What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 173 added, 199 removed, 34 unchanged (92% of the section changed)

1 unchanged sentence

FORWARD-LOOKING

following discussion and analysis of our results of operations and financial condition should be read in conjunction with our

unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

This section includes several forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of

1995, that reflect our current views with respect to future events and financial performance.

All statements that address

expectations or projections about the future, including, but not limited to, statements about our plans, strategies, adequacy of

resources and future financial results (such as revenue, gross profit, operating profit, cash flow), are forward-looking statements.

Some of the forward-looking statements can be identified by words like “anticipates,” “believes,”

“expects,” “may,” “will,” “can,” “could,” “should,”

“intends,” “project,” “predict,” “plans,” “estimates,”

“goal,” “target,” “possible,” “potential,” “would,” “seek,”

and similar references to future periods.

These statements are not a guarantee of future performance and involve a number of risks,

uncertainties and assumptions that are difficult to predict.

Because these forward-looking statements are based on estimates and

assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control

or are subject to change, actual outcomes and results may differ materially from what is expressed or forecasted in these

following discussion and analysis of our results of operations and financial condition should be read in conjunction with our unaudited

condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

includes several forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect

our current views with respect to future events and financial performance.

All statements that address expectations or projections about

the future, including, but not limited to, statements about our plans, strategies, adequacy of resources and future financial results

(such as revenue, gross profit, operating profit, cash flow), are forward-looking statements.

Some of the forward-looking statements

can be identified by words like “anticipates,” “believes,” “expects,” “may,” “will,”

“can,” “could,” “should,” “intends,” “project,” “predict,” “plans,”

“estimates,” “goal,” “target,” “possible,” “potential,” “would,”

“seek,” and similar references to future periods.

These statements are not a guarantee of future performance and involve

a number of risks, uncertainties and assumptions that are difficult to predict.

Because these forward-looking statements are based on

estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond

our control or are subject to change, actual outcomes and results may differ materially from what is expressed or forecasted in these

forward-looking statements.

Important factors that could cause actual results to differ materially from these forward-looking

statements include, but are not limited to:

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

financing to fund our business plan and expenses;

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

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

potential loss of clients and possible rejection of our

business model and/or sales methods;

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

industries we serve;

weakness or volatility in the financial and capital markets, which may result in the postponement or

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

Important factors that could cause actual results to differ materially from these forward-looking statements

include, but are not limited to:

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

business plan and expenses;

negative outcome of pending and future claims and litigation and our ability to comply with our contractual

covenants, including in respect of our debt;

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

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

weakness or volatility

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

of our customers to pay our fees;

delays or reductions in U.S.

1 unchanged sentence

credit risks associated with our customers;

competitive market pressures;

the availability and cost of

qualified labor;

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

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

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

market pressures;

the availability and cost of qualified labor;

our level of success in attracting, training and retaining qualified

management personnel and other staff employees;

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

care reform laws and regulations;

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

the activities of our temporary employees;

our performance on customer contracts;

and government policies, legislation or judicial decisions adverse to our

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

and government policies, legislation or judicial decisions

adverse to our businesses.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as

of the date hereof.

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

except as required by law.

We recommend readers to carefully review the entirety of this Quarterly Report, the “Risk

Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and the other

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

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

We recommend readers to carefully review the entirety of this Quarterly Report, the “Risk Factors”

in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and the other reports and documents

we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our Quarterly Reports on Form

10-Q and our Current Reports on Form 8-K.

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

9 unchanged sentences

ACCOUNTING POLICIES AND COMMENTS RELATED TO OPERATIONS

discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated

financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect

the reported amounts of assets, liabilities, revenues, and expenses based on historical experience and various other factors that

are believed to be reasonable under the circumstances.

Actual results may differ from these estimates under different assumptions or

discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial

statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation

of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts

of assets, liabilities, revenues, and expenses based on historical experience and various other factors that are believed to be reasonable

under the circumstances.

Actual results may differ from these estimates under different assumptions or conditions.

have been no material changes or developments in the Company’s evaluation of the accounting estimates and the underlying assumptions

7 unchanged sentences

OF OPERATIONS

for the three months ending September 30, 2024, were $6,230, which represented an increase of $889 over the $5,341 generated in the third

for the three months ending March 31, 2025, totaled $4,746, representing a decrease of $549 over the $5,295 generated in the first

quarter of 2024.

This was the first time we have enjoyed three quarters of consecutive revenue beats on comparative periods to a year

ago since 2019.

Our top four clients all had increases in revenue when compared to the third quarter of a year ago of $1,394.

EOR segment continues to drive this year-over-year growth with third quarter revenue of its own of, which was $826 or.18.5% over 2023’s

third quarter EOR revenue of $4,467.

Our top four revenue producing clients overall contributed $4,255 or 80.4% of EOR quarterly revenue

compared to $2,926 a year ago in the period ending September 30, 2023.

The EOR segment revenue quarterly increase from these four clients

was a combined $1,329.

revenue at $822 increased over its performance a year ago by $112 or 15.8%, when the period ended September 30, 2023, resulted in $710.

One new client was the catalyst, adding $156 for the quarter.

Otherwise, if one declining account is omitted, 13 clients were up $20

over the same period a year ago.

Video Production and Direct Hire segments were down comparatively to the third quarter of 2023 as revenue in the third quarter

2024 was $87 and $28, respectively, to $100 and $64 in revenue, respectively, in 2023.

Thus, Video Production was down 13.7% and Direct

at $17,566 grew $1,574 for the nine-month period ending September 30, 2024, versus the same period in 2023 with a total of $15,992.

increase was driven by our top four revenue producers amassing $12,172 in the nine months ending September 30, 2024, which represents 69.3%

of our total revenue and a $3,542 increase over their revenue contributions in the same nine-month period ending September 30, 2023.

The aforementioned four clients have each surpassed the million-dollar mark year to date.

drove the nine-month growth with $15,108 in revenue which was $1,868, or 14.1% more than this business garnered in the same period 2023 when it produced $13,240 in revenue.

Otherwise, in the nine-month period ending September 30, 2024, Staffing at $2,202 was off 2023’s

third quarter pace by $136, or 5.8%, which was about 5.7% better than the gap in the second quarter 2024.

Video Production

at $177 was $122 or 40.9% away from 2023’s nine-month revenue of $299.

Finally, Direct Hire revenue at $79 was $36 off the pace

of where it was to the same nine-month period in 2023 at $115.

from our EOR segment declined by $817 or 17.9% compared to $4,572 in the first quarter of 2024.

This decline was primarily

attributable to a $366 reduction in revenue from one of our top three clients in 2024 largely due to the absence of election-related activity in this non-election year.

This client-specific reduction accounted for approximately 67% of the total revenue decline and 45% of the decline

within the EOR segment.

Offsetting this, our other top four revenue-generating clients contributed a combined $280 in incremental revenue

compared to the same period last year.

revenue increased to $932 a growth of $265 or 39.7%, from $667 in the prior-year period.

A key contributor to this growth was a government agency client that accounted for $233, or approximately 88%, of

the total increase in staffing revenue.

Production revenue rose was up $17 with $49 compared to $32 in the first quarter of 2024.

Conversely, our Direct Hire business

generated $10 in revenue in the first quarter of 2025, a decrease of $14,000 from $24,000 in the prior-year period.

of Revenue / Gross Profit

the three-month period ended September 30, 2024, gross profit at $834 saw a $62 or 8.0% improvement comparatively to the three-month

period ended September 30, 2023, when gross profit landed on $772.

Gross margins, however, at 13.4% were not as strong as they were a

year ago at 14.5%.

Several factors contributed to the margin drop, including the higher margin Direct Hire revenue being down by $36,

our EOR business increasing by 1.3% to 85.0% of revenue at 12.1% margins vs.

12.5% which was caused by a shift in our labor from W2 to

lower margin 1099.

shift of revenue concentration by 1.3% to EOR at 12.1% margins alone resulted in a loss of gross profit by approximately $44 or seventy

basis points (.7).

terms of gross profit, EOR and Staffing saw increases of $83 and $13 in the third quarter of 2024 compared to 2023, while Video Production

and Direct Hire were off the mark by $1 and $33, respectively.

the nine-month period ended September 30, 2024, gross profit at $2,346 improved by $123 or 5.5% over the $2,223 earned comparatively

to the nine-month period ended September 30, 2023.

margins for the nine-month period ended September 30, 2024, were 13.4%, versus 13.9% where margins stood a year ago at the end of September

The paradigm causing the deficiency is the same as the third quarter, as the nine-month revenue mix weighed heavier to EOR as the

business unit grew in gross profit by $201 while the other three declined by a combined gross margin of $125.

This phenomenon alone caused

margins to compress by 42 basis points which explains 79% of the 53-basis point spread (13.4 to 13.95%).

margins declined 20 basis points (12.3% to 12.1%) in the nine months ending September 30, 2024 when compared to the same period in

2023, as a heavier use of 1099 labor of almost $1,500 at a 2.5% lower margin more than offset a W2 margin increase by 30 basis

When extending EOR contracts we continue to incorporate reasonable pricing markup increases which slowly should improve

Additionally, our customer mix continues to be more weighted to clients that have favorable pricing terms than those that

previously dominated sales.

This is why our EOR business is now seeing 12.1% margins as opposed to the 9.8% it did, four years

For the three-month period ended March 31, 2025, gross profit totaled $641,

representing a decline of $68 or 9.6%, compared to $709 in the prior-year period.

Despite the year-over-year decrease in gross profit,

gross margins improved by 10 basis points to 13.5%, up from 13.4% in the first quarter of 2024.

This marks the third increase in gross

margin during the first quarter over the past four years.

shift in revenue mix positively influenced overall margins.

Staffing revenue increased from 12.6% to 19.6% of total revenue, with a gross

margin of 17.9%, contributing approximately 30 basis points of margin improvement.

Additionally, Video Production delivered gains in

both gross profit and margin, adding another 10 basis points.

These improvements offset a combined 30 basis point negative impact from

Direct Hire and EOR services.

Comparatively year over year, Staffing gross margin fell to 17.9% from 18.4% in 2024, mostly because IT

staffing revenue of 37 lifted margins by thirty basis points.

In the first quarter 2025, all our staffing revenue were from media roles.

gross margin was 12.0%, just 10 basis points below the prior-year level of 12.2%.

Given the trend that began in Q2 2024—where EOR

margins declined modestly due to a heavier reliance on Maslow 1099 resources over W-2 employees, this limited margin compression in Q1

2025 was a positive indicator of stabilization.

Hire’s 20 basis point negative impact on margin was attributable to a decline in revenue compared to the prior year quarter.

Direct Hire typically generates gross margins of approximately 90%, even modest revenue shifts have a disproportionate effect on consolidated

margin performance.

and Administrative (“G&A”)

and administrative expenses for the three months ending September 30, 2024 were $958 compared to $998 in the same period in 2023,

representing a $40 or 4.0% favorable result.

The decrease in spending when compared to 2023’s second quarter was rooted in $71

in lower legal costs than a year ago, $23 of which were reimbursed outside counsel fees for an employee matter that a client agreed to

take responsibility.

salaries, payroll tax and benefits were higher by $44, and benefits by $30 in the third quarter 2024 compared to the same period 2023.

Bonus and Commissions, though, saw reductions of $65.

and administrative expenses for the nine months ending September 30, 2024, were $2,891 compared to $2,843 a year ago, resulting in $48

or 1.7% more in costs 2024 when compared to the same year to date period ending September 30, 2023.

Loaded Payroll was $221 higher with a $168 increase in salaries as we have continued to bolster our sales and client services departments.

A continued increase in our

health insurance benefits and higher usage of our subsidy resulted in a $47 increase in the nine months ending September 2024 compared

Non-salary SG&A costs $173 or 18.5% favorable as approximately $97 of $103 in Legal cost savings were reclassed or booked

in 2024 to Other (See last paragraph of this section below for further details).

cost savings were realized in Contract Services by $77, Staff Events which were scaled back by $39, Payroll fees by $14, and Travel

and Meals and Entertainment by $9.

Unfavorable changes in SG&A expenses by category were Recruiting Software costs $34 (these

are allocated to COR if associated with Staffing or Direct Hire fulfillment), Business Insurance at $15, Communications at $8, and

Business License and Taxes at $10 which now consist of state minimum tax and franchise fees to states that are not deemed to be

state income taxes.

Prior to 2024, we were booking these taxes and fees to state income taxes.

December 29, 2023, we learned the Maryland Circuit court certified the arbitration award as a judgement.

The costs related to the award

are now centered on collection and recovery.

Since we began separating non-core operational expenses in 2023 and recording them to Other

Expense, MMG decided to begin recording all related Receiver expenses from SG&A (operational) legal to Other Expense in the second

This practice continues, which lowers costs associated with non-operational legal obligations.

the three-month period ending September 30, 2024, the Company incurred $27 in interest charges for financing, factoring, and paying an

advance rate (BIP) against its invoices compared with $12 in the same period a year ago.

the nine-month period ending September 30, 2024, the Company incurred $62 in interest charges for financing, factoring, and paying an

advance rate (BIP) against its invoices compared with $77 in the same period a year ago.

and administrative expenses for the three months ended March 31, 2025, totaled $1,023, compared to $947 in the first quarter of 2024,

representing an unfavorable variance of $76 or 8.0%.

The year-over-year increase was primarily driven by higher loaded salaries, which

rose by $37 or 4.9%, led by $20 increase in accrued leave.

Wages increased by $15.

Overall loaded salaries represented 48.6% of the overall

$76 higher SG&A costs.

costs rose by $39 (51.4%), largely due to a $26 increase in ADP payroll processing fees.

This increase was anticipated, as the first

quarter of 2024 benefited from a one-time holiday incentive tied to our 2023 ADP servicing agreement.

Other notable increases by account

were non recruiting software at $10, and business taxes and licenses at $10 which consist of state minimum tax and franchise fees for

states that are not deemed to be state income taxes.

A year ago, in the first quarter of 2024, we were booking these taxes and fees to state

income taxes.

cost savings were realized in Legal by $11, as Receivership fees a year ago resided here, and recruiting software which a greater portion,

was allocated to COR for staffing and Direct Hire searches.

the three-month period ending March 31, 2025, the Company incurred $52 in interest charges for financing, factoring, and paying an advance

rate (BIP) against its invoices compared with $16 in the same period a year ago.

Income (Expense)

non-operational costs, in the third quarter totaled $68 including $32 in Receiver and arbitration award related legal costs.

This represented

$55 more than the $13 we incurred in the third quarter of 2023.

In the three-month period ending September 30, 2024, we incurred $30

more in legal costs related to the SWC matter (see Note 6), and another $25 for a settlement with HCRN.

We began booking these non-operational

fees to Other Income (Expense) last year in the second quarter.

the nine months ended September 30, 2024, Other Expense was $297, which was $164 greater than a year ago when Other Expenses tallied

Because approximately $97 of the $297 were Receiver related costs, the normalized Other Expense increase year to date in 2024 versus

2023 would have been $68.

December 29, 2023, the Maryland Circuit Court certified the Company’s arbitration award as a judgment.

Given that the associated

legal costs relate primarily to collection and recovery efforts, the Company began reclassifying these non-core legal expenses to Other

Expense starting in the second quarter of 2024.

This practice has continued, effectively isolating non-operational legal obligations

from operating expenses.

Non-operational

income and expenses totaled a net expense of $26 for the three months ended March 31, 2025, reflecting a $67 or 72.0%, decrease compared

to $93 in the same period in 2024.

The year-over-year decline was primarily due to a narrower scope of legal activity in the current

In the first quarter of 2025, legal expenses were limited to matters involving the court-appointed receiver, whereas the prior-year

period included additional legal costs related to restructuring activities and obligations associated with the non-award Vivos Group

The $26 net expense in the first quarter of 2025 also includes $1 in credit card rebate income.

AND CAPITAL RESOURCES

working capital requirements are driven predominantly by EOR field talent payments, G&A salaries, public company costs, interest

associated with financing, legal fees associated with the Vivos and related SWC matter and client accounts receivable receipts.

receipts from client payments are on average 60 days behind payments to field talent, working capital requirements can be periodically

To accelerate cash and ensure sufficient liquidity, we have both a Buyer Initiated Payment (“BIP”) agreement

with American Express (“Amex”) and a Factoring Facility with Gulf Coast Bank (“Gulf”).

BIP agreement with Amex enables MMG to be advanced 100% of purchase order approved invoices minus a flat interest rate percentage that

is based on that day’s submitted invoice volume.

The greater the volume the lower the interest rate charged.

The implementation

of this program in the second quarter of 2023 profoundly impacted our ability to accelerate cash conversion and lower DSO as well as

our borrowing costs.

Given our use of BIP is with 90-day terms clients, our approximate APR is 6.1% compared to Factoring average approximate

APR rate of 10.6% based on the current prime rate of 8%.

on the other hand, advances 93% of our eligible receivables at an advance rate of 15 basis points, an interest rate of prime plus

2%., and our prime floor rate at 4%.

Our Days Outstanding (DSO) remained strong for the trailing twelve months ending September 30, 2024,

at 49 compared to a 53 DSO for the trailing twelve months ended September 30, 2023.

programs, plus the portion of our business in which the client has elected or is required to pay in advance of payroll, approximately

$198 every two weeks, counteract the approximate 32% of our revenue from clients that are on 90-day terms, some of which were demanded

by larger clients, and have delays in providing receipt of purchase orders.

looking at A/R aging in relation to payments to due date, as of September 30, 2024, 98.7% was < 31 days aged, 93.3% a year ago, respectively.

We had only one hundred and eighty dollars in bad debt over the past five years.

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

with Gulf enabling access to the 7% unfactored portion.

Because certain large clients have changed their payment practices

announcing 60- and 90-day terms amounting to a unilateral extension to contractual terms by 30-60 days, we would otherwise be

adversely impacted but not since we adopted Amex’s BIP program which coupled with an increase in our client biweekly

prepayments (drawdowns) to $198 from $159, over the past 12 months, have been catalysts to our cash conversion success measured by

our DSO improving from 66 at the start of 2023 to 49 at the end of June and carried over to September 2024.

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

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

auditor and accounting fees;

stock transfer services;

and board compensation, followed by cash factoring

and other borrowing interest;

and debt payments.

we are an EOR with the majority of contracted talent paid as W-2 employees who are paid known amounts, but on inconsistent schedules,

our cash inflows do not typically align with these required payments, resulting in temporary cash challenges, which is why we employ

Debtors as of September 30, 2024, had notes receivable totaling $5,827, including default on a $3,000 promissory note and on a $750 tax

obligation in December 2019.

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

Common Stock and use shares of Company Common Stock as currency to acquire other business revenues.

However, all 300 million authorized

shares of Company Common Stock were issued in connection with the Merger.

No shares are expected to become available to the Company until

the legal dispute with the Vivos Debtors and Vivos Group is resolved.

At that point, the Company can decide whether to amend the Company’s

Certificate of Formation to increase the number of authorized shares of Company Common Stock or approve a reverse split of the outstanding

shares of Company Common Stock to provide additional shares for these purposes.

No assurance can be given as to when this might take

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

The proceeds were accrued in the first quarter since the credits were for

past tax events.

of September 30, 2024, our working capital was $7,536 compared to $7,592 on June 30, 2024, $7,783 at the end of March 2024, to $7,913

at end of December 2023 and compared $8,040 at the end of September 2023.

Our adjusted working capital, as of September 30, 2024, excluding

the notes receivable related to the Vivos Debtors, totals $1,709, compared to 1,826 compared at the end of June 2024, compared to 2,212

at the end of the first quarter, to $2,412 at the end of 2023, and finally compared to 2,623 at the end of September 2023.

working capital requirements are driven primarily by payroll for Employer of Record (EOR) field talent, general and administrative (G&A)

salaries, public company expenses, interest on financing arrangements, legal fees related to the enforcement of arbitration awards against

the Vivos Group, and the timing of collections on client accounts receivable.

Because client payments, on average, lag field talent payroll

by approximately 49 days, working capital demands can fluctuate and occasionally present short-term challenges.

principal sources of liquidity include cash generated from operations via accounts receivable collections, borrowings under our Factoring

Facility with Gulf, and, more recently, three separate receivables purchase arrangements.

These arrangements function similarly to factoring

but operate through supplier payment programs facilitated by client-affiliated financial institutions.

of our larger clients have recently adopted extended payment terms, 60 to 90 days.

amounting to unilateral term extensions of 30 to 60

To mitigate the impact of these changes, we adopted Buyer-Initiated Payment (BIP) and Receivable Purchase Programs with American

Express, MUFG, and JP Morgan.

Combined with our factoring facility and biweekly prepayments (averaging approximately $56 every two weeks),

these programs have materially improved our cash conversion cycle.

Our Days Sales Outstanding (DSO) improved from 66 days at the beginning

of 2023 to 49 days by March 2024 and has averaged 50 days since.

For the trailing twelve months ended March 31, 2025, our DSO remained

strong at 49.5 compared to 49.2 in the prior-year period.

BIP and Receivable Purchase Programs allow MMG to receive payment for 100% of client-approved invoices, net of a flat interest rate.

For Amex and MUFG programs, rates vary based on daily invoice volume, with higher volume reducing the effective rate.

The JP Morgan agreement,

executed on April 23, 2025, purchases one of our largest client’s invoices within 15 days of approval, using the Secured Overnight

Financing Rate (SOFR) plus an 80-basis point program fee.

Based on current rates, this results in an annualized cost of approximately

5.27%, significantly lower than our average factoring APR of 10.6%, which is based on a prime rate of 8%.

factoring facility with Gulf advances 93% of eligible receivables, subject to a 15-basis point advance fee and an interest rate of prime

plus 2%, with a floor prime rate of 4%.

These financing arrangements, combined with the portion of client business that pays in advance

of payroll (~$56 every two weeks), help offset the impact of approximately 32% of our revenue coming from clients on 90-day terms, some

of which involve delayed issuance of purchase orders.

of March 31, 2025, 96.3% of accounts receivable were current (aged <31 days), compared to 96.5% a year earlier.

Our long-term credit

performance remains strong, with total bad debt over the past five years amounting to just one hundred and eighty dollars.

primary uses of cash include payments to field talent, corporate and staff employee payroll and related liabilities, operating expenses,

public company costs (including D&O and general liability insurance premiums, SEC filing and audit fees, legal and professional services,

stock transfer agent costs, and board compensation), as well as factoring and borrowing-related interest, taxes, and debt service.

to the nature of our EOR business, where most contracted talent are W-2 employees paid known amounts on varying schedules, cash inflows

from clients often do not align with required payroll disbursements.

This mismatch necessitates our use of factoring and receivables

financing to ensure timely fulfillment of payroll and other obligations.

of March 31, 2025, the Vivos Debtors owed the Company $5,973 in notes receivable, which includes a $3,000 defaulted promissory note and

a $750 unpaid tax obligation dating back to December 2019.

the Maslow–Reliability merger, the Company anticipated accessing capital markets and using its common stock as acquisition currency.

However, all 300 million authorized shares of common stock were issued in connection with the merger.

No additional shares are expected

to become available until the legal dispute with the Vivos Debtors and the broader Vivos Group is resolved.

Once resolved, the Company

may pursue either an increase in authorized shares or a reverse stock split to create capacity for future capital raises or acquisitions.

is no assurance as to the timing of such actions.

of March 31, 2025, our working capital totaled $6,966, compared to $7,296 as of December 31, 2024.

Adjusting for the notes receivable

related to the Vivos Debtors, our working capital stood at $993, compared to $1,449 as of December 31, 2024.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis