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Item 1. Legal Proceedings

2021-11-15 compared with 2021-08-16 · 63 added, 51 removed, 69 unchanged (62% of the section changed)

Legal Proceedings

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 business.

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

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,

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.

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.

MMG has vigorously

pursued this litigation and atrial on this matter is scheduled to begin in the Circuit Court of Montgomery County, Maryland,

on October 4, 2021.

On 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

The Company continues to vigorously defended itself and its indemnified officers, directors and other parties as permitted

The Company believes that it will be granted a judgment in

MMG has vigorously pursued this litigation but as of September 7, both parties agreed to have their case heard in front of

a Maryland Arbiter (See Below).

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 believing

the Counterclaim has no merit, continues to vigorously defended itself and its indemnified officers, directors and other parties as permitted

by the Company’s organizational documents.

1 unchanged sentence

Suit and the Counterclaim stayed pending the outcome of the Arbitration described below in Intent to Arbitrate.

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

starting on October 4, 2021.

On September 7 th ,

2021 (see last paragraph below) both parties agreed to have all matters settled through a binding arbitration process which was cited

as a remedy for merger violations in the merger agreement.

This process is to be completed within 150 days of the execution of this agreement

on September 7 th , 2021.

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

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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

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

The Company brought a motion to compel the Arbitration and the Respondents countered with

a motion to dismiss Reliability’s Petition to Compel Arbitration to the Federal Courts in New York.

On August 4, the US District

Court, Southern District of New York, denied the Respondents motion to dismiss.

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

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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

After an extension was granted to Reliability’s

“reply brief,” on June 2nd, 2021, Reliability, Incorporated, Maslow Media Group, Inc, Nick Tsahalis and Mark Speck filed

an appellant’s brief in the Fourteenth District of Texas, Houston Texas to challenge the court’s prior ruling granting

a special appearance to Igly Trust and to the Doki Shareholders.

A response to the filed appellant brief has not yet been received.

On 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 Shirisha Janumpally, its trustee (“Judos”) and Igly Trust by

Kaylan Pathuri, its trustee, (“Igly”) to compel a shareholder meeting based on the facts presented at trial.

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, in a trial starting on October 4, 2021.

On 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.

9 , 2021, Reliability filed an additional claim in the Debt Collection Suit and Vivos Default Counterclaim in the Circuit

Court of Montgomery County, Maryland against Doki, Valleru, Pathuri, Janumpally, Igly, and Judos, asserting that the Respondents

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

The following legal proceedings

where Vivos Group borrowings impacting MMG:

that the directors under Texas law retain control of shareholder lists and determining the timing of shareholder meetings.

has since been moved into a single binding arbitration proceeding in Maryland.

an extension was granted to Reliability’s “reply brief,” on June 2nd, 2021, Reliability, Incorporated, Maslow Media

Group, Inc, Nick Tsahalis and Mark Speck filed an appellant’s brief in the Fourteenth District of Texas, Houston Texas to challenge

the court’s prior ruling granting a special appearance to Igly Trust and to the Doki Shareholders.

A response to the filed appellant

brief has not yet been received.

This matter has since been moved into a single binding arbitration proceeding in Maryland.

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 Shirisha Janumpally, its trustee (“Judos”)

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

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

despite adverse circumstances.

A full trial to address the Company’s lawsuit to enforce the repayment of notes and the Vivos Group

counterclaim, was scheduled to commence in early October but was preempted by an agreement by both sides to go to arbitration (See last

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.

However, the deadline to pursue the appeal lapsed absent additional

filings by the Vivos Group.

August 9 th , 2021, Reliability filed an additional claim in the Debt Collection Suit and Vivos Default Counterclaim in the

Circuit Court of Montgomery County, Maryland against Doki, Valleru, Pathuri, Janumpally, Igly, and Judos, that the Respondents breached

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

following legal proceedings where Vivos Group borrowings impacting MMG:

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

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the Circuit Court of Montgomery County, Maryland.

MMG needs to confirm whether this matter has been settled and if so whether MCA lenders

and HCRN remitted payments to Credit Cash, and if so, which liens have been removed.

Resource Network Complaint:

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Foreign Judgement total is $579.

There was a settlement reached on 10/1/2021 with both

parties releasing each other of any and all claims with no assets changing hands.

MMG needs to determine which lien releases have been

July 21, 2021, MMG came to an agreement with Kinetic and Libertas for $475 to release MMG from being obligated to this Vivos Group debt.

9 , 2021, Reliability filed an additional claim in the Debt Collection Suit and Vivos Default Counterclaim in the Circuit

Court of Montgomery County, Maryland against Doki, Valleru, Pathuri, Janumpally, Igly, and Judos, asserting that the Respondents

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

The intended shield to protect MMG from having to pay Vivos Group’s debt was the aforementioned Liquidation Agreement which Vivos

Debtors refuse to comply with (as covered in Note 7).

September 7, 2021, the Company entered in Arbitration and Tolling Agreements with alleged shareholder Naveen Doki, M.D., and his affiliates

and all other persons who were parties to the pending litigation previously reported in the Texas, New York and Maryland courts and before

the American Arbitration Association.

The Agreements call for the stay or dismissal of the pending litigation, with the parties agreeing

to resolve their disputes before a single arbitrator in Maryland.

The parties also agreed to maintain the status quo in corporate governance

and related matters pending a final non-appealable judgment confirming any award in arbitration.

The parties also signed a Tolling Agreement

to toll the statute of limitations following the dismissal of a pending litigation.

binding Arbitration must be completed with 150 days of the agreement date which places the deadline date around February 4, 2022.

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