Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 66

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 66
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5, 2025. The initial payment of $100,000 was made on March 24, 2025. The Company has not made the second instalment as of the date of this report and has not issued the convertible
notes, securing the obligations, as discussed below, as of the date of this report.

Any breach of the terms of
the settlement agreement will result in a payment to the Plaintiffs of liquidated damages of $25,000 for each event of default. We are
negotiating with the plaintiffs on the payment of the second instalment, and may be obligated to pay the additional $25,000 default penalty,
if we are unable to agree to waive it.

In order to secure the obligations
to the Plaintiff Group, the Company is to execute two convertible notes, the first note for $100,000 (“Note 1”) and the second
note for $300,000 (“Note 2”). Each note bears interest at the rate of 10% per annum, Note 1 has a maturity date of 60 days
and Note 2, 240 days from March 5, 2025. The Notes will be convertible upon an event of default, which includes any failure to pay any
of the installments. The Notes plus any accrued interest thereon, are convertible into common stock of the Company at a conversion price
of $0.02 per share or the lowest conversion price of the senior secured note holders, as determined and established as the conversion
price for all their notes outstanding as of March 5, 2025, if there are any limits on trading or the trading price falls below $0.01 per
share, the conversion price will be discounted by a further 15%. The notes provide for certain events such as mergers and consolidations,
distributions to shareholders, and stock splits and dividends.

Minkovich v. Corbett, et
al.

On May 26, 2022, Mr. Jan Minkovich
(“Minkovich”) filed a lawsuit in California Superior Court in Los Angeles County (Minkovich v. Corbett, et al., CASE NO. 22CHCV00377)
against our 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