What changed in this filing

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Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 316 added, 394 removed, 449 unchanged (61% of the section changed)

3 unchanged sentences

in thousands, except per share data)

June 30, December 31,

September 30, December 31,

CURRENT ASSETS

20 unchanged sentences

SHAREHOLDER’S EQUITY

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of June 30, 2021, and as of December 31, 2020

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of September 30, 2021, and as of December 31, 2020

Additional paid-in capital

6 unchanged sentences

in thousands, except per share data)

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Revenue earned

11 unchanged sentences

Consolidated net income (loss)

Less net income attributable to noncontrolling interest in consolidated affiliates

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

Net income (loss) attributable to Reliability Inc.

5 unchanged sentences

in thousands, except per share data)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Revenue earned

3 unchanged sentences

Selling, general and administrative expenses

Operating income (loss)

Operating loss

Other income (expense)

1 unchanged sentence

Interest expense

Other (expense)

Other income (expense)

Income (loss) before income tax (expense) benefit

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY

the Six Months Ended June 30, 2021, and 2020

the Nine Months Ended September 30, 2021, and 2020

in thousands, except per share data)

3 unchanged sentences

VIE consolidation

Balance, June 30, 2020

Balance, September 30, 2020

Balance, December 31, 2020

Balance, June 30, 2021

Net income (loss)

Balance, September 30, 2021

accompanying notes are an integral part of these statements.

2 unchanged sentences

in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows from operating activities:

Net income (loss)

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

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

Depreciation and amortization

3 unchanged sentences

Changes in operating assets and liabilities:

Trade receivables

Accounts receivables

Prepaid expenses and other current assets

14 unchanged sentences

Borrowing of note payable

Advances to related Parties

Repayment of notes receivable from related parties

7 unchanged sentences

in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Supplemental disclosures of cash flow information:

12 unchanged sentences

Employer of Record (“EOR”),

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

which is a unique workforce management solution, represented 80.7 % of the revenue in 2020 and 78.5 % of second quarter 2021 revenue.

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

Our Staffing previously included revenue derived from permanent placements which was a rare occurrence.

In the second quarter, MMG decided

to add Permanent Placement as a segment when new clients began requesting the Company source candidates for permanent hire on a regular

The Company had one such placement in the second quarter.

Video Production involves assembling and providing crews for special

projects that can last anywhere from a week to 6 months.

Recruiting and Staffing, Permanent Direct Placements, and Video and Multimedia Production which provides script to screen media talent.

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

Our Staffing segment occasionally received requests for (direct) placements.

Because of an uptick in direct hire requests in

2021, factoring in the much higher margins that business derives, MMG decided to add Permanent (Direct) Placement as a stand-alone

business segment.

Video Production involves assembling and providing crews for special projects that can last anywhere from a week

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

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

Vivos Holdings, LLC and Vivos Real Estate Holdings,

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

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 9) (collectively

“Vivos Debtors”).

Janumpally, Mr.

3 unchanged sentences

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

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

Solutions, Inc.

IQS operates as a division of MMG.

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”) See Note 6.

Vivos Debtors (“Vivos Default Claim”) (See Note 7).

or about May 6, 2020, the Vivos Debtors and other Vivos Group members, specifically.

3 unchanged sentences

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 Mr.

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 Respondents have not 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 Shirisha Janumpally, its trustee (“Judos”)

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

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.

May 27, 2021, MMG filed a 941X refund request for $ 1,440 after determining it’s eligibility for the Employee Retention Credit (“ERC”).

June 10, 2021, MMG received notification by the Small Business Administration (“SBA”) of forgiveness of its PPP 2020 Loan

totaling $ 5,216.

The forgiveness included the deferred interest

of $ 59 totaling

principal and interest.

9 , 2021, Reliability filed an additional claim in the Debt Collection Suit and Vivos Default Counterclaim in the Circuit

Court of Montgomery County, Maryland against Doki, Valleru, Pathuri, Janumpally, Igly, and Judos, asserting that the Respondents

breached the Merger Agreement in a number of significant respects and potentially committed fraud in connection with the

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

The remedy for the nature and extent of the alleged violations, per the merger agreement, is the forfeiture of Vivos

Group shares.

September 7, 2021, the Company entered in Arbitration and Tolling Agreements with alleged shareholder Naveen Doki, M.D., and his affiliates

and all other persons who were parties to the pending litigation previously reported in the Texas, New York and Maryland courts and before

the American Arbitration Association.

The Agreements call for the stay or dismissal of the pending litigation, with the parties agreeing

to resolve their disputes before a single arbitrator in Maryland (See Note 7).

of presentation

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Actual results could differ from those estimates.

estimates and assumptions included in the Company’s consolidated financial statements related revenue recognition, allowances for

doubtful accounts, recoverability of notes receivable, useful lives for depreciation and amortization, loss contingencies, allocation

estimates and assumptions included in the Company’s consolidated financial statements relate to revenue recognition, allowances

for doubtful accounts, recoverability of notes receivable, useful lives for depreciation and amortization, loss contingencies, allocation

of purchase price in connection with business combinations, valuation allowances for deferred income taxes, and the assumptions used

4 unchanged sentences

of Credit Risk

the six months ended June 30, 2021, 24.1 % of revenue came from AT&T Services, Inc.

the nine months ended September 30, 2021, 26.7 % of revenue came from AT&T Services, Inc.

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

16.3 % from Goldman Sachs, 13.5 % from Morgan Stanley, and 11.2 % from Janssen Pharmaceuticals (which includes workforce partners Ortho

McNeil and Johnson & Johnson).

AT&T, Goldman Sachs, Morgan Stanley and Janssen accounted for 27.4 %, 8.6 %, 5.8 % and 11.3 %, respectively,

in revenue for the same time period ended June 30, 2020.

No other client exceeded 10% of revenues.

15.7 % from Goldman Sachs, 12.8 % from Janssen Pharmaceuticals (which includes workforce partners Ortho McNeil and Johnson & Johnson),

and 11 % from Morgan Stanley.

Combined, this totals 66.4 % of revenue.

AT&T, Goldman Sachs, Janssen, and Morgan Stanley accounted

for 27.6 %, 8.8 %, 10.9 % and 5.7 %, respectively, in revenue for the same time period ended September 30, 2020.

No other client has exceeded

10% of revenues in 2021.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

LIQUIDITY AND GOING CONCERN

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

The factors which have impacted the

business and our liquidity are;

from the SBA on June 10, 2021, that our PPP Loan totaling $ 5,275

in principal and interest had been 100% forgiven;

for Employee Retention Credits (“ERC”) resulting in a refund in April 2021 in the amount of $ 1,440 ;

eligibility for ERCs in the second quarter resulting in additional credits of $ 153 in the second quarter;

loss of approximately $ 224 for the six months ended June 30, 2021;

loss of $ 161 for the three months ended June 30, 2021;

The factors which have impacted the business

and our liquidity are;

from the SBA on June 10, 2021, that our PPP Loan totaling $ 5,275 in principal and interest had been 100% forgiven;

for Employee Retention Credits (“ERC”) resulting in refunds totaling $ 3,221 and payroll credits in the third quarter

totaling $ 1,156 ;

loss in third quarter ending September 30, 2021, of $ 63 which is a $ 368 improvement over the third quarter operating loss

a year ago and $ 161 in the second quarter;

of the ERC by Congress’ passing infrastructure bill, retroactively effective September 30, 2021;

tax return submission with net operating loss carry back of $ 339 which will reduce tax liabilities;

loss of approximately $ 287

for the nine months ended September 30, 2021;

of $ 475 on July 21, 2021, to satisfy a Vivos Group debt that was supposed to have been paid by the Vivos Group and covered by the

Liquidation Agreement (see notes 2 and 7), but Vivos refuses to cooperate;

estimated tax of $ 1,075

based on current year operations;

to finance over $ 3,000 in accounts receivable (based on unfactored portion on September 30, 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 $ 4.4 M

in notes receivables from Vivos Debtors;

in raising cash via public markets 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 $ 4.9 M in notes receivables from Vivos Group;

liabilities, described further in Note 7.

these conditions noted and factored in above, but from a prevailing operational view there is still substantial doubt about the Company’s

ability to continue as a going concern as the underlying business has yet to recover from COVID-19 with revenue levels down as

much as 35% from 2019 standards.

There is also the risk that the arbitration (see Note 7) outcome is not in the Company’s favor,

and or the $ 4.9 M in notes receivable is not realized in a timely fashion.

As far as cash equivalents, once the $ 3,221 in ERC is fully

refunded, the Company will have sufficient capital resources, but these are based on government stimulus programs.

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 interim consolidated 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 ongoing outside legal costs related to Doki Group disputes and increased pressure to make cash payments for Doki group

MCA obligations, which ultimately took place on July 21, 2021, 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,

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 and how long it will take to enforce the requirements of the Liquidation Agreement.

As a result, the Company could

face hurdles 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.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands, except per share data)

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 consolidated 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, which ultimately took place on July 21, 2021, (See Note 10:

Subsequent Events) 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, and how long it will take to enforce the requirements of the Liquidation Agreement.

As a result, the Company faces 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”.

ACCOUNTS RECEIVABLE

Receivable can be broken down as follows

OF ACCOUNTS RECEIVABLE

September 30, December 31,

Accounts Receivable

Trade receivables

Other receivables (ERC Refund)

Unbilled receivables

Less allowance for doubtful accounts

Total Accounts Receivable

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

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

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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.

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 2020.

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.

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The adoption of this update is not expected to have a material impact on our consolidated financial position and results of

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 amendment in this update is effective for us beginning with fiscal year 2021, with early adoption permitted.

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.

GAAP 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 amendment in this update is 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.

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effect on its present or future consolidated financial statements.

June 10, 2021, the SBA notified MMG that it’s Paycheck Protection Program (“PPP”) loan of $ 5,216

issued in May of 2020 had been forgiven along

in SBA calculated deferred interest.

This eliminated

the long-term debt on the Company’s books, leaving only the $ 103

in federal income tax as explained in

Tax Liabilities portion below.

The Company recorded this forgiveness as a component of other income on the accompanying unaudited consolidated

statements of operations.

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

4 unchanged sentences

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.

Since no conversion occurred, the 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, which expires correspondingly to each note

between June and October 2024.

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.

triggered an accelerated tax event, a $ 215

estimated annual impact per year for four years, that MMG is working with the IRS to pay .

of June 30, 2021, the tax liability was $ 92 compared

of December 31, 2020.

The Company also accrued current income taxes of $ 669 as

of June 30, 2021, relating to its current operations.

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 has been working with the IRS to pay.

As of September 30, 2021, the tax liability was $ 1,030 compared to $ 292 as of December

The Company also has accrued current incremental income taxes of $ 1,075 YTD, $ 396 of which was recorded in Q3, as of

September 30, 2021, relating to its current operations.

Business Capital

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.

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

to the agreement, MMG received advances on its accounts receivable (i.e., invoices) through TBC to fund growth and operations.

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 .

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 %.

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.

MMG continues to be obligated to meet certain financial covenants in respect to

invoicing and reserve account balance.

The agreement which previously renewed annually, is now

month to month.

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

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 June 30, 2021, the required amount was 10%.

As of September 30, 2021, the required amount was

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

2 unchanged sentences

receivable (A/R) were sold with full recourse.

Proceeds from the sale of receivables were $ 1,131

For the three months ended June 30, 2021, compared

in the same period ending June 30, 2020.

Proceeds from the sale of receivables were $ 1,756 for the three months ended September

30, 2021, compared to $ 10,175 in the same period ending September 30, 2020.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

outstanding balance with TBC as of September 30, 2021, was $ 939 and $ 2,999 on December 31, 2020.

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

1 unchanged sentence

the Company repurchase the receivable or debit the reserve account.

Total finance line fees for the three months ended June 30, 2021,

Total finance line fees for the three months ended September 30,

2021, and 2020 comparatively totaled $ 15 and $ 30 , respectively.

4 unchanged sentences

MMG leased this space on market terms.

MMG challenges its status as a guarantor on the building.

challenges its status as 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

3 unchanged sentences

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.

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.

of approximately $ 1,734 as of June 30, 2021, (the latest information made available to the Company), with $ 21 unpaid in 2021 as

VREH was behind on two of their mortgage payments.

The loan is deemed to be in default with outstanding taxes due of $ 7 , a 2019 DSC ratio

violation, failure to submit updated financials, and subsequent liens without bank written consent for $ 250 to another Vivos Group creditor.

To 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.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

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)

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

25 unchanged sentences

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

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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.

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

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.

As of October 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

1 unchanged sentence

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.

This was settled on

October 1st, 2021 with both parties mutually releasing each other of any claims

February 28, 2020, Healthcare Resource Network, LLC (“HCRN”) filed a complaint against MMG in the Circuit Court of Montgomery

4 unchanged sentences

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 .

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

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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 HCRN, MMG, Vivos Holdings, LLC, Vivos Acquisitions, LLC, Naveen Doki and Silvija Valleru.

This foreign judgement

relates to Vivos Holdings adding MMG as a guarantor on a loan made to HCRN 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.

May 5, 2020, Libertas Funding, LLC (“Libertas”) domesticated a foreign judgement in the Montgomery County Circuit Court system

3 unchanged sentences

Foreign Judgement total is $ 229 .

Maslow settled with Libertas/Kinetic (both judgements) this summer

for $ 475 (See last 2 paragraphs below).

May 5, 2020, Kinetic Direct Funding (Kinetic”) domesticated a foreign judgement in the Montgomery County Circuit Court system against

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court relating to MMG totaling $ 1,038 .

Maslow settled with Libertas/Kinetic (both judgements) this summer for $ 475 (See last 2 paragraphs

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

or about May 6, 2020, the Vivos Debtors and other Vivos Group members, specifically.

Kaylan Pathuri (“Pathuri”), Judos Trust

by Shirisha 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”).

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 documents.

Trial on this matter is scheduled to begin on October

Pathuri, Judos, and Igly responded to the Vivos

Default Claim with the “Vivos Default Counterclaim.

The Company continues to believe that the

Counterclaim has no merit and had planned to vigorously defend itself and its indemnified officers, directors and other parties as permitted

by the Company’s organizational documents, when a trial on this matter was scheduled to begin on October 4, 2021, but both parties

agreed on September 7 th , 2021, to resolve their disputes before a single arbitrator in Maryland, which calls for the stay

or dismissal of the pending litigation.

The agreement provides 150 days to resolve all pending matters through binding arbitration in

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

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The Company 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.

the Arbitration which is currently being decided by the Federal Courts in New York, but the Respondents countered with a motion to dismiss

Reliability’s Petition to Compel Arbitration to the Federal Courts in New York.

On August 4, the US District Court, Southern District

of New York, denied the Respondents motion to dismiss.

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

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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”), Dr.

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

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

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

On January 20, 2021, Defendants and Counter/Third-Party Plaintiffs, Vivos, VREH, Doki, Pathuri,

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

However, the deadline to pursue the appeal lapsed absent additional

filings by the Vivos Group.

July 21, 2021, Maslow settled the obligation which with it had been committed by Vivos Holdings, LLC in July 2018, with Libertas and

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

Vivos IT LLC, Vivos Global Holdings LLC, Vivos Acquisitions

LLC, or Vivos Holdings.from the remaining obligation.

This debt belonged to Vivos Holdings LLC, and the aforementioned Liquidation Agreement,

(See Note 2) had been created as a safeguard to shelter MMG should Vivos default, which actually transpired prior to the merger closing

in October 2019.

Viv’s IT LLC, Vivos Global Holdings LLC, Vivos

Acquisitions LLC, or Vivos Holdings from the remaining obligation.

This debt belonged to Vivos Holdings LLC, and the aforementioned Liquidation

Agreement, (See Note 2) had been created as a safeguard to shelter MMG should Vivos default, which actually transpired prior to the merger

closing in October 2019.

felt compelled to settle Vivos’ Holdings at this time due to 1) added pressure placed by Libertas to collect a balance that now

exceeded $1,700, 2) a desire to clear liens against the Company to improve its credit status, and 3) its ability to negotiate a much

lower and separate settlement.

is pursuing remedy for the $ 475 payment to Libertas with the Vivos Group through the arbitration process.

In the meantime, the $ 475 has

been added the Vivos Debtor balance which as of September 30, 2021, is $ 4,944 .

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

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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.

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 on behalf of Vivos Holdings, Inc.

Interest 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.

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 June 30, 2021, the total outstanding balance was $ 2,767

which includes accrued interest receivable of

The actual funds (additional eligible interest and legal fees) sought

may be greater than what is represented herein per GAAP.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

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 September 30, 2021, the total outstanding balance was $ 2,767 which includes accrued interest receivable of $ 55 .

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

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 June 30, 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 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.

the loan consists of two periods, whereby the first period from November 15, 2017, until September 30, 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 September 30, 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 June 30, 2021, the total outstanding balance was $ 774 .

which includes accrued interest receivable of $ 15 .

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 September 30, 2021, the total outstanding balance was $ 774 .

which includes

accrued interest receivable of $ 15 .

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

7 unchanged sentences

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 June 30, 2021, the receivable totaled $ 4,372 .

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.

In addition, 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.

of June 30, 2021, the total outstanding balance was $ 780 .which includes interest of $ 12 .

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

summary, the Vivos Group 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 September 30, 2021, the receivable totaled

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

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.

In addition, 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 September 30,

2021, the total outstanding balance was $ 780,

which includes interest of $ 12 .

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

27 unchanged sentences

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 .

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 September 30, 2019.

The HCRN Credit Facility is still being repaid by Vivos Holdings, and as of October

29, 2019, had an outstanding balance of approximately $ 635 .

INCORPORATED AND SUBSIDIARY

7 unchanged sentences

of the shares of Company Common Stock pledged pursuant to the Liquidation Agreement.

So, on July 21, 2021, Maslow signed a settlement

agreement with Kinetic Direct Funding, LLC and Libertas Funding, LLC for $ 475 in order to remove MMG from the remaining obligation owed

by the Vivos Group which we were informed was $ 1,773.

So, on July 21, 2021, as explained in Note 7, Maslow

signed a settlement agreement with Kinetic Direct Funding, LLC and Libertas Funding, LLC for $ 475 in order to remove MMG from the remaining

obligation owed by the Vivos Group which we were informed was $ 1,773 .

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.

The anticipated arbitration process could have this matter settled in the first quarter 2022.

no assurance can be given how long it will take to enforce the requirements of the Liquidation Agreement.

Having made the payment may at some point present a liquidity issue for the Company.

Having made the payment may

at some point present a liquidity issue for the Company.

August 9 th , 2021, Reliability filed an additional claim in the Debt Collection Suit and Vivos Default Counterclaim in the

Circuit Court of Montgomery County, Maryland against Doki, Valleru, Pathuri, Janumpally, Igly, and Judos, that the Respondents breached

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

September 7, 2021, the Company entered in Arbitration and Tolling Agreements with alleged shareholder Naveen Doki, M.D., and his affiliates

and all other persons who were parties to the pending litigation previously reported in the Texas, New York and Maryland courts and before

the American Arbitration Association.

The Agreements call for the stay or dismissal of the pending litigation, with the parties agreeing

to resolve their disputes before a single arbitrator in Maryland.

The parties also agreed to maintain the status quo in corporate governance

and related matters pending a final non-appealable judgment confirming any award in arbitration.

The parties also signed a Tolling Agreement

to toll the statute of limitations following the dismissal of a pending litigation.

Party Relationships

12 unchanged sentences

The note bore interest at 12 % per year, with the balance of $ 56 paid in full on June 26,

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

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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.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

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 deposit.

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

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.

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 deposit.

reimbursement took place on May 8, 2020, totaling $ 83 .

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

14 unchanged sentences

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.

Convertible 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.

BUSINESS SEGMENTS

Company operates within four industry segments:

EOR, Recruiting and Staffing, Permanent Placements and Video and Multimedia Production.

EOR, Recruiting and Staffing, Permanent (Direct) Placements and Video and Multimedia

The EOR segment provides media field talent to a host of large corporate customers in all 50 states.

The Recruiting and Staffing segment

provides skilled media and IT field talent on a nationwide basis for customers in a myriad of industries.

Permanent Placements was added

as a segment this quarter as the Company took on clients who will have the Company source candidates for permanent hire on a regular

The Video and Multimedia Production segment provides Script to Screen services for corporate, government and non-profit clients,

The Recruiting and Staffing

segment provides skilled media and IT field talent on a nationwide basis for customers in a myriad of industries.

Permanent Placements

was added as a segment this quarter as the Company took on clients who will have the Company source candidates for permanent hire on

a regular basis.

The Video and Multimedia Production segment provides Script to Screen services for corporate, government and non-profit

clients, globally.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands, except per share data)

following table provides a reconciliation of revenue by reportable segment to consolidated results for the three months Ended June 30,

2021, and 2020, respectively:

SCHEDULE OF RECONCILIATION OF REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS

the three months ended June 30:

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

September 30, 2021, and 2020, respectively:

the three months ended September 30:

OF RECONCILIATION OF REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS

Recruiting and Staffing

1 unchanged sentence

Video and Multimedia Production

the six months ended June 30:

the Nine months ended September 30:

Recruiting and Staffing

2 unchanged sentences

SUBSEQUENT EVENTS

Company has evaluated subsequent events through August 15, 2021, the date on which the unaudited condensed consolidated financial statements

Company has evaluated subsequent events through November 15, 2021, the date on which the unaudited condensed consolidated financial statements

were available to be issued.

1 unchanged sentence

would require recognition in or disclosures in the accompanying unaudited condensed consolidated financial statements, except as follows:

July 21, 2021, Maslow entered into a settlement agreement with Libertas and Kinetic, which resulted in MMG paying both parties $ 475 ,

to settle the obligation which Vivos Holdings, LLC had committed MMG to, in July 2018.

The agreement which included $ 100 in legal fees,

released MMG from all claims judgements and obligations against MMG but did not release Naveen Doki, Silvija Valleru, Judos Trust, Igly

Trust, Srinivas Kalidindi, Shirisha Janumpally, Federal Systems, Kalyan Pathuri, US IT Solutions Inc., 360 IT Professionals Inc., Alliance

Vivos IT LLC, Vivos Global Holdings LLC, Vivos Acquisitions LLC, or Vivos Holdings.from the remaining obligation.

to Kinetic and Libertas the amount due before the settlement was $ 1,773 .

MMG became a debtor when Vivos Holdings had included MMG as

a signer on its confession of judgement in September 2018.

MMG will pursue enforcement of the aforementioned Liquidation Agreement, (See

Note 2) which was put into place prior to the Merger Agreement to shield the Company if the Vivos Group should default, which unbeknownst

to the Company had already transpired, prior to the merger closing.

However, upon default the Libertas notes reverted to their original

outstanding totals.

There were 4 total loans in the settlement, with the 3 domesticated judgements in Montgomery County circuit court

relating to MMG totaling $1,038.

MMG’s negotiated payment of $475 settles that portion of the Libertas debt.

9, 2021, Reliability filed an additional claim in the Debt Collection Suit and Vivos Default Counterclaim in the Circuit Court of Montgomery

County, Maryland against Doki, Valleru, Pathuri, Janumpally, Igly, and Judos, asserting that the Respondents breached the Merger Agreement

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

November 5, 2021, Congress passed H.R.

3684) infrastructure bill which terminated early the ERC program, making wages paid after

30, 2021, ineligible for the credit.

It is expected that monies the Company has been credited in the 4 th quarter

will reduce the 941 refund portions owed.

The Company awaits IRS guidance on how this will be handled, given the retroactive nature of

the legislation.

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