What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-04-01 compared with 2023-03-31 · 385 added, 458 removed, 315 unchanged (73% of the section changed)

1 unchanged sentence

Report of Independent Registered Public Accounting Firms PCAOB ID NO:

Consolidated Financial Statements of Reliability, Inc.

Consolidated Financial Statements of Reliability, Incorporated.

Consolidated Balance Sheets as of December 31, 2023 and 2022

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our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position

of the Company as of December 31, 2022 and 2021, and the results of their operations and their cash flows for the years then ended,

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

of the Company as of December 31, 2023 and 2022, and the results of their operations and their cash flows for the years then ended, in

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

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

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critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

were communicated or required to be communicated to the Audit Committee of the Board of Directors and that:

was communicated or required to be communicated to the Audit Committee of the Board of Directors and that:

(1) relate to accounts or

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on the accounts or disclosures to which they relate.

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, 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.

Recoverability

of Notes Receivable from Related Parties

discussed in Notes 9 and 11 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 award in favor of the

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

determined the recoverability of the related party notes receivable (recoverability of RP notes) as a critical audit matter.

judgment was involved in assessing the sufficiency of the procedures performed to assess the collectability of the notes receivable

from related parties.

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

We performed the following procedures to evaluate

the identification of related parties, related party transactions and the collectability of the notes receivable from related parties

by the Company:

Reviewed any new agreements and contracts between the Company and its related parties, noting none;

Queried the accounts payable system for transactions with its related parties;

Inspected director and officer questionnaires from the Company’s directors and officers;

Evaluated the Company’s reconciliation of its applicable accounts to the related parties’ records of transactions and balances;

Read the Company’s minutes from meetings of the Board of Directors and related committees;

Inquired with executive officers and key members of management as to the collectability of these balances due from related parties;

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 award granted by the arbitrator.

the recoverability of the RP notes by the Company:

Sent and inspected

questionnaires from the Company’s officers;

Evaluated and reviewed the

Company’s reconciliation of the notes receivable from related parties;

Read the Company’s minutes from meetings of the Board

of Directors;

Reviewed public filings, external news, and research sources

for information related to transactions between the Company and related parties;

Confirmed with the Company’s management and its outside

counsel as to the award granted by the arbitrator;

Reviewed management’s assessment of the collectability

of these balances due from related parties.

have served as the Company’s auditor since 2009.

Jimenez International CPAs

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

BALANCE SHEETS

(amounts in thousands, except per share data)

in thousands, except per share data)

CURRENT ASSETS

Cash and cash equivalents

Trade receivables, net of allowance for doubtful accounts

Trade receivables, net of allowance for credit losses

Retention credit receivable

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Total current assets

Other intangible assets, net

Property, plant and equipment, net

LIABILITIES AND STOCKHOLDER’S EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

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Income taxes payable

Other current liabilities

Total current liabilities

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Subsequent events (Note 14)

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

STOCKHOLDERS’ EQUITY

Common stock, without par value, 300,000,000

shares authorized, 300,000,000

issued and outstanding as of December 31, 2023 and 2022

Additional paid-in capital

Retained earnings

Total stockholder’s equity

Total liabilities and stockholder’s equity

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

STATEMENTS OF OPERATIONS

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Interest expense

Impairment of goodwill and other intangible assets

Other income (expense)

Income (loss) before income tax expense

Loss before income tax expense

Income tax expense

Consolidated net income (loss)

Net income per share:

Consolidated net loss

Net loss per share:

Share used in per share computation:

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

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

STATEMENTS OF CHANGE IN STOCKHOLDERS’ EQUITY

the year ended December 31, 2022 and 2021

the years ended December 31, 2023 and 2022

in thousands, except per share data)

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Balance, December 31, 2022

Balance, value

Net income (loss)

Balance, December 31, 2023

Balance, value

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

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

STATEMENTS OF CASH FLOWS

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Cash flows from operating activities:

Net income (loss)

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

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

Depreciation and amortization

(Gain) on disposal of property and equipment

Accrued interest

Loss on impairment of goodwill and other intangible assets

Gain on forgiveness of PPP loan payable and interest

Changes in operating assets and liabilities:

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Cash flows from financing activities:

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

Repayment of notes payable

Proceeds from the factoring facility

Repayments to the factoring facility

Advances to related parties

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

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

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

STATEMENT OF CASH FLOWS, continued

in thousands)

For the years ended December 31,

Supplemental disclosures of cash flow information:

Cash paid during the year for:

Supplemental disclosures of non-cash investing and financing activities:

PPP loan and interest forgiveness

the years ended December 31,

disclosures of cash flow information:

paid during the year for:

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

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

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1 - NATURE OF OPERATIONS

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

a reverse merger (the “Merger”).

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

Solutions, Inc.

IQS operates as a division of MMG.

Incorporated operates, along with its wholly owned subsidiary, The Maslow Media Group, Inc.

“Maslow”), (collectively, “Reliability” or the “Company”) as a workforce management solutions

MMG has for over 30 years focused primarily on the media industry.

That changed in late 2019 when MMG began providing

staffing services in the area of IT.

Now MMG fills roles in a variety of business functional areas, including administrative, IT,

accounting and finance, HR, and sales.

In servicing its clients, Reliability provides a variety of staffing services which include

employer of record, temporary staffing services, and direct hire, primarily within the United States of America in four industry

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

EOR, which is a unique workforce management solution, represented 83.1 %

of our revenue in 2023.

Our Staffing segment provides skilled field talent on a nationwide basis for client partner projects.

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

2021, MMG began building its direct hire business as a separate business segment, which added $ 199

in revenue and $ 181

in gross profit in 2023 and 2022 respectively.

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 Company has experienced net losses before taxes in the years ended December 31, 2023 and 2022 of $ 726 and $ 569 , respectively,

management believes it has the ability to continue as a going concern and meet its financial obligation as they become due in 2024 and

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;

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

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

flow forecast showing sufficient cash and working capital 52 weeks from April 1, 2024;

expected reductions in continuing legal fees in 2024 given the Company has collectible judgments which the Receiver is now eligible

expectation that the notes receivable from related parties will be renumerated in cash and or stock and that stock will provide capital

market access;

progress in sales, newer agreements that will begin fulfillment, and current larger clients who have indicated increases in media

activity for 2024;

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

March 11, 2024, was $ 2,623 .

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.

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

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

its wholly owned subsidiary, Maslow.

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

wholly owned subsidiary, MMG.

All intercompany transactions and balances have been eliminated in consolidation.

Company’s fiscal year is from January 1 st through December 31 st .

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

consolidated financial statements and related disclosures are prepared in conformity with United States (“U.S.”) generally

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

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.

for credit losses, and recoverability of notes.

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

and Cash Equivalents

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% 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.

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

In 2023, Clients C, D, and F

accounted for 49.5 %

of the revenue.

Only Clients C and D accounted for 10% or more of the revenue with the two totaling 25.1 %

respectively, or 40.3 %

Comparatively, for the year ended December 31, 2022, Clients A, B, C, and D, all of which contributed 10% or more of the

revenue, accounted for a combined 58.8 %

with Client C leading again with 19.6 %.

From an accounts receivable perspective, on December 31, 2023, we had three clients whose balances represented 10% or greater than

the total balance of $ 2,993 .

Clients D, C, and A had 42.2 %, 19.9 %

and 12.3 %, respectively,

of the accounts receivable balance, aggregating to 74.4 %.

other client exceeded 10% of revenues .

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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.

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

an estimate of the loss exposure.

Management considers all contract receivables as of December 31, 2022 and 2021 to be fully collectible,

therefore an allowance for doubtful accounts is not provided for.

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.

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

estimate of the loss exposure.

Management considers all contract receivables as of December 31, 2023 and 2022 to be fully

collectible, therefore an allowance for credit losses is not provided for.

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

Contract assets primarily relate to the Company

rights to consideration for services provided that they are conditional on satisfaction of future performance obligations.

Contract assets primarily relate to the

Company’s rights to consideration for services provided that they are conditional on satisfaction of future performance

Company holds customer deposits of certain customers related to its EOR business to minimize cash flow impact and reduces risks of uncollectible

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Company records contract liabilities (deferred revenue) when payments are made or due prior to the related performance obligations being

The current portion of the Company contract liabilities is included in accrued liabilities in its consolidated balance sheets.

The Company does not have any material contract assets or long-term contract liabilities.

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

of December 31, 2023, the Company’s deferred revenue totaled $ 206 , whereas it was $ 176 at the end of 2022.

Value Measurements

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Company measures fair value based on the price that the Company would receive upon selling an asset or pay to transfer a liability in

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2023 and 2022 totaled $ 18 and $ 32 , 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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future cash flows in its assessment of whether or not long-lived assets have been impaired.

The Company recorded an impairment loss in

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

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

carrying amount may not be recoverable.

The Company annually evaluates the remaining useful lives of all intangible assets and goodwill

to determine whether events and circumstances warrant a revision to the remaining period of amortization.

The Company determined that

there was impairment needed for these assets during the year ended December 31, 2021, and thus impaired $ 170 in remaining carrying value

of IQS based intangible assets.

represents the difference between the enterprise value/cash paid less the fair value of all recognized net asset fair values including

identifiable intangible asset values in a business combination.

The Company reviews goodwill for impairment annually during the fourth

quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.

Based on annual

testing, the Company has determined that there was goodwill impairment during the year ended December 31, 2021.

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

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:

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

The Company provides

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

statements of operations represent services rendered to clients, less sales adjustments and allowances.

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 of revenue.

AND SUBSIDIARY

INCORPORATED 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.

Company recognizes revenue in accordance with Accounting Standards Codification (“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;

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 four segments:

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

Direct Hire is within the Recruiting and Staffing domain, we consider it as a separate business segment.

The Company provides 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 statements

of operations represent services rendered to clients, less sales adjustments and allowances.

Reimbursements, including those related

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

are included in cost of revenue.

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

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

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.

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.

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There were no revenues

recognized during years ended December 31, 2022 and 2021 related to performance obligations satisfied or partially satisfied in previous

recognized during the years ended December 31, 2023 and 2022 related to performance obligations satisfied or partially satisfied in previous

There are no contract costs capitalized.

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

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

and $ 23 , respectively.

marketing and promotion expenses for the years ended December 31, 2023 and 2022 as $ 39 and $ 25 , 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 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.

Under this method, deferred tax assets and liabilities are

determined based on differences between the financial statement carrying amounts of

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

the relevant taxing authority.

An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being

The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

As of December 31, 2022 and 2021, the Company did not record any accruals for interest and penalties.

The Company does not foresee material

changes to its uncertain tax positions within the next twelve months.

The Company’s tax years are subject to examination for 2019

and forward for U.S.

Federal tax purposes and for 2018 and forward for state tax purposes.

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

by the relevant taxing authority.

An uncertain income tax position will not be recognized if it has less

than a 50% likelihood of being sustained.

The Company’s policy is to recognize interest and/or penalties related to

income tax matters in income tax expense.

As of December 31, 2023 and 2022, the Company did not record any accruals for interest and

The Company does not foresee material changes to its uncertain tax positions within the next twelve months.

Company’s tax years are subject to examination for 2021 and forward for U.S.

Federal tax purposes and for 2020 and forward for

state tax purposes.

Issued Accounting Pronouncements

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13,

Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments , which significantly

changes how entities measure credit losses for most financial assets and certain other instruments.

ASU 2016-13 introduces a new model

for recognizing credit losses, known as the current expected credit loss (CECL) model, which is based on expected losses rather than

incurred losses.

Under the CECL model, entities will be required to estimate all expected credit losses over the life of the asset.

update applies to all entities holding financial assets and net investment in leases that are not accounted for at fair value through

This ASU is effective for public business entities classified as smaller reporting companies for fiscal years beginning after

December 15, 2022.

The Company adopted the amendments during the current year and the adoption did not have a material impact on its

consolidated financial statements and disclosures.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

ASU enhances the disclosures related to segment reporting for public entities.

It requires entities to disclose significant segment expenses

for each reportable segment, providing greater transparency in segment performance.

The ASU is effective for fiscal years beginning after

December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

is currently evaluating how this ASU will impact its consolidated financial statements and disclosures.

December 2019, the FASB issued ASU No.

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enactment date.

The amendments in this update will be effective for us beginning with fiscal year 2022, with early adoption permitted.

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

retrospective or modified retrospective basis.

The adoption of the amendments 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.

January 2017, the FASB issued ASU No.

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

Simplifying the Test for Goodwill

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

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

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

Instead, under the amendments

in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting

unit with its carrying amount.

The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount

to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

The amendments

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

The Company is currently

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

The amendments in this update were effective for us beginning with fiscal year 2022, with early adoption permitted.

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

or modified retrospective basis.

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

and results of operations as of and for the year ended December 31, 2023.

December 14, 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09).

The ASU focuses on income tax disclosures around effective

tax rates and cash income taxes paid.

ASU 2023-09 largely follows the proposed ASU issued earlier in 2023 with several important

modifications and clarifications discussed below.

ASU 2023-09 is effective for public business entities for annual periods beginning

15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later.

Entities should

adopt this guidance on a prospective basis, though retrospective application is permitted.

The Company is currently evaluating how

this ASU will impact its consolidated financial statements and disclosures.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

1 unchanged sentence

4 – TRADE RECEIVABLES

Contract receivables consist of the following as of December 31:

SUMMARY OF CONTRACT RECEIVABLES

Billed receivables

receivables for the years ended December 31, 2023 and 2022 consist of the following:

SCHEDULE OF CONTRACT RECEIVABLES

Accounts receivable, unfactored

Unbilled receivables

Accounts receivable, factored

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

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

5 – PROPERTY, PLANT AND EQUIPMENT

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

plant and equipment for the years ended December 31, 2023 and 2022 consist of the following:

SUMMARY OF PROPERTY, PLANT AND EQUIPMENT

1 unchanged sentence

Computer software

Operating lease asset

Property, plant and equipment, gross

1 unchanged sentence

Property, plant and equipment, net

6 – GOODWILL AND OTHER INTANGIBLE ASSETS

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.

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.

6 - ACCRUED EXPENSES

expenses consist of the following as follows:

expenses for the years ended December 31, 2023 and 2022 consist of the following:

SUMMARY OF ACCRUED EXPENSES

2 unchanged sentences

Accrued expenses

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

7 - INCOME TAXES

5 unchanged sentences

Income tax expense (benefit)

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

16 unchanged sentences

Permanent Differences

Forgiveness of PPP Loan - Federal

Effect of deferred rate change

2 unchanged sentences

Income tax expense

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

a C Corp due to its new ownership structure.

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

which was accounted for in subsequent tax returns through 2019.

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

has settled its past tax liabilities that began in 2017 and has approximately $ 138 in credits held by the IRS for negotiated abatements

for additional interest and penalties MMG should not have been assessed.

This total is included in our prepaid expense balance of $ 442 .

Coast Bank and Trust

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

1 unchanged sentence

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%.

amount of an invoice eligible for sale 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.

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.

The Company continues to be obligated to meet certain

financial covenants in respect to invoicing and reserve account balance.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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, 2023 and 2022, respectively.

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

Repayments totaled $ 6,214 and $ 12,299 for the years ending December 31, 2023 and 2022, respectively.

Thus, the total outstanding balance under the recourse contract was $ 174 and $ 2,619 as of December 31, 2023 and 2022, respectively.

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

In the event of a default, the Factor may demand

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

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

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

In the event of a default, the Factor may

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

Total finance line fees for the years ended December

31, 2023 and 2022 totaled $ 92 a nd

respectively.

9 – COMMITMENTS AND CONTINGENCIES

are a number of debts and confessions of judgement (“COJ”) related to the Vivos Group that included Maslow as a co-signer

or guarantor at some stage in the Vivos Group debt process from November 2016 through October 29, 2019, when Vivos Holdings LLC owned

All known debts disclosed to Maslow management and Reliability prior to the merger were addressed by various safeguards such

as the Liquidation Agreement, and the Naveen Doki personal guarantee described in Item 1.

However, there were certain non-disclosures

by Vivos Holdings, LLC that are included below which are completely covered in Note 12 and Item 3 Legal Proceedings.

December 2019, the Company’s executive management learned that prior to the Merger, in January 2018, one of the Company’s

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

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

Maslow leased this space on market terms.

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

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

time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.

However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise from time to time

that may harm our business.

Except as set forth below, we are not aware of any such legal proceedings or claims against the Company.

series of legal actions and hearings took place starting in March of 2020 with the Vivos Group over Merger agreement violations and Vivos

Group debt obligations.

Arbitration was agreed to in the fall of 2021 by both the Vivos Group and MMG with the proceedings commencing

in February 2022.

August 31, 2022, the arbitrator issued the Award with the Company and MMG prevailing on their claims.

The awards included citing of fraud

Supplemental awards were subsequently issued on May 17, 2023, October 10, 2023, and finally on October 27, 2023.

MMG was awarded the totals of all notes the Vivos Group had with MMG for its borrowings, the contracted interest, attorneys’ fees

and expenses of $ 1,209,

and a contract damage of $ 1,000

to be satisfied by the transfer of their shares

of the Company Common Stock to the Company equal in value to $ 1,000 .

The aggregate amount of the Awards totaled $ 7,710 .

May 17, 2023 award also appointed a Receiver whose primary function is to collect the contract and fraud damages, including costs, expenses,

and fees provided in the awards.

December 29, 2023, the Circuit Court for Montgomery County, Maryland signed orders entering all three arbitration awards as judgments

in Reliability’s case against the Vivos Group.

These orders became final on January 29, 2024, when the appeal period expired for

the defendants.

The judgments are good for 12 years and can be enrolled in other states.

Reliability has collectible judgments which

the Receiver is now eligible to pursue.

September 2022, MMG learned that a Vivos IT, LLC lawsuit against SWC in May 2019 included MMG as a plaintiff.

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:

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

Inc., and US IT Solutions, Inc.

SWC countersued all plaintiffs on September 30, 2019 seeking to collect the balance of $ 403

not paid by the Vivos Group.

This was not disclosed to Maslow management or to Reliability before the Merger which closed on October

Maslow’s counsel filed a motion to include all original parties to the SWC agreement, as two of the original parties

were not in the original filings.

SWC filed a motion for summary judgement and Maslow responded on March 18, 2024 opposing the

the present time, the Company is uncertain as to whether the above item will have a material impact on their consolidated financial statements.

INCORPORATED AND SUBSIDIARY

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.

All authorized shares of

Company common stock are issued and outstanding.

Company’s authorized capital stock consists of 300,000,000

shares of common stock with no

All authorized shares of Company Common Stock are issued and outstanding.

11 - RELATED PARTY TRANSACTIONS

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 , 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”).

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.

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 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 .

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 .

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.

Doki, pursuant to which Dr.

Naveen Doki personally guaranteed

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

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

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

Stock, and therefore is a related party.

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.

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

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

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

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

Upon an event of default, which 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 .

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 $ 1,400

was paid at settlement with proceeds from MMG.

The Vivos Debtors subsequently entered into a promissory note receivable with MMG for the full stock purchase price.

No payment has ever

been made against this note and between 2018 to present and there has been $ 2,503

in additional borrowings.

Party Notes Receivable

Company has several notes receivable from related parties.

Prior to the Merger, Vivos Holdings collaborated on a share swap of Maslow

for other Vivos companies with individuals who included, but were not limited to, Dr.

Doki, Shirisha Janumpally (“Mrs.

Janumpally”),

Doki, Kalyan Pathuri (“Mr.

Pathuri”) husband of Silvija Valleru, Igly Trust, and Judos Trust.

These parties

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

Vivos Real Estate Holdings, LLC (“VREH”),

Vivos Holdings, Inc., Vivos Group, Vivos Acquisitions, LLC., and Federal Systems, LLC], which are collectively referred to as the “Vivos

table below is a summary of Vivos Group related party notes receivable which as of December 31, 2023 total $ 5,501 .

OF RELATED PARTY NOTES RECEIVABLE

Note Description

Acquisition Loan to Vivos, LLC

Interco Loan to Vivos Real Estate, LLC

Total Notes Receivable

Origination date

November 9, 2016

November 15, 2017

September 15, 2019

Original borrowed amount

Balance on December 31, 2021

Additional borrowings

Accrued interest

Balance on December 31, 2022

Accrued interest

Balance on December 31, 2023

Settlement Agreements

1 unchanged sentence

and Kinetic for $ 475 .

(See Section 1A).

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).

The $ 475 is included in the additional borrowings represented above.

June 2023, VREH was able to sell the property at 22 Baltimore Road, in Rockville, Maryland, leaving Maslow with no liability with

respect to the building that MMG had been signed as a guarantor without management’s knowledge in 2017.

The Company may be

entitled to cash in the amount of up to $90 as a result of the bankruptcy proceedings and sale of the building.

Such an amount would

reduce Vivos debt to MMG by that amount.

As of March 21, 2024, MMG has not learned of any proceeds granted by the court.

Party Relationships

October 29, 2019, prior to the Merger, pursuant to the Merger Agreement, Naveen Doki and Silvija Valleru became beneficial owners of

206,606,528 and 51,652,908 shares of RLBY Common Stock, respectively, equal to 68.9 % and 17.2 % of the total number of shares of RLBY

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

The Company is seeking damages which if granted will likely

be the remedy set forth within the Merger Agreement which is primarily the relinquishment in whole or in part shares of Company Common

Stock received by the Respondents in connection with the Merger.

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

and controlled by Mark Speck (“Mr.

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

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

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

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

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

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

Speck, the Company issued to this individual

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

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

The note bore interest at 12 % per year, with balance of $ 56 paid in full on August 4, 2020.

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

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

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

in the initial principal amount of $ 100 , in exchange for $ 100 .

The note bore interest at 12 % per year, with balance of $ 112 becoming

due and paid in full on July 31, 2020.

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,

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

was then prohibited from entering into the LOI directly.

In connection with the LOI, Hawkeye paid a non-refundable deposit of $ 75 with

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

for the deposit.

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

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

October 29, 2019, prior to the Merger, Naveen Doki and Silvija Valleru became beneficial owners of Company Common Stock, equal to

approximately 69 %

of the total number of shares of the Company’s Common Stock outstanding after giving effect to the Merger,

respectively.

the present time, the Vivos Group shall not be entitled to vote any of their shares in Reliability at any annual or special meetings

of the shareholders.

A Receiver is empowered to recover the awards by seizing shares of the Company held by Dr.

Naveen Doki and his affiliates,

the Vivos Group.

Once the judgments in favor of Reliability are satisfied, the restrictions on the rights of the Vivos Group shareholders

imposed by the Award shall be lifted.

the summer of 2019, prior to the Merger, MMG entered into a Securities Purchase Agreement with several parties including CEO Nick

Tsahalis (“Mr.

Tsahalis”), CFO Mark Speck (“Mr.

Speck”), both officers and then directors of Maslow and

Hawkeye Enterprises (“Hawkeye”) a company owned and controlled by Mr.

The convertible promissory notes signed by

Tsahalis and Mr.

Speck afforded them both common shares of Reliability based on the initial principal amounts of $ 100

Tsahalis, Mr.

Speck, and Hawkeye also received Warrants to purchase 16,323 , 81,616 ,

shares, respectively, (on a post-Merger basis) of the Company Common Stock.

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

1 unchanged sentence

The Warrant may be exercised at any time or from time

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

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

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

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

For purposes herein, a “Qualified Financing” means the issuance by the Company, other than certain excluded issuances of

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

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

The exercise price per full share of the Company common stock shall be 120 % of the

average sale price of the Company common stock across all transactions constituting a part of the Qualified Financing, with equitable

adjustments being made for any splits, combinations or dividends relating to the Company common stock, or combinations, recapitalization,

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

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

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

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

September 7, 2022, the Company entered in Arbitration and Tolling Agreements with alleged shareholder Naveen Doki, M.D., and his affiliates

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

the American Arbitration Association.

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

to resolve their disputes before a single arbitrator in Maryland.

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

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

The parties also signed a Tolling Agreement

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

arbitration award was announced on August 31, 2022.

to time during the period commencing on first business day following the completion of the Qualified Financing (as defined below) and

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

For purposes herein, a “Qualified Financing”

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

transactions, which transaction(s) result in aggregate gross proceeds actually received by the Company of at least $ 5,000 .

price per full share of the Company Common Stock shall be 120 % of the average sale price of the Company Common Stock across all transactions

constituting a part of the Qualified Financing.

Convertible note warrants were not valued and included as liability on balance sheet

because of uncertainty around their pricing, value, and low probability at this juncture in receiving the $ 5,000 trigger.

The five-year

eligibility for all holders of these Warrants will expire in October 2024.

12 - EMPLOYEE BENEFIT PLAN

3 unchanged sentences

employee contributions.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

13 - BUSINESS SEGMENTS

10 unchanged sentences

Currently, the Company is not allocating sales, general, and administrative

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

and Multimedia Production

expenses at the segment level.

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

SCHEDULE OF RECONCILIATION OF

REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS

Recruiting and Staffing

Video and Multimedia Production

14- SUBSEQUENT EVENTS

Company has evaluated subsequent events after the balance sheet date of December 31, 2022, through March 31, 2023, the date on which

the consolidated financial statements were available to be issued.

Based upon this evaluation, management has determined that no material

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

Company has evaluated subsequent events after the balance sheet date of December 31, 2023 through April 1, 2024, the

date on which the consolidated financial statements were available to be issued.

Based upon this evaluation, management has determined

that no material subsequent events have occurred that would require recognition in or disclosures in the accompanying consolidated financial

statements, except as follows:

January 29, 2024, the three arbitration Awards entered as judgments in in Reliability’s case against Vivos, et.

al., became final

as the appeal period expired for the defendants.

The judgments which are good for 12 years and can be enrolled in other states were signed

by the Circuit Court for Montgomery County Maryland on December 29, 2023.

Thus, Reliability has collectible judgments which the Receiver

is now eligible to pursue.

March 2024, counsel for SWC filed a motion for Summary Judgement against Maslow.

On March 18, 2024, Maslow filed its

response opposing the motion.

The court has not yet ruled on the motion.

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