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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-31 · 530 added, 549 removed, 170 unchanged (86% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firms PCAOB ID NO:

Audited Consolidated Financial Statements of Reliability, Incorporated.

Consolidated Financial Statements of Reliability, Incorporated.

Consolidated Balance Sheets as of December 31, 2025, and 2024

4 unchanged sentences

Sky Park Circle, Suite 200

Irvine, California 92614

tel 949-852-1600

fax 949-852-1606

California 92614

www.rjicpas.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and Board of Directors

Reliability Incorporated:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance

sheets of Reliability Incorporated and Subsidiary (the “Company”) as of December 31, 2024 and 2023, and the related consolidated

statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the

consolidated financial statements (collectively referred to as the “consolidated financial statements”).

In 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, 2024 and 2023, 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.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audit.

We are a public accounting firm registered with Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Security and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and Board of Directors

Incorporated:

on the Consolidated Financial Statements

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

December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows

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

financial statements”).

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, 2025, and 2024, 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.

Substantial Doubt About the Company’s Ability

to Continue as a Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements,

the Company has incurred recurring losses, has experienced liquidity constraints, and is dependent on receivables-based financing arrangements

and management’s ability to execute its plans to improve liquidity and operating performance.

These conditions raise substantial

doubt about the Company’s ability to continue as a going concern.

Management’s plans concerning these matters are also described

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

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

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures include examining, on a test basis, evidence supporting the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a

matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the Audit Committee of the Board of Directors and that:

(1) related to accounts or disclosures that are material to the consolidated

financial statements and (2) involve challenging, subjective, or complex judgments.

The communication of critical audit matters does not

alter in any way our opinion on the consolidated financial statements, taken as a while, and we are not, by communicated the critical

audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they related.

Recoverability of Notes Receivable from Related

As discussed in Notes 9 and 11 to the consolidated

financial statements, the Company has significant related party transactions and arrangements with the majority shareholders of the Company and

other companies owned by the majority shareholders.

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 the majority shareholder group.

We determined the recoverability of the related party

notes receivable (recoverability of RP notes) as a critical audit matter.

Auditor judgment was involved in assessing the sufficiency of

the procedures performed to assess the collectability of the notes receivable from related parties.

The following are the primary procedures we performed

to address this critical audit matter.

We performed the following procedures to evaluate the recoverability of the RP notes by the Company:

and inspected questionnaires from the Company’s officers;

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

the Company’s minutes from meetings of the Board of Directors;

public filings, external news and research sources for informational related to transactions

between the Company and related parties;

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

● Reviewed management’s assessment of the collectability of these balances due from related parties.

We have served as the Company’s auditor since

Ramirez Jimenez International CPAs

Irvine, California

March 31, 2025

RELIABILITY INCORPORATED AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share data)

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence

supporting the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Audit Matters

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

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

(1) related to accounts or

disclosures that are material to the consolidated financial statements and (2) involve challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as

a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or

on the accounts or disclosures to which they are related.

Purchase Agreements — Technical Accounting under ASC 860

Company entered into receivable purchase agreements with financial institutions during 2025 under which certain trade receivables were

transferred to the purchasers.

As described in Note 8 to the consolidated financial statements, management concluded that transfers under

these arrangements that met program eligibility qualified for sale accounting under ASC 860, Transfers and Servicing , and accordingly

derecognized the related receivables, recorded the related discounts and fees as loss on sale, and presented the related cash proceeds

and settlements within operating cash flows.

identified the accounting for the receivable purchase agreements as a critical audit matter because evaluating management’s

conclusion involved especially challenging auditor judgment regarding the interpretation of the contractual provisions and the

application of ASC 860.

In particular, significant judgment was required to evaluate whether the transferred receivables were

legally isolated from the Company and its creditors, whether the purchasers had the practical ability to pledge or exchange the

transferred receivables, whether the Company retained effective control over the transferred receivables, and whether the limited

repurchase provisions were consistent with sale accounting rather than secured borrowing treatment.

In addition, judgment was

required to evaluate the presentation of the related fees and discounts in the statement of operations and the classification of the

related cash flows and disclosures in the consolidated financial statements.

primary procedures we performed to address this critical audit matter included, among others:

executed receivable purchase agreements and related amendments;

management’s technical accounting analysis under ASC 860;

involving professionals

with specialized knowledge and skill to assist in evaluating the legal isolation support obtained by management;

assessing whether

the contractual terms provided the purchasers with the ability to pledge or exchange the transferred receivables and whether the Company

retained effective control;

testing a sample

of receivable transfers during the year and agreeing the amounts sold, cash proceeds received, and related fees and discounts to supporting

documentation;

the Company’s presentation of the related amounts in the statements of operations and statement of cash flows;

assessing the

adequacy of the related financial statement disclosures.

have served as the Company’s auditor since 2009.

Jimenez International CPAs PCAOB ID No.820

INCORPORATED AND SUBSIDIARY

BALANCE SHEETS

in thousands, except per share data)

CURRENT ASSETS

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Total liabilities and stockholders’ equity

The accompanying notes to consolidated financial statements

are an integral part of these financial statements.

RELIABILITY INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

For the Years Ended December 31,

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

INCORPORATED AND SUBSIDIARY

STATEMENTS OF OPERATIONS

in thousands, except per share data)

the Years Ended December 31,

Revenue earned

Service revenue

Cost of revenue

Selling, general and administrative expenses

general and administrative expenses

Operating loss

Other income (expense):

Interest income from related parties

Interest income from related

Interest income

Interest expense

Other income (expense)

income (expense)

Loss before income tax expense

Income tax benefit (expense)

Net loss per share:

Share used in per share computation:

The accompanying notes to consolidated financial statements

are an integral part of these financial statements.

RELIABILITY INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’

For the years ended December 31, 2024 and 2023

(amounts in thousands, except per share data)

Weighted average common shares outstanding:

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

INCORPORATED AND SUBSIDIARY

STATEMENTS OF CHANGE IN STOCKHOLDERS’ EQUITY

the years ended December 31, 2025, and 2024

in thousands, except per share data)

Total Stockholders’

Balance, January 1, 2024

1 unchanged sentence

Balance, December 31, 2025

The accompanying notes to consolidated financial statements

are an integral part of these financial statements.

RELIABILITY INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

For the Years Ended December 31,

Cash flows from operating activities:

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

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

INCORPORATED AND SUBSIDIARY

STATEMENTS OF CASH FLOWS

in thousands)

the Years Ended December 31,

Cash flows from operating

Adjustments to reconcile

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

Depreciation and amortization

Loss on receivable purchase agreements

Loss on Disposal of fixed assets

Accrued interest

Changes in operating assets and liabilities:

Changes in operating assets

and liabilities:

Trade receivables

Retention credit receivable

Prepaid expenses and other current assets

Prepaid expenses and other

current assets

Accounts payable

2 unchanged sentences

Deferred revenue

Income taxes payable

Net cash (used in) provided by operating activities

Cash flows from investing activities:

Purchase of fixed assets

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from the factoring facility

Repayments to the factoring facility

Proceeds from note payable

Repayment of note payable

Advances to related parties

Repayment of notes receivable from related parties

Net cash provided by (used in) financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

The accompanying notes to consolidated financial statements

are an integral part of these financial statements.

RELIABILITY INCORPORATED AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS, continued

(amounts in thousands)

Supplemental disclosures of cash flow information:

For the years ended December 31,

Supplemental disclosures of cash flow information:

cash provided by (used in) operating activities

Cash flows from investing

of fixed assets

cash used in investing activities

Cash flows from financing

Proceeds from the factoring

Repayments to the factoring

Proceeds from issuing short

Repayments of long term

Payments on behalf of related parties

of notes receivable from related parties

cash (used in) provided by financing activities

(decrease) increase in cash and cash equivalents

and cash equivalents, beginning of year

and cash equivalents, end of year

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

INCORPORATED AND SUBSIDIARY

STATEMENT OF CASH FLOWS, continued

in thousands)

the years ended December 31,

Supplemental disclosures

of cash flow information:

Cash paid during the year for:

Income taxes (received) paid

The accompanying notes to consolidated financial statements

are an integral part of these financial statements.

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands)

NOTE 1 - NATURE OF OPERATIONS

Reliability Incorporated operates, along with its

wholly owned subsidiary, The Maslow Media Group, Inc.

(“MMG” or “Maslow”), (collectively, “Reliability”

or the “Company”) as a workforce management solutions company.

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

Income taxes (received)

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

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

1 - NATURE OF OPERATIONS

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

(“MMG” or “Maslow”),

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

MMG, 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 segments:

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

and Direct Hire.

EOR, which is a unique workforce management solution, represented 83.1 % of our revenue in 2024.

Our Staffing segment

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

Video Production, for one, 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, which added $ 95 and $ 199 in revenue and $ 90 and $ 181 in gross profit in 2024 and 2023 respectively.

NOTE 2 - MANAGEMENT’S PLAN

Although the Company has experienced net losses after

taxes in the years ended December 31, 2024 and 2023 of $ 594 and $ 740 , respectively, management believes it has the ability to continue

as a going concern and meet its financial obligation as they become due in 2025 and beyond.

The factors impacting this view include, but

are not limited to, the following:

Cash flow forecast showing

sufficient cash and working capital 52 weeks from March 31, 2025;

The expected reductions in continuing legal fees in 2025 given the Company has collectible judgments which the Receiver is pursuing;

An expectation that the notes

receivable from related parties will be remunerated in cash and or stock and that stock will provide capital market access;

Expected progress in sales, newer agreements that will begin fulfillment, and certain larger clients who increased sales in 2024 and are expected to continue growth trends in media activity for 2025;

$ 1,323 in new account revenue in 2024 with the expectation of additional new revenue in 2025;

The Company has additional availability to use its factoring line to extend borrowing of up to 93 % of unfactored invoices which, as of March 27, 2025, was $ 1,707 ;

The business can adapt by trimming personnel and software to have costs more aligned to revenues if need be.

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.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The 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.

All dollar amounts presented in this Form 10-K, unless otherwise specified, are expressed in thousands.

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands)

Management Estimates

The consolidated financial statements and related

disclosures are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”).

The Company must make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying

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

Cash and Cash Equivalents

The Company considers all highly liquid investments

with an original maturity of 90 days or less to be cash equivalents.

Now MMG fills roles in a variety of business functional areas, including administrative, IT, accounting and finance, HR, and sales.

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 segments:

Employer of Record (“EOR”), Staffing

Solutions, Video and Multimedia Production resources, and Direct Hire.

EOR, which is a unique workforce management solution, represented

of our revenue in 2025.

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

Video Production, for one, 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, which added $ 37

revenue and $ 33 and

gross profit in 2025 and 2024 respectively.

2 - GOING CONCERN

The accompanying consolidated

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

For the years ended December 31,

2025 and 2024, the Company incurred net losses of $ 664

respectively.

In addition, the Company’s operations require significant working capital to fund payroll and related

obligations in advance of collecting client receivables, and the Company remains dependent on receivables-based financing

arrangements and timely collections from a concentrated customer base to meet its obligations as they come due.

conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going

concern within one year after the date these consolidated financial statements are issued.

has developed plans to mitigate these conditions and events, which include continued use of existing receivables-based financing

arrangements, cost containment and operating expense reductions, efforts to improve revenue and margin mix through higher-margin

staffing and managed services, anticipated reductions in legal expenditures following the February 2026 Vivos settlement, and

potential capital structure flexibility upon completion of the share transfer contemplated by that settlement.

In connection with the anticipated return of a significant portion (approximately 84%) of the Company’s outstanding

shares to treasury, management is also evaluating a range of potential strategic and financing alternatives, such as, but not limited

M&A opportunities or other possible business combinations, strategic issuance of equity or equity-linked securities (including

convertible instruments), capital raises, and other capital structure or financing transactions.

Proceeds from any such transactions,

if pursued, would be expected to support investments in business development, technology infrastructure, and other growth-oriented initiatives,

as well as general working capital needs.

These plans are not entirely within the Company’s control and may not be fully achieved, substantial doubt about the

Company’s ability to continue as a going concern is not alleviated.

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset

amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

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.

All dollar amounts presented

in this Form 10-K, unless otherwise specified, are expressed in thousands.

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

accepted accounting principles (“GAAP”).

The Company must make estimates and judgments that affect the amounts reported in

the consolidated financial statements and accompanying notes.

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

for credit losses, and 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.

and Cash Equivalents

Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Concentrations

For the year ended December 31, 2024, Clients

A, B and C each accounted for 10% or more of the total revenue, with their respective contributions approximately 26.9 %, 22.6 %

For the year ended December 31, 2023, Clients A and B contributed 10% or more of the total revenue, with their respective

share approximately 25.1 %

As of December 31, 2024, Clients A, B, C and D represented approximately 23.5 %, 48.7 %, 0 %

of the total accounts receivable outstanding, respectively.

As of December 31, 2023, Clients A, B and E represented approximately 19.9 %, 42.9 %,

the year ended December 31, 2025, Clients A and B each accounted for 10% or more of the total revenue, with their respective

contributions approximately 31.5 %

For the year ended December 31, 2024, Clients B, A, and D contributed 10% or more of the total revenue, with their

respective share approximately 26.9 , 22.6 %

Looking at our top 5 client concentration in 2025, A, B, C and D and E represented a combined approximate 76.7 %

of the total, compared to 69.5 %

of December 31, 2025 two clients greater than 10% of accounts receivable outstanding were clients B at 41.3 %

and A at 19.6 %.

As of December 31, 2024, Clients A and B represented approximately 19.9 %,

of the total accounts receivable outstanding, respectively.

Financial instruments, which potentially subject the

Company to concentrations of credit risk, are primarily cash, notes receivable from related parties and accounts receivable.

performs continuing credit evaluations of its customers and does not require collateral.

The Company has not experienced significant losses

related to receivables.

The Company at times may have cash in

excess of the Federal Deposit Insurance Corporation (“FDIC”) limit.

The Company has not experienced losses on these accounts

and management believe the Company is not exposed to losses on such accounts.

Approximately 15% of our field talent are represented

by a labor union.

Accounts Receivable, Contract Assets, and Contract

Liabilities (Deferred Revenue)

Receivables 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

instruments, which potentially subject the Company to concentrations of credit risk, are primarily cash, notes receivable from related

parties and accounts receivable.

The Company performs continuing credit evaluations of its customers and does not require collateral.

The Company has not experienced significant losses related to receivables.

Company at times may have cash in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit.

The Company has not

experienced losses on these accounts and management believe the Company is not exposed to losses on such accounts.

Approximately

15% of our field talent are represented by a labor union .

Receivable, Contract Assets, and Contract Liabilities (Deferred Revenue)

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.

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands)

The 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, 2024 and 2023 to be fully collectible, therefore an allowance for credit losses is not provided

The Company records accounts receivable when its right

to consideration becomes unconditional.

Contract assets primarily relate to the Company’s rights to consideration for services provided

that they are conditional on satisfaction of future performance obligations.

The Company holds customer deposits of certain customers

related to its EOR business to minimize cash flow impact and reduces risks of uncollectible trade receivables.

The Company records contract liabilities (deferred

revenue) when payments are made or due prior to the related performance obligations being satisfied.

The Company does not have any material

contract assets or long-term contract liabilities.

As of December 31, 2024 and 2023, the Company’s

deferred revenue totaled $ 207 and $ 206 , respectively.

Fair Value Measurements

The Company measures fair value based on the price

that the Company would receive upon selling an asset or pay to transfer a liability in an orderly transaction between market participants

at the measurement date.

Various inputs are used in determining the fair value of assets or liabilities.

Inputs are classified into a

three-tier hierarchy, summarized as follows:

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

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

Level 3 – Significant unobservable inputs for the assets or liabilities.

When Level 1 inputs are not available, the Company

measures fair value using valuation techniques that maximize the use of relevant observable inputs (Level 2) and minimizes the use of

unobservable inputs (Level 3).The carrying amounts reported as of December 31, 2024 and 2023 for cash and cash equivalents, trade receivables,

prepaid expenses and other current assets, accounts payable and accrued expenses, and factoring liability approximate their fair values

due to the short-term nature of these instruments or are based on interest rates available to the Company that are comparable to current

market rates.

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

Property and Equipment

Property and equipment are stated at cost and are

depreciated using primarily the straight-line method over the following estimated useful lives:

furniture, fixtures, and computer equipment

— three to seven years ;

leasehold improvements — over the shorter of the estimated useful life of asset or the lease term.

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

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

a gain or a loss.

Depreciation and amortization expense for the years ended December 31, 2024 and 2023 totaled $ 23 and $ 18 , respectively.

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands)

Long-Lived Assets

The Company reviews its long-lived assets, primarily

fixed assets and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the

asset may not be recovered.

The Company looks primarily at the undiscounted future cash flows in its assessment of whether or not long-lived

assets have been impaired.

The Company did not record an impairment expense for the years ended December 31, 2024 and 2023.

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, 2025, and 2024 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’s

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

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

trade receivables.

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

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

of December 31, 2025, and 2024, the Company’s deferred revenue totaled $ 235 and $ 207 , respectively.

Value Measurements

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

an orderly transaction between market participants at the measurement date.

Various inputs are used in determining the fair value of

assets or liabilities.

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

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

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

3 – Significant unobservable inputs for the assets or liabilities.

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

inputs (Level 2) and minimizes the use of unobservable inputs (Level 3).The carrying amounts reported as of December 31, 2025 and 2024

for cash and cash equivalents, trade receivables, prepaid expenses and other current assets, accounts payable and accrued expenses, and

factoring liability approximate their fair values due to the short-term nature of these instruments or are based on interest rates available

to the Company that are comparable to current market rates.

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

from related parties due to their related party nature.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

and Equipment

and equipment are stated at cost and are depreciated using primarily the straight-line method over the following estimated useful

furniture, fixtures, and computer equipment — 3 three

leasehold improvements — over

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

Expenditures for renewals and betterments are

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

Upon sale or disposition of property

and equipment, the difference between the unamortized cost and the proceeds is recorded as either a gain or a loss.

Depreciation and

amortization expense for the years ended December 31, 2025, and 2024 totaled $ 29

and $ 23 , respectively,

and is included in selling, general and administrative expenses in the accompanying consolidated statements of

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

indicate that the carrying amount of the asset may not be recovered.

The Company looks primarily at the undiscounted future cash flows

in its assessment of whether or not long-lived assets have been impaired.

The Company did not record an impairment expense for the years

ended December 31, 2025, and 2024.

Intangible Assets

The Company has intangible assets with finite lives.

Intangible assets with finite useful lives were amortized over their respective estimated useful lives, ranging from three to ten years , based on a pattern in which the economic benefit of the respective intangible asset is realized.

Revenue Recognition

The 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:

Company has intangible assets with finite lives.

Intangible assets with finite useful lives were amortized over their respective

estimated useful lives, ranging from 3 three to ten

years , based on a pattern in which the economic benefit of the respective intangible asset is realized.

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;

(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.

The Company derives its revenues from four segments:

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

Although 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.

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 in 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.

Temporary 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.

Direct Hire staffing revenues - Direct Hire staffing

revenues are recognized when employment candidates start their permanent employment.

MMG estimates the effect of Direct Hire candidates

who do not remain with its client through the guarantee period (generally 90 days) based on historical experience.

Allowances, recorded

as a liability, are established to estimate these losses.

Fees to clients are generally calculated as a percentage of the new worker’s

annual compensation.

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

Refer to Note 13 for disaggregated revenues by segment.

Payment terms in our contracts vary by the type and

location of our client partner and the services offered.

The term between invoicing and when payment is due is not significant.

were no unsatisfied performance obligations as of December 31, 2024.

There were no revenues recognized during the years ended December

31, 2024 and 2023 related to performance obligations satisfied or partially satisfied in previous periods.

There are no contract costs

The Company did no t recognize any contract impairments during the years ended December 31, 2024 and 2023.

Transfers of Financial Assets

Transfers of financial assets that

do not qualify for sale accounting are reported as collateralized borrowings.

Accordingly, the related assets remain on the

Company’s balance sheet and continue to be reported and accounted for as if the transfer had not occurred.

Cash proceeds from

these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related

transactions.

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, Staffing Solutions, Direct Hire and Video and Multimedia Production.

Although Direct

Hire is within the Staffing Solutions domain, we consider it a separate business segment.

The Company under its Staffing Services

umbrella, provides managed service, consulting and 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 in 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.

Solutions managed and Temporary 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.

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

on historical experience.

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

Fees to clients are generally

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

No fees for Direct Hire services are charged to employment

to Note 14 for disaggregated revenues by segment.

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

The term between invoicing and when

payment is due is not significant.

There were no unsatisfied performance obligations as of December 31, 2025.

There were no revenues

recognized during the years ended December 31, 2025, and 2024 related to performance obligations that satisfied or partially satisfied

in previous periods.

There are no contract costs capitalized.

The Company did no t recognize any contract impairments during the years

ended December 31, 2025, and 2024.

of Financial Assets

of financial assets that do not qualify for sale accounting are reported as collateralized borrowings.

Accordingly, the related assets

remain on the Company’s balance sheet and continue to be reported and accounted for as if the transfer had not occurred.

Cash proceeds

from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands)

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

marketing and promotion expenses for the years ended December 31, 2024 and 2023 as $ 65 and $ 51 , respectively.

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

marketing and promotion expenses for the years ended December 31, 2025, and 2024 were $ 65 and $ 54 , respectively.

(Loss) Per Share

20 unchanged sentences

to its uncertain tax positions within the next twelve months.

The Company’s tax years are subject to examination for 2022 and forward

Federal tax purposes and for 2021 and forward for state tax purposes.

The Company’s tax years remain subject to examination by tax authorities

federal income tax purposes beginning with the 2022 tax year and for state income tax purposes beginning with the 2021 tax year .

Issued Accounting Pronouncements

November 2023, the FASB issued ASU No.

2023-07, Improvements to Reportable Segment Disclosures.

The FASB amended the guidance in ASC

280, Segment Reporting (“ASC 280”), to require a public entity to disclose significant segment expenses and other segment

items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss

and assets that are currently required annually.

The guidance is applied retrospectively to all periods presented in financial statements,

unless it is impracticable.

This new guidance is effective for public business entities for annual periods beginning after December 15,

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

The Company adopted this new standard effective January 1, 2024.

Note 13, Segment Information, for disclosures related to the adoption of ASU 2023-07.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

2025, the FASB issued ASU 2025-05, which provides updated guidance on the accounting for internal-use software and cloud computing arrangements,

including the capitalization and amortization of implementation costs.

The Company does not develop internal-use software and primarily

utilizes third-party hosted (SaaS) solutions.

Accordingly, the adoption of this standard is not expected to have a material impact on

the Company’s consolidated financial statements.

November 2024, the FASB issued ASU No.

15 unchanged sentences

2023-09, Improvements to Income Tax Disclosures .

This ASU does not change accounting for

income taxes but requires new disclosures focusing on two areas, the effective rate reconciliation and taxes paid.

This new standard

is effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption is permitted.

is currently evaluating the impact of the adoption of this standard on the related disclosures.

In 2025, the Company adopted ASU 2023-09,

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, on a prospective basis.

The adoption impacted the presentation and

disaggregation of income tax disclosures but did not affect the Company’s consolidated financial statements.

in valuation allowance reflect updates to the Company’s assessment of the realizability of deferred tax assets, primarily related

to net operating losses.

taxes paid represent cash payments made to taxing authorities, net of refunds received, during the period.

Income taxes paid are disaggregated

by federal, state, and foreign jurisdictions.

The Company made income tax payments solely to jurisdictions in the United States during

2025, including California, Connecticut, Massachusetts, New Jersey, New York, Oregon and the District of Columbia.

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

effect on its present or future consolidated financial statements.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

4 – TRADE RECEIVABLES

9 unchanged sentences

plant and equipment for the years ended December 31, 2025, and 2024 consist of the following:

SUMMARY OF PROPERTY, PLANT AND EQUIPMENT

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

Office equipment

2 unchanged sentences

Accumulated depreciation

Property, plant and equipment, net

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

Property, plant and

equipment, net

6 - ACCRUED EXPENSES

expenses for the years ended December 31, 2025 and 2024 consist of the following:

SUMMARY OF ACCRUED EXPENSES

SCHEDULE OF ACCRUED EXPENSES

Accrued vendor costs

2 unchanged sentences

7 - INCOME TAXES

tax expense (benefit) for the years ended December 31, 2024 and 2023 are comprised of the following:

SUMMARY OF INCOME TAX EXPENSE

tax expense for the years ended December 31, 2025, and 2024 are comprised of the following:

SCHEDULE OF INCOME TAX EXPENSE

Current federal income tax

Current state income tax

Deferred income tax (benefit)

Income tax expense (benefit)

Deferred income tax

Income tax expense

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

SUMMARY OF DEFERRED INCOME TAX ASSETS (LIABILITIES)

Company has federal and state net operating loss carryforwards (“NOLs”) available to offset future taxable income.

December 31, 2025, the Company had approximately $ 1,665 of total NOL carryforwards, consisting of $ 1,499 of federal NOLs and $ 166 of

NOLs generated in tax years beginning after December 31, 2017 do not expire but are subject to limitations on utilization.

may expire at various dates depending on the jurisdiction, if not utilized.

Company has not completed a formal analysis under Internal Revenue Code Section 382 to determine whether ownership changes have occurred

that could limit the utilization of its NOL carryforwards.

If such limitations apply, the amount of NOLs available to offset future taxable

income could be significantly reduced.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES)

Deferred tax assets (liabilities):

Employee accruals

Cash to accrual

Accrued workers’ compensation and other

State deduction

163(j) interest limitation

Federal and State net operating loss carry forwards

Accrued workers’

compensation and other

Federal and State net operating

loss carry forwards

Deferred tax liabilities:

Deferred income taxes, net

Valuation allowance

Deferred tax assets (liabilities)

Deferred income taxes,

Deferred tax assets

(liabilities)

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

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

Tax expense at federal statutory rate

Tax expense at federal statutory

State income taxes, net

Permanent Differences

Expired of NOL carryforwards

Prior year NOL true-up

Other deferred adjustments

Change in valuation allowance

Effect of deferred rate change

Historical Adjustments

Valuation allowance

Income tax expense

Coast Bank and Trust

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

which was amended in January 2020.

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

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

The agreement is on month-to-month terms.

August 24, 2023, we were notified by that our factoring arrangement had been sold to Gulf Coast Bank and Trust (“Gulf”),

by Triumph who decided to sell its non-transportation portfolio.

The transition took place in August 2023 with new financing coming from

The Company continues to be obligated to meet certain covenants with respect to invoicing and reserve account balance.

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

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

As of December 31, 2024, the required amount was

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

If a reserve shortfall exists for a period

of ten days, the Company is required to make payment to the financial institution for the shortage.

receivables were sold with full recourse.

Proceeds from the sale of receivables were $ 9,132 and $ 3,768 for the years ended December 31,

2024 and 2023, respectively.

Repayments totaled $ 6,930 and $ 6,214 for the years ending December 31, 2024 and 2023, respectively.

the total outstanding balance under the recourse contract was $ 2,375 and $ 174 as of December 31, 2024 and 2023, 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, 2024

and 2023 totaled $ 108 and $ 92 , respectively.

and are included in other income (expense) in the accompanying consolidated statement of

9 – 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.

Tax expense at federal statutory rate ( 21 %)

8 – TRANSFER OF FINANCIAL ASSETS

2025, the Company entered into receivables purchase programs with JPMorgan (“JPM”) and Mitsubishi UFJ Financial Group (“MUFG”),

under which certain eligible trade receivables may be transferred on a non-recourse basis, other than customary representations and warranties

and limited breach-based repurchase obligations.

The Company evaluated these transfers under ASC 860, Transfers and Servicing ,

and concluded that transfers under these programs are accounted for as sales when control over the receivables is surrendered.

qualifying receivables are derecognized upon transfer, and the related discounts and fees are recognized as loss on sale of receivables

in the consolidated statements of operations.

Because the transferred receivables arise from the Company’s ordinary revenue-producing

activities, cash proceeds from these transfers are classified within operating cash flows.

the year ended December 31, 2025, the Company sold $ 6,509 of receivables under the JPM program and $ 1,354 under the MUFG program and

received cash proceeds of $ 6,455 and $ 1,211 , respectively.

The Company recognized discounts and fees of $ 54 under the JPM program and

$ 19 under the MUFG program, which were recorded as loss on sale of receivables during 2025 in other income (expense) on the accompanying

consolidated statement of operations.

difference between the carrying value of receivables sold and the cash proceeds received, totaling $ 73 for

the year ended December 31, 2025, represents non-cash adjustments included in net income for purposes of reconciling net loss to net

cash provided by operating activities in the consolidated statement of cash flows.

These amounts are added back in the operating

section of the consolidated statement of cash flows.

Company did not retain servicing assets or liabilities, beneficial interests, derivatives, or other significant continuing involvement

in the transferred receivables, and its exposure under customary representations and warranties and limited breach-based repurchase obligations

was not material as of December 31, 2025.

Factoring Facility - Gulf Coast Bank and Trust Company

Company maintains a factoring and security agreement with Gulf Coast Bank and Trust Company, which under their lending arm, Gulf

Coast Business Credit (“Gulf”), provides for the sale of certain receivables with full recourse.

Under this arrangement,

the Company receives advances of up to 93 % of eligible receivables, with the remaining balance held as a reserve.

The reserve is

released as underlying customer payments are collected.

the Company retains recourse under this arrangement, transfers of receivables are accounted for as secured borrowings rather than sales.

from the sale of receivables were $ 8,299 and $ 9,132 for the years ended December 31, 2025, and 2024, respectively.

Repayments totaled

$ 10,220 and $ 6,930 for the years ending December 31, 2025, and 2024, respectively.

Thus, the total outstanding balance under the recourse

contract was $ 455 and $ 2,375 as of December 31, 2025, and 2024, respectively.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands)

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 has been eligible to pursue.

Sometime in March 2025 MMG expects the Receiver to make a recommendation to the arbitrator.

Financing costs associated with this

facility totaled $ 105 and $ 108 for the years ended December

31, 2025 and 2024 , respectively.

10 – COMMITMENTS AND CONTINGENCIES

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

is subject to inherent uncertainties, and an adverse outcome in these or other matters could arise that may have an adverse effect on

the Company’s business, financial condition, or results of operations.

Except as described below, the Company is not currently

aware of any material pending legal proceedings.

Group Arbitration and Judgments

in March 2020, the Company and its subsidiary Maslow Media Group, Inc.

(“MMG”) initiated legal proceedings against members

of the Vivos Group related to breaches of the Merger Agreement and outstanding debt obligations owed to MMG.

In the fall of 2021, the

parties agreed to resolve the dispute through arbitration, and arbitration proceedings commenced in February 2022.

August 31, 2022, the arbitrator issued an award (the “Award”) in favor of the Company and MMG, including findings of fraud

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

In aggregate, the arbitration

awards provided for recovery of amounts owed under promissory notes issued by members of the Vivos Group, accrued contractual interest,

attorneys’ fees and expenses of $ 1,209 , and contract damages of $ 1,000 to be satisfied through the transfer of shares of the Company’s

common stock previously issued to the Vivos Group in connection with the merger.

The total value of the awards on December 31, 2025 aggregated

May 17, 2023, supplemental award also appointed a Receiver whose primary responsibility was to assist in the enforcement and collection

of the arbitration awards, including recovery of amounts owed and related damages, costs, and fees.

December 29, 2023, the Circuit Court for Montgomery County, Maryland entered orders confirming the arbitration awards as judgments in

favor of Reliability Incorporated.

These judgments became final on January 29, 2024, after the expiration of the appeal period and are

enforceable for a period of twelve years, subject to renewal and enforcement in other jurisdictions.

February 16, 2026, the Company entered into a settlement agreement with the Vivos Group to resolve the outstanding judgments and

enforcement matters.

Under the terms of the settlement agreement, the Vivos Group agreed to transfer to the Company certain shares

of the Company’s common stock previously issued to them in connection with the merger.

Upon completion of the transfers, the

shares will be returned to the Company and recorded as treasury shares.

settlement agreement provided specified time periods for the execution and delivery of the required transfer documentation.

If the required

transfers were not completed within the agreed timeframes, the Company could pursue enforcement of the judgments and related remedies through

March 2026, the Company filed a motion with the court seeking entry of a consent judgment to effectuate the transfer of these shares through

the Company’s transfer agent.

As of the date of this filing, the transfer process has not yet been completed.

expects that resolution of this matter, including completion of the settlement transfers or enforcement of the related judgments, will

reduce legal and administrative costs in future periods.

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

2 unchanged sentences

12 - 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 $ 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

For the year ended December 31, 2024, the Company recorded a change in

estimate based on the advice of MMG counsel, whose interpretation of the award led to MMG’s recalculation of accrued interest at a lower

interest rate from August 31, 2022 to December 31, 2024, resulting in an approximate $ 132 reversal in interest.

table below is a summary of Vivos Group related party notes receivable which as of December 31, 2024 total $ 5,847 .

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

SCHEDULE 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 December 31, 2024

Settlement Agreements

June 2023, VREH successfully sold the property at 22 Baltimore Road in Rockville, Maryland, relieving Maslow of any liability related

to the building, which MMG had been signed as a guarantor for in 2017 without management’s knowledge.

In September 2024, the Company

received $ 91 from the bankruptcy proceedings and sale of the building.

This amount was applied toward reducing the Vivos Group’s

outstanding debt to MMG (see table above).

The SWC matter was also resolved with MMG’s portion being $ 10 .

Related Party Costs

RLBY’s Other Income and Expenses totaling approximately $ 379 in legal

fees and settlements included $ 143 for receivership related costs for recovery of the arbitration award and $ 115 for legal fees and settlement

of the SWC matter (see Debt Settlement Agreement above).

These $ 258 in costs were related to the Vivos Group.

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 (“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 each.

Tsahalis, Mr.

Speck, and Hawkeye also received Warrants to purchase 16,323 , 81,616 , and 81,616 shares, respectively, (on a

post-Merger basis) of the Company Common Stock.

The term “warrant” herein refers to warrants issued by MMG and assumed

by the Company as a result of the Merger.

The terms of all Warrants are the same other than as to the number of shares covered

The Warrant may be exercised at any time or from time 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 .

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.

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

The five-year eligibility for all holders of these Warrants expired in October 2024.

Related Party Relationship

to and following the October 29, 2019 Merger, members of the Vivos Group were majority shareholders of the Company and were considered

related parties.

As of December 31, 2025, the Vivos Group remained related parties due to their ownership interests.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands)

Party Notes Receivable

amounts due from the Vivos Group arose from acquisition-related borrowings and advances made prior to the October 29, 2019 merger.

borrowings consisted of several promissory notes and related advances associated with the Maslow Media acquisition structure.

arbitration proceedings concluded in 2022 and supplemental awards issued in 2023, the outstanding balances, together with accrued interest

and related obligations, were incorporated into the final arbitration awards and related court judgments.

of December 31, 2025, and 2024, the aggregate balance due from members of the Vivos Group totaled $ 6,357 and $ 5,847 , respectively.

accrues pursuant to the terms of the arbitration awards and related agreements.

Management evaluates the collectability of these amounts

on an ongoing basis.

February 16, 2026, the Company entered into a settlement agreement with the Vivos Group pursuant to which members of the Vivos Group

agreed to transfer to the Company shares of the Company’s common stock in full satisfaction of the outstanding judgments and related

settlement occurred subsequent to December 31, 2025, and did not require adjustment to the Company’s consolidated financial statements

as of that date.

As of the date of issuance of these financial statements, the transfer of the shares is in process pursuant to the settlement

13 - EMPLOYEE BENEFIT PLAN

5 unchanged sentences

Company operates within four industry segments:

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

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

The Recruiting and Staffing segment provides

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

Direct Hire fulfils direct placement

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

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

The EOR segment

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

The Staffing Solutions 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

2 unchanged sentences

Currently, the Company is not allocating interest income, interest expense,

depreciation expense, other income (expense), income tax benefit (expense) and sales, general, and administrative expenses at the

segment level.

Our operating segments align with our organizational structure and are regularly reviewed by our Chief Executive

Officer (our chief operating decision-maker or “CODM”) to allocate resources and assess performance.

segments based on revenue and gross profit, which also guide our annual budgeting process.

Monthly, our CODM reviews segment revenue

and gross profit against the prior year and budget to inform working capital allocation decisions.

The measure of segment

assets is reported on the consolidated balance sheet as total assets.

depreciation expense, other income (expense), income tax benefit (expense) and sales, general, and administrative expenses at the segment

Our operating segments align with our organizational structure and are regularly reviewed by our Chief Executive Officer (our

chief operating decision-maker or “CODM”) to allocate resources and assess performance.

We evaluate segments based on revenue

and gross profit, which also guide our annual budgeting process.

Monthly, our CODM reviews segment revenue and gross profit against the

prior year and budget to inform working capital allocation decisions.

The measure of segment assets is reported on the consolidated balance

sheet as total assets.

following table provides a reconciliation of revenue and gross profit by reportable segment to consolidated results for the years indicated:

1 unchanged sentence

SCHEDULE OF GROSS PROFIT PERFORMANCE BY SEGMENT

Business Segment

Video Production

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

15- SUBSEQUENT EVENTS

Company has evaluated subsequent events after the balance sheet date of December 31, 2024 through March 31, 2025, 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 occurring after December 31, 2025 through March 31, 2026, the date the consolidated financial

statements were issued.

February 16, 2026, the Company and its subsidiary Maslow Media Group, Inc.

entered into a Settlement Agreement and General Mutual Release

with Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC, Naveen Doki, Silvija Valleru, Suresh Doki, Shirisha Janumpally (individually

and as trustee of Judos Trust), Kalyan Pathuri (individually and as trustee of Igly Trust), and Federal Systems, LLC (collectively, the

“Respondents”).

the terms of the agreement, the Respondents agreed to transfer an aggregate of 253,292,210

shares of the Company’s common stock to the Company in

full satisfaction of the monetary judgments and other claims arising from the previously disclosed arbitration and related court proceedings.

agreement required Respondents to complete the transfer of the shares through the Company’s transfer agent within twenty ( 20 )

days of execution of the agreement.

Since the Respondents had not completed the required transfer of shares within the specified time

period, pursuant to the terms of the settlement agreement, the Company filed a motion with the court seeking entry of a consent judgment

to effectuate the transfer of these shares through the Company’s transfer agent.

As of the date of this filing, the transfer process

has not yet been completed.

the transfer is completed, the shares are expected to be returned to the Company and recorded as treasury shares.

settlement occurred subsequent to December 31, 2025 and did not require adjustment to the Company’s consolidated financial statements

as of that date.

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