UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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Item 8.01. Other Events.
Supplemental Award Appointing Rehabilitative Receiver
On August 31, 2022 the arbitrator presiding over the Reliability Incorporated (the “Company”) and Maslow Media Group, Inc. (“MMG”) arbitration case versus Vivos Holdings, LLC (“Vivos”), Vivos Real Estate Holdings, LLC (“VREH”), Naveen Doki (“Naveen”) Silvija Valleru (“Valleru”), Suresh Doki (“Suresh”), Shirisha Janumpally (“Janumpally”), individually and as Trustee of Judos Trust, Kalyan Pathuri (“Pathuri”), individually and as Trustee of Igly Trust, and Federal Systems, LLC (“Federal Systems” and, together with Vivos, VREH, Naveen, Valleru, Suresh, Janumpally and Pathuri, collectively the “Vivos Group”) issued an Arbitration Award (“Award”) with the Company and MMG prevailing on their claims.
Subsequently on May 17, 2023 the arbitrator issued an Amended and Supplemental Arbitration Award which among other things an award in favor of MMG and against VREH under Note II in the amount of $835,156 as of June 30, 2022, with interest thereafter at the rate of 5.5% per year, and stated that a rehabilitative receiver under Maryland law would be appointed in a forthcoming Supplemental Award Appointing Rehabilitative Receiver.
On October 10, 2023, the Arbitrator has now issued a Supplemental Award Appointing Rehabilitative Receiver whom is appointed to collect the Award and who also has the power to:
| ● | appoint Board members at each annual meeting, until such time the receiver’s appointment terminates, | |
| ● | appoint or approve the auditor, | |
| ● | approve reasonable compensation and incentive plans for employees, except officers, of Reliability, and | |
| ● | approve any other matter that is in the ordinary course of business. |
The Receiver shall vote in accordance with the Board’s recommendations for all actions taken by it in the ordinary course of business.
The Receiver shall not have power to take any action to alter or change;
| ● | the Board of Directors of Reliability, | |
| ● | the corporate governance or structure of Reliability or Maslow, and | |
| ● | the authorized or issued stock of Reliability, |
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, the Receiver must promptly complete the Receiver’s functions within one year (the “Receivership Term”). With the approval of the Arbitrator, the Receivership Term may be extended up to, but not beyond, three (3) years after the date the Receiver is appointed.
The foregoing summary of the Amended Award is qualified in its entirety by reference to the full text of the Amended Award, which is filed as Exhibit 104.1 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit
Number |
Description | |
| 11.1 | SUPPLEMENTAL AWARD APPOINTING REHABILITATIVE RECEIVER, dated Oct 10, 2023. | |
| 104 | Cover Page Interactive Data (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RELIABILITY INCORPORATED | ||
| By: | /s/ Nick Tsahalis | |
| Nick Tsahalis | ||
| President and Chief Executive Officer | ||
| Date: Oct 19, 2023 | ||