Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 501

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1C
Chunk 501
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 Corbett,
the sole remaining individual defendant, through prior counsel moved to compel arbitration on February 17, 2023. As a result of that
motion and a stipulated order entered by the court, all proceedings in the Superior Court were stayed.

On June 8, 2023, while
our motion to compel arbitration was pending in the Superior Court three of the employees (Naum Voloshin, Alexander Voloshin, and Novikov)
filed a civil action in the U.S. District Court for the Central District of California. Naum Voloshin, et al., v. Innovative Payment
Solutions, Inc., Case No. CV 23-4515-JFW (PVCx), which alleges a single cause of action for retaliation in violation of The Sarbanes-Oxley
Act of 2002 (the “Federal Action”). The plaintiffs in the Federal Action made no attempt to serve their complaint or to give
notice to any defendant in the Federal Action until August 2023.

On August 30, 2023,
the Hon. William A. Crowfoot granted our and Mr. Corbett’s motion to compel arbitration, concluding that all of the claims alleged
in the former employees’ first amended complaint were subject to arbitration. The California Court of Appeal subsequently denied
the former employees’ petition for writ of mandate on November 1, 2023. On December 15, 2023, all five former employees filed a
demand for arbitration. We withdrew our motion to compel appointment of an arbitrator.

Upon motion of our Company
and Mr. Corbett, on January 10, 2024, the U.S. District Court for the Central District of California stayed all proceedings in the Federal
Action until the arbitration is completed.

Plaintiffs Naum Voloshin,
Andrey Novikov, and Alexander Voloshin asserted, in the Federal Action, that they are entitled to damages in the following amounts: Naum
Voloshin: $950,000 plus an unstated amount of lost wages and emotional distress damages. The claim is premised upon Mr. Voloshin earning
$15,000 per month and a claim that he was entitled to receive 333,334 shares of Common Stock (after giving effect to our August 2023
reverse stock split) on or about June 29, 2021 that he would have sold on July 1, 2021 for $2.85 per share on July