Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 161

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 161
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 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.

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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