Reliability Incorporated (OTCMKTS:RLBY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 30, 2019, the Board of Directors of Reliability Incorporated (the “Company”) appointed Nick Tsahalis, the Company’s President, as a member of the Board of Directors. Following Mr. Tsahalis’ appointment to the Board of Directors, the Company’s Board of Directors consists of three directors: Nick Tsahalis, Mark Speck and Hannah Bible.
Mr. Tsahalis will not receive any compensation for his services as a director. See, however, the information regarding Mr. Tsahalis’ compensation for his services as an executive officer contained under “Item 2.01. Completion of Acquisition or Disposition of Assets—Form 10 Disclosures—Executive Compensation” in the Company’s Current Report on Form 8-K filed by the registrant on October 30, 2019 (the “October 30th Form 8-K”), which information is incorporated herein by reference.
The information regarding Mr. Tsahalis’ securities purchase agreement with The Maslow Media Group, Inc. (“Maslow”) contained under “Item 2.01. Completion of Acquisition or Disposition of Assets—Form 10 Disclosures—Certain Relationships and Related Transaction, and Director Independence—Transactions with Related Persons” in the October 30th Form 8-K is incorporated herein by reference.
Item 8.01. Other Events.
As previously disclosed in the October 30th Form 8-K, on September 18, 2019, the Company, R-M Merger Sub, Inc. (“Merger Sub”), Maslow, Jeffrey Eberwein, Naveen Doki and Silvija Valleru entered into a Merger Agreement (the “Merger Agreement”). The Merger Agreement provided for, among other things, a business combination to which Merger Sub would merge with and into Maslow, with Maslow as the surviving entity (the “Merger”). The Merger closed on October 29, 2019. As a result of the Merger, the separate corporate existence of Merger Sub ceased and Maslow continued as the surviving corporation and a wholly owned subsidiary of the Company.
In the October 30th Form 8-K, the registrant indicated that at the closing of the Merger, the Company entered into a Lock-Up Agreement with each of Mr. Eberwein, Dr. Doki, Shirisha Janumpally, Dr. Valleru, Igly Trust, a trust for which Kalyan Pathuri (Dr. Valleru’s spouse) is sole trustee and beneficiary, and Judos Trust, a trust for which Mrs. Janumpally is the sole trustee and beneficiary (each a “Holder”) (each, a “Lock-Up Agreement”) to which each Holder agreed not to (i) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Company common stock; (ii) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of Company common stock, whether any such transaction is to be settled by delivery of shares of Company common stock or other securities, in case or otherwise; or (iii) publicly disclose the intention to do (i) or (ii) constituting the Merger Consideration (as defined in the October 30th Form 8-K) or held by the Holders as of the closing of the Merger for a period of one year following the closing of the Merger. However, the Company waived the requirement that each of Mrs. Janumpally, Federal Systems (a company owned and controlled by Mrs. Janumpally), Mrs. Pathuri and Mr. Eberwein enter into a Lock-Up Agreement. Accordingly, such persons did not enter into a Lock-Up Agreement with the Company. Although shares held by such persons are not subject to a Lock-Up Agreement, the shares are restricted and may not be sold without registration or an exemption from registration. Because the Company was a shell company prior to the Merger, Rule 144 will not be available for the resale of such shares until one year has elapsed since the filing of the October 30th Form 8-K, in addition to certain other requirements.
About Reliability Incorporated (OTCMKTS:RLBY)
Reliability Incorporated is a shell company. The Company has no operating activities. The Company intends to look for acquisitions or identify a merger partner or other business combination. The Company intends to focus its search on target businesses located within the United States. The Company has no source of revenue.