What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-04-01 compared with 2023-03-31 · 346 added, 322 removed, 134 unchanged (83% of the section changed)

19 unchanged sentences

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

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

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

financing to fund our business plan and expenses;

our continued inability to issue additional shares of equity securities;

negative outcome

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

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

weakness in general economic conditions

and levels of capital spending by customers in the industries we serve;

weakness or volatility in the financial and capital markets,

which may result in the postponement or cancellation of our customers’ projects or the inability of our customers to pay our fees;

ability to access the capital markets by pursuing additional debt and equity financing to fund our business plan and expenses;

our continued

inability to issue additional shares of equity securities;

negative outcome of pending and future claims and litigation and our ability

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

potential loss of clients and possible rejection of our business

model and/or sales methods;

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

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

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

delays or reductions in U.S.

government spending;

credit risks associated with our customers;

credit risks associated

with our customers;

competitive market pressures;

the availability

and cost of qualified labor;

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

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

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

the availability and cost of qualified labor;

our level of success in attracting, training

and retaining qualified management personnel and other staff employees;

changes in tax laws and other government regulations, including

the impact of health care reform laws and regulations;

the possibility of incurring liability for our business activities, including,

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

our performance on customer contracts;

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

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

We assume no obligation

to update such statements, whether as a result of new information, future events or otherwise, except as required by law.

readers to carefully review the entirety of this Annual Report, including the “Risk Factors” in Item 1A of this Annual Report

and the other reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly

our Quarterly Reports on Form 10-Q and our reports on Form 8-K.

and government policies, legislation

or judicial decisions adverse to our businesses.

Readers are cautioned not to place undue reliance on these forward-looking statements,

which speak only as of the date hereof.

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

events or otherwise, except as required by law.

We recommend readers to carefully review the entirety of this Annual Report, including

the “Risk Factors” in Item 1A of this Annual Report and the other reports and documents we file from time to time with the

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

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

8 unchanged sentences

financial information may not be indicative of our future performance.

was a challenging year for Reliability and our wholly owned operational entity Maslow Media Group.

Although our revenues declined by

$521 or 2.1% to 2021 and by 12% or $3,507 to 2020;

conversely though, our gross profits of $3,494 were $228 over 2021 and $20 over 2020’s

The more attractive gross profit on lower revenues is reflected by our ever-increasing gross margin which reached 13.6% in 2022

versus 12.4% in 2001 and 11.9% in 2020.

This was the fourth consecutive year that MMG’s gross margin percentage has increased and

represents an 8.7% compounded annual growth rate (CAGR) over the last three of those years.

consistent improvement of gross margins has been driven by renewal pricing increases, changes in volume discounts, billing for added

overhead, equipment rental price increases, and client mix in which a greater share of our business has shifted to more favorable company

time, effort and expense put into the arbitration proceedings (see section1) in the first half of 2022 detracted from officer focus on

sales, our strategic focus and thus distracted from our ability to fully drive stockholder value.

In the fourth quarter, MMG

made changes to the sales organization with the intent on driving more immediate new business.

The arbitration award has assisted the

Company in attracting many new additions to our corporate team.

These additions to our team will assist us in strengthening client relationships

while providing a better employee experience for our talent working in the field.

for Maslow EOR services has not recovered to pre-2020 COVID 19 (“COVID”) levels as the Media business was profoundly impacted

by the stay at home and vaccination mandates.

Maslow’s clients have been slower to return to full schedules even as federal, state

and local governments have lifted COVID-19 restrictions.

Some mask and vaccine mandates still impact the total number of MMG employees

assigned to our clients.

Consequently, our business has been slow to recover to 2019 levels when our revenues were $38,444.

quarter of 2020 our performance, compared to the same period in 2019 saw an increase of $500 with $8,801 to $8,301 despite a swoon in

the last two weeks of the quarter when stay at home orders from state and the Federal Government began taking effect.

addition to the impact of the pandemic, some of our larger clients have experienced internal reorganization, show cancellations, and

budget reductions that have impacted their utility of our services.

For instance, one client cancelled two nationally syndicated shows

that we had been staffing.

Regardless, COVID-19 and the response to the pandemic took its toll as the remaining three quarters MMG saw

quarterly 2020 declines of 46%, 38.5%, and 13.7% respectively compared to 2019, and ended up 2020 with $29,202 in revenue.

2021 we realized an additional decline of revenue down 10.1% from 2020 levels to $26,246.

Besides the slower return to work nature of

the media business, there was a mix of new and more active clients, and those who had large downward budget shifts.

final three quarters of revenue performance in 2021 were on par with 2020 with $20,452 realized over $20,401 in 2020, demonstrating the

strength of the 2020 first quarter that was abruptly halted by the pandemic.

So, in essence ¾ of 2021 revenue was on par with

However, most of MMG’s larger clients were slow to ramp back up, and we suffered steep long-term revenue declines due to

client attrition, internal reorganizations or budget cuts (i.e., Client A), an insourcing of their media needs, offshoring altogether,

or cut altogether This paradigm has not allowed for revenues to begin returning to pre-COVID-19 2019 levels.

The 6 largest attritted

customers represented a $4,385 loss of revenue in 2021 over 2020, with Client B accounting for another $1,204.

Client B had actually

eliminated certain programming resulting in an estimated $4,000 loss in 2021 annual revenue.

Client B’s 2021 to 2020 annual net

revenue decline wound up being $1,204 as they increased revenue activity by $2,796 in other areas of their business.

2022, MMG seemed poised to be on pace to beat 2021’s annual revenue total of $26,246, but an abrupt curtailment of staffing over

the holidays lasting approximately 2 weeks by five of our top 6 clients, resulted in a steep decline in revenue especially when compared

to the previous 2 years also making December of 2022 the lowest revenue month of 2022.

MMG revenues in December 2022 comparative to 2021

were down $1,401 or 46% and $1,169 or 41% to December 2020.

a result, annual revenue slipped by $521 to $25,725 compared to $26,246 in the year ending December 31, 2021.

despite the revenue decline in 2022 to 2021 year over year by 2%, MMG’s gross profit increased by $228 or 7% in the year ending

December 31, 2022, compared to a year ago, as our margins continue to ascend to new heights on the strength of our EOR business that

saw margins increase to 12% in the year ended December 31, 2022, from 9.8% in the year ended December 31, 2021.

Since EOR revenue in

2022 of $21,894 represents 85.1% of our overall revenue, this business segment clearly drove our company margin improvement.

improved EOR margins can be attributed to four factors, two within and two outside our control;

changes in pricing upon client renewals,

new pricing for equipment rentals, larger margin clients dominating the product mix, and greater use of W2 employees by our clients which

yield on average 1.2% higher margins.

It also helped that we maintained strong non-EOR margins at 22.3%.

Thus, our annual gross margin

percentage of 13.6% represented a fourth consecutive year of growth;

comparing 12.4% and 11.9% in 2021 and 2020 respectively and 10.6%

what could not be managed proportionately in 2021 was our SG&A which rose 23.3% to $4,400 as corporate non-operational costs, consisting

mostly of public company and legal costs added $1,451, which represented $548 of the $820 SG&A increase when comparing the year ending

December 31, 2022, to the same period in 2021.

Operationally SG&A at $2,949 was $285 over the $2,665 in SG&A spend in 2021.

far as cash is concerned, in 2022 our cash position remained strong due to our receiving $1,651 in Employee Retention Credits (ERC) from

the first quarter of 2021.

We are still due $1,174 from the second quarter 2021 that was filed via a 941X form and received by the IRS

in December 2021.

We accrued an additional $26 for interest using the IRS interest schedule.

working capital though has assumed repayment of Vivos Debtors which as of December 31, 2022, was $8,645.

Our adjusted working capital

excluding the $5,251 in Vivos Debtor notes is $3,394.

are investing in new technologies and bringing on additional staffing professionals to grow the staffing side of our business in 2023.

EOR has been the Company’s primary focus for a long time and 2023 brings a focus on growing our Direct Hire, Staffing & Recruiting

That said, our determination of what service to bring to each client depends on individual needs.

But when it comes to non-media

staffing, we certainly can focus more on IT and administrative opportunities with our existing customers while opening up new opportunities.

the Vivos Matter award has been settled the Company may contemplate moving forward with its original plans to increase outstanding shares

by authorizing new ones or via a reverse split to acquire synergistic staffing companies to grow more quickly.

The Company would also

like to move to the OTCQB and or OTCQX on its way to eventually being listed on the NASDAQ Exchange.

The Company continues to work towards

meeting all of the requirements to pursue up listing the OTC-QB or OTC-QX exchanges.

Once collection of the Vivos Debtors has taken place,

MMG may consider moving forward with this initiative.

2023 saw decreases in revenue by $4,274 and gross profits by $455 to those earned in 2022, our operating margin had a favorable variance

by $156 to 2022, as SG&A expenses were lowered by $611 to $3,788.

This resulted in a reduction in our operating loss of $749

compared to $906 in 2022.

With Other Income consisting of one-time nonoperational costs of $179 and state tax costs at $14, the

consolidated net loss landed on $740 which was $1 below 2022’s net loss of $739.

expected, two large clients combined for a steep decline of $3,583 that accounted for approximately 84% of our $4,274, or

16.6%, unfavorable revenue variance to 2022’s $25,725.

One lost sports programming to a competitor in a bid that

resulted in about $2,100 a year revenue loss for MMG.

The $21,451 in revenue in 2023 was also $4,795, or 17.2%, less

than our 2021 revenue total of $26,246.

profits did not dip quite proportionately, as lower costs of revenue resulted in 2023 gross profit of $3,039, $455 less than the $3,494

in gross profit earned in 2022 a 13% variance.

The 2023 gross profit of $3,039 is off the pace by $227, or 6.9%, of the $3,266

in gross profit produced in 2021.

profit margins (“GM”) however were up for the fifth year in a row reaching 14.2% in 2023 versus 13.6% in 2022 and 12.4% in

This represents a 7.6% compounded annual growth rate (CAGR) over the last four of those years.

consistent improvement of gross margins over the past four years was driven by several factors including contract extension price

increases, changes in volume discounts, billing for added overhead, our client mix where the change has been favorable to company terms,

and our service mix in which a greater share of our business has shifted to higher margin services.

But in 2023, the catalyst driving

the margin up 80 basis points is the performance of our Direct Hire business, which delivered $199 in revenue at a gross margin of 90.8%.

These were both highs since we began increasing our focus and volumes in this area of the business in 2021.

we did not have arbitration preparation and hearings in 2023 (see Note 1) absorbing our leadership’s focus as it did in 2022, the

progression of legal activities in finalizing the awards, including the petition for legal fees, which was honored, filing with the court

system, and dealing with the lawsuit related to the Vivos Group and Second Wind (See Item 1A), which was discovered too late to be included

in the arbitration proceedings, was still quite time consuming.

The time, effort, and expense put into these efforts detracted from officer

focus on sales, strategy, and our ability to fully drive stockholder value.

for Maslow EOR services has not recovered to pre-2020 COVID-19 (“COVID”) levels as the foundational Media clients businesses

were profoundly impacted by the stay at home and vaccination mandates.

Consequently,

our business has not only failed to recover to 2019 levels, our revenues declined over the past four years, as a myriad of events outside

our control took place, including conversions from our payroll to clients’ payroll, programming discontinued, media budgets curtailed for various reasons, or in one case a loss of a government contract which we subbed, because

our client failed to re-bid without notification.

Additionally,

we had just $356 in new client revenue in 2023, which was only marginally better than the $333 new client revenue produced in 2022.

did see an increase in the 2022 new client revenue in 2023 as it rose to $404, and one 2023 new client is among our top 25 revenue producers

Although these new clients have not produced large swaths of revenue over the past two years, they have the potential in the

future to be $500- to $1,000- a-year clients in that there are a few sizable news networks and trade organizations that we expect to see

staffing increases in 2024 and beyond (see below).

the revenue decline, MMG’s gross profit margins continue to increase year-over-year for the fifth straight year from 10.3% in 2018

to 14.2% in 2023.

This softened the gross profit variance from being as high as revenue and at $3,039 landing $455 off 2022’s $3,494

revenue decline of $4,066 made up 95.1% of the $4,274 variance between 2023 and 2022.

Our non-EOR revenue consisting of Contingent and

Direct Hire Staffing and Video Production tallied $3,623, which was $208, or 5.4%, off of revenues produced in 2022.

performance continued to flourish as a $100 increase, $199 from $99 in 2022, in direct hire revenues had the largest impact on triggering

gross margins reaching 14.2% for the year ending December 31, 2023.

Because this additional $100 created approximately $91 gross profit,

the 2023 company annual gross margins improved to 14.2%, otherwise it would have landed on 13.8%.

other contributor leading to a 20-basis point increase in gross margins was EOR, which reached an all-time high of 12.2% - a

twenty-point increase over 12.0% in 2022.

This was in stark contrast to the EOR gross margin average in 2021 of 9.8%.

what could be managed somewhat proportionately in 2023 was our SG&A, which decreased by $611, or 13.9%, enabling our operating income

to improve on 2022’s total by $156 to a loss of $749 versus $906 in 2022.

reduction drivers were lower salaries, taxes, and benefits (referred to as “Loaded salaries”), with operational loaded payroll

lower by $75, legal and other fees associated with the Vivos Matter down $434 from 2022, business insurance and commercial

legal down $46 and $39, respectively.

far as cash is concerned, in 2023 our cash position remained relatively strong due to our receiving $1,209 in Employee Retention Credits

(ERC) which was our final payment for this program.

This coupled with a new financing agreement with American Express (See Item 7:

and Capital Resources below) enabled MMG not only to accelerate cash that otherwise would not be

paid for approximately 90 days but allows for proceeds to immediately booked against the accounts receivable as opposed to crediting

factoring as short-term debt.

When compared with GAAP accounting for factoring, the difference is profound.

change resulted in our Current Ratio rising to 5.27 from 2.79, and our Quick ratio to 2.06 from 1.36, from 2023 to 2022, respectively.

working capital, which includes repayment of Vivos Debtors as of December 31, 2023, was $7,913 versus $8,645 on December 31, 2022.

Our adjusted working capital excluding the $5,501 in Vivos Debtor notes is $2,412.

late December 2023 in time for the first payroll of 2024, we formally transitioned our HR and Payroll solution from Paycom to ADP, a

more comprehensive and robust HR and Payroll solution.

This transition will allow us to provide cloud-based tools to our dispersed

employee population and our national clients providing them with a more seamless experience.

In addition, ADP’s tools will

automate processes that were previously manual and provide our corporate teams with an integrated Recruiting, Onboarding, Benefits,

Performance Management, Scheduling, Time Keeping, Payroll, and Manager and Employee self-service solutions to support clients

workforce management needs.

ADP’s reporting, predictive analytics, and proactive compliance features will allow our corporate

teams to foresee trends and make informed decisions to better partner with our clients.

We feel strongly after the implementation

pain has subsided, our ADP tech stack will add value and save immeasurable time for MMG, our employees, and our clients.

ADP’s Workforce

Now is just one of several reasonably priced innovative technologies we are investing in starting in 2024.

we had stated a year ago, we would bring on additional staffing professionals to grow the staffing side of our business, we only

progressed modestly.

Our business development with some rewards that were not realized during 2023 as a couple clients expected to

be top 10 revenue producers (revenue greater than $500 a year) not beginning staffing activities with us in 2023.

But in 2024, we

are beginning to see a ramp up in business from one customer who signed a $1,500 Statement of Work (“SOW”) with us at

the end of 2022 through 2025.

Additionally,

we are seeing improvements in our pipeline with new opportunities than we have ever had, and existing large clients giving us assurances

that their volumes will continue to increase at even more rapid levels in 2024.

We expect our Direct Hire business to grow in 2024 as

a number of existing clients took advantage of our expertise and speed of filling roles outside the Media space.

This success should

enable us to fill even more diverse functional openings in 2024 and beyond.

As we do the same for our other large clients, so should

our opportunity to increase our requisition volume and convert to fills and revenue.

has been the Company’s primary revenue source for many years, and it represented 83.1% in 2023.

Our challenge over the past four

years has been maintaining the large base of clients and employees post COVID as the Media functions in some large corporates especially

have cut back on media activities and personnel.

Despite lower payrolls for some, the challenge with EOR is the complexity of managing

HR and Payroll for a myriad group of clients who vary significantly in uniformity and have unique needs that absorb our staff’s

This client service intensity is somewhat unique to Media EOR than to other EOR providers due to the idiosyncratic ways that

employee time is scheduled, tracked, recorded, and managed.

This complexity is why we have added client service and HR personnel and technology

to best service our gold star clients.

our goal is to maintain and build on our legacy client foundational relationships while putting our foot on the proverbial gas pedal

to develop much more contingent contract staffing and direct hires.

And in doing so, our goal is to increase our staffing business by

supporting other functions outside of Media such as Administrative, Accounting and Finance, HR, and IT.

To that end, we will add two

more staffing-experienced sales representatives in the first half of 2024.

staffing is no longer a limited niche for certain companies and certain positions.

Virtual scenarios are also favored by Generation Z,

which values work-life balance as one of the most important factors when deciding on a company to work for.

Considering the perks that

remote working offers, and the keen interest shown by employees from different age groups, we believe that remote working will be prevalent

in 2023 and beyond.

This paradigm however should not adversely impact MMG, in that whether media jobs are filled virtually or not, MMG

has the pipeline of talent to fill these diversified roles.

we believe given the changing nature in specialized staffing there exists a greater opportunity to expand our EOR business as it offers

businesses of all types and industries, more flexibility in, on, and off boarding employees as well as managing 1099 risk.

As for media,

IT and finance and accounting staffing is concerned, we believe it will grow but there are also opportunities to get into staffing specialties

which represent areas where we see the most rebound or a robust demand.

While we will continue to focus on growing the contingent staffing

side of our business, our splash into Direct Hire staffing, has opened up a new avenue in business of diversified relationships (Media,

IT, and finance and administrative roles) that have strengthened our gross margins and has the potential to grow and flourish.

focus on traditional staffing has resulted in some early success in filling client Direct Hire needs, having added $167 in high margin

revenue in 2022.

focus reflects our desire to shift our portfolio toward a higher margin, higher value proposition.

a result, we have continued to move forward with our diversified offerings and future specialization staffing strategy, updating our

already expert operating model and organizing our business to maximize acquisition and retention of client accounts.

concern is the low probably of maintaining the National Football League’s (NFL) RedZone channel programming after this past season

ended in January 2023.

Client B, which had the rights to its own RedZone broadcast since 2005, lost those rights as a result of Google/YouTube’s $14

billion, 7-year deal for “Sunday Ticket” rights.

Consequently, the NFL will only offer the version of the “NFL RedZone”

channel produced by the NFL Network next season.

we staff other events for Client B, the loss of this programming could impact MMG between $2-$3M in annual revenue.

MMG will continue

to pursue other opportunities at Client B and the continued staffing of sports programming of this type.

is a national provider of employer of record, recruiting and staffing services, consisting of media and IT resources.

We provide services

to client primarily within the United States of America.

which values work-life balance as one of the most crucial factors when deciding on a company for which to work.

Considering the benefits

that remote working offers, and the keen interest shown by employees from different age groups, we believe that remote working will be

prevalent in 2024 and beyond.

This paradigm, however, should not adversely impact MMG, in that whether jobs are filled virtually or not,

MMG has the pipeline of talent to fill these diversified roles.

we still believe given the changing nature in specialized staffing, there exists a greater opportunity to expand our EOR business as it

offers businesses of all types and industries, more flexibility in on- and offboarding employees, as well as managing 1099 risk.

staffing outside of Media, we believe it will grow, but there are also opportunities to get into staffing specialties which represent

areas where we see the most rebound or a robust demand.

shift in focus to staffing will also have a positive impact on gross margins as we saw 19.3% gross margins in 2023 for Media personnel

and 23.1% for IT.

We expect blended rates to be in low 20s in the future, which with volume will continue our ascent in converting

a much higher percentage of our revenues to gross profit.

a result, we continued to move forward with our diversified offerings with an eye on our future specialization staffing strategy,

updating our already expert operating model, and organizing our business to maximize acquisition and retention of client accounts.

the Vivos Matter judgements are recovered, the Company may contemplate moving forward with its original plans to increase outstanding

shares by authorizing new ones or via a reverse split to acquire synergistic staffing companies to grow more quickly.

would also like to move to the OTCQB and/or OTCQX on its way to eventually being listed on the NASDAQ Exchange.

continues to work towards meeting all of the requirements to pursue listing the OTCQB or OTCQX exchanges.

Once collection of

the Vivos Debtors has taken place, MMG may consider moving forward with this initiative.

is a national provider of employer of record (EOR), recruiting and staffing services, consisting of media, IT, and administrative resources.

We provide services to client primarily within the United States of America.

services consist of:

7 unchanged sentences

Staffing covering a wide variety of specialties:

Currently Media and Information Technology (“IT”) encompass

most of our placements.

media, information technology (“IT”), accounting and finance,

HR, marketing, sales, and other administrative personnel.

and Multimedia Production:

1 unchanged sentence

including producers, audio engineers, editors, broadcasters, makeup artists, camera crews, Gaffers and grips, drone operators, and

Also referred to as Direct Hires, we strategically recruit and fill a variety of fulltime roles for our customers which is

only limited by our recruiting capabilities which are diversified.

Company’s subsidiary, The Maslow Media Group, Inc.

(“Maslow”) is currently the only operating entity for the business.

After our Merger in October 2019, non-operational expenses (e.g., public company fees, D&O insurance, investor relations, etc.) were

We strategically recruit and fill a variety of fulltime roles for our customers which is only limited by our recruiting capabilities

which are already quite diverse.

Company’s subsidiary, The Maslow Media Group, Inc., is currently the only operating entity for the business.

After our Merger in October 2019, nonoperational expenses (e.g., public company fees, D&O insurance, investor relations, etc.) were

assigned at the corporate level.

This enables a more pristine, focused view of the operational side of the business we refer to as Operational

Income Before Depreciation, Interest, and Amortization.

Income Before Interest, Taxes, Depreciation, and Amortization (OIBITDA).

OF OPERATIONS

had revenues totaling $25,725 in 2022, which was a 2% decrease over $26,246 in 2021.

The $521 decline can be attributed to several factors

including the slower return to normal work schedules for our media EOR and staffing customers from COVID-19 shutdowns and work from home

Maslow lost $4,529 to 10 accounts with declining revenues => $100, which mostly declines in revenue by Client E as they moved their

creative business to an overseas competitor and Client A, which scaled back and moved several EOR staff to the Client A payroll.

clients scaled back their media budgets.

we added $4,290 from 8 accounts that had => $100 in revenue in 2022 from 2021.

Client C stepped up their programs as did Client B,

and several others in the insurance, education, and healthcare space.

a revenue contribution standpoint our top 10 clients represented $22,940 which is 86.1% of 2022 revenues which is an increase in top

10 revenue reliance as in 2021 the top 10 represented 85.5%, or 21,628.

2020 saw a 78.4% top 10 reliance of revenue at $23,160.

in rebates were issued in December 2022 which was $2 less than a year ago when they were $33 in 2021.

had revenues totaling $21,451 in 2023, which was a $4,274 decrease (16.6%) from the $25,725 in revenue produced in 2022.

can be attributed to four predominantly EOR clients which curtailed revenue by $4,066 in 2023 when compared to same period ending December

clients simply scaled back their media budgets and/or converted and/or replaced our staff to and with their own.

we added $1,098 from 10 accounts that had equal or greater than $50 in revenue in 2023 from 2022.

Client C stepped up their programs

by 6.8% to approximately $5.4 million in revenue as did several other clients in the insurance, education, and healthcare space.

a revenue contribution standpoint, our top 10 clients represented $18,526 in revenue, which is 86.4% of our $21,451 in 2023

This is an increase in top 10 revenue reliance as in 2022 the top 10 represented 85.9%, as $22,095 came from $25,725 of revenue.

in rebates were issued in December 2023, which was $1 more than a year ago when they were $31 in 2022.

following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage

of revenues, and have been derived from our consolidated financial statements.

of revenues, and were derived from our consolidated financial statements.

Cost of services

4 unchanged sentences

Interest expense

Impairment of goodwill and intangibles

Other income (expense)

4 unchanged sentences

Video and Multimedia Production

Direct Hire (Formerly Permanent Placement)

Total Revenue

Employer of Record (EOR) Revenues :

represented 85.1% of our revenue in 2022 as opposed to 81.3% in 2021 and 80.8% in 2020.

The 2020 to 2022 EOR increase in revenue contribution

can be attributed to this business segment showing signs of returning to pre COVID-19 levels and a lack of growth in our Staffing, Video

Production, and Direct Hire performance.

Client A had the largest EOR revenue decline of any client at $1,427, which can be attributed

to a slate of employees moving from our payroll to Client A’s.

However, Client C and Client B increased their EOR revenue by a combined

This $451 revenue variance among the three clients makes up 78.7% of the year over year EOR revenue increase 2022 over 2021.

of Record (EOR) Revenues :

EOR represented 83.1% of our revenue in 2023 as opposed to 85.1% in 2022.

The change was driven more

by the EOR revenue decline by $4,066 than a shift to our other business segments.

However, those business segments saw a decline of $208,

or 4.9%, versus 18.7% for EOR 2023 to 2022.

Our number one revenue producer (Client C), which is an EOR client, increased its revenue

by $343 but clients A and B had a combined drop in revenue by ($3,583) due to converted employees, lost programming, and otherwise weaker

Two mid-sized clients communicated to us during the year their need to reduce their media budget as a needed cost savings measure,

dropping their 2023 revenues by $460 and $154, respectively, when compared to 2022.

and Staffing Revenues :

Staffing revenues declined by $145 or 4.2% to $3,468.

IT Staffing declined by $287 while our Media Staffing

division increased revenues by $1436 over its 2021 performance.

Thus, Media Staffing at $3,176 represented 12.3% of total 2022 annual

revenue, whereas it represented 11.6% of 2021 annual revenue and 6.5% of 2020 revenue.

The Media Staffing increase, however, was driven

to a degree by our reclassing staffing activities to Video Production clients after 2021.

We believe the approximate impact of this change

If we look at performance in that light, our Media Staffing declined by an equal amount to IT at $287 in the year ended December

31, 2022, to the same period a year ago.

One notable lost account was one which hired us to staff a government contract it elected not

This led to a $131 loss in 2022 revenue when compared to 2021.

Staffing revenues slid by $370, or 10.7%, to $3,098.

IT Staffing increased by $54, while our Media Staffing

division was down $424, or 13.3%, to our 2022 performance.

Media Staffing at $2,752 represented 12.8% of total 2023 annual revenue, whereas

it represented 12.3% of 2022 annual revenue.

The loss of two government agencies and a government contract as a sub, which it elected not

to rebid on, accounted for $384.

Outside of these account losses, our other 20 staffing clients, plus a new one, combined for

a year-over-year increase in Recruiting and Staffing revenue of $14.

and Multimedia Production Revenues :

Video Production, which includes managed services and project freelance work, was down sharply

in revenue in 2022, garnering $264 against $1,121 a year earlier.

However, if we factor the estimated $383 that was reclassed to Media

Staffing in 2022, the revenue would have been recorded as $648 and the decline to 2021 revenue would be $473 versus $856.

business was hurt by loss of a customer which provided $119 in revenue in 2021, and reduced demand for production activities by the U.S.

Environmental Protection Agency (EPA) and The US House of Representatives with the former revenues at $90 for year ending December 31,

2022, from $270 in same period 2021, and the latter down 19% from $457 in 2021 to $370 in 2022.

Video Production, which includes managed services and project freelance work, increased its

revenue in 2023 by $62 to $326 when compared to 2022’s $264.

Video Production represented 1.5% of 2023 revenue, a 50% improvement

in segment share when it represented 1% of revenue in 2022.

Gross profit represents revenues from services less cost of services expenses also referred to as Cost of Revenue (COR),

which consist of payroll, payroll taxes, benefits, payroll-related insurance, union benefits, field talent, recruiting software license

fees and reimbursable costs for out-of-pocket items.

Gross Profits rose in 2022 by $228 or 7% to $3,494 from $3,266 in the year ended December 31, 2021.

which consist of payroll, payroll taxes, benefits, payroll-related insurance, union benefits, field talent, allocation of recruiting

Software as a Service (“SaaS”), and reimbursable costs for out-of-pocket items.

Gross Profits in 2023 of $3,039 were short of 2022’s $3,494 by $455, a 13.0% negative variance.

gross margin is the percentage of revenue after cost of revenue (COR).

Gross margins increasing to 13.6% in 2022 from 12.4%

in 2021 was the catalyst of our gross profit growth.

This was the fourth consecutive year in which MMG has been able to increase its

gross margins, with the compounded annual growth rate (CAGR) of such increases being 7.2%.

Gross margins increased 60 basis points in 2023 to 14.2% from

13.6% in 2022.

The catalyst in 2023 was the $100 increase in our Direct Hire business which accounted for the 40-basis point difference.

EOR’s 20 basis point increase to 12.2 accounted for the remaining 20 points of the 60-point increase in 2023 from 2022.

the fifth consecutive year in which MMG was able to increase its gross margins, with the compounded annual growth rate (CAGR) of

such increases being 6.6%.

Since 2019, the CAGR is 7.6%.

margin improvement was driven entirely by our EOR margins increasing 2.2 points to 12% from 9.8% in 2021.

The only other business segment

margin improvement was Video Production moving to 23.7% from 19.4%, but this was because of exodus of account revenue to staffing described

with the overall impact not being significant because the Video Production contribution to revenue is only 1%.

margins which were 9.2% in 2020, have risen to 12% due to price changes to large clients at their contract renewal, a mix in client revenue

favoring those with higher contractual margins, increased use of higher margin W2 over 1099 workers, and equipment rental pricing change

which enabled our gross profits to increase by $51 making up 22% of our $228 gross profit improvement 2022 over 2021.

Media Staffing, however, saw its gross margins decline 2 points from 22.3% to 20.3% as a consequence of having taken on over $600 in Video

Production revenue at lower margins, and the roles being filled in 2022 having tighter margins.

IT Staffing also saw a decline to 21.4%

in 2022 from 26.9% in 2021.

But this was the result of far few resources being brought to bear at lower price points leading to margin

This paradigm can reverse itself as this business becomes revitalized.

EOR margins, which a year ago increased 0.2%, or 2.2 points, from 9.8% in 2021 to 12.0% in 2022, continued to remain strong at 12.2%

versus 12.0% in 2022.

margins, which were 9.2% in 2020 and 9.8% in 2021, rose 32.6% and 24.9%, respectively, due to price changes to several

clients at their contract renewal, a mix in client revenue, favoring those with higher contractual margins, increased use of higher

margin W2 over 1099 workers, and equipment rental pricing change which enabled our gross margins to flex.

margin performance climbed 1.5% to 23.9% from 22.4% when comparing 2023 to 2022.

However, Media Staffing was off 2022’s

20.3% GM to 2023’s 19.3% as the loss of one of the aforementioned clients alone prevented Staffing margins from reaching 20.6%

which otherwise would have exceeded 2022’s 20.3% performance.

Production and Direct Hire margins at 23.0% and 90.8% in 2023 were only slightly off 2022’s 23.5% and 90.9%, respectively.

General and Administrative Expenses (“SG&A”):

SG&A expenses increased $833 to $4,400 from $3,567

largely because of $605 in legal and other professional service fees associated with the Vivos Matter and Arbitration.

non-operational costs inclusive of the $605 were $1,451, were $548 greater in 2022 than in the same period ending December 31, 2021.

$343 of the $1,451 were public company related costs.

inclusive of commissions, payroll tax, and bonus rose $110 in the year ending December 31, 2022, compared to same period in 2021.

increases by department were driven by client service salaries up $55 as we added headcount and leadership to enable sales to focus on

customer acquisition solely.

Human resource (HR) department, which includes field support rose $19 and the executives by $35.

sales and marketing salaries were down by $32 and accounting and finance down $15.

Staff health benefits were up $81 due to rising premium

costs and because we had a large credit for unused portion of our 2020 subsidy booked in 2021.

only other notable variances were commercial legal were up by $46 in 2022 over 2021, mainly due to union negotiations, recruiting

software subscriptions up $35 and recruiting costs increasing by $32.

The greatest cost decrease was amortization, down $34

since there were no longer any intangible assets to amortize as the balance was written off entirely in 2021.

SG&A costs in 2022 were $2,949 which was $284 greater or 10.7% than the $2,665 operational SG&A costs in 2021.

The largest increase

in spend was on health benefits for all SG&A employees at $81.

Operational salaries (inclusive of payroll taxes, leave and bonus

only) were $24 higher in 2022 over 2021.

Interest income from related parties decreased by $42 from $274 to $232, as a result of last year’s accrued interest

income including adjustments to prior periods based on the proper default rates and dates.

Maslow earned an additional $23 mostly for

the delay in first quarter ERC receipts which were not paid until August 31, 2022, accrued another $3 for a miscalculation of interest

owed and $26 to cover the earned portion through December 31, 2022, for the second quarter 2021 ERC for $1,174 that we still await payment.

SG&A expenses decreased $611 to $3,788 in 2023 compared to

$4,400 in SG&A in 2022 largely because of lowering of legal and other professional service fees associated with the Vivos Matter

by $434, $440 when looking at commercial and Vivos Matter legal costs only;

while loaded salaries were $187 favorable to 2022, and liability

insurance was lowered by $46.

The loaded salaries reduction was driven by bonuses being lowered by $156, commissions by $46, and salaries

non-operational costs totaling $788 were $663, or 45.7%, favorable when compared to the same period ending December 31, 2022 when

they reached $1,451.

Corporate non-operational costs consist predominantly of public company costs as well as those related to the

Vivos Matter.

an MMG operational perspective, SG&A was up $51 in 2023 from 2022.

Salaries, inclusive of commissions, payroll tax, and bonus

rose $25 in the year ending December 31, 2023 compared to same period in 2022.

$75 of the increase were salary based alone as we

bolstered client services, sales, and HR personnel while making sacrifices elsewhere.

The salary increases by department were driven

by Client Service loaded salaries up $59 as we added headcount to focus on existing and new clients.

Our Human Resource (HR)

department which includes operational field support rose $48 through headcount growth.

Conversely, Sales and Marketing department

loaded salaries were favorable by $36 because commission payments were down by $63, accounting and finance down $5, and Video

Production loaded salaries reduced by $14.

nonwage and benefit costs savings were derived in commercial legal fees by $39, dues and subscriptions by $17, and depreciation and recruiting

software, each by $13.

staff health benefits were up $11 due to an increase in premium costs and accrued leave up $33.

The only other notable cost increases

in 2023 over 2022 were staff meetings by $31, necessitated by our virtual model;

marketing and promotion by $26, as investments were

made in digital marketing;

and contract services by $15.

Interest income from related parties increased by $37 from $232 to $269.

Maslow earned an additional $25 interest income;

$8 of which was federal interest received for the delay in receipt of the 2021 second quarter ERC which was not deposited until April

and $17 from the money market interest on mostly those very same funds.

Income (Expense):

Other income was $223 as the catalyst was the Company receiving $211 in additional ERC funds from our 941X

submission for the first quarter 2021, that we thought to be ineligible when it was filed.

In the year ending December 31, 2021, MMG

booked $9,681 in Other Income (Expense) as combined PPP loan forgiveness and ERC refunds minus $688 for writing down goodwill and remaining

intangible asset for IQS were aggregated.

Interest expense, increased $132 from $39 to $171 as our borrowing base was higher in 2022 versus 2021, our factoring

interest rate rose from 6% to 9.5% over the course of 2022, and last year our interest expense total included $35 in accrued PPP interest

Thus, the adjusted increase in cost variance interest in 2022 would be $97.

Income tax expense in 2022 was $170 compared to $984 a year ago for the year ending December 31, 2021.

Despite the Net

Loss of $739, taxes were posted for additional taxes owed the federal and state governments for 2021’s tax returns which were not

filed until mid-October 2022.

There were also penalties and interest charged on the late portion of what was owed the IRS.

In 2022, $223 was netted mainly from $211 in additional ERC funds from the IRS for our 941X submission for

the first quarter 2021, which we thought a portion to be ineligible when it was filed.

These earnings were eroded slightly by legal fees

associated with the SWC matter.

In 2023, the results are flipped by $402 as we accumulated only nonoperational costs, which were legal

fees for the SWC matter ($65), and for restructuring severance and related legal fees ($114).

Interest expense was the lowest it has been since 2016 at $92 in 2023 versus $171 in the year ending December 31, 2022.

This represents a $79 positive variance which was enabled by the ERC cash which in turn eliminated our need to factor (borrow) from

May until the end of December 2023.

Income tax expense in 2023 was $14 compared to $170 for the year ending December 31, 2022.

2023 taxes booked covered several

state income taxes which had minimum tax requirements.

AND CAPITAL RESOURCES

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an interest rate of prime plus 2%, with our prime floor rate at 4%.

As of December 31, 2022, 66.3% of our $5,750 in accounts receivable

was current compared to 70% out of $5,592 which was current in on December 31, 2021.

As of December 31, 2022, 21.2% is 1 to 30 days past

due compared to 17.9% a year ago, 11.6% between 31 and 60 days past due versus 4.7% in 2021, and 1% greater than 60 days versus 3.6%

at the end of 2021.

Additionally,

in April 2023, we entered into a Buyer Initiated Payment (“BIP”) agreement with American

Express (“Amex”) which enables MMG to be advanced 100% of purchase order approved invoices minus a flat interest rate percentage

that is based on that day’s submitted invoice volume.

The greater the volume the lower the interest rate charged.

a profoundly positive impact on our ability to accelerate cash conversion and lower DSO as well as our borrowing costs.

of December 31, 2023, 87.4% of our $2,993 in accounts receivable was current compared to 66.3% out of $5,750 which was current on

December 31, 2022.

As of December 31, 2023, 98.0% is current to 30 days past due compared to 87.5% a year ago, 0.9% between 31 and

60 days past due versus 11.6% in 2022, and 0.6% between 60 and 90 days versus 0.4% at the end of 2022, and 2023’s

0.5% for 90 days and greater past due which was on par for the portion greater than 90 days in 2022.

primary sources of liquidity are cash generated from operations via accounts receivable and borrowings under our Factoring Facility with

Gulf Bank (“Gulf”) enabling access to the 7% unfactored portion.

Because certain large clients have changed their payment

practices announcing 60- and 90-day terms amounting to a unilateral extension to contractual terms by 30-60 days, we can be adversely

impacted since TBC no longer provides credit if an account obligor pays more than 120 days after the invoice date.

primary uses of cash are for payments to field talent, corporate and staff employees, related payroll liabilities, operating expenses,

public company costs, including but not limited to general and professional liability and directors and officer’s liability insurance

premiums, legal fees, filing fees, auditor and accounting fees, stock transfer services, and board compensation;

followed by cash factoring

and other borrowing interest;

and debt payments.

we are an EOR with the majority of contracted talent paid as W-2 employees who are paid known amounts on a consistent schedule;

inflows do not typically align with these required payments, resulting in temporary cash challenges, which is why in the past we have

employed factoring.

Because we do also employ 1099 contracted firms and individuals with payments terms which vary from immediate to

30 days, our cash requirements can be quite variable.

Debtors as of December 31, 2022, had notes receivable totaling $5,251, including default on a $3,000 promissory note and on a $750 tax

obligation in December 2019.

Gulf Bank (“Gulf”), and Amex’s BIP, with the former enabling access to the 7% unfactored portion.

Because certain large

clients a few years ago changed their payment practices announcing 60- and 90-day terms amounting to a unilateral extension to contractual

terms by 30-60 days, we can be adversely impacted since Gulf no longer provides credit if an account obligor pays more than 120 days

after the invoice date.

However, since Gulf covers two of the companies that have moved to 90-day terms, it reduces that burden on us.

primary uses of cash are for payroll to field talent, corporate and staff employees, related payroll liabilities, operating expenses,

legal fees relating to the Vivos matter and the SWC lawsuit, public company costs, including but not limited to general and professional

liability and directors and officer’s liability insurance premiums, legal fees, filing fees, auditor and accounting fees, stock

transfer services, and board compensation;

followed by cash factoring, and BIP borrowing interest;

and cash taxes.

As of March 17, 2024,

we have no long-term debt payments.

we are an EOR with the majority of contracted talent paid as W-2 employees who are paid known amounts on a consistent schedule, our

cash inflows do not typically align with these required payments, resulting in temporary cash challenges, which is why in the past

we employed factoring.

Because we do also employ 1099 contracted firms and individuals with payments terms which vary from immediate

to 30 days, our cash requirements can be quite variable.

Debtors as of December 31, 2023 had notes receivable totaling $5,501, including default on a $3,000 promissory note and on a $750

tax obligation in December 2019.

was also anticipated that following the Merger, the Company would both access the capital markets by selling additional shares of Company

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No assurance can be given as to when this might take

the past three years MMG received eligible forgiven PPP Loan totaling $5,216, ERC cash of $3,501 out of eligible $4,676, which has bolstered

working capital enabling us to invest in software, build A/R reserves, and hire needed resources for operations.

of December 31, 2022, our working capital was $8,645 compared to $9,361 in 2021 and $5,970 at the end of 2020.

Once the $1,174 in ERC

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

anticipate approximately $350 in incremental SG&A costs in 2023 as we invest in growth as heads will be added for sales, recruiting

and marketing as well as a new system to improve lifecycle management of payroll and benefits for our clients.

We expect these incremental

costs to exceed the reduction in legal fees which in 2023 will not be nearly as intensive as they were in 2022 when we prepared and participated

in a multi week arbitration.

We also expect costs in service areas to be up based on inflation.

summary of our operating, investing and financing activities are shown in the following table:

April 2023, we received our final ERC payment of $1,209 as the ERC did help bolster our cash reserves over the past three years.

of December 31, 2023, our working capital was $7,913 compared to $8,645 on December 31, 2022 and $9,361 at the end of 2021.

due an additional approximate $138 for tax abatements that we negotiated with the IRS for the tax period 2016-2019.

2023, our 2022 10K stated we would be adding $350 to our SG&A for growth, and although we did begin the investments on personnel,

we did not begin implementing our new ADP Workforce Manager and Workforce Now Payroll and HRIS system as soon as

originally planned as it went live late December 2023.

Additionally, due to lower revenue than anticipated and the Vivos Matter not

settling as anticipated, certain initiatives were not pursued.

2024, we do anticipate approximately $350 in incremental SG&A, as we continue to invest for growth as heads will be added for sales,

recruiting, and human resources, as well as an expected increase in legal fees associated with the receiving process, liability insurance

based on improved D&O coverage, and payroll fees associated, and with ADP’s Workforce Now .

We also factored in price

increases due to inflation but at a lower rate than a year ago.

2023, a summary of our operating, investing, and financing activities is shown in the following table:

Net cash provided by (used in) operating activities

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payroll and expenses.

2022, net cash provided by operating activities was ($1,427), a decrease of $3,932 compared with $2,505 for 2021.

This decrease is primarily

attributable to net loss and decreases in accounts payable, accrued payroll, accrued expenses, and income tax payable.

The holiday season

impact on revenue also decreased the need for cash to pay 1099 and W2 workers.

2023, net cash provided by operating activities was $3,016, an increase of $4,443 compared to ($1,427) in 2022.

This increase is primarily

attributable to trade receivables providing $3,344 more in converted cash than 2022, while accrued payroll shrank comparatively by $304,

coupled with $505 less in cash accumulated for taxes in 2022 based on 2021’s net profit.

used in investing activities consists primarily of cash paid for capital expenditures.

used in financing activities in 2022 was $1,639 as compared to cash employed for same purpose totaling ($2,544) in 2021.

swing of (3,726) was due to operational cash deficiencies cited above due predominantly legal costs for arbitration and now recovery

of final award.

A year ago, MMG received ERC cash support in the third and portion of the fourth quarter until the policy change

led to our having to return $842 in January 2022.

For the year, Maslow borrowed $13,972 but repatriated $11,342.

Only laptops were purchased in 2022 and 2023.

used in financing activities in 2023 was ($2,412) as compared to cash employed for the same purpose totaling $1,639 in 2022.

borrowing was $10,204 and repayment of $6,085 less in 2023 than in 2022 as we repatriated all factoring cash by July 2023.

began borrowing again in late December 2023 and landed on $174 due to Gulf compared to $2,619 at the end of 2022.

SHEET ARRANGEMENTS

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Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties

and payment terms are identified, and collectability of consideration is probable.

are identified, payment terms are identified, and collectability of consideration is probable.

Payment terms vary by client and the services

derive our revenues from four segments:

EOR, Recruiting and Staffing (temporary), Direct Hire (Formerly referred to as Permanent

Placement) and Video and Multimedia Production.

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

amount that reflects the consideration we expect to be entitled to in exchange for those services.

Revenues as presented on the

consolidated statements of operations represent services rendered to client less variable consideration, such as sales adjustments

and allowances.

Reimbursements, including those related to out-of-pocket expenses, are also included in revenues, and equivalent

amounts of reimbursable expenses are included in cost of services.

EOR, Recruiting and Staffing (temporary), Direct Hire and Video and Multimedia Production.

are recognized when promised services are delivered to a client, in an amount that reflects the consideration we expect to be entitled

to in exchange for those services.

Revenues as presented on the consolidated statements of operations represent services rendered to

client less variable consideration, such as sales adjustments and allowances.

Reimbursements often related to out-of-pocket expenses,

and equipment leasing are also included in revenues, and equivalent amounts of reimbursable expenses and leased costs are included in

cost of services.

record revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses.

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as we have the right to payment in an amount that corresponds directly with the value of performance completed to date.

Hire (formerly referred to as Permanent Placement) revenue is recognized on the date the candidate’s full-time employment with

the customer has commenced.

The customer is invoiced on the start date, and the contract stipulates payment due under varying terms,

typically 90 days.

The contract with the customer stipulates a guarantee period whereby the Company will replace the candidate free

of charge if the employee is terminated within that 90-day period.

As such, the Company’s performance obligations are satisfied

upon commencement of employment, at which point control has transferred to the customer.

Hire revenue is recognized on the date the candidate’s full-time employment with the customer has commenced.

The customer is

invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days.

The contract with the

customer stipulates a guarantee period whereby the Company will replace the candidate free of charge if the employee is terminated

within the first 90-day period.

As such, the Company’s performance obligations are satisfied upon commencement of employment,

at which point control has transferred to the customer.

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

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No fees for Direct Hire services are charged to employment candidates.

and Multimedia Production revenues from contracts with clients are recognized in the amount to which we have a right to invoice when the

services are rendered by our field talent.

and Multimedia Production revenues from contracts with clients are recognized in the amount to which we have a right to invoice when

the services are rendered by our field talent.

ACCOUNTING PRONOUCEMENTS

2 unchanged sentences

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 7. Management’s Discussion and Analysis