Company: IPSI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044146
Chunk: 286

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 4
Chunk 286
---
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.

38

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, 2024, by the trial court for the fees incurred
on the successful appeal. As with the Voloshin matter, we are contractually bound to proceed through arbitration and to that end completed
the process of selecting an arbitrator under the AAA rules. That appointment was made on August 7, 2024. Henceforth, the Minkovich matter
will track along the same lines as the Voloshin matter but on a smaller scale as there is only one plaintiff in the Minkovich matter as
opposed to five in the Voloshin matter. The arbitration hearing (“trial”) in the Minkovich matter was set for June 30, 2025
to July 3, 2025 at the continued “preliminary conference” held on October 7, 2024. Before the arbitration hearing, the parties
will engage in discovery and some motion work which may (1) either dispose of all or some of the case, and/or (2) result in the Minkovich
matter being sent back to the Superior Court for final determination.

We have a $22,000 deposit
on account for the arbitration of the Minkovich matter, the arbitrator has indicated that he will proceed as the