IPSI 10-K & 10-Q changes, risk factors and insider trading

We have had no revenue generating operations to date with our current IPSIPay Express business model.date.

We have no operating history in our current IPSIPay Express business model, which makes it difficult to evaluate our future potential. We have yet to demonstrate our ability to overcome the risks frequently encountered in “start-up” companies, including in the payment services industry in the United States, and are still subject to many of the risks common to early stage companies, including the uncertainty as to our ability to implement our business plan, market acceptance of our proposed business and services, under-capitalization, cash shortages, limitations with respect to personnel, financing and other resources and uncertainty of our ability to generate revenues. There is therefore a significant risk that our activities will not result in any material revenues or profit, and the likelihood of our business viability and long-term prospects must be considered in light of the stage of our development. There can be no assurance that we will be able to fulfill our stated business strategy and plans, or that financial, technological, market, or other limitations may force us to modify, alter, significantly delay, or significantly impede the implementation of such plans. We have no results of operations in our current business model for investors to use to identify historical trends. Investors should consider our prospects considering the risk, expenses and difficulties we will encounter as an early-stage company. Our revenue and income potential is unproven and our business model is continually evolving. We are subject to the risks inherent to the operation of a new business enterprise and cannot assure you that we will be able to address these risks, and our inability to address these risks could lead to the failure of our business.

We have generated and we will likely continue to generate, operating losses and experience negative cash flows, and it is uncertain whether we will everachieve generate predictable revenues or achieve positive cash flows or profitability.

For the year ended December 31, 20242025 and 2023,2024, we incurred a net loss of approximately $4.6 million$4.4 and $5.8$4.1 million, respectively. We have an accumulated deficit of $62.8 $69.0 million through December 31, 2024.2025. We expect to continue to incur operating losses until such time, if ever, as we are able to achieve sufficient levels of revenue from operations. There can be no assurance that we will ever generate significant sales or achieve profitability. profitability. Accordingly, the extent of future losses and the time required to achieve profitability, if ever, cannot be predicted.

We have a present need for additional funding, which raises questions about our ability to continue as a going concern. We may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts, or could cause our business to fail.efforts.

As of December 31, 2024,2025, we had cash and cash equivalents of $526.$29,804. We believe that based on our current operating plan, our existing cash and cash equivalents will not be sufficient to enable us to fund our operations and our debt and other obligations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” below. This raises questions about our ability to continue as a going concern. Moreover, we have significant indebtedness due in the first half of 2025,2026, and thus we will need significant additional funds to repay our debt, fund our working capital, and fully implement our business plan as we seek to achieve revenues, positive cash flow and profitability. There is a material risk that we will be unable to generate sufficient revenues to pay our expenses, and if our existing sources of cash and cash flows are insufficient to fund our activities, we will need to raise additional funds. Additional equity or debt financing may not be available on acceptable terms, if at all, particularly in the current economic environment. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our new products in development.

As of December 31, 2024,2025, we had outstanding convertible notes owed to institutional investors in the aggregate principal amount of approximately $5.02$5.4 million, net of debt discount of $0.08$0.2 million, which has either matured or is maturing during 2025.2026. To date, we have not generated sufficient revenue revenue or cash flows to pay the balances owed under these notes and provide sufficient working capital to run our business. The outstanding principal principal amount of the notes is convertible at any time into shares of our common stock at prices ranging from 60%fixed conversion prices of historical$0.0005 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), to variable conversion prices of 90% of the average of the two lowest trading prices over a trading20-trading periodday to $0.345 per share, which has subsequently been adjusted to $0.04 per share.period. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the notes), the notes each will become immediately due and payable and we have agreed to pay additional default interest rates. We may not have sufficient cash resources or access to funding to repay such notes. Moreover, upon conversion of these notes, our current shareholders will suffer dilution, which given the current conversion price of the notes would be significant.

We could be held liable for damages or our reputation could suffer from security breaches or disclosure of confidential information or personal data. Through Frictionless and other service providers, weWe are dependent on technology networks and systems to process, transmit and securely store electronic information with our partners and with our customers. Security breaches of this infrastructure could lead to shutdowns or disruptions of our systems and potential loss or unauthorized disclosure of confidential information or data, including personal data. The theft and/or unauthorized use or publication of our, or our customers’, confidential information or other proprietary business information as a result of such an incident could adversely affect our competitive position and reduce marketplace acceptance of our services. Any failure in the networks or computer systems used by us or our customers could result in a claim for substantial damages against us and significant reputational harm, regardless of our responsibility for the failure. In addition, through our other service providers, we have access to or are required to manage, utilize, collect and store sensitive or confidential customer or employee data, including personal data. As a result, we are subject to numerous U.S. and non-U.S. laws and regulations designed to protect this information, such as various U.S. federal and state laws governing the protection of personal data. If any person, including any of our employees, negligently disregards or intentionally breaches controls or procedures with which we are responsible for complying with respect to such data, or otherwise mismanages or misappropriates that data, or if unauthorized access to or disclosure of data in our possession or control occurs, we could be subject to liability and penalties in connection with any violation of applicable privacy laws and/or criminal prosecution, as well as significant liability to our customers or our customers’ clients’ for breaching contractual confidentiality and security provisions or privacy laws. The loss or unauthorized disclosure of sensitive or confidential customer or employee data, including personal data, whether through breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, could damage our reputation and cause us to lose customers. Similarly, unauthorized access to or through our information systems and networks or those we develop or manage for our customers, whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation, which could in turn harm our business, results of operations, or financial condition.

We have implemented joint joint ventures and commercial partnerships as part of our business, and from time-to-time, we may evaluate possible acquisition transactions, partnerships or joint ventures, some of which may be material. Potential future acquisitions, partnerships and joint ventures may pose significant risks to our existing operations if they cannot be successfully integrated. These projects would place additional demands on our managerial, operational, financial and other resources, create operational complexity requiring additional personnel and other resources and require enhanced control procedures. In addition, we may not be able to successfully finance or integrate any businesses, services or technologies that we acquire or with which we form a partnership or joint venture. Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations. Moreover, even if we were successful in integrating newly acquired assets, expected synergies or cost savings may not materialize, resulting in lower than expectedlower-than-expected benefits to us from such transactions. We may spend time and money on projects that do not increase our revenue. Additionally, when making acquisitions it may not be possible for us to conduct a detailed investigation of the nature of the assets being acquired due to, for instance, time constraints in making the decision and other factors. We may become responsible for additional liabilities or obligations not foreseen at the time of an acquisition. In addition, in connection with any acquisitions, we must comply with various antitrust requirements. It It is possible that perceived or actual violations of these requirements could give rise to regulatory enforcement action or result in us us not receiving all necessary approvals in order to complete a desired acquisition. To the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves, and to the extent the purchase price is paid with our stock, it could be dilutive to our stockholders. stockholders. To the extent we pay the purchase price with proceeds from the incurrence of debt, it would increase our level of indebtedness and could negatively affect our liquidity and restrict our operations. All of the above risks could have a material adverse effect on our business, results of operations, financial condition, and prospects.

The payment services industry in which we operate is characterized by rapid technological change, new product and service introductions, evolving industry standards, changing customer needs and the entrance of more established market players seeking to expand into these businesses. In order to remain competitive, we continually seek to expand the services we offer and to develop new projects. These projects carry risks, such as delays in delivery, performance problems and lack of customer acceptance. In our industry, these risks are acute. Any delay in the delivery of new services or the failure to differentiate our services or to accurately predict and address market demand could render our services less desirable, or even obsolete, to consumers. In addition, if alternative payment mechanisms become widely available, substituting substituting our current products and services, and we do not develop and offer similar alternative payment mechanisms successfully and on a timely basis, our business and prospects could be adversely affected. Furthermore, we may be unable to recover the costs we have incurred in developing new services. Our development efforts could result in increased costs and we could also experience a loss in business that that could reduce our earnings or could cause a loss of revenue if promised new services are not timely delivered to our clients, we are not able to compete effectively with our competitors’ or do not perform as anticipated. If we are unable to develop, adapt to or access technological changes or evolving industry standards on a timely and cost effectivecost-effective basis, our business, financial condition and results of operations could be materially adversely affected.

Our systems and our third partythird-party providers’ systems may fail due to factors beyond our control, which could interrupt our service, cause us to lose business and increase our costs.

We depend on the efficient and uninterrupted operation of numerous systems, including our computer systems, software and telecommunications networks, as well as the data centers that we lease from third parties. Our systems and operations, or those of our third partythird-party providers, could be exposed to damage or interruption from, among other things, fire, flood, natural disaster, power loss, telecommunications failure, vendor failure, unauthorized entry, improper operation and computer viruses. Substantial property and equipment loss, and disruption in operations, as well as any defects in our systems or those of third parties or other difficulties could expose us to liability and materially adversely impact our business, financial condition and results of operations. In addition, any outage or disruptive efforts to our data center would would result in the failure of our computers to operate and would, if for an extensive period, adversely impact our reputation, brand and future prospects.

We rely on a combination of contractual rights, copyright, trademark and trade secret laws to establish and protect our technology and the technology that we license license and/or that we develop in the future. We have applied for trademark protection for certain marks, but there is a risk that such trademarks will not be approved, which could leave us without important protections for our brand.

We may use open-source software software in connection with our technology and services. The original developers of the open sourceopen-source code provide no warranties on such code. Moreover, some open sourceopen-source software licenses require users who distribute open sourceopen-source software as part of their software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open sourceopen-source code on unfavorable terms or at no cost. The use of such open sourceopen-source code may ultimately require us to replace certain code used in our products, pay a royalty to to use some open sourceopen-source code or discontinue certain products. Any of the above requirements could be harmful to our business, financial condition and operations.

Compliance with the reporting requirements of federal securities laws areis expensive and time consuming.

Our stock price has fluctuated fluctuated in the past, has been subject to volatility and may be volatile in the future. We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance. For example, the COVID-19recent pandemicwar and itsin variants,Iran , the ongoing Russia-Ukraine conflict, conflict,and the warconstant betweenconflicts Israelin the middle east, and Hamas,volatile risinginflationary inflationmarket and bank failuresconditions have caused broad stock market and industry fluctuations. Furthermore, the market prices for companies operating in our industry have experienced extreme volatility. As As a result of this volatility, investors may experience losses on their investment in our common stock. The market price for our common stock may be influenced by many factors, including the following:

We are a fintech provider of digital payment solutions presently focused on, through our participation in IPSIPay Express, developing a new account-to-account payment application called Instant Settlement in RealTime as well as traditionalon credit card processing services.services for undeveloped and underserved markets. We have in the past (under the name IPSIPay) and may in the future develop and operate “e-wallets” that enable consumers to deposit cash, convert convert it into a digital form and remit funds quickly and securely.

Development of IPSIPayJetties ExpressPartners, LLC (d/b/a IPSIPAY)(“IPSIPAY”)

Macro-economic conditions could affect consumer spending adversely and consequently our future operations when we fully launch our e-wallet products commercially. The U.S.recent haswar enteredin Iran and uncertainty and volatility in energy markets may have a periodripple ofeffect significanton 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.plan.

We had revenue of $0 and $410$0 for the years ended December 31, 20242025 and 2023,2024, respectively. We pivoted to focus our attention on thenew IPSIPay Expresspayment processing joint venture, Jetties LLC, doing business as IPSIPay, serving underserved and niche markets where we expect to generate initial revenues during the 20252026 fiscal year, dependent on product testing, which is currently underway, and market acceptance. We are focusing all of our efforts on developing and launching IPSIPay Express, which we believe has a higher possibility for revenue generation in the near and longer term.year.

We had cost of goods sold of $0 and $3,547$0 for the years ended December 31, 20242025 and 2023,2024, respectively. In the prior year cost of goods sold of bank and merchant related fees and chargebacks.

Fair value of warrantsDepreciation issued was $0$2,169 and $14,176$2,169 for the years ended December 31, 20242025 and 2023,2024, respectively,respectively. aNo decreasenew ofcapital $14,176expenditure orhas 100.0%.been Inincurred since the prior year, we issued a replacement warrant exercisable for 33,334 shares to an investor.year.

Interest expense was $603,588$902,194 and $424,117$603,588 for the years ended December 31, 20242025 and 2023,2024, respectively, an increase of $179,471$298,606 or 42.3%.49.5%. The increase is related to new convertible note funding of $885,502, less repayments of $381,832$817,000 and $577,778increased ofinterest promissoryrates noteon fundingcertain duringnotes thewhich current yearhave for working capital purposes.matured.

Interest income was $53,818 $32,838 and $0$32,838 for the years ended December 31, 20242025 and 2023,2024, respectively, an increase of $32,838$20,980 or 100.0%.63.9%. The interest income relates to funds advanced to Business Warrior prior to the cessation of our merger plans with them. These amounts have been fully provided for as we are uncertain as to the collectability of the balance outstanding.

Amortization of debt discount was $1,037,914$318,100 and $770,372 $1,037,914 for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $267,542$719,814 or 34.7%.69.4%. The increasedecrease is primarily due to the full amortization of debt discounts raided in the prior year, with limited debt discount onincurred convertiblein notes carried over from the prior year and additional debt discount on new convertible notes issued during the current year to fund working capital.year.

Derivative liability movements were $6,892,395$132,791 and $1,501,446$6,892,395 for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $5,390,949$6,759,604 or 359.1%.98.1%. The derivative liability arose primarily due to the revaluation of certain repriced conversion features on convertible notes and the reset 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 was $819$0 and $403,282$819 for the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of $402,463$819 or 99.8%. 100.0%. The lossjoint venture inhas been dormant and no expenditure has been incurred during the priorcurrent 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.year.

Impairment of equity method investments was $705,142$0 and $0$705,142 for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $705,142 or 100.0%. The equity method investment was impaired due to uncertainty as to when, the joint venture will begin generating revenues and the certainty of future business prospects at this time.

Net loss was $4,126,341$4,394,384 and $5,837,357$4,126,341 for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $1,711,016$268,043 or 29.3%.6.5%. the decreaseincrease is primarily attributable to the decrease in netthe lossderivative fromliability continuingmovements operationsand the increase in the fair value adjustment to price protected securities, the investment impairment charge and the increase in interest expense, offset by the gain on settlement, cancellation and repricing of securities, and the decrease in lossthe on disposalamortization of subsidiarydebt anddiscount, investment, as described above.

We have an accumulated deficit of $62.8$69.0 million through December 31, 20242025 and incurred negative cash flow from operations of $0.65$0.79 million for the year ended December 31, 2024.2025. Our primary focus is on developing our IPSIPay Express LLC three-way joint venture arrangement with Brant Point Solutions to developprovide payment solutions to underserved and marketunder-developed amarkets proprietarywith consumer toan merchantadditional real-time payment platform initially focusedfocus 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 IPSIPayJetties ExpressPartners, d/b/a, IPSIPAY to commence revenue generating operations from payment processing has been completed. 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.us.

We used cash of $0.65$0.79 million and $1.45$0.65 million in operations for the years ended December 31, 20242025 and 2023,2024, respectively. Overall cash used in operations decreasedincreased by $0.8$0.14 million due to cost containment to preserve cash balances.million.

We generated cash of $1.3$0.8 million from convertible notes, In the prior year we generated cash of $1.4 million from promissory notes and convertible notes and repaid $0.4 million of convertible notes. In the prior year we generated $2.4 million from convertible notes and repaid $0.3 million.

At December 31, 2024,2025, we had outstanding convertible notes, including interest thereon of $5.0$5.4 million, net of unamortized debt discount of $0.1$0.2 million and outstanding promissory notes, including interest thereon of $1.7 million, net of unamortized debt discount of $0.1$2.0 million. The notes contain certain covenants, such as restrictions on: (i) distributions on capital stock, (ii) stock repurchases, and (iii) sales and the transfer of assets. The notes bear interest at a rates ranging from 8% to 24.98%18% per annum. and are convertible into our common stock at conversion prices ranging from fixed conversion prices of $0.084$0.0005 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events), to variable conversion prices of 60% to 70%90% of the average of the two lowest trading prices over a 1020-trading 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 model with IPSIPayJetties Express.Partners, d/b/a as IPSIPAY. 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.

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

Preparation of our consolidatedfinancial financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. Significant accounting policies are fundamental to understanding our financial condition and results as they require the use of estimates and assumptions which affect the financial statements and accompanying notes. See Note 2 - Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10- K for further information.

See Note 2 - Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for information regarding recently issued accounting standards.

All references to “we,” “us,” “our” and the “Company” refer to Innovative Payment Solutions, Inc., a DelawareNevada corporation unless unless the context requires otherwise.

Our shareholders face significant dilution risk due to the fixed price convertible debt and variable price convertible debt totaling $5,734,682,$6,028,384, net of debt discount of $191,847$104,801 and convertible debt due to a related party of $258,253,$263,040, as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we calculated that the potential dilutive impact of conversion of the convertible notes is a total of 669,844,166 5,094,790,511 shares of common stock.stock However,after the expiry of a forbearance agreement with certain significant convertible note holders expired on May 1, 2026, resulting in a fixed conversion price reverting to $0.0005 per share which will increase the potential number of dilutive shares by 3,776,481,230.holders.

The dilutive risk will also be effected by any increases or decreases of our stock price due to the variable nature of the conversion price of certain notes with a total outstanding balance of $2,418,961$2,508,425 as of MarchJune 31,30, 2026. Any decreases in stock price below $0.01 per share increases the dilutive potential of these convertible notes, which have a maximum conversion price of $0.01 per share.

Preparation of our financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. Significant accounting policies are fundamental to understanding our financial condition and results as they require the use of estimates and assumptions which affect the financial statements and accompanying notes. See Note 2 - Summary of Significant Accounting Policies of the Notes to the condensed consolidated Financial Statements included in Part I, Item I of this Form 10-Q for further information.

We have certain short-term convertible debt which have variable conversion prices and certain warrantsconvertible whichnotes 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.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025

We had no revenues for the three months ended MarchJune 31,30, 2026 and 2025. We pivoted to focus our attention on the Jetties IPSIPay joint venture and the FINAP USA joint venture and potential payment processing opportunities to generate revenues, however there can be no guarantees that we will be successful in our endeavors.

The Company will, through its joint venture operations, earn a commission percentage of the gross amount of transactions processed through the payment processing platforms its owns or licenses from third parties. The income will be disclosedconsolidated into our operations as equity investment income earned from our both joint ventures and willare considered to be netvariable interest entities in terms of operatingASC expenses incurred in those joint ventures.810. We expect that the joint venture operations will distribute the excess cash flow to the joint venture parties on a regular basis.

We had no cost of goods sold for the three months ended MarchJune 31,30, 2026 and 2025.

General and administrative expenses were $1,144,963$368,366 and $254,308$170,638 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of $890,655$197,728 or 350.2%.115.9%. The increase is primarily due to the following:

Depreciation was $330 and $543 $542 for the three months ended MarchJune 31,30, 2026 and 2025. Depreciation is on small office related equipment.

Loss on settlement and repricing of convertible debtnotes

LossThe loss on settlement and repricing of convertible debtnotes was $138,008 and $2,487,213 forduring the threecurrent monthsyear endedrelated Marchto; 31, 2026 and 2025, respectively,(i) a decrease of $2,349,205 or 94.5%. The decrease is primarily due to the prior year loss of $2,341,480$20,196,476 realized on anthe anti-dilution adjustment torepricing of the conversion feature of certain convertiblenotes debtwhich were under a forbearance agreement which expired on May 1, 2026; (ii) a priorpenalty yearon penaltyconversion of $100,000 realized on the conversion of a legal liability settled in common stock; (iii) a reversal of a loss realized on the conversion of convertible debt of $94,000, (iv) conversion fees on conversion of 39,229 of convertible debt whichof is in default;$16,757, and (iii) a decrease in loss of $12,504 realized on conversion of certain convertible debt at prices lower than market prices; and (ivv) a debt extinguishment charge charge of $44,008$14,116 during the current year,period, due to forbearance agreements entered into with certain convertible noteholders to modify the conversion conversion price of convertible notes in exchange for an extension of the maturity date to December 31, 2026.

Fair value onadjustment to price protected warrants

Fair value on price protected warrants was $0 and $1,618,545$6,631,924 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. During the prior year, the exercise price of certain warrants was reset due to the anti-dilution price protection and in the case of certain warrants, full ratchet price protection, from an exercise price of $0.084$0.001105 to $0.001105.$0.0005. This resulted in a Black -Scholes derived valuation difference related to those certain warrants.

Interest expense, net expense

Interest expense was $226,110 $223,572 and $212,743$227,806 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, ana increasedecrease of $13,367$4,234 or 6.3%.1.9%. The increase decrease is primarily related to additionalthe conversion of several convertible notes issuedsince the prior period, offset by additional notes entered into during the current year, offset by convertible notes converted into equity in the prior year.period.

Interest income was $0 and $12,607 $13,193 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $12,607$13,193 or 100.0%. The interest income in the prior year relates to funds advanced to Business Warrior prior to the cessation of our merger plans with them. We have fully provided for the recoverability of these notes and the interest thereon.

Amortization of debt discount was $94,130$99,610 and $118,056$60,434 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, aan decreaseincrease of $23,926$39,176 or 20.3%. 64.8%. The decrease increase is primarily due to the amortization of the value of warrants issued on new convertible notedebt funding significantlyand lowerthe thanvalue of derivative liabilities on variable priced conversion feature notes issued in the prior year.

Derivative liability movements were $1,018,083$8,189,992 and $928,979$1,706,229 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a net movement of $89,104 $6,483,763 or 9.6%.380.0%. The derivative liability arose primarily due to the revaluation of certain repriced conversion features on convertible debt debtduring the current period and the subsequent mark-to-market of these derivatives due to a declining stock price and the expiration of certain warrants subject to derivative liability.price.

Deemed dividend was $0$36,973 and $350,364 $1,430,065 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $350,364$1,393,092 or 100.0%. the97.4%. The deemed dividend in the current period related to the repricing of fixed priced anti-dilution adjustments to certain convertible notes and warrants and in the prior yearperiod, related to a full rachet anti-dilution adjustment to certain fixed exercise price warrants issued to a convertible note holder holders during the prior year. The deemed dividend was recorded as a component of additional paid in capital.

Net loss attributable to Innovative Payment Solutions common stockholders

Net loss attributable to common stockholdersInnovative Payment Solutions Common Stockholders was $585,458$12,772,182 and $4,100,185$22,001,308 for the three months ended March 31,June 30, 2026 and 2025, respectively, a decrease of $3,514,727$9,229,126 or 85.7%. 41.9%. The decrease is primarily due to the decrease in the fair value adjustment to price protected warrants, the net losscredit on derivative liability movements and the decreasereduction in deemed dividenddividends, asoffset by an increase in general and administrative expenses, and an increase in the loss on settlement and repricing of convertible notes, discussed in detail above.