{"url_path":"/sec/rlby/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Legal Proceedings**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-20","source_url":"https://www.sec.gov/Archives/edgar/data/34285/0001493152-26-024677-index.html","accession_number":"0001493152-26-024677","cik":"0000034285","ticker":"RLBY","issuer_name":"RELIABILITY INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/34285/0001493152-26-024677-index.html","primary_entity_key":"0000034285","primary_entity_name":"RELIABILITY INC"},"word_count":399,"has_tables":true,"body_markdown":"**Item\n1. Legal Proceedings**\n\n \n\nFrom\ntime to time, the Company may become involved in lawsuits and legal proceedings arising in the ordinary course of business. Litigation\nis subject to inherent uncertainties, and an adverse outcome could have a material effect on the Company’s business, financial\ncondition, or results of operations. Except as described below, the Company is not currently a party to any material legal proceedings.\n\n \n\n**Vivos\nArbitration and Related Matters**\n\n \n\nBeginning\nin March 2020, the Company and its wholly owned subsidiary, MMG, initiated legal actions\nagainst certain former shareholders and related parties (collectively, the “Vivos Group”) arising from alleged violations\nof the merger agreement and defaults under related party debt obligations.\n\n \n\nIn\nthe fall of 2021, the parties agreed to binding arbitration. Proceedings commenced in February 2022. On August 31, 2022, the\narbitrator issued an award in favor of the Company and MMG. Supplemental awards were subsequently issued on May 17, 2023, October\n10, 2023, and October 27, 2023 (collectively, the “Awards”).\n\n \n\nUnder\nthe Awards, MMG was granted recovery of outstanding related party indebtedness, contractual interest, attorneys’ fees and expenses\nof approximately $1,209, and fraud damages of $1,000, portions of which were to be satisfied through the transfer of shares of the Company’s\ncommon stock to the Company. The gross aggregate amount of the Awards totaled approximately $8,887 as of December 31, 2025.\n\n \n\nOn\nDecember 29, 2023, the Circuit Court for Montgomery County, Maryland entered the Awards as judgments. The judgments became final on January\n29, 2024.\n\n \n\nIn\nFebruary 2026, the Company entered into a settlement agreement with members of the Vivos Group providing for the transfer of an aggregate\nof 253,292,210 shares of the Company’s common stock to the Company in satisfaction of amounts owed under the awards.\n\n \n\nThe\ndifference between the aggregate Awards and the recorded receivable reflects amounts not recognized due to collectability\nconsiderations. As of March 31, 2026, the recorded balance due from the Vivos Group was approximately $6,422 compared to aggregate Awards totaling approximately $8,887.\n\n \n\nEffective April 2, 2026, pursuant to a consent judgment entered by\nthe Circuit Court for Montgomery County, Maryland, an aggregate of 253,292,210 shares of the Company’s common stock were transferred\nto the Company. On April 7, 2026, the Company was notified by Equiniti Shareholder Services, LLC, its transfer agent, that the transfers\nhad been completed effective April 2, 2026. Following the transfer, the shares were no longer outstanding."}