company that contain “full ratchet” anti-dilution price protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.084 per share. Certain warrants exercisable for 3,145,342 shares of common stock at an exercise price of $0.345 per share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants by 9,773,028 to a total number of shares of Common Stock exercisable for such warrants of 12,918,370 and a reduction in the exercise price to $0.084 per share from $0.345 per share, In addition to this, certain warrants exercisable for 457,897 shares of common stock have exercise price protection which reduced the exercise price of these warrants to $0.084 per share from $0.345 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $119,511. This resulted in a fair value adjustment charge of $2,478,211 of which $2,051,405 was recorded as a charge to the statement of comprehensive loss as it related to warrants subject to derivative liability treatment and $426,807 was recorded as a deemed dividend expense, as it related to a down round adjustment to the price of a warrant issued during the current year, which is not subject to derivative liability treatment.

On January 7, 2025 and February 20, 2025, the Company entered into a Securities Purchase Agreements with one accredited investor. In terms of the Securities Purchase Agreements, the Company issued five-year warrants to purchase an aggregate of 2,654,761 shares of the Common Stock at an exercise price of $0.084 per share (as adjusted 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 Note or the Warrant, for public resale.

Between January 7, 2025 and March 28, 2025, the Company received conversion notices from 5 note holders. As a result of these conversion notices, all warrants of the Company that contain price-based anti-dilution protection had the exercise price of such warrants adjusted to $0.001105 per share and certain warrants of the Company that contain “full ratchet” anti-dilution price protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.001105 per share. Certain warrants exercisable for 12,918,370 shares of common stock at an exercise price of $0.084 per share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants by 969,111,567 to a total number of shares of Common Stock exercisable for such warrants to 982,029,937 and a reduction in the exercise price to $0.001105 per share from $0.084 per share, In addition to this, certain warrants exercisable for 457,897 shares of common stock have exercise price protection which reduced the exercise price of these warrants to $0.001105 per share from $0.084 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $37,990. This resulted in a fair value adjustment charge of $1,968,909 of which $1,618,545 was recorded as a charge to the statement of comprehensive loss as it related to warrants subject to derivative liability treatment and $350,364 was recorded as a deemed dividend expense, as it related to a down round adjustment to the price of a warrant issued during the current year, which is not subject to derivative liability treatment.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1410 STOCKHOLDERS’ EQUITY (continued)

Warrants (continued)

OnThe ~~August 6~~2023, 2024~~, the Company received~~ aand ~~conversion~~2025 ~~notice~~Warrants ~~from~~contain ~~the~~exercise ~~holder~~limitations ofproviding ~~RRH~~that ~~Note~~a 2holder ~~(see~~thereof ~~Note~~may ~~12).~~not Asexercise ~~a result of~~ the ~~conversion~~Warrants ofto the ~~RRH~~extent ~~Note 2~~that, ~~all~~if ~~warrants of the~~after ~~Company~~giving ~~that~~effect ~~contain~~to ~~price-based~~such ~~anti-dilution~~exercise, ~~protection had~~ the ~~exercise~~holder ~~price~~or any of ~~such~~its ~~warrants~~affiliates ~~adjusted~~would tobeneficially ~~$0.084~~own ~~per~~in ~~share~~excess ~~and certain warrants~~ of 4.99% (the ~~Company that contain~~ “~~full ratchet~~Maximum Percentage”) ~~anti-dilution price protection had the number~~ of ~~shares exercisable for such warrants increased by~~ the ~~full~~outstanding ~~ratchet provision and the conversion prices of such warrants adjusted to $0.084 per share. Certain warrants exercisable for 3,145,342~~ shares of ~~common stock at an exercise price of $0.345 per share, have a full ratchet provision which results in an increase in~~ the ~~number of shares of~~ Common Stock ~~exercisable~~immediately ~~for~~after ~~such~~giving ~~warrants~~effect ~~by 9,773,028~~ to ~~a total number of shares of Common Stock exercisable for~~ such ~~warrants of 12,918,370 and a reduction in the~~ exercise ~~price to $0~~.~~084~~ ~~per~~A ~~share~~holder ~~from~~may ~~$0.345 per~~increase ~~share,~~or Indecrease ~~addition~~its tobeneficial ~~this,~~ownership ~~certain~~limitation ~~warrants~~upon ~~exercisable~~notice ~~for~~to ~~457,897 shares of common stock have exercise price protection which reduced~~ the ~~exercise~~Company ~~price~~provided ofthat ~~these warrants to $0.084 per share from $0.345 per share, resulting~~ in ano ~~decrease~~event ~~in potential proceeds receivable from the exercise price of~~ such ~~warrants~~limitation ~~by $119,511~~exceeds 9. ~~This resulted in a fair value adjustment charge of $2~~99%,~~478,211 of which $2,051,405~~ ~~was recorded as a charge to the statement of comprehensive loss as it related to warrants subject to derivative liability treatment~~ and ~~$426,807~~ ~~was~~that ~~recorded~~any asincrease ashall ~~deemed~~not ~~dividend~~be ~~expense,~~effective asuntil ~~it related to a down round adjustment to~~ the ~~price~~61st day ofafter asuch ~~warrant issued during the current year, which is not subject to derivative liability treatment~~notice.

The ~~2023~~fair ~~and~~value ~~2024~~of ~~Warrants contain exercise limitations providing that a holder thereof may not exercise~~ the ~~Warrants~~warrants togranted, ~~the~~repriced ~~extent~~and ~~that~~issued, ifas ~~after giving~~described ~~effect to such exercise~~above, ~~the~~were ~~holder~~determined orby ~~any~~using ofa ~~its~~Black ~~affiliates~~Scholes ~~would~~valuation ~~beneficially~~model ~~own~~using ~~in excess of 4.99% (~~the ~~“Maximum~~following 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 61st day after such notice.assumptions:

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 ended March 31, 2025
Exercise price	$	0.001105 to 0.084
Risk free interest rate		3.94 to 4.46	%
Expected life		5 months to 5 years
Expected volatility of underlying stock		183.1 to 207.0	%
Expected dividend rate		0	%

	Nine months ended September 30, 2024
Exercise price	$	0.084 to 0.345
Risk free interest rate		3.73 to 4.56%
Expected life		1 to 5 years
Expected volatility of underlying stock		177.78 to 191.17%
Expected dividend rate		0%

A summary of warrant activity during the period January 1, 2024 to March 31, 2025 is as follows:

A summary of warrant activity during the period January 1, 2023 to September 30, 2024 is as follows:

	Shares Underlying Warrants		Exercise price per share		Weighted average exercise price
Outstanding January 1, 2024		10,442,093	$	0.345 – 5.625	$	0.626500
Granted		1,796,493		0.084 to 0.345		0.267000
Increase in warrants issued due to anti-dilution price protection		9,773,028		0.0840		0.084000
Forfeited		-		-		-
Exercised		-		-		-
Outstanding December 31, 2024		22,011,614	$	0.084 – 5.625	$	0.319900
Granted		2,654,761		0.084		0.084000
Increase in warrants issued due to anti-dilution price protection		969,111,567		0.001105		0.001105
Forfeited		-		-		-
Exercised		-		-		-
Outstanding March 31, 2025		993,777,942	$	0.001105 – 5.625	$	0.007300

	Shares Underlying Warrants*			Exercise price per share*		Weighted average exercise price*
Outstanding January 1, 2023		5,186,376		$	0.345 – 5.625	$	0.9000
Granted		6,289,051			0.345 – 1.50		0.3556
Forfeited		(33,334	)		1.50		1.5000
Cancelled on disposal of investment in Frictionless and Beyond Fintech		(1,000,000	)		0.345		0.3450
Exercised		-			-		-
Outstanding December 31, 2023		10,442,093		$	0.345 – 5.625	$	0.6265
Granted		1,506,638			0.345		0.345
Increase in warrants issued due to anti-dilution price protection		9,773,028			0.084		0.084
Forfeited		-			-		-
Exercised		-			-		-
Outstanding September 30, 2024		21,721,759		$	0.084 – 5.625	$	0.3196

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1410 STOCKHOLDERS’ EQUITY (continued)

Warrants (continued)

The warrants outstanding and exercisable at ~~September~~March 3031, ~~2024~~2025 are as follows:

		Warrants Outstanding*						Warrants Exercisable*
		Warrants Outstanding						Warrants Exercisable
Exercise Price*		Number Outstanding*		Weighted Average Remaining Contractual life in years		Weighted Average Exercise Price*		Number Exercisable*		Weighted Average Exercise Price*		Weighted Average Remaining Contractual life in years
$	0.~~084~~001105		13982,~~376~~487,~~267~~834		32.1269				13982,~~376~~487,~~267~~834				32.1269
$	0.345		6,959,041		3.89				6,959,041				3.89
	0.084000		2,654,761		4.83				2,654,761				4.83
$	0.~~450~~345000		~~266~~7,~~668~~248,896		3.7344				~~266~~7,~~668~~248,896				3.7344
$	10.~~035~~450000		~~500~~266,~~000~~668		03.7723				~~500~~266,~~000~~668				03.7723
$	1.~~500~~035000		33500,~~334~~000		30.8727				33500,~~334~~000				30.8727
$	41.50500000		~~505~~33,~~560~~334		13.4637				~~505~~33,~~560~~334				13.4637
$	54.~~625~~500000		80505,~~889~~560		10.4696				80505,~~889~~560				10.4696
			21,721,759		3.28	$	0.3196		21,721,759	$	0.3196		3.28
$	5.625000		80,889		0.96				80,889				0.96
			993,777,942		2.70	$	0.007300		993,777,942	$	0.007300		2.70

*The warrants ~~After~~outstanding ~~giving~~have ~~effect~~an tointrinsic avalue of $1,075,824 and ~~for~~$0 as 30of ~~reverse~~March ~~stock~~31, ~~split~~2025 onand ~~August~~December 3031, ~~2023~~2024, respectively.

The warrants outstanding have an intrinsic value of $13,376 and $0 as of September 30, 2024 and 2023.

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.

During 2023, the Company cancelled options exercisable for 23,891 shares of Common Stock due to the previous resignation or termination of employees and officers whose stock options were not exercised in accordance with the terms allowed under the plan and were therefore canceled.27

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1410 STOCKHOLDERS’ EQUITY (continued)

Stock options (continued)

During 2024, ~~the Company~~ options exercisable for 6,667 shares of Common Stock expired due to the resignation of a director whose options were not exercised in accordance with the terms allowed under the plan and were therefore canceled.

AOn ~~summary~~January of7, ~~option~~2025, ~~activity~~in ~~during~~terms of an employment ~~the~~agreement ~~period~~entered ~~January 1~~into with Mr. Corbett, ~~2023~~ tothe ~~September~~Company 30awarded him ten year options exercisable for 600,000 ~~2024~~shares isof ascommon ~~follows:~~stock at an exercise price of $0.09 per share.

	Shares Underlying options*			Exercise price per share*		Weighted average exercise price*
Outstanding January 1, 2023		1,543,891		$	1.20 to 12.00	$	4.47
Granted		-			-		-
Forfeited/Cancelled		(23,889	)	$	1.20 to 12.00		5.41
Exercised		-			-		-
Outstanding December 31, 2023		1,520,002		$	1.20 to 12.00	$	4.46
Granted		-			-		-
Forfeited/Cancelled		(6,667	)		1.20		1.20
Exercised		-			-		-
Outstanding September 30, 2024		1,513,335		$	1.20 to 12.00	$	4.47

The fair value of the options granted were determined by using a Black Scholes valuation model using the following assumptions:

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

	Three months ended March 31, 2025
Exercise price	$	0.09
Risk free interest rate		4.67	%
Expected life		Ten years
Expected volatility of underlying stock		200.7	%
Expected dividend rate		0	%

~~The~~A ~~options~~summary ~~outstanding~~of ~~and~~option ~~exercisable~~activity during the atperiod ~~September~~January 1, 2024 30to March 31, ~~2024~~2025 ~~are~~is as follows:

				Options Outstanding*										Options Exercisable*
		Shares Underlying options				Exercise price per share				Weighted average exercise price
Exercise Price*				Number Outstanding*				Weighted Average Remaining Contractual life in years				Weighted Average Exercise Price*		Number Exercisable*		Weighted Average Exercise Price*		Weighted Average Remaining Contractual life in years
Outstanding January 1, 2024			1,520,002			$	1.20 to 12.00			$	4.46
$	1.20				13,334				7.96						13,334				7.96
Granted			-				-				-
$	4.50				1,500,001				7.19						1,500,001				7.19
Forfeited/Cancelled			(6,667	)			1.20				1.20
					1,513,335				7.20			$	4.47		1,513,335	$	4.47		7.20
Exercised			-				-				-
Outstanding December 31, 2024			1,513,335			$	1.20 to 12.00			$	4.47
Granted			600,000				0.09				0.09
Forfeited/Cancelled			-				-				-
Exercised			-				-				-
Outstanding March 31, 2025			2,113,335			$	0.09 to 12.00			$	3.227

The options outstanding ~~have~~and ~~an intrinsic~~exercisable ~~value~~at ofMarch ~~$0 as of September 30~~31, ~~2024~~2025 ~~and~~are ~~2023.~~as follows:

The option expense was $31,488 and $94,464 for the three months ended September 30, 2024 and 2023, respectively, and $220,416 and $283,392 for the nine months ended September 30, 2024 and 2023, respectively.

		Options Outstanding						Options Exercisable
Exercise Price*		Number Outstanding		Weighted Average Remaining Contractual life in years		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual life in years
$	0.09		600,000		9.78				325,000				9.78
$	1.20		13,334		7.46				13,334				7.46
$	4.50		1,500,001		6.69				1,500,001				6.69
			2,113,335		7.57	$	3.227		1,838,335	$	3.696		7.24

32The options outstanding have an intrinsic value of $0 as of March 31, 2025 and December 31, 2024.

The option expense was $17,815 and $94,464 for the three months ended March 31, 2025 and 2024, respectively.

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1511 LOSS ON CONVERTIBLE ~~NOTES~~DEBT

The loss on convertible ~~notes~~debt consists of the following:

	Three months ended		Three months ended		Nine months ended		Nine months ended
	Three months ended March 31, 2025		Three months ended March 31, 2024
	September 30,		September 30,		September 30,		September 30,
Penalty on convertible debt	$	39,229	$	-
	2024		2023		2024		2023
Expense on extension of maturity date of convertible debt		-		66,047
Expense on extension of maturity date of convertible notes		-		-		102,352		-
Loss on conversion of convertible debt		106,504		-
Loss on conversion of convertible notes		159,493		58,769		159,493		77,247
Loss on anti-dilution price protection adjustment		2,341,480		-
Loss on anti-dilution price protection adjustment		4,318,669		-		4,318,669		-
	$	2,487,213	$	66,047
Loss on no notice default convertible note		56,329		-		56,329		-
		4,534,491		58,769		4,636,843		77,247

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.

Expense on extension of maturity date of convertible debt

On March 14, 2024, the Company extended the maturity date of 11 convertible notes which matured between February 13, 2024 and February 23, 2024 by six months and issued the note holders additional warrants exercisable for 387,673 shares of Common Stock, the modification of the terms and the issue of the new warrants was assessed as a debt extinguishment.

OnThe ~~May~~debt 4,extinguishments ~~2024,~~resulted ~~the~~in ~~maturity~~a ~~date~~charge of ~~two notes totaling~~ $~~225~~66,~~000 which~~047 originally matured on December 31, 2023 and which maturity dates were extended to March 30, 2024, 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~~three ~~date~~months ~~extension,~~ended onMarch ~~June 14~~31, 2024~~, the Company issued to note holders warrants exercisable for 292,463 shares of Common Stock, the modification of the terms and the issue of the new warrants was assessed as a debt extinguishment~~.

~~The debt~~Loss ~~extinguishments~~on ~~resulted~~conversion ~~in a charge~~ of $0convertible ~~and $102,352 for the three and nine months ended September 30, 2024, respectively.~~debt

Between ~~August~~January 67, ~~2024~~2025 and ~~September~~March 28, 172025, ~~2024,~~ in terms of conversion notices received from 45 convertible note holders, the Company issued 2 54,~~365~~807,~~663~~ 989 shares of common ~~stock~~ stock for the conversion of $~~198~~230,~~716~~ 798 of convertible debt at a weighted average conversion price of $0.~~084~~004211 ~~per~~(conversion ~~share~~prices ranging from $0.0325 to $0.001105), realizing an aggregate loss on conversion of $~~159~~106,~~493~~504.

~~As a result of the conversion of the~~Loss ~~RRH~~on ~~Note 2 ( see note 12 above), included in the paragraph above, all other outstanding convertible notes of the Company that contain price-based~~ anti-dilution price protection ~~had the conversion prices of such notes adjusted to $0.084 per share (the “Triggering Event”).~~adjustment

~~The~~As ~~value~~a result of the ~~derivative~~conversion ~~liability related~~of to the ~~anti-dilution price protected~~ convertible ~~notes~~debt, ~~was~~referred ~~evaluated immediately prior~~ to ~~the~~in ~~Triggering Event and immediately after~~ the ~~Triggering~~paragraph ~~Event~~above, ~~resulting~~all inother anoutstanding ~~additional derivative liability and loss on~~ convertible ~~notes~~debt of ~~$4,318,669.~~the InCompany ~~addition,~~that acontain ~~payment~~price-based ~~was~~anti-dilution ~~not~~protection ~~made~~had ~~on a convertible note with a no notice default clause, resulting in~~ the ~~triggering~~conversion prices of asuch ~~variable~~notes ~~priced~~adjusted ~~conversion feature, which gave rise~~ to a$0.001105 ~~derivative~~per ~~liability~~share on (the ~~payment due date, this gave rise to an additional loss on convertible notes~~“Triggering ~~of $56,329~~Event”).

16The ~~NET~~value of ~~LOSS~~the ~~PER~~derivative ~~SHARE~~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.

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 and nine months ended September 30, 2024 and 2023 all warrants options and convertible debt securities were excluded from the computation of diluted net loss per share.29

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 and nine months ended September 30, 2024 and 2023 are as follows:

	Three and nine months ended September 30, 2024 (Shares)		Three and nine months ended September 30, 2023 (Shares)
Convertible debt		38,680,397		13,046,469
Stock options		1,513,335		1,543,893
Warrants to purchase shares of Common Stock		21,721,759		9,135,137
		61,915,491		23,725,499

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the ~~unaudited~~Unaudited Condensed ~~Consolidated~~ Financial Statements

1712 ~~RELATED~~NET ~~PARTY~~LOSS ~~TRANSACTIONS~~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 ~~following~~computation ~~transactions~~of ~~were~~diluted ~~entered~~net loss per share does not assume the issuance of ~~into~~Common ~~with~~Stock ~~related~~that ~~parties~~have ~~during~~an anti-dilutive effect on net loss per share. For the ~~nine~~three months ended ~~September~~March 3031, 2025 and 2024: 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, 2025 and 2024 are as follows:

	Three months ended March 31, 2025 (Shares)		Three months ended March 31, 2024 (Shares)
Convertible debt		1,978,891,288		15,232,285
Stock options		2,113,335		1,520,002
Warrants to purchase shares of Common Stock		993,777,942		11,187,530
		2,974,782,565		27,939,817

RELATED PARTY TRANSACTIONS

The following transactions were entered into with related parties:

William Corbett

AnIn ~~option~~terms ~~expense~~of ~~for~~an ~~options~~employment ~~still~~agreement ~~vesting~~entered ~~for~~into on January 7, 2025, with Mr. Corbett, ~~was~~which ~~$22~~is for a term expiring on December 31,~~196~~ ~~and~~2025 at a base salary of $6620,~~587 for~~000 ~~the~~per ~~three~~month, Mr. ~~months~~Corbett ~~ended~~was ~~September~~awarded ~~30,~~ten ~~2024~~year ~~and~~options ~~2023~~exercisable for 600,000 ~~respectively~~shares ~~and~~of common stock at an exercise price of $~~155,369~~0.09 per share. With ~~and~~the ~~$199~~resignation of Mr. Rosenblum,~~760~~ ~~for~~disclosed below, Mr. Corbett assumed the ~~nine~~role ~~months~~of ~~ended~~Chief ~~September~~Executive 30Officer, ~~2024~~Chief Financial Officer and President ~~2023,~~of ~~respectively~~the Company.

The option expense for options still vesting for Mr. Corbett was $17,815 and $66,587 for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 and December 31, 2024, the company owed Mr. Corbett $5,106 and $0, respectively. Mr. Corbett paid certain operating expenses on behalf of the Company.

Richard Rosenblum

An option expense for options still vesting for Mr. Rosenblum was $~~9,292~~ 0 and $27,~~879~~877 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively and $65,047 and $83,636 for the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively.

18Mr. ~~COMMITMENTS~~Rosenblum ~~AND~~resigned ~~CONTINGENCIES~~all his positions with the Company with effect from January 7, 2025.

The Company has notes payable and convertible notes payable, disclosed under Notes 11 and 12 above, which had and have maturity dates between May 22, 2024 and May 9, 2025. The Company may settle certain of the notes payable, at its option by the issue of shares of its Common Stock and should the convertible notes not be converted to Common Stock prior to their maturity dates, the Company may need to repay the principal and interest outstanding on these notes.30

19INNOVATIVE ~~SUBSEQUENT~~PAYMENT ~~EVENTS~~SOLUTIONS, INC.

~~October~~Notes ~~2024~~to ~~Senior~~the ~~Promissory~~Unaudited ~~Notes~~Condensed Financial Statements

On14 ~~October~~COMMITMENTS ~~10,~~AND 2024, the Company entered into two Securities Purchase Agreements with accredited investors, pursuant to which the Company issued two senior promissory notes each with a principal amount totaling $66,667 (totaling $133,334), for gross proceeds of $50,000 each (totaling $100,000), including an aggregate original issuance discount of $16,667 (totaling $33,334), for each note. The notes mature on October 10, 2025 and bear interest at 8.5% per annum.CONTINGENCIES

~~October~~The ~~2024~~Company ~~Convertible~~has ~~Promissory~~notes payable and convertible debt, disclosed under Notes 7 and 8 above, which had and have already matured and are technically in default or mature by February 20, 2026. 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.

On15 ~~October~~SUBSEQUENT 22, 2024, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company received an aggregate of $100,000 through the issuance of a convertible promissory note and a five-year warrant to purchase an aggregate of 289,855 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). The note matures on October 22, 2025 and bears interest at 8% per annum and are convertible into shares of Common Stock at a conversion price of $0.084 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The note may be prepaid at any time without penalty. The Company is under no obligation to register the shares of Common Stock underlying the notes or the warrants for public resale.EVENTS

~~The~~Conversion note and warrant contain conversion limitations providing that a holder thereof may not convert the notes or exercise the warrants, to the extent that, if after giving effect to such conversion, the holder or any of ~~its~~convertible 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. The 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.debt

~~Note~~Between ~~Conversions~~April 7, 2025 and May 14, 2025, The Company received conversion notices from convertible note holders converting an aggregate of $97,064 into 99,338,142 shares of common stock at conversion prices ranging from $0.000585 to $0.001170 per share, resulting in a loss on conversion of $62,537.

OnAs ~~October~~a ~~11,~~result ~~2024,~~of the ~~Company~~conversion ~~received~~notices ~~two~~received, ~~conversion~~warrants ~~notices~~exercisable ~~from~~for 457,897 shares ~~two~~of ~~convertible~~common ~~note~~stock ~~holders,~~that ~~each~~contain ~~converting~~price-based ananti-dilution ~~aggregate~~protection had the exercise price of such warrants adjusted from $~~33,922~~0.001105 per ~~(totaling~~share to $~~67,844)~~0.000585 per share and certain warrants exercisable for 982,029,937 shares of common stock that contain “full ratchet” anti-dilution price protection had the ~~interest~~number of shares exercisable for such warrants ~~outstanding~~increased onby the ~~notes~~full ratchet provision and the exercise prices of such warrants adjusted to $0.000585 per share. In addition, ~~into~~certain convertible notes with an aggregate balance outstanding of ~~403~~$2,~~829~~049,064 on ~~(totaling~~March ~~807~~31,~~658)~~ ~~shares~~2025, will have their conversion prices adjusted to the lowest conversion price during subsequent periods, as of ~~common~~the ~~stock~~date of this report, atthe alowest conversion price ofis $0.~~084~~000585. ~~per~~Further ~~share~~conversions at conversion prices lower than $0.000585 subsequent to May 14, 2025, will impact the exercise price and the number of warrants outstanding and the conversion price of convertible notes for subsequent reporting periods.

OnConvertible ~~October~~debt 25, 2024, the Company received two conversion notices from two convertible note holders, each converting an aggregate of $35,614 (totaling $71,229) of the interest outstanding on the notes into an aggregate of 423,981 (totaling 847,962) shares of common stock, at a conversion price of $0.084 per share. funding

On ~~November~~April 1129, ~~2024~~2025, the Company ~~received~~entered ~~two~~into ~~conversion~~Securities ~~notices~~Purchase ~~from~~Agreement ~~two~~pursuant to which the Company issued a convertible promissory note ~~holders,~~and ~~each~~a ~~converting~~warrants anto ~~aggregate~~one accredited investment entity for total gross proceeds of $37150,~~392~~000, ~~(totaling~~less expenses of $746,~~783)~~000 for net proceeds of ~~interest~~$144,000. ~~and~~The notes are unsecured, ~~principal~~mature ~~outstanding~~12 onmonths ~~the~~from ~~notes~~issuance ~~into~~date anand ~~aggregate~~bear interest at a rate of 8% ~~445,137~~per ~~(totaling~~annum ~~890~~based on a 360 day trading-year,~~274)~~ and are convertible into shares of common stock, of the Company at a conversion price of $0.~~084~~005 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 five-year warrants to purchase an aggregate of 30,000,000 shares of the Common Stock at an exercise price of $0.005 per share (as adjusted for stock splits, stock combinations, and similar events). The Company is under no obligation to register the shares of Common Stock underlying the Note or the Warrant, for public resale.

Other than the above, the Company has evaluated subsequent events through the date the financial statements were issued and did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

3431

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 ~~and its consolidated subsidiaries~~ unless the context requires otherwise.

Overview

We are a fintech provider of digital payment solutions presently focused on, through its participation in IPSIPay Express, developing a new account-to-account payment application called Instant Direct Payments (which we call IPEX) as well as traditional credit card processing services. 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~~ IPSIPay Express

~~Our principal~~While ~~business~~we asbelieve of the IPSIPay ~~date~~Express ofopportunity ~~this~~has ~~Report~~great ~~consists~~promise, as of ~~our participation in~~ the ~~IPSIPay~~date ~~Express~~of ~~joint~~this ~~venture.~~report, ~~Since~~IPEX ~~May~~has ~~2023, we~~not ~~have~~ been ~~working~~launched ~~with our joint venture partners OpenPath~~ and ~~EfinityPay~~we tohave ~~establish~~derived ~~the~~no ~~necessary elements to commercially launch~~revenue ~~IPEX.~~or ~~This~~cash ~~remains~~distributions ~~our~~from ~~top~~IPSIPay ~~business priority~~Express. We ~~have~~expect ~~been~~that ~~responsible~~revenue ~~for~~will ~~certain~~be ~~key~~generated ~~aspects~~by ofIPSIPay ~~establishing~~Express ~~and~~through ~~launching~~fees ~~IPEX.~~derived Wefrom merchant ~~have~~processing ~~continued~~fees, ~~these~~money ~~efforts~~transfer ~~during~~fees, ~~2024.~~and Nocommissions ~~assurances~~on ~~can~~international bebill ~~given~~payment ~~that~~processing. weTo ~~will~~date, ~~be able to launch IPEX with~~ our ~~joint~~activities ~~venture~~related ~~partners or~~to ~~that~~ IPSIPay Express ~~will~~have ~~generate~~included ~~revenues~~the ~~for us.~~following:

~~Merger~~● ~~Agreement~~Securing Banking Relationships. To engage in traditional credit card processing or the proposed IPEX account-to-account payment solution, it is necessary to work with ~~Business~~qualified ~~Warrior~~banking institutions through which transactions are processed. As of the date of this Report, such relationships are not in place.

~~On July~~● ~~28,~~Assisting ~~2024,~~with wePayment ~~entered~~Logistics. ~~into~~We anhave ~~Agreement~~been ~~and~~working ~~Plan~~with ofour ~~Merger~~IPSIPay ~~pursuant~~Express joint venture partners to ~~which~~establish wethe ~~would~~systems ~~acquire~~and ~~Business~~technology ~~Warrior~~necessary ~~Corporation,~~to aeffectuate ~~Wyoming corporation~~payments ~~(“Business~~through ~~Warrior”)~~IPEX. ~~See~~As ~~Note~~of ~~1(c)~~the todate of this Report, the ~~accompanying~~establishment ~~financial~~of ~~statements~~such ~~for~~systems ~~information~~and ~~regarding~~technology is still ongoing, which is the ~~terms and~~primary ~~conditions~~reason ofwhy ~~this~~IPEX ~~proposed~~has ~~merger~~not been commercially launched to date.

~~Business Warrior~~● ~~offers~~Securing aCustomers. ~~proprietary~~Our ~~software~~management ~~solution~~has ~~for~~also ~~lenders~~been ~~called~~working ~~PayPlan,~~to asecure ~~next-generation~~potential ~~SaaS~~customers ~~platform~~for ~~that~~IPEX. ~~offers~~These ~~lenders~~customers ~~unprecedented flexibility~~would toinclude ~~customize~~gaming ~~their loan offerings~~ and ~~adjust~~entertainment ~~underwriting rules in minutes, without the need for coding or significant financial outlay~~businesses.

WeNo assurances can be ~~believe~~given ~~this~~that ~~strategic~~IPSIPay ~~merger~~Express ~~brings~~will ~~together~~be ~~the~~successfully ~~strengths~~launched ofor ~~both~~will ~~our~~generate ~~Company~~revenues ~~and~~or ~~Business~~otherwise ~~Warrior,~~have ~~creating~~a anpositive ~~expanded~~impact ~~fintech~~on ~~offering~~our results ~~and~~of ~~promising~~operations. ~~immediate~~We ~~cost~~believe ~~efficiencies~~IPSIPay ~~and~~Express could abe ~~stronger~~commercially ~~executive~~launched ~~team~~and ~~capable~~generate ofinitial ~~raising~~revenues ~~additional~~during ~~capital. The~~the ~~integration~~current offiscal ~~our~~year, ~~Company~~but ~~with~~no ~~Business~~assurances ~~Warrior~~can be provided that this will ~~enable~~be ~~optimization~~achieved ofor ~~talent~~that ~~and~~(i) ~~networks,~~we ~~allowing~~will ~~the~~be ~~teams~~able ~~from~~to ~~both~~raise ~~companies~~funds satisfactory to ~~leverage~~fulfill ~~their~~all ~~experience~~of ~~and~~our ~~connections~~capital contributions to ~~drive~~IPSIPay ~~business~~Express ~~growth.~~or ~~The~~(ii) ~~merger~~that ~~also~~we ~~aligns~~will ~~the~~ever ~~scalable~~receive ~~technologies~~distributions of ~~our~~free ~~Company~~cash ~~and~~flow ~~Business~~from IPSIPay Express. ~~Warrior~~Moreover, ~~paving~~ the ~~way~~IPSIPay ~~for~~Express ~~increased~~product ~~revenue~~offering ~~generation~~will be targeting so-called “high risk” sectors such as online gaming and, ~~ultimately~~entertainment, which ~~profitability~~also carries certain risks.

We expect to spend much of the fourth quarter of 2024 raising capital necessary to seek appropriate shareholder approvals, and seeking such approvals, for the merger and otherwise fulfilling the conditions to closing of the merger. Among such conditions is an exchange of our and Business Warrior’s outstanding convertible promissory notes for shares of a newly designated preferred stock of our Company (we have convertible note investors in common with Business Warrior). However, the terms of such exchange and such preferred stock remain subject to negotiation and approval of our shareholders. Moreover, there are several other key conditions to closing which will be challenging to fulfill. Therefore, our ability to consummate the merger is subject to significant risks and uncertainties, and the merger may never be consummated. The efforts needed to complete the merger and these risks and uncertainties will affect our results of operations in the coming periods.Inflation

35Macro-economic conditions could affect consumer spending adversely and consequently our future operations when we fully launch our e-wallet products commercially. The U.S. has entered a period of significant 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 due to recent inflationary concerns in the U.S.

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.

Critical Accounting Estimates

Preparation of our ~~consolidated~~ 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~~ policies are fundamental to understanding our financial condition and results as they require the use of estimates and assumptions which ~~affect~~ affect the financial statements and accompanying notes. See Note 2 - Summary of Significant Accounting Policies of the Notes to the condensed ~~Consolidated~~ 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 ~~notes~~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 ~~September~~March 3031, ~~2024~~ 2025 and ~~2023~~2024

Net revenue

We ~~recorded~~had ~~minimal~~no revenues offor ~~$0 and $(28) during~~ the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively~~2024. ~~The revenue in the prior year was generated from our legacy IPSIPay platform which was novated to a third party in September 2023.~~ We pivoted to focus our attention on the IPSIPay Express joint venture, ~~where~~and wepotential ~~expect to~~payment ~~generate~~processing ~~initial~~opportunities ~~revenues~~to ~~during~~generate ~~the 2024 fiscal year~~revenues, ~~dependent~~however onthere ~~product~~can ~~testing,~~be ~~which~~no isguarantees ~~currently~~that ~~underway, and market acceptance. In addition, if the merger with Business Warrior is consummated,~~ we ~~expect~~will tobe ~~generate~~successful ~~revenues~~in ~~from~~our ~~Business Warrior’s business activities~~endeavors.

Cost of goods sold

We ~~did~~had ~~not~~no ~~have any revenues or~~ cost of goods sold for the three months ended ~~September~~March 3031, ~~2024.~~2025 ~~Cost of goods sold was $387 for the three months ended September 30, 2023~~ and ~~consisted primarily of bank and merchant related fees and chargebacks~~2024.

3633

General and administrative expenses

General and administrative expenses were $~~296~~254,~~438~~308 and $~~745~~626,~~688~~797 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $~~449~~372,~~250~~489 or 6059.24%. The decrease is primarily due to the following:

(i) Legal fees were $893,~~334~~805 and $~~236~~152,~~832~~594 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $~~147~~148,~~498~~789 or 6297.35%. The decrease is primarily due to the ~~prior~~settlement ~~year~~of ~~legal~~the ~~fees related to~~ unfair dismissal matters which were claimed in the prior year by several individuals~~, offset by legal fees incurred on the proposed merger with Business Warrior~~. (ii) ~~Professional~~Salaries ~~fees~~and wages were $11111,~~607~~548 and $~~131~~269,~~867~~003 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $~~120~~157,~~260~~455 or 9158.25%. ~~The~~the decrease is primarily due to ~~professional fees incurred in~~ the ~~prior~~resignation ~~year~~of ~~from Frictionless for management fees and customer support fees and a decrease in solicitation agent fees incurred in the prior year to support~~ our ~~prior~~CFO ~~year~~during ~~annual general meeting. (iii) Salaries and wages were $140,087 and $278,345 for~~ the ~~three months ended September 30~~quarter, ~~2024~~resulting ~~and~~in ~~2023, respectively,~~ a ~~decrease~~saving of $~~138~~45,~~258~~000 orand ~~49.7%.~~ the ~~decrease~~reduction isof ~~primarily due to the decrease in accrued compensation due to~~ our CEO’s salary by $6030,000 during the current period and a reduction in ~~payroll~~stock ~~taxes~~based compensation of $876,~~704~~649, ~~related to~~ the ~~reduction~~options granted in ~~payroll~~2021, ~~and~~were ~~the~~fully ~~reduction~~amortized in ~~stock-based compensation of $62~~2024,~~976~~ ~~due to~~ the ~~full~~current ~~amortization~~charge ofrepresents ~~option~~new ~~expense~~options granted during the current ~~year.~~period ~~(iv) Audit fees were $12,500~~ and ~~$(23,000)~~a ~~for~~reduction ~~the~~in ~~three~~overall ~~months~~payroll ~~ended~~taxes ~~September 30, 2024 and 2023, an increase of $35,500 or 154.3%, primarily~~ due to ~~a credit processed in~~ the ~~prior~~reduction ~~year for duplicated invoices recorded~~ in ~~the prior year~~salaries. (viii) ~~Insurance~~Marketing ~~expense~~expenses ~~was~~were $~~317~~0 and $1175,~~771~~707 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $1175,~~454~~707 or 97100.30%. ~~This~~The decrease is primarily due to the ~~suspension~~full amortization of ~~insurance~~warrants ~~coverage~~in ~~during~~ the ~~current~~prior ~~period~~year. asThese nowarrants ~~business~~were isissued ~~being~~to ~~conducted~~Mario ~~during~~Lopez ~~this~~to ~~development~~endorse ~~phase~~the IPSIPay wallets in 2021. (viiv) ~~Selling~~Audit ~~and~~fees ~~marketing expenses~~ were $595,~~991~~500 and $8780,~~361~~000 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, ~~respectively,~~an aincrease ~~decrease~~ of $8115,~~370~~500 or 9319.14%., ~~the decrease is~~ primarily due ~~the~~to ~~decrease in social media marketing expenses and~~ the ~~decrease~~timing inof ~~endorsement~~invoices ~~fees~~received ~~due~~from toour ~~Mario Lopez which were fully amortized during the current year~~auditors. (~~vii~~v) The balance of the general and administrative expenses was $3643,~~601~~455 and $2249,~~512~~493 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, ana ~~increase~~decrease of $146,~~089~~038 or 6212.62%. The ~~increase~~decrease is made up of several individually insignificant items.

Depreciation and amortization

Depreciation was $~~543~~542 and $~~100,387~~542 for the three months ended ~~September 30~~March 31, ~~2024~~2025 and ~~2023,~~2024. ~~respectively,~~The ~~a decrease of $99,844, primarily due to the prior period~~ depreciation ofis ~~our~~on ~~legacy~~small ~~IPSIPay~~office ~~software platform~~related ~~and purchased software of $93,095 prior to the novation of such platform to a third party during the prior year~~equipment.

Loss on convertible ~~notes~~debt

Loss on convertible ~~notes~~debt was $42,~~534~~487,~~491~~213 and $5866,~~769~~047 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $42,~~475~~421,~~722~~166 or 3,665.8%. The loss on convertible ~~notes~~debt during the current year related to; (i) a loss of $42,~~318~~341,~~669~~480 realized on an anti-dilution adjustment to the conversion feature of certain convertible ~~notes~~debt; (ii) a ~~loss~~penalty on conversion of ~~$56~~39,~~329~~229 ~~realized~~ on ~~the~~ conversion ~~feature~~ of a convertible ~~note~~ debt which are ~~through~~in ~~a no notice~~ default ~~clause, triggered a variable priced conversion liability~~; and (iii) a loss of $~~159~~106,~~493~~504 realized on conversion of certain convertible ~~notes~~debt at prices lower than the current market price during the current ~~year~~period. In the prior ~~year~~period, the loss on convertible ~~notes~~debt related to the ~~conversion~~extension ofwarrants ~~$135,000~~issued to certain noteholders to extend the maturity date of ~~convertible~~their ~~debt~~notes ~~into~~by ~~391~~6 months,~~306~~ ~~shares~~the value of ~~common~~the ~~stock~~warrants was determined to be a debt extinguishment and were therefore expensed.

Fair value on price protected warrants

Fair value on price protected warrants was $21,~~051~~618,~~405~~545 and $0 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively. During the current period, ~~year~~ the exercise price of certain warrants ~~were~~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.~~345~~084 to $0.~~084~~001105. This resulted in a Black -Scholes derived valuation difference related to those certain warrants ~~of $2,051,405~~.

~~Penalty~~Interest ~~on convertible notes~~income

~~Penalty on~~Interest ~~convertible~~income ~~notes~~ was $612,~~611~~ 607 and $93,~~306~~282 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, arespectively, ~~decrease~~an increase of $29,~~695~~325 or 29284.01%. The ~~current~~ ~~year~~interest ~~penalty~~income ~~arose~~relates to onfunds ~~certain~~advanced ~~warrants~~to ~~conversions~~Business ~~which~~Warrior ~~were~~prior ~~triggered~~to bythe ~~delayed~~cessation ~~payments~~of toour ~~the~~merger ~~note~~plans ~~holders~~with them, ~~resulting~~we increased our investment in Business Warrior over the ~~charge~~second half of ~~$6,611~~the prior year.

3734

Loss on novation

Loss on novation was $0 and $1,066,165 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $1,066,165 or 100%. The prior year loss on novation arose due to the September 2023 transfer of our legacy IPSIPay platform and all rights and obligations associated with the service agreement with Frictionless to a third party.

Fair value of warrants issued

Fair value of warrants issued was $0 and $14,176 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $14,176 or 100.0%. We issued a replacement warrant exercisable for 33,334 shares to an investor during the prior period.

Interest expense, net

Interest expense was $~~152~~212,~~376~~743 and $~~110~~136,~~328~~919 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $4275,~~048~~824 or 3855.14%. ~~The~~ The increase is primarily related to the ~~additional~~contractual ~~$785,502~~increase ofin ~~new~~the ~~convertible~~interest ~~note~~rates ~~funding~~on ~~and~~several ~~$233,333~~matured ofnotes ~~promissory~~which ~~note~~are ~~funding~~currently ~~during~~in ~~the current year for working capital purposes~~forbearance.

Amortization of debt discount

Amortization of debt discount was $~~233~~118,~~948~~056 and $~~303~~319,~~042~~899 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $69201,~~094 or~~843 22or 63.81%. The decrease is primarily due to the full amortization of debt discount on convertible debt in the prior year, these notes were carried over from the prior year ,. ~~the~~The current ~~year~~period funding and debt discount, and consequent amortization thereof, on ~~new~~this funding is significantly lower than the prior ~~year~~period.

Derivative liability movements

Derivative liability movements were $5928,~~538,008~~979 and $1815,~~795,642~~941 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a net movement of $3113,~~742,366~~ 038 or 7213.79%. The derivative liability arose primarily due to the revaluation of certain repriced conversion features on convertible ~~notes~~ debt and the reset of the exercise price and full ratchet reset of certain warrants during the current ~~year~~period, and the subsequent mark-to-market of these derivatives due to a declining stock price on the exercise of certain convertible ~~notes~~debt during the current ~~year~~period.

Net loss from equity method investment

Net loss from equity method investment was $880 and $~~402,509~~484 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $~~402,421~~ 484 or 99100.90%. ~~The~~No ~~loss~~further inexpense ~~the prior year related~~ is ~~due~~being toincurred ~~the~~on ~~dilutive effect of withdrawals of cash out of~~ the ~~joint~~Joint ~~venture by the other joint venture parties~~Venture, ~~impacting~~in on the ~~overall~~prior ~~value~~period ofexpenses ~~the.~~were ~~IPSIPay~~minimal ~~Express~~and ~~Joint~~administrative ~~venture attributes to the Company~~in nature.

Deemed dividend

Deemed dividend was $350,364 and $0 for the three months ended March 31, 2025 and 2024, respectively, an increase of $350,364 or 100.0%. the deemed dividend in the current period related to a full rachet anti-dilution adjustment to certain fixed exercise price warrants issued to a convertible note holder during the current year. The deemed dividend was recorded as a component of additional paid in capital.

Net loss

Net loss was $13,~~728~~749,~~152~~821 and $1331,~~015,143~~465 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $~~713~~3,~~009~~418,356 or 701,031.23%. The increase is primarily due to the increase in the loss on convertible ~~notes~~debt and the increase in the fair value adjustment on price protected warrants, offset by the decrease in ~~loss on novation, the decrease~~ in ~~operating~~general ~~loss~~ and ~~the~~administrative ~~movement in derivative liabilities~~expenses, as discussed in detail above.

Results of Operations for the Nine Months Ended September 30, 2024 and 2023

Net revenue

We did not have any revenues during the nine months ended September 30, 2024 and minimal revenues of $410 for the nine months ended September 30, 2023. The revenue in the prior year was generated from the IPSIPay platform which was been novated to a third party in September 2023. We pivoted to focus our attention on the IPSIPay Express joint venture, where we expect to generate initial revenues during the 2024 fiscal year, dependent on product testing, which is currently underway, and market acceptance. In addition, if the merger with Business Warrior is consummated, we expect to generate revenues from Business Warrior’s business activities.

Cost of goods sold

We did not have any revenues or cost of goods sold for the nine months ended September 30, 2024. Cost of goods sold was $2,756 for the nine months ended September 30, 2023 and consisted primarily of bank and merchant related fees and chargebacks.

General and administrative expenses

General and administrative expenses were $1,330,367 and $2,753,266 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $1,422,899 or 51.7%. The decrease is primarily due to the following:

(i) Legal fees were $307,997 and $611,178 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $303,181 or 49.6%. The decrease is primarily due to the legal matters relating to unfair dismissal matters which were claimed in the prior year by several individuals, offset by legal expenses related to the proposed acquisition of Business Warrior. (ii) Professional fees were $35,441 and $583,873 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $548,432 or 93.9%. The decrease is due to the reduction in professional fees related to services previously provided to us by Frictionless, amounting to $490,293 and a reduction in proxy solicitation agent fees of $47,069, which were required in the prior year to approve the reverse stock split at our 2023 annual meeting of stockholders. (iii) Salaries and wages were $614,081 and $836,887 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $222,806 or 26.6%. The decrease is primarily attributable to the reduction in stock-based compensation of $62,976 due to the current-year full amortization of option expense related to options issued to our management, the decrease in our previous CEO’s salary of $120,000 during the second and third quarter of 2024 and the related decrease in employer related payroll taxes and health insurance costs during the current year. (iv) Audit fees were $105,000 and $84,000 for the nine months ended September 30, 2024 and 2023, an increase of $21,000 or 25.0%, primarily due to a credit processed in the prior year for duplicated invoices recorded in the prior year. (v) Insurance expense was $943 and $105,067 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $104,124 or 99.1%. This is primarily due to the suspension of insurance coverage during the current period as no business is being conducted during this development phase. (vi) Selling and marketing expenses were $154,864 and $348,003 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $193,139 or 55.5%. The decrease is primarily due to the fair value of the prior period immediately vesting warrants granted to Mario Lopez (who performed spokesperson services for us), offset by the monthly amortization of vesting warrants during the current period, and a reduction in both social media marketing and marketing expenses related to the launch of our legacy IPSIPay platform and e-wallet in the prior year. (vii) The balance of the general and administrative expenses was $112,042 and $184,258 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $72,216 or 39.9%, which is made up of several individually insignificant items.

Depreciation

Depreciation was $1,627 and $380,092 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $378,465 or 99.6%, primarily due to the depreciation of the software platform and purchased software of $374,298, prior to the novation of the platform to a third party during the prior year.

Loss on convertible notes

Loss on convertible notes was $4,636,843 and $77,247 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $4,559,596. The loss on convertible notes during the current year related to; (i) a loss of $4,318,669 realized on an anti-dilution adjustment to the conversion feature of certain convertible notes; (ii) a loss of $56,329 realized on the conversion feature of a convertible note which through a no notice default clause, triggered a variable priced conversion liability; (iii) a loss of $159,493 realized on conversion of certain convertible notes at prices lower than the current market price during the current year; and (iv) a loss on debt extinguishment of $102,352. In the prior year, the loss on debt conversion related to the conversion of $160,000 of convertible debt into 463,770 shares of common stock.

Fair value on price protected warrants

Fair value on price protected warrants was $2,051,405 and $0 for the nine months ended September 30, 2024 and 2023, respectively. During the current year the exercise price of certain warrants were reset due to the anti-dilution price protection and in the case of certain warrants, full ratchet price protection, from an exercise price of $0.345 to $0.084. This resulted in a Black -Scholes derived valuation difference related to those certain warrants of $2,051,405.

Penalty on convertible notes

Penalty on convertible notes was $6,611 and $9,306 for the nine months ended September 30, 2024 and 2023, a decrease of $2,695 or 29.0%. The current year penalty arose on certain warrants conversions which were triggered by delayed payments to the note holders, resulting in the charge of $6,611.

Loss on novation

Loss on novation was $0 and $1,066,165 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $1,066,165 or 100%. The prior year loss on novation arose due the novation of our legacy IPSIPay platform and all rights and obligations associated with the service agreement with Frictionless to a third party.

Fair value of warrants issued

Fair value of warrants issued was $0 and $14,176 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $14,176 or 100.0%. We issued a replacement warrant exercisable for 33,334 shares to an investor during the prior period.

Interest expense, net

Interest expense was $435,471 and $290,628 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $144,843 or 49.8%. The increase is related to the additional $785,502 of new convertible note funding and $233,333 of promissory note funding during the current year for working capital purposes.

Amortization of debt discount

Amortization of debt discount was $874,193 and $414,696 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $459,497 or 110.8%. The increase is primarily due to the amortization of debt discount on convertible notes carried over from the prior year and additional debt discount on new convertible notes issued during the current year to fund working capital.

Derivative liability movements

Derivative liability movements were $6,461,496 and $1,483,710 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $4,977,7862,541,364 or 171.3%. The derivative liability arose primarily due to the revaluation of certain repriced conversion features on convertible notes and the reset of the exercise price and full ratchet reset of certain warrants during the current year, and the subsequent mark-to-market of these derivatives due to a declining stock price on the exercise of certain convertible notes during the current year.

Net loss from equity method investment

Net loss from equity method investment was $660 and $403,890 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $403,230 or 99.8%. The loss in the prior year related is due to the dilutive effect of withdrawals of cash out of the joint venture by the other joint venture parties, impacting on the overall value of the. IPSIPay Express Joint venture attributes to the Company.

Net loss from continuing operations

Net loss from continuing operations was $2,857,262 and $3,928,102 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $1,070,840 or 27.3%. The decrease is primarily due to the decrease in general and administrative expenses, a decrease in depreciation and amortization, a decrease in loss on novation and the movement in derivative liability, offset by an increase in loss on convertible notes and fair value oof price protected warrants, as discussed in detail above.

Operating loss from discontinued operations

Operating loss from discontinued operations was $0 and $40,821 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $40,821 or 100.0%. On May 12, 2023, we entered into an agreement with Frictionless to unwind the equity ownership stakes that we and Frictionless have in each other and in Beyond Fintech. We assigned to Frictionless all common stock of Frictionless owned by us and all shares of common stock of Beyond Fintech owned by us.

Loss on disposal of subsidiary

Loss on disposal of subsidiary was $0 and $495,424 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $495,424 or 100.0%. This relates to the unwinding of our relationship with Frictionless as described above. The consideration received by us for the assignment of our equity in Beyond Fintech to Frictionless was $250,000, resulting in a net loss on disposal of $495,424.

Net loss

Net loss was $2,857,262 and $4,464,347 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $1,607,085 or 36.0%. the decrease is primarily attributable to the decrease in net loss from continuing operations and the decrease in loss on disposal of subsidiary and investment, as described 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 $6166.59 million through ~~September~~March 3031, ~~2024~~2025 and incurred negative cash flow from operations of $0.52 million for the ~~nine~~three months ended ~~September~~ 30March 31, ~~2024~~2025. Our primary focus is on our IPSIPay Express LLC three-way joint venture to develop and market a proprietary consumer to merchant 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 for IPSIPay Express to commence revenue ~~generating~~ 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 as an approximately 22% joint venture partner in IPSIPay Express.

WeAt ~~have~~March ~~also~~31, ~~entered~~2025, ~~into~~we had acash ~~merger~~of ~~agreement~~$57 ~~with~~and ~~Business~~working ~~Warrior~~capital asdeficit ~~described~~of ~~above~~$13.8 ~~and~~million, ~~expect~~including toa ~~generate~~derivative ~~revenue~~liability ~~from~~of ~~Business~~$4.2 ~~Warrior’s~~million. ~~product~~After ~~offerings following~~eliminating ~~this~~the ~~merger~~derivative liability ifour ~~the~~working ~~transaction~~capital deficit is ~~consummated~~$9.6 million.

~~At September~~We ~~30,~~used ~~2024, we had~~ cash of $~~1,033~~0.2 million and ~~working~~$0.2 ~~capital~~million ~~deficit~~in ofoperations ~~$10.3~~for ~~million,~~the ~~including~~three amonths ~~derivative~~ended ~~liability~~March of31, ~~$1.6~~2025 ~~million. After~~and ~~eliminating~~2024, ~~the~~respectively. ~~derivative~~We ~~liability~~have reduced our ~~working~~expenditure ~~capital~~substantially while ~~deficit~~we isactively ~~$8.7~~seek ~~million.~~other revenue generating opportunities

We ~~used~~ ~~cash~~had ofno ~~$0.5~~investing activities ~~million~~during ~~and~~the $1current period.1 ~~million~~In ~~in operations for~~ the ~~nine~~prior ~~months~~period ~~ended~~we ~~September~~had ~~30,~~invested ~~2024 and 2023, respectively~~$0.2 ~~Overall cash~~million ~~used~~ in ~~operations~~Business ~~decreased~~Warrior bywhile ~~$0.6~~we ~~million~~were ~~due~~still pursuing tomerger ~~cost~~discussions ~~containment~~with ~~to preserve cash balances~~them.

We ~~invested~~generated cash of $0.~~3 million~~2 inmillion ~~Business~~from ~~Warrior~~convertible indebt ~~the form of notes receivable for strategic purposes~~ during the ~~nine~~current ~~months ended September 30, 2024~~period. In the prior ~~year~~ period we ~~had~~generated ~~invested~~ $0.~~1million~~4 inmillion ~~our payment platforms which we subsequently disposed of or novated to other parties~~ and werepaid ~~invested~~ $1.0.1 million inof ~~our equity method investment~~convertible debt.

We generated cash of $0.8 million from promissory notes and convertible notes and repaid $0.3 million of convertible notes and generated a further $0.2 million in notes payable during the current period. In the prior year we generated $2.0 million from convertible notes and repaid $0.2 million.35

At ~~September~~ 30March 31, ~~2024~~2025, we had outstanding convertible ~~notes~~debt, including interest thereon of $45.92 million, net of unamortized debt discount of $0.21 million and outstanding ~~promissory~~ notes payable, including interest thereon of $1.48 million, net of unamortized debt discount of $0.06 05 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 ofranging from 8% to 3224.051% per annum. and are convertible into our common stock at conversion prices ranging from fixed conversion prices of $0.~~084~~001105 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), to variable conversion prices of 6065% ~~to 70%~~ of lowest trading prices over a 10 to 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, ~~complete~~model ~~the~~with ~~Business~~IPSIPay ~~Warrior merger and grow the combined company (should the merger be consummated) as planned~~Express. ~~Should this occur, our stockholders would experience dilution, perhaps significantly.~~ 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~~ balance sheet financing arrangements as of the date of this ~~report~~Report.

41Capital Expenditures

Our capital expenditure is dependent on our cash resources, currently we are not forecasting any additional capital expenditure for the 2025 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 ~~Chairman~~Officer (“~~Executive Chairman~~CEO”) who ~~and~~also fulfils the role of our President and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls ~~and~~ 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~~ that evaluation, our ~~Executive~~CEO ~~Chairman and CFO~~ concluded that our disclosure controls and procedures as of ~~September~~March 3031, ~~2024~~2025 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 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~~ our fiscal quarter ended ~~September~~March 3031, ~~2024~~2025.

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.

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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 October 20, 2021, a complaint was filed against our Company and certain of its officers and directors with the Occupational Safety and Health Administration of the United States Department of Labor (“OSHA”), captioned Naum Voloshin, Yulia Rey, Alexander Voloshin, Andrey Novikov, and Frank Perez v. Innovative Payment Solutions, Inc., William Corbett, Richard Rosenblum, Madisson Corbett, Jim Fuller, Cliff Henry and David Rios. The complaint generally alleged that complainants, four former employees (or independent consultants) of our Company and one employee who was on suspension, did not receive compensation to which they claim they were entitled and that they were wrongfully terminated for engaging in protected activities in violation of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A. The complaint sought reinstatement of complainants’ employment, monetary damages including back pay, raises, bonuses, benefits, overtime, emotional distress and loss of reputation, orders of abatement and injunctive relief, and costs of litigation.

In early 2022, OSHA dismissed the claims of Ms. Rey and Mr. Perez, and they appealed that decision. Prior counsel moved to dismiss the remaining claims and as of this writing OSHA took no action with respect to that motion as ultimately the former employees elected to proceed in federal court. Pursuant to agreement and stipulation, dismissal of the OSHA claims was accomplished without prejudice on November 10, 2022.

On November 7, 2022, the same five employees filed a lawsuit, not in federal court, but in the California Superior Court for the County of Los Angeles, against our Company and the same individuals against whom they had asserted their OSHA claim. The complaint asserted claims for, among other things, breach of contract, failure to pay wages and failure to reimburse expenses under the California Labor Code and asserting retaliation claims under the California Labor Code. On December 16, 2022, the same five employees filed an amended complaint dropping all defendants from the case except Mr. Corbett and our Company. The amended complaint asserts claims for violations of California Labor Code Section 1102.5; wrongful termination in violation of public policy; breach of contract; breach of covenant of good faith and fair dealing; violation of California Labor Code Section 201; waiting time penalties (Cal. Lab. Code Sections 201 & 203) and violation of California Labor Code Section 2802.

We and Mr. Corbett, the sole remaining individual defendant, through prior counsel moved to compel arbitration on February 17, 2023. As a result of that motion and a stipulated order entered by the court, all proceedings in the Superior Court were stayed.

On June 8, 2023, while our motion to compel arbitration was pending in the Superior Court three of the employees (Naum Voloshin, Alexander Voloshin, and Novikov) filed a civil action in the U.S. District Court for the Central District of California. Naum Voloshin, et al., v. Innovative Payment Solutions, Inc., Case No. CV 23-4515-JFW (PVCx), which alleges a single cause of action for retaliation in violation of The Sarbanes-Oxley Act of 2002 (the “Federal Action”). The plaintiffs in the Federal Action made no attempt to serve their complaint or to give notice to any defendant in the Federal Action until August 2023.

On August 30, 2023, the Hon. William A. Crowfoot granted our and Mr. Corbett’s motion to compel arbitration, concluding that all of the claims alleged in the former employees’ first amended complaint were subject to arbitration. The California Court of Appeal subsequently denied the former employees’ petition for writ of mandate on November 1, 2023. On December 15, 2023, all five former employees filed a demand for arbitration. We withdrew our motion to compel appointment of an arbitrator.

Upon motion of our Company and Mr. Corbett, on January 10, 2024, the U.S. District Court for the Central District of California stayed all proceedings in the Federal Action until the arbitration is completed.

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Plaintiffs Naum Voloshin, Andrey Novikov, and Alexander Voloshin asserted, in the Federal Action, that they are entitled to damages in the following amounts: Naum Voloshin: $950,000 plus an unstated amount of lost wages and emotional distress damages. The claim is premised upon Mr. Voloshin earning $15,000 per month and a claim that he was entitled to receive 333,334 shares of Common Stock (after giving effect to our August 2023 reverse stock split) on or about June 29, 2021 that he would have sold on July 1, 2021 for $2.85 per share on July 1, 2021 for $950,000. Andrey Novikov: $285,000 plus emotional distress and punitive damages. The claim is premised upon Mr. Novikov earning $15,000 per month and a claim that he was entitled to receive 100,000 shares of Common Stock (after giving effect to our August 2023 reverse stock split) on or about June 29, 2021, that he would have sold at $2.85 per share on July 1, 2021 for $285,000. Alexander Voloshin: $263,000 plus emotional distress and punitive damages. The claim is premised upon an alleged two-year contract signed in May 2021 that paid him $7,000 per month and that promised him 333,334 shares of Common Stock (after giving effect to our August 2023 reverse stock split) on or about June 29, 2021. We have not received meaningful information on the amount of the claims of the other two plaintiffs.

An arbitrator was appointed through the American Arbitration Association and the arbitrator issued a scheduling order and Notice of Hearing. The ten-day arbitration has been set for April 7-11, 2025, and April 14-18, 2025. Management continues its vigorous defense of the claims.

In mid-April 2024, the Company and Mr. Corbett changed attorneys. The Law Offices of Jeffrey B. Neustadt replaced prior counsel. Mr. Neustadt and Plaintiffs’ counsel conferred and timely submitted the required joint statement on April 25, 2024.

Initial discovery was served by both sides. Documents were exchanged, and depositions proceeded for 4all persons ~~with three depositions still outstanding, the first scheduled to be heard on November 20, 2024~~.

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 will pay $100,000 (the “First Payment”) and within 60 days the Company will 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 has not made the second instalment as of the date of this report and has not issued the convertible notes, securing the obligations, as discussed below, as of the date of this report.

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. We are negotiating with the plaintiffs on the payment of the second instalment, and may be obligated to pay the additional $25,000 default penalty, if we are unable to agree to waive it.

In order to secure the obligations to the Plaintiff Group, the Company is to execute two convertible notes, the first note for $100,000 (“Note 1”) and the second note for $300,000 (“Note 2”). Each note bears interest at the rate of 10% per annum, Note 1 has a maturity date of 60 days and Note 2, 240 days from March 5, 2025. The Notes will be convertible upon an event of default, which includes any failure to pay any of the installments. The Notes plus any accrued interest thereon, are convertible into common stock of the Company at a conversion price of $0.02 per share or the lowest conversion price of the senior secured note holders, as determined and established as the conversion price for all their notes outstanding as of March 5, 2025, if there are any limits on trading or the trading price falls below $0.01 per share, the conversion price will be discounted by a further 15%. The notes provide for certain events such as mergers and consolidations, distributions to shareholders, and stock splits and dividends.

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 our Company and our 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. He bases his claim in part on the unilateral expectation that he receives 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, we and Mr. Corbett filed a motion to compel arbitration. The motion was denied on October 4, 2022. We 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) we 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.

As expected, the plaintiff-initiated arbitration before the American Arbitration Association (“AAA”) based on the appellate ruling. While, as the court order states, the plaintiff may renew his challenge to the arbitration clause before the arbitrator, we believe such challenges are rare and rarely succeed. Accordingly, we expect the dispute likely will be resolved through AAA arbitration. Management is vigorously defending the claims and intends to continue to do so.

In mid-April 2024, the Company and Mr. Corbett changed attorneys. The Law Offices of Jeffrey B. Neustadt replaced prior counsel. Mr. Neustadt’s office submitted the cost bill and an attorneys’ fees motion that will be decided on September 10, 2024, by the trial court for the fees incurred on the successful appeal. As with the Voloshin matter, we are contractually bound to proceed through arbitration and to that end completed the process of selecting an arbitrator under the AAA rules. That appointment was made on August 7, 2024. Henceforth, the Minkovich matter will track along the same lines as the Voloshin matter but on a smaller scale as there is only one plaintiff in the Minkovich matter as opposed to five in the Voloshin matter. The arbitration hearing (“trial”) in the Minkovich matter was set for June 30, 2025 to July 3, ~~2025at~~2025 at the continued “preliminary conference” held on October 7, 2024. Before the arbitration hearing, the parties will engage in discovery and some motion work which may (1) either dispose of all or some of the case, and/or (2) result in the Minkovich matter being sent back to the Superior Court for final determination.

We have a $22,000 deposit on account for the arbitration of the Minkovich matter, the arbitrator has indicated that he will proceed as the deposit is expected to be sufficient to cover all expenses of the arbitration. The arbitration summary call is scheduled for May 16, 2025 with all parties involved. We expect a favorable outcome from the arbitration process.

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

Between ~~February~~January 67, ~~2024~~ 2025 and March ~~October 22~~28, ~~2024~~2025, wein ~~entered~~terms ~~into~~of ~~Securities~~conversion ~~Purchase~~notices ~~Agreements~~received ~~with~~from 95 ~~accredited~~convertible ~~investors~~note holders, ~~pursuant~~the toCompany ~~which~~issued 54,807,989 shares of wecommon ~~received~~stock anfor ~~aggregate~~ the conversion of $~~575~~230,~~001~~798 of inconvertible ~~gross~~debt ~~proceeds~~at ~~from~~a ~~the~~weighted ~~Investors~~average ~~through~~conversion ~~the~~price ~~initial~~of ~~closing~~$0.004211 of(conversion prices aranging ~~private~~from ~~placement~~($0.0325 ~~issuance~~to $0.001105) realizing an aggregate loss on conversion of: $106,504.

●Between ~~Convertible~~April 7, ~~Promissory~~2025 ~~Notes~~and ~~(the~~May ~~“Notes”~~8, ~~and~~2025, ~~each~~The Company received conversion notices from convertible note holders converting an aggregate of $79,652 into 80,052,341 shares of common stock at conversion prices ranging from $0.000585 to $0.001170 per share, resulting in a ~~“Note”);~~loss ~~and~~on conversion of $52,187.

●On ~~five-year~~April ~~warrants~~29, (2025, the ~~“Warrants”~~Company entered into Securities Purchase Agreement pursuant to which the Company issued a convertible promissory note and ~~each~~a warrants to one accredited investment entity for total gross proceeds of $150,000, less expenses of $6,000 for net proceeds of $144,000. The notes are unsecured, mature 12 months from issuance date and bear interest at a ~~“Warrant”~~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 price of $0.005 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 five-year warrants to purchase an aggregate ~~579~~ of 30,~~711~~000,000 shares of the ~~Company’s~~ Common Stock at an exercise price of $0.~~345~~ 005 per share (as adjusted 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 Note or the Warrant, for public resale.

The Notes mature between 9 months and 12 months, and bear interest at 8% per annum and are convertible into shares of Common Stock at a conversion prices ranging from $0.084 to $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events).

The Notes may be prepaid at any time without penalty. The Company is under no obligation to register the shares of Common Stock underlying the Notes or the Warrants for public resale, pursuant to Section 4(a)(2) of the Securities Act.

Between April 2, 2024 and May 28, 2024, we entered into Securities Purchase Agreements with 2 accredited investors, whereby we received net proceeds of $310,000 after original issued discounts of $74,510 in exchange for:

● Variable Priced Convertible Promissory Notes (the “Variable Notes” and each a “Variable Note”); and

● five-year warrants (the “Warrants” and each a “Warrant”) to purchase an initial aggregate 536,646 shares of the Company’s Common Stock at an initial exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). On August 6, 2024, in terms of a conversion notice received, the terms of the warrants were changed, in terms of a full ratchet provision by increasing the number of shares subject to exercise of the warrants by 9,773,028 shares of the Company’s common stock to a total of 12,918,370 shares of the Company’s common stock, and an adjustment to the exercise price to $0.084 per share.

The Variable Notes are convertible into common stock at a variable conversion price upon an event of default, the Variable conversion price was triggered in the last quarter. The Variable Notes are convertible into shares of common stock at conversion prices ranging from 65% to 70% of the lowest trading price five to ten day prior to conversion, bear interest at a one-time interest charge rate ranging from 8% to 15%, giving rise to an effective interest rates between 11.03% and 24.98%. The Variable Notes each have fixed instalment repayment terms.

Between August 6, 2024 and September 17, 2024, the Company received conversion notices from 4 convertible noteholders, converting $198,716 of principal and interest of convertible notes into 2,365,663 shares of Common Stock at a conversion price of $0.084 per share.

Between October 11, 2024 and November 11, 2024, the Company received conversion notices from 2 convertible noteholders, converting $213,855 of principal and interest of convertible notes into 2,545,894 shares of Common Stock at a conversion price of $0.084 per share.

On August 6, 2024, three notes with an aggregate principal balance of $1,859,174 as of September 30, 2024 ($868,951, 901,334 and $88,889, respectively), maturing between October 31, 2024, which maturity date gets automatically extended on a monthly basis, and May 9, 2025, had their conversion prices reset from between $0.10 and $0.345 to $0.084 per share of common stock.

Between March 12, 2024 and June 14, 2024, the Company issued five-year warrants exercisable for 680,136 shares of the Company’s common stock at an exercise price of $0.345 per share, in exchange for extending the maturity date of the underlying convertible notes.

Use of Proceeds from Public Offering of Common Stock

Not applicable.

Item 3. Defaults upon Senior Securities.

~~None~~All 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 $22,704. 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.

4539

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)
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)
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)
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)
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)
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)
31.1*		Certification of ~~Richard~~William ~~Rosenblum~~Corbett, Chief Executive Officer, President and Chief Financial Officer, pursuant to Rule 13a-14(a) or Rule15d-14(a)
32.1*		Certification of ~~Richard~~William ~~Rosenblum~~Corbett, Chief Executive Officer, President and Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
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

4640

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.
Date: November 12, 2024	By:	/s/ Richard Rosenblum
Date: May 15, 2025	By:	/s/ William Corbett
		Richard Rosenblum
		William Corbett
		Principal Officer, President & Chief Financial Officer
		Principal Officer, Chief Executive Officer, President & Chief Financial Officer
		(Principal Executive Officer, Principal Financial and Accounting Officer)

4741

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