Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 336

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 4
Chunk 336
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, 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 and Use of Proceeds.

Unregistered Sales of Equity Securities 

Between January 7, 2025 and
June 27, 2025, in terms of conversion notices received from 5 convertible note holders, the Company issued 300,868,611 shares
of common stock for the conversion of $439,108 of convertible debt at a weighted average conversion price of $0.00146 (conversion
prices ranging from ($0.0325 to $0.0005) realizing an aggregate loss on conversion of $439,108.

Between July 14, 2025 and August 12, 2025, The Company received conversion
notices from convertible note holders converting an aggregate of $29,403 into 50,261,