What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 311 added, 356 removed, 149 unchanged (82% of the section changed)

Financial Statements

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

in thousands, except per share data)

September 30,

CURRENT ASSETS

Cash and cash equivalents

Trade receivables, net of allowance for doubtful accounts

Trade receivables, net of credit losses

Retention credit receivable

Other receivables

Notes receivable from related parties

1 unchanged sentence

Total current assets

Other intangible assets, net

Property, plant and equipment, net

Other intangible assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

5 unchanged sentences

Deferred revenue

Income taxes payable

Total current liabilities

3 unchanged sentences

SHAREHOLDERS’ EQUITY

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of September 30, 2023 and as of December 31, 2022

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of March 31, 2024 and as of December 31, 2023

Additional paid-in capital

1 unchanged sentence

Total shareholders’ equity

Total liabilities and shareholders’ equity

accompanying notes are an integral part of these statements.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

For the Three Months Ended September 30,

Revenue earned

Service revenue

Cost of revenue

Selling, general, and administrative expenses

Operating loss

Other income (expense)

Interest income from related parties

Interest income

Interest expense

Other income (expense)

Income (loss) before income tax expense

Income tax expense

Consolidated net income (loss)

Net loss per share:

Share used in per share computation:

Total liabilities and shareholders’

accompanying notes are an integral part of these statements.

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Revenue earned

8 unchanged sentences

Interest expense

Other income (expense)

Loss before income tax expense

Income (loss) before income tax expense

Income tax expense

Other expense

Loss before income tax (expense) benefit

Income tax (expense) benefit

Consolidated net loss

Consolidated net income (loss)

Net loss per share:

Shares used in per share computation:

Net income per share:

Share used in per share computation:

accompanying notes are an integral part of these statements.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY

the Nine months Ended September 30, 2023 and 2022

INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

the Three Months Ended March 31, 2024 and 2023

in thousands, except per share data)

Balance, December 31, 2022

Balance, September 30, 2022

Balance, March 31, 2023

Balance, December 31, 2023

Balance, September 30, 2023

Balance, March 31, 2024

accompanying notes are an integral part of these statements.

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

in thousands)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flows from operating activities:

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

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

Depreciation and amortization

3 unchanged sentences

Retention credit receivable

Other receivable

Other receivables

Prepaid expenses and other current assets

2 unchanged sentences

Accrued expenses

Other liabilities

Deferred revenue

Income taxes payable

Net cash provided by operating activities

Cash flows from investing activities:

Purchase of fixed assets

Net cash used in investing activities

Net cash provided by (used in) operating activities

Cash flows from financing activities:

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

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

Advances to related parties

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

1 unchanged sentence

accompanying notes are an integral part of these statements.

AND SUBSIDIARY

INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

in thousands)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Supplemental disclosures of cash flow information:

Cash paid during the year for:

Cash paid (received) during the year for:

INCORPORATED AND SUBSIDIARY

3 unchanged sentences

of Operations

is a leading provider of employer workforce management solutions that operates, along with its wholly owned subsidiary, The Maslow

Media Group, Inc (“MMG”), (collectively, “Reliability” or the “Company”), primarily within the United

States of America in four industry segments:

Employer of Record (“EOR”), Recruiting and Staffing, Direct Placements, and

Video and Multimedia Production Services, which provides script to screen media talent.

Our Staffing segment provides skilled field talent

on a nationwide basis for Media, IT, and finance and accounting client partner projects.

Video Production involves assembling and providing

staff and/or crews with equipment for live or taped programming.

This service can be provided within client facilities or on location

across the globe and cover pre-production planning to post-production services.

is a leading provider of Employer of Record and temporary Media and Information Technology (“IT”) staffing services

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

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

Employer of Record (“EOR”),

Recruiting and Staffing, Direct Hire, and Video and Multimedia Production, which provides script-to-screen services.

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

Video Production

involves assembling and providing crews for special projects, webcasting, live events, post-production services, and production management.

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

1 unchanged sentence

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

Maslow founded Maslow Group initially in 1988 and incorporated the firm under the name the Maslow Media Group Inc.

Maslow founded MMG initially in 1988 and incorporated the firm under the name the Maslow Media Group Inc.

in March 1992.

November 9, 2016, MMG was sold to Vivos Holdings, LLC (“Vivos Holdings”), owned by Dr.

November 9, 2016, Linda Maslow sold the business to Vivos Holdings, LLC (“Vivos Holdings”) owned by Dr.

Naveen Doki (“Dr.

and Silvija Valleru (“Ms.

2018, Vivos Holdings and several other Vivos companies engaged an investment banker who approached management of Reliability to discuss

a potential reverse merger transaction.

The other investors who collaborated on a share swap of MMG for other Vivos companies were Shirisha

Janumpally (“Mrs.

Doki”) and Silvija Valleru (“Ms.

2019, Vivos Holdings collaborated on a share swap of MMG for other Vivos companies with individuals who included, but were not limited

Doki, Shirisha Janumpally (“Mrs.

Janumpally”), wife of Dr.

Doki, and Kalyan Pathuri (“Mr.

Pathuri”), husband of Silvija Valleru.

individuals included, but were not limited to, Dr.

Janumpally, Mr.

Pathuri, Mrs.

Valleru, Igly Trust, and Judos Trust also

have common ownership combinations in a number of other entities (Vivos Holdings, LLC;

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

Vivos Holdings, Inc.;

Vivos Acquisitions, LLC;

and Federal Systems, LLC, (collectively referred to herein as “Vivos

reverse merger was consummated on October 29, 2019.

As a result of the Merger, the Vivos Group (Vivos Holdings LLC, officially) acquired

approximately 84 % of the issued and outstanding shares of Reliability, which were distributed by Vivos Holdings, LLC.

October 29, 2019, MMG became a wholly owned subsidiary of Reliability by merging R-M Merger Sub, Inc., a Virginia corporation and a wholly owned

subsidiary of Reliability, with and into Maslow, with MMG being the surviving corporation.

Company ceased to be a “shell” company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, (the

“Exchange Act”) by virtue of its ownership of MMG following the Merger.

The acquisition of MMG also resulted in a “change

in control” of Reliability.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

purchasing MMG and thereafter, the Vivos Group began borrowing monies from MMG starting with $ 1,400 in 2016, and by the end of 2019,

the balance had reached $ 3,418 , which included a $ 3,000 guarantee from Dr.

(See Note 8 for more details).

attempted collection of the guarantee and debt from the Vivos Group set off a chain of legal events culminating in an arbitration hearing

and award in 2022.

(See below and Item 1 for complete summary).

We refer below to the disputes between Reliability and the Vivos Group

as the “Vivos Matter.”

series of legal actions and hearings took place starting in March 2020 through September 2021.

At that time, arbitration was agreed to

by both the Vivos Group and MMG.

The proceedings began in February 2022 and were completed in March 2022.

August 31, 2022, the Arbitrator issued an award (the “Award”) with the Company prevailing on their claims.

The Company was

awarded the following:

award in favor of MMG against Vivos Holdings, LLC under Note I (as defined in the Award) in the amount of $ 3,458 , with interest thereon

from September 30, 2022 at the rate of 4.5 % per year;

award as to Note II (as defined in the Award) until and at such time as the automatic stay imposed by the United States Bankruptcy

Court as a result of the filing of a petition in bankruptcy by VREH is lifted or the bankruptcy proceeding is terminated;

award in favor of MMG against Vivos Holdings, LLC under Note III (as defined in the Award) in the amount of $ 800 , with interest thereon

from September 30, 2022 at the rate of 2.5 % per year, plus collection costs, including reasonable attorneys’ fees, incurred

in the effort to collect Note III;

award in favor of MMG against Dr.

Doki under the Personal Guaranty (as defined in the Award) in the amount of $ 2,309 , plus interest

thereon at the rate of 6 % per year from the date of the Award;

award in favor of the Company against Dr.

Valleru, Mrs.

Janumpally, individually and as Trustee of Judos Trust, and Mr.

Pathuri, as Trustee of Igly Trust, jointly and severally, for contract damages 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 , valued as of the date of the Award, in accordance with

the provisions of Section 9.06(d) of the Merger Agreement;

award appointing a Rehabilitative Receiver for the Company under the deadlock situation provisions of Section 11.404(a)(1)(B) of

the Texas Business Organizations Code, the primary function of which is to collect the contract and fraud damages, including costs,

expenses and fees provided in the Award, due to the Company, with matters regarding such receivership to be set forth in a supplemental

relief in favor of the Company and its officers and directors.

to the receivership, the owners or holders of all of the shares of common stock of the Company received as a result of the conversion

of 1,600 shares of common stock of MMG owed by Dr.

Doki and Mrs.

Valleru under the Merger Agreement shall not be entitled to vote any

of those shares at any annual or special meeting of the shareholders of the Company during the period of the receivership.

Upon the completion

of the receiver’s primary function of collecting damages due to the Company, the receivership shall terminate and the restrictions

on the rights of the shareholders of the Company imposed by the Award shall be lifted.

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

As a result of the Merger, on October 29, 2019, MMG became a wholly owned subsidiary of Reliability,

and the Vivos

Group (Vivos Holdings, LLC, officially) acquired approximately 84 %

of the issued and outstanding shares of Reliability which were distributed by Vivos Holdings, LLC.

purchasing MMG and thereafter, the Vivos Group began borrowing monies from MMG starting with $ 1,400

in 2016, and by the end of 2019 the balance had reached $ 3,418 ,

which included a $ 3,000

guarantee from Dr.

Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC, and Dr.

Doki are collectively referred to as

“Vivos Debtors.”

Additionally,

Reliability became aware of debt obligations that included MMG as a borrower or guarantor that the Vivos Group failed to disclose to

This and the attempted collection of the guarantee and debt from the Vivos Group set off a chain of legal events culminating

in an arbitration hearing and award in 2022.

We refer below to the disputes between Reliability and the Vivos Group as the “Vivos

series of legal actions and hearings took place starting in March of 2020 through September of 2021, culminating in an agreement to settle

through arbitration.

On August 31, 2022, the arbitrator issued an award (the “Award”) with the Company and MMG prevailing

on their claims.

The awards included citing fraud damages.

Supplemental awards were subsequently issued on May 17, 2023, October 10,

2023, and finally, on October 27, 2023.

Summarily, 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 .

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands, except per share data)

May 17, 2023, the Arbitrator issued an Amended and Supplemental Arbitration Award (the “Amended Award”), which included the

will appoint a Rehabilitative Receiver in a Supplemental Award under Maryland law;

award in favor of MMG and against VREH under Note II in the amount of $ 835 as of September 30, 2022 with interest thereafter at the

rate of 5.5 % per year;

June 16, 2023, we learned that the principal amount due on 22 Baltimore Road had been satisfied via bankruptcy sale and thus the Fairfax,

Virginia court released the VREH confessed judgement, meaning MMG was no longer listed as a guarantor.

Subsequently,

there were two supplemental awards issued by the Arbitrator on May 17, 2023 and October 10, 2023, the latter appointing a Rehabilitative

Receiver whose primary purpose is to collect the Award, and who also has been granted specified powers as described in the 8-K released

on October 19, 2023.

October 27, 2023, the Arbitrator entered a third Supplemental Award of attorneys’ fees and expenses in favor of Reliability,

Incorporated., individually and as agent for Maslow Media Group, Inc.;

management and certain other named persons and parties

against Naveen Doki;

Silvija Valleru;

Shirisha Janumpally, individually and as Trustee of Judos Trust;

and Kaylan Pathuri,

individually and as Trustee of Igly Trust, jointly and severally, in the amount of $1,209 (See Note 10).

Additionally,

the Arbitrator stated the actual amounts of interest that would be due will depend on when and how much is collected by the Rehabilitative

Receiver on each award and will leave the determination of such interest to the Rehabilitative Receiver at the time that payments are

made subject to review thereof by the Arbitrator at the request of any party.

May 17, 2023 award also appointed a rehabilitative receiver (the “Receiver”) whose primary function is to collect the contract

and fraud damages, including costs, expenses, and fees provided in the awards.

With respect to the receivership, the Vivos Group owners

or holders of all of the shares of common stock of the Company were declared not be entitled to vote any of those shares at any annual

or special meetings of the shareholders of the Company during the period of the receivership.

On October 10, 2023, the Arbitrator issued a Supplemental Award appointing

the Receiver to assist the Company in collecting the awarded amounts.

In the award, the Arbitrator established the powers of the Receiver.

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.

final resolution as to the underlying ownership and rights of certain shareholders, the Company intends to hold an annual meeting of

shareholders within a reasonable time thereafter.

of September 30, 2023, the Vivos Debtor balance was $ 5,417 .

The arbitration award covering all bulleted items above currently totals

$ 6,348 independent of legal fees, interest, and other fees (see Note 2 below).

This amount represents a reduction in earlier estimates

as a result of the clarifications issued by the Arbitrator in the Amended Award on May 17, 2023.

of March 31, 2024, the Vivos Debtor balance was $ 5,571 .

The Award value in totality currently aggregates $ 7,779 , independent of legal

fees and interest.

of presentation

6 unchanged sentences

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for

a fair presentation of financial position and

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

results of operations for the periods presented have been reflected herein.

The results of operations for the periods presented herein

are not necessarily indicative of the results to be expected for the full year.

a fair presentation of financial position and the results of operations for the periods presented, have been reflected herein.

of operations for the periods presented herein are not necessarily indicative of the results to be expected for the full year.

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

2 unchanged sentences

of Credit Risk

the nine months ended September 30, 2023, 24.6 % of revenue came from one customer, and 13.8 % from a second customer.

the three months ended March 31, 2024, 30.6 %

of revenue came from one customer, 15.5 %

from a second customer and 12.7 %

from a third.

Combined, this totals 58.8 %

38.4 % of revenue.

Last year, these two customers plus a third, accounted for 47.9 % of revenue for the same period ended September 30,

This year, the top five customers accounted for 61.8% of revenue versus a year ago, when the top five comprised 66.2% .

client has exceeded 10% of revenues for the nine months ended September 30, 2023 or 2022.

In 2023, the top two companies were the only ones above the 10% mark and accounted for 25.2 %

respectively, which is 37.6 %

The aforementioned same three clients improved upon their combined concentration in 2023 when this group garnered 44.6 %

share of the revenue.

other client has exceeded 10% of revenues for

the three months ended March 31, 2024 or 2023.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

MANAGEMENT’S PLAN

the Company continues to experience net operating losses, management believes it has the ability to continue as a going concern and meet

its financial obligation as they become due in 2023 and beyond.

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

flow forecasts showing sufficient cash and working capital for at least the next 12 months;

prospect of receiving the amounts awarded in the arbitration hearing in 2023, which include $ 5,417 in notes receivable from related

parties, plus awards for fraud, totaling $ 1,000 for contract damages, additional interest, and legal fees after the supplemental

award is finalized;

reduction in legal fees associated with Vivos Matter year to date at $ 460 plus future savings compared to a year ago;

sales plan implementation by recently hired Vice President of Sales, who has experience and success in managing contingent and direct

hire staffing organizations;

factoring line availability of up to 93 % of unfactored invoices, which as of November 1, 2023, could be converted to approximately

$ 2,468 in cash.

the Company experienced net losses before taxes for the three months ended March 31, 2024 and in the years ended December 31, 2023

and 2022 of $ 262 , $ 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 beyond.

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

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

expected reductions in continuing legal fees in 2024 given the Company has collectible judgments

that the Receiver is now eligible to pursue;

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

capital market access over the long term;

progress in sales, newer agreements that will begin fulfillment, and current larger clients

who have indicated increases in media activity for 2024 and in the first quarter these have

been realized;

Company has additional availability to use its factoring line to extend borrowing of up to

93 % of unfactored invoices which, as of May 2, 2024, was $ 2,936 .

a result of the foregoing, the Company believes that it has sufficient cash to meet its financial obligations for the next 12 months

1 unchanged sentence

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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

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

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

enactment date.

The amendments in this update 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

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 after Dec.

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.

Accounting Pronouncements

7 unchanged sentences

OF ACCOUNTS RECEIVABLE

September 30,

Accounts receivable, unfactored

2 unchanged sentences

Total Accounts Receivable

of September 30, 2023, the Company’s overall tax liability was $ 5 compared to $ 6 on December 31, 2022.

Company has a factoring and security agreement with Gulf Coast Bank and Trust (“Gulf”), which enables the Company to receive

advances on its accounts receivable (i.e., invoices) through Gulf to fund growth and operations.

The proceeds of this agreement are most

frequently used to pay operating costs of the business, which include employee salaries, vendor payments, and overhead expenses.

of March 31, 2024, the Company’s overall tax liability was $ 0 compared to $ 5 at end of same period in 2023.

Facility & Insurance Financing

Company is in a factoring and security agreement with Gulf Coast Bank and Trust (“Gulf”) ,

which enables the Company to receive advances on its accounts receivable (i.e.

invoices) through Gulf to fund growth and operations.

The proceeds of this agreement are most frequently used to pay operating costs of the business, which include employee salaries, vendor

payments, and overhead expenses.

arrangement calls for interest at prime plus 2 % and includes an advance rate of 18 basis points.

4 unchanged sentences

to invoicing and reserve account balance.

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

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

As of August 1, 2023, the required amount was 10 %.

Any excess of the reserve amount is paid to the Company as requested.

If a reserve shortfall exists for a period of ten days, the Company

is required to make payment to Gulf for the shortage.

receivables were sold with full recourse.

Proceeds from the sale of receivables were $ 0 for the three-month period ending September 30,

2023, compared to $ 3,429 for the same period ending on September 30, 2022, and $ 3,297 compared to $ 10,388 for the nine months ended September

30, 2023 and 2022, respectively.

The total outstanding balance under the recourse contract was $ 0 on September 30, 2023, compared to

$ 2,619 as of December 31, 2022.

Proceeds from the sale of receivables were $ 1,222

for the three-month period ended March 31, 2024,

compared to $ 2,971

for the same period ended on March 31, 2023.

The total outstanding

balance under the recourse contract was $ 149

on March 31, 2024, compared to $ 174

as of December 31, 2023, and $ 924

on March 31, 2023.

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

1 unchanged sentence

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

Total finance line fees for the three months ended September

30, 2023 and 2022 were $ 0 and $ 46 , respectively.

For the nine months ended September 30, 2023 and 2022, finance fees totaled $ 44 and

$ 111 , respectively.

MMG also enters into short term 10-month loan agreements

annually to finance advance payments on crime, E&O, and D&O insurances.

In 2023, MMG entered into two loans totaling $ 143 with finance

charges over 10 months totaling approximately $ 7 .

Total finance fees for all loans for the three months ended March 31, 2024

and 2023 totaled $ 16 and $ 44 , respectively.

The insurance portion of both periods was approximately $ 2 .

COMMITMENTS AND CONTINGENCIES

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.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands, except per share data)

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.

However, there were certain non-disclosures by Vivos Holdings,

LLC that are included below.

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

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:

Maslow 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 30, 2019, seeking to collect the balance of $ 402 not paid by the Vivos Group.

suits were not disclosed to MMG management or to Reliability before the Merger closed on October 29, 2019.

Maslow retained Counsel and filed a motion to include all original parties to the SWC agreement, as four of the original

parties were not in the original filings (HCRN 360 IT, and US IT & Media Solutions).

On September 11, 2023, we learned our motion

was denied, however, on September 27, we filed a motion for reconsideration on grounds our counsel felt were compelling.

MMG has spent $ 55 on legal fees related to this matter.

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

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

The awards included citing of

fraud damages.

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

Summarily, 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 .

Interest continues to accrue on these awarded balances.

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.

On October 10, 2023, the Arbitrator issued a Supplemental Award appointing

the Receiver to assist the Company in collecting the awarded amounts.

In the award, the Arbitrator established the powers of the Receiver.

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 Second Wind Consulting (“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

MMG, 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

This was not disclosed to MMG management or to Reliability before the Merger which closed on October 29, 2019.

counsel filed a motion to include all original parties to the SWC agreement, as two of the original parties were not in the original

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

The next status conference

related to SWC’s motion for Summary Judgement is scheduled for July 24, 2024.

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

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

4 unchanged sentences

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 24 equal installments, including interest at 4.5%,

in the amount of approximately $15, commencing nine months after closing, with the last payment on March 1, 2019.

These payments were

paid by MMG on behalf of the Vivos Debtors.

The Vivos Debtors subsequently entered into a promissory note receivable with MMG, described

below, for the full stock purchase price.

No payment has ever been made against this note and between 2018 to present, there has been

$ 2,503 in additional borrowings.

of September 30, 2023 and December 31, 2022, the receivable totaled $ 5,417 and $ 5,251 , respectively.

This is not inclusive of the additional

amounts awarded in the arbitration.

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.

Between 2018 to present there was $ 2,217 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 MMG 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

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands, except per share data)

Company has notes receivable from Vivos Holdings, LLC and VREH, both related party affiliates due to their ownership percentage in the

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 periods allowed was made using the eligible agreement rates.

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 in 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 was due September 20, 2023.

As of September 30, 2023, the total

outstanding balance was $ 3,698 , which includes accrued interest receivable of $ 51 for the period.

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 September 30, 2023, the total outstanding balance was $ 893 , which includes accrued interest receivable of $ 12 for the period.

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

Doki, pursuant to which Dr.

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 the Company’s

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 receivable.

November 2016 and September 30, 2023, the Vivos Group borrowed an additional $ 2,547 , included in the note receivable, totaling $ 3,647 .

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,

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 September 30, 2023, the total

outstanding balance was $ 825 , which includes 2023 interest of $ 5 for the period.

table below is a summary of Vivos Group related party notes receivable which, as of March 31, 2024, totals $ 5,571 .

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

Accrued interest

Balance on March 31, 2024

Settlement Agreements

July 21, 2022, Maslow settled the obligation which Vivos Holdings, LLC had obligated Maslow to a note in July 2018, with Libertas Funding,

LLC and Kinetic which a portion was paid and subsequently included in the additional borrowing cited above.

July 21, 2021, MMG settled the obligation which Vivos Holdings, LLC had obligated MMG to in July 2018, with Libertas Funding, LLC

and Kinetic for $ 475 .

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 the Company with no liability with

respect to the building that MMG was 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, Naveen Doki and Silvija Valleru became beneficial owners of Company Common Stock, equal to approximately

69 % and 17 % 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

Tsahalis”), CFO Mark Speck (“Mr.

Speck”), both officers and then directors of the Company, and Hawkeye Enterprises

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

The convertible promissory notes signed by Mr.

Tsahalis and Mr.

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

Tsahalis, Mr.

Hawkeye also received Warrants to purchase 16,323 , 81,616 , and 81,616 shares, respectively, (on a post-Merger basis) of the Company Common

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands, except per share data)

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’s arbitration award thus far includes relinquishment

of shares of the Company common stock equal in value to $ 1,000 , valued as of the date of the Award, in accordance with the provisions

of Section 9.06(d) of the Merger Agreement.

2019, the Company entered into transactions with two executive officers, Nick Tsahalis and Mark Speck, of the Company, resulting in the

issuance of warrants to purchase 163,232 shares each of 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 the balance sheet because of uncertainty around their pricing,

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

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.

BUSINESS SEGMENTS

Company operates within four industry segments:

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

The EOR segment provides

media field talent to a host of large corporate customers in all 50 states.

The Recruiting and Staffing segment provides skilled Media,

IT, accounting and finance, human resources (HR), and general administrative talent on a nationwide basis for customers in a myriad of

Direct Hire fulfills direct placement requests by MMG clients for a wide variety of posts, including administrative, media,

and IT professionals.

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

clients, globally.

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

30, 2023 and 2022, respectively:

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

Recruiting and Staffing

Video and Multimedia Production

Total Revenue

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

EOR, Recruiting and Staffing (“Staffing”), Direct Hire, and Video Production.

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

The Recruiting and Staffing segment

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

Direct Hire fulfils direct

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

The Video and Multimedia

Production segment provides script-to-screen services for corporate, government, and non-profit clients, globally.

following table provides a reconciliation of revenue by reportable segment to consolidated results for the three months ended March 31,

2024 and 2023, respectively:

the three months ended March 31:

SCHEDULE OF RECONCILIATION OF

REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS

Recruiting and Staffing

1 unchanged sentence

SUBSEQUENT EVENTS

Company has evaluated subsequent events through November 14, 2023, the date on which the unaudited condensed consolidated financial statements

Company has evaluated subsequent events through May 10, 2024, the date on which the unaudited condensed consolidated financial statements

were available to be issued.

1 unchanged sentence

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

October 10, 2023, the Arbitrator issued a Supplemental Award appointing Rehabilitative Receiver who is appointed to collect the Award.

October 27, 2023, the Arbitrator entered a third Supplemental Award of attorneys’ fees and expenses in favor of Reliability,

Incorporated., individually and as agent for Maslow Media Group, Inc.;

management and certain other named persons and parties

against Naveen Doki;

Silvija Valleru;

Shirisha Janumpally, individually and as Trustee of Judos Trust;

and Kaylan Pathuri,

individually and as Trustee of Igly Trust, jointly and severally, in the amount of $ 1,209 .

Additionally,

the Arbitrator stated the actual amounts of interest that would be due will depend on when and how much is collected by the Rehabilitative

Receiver on each award and will leave the determination of such interest to the Rehabilitative Receiver at the time that payments are

made subject to review thereof by the Arbitrator at the request of any party.

On November 7, 2023 MMG filed a petition to confirm the arbitration award with Montgomery County Circuit Court in

Rockville, Maryland.

On April 22, 2024, MMG received a refund of $288 from the IRS.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements