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Item 8. Financial Statements and Supplementary Data

2025-03-31 compared with 2024-04-01 · 468 added, 449 removed, 251 unchanged (79% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY

Report of Independent Registered Public Accounting Firms PCAOB ID NO:

Consolidated Financial Statements of Reliability, Incorporated.

Audited Consolidated Financial Statements of Reliability, Incorporated.

Consolidated Balance Sheets as of December 31, 2024 and 2023

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18012 Sky Park Circle, Suite 200

California 92614

Irvine, California 92614

tel 949-852-1600

fax 949-852-1606

www.rjicpas.com

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, 2023 and 2022, and the related consolidated statements of operations, changes stockholders’ equity, and cash flows

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

financial statements”).

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

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

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

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.

conducted our audit 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 audit, 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.

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.

Accordingly, we express no such opinion.

audit 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 audit 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) relate to accounts or

disclosures that are material to the consolidated financial statements and (2) involved 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 relate.

Recoverability

of Notes Receivable from Related Parties

discussed in Notes 9 and 11 to the consolidated financial statements, the Company has significant related party transactions

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

In addition to holding several

receivable agreements, including notes receivable with these related parties, in 2022, an arbitrator issued an award in favor of the

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

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

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

from related parties.

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

We performed the following procedures to evaluate

the recoverability of the RP notes by the Company:

Sent and inspected

questionnaires from the Company’s officers;

Evaluated and reviewed the

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

Read the Company’s minutes from meetings of the Board

of Directors;

Reviewed public filings, external news, and research sources

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

Confirmed with the Company’s management and its outside

counsel as to the award granted by the arbitrator;

Reviewed management’s assessment of the collectability

of these balances due from related parties.

have served as the Company’s auditor since 2009.

Jimenez International CPAs

INCORPORATED AND SUBSIDIARY

BALANCE SHEETS

in thousands, except per share data)

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)

CURRENT ASSETS

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Trade receivables, net of allowance for credit losses

Retention credit receivable

Other receivables

Notes receivable from related parties

10 unchanged sentences

Deferred revenue

Income taxes payable

Note payable, current

Total current liabilities

LONG TERM LIABILITIES

Note payable, net of current

Total long-term liabilities

Total liabilities

Commitment and contingencies (Note 9)

Subsequent events (Note 14)

STOCKHOLDERS’ EQUITY

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

shares authorized, 300,000,000

issued and outstanding as of December 31, 2023 and 2022

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

Additional paid-in capital

2 unchanged sentences

Total liabilities and stockholders’ equity

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 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,

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Loss before income tax expense

Income tax expense

Consolidated net loss

Income tax benefit (expense)

Net loss per share:

Share used in per share computation:

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, 2023 and 2022

in thousands, except per share data)

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)

Balance, January 1, 2023

1 unchanged sentence

Balance, December 31, 2024

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

INCORPORATED AND SUBSIDIARY

STATEMENTS OF CASH FLOWS

in thousands)

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 provided by (used in) operating activities:

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

Depreciation and amortization

8 unchanged sentences

Deferred revenue

Other liabilities

Income taxes payable

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

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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 increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash 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,

disclosures of cash flow information:

paid during the year for:

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.

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

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 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.

That changed in late 2019 when MMG began providing

staffing services in the area of IT.

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

accounting and finance, HR, and sales.

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

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

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

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

of our revenue in 2023.

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

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

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

in revenue and $ 181

in gross profit in 2023 and 2022 respectively.

2 - MANAGEMENT’S PLAN

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

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

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

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

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

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

market access;

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

activity for 2024;

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

March 11, 2024, was $ 2,623 .

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

and beyond as they become due.

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

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

wholly owned subsidiary, MMG.

All intercompany transactions and balances have been eliminated in consolidation.

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

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

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.

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.

2 unchanged sentences

In making its estimates, the Company considers the current economic and legislative

and Cash Equivalents

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

Concentration

of Credit Risk

the year ended December 31, 2023, the Company’s top 10 clients generated over 86.4

% of the revenue.

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

In 2023, Clients C, D, and F

accounted for 49.5 %

of the revenue.

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

respectively, or 40.3 %

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

revenue, accounted for a combined 58.8 %

with Client C leading again with 19.6 %.

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

the total balance of $ 2,993 .

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

and 12.3 %, respectively,

of the accounts receivable balance, aggregating to 74.4 %.

other client exceeded 10% of revenues .

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

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

The Company has not experienced significant

losses related to receivables.

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

Cash and Cash Equivalents

The Company considers all highly liquid investments

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

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 %,

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

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

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

estimate of the loss exposure.

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

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

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

Contract assets primarily relate to the

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

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

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

Value Measurements

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

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, 2023 and 2022

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.

and Equipment

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,

2023 and 2022 totaled $ 18 and $ 32 , respectively.

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

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

The Company looks primarily to the undiscounted

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

Company held 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

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.

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:

(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.

INCORPORATED AND SUBSIDIARY

1 unchanged sentence

in thousands)

Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, the core principle of which

is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects

the consideration to which the entity expects to be entitled to receive in exchange for those goods or services.

To achieve this core

principle, five basic criteria must be met before revenue can be recognized:

(1) identify the contract with a customer;

the performance obligation(s) in the contract;

(3) determine the transaction price;

(4) allocate the transaction price to performance

obligation(s) in the contract;

and (5) recognize revenue when or as the Company satisfies a performance obligation.

Company derives its revenues from four segments:

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

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

The Company provides temporary

staffing and Direct Hire services.

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

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

Revenues as presented on the consolidated statements

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

Reimbursements, including those related

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

are included in cost of revenue.

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

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

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

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 13 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, 2023.

There were no revenues

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

There are no contract costs capitalized.

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

31, 2023 and 2022.

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

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Under this method, deferred tax assets and liabilities are

determined based on differences between the financial statement carrying amounts of

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

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

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

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

the differences reverse.

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

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

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

by the relevant taxing authority.

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

than a 50% likelihood of being sustained.

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

income tax matters in income tax expense.

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

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

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

Federal tax purposes and for 2020 and forward for

state tax purposes.

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

the relevant taxing authority.

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

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

As of December

31, 2024 and 2023, the Company did not record any accruals for interest and penalties.

The Company does not foresee material changes

to its uncertain tax positions within the next twelve months.

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

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

Issued Accounting Pronouncements

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

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

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

ASU 2016-13 introduces a new model

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

incurred losses.

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

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

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

December 15, 2022.

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

consolidated financial statements and disclosures.

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

November 2023, the FASB issued ASU No.

2023-07, 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 taxes paid.

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

modifications and clarifications discussed below.

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

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

Entities should

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

The Company is currently evaluating how

this ASU will impact its consolidated financial statements and disclosures.

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

1 unchanged sentence

in thousands)

November 2024, the FASB issued ASU No.

2024-03 , Income Statement - Reporting Comprehensive Income - Expense Recognition Disclosures .

This ASU will require entities to provide enhanced disclosures related to certain expense categories included in income statement captions.

The ASU aims to increase transparency and provide investors with more detailed information about the nature of expenses reported on the

face of the income statement.

The new standard does not change the requirements for the presentation of expenses in the face of the income

Under this ASU, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the

income statement — excluding earnings or losses from equity method investments — if they include any of the following expense

purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion.

For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those

The new ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning

after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption of this standard

on the related disclosures.

December 2023, the FASB issued ASU No.

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.

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

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Accounts receivable, factored

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

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

The unbilled receivables relate to services that were performed,

and the related revenue was recognized but the Company has not invoiced for these services as of December 31, 2024.

5 – PROPERTY, PLANT AND EQUIPMENT

6 unchanged sentences

Property, plant and equipment, net

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

6 - ACCRUED EXPENSES

11 unchanged sentences

Income tax expense (benefit)

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

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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

6 unchanged sentences

Income tax expense

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

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

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

Coast Bank and Trust

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

was amended in January 2020.

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

amount of an invoice eligible for sale is 93%.

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

The agreement is on month-to-month terms.

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

(“Gulf”), as TBC had decided to sell its non-transportation portfolio.

The transition took place between August

26 th and 28 th with new financing coming from Gulf.

The Company continues to be obligated to meet certain

financial covenants in respect to invoicing and reserve account balance.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

8 unchanged sentences

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

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

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

31, 2023 and 2022 totaled $ 92 a nd

respectively.

and 2023 totaled $ 108 and $ 92 , respectively.

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

9 – COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

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

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

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 .

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 .

7 unchanged sentences

Reliability has collectible judgments which

the Receiver is now eligible to pursue.

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

The lawsuit related to

a debt restructuring services agreement secured by Suresh Doki, Naveen Doki, and Silvija Valleru to assist the following then owned

Vivos entities:

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

Inc., and US IT Solutions, Inc.

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

not paid by the Vivos Group.

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

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

were not in the original filings.

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

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

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

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

shares of common stock with no

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

the Receiver has been eligible to pursue.

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

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

All authorized shares of Company

Common Stock are issued and outstanding.

11 - RELATED PARTY TRANSACTIONS

Purchase Agreement

November 9, 2016, Vivos Holdings LLC, the former owner of MMG, acquired 100 %

of MMG through a stock acquisition exchange for a purchase price of $ 1,750 ,

of which $ 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.

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

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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.

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 .

OF RELATED PARTY NOTES RECEIVABLE

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

SCHEDULE OF RELATED PARTY NOTES RECEIVABLE

Note Description

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Balance on December 31, 2023

Accrued interest

Balance on December 31, 2024

Settlement Agreements

July 21, 2021, Maslow settled the obligation which Vivos Holdings, LLC had obligated Maslow 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 Maslow with no liability with

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

The Company may be

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

Such an amount would

reduce Vivos debt to MMG by that amount.

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

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 %

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

respectively.

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

12 unchanged sentences

Tsahalis and Mr.

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

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 ,

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

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

all Warrants are the same other than as to the number of shares covered thereby.

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 .

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

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 trigger.

The five-year

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

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.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

12 - EMPLOYEE BENEFIT PLAN

3 unchanged sentences

employee contributions.

INCORPORATED AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

in thousands)

13 - BUSINESS SEGMENTS

8 unchanged sentences

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

operating income includes revenue and cost of services only.

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

expenses at the segment level.

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

SCHEDULE OF RECONCILIATION OF

REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS

Recruiting and Staffing

Video and Multimedia Production

gross profit includes revenue and cost of services only.

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.

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

Profit Performance by Segment

SCHEDULE OF GROSS PROFIT PERFORMANCE BY SEGMENT

Business Segment

Video Production

14- SUBSEQUENT EVENTS

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

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

Based upon this evaluation, management has determined

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

statements, except as follows:

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

al., became final

as the appeal period expired for the defendants.

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

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

Thus, Reliability has collectible judgments which the Receiver

is now eligible to pursue.

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

On March 18, 2024, Maslow filed its

response opposing the motion.

The court has not yet ruled on the motion.

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.

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