What changed in this filing

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Item 1. Legal Proceedings

2021-05-17 compared with 2020-11-12 · 106 added, 83 removed, 6 unchanged (97% of the section changed)

Legal Proceedings

Company is engaged from time to time in legal matters and proceedings arising out of its normal course of business.

establishes a liability related to its legal proceedings and claims when it has determined that it is probable that the Company

has incurred a liability and the related amount can be reasonably estimated.

If the Company determines that an obligation is reasonably

possible, the Company will, if material, disclose the nature of the loss contingency and the estimated range of possible loss,

or include a statement that no estimate of the loss can be made.

or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland

against Vivos Holdings, LLC, VREH and Naveen Doki (the “Defendants”), to enforce Maslow’s rights under certain

promissory notes and a personal guarantee made by the defendants (the “Debt Collection Suit”).

The aggregate amount

of these obligations as of the Balance Sheet Date is approximately $4,229.

a description of our legal proceedings, see Note 6, Commitments and Contingencies, of the Notes to Unaudited Consolidated Financial

Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of

However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise

from time to time that may harm our business.

Except as set forth below, we are not aware of any such legal proceedings or claims

against the Company.

or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland against

Vivos Holdings, LLC, VREH and Naveen Doki (the “Defendants”), to enforce MMG’s rights under certain promissory

notes and a personal guarantee made by the defendants (the “Debt Collection Suit”).

The aggregate amount of these obligations

as of the balance sheet date is approximately $4,308.

The case is proceeding.

The Company believes that it

will be granted a judgment in its favor.

Maslow intends to continue to vigorously pursue this litigation.

The trial on this matter

is scheduled for March 2021.

or about May 6, 2020, the Defendants filed with the Circuit Court of Montgomery County, Maryland a Counterclaim and Third-Party

Complaint for Damages, Declaratory and Injunctive Relief and Jury Demand (the “Counterclaim”), The Company believes

The Company believes that it will be granted a judgment

in its favor.

MMG has vigorously pursued this litigation and a full trial on this matter that is expected to last two weeks is

scheduled to begin in Maryland Circuit Court of Montgomery County, Maryland, on October 4, 2021, absent any COVID-19 disruptions that

could cause further delay.

or about May 6, 2020, the Defendants filed with the Circuit Court of Montgomery County, Maryland a Counterclaim and Third-Party Complaint

for Damages, Declaratory and Injunctive Relief and Jury Demand (the “Vivos Default Counterclaim”), The Company believes

that the Counterclaim has no merit.

The Company will vigorously defend itself and its indemnified officers, directors and other

parties as permitted by the Company’s organizational documents.

The Company and the other Counterclaim defendants have moved

to have the Debt Collection Suit and the Counterclaim stayed pending the outcome of the Arbitration described below.

this matter is scheduled for March 2021.

The Defendants have also brought a motion seeking an injunction related to corporate

The Company has objected to this motion and a hearing has been scheduled for November 2020.

or about June 5, 2020, the Company submitted a Claimant’s Notice of Intention to Arbitrate and Demand For Arbitration

(the “Arbitration”) with the American Arbitration Association in New York, and to the Respondents thereto:

The Company continues to vigorously defended itself and its indemnified officers, directors

and other parties as permitted by the Company’s organizational documents.

The Company and the other Counterclaim defendants have

moved to have the Debt Collection Suit and the Counterclaim stayed pending the outcome of the Arbitration described below in Intent to

A full trial covering the Vivos Group note defaults and the Vivos Group’s countersuit which was originally scheduled

for March 2021, will take place over a two-week period starting on October 4, 2021, absent any COVID-19 disruptions that could affect

or about June 5, 2020, the Company submitted a Claimant’s Notice of Intention to Arbitrate and Demand For Arbitration (the

“Arbitration”) with the American Arbitration Association in New York, and to the Respondents thereto:

Silvija Valleru;

Shirisha Janumpally (individually and in her capacity as trustee of Judos Trust);

Kalyan Pathuri

(individually in his capacity as trustee of Igly Trust) and Federal Systems (the “Respondents”).

The Arbitration

alleges that the Respondents breached the Merger Agreement in a number of significant respects and committed fraud in

connection with the Merger.

The Company is seeking damages which if granted will likely be the remedy set forth within the

merger agreement which is in whole or in part shares of Company Common Stock received by the Respondents in connection with

The Company has brought a motion to compel the Arbitration which is currently being decided by the Federal Courts

The Company believes a strong basis for the motion exists, but no assurance can be given that it will be

Regardless, the Company intends to pursue claims under the Merger Agreement in whatever venue is

June 12, Igly Trust, a Vivos entity, brought an action in Texas to compel the Company to provide it certain corporate records,

including the Company’s shareholder list.

The Company has moved to have this action stayed pending the outcome of the Arbitration.

February 28, 2020, Healthcare Resource Network, LLC (“HCRN”) filed a complaint against Maslow in the Circuit Court

of Montgomery County, Maryland.

The plaintiff has not specified any alleged damage caused by Maslow and the Company believes any

claims are without merit.

The Company will defend itself from this case.

Since HCRN’s primary claim relates to the improper

actions of Vivos, the parties have been discussing the tolling of HCRN’s claims against the Company while both the Company

and HCRN, together or separately, resolve the matters against Vivos.

On September 3, 2020, MMG and HCRN entered into a Tolling

Agreement pursuant to which HCRN dismissed MMG from this litigation without prejudice and agreed to forebear filing a new complaint

or initiating any lawsuit or other legal proceeding against MMG until January 31, 2022.

On September 28,

2018, Credit Cash filed a complaint against Maslow, Vivos, Vivos Acquisitions, LLC, Dr.

Kalyan Pathuri (individually

in his capacity as trustee of Igly Trust) and Federal Systems (the “Respondents”).

The Arbitration alleges that the

Respondents breached the Merger Agreement in a number of significant respects and committed fraud in connection with the Merger.

The Company is seeking damages which if granted will likely be the remedy set forth within the merger agreement which is in whole

or in part shares of Company Common Stock received by the Respondents in connection with the Merger.

The Company has brought a

motion to compel the Arbitration which is currently being decided by the Federal Courts in New York.

The Company believes a strong

basis for the motion exists, but no assurance can be given that it will be granted.

Regardless, the Company intends to pursue

claims under the Merger Agreement in whatever venue is required.

June 12, 2020, Igly Trust, a Vivos entity, asked the Texas court for an injunction requiring the Company to provide a shareholder

list and to hold a shareholder meeting.

On October 20, 2020, the Texas court denied the injunction but, incongruously, dismissed

all the Vivos plaintiffs for lack of personal jurisdiction.

The Company appealed the dismissal because the court had jurisdiction

over Igly Trust once it made affirmative claims in Texas and because the Court’s order denying the injunction is an important

precedent for establishing that the directors under Texas law retain control of shareholder lists and determining the timing of

shareholder meetings.

There exists an extension on Reliability’s “reply brief,”

which is due on May 17, 2021.

December 23, 2020, after an evidentiary hearing before the Circuit Court for Montgomery County, Maryland, a judge denied a motion by

Vivos Holdings, LLC, VREH, Doki, Kaylan Pathuri (“Pathuri”), Judos Trust by Shrishsha Janumpally, its trustee (“Judos”)

and Igly Trust by Kaylan Pathuri, its trustee, (“Igly”) to compel a shareholder meeting based on the facts presented

The judge also commented that, based on the evidence presented, management was performing its fiduciary duties to protect the

Company despite adverse circumstances.

This same judge will be presiding over a full trial regarding Company’s lawsuit to enforce

the repayment of notes and the Vivos Group counterclaim, over a two-week period starting on October 4, 2021, absent any COVID-19 disruptions

that may affect scheduling.

January 20, 2021, Defendants and Counter/Third-Party Plaintiffs, Vivos Holdings, LLC (“Vivos”), Vivos Real Estate

Holdings, LLC (“VREH”), Dr.

Naveen Doki (“Doki”), Kaylan Pathuri (“Pathuri”), Igly Trust (“Igly”),

Judos Trust (“Judos”), by counsel, filed a Notice of Appeal with the Circuit Court for Montgomery County, Maryland

denying their Motion for Preliminary Injunction signed on December 23, 2020.

The following legal

proceedings were Vivos Group borrowings impacting

September 28, 2018, Credit Cash filed a complaint against MMG, Vivos, Vivos Acquisitions, LLC, Dr.

Valleru (the “Parties”)

and other defendants in the United States District Court for the District of New Jersey for, among other things, breach of contract

of the Maslow and HCRN Credit Facilities and their respective guaranties in relation to the November 15, 2017 agreement (the “DNJ

Action”).

On October 30, 2018, Credit Cash filed a motion to intervene in an action pending in New York State, Monroe County,

filed by HCRN and LE Finance, LLC against the Parties, and other defendants (“NY State Action”).

10, 2018, the Parties entered into a settlement agreement for the purpose of settling certain claims related to the DNJ Action

Pursuant to the settlement agreement, certain repayment terms were agreed upon between Credit Cash and the Parties, but

Credit Cash did not relinquish the right to pursue any claims related to the NY State Action, nor to pursue any remedies against

any of the parties in relation to the November 15, 2017 agreement.

Certain of the Vivos Shareholders executed and delivered to

Maslow that certain Agreement for the Contingent Liquidation of the Common Stock of Maslow Media Group, Inc., dated as of October

28, 2019 (the “Liquidation Agreement”), pursuant to which such Vivos Shareholders pledged to Maslow the shares of

Company Common Stock they received in the Merger to provide the capital required to satisfy the Parties’

obligations under

the Settlement Agreements.

Vivos Shareholders misrepresented upon the execution of the Liquidation Agreement to Maslow the status

of its obligations under the Settlement Agreement, which were, in fact, then in default.

To date these Vivos Shareholders have

not cooperated with the Company to monetize those shares as contemplated by the Liquidation Agreement.

The Company will take appropriate

action to enforce its rights under the Liquidation Agreement, which actions will be dictated in part by the outcome of the Arbitration.

On or about March 16, 2020, Credit Cash entered its New Jersey confession of judgment with the Circuit Court of Montgomery County,

Company may be required to make cash payments pursuant to the Settlement Agreements (filed as exhibits 10.4, 10.5 and 10.6 the

Company’s Current Report on Form 8-K filed on October 30, 2019).

or about May 5, 2020, Libertas Holdings LLC and Kinetic Direct Funding entered their New York confession of judgment with the

Circuit Court of Montgomery County, Maryland, and have approached the Company regarding payment, which the parties have been discussing.

The Vivos Shareholders that are the counterparties to the Liquidation Agreement are not cooperating with the Company in regard

to the payment of the debt.

These debts were incurred by another company held by the Vivos Shareholders for the other company’s

benefit but for which Maslow, while under the Vivos Shareholders ownership, guaranteed payment for the benefit of the other company.

and other defendants in the United States Circuit Court of Montgomery County, Maryland for the District of New Jersey for, among other

things, breach of contract of the MMG and HCRN Credit Facilities and their respective guaranties in relation to the November 15,

2017 agreement (the “DNJ Action”).

On October 30, 2018, Credit Cash filed a motion to intervene in an action pending in New

York State, Monroe County, filed by HCRN and LE Finance, LLC against the Parties, and other defendants (“NY State Action”).

On December 10, 2018, the Parties entered into a settlement agreement for the purpose of settling certain claims related to the DNJ Action

Pursuant to the settlement agreement, certain repayment terms were agreed upon between Credit Cash and the Parties, but Credit

Cash did not relinquish the right to pursue any claims related to the NY State Action, nor to pursue any remedies against any of the

parties in relation to the November 15, 2017 agreement.

Certain of the Vivos Group executed and delivered to MMG that certain

Agreement for the Contingent Liquidation of the Common Stock of Maslow Media Group, Inc., dated as of October 28, 2019 (the “Liquidation

Agreement”), pursuant to which such Vivos Group pledged to MMG the shares of Company Common Stock they received in the Merger

to provide the capital required to satisfy the Parties’

obligations under the Settlement Agreements.

Vivos Group misrepresented

upon the execution of the Liquidation Agreement to MMG the status of its obligations under the Settlement Agreement, which were,

in fact, then in default.

To date these Vivos Group have not cooperated with the Company to monetize those shares as contemplated by

the Liquidation Agreement.

The Company will take appropriate action to enforce its rights under the Liquidation Agreement, which actions

will be dictated in part by the outcome of the Arbitration.

On or about March 16, 2020, Credit Cash entered its New Jersey confession

of judgment with the Circuit Court of Montgomery County, Maryland.

Resource Network Complaint:

On or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery

County, Maryland against Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC and Mr.

Naveen Doki, to enforce MMG’s rights

under certain promissory notes and a personal guarantee made by the defendants.

The case is proceeding.

The Company believes that it

will be granted a judgment in its favor.

MMG intends to continue to vigorously pursue this litigation.

On September 3, 2020, MMG

and HCRN entered into a Tolling Agreement pursuant to which HCRN dismissed MMG from this litigation without prejudice and agreed to forebear

filing a new complaint or initiating any lawsuit or other legal proceeding against MMG until January 31, 2022.

or about May 5, 2020, Kinetic Direct Funding domesticated a foreign judgement in the Montgomery County Circuit Court system again

Health Care Resources Network (HCRN), Maslow Media Group, US IT Solutions Inc., 360 IT Professionals, Alliance Micro, Inc.

This foreign judgement from the State of New York relates to loans the Vivos Group took out by adding Maslow Media

Group as additional collateral.

This loan is currently in default.

Foreign Judgement total is $579.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings