Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 199

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 199
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 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 ease 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. We
had expected the dispute to be resolved by the AAA arbitration process. Management had vigorously defended the claims, intends to continue
to continue do so, but there is now a lull in activity as the Arbitrator is weighing several issues, the new date for arbitration was
set for May 26 to 29, 2026.

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

40

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 January 7, 2025 and
September 30, 2025, in terms of conversion notices received from 6 convertible note holders, the Company issued 365,655,485 shares
of common stock for the conversion of $759,011 of convertible debt at a weighted average conversion price of $0.00208 (conversion
prices ranging from ($0