What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 244 added, 207 removed, 230 unchanged (66% of the section changed)

27 unchanged sentences

STOCKHOLDERS’ EQUITY

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of March 31, 2025 and December 31, 2024

Common stock, without par value, 300,000,000 shares authorized, 300,000,000 issued and outstanding as of June 30, 2025 and December 31, 2024

Additional paid-in capital

2 unchanged sentences

Total liabilities and stockholders’ equity

accompanying notes are an integral part of these financial statements.

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Revenue earned

8 unchanged sentences

Interest expense

Other expense

Loss before income tax (expense) benefit

Income tax (expense) benefit

Consolidated net loss

Net income per share:

Share used in per share computation:

accompanying notes are an integral part of these statements.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

For the Six Months Ended June 30,

Revenue earned

Service revenue

Cost of revenue

Selling, general, and administrative expenses

Operating loss

Other income (expense)

before income tax (expense) benefit

tax (expense) benefit

Interest income from related parties

Interest income

Interest expense

Other income (expense)

Loss before income tax (expense) benefit

Income tax (expense) benefit

Consolidated net loss

Net loss per share:

Share used in per share computation:

Shares used in per share computation:

accompanying notes are an integral part of these statements.

INCORPORATED AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

the three Months Ended March 31, 2025 and 2024

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

the Six Months Ended June 30, 2025 and 2024

in thousands, except per share data)

1 unchanged sentence

Balance, March 31, 2024

Balance, June 30, 2024

Balance, December 31, 2024

Balance, March 31, 2025

Balance, June 30, 2025

accompanying notes are an integral part of these statements.

2 unchanged sentences

in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Trade receivables

Retention credit receivable

Other receivables

4 unchanged sentences

Deferred revenue

Income taxes payable

Net cash provided by (used in) operating activities

1 unchanged sentence

Purchase of fixed assets

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

1 unchanged sentence

Repayments to the factoring facility

Repayment of note payable

Net cash used in financing activities

Proceeds from issuing short-term debt

Proceeds from issuing long-term debt

Repayment of long-term debt

Net cash provided by (used in) financing

Net decrease in cash and cash equivalents

3 unchanged sentences

INCORPORATED AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

in thousands)

For the Three Months Ended March 31,

disclosures of cash flow information:

For the Six Months Ended June 30,

Supplemental disclosures of cash flow information:

1 unchanged sentence

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

40 unchanged sentences

through arbitration

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

on their claims.

The awards included citing fraud damages.

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

2023, and finally, on October 27, 2023.

Summarily, MMG was awarded the totals of all notes the Vivos Group had with MMG for its borrowings,

the contracted interest, attorneys’ fees and expenses of $ 1,209 , and a contract damage of $ 1,000 to be satisfied by the transfer

of their shares of the Company common stock to the Company equal in value to $ 1,000 .

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

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

With respect to the receivership, the Vivos Group

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

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

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

in Reliability’s case against the Vivos Group.

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

the defendants.

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

Reliability has collectible judgments which

the Receiver has been eligible to pursue.

In May 2025, MMG expects the Receiver to make a recommendation to the arbitrator.

On August 31, 2022, the Company and MMG were granted arbitration awards against the Vivos Group, with supplemental

awards issued on May 17, 2023, October 10, 2023, and October 27, 2023 which included an award citing fraud damages.

Summarily, MMG was

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

of $ 1,209 , and a contract damage of $ 1,000 to be satisfied by the transfer of their shares of the Company common stock to the Company

equal in value to $ 1,000 .

These awards were entered as final judgments by the Circuit Court for Montgomery County, Maryland on December 29,

2023, and became final on January 29, 2024.

The judgments, which total approximately $ 8.49 million plus accrued interest, are enforceable

for 12 years and may be enrolled in other states.

While the Company is pursuing enforcement of these judgments,

there can be no assurance as to the timing or amount of any recovery, or whether recovery will be in cash, equity, or other assets

Maryland law, the enrolling of judgements enables MMG to apply 10 % interest to the Vivos Debtor balance beginning December 29, 2023.

MMG began applying the additional interest in the second quarter 2025.

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

shareholders within a reasonable time thereafter.

of March 31, 2025, the Vivos Debtor balance was $ 5,973 .

of June 30, 2025, the Vivos Debtor balance was $ 6,100 .

The Award value in totality currently aggregates $ 8,490 , independent of legal

fees after the award and interest.

of presentation

unaudited condensed consolidated financial statements include the accounts of the Company and all wholly owned divisions, including its

100 % owned subsidiary, MMG.

All significant intercompany accounts and transactions have been eliminated in consolidation.

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States and the rules of the SEC and should be read in conjunction with the audited financial statements and notes

thereto contained in our Form 10-K.

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

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

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

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

on Form 10-K for the year ended December 31, 2024.

Concentration

of Credit Risk

the three months ended March 31, 2025, $ 1,533

of revenue came from one customer, and $ 1,166

from a second customer.

Combined, this totals $ 2,699

In 2024, three companies accounted for $ 1,621

or 30.6 %, $ 820

respectively, which combined, totals $ 3,113

No other client exceeded 10% of revenues for the three months ending March 31, 2025 and 2024.

of March 31, 2025, the Company had accounts receivable of $ 2,864 , of which $ 1,489 ( 52 %) was attributable to its second-largest

client, $ 459 ( 16 %) to its largest client, and $ 334 ( 11.7 %) to its third-largest revenue-producing client for the quarter.

these three clients accounted for approximately $ 2,283 , or 79.7 % of total accounts receivable.

comparison, as of December 31, 2024, the same three clients—listed in the same order—represented $ 1,862 ( 44.2 %), $ 1,102

( 23.5 %), and $ 611 ( 13.0 %) of accounts receivable, respectively, collectively comprising 80.7 % of the total A/R balance.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

MANAGEMENT’S PLAN

the Company incurred net losses after taxes of $ 333 , $ 594 , and $ 740 for the three months ended March 31, 2025 and the years

ended December 31, 2024 and 2023, respectively, management believes the Company will continue as a going concern and meet its financial

obligations as they become due in 2025 and beyond.

This assessment is based on the following key factors:

the Company incurred net losses after taxes of $ 538

for the six months ended June 30, 2025, and $ 594

for the years ended December 31, 2024 and 2023, respectively, management has evaluated whether these conditions or events raise

substantial doubt about the Company’s ability to continue as a going concern for at least the 12 months following the issuance

of these financial statements.

Based on this assessment, management believes it is probable the Company will continue as a going

concern and meet its financial obligations through August 14, 2026, thereby alleviating substantial doubt.

This conclusion reflects

management’s view that the Company has sufficient liquidity and working capital resources to fund operations for at least the

next 52 weeks, as well as the ability to take actions, if necessary, to align costs with revenue fluctuations.

assessment is based on the following key factors:

Flow Forecast :

Management has prepared a 52-week cash flow forecast from May 15, 2025,

which projects sufficient cash and working capital to fund operations.

Management has prepared a 52-week cash flow forecast from August 14, 2025, which projects sufficient cash and

working capital to fund operations.

in Legal Fees :

Legal expenses are expected to decline in 2025, as the Company holds collectible

judgments currently being pursued by a court-appointed receiver.

Legal expenses related to non-operational activities, $ 86 through the first six months of 2025 and are

expected to continue decreasing in 2025.

of Notes Receivable :

Management anticipates that notes receivable from related parties

will be settled through a combination of cash and stock, providing additional liquidity and

potential access to capital markets.

Management anticipates that notes receivable from related parties will be settled through a combination

of cash and stock, providing additional liquidity and potential access to capital markets in 2025.

Financing Arrangement :

A financing arrangement through JPMorgan for the Company’s

second-largest client is expected to reduce the cash conversion cycle by approximately 90

This client generated $ 5.5 million in revenue in 2024, representing about 20 % of total

A financing arrangement through JPMorgan for the Company’s second-largest client is expected to

reduce the cash conversion cycle by approximately 110 days.

This acceleration in cash flow will ensure more cash is on hand and reduce

our cost of capital.

Availability :

As of May 3, 2025, the Company had access to additional borrowing under

its factoring facility of up to 93 % of unfactored invoices, totaling approximately $ 1.5 million

in available liquidity.

As of August 14, 2025, the Company had access to additional borrowing under its factoring facility of up to 93 %

of unfactored invoices, totaling approximately $ 1,361 .

Flexibility :

If necessary, the Company can align costs more closely with revenues by

reducing personnel and software expenditures.

on these factors, management believes the Company has adequate resources to meet its obligations as they come due for at least the next

12 months and that the use of the going concern basis of accounting remains appropriate.

If necessary, the Company can align costs more closely with revenues.

The Company suspended accrual of all employee bonuses for 2025 in the second quarter.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pronouncements

November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 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 statement.

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 categories:

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 expenses.

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.

of presentation

unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including

its 100 % owned subsidiary, MMG.

All significant intercompany accounts and transactions have been eliminated in consolidation.

accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States and the rules of the SEC and should be read in conjunction with the audited financial statements and notes thereto

contained in our Form 10-K.

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

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

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

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

on Form 10-K for the year ended December 31, 2024.

have been no material changes to the accounting policies discussed in Note 3 to the financial statements included in the Company’s

Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025.

Concentration

of Credit Risk

the six months ended June 30, 2025, 31.0 % of revenue came from one customer, and 23.6 % from a second customer.

Combined, this totals

54.6 % of revenue for the top two contributors greater than 10%.

In 2024, three companies ascended 10% of revenue contribution accounting

for 27.2 %, 21.7 %, and 13.5 %, respectively, which combined totaled 62.4 %.

No other client has exceeded 10% of revenues for the six months

ended June 30, 2025 or 2024.

an accounts receivable (A/R) perspective, two clients dominated our balance at the end of the quarter on June 30, 2025, with one at $ 1,357

or 52.4 % and the other at $ 409 or 15.8 % of $ 2,591 in trade receivables.

A year ago, the same two clients represented $ 1,563 or 41.7 %,

and $ 885 or 23.6 % of the $ 3,746 in A/R, respectively.

In the periods ended June 30, 2025 and 2024, no other client represented 10% or

Issued Accounting Pronouncements Not Yet Adopted

December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

1 unchanged sentence

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 after December 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.

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

effect on its present or future consolidated financial statements.

ASU 2023-09 largely

follows the proposed ASU issued earlier in 2023 with several important modifications and clarifications discussed below.

is effective for public business entities for annual periods beginning after December 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 year end

December 31, 2025 consolidated financial statements and disclosures as the Company did not have an interim tax effect to disclose.

On November 4, 2024, the FASB issued ASU 2024-03, Income Statement –

Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses

(ASU 2024-03).

The ASU requires disaggregated disclosure of income statement expenses for public business entities.

The ASU does not change

the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions

into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 is effective for public business

entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

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 year end December 31, 2025 consolidated financial statements and disclosures.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

16 unchanged sentences

are sold to Gulf on a full recourse basis, meaning the Company retains the risk of collection.

For the three months ended March 31, 2025,

the Company received $ 2,222 in proceeds from the sale of receivables and repaid $ 3,434 under the agreement.

Because the factoring arrangement is full recourse, it is accounted for as a secured borrowing under ASC 860, Transfers

and Servicing , rather than as a sale of receivables.

For the six months ended June 30,

2025, the Company received $ 5,038

in proceeds from the sale of receivables and repaid $ 6,586

under the agreement.

This compares to $1,405

$ 9,132 in proceeds and $ 6,930 in repayments for the year ended December 31, 2024.

The outstanding balance under the factoring

arrangement was $ 1,163 as of March 31, 2025, down from $ 2,375 as of December 31, 2024.

in proceeds and $1,362

in repayments for the period ended June 30, 2024.

The outstanding balance under the factoring arrangement was $ 827

as of June 30, 2025, $ 1,163

on March 31, 2025, and $ 2,375

as of December 31, 2024.

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

5 unchanged sentences

Financing with Long Term Debt

October 30, 2024, MMG entered into an agreement which deferred $ 52

due for our ADP implementation that was concluded in January 2024, to be paid over 24 months, at 6.21 %

As of March 31, 2025, the current portion balance was $ 25

and the long term, $ 15 .

COMMITMENTS AND CONTINGENCIES

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

However, litigation is subject to inherent uncertainties and an adverse result in

October 30, 2024, the Company entered into a deferred payment agreement related to its ADP implementation, completed in January

The total amount of $ 52 is payable over 24 months with an interest rate of 6.21 %.

On April 4, 2025, the Company entered into a

second deferred payment agreement totaling $ 39 , related to the implementation and multi-year licensing of the Datarails, analytics

This amount is payable over 36 months and carries a 0.0 % interest rate.

As of June 30, 2025, the aggregate current portion

of these obligations was $ 39 , with the long-term portion totaling $ 31 .

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

or other matters may arise from time to time that may harm our business.

Except as set forth below, we are not aware of any such legal

proceedings or claims against the Company.

COMMITMENTS AND CONTINGENCIES

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

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

that may harm our business.

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

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

2 unchanged sentences

in February 2022.

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

The awards included citing of fraud

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

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

and expenses of $ 1,209 , and a contract damage of $ 1,000 to be satisfied by the transfer of their shares of the Company Common Stock to

the Company equal in value to $ 1,000 .

The aggregate amount of the Awards, which are now court judgements, totals $ 8,333 as interest continues

to accrue on these awarded balances.

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

and fees provided in the awards.

October 10, 2023, the Arbitrator issued a Supplemental Award appointing the Receiver to assist the Company in collecting the awarded

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

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

in Reliability’s case against the Vivos Group.

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

the defendants.

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

Reliability has collectible judgments which

the Receiver has been eligible to pursue.

August 31, 2022, the arbitrator issued an award in favor of the Company and MMG, including fraud damages.

Supplemental awards were issued on May 17, 2023, October

10, 2023, and October 27, 2023.

The awards granted MMG the total of all notes receivable from the Vivos Group, contracted interest, attorneys’ fees

and expenses of $ 1,209 ,

and a contract damage of $ 1,000

to be satisfied by the transfer of the Vivos Group’s shares of the Company

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

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

expenses, and fees provided in the awards.

On October 10, 2023, the Arbitrator issued a Supplemental Award outlining the Receiver’s powers.

December 29, 2023, the Circuit Court for Montgomery County, Maryland entered all three arbitration awards as final judgments which became effective on January 29, 2024 after the appeal period expired.

These judgments, totaling approximately

$ 8,490 plus accrued interest, are enforceable for 12 years and may be enrolled in other states.

On May 19, 2025, the Receiver submitted final recommendations, calculations, and a proposed order to the arbitrator.

The response deadline was initially set for July 7, 2025, but was extended to August 6, 2025 after Vivos Holdings retained new counsel.

On August 8, 2025, the arbitrator granted both parties until September 5, 2025 to submit replies to each other’s filings.

On June 11, 2025, the Company’s subsidiary entered into a Memorandum

of Understanding (“MOU”) to settle a California wage-and-hour matter that also included a representative claim under the California

Private Attorneys General Act (“PAGA”).

The MOU contemplates a gross settlement of $ 125,000 , inclusive of all attorneys’

fees, costs, PAGA penalties, an individual settlement amount for the plaintiff, and settlement administration expenses, payable in installments

following court approval.

The agreement includes an “escalator” provision that may increase the gross settlement if the number

of compensable pay periods exceeds agreed thresholds and is contingent upon final court approval.

As of June 30, 2025, the settlement remains subject to court approval,

and no liability has been recorded in the Company’s consolidated financial statements.

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

1 unchanged sentence

Company Common Stock are issued and outstanding.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

RELATED PARTY TRANSACTIONS

14 unchanged sentences

These parties also

have common ownership combinations in a number of other entities:

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

have common ownership combinations in a number of other entities [Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC (“VREH”),

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

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

table below is a summary of Vivos Group related party notes receivable which, as of March 31, 2025, totals $ 5,973 .

table below is a summary of Vivos Group related party notes receivable which, as of June 30, 2025, total $ 6,100 .

Based on management’s current expected credit loss (“CECL”) assessment, which considered legal

judgments in favor of Company and the ongoing receivership process supporting recovery and collectability, no allowance for credit losses

has been recorded.

SCHEDULE OF RELATED PARTY NOTES RECEIVABLE

Note Description

Acquisition Loan to Vivos, LLC

Interco Loan to Vivos Real Estate, LLC

Real Estate, LLC

Total Notes Receivable

2 unchanged sentences

Balance on March 31, 2025

The Award value in totality

is currently aggregated to $ 8,333 , independent of legal fees and interest.

Accrued interest

Balance on June 30, 2025

Settlement Agreements

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

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

2024, the Company received $ 91

from the bankruptcy proceedings and sale of the building.

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).

In December 2024, he SWC matter was also resolved with MMG’s portion being $ 10 .

RLBY’s Other expense portion of Other Income totaled approximately

In December 2024, the Second Wind Consulting (“SWC”) matter was also resolved with MMG’s portion being $ 10 .

Other expense portion of Other Income totaling approximately $ 41 in the second quarter and $ 68 for the six months ended June 30, 2025,

were exclusively for receivership related costs for recovery of the arbitration award related to the Vivos Group.

2 unchanged sentences

69 % and 17 % of the total number of shares of the Company’s Common Stock outstanding after giving effect to the Merger, respectively.

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

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

9 unchanged sentences

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

The Recruiting and Staffing segment

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

Direct Hire fulfils direct

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

The Video and Multimedia

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

The Recruiting and Staffing (“Staffing”)

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

Direct Hire fulfils

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

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

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

Our operating segments align with our organizational

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.

No additional segment expense categories (beyond cost of services) are regularly provided to the CODM.

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 three-month

and six-month periods ended June 30, 2025 and 2024, respectively:

SCHEDULE OF GROSS PROFIT PERFORMANCE BY SEGMENT

Profit Performance by Segment

the Three Months Ended June 30:

June 30, 2025

June 30, 2024

Business Segment

Video Production

INCORPORATED AND SUBSIDIARY

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

in thousands, except per share data)

and are regularly reviewed by our Chief Executive Officer (our chief operating decision-maker or “CODM”) to allocate resources

and assess performance.

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

our CODM reviews segment revenue and gross profit against the prior year and budget to inform working capital allocation decisions.

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 three months

ended March 31, 2025 and 2024, respectively:

Profit Performance by Segment

SCHEDULE OF GROSS PROFIT PERFORMANCE BY SEGMENT

the Six Months Ended June 30:

June 30, 2025

June 30, 2024

Business Segment

Video Production

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SUBSEQUENT EVENTS

Company has evaluated subsequent events through May 15, 2025, the date on which the unaudited condensed consolidated financial statements

Company has evaluated subsequent events through August 14, 2025, the date on which the unaudited condensed 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 unaudited condensed consolidated financial statements, except as follows:

April 23, 2025, we entered into a Receivable Purchase Agreements with JP Morgan which will purchase one of our largest client’s

invoices within 15 days of approval.

The program uses a market index rate based on the Secured Overnight Financing rate (SOFR) and adds

80 basis points called a program rate.

The APR on this loan as of May 3, 2025, was 5.15 % .

April 24, 2025, Reliability submitted its application for the new Over-the-Counter Identification (“OTCID”), which is scheduled

to launch on July 1, 2025.

OTCID is meant to replace the “Pink Current” tier, and is intended to establish baseline requirements

for companies, including the submission of current information disclosures and management certifications.

OTC Markets will still maintain

the Pink Limited and Expert Market tiers for companies that do not meet the OTCID criteria.

would require recognition in our disclosures in the accompanying unaudited condensed consolidated financial statements.

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

What changed 10-Q

Item 1. Financial Statements