Huge share surrender, dispute resolution at Reliability (OTC: RLBY)
Rhea-AI Filing Summary
Reliability Incorporated entered into a Settlement Agreement and general mutual release with multiple Vivos-related parties to resolve all remaining disputes from prior arbitration and related Maryland court litigation. As part of the settlement, the respondents agreed to transfer 253,292,210 shares of Reliability’s common stock back to the company as a share surrender in satisfaction of previously adjudicated claims.
This transfer, once confirmed by the transfer agent, would reduce the number of shares outstanding by approximately 84%, leaving about 46,707,790 shares outstanding. The parties will then mark all money judgments as satisfied in full and dismiss the arbitration and court case with prejudice, which is expected to conclude all pending disputes among them.
Positive
- Massive share count reduction: Transfer of 253,292,210 shares back to the company would cut outstanding shares by about 84% to roughly 46,707,790, significantly altering the equity base.
- Full dispute resolution: The settlement includes mutual releases, satisfaction of money judgments, and dismissals with prejudice of arbitration and court cases, aiming to conclude long-running legal conflicts.
Negative
- Completion and clawback risks: The share transfer still requires completion through the transfer agent, and a respondent’s bankruptcy within 91 days of transfer can render the agreement void as to that party.
Insights
Reliability plans an 84% share reduction tied to a litigation settlement.
The agreement calls for respondents to surrender
The Settlement Agreement also provides mutual releases and, after transfer, satisfaction of money judgments and dismissals with prejudice, aiming to conclude arbitration and related court proceedings. Execution depends on respondents delivering transfer documents within twenty days of
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
On February 16, 2026, Reliability Incorporated, a Texas corporation, and Maslow Media Group, Inc., a Virginia corporation entered into a settlement agreement and general mutual release (“Settlement Agreement”) with Vivos Holdings, LLC; Vivos Real Estate Holdings, LLC; Naveen Doki; Silvija Valleru; Suresh Doki; Shirisha Janumpally, individually and as Trustee of Judos Trust; Kalyan Pathuri, individually and as Trustee of Igly Trust; and Federal Systems, LLC (collectively, “Respondents”).
The Settlement Agreement resolves all remaining disputes among the parties arising out of prior arbitration proceedings and related litigation in Maslow Media Group, Inc. v. Vivos Holdings LLC, et al., No. 479883V in the Circuit Court for Montgomery County, Maryland, including awards previously disclosed by the Company.
Pursuant to the Settlement Agreement:
● The Respondents agreed to transfer an aggregate of 253,292,210 shares of the Company’s common stock to the Company.
● The Respondents agreed not to seek to vacate the Arbitrator’s Fifth Supplemental Award.
● The parties agreed to mutual general releases of all claims in Maslow Media Group, Inc. v. Vivos Holdings LLC, et al., No.479883V as of the date of the Settlement Agreement.
● Upon completion of the share transfer, the Company and Maslow Media Group will file notices marking all money judgments entered against the Respondents in the Circuit Court proceeding as satisfied in full.
● The parties will file stipulations dismissing the arbitration and the Circuit Court case with prejudice.
The Settlement Agreement provides that the Respondents must complete and deliver all required stock power forms and related transfer documentation to the Company’s transfer agent within twenty (20) days following execution of the agreement. If the transfer is not completed within the timeframes specified in the agreement, the parties consent to the entry of a consent judgment directing the transfer agent to transfer their shares to the Company. As of the date of this report, the Company has not received confirmation from its transfer agent that the share transfers have been completed. The Company will report completion of the transfers upon confirmation from the transfer agent.
The Settlement Agreement further provides that if any of the Respondents files for bankruptcy within ninety-one days following the transfer of that respondent’s shares, the agreement will be null and void as to that Respondent but remain enforceable as to the other parties.
The transfer of 253,292,210 shares to the Company would reduce the number of shares outstanding by approximately 84%, subject to confirmation of final transfer of such shares in accordance with applicable law and the Company’s governing documents. Once the shares have been transferred back to the Company, the outstanding share count will be approximately 46,707,790.
Item 8.01. Other Events.
The transfer of 253,292,210 shares of the Company’s common stock to the Company pursuant to the Settlement Agreement constitutes a share surrender in settlement of previously adjudicated claims.
The Settlement Agreement fully resolves the arbitration proceedings conducted before the Honorable Patrick Woodward of The McCammon Group, including the Award dated August 31, 2022, the Amended and Supplemental Award dated May 17, 2023, the Supplemental Award Appointing Rehabilitative Receiver dated October 10, 2023, the Supplemental Award of Attorneys’ Fees and Expenses dated October 27, 2023, and the Supplemental Award Regarding Proposed Conclusions of Receiver dated December 26, 2025, as well as all related proceedings in the Circuit Court for Montgomery County, Maryland.
Upon completion of the share transfer and filing of satisfactions of judgment and dismissals with prejudice, the Company expects that all pending disputes among the parties will be concluded.
The foregoing summary of the Settlement Agreement is qualified in its entirety by reference to the full text of the Settlement Agreement and General Mutual Release, which is filed as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |
99.1 |
Settlement Agreement and General Mutual Release, dated February 16, 2026. | |
| 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: February 20, 2026 | ||
Exhibit 99.1
FAQ
What major agreement did Reliability Incorporated (RLBY) enter on February 16, 2026?
How many Reliability Incorporated (RLBY) shares are being surrendered in the settlement?
How will the settlement affect Reliability Incorporated’s (RLBY) shares outstanding?
What legal disputes does the Reliability Incorporated (RLBY) settlement resolve?
What deadlines and enforcement mechanisms are in the Reliability (RLBY) settlement?
What is the 91-day bankruptcy clause in the Reliability (RLBY) Settlement Agreement?
Filing Exhibits & Attachments
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