10-K: Innovative Payment Solutions Reports $4.4M Loss in 2025

Innovative Payment Solutions, Inc. reported a net loss of $4.4 million for fiscal year 2025, continuing negative cash flows and raising substantial doubt about its ability to continue as a going concern.

Summary

• Reported a net loss of $4.4 million for the year ended December 31, 2025, an increase from $4.1 million in 2024.
• Accumulated deficit reached $69.0 million as of December 31, 2025.
• Generated no revenue for the years ended December 31, 2025, and 2024.
• Cash and cash equivalents stood at $29,804 as of December 31, 2025, down from $526 in 2024.
• Working capital deficit was $11.6 million, or $10.0 million excluding derivative liability, as of December 31, 2025.
• Formed Jetties Partners, LLC (d/b/a IPSIPAY) on October 29, 2025, a 50/50 joint venture with Brant Point Solutions, LLC, to develop merchant processing solutions for the gaming industry.
• Issued 200,000,000 shares, valued at $4,200,000, for its 50% interest in the Jetties Partners, LLC joint venture.
• Mutually agreed to terminate the merger agreement with Business Warrior Corporation on January 22, 2025, and fully impaired the investment in Business Warrior, resulting in a $424,989 charge.
• Identified material weaknesses in internal controls, including insufficient segregation of duties and lack of written policies and procedures.
• Outstanding convertible notes totaled approximately $5.4 million (net of discount) and promissory notes totaled $2.0 million (including interest) as of December 31, 2025, many of which have matured or are maturing in 2026 and are technically in default.
• Settled legal proceedings with the Voloshin Plaintiff Group for $500,000, with an initial payment of $100,000 made on March 24, 2025.
• Increased authorized common stock to 1,500,000,000 shares on October 3, 2025, and further to 5,000,000,000 shares on January 14, 2026.
• Issued 80,000,000 shares of common stock to directors, officers, and a consultant on February 3, 2026, valued at $1,080,000.
• The company's common stock traded at $0.007 per share on the OTCQB as of March 30, 2026.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as highly negative due to the complete lack of revenue, increasing net losses, severe liquidity issues, substantial doubt about going concern, and ongoing reliance on dilutive financing, despite some cost reductions and new joint venture formation.

Positives

• General and administrative expenses decreased by 46.0% ($866,069) in 2025, primarily due to reduced salaries, stock-based compensation, and legal fees.
• Settled the Voloshin legal matter for $500,000, reducing potential future litigation costs and uncertainty.
• Formed Jetties Partners, LLC (d/b/a IPSIPAY) joint venture, with an initial focus on the gaming industry, which is expected to generate initial revenues in fiscal year 2026.

Negatives

• No revenue generated for the years ended December 31, 2025, and 2024.
• Net loss increased to $4.4 million in 2025 from $4.1 million in 2024.
• Accumulated deficit of $69.0 million as of December 31, 2025.
• Negative cash flows from operations of $0.79 million in 2025.
• Cash and cash equivalents of only $29,804 as of December 31, 2025, indicating severe liquidity issues.
• Working capital deficit of $11.6 million.
• Substantial doubt about the company's ability to continue as a going concern.
• Significant indebtedness: $5.4 million in convertible notes and $2.0 million in promissory notes, many of which are matured or maturing in 2026 and are technically in default.
• Material weaknesses identified in internal controls (insufficient segregation of duties, lack of written policies).
• Incurred an impairment charge of $424,989 for the investment in Business Warrior due to significant doubt over collectability.
• Experienced significant losses on convertible debt repricing and conversions due to anti-dilution provisions and declining stock price.
• Ongoing legal proceedings (Minkovich v. Corbett, et al.) with potential for significant damages and legal costs.
• Failed to make the second installment payment for the Voloshin settlement, potentially incurring a $25,000 default penalty.
• Significant dilution of existing shareholders due to conversion of convertible notes and issuance of new shares for joint ventures and compensation.

Risks

• No revenue-generating operations to date and no operating history in the current business model, making future potential difficult to evaluate.
• Expectation of continued operating losses and negative cash flows, with uncertainty about achieving profitability.
• Present need for additional funding, raising substantial doubt about the ability to continue as a going concern, and potential inability to raise capital when needed.
• Inability to pay outstanding convertible notes, leading to significant dilution upon conversion.
• Servicing debt requires a significant amount of cash, and the ability to generate sufficient cash is uncertain.
• Covenant restrictions under indebtedness may limit the ability to operate the business.
• Material weaknesses in internal controls, with no assurance of effective remediation or prevention of future weaknesses.
• The payment services industry is highly competitive, with many larger competitors possessing greater financial and other resources.
• Uncertainty regarding market acceptance of the company's technology, products, and services.
• Dependence on technology networks and systems, with risks of security breaches, data loss, or system failures.
• Subject to economic risks that could impact overall consumer spending.
• Deterioration of consumer confidence could adversely affect business, financial condition, and results of operations.
• Expectation of extensive government regulation if deemed engaged in a regulated business, and risk of new regulations.
• The regulatory regime governing digital assets is evolving and uncertain, potentially affecting development.
• Difficulty managing growth, which may divert resources and limit successful expansion.
• Inability to successfully complete or integrate potential future acquisitions, partnerships, or joint ventures.
• Subject to the discretion of administrative enforcement agencies, leading to potential increased costs or inconsistent application of regulations.
• Major bank failure or sustained financial market illiquidity could adversely affect business.
• Need to implement enhanced compliance processes, procedures, and controls as the business develops.
• Inability to keep pace with rapid developments and changes in the industry and provide new services.
• Unauthorized disclosure of data (cybersecurity breaches, computer viruses) could expose the company to liability and damage its reputation.
• Customer complaints or negative publicity about customer service could adversely affect the attractiveness of services.
• Payment system might be used for fraudulent, illegal, or improper purposes, exposing the company to additional liability.
• Inability to successfully protect licensed or owned intellectual property and potential exposure to infringement claims.
• Use of open-source software in a manner that could be harmful to the business.
• Insufficient insurance coverage to protect against business risks.
• Reliance on certain key personnel (CEO William Corbett) and challenges in attracting, recruiting, retaining, and developing qualified personnel.
• Limited public trading market for common stock, with no assurance one will develop or be sustained.
• Common stock may be a 'penny stock,' making it more difficult for investors to sell shares.
• Regulatory constraints and difficulty attracting brokerage firm attention due to becoming public via a reverse merger.
• Compliance with federal securities laws' reporting requirements is expensive and time-consuming.
• Stock price has been subject to significant volatility, and future volatility may result in substantial losses for investors.
• Investor ownership will likely be diluted in the future due to additional equity issuances.
• Board of Directors has historically had significant control, and independent committees have not been established.
• Lack of an independent compensation committee presents a risk that executive compensation may not be commensurate with financial performance.
• Limitations on director and officer liability and indemnification may discourage stockholders from bringing suit.
• Responsibility for indemnification of officers and directors could result in substantial expenditures.
• No expectation of paying dividends on common stock in the foreseeable future.

Future Outlook

The company expects to continue incurring operating losses and negative cash flows for the foreseeable future. It aims to generate initial revenues from the Jetties Partners, LLC joint venture during the current fiscal year (2026), but provides no assurances that this will be achieved or that free cash flow distributions will be received. Significant additional funds are needed to repay outstanding debt, fund working capital, and fully implement its business plan.

Management Comments

• "Previously, we believed the IPSIPay Express opportunity has great promise, as of the date of this report, IPEX has not been launched, and we have derived no revenue or cash distributions from IPSIPay Express. We have significantly decreased our efforts on developing IPSIPay Express and have focused our attention on new markets."
• "We expect that revenue will be generated by IPSIPAY through fees derived from merchant processing fees, money transfer fees, and commissions on international bill payment processing."
• "No assurances can be given that IPSIPAY will be successfully launched or will generate revenues or otherwise have a positive impact on our results of operations."
• "We believe IPSIPAY could be commercially launched and generate initial revenues during the current fiscal year, but no assurances can be provided that this will be achieved or that (i) that we will ever receive distributions of free cash flow from IPSIPAY."
• "Management continues its vigorous defense of the claims." (referring to legal proceedings)
• "Our management has concluded that our internal control over financial reporting continued to be ineffective as of December 31, 2025 as a result of continuing insufficient segregation of duties and oversight of work performed in the finance and accounting function due to limited personnel with the appropriate skill sets."
• "During 2026, our management plans to continue to address these matters with a view towards remediating the weaknesses."

Industry Context

StockSavvy.ai notes that Innovative Payment Solutions operates in the highly competitive digital payment solutions and money remittance industry, which is dominated by large, established players like Western Union, MoneyGram, PayPal, and Venmo. The company's strategy to target "underserved markets" and "high-risk sectors" such as online gaming, while potentially offering higher margins, also introduces significant regulatory and operational challenges. This is particularly concerning given the company's current lack of revenue and substantial financial distress. The global remittance market is projected to reach over $913 billion in 2025, with digital payments accounting for approximately 30% ($273.5 billion), indicating a large addressable market if the company can successfully launch and scale its offerings, a significant 'if' given its current state.

Comparison to Industry Standards

• The company's complete lack of revenue and significant accumulated deficit stands in stark contrast to established industry leaders like PayPal (PYPL) or Block (SQ), which generate billions in revenue and operate profitably.
• Its market capitalization of approximately $1.36 million (as of June 30, 2025) is minuscule compared to industry giants, reflecting its early stage, unproven business model, and extremely high-risk profile.
• The reliance on convertible debt with highly dilutive conversion features and frequent repricing is common for distressed micro-cap companies but is not a standard or sustainable financing practice for healthy, growing fintech firms.
• The identified material weaknesses in internal controls are a significant governance issue, falling far short of the robust control environments expected in mature financial services companies, which are critical for maintaining trust and regulatory compliance.

Management Changes

Corporate Governance

Legal Proceedings

• **Voloshin, et al., v. Innovative Payment Solutions, Inc., et al.**: A lawsuit by five former employees alleging unpaid compensation and wrongful termination. The claims were compelled to arbitration and subsequently settled on March 4, 2025, for $500,000. The initial payment of $100,000 was made on March 24, 2025, but the company has not made the second installment and may be obligated to pay a $25,000 default penalty.
• **Minkovich v. Corbett, et al.**: A lawsuit filed by former employee Jan Minkovich against the company and CEO William Corbett for breach of contract, nonpayment of wages, and wrongful termination, seeking $570,000 in damages plus 5% ownership. The case was remanded to the Superior Court with directions to compel arbitration, with a new arbitration hearing date set for May 26-29, 2026.

Related Party Transactions

• **William Corbett (CEO, CFO, Chairman)**: Voluntarily reduced salary to $10,000/month from April 1, 2024, then increased to $20,000/month from January 7, 2025. Awarded ten-year options for 600,000 shares at $0.09/share on January 7, 2025. Accrued payroll of $240,000 exchanged for a convertible note on April 18, 2025, with a conversion price amended to $0.005/share. Granted 25,000,000 shares of common stock on August 19, 2025, valued at $92,500. Owed $7,832 as of December 31, 2025, for operating expenses paid on behalf of the company.
• **Madisson Butler (Director, daughter of CEO)**: Received $18,000 in directors fees for 2025. Authorized issuance of 5,000,000 shares of common stock on August 19, 2025, in settlement of $18,500 of outstanding directors fees.
• **David Rios (Director)**: Received $18,000 in directors fees for 2025. Authorized issuance of 5,000,000 shares of common stock on August 19, 2025, in settlement of $18,500 of outstanding directors fees.
• **Richard Rosenblum (Former CFO, President)**: Resigned all executive positions on January 7, 2025. Accrued payroll of $210,000 exchanged for a convertible note on April 18, 2025, with a conversion price amended to $0.005/share. This note was assigned to a third party on October 9, 2025.

Stakeholder Impact

• **Shareholders**: Face significant dilution from ongoing convertible debt conversions and new share issuances. High risk of investment loss due to the company's going concern doubt, lack of revenue, and volatile stock price. No dividends are expected in the foreseeable future.
• **Employees**: The company relies substantially on key personnel, particularly CEO William Corbett. Legal proceedings involving former employees could impact morale and resources.
• **Creditors (Noteholders)**: Many notes are technically in default, requiring forbearance agreements. There is a risk of non-repayment if the company cannot raise additional capital or achieve profitability.
• **Customers/Merchants**: Uncertainty surrounds the successful launch and market acceptance of new payment solutions. Potential impact from security breaches or customer service issues could erode trust.

Next Steps

• Generate initial revenues from the Jetties Partners, LLC (d/b/a IPSIPAY) joint venture during the current fiscal year (2026).
• Secure banking relationships and customers for IPSIPAY.
• Remediate identified material weaknesses in internal controls during 2026.
• Negotiate forbearance agreements with noteholders for technically defaulted debt.
• Resolve the Minkovich v. Corbett, et al. legal proceeding through AAA arbitration, with a hearing set for May 26-29, 2026.
• Address the payment of the second installment for the Voloshin settlement and potential default penalty.

Key Dates

Recommendation

The company exhibits severe financial distress, including zero revenue, increasing net losses, a substantial accumulated deficit, and critically low cash reserves, leading to a "going concern" doubt. Its business model is unproven, and past joint ventures have failed to generate revenue. The reliance on highly dilutive convertible debt, coupled with material weaknesses in internal controls and ongoing legal challenges, presents an extremely high-risk profile. Despite some cost reductions and new joint venture formation, the fundamental financial health is deteriorating, making it a highly speculative investment with a strong likelihood of further capital erosion for shareholders.

Keywords

digital payments, fintech, payment solutions, merchant processing, online gaming, e-wallet, SEC filing, 10-K, going concern, convertible debt, stock dilution, corporate governance, risk management, start-up, Nevada corporation, liquidity crisis