Item 1.01 Entry into Material Definitive Agreement.
On
Under the terms of the Note and the PPP Loan, interest accrues on the outstanding principal at the rate of 1.0% per annum. The term of the Note is two years. No payments are required under the Note during the six-month period beginning on the Effective Date (the "Deferral Period"). Commencing one month after the expiration of the Deferral Period the Company will make monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the Note on the last day of the Deferral Period by the maturity date.
The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during the eight-week period after the loan origination for certain eligible purposes including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, provided that at least 75% of the loan amount is used for eligible payroll costs; the employer maintaining or rehiring employees and maintaining salaries at certain levels; and other factors. Subject to the other requirements and limitations on loan forgiveness, only loan proceeds spent on payroll and other eligible costs during the covered eight-week period will qualify for forgiveness. Any forgiveness of the PPP Loan will be subject to approval by the SBA, and no assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.
The Note may be prepaid in part or in full, at any time, without penalty. The note evidencing the PPP Loan contains customary events of default including, but not limited to, those relating to failure to make payment, bankruptcy, materially false or misleading representations to Lender or the SBA, and adverse changes in the Company's financial condition or business operations that Lender believes may materially affect the Company's ability to repay the PPP Loan. Upon the occurrence of an event of default, Lender has customary remedies including, but not limited to, requiring immediate payment of all amounts owed under the Note, collecting all amounts owing from the Company, and filing suit and obtaining judgment against the Company.
The description of the material terms of the Note is qualified in its entirety by reference to the complete text of the Note, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information required by this Item 2.03 is set forth under Item 1.01 of this Current Report on Form 8-K, which is incorporated herein by reference.
2
Item 5.03 Amendments to Articles of Incorporation or Bylaws.
The Board of Directors of the corporation, at a meeting duly held, determined that it was in the best interest of the corporation and its shareholders to move the corporation's annual meeting from May to October for two principal reasons. First, the Board determined that it was most useful to hold the first annual meeting approximately twelve months after the corporation was no longer a shell company, and second that due to the COVID-19 pandemic holding the annual meeting in May is not possible. At the meeting, the Board agreed to amend Section 3.1 of the corporation's Bylaws effective upon the filing of the amendment with a Current Report on Form 8-K. Section 3.1 is amended to change the month in which the corporation's annual meeting is to be held from May to October. A copy of the amendment is attached to this Form 8-K as Exhibit 3.1 and is incorporated herein by reference.
Item 8.01 Other Events.
On
Item 1.1A of registrant's Annual Report on Form 10-K for the Fiscal Year ended
Impact of COVID-19 Pandemic
In
In reaction to the COVID-19 pandemic, federal and state legislatures have been attempting to push through legislation, much of which affects the employee-employer relationship and these new laws may have a material impact on our operations, business, finances and prospects. No certainty can be provided as to the nature of these new regulations or their impact.
Cautionary Note on Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Private Securities Litigation Reform Act, as amended, including those relating to the Company's expectations, anticipations, intentions, or beliefs regarding the PPP Loan, including any amount of the PPP Loan that will be eligible to be forgiven, and other statement that are predictive in nature. These forward-looking statements are based on current expectations, estimates, forecasts and projections and management's current beliefs and assumptions.
Forward looking statements may be identified by the use of forward-looking
expressions, including, but not limited to, "expect," "anticipate," "intend,"
"plan," "believe," "estimate," "potential," "predict," "project," "should,"
"would" and similar expressions and the negatives of those terms. These
statements relate to future events or our financial performance and involve
known and unknown risks, uncertainties, and other factors which may cause actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements. Such factors include, among other things, actions by the PPP Loan
parties, changes by the SBA or other governmental authorities regarding the
CARES Act, the Payroll Protection Program or related administrative matters, the
Company's ability to comply with the terms of the PPP Loan and the CARES Act,
including to use the proceeds of the PPP Loan as described herein, and those set
forth in the Company's filings with the
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are furnished with this report:
Exhibit No. Description 3.1 First Amendment to Amended and Restated Bylaws ofReliability Incorporated 10.1 Promissory Note (PPP), dated as ofMay 5, 2020 , made byThe Maslow Media Group, Inc. , asBorrower andTBK Bank, SSB , as Lender 3
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