Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 243

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 243
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 $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 receive 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 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 that may ultimately send the ease back to the Superior Court.

Discovery is
closed. The arbitration date was vacated. Pending is a motion for reconsideration as to certain issues the arbitrator decided in May 2025
that may have been in excess of his jurisdiction. Additional investigation by our forensic specialist led to the recovery of previously
unavailable materials that weigh heavily on the issues now before the Arbitrator. A hearing on these issues is set for September 2, 2025.

No new date for final arbitration hearing
in the Minkovich matter has yet been scheduled.

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