NOTE 14 – COMMITMENTS AND CONTINGENCIES

 

On March 13, 2026, we entered into a confidential joint settlement and release agreement (the “Settlement Agreement”) with Ortho-Tain for the full release, waiver and dismissal-resolution of all claims asserted by the parties against each other in the lawsuit we filed in federal district court in Colorado, Case No. 20 cv 1637 and the lawsuit Orth-Tain, Inc. filed in the United States District Court for the Northern District of Illinois on July 22, 2020.

 

In June of 2020, we filed a lawsuit in federal district court in Colorado, Case No. 20 cv 1637. Our’ Complaint alleged that we had suffered economic injuries, including lost profits/sales and an injury to its business reputation, as a result of allegedly false, misleading, and defamatory statements made by Ortho-Tain, Inc.’s CEO and legal counsel. In July of 2020, Ortho-Tain, Inc. filed a lawsuit in federal district court in Illinois, Case No. 20 cv 0301. Ortho-Tain’s Complaint alleged that it had suffered economic injuries, including lost profits/sales and an injury to its business reputation, as a result of allegedly unlawful marketing conduct by agents of Vivos.

 

The Settlement Agreement resolves any claim for relief that was, or could have been alleged, in the foregoing litigation matters. Pursuant to the Settlement Agreement, we will pay Ortho-Tain a confidential sum and, among other considerations, not make use of the phrase “Guide” or “Guides” in the formal product name of any of our oral appliance products and cease direct solicitation and training of independent dental professionals in the use of any Vivos pre-formed tooth positioner products that are competitive with Ortho-Tain. As of December 31, 2025, management recorded an accrual of $250 thousand for the settlement expense under accrued expenses.

 

There were no new other material commitments or contingencies entered into as of the year ended December 31, 2025 and 2024.

 

Historical Timeline

Fiscal YearFiled
2025Apr 15, 2026Showing above
2024Mar 31, 2025
2023Mar 28, 2024
2022Mar 30, 2023
2021Mar 31, 2022
2020Mar 25, 2021

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.