What changed in this filing

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Item 1. Financial Statements

2021-05-17 compared with 2020-11-12 · 807 added, 807 removed, 149 unchanged (92% of the section changed)

Financial Statements

INCORPORATED AND SUBSIDIARIES

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

in thousands, except per share data)

September 30, 2020

31, December 31,

and cash equivalents

receivables, net of allowance for doubtful accounts

receivable from related parties

expenses and other current assets

current assets

Cash and cash equivalents

Trade receivables, net of allowance for doubtful accounts

Notes receivable from related parties

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net

Other intangible assets, net

LIABILITIES AND STOCKHOLDER’S EQUITY

plant and equipment, net

intangible assets, net

AND SHAREHOLDER’S EQUITY

taxes payable

current liabilities

Accounts payable

Accrued expenses

Accrued payroll

Deferred revenue

Income taxes payable

Notes payable

Current portion of mortgage loan payable

Other current liabilities

Total current liabilities

Mortgage loan payable, net of current portion

Long term debt (Note 4)

Total liabilities

Commitment and contingencies (Note 5)

Subsequent events (Note 10)

STOCKHOLDERS’

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of September 30, 2020 and December 31, 2019

Additional paid-in capital

Retained earnings

Total stockholders’

equity attributable to Reliability Inc.

Noncontrolling interest in consolidated affiliates

Total liabilities and stockholders’

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

For the Three Months Ended

September 30,

Revenue earned

Service revenue

Cost of revenue

Selling, general and administrative expenses

Operating income (loss)

Other income (expense)

Interest income

Interest expense

Other (income) expense

Income (loss) before income tax benefit

Income tax benefit/(expense)

Consolidated net income (loss)

Net income (loss) attributable to noncontrolling interest in consolidated affiliates

Net income (loss) attributable to Reliability Inc.

Net income per share:

Share used in per share computation:

current liabilities

and contingencies (Note 6)

events (Note 10)

SHAREHOLDER’S

Common stock,

without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of March 31, 2021 and as of December

paid-in capital

shareholder’s equity

liabilities and shareholder’s equity

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARIES

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

For the Nine Months Ended

September 30,

Revenue earned

Service revenue

Cost of revenue

Selling, general and administrative expenses

Operating income (loss)

Other income (expense)

Interest income

Interest expense

Other (expense)

Income (loss) before income tax benefit

Income tax benefit

Consolidated net income (loss)

Net income (loss) attributable to noncontrolling interest in consolidated affiliates

Net income (loss) attributable to Reliability Inc.

Net income per share:

Share used in per share computation:

the Three Months Ended March 31,

general and administrative expenses

income (expense)

before income tax (expense) benefit

tax (expense) benefit

net income attributable to noncontrolling interest in consolidated affiliates

loss attributable to Reliability Inc.

in per share computation:

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

the Nine Months Ended September 30, 2020 and 2019

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY

the Three Months Ended March 31, 2021 and 2020

in thousands, except per share data)

Controlling Interest

Non-Controlling

Balance, December 31, 2018

Recapitalization

Note receivable from shareholder for tax debt

VIE consolidation

Balance, September 30, 2019

December 31, 2019

consolidation

March 31, 2020

Balance, December

VIE consolidation

Balance, September 30, 2020

March 31, 2021

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARIES

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

in thousands)

For the Nine Months Ended

September 30,

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

Accrued interest

Gain/(loss) on disposal of property, plant, and equipment

Changes in operating assets and liabilities:

Trade receivables

Prepaid expenses and other current assets

Accounts payable

Accrued payroll

Accrued expenses

Deferred revenue

Other liabilities

Income taxes payable

Net cash provided by operating activities

Cash flows from investing activities:

Purchase of fixed assets

Cash from reverse merger

Net cash used in investing activities

Cash flows from financing activities:

Net repayment of line of credit

Proceeds from long term debt (PPP)

Repayment of long term debt

Proceeds from notes payable

Repayment of notes payable

Repayment/(advances) from/to related parties

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

the three months ended March 31,

flows from operating activities:

to reconcile net loss to net cash provided by operating activities:

and amortization

in operating assets and liabilities:

expenses and other current assets

taxes payable

cash provided by operating activities

flows from investing activities:

of fixed assets

cash used in investing activities

flows from financing activities:

borrowing/(repayment) of line-of-credit+

of note payable

of notes receivable from related parties

cash used in financing activities

decrease in cash and cash equivalents

and cash equivalents, beginning of year

and cash equivalents, end of year

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARIES

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

in thousands)

For the Nine Months Ended

September 30,

Supplemental disclosures of cash flow information:

Cash paid during the period for:

Supplemental disclosures of non-cash financing activities:

Non-cash impact of recapitalization from merger

Liabilities assumed in merger

Conversion of shareholder loan to equity in merger

VIE net assets consolidated

VIE liabilities consolidated

VIE reduction in equity

the Three Months Ended March 31,

disclosures of cash flow information:

paid during the period for:

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARIES

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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of Operations

Incorporated (“Reliability”

or the “Company”;

references herein to the Company include both Reliability

and its wholly-owned, consolidated subsidiary, Maslow) is a leading provider of employer of record (“EOR”) and temporary

staffing services for media and information technology (“IT”) that operates, along with its wholly owned subsidiary,

The Maslow Media, Inc., (“MMG”

or “Maslow”), primarily within the United States of America (the “U.S.”)

in three industry segments:

Employer of Record (“EOR”), Staffing and Video Production segment which provides script

to screen media talent.

EOR which is a unique workforce management solution, represents 78.4% of the year to date revenue.

Staffing segment provides skilled field talent on a nationwide basis for IT and finance and accounting projects.

is a leading provider of employer of record and temporary media and information technology (“IT”) staffing services

that operates, along with its wholly owned subsidiary, The Maslow Media Group, Inc (“MMG”), (collectively, “Reliability”

or the “Company”), primarily within the United States of America in three industry segments:

Employer of Record (“EOR”),

Recruiting and Staffing and Video and Multimedia Production which provides script to screen media talent.

EOR, which is a unique

workforce management solution, represented 80.7% of the revenue in 2020 and 77.6% of first quarter 2021 revenue.

segment provides skilled field talent on a nationwide basis for IT and finance and accounting client partner projects.

includes revenue derived from permanent placement.

Video Production involves assembling and providing crews for special projects

that can last anywhere from a week to six months.

Reliability was incorporated under the laws of the State of Texas

in 1953, but the then principal business of the Company started in 1971 was closed down in 2007.

The Company completed a reverse

merger with MMG (the “Merger”) on October 29, 2019 via the merger agreement filed with the SEC (“Merger Agreement”).

Company acquired the customer contracts and trade receivables and assumed certain liabilities of Intelligent Quality Solutions

(“IQS”) in exchange for a reduction of notes receivable from Vivos Holdings LLC (“Vivos Holdings”), the

previous sole shareholder of MMG, (the “IQS Acquisition”) on December 1, 2019.

The owners of Vivos Holdings and their

transferees who were issued shares of Reliability Common Stock as consideration in the Merger include Naveen Doki, Silvija Valleru,

Shirisha Janumpally (through Judos Trust and Federal Systems), and Kalyan Pathuri (through Igly Trust) who together own approximately

84.4% of the issued and outstanding shares of Reliability Common Stock and are referred to herein as “Vivos”

“Vivos Shareholders.”

IQS Acquisition has enabled Maslow to expand its staffing capabilities into the IT realm.

that can last anywhere from a week to 6 months.

was incorporated under the laws of the State of Texas in 1953, but the then principal business of the Company started in 1971

was closed down in 2007.

The Company completed a reverse merger with MMG (the “Merger”) on October 29, 2019.

Holdings LLC, the previous sole shareholder of MMG and their transferees who were issued shares of Reliability Common Stock include Naveen

Doki, Silvija Valleru, Shirisha Janumpally (through Judos Trust and Federal Systems), and Kalyan Pathuri (through Igly Trust) together

own approximately 84% of the issued and outstanding shares of Reliability Common Stock.

Vivos Holdings, LLC and Vivos Real Estate

Holdings, LLC and Mr.

Doki have outstanding notes with MMG that date back to acquisition of MMG in November 2016 (See Note 8) (collectively

“Vivos Debtors”).

Janumpally, Mr.

Doki, and Mr.

Pathuri also have common ownership combinations in a number of other entities [Vivos Holdings, LLC.

Vivos Real Estate Holdings, LLC (“VREH”), Vivos Holdings, Inc., Vivos Group, Vivos Acquisitions, LLC., and Federal Systems,

LLC], (collectively referred to herein as “Vivos Group”).

On or about February 17, 2020, the Company,

as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland against Vivos Debtors.

(“Vivos Default Claim”)

On or about May 6, 2020, the Vivos Debtors

and other Vivos Group members, specifically.

Kaylan Pathuri (“Pathuri”), Judos Trust by Shrishsha Janumpally, its trustee

(“Judos”) and Igly Trust by Kaylan Pathuri, its trustee, (“Igly”) responded to the Vivos Default Claim with a

Counterclaim and Third-Party Complaint (the “Vivos Default Counterclaim”).

June 5, 2020, Reliability commenced an arbitration seeking to address purported merger violations before the American Arbitration Association

(“AAA”) in New York, New York (the “Merger Arbitration”), as permitted by the Merger Agreement against

Janumpally (individually and in her capacity as trustee of Judos Trust);

Pathuri (individually in his

capacity as trustee of Igly Trust) and Federal Systems (the “Merger Respondents”).

Although the Merger

Respondents filed a counterclaim, Merger Respondent’s have not to paid the AAA’s fees, and ultimately

refused to participate in the arbitration.

Thereafter, Reliability petitioned the state court in New York to compel arbitration, but

this action was removed to federal court, where it has been pending for several months awaiting court action.

The Company is seeking

damages which if granted will likely be the remedy set forth within the Merger agreement which is primarily the relinquishment in whole

or in part shares of Company Common Stock received by the Merger Respondents in connection with the Merger.

December 23, 2020, after an evidentiary hearing before the Circuit Court for Montgomery County, Maryland, a judge denied a motion by

Vivos Holdings, LLC, VREH, Doki, Kaylan Pathuri (“Pathuri”), Judos Trust by Shrishsha Janumpally, its trustee (“Judos”)

and Igly Trust by Kaylan Pathuri, its trustee, (“Igly”) to compel a shareholder meeting based on the facts presented

The judge also commented that, based on the evidence presented, management was performing its fiduciary duties to protect the

Company despite adverse circumstances.

This same judge has been assigned to preside over a full trial regarding Company’s

lawsuit to enforce the repayment of notes and the Vivos Group counterclaim, over a two-week period starting on October 4, 2021, absent

any COVID-19 disruptions that may affect scheduling.

December 1, 2019, the Company acquired the customer contracts and trade receivables and assumed certain liabilities of Intelligent

Quality Solutions, Inc.

(“IQS”).

IQS operates as a division of MMG.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

of presentation

unaudited consolidated interim financial statements include the accounts of the Company and its only 100% owned subsidiary, MMG.

unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions,

including its 100% owned subsidiary, MMG.

All significant intercompany accounts and transactions have been eliminated in consolidation.

unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in

the U.S (“U.S.

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the U.S (“U.S.

GAAP”) for interim financial information and with instructions to Form 10-Q.

Operating results of the

interim periods are not necessarily indicative of financial results for the full year.

Operating results of

the interim periods are not necessarily indicative of financial results for the full year.

These unaudited consolidated financial

9 unchanged sentences

valuation allowances for deferred income taxes, and the assumptions used for web site development cost classifications.

further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual

report on Form 10-K for the year ended December 31, 2019.

INCORPORATED AND SUBSIDIARIES

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

Reclassification

amounts in the 2019 consolidated financial statements have been reclassified to conform to the current year presentation.

further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on

Form 10-K for the year ended December 31, 2020.

Concentration

of Credit Risk

the three and nine months ended September 30, 2020, 27.7% and 27.6%, respectively of revenue came from AT&T Services, Inc.

(inclusive of its DirecTV division) (“AT&T”) and 10.0 % and 11.0%, respectively from Janssen Pharmaceuticals (which

includes workforce partners Johnson & Johnson).

For the three and nine months ended September 30, 2019, 38.5% and 38.2%, respectively

of revenue came from AT&T.

For the three months ended September 30, 2020, 12.1% was from WETA.

No other client exceeded 10%

Janssen, and Goldman Sachs accounted for 37.1%, 17.4%, and 14.3%, respectively of accounts receivable as of September 30, 2020.

As of September 30, 2019, AT&T and Janssen accounted for 63.3% and 10.8% of accounts receivable, respectively.

the quarter ended March 31, 2021, 24.6% of revenue came from AT&T Services, Inc.

(inclusive of its DirecTV division) (“AT&T”),

15.4% from Goldman Sachs and 13.6% from Morgan Stanley.

AT&T, Goldman Sachs and Morgan Stanley accounted for 32.8%, 7.7%,

and 5.6%, respectively, in revenue for the same time period ended March 31, 2020.

No other client exceeded 10% of revenues.

LIQUIDITY AND GOING CONCERN

accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern.

On May 5, 2020 (the “Effective Date”), MMG received the proceeds of a loan pursuant to a promissory note (the “Note”)

under the Paycheck Protection Program (“PPP”) with TBK Bank, SSB (“Lender”), in the amount of $5,216 (the

“PPP Loan”).

The Paycheck Protection Program was established under the recently enacted Coronavirus Aid, Relief, and

Economic Security Act (the “CARES Act”) and is administered by the U.S.

Small Business Administration (“SBA”).

The Lender’s affiliate, Advance Business Capital LLC (d/b/a Triumph Business Capital), is currently the Company’s

factor under its existing Factoring and Security Agreement, dated November 4, 2016, as amended and modified.

Paycheck Protection Program Flexibility Act (“PPPFA”) signed into law on June 5, 2020, resulted in the SBA issuing

two revisions on June 11 and June 12, 2020 to the First Interim Final Rule, which was originally posted on the Treasury and SBA

websites on April 2, 2020 and published in the Federal Register on April 15, 2020 (85 Fed.

of September 30, 2020, 100% of the PPP funds had been utilized with 99% covering payroll costs.

The Company believes that the

funds have been employed to achieve a high level of forgiveness.

Although the Company believes that a significant portion of the

PPP Loan will be forgiven, no assurance can be given that any of such PPP Loan will, in fact, be forgiven.

the third quarter of 2020, the Company made required repayments of principal and interest of approximately $806 pursuant to the

Convertible Notes described in Note 4 below.

Thus, with interest, the total bridge loan debt serviced was $946.

Company’s ongoing liquidity position has experienced additional pressures due to the loss of business resulting from the

COVID-19 Pandemic.

In the second quarter of 2020, the business saw a year over year comparative drop in revenue by 46%, attributable

in large part to the impact of the COVID-19 Pandemic.

In the third quarter of 2020, that loss dwindled to approximately 28%, as

the Company generated $6,201 in third quarter revenue.

This improved total, however, was 38% lower than the third quarter of 2019.

business does not return to historical levels, a significant portion of the PPP loan is not forgiven, or if other challenges facing

the Company are not resolved favorably, the Company may cease to continue as a going concern.

INCORPORATED AND SUBSIDIARIES

considers on a regular basis, the Company’s ability to continue as a going concern.

The factors which have put downward

pressure on the business and our liquidity are;

loss of approximately $789 for 2020;

loss of $28 in 1Q 2021

pandemic resulting decline in client demand for our services continuing through the present;

in raising cash via public market for organic and inorganic growth, due to lack of unissued authorized shares available for

Company use, despite having public company cost structure;

to realize approximately $4.3M in receivables from Vivos;

liabilities, described further in Note 6.

these conditions noted above, most notably the adverse impact of COVID 19 on sales and a scenario where the presumption is all

debts come due with an inability to raise cash through equity given the unavailability of unissued authorized shares, raise substantial

doubt about the Company’s ability to continue as a going concern.

There can be no assurances that the Company will be successful

in managing the impact of the foregoing or its ability to maintain sufficient liquidity over a period of time that will allow

it to continue as a going concern.

The accompanying

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

part of its response management has invested in business development in order to increase client workforce needs and has worked

to eliminate non-essential general and administrative costs.

The Company continues to face pressure to make cash payments pursuant

to the Settlement Agreements (filed as exhibits 10.4, 10.5 and 10.6 the Company’s Current Report on Form 8-K filed on October

30, 2019) prior to the Company’s anticipated liquidation of the shares of Company Common Stock pledged pursuant to the Agreement

for the Contingent Liquidation of the Common Stock of Reliability Incorporated (as successor in interest to Maslow Media Group,

Inc.), dated October 28, 2019 (the “Liquidation Agreement”) (filed as exhibit 10.30 to the Company’s Current

Report on Form 8-K filed on October 30, 2019).

The Vivos Shareholders that are the counterparties to the Liquidation Agreement

are not cooperating with the Company to liquidate the shares subject thereto, and the shares underlying the Liquidation Agreement

itself may not be properly held as claimed in the Arbitration (defined below).

No assurance can be given that the beneficiaries

of the Settlement Agreement will continue to forebear.

assurance can be given that the Company will return to its pre-Pandemic revenue levels, how long it will take to enforce the requirements

of the Liquidation Agreement, the Company’s ability to utilize capital markets, and the actual amount of PPP Loan forgiveness.

As a result, the Company may face hurdles in maintaining sufficient liquidity to continue operations, in which case the Company

might be forced to liquidate or seek to reorganize under applicable bankruptcy statutes.

financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification

of assets or the amounts and classifications of liability that may result from the possible inability of the Company to continue

as a going concern.

Company’s ongoing liquidity position is facing pressures due to the loss of business resulting from the COVID-19 pandemic as well

as increased pressure to make cash payments pursuant to the Settlement Agreements (filed as exhibits 10.4, 10.5 and 10.6 the Company’s

Current Report on Form 8-K filed on October 30, 2019) prior to the Company’s anticipated liquidation of the shares of Company Common

Stock pledged pursuant to the Agreement for the Contingent Liquidation of the Common Stock of Reliability Incorporated (as successor

in interest to MMG Media Group, Inc.), dated October 28, 2019 (the “Liquidation Agreement”) (filed as exhibit 10.30

to the Company’s Current Report on Form 8-K filed on October 30, 2019).

The Vivos Group that are the counterparties to the Liquidation

Agreement are not cooperating with the Company to liquidate the shares subject thereto as contemplated thereby.

No assurance can be given

that the Company will return to its pre-pandemic revenue levels, how long it will take to enforce the requirements of the Liquidation

Agreement, and the actual amount of PPP Loan forgiven.

As a result, the Company face hurdles to maintaining sufficient liquidity to continue

to operate, in which case the Company might be forced to liquidate or seek to reorganize under applicable bankruptcy statutes.

Company is quoted on the OTC Marketplace under the symbol “RLBY”.

1 unchanged sentence

Accounting Pronouncements

In August 2018, the Financial Accounting Standards

Board (the “FASB”) issued new guidance on disclosures related to fair value measurements.

The guidance is intended

to improve the effectiveness of the notes to financial statements by facilitating clearer communication, and it includes multiple

new, eliminated, and modified disclosure requirements.

The guidance was effective for the Company as of January 1, 2020

and did not have a material impact on the Company’s consolidated financial statements.

August 2018, the FASB issued new guidance on the accounting for internal-use software.

The guidance aligns the accounting for

costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs

associated with developing or obtaining internal-use software.

The guidance was effective for the Company as of January 1, 2020

and did not have a material impact on the Company’s consolidated financial statements.

Pronouncements Not Yet Adopted

December 2019, the FASB issued new guidance on income taxes.

The guidance removes certain exceptions to the general income tax

accounting principles and clarifies and amends existing guidance to facilitate consistent application of the accounting principles.

The new guidance is effective for the Company as of January 1, 2021.

The Company is assessing the impact of the adoption of this

guidance on its consolidated financial statements.

Company had convertible notes payable (“Convertible Notes”) in the amount of $802 as of June 30, 2020 and $890 as

of December 31, 2019, respectively, pursuant to a convertible debt offering that commenced June 13, 2019.

As of September 30,

2020, the balance was zero ($0) as all note payments have been satisfied.

The offering was conducted pursuant to Section 4(a)(2)

of the Securities Act of 1933, as amended, and the rules promulgated thereunder.

The notes bore interest at 12% per year, with

the balance due and payable within 1 year from the issuance date, unless earlier converted into shares of Company Common Stock.

Warrants, issued in connection with these notes, can only be exercised if the proceeds of $5,000 are obtained by the Company from

the sale of equity securities within 5 years of issuance.

INCORPORATED AND SUBSIDIARIES

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ,

to replace the incurred loss methodology with an expected credit loss model that requires consideration of a broader range of

information to estimate credit losses over the lifetime of the asset, including current conditions and reasonable and supportable

forecasts in addition to historical loss information, to determine expected credit losses.

Pooling of assets with similar risk

characteristics and the use of a loss model are also required.

Also, in April 2019, the FASB issued ASU No.

2019-04, Codification

Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging , and Topic 825, Financial

Instruments , to clarify the inclusion of recoveries of trade receivables previously written off when estimating an allowance

for credit losses.

The amendments in this update were required to be applied using the modified retrospective method with an adjustment

to retained earnings and were effective for us beginning with fiscal year 2020, including interim periods.

The adoption of the

amendments in this update as of January 1, 2020 did not have a material impact on our accounts receivable, retained earnings,

as well as our results of operations for the year ended December 31, 2020.

August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework—

Changes to the

Disclosure Requirements for Fair Value Measurement , to improve the fair value measurement reporting of financial instruments.

The amendments in this update require, among other things, added disclosure of the range and weighted average of significant unobservable

inputs used to develop Level 3 fair value measurements.

The amendments in this update eliminate, among other things, disclosure

of the reasons for and amounts of transfers between Level 1 and Level 2 for assets and liabilities that are measured at fair value

on a recurring basis and an entity’s valuation processes for Level 3 fair value measurements.

The amendments in this update

were effective for us beginning with fiscal year 2020.

Retrospective application is required for all amendments in this update

except the added disclosures, which should be applied prospectively.

The adoption of the amendments in this update did not have

a material impact on our consolidated financial position and results of operations as of and for the year ended December 31, 2020.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

February 2020, the Company took out a $250 6-month term loan from Triumph Business Capital (“Triumph”) at 10% per

annum, in order to meet the Company’s cash obligations (“Triumph Term Loan”).

On April 7, 2020, in the face

of the COVID 19 lockdown, Triumph offered a 2-month payment holiday and to extend the note payment, which ultimately was agreed

to end in February 2021.

As of September 30, 2020, $117 was outstanding under the Triumph Term Loan arrangement.

the Maslow Media Group was initially acquired by Vivos Holdings in December 2016, Maslow’s corporate status was changed

from an S Corp to a C Corp due to its new ownership structure.

This triggered an accelerated tax event, a $215 estimated annual

impact per year, for four years, that the Company is working with the IRS to pay off.

As of September 30, 2020, the tax liability

was $258 compared to $817 as of December 31, 2019.

August 2018, the FASB issued ASU No.

2018-15, Intangibles–Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract ,

to provide additional guidance on the accounting for costs of implementing cloud computing arrangements that are service contracts.

The amendments in this update require the capitalization of implementation costs during the application development stage of such

hosting arrangements and amortization of the expense over the term of the arrangement, including any option to extend reasonably

certain to be exercised or option to terminate reasonably certain not to be exercised.

Capitalized implementation costs and amortization

thereof are also required to be classified in the same line item in the statements of financial position, operations and cash

flows associated with the hosting service fees.

The amendments in this update were effective for us beginning with fiscal year

Entities may select retrospective or prospective application to all implementation costs incurred after the adoption date.

We selected prospective application to all implementation costs incurred after the adoption date.

The adoption of the amendments

in this update did not have a material impact on our property and equipment, net and results of operations as of and for the year

ended December 31, 2020.

March 2020, the FASB issued ASU No.

2020-04 Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference

Rate Reform on Financial Reporting , that provides optional relief to applying reference rate reform to contracts, hedging

relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR), which will be discontinued by

the end of 2021.

Also, in January 2021, the FASB issued ASU No.

2021-01 Reference Rate Reform (Topic 848)—Scope ,

to clarify that cash flow hedges are eligible for certain optional expedients and exceptions for the application of subsequent

assessment methods to assume perfect effectiveness as previously presented in ASU 2020-04.

The amendments in this update are effective

for us immediately and may be applied through December 31, 2022.

The adoption of this update is not expected to have a material

impact on our consolidated financial position and results of operations.

December 2019, the FASB issued ASU No.

2019-12 Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes ,

to remove certain exceptions and improve consistency of application, including, among other things, requiring that an entity reflect

the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes

the enactment date.

The amendments in this update will be effective for us beginning with fiscal year 2021, with early adoption

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must

be applied on a retrospective or modified retrospective basis.

The adoption of the amendments in this update did not have a material

impact on the Company’s consolidated financial position and results of operations.

October 2020, the FASB issued ASU No.

2020-10 Codification Improvements , to make incremental improvements to U.S.

and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information

in the financial statements extends to the corresponding disclosures section.

The amendments in this update will be effective

for the Company beginning with fiscal year 2021, with early adoption permitted.

The amendments in this update should be applied

retrospectively and at the beginning of the period that includes the adoption date.

The adoption of the amendments in this update

did not have a material impact on the Company’s consolidated financial position and results of operations.

January 2017, the FASB issued ASU No.

2017-04, Intangibles—Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill

Impairment , to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.

entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value

of a reporting unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination.

Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing

the fair value of a reporting unit with its carrying amount.

The FASB also eliminated the requirements for any reporting unit

with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform

Step 2 of the goodwill impairment test.

The amendments in this update will be effective for the Company beginning with fiscal

year 2023, with early

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

The adoption of the amendments in this update is not expected to have a material impact on our consolidated financial

position and results of operations.

Company does not believe any other recently issued but not yet effective accounting pronouncement, if adopted, would have a material

effect on its present or future consolidated financial statements.

of March 31, 2021, the Company had long term debt from Paycheck Protection Program loans, totaling $5,264.

The Company on March

4, 2021 sought full loan forgiveness, based on the satisfaction of applicable criteria and guidelines.

Although the Company expects full

forgiveness, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained.

Short term debt only consists

of $253 in federal income tax explained further below.

Company had notes payable in the amount of $890 as of December 31, 2019, pursuant to a convertible debt offering that MMG commenced

June 13, 2019.

Pursuant to this agreement, MMG issued to each individual a warrant for 0.5 shares of Company Common Stock and

a convertible promissory note of same date in the initial principal amount of $50, in exchange for $50.

The notes bore interest at 12%

per year with the balance becoming due within 1 year from the issuance date unless earlier converted into shares of Company Common Stock

upon the issuance by Reliability of Company Common Stock for gross proceeds of at least $5,000.

Since no conversion occurred, notes

were paid in full as they became due over a 3-month period between June 2020 and September 2020.

can only be redeemable if the proceeds of $5,000 are secured within 5 years of note issuance.

MMG was initially acquired by Vivos Holdings, LLC in December 2016, MMG’s corporate status was changed from an S Corp to

a C Corp due to its new ownership structure.

This triggered an accelerated tax event, a $215 estimated annual impact per year for four

years, that MMG is working with the IRS to pay.

As of March 31, 2021, the tax liability was $249 compared to $292 as of

December 31, 2020.

The $249 tax liability includes tax liabilities for 2018 and 2019 from completed tax returns and loss carryback

provisions for 2020.

Business Capital

November 4, 2016, the Company entered into a factoring and security agreement with Triumph.

Pursuant to the agreement, the Company

received advances on its accounts receivable (i.e.

invoices) through Triumph to fund growth and operations.

The proceeds of this

agreement were used to pay operating costs of the business which included employee salaries, vendor payments and overhead expenses.

November 4, 2016, the MMG entered into a factoring and security agreement with Triumph Business Capital (“Triumph”).

Pursuant to the agreement, MMG received advances on its accounts receivable (i.e.

invoices) through Triumph to fund growth and

The proceeds of this agreement were used to pay operating costs of the business which include employee salaries, vendor payments

and overhead expenses.

On January 5, 2018, the agreement was amended to lower the factoring fee and interest rate for a term of one year.

The agreement

was amended again on January 19, 2018, to increase the maximum advance rate to $5,500.

In January 2020, a new agreement was negotiated

with Triumph lowering advance rate from 18 basis points to 15 and the interest rate from prime plus 2.5% to prime plus 2%.

portion of an invoice eligible for sale to Triumph went from 90% to 93%.

The agreement was amended again on January 19, 2018, to increase the maximum advance rate to $5,500.

In January 2020, a new agreement

was negotiated with Triumph lowering advance rate from 18 basis points to 15 and the interest rate from prime plus 2.5% to prime plus

The amount of an invoice eligible for sale to Triumph went from 90% to 93%.

The agreement which previously renewed annually, is now

month to month.

The Company continues to be obligated to meet certain financial covenants in respect to invoicing and reserve

account balances.

accordance with the agreement, a reserve amount is required for the total unpaid balance of all purchased accounts multiplied

by a percentage equal to the difference between one hundred percent and the advanced rate percentage.

As of September 30, 2020,

the required amount was 10%.

Any excess of the reserve amount is paid to the Company on a weekly basis, as requested.

shortfall exists for a period of ten-days, the Company is required to make payment to the financial institution for the shortage.

receivable were sold with full recourse.

Proceeds from the sale of receivables were $10,175 and $19,815 comparatively for the

nine months ended September 30, 2020 and 2019, respectively.

Proceeds from the sales of receivables were $868 and $6,516 for the

three months ended September 30, 2020 and 2019, respectively.

The total outstanding balance under the recourse contract was $306

on September 30, 2020 and $5,508 as of December 31, 2019.

Factoring Facilities are collateralized by substantially all the assets of the Company.

In the event of a default, the Factor

may demand that the Company repurchase the receivable or debit the reserve account.

Total finance line fees for the three and

nine months ended September 30, 2020 and 2019 totaled $1, $19, $14, and $42, respectively.

INCORPORATED AND SUBSIDIARIES

MMG continues to be obligated to meet certain financial covenants in respect to invoicing and reserve account

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

April 29, 2020, MMG was approved for a $5,216 loan through the Paycheck Protection Program (the “PPP”) with a term

of two (2) years and an interest rate of 1% per annum.

The PPP provides that the Company may apply for forgiveness of this loan

if the loan proceeds were used for payroll and certain other specified operating expenses while maintaining specified headcount

requirements.

The accrued interest on the PPP loan as of September 30, 2020 was $22.

June 5 th , 2020 , The Paycheck Protection Program Flexibility Act (the “PPPF Act”) went into effect

providing more flexibility to participants in the PPP which included extending the time to begin repayment of the PPP loan until

the amount of forgiveness, if any, is determined, which could be as late as December 31, 2020.

The Company may apply for forgiveness

earlier if they determine that doing so will maximize the amount of loan forgiveness.

date the Company ultimately decides to apply for forgiveness will be dependent on maximizing headcount which, in turn will determine

the extent of forgiveness.

the Company has rehired previously furloughed employees, and hired new employees based on various necessities, there are many

other dynamic factors that will impact revenue producing and SG&A headcount between now and December 31, 2020.

no assurance can be given that all or any portion of this loan will be forgiven.

accordance with the agreement, a reserve amount is required for the total unpaid balance of all purchased accounts multiplied by a percentage

equal to the difference between one hundred percent and the advanced rate percentage.

As of March 31, 2021, the required amount was 10%.

Any excess of the reserve amount is paid to MMG on a weekly basis, as requested.

If a reserve shortfall exists for a period

of ten-days, MMG is required to make payment to the financial institution for the shortage.

receivable were sold with full recourse.

Proceeds from the sale of receivables were $1,332 for the three months ended March 31,

The total outstanding balance under the recourse contract was $592 on March 31, 2021 and $2,999 as of December 31, 2020.

February 2020, MMG took out a $250 loan from Triumph at 10% APR, in order to meet our cash obligations.

In early February 2021,

MMG met our obligation by making the final principal and interest payment to Triumph.

Factoring Facilities are collateralized by substantially all the assets of MMG.

In the event of a default, the Factor may demand

that the Company repurchase the receivable or debit the reserve account.

Total finance line fees for the three months ended March 31,

2021 and 2020 totaled $32 and $84, respectively.

VARIABLE INTEREST ENTITY (“VIE”)

December 2019, the Company’s executive management learned that prior to the Merger, in January 2017, one of the Company’s

related parties, on behalf of MMG, executed a guarantee of obligations of Vivos Real Estate Holdings, LLC (“VREH”),

under a mortgage loan for the purchase of the property at 22 Baltimore Rd., Rockville, Maryland.

MMG leased this space on market

MMG contends it being a guarantor on the building.

the Company has neither any decision-making authority over VREH, nor financial interest in the operations of VREH, the Company was required

to consolidate its financial statements with those of VREH as it was considered the primary beneficiary of the VIE.

As a result of the

Company terminating the lease on April 30, 2020, VREH was no longer to be considered a VIE after April 30, 2020.

potential financial exposure to loss as a guarantor could equal all the book value of the related party mortgage loan payable, a total

of approximately $1,760 as of December 31, 2020, with $126 due in 2021.

VREH is currently a few months behind on payments.

date, the Company has not been called on for any loan repayment guarantee.

The Company believes the building valuation is at or near

the current mortgage amount, with adequate equity in the property.

COMMITMENTS AND CONTINGENCIES

Company is engaged from time to time in legal matters and proceedings arising out of its normal course of business.

establishes a liability related to its legal proceedings and claims when it has determined that it is probable that the Company

has incurred a liability and the related amount can be reasonably estimated.

If the Company determines that an obligation is reasonably

possible, the Company will, if material, disclose the nature of the loss contingency and the estimated range of possible loss,

or include a statement that no estimate of the loss can be made.

or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland

against Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC (“Vivos Real Estate”) and Naveen Doki (the “Defendants”),

to enforce Maslow’s rights under certain promissory notes and a personal guarantee made by the defendants (the “Debt

Collection Suit”).

The aggregate amount of these obligations as of the Balance Sheet Date is approximately $4,229.

is proceeding, and Maslow intends to continue to vigorously pursue this litigation.

The trial on this matter is scheduled for

or about May 6, 2020, the Defendants filed with the Circuit Court of Montgomery County, Maryland a Counterclaim and Third-Party

Complaint for Damages, Declaratory and Injunctive Relief and Jury Demand (the “Counterclaim”), The Company believes

that the Counterclaim has no merit.

The Company will vigorously defend itself and its indemnified officers, directors and other

parties as permitted by the Company’s organizational documents.

The Company and the other Counterclaim defendants have moved

to have the Debt Collection Suit and the Counterclaim stayed pending the outcome of the Arbitration described below.

this matter is scheduled for March 2021.

The Defendants have also brought a motion seeking an injunction related to corporate

The Company has objected to this motion and a hearing has been scheduled for November 2020.

or about June 5, 2020, the Company submitted a Claimant’s Notice of Intention to Arbitrate and Demand For Arbitration (the

“Arbitration”) with the American Arbitration Association in New York, and to the Respondents thereto:

Silvija Valleru;

Shirisha Janumpally (individually and in her capacity as trustee of Judos Trust);

Kalyan Pathuri (individually

in his capacity as trustee of Igly Trust) and Federal Systems (the “Respondents”).

The Arbitration alleges that certain

of the Respondents breached the Merger Agreement providing for the Merger of MMG into a subsidiary of Reliability, in a number

of significant respects and committed fraud in connection with the Merger.

The Company is seeking damages which if granted will

likely be the remedy set forth within the merger agreement which is primarily the relinquishment in whole or in part shares of

Company Common Stock received by the Respondents in connection with the Merger.

The Company has brought a motion to compel the

Arbitration in accordance with the Merger Agreement which is currently being decided by the Federal Courts in New York.

believes a strong basis for the motion exists, but no assurance can be given that it will be granted.

Regardless, the Company

intends to pursue claims under the Merger Agreement in whatever venue is required.

INCORPORATED AND SUBSIDIARIES

Company is engaged from time to time in legal matters and proceedings arising out of its normal course of business, and currently

also is involved in litigation outside of the normal course of business.

The Company establishes a liability related to its legal

proceedings and claims when it has determined that it is probable that the Company has incurred a liability and the related amount

can be reasonably estimated.

If the Company determines that an obligation is reasonably possible, the Company will, if material,

disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate

of the loss can be made.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

June 12, Igly Trust, a Vivos entity, brought an action in Texas to compel the Company to provide it certain corporate records,

including the Company’s shareholder list.

The Company has moved to have this action stayed pending the outcome of the arbitration.

February 28, 2020, Healthcare Resource Network, LLC (“HCRN”), an entity previously owned by Vivos Holdings,

filed a complaint against Maslow in the Circuit Court of Montgomery County, Maryland.

The plaintiff has not specified any alleged

damage caused by Maslow and the Company believes any claims are without merit.

The Company will defend itself from this case.

Since HCRN’s primary claim relates to the improper actions of Vivos, the parties have been discussing the tolling of HCRN’s

claims against the Company while both the Company and HCRN, together or separately, resolve the matters against Vivos.

3, 2020, MMG and HCRN entered into a Tolling Agreement pursuant to which HCRN dismissed MMG from this litigation without prejudice

and agreed to forebear filing a new complaint or initiating any lawsuit or other legal proceeding against MMG until January 31,

September 28, 2018, Credit Cash filed a complaint against Maslow, Vivos, Vivos Acquisitions, LLC, Dr.

Valleru (the “Credit

Cash Parties”) and other defendants in the United States District Court for the District of New Jersey for, among other

things, breach of contract of the Maslow and HCRN Credit Facilities and their respective guaranties in relation to the November

15, 2017 agreement (the “DNJ Action”).

On October 30, 2018, Credit Cash filed a motion to intervene in an action pending

in New York State, Monroe County, filed by HCRN and LE Finance, LLC against the Parties, and other defendants (“NY

State Action”).

On December 10, 2018, the Parties entered into a settlement agreement for the purpose of settling certain

claims related to the DNJ Action only.

Pursuant to the settlement agreement, certain repayment terms were agreed upon between

Credit Cash and the Parties, but Credit Cash did not relinquish the right to pursue any claims related to the NY State Action,

nor to pursue any remedies against any of the parties in relation to the November 15, 2017 agreement.

Certain of the Vivos Shareholders

executed and delivered to Maslow that certain Agreement for the Contingent Liquidation of the Common Stock of Maslow Media Group,

Inc., dated as of October 28, 2019 (the “Liquidation Agreement”), pursuant to which such Vivos Shareholders pledged

to Maslow the shares of Company Common Stock they received in the Merger to provide the capital required to satisfy the Parties’

September 28, 2018, Credit Cash filed a complaint against MMG, Vivos Holdings LLC, Vivos Acquisitions, LLC, Dr.

Valleru (the “Credit Cash Defendants”) and other defendants in the United States Circuit Court of Montgomery County,

Maryland for the District of New Jersey for, among other things, breach of contract of the MMG and HCRN Credit Facilities and

their respective guaranties in relation to the November 15, 2017 agreement (the “Credit Cash Complaint”).

30, 2018, Credit Cash filed a motion to intervene in an action pending in New York State, Monroe County, filed by HCRN and LE Finance,

LLC against the Credit Cash Defendants, and other defendants (“NY State Action”).

On December 10, 2018, the Credit

Cash Defendants entered into a settlement agreement for the purpose of settling certain claims related to the Credit Cash Complaint

Pursuant to the settlement agreement, certain repayment terms were agreed upon between Credit Cash and the Credit Cash Defendants,

but Credit Cash did not relinquish the right to pursue any claims related to the NY State Action, nor to pursue any remedies against

any of the Credit Cash Defendants in relation to the November 15, 2017 agreement.

Naveen Doki, Kalyan Pathuri, Shirisha Janumpally,

and Federal Systems, LLC, (“Credit Cash Vivos Group”) executed and delivered to MMG that certain Agreement for

the Contingent Liquidation of the Common Stock of MMG , dated as of October 28, 2019 (the “Liquidation Agreement”),

pursuant to which the Credit Cash Vivos Group pledged to MMG the shares of Company Common Stock they received in the Merger

to provide the capital required to satisfy the Credit Cash Defendants’

obligations under the Settlement Agreements.

Immediately prior to the execution of the Liquidation Agreement, certain Vivos Shareholders

misrepresented to Maslow the status of the obligations under the Settlement Agreement, which were, in fact, then in default.

date these Vivos Shareholders have not cooperated with the Company to monetize those shares as contemplated by the Liquidation

Agreement and certain of the shares underlying the Liquidation Agreement may not be properly held by Vivos as claimed in the Arbitration

(defined below) due to violations of the Merger Agreement by Vivos Shareholders..

The Company will take appropriate action to

enforce its rights under the Liquidation Agreement, which actions will be dictated in part by the outcome of the Arbitration.

On or about March 16, 2020, Credit Cash entered its New Jersey confession of judgment with the Circuit Court of Montgomery County,

Company may be required to make cash payments pursuant to the Settlement Agreements (filed as exhibits 10.4, 10.5 and 10.6 the

Company’s Current Report on Form 8-K filed on October 30, 2019).

INCORPORATED AND SUBSIDIARIES

of the Credit Cash Vivos Group misrepresented upon the execution of the Liquidation Agreement the status of its obligations under

the Settlement Agreement, which were, in fact, then in default.

To date the Credit Cash Vivos Group have not cooperated with the

Company to monetize those shares as contemplated by the Liquidation Agreement.

The Company will take appropriate action to enforce its

rights under the Liquidation Agreement, which actions will be dictated in part by the outcome of the Merger Arbitration wherein

relinquishment of shares for certain claims may be an applied remedy.

On or about March 16, 2020, Credit Cash entered its New Jersey

confession of judgment with the Circuit Court of Montgomery County, Maryland.

October 9, 2018, MMG was named as a defendant along with six other defendants, all of which are entities related to the Vivos

Group, in an Affidavit of Confession of Judgment (COJ) filed in the Supreme Court of the State of New York in relation to a case

brought by Hop Capital, wherein the defendants collectively agree to pay a sum of $400 to Hop Capital.

The claim brought by Hop

Capital against the defendants in this case is in relation to a Merchant Agreement dated October 4, 2018;

an agreement to which MMG

was not a party.

As such, MMG contends that being named in the COJ as a defendant was made in error and is currently

seeking to have its name removed from the COJ.

As of March 2021, we have not been contacted again on this matter, nor have we

been notified on any developments The Company will defend itself from this case.

or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland against

Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC and Naveen Doki (“Vivos Debtors”), to enforce MMG’s

rights under certain promissory notes and a personal guarantee made by the Vivos Debtors (“Vivos Default Claim”)The

case is proceeding.

Although there are no certainties or guarantees, the Company believes that it will be granted a judgment in its favor

as it vigorously pursues this litigation.

On February 28, 2020,

Healthcare Resource Network, LLC (“HCRN”) filed a complaint against MMG in the Circuit Court of Montgomery County,

Maryland alleging that Maslow participated with members of the Vivos Group to financially harm the plaintiff.

The plaintiff has

not specified any alleged damage caused by MMG and the Company believes any claims are without merit.

The Company will defend

itself from this case.

March 16, 2020, CC Business Solutions, a division of Credit Cash NJ, LLC domesticated a foreign judgement in the Montgomery County Circuit

Court system against Health Care Resources Network (“HCRN”), MMG, Vivos Holdings, LLC, Vivos Acquisitions, LLC, Naveen

Doki and Silvija Valleru.

This foreign judgement relates to Vivos Holdings adding Maslow Media Group as a guarantor on a loan made to

Health Care Resources Network which is in default by HCRN and Vivos Holdings.

Foreign judgement total is $820.

This judgement relates

to the default on the settlement agreement dated December 10, 2018 referenced above in the Credit Cash Complaint.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

or about May 5, 2020, Libertas Holdings LLC and Kinetic Direct Funding entered their New York confession of judgment with the

Circuit Court of Montgomery County, Maryland, and have approached the Company regarding payment, which the parties have been discussing.

The Vivos Shareholders that are the counterparties to the Liquidation Agreement are not cooperating with the Company in regard

to the payment of the debt.

These debts were incurred by another company held by the Vivos Shareholders for the other company’s

benefit but for which Maslow, while under the Vivos Shareholders ownership, guaranteed payment for the benefit of the other company.

May 5, 2020, Libertas Funding, LLC domesticated a foreign judgement in the Montgomery County Circuit Court system against HCRN, MMG,

Vivos Holdings, LLC, Vivos Acquisitions, LLC, Vivos IT, LLC, Vivos Global Services, LLC, Alliance Micro, Inc.

and Naveen Doki.

foreign judgement from the State of New York relates to loans the Vivos Group took out by adding MMG additional collateral.

loan is currently in default.

Foreign Judgement total is $229.

May 5, 2020, Kinetic Direct Funding domesticated a foreign judgement in the Montgomery County Circuit Court system against HCRN, MMG,

US IT Solutions Inc., 360 IT Professionals, Alliance Micro, Inc.

and Naveen Doki.

This foreign judgement from the State of New York

relates to loans the Vivos Group took out by adding MMG as additional collateral.

This loan is currently in default.

Foreign Judgement

total is $579.

On or about May 6, 2020, the Vivos Debtors and

other Vivos Group members, specifically.

Kaylan Pathuri (“Pathuri”), Judos Trust by Shrishsha Janumpally, its trustee (“Judos”)

and Igly Trust by Kaylan Pathuri, its trustee, (“Igly”) responded to the Vivos Default Claim with a Counterclaim and Third-Party

Complaint (the “Vivos Default Counterclaim”).

The Company believes that the Counterclaim has no merit.

The Company continues

to vigorously defend itself and its indemnified officers, directors and other parties as permitted by the Company’s organizational

Trial on this matter is scheduled to begin on October 4, 2021.

or about June 5, 2020, the Company submitted a Claimant’s Notice of Intention to Arbitrate and Demand for Arbitration (the “Merger

Arbitration”) with the American Arbitration Association in New York, and to the Respondents thereto:

Silvija Valleru;

Shirisha Janumpally (individually and in her capacity as trustee of Judos Trust);

Kalyan Pathuri (individually in his capacity as trustee

of Igly Trust) and Federal Systems (the “Merger Respondents”).

The Merger Arbitration alleges that the Merger

Respondents breached the Merger Agreement in a number of significant respects and may have committed fraud in connection with

The Company is seeking damages, which if granted will likely be the remedy set forth within the Merger Agreement which

is in whole or in part shares of Company Common Stock received by the Merger Respondents in connection with the Merger.

has brought a motion to compel the Arbitration which is currently being decided by the Federal Courts in New York.

The Company believes

a strong basis for the motion exists, but no assurance can be given that it will be granted.

Regardless, the Company intends to pursue

claims under the Merger Agreement in whatever venue is required.

June 12, 2020, Igly Trust, a Vivos entity, asked the Texas court for an injunction requiring the Company to provide a shareholder

list and to hold a shareholder meeting.

On October 20, 2020, the Texas court denied the injunction but, incongruously, dismissed

all the Vivos plaintiffs for lack of personal jurisdiction.

The Company appealed the dismissal because the court had jurisdiction

over Igly Trust once it made affirmative claims in Texas and because the Court’s order denying the injunction is an important

precedent for establishing that the directors under Texas law retain control of shareholder lists and determining the timing of

shareholder meetings.

December 23, 2020, at a hearing in the Maryland Circuit Court of Montgomery County, Maryland, a motion by the Vivos Group to compel a

shareholder meeting was summarily dismissed.

This same judge is scheduled to preside over a full trial on the Vivos Default

Claim and Vivos Default Counterclaim in October 2021, absent any disruptions that could affect scheduling.

On January 20,

2021, Defendants and Counter/Third-Party Plaintiffs, Vivos Holdings, LLC (“Vivos”), Vivos Real Estate Holdings, LLC (“VREH”),

Naveen Doki (“Doki”), Kaylan Pathuri (“Pathuri”), Igly Trust (“Igly”), Judos Trust (“Judos”),

by counsel, filed a Notice of Appeal on the dismissal.

Company’s authorized capital stock consists of 300,000,000 shares of common stock, with no par value.

All authorized

shares of Company Common Stock are issued and outstanding.

All authorized shares

of Company Common Stock are issued and outstanding.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

RELATED PARTY TRANSACTIONS

Purchase Agreement

November 9, 2016, Vivos Holdings LLC ( “

Vivos ”

), a related party affiliate and former owner

of MMG, acquired 100% of MMG through a stock acquisition exchange (“Stock Purchase Agreement”) for a purchase price

of $1,750 of which$1,400 was paid at closing with proceeds from MMG (“MMG Purchase Proceeds”) and $350 through the

execution of a promissory note (“MMG Purchase Note”) .

The MMG Purchase Note was to be paid in twenty-four equal installments,

including interest at 4.5%, in the amount of approximately $15, commencing nine months after closing with the last payment on

March 1, 2019.

Both the MMG Purchase Proceeds and the MMG Purchase Note were funded by MMG on behalf of Vivos.

Vivos and MMG executed

a promissory note receivable (“Vivos Promissory Note”), described below, for the full stock purchase price.

Company has notes receivable from Vivos and Vivos Real Estate, a member of Vivos, both related party affiliates.

in Note 5, the Company is pursuing legal action to collect on the affiliated party debt.

connection with the Stock Purchase Agreement noted above, on November 15, 2016, the MMG executed a Vivos Promissory Note”

in the amount of $1,400.

As defined by the Vivos Promissory Note and agreement, the loan consists of two periods, whereby the

first period from November 15, 2016 until September 30, 2018 (“Vivos Note Period 1”), no principal or interest payments

were required.

Interest then began to accrue monthly with the issuance of a new loan in the amount of $1,773 subject to a second

loan period (“Vivos Note Period 2”).

During the second loan period, interest shall be paid in twenty equal consecutive

payments, quarterly.

On November 9, 2016, Vivos Holdings LLC,

the former owner of MMG, acquired 100% of MMG through a stock acquisition exchange for a purchase price of $1,750,

(i) $1,400 was paid at settlement with proceeds from MMG and (ii) a promissory note to pay the remaining

$350 (“Vivos/MMG Purchase Agreement”).

The promissory note was to be paid in twenty-four equal installments, including

interest at 4.5%, in the amount of approximately $15, commencing six months after closing, with the last payment on March 1,

These payments were paid by the MMG on behalf of the Vivos.

Vivos subsequently entered into a promissory note receivable

with the MMG, described below, for the full stock purchase price.

No payment has ever been made against this note.

Company has notes receivable from Vivos Holdings LLC and VREH, a member of Vivos Group, both related party affiliates due

to their ownership percentage in the Company.

In January 2021, MMG began applying the legal rate of interest which per Virginia statute

is 8.0% on two of the three defaulted notes receivable below, which were so eligible.

connection with the Vivos/MMG Purchase Agreement, on November 15, 2016, MMG executed a promissory note receivable with

Vivos Holdings LLC in the amount of $1,400.

As defined by the Vivos/MMG Purchase Agreement, the loan consists of two periods,

whereby the first period from November 15, 2016 until September 30, 2018, no principal or interest payments were required.

Interest would

accrue monthly and a new loan in the amount of $1,773 would be subject to a second loan period.

During the second loan period,

interest shall be paid in 20 equal consecutive payments, quarterly.

Principal plus any unpaid interest is due September 20, 2023.

Interest during both loan periods accrues at

a rate of 2.5%.

Additionally, monthly payments of $15 are made by MMG on behalf of Vivos to the seller in accordance with the

MMG Purchase Note.

These payments, plus any other payments made by the Company on behalf of Vivos, are added to the principal

balance of the Vivos Promissory Note receivable.

In 2018, all quarterly interest payments to be made in Vivos Note Period 2 were

offset by the management fees due to Vivos.

As of September 30, 2020, and December 31, 2019, the total outstanding balance was

$2,719 and $2,666, which includes accrued interest receivable of $217 and $162, respectively.

November 15, 2017, MMG executed an intercompany promissory note receivable with Vivos Real Estate in the amount of $772 (“Vivos

RE Promissory Note”).

As defined by the Vivos RE Promissory Note and agreement, the loan consists of two periods, where

the first period from November 15, 2017 until June 30, 2018, no principal or interest payments were required but interest accrued

monthly and a new loan amount of $781 was then subject to a second loan period.

During the second period, interest is payable

in 20 equal consecutive installments and the principal balance plus accrued and unpaid interest is due June 30, 2023.

during both periods accrues at a rate of 3.5% annually.

In 2018, all quarterly interest payments to be made in Phase 2 were offset

by the management fees due to Vivos.

In addition, principal payments totaling $30 were made by Vivos.

As of September 30,

2020, and December 31, 2019, the total outstanding balance of the Vivos RE Promissory Note was $746 and $772, respectively.

December 31, 2019 balance was eliminated during consolidation of the VIE during this period.

INCORPORATED AND SUBSIDIARIES

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

June 12, 2019, MMG entered into a personal guaranty agreement with Naveen Doki, pursuant to which Mr.

Doki personally guaranteed

during both loan periods accrues at a rate of 2.5%.

Additionally, monthly payments of $15 are made on behalf of Vivos Holdings, Inc.

to the seller by MMG.

These payments, plus any other payments made by MMG on behalf of Vivos Holdings, Inc,

are added to the principal balance of the promissory note receivable (“Vivos/MMG Purchase Agreement Note Receivable”).

In 2018, all quarterly interest payments to be made in phase 2 were offset by the management fees due to Vivos Holdings.

January 2021, MMG began applying the legal rate of interest which per Virginia statute is 8.0% on two of the three defaulted notes receivable,

which were eligible.

Only the $750 September 5, 2019 note is not eligible for a default rate of interest but is eligible for recovery

of legal fees.

As of March 31, 2021 the total outstanding balance was $2,767 which includes accrued interest receivable No for

Q1 2021 of $55.

The actual funds (additional eligible interest and legal fees) sought may be greater than what is represented herein

November 15, 2017, MMG executed an intercompany promissory note receivable with VREH in the amount of $772.

As defined by the

agreement, the loan consists of two periods, whereby the first period from November 15, 2017 until March 31, 2018, no principal or interest

payments are required.

During the first loan period, interest accrued monthly and a new loan amount of $781 will be subject to a second

During the second period, interest is payable in 20 equal consecutive installments and the principal balance plus accrued

and unpaid interest is due March 31, 2023.

Interest during both periods accrues at a rate of 3.5% annually.

In 2018, all quarterly interest

payments to be made in Phase 2 were offset by the management fees due to Vivos, Holdings LLC.

In addition, principal payments

totaling $30 were made by the Vivos Group.

As of March 31, 2021 the total outstanding balance was $774.

which includes

accrued interest receivable for Q1 2021 of $15.

June 12, 2019, MMG entered into a Personal Guaranty agreement with Dr.

Doki, pursuant to which Dr.

Naveen Doki personally guaranteed

to MMG repayment of $3,000 of the balance of the Promissory Note issued to Vivos on November 15, 2017 within the 2019 calendar

year via cash, stock, or other business assets acceptable to the Company.

Doki is a 5% or greater beneficial holder of Company

Common Stock, and therefore is a related party.

As of February 2020, the Company filed a lawsuit against the majority shareholder,

pursuant to the personal guaranty agreement for defaulting on the outstanding notes receivables.

September 5, 2019, Maslow entered into a secured promissory note agreement with Vivos, pursuant to which Maslow issued a secured

promissory note to Vivos in the principal amount of $750 (“Secured Note”).

The note bears interest at 2.5% per year

and requires Vivos to make monthly payments to Maslow of $10 beginning December 1, 2019, with balance due and payable on November

Upon an event of default, which occurs upon failure of Vivos to make any monthly payment due under the terms of the note,

Maslow has the right to declare the entire unpaid balance of the note due and payable.

The note is secured by 30,000,000 shares

of Company Common Stock, which is due and payable upon a default by Vivos, which occurs upon failure of Vivos to make any monthly

payment due under the terms of the note.

However, under claims made within the Arbitration, the ownership of the 30,000,000

shares of Company Common Stock by certain Vivos Shareholders is in question.

In addition, both Naveen Doki and Silvija Valleru personally guaranty the repayment of the note by Vivos.

Doki and Silvija Valleru are beneficial owners of Vivos and are also 5% or greater beneficial owners of Company Common Stock.

As of September 30, 2020, and December 31, 2019, the total outstanding balance was $764 and $752, respectively, which includes

interest of $14 and $2, respectively.

This note is in default and the Company is pursuing collection.

Doki is a 5% or greater beneficial holder of Company Common

Stock, and therefore is a related party.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

of February 2020, the Company filed a lawsuit against the majority shareholder, pursuant to the personal guaranty agreement for

defaulting on the outstanding notes receivables.

summary, the Vivos Holdings receivable totaled $4,258 on December 31, 2020 which included $2,007 of additional borrowings over

the period between November 2016 and December 31, 2109.

As of March 31, 2021, the receivable totaled $4,308.

September 5, 2019, MMG entered into a Secured Promissory Note agreement with Vivos, pursuant to which MMG issued a secured

promissory note to Vivos in the principal amount of $750.

The note bears interest at 2.5% per year and requires Vivos to make monthly

payments to MMG of $10 beginning December 1, 2019, with balance due and payable on November 1, 2026.

Upon an event of default,

which occurs upon failure of Vivos to make any monthly payment due under the terms of the note, MMG has the right to declare the

entire unpaid balance of the note due and payable.

The note is secured by 30,000,000 shares of Company Common Stock, which is due and

payable upon a default by Vivos, which occurs upon failure of Vivos to make any monthly payment due under the terms of the note.

both Naveen Doki and Silvija Valleru personally guaranty the repayment of the note by Vivos.

Naveen Doki and Silvija Valleru were

beneficial owners of Vivos and are also 5% or greater beneficial owners of Company Common Stock, which is qualified by

the Merger Arbitration complaint.

As of March 31, 2021 the total outstanding balance was $780.which includes interest of $12 for

In January 2021, MMG began charging the Maryland minimum interest rate by law allowed for defaulted totals as this note is in

default and we are pursuing collection via the Vivos Default Claim.

Settlement Agreements

August 10, 2017, Vivos executed a receivable advance agreement with Argus Capital Funding.

Maslow received a net advance of $487

in exchange for $705 of the Maslow’s accounts receivable.

Included in this loan was a fee of $218.

August 10, 2017, the Vivos Group executed a receivable advance agreement with Argus Capital Funding.

MMG received a net advance

of $487 in exchange for $705 of MMG’s accounts receivable.

Included in this loan is a fee of $218.

The agreement was refinanced

on November 15, 2017, when Vivos, and Vivos Acquisitions, LLC, via Mr.

Naveen Doki and Mr.

on November 15, 2017, when Vivos, and Vivos Acquisitions, LLC, via Dr.

Naveen Doki and Dr.

Silvija Valleru entered into an agreement

with CC Business Solutions, a division of Credit Cash NJ, LLC (“Credit Cash”) pursuant to which Credit Cash advanced

to Maslow $600 in exchange for $780 of the Company’s accounts receivable, to be repaid fully by approximately May 20, 2019

(the “Maslow Credit Facility”).

addition, pursuant to the same agreement, Credit Cash advanced to HCRN a credit facility in the principal amount of $1,005 (“HCRN

with CC Business Solutions, a division of Credit Cash NJ, LLC (“Credit Cash”) pursuant to which Credit Cash advanced to the

Company $600 in exchange for $780 of the Company’s accounts receivable, to be repaid fully by approximately May 20, 2019 (the “Maslow

Credit Facility”).

Each of Maslow, Vivos, Vivos Acquisitions, LLC, Mr.

Naveen Doki and Mr.

Silvija Valleru guaranteed the

HCRN Credit Facility.

To secure repayment of their guarantee obligations, Maslow and Vivos granted to Credit Cash a security interest

in all their assets.

On September 14, 2018, Maslow defaulted on the Maslow Credit Facility.

In addition, on same date, the HCRN

Credit Facility went into default.

As a result, repayment on both facilities was accelerated, with the full balance for each becoming

immediately due and payable.

On December 10, 2018, Maslow, Vivos, Vivos Acquisitions, LLC, Dr.

Doki, and Dr.

Valleru and Credit

Cash entered into a settlement agreement in connection the November 15, 2017 agreement to govern the terms of the repayment of

the HCRN Credit Facility and Maslow Credit Facility (“Settlement Agreement”).

Pursuant to the Settlement Agreement,

the Company agreed to pay $10 per week until the entire balance of the Maslow Credit Facility was paid off.

Pursuant to a subsequent

agreement dated May 17, 2019, not involving the Company, Vivos and Vivos Acquisitions, LLC agreed to fully repay the HCRN Credit

Facility via quarterly payments beginning June 30, 2019.

The HCRN Credit Facility as of October 29, 2019, has an outstanding balance

of approximately $635.

however, the total outstanding balance owed by the Company as of December 31, 2018 was $351.

2019, the Company has repaid the outstanding balance due for the Maslow Credit Facility under the settlement agreement in full.

INCORPORATED AND SUBSIDIARIES

addition, pursuant to the same agreement, Credit Cash advanced to Healthcare Resource Network, a company owned by the Vivos Group (“HCRN”)

a credit facility in the principal amount of $1,005 (“HCRN Credit Facility”).

Each of MMG, Vivos Holdings, Vivos Acquisitions,

Naveen Doki and Mrs.

Silvija Valleru guaranteed the HCRN Credit Facility.

To secure repayment of their guarantee obligations,

the Company and Vivos Holdings granted to Credit Cash a security interest in all their assets.

On September 14, 2018, the Company defaulted

on the Maslow Credit Facility.

In addition, on same date, the HCRN Credit Facility went into default.

As a result, repayment on both

facilities was accelerated, with the full balance for each becoming immediately due and payable.

On December 10, 2018, the Company, Vivos

Holdings, Vivos Acquisitions, LLC, Mr.

Doki, and Mrs.

Valleru and Credit Cash entered into a settlement agreement in connection the November

15, 2017 agreement to govern the terms of the repayment of the HCRN Credit Facility and Maslow Credit Facility.

Pursuant to the settlement

agreement, the Company agreed to pay $10 per week until the entire balance of the Maslow Credit Facility was paid off.

Pursuant to a

subsequent agreement dated May 17, 2019 not involving the Company, Vivos Holdings and Vivos Acquisitions, LLC agreed to fully repay the

HCRN Credit Facility via quarterly payments beginning June 30, 2019.

The HCRN Credit Facility is still being repaid by Vivos Holdings,

and as of October 29, 2019, has an outstanding balance of approximately $635.

The Company has a binding and enforceable agreement with

certain shareholders permitting Maslow to liquidate up to the full amount of Maslow equity held by such shareholders in order to satisfy

the shareholders’

obligations under the Settlement Agreements.

As of December 31, 2019, the Company had repaid the outstanding

balance due for the Maslow Credit Facility under the settlement agreement in full.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

Company is facing pressure to make cash payments pursuant to the Settlement Agreements.

The Vivos Shareholders that are the counterparties

to the Liquidation Agreement are not cooperating with the Company to liquidate the shares subject thereto as contemplated thereby.

MMG is facing pressure to make cash payments

pursuant to the Settlement Agreements prior to the Company’s anticipated liquidation of the shares of Company Common Stock pledged

pursuant to the Liquidation Agreement.

The Vivos Group that are the counterparties to the Liquidation Agreement are not cooperating with

the Company to liquidate the shares subject thereto as contemplated thereby.

No assurance can be given how long it will take to enforce

the requirements of the Liquidation Agreement.

The resulting time gap may present a liquidity issue for the Company.

3 unchanged sentences

of RLBY Common Stock outstanding after giving effect to the Merger, respectively.

Company repaid $588 in bridge loan notes which reached maturity between July 22, 2020 and July 31, 2020, including notes held

by Nick Tsahalis ($100), and Mark Speck ($50).

discussed in Note 4 (Convertible Debt), the term “warrant”

herein refers to warrants issued by Maslow and assumed

by RLBY as a result of the Merger.

The terms of all Warrants are the same other than as to the number of shares covered thereby.

The Warrant may be exercised at any time or from time to time during the period commencing at 10:00 a.m.

Eastern time on first

business day following the completion of the Qualified Financing (as defined below) and expiring at 5:00 p.m.

Eastern time on

the fifth annual anniversary thereof (the “Exercise Period”).

The Company is seeking damages which if granted

will likely be the remedy set forth within the merger agreement which is primarily the relinquishment in whole or in part shares

of Company Common Stock received by the Respondents in connection with the Merger.

June 27, 2019, prior to the Merger, MMG entered into a Securities Purchase Agreement with Hawkeye Enterprises, Inc., a company

owned and controlled by Mark Speck (“Mr.

Speck”), an officer and then director of Maslow.

to this agreement, MMG issued to Hawkeye Enterprises 16,323 (on a post-Merger basis) shares of Company Common Stock, a warrant

(as defined below) for 81,616 (on a post-Merger basis) shares of Company Common Stock and a convertible promissory note of same date

in the initial principal amount of $50, in exchange for $50.

The note bore interest at 12% per year, with the balance of $56 paid in

full on June 26, 2020.

July 31, 2019, prior to the Merger, MMG entered into a Securities Purchase Agreement with Mr.

Speck, the Company issued to this

individual a Warrant for 81,616 (on a post-Merger basis) shares of MMG Common Stock and a convertible promissory note of same

date in the initial principal amount of $50, in exchange for $50.

The note bore interest at 12% per year, with balance of $56 paid in

full on August 4, 2020.

July 31, 2019, prior to the Merger, MMG entered into a Securities Purchase Agreement with Nick Tsahalis, an executive officer

and director of MMG.

Pursuant to this agreement, the Company issued to this individual 32,646 (on a post-Merger basis) shares

of MMG Common Stock, and a Warrant to purchase 16,323 (on a post-Merger basis) shares of the MMG Common Stock, and a Convertible

Promissory Note of same date in the initial principal amount of $100, in exchange for $100.

The note bore interest at 12% per year, with

balance of $112 becoming due and paid in full on July 31, 2020.

September 18, 2019, in anticipation of the closing of the Merger and intending that it be assumed by MMG after the closing of

the Merger, Hawkeye entered into a letter of intent (the “LOI”) regarding the potential acquisition of a complementary business.

MMG was then prohibited from entering into the LOI directly.

In connection with the LOI, Hawkeye paid a non-refundable deposit

of $75 with the understanding that after the closing of the Merger, the LOI would be assigned to the Company and the Company would reimburse

Hawkeye for the deposit.

On October 17, 2019, Hawkeye assigned, and MMG agreed to assume the LOI and reimbursed Hawkeye for the

The reimbursement took place on May 8, 2020 and totaled $83.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

term “warrant”

herein refers to warrants issued by MMG and assumed by RLBY as a result of the Merger.

all Warrants are the same other than as to the number of shares covered thereby.

The Warrant may be exercised at any time or from time

to time during the period commencing at 10:00 a.m.

Eastern time on first business day following the completion of the Qualified Financing

(as defined below) and expiring at 5:00 p.m.

Eastern time on the fifth annual anniversary thereof (the “Exercise Period”).

For purposes herein, a “Qualified Financing”

means the issuance by the Company, other than certain excluded issuances of shares of Common Stock, in one transaction or series

of related transactions, which transaction(s) result in aggregate gross proceeds actually received by the Company of at least

The exercise price per full share of RLBY Common Stock shall be 120% of the average sale price of the RLBY Common Stock

across all transactions constituting a part of the Qualified Financing, with equitable adjustments being made for any splits,

combinations or dividends relating to the RLBY Common Stock, or combinations, recapitalization, reclassifications, extraordinary

distributions and similar events, that occur following one transaction constituting a part of the Qualified Financing and prior

to one or more other transactions constituting a part of the Qualified Financing (the “Exercise Price”).

Convertible note warrants were not valued

and included as a liability on the Company’s consolidated balance sheet because of uncertainty around their pricing, value,

and low probability at this juncture in receiving the $5,000qualifying event.

$125 of the convertible notes reached maturity

at the end of June 2020, resulting in return of principal with interest of $140.

The remaining convertible notes were paid in

full during the three months ended September 30, 2020.

December 1, 2019, the Company acquired assets of IQS from Vivos Holdings Inc.

as described in Note 1 above.

Company is involved in a number of disputes with Vivos as described in Note 5 above.

means the issuance by the Company, other than certain excluded issuances of

shares of Common Stock, in one transaction or series of related transactions, which transaction(s) result in aggregate gross proceeds

actually received by the Company of at least $5,000.

The exercise price per full share of RLBY Common Stock shall be 120% of the average

sale price of the RLBY Common Stock across all transactions constituting a part of the Qualified Financing, with equitable adjustments

being made for any splits, combinations or dividends relating to the RLBY Common Stock, or combinations, recapitalization, reclassifications,

extraordinary distributions and similar events, that occur following one transaction constituting a part of the Qualified Financing and

prior to one or more other transactions constituting a part of the Qualified Financing (the “Exercise Price”).

note warrants were not valued and included as liability on balance sheet because of uncertainty around their pricing, value and

low probability at this juncture in receiving the $5,000 trigger.

prior filings, when referencing these related party notes, we have defined the issuer as the Company, when we could have been more specific

and referenced MMG or Reliability.

For clarification purposes, any of the related party transactions entered into prior to the

Merger on October 29, 2019, should refer to MMG and not Reliability.

BUSINESS SEGMENTS

7 unchanged sentences

segment provides Script to Screen services for corporate, government and non-profit clients, globally.

INCORPORATED AND SUBSIDIARIES

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

following table provides a reconciliation of revenue by reportable segment to consolidated results for the three and nine months

ended September 30, 2020 and 2019, respectively:

three months ended:

Recruiting and Staffing

Video and Multimedia Production

nine months ended

following table provides a reconciliation of revenue by reportable segment to consolidated results for the three months ended

March 31, 2021 and 2020, respectively:

Recruiting and Staffing

Video and Multimedia Production

CONTINGENT LIABILITY

January 22, 2018, VREH executed a mortgage loan for the purchase of the property at 22 Baltimore Rd., Rockville, Maryland, and

the Company executed a guarantee of this loan.

The loan was in the amount of $1,875 with an interest rate of 4.5% annually for

the first 60 months of the loan and increasing to 5.25% annually on January 28, 2023 for the remaining 59 months.

payments during repayment period is $11 with a lump sum payment of $1,393 on December 28, 2027.

The outstanding balance on this

mortgage loan as of September 30, 2020 was $1,768.

The Company has not yet been called on to make any payments under its guarantee.

SUBSEQUENT EVENTS

Company has evaluated subsequent events through November 9, 2020, the date on which the unaudited consolidated financial statements

were available to be issued.

No material subsequent events have occurred that would require recognition in or disclosures in the

accompanying unaudited consolidated financial statements except that:

October 7, 2020, the Board Directors determined to reduce the number of employee directors on the Board and Mark Speck, the Chief

Financial Officer of the Company, volunteered to resign as a director effective October 7, 2020.

October 7, 2020, the Board of Directors of the Company appointed John Chanaud to fill the vacancy created by the resignation of

The initial term as director for Mr.

Chanaud will expire upon the election of his replacement at a duly called meeting

of shareholders.

Chanaud is independent under the Company’s criteria for determining director independence.

It is expected

Chanaud will be appointed as a member of each of the Company’s Compensation Committee and Audit Committee.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Company has evaluated subsequent events through May 12, 2021 the date on which the unaudited condensed consolidated financial

statements were available to be issued.

Based upon this evaluation, management has determined that no material subsequent events

have occurred that would require recognition in or disclosures in the accompanying unaudited condensed consolidated financial

statements, except as follows:

April 28, 2021, MMG realized its eligibility and filed for the Cares Act Employee Retention Credit for a total of $1,486.

was filed on the Company’s Employer’s Quarterly Federal Tax Return for the first quarter 2021.

Management’s

Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING

31 unchanged sentences

differ materially from what is expressed or forecasted in these forward-looking statements.

The uncertainties surrounding the

impact of the COVID-19 pandemic continues to make forward looking assumptions and estimates very volatile.

Moreover, the continued

contradictory advice between the federal and state governments regarding such matters as reopening schools, social distancing

and mask requirements make it even more difficult to predict the timing of a return to pre-pandemic levels, particularly in the

media production space.

The current potential for a surge of cases heading into the late fall, winter period could also impact

the accuracy of forward looking statements.

Important factors that could cause actual results to differ materially from these

forward-looking statements include, but are not limited to:

the continuing impact of the COVID-19 pandemic on us and our clients

including renewed lock-downs that may be required if a surge levels are not contained;

our ability to access the capital markets

by pursuing additional debt and equity financing to fund our business plan and expenses on terms acceptable to the Vivos Shareholders

negative outcome of pending and future claims and litigation and our ability to comply with our contractual covenants,

including in respect of our debt;

potential loss of clients and possible rejection of our business model and/or sales methods;

weakness in general economic conditions and levels of capital spending by customers in the industries we serve;

weakness or volatility

in the financial and capital markets, which may result in the postponement or cancellation of our customers’

the inability of our customers to pay our fees;

delays or reductions in U.S.

Important factors that could cause

actual results to differ materially from these forward-looking statements include, but are not limited to:

the impact of the COVID-19

pandemic on us and our clients;

our ability to access the capital markets by pursuing additional debt and equity financing to

fund our business plan and expenses on terms acceptable to the Vivos Group or at all;

negative outcome of pending and future claims

and litigation and our ability to comply with our contractual covenants, including in respect of our debt;

potential loss of clients

and possible rejection of our business model and/or sales methods;

weakness in general economic conditions and levels of capital

spending by customers in the industries we serve;

weakness or volatility in the financial and capital markets, which may result

in the postponement or cancellation of our customers’

projects or the inability of our customers to pay our fees;

or reductions in U.S.

government spending;

credit risks associated with

our customers;

credit risks associated with our customers;

competitive market pressures;

the availability and cost of qualified labor;

our level of success in attracting,

training and retaining qualified management personnel and other staff employees;

changes in tax laws and other government regulations,

including the impact of health care reform laws and regulations;

the possibility of incurring liability for our business activities,

including, but not limited to, the activities of our temporary employees;

the availability

and cost of qualified labor;

our level of success in attracting, training and retaining qualified management personnel and other

staff employees;

changes in tax laws and other government regulations, including the impact of health care reform laws and regulations;

the possibility of incurring liability for our business activities, including, but not limited to, the activities of our temporary

our performance on customer contracts;

and government

policies, legislation or judicial decisions adverse to our businesses.

Readers are cautioned not to place undue reliance on these

forward-looking statements, which speak only as of the date hereof.

We assume no obligation to update such statements, whether

as a result of new information, future events or otherwise, except as required by law.

We recommend readers to carefully review

the entirety of this Quarterly Report, the “Risk Factors”

in Item 1A of the Company’s Annual Report on Form

10-K for the year ended December 31, 2019 and the other reports and documents we file from time to time with the Securities and

Exchange Commission (“SEC”), particularly our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.

and government policies, legislation or judicial decisions adverse to our businesses.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

We assume no obligation to update such statements, whether as a result of new information, future events or otherwise, except

as required by law.

We recommend readers to carefully review the entirety of this Quarterly Report, the “Risk Factors”

in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the other reports and documents

we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our Quarterly Reports

on Form 10-Q and our Current Reports on Form 8-K.

following discussion and analysis of our financial condition and results of operations, our expectations regarding the future

2 unchanged sentences

Risk Factors”

of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the

Our actual results may differ materially from those contained in any forward-looking statements.

You should read the following

discussion together with our financial statements and related notes thereto and other financial information included in this Quarterly

Report on Form 10-Q.

of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 with the SEC.

actual results may differ materially from those contained in any forward-looking statements.

You should read the following discussion

together with our financial statements and related notes thereto and other financial information included in this Quarterly Report

on Form 10-Q.

ACCOUNTING POLICIES AND COMMENTS RELATED TO OPERATIONS

7 unchanged sentences

have been no material changes or developments in the Company’s evaluation of the accounting estimates and the underlying

assumptions or methodologies that it believes to be Critical Accounting Policies and Estimates from those disclosed in its Form

10-K for the year ended December 31, 2019.

assumptions or methodologies that it believes to be Critical Accounting Policies and Estimates as disclosed in its Form 10-K for

the year ended December 31, 2020.

Management’s

3 unchanged sentences

discussed in the Form 10-K and many of the items discussed in the Form 10-K are relevant to 2021 operations;

thus the reader of

this report should read Management’s Discussion included in Form 10-K for the year ended December 31, 2019.

thus, the reader

of this report should read Management’s Discussion included in Form 10-K for the year ended December 31, 2020.

OF OPERATIONS

of COVID-19 Pandemic

December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China.

In January 2020, this coronavirus

spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified.

March 30, 2020, Maryland governor Larry Hogan issued a stay at home order which resulted in the Company moving to a work from

We reacted as soon as March 20, 2020 when we instituted furloughs and cut administrative pay by 10% and executive

Other non-essential costs were reduced or eliminated.

Whereas we were prepared for this situation and were able to

adapt quickly, our business began to suffer from companies and governors in the other 49 states simultaneously or subsequently

issuing similar orders.

of our billable workforce began working from home dependent on client instructions.

Some IT staffing clients in the healthcare

space were still able to have employees and contractors come to their facilities due to essential service exceptions.

we still began to observe stronger negative impact in the media space as our client partners demand began to wane in all segments.

In April and May combined, we saw a 49% decline in revenue when compared to same periods in 2019.

April 29, 2020 we were formally approved by TBK bank and the SBA for Payroll Protection (PPP) lending.

With the board approving

the loan provisions in the loan documents presented to us on the same day, May 4th, the proceeds totaling $5,216 were then

released on May 5, 2020.

of September 30, 2020, we had deployed all $5,216 in PPP funds.

The Company believes that 99% of the PPP funds deployed have been

for eligible payroll per the SBA regulations governing fund eligibility for fund use and forgiveness.

However, there is no certainty

that any of or all the PPP funds will ultimately be forgiven.

our administrative staff continued to be productive using our web-based applications from the safety of their homes, management

decided to terminate its lease at 22 Baltimore Road with Vivos Real Estate, affording Vivos Real Estate 30 days of notice prior

to the effective termination date of April 30, 2020.

And because our lease was on a month to month basis, there was no

penalty or negative consequences associated with this action.

We do not believe our work from home protocols have materially adversely

impacted our internal controls, financial reporting systems or our operations.

this period, our critical priorities continue to be the health and safety of our team members, field talent, candidates, and client

extent to which the coronavirus impacts our results will depend on future developments, which are uncertain and cannot be predicted,

including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus

or treat its impact, circumstances permitting people to return to work, among others.

A surge in cases during the fall and winter

could result in additional shutdowns or protocols that could adversely impact the Company.

expect that the social distancing measures, the reduced operational status of our client partners, reductions in production at

certain client partners facilities, and general business uncertainty will continue to significantly effect demand in all our segments

throughout the remainder of 2020, and possibly beyond.

the last two months of the third quarter our customers began to reengage in their media activities due in part to a relaxation

of state COVID-19 measures, and because customers had instituted safe policies and procedures for their and our employees to return

In addition, media coverage of the national election and return of the National Football League in September, propelled

business from its COVID-19 lows but not to the levels of 2019.

Due to the many uncertainties at this time, no assurance can be

given that this trend will continue at its current pace.

for the three months ended September 30, 2020 was $ 6,201, an increase of $1,004 or 19% over the quarter ending June 30, 2020

but a decrease of $3,874 or 38 % to same quarter ending September 30, 2019.

The comparable

drop to 2019 was predominantly due to reduced demand for services resulting from the COVID-19 pandemic.

EOR revenue dropped 47%

and Video and Multimedia production declined by 48%, as clients continued to curtail studio and on-site productions due mostly

to stay at home / shelter in place state orders.

Staffing Revenues however increased 4% due to IQS IT staffing which was not in

place a year ago.

the nine months ending September 30, 2020 revenues were $20,199, which was $7,807 or 27.9% less than the nine-month period ending

September 30, 2019.

This variance can also be attributed to reduced demand for workforce services due to COVID-19 pandemic.

staffing revenues when compared to its pre-acquisition records as a stand-alone company, declined in the third quarter by $283

from $926 to $643, or 31%

IT staffing Revenue for the three-month period ending September 30, 2020, totaled $624 which was 27% off the pace of a

year ago when it was $855 due to the causes stated above which although began in mid-March 2020, did not affect this IT business

as much until the end of the second quarter.

IT staffing Revenue for the nine-month period ending September 30, 2020, totaled $2,066 which was 11.7% off the pace of

a year ago when it was $2,340.

for the three months ended March 31, 2021 was $5,794 which was $3,007 lower than for the same period in 2020 which was $8,801.

EOR revenues declined 37.1% or $2,655, and staffing revenue by 31.5% or $406 as demand for services was down from a year ago which

before the mid-March 2020 governmental shutdown caused by the COVID-19 pandemic, was buoyed by election and sporting event client

AT&T’s DirecTV unit cancellation of several Sirius-XM shows accounted for an estimated $1,000 revenue decline

which represents approximately 33% of our overall comparative revenue decline and 37% of the EOR comparative Q1 decline.

revenue was adversely impacted by our IQS IT division which saw a dramatic decline of $516 or 65.3% from $790 in Q1 2020, to $274

in the Q1 2021, as 2 clients ceased employing our IT solutions almost altogether ($402 revenue decline) and one of our largest

clients converted 4 full-time equivalents (“FTE”) to permanent roles over the course of 12 months after April 1, 2020,

leading to a $84 top line comparative Q1 reduction.

Conversely, Media staffing grew 22% to $610 as head count increased by a commensurate

percentage of 25% by end of the quarter.

of Revenue / Gross Profit

Company’s gross margin in the third quarter was $654 or 10.5% which was well short of our second quarter performance of

$723 and 13.9% respectively.

This was caused by 2 factors:

i) an arrangement MMG made with one of our customers to employ our

PPP funds directly for a limited number of resources assigned to this client.

Hence, we returned up to 14 media specialists, so

far, to work and billed our client only the gross profit portion and not approximately $116 in payroll costs.

Although we still

had PPP funds when this arrangement commenced, it has continued several weeks past the point when we exhausted the PPP funds for

its intended use.

Because PPP fund forgiveness and accounting use has not been finalized, we could not apply these funds as a

subsidy to amply offset our cost of revenue for this project.

Otherwise our gross margin would have been $770 and 12.4% for quarter

and our gross profit total would have exceeded our second quarter total of $723 by $47;

ii) the other reason for the margin decline

was that our EOR business, which is our lowest margin segment, improved in a greater proportion to the other two segments, with

EOR representing 73% of the revenue in the second quarter to 79% in the third.

In contrast the IQS business, our highest margin

declined by 3% in revenue when comparing the third quarter 2020 to the second.

comparing gross profit performance for the quarter ended September 30, 2020 to its 2019 counterpart, the third quarter 2020 yielded

$654 or a 39% decrease in gross profit compared to a year ago.

contribution to gross profit was at $262 which represents 28.5% of the Company’s third quarter gross profit.

IT staffing’s gross margin was 30% for the quarter ending September, and year to date is now at 31%.

A change in client

composition has compacted margins from 34% to 31%.

IT staffing’s operating income for the nine-month period ending September 30, 2020 was $182 compared to a loss of ($21)

This is due to our ability to take on this business and manage with existing organizational structure resulting in

an elimination of redundancies.

gross profit for the nine months ended September 30, 2020, of $2,409 was $570 less or 19% less than it was a year ago at $2,979.

September’s revenue at $2,542 represented 41% of our third quarter revenue and was a 43% improvement over the average of

the 5 preceding months beginning in April and ending in August.

This improvement can be attributed to increases in EOR services

demand by AT&T, Janssen, and WETA which began increasing their media resources to percentages approaching pre-COVID 19 levels.

General and Administrative

general and administrative (“SG&A”) expenses for the three months ended September 30, 2020 were $1,086 as compared

to $724 in 2019.

The increase is due to costs associated with being a public company and higher legal costs which totaled

approximately $214 and $131, respectively, or $345 which exceeds the $314 difference.

The other major SG&A increase in comparing

2020 third quarter to a year ago is $128 comes from IQS administrative salaries.

So, when comparing MMG operating costs in the

third quarter 2020 to 2019, costs were reduced by $159, representing a 21% improvement.

the nine months ending September 30, 2020, SG&A expenses of $3,438 were $1,398 greater than 2019 with an identical paradigm

to the quarter with cost associated with being a public company and higher legal costs being the drivers, totaling approximately

$868 and $333, respectively, for a total of $1,201 of the $1,398 difference.

Company recognized interest expense in the amount of $30 during the three months ended September 30, 2020, compared to $100 in

The decrease was attributable to interest on the $850 in convertible notes and offset by a large reduction in use of factoring

which was due to the reduction of revenues and the PPP funds which do not necessitate immediate borrowing for working capital.

the nine months ending September 30, 2020, interest expense increased to $283 compared with $273 in 2019 primarily due to the

$725 in interest on the convertible notes the Company in the third quarter of 2020 compared with $491 in 2019.

factoring costs decreased year over year as the necessity to factor invoices was significantly diminished after receipt of the

Prior to receipt of the PPP funds, our average cash balance was $395, while employing 85-90% of factoring capabilities.

Use of PPP funds for payroll and rent enabled cash reserves to be fortified as our average cash improved to $657 in the third

quarter 2020.

Hence, our 2020 factoring costs (factoring fee plus interest) were $8 compared to $79 in 2019.

Income (Loss)

Company incurred a net loss during the three months ended September 30, 2020 of $192 compared to net profit in the same period

2019 of $157.

$349 increase in net loss can be attributed to i) reduction in revenue by $3,874 leading to gross profit decrease by $406 as a

result of COVID-19 customer reductions in force;

ii) corporate costs much of which are public company related ($214, see quarterly

G&A results above) totaling $419 which include legal costs associated with shareholder disputes totaling $131;

iii) increase in cost of revenue due to the customer subsidy described above totaling $116 iv) additional losses were offset

by income tax benefit of $237.

the nine months ended September 30, 2020, the net loss was $753 versus a profit of 533 in the same period in 2019.

variance can be attributed less to the same factors cited above which can be simplified by focusing on the $570 gross profit deficit

and corporate costs of $1,191 that were not necessary a year ago.

Those two changes alone account for a $1,762 reduction in operational

profit in the nine months ending on September 30 in 2020 to a year ago offset by income tax benefit of $286.

Profit was $747 representing 12.9% of revenues, which was $285 below the gross profit of $1,032 in the first quarter of 2020.

Although revenues from Q1 declined by 34.2% from Q1 2020, gross margins only declined by 27.7%.

This was a result of Q1 profit

margin improved from 11.7% in Q1 2020 to 13% in Q1 2021.

Margin improvement can be attributed to product mix being more titled

to higher margin staffing and Video Production, which combined was 22.3% in Q1 2021 versus 18.5% in Q1 2020.

and Administrative (“G&A”)

and administrative expenses for the three months ended March 31, 2021 were $810, as compared to $1,091 in the comparable period in

The $281decrease in comparative three-month periods is due to $101 in salary and benefit cost reductions, outside legal costs

declined by $90 and accounting fees by $19.

Given the adverse effect on revenues caused by COVID-19, and the need to add new

clients, management restructured the organization accordingly, which improved sales resources, but lowered overhead costs by 15% to

Company recognized interest expense in the amount of $45 during the three months ended March 31, 2021, compared to $138 during

the prior year period.

The $93 decrease is directly attributed to a significant decreased reliance on the factoring line that

had an outstanding average Q1 2020 balance of $4,711 compared to $2,164 in 1Q 2021.

This resulted in a savings of approximately

$50 and paying off the convertible note which carried approximately $26 in interest in 2020.

The Triumph Loan for $250 which was

satisfied in February had $11 more in costs in 2020.

Company incurred a lower net loss in first quarter of 2021 at $28 compared to a year earlier when it was $237 as the reduced G&A

and interest charges (includes VIE related interest), and income tax coupled with $75 in earned interest, totaled a $489 improvement

from a year ago, compared to a reduction of $285 netting 204 in net profit improvement in Q1 2021compared to March 31, 2020.

AND CAPITAL RESOURCES

primary sources of liquidity are cash generated from operations via traditional accounts receivable activities and via borrowings

under our Factoring Facility (up to 93%) with Triumph and receivables enabling access to the 7% unfactored portion.

Because certain

large clients have changed their payment practices announcing 60 and 90 day terms amounting to a unilateral extension to contractual

terms by 30-60 days, we can be adversely impacted since Triumph, and most other factoring institutions no longer provide credit

after an account obligor who pays 30 or more days from their contractual terms.

primary use of cash are for payments to field talent, corporate and staff employees, related payroll liabilities, operating expenses,

public company costs, including but not limited to general and professional liability and directors and officers liability insurance

premiums, legal fees, filing fees, auditor and accounting fees, stock transfer services, and board compensation;

followed by cash

factoring and other borrowing interest;

and debt servicing payments.

Company expected to have promissory note receivable for $3,000 repaid by Naveen Doki at the end of 2019.

In the first quarter

of 2020, the Company continued to pursue repayment as the impact of not having that cash returned to the Company coupled with

approximately $900 more a year in costs associated with being a public company and the inability to tap the capital markets due

to not having any available shares, resulted in cash challenges.

as described in Note 5 to the Financial Statements above, Vivos Holdings LLC has defaulted its secured promissory note that would

have paid $10 per month to Company.

the third quarter of 2020, the Company made required repayments of principal and interest of approximately $806 pursuant to the

convertible notes.

This completed the repayment of outstanding notes having an aggregate value of principal and interest of approximately

March 2020, a national, lockdown began to unfold due to the COVID-19 pandemic.

This resulted in a significant loss of business

starting the last week of March 2020, resulting in a reduction of billing by approximately 51% in the combined months of April

and May 2020.

May 5, 2020, MMG received the PPP Loan.

Subsequently, the Paycheck Protection Flexibility Act, was passed by Congress and signed

by the President on June 3, 2020, which among other changes and provisions, allowed for the funds to be employed over a 24-week

period versus 8.

By utilizing these funds for their intended purpose of payroll, with forgiveness potential over the first 24

weeks, the Company has been able to free up cash to pay other expenses and obligations, while also improving our non-PPP working

As stated above under Interest, use of PPP funds for payroll and rent enabled cash reserves to be fortified to average

(Non PPP) working capital of $458 from May 1 through July 6, 2020, from a previous 4 month average of $395.

employed to repay the convertible notes in the second quarter totaled $140 and required disbursement in the third quarter

Although the outlay of the $806 in the third quarter had a substantial impact on cash flows, the Company expects to have

sufficient working capital after making these payments.

cash provided by operating activities during the nine months ended September 30, 2020 was $586 compared to $136 in the comparable

period of 2019.

The change was attributable to an increase in legal expenses and other costs associated with being a public company.

February 2020, Maslow took out a $250 6-month term loan from Triumph at 10% APR, in order to meet its cash obligations.

March 2020, the loan principal was increased by $75 with the remaining term extended 26 weeks to September 2020.

On April 7, 2020,

in the face of the COVID 19 lockdown, Triumph offered a 2-month payment holiday and to extend the note payment to February 2021.

working capital requirements are driven predominantly by EOR field talent payments, G&A salaries, public company costs, interest

associated with factoring, and client accounts receivable receipts.

Since receipts from client payments are on average 70 days

behind payments to field talent, working capital requirements can be periodically challenged.

We have a Factoring Facility with

Triumph Business Capital (“TBC”).

TBC advances 93% of our eligible receivables at an advance rate of 15 basis points,

an interest rate of prime plus 2%., and our prime floor rate at 4%.

As a result of the impact of the COVID-19 pandemic, our clients

may be more likely to be delinquent in their payments.

However, to date, we have not seen any adverse change in our collections,

with our Days Outstanding (DSO) improving to 63 days compared to 73 on December 31, 2020.

Our DSO increased in 2020 because several

of our large clients now require 60-to-90-day terms.

As of March 31, 23% of our invoicing was > 60 days aged.

of March 31, 2021, 64% of our $3,964 in total A/R was < 31 days, 34% 1 to 30 days past due, 5% between 31 and 60 days past

due and 2% ($66) greater than 60 days.

As of March 31, 2021, having 7% of our A/R > 31 days is an improvement over December

31, 2020, where 11% of our A/R was aged >31 days.

primary sources of liquidity are cash generated from operations via accounts receivable and borrowings under our Factoring Facility

with Triumph enabling access to the 7% unfactored portion.

Because certain large clients have changed their payment practices

announcing 60- and 90-day terms amounting to a unilateral extension to contractual terms by 30-60 days, we can be adversely impacted

since Triumph no longer provides credit if an account obligor pays more than 120 days after the invoice date.

primary uses of cash are for payments to field talent, corporate and staff employees, related payroll liabilities, operating expenses,

public company costs, including but not limited to, general and professional liability and directors and officer’s liability

insurance premiums, legal fees, filing fees, auditor and accounting fees, stock transfer services, and board compensation;

by cash factoring and other borrowing interest;

and debt payments.

we are an EOR with the majority of contracted talent paid as W-2 employees who are paid known amounts on a consistent schedule;

our cash inflows do not typically align with these required payments, resulting in temporary cash challenges, which is why in

the past we have employed factoring.

Debtors as of March 31, 2021, had notes receivable totaling $4, 308 including default on a $3,000 promissory note and on a $750

tax obligation in December 2019.

After numerous failed collection attempts, on February 17, 2020 the Company initiated an action

in the Circuit Court of Montgomery County Maryland against Naveen Doki and the Vivos Holdings for nonpayment.

was also anticipated that following the Merger, the Company would both access the capital markets by selling additional shares

of Company Common Stock and use shares of Company Common Stock as currency to acquire other business revenues.

However, all 300

million authorized shares of Company Common Stock were issued in connection with the Merger.

No shares are expected to become

available to the Company until the legal dispute with the Vivos Debtors and Vivos Group is resolved.

At that point, the Company

can decide whether to amend the Company’s Certificate of Formation to increase the number of authorized shares of Company

Common Stock or approve a reverse-split of the outstanding shares of Company Common Stock to provide additional shares for these

No assurance can be given as to when this might take place.

May 5, 2020, MMG received a $5,216 loan through the Paycheck Protection Program (the “PPP”) with a term of

two (2) years and an interest rate of 1% per annum.

The PPP provides that the Company may apply for forgiveness of this loan if the loan

proceeds were used for payroll and certain other specified operating expenses while maintaining specified headcount requirements.

accrued interest on the PPP loan as of December 31, 2020 was $34.

June 5, 2020, The Paycheck Protection Program Flexibility Act (the “PPPF Act”) went into effect providing more flexibility

to participants in the PPP which included extending the time to begin repayment of the PPP loan until the amount of forgiveness,

if any, is determined, which could be as late as December 31, 2020.

The Company may apply for forgiveness earlier if they determine

that doing so will maximize the amount of loan forgiveness.

December 22, 2020, the United States Congress passed an omnibus spending bill (the December relief bill) that included significant

revisions and additions to the PPP established by the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”),

and previously amended by the Paycheck Protection Program Flexibility Act (“PPP Flexibility Act”).

President Trump

signed the bill on December 27, 2020.

The December relief bill permits expenses paid with PPP loan funds to be deductible at the

Federal level.

December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues &lrm;Act (the “PPP2 Act”)

contained in the Consolidated Appropriations Act, 2021 (“2021 Appropriations Act”) &lrm;was enacted.

and 2021 Appropriations Act included several changes to the forgiveness &lrm;deadline process and deadlines allowing PPP borrowers

up to 10 months to apply for loan forgiveness after the covered period ends.

Company utilized the PPP funds for their intended purposes, in this case for payroll only following guidelines for wage earners

funds bolstered our working capital and enabled us to bring back employees and continue to serve our clients even though their

requirements had lessened.

of March 31, 2021, our working capital was $5,938, compared to $5,970 at the end of December 2020, and $566 a year ago as the

PPP funds enabled the Company to build A/R reserves since PPP funds were employed to pay salaries of both outsourced and G&A

employees during the covered 24-week period between May and October 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements