UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

FORM 10-K

(Mark One)

For the fiscal year ended December 31 2020, 2023

For the annual period from January-1-2020January-1-2023 to December-31-2020December-31-2023

Commission File Number: 000-07092

RELIABILITY INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)

Registrant’s telephone number, including area code:

(202)965-1100

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [  ]☐ Yes, [X] ☒ No

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [  ]☐ Yes, [X] ☒ No

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] ☒ Yes [  ], ☐ No

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website,website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). [X] ☒ Yes [  ], ☐ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the Registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large, accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [  ]☐ Yes, [X]☒ No

The aggregate market value of the common stock held by non-affiliates of the Registrant as of December 31, 2020June 30, 2023, was $21,300,000$1,706,617 (based on the closing sale price of the Registrant’s common stock on December 31, 20202023, as reported on OTC American).

As of March 31, 2021,April 1, 2024, there were 300,000,000 shares of the Registrant’s common stock outstanding.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. Forward-looking statements may include, but are not limited to, statements with respect to our future financial or operating performance, future plans and objectives, competitive positioning, requirements for additional capital, government regulation of operations and the timing and possible outcome of litigation and regulatory matters. All statements other than statements of historical fact, included or incorporated by reference in this Annual Report on Form 10-K that address activities, events or developments that we, or our subsidiaries, expect or anticipate may occur in the future are forward-looking statements. Often, but not always, forward-looking statements can be identified by use of forward-looking words such as “aim,” “potential,” “may,” “could,” “would,” “might,” “likely,” “will,” “expect,” “intend,” “plan,” “budget,” “scheduled,” “estimate,” “anticipate,” “believe,” “forecast,” “committed,” “future” or “continue” or the negative thereof or similar variations. Forward-looking statements are based on certain assumptions and analyses made by us, in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and known and unknown risks, many of which are outside our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Important factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among other things, general business, economic, competitive, political and social uncertainties, the actual results of current operations, industry conditions, intellectual property and other proprietary rights, liabilities inherent in our industry, accidents, labor disputes, delays in obtaining regulatory approvals or financing and general market factors, including interest rates, equity markets, business competition, changes in government regulations. Additional risks and uncertainties include, but are not limited to, those listed under “Item 1A. Risk Factors.”

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, this coronavirus spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified. The outbreak and any preventative or protective actions that governments or we may take in respect of this coronavirus may result in a period of business disruption, reduced customer traffic and reduced operations. The Company expects that the impact of this coronavirus will continue to be materially negative in the short term. The full financial impact cannot be reasonably estimated at this time but may materially continue to affect our business, financial condition and results of operations. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, circumstances permitting people to return to work, among others. In reaction to the COVID-19 pandemic, federal and state legislatures have been attempting to push through legislation, much of which affects the employee-employer relationship, and these new laws may have a material impact on our operations, business, finances and prospects. Recently some states have been reducing or eliminating restrictions instituted to contain the spread of the virus, while this may result in a trend toward a more normalized environment, the restrictions may be reinstituted if circumstances warrant. No certainty can be provided as to the future track of the COVID-19 pandemic or the governmental responses to it. Recent federal legislation has proposed significant federal stimulus funds to address the economic impact of the pandemic, and while such legislation may be a positive factor for the Company’s business, no assurance can be given that any such stimulus will ultimately be enacted or that such legislation will in fact benefit the Company.

Although we have attempted to identify important factors that could cause actual actions, events or results towhich differ materially from those described in the forward-looking statements, there may be other factors such as the impact of the COVID-19 pandemic, that cause results to differ from those anticipated. Forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of the Annual Report on Form 10-K and we disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events, results or otherwise, except as required by applicable securities laws.

As used in this Annual Report, the terms “we,” “us,” “our,” “Reliability,” “Maslow,” “MMG” and the “Company” meaning Reliability, Inc. and its operational subsidiary, Maslow Media Group Inc., unless otherwise indicated. All dollar amounts in this Annual Report are expressed in thousands except for share and per share values, unless otherwise indicated.

The disclosures set forth in this report should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2020.2023. All dollars, except earnings per share, presented inon this Form 10-K are in thousands ($000).

Part I

ITEM 1. BUSINESS

OVERVIEW AND HISTORY

Reliability Incorporated (“Reliability” or the “Company”), headquartered in Clarksburg, Maryland, through its wholly owned subsidiary, The Maslow Media Group, Inc. (“Maslow” or “MMG”), provides workforce solutions to its clients consisting primarily of Employer of Record (“EOR”) services, recruitingRecruiting and staffing,Staffing, and videoVideo and multimedia production.Multimedia Production. The Company focuses on domestic clients but provides services to these clients throughout the world. The Company’s clients are in diverse industries including media, financial services including banking, medical devices, pharmaceuticals, telecommunications, energy, healthcare, photography and chain restaurants.education.

Reliability was incorporated under the laws of the State of Texas in 1953. From 1971 to 2007, the Company was principally engaged in the design, manufacture, market, and support of high-performance equipment used to test and condition integrated circuits. This business was shut down in 2007, and the Company was continued as a “shell company” as defined by the Exchange Act, with no operating activities until October 29, 2019, when the Company acquired Maslow.

Maslow was founded in 1988 by Linda Maslow whose impetuous drive was recognizing the need for a single resource that could provide qualified production crews to Washington, D.C.’s television, cable, and multimedia outlets. Maslow was later incorporated in Virginia in 1992 and changed its name to our current legal name, The Maslow Media Group, Inc. Maslow’s initial business consisted of providing “script to screen” services which consisted principally of providing production management and services to television, cable, and multimedia outlets. Over time, Maslow expanded its product offerings, adding workforce management solutions, such as EOR services, andEmployer of Record (“EOR”), recruiting and staffing services. As Maslow grew, it expanded its geographic footprint by acquiring clients outside of the Washington D.C. metro area.

On November 9, 2016, Linda Maslow sold the business to Vivos Holdings, LLC (“Vivos Holdings”) owned by Naveen Doki (“Mr.Dr. Doki”) and Silvija Valleru (“Mrs.Ms. Valleru”).

In 2018,2019, Vivos Holdings and severalcollaborated on a share swap of Maslow for other Vivos companies with individuals who included but were not limited to Dr. Doki, Shirisha Janumpally (“Mrs. Janumpally”), wife of Dr. Doki, Kalyan Pathuri (“Mr. Pathuri”) husband of Silvija Valleru, Igly Trust, and Judos Trust. These parties also have common ownership combinations in a number of other entities [Vivos Holdings, LLC. Vivos Real Estate Holdings, LLC (“VREH”), Vivos Holdings, Inc., Vivos Group, Vivos Acquisitions, LLC., and Federal Systems, LLC], (collectively referred to herein as “Vivos Group”) engaged an investment banker who approached management of Reliability to discuss a potential reverse merger transaction. .

The reverse merger was consummated on October 29, 2019.2019 (the “Merger”). As a result of the Merger, the Vivos Group (Vivos Holdings LLC officially) acquired approximately 86%84% of the issued and outstanding shares of Reliability which were distributed by Vivos Holdings; two married couples through their direct ownership of shares as well as indirect ownership through entities controlled by them.Holdings LLC.

The Company was incorporated under the laws of the State of Texas in 1953. From 1971 to 2007, the Company was principally engaged in the design, manufacture, market, and support of high-performance equipment used to test and condition integrated circuits. This business was shut down in 2007, and the Company was continued as a “shell company” as defined by the Exchange Act, with no operating activities until October 29, 2019 when the Company acquired Maslow.

On October 29, 2019, Maslow became a wholly owned subsidiary of ReliabilityReliability.

Upon purchasing MMG and thereafter, the “Vivos Group” began borrowing monies from MMG starting with $1,400 in 2016, and by merging R-M Merger Sub, Inc.,the end of 2019 the balance had reached $3,418, which included a Virginia corporation and a wholly owned subsidiary of Reliability, with and into Maslow, with Maslow being the surviving corporation (the “Merger”). The Merger is more fully described in our Current Report on Form 8-K filed on October 30, 2019.

The Company ceased to be a “shell” company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) by virtue of its ownership of Maslow following the Merger. The acquisition of Maslow also resulted in a “change in control” of Reliability.

Since the Merger, Maslow expanded its staffing vertical footprint by acquiring the business assets of Intelligent Quality Solutions Inc. (“IQS”), providing IT Staffing solutions in December 2019, which formerly operated in Plymouth, Minnesota.

On or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland against$3,000 guarantee from Dr. Naveen Doki. Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC, and Mr. Doki (collectivelyare collectively referred to as “Vivos Debtors”),Debtors.”

Additionally, Reliability became aware of debt obligations that included MMG as a borrower or guarantor that the Vivos Group failed to enforce Maslow’s rights under certain promissory notesdisclose to Reliability. This and the attempted collection of the guarantee and debt from the Vivos Group set off a personal guarantee made by the Mr. Doki. On or about May 6, 2020, the Defendants filed a counterclaimchain of legal events culminating in an arbitration hearing and third-party complaint for Damages, declaratory and injunctive Relief and jury Demand (the “Counterclaim”). Both cases are proceeding to go to trial scheduled to begin October 4, 2021.award in 2022. We refer below to this disputethe disputes between Reliability and the Vivos Group as the “Vivos Matter.” Please see Item 3 under LEGAL PROCEEDINGS

A series of legal actions and hearings took place starting in March of 2020 through September of 2021. At that time, arbitration was agreed by both the Vivos Group and MMG. The proceedings began in February 2022 and were completed in March 2022.

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 more detailits borrowings, the contracted interest, attorneys’ fees and context.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 May 17, 2023 award also appointed a rehabilitative receiver (the “Receiver”) whose primary function is to collect the contract and fraud damages, including costs, expenses and fees provided in the awards. With respect to the receivership, the Vivos Group owners or holders of all of the shares of common stock of the Company were declared not be entitled to vote any of those shares at any annual or special meeting of the shareholders of the Company during the period of the receivership.

On December 29, 2023, the Circuit Court for Montgomery County Maryland signed orders entering all three arbitration awards as judgments in Reliability’s case against the Vivos Group. These orders became final on January 29, 2024, when the appeal period expired for the defendants. The judgments are good for 12 years and can be enrolled in other states. Reliability has collectible judgments which the Receiver is now eligible to pursue.

As of March 15, 2021,December 31, 2023, the Vivos Debtor balance was $5,501. The Award value in totality currently aggregates $7,710, independent of legal fees and interest.

Upon 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.

As of December 31, 2023, there were 300,000,000 shares of the Company’s common stock, no par value per share (the “Company Common Stock,” or “Common Stock”) outstanding.

EMPLOYEES

EMPLOYEES

As of March 23, 2021,25, 2024, we had 2219 team members (staff employees) at our Clarksburg, MD corporate and remote locations. During the fiscal year ended 2020,2023, we assigned approximately 1,067950 field talent workers of which 172 were deemed full-time equivalent (FTE) throughout the year.

As of December 31, 2023, 661 active field talent workers and approximately 129 were working on average throughout the year.

As of March 23, 2021, 648 active field talent workers21 Maslow staff employees had been employed over the past 6six months.

Approximately 10%15% of our field talent are represented by a labor union. We are not aware of any current labor efforts or plans to formalize or organize any of our other team members or field talent. To date we have not experienced any material labor disruptions.

Because of the sudden drop-in client requirements due to the COVID-19 pandemic, in March 2020 the Company reduced the hours of contracted employees, reduced corporate salaries, and furloughed six (6) general and administrative personnel. However, upon receipt of Payroll Protection Act (“PPP”) funds totaling $5,215,605 in early May 2020, the Company was able to bring back those employees willing to return, plus commence hiring in direct proportion to our client resource demands. The Company also returned those reduced corporate salaries back to normal levels and paid back the previously suspended amounts. The Company also lowered a number of sales and recruiting employee salaries as part of a compensation restructuring, moving more of their compensation to a performance-based commission.PRODUCTS

PRODUCTS

Employer of Record (“EOR”)

Maslow’s EOR product is a unique outsourced managed workforce solution. The costs and compliance obligations relating to the employment of contingent or permanent workers isare borne by Maslow. These workers are Maslow employees, and theemployees. The client is responsible for maintaining its workplace, but all administrative roles and responsibilities are handled by Maslow as the employer of record. This arrangement also obviates the need forprovides our clients to hire freelance contractorscompliance and legal protection as our expert staff takes responsibility for short-termproperly classifying and onboarding employees or project-based hiring, who may later be re-classifiedindependent contractors. Misclassifying an employee as “employees” by the Department of Labor, resultingan independent contractor can result in significant costs to the client.

The EOR services offered by Maslow consist of the following principal activities;activities:

The EOR solution is different than a professional employer organization (“PEO”). In the PEO model, the workers are employees of the PEO’s client. EORs differ from PEOs in that the EOR;

Recruiting/Staffing

Maslow has been in the staffing business for over thirty years. During that time, Maslow has developed, and we continuecontinues to develop, a large global network of multimedia and video production workers for our media clients, camera crews, and other technical and creative talent. Maslow uses this extensive network to rapidly respond to our clients’ needs for contingent staffing and permanent placements.direct hires.

In December 2019, Maslow acquired the operational assets of Intelligent Quality Solutions, Inc. (“IQS”), aOur staffing firmservices, however, are no longer only focused on information technology (“IT”) related industriesmedia roles. We are also filling contingent and specializingdirect hire positions for our clients in software testing. IQS formerly operated out of Plymouth, Minnesota.the IT, Accounting and Finance, and Administrative areas.

Our overall temporary staffing services consist of on-demand or short-term staffing assignments, contract staffing, and on-site management administration. Short-term staffing services assist employers in dealing with employee demands caused by such factors as seasonality, fluctuations in demand for their products and services, vacations, illnesses, parental leave, and special projects, withoutprojects. This benefits organizations from incurring the ongoing expense and administrative responsibilities associated with recruiting, hiring, and retaining these employees. More and more companies are focused on effectively managing variable costs and reducing those which are fixed overhead. The use of short-term staffing services allows companies to utilize a contingent staffing approach for their personnel needs, thereby converting a portion of their fixed personnel costs to a variable expense.

Our staffing services place workers with clients for assignments lasting from three monthsas little as one day to an indefinite time period or the placement of full-time equivalent employees on a contingency fee basis.time. We offer our clients several levels of staffing services: freelance, contract, temp-to-hire, direct hire, or managed services. Our managed services solution includes building or assuming an existing team and placing an onsite manager, or managers, to help manage the team, including providing just the managed service or more involved assignments consisting of staffing an entire department or providing the workforce for a large project.scheduling and logistics.

In some cases, we place an experienced workforce manager on-site at our client’s place of business. This manager then has responsibility of conducting all recruiting, employee screening, interviewing, drug testing, hiring and employee placement for employees at the client’s place of business.

As is common in the staffing industry, the majority of our engagements to provide temporary services to our client are generally of a non-exclusive, short-term nature and subject to termination by our client with little or no notice.

In 2021, we began focusing on the placement of full-time equivalent employees on a contingency fee basis as a stand-alone practice. Because the margins are significantly higher, this line of business boosts our overall margins and operating income as explained in Results of Operations. Direct Hire, which we originally titled “Permanent Placement,” margins are much higher than temporary staffing and EOR in that we do not bear employee or 1099 costs for the direct hire placement. The only cost of revenue which is allocated is the relational use of our recruiting software subscriptions.

Video/Multimedia Production

Maslow continues to be a provider of multimedia and video production solutions. Maslow provides script-to-screen production servicessolutions for corporate, government, and non-profitbroadcast clients.

We use our large, pre-vetted network of worldwide freelancers with high-level technical and creative skills to respond quickly to our clients’ needs. Our network includes directors of photography, audio engineers, make-up artists, field producers, gaffers and grips, talent, teleprompter operators, and drone operators. Maslow provides video production services to our clients for the purpose of branding videos, documentaries, Public Service Announcements, training modules, live events, webcasts, animation, projects, and more. Our freelance video production teams and clients collaborate with our in-house, full-time Video Production Managers who bring years of experience to every project, and who work side-by-side with the team to create the vision and story for the project. In addition to human assets, Maslow sources the latest technical broadcast equipment for television, the internet, and social media. Our network includes freelance talent across the globe to allow us to provide local talent, resulting in cost savings to our clients.

Maslow provides, among others, the following production services;services:

Intelligent Quality Solutions (“IQS”)

The Company operates its IQS assets as an IT staffing division within Maslow. Maslow provides quality assurance (“QA”) analysts, engineers, R&D, testers, developers, business systems analysts and other resources to our customers in a myriad of industries including those manufacturing and or providing medical devices, health care, energy technologies, mobile communications, and photography, as well as restaurant chains.

We have significant experience with Software Quality Management SQM, affording our clients sophisticated Independent Verification & Validation (“IV&V”) and QA Consulting Solutions. Our clients can leverage our software testing experience to verify and validate the effectiveness of the applications they deploy and thereby get the best value for their technology investments. We provide staff augmentation and permanent placement from our technical resource pool comprised of top industry professionals. Our team members are typically full-time IQS employees that have established themselves as leaders in their chosen field. We can augment your team with any of the following skill sets:

IQS is an innovative leader in information technology staffing and staff augmentation. As a partner, we provide expertise and technology to help companies achieve their optimal growth and profitability by securing the right talent at the right time. We also offer integrated workforce solutions as a managed service to give companies even more valuable resource options.

Our teams support client projects with dedicated research, sourcing and recruiting specialists. IQS provides ongoing training for our managed teams, keeping them abreast of industry trends, practices and technologies. Clients who have partnered for managed Human Resource operations and services with IQS have discovered that they lower costs, reduce risk and streamline critical processes.

Our dedicated recruiting project teams provide:

OUR INDUSTRY

Maslow operates within the workforce management and production services industry. The services Maslow provides (managed services, employer of record, staffing, recruiting, and video production services) generally fall within the broader category known as “workforce management” services.solutions.

The temporary staffing portion of the workforce management industry supplies workers to clients. These services offer client’sclients the ability to rapidly match their workforce to changes in business conditions and needs. In some cases, clients can convert fixed labor costs to variable costs. The demand for a flexible workforce continues to grow with competitive and economic pressures on employers to reduce costs, manage payroll compliance risks and respond to changing market conditions.

Per Business Wire’s “2024 State of Staffing Industry Analysts 2019 North America Staffing Company Survey,Report,” the 2019 trendtrends expected to have the mostgreatest impact toon staffing businesses in 2024 include: An increased role for technology/artificial intelligence (“AI”), expansionAI is transforming staffing, word of gig workmouth drives business growth, and staffing convergence with human cloud, increased VMS/MSP use, a continuation of talent shortages, more legislative/regulatory involvementcandidate and communication preferences are shifting. We believe the Gig Economy, and Emphasis on Diversity, Equity, and Inclusion (DEI) should be included in staffing, clients doing more in house recruiting, negative economic trends, and increased use of flexible/remote work.trends.

The temporary staffing industry is large and highly fragmented with thousands of competing companies. It iswas estimated that the 2021size of the 2023 U.S. temporary staffing industry was $201.7 billion in 2023, a decrease of 10% from 2022 after two years of post-COVID growth of 34% in 2021 and 20% in 2022. Additionally, the US market is the largest globally with a 33% share. In 2024, the SIA is projecting that the US market will be $136.4worth $207.2 billion, which represents approximately a 7% growth.

According to the US Bureau of Labor Statistics, the US staffing market is in a healthy state with over 4 million more jobs in August 2023 than in February 2020, up from an estimated $119 billion2.7% over that time period. The revenue increase projected for just the temporary staffing in 2020. The market hit a high2024 is 5%.

Per Precision Global Consulting, over half of US companies are planning to increase hiring in 2019 at $151.8 billion. Staffingthe first half of 2024, with two-thirds of employers planning to increase their use of contract professionals. US Hiring Trends to Watch in 2024 are:

One paradigm which has not changed is staffing companies compete both to recruit and retain a supply of field talent and to attract and retain clients to use these workers. Client demand for temporary staffing services is dependent on the overall strength of the labor market and trends toward greater workforce flexibility. The temporary staffing industry includes several markets focusing on business needs that vary widely in duration of assignment and level of technical specialization.

The

And still, the temporary staffing market is subject to volatility based on overall economic conditions. Historically, in periods of economic growth, the number of companies providing temporary staffing services has increased due to low barriers to entry. During recessionary periods, the number of companies has decreased through consolidation, bankruptcies based on loss of key clients or material reductions of usage by existing clients, or other events. Prior toThe factors that have an impact on the onsetdirection of the COVID-19 pandemic, we had been seeing thateconomy are high interest rates, continued supply chain problems, inflation, economic sanctions, and unemployment rates.

Regardless of the temporary staffing industry is experiencing increased demand in relation to total job growth as clientsdirection of the economy, federal and state laws continue to seek a more flexible workforce.

Each state hasroll out various protections for employees that involve the compliance of their own set of employment laws and regulations.employers. The complexity of keeping up with this regulatory compliance landscape, particularly for smaller employers and companies requiring workers in multiple states, has focused more attention onprovided greater opportunity for EOR services.solutions. Many states have made significant changes to their employment laws. For example, starting on January 1, 2024, Minnesota instituted a new Earned Sick and Safe Time law which will require employers to provide paid sick leave to Minnesota employees, while California adopted eleven newinstituted increases to its paid sick leave law. Meanwhile, Illinois enacted paid leave for essentially all employees. Colorado expanded its paid sick leave requirements and updated its laws to redefine the standard for sexual harassment, adding marital status as a protected employment laws for 2020.category.

In reaction to the COVID-19 pandemic, federal and state legislatures have proposed and enacted legislation affecting the employee-employer relationship and these new and proposed laws may have a material impact on our operations, business, finances and prospects. For instance, restrictions have been instituted in several states preventing large number of employees to return to the office. No certainty can be provided as to the nature of these new regulations or their impact. Individual states continue to change their pandemic related requirements to relax or remove restrictions on employers, but not assurance can be given as to the effect of these changes or the potential that they may be reimposed if conditions warrant.

OUR CLIENTS

A largeHistorically, the largest portion of our business comeshas come from three clients, Client A, Client C and Client D. In 2021, those three clients accounted for $11,970, or 45.6%, of 2021 revenue. But over the past two years, that same level of reliance, revenue greater than $3,000 has come from two clients, AT&T Services, Inc. (inclusive of its DirecTV division) (“AT&T”)Client C and Janssen Pharmaceuticals (which includes workforce partners Ortho McNeil and Johnson & Johnson). AT&T and Janssen Pharmaceuticals accountedClient D, with $8,643 in revenue in 2023 accounting for 28.8% and 10.9%40.3% of the Company’s total revenues for 2020.revenue. In 2019 AT&T accounted for 37.5% of2023, Client C became the Company’s business while Janssen accounted for 11.3%. The combinationnumber one contributor to revenue with $5,395, which was a 6.8% improvement over 2022 when it produced $5,052.

In terms of revenue from new accounts and a dropcontribution by clients representing 10% or more in revenue, by AT&T by 25% dueClient C represented 25.1% of our 2023 revenue compared with 19.6% in 2022. Meanwhile, Client D pitched in 15.1% of our 2023 revenue compared with 12.9% in 2022.

No other client exceeded 10% of revenues in 2023.

Client A, now number 4 in revenue, declined 42.9% to COVID-19 stay at home orders resulted$1,755 as their use of outsourced media personnel decreased coupled with conversions of long-term contract employees to direct hires.

From a revenue concentration standpoint, our top five customers represented 64.3% of our revenue in 2023 compared to 66.0% in 2022.

From a more egalitarian client mix.

AT&T comprisedtop 10 perspective, revenue from our top 10 clients totaled $18,526 which represents 86.4% of 48.5% and 50%our revenue in 2023 compared with $22,095, representing 85.9% of revenue in the accounts receivable balance as ofyear ending December 31, 20202022.

Collectively, Client D (42.2%), Client C (19.9%), and 2019, respectively. Janssen Pharmaceuticals comprised of 18.4% and 19%Client A (12.3%) represent 74.4% of accounts receivable as of December 31, 2020 and 2019, respectively. No other client exceeded2023. A year ago, five clients had accounts receivable greater than 10% of revenues.the balance representing 88.3% of 2022 accounts receivable.

Other significant customers include Morgan Stanley, Goldman Sachs, Abbott Labs, Kaiser Permanente, Discovery, WETA, Felix Lighting, Liberty Mutual, US HouseGROWTH STRATEGY

Maslow’s growth strategy has remained a three-pronged approach with emphasis of Representatives, and Strayer University. We additionally have a number of fast-growing techthe 1) Media Staffing market, 2) Corporate and IT government contracts which outsource organizations recruiting process to Maslow/IQS.Staffing market, and 3) EOR expansion.

GROWTH STRATEGY

Maslow had developed its expertiseMedia Staffing margins are healthy in the EOR market principally19.3% range with $2,751 in revenue for the period ending December 31, 2023, compared to $3,176 in the same period 2022. This represents 12.8% of MMG’s total revenue in 2023 compared to 12.3% in 2022.

The IT and Corporate Staffing business segment was combined since our clients’ staffing needs extend beyond into job areas where we are well equipped to recruit talent.

Our overall Staffing revenue in 2023 was $3,098 compared to $3,468 in 2022. The objective in 2024 is to increase these levels at a steady linear pace, with an emphasis on the immediate needs of our existing clients and prospects. We have access to talent across the business spectrum, and we need to market non-media roles to our many clients who have staffing needs in other functional areas of their business.

Maslow’s EOR approach is to continue to seek media-based opportunities given the transient, contingent, and part-time nature of corporate media, industry.which is conducive to an EOR solution. We believe, however, there is an opportunity to leverage this expertise into other industries. The client acquisition challenge outside of media consists principally of educating prospective clients ofon the merits of the EOR solution over other options, finding the unique opportunities in each industry or within a corporate client that lendlends itself for an EOR solution, and competition from other providers of EOR services.

The existing pandemic may makeU.S. Department of Labor (DOL) is modifying Wage and Hour Division regulations to replace its analysis for determining employee or independent contractor classification under the Fair Labor Standards Act (FLSA). This final ruling will address how to determine whether a worker is properly classified as an employee or independent contractor under the FSLA. In 2022, the DOL proposed a new, yet-to-be-enacted rule on how to determine who is an employee or independent contractor under the FLSA. This new DOL rule will replace the 2021 rule with a multifactor approach intended to reduce the misclassification of employees as independent contractors and provide greater clarity to employers who engage (or wish to engage) with individuals who are in business for themselves. The final ruling is likely to be announced in 2024.

This rule change and a more aggressive enforcement thereof could and should create greater incentive for companies to virtually eliminate their risk of noncompliance by outsourcing their 1099 contractors to an EOR company who hires the 1099s, places them on its payroll, and then leases their services to those companies.

Given the DOL rule change is more likely than not going to be more restrictive in its classification of a 1099 worker, creates an opportunity for EOR as more desirable solution to companies that are looking for more agile ways of changing the headcount and nature of portions if not all of their workforce in an expeditious and low risk manner.

IfThus, we expect to explore expanding our EOR segment to enter new industries, particularly those that rely significantly on contractors or freelancers to perform limited time or project-based assignments. To that end, Maslow continues to add industry expertise to our sales, client and human services, and recruiting teams for the Vivos Matter (defined and referenced in Overview section) is resolved,purpose of managing the challenging EOR business.

Once the Company plansis able to issue additional shares, we plan to tap the capital markets to pursue an aggressive but disciplined acquisition growth strategy, both in terms of using shares for raising capital and using our shares as currency to acquire additional businesses.businesses as was our intent when we merged with Reliability in October 2019. We believe that the staffing/EOR segment is fragmented, and while there are several large players in the industry, there are also a significantsizable number of smaller businesses that would make ideal acquisition targets. These businesses are often limited in geographic scope or are specialized within an industry. In addition,Meanwhile, we continue to emphasizefoster organic growth specifically directing resourcesthrough new sales to Sales with the hiring of an experienced Vice President of Sales in the first quarter of 2021.new and existing customers.

Presently,At present, the Company does not have any authorized shares that are not issued. No shares are expected to become available to the Company until an amendment to the Company’s Certificate of Formation to increase the number of authorized shares of Common Stock or a reverse-splitstock split of the outstanding shares of Common Stock is approved. Such approval may not likely occur until the Vivos Matter is completely resolved. Following the Merger, shareholders holdingthe Vivos Group, which holds over 80 percent of the issued and outstanding shares of Common Stock, notified the Company that acting as a group they would not approve an amendment to the Company’s Certificate of Formation to increase the number of authorized, but unissued, shares of Common Stock. As a result, the Company has not been able to execute on its business plan.

We expect to achieve greater synergies and removal of redundant resources by acquiring EOR and specialized staffing firms in more diverse locations and serving diversified industries such as healthcare, medical, biotech, pharmaceuticals, aeronautics, green technologies, oil and gas, and a myriad of IT specialties. We believe that acquisitions would be not only directly accretive, but also provide significant cross-selling opportunities. Moreover, we can see immediate returns on these acquisitions as we can quickly consolidate back-office operations and realize significant savings.

We will focus our organic growth on growing our EOR and staffing business and leveraging our experience to enter new industries, particularly those that rely significantly on contractors and freelancers to perform limited time or project-based assignments such as IT (i.e., software developers and testers), marketing, food services (i.e., cafeteria), and sales activities.

As stated above under “Our Industry”,Industry,” the trend for staffing expertise in the areas of AI, gig, cloud services, VMS/MSP, plus the expected need in fields like biotech and healthcare, are of interest to Maslow. We will continue to embrace this trend and look to expand on our capabilities, which in turn we believe will open up new markets for us.

Additionally, we will continue to invest in technology and process improvements as necessary and resources allow,to grow the staffing side of our business and to ensure that we operate at optimal productivity and performance and are able to quickly adapt if operations scale up.

COMPETITIONIn late 2023, we began using ADP as our payroll processor, which brings workforce management cloud services that enable us to better manage our HR benefits, timecards, payroll records, and applicant tracking. This new partnership was implemented to help improve both our employee and client experiences, while creating operational efficiencies and improved reporting.

COMPETITION

The staffing services market is highly fractured and competitive with limited barriers to entry. We compete in national, regional, and local markets with full-service and specialized temporary staffing companies. Some of our competitors have significantly more marketing and financial resources than we do. PriceThe elevated level of competition in the staffing industry is intense.continues to put downward pressure on pricing for services being offered. We expect that the level of competition will remain high.

The principal competitive factors in attracting qualified candidates for temporary assignments are pay rates, availability of assignments, duration of assignments, and responsiveness to requests for placement. Because temporary employees often use more than one recruiter for assignments, the speed at which we place prospective workers, and the availability of appropriate assignments are important factors in our abilityClient retention is highly predicated on being able to complete assignments of qualified workers. In addition to having highsource quality workers to assigncandidates that meet their specific requirements in a timely manner, the principal competitive factors in obtaining and retaining potential workers in the temporary staffing industry include properly assessing the clients’ specific job requirements, the appropriateness of the workers assigned to the client, the price of services and the monitoring of client satisfaction.manner. Although we believe we compete favorably with respect to these factors, we expect competition to continue to increase.increase, which may cause margin compression.

The workforce management industry is highly fragmented, so we experience competition from different competitors for different services. Some direct competitors of Maslow for EOR services in the television and video production industry include, but are not limited to, Entertainment Partners, Cast & Crew, PayReel, Inc., Innovative Employee Solutions. Competitors in the broader EOR space include, Velocity Global, Easy Payroll Global, Elements Global Services, and Nexus Contingent Workforce. Direct competitors of Maslow in the staffing space include, but are not limited to TeamPeople, a division of System One Inc., Randstad, Insperity, Group Management Services, and Namely.com. Direct competitors of Maslow in the executive recruiting/permanent placement include, but are not limited to, TeamPeople, a division of System One Inc., Creative Circle, The Lucas Group, Onward Search, and DHR International. Some direct competitors of Maslow in the video production services space include, but are not limited to, PayReel, Inc., Crew Connection Inc. and TeamPeople, a division of System One Inc.

In addition to the above identified competitors, there are additional competitors that include any company that provides a similar range of services as us, as well as companies that just provide some or one of the services Maslow provides. The direct competitors listed above service the same industry that Maslow services and relies upon. The criteria for which these companies compete are generally based on price and service levels.

While recognizing the need to continue implementation and awareness in human cloud services as referenced, we believe our competitive advantage is underpinned by human relationships and interactions, and that online staffing will never fully replace relationships built on a personal touch. This plays into MMG’s strength as our underlying client business relies on these personal relationships such to be successful, leading us to continue to hire career professionals who are able to parlay the emotional intelligence needed with ever evolving modern technology. We see this hybrid of technology and client centricity to be our competitive advantage.

SEASONALITY

The staffing industry has historically been cyclical, often acting as an indicator of both economic downturns and upswings. Staffing clients tend to use temporary staffing to supplement their existing workforces and generally hire direct workers when long-term demand is expected to increase. Consequently, our revenues tend to increase quickly when the economy begins to grow and, conversely, our revenues may decrease quickly when the economy begins to weaken. Other factors include the timing of recurring annual client events or sporting seasons which last a defined period of time throughout the year.

REGULATION

We are subject to regulation by numerous federal, state and local regulatory agencies, In the past four years, including but not limited to2023, the U.S. Departmentfourth quarter has been our busiest with 29% of Labor, which sets employment practice standards for workers, and similar state and local agencies. We are subject toour annual revenue being the laws and regulationsaverage. This is because of the jurisdictions within which we operate. While the specific lawsfall schedule and regulations vary among these jurisdictions, some require some form of licensing and often have statutory requirements for workplace safety and notice of change in obligation of workers’ compensation coverageyear-end projects planned by several large clients. However, in the eventlast two years, our December revenue has been uncharacteristically low as many of contract termination. Although compliance with these requirements imposes some additional financial risk on us, particularly with respect toour clients who breachare shutting down their payment obligation to us, such compliance has not had a material adverse effect on our business to date. Additional government regulation ofmedia operations during and around the employer-employee relationship could result in additional clients seeking our services. Conversely, increased government regulation of the workplace or of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could also materially harm our business.holidays.

Because of the sudden drop-in client requirements during this pandemic as clients have elected to delay productions for safety, the Company was forced to reduce the hours of contracted employees, furlough 6 general and administrative personnel and institute pay-cuts across the board with executives taking a larger temporary cut.

AVAILABLE INFORMATION

We file electronically with the SEC our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. Our website address is www.maslowmedia.com. The information included on our website is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K. We will make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we have filed or furnished such material to the SEC. You may read and copy any materials we file with the SEC at the SEC’s Public Reference room at 100 F Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and formation statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Furthermore, we will provide electronic or paper copies of filings free of charge upon written request to our Chief Financial Officer.

ITEM 1A. RISK FACTORS

There are numerous and varied risks that may prevent us from achieving our goals, including those described below. You should carefully consider the risks described below and the other information included in this Annual Report on Form 10-K, including our consolidated financial statements and related notes. Our business, financial condition, and orour results of operations could be harmed by any of the following risks. If any of the events or circumstances described below were to occur, our business, the financial condition and the results of operations could be materially adversely affected. As a result, the trading price of Company Common Stock could decline, and investors could lose part or all of their investment. The risks below are not the only risks we face. Additional risks not currently known to us or that we currently deem to be immaterial may also adversely affect our business, financial condition, or results of operations.

An investment in our common stockCommon Stock should be considered high risk.

An investment in RLBY should be considered high risk and requires a long-term commitment, with no certainty of return.

ImpactWe face risks related to health pandemics, wars, inflation, and other widespread outbreaks of contagious disease, including COVID-19 Pandemicand its variants, or other potential causes of global instability which could significantly disrupt our operations and impact our financial results.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, this coronavirus spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified. The outbreak and any preventative or protective actions that governments or we may take in respect of this coronavirus may result in a period of business disruption, reduced customer traffic and reduced operations.

We have maintained our focus on the health and safety of our employees, contractors, customers, and suppliers, working with each stakeholder on precautions to keep everyone safe from the virus. We have worked closely with our clients whom we contract staffing to implement health and safety protocols and develop plans for safely reestablishing or continuing operations during this pandemic.

The demand for staffing services has been and will be significantly affected by general economic conditions. UncertaintiesThe trend of companies allowing remote workers has negatively impacted the media staffing business because some companies have elected not to bring back the worker count it had pre-pandemic. Also, pandemic related to the duration of the COVID-19 pandemicvaccine mandates maintained by some clients have on occasion had and are expected to have an adverse impact on the staffing industry and the Company’s ability to forecast its financial performance. As such, any resulting financial impact cannot be reasonably estimated at this time but may materially affect our business financial conditionwhen associates have elected not to comply. In some cases, we are able to backfill the post and resultsin some we may not have the opportunity. When we are able to backfill, there are still gaps in the period of operations.revenue generation until a selection is made and a start date is determined. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning new strains of the virus, the severity of the coronavirus, rollout of vaccines, and federal, state and local government and client actions to contain the coronavirus or treat its impact, among others. Our executive management team continues to track COVID-19 news and developments, including the deployment of vaccines.

RISKS RELATED TO OUR COMPANY

Disputes between Reliability and the Vivos Group have put our growth plans on hold as Reliability cannot tap the public markets for capital.

Approximately 84.4% of common stockCommon Stock is owned by two (2) groups of related parties (“Vivos Group”);

On June 5, 2020, Reliability commenced an arbitration seeking to address purported merger violations before the American Arbitration Association (“AAA”) in New York, New York, as permitted by the Merger Agreement against Mr. Doki; Mrs. Valleru; Mrs. Janumpally (individually and in her capacity as trustee of Judos Trust); Mr. Pathuri (individually in his capacity as trustee of Igly Trust) and Federal Systems (the “Respondents”).as The Respondents filed a counterclaim, but changed, set forth below, however their mind, refused to pay the AAA’s fee, and ultimately refused to participate in the arbitration. Thereafter, Reliability petitioned the state court in New York to compel arbitration, but this action was removed to federal court, where itownership has been pending for several months awaiting court action. The Company is seeking damages which if granted will likely be the remedy set forth within the merger agreement which is primarily the relinquishment in whole or in part sharessubject of Company Common Stock received by the Respondents in connection with the Merger.an arbitration.

The Vivos Group will likely continue to control virtually all matters submitted to shareholders for a vote; may elect all of our directors upon the end of the term of the current directors; and, as a result, may control our management, policies, and operations. Our other shareholders will not have voting control over our actions, including the determination of other industries and markets that we may enter and the entities we acquire, which may be affiliated with Vivos. The various actions taken by the Company against the Vivos Group are motivated by ensuring that either Vivos no longer controls the vote of the shareholders or, in the alternative, that no Vivos Group votes or actions can harm the Company or the minority shareholders. No assurance can be given that the Company will be successful in these actions, however on December 23, 2020 at a hearing in the Maryland District Court, a motion by Vivos to compel a shareholder meeting was summarily dismissed. The judge agreed that permitting Vivos Group to vote their shares at a meeting of shareholders could materially harm the interests of the Company as a whole, its employees and minority shareholders. This judge will be presiding over a full trial on the merits shortly. While our dispute with Vivos continues, we will be unable to execute our busines plan. The Company’s business plan contemplates issuing additional shares of Common Stock to raise capital and to use as currency for our acquisition growth strategy. Presently, the Company does not have any authorized shares that are not issued. No shares are expected to become available to the Company until this matter is resolved. The Company will suffer a material adverse effect if the Company continues to have no shares of Common Stock available for issuance.

Related Party Indebtedness; Default.

Prior to the Merger, shareholders of Vivos (“Vivos Debtors”), directly and through affiliated entities, borrowed amounts from Maslow (the “Related Party Debt”) that reached an aggregate outstanding balance (including principal and interest) as of December 31, 2019 of approximately $4,169. The Related Party Debt is evidenced by several promissory notes and a personal guaranty of Mr. Naveen Doki, also a Majority Shareholder.

The Related Party Debt is currently in default, and as of December 31, 20202023, had a balance of $4,258.$5,501. In February 2020,August 2022, Maslow brought an actionlearned it had prevailed in arbitration against the District CourtVivos Group. In May and October of Montgomery County, Maryland,2023, the Company was afforded three supplemental awards. On January 29, 2024, the three arbitration awards entered as judgments in Reliability’s case against the Vivos Group became final giving Reliability collectible judgments which the appointed Receiver is now eligible to enforcepursue.

While the promissory notes and guaranty. FailureCompany is optimistic that it will recover the amounts of the Companyaward, failure to recover the Related Party Debt could have a material adverse effect on the Company. The case is currently pending with a trial date set to begin on October 4, 2021, barring any delays that more likely would be the result of the COVID-19 pandemic.

In addition, prior to the Merger, some of the Vivos Group incurred obligations at a number of other businesses they ownowned and caused Maslow to become obligated thereon as co-obligor or guarantor and pledged assets of Maslow to secure certain of these obligations. During the five months prior to the consummation of the Merger,In 2021, Maslow paid approximately $450 in satisfaction of these obligations. Maslow continues to beobligations incurred before the Merger.

In September 2022, MMG learned that a contingent obligor on certainVivos IT, LLC lawsuit against Second Wind Consultants (“SWC”) in May 2019 included MMG as a plaintiff. The lawsuit brought claims of these debts. If the direct obligors fail to satisfy these debts, the creditors may bring action against Maslow, which, if determined adversely, could have a material adverse effect on the Company.

The existence of these obligations could significantly affect our liquidity, as well as our ability to obtain loansfraud in the future. Certain members ofinducement, unjust enrichment, and other monetary claims against SWC. The five parties suing SWC included Vivos Group entered into that certain Agreement for the Contingent Liquidation of the Common Stock ofIT, LLC, Maslow Media Group, Inc., dated asSuresh Venkat Doki, Naveen Doki, and Silvija Valleru. The lawsuit related to a debt restructuring services agreement secured by Suresh Doki, Naveen Doki, and Silvija Valleru to assist the following then-owned Vivos entities: Maslow Media Group, Inc., Health Care Resources Network, Inc., Mettler & Michael, Inc., 360 IT Professionals, Inc., and US IT Solutions, 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 28, 2019 (the “Liquidation Agreement”), pursuant29, 2019.

Maslow’s retained counsel filed a motion to include all original parties to the SWC agreement, and in March 2024, SWC petitioned the court for a summary judgment to which those Vivos Group thereto pledged their shares of Company Common Stock to be sold or granted to the applicable creditors in satisfaction of the debts owed to the creditors and terminate any guarantees, liens and obligations affecting Maslow. The sale of the shares subject to the Liquidation Agreement could adversely impact the value of the Common Stock. In addition, the value of the shares of Company Common Stock may be insufficient to pay off all outstanding obligations. The Company may have to resort to the courts to enforce the terms of the Liquidation Agreement, and the sale of these shares may need to be registered under applicable securities laws, which would distract management and increase expenses.MMG filed opposition.

The Company could be subject to unknown liabilities incurred by its previous sole shareholder, Vivos Holdings LLC.

Maslow, was previously a wholly owned subsidiarysubsequent to the Merger with Reliability, discovered that unbeknownst to them at the time of Vivos Holdings, LLC (“Vivos Holdings”). Vivos is owned and controlled by the seven partiesorigination that we are currently in dispute. Vivos Holdings had caused Maslow to be ait was guarantor or direct obligor for loans, advances, or other liabilities for the benefit of the Vivos Group and related entities other than Maslow. These obligations were often incurred by Vivos Holdings on behalfentities. For example, we became aware of Maslow withoutbeing a party to the knowledge of Maslow’s senior management.SWC lawsuit in September 2022. There may be additional obligations of other Vivos Group entities for which Maslow may have liability as a result of these arrangements that are not known to the management of Maslow. These liabilities could have a material adverse effect on the Company and the value of the Common Stock. Reliability periodically runs periodic lien checks the latest as late as January 2021 and have not seento detect if there are any other new uncommunicated pre-existing liabilities.liabilities on the record.

The Arbitration outcome could lead to a new shareholder base where the new affiliated parties decide a different strategic direction for the Company and take appropriate action.

If a new shareholder base is the outcome of the arbitration, a new shareholder base may decide to change the strategic direction of the Company in a significant way. This might include, but is not limited to, capitalization plans, whether the Company remains a public company, merger and acquisition plans, corporate structure, and executive management.

The success of our business depends on our ability to attract and retain qualified employees that possess the skills demanded by clients and intense competition may limit the ability to attract and retain such qualified employees.

For the Company’s staffing, executive recruiting, and video production services, the success of the Company depends on the ability to attract and retain qualified employees who possess the skills and experience necessary to meet the requirements of clients or to successfully bid for new client projects. The legal dispute with the Vivos Group has negatively impacted the Company’s ability to attract and retain some top talent. The level of uncertainty since the legal dispute began in late 2019 until the arbitration award issued in August 2022 provided reason for concern for existing and prospective staff in remaining or joining the Company. The ability to attract and retain qualified employees could be impaired by improvement in economic conditions resulting in lower unemployment, increases in compensation, or increased competition. During periods of economic growth, the Company faces increasing competition from other staffing companies for retaining and recruiting qualified temporary and permanent employees, which in turn leads to greater advertising and recruiting costs and increased salary expenses. These problems can be exacerbated by the fact that the Company often must attract and retain employees with skills specific to the video production industry, which narrows the pool of available, qualified employees that the Company may draw upon. If the Company cannot attract and retain qualified temporary and permanent employees, the quality of its services may deteriorate and the financial condition, business, and results of operations may be materially adversely affected.

Our success depends to a large degree on growth in market acceptance of human resources outsourcing and related services we provide.

Because the majority of our revenues currently comescome from EOR services, a largesubstantial portion of our success depends on the willingness of clients to outsource their human resources (“HR”) functioncontingent staffing requirements to a third-party service provider. Many companies have invested substantial personnel, infrastructure, and financial resources in their own internal HR organizations, and therefore, may be reluctant to switch to our solution. Companies may not engage us for other reasons, including a desire to maintain control over all aspects of their HR activities, a belief that they manage their HR activities more effectively using their internal administrative organizations, perceptions about the expenses associated with our services, perceptions about whether our services comply with laws and regulations applicable to them or their businesses, or other considerations that may not always be evident. We also lost some of our headcounts with existing clients who decided to convert placed resources to their payroll. This has had a modest impact on our business with a few clients. Additional concerns or considerations may also emerge in the future. We must address our potential clients’ concerns and explain the benefits of our approach in order to convince them to change the way that they manage their HR activities, particularly in parts of the United States where our Company and solution are less well-known. If we are not successful in addressing potential clients’ concerns and convincing companies that our solution can fulfillfulfil their HR needs, then the market for our solution may not develop as we anticipate, thus our business may not grow.

Any significant or prolonged economic downturn could result in clients using fewer staffing and executive recruiting services offered by the Company, terminating their relationship with the Company, or becoming unable to pay for services on a timely basis or at all.

Because demand for the types of services our Company offers is sensitive to changes in the level of economic activity, the Company’s business has in the past, and may in the future, suffer during economic downturns. Demand for the services we provide areis highly correlated to changes in the level of economic activity and employment. Consequently, as economic activity begins to slow down, it has been the Company’s experience that companies tend to reduce their use of our services, resulting in decreased revenues and profit levels. In addition, the Company may experience pricing pressure during economic downturns, which could have a negative impact on the results of operations. Further, many of our clients are corporate media departments and broadcast networks. As a result, any industry downturn that affects these kinds of companies could have a major effect on our business.

The deterioration of the financial condition and business prospects of clients could reduce their need for the staffing and executive recruiting services we provide and could result in a significant decrease in the Company’s revenues and earnings derived from these clients. In addition, during economic downturns, companies may slow down the rate at which they pay their vendors, seek more flexible payment terms, or become unable to pay their debts as they become due.

In late 2022 and early 2023, some of our clients announced layoffs, which led to a reduced usage of our staff in 2023. Our two largest clients, however, increased their business as measured by revenue by 2% and 6%, respectively, in 2023 over 2022.

State unemployment insurance expense is a direct cost of doing business in the staffing industry. State unemployment tax rates are established based on a company’s specific experience rate of unemployment claims and a state’s required funding formula on covered payroll. Economic downturns have in the past, and may in the future, result in a higher occurrence of unemployment claims resulting in higher state unemployment tax rates. This would result in higher direct costs to us. In addition, many statestates unemployment funds have beenwere depleted during the recent economic downturn and many states have borrowed from the federal government under the Title XII loan program. Employers in all states receive a credit against their federal unemployment tax liability if the employer’s federal unemployment tax payments are current and the applicable participating state is also current with its Title XII loan program. If a state fails to repay such loans within a specific time period, employers in such states may lose a portion of their tax credit.

The Company is exposed to employment-related claims and costs, as well as periodic litigation that could materially adversely affect the Company’s financial condition, business, and results of operations.

Our business often entails employing individuals and placing such individuals in our clients’ workplaces. The Company’s ability to control the workplace environment of clients is limited. As the employer of record of these employees, the Company incurs a risk of liability to its employees and clients for various workplace events, including:

The Company may incur fines and other losses and negative publicity with respect to any of these situations. Some of the claims may result in litigation, which is expensive and distracts attention from the operation of ongoing business.

The Company assumes the obligation to make wage, tax, and regulatory payments for our employees, and, as a result, is exposed to client credit risks.

The Company generally assumes responsibility for and manages the risks associated with employees’ payroll obligations, including liability for payment of salaries, wages, and certain taxes. These obligations are fixed, whether clients make payments as required by service contracts with the Company, which exposes the Company to credit risks of clients. As a result of the broad economic impact of the COVID-19 pandemic, our clients may be more likely to breach their payment obligations.

Workers’ compensation costs for employees may rise and reduce our margins and require more liquidity.

The Company is responsible for, and pays, workers’ compensation costs for individuals employed by the Company – both regular staff and client employees for which the Company is the employer of record. At times, these costs have risen substantially as a result of increased claims and claim trends, general economic conditions, changes in business mix, increases in healthcare costs, and government regulations. Although the Company carries insurance, unexpected changes in claim trends, including the severity and frequency of claims, actuarial estimates, and medical cost inflation could result in costs that are significantly different than initially reported. If future claims-related liabilities increase due to unforeseen circumstances, or if new laws, rules, or regulations are passed, costs could increase significantly. There can be no assurance that the Company will be able to increase the fees charged to clients in a timely manner and in a sufficient amount to cover increased costs as a result of any changes in claims-related liabilities.

We currently depend on two to four customers for a material portion of our net revenue. The loss of or a substantial reduction in business of either customerone of these four customers would significantly reduce our net revenue and adversely impact our operating results.

AT&T (AT&TRevenue reliance in 2023 was concentrated on two clients compared to 2022 when it was four clients delivering 10% or more the revenue. The top two revenue producing clients in 2023, Clients C (25.1%) and DirectTV combined)D (15.1%), produced 40.3% of the revenue whereas in 2022, Clients C (19.6%), D (12.9%), A (12.0%), and Janssen Pharmaceuticals (which includes workforce partners Johnson & Johnson) accounted for approximately 49% and 38%B (14.4%) brought in 58.8% of ourthe revenue.

When comparing the top four irrespective of a 10% threshold, the four clients produced 57.7% in 2023 compared with the aforementioned 2022 total revenuesof 58.8%.

In terms of accounts receivable balances on December 31, 2023, Client D had 42.2% compared to 21.7% for the years endedsame period 2022. Client C had 19.9% and Client A had 12.3%, respectively in 2023, compared to Client C’s 18.5% and Client A’s 13.7% of accounts receivable on December 31, 2020 and 2019, respectively. In addition, AT&T comprised 49%2022. Client B had the largest share of accounts receivable on December 31, 2022 with 33.7%. But on December 31, 2023, Client B had only a 3.6% share of the accounts receivable balance in both December 31, 2020 and 2019. Janssen Pharmaceuticals comprised of 18% and 19% of accounts receivable as of December 31, 2020 and 2019, respectively. No other client exceeded 10% of revenues. receivable. Client B’s drop was because Client B was eligible for an early payment discount which was taken.

The loss of or a substantial reduction in business from either of these four to five customers would have a significant negative impact on our business and our operating results. We may not be successful in finding a client or clients that could replace the losslevel of eitherloss of these customers, and as such, it could have a negative impact on our revenue and results of operations for a prolonged period.

Improper disclosure of employee and client data could result in liability and harm to the reputation of the Company.

The business of the Company involves the use, storage, and transmission of information about employees and clients. It is possible that security controls over personal and other data and practices that the Company follows may not prevent the improper access to, or disclosure of, personally identifiable or otherwise confidential information. Our security controls may be inadequate, or hackers or other malicious groups or organizations may attempt to interfere with our data through different means, including but not limited to malware attacks, denial of service attacks, consensus-based attacks. Any event that results in a disclosure of our clients’ and employees’ data could harm the reputation of the Company and subject the Company to liability under contracts and the laws that protect personal data and confidential information, resulting in increased costs or loss of revenue. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions in which the Company provides services. The failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to the reputation of the Company in the marketplace.

The Company could face disruption and increased costs from outsourcing and offshoring various aspects of its business.

The Company may outsource aspects of its business to lower cost of employment areas in the United States and potentially to places such as India. This outsourcing solution would focus predominantly on shared service activities which traditionally consist of back-office functions, such as “hire to retire”,retire,” “procure to pay”pay,” and “order to cash” processes. Although a goal of outsourcing our operations is to reduce the operational costs of our business, it is possible that we will not realize any benefit from outsourcing such aspects of our business or even increase our overhead expenses. A transition may create the risk of errors and omissions or technical disruptions that could negatively impact our clients, and in turn, damage our reputation resulting in a loss of customers of our business.customers.

The Company is obligated to pay certain fees and expenses.

The Company will pay various fees and expenses related to its ongoing operations regardless of whether or not the Company’s activities are profitable. These fees and expenses will require dependence on third-party relationships. The Company is generally dependent on relationships with its strategic partners and vendors, and the Company may enter into similar agreements with future potential strategic partners and alliances. The Company must be successful in securing and maintaining its third-party relationships to be successful. There can be no assurance that such third parties may regard their relationship with the Company as important to their own business and operations, that they will not reassess their commitment to the business at any time in the future, or that they will not develop their own competitive services, either during their relationship with the Company or after their relations with the Company expire. Accordingly, there can be no assurance that the Company’s existing relationships or future relationships will result in sustained business partnerships, successful service offerings, or significant revenues for the Company.

The Company depends on its management team to manage its business effectively.

The Company’s future success is largely dependent in large part upon its ability to understand, develop, and execute the business plan and to attract and retain highly skilled management, operational, and executive personnel. Thus, the Company is highly dependent on its officers to provide the necessary skills, experience, and background to execute the Company’s business plan. Additionally, the employer of record business is a specialty service which requires a full understanding of the service and its merits to be able to educate clients and potential clients to win business and operate optimally. The loss of any officer’s services with this knowledge could stifle the Company’s growth for 4-9four to nine months, and could impede, particularly initially, as the Company builds aCompany’s EOR business with existing clients, record and reputation itswith new clients, ability to develop and execute on its objectives, and as such, would negatively impact the Company’s possible overall development.

To mitigate this risk, on September 1, 2021, Reliability entered into new employment agreements with President/CEO, Nick Tsahalis, and CFO, Mark Speck, respectively. The board of directors acted in accordance with the advice of its compensation committee to grant new employment agreements to Mr. Tsahalis, who has served as wholly owned subsidiary Maslow Media Group’s CEO since November of 2016, and Mr. Speck, who has served MMG as CFO since April of 2019.

Government regulation could negatively impact the business.

The Company’s business is subject to various government regulations in the jurisdictions in which it operates. Currently, the Company has clients and places employees in all 50 U.S. states and in numerous foreign countries.states. Due to the wide scope of the Company’s operations, the Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. The Company’s operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry, such as the imposition of additional licensing or tax requirements. Failure to comply with the legal regulations in places we do business, or the regulatory prohibition or restriction of employment services, could lead to financial liability and regulatory action against the Company, which could significantly harm our development as a business.

The Company may face significant competition from companies that serve its industries.

The Company may face competition from other companies that offer similar solutions. Some of these potential competitors may have longer operating histories, greater brand recognition, larger client bases, and significantly greater financial, technical, and marketing resources than the Company possesses. These advantages may enable such competitors to respond more quickly to new or emerging trends and changes in customer preferences. These advantages may also allow them to engage in more extensive market research and development, undertake extensive far-reaching marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to potential customers, employees, and strategic partners. Increased competition may result in price reductions, reduced gross margin, and loss of market share. The Company may not be able to compete successfully, and competitive pressures may adversely affect its business, results of operations, and financial condition.

The staffing industry is highly competitive with low barriers to entry which could limit the Company’s ability to maintain or increase our market share or profitability.

The staffing services industry is highly competitive with limited barriers to entry. Although we specialize in EOR and providing staffing services specifically for video production where the market is not yet saturated by competitors, we still face significant competition on a national, regional, and a local scale with full-service and specialized temporary staffing companies. We expect that the level of competition will remain high, which could limit our ability to maintain or increase our market share or profitability.

Several of our existing or potential competitors have substantially greater financial, technical, and marketing resources than we do, which may enable them to:

The Company is subject to the potential factors of market and customer changes, which could result in our inability to timely respond to the needs of our clients.

The business of the Company is susceptible to rapidly changing preferences of the marketplace and its customers. The needs of customers are subject to constant change. Although the Company intends to continue to develop and improve its services to meet changing customer needs of the marketplace, there can be no assurance that funds for such expenditures will be available or that the Company’s competition will not develop similar or superior capabilities or that the Company will be successful in its internal efforts. The future success of the Company will depend in part on its ability to respond effectively to rapidly changing trends, industry standards, and customer requirements by adapting and improving the features and functions of its services. In the Company’s industry, failure by a business to adapt to the changing needs and demands of customers is likely to render the business obsolete.

Negative publicity could adversely affect our business and operating results.

Negative publicity about our industry or our Company, including the utility of our services, even if inaccurate, could adversely affect our reputation and the confidence in and the use of our services, which could harm our business and operating results. Harm to our reputation can arise from many sources, including poor performance or misconduct by the workers we supply and recruit for our clients, misconduct by our partners, outsourced service providers, or other counterparties, and failure by us to meet minimum standards of service expected by clients in our industry.

The Company has generated revenues, but limited profits, to date.

The business model of the Company involves significant costs of services, resulting in a lowlower gross and net marginsmargin on revenues.revenues than many staffing businesses derive. Coupling this fact with the required operating expenses incurred by the Company, the Company has only generated approximately $1,500$1,000 in total profitsoperating income and net income from operations in any one year, andwith a high net income of approximately $500 since 2015. Net income for the Company specifically was $386 in 2018, $195 in 2019, and $386 in 2018. In 2020, with the Company taking on the added expense of being a public company, additional expenses of approximately $900 for management compensation, administrative costs, D&O insurance, consulting, and legal fees for reporting and regulatory compliance, had the most impact on our incurring a net loss of $826.$789. In 2021, the Company earned a record $7,893 in net income, but $9,631 was achieved as Other Income based on eligibility for government programs. The Company hopes and expects that as its business expands, it will enjoy economies of scale resulting in higher operating and net margins and improved cash flows, but there is no guarantee this will occur.

The Company may suffer from a lack of availability of additional funds.

We have ongoing needs for working capital in order to fund operations, pay costs associated with being a public company, and to continue to expand our operations. To that end, we will be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital on favorable terms, if at all. There is a potential that we will continue to lack shares of Company Common Stock available for an equity financing. If additional debt is incurred, the Company may fail to comply with the terms of such financing, which could result in significant liabilityliabilities for our Company. If we are unsuccessful, we may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund liabilities, or (d) seek protection from creditors. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below the prices at which our shares currently trade. Our inability to raise capital could require us to significantly curtail or terminate our operations. Our plan is to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties.

In addition, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be onin terms that result in significant dilution to our shareholders or that result in our shareholders losing all of their investment in our Company.

Our acquisition strategy creates risks for our business.

We expect that we will pursue acquisitions of other businesses, assets, or technologies to grow our business. We may fail to identify attractive acquisition candidates, or we may be unable to reach acceptable terms for future acquisitions. We might not be able to raise enough cash to compete for attractive acquisition targets. If we are unable to complete acquisitions in the future, our ability to grow our business at our anticipated rate will be impaired.

We may pay for acquisitions by issuing additional shares of Common Stock, if such shares become available, which would dilute our shareholders, or by issuing debt, which could include terms that restrict our ability to operate our business or pursue other opportunities and subject us to meaningful debt service obligations. We may also use significant amounts of cash to complete acquisitions. Most acquisitions will include “Earn Out” provisions which ensure adequate generation of revenue and profits, but cash required to pay Earn Outs likely will exceed that total or incremental cash flow generated by the acquired business. To the extent that we complete acquisitions in the future, we likely will incur future depreciation and amortization expenses associated with the acquired assets. We may also record significant amounts of intangible assets, including goodwill, which could become impaired in the future. Acquisitions involve numerous other risks, including:

The Company may suffer from a lack of liquidity.

By incurring indebtedness, the Company subjectsmay subject itself to increased debt service obligations, which could result in operating and financing covenants that would restrict our operations and liquidity. This would impair our ability to hire the necessary senior and support personnel required for our business, as well as carry out its acquisition strategy and other business objectives.

The Company lacks some of the technology necessaryhas only been able to manage its planned staffing operations, payroll, and sales activitiessecure asset-based lending at this time..

The Company relies heavily on its software providers to manage payroll, recruitment, onboarding, benefits administration, scheduling, year-end reporting, and other related human resources issues. Currently, we relyfactoring relationship with Gulf Coast Bank which is based on software provided by Paycom to help manage these operations. In 2020, we added Intaact finance and accounting suite, SalesForce.Com, and advanced search B2B sales facilitator Zoom Info; all which have made our business more efficient and effective. However, this segmented technology is not an integrated ERP and will not handle the growing complexity of our needs as we evolve our operations through mergers and acquisitions of other businesses. This could hamper our ability to successfully reduce the general and administrative costs of businesses that we acquire, as contemplated by our acquisition strategy, which would ultimately impair our ability to generate a healthy profit.

The Company is currently party to Factoring Facilities that are eroding its profit margins and may impair our ability to secure additional financing.

The Company has a factoring and security agreements (collectively, the “Factoring Facilities”) with Triumph Business Capital (“Triumph”) who is sometimes referred to herein as a “Factor” or “Factoring Company”. Pursuant to the Factoring Facilities, the Company sells its accounts receivable (i.e., invoices) at a discount so thatbalance. As of December 31, 2023, Maslow could raise an additional $2,624 in cash through factoring. In the Company can meet its immediate cash needs, at which pointpast, Maslow has tried to tap non-asset-based lending but the value of those invoices become a debt ofmarket for such loans is challenging, and the Company that must be paid to the Factoring Company. This type of facility is common for companiesVivos Group’s association has prevented loans from proceeding in the EOR and staffing industries as a great dealpast. Thus, at this time, Maslow is limited in borrowing based on the amount of cashunfactored accounts receivable that is advanced to make payroll and pay contractors. We may use a substantial portion of our cash flow from operations to make debt service payments on these Factoring Facilities, which reduces the funds available to us for other purposes such as working capital, capital expenditures and acquisitions. In addition, because our largest asset (our accounts receivable) is encumbered pursuant to these Factoring Facilities, our ability to obtain lines of credit or other financings for other purposes such as growth initiatives and acquisitions is limited. Additionally, we are exposed to fluctuations in interest rates because our Factoring Facilities have variable rates of interest tied to the prime interest rate. The reduction of cash flow as a result of these Factoring Facilities may put us at a competitive disadvantage and reduce our flexibility in planning for, or responding to, changing conditions in our industry, including increased competition, and makes us more vulnerable to general economic downturns and adverse developments in our business.available.

No formal market survey has been conducted.

No independent marketing survey has been undertaken to determine the potential demand for the Company’s services over the longer term. The Company has conducted no marketing studies regarding whether its business would continue to be marketable. No assurances can be given that upon marketing, sufficient customer markets and business can be developed to sustain the Company’s operations on a continued basis.

The Company services numerous geographic areas, and therefore may be subject to risks such as natural disasters and travel-related disruptions, which may materially adversely affect our business, financial condition, and results of operations.

We operate in all U.S. states and territories and in numerous countries around the world. To do so, we often send workers to locations that could be affected by variousa range of factors beyond our control that could adversely affecteffect our ability to service our clients. These factors could also affect our employees, vendors, insurance carriers, and other contractual counterparties. Such factors include:

Any one or more of these factors could adversely affect our ability to offer services to clients, which could materially adversely affect our business, financial condition, and results of operations.

A downturn of the U.S. or global economy could result in our clients using fewer workforce solutions or becoming unable to pay us for our services on a timely basis or at all, which would materially adversely impact our business.

Because demand for workforce solutions and services, particularly staffing services, is sensitive to changes in the level of economic activity, our business may suffer during an economic downturn, resulting from among other thingswhich can be caused by such events as the COVID-19 pandemic. During periods of weak economic growth or economic contraction, the demand for staffing services typically declines. When demand drops, our operating profit is typically impacted unfavorably as we experience a deleveraging of our selling and administrative expense base as expenses may not decline as quickly as revenues. In periods of decline, we can only reduce selling and administrative expenses to a certain level without negatively impacting our long-term prospects. Additionally, during economic downturns companies may slow the rate at which they pay their vendors, or they may become unable to pay their obligations. If our clients become unable to pay amounts owed to us, or pay us more slowly, then our cash flow and profitability may suffer.

ClientA client’s use of our services may be terminated on short notice, leaving us vulnerable to a significant loss in revenuerevenue.

Client staffing needs can change and, as a result, we could lose staffing or EOR headcount rather quickly. In late 2019,early 2022, this was the case when AT&T announcedClient A moved eight heads from our payroll to theirs and Client B’s loss of major sports program, which we staffed, to a competitor had approximately $1,800 impact to our revenues in 2023. In 2022, our client did not rebid on a government contract, and it was awarded to another party. The end customer required a minority or disadvantaged business to own the cancellationcontract, a requirement that our Company does not meet. The result was a loss of two (2) live anchor multiple hour DirecTV sports programs, which had an estimated $4,000approximately $130 in revenue impact on the Company.in 2022 and $320 in 2023 revenue. A reduction in such needs and resulting loss of clients or placements at clients could result in a significant decrease in revenue within a short period of time that would be difficult to quickly replace.

Inability to retain or attract new clients.

GrowthThe growth and profitability of our business is dependent upon our ability to retain and capture new clients. Our ability to achieve success in both areas is reliant in large part on our sales and service organization. If we are unable to execute effectively, or our selected business development efforts falter, we may not be able to attract a significant number of new clients and our existing client base could shrink, resulting in an adverse impact on our revenues and profitability.

We could be required to write-off goodwill and intangible assets.

In accordance with generally accepted accounting principles, we are required to review our goodwill and intangible assets for impairment at least annually. Our goodwill and intangibles assets were $721 at the end of 2020. An unfavorable evaluation could cause us to write-off these assets in future periods. Any future write-offs could have a material adverse impact on our operational results or Operating Income Before Interest, Taxes, Depreciation, and Amortization (“OIBITDA”). OIBITDA is a non-GAAP metric we use to better reflect the operating results of the Company.

Our business is subject to federal, state and local labor and employment laws and a failure to comply could materially harm our business.

We are subject to regulation by a host of federal, state and local regulatory agencies in the jurisdictions within which we operate including but not limited to the U.S. Department of Labor. There are local agencies which have similar state and city regulations as well with specific laws and regulations varying among these jurisdictions. This acts both as an opportunity for the Company since we manage these risks as a matter of course for our EOR service, and a risk as compliance with these requirements imposes some additional burden on us. However, in the past challenges complying with these local, state and federal regulations has not resulted in a material adverse event on Maslow’s business. Any inability or failure to comply with government regulation could however materially harm our business. Increased government regulation of the workplace or of the employer-employee relationship, or judicial or administrative proceedings related to such regulation, could create additional business for the Company, but could also materially harm our business

In reaction to the COVID-19 pandemic, federal and state legislatures have been attempting to push through legislation, much of which affects the employee-employer relationship, and these new laws may have a material impact on our operations, business, finances and prospects. No certainty can be provided as to the nature of these new regulations or their impact.

Concentration Risk of Customers

Workforce clients AT&T and DirecTV (under a single AT&T agreement) and Janssen Pharmaceuticals (which includes workforce partners Johnson & Johnson) made up approximately 29% and 11% of our 2020 revenues, respectively. In addition, these two customers account for approximately 49% and 18% of our accounts receivables as of December 31, 2020, respectively. Our business relies on relationships with several large customers to generate a large portion of our revenue. This revenue concentration in a relatively small number of customers (5 clients make up 65% of revenue) makes us particularly dependent on factors affecting those companies. Workforce clients C, D, F, and A made up approximately 57.7% of our revenues in 2023. Whereas, in 2022, Workforce Clients C, D, B, and A, made up approximately 58.8% of our 2022 revenues.

As of December 31, 2023, Clients D, C, and A account for approximately 74.4% of our accounts receivable compared to the 2022 group of four (Clients C, D, B, and A) which comprised 87.6% of our receivables as of December 31, 2022.

We face risks related to health pandemics, wars, inflation, and other widespread outbreaks of contagious disease, including COVID-19 and its variants, or other potential causes of global instability which could significantly disrupt our operations and impact our financial results.

RISKS RELATED TO OWNERSHIP OF COMMON STOCK

Our stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for our shareholders.

The market price of Common Stock has been, and iswill likely to continue to be, volatile for the foreseeable future. The market price of Common Stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors listed below:

In addition, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many business services companies. Stock prices of many business services companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business, results of operations, and financial condition.

Common Stockstock is subject to risks arising from restrictions on reliance on Rule 144 by shell companies or former shell companies.

Under a regulation of the SEC known as “Rule 144,” a person who beneficially owns restricted securities of an issuer and who is not an affiliate of that issuer may sell them without registration under the Securities Act provided that certain conditions have been met. One of these conditions is that such person has held the restricted securities for a prescribed period, which will be 6is six months for Common Stock.common stock. However, Rule 144 is unavailable for the resale of securities issued by an issuer that is a shell company (other than a business combination related shell company) or, unless certain conditions are met, that has beenwas, at any time, previously a shell company.

The SEC defines a shell company as a company that has (a) no or nominal operations and (b) either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets.

As a result of the Merger described in Item 1.01, the Company ceased being a shell company as such term is defined in Rule 12b-2 under the Exchange Act.

While we believe that as a result of the Merger, Reliability ceased to be a shell company, the SEC and others whose approval is required for shares to be sold under Rule 144 might take a different view.

Rule 144 is available for the resale of securities of former shell companies if and for as long as the following conditions are met:

Although the Company has filed Form 10 Information with the SEC on its Current Report on Form 8-K filed October 29, 2019, shareholders who receive the Company’s restricted securities will not be able to sell them pursuant to Rule 144 without registration until the Company has met the other conditions to this exception and then for only as long as the Company continues to meet the condition described in subparagraph (iii), above, and is not a shell company. No assurance can be given that the Company will meet these conditions or that, if it has met them, it will continue to do so, or that it will not again be a shell company.

The issuance of the additional shares of Common Stock could cause the value of Common Stock to decline.

The sale or issuance of a substantial number of shares of Common Stock, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish. Further, if we do sell or issue more Common Stock, any investors’ investment in the Company will be diluted. Moreover, the Company has outstanding warrants. The conversion or exercise of the warrants for shares of Company Common Stock would dilute the common shareholders. If significant dilution occurs, any investment in Common Stock could significantly decline in value.

The application of the “penny stock” rules could adversely affect the market price of Common Stock and increase transaction costs to sell those shares. This can be exacerbated by the current low float of the stock in relation to the shares outstanding.

The SEC has adopted Rule 3a51-1, which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:form, sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of Common Stock and cause a decline in the market value of Common Stock.

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted Rule 2111 that requires a broker-dealer to have reasonable grounds for believing that an investment is suitable for a customer before recommending the investment. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy Common Stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

We do not intend to pay dividends for the foreseeable future.

We have never declared ornor paid any cash dividends on our stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors.

RISKS RELATED TO OUR PREVIOUS STATUS AS A SHELL COMPANY

We may have contingent liabilities related to our operations prior to the Merger of which we are not aware and for which we have not adequately provided for. For example, in October 2022, we learned about a Vivos IT, LLC lawsuit against Second Wind Consultants (‘SWC”) in May 2019 which included MMG as a plaintiff. SWC is seeking to collect the balance of $403 not paid by the Vivos Group. In July 2021 the Company paid $475 plus $3 in attorney fees to settle a debt owed by the Vivos Group to Libertas Funding, LLC (“Libertas”). This settlement relieved MMG from obligation to Libertas given the Vivos Group had included MMG as a signing company to its debt in July 2018. In March 2022, Vivos Real Estate defaulted on its mortgage loan with FVCBank for which Maslow was listed as a guarantor. In June 2023, this matter was resolved with the sale of the property, leaving Maslow with no liability.

WeReliability identified as a shell company with no operating activities prior to the Merger. Upon completion of the Merger, we acquired all of the operations of The Maslow Media Group, Inc. Prior to the consummation of the Merger, Reliability, Incorporated was engaged from 1971 to 2007 in the design, manufacture, market, and support of high-performance equipment used to test and condition integrated circuits. This business was closed in 2007. We cannot assure you that there are no material claims outstanding, or other circumstances of which we are not aware, that would give rise to a material liability relating to those prior operations, even though we do not record any provisions in our financial statements related to any such potential liability. If we are subject to past claims or material obligations relating to our operations prior to the consummation of the Merger, such claims could materially adversely affect our business, financial condition, and results of operations.

RISK RELATED TO THE MERGER AND OWNERSHIP OF COMMON STOCK

Costs of being a public company and risks associated with having beenbeing a shell.public company.

We are now incurring increasedThe company incurs costs with demands upon management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies; any failure to establish and maintain adequate internal control over financial reporting or to recruit, train and retain necessary accounting and finance personnel could have an adverse effect on our ability to accurately and timely prepare our consolidated financial statements.

We identified as a shell company with no recent operating activities prior to the Merger. Upon completion of the Merger, we acquired all the operations of The Maslow Media Group. Inc.

As a public operating company, we are now incurring significant administrative, legal, accounting, and other burdens and expenses beyond those of a private company, including those associated with corporate governance requirements and public company reporting obligations. We have already enhanced and supplemented our internal accounting resourcesdepartment with additional accounting and finance personnel with the requisite technical and public company experience and expertise, added requisite technical resources, as well as refined our quarterly and annual financial statement closing process, to enable us to satisfy such reporting obligations.obligations over the past four years. However, even with perceived success in doing so, there can be no assurance that our finance and accounting organization will be able to adequately meet the increased demands that result from being a public company.

Furthermore, we are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002. In order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we are required to document and test our internal control procedures and prepare annual management assessments of the effectiveness of our internal control over financial reporting. These assessments will need to include disclosure of identified material weaknesses in our internal control over financial reporting. Testing and maintaining internal control over financial reporting will involve significant costs and could divert management’s attention from other matters that are important to our business. Additionally, we cannot provide any assurances that we will be successful in remediating any deficiencies that may be identified. If we are unable to remediate any such deficiencies or otherwise fail to establish and maintain adequate accounting systems and internal control over financial reporting, or we are unable to recruit, train, and retain necessary accounting and finance personnel, we may not be able to accurately and timely prepare our consolidated financial statements and otherwise satisfy our public reporting obligations. Any inaccuracies in our consolidated financial statements or other public disclosures (in particular if resulting in the need to restate previously filed financial statements), or delays in our making required SEC filings, could have a material adverse effect on the confidence in our financial reporting, our credibility in the marketplace, and the trading price of Common Stock.

In addition, our management team will also have to adapt to other requirements of being a public company. We will need to devote significant resources to address these public company-associated requirements, including compliance programs and investor relations, as well as our financial reporting obligations. Complying with these rules and regulations willhas substantially increaseincreased our legal and financial compliance costs and make some activities more time-consuming and costly.

Our Common Stock may not be eligible for listing on a national securities exchange.

Our Common Stock is not currently listed on a national securities exchange, and we do not currently meet the initial quantitative listing standards of a national securities exchange. We cannot assure you that we will be able to meet the initial listing standards of any national securities exchange, or, if we do meet such initial qualitative listing standards, that we will be able to maintain any such listing. Our Common Stock is currently quoted on the pink sheets OTCQBOTC of the OTC Marketplace under the symbol of “RLBY”,“RLBY,” and, unless and until our Common Stock is listed on a national securities exchange, we expect that it will continue to be eligible and quoted on the “pink sheets,” to which time we are eligible to apply to the OTCQB or OTCQX. However, inIn order to qualify for the OTCQB for instance, we would need our float to be a minimum of 5%10% of outstanding shares to even apply for an exception. Currently, our float is under 3%10.4% of outstanding. Untilour outstanding shares are increased, or sufficient number of shares registered and eligible for trade we will be unable to apply for an exception to move to the OTCQB or OTCQX.shares. In those venues, however, an investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock. In addition, if we continue to fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations normally deter broker-dealers from recommending or selling Common Stock,common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.

We cannot predict whether there will be an active trading market for our common stockCommon Stock and the market price of our common stockCommon Stock may remain volatile.

Given our low float of approximately 11,675,50330,129,085 shares and the absence of an active trading market, shareholders may have difficulty buying and selling our common stockCommon Stock at all or at the price you consider reasonable. Market visibility for shares of our common stockCommon Stock may be limited, which may have a depressive effect on the market price for shares of our common stockCommon Stock and on our ability to raise capital or make acquisitions by issuing our common stock.Common Stock.

Our compliance with regulations concerning corporate governance and public disclosure has resulted and may in the future result in additional expenses.

Evolving disclosure, governance and compliance laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 (“SOX”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act. New or changing laws, regulations, and standards are subject to varying interpretations in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. As a result, our efforts to comply with evolving laws, regulations, and standards of a public company are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

The Company’s headquartersCompany does not have any active office leases at this time and operations were moved from Rockville, Maryland to Clarksburg, Maryland effective April 30, 2020 ashas been operating the Company terminated its lease. Asin a remote environment since April of December 31, 2020, Clarksburg, Maryland became our sole location, as the Company terminated its lease for its office in Plymouth, Minnesota effective December 31, 2020.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we 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.

On September 28, 2018, Credit Cash filed a complaint against Maslow,A series of legal actions and hearings took place starting in March of 2020 with the Vivos Holdings, LLC,Group over Merger agreement violations and Vivos Acquisitions, LLC, Mr. Doki, Mr. Valleru (the “Parties”) and other defendantsGroup debt obligations. Arbitration was agreed to in the United States Districtfall of 2021 by both the Vivos Group and MMG with the proceedings commencing in February 2022.

On August 31, 2022, the arbitrator issued the Award with the Company and MMG prevailing on their claims. The awards included citing of fraud damages. Supplemental awards were subsequently issued on May 17, 2023, October 10, 2023, and finally on October 27, 2023. Summarily, MMG was awarded the totals of all notes the Vivos Group had with MMG for its borrowings, the contracted interest, attorneys’ fees and expenses of $1,209, and a contract damage of $1,000, to be satisfied by the transfer of their shares of the Company Common Stock to the Company equal in value to $1,000. The aggregate amount of the Awards totaled $7,710.

The 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 December 29, 2023, the Circuit Court for the District of New Jersey. Credit Cash alleged, among other things, that the Parties breached the Maslow and HCRN Credit Facilities and their respective guarantiesMontgomery County, Maryland signed orders entering all three arbitration awards as judgments in relation to the November 15, 2017 agreement (the “DNJ Action”).

On October 9, 2018, Maslow Media Group, Inc. was named as a defendant in an Affidavit of Confession of Judgment filed in the Supreme Court of the State of New York in relation to aReliability’s case brought by Hop Capital, which the defendants collectively agree to pay a sum of $400 to Hop Capital. Maslow Media Group, Inc. is named as one defendant among six other defendants, all of which are entities related toagainst the Vivos Group. These orders became final on January 29, 2024, when the appeal period expired for the defendants. The claim brought by Hop Capitaljudgments are good for 12 years and can be enrolled in other states. Reliability has collectible judgments which the Receiver is now eligible to pursue.

The following represents legal proceedings where Vivos Group borrowings impact MMG:

In September 2022, MMG learned that a Vivos IT, LLC lawsuit against the defendantsSWC in this case is in relationMay 2019 included MMG as a plaintiff. The lawsuit related to a Merchant Agreement dated October 4, 2018; andebt restructuring services agreement secured by Suresh Doki, Naveen Doki, and Silvija Valleru to which Maslow Media Group, Inc. was not a party. As such, Maslow Media Group, Inc. contends that being named inassist the Affidavit of Confession of Judgment as a defendant was made in error and is currently seeking to have its name removed from Affidavit of Confession of Judgment as a defendant.

On October 30, 2018, Credit Cash filed a motion to intervene in an action pending in New York State, Monroe County, filed by HCRN and LE Finance, LLC against the Parties and other defendants (“NY State Action”).

On December 10, 2018, the Parties entered into a settlement agreement for the purpose of settling certain claims related to the DNJ Action only. Pursuant to the settlement agreement, certain repayment terms were agreed upon between Credit Cash and the Parties, but Credit Cash did not relinquish the right to pursue any claims related to the NY State Action, nor to pursue any remedies against any of the parties in relation to the November 15, 2017 agreement.

Because the Parties acknowledged and agreed, that the Credit Cash relationship benefitted Parties other than Maslow, certain of the Parties and their related parties, executed and delivered to the Company that certain Agreement for the Contingent Liquidation of the Common Stock offollowing then-owned Vivos entities: Maslow Media Group, Inc., dated as of October 28, 2019 (the “Liquidation Agreement”). Pursuant to the Liquidation Agreement the parties thereto pledged shares of Company Common Stock to Maslow to be used to obtain releases from the Lenders defined therein, including Credit Cash and its affiliates. The Liquidation Agreement permits Maslow to either transfer the shares to the Lenders in satisfaction of the outstanding obligations or to arrange for the sale of the shares and using the cash to satisfy such obligations.

On or about February 17, 2020, the Company, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland against Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC and Mr. Naveen Doki, to enforce Maslow’s rights under certain promissory notes and a personal guarantee made by the defendants. The case is proceeding. The Company believes that it will be granted a judgment in its favor. Maslow intends to continue to vigorously pursue this litigation.

On February 28, 2020, Healthcare Resource Network, LLC filed a complaint against Maslow in the Circuit Court of Montgomery County, Maryland alleging that Maslow participated with the Vivos Group to financially harm the plaintiff. The plaintiff has not specified any alleged damage caused by Maslow and the Company believes any claims are without merit. The Company will defend itself from this case.

On March 16th, 2020, CC Business Solutions, a division of Credit Cash NJ, LLC domesticated a foreign judgement in the Montgomery County Circuit Court system again Health Care Resources Network, (HCRN)Inc., Maslow Media Group, Vivos Holdings, LLC, Vivos Acquisitions, LLC, Naveen Doki and Silvija Valleru.  This foreign judgement relates to Vivos Holdings adding Maslow Media Group as a guarantor on a loan made to Health Care Resources Network which is in default by HCRN and Vivos Holdings.  Foreign judgement total is $820. This judgement relates to the default on the settlement agreement dated December 10, 2018 referenced above.

On May 5th, 2020, Libertas Funding, LLC domesticated a foreign judgement in the Montgomery County Circuit Court system again Health Care Resources Network (HCRN), Maslow Media Group, Vivos Holdings, LLC, Vivos Acquisitions, LLC, Vivos IT, LLC, Vivos Global Services, LLC, Alliance Micro, Inc. and Naveen Doki.  This foreign judgement from the State of New York relates to loans the Vivos Group took out by adding Maslow Media Group additional collateral.  This loan is currently in default. Foreign Judgement total is $229.  

On May 5th, 2020, Kinetic Direct Funding domesticated a foreign judgement in the Montgomery County Circuit Court system again Health Care Resources Network (HCRN), Maslow Media Group, US IT SolutionsMettler & Michael, Inc., 360 IT Professionals, Alliance Micro,Inc., and US IT Solutions, Inc. and Naveen Doki.  This foreign judgement fromSWC countersued all plaintiffs on September 30, 2019 seeking to collect the Statebalance of New York relates to loans$403 not paid by the Vivos Group took out by addingGroup. This was not disclosed to Maslow Media Group as additional collateral.  This loan is currently in default. Foreign Judgement total is $579.

On May 5th, 2020, Libertas Funding, LLC domesticated a foreign judgement in the Montgomery County Circuit Court system again Health Care Resources Network (HCRN), Maslow Media Group, Vivos Holdings, LLC, Vivos Acquisitions, LLC, Vivos IT, LLC, Vivos Global Services, LLC, Alliance Micro, Inc. and Silvija Valleru.  This foreign judgement from the State of New York relatesmanagement or to loans the Vivos Group took out by adding Maslow Media Group additional collateral.  This loan is currently in default. Foreign Judgement total is $229.

On or about May 6, 2020, the Defendants filed with the Circuit Court of Montgomery County, Maryland a Counterclaim and Third-Party Complaint for Damages, Declaratory and Injunctive Relief and Jury Demand (the “Counterclaim”), The Company believes that the Counterclaim has no merit. The Company will vigorously defend itself and its indemnified officers, directors and other parties as permitted by the Company’s organizational documents. The Company and the other Counterclaim defendants have moved to have the Debt Collection Suit and the Counterclaim stayed pending the outcome of the Arbitration described below. Trial on this matter is scheduled for March 2021.

On or about June 5, 2020, the Company submitted a Claimant’s Notice of Intention to Arbitrate and Demand for Arbitration (the “Arbitration”) with the American Arbitration Association in New York, and to the Respondents thereto: Naveen Doki; Silvija Valleru; Shirisha Janumpally (individually and in her capacity as trustee of Judos Trust); Kalyan Pathuri (individually in his capacity as trustee of Igly Trust) and Federal Systems (the “Respondents”). The Arbitration alleges that the Respondents breachedReliability before the Merger Agreement in a number of significant respects and committed fraud in connection with the Merger. The Company is seeking damages which if granted will likely be the remedy set forth within the Merger Agreement which is in whole or in part shares of Company Common Stock received by the Respondents in connection with the Merger. The Company has broughtclosed on October 29, 2019.

Maslow’s counsel filed a motion to compelinclude all original parties to the Arbitration which is currently being decided bySWC agreement, as two of the Federal Courts in New York. The Company believes a strong basis for the motion exists, but no assurance can be given that it will be granted. Regardless, the Company intends to pursue claims under the Merger Agreement in whatever venue is required.

On June 12, 2020, Igly Trust, a Vivos Group entity, asked the Texas court for an injunction requiring the Company to provide a shareholder list and to hold a shareholder meeting. On October 20, 2020, the Texas court denied the injunction but, incongruously, dismissed all the Vivos Group plaintiffs for lack of personal jurisdiction. The Company appealed the dismissal because the court had jurisdiction over Igly Trust once it made affirmative claims in Texas and because the Court’s order denying the injunction is an important precedent for establishing that the directors under Texas law retain control of shareholder lists and determining the timing of shareholder meetings.

On December 23, 2020, at a hearingoriginal parties were not in the Maryland District Court,original filings. SWC filed a motion byfor summary judgment and Maslow responded on March 18, 2024 opposing the Vivos Group to compel a shareholder meeting was summarily dismissed. The judge agreed with the Company that permitting the Vivos Group to vote their shares at a meeting of shareholders could materially harm the interests of the Company as a whole, its employees and minority shareholders. This judge will be presiding over a full trial regarding these matters over a two-week period starting on October 4, 2021, absent any COVID-19 disruptions that could affect scheduling.motion.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERS’ MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION AND HOLDERS

The Company’s common stockCommon Stock trades in the over-the-counter market under the symbol RLBY. The high and low sale prices for 20202023 and 20192022 are set forth below. High and Lowlow price is based on the last trading day of the quarter.

The Company paid no cash dividends in 20192022 or 2020.2023.

As of March 16, 2021,18, 2024, the last reported sales price for Company Common Stock was $ .061$0.0800 per share.

As of March 16, 2021,22, 2024, there were 565525 holders of record of Company Common Stock.

EQUITY COMPENSATION PLANS

None

RECENT SALES OF UNREGISTERED SECURITIES

None

SHARE REPURCHASES

None

ITEM 6. SELECTED FINANCIAL DATA

The following tables set forth our summary of consolidated historical financial data. You should read the information set forth below in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated historical financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. The statement of operations data for the fiscal years ended 20202023 and 20192022 and the balance sheet data as of December 31, 20202023 and 20192022 set forth below are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

⁽¹⁾ We present OIBITDA as a measure that is not in accordance with generally accepted accounting principles (“non-GAAP”), in this Annual Report on Form 10-K to provide investors with a supplemental measure of our operating performance. We believe that OIBITDA is a useful performance measure and is employed by us to facilitate comparisons of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our core business than measures under generally accepted accounting principles (“GAAP”) can provide alone. Our board and management also use OIBITDA as some of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual result against such expectations, and as a performance evaluation metric in determining achievement of certain compensation programs and plans for our management and organization.

We define OIBITDA as operational earnings before interest expense, related party interest, income taxes, depreciation and amortization expense, loss on early extinguishment of debt and related party debt, transaction fees and costs related to our corporate overhead which consist mainly of costs associated with being a public company. Omitting interest, taxes and the other items provides a financial measure that facilitates comparisons of our results of operations with those of companies having different capital structures. Since the levels of indebtedness and tax structures that other companies have are different from ours, we omit these amounts to facilitate investors’ ability to make like comparisons. Similarly, we omit depreciation and amortization because many other companies likely employ a greater amount of property and intangible assets. We omit corporate or non-operating costs as they are meant to be allocated against a larger operational base which our business plan outlines. As we grow our operations organically and through M&A activities these corporate costs are absorbed more equitably, we will use Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) as our means of measuring comparable operational performance to other companies in our industry. We also believe that investors, analysts, and other interested parties view our ability to generate OIBITDA as an important measure of our operating performance and that of other companies in our industry. OIBITDA should not be considered as an alternative to net income (loss) for the periods indicated as a measure of our performance.

The use of OIBITDA has limitations as analytical tools, and you should not consider these performance measures in isolation from, or as an alternative to, GAAP measures such as net income (loss). OIBITDA is not a measure of liquidity under GAAP or otherwise and is not an alternative to cash flow from continuing operating activities. Our presentation of OIBITDA should not be construed as an inference that our future results will be unaffected by the expenses that are excluded from that term or by unusual or non-recurring items. The limitations of OIBITDA include: (i) it does not reflect our corporate expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, our working capital needs; (iii) it does not reflect income tax payments we may be required to make; and (iv) it does not reflect the cash requirements necessary to service interest or principal payments associated with indebtedness.

To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Annual Report on Form 10-K and the reconciliation to OIBITDA from net income (loss), the most directly comparable financial measure presented in accordance with GAAP, set forth in the following table. All the items included in the reconciliation from net income (loss) to OIBITDA are either (i) corporate costs or (ii) items that management does not consider in assessing our on-going operating performance. In the case of the other items that management does not consider in assessing our on-going operating performance, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact may not reflect on-going operating performance.

OIBITDA calculation comparison for the years ended December 31, 20202023 and 2019 is2022 are as follows:

Operational performance comparison for the years ended December 31, 20202023 and 2019 is2022 are as follows:

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. 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 forward-looking statements. Important factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: the impact of the COVID-19 pandemic on us and our clients; our ability to access the capital markets by pursuing additional debt and equity financing to fund our business plan and expenses; our continued inability to issue additional shares of equity securities; 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. government spending; 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 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 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 Annual Report, including the “Risk Factors” in Item 1A of this Annual Report 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 reports on Form 8-K.

The following discussion and analysis of our financial condition and results of operations, our expectations regarding the future performance of our business and the other non-historical statements in the discussion and analysis are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors including those described in “Item 1A. Risk Factors” of this Annual Report on Form 10-K. Our actual results may differ materially from those contained in any forward-looking statements. You should read the following discussion together with our audited consolidated financial statements and related notes thereto and other financial information included in this Annual Report on Form 10-K.

Our financial information may not be indicative of our future performance.

EXECUTIVE OVERVIEW

Although 2023 saw decreases in revenue by $4,274 and gross profits by $455 to those earned in 2022, our operating margin had a favorable variance by $156 to 2022, as SG&A expenses were lowered by $611 to $3,788. This resulted in a reduction in our operating loss of $749 compared to $906 in 2022. With Other Income consisting of one-time nonoperational costs of $179 and state tax costs at $14, the consolidated net loss landed on $740 which was $1 below 2022’s net loss of $739.

As expected, two large clients combined for a steep decline of $3,583 that accounted for approximately 84% of our $4,274, or 16.6%, unfavorable revenue variance to 2022’s $25,725. One lost sports programming to a competitor in a bid that resulted in about $2,100 a year revenue loss for MMG. The $21,451 in revenue in 2023 was also $4,795, or 17.2%, less than our 2021 revenue total of $26,246.

Gross profits did not dip quite proportionately, as lower costs of revenue resulted in 2023 gross profit of $3,039, $455 less than the $3,494 in gross profit earned in 2022 a 13% variance. The 2023 gross profit of $3,039 is off the pace by $227, or 6.9%, of the $3,266 in gross profit produced in 2021.

Gross profit margins (“GM”) however were up for the fifth year in a row reaching 14.2% in 2023 versus 13.6% in 2022 and 12.4% in 2021. This represents a 7.6% compounded annual growth rate (CAGR) over the last four of those years.

This consistent improvement of gross margins over the past four years was driven by several factors including contract extension price increases, changes in volume discounts, billing for added overhead, our client mix where the change has been favorable to company terms, and our service mix in which a greater share of our business has shifted to higher margin services. But in 2023, the catalyst driving the margin up 80 basis points is the performance of our Direct Hire business, which delivered $199 in revenue at a gross margin of 90.8%. These were both highs since we began increasing our focus and volumes in this area of the business in 2021.

Although we did not have arbitration preparation and hearings in 2023 (see Note 1) absorbing our leadership’s focus as it did in 2022, the progression of legal activities in finalizing the awards, including the petition for legal fees, which was honored, filing with the court system, and dealing with the lawsuit related to the Vivos Group and Second Wind (See Item 1A), which was discovered too late to be included in the arbitration proceedings, was still quite time consuming. The time, effort, and expense put into these efforts detracted from officer focus on sales, strategy, and our ability to fully drive stockholder value.

Demand for Maslow EOR services and field talent is dependent upon general economic conditions and labor trends. The United States economic backdrop duringhas not recovered to pre-2020 COVID-19 (“COVID”) levels as the first quarter 2020 was positive untilfoundational Media clients businesses were profoundly impacted by the rise in COVID 19 cases changed the business landscape profoundly. Before the pandemic, the United States marked a 50-year unemployment low in February 2020, with just 3.5% of Americans unemployed. Starting the week of March 9, 2020, numerous U.S. state and federal governments began urging or requiring residents to stay at home and banningvaccination mandates. Consequently, our business has not only failed to recover to 2019 levels, our revenues declined over the past four years, as a myriad of events outside our control took place, including conversions from our payroll to clients’ payroll, programming discontinued, media budgets curtailed for various reasons, or in one case a loss of a government contract which we subbed, because our client failed to re-bid without notification.

Additionally, we had just $356 in new client revenue in 2023, which was only marginally better than the $333 new client revenue produced in 2022. We did see an increase in the 2022 new client revenue in 2023 as it rose to $404, and one 2023 new client is among our top 25 revenue producers this year. Although these new clients have not produced large gatheringsswaths of revenue over the past two years, they have the potential in the future to be $500- to $1,000- a-year clients in that there are a few sizable news networks and restricted travel. Schools were closedtrade organizations that we expect to see staffing increases in 2024 and all sporting events acrossbeyond (see below).

Despite the United States were either cancelledrevenue decline, MMG’s gross profit margins continue to increase year-over-year for the fifth straight year from 10.3% in 2018 to 14.2% in 2023. This softened the gross profit variance from being as high as revenue and at $3,039 landing $455 off 2022’s $3,494 by 13.0%.

EOR revenue decline of $4,066 made up 95.1% of the $4,274 variance between 2023 and 2022. Our non-EOR revenue consisting of Contingent and Direct Hire Staffing and Video Production tallied $3,623, which was $208, or postponed indefinitely. Many companies mandated that their employees work5.4%, off of revenues produced in 2022.

Margin performance continued to flourish as a $100 increase, $199 from home and discontinued use$99 in 2022, in direct hire revenues had the largest impact on triggering gross margins reaching 14.2% for the year ending December 31, 2023. Because this additional $100 created approximately $91 gross profit, the 2023 company annual gross margins improved to 14.2%, otherwise it would have landed on 13.8%.

The other contributor leading to a 20-basis point increase in gross margins was EOR, which reached an all-time high of many workers who could not perform their type of work from home (e.g., video, sound, lighting crew, makeup-artists). Maslow began seeing the effects the week of March 16, 2020 as its contracted employee and freelance payroll hours dropped as much as 49% during the second quarter.12.2% - a twenty-point increase over 12.0% in 2022. This was becausein stark contrast to the EOR gross margin average in 2021 of 9.8%.

But what could be managed somewhat proportionately in 2023 was our SG&A, which decreased by $611, or 13.9%, enabling our operating income to improve on 2022’s total by $156 to a large portionloss of Maslow employees$749 versus $906 in 2022.

SG&A reduction drivers were assignedlower salaries, taxes, and benefits (referred to field, location, or studio filming projects for our clients that require close contactas “Loaded salaries”), with others. These projects were placed on indefinite holdoperational loaded payroll lower by $75, legal and these employees who saw their hours dramatically reduced. Those who could continue to workother fees associated with the Vivos Matter down $434 from their homes for our clients, have continued to log hours. Not surprisingly the months of April2022, business insurance and May 2020 saw the largest drop in comparative 2020 revenue to 2019 at 49% ($3,379 from $6,673). Second quarter 2020 revenue of $5,197 was 46% off the pace of 2019’s $9,617 comparative. In the third quarter of 2020, that loss dwindled to approximately 38%, as the Company generated $6,201 in third quarter revenues vs. $10,089 in the same period in 2019.commercial legal down $46 and $39, respectively.

However, our fourth quarter revenue of $9,003 was only 13.7% less than the fourth quarter in 2019 when it was $10,438. This was due to our clients increasing their payrolls as COVID-19 restrictions by state began to wane, and seasonal fall business activities such as the U.S. elections were held, and the 17-week regular season of the National Football League (“NFL”) season commenced and proceeded.

We are hopeful that the dissemination of vaccines will result in resumption of a normally functioning economy which will continue to enable our clients to return their payrolls to normal levels that in turn, will continue ours and an overall economic rebound. However, no assurance can be given on if and when this will happen or what impact it will have on our business.

As far as cash is concerned, in 2020 although COVID-19 exacerbated2023 our already precarious cash position as explained more thoroughly below (seeremained relatively strong due to our receiving $1,209 in Employee Retention Credits (ERC) which was our final payment for this program. This coupled with a new financing agreement with American Express (See Item 7: Liquidity and Capital Resources), we received a $250 short term loanResources below) enabled MMG not only to accelerate cash that otherwise would not be paid for approximately 90 days but allows for proceeds to immediately booked against the accounts receivable as opposed to crediting factoring as short-term debt. When compared with GAAP accounting for factoring, the difference is profound.

This change resulted in our Current Ratio rising to 5.27 from Triumph at 10% annual percentage rate (“APR”), in February,20202.79, and then in May 2020, $5,215 in Payroll Protection Plan (PPP) funds which assisted us in weathering the storm, especially through the lean monthsour Quick ratio to 2.06 from May through August 2020. By the end of August 2020, we had exhausted our use of PPP funds, but our working capital remained strong at $5,693.1.36, from 2023 to 2022, respectively.

Because our larger clients scaled back media related activities in 2020 due to COVID-19, our revenue became more diverse as reliance on our top 2 clients dropped from 49% in 2019 to 39% in 2020. Four clients with revenues greater than $500 actually increased revenue in 2020 by $2,111.

Our working capital, though has assumedwhich includes repayment of Vivos Holdings debt whichDebtors as of December 31, 20202023, was $5,970.$7,913 versus $8,645 on December 31, 2022. Our adjusted working capital excluding the $5,501 in Vivos Debtor notes is $2,412.

2024 and Beyond

In late December 2023 in time for the first payroll of 2024, we formally transitioned our HR and Payroll solution from Paycom to ADP, a more comprehensive and robust HR and Payroll solution. This transition will allow us to provide cloud-based tools to our dispersed employee population and our national clients providing them with a more seamless experience. In addition, ADP’s tools will automate processes that were previously manual and provide our corporate teams with an integrated Recruiting, Onboarding, Benefits, Performance Management, Scheduling, Time Keeping, Payroll, and Manager and Employee self-service solutions to support clients workforce management needs. ADP’s reporting, predictive analytics, and proactive compliance features will allow our corporate teams to foresee trends and make informed decisions to better partner with our clients. We feel strongly after the implementation pain has subsided, our ADP tech stack will add value and save immeasurable time for MMG, our employees, and our clients. ADP’s Workforce Now is just one of several reasonably priced innovative technologies we are investing in starting in 2024.

Although we had stated a year ago, we would bring on additional staffing professionals to grow the staffing side of our business, we only progressed modestly. Our business development with some rewards that were not realized during 2023 as a couple clients expected repaymentto be top 10 revenue producers (revenue greater than $500 a year) not beginning staffing activities with us in early 2020 after Vivos Holdings defaulted on two2023. But in 2024, we are beginning to see a ramp up in business from one customer who signed a $1,500 Statement of their notesWork (“SOW”) with us at the end of December 2019.2022 through 2025.

From a technology perspective,

Additionally, we updated our finance and accounting system from Sage 50 which was a client server version, to Sage Intaact, a cloud-based application. We also bolstered our automated sales and marketing capabilities by adding SaaS applications Salesforce.com and ZoomInfo. So, although we still do not possess an integrated ERP, we improved our business intelligence, CRM, Finance and Accounting capabilities.

On February 17, 2020, after several attempts to negotiate a payment plan with Suresh Venkat Doki (brother of Mr. Doki) and Mr. Doki, Maslow, as plaintiff, filed a complaint with the Circuit Court of Montgomery County, Maryland against Mr. Doki and other Vivos Debtors.

In February 2020, the shortage of cash at this juncture resulted from, among other things, the Company being unable to finance IQS invoices through Triumph because a lien was discovered to exist on IQS assets delaying utilization of Maslow’s much more favorable factoring relationship with Triumph. As for the lien, it was not disclosed to Maslow by Vivos Holdings, the seller, before or after the transaction closed. This is when Maslow sought $250 from Triumph and later made a payment to buy its way out of the unfavorable factoring arrangement and take on other actions to move IQS financing to Triumph.

The Company’s executives and its board of directors worked together on managing costs and implementing measures to facilitate the rapid ramp-up of operations once the governmental restrictions began being lifted in June 2020. But we did not see our clients return to better than 60% of their customary levels of demand until September 2020.

Cash and working capital began stabilizing in late September 2020 after the PPP funds had been exhausted for their intended purpose, payroll onlyare seeing improvements in our case,pipeline with new opportunities than we have ever had, and existing large clients giving us assurances that their volumes will continue to increase at even more rapid levels in 2024. We expect our Direct Hire business to grow in 2024 as a number of existing clients took advantage of our expertise and speed of filling roles outside the Media space. This success should enable us to fill even more diverse functional openings in 2024 and beyond. As we began utilizingdo the same for our factoring facility again, but notother large clients, so should our opportunity to increase our requisition volume and convert to fills and revenue.

EOR has been the 93% level we haveCompany’s primary revenue source for many years, and it represented 83.1% in 2023. Our challenge over the past 2 years.four years has been maintaining the large base of clients and employees post COVID as the Media functions in some large corporates especially have cut back on media activities and personnel. Despite lower payrolls for some, the challenge with EOR is the complexity of managing HR and Payroll for a myriad group of clients who vary significantly in uniformity and have unique needs that absorb our staff’s attention. This client service intensity is somewhat unique to Media EOR than to other EOR providers due to the idiosyncratic ways that employee time is scheduled, tracked, recorded, and managed. This complexity is why we have added client service and HR personnel and technology to best service our gold star clients.

2021

Hence, our goal is to maintain and Beyondbuild on our legacy client foundational relationships while putting our foot on the proverbial gas pedal to develop much more contingent contract staffing and direct hires. And in doing so, our goal is to increase our staffing business by supporting other functions outside of Media such as Administrative, Accounting and Finance, HR, and IT. To that end, we will add two more staffing-experienced sales representatives in the first half of 2024.

The continued impactVirtual staffing is no longer a limited niche for certain companies and certain positions. Virtual scenarios are also favored by Generation Z, which values work-life balance as one of this pandemic cannot be precisely predicted. Wethe most crucial factors when deciding on a company for which to work. Considering the benefits that remote working offers, and the keen interest shown by employees from different age groups, we believe that remote working will be prevalent in 2024 and beyond. This paradigm, however, should not adversely impact MMG, in that whether jobs are filled virtually or not, MMG has the shortpipeline of talent to mid-term impacts on how our clients conduct work will continue to be aligned with our strategic path.fill these diversified roles.

As a result,Furthermore, we have continued to move forward with our diversified offerings and future specialization staffing strategy, updating our already expert operating model and organizing our business to more easily acquire and maintain client accounts.

Westill believe given the changing nature in specialized staffing, due to the pandemic that there likesexists a greater opportunity to expand our EOR business as it offers businesses of all types and industries, more flexibility in onon- and off boardingoffboarding employees, as well as managing 1099 risk. As far asfor staffing media staffing,outside of Media, we believe it will grow, but there are also opportunities to get into staffing specialties which represent areas where we see the most rebound foror a robust demand.

This shift in focus to staffing will also have a positive impact on gross margins as we saw 19.3% gross margins in 2023 for Media personnel and 23.1% for IT. We expect blended rates to be in low 20s in the future, which with volume will continue to focus on growing the contingent staffing sideour ascent in converting a much higher percentage of our business. Our IT Staffing brand, Intelligent Quality Solutions, will berevenues to gross profit.

As a primary focusresult, we continued to move forward with our diversified offerings with an eye on our future specialization staffing strategy, updating our already expert operating model, and organizing our business to maximize acquisition and retention of client accounts.

Once the Vivos Matter judgements are recovered, the Company may contemplate moving forward. Bringingforward with its original plans to increase outstanding shares by authorizing new ones or via a reverse split to acquire synergistic staffing companies to grow more quickly. The Company would also like to move to the OTCQB and/or OTCQX on new segments whether organicallyits way to eventually being listed on the NASDAQ Exchange. The Company continues to work towards meeting all of the requirements to pursue listing the OTCQB or through M&A reflect our desire to shift our portfolio toward a higher margin, higher value proposition.OTCQX exchanges. Once collection of the Vivos Debtors has taken place, MMG may consider moving forward with this initiative.

COMPANY OVERVIEW

Maslow is a national provider of employer of record (EOR), recruiting and staffing services, consisting of media, IT, and ITadministrative resources. We provide services to client primarily within the United States of America.

Our services consist of:

The Company’s subsidiary, The Maslow Media Group, Inc. (“Maslow”), is currently the only earningoperating entity for the business. After our Merger in October 2019, non-operationalnonoperational expenses (e.g., public company fees, D&O insurance, investor relations, etc.) were assigned at the corporate level. This enables a more pristine, focused view of the operational side of the business we refer to as Operational Income Before Interest, Taxes, Depreciation, Interest, and Amortization.Amortization (OIBITDA).

RESULTS OF OPERATIONS

Maslow had revenues totaling $29,202$21,451 in 2020,2023, which was a 24%$4,274 decrease over $38,444(16.6%) from the $25,725 in 2019. IQS,revenue produced in 2022. The decline can be attributed to four predominantly EOR clients which curtailed revenue by $4,066 in 2023 when compared to same period ending December 31, 2022.

These clients simply scaled back their media budgets and/or converted and/or replaced our IT Staffing business segment, which was acquired on December 1, 2019, accounted for $2,571, or 8.8%. The COVID-19 impactstaff to revenue was undoubtedly profound but difficult to measure given there is no way to know what level of growth existing clients may have had or revenue potential of new clients.and with their own.

Overall, Maslow lost $7,611 to accounts with declining revenues => $500, but converselyConversely, we added $2,111$1,098 from new or growing10 accounts that had at least $500 moreequal or greater than $50 in revenue in 20202023 from 2019. AT&T’s DirecTV cancelled Sirius-XM programming2022. Client C stepped up their programs by 6.8% to approximately $5.4 million in February 2020 that we believe hadrevenue as did several other clients in the insurance, education, and healthcare space.

From a negative impact of $3,400 on revenue. Overall DirecTV year over year revenue declined by $4,759.

If we assume that those clients who had revenues in 2019 and zero in 2020 and include those with steep declines > $500 and 2020 revenues < $10, the total in attrition is approximately $3,874. This attrition may not be permanent as many clients hire Maslow for special events. The decision to leave Maslow or not use Maslow services in 2020 by these three clients was not attributable to Maslow’s pricing, service, or performance.

Overall, thecontribution standpoint, our top 10 clients represented $24,242$18,526 in revenue, which is 82%86.4% of 2020 revenues, which was a decrease by approximately $7,249 to 2019’sour $21,451 in 2023 revenue. This is an increase in top 10 at approximately $31,491. $24revenue reliance as in 2022 the top 10 represented 85.9%, as $22,095 came from $25,725 of revenue.

$32 in rebates were issued in December 20202023, which was $24 less$1 more than a year ago when they were $48$31 in 2019.2022.

The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of revenues, and have beenwere derived from our consolidated financial statements.

The 2019 consolidated statement of income includes only 1 month of IQS operations versus 12 months in 2020.

Revenues: By Segment

Employer of Record (EOR) Revenues: EOR represented 80.7%83.1% of our revenue in 20202023 as opposed to 89.6%85.1% in 2019. This can be attributed2022. The change was driven more by the EOR revenue decline by $4,066 than a shift to thisour other business segment being hit the hardest by COVID-19 as our large corporate clients curtailed non-essential media activities and AT&T announced the cancellationsegments. However, those business segments saw a decline of two (2) live anchor multiple hour DirecTV sports programs,$208, or 4.9%, versus 18.7% for EOR 2023 to 2022. Our number one revenue producer (Client C), which we estimate reducedis an EOR client, increased its revenue by $4,000. Additionally, our IT staffing business which we enjoyed for its first full$343 but clients A and B had a combined drop in revenue by ($3,583) due to converted employees, lost programming, and otherwise weaker demand. Two mid-sized clients communicated to us during the year contributed 8% of revenue, thus also reducing EOR concentration.their need to reduce their media budget as a needed cost savings measure, dropping their 2023 revenues by $460 and $154, respectively, when compared to 2022.

Recruiting and Staffing Revenues: Staffing revenues buoyedslid by having a full year of$370, or 10.7%, to $3,098. IT Staffing capabilities increased revenue by $2,288, or 104%. The IT Staffing (IQS) contributing the vast majority, but$54, while our Media Staffing despite COVID-19 headwinds, manageddivision was down $424, or 13.3%, to eke out a slight increase in 2020 of $17 over 2019, finishing year with $1,904 in revenue.

IQS, our IT Staffing division although contributing $2,571 in revenue and $784 in gross profit (30.5%) in 2020, saw a decline in business from its 2019 full year levels (including pre-acquisition as it was acquired December 2019) of $3,206 in revenue and $908 in gross profit. These are declines at levels of $723 or 28% and $131 or 17% in revenue and gross profit, respectively. The decline in IQS business was most poignant in Q4 with revenue coming in at $478 compared to $751 in Q4 2019; a drop of 36.4%. When IQS Q4 2020 revenue is compared to Q1 2020, the decline is comparative at 39.5%. The drop in revenue began in April 2020 due to COVID-19 as the next 6 months saw an approximate decline of 27% compared to same period a year ago. The decline however was not as steep as the EOR, Video Production and2022 performance. Media Staffing comparative declines because a few clients had essential business exceptions and accommodations to keep their IT projects active.at $2,752 represented 12.8% of total 2023 annual revenue, whereas it represented 12.3% of 2022 annual revenue. The reason there was no bounce back for this business segment in Q4 was a combination of losing 7 staffing positions to permanent offers and what we believe is the temporary loss of two government agencies and a government contract as a sub, which it elected not to rebid on, accounted for $384. Outside of these account losses, our other 20 staffing clients, Inspire Brands and Accruent who both began implementing temporary hiring freezes in early 2020. This resulted inplus a $745 revenue loss in 2020. Conversely, Abbott Labs through vendor management firm Tapfin, hadnew one, combined for a 57%year-over-year increase in revenues going from $691 in 2019 to $1,083 in 2020.Recruiting and Staffing revenue of $14.

Video and Multimedia Production Revenues: Video Production, by nature of thewhich includes managed services and project freelance work, our clients undertake, did seeincreased its revenue in 2023 by $62 to $326 when compared to 2022’s $264. Video Production represented 1.5% of 2023 revenue, a decline50% improvement in segment share when it represented 1% of revenue by $516 or 31.4%, from $1,641 in 2019 to revenues of $1,125 in 2020.2022.

Gross Profit: Gross profit represents revenues from services less cost of services expenses also referred to as Cost of Revenue (COR), which consist of payroll, payroll taxes, benefits, payroll-related insurance, union benefits, field talent, allocation of recruiting Software as a Service (“SaaS”), and reimbursable costs for out-of-pocket items.

Overall,Our Gross Profits in 2023 of $3,039 were short of 2022’s $3,494 by $455, a 13.0% negative variance.

Our gross margin is the percentage of revenue after cost of revenue (COR). Gross margins increased 60 basis points in 2023 to 14.2% from 13.6% in 2022. The catalyst in 2023 was the $100 increase in our Direct Hire business which accounted for the 40-basis point difference. EOR’s 20 basis point increase to 12.2 accounted for the remaining 20 points of the 60-point increase in 2023 from 2022. This was the fifth consecutive year in which MMG was able to increase its gross margins, with the compounded annual growth rate (CAGR) of such increases being 6.6%. Since 2019, the CAGR is 7.6%.

Our EOR margins, which a year ago increased 0.2%, or 2.2 points, from 9.8% in 2021 to 12.0% in 2022, continued to remain strong at 12.2% versus 12.0% in 2022.

EOR margins, which were 9.2% in 2020 and 9.8% in 2021, rose 32.6% and 24.9%, respectively, due to price changes to several clients at their contract renewal, a mix in client revenue, favoring those with higher contractual margins, increased use of higher margin W2 over 1099 workers, and equipment rental pricing change which enabled our gross profit declined $595, or 14.6%margins to $3,474flex.

Non-EOR margin performance climbed 1.5% to 23.9% from $4,069 in 2019; but22.4% when comparing 2023 to 2022. However, Media Staffing was off 2022’s 20.3% GM to 2023’s 19.3% as the decline was not proportionate and as steep as our revenue’s decline by 24%. This was due primarily to an increase in higher margin activities such as IT staffing which garnered 30.5% as it represented 8.8%loss of one of the overall revenue. This coupled with a reductionaforementioned clients alone prevented Staffing margins from reaching 20.6% which otherwise would have exceeded 2022’s 20.3% performance.

Video Production and Direct Hire margins at 23.0% and 90.8% in the low margin EOR business at 9.2%2023 were only slightly off 2022’s 23.5% and increase in Media Staffing at 22.8% drove an overall margin of 11.9% which was 1.3% higher than 2019’s margin of 10.6%.90.9%, respectively.

Selling, General and Administrative Expenses (“SG&A”): SG&A expenses increased $1,477, or 49.5%,decreased $611 to $4,462, $1,567$3,788 in 2023 compared to $4,400 in SG&A in 2022 largely because of which were related to non-operational corporate costs, with $1,109lowering of which were public company basedlegal and $446 were for outside legalother professional service fees associated with ourthe Vivos Group dispute. Otherwise, our operational SG&A increase in 2020 over 2019 was only $63.

Operational SG&A increases were in salary of $381 in 2020 over 2019, which can be attributed to having IQS IT Staffing unit for full year which added approximately $453 to 2020’s salary demonstrating thatMatter by $434, $440 when comparing MMG pre IQS salaries from 2020 to 2019, there was actually a savings of $72. The savings in salaries was attained despite adding business development personnel.

IQSlooking at commercial and Vivos Matter legal costs only; while loaded salaries were trimmed$187 favorable to be2022, and liability insurance was lowered by $46. The loaded salaries reduction was driven by bonuses being lowered by $156, commissions by $46, and salaries by $37.

Corporate non-operational costs totaling $788 were $663, or 45.7%, favorable when compared to the same period ending December 31, 2022 when they reached $1,451. Corporate non-operational costs consist predominantly of public company costs as well as those related to the Vivos Matter.

From an MMG operational perspective, SG&A was up $51 in line with reduction in revenue, which included a change in senior management. For the first 8 months2023 from 2022. Salaries, inclusive of 2020, SG&A salary,commissions, payroll tax, and benefits averaged $40 a month,bonus rose $25 in contrastthe year ending December 31, 2023 compared to same period in 2022. $75 of the last 5 months of 2020 where salaries averaged $28, without a loss in productivity. This staff realignment was implemented to position this division for success and growth moving forward.

Non-operational corporate costs for 2020 totaled $1,567, which are not comparable to 2019 as these costs only were classified as such after the Company went public via the reverse merger in October 2019. The 2020 cost driversincrease were salary payroll tax,based alone as we bolstered client services, sales, and HR personnel while making sacrifices elsewhere. The salary increases by department were driven by Client Service loaded salaries up $59 as we added headcount to focus on existing and new clients. Our Human Resource (HR) department which includes operational field support rose $48 through headcount growth. Conversely, Sales and Marketing department loaded salaries were favorable by $36 because commission payments were down by $63, accounting and finance down $5, and Video Production loaded salaries reduced by $14.

Operational nonwage and benefit costs savings were derived in commercial legal fees by $39, dues and subscriptions by $17, and depreciation and recruiting software, each by $13.

Overall, staff health benefits at $738were up $11 due to an increase in premium costs and D&O insurance totaling $115.accrued leave up $33. The former consists ofonly other notable cost increases in 2023 over 2022 were staff meetings by $31, necessitated by our general counselvirtual model; marketing and allocated executivepromotion by $26, as investments were made in digital marketing; and senior management loaded salaries.contract services by $15.

Depreciation and Amortization: Depreciation and amortization charges were $79 compared to $25 in 2019, with the increase coming from capitalized software and IQS brand name and client relationships amortization.

Interest Income:: Interest income from related parties increased by $37 from $68$232 to $120, as a result$269. Maslow earned an additional $25 interest income; $8 of which was federal interest received for the delay in receipt of the Vivos Holdings 2019 tax note accruing2021 second quarter ERC which was not deposited until April 28, 2023; and $17 from the money market interest for a full year.on mostly those very same funds.

Other Expense:Income (Expense): Other expenses decreasedIn 2022, $223 was netted mainly from $211 in additional ERC funds from the IRS for our 941X submission for the first quarter 2021, which we thought a portion to be ineligible when it was filed. These earnings were eroded slightly by $205 from $206 to $1 primarily due to elimination of these non- essential, non-operationallegal fees associated with the SWC matter. In 2023, the results are flipped by $402 as we accumulated only nonoperational costs, which were legal fees for the Company had incurred in 2019.SWC matter ($65), and for restructuring severance and related legal fees ($114).

Interest Expense: Interest expense decreasedwas the lowest it has been since 2016 at $92 in 2023 versus $171 in the year ending December 31, 2022. This represents a $79 positive variance which was enabled by $157the ERC cash which in turn eliminated our need to factor (borrow) from $438 to $281 as reliance on factoring was minimized as a benefit of having PPP loan proceeds, managing expenses downward and business picking up in Q4. Additionally, interest accrual at 12% on $890 in convertible notes began subsiding as notes were repaid from July through September 2020. Conversely PPP loan interest was carried at 1% starting in May 2020 throughuntil the end of the year, and interest of 10% on a $250 loan from Triumph Capital.December 2023.

Income Taxes: Income tax expense improved from $156 in 2023 was $14 compared to $170 for the year ending December 31, 2022. 2023 taxes booked covered several state income taxes which had minimum tax expense to an income tax benefit of $230 due to the net loss recorded in 2020.requirements.

LIQUIDITY AND CAPITAL RESOURCES

Our working capital requirements are driven predominantly by EOR field talent payments, SG&A salaries, public company costs, interest associated with factoring, legal costs associated with the Vivos Matter, and client accounts receivable receipts. Since receipts from client payments are on average 7069 days behind payments to field talent, working capital requirements can be periodically challenged. We have a Factoring Facilityfactoring facility with Triumph Business Capital (TBC). TBCGulf Coast Bank, which advances 93% of our eligible receivables at an advance rate of 15 basis points, an interest rate of prime plus 2%., andwith our prime floor rate at 4%. As

Additionally, in April 2023, we entered into a result of the impact of the COVID-19 pandemic, our clients may be more likelyBuyer Initiated Payment (“BIP”) agreement with American Express (“Amex”) which enables MMG to be delinquent in their payments. 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. This has had a profoundly positive impact on our ability to accelerate cash conversion and lower DSO as well as our borrowing costs.

As of December 31, 2020, 63%2023, 87.4% of our $6,629 were$2,993 in accounts receivable was current 26% 1compared to 66.3% out of $5,750 which was current on December 31, 2022. As of December 31, 2023, 98.0% is current to 30 days past due 8%compared to 87.5% a year ago, 0.9% between 31 and 60 days past due versus 11.6% in 2022, and 3% ($202)0.6% between 60 and 90 days versus 0.4% at the end of 2022, and 2023’s 0.5% for 90 days and greater past due which was on par for the portion greater than 60 days.90 days in 2022.

Our primary sources of liquidity are cash generated from operations via accounts receivable and borrowings under our Factoring Facility with TriumphGulf Bank (“Gulf”), and Amex’s BIP, with the former enabling access to the 7% unfactored portion. Because certain large clients havea few years ago changed their payment practices announcing 60- and 90-day terms amounting to a unilateral extension to contractual terms by 30-60 days, we can be adversely impacted since TriumphGulf no longer provides credit if an account obligor pays more than 120 days after the invoice date. However, since Gulf covers two of the companies that have moved to 90-day terms, it reduces that burden on us.

Our primary uses of cash are for paymentspayroll to field talent, corporate and staff employees, related payroll liabilities, operating expenses, legal fees relating to the Vivos matter and the SWC lawsuit, public company costs, including but not limited to general and professional liability and directors and officer’s liability insurance premiums, legal fees, filing fees, auditor and accounting fees, stock transfer services, and board compensation; followed by cash factoring, and otherBIP borrowing interest; and cash taxes; andtaxes. As of March 17, 2024, we have no long-term debt payments.

Since we are an EOR with the majority of contracted talent paid as W-2 employees who are paid known amounts on a consistent schedule;schedule, our cash inflows do not typically align with these required payments, resulting in temporary cash challenges, which is why in the past we have employed factoring. Because we do also employ 1099 contracted firms and individuals with payments terms which vary from immediate to 30 days, our cash requirements can be quite variable.

Vivos Debtors as of December 31, 2020,2023 had notes receivable totaling $4,258$5,501, including default on a $3,000 promissory note and on a $750 tax obligation in December 2019. After numerous failed collection attempts, on February 17, 2020 the Company initiated an action in the Circuit Court of Montgomery County Maryland against Naveen Doki and the Vivos Holdings for nonpayment.

It 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 place.

On May 5, 2020, MaslowIn April 2023, we received $5,216 loan throughour final ERC payment of $1,209 as the Paycheck Protection Program (the “PPP”) with a term of two (2) years and an interest rate of 1% per annum. The PPP provides thatERC did help bolster our cash reserves over the Company may apply for forgiveness of this loan if the loan proceeds were used for payroll and certain other specified operating expenses while maintaining specified headcount requirements. The accrued interest on the PPP loan as of December 31, 2020 was $34.past three years.

On June 5, 2020, The Paycheck Protection Program Flexibility Act (the “PPPF Act”) went into effect providing more flexibility to participants in the PPP which included extending the time to begin repayment of the PPP loan until the amount of forgiveness, if any, is determined, which could be as late as December 31, 2020. The Company may apply for forgiveness earlier if they determine that doing so will maximize the amount of loan forgiveness.

On December 22, 2020, the United States Congress passed an omnibus spending bill (the December relief bill) that included significant revisions and additions to the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief and Economic Security Act (CARES Act), and previously amended by the Paycheck Protection Program Flexibility Act (PPP Flexibility Act). President Trump signed the bill on December 27, 2020. The December relief bill permits expenses paid with PPP loan funds to be deductible.

On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues ‎Act (the “PPP2 Act”) contained in the Consolidated Appropriations Act, 2021 (“2021 Appropriations Act”) ‎was enacted. The PPP2 Act and 2021 Appropriations Act included several changes to the forgiveness ‎deadline process and deadlines allowing PPP borrowers up to 10 months to apply for loan forgiveness after the covered period ends.

The Company utilized PPP funds for their intended purpose, in this case for payroll only following guidelines for wage earners > $100.

The funds bolstered our working capital and enabled us to bring back employees and continue to serve our clients even though their requirements had lessened.

As of December 31, 2020,2023, our working capital was $5,970,$7,913 compared to $784$8,645 on December 31, 2022 and $9,361 at the end of 2021. We are due an additional approximate $138 for tax abatements that we negotiated with the IRS for the tax period 2016-2019.

In 2023, our 2022 10K stated we would be adding $350 to our SG&A for growth, and although we did begin the investments on personnel, we did not begin implementing our new ADP Workforce Manager and Workforce Now Payroll and HRIS system as soon as originally planned as it went live late December 2023. Additionally, due to lower revenue than anticipated and the Vivos Matter not settling as anticipated, certain initiatives were not pursued.

In 2024, we do anticipate approximately $350 in incremental SG&A, as we continue to invest for growth as heads will be added for sales, recruiting, and human resources, as well as an expected increase in legal fees associated with the receiving process, liability insurance based on improved D&O coverage, and payroll fees associated, and with ADP’s Workforce Now. We also factored in price increases due to inflation but at a lower rate than a year ago as the PPP funds enabled the Company to build A/R reserves since PPP funds were employed to pay salaries of both outsourced and SG&A employees, while approximately 58% of 2019 revenue was still attained and collectible during the covered 24-week period between May and October 2020.ago.

We anticipate approximately $300 in additional SG&A costs in 2021, when compared with 2020 relating to increase in sales and marketing head count to meet growth objectives.

AFor 2023, a summary of our operating, investing, and financing activities areis shown in the following table:

Operating Activities

Cash employed by operating activities consists of net income (loss), adjusted for non-cash items, including depreciation and amortization, and the effect of working capital changes. The primary drivers of cash inflows and outflows are factoring, accounts receivable, and accrued payroll and expenses.

During 2020,2023, net cash used inprovided by operating activities was ($2,070), a decrease$3,016, an increase of $2,071$4,443 compared with $1 for 2019.to ($1,427) in 2022. This decreaseincrease is primarily attributable to our net loss of ($789), and changestrade receivables providing $3,344 more in income tax payable by ($525),converted cash than 2022, while accrued payroll ($455), and accounts payable ($401).shrank comparatively by $304, coupled with $505 less in cash accumulated for taxes in 2022 based on 2021’s net profit.

Investing Activities

Cash used in investing activities consists primarily of cash paid for capital expenditures. Only laptops were purchased in 2022 and 2023.

Financing Activities

Cash provided byused in financing activities in 20202023 was $1,915($2,412) as compared to cash usedemployed for the same purpose totaling $284$1,639 in 2019. The increase2022. Our borrowing was $10,204 and repayment of $6,085 less in 2023 than in 2022 as we repatriated all factoring cash by July 2023. We only began borrowing again in late December 2023 and landed on $174 due to Gulf compared to $2,619 at the Company receiving $5,216 in PPP offset by $853 in repayments from the issuanceend of convertible notes starting in June of 2019 and return of cash flows from short-term borrowing via our factoring vehicle.2022.

OFF-BALANCE SHEET ARRANGEMENTS

We had no material off-balance sheet arrangements that have, or are likely to have, a current or future material effect on our operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We have identified the policies listed below as critical to our business and the understanding of our results of operations. For a detailed discussion of the application of these and other accounting policies, see Note 3 in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K. The preparation of consolidated financial statements in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, collectability of accounts receivable, impairment of goodwill and intangible assets, contingencies, litigation, income taxes, stock option expense, and other liabilities. Management based its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the consolidated financial statements.

REVENUE RECOGNITION

On January 1, 2019 the Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers, for all open contracts and related amendments as of December 31, 2019 using the modified retrospective method. The adoption had no impact to the reported results.

The Company recognizes revenue in accordance with 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 accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered.

We derive our revenues from threefour segments: EOR, Recruiting and Staffing (temporary), Direct Hire and Video and Multimedia Production. We provide temporary staffing and permanent placement services. Revenues are recognized when promised services are delivered to a client, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Revenues as presented on the consolidated statements of operations represent services rendered to client less variable consideration, such as sales adjustments and allowances. Reimbursements including thoseoften related to out-of-pocket expenses, and equipment leasing are also included in revenues, and equivalent amounts of reimbursable expenses and leased costs are included in cost of services.

We record revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. We have concluded that gross reporting is appropriate because we (i) have the risk of identifying and hiring qualified workers, (ii) have the discretion to select the workers and establish their price and duties and (iii) we bear the risk for services that are not fully paid for by client.

Temporary staffing revenues isare accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly basis. The contracts stipulate weekly billing, and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date.

Permanent placementDirect Hire revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 9030 days. The contract with the customer stipulates a guarantee period whereby the Company will replace the candidate for free of charge if the employee is terminated within thatthe first 90-day period. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer.

Allowances, recorded as a liability, are established to estimate these losses. Fees to clientclients are generally calculated as a percentage of the new worker’s annual compensation. No fees for permanent placementDirect Hire services are charged to employment candidates.

Video and Multimedia Production revenues from contracts with clientclients are recognized in the amount to which we have a right to invoice when the services are rendered by our field talent.

INTANGIBLE ASSETS

The Company holds intangible assets with finite lives. Intangible assets with finite useful lives are 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.

Identifiable intangible assets recognized in conjunction with acquisitions are recorded at fair value. Significant unobservable inputs are used to determine the fair value of the identifiable intangible assets based on the income approach valuation model whereby the present worth and anticipated future benefits of the identifiable intangible assets were discounted back to their net present value.

The Company evaluates the recoverability of intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The Company annually evaluates the remaining useful lives of all intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company determined that there were no impairment indicators for these assets during the year ended December 31, 2020.

GOODWILL

Goodwill represents the difference between the enterprise value/cash paid less the fair value of all recognized net asset fair values including identifiable intangible asset values in a business combination. The Company reviews goodwill for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Based on annual testing, the Company has determined that there was no goodwill impairment during the year ended December 31, 2020.

The Company first evaluates qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of the reporting unit is less than its carrying amount, including goodwill. If after qualitatively assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then further testing is unnecessary. If after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company then estimates the fair value of the reporting unit and compares the fair value of the reporting unit with its carrying amount, including goodwill, as discussed below.

In assessing whether it is more likely than not that an indefinite-lived intangible asset is impaired, the Company assesses relevant events and circumstances that could affect the significant inputs used to determine the fair value.