What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-03-31 compared with 2022-03-31 · 293 added, 415 removed, 480 unchanged (60% of the section changed)

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Report of Independent Registered Public Accounting Firms PCAOB ID NO:

Audited Consolidated Financial Statements of Reliability,

Consolidated Financial Statements of Reliability, Inc.

Consolidated Balance Sheets as of December 31, 2022 and 2021

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have audited the accompanying consolidated balance sheets of Reliability Incorporated and Subsidiary (the “Company”) as of

December 31, 2021, and 2020, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the

years then ended, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated

December 31, 2022 and 2021, and the related consolidated statements of operations, changes stockholders’ equity, and cash flows

for the years then ended, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated

financial statements”).

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in conformity with accounting principles generally accepted in the United States of America.

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

in note 2 to the consolidated financial statements, the Company has experienced cash constraints and extended payment terms from its

customers, has been unable to negotiate payments due on its related party receivables which are currently in default, is currently unable

to access the capital markets, and believes the impact of the COVID 19 pandemic will continue to have a material impact on its business,

operations and cash flows.

These factors raise substantial doubt about its ability to continue as a going concern.

The consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

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Party Transactions and Recoverability of Notes Receivable from Related Parties

discussed in Notes 10 and 12 to the consolidated financial statements, the Company has significant related party transactions

and arrangements with the majority owners of the Company and other companies owned by the majority owners.

In addition to holding several

receivable agreements, including notes receivable with these related parties, the Company is currently involved in a lawsuit against

one of the majority owners and other companies owned by the majority owner.

determined the (1) evaluation of the identification of related parties, (2) related party transactions and (3)

collectability of notes receivable from related parties, collectively, as a critical audit matter.

Auditor judgement was involved

in assessing the sufficiency of the procedures performed to identify related parties, identify related party transactions and assess

the collectability of the notes receivable from related parties.

discussed in Notes 10 and 12 to the consolidated financial statements, the Company has significant related party transactions and arrangements

with the majority owners of the Company and other companies owned by the majority owners.

In addition to holding several receivable agreements,

including notes receivable with these related parties, in 2022, an arbitrator issued an aware in favor of the Company against one of

the majority owners and other companies owned by the majority owner.

determined the (1) evaluation of the identification of related parties, (2) related party transactions and (3) collectability of notes

receivable from related parties, collectively, as a critical audit matter.

Auditor judgement was involved in assessing the sufficiency

of the procedures performed to identify related parties, identify related party transactions and assess the collectability of the notes

receivable from related parties.

following are the primary procedures we performed to address this critical audit matter.

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Reviewed public filings, external news, and research sources for information related to transactions between the Company and related

Confirmed with the Company’s management and its outside counsel as to the status of the lawsuits.

Confirmed with the Company’s management and its outside counsel as to the award granted by the arbitrator.

have served as the Company’s auditor since 2009.

Ramirez Jimenez International CPAs

Jimenez International CPAs

AND SUBSIDIARY

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Property, plant and equipment, net

Other intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDER’S EQUITY

CURRENT LIABILITIES

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Total current liabilities

PPP loan payable

Total liabilities

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Subsequent events (Note 15)

STOCKHOLDERS’ EQUITY

STOCKHOLDER’S EQUITY

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of December 31, 2022 and 2021

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Retained earnings

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total stockholder’s equity

Total liabilities and stockholder’s equity

accompanying notes to consolidated financial statements are an integral part of these financial statements.

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Selling, general and administrative expenses

Operating income (loss)

Operating loss

Other income (expense):

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Other income (expense)

Income (loss) before income tax benefit / (expense)

Income tax benefit/(expense)

Income (loss) before income tax expense

Income tax expense

Consolidated net income (loss)

Less net (income) loss attributable to noncontrolling interest in consolidated affiliates

Net income (loss) attributable to Reliability Inc.

Net income per share:

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in thousands, except per share data)

Controlling Interest

Non - Controlling

Balance, January 1, 2021

Net income (loss)

Balance, December 31, 2021

Balance, value

Net income (loss)

Balance, December 31, 2022

Balance, value

accompanying notes to consolidated financial statements are an integral part of these financial statements.

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Depreciation and amortization

(Gain)/loss on disposal of property and equipment

(Gain) on disposal of property and equipment

Accrued interest

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Trade receivables

Retention credit

Retention credit receivable

Prepaid expenses and other current assets

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Income taxes payable

Net cash provided by (used in)

operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

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

Proceeds from long-term debt (PPP)

Repayment of notes

Repayment of notes payable

Advances to related parties

Repayment of long-term debt

Net cash used in

financing activities

Net (decrease) in cash and cash equivalents

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

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PPP loan and interest forgiveness

VIE net asset consolidated (unconsolidated)

VIE liabilities consolidated (unconsolidated)

accompanying notes to consolidated financial statements are an integral part of these financial statements.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

1 - NATURE OF OPERATIONS

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., (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 80.8 % of the revenue in 2021.

Our Staffing segment provides skilled field talent on a nationwide basis

for IT and finance and accounting client partner projects.

Our Staffing includes revenue derived from permanent placement.

Video Production

involves assembling and providing crews for special projects that can last anywhere from a week to 6 months.

is a workforce management solutions company that has for 30 years focused primarily on the media industry.

In servicing its clients,

Reliability provides a variety of staffing services which include employer of record, temporary media and information technology (“IT”)

staffing services, and direct hire.

Reliability operates, along with its wholly owned subsidiary, The Maslow Media Group, Inc., (collectively,

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

of Record (“EOR”), Recruiting and Staffing, Video and Multimedia Production resources, and Direct Hire.

EOR which is a unique

workforce management solution, represented 85.1 % of our revenue in 2022.

Our Staffing segment provides skilled field talent on a nationwide

basis for IT and finance and accounting client partner projects.

Video Production involves assembling and providing crews for special

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

In 2021, MMG began building its direct hire business as a separate business

segment originally titled permanent placement.

We now refer to this earning center as Direct Hire.

This division added $ 99 and $ 167 in

revenue and $ 89 and $ 164 in gross profit in 2022 and 2021 respectively.

October 29, 2019, Maslow Media Group (“Maslow” or “MMG”) became a wholly owned subsidiary of Reliability via

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IQS operates as a division of MMG.

2021 MMG began building its direct hire business as a separate business segment titled Permanent placement.

This division added $ 167

in revenue and $ 164 in gross profit in 2021.

2 - LIQUIDITY AND GOING CONCERN

the years ended December 31, 2021, and 2020, we had an operating loss of $ 301

respectively.

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;

in outcome of arbitration hearing with Vivos Group which will likely not have decision rendered until approximately the end of the

2 - MANAGEMENT’S PLAN

the Company has experienced operating losses in the years ended December 31, 2022 and 2021, of $ 906 and

respectively, management believes it has the ability to continue as a going concern and meet its financial obligation as they become

due in 2023 and beyond.

The factors impacting this view include, but are not limited to, the following:

flow forecast showing sufficient cash and working capital 52 weeks from March 5 th , 2023;

prospect of receiving the amounts awarded in the arbitration hearing in 2023, which include the $ 5,251 in notes receivable from related

parties, plus awards for fraud for $ 4,327 , contract damages of $ 1,000 , and additional interest, and legal fees, after the receiver

has been selected;

expected receipt of approximately $ 1,219 in the form of a retention credit receivable, with additional interest from the IRS for the

second quarter 2021;

loss of approximately $ 301 for the year ending December 31, 2021;

of $ 475 plus $ 3 in associated legal costs 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 but Vivos Group refuses to cooperate;

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

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 $ 5 M in notes receivables from Vivos Group;

liabilities, described further in Note 10

these conditions noted and factored in above with the prevailing risk being that the arbitration (see Item 1) outcome is not in the Company’s

favor, and the $ 4,985 in

notes receivable are not realized in full, part, or all, creates substantial doubt about the Company’s ability to continue

as a going concern.

Additionally,

from an operational view the underlying business has yet to fully recover from COVID-19 with 2021 quarterly comparative revenue levels

down as much as 47% from 2019 standards.

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 that might result from the outcome from these uncertainties.

expected reductions in continuing legal fees in 2023 given the Company is past the preparation and arbitration proceedings;

reduction of approximately $ 500 in federal and state tax payments made in 2022, based on

2021’s taxable earnings;

Addition of a new Vice President of Sales recently hired with experience

and success in managing contingent and direct hire staffing organizations;

Company has additional availability to use its factoring line to extend borrowing of up to 93 % of unfactored invoices which as of March

19, 2023, was $ 2,141 ;

As a result of the foregoing, the Company believes that it has sufficient cash to meet its financial obligations

for the next 12 months and beyond as they become due.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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of Presentation

Company’s consolidated financial statements reflect the financial position and operating results of Reliability, Inc.

Company’s consolidated financial statements reflect the financial position and operating results of Reliability, Inc., including

its wholly owned subsidiary, Maslow.

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Estimates are used for, but not limited to revenue recognition, allowances

for doubtful accounts, recoverability of notes receivable, goodwill and intangible assets, useful lives for depreciation and amortization,

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

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

valuation allowances for deferred income taxes.

Actual results may be materially different from those estimated.

In making its estimates, the Company considers the current economic

and legislative environment.

In making its estimates,

the Company considers the current economic and legislative environment.

and Cash Equivalents

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of Credit Risk

the year ended December 31, 2021, the Company’s top 10 clients generated over 85 % of the revenue.

A large portion of our business

comes from two clients, AT&T Services, Inc.

(inclusive of its DirecTV division) (“AT&T”) and Janssen Pharmaceuticals

(which includes workforce partners Johnson & Johnson).

AT&T accounted for 28 % and 29 % of revenue in 2021 and 2020, respectively.

AT&T comprised approximately 41 % and 49 % of the accounts receivable balance as of December 31, 2021, and 2020, respectively.

Pharmaceuticals (which includes workforce partners Johnson & Johnson) accounted for approximately 15 % and 11 % of our total revenues

for the years ended December 31, 2021, and 2020, respectively.

Janssen Pharmaceuticals comprised approximately 33 % and 18 % of accounts

receivable as of December 31, 2021, and 2020, respectively.

Morgan Stanley and Goldman Sachs receivables were 6.4 % and 5.5 % of receivables

respectively.

No other client exceeded 10% of revenues .

the year ended December 31, 2022, the Company’s top 10 clients generated over 86 %

of the revenue.

A sizable portion of our business tends to come from three or four clients.

In 2022, Client A (inclusive of its

Client B division) (“Client AA”), Client C, and Client D accounted for 58.8 % of total revenue.

Client AA accounted for 26.3 %

of revenue in 2022 and 2021, respectively.

Client AA comprised approximately 47.4 %

of the accounts receivable balance as of December 31, 2022 and 2021, respectively.

Client C delivered 19.6 % of revenue in 2022

compared to 14.9 % in 2021.

Client D accounted for approximately 12.9 %

of our total revenues for the years ended December 31, 2022 and 2021, respectively.

Client D comprised approximately 22.4 %

of accounts receivable as of December 31, 2022 and 2021, respectively.

other client exceeded 10% of revenues.

instruments, which potentially subject the Company to concentrations of credit risk, are primarily cash and accounts receivable.

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represent both trade receivables from customers in relation to fees for the Company’s services and unpaid amounts for benefit services

provided by third-party vendors, such as healthcare providers for which the Company records a receivable for funding until the payment

is received from the customer and a corresponding customer obligations liability until the Company disburses the balances to the vendors.

provided by third-party vendors, such as healthcare providers for which the company

records a receivable for funding until the payment is received from the customer and a corresponding customer obligations liability until

the Company disburses the balances to the vendors.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Company provides for an allowance for doubtful accounts by specifically identifying accounts with a risk of collectability and providing

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therefore an allowance for doubtful accounts is not provided for.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Company records accounts receivable when its right to consideration becomes unconditional.

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of December 31, 2022 and 2021, the Company’s deferred revenue totaled $ 176 .

respectively.

Value Measurements

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Inputs are classified into a three-tier hierarchy, summarized as follows:

Level 1 – Quoted

prices in active markets for identical assets or liabilities;

Level 2 – Quoted

prices in active markets for similar assets and liabilities and inputs that are observable for the assets or liabilities;

Level 3 – Significant

unobservable inputs for the assets or liabilities.

1 – Quoted prices in active markets for identical assets or liabilities;

2 – Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the assets or liabilities;

3 – Significant unobservable inputs for the assets or liabilities.

Level 1 inputs are not available, the Company measures fair value using valuation techniques that maximize the use of relevant observable

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to the Company that are comparable to current market rates.

The estimated fair value of the Company’s PPP loan payable approximated

its carrying value as the rate on this debt was determined by the U.S.

government which was offered to all participating companies under

the CARES Act.

It is not practicable to estimate the fair value of the notes receivable from related parties due to their related party

It is not practicable to estimate the fair value of the notes receivable

from related parties due to their related party nature.

and Equipment

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furniture, fixtures, and computer equipment — three to seven years;

leasehold improvements — over

the shorter of the estimated useful life of asset or the lease term .

Expenditures for renewals and betterments are capitalized whereas expenditures for repairs and maintenance are charged to income as incurred.

Upon sale or disposition of property and equipment, the difference between the unamortized cost and the proceeds is recorded as either

a gain or a loss.

Depreciation and amortization expense for the years ended December 31, 2021, and 2020 totaled $ 38

respectively.

leasehold improvements — over the shorter of the estimated

useful life of asset or the lease term .

Expenditures for renewals and betterments are capitalized whereas expenditures for repairs and

maintenance are charged to income as incurred.

Upon sale or disposition of property and equipment, the difference between the unamortized

cost and the proceeds is recorded as either a gain or a loss.

Depreciation and amortization expense for the years ended December 31,

2022 and 2021 totaled $ 32 and $ 72 , respectively.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Company reviews its long-lived assets, primarily fixed assets, intangible assets and goodwill, for impairment whenever events or changes

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the amount of $ 688 for goodwill and intangible assets in 2021.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Company held intangible assets with finite lives.

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useful lives, ranging from three to ten years, based on a pattern in which the economic benefit of the respective intangible asset is

For the years ended December 31, 2021, and 2020, amortization expense was $ 34

for both years prior to taking impairment on

the remaining intangible value.

For the year ended December 31, 2021, amortization expense was $ 34 prior to taking impairment on the remaining intangible value.

intangible assets recognized in conjunction with acquisitions are recorded at fair value.

Significant unobservable inputs are used to

Significant unobservable inputs were used to

determine the fair value of the identifiable intangible assets based on the income approach valuation model whereby the present worth

and anticipated future benefits of the identifiable intangible assets were discounted back to their net present value.

Company evaluates the recoverability of intangible assets whenever events or changes in circumstances indicate that an intangible asset’s

Company evaluated the recoverability of intangible assets whenever events or changes in circumstances indicate that an intangible asset’s

carrying amount may not be recoverable.

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the Company recorded a goodwill impairment adjustment of $ 518 upon finalizing the detailed step two impairment analysis for the IQS segment.

that led to a decrease in revenue ($ 2,000 ) in 2021 from 2020.

Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict

the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be

entitled to receive in exchange for those goods or services.

To achieve this core principle, five basic criteria must be met before revenue

can be recognized:

(1) identify the contract with a customer;

(2) identify the performance obligation(s) in the contract;

(3) determine

the transaction price;

(4) allocate the transaction price to performance obligation(s) in the contract;

and (5) recognize revenue when

or as the Company satisfies a performance obligation.

Company derives its revenues from three segments:

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The Company provides

temporary staffing and permanent placement services.

Revenues are recognized when promised services are delivered to client, in an amount

that reflects the consideration the Company expects to be entitled to in exchange for those services.

temporary staffing and Direct Hire services.

Revenues are recognized when promised services are delivered to the client, in an amount that

reflects the consideration the Company expects to be entitled to in exchange for those services.

Revenues as presented on the consolidated

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Reimbursements, including those

related to out-of-pocket expenses, are also included in revenues, and the related amounts of reimbursable expenses are included in cost

related to out-of-pocket

expenses, are also included in revenues, and the related amounts of reimbursable expenses are included in cost of revenue.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

staffing revenues - Field talent revenues from contracts with clients are recognized in the amount to which the Company has a right to

invoice when the services are rendered by the Company’s field talent.

placement staffing revenues - Permanent placement staffing revenues are recognized when employment candidates start their permanent employment.

The Company estimates the effect of permanent placement candidates who do not remain with its client through the guarantee period (generally

90 days) based on historical experience.

Hire staffing revenues - Direct Hire staffing revenues are recognized when employment candidates start their permanent employment.

Company estimates the effect of Direct Hire candidates who do not remain with its client through the guarantee period (generally 90 days)

based on historical experience.

Allowances, recorded as a liability, are established to estimate these losses.

Fees to client

are generally calculated as a percentage of the new worker’s annual compensation.

No fees for permanent placement services are

charged to employment candidates.

Fees to clients are generally

calculated as a percentage of the new worker’s annual compensation.

No fees for Direct Hire services are charged to employment

to Note 14 for disaggregated revenues by segment.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

terms in our contracts vary by the type and location of our client partner and the services offered.

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Company recognizes marketing and promotion expense in selling, general and administrative expenses as the services are incurred.

marketing and promotion expense for the years ended December 31, 2021, and 2020 was $ 23

respectively.

total marketing and promotion expense for the years ended December 31, 2022 and 2021 was $ 25

and $ 23 , respectively.

(Loss) Per Share

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Company accounts for income taxes utilizing the asset and liability method.

Under this method, deferred tax assets and liabilities are

determined based on differences between the financial statement carrying amounts of

assets and liabilities and their respective tax basis, and net operating loss and tax credit carry forwards, using enacted tax rates

and laws that are expected to be in effect when the differences reverse.

Under this method, deferred tax assets and liabilities

are determined based on differences between the financial statement carrying amounts of existing assets and liabilities and their

respective tax basis, and net operating loss and tax credit carry forwards, using enacted tax rates and laws that are expected to be

in effect when the differences reverse.

valuation allowance is recorded against deferred tax assets in these cases when management does not believe that the realization is more

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significant differences in actual results may materially affect the Company’s future financial results.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Company recognizes any uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon audit by

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Issued Accounting Pronouncements

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

July 2021, the FASB issued ASU No.

2021-05, Leases (Topic 842):

Lessors—Certain Leases with Variable Lease Payments.

issued to address the day-one loss issue related to a lessor’s accounting for certain leases with variable lease payments.

the update, a lessor will classify a lease with variable lease payments that do not depend on an index or a rate as operating if the

following two conditions are met:

the lease would be classified as sales-type or direct financing lease and doing so would result in

recognizing a selling loss.

Fixed lease payments will be recognized in income on a straight-line basis and any variable payments will

continue to be recognized when the changes in facts and circumstances on which those variable payments are based occur.

ASU 2021-05 if

effective for all companies in fiscal year starting after December 15, 2021.

Public companies are required to adopt this ASU in interim

periods during the fiscal year starting after December 15, 2021, which other entities will adopt in interim periods starting after December

Early adoption is permitted.

The Company is currently evaluating the impact on its consolidated financial statements and related

In October 2020, the FASB issued ASU No.

Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs.

This ASU provides more detailed

explanation on the subsequent measurement of callable debt and whether callable debt falls within the scope of paragraph 310-20-35-33.

ASU 2020-08 applies to all entities with callable debt and is effective for public business entities for fiscal years beginning after

December 15, 2020, with early adoption not permitted.

The Company’s adoption of this ASU did not have a material impact on its

consolidated financial position and results of operations for the year ending December 31, 2021.

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, 2021

December 2019, the FASB issued ASU No.

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retrospective or modified retrospective basis.

The adoption of the amendments did have a material impact on our consolidated financial

The adoption of the amendments did not have a material impact on our consolidated financial

position and results of operations as of and for the year ended December 31, 2022.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

January 2017, the FASB issued ASU No.

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in this update will be effective for the Company beginning with fiscal year 2023, with early adoption permitted.

The Company adopted

this during 2021 resulting in an impairment charge as stated in the financial statements.

The Company is currently

evaluating the impact on its consolidated financial statements and related disclosures.

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

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4 – TRADE RECEIVABLES

OF CONTRACT RECEIVABLES

Contract receivables consist of the following as of:

Contract receivables consist of the following as of December 31:

SUMMARY OF CONTRACT RECEIVABLES

Billed receivables

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of the net trade receivables are pledged as collateral on a loan agreement.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

5 – PROPERTY, PLANT AND EQUIPMENT

plant and equipment as of December 31, 2022 and 2021 consists of the following:

OF PROPERTY, PLANT AND EQUIPMENT

SUMMARY OF PROPERTY, PLANT AND EQUIPMENT

Office equipment

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Company acquired intangible assets as part of the IQS acquisition in 2019.

The Company recorded $ 518

of goodwill and $ 240

of intangibles from this acquisition.

fourth quarter of 2021, the Company determined through testing using guidance from ASU 2017-04 that the goodwill of $ 518

and remaining $ 170

in intangible assets made up of the IQS trade

name and customer base had been fully impaired and were written off.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

The Company recorded $ 518 of goodwill and $ 240 of intangibles

from this acquisition.

In the fourth quarter of 2021, the Company determined through testing using guidance from ASU 2017-04 that the

goodwill of $ 518 and remaining $ 170 in intangible assets made up of the IQS trade name and customer base had been fully impaired and

were written off.

7 - ACCRUED EXPENSES

expenses consist of the following as follows:

OF ACCRUED EXPENSES

SUMMARY OF ACCRUED EXPENSES

Accrued vendor costs

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Accrued expenses

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

8 - INCOME TAXES

tax expense (benefit) for the years ended December 31, 2022 and 2021 are comprised of the following:

OF INCOME TAX EXPENSE

SUMMARY OF INCOME TAX EXPENSE

Current federal income tax

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components of the Company’s deferred income tax assets (liabilities) are as follows at:

OF DEFERRED INCOME TAX ASSETS (LIABILITIES)

SUMMARY OF DEFERRED INCOME TAX ASSETS (LIABILITIES)

Deferred tax assets (liabilities):

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income tax provision, reconciled to the tax computed at the statutory federal rate, is as follows:

OF INCOME TAX PROVISION, RECONCILED TO TAX COMPUTED AT STATUTORY FEDERAL RATE

SCHEDULE OF INCOME TAX PROVISION, RECONCILED TO TAX COMPUTED AT STATUTORY FEDERAL RATE

Tax expense at federal statutory rate

State income taxes, net

Meals and entertainment

Permanent Differences

Forgiveness of PPP Loan - Federal

Effect of deferred rate change

Historical Adjustments

Valuation allowance

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AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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a C Corp due to its new ownership structure.

This triggered an accelerated tax event, a $ 215

estimated annual impact per year for 4 years

This triggered an accelerated tax event, a $ 215 estimated annual impact per year for 4 years

which was accounted for in subsequent tax returns through 2019.

In 2021 Maslow completed settlement of the estimated

tax liability caused by the Vivos Group in 2017,

paying the final estimated portion of $ 300

As of December 31, 2021, the Company’s overall

tax liability was $ 517

compared to $ 292

at the end of 2020.

Business Capital

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

Pursuant to the agreement, the Company 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

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

In 2021 Maslow completed settlement of the estimated $ 860 tax liability

caused by the Vivos Group in 2017, paying the final estimated portion of $ 300 in 2021.

As of December 31, 2022, the Company had a federal

tax balance of $ 1 compared to $ 284 at the end of 2021.

The state tax balance is $ 5 compared with $ 232 at the end of 2021.

Business Capital and Gulf Coast Bank and Trust

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

was amended in January 2020.

The current agreement has an advance rate of 15 basis points, and the interest rate is prime plus 2 %.

amount of an invoice eligible for sale to is 93%.

The agreement is on month-to-month terms.

August 24, 2022, we were notified by TBC that our factoring arrangement had been sold to Gulf Coast Bank and Trust (“Gulf”),

as TBC had decided to sell its non-transportation portfolio.

The transition took place between August 26 th and 28 th

with new financing coming from Gulf.

However, a portion of unfactored receivables continue to be sent to TBC who routes them

The Company 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

7 unchanged sentences

31, 2022 and 2021, respectively.

The total outstanding balance under the recourse contract was $ 946 and $ 2,999 as of December 31, 2021,

and 2020, respectively.

The total outstanding balance under the recourse contract was $ 2,619 and $ 946 as of December 31, 2022 and 2021, respectively.

Factoring Facility is collateralized by substantially all the assets of the Company.

1 unchanged sentence

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

Total finance line fees for the years ended December 31, 2021,

and 2020 totaled $ 71

respectively.

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

in principal and interest.

was booked as of June

10, 2021, which was the portion credited to interest expense.

Total finance line fees for the years ended December 31, 2022 and 2021 totaled $ 169 and $ 71 , respectively.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

10 unchanged sentences

Maslow leased this space on market terms.

This obligation had not been included in Maslow’s financial statements and were not separately disclosed prior to the Merger.

March 3, 2022, Maslow received a notice of default, acceleration, and demand for payment in full from FVCBank due to incurable

events of default on behalf of Borrower Vivos Real Estate Holdings LLC.

Per the default notice, “As of March 2, 2022, the

total indebtedness due and owing under the Loan (the ‘‘Debt’’) is $ 1,743 consisting

of an unpaid principal balance in the amount of $ 1,703 accrued

and unpaid interest in the amount of $ 7 ,

deferred payments in the amount of $ 20 and

late fees in the amount of $ 12 plus

prepayment penalties and attorneys’ fees, costs and expenses,” less setoff fees of $ 16 .

This obligation had not been included in Maslow’s consolidated financial statements and was not separately disclosed prior to the

March 3, 2022, Maslow received a notice of default, acceleration, and demand for payment in full from FVCBank due to incurable events

of default on behalf of Borrower VREH.

Per the default notice, “As of March 2, 2022, the total indebtedness due and owing under

the Loan (the ‘‘Debt’’) is $ 1,743 consisting of an unpaid principal balance in the amount of $ 1,703 accrued and

unpaid interest in the amount of $ 7 , deferred payments in the amount of $ 20 and late fees in the amount of $ 12 plus prepayment penalties

and attorneys’ fees, costs and expenses,” less setoff fees of $ 16 .

Maslow may have grounds to contest it being a guarantor

Maslow has not been formally notified of an obligation to pay Credit Cash due to a now known default on Vivos Group’s COJ.

October 9, 2018, Maslow Media Group, Inc.

was named as a defendant in an Affidavit of COJ filed in the Supreme Court of the State of

New York in relation to a case brought by Hop Capital against members of the Vivos group, which had collectively agreed to pay a sum

to HOP Capital.

Maslow Media Group, Inc.

as one defendant among six other defendants.

The claim brought by HOP Capital against the defendants in this case is in relation to a

Merchant Agreement dated October 4, 2018, to which Maslow Media Group, Inc.

was not a party.

As such, Maslow Media Group, Inc.

contends that being named in the Affidavit of COJ as a defendant was made in error and is currently seeking to have its name removed

from Affidavit of COJ as a defendant.

As of March 24, 2022, we have not been contacted again on this matter, nor have we been notified

on any developments.

February 28, 2020, Healthcare Resource Network, LLC filed a complaint against Maslow in the Circuit Court of Montgomery County, Maryland

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

The plaintiff has not specified any alleged

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

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

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

documents, via a March 2022 arbitration hearing which both parties agreed on September 7, 2021, to resolve their disputes before a single

arbitrator in Maryland.

The hearing began on March 21 and is set to conclude on March 30, 2022.

A decision isn’t anticipated

until sometime in the late second quarter.

At the present time,

the Company is uncertain as to whether any of the above items will have a material impact on their consolidated financial statements.

July 12, 2022, MMG was advised that a foreclosure sale of the 22 Baltimore Road property was scheduled to take place on August 4, 2022,

at Montgomery County Circuit Court in Rockville, Maryland.

It was subsequently cancelled after VREH filed for bankruptcy on August 2,

August 2, 2022, VREH filed for Chapter 11 bankruptcy in the District Court of Maryland.

has filed a Motion to Vacate Confessed Judgment entered against it by FVC Bank in the Circuit Court for Fairfax County.

November 17, 2022, FVC Bank and VREH entered into a Stipulation and Consent Order through the bankruptcy court that provides VREH to

pay back taxes and interest, hire a new property manager and make repairs to the building, and work on a plan to refinance or sell the

This automatic stay to the bankruptcy proceeding provides VREH until April 15 th , 2023, to either refinance or sell

the building to prevent FVC Bank from foreclosing on the property and commencing action to sell the property.

September 2022, MMG learned that Vivos IT, LLC filed a lawsuit against Second Wind Consultants (“SWC”) in May 2019 included

MMG as a plaintiff.

The lawsuit included claims of fraud in inducement and unjust enrichment against SWC.

The five parties suing SWC,

included Vivos LLC, The Maslow Media Group, Suresh Venkat Doki, Naveen Doki and Silvija Valleru.

The lawsuit related to a debt restructuring

services agreement secured by Suresh Doki, Naveen Doki and Silvija Valleru to assist the following then owned Vivos entities:

Media Group, Inc., Health Care Resources Network, Inc., Mettler & Michael, Inc., 360 IT Professionals, Inc.

and US IT Solutions,

SWC countersued all plaintiffs on September 30th, 2019, seeking to collect the balance of $ 402,500 not paid by the Vivos Group.

These suits were not disclosed to Maslow Management or to Reliability before the merger closed on October 29, 2019.

MMG is weighing its

legal options at this time.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

the present time, the Company is uncertain as to whether any of the above items will have a material impact on their consolidated financial

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

3 unchanged sentences

Purchase Agreement

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 ,

was paid at settlement with proceeds from MMG

and (ii) a promissory note to pay the remaining $ 350

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 , of which:

(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”).

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, 2019 .

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

The Vivos Debtors 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 and between 2018

to present there has been $ 2,503 in additional borrowing.

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, 2019 .

These payments

were paid by MMG on behalf of the Vivos Debtors.

The Vivos Debtors 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 and between 2018 to present there

has been $ 2,537 in additional borrowing.

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 minimum rate of interest which per Virginia statute is 8.0 %

on two of the three defaulted notes receivable below.

Per Code of Virginia the legal rate of interest shall be implied when there is

an obligation to pay interest and no express contract to pay interest at a specified rate.

However, it was determined that the two notes

had clauses capping the default interest at 4.5 % and 5.5 % respectively.

The rate adjustment for the allowed periods were made using the

eligible agreement rates.

Per Code of Virginia the legal rate of interest shall be implied when there is an obligation to pay interest

and no express contract to pay interest at a specified rate.

However, it was determined in 2021 that the two notes had clauses capping

the default interest at 4.5 % and 5.5 % respectively.

The rate adjustment for the allowed periods were made using the eligible agreement

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.

As defined by the Vivos/MMG Purchase Agreement, the loan consisted of two periods, whereby the first period

no principal or interest payments were required.

During the second loan period, interest was supposed to have been 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.

to the seller by MMG.

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.

As of December 31, 2022, the total outstanding balance

was $ 3,585 which includes accrued interest receivable of $ 168 .

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 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 loan period.

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 %

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 December

31, 2021, the total outstanding balance was $ 816

which includes accrued interest receivable of

There were two loan periods

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

of December 31, 2022, the total outstanding balance was $ 859 which includes accrued interest receivable of $ 46 .

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

5 unchanged sentences

Stock, and therefore is a related party.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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 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 December 31, 2021, the receivable totaled $ 4,985 .

the period between November 2016 and December 31, 2022, the Vivos Group borrowed an additional $ 2,537 .

which is included in the note

receivable totaling $ 3,585 .

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

2 unchanged sentences

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 the Vivos Group.

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 December 31, 2021, the total outstanding balance was $ 790 , which includes interest of $ 20 .

Upon an event of default, which has occurred, MMG has the right to declare the entire unpaid balance of the note due and payable.

The note was secured by 30,000,000

shares of Company Common Stock, was due and payable upon a default by Vivos.

In addition, both Naveen Doki and Silvija Valleru personally

guaranteed the repayment of the note by the Vivos Group.

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 December 31, 2022,

the total outstanding balance was $ 810 , which includes 2022 interest of $ 20 .

Settlement Agreements

2 unchanged sentences

(See Section 1A).

March 6, 2022, Maslow received a notice of default, acceleration, and demand for payment in full from FVCBank due to incurable

events of default on behalf of Borrower Vivos Real Estate Holdings LLC.

The $ 475 is included in the additional borrowing cited above.

March 6, 2022, Maslow received a notice of default, acceleration, and demand for payment-in-full from FVCBank due to incurable events

of default on behalf of Borrower Vivos Real Estate Holdings LLC.

(See Note 10).

4 unchanged sentences

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.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

12 unchanged sentences

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

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.

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.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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,

32 unchanged sentences

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

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

arbitration award was announced on August 31, 2022.

13 - EMPLOYEE BENEFIT PLAN

5 unchanged sentences

Company operates within four industry segments:

EOR, Recruiting and Staffing, Permanent Placement (Direct Hire) 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 Placement

fulfils direct hire requests by MMG clients for a wide variety of posts, including administrative, media and IT professionals.

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

EOR, Recruiting and Staffing, Direct Hire and Video and Multimedia Production.

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.

Direct Hire fulfils direct placement

requests by MMG clients for a wide variety of posts, including administrative, media and IT professionals.

The Video and Multimedia Production

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

operating income includes revenue and cost of services only.

1 unchanged sentence

costs at the segment level.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the periods

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

Recruiting and Staffing

Video and Multimedia Production

Permanent Placement

and Multimedia Production

15- SUBSEQUENT EVENTS

3 unchanged sentences

subsequent events have occurred that would require recognition in or disclosures in the accompanying consolidated financial statements.

except as follows:

March 6, 2022, Maslow received a notice of default, acceleration, and demand for payment in full from FVCBank due to

incurable events of default on behalf of Borrower Vivos Real Estate Holdings LLC.

Per the default notice, “As of March 2,

2022, the total indebtedness due and owing under the Loan (the ‘‘Debt’’) is $ 1,743 consisting

of an unpaid principal balance in the amount of $ 1,703 accrued

and unpaid interest in the amount of $ 7 ,

deferred payments in the amount of $ 20 and

late fees in the amount of $ 12 plus

prepayment penalties and attorneys’ fees, costs and expenses,” less setoff fees of $ 16 .

Notwithstanding, Maslow has grounds to protest its status as a guarantor on the loan and is pursuing this matter with FVCBank.

assurances can be made to guarantee that the outcome of this matter is in the Company’s favor.

March 21, 2022, the Company began its arbitration proceedings against the Vivos Group that is slated to run into the

2 nd quarter of 2022, with anticipation of a decision by July 7, 2022.

Maslow contends

the Vivos Group committed merger violations and continues to pursue the defaults on the related party notes receivable.

of the arbitration could result in relinquishment in whole or in part shares of Company common stock received by the Respondents in

connection with the Merger.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data