Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 22, 2021, the board
of directors (the “Board”) of Innovative Payment Solutions, Inc. (the “Company”) appointed Richard
Rosenblum as President and Chief Financial Officer of the Company. In addition, Mr. Rosenblum was elected to the board of directors of
the Company to serve until the Company’s next annual meeting of shareholders.
Since its founding in 2004,
Mr. Rosenblum has been Chief Executive Officer and Principal at Harborview Capital Advisors LLC (“Harborview”), which
provided strategic advisory services in the areas of capital formation, merchant banking and management consulting. Additionally, Mr.
Rosenblum has been the owner of Harborview Property Management (“HPM”) for over twenty-five (25) years, where he invests and
manages domestic and international commercial real-estate, and multi-family real-estate assets. From 2008 to 2014, Mr. Rosenblum was a
Director, President and Executive Chairman of Alliqua Biomedical Inc. (NASDAQ: ALQA), which developed and marketed hydrogel manufacturing
technology in the wound care sector. His philanthropic and community-centered activities include being a founding board member of the
Dr. David Feit Memorial Foundation (DFM), which for over 15 years raised money for the benefit and support of youth activities. Since
2018, Mr. Rosenblum has served on the Board of Directors of the Chilton Hospital Foundation. Mr. Rosenblum graduated Summa Cum Laude from
SUNY Buffalo with a B.A. in Finance & Accounting.
There are no family relationships between Mr. Rosenblum
and any of the Company’s directors or executive officers and the Company has not entered into any transactions with Mr. Rosenblum
that are reportable pursuant to Item 404(a) of Regulation S-K.
On July 27, 2021, the Company
and Mr. Rosenblum entered into an Executive Employment Agreement (the “Employment Agreement”), pursuant to which Mr.
Rosenblum will serve as the Company’s President and Chief Financial Officer on a full time basis effective as of July 1. The effectiveness
of the Employment Agreement is subject to the approval of the Employment Agreement by the Board, unless earlier terminated as provided
in the Employment Agreement. The term of the Employment Agreement is until December 31, 2024. Mr. Rosenblum’s base salary will be
$18,000 per month commencing with the payroll beginning July 1, 2021. In addition, the Employment Agreement provides that: (1) Mr. Rosenblum
will be eligible for a cash bonus as determined by the Board to the extent the Company achieves (or exceeds) annual revenue or other financial
performance objectives established by the Board, in its sole discretion, from time to time; and (2) the Company will grant to Mr. Rosenblum
options to purchase 10,000,000 shares of common stock of the Company at a per share exercise price equal to the fair market value of the
Company’s common stock, as reflected in the closing price of the Company’s common shares on the OTC exchange or, in the event
the stock is uplisted, on the NASDAQ exchange, on the date of grant (the “Options”)”. Fifty percent (50%) of the shares
subject to the Options shall vest on the grant date and the other 50% of the shares subject to the Option shall vest at the rate of 1/36
per month over a three-year period. The Options will be exercisable for a period of ten (10) years after the date of grant and the Company
shall provide for cashless exercise of the Option by Executive. The Options are being granted pursuant to the Company’s 2021 Stock
Incentive Plan.
If Mr. Rosenblum’s employment
with Company is terminated at any time during the term of the Employment Agreement other than for Cause (as defined in the Employment
Agreement), or due to voluntary termination, retirement, death or disability, then Mr. Rosenblum shall be entitled to severance equal
to fifty percent (50%) of his annual base salary rate in effect as of the date of termination. If Mr. Rosenblum’s employment with
Company is terminated at any time during the term of the Employment Agreement other than for Cause (as defined in the Employment Agreement),
or due to voluntary termination, retirement, death or disability, within 12 months following an Acquisition (as defined in the Employment
Agreement), then Mr. Rosenblum shall be entitled to severance equal to 100% of his annual base salary rate in effect as of the date of
termination. Severance payments shall be subject to execution and delivery of a general release in favor of the Company.
In addition, the Company and Mr. Rosenblum entered
into an Indemnification Agreement (the “Indemnification Agreement”), pursuant to which the Company agreed to indemnify
Mr. Rosenblum to indemnify Indemnitee to the fullest extent permitted by or under the Nevada Corporation Law in respect of claims, including
third-party claims and derivative claims and provides for advancement of expenses.
The preceding description of the Employment Agreement
and Indemnification Agreement is a summary of its material terms, does not purport to be complete, and is qualified in its entirety by
reference to the Employment Agreement and Indemnification Agreement, copies of which are being filed as Exhibits 10.1 and 10.2 to this
Current Report on Form 8-K and are incorporated herein by reference.
On July 28, 2021, the Company issued a press release
announcing the appointment of Mr. Rosenblum as President and Chief Financial Officer of the Company. A copy of the press release is furnished
as Exhibit 99.1 to this current report on Form 8-K.