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Box 71 Clarksburg MD 20871 (202) 965-1100 Common Stock, no par value RLBY Non-accelerated Filer true false false 300000000 0 262000 522000 2652000 4785000 19000 4000 6100000 5847000 291000 336000 9324000 11494000 2000 2000 55000 60000 9381000 11556000 827000 2375000 345000 734000 129000 288000 999000 568000 212000 207000 39000 26000 2551000 4198000 31000 21000 31000 21000 2582000 4219000 300000000 300000000 300000000 300000000 300000000 300000000 750000 750000 6049000 6587000 6799000 7337000 9381000 11556000 4718000 6041000 4005000 5237000 713000 804000 966000 986000 -253000 -182000 127000 210000 1000 1000 36000 20000 -44000 -136000 -205000 -127000 7000 -205000 -134000 0.00 0.00 0.00 0.00 300000000 300000000 300000000 300000000 9465000 11336000 8110000 9824000 1355000 1512000 1989000 1933000 -634000 -421000 253000 280000 1000 16000 88000 35000 -70000 -229000 -538000 -389000 -122000 -538000 -267000 0.00 0.00 0.00 0.00 300000000 300000000 300000000 300000000 300000000 750000 7181000 7931000 -133000 -133000 300000000 750000 7049000 7799000 -134000 -134000 300000000 750000 6914000 7664000 300000000 750000 6587000 7337000 300000000 750000 6587000 7337000 -333000 -333000 300000000 750000 6254000 7004000 -205000 -205000 300000000 750000 6049000 6799000 300000000 750000 6049000 6799000 -538000 -267000 16000 4000 253000 265000 -2133000 749000 15000 5000 -45000 -260000 -389000 199000 432000 349000 -160000 -56000 4000 -6000 1275000 -536000 11000 58000 -11000 -58000 5038000 1405000 6586000 1362000 14000 25000 15000 -1524000 43000 -260000 -551000 522000 822000 262000 271000 88000 20000 7000 <p id="xdx_801_eus-gaap--OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock_zCvg0U9oIzJg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 1. <span id="xdx_827_zdY2f06jbf8g">NATURE OF OPERATIONS AND BASIS OF PRESENTATION</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Nature of Operations</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reliability, Inc. is a leading provider of Employer of Record and temporary Media and Information Technology (“IT”) staffing services that operates, along with its wholly owned subsidiary, The Maslow Media Group, Inc (“MMG”), (collectively, “Reliability” or the “Company”), primarily within the United States of America in four industry segments: Employer of Record (“EOR”), Recruiting and Staffing, Direct Hire, and Video and Multimedia Production, which provides script-to-screen services. Our Staffing segment provides skilled field talent on a nationwide basis for Media, IT, and finance and accounting client partner projects. Video Production involves assembling and providing crews for special projects, webcasting, live events, post-production services, and production management.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reliability was incorporated under the laws of the State of Texas in 1953, but the then principal business of the Company started in 1971 was closed down in 2007. The Company completed a reverse merger with MMG (the “Merger”) on October 29, 2019.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Company Background</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Linda Maslow founded MMG initially in 1988 and incorporated the firm under the name the Maslow Media Group Inc. in March 1992.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On November 9, 2016, Linda Maslow sold the business to Vivos Holdings, LLC (“Vivos Holdings”) owned by Dr. Naveen Doki (“Dr. Doki”) and Silvija Valleru (“Ms. Valleru”).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 2019, Vivos Holdings collaborated on a share swap of MMG 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”).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As a result of the Merger on October 29, 2019, MMG became a wholly owned subsidiary of Reliability, and the Vivos Group (Vivos Holdings, LLC, officially) acquired approximately <span id="xdx_907_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_c20191029__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--VivosHoldingsLLCMember_zhWqPLMsZNCl" title="Ownership percentage">84</span>% of the issued and outstanding shares of Reliability which were distributed by Vivos Holdings, LLC.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon purchasing MMG and thereafter, the Vivos Group began borrowing monies from MMG starting with $<span id="xdx_901_eus-gaap--ProceedsFromPreviousAcquisition_pn3n3_c20161109__20161109__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember_zuccOR0hDLJf" title="Borrowing from acquisition">1,400</span> in 2016, and by the end of 2019 the balance had reached $<span id="xdx_900_eus-gaap--NotesPayable_iI_pn3n3_c20191231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember_zyJ9ZZdSssMg" title="Notes payable">3,418</span>, which included a $<span id="xdx_90D_eus-gaap--NotesPayable_iI_pn3n3_c20191231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember__us-gaap--GuaranteeObligationsByNatureAxis__us-gaap--PaymentGuaranteeMember_zpqcEsvC34w8" title="Notes payable">3,000</span> guarantee from Dr. Doki. Vivos Holdings, LLC, Vivos Real Estate Holdings, LLC, and Dr. Doki are collectively referred to as “Vivos Debtors.”</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally, Reliability became aware of debt obligations that included MMG as a borrower or guarantor that the Vivos Group failed to disclose to Reliability. This and the attempted collection of the guarantee and debt from the Vivos Group set off a chain of legal events culminating in an arbitration hearing and award in 2022. We refer below to the disputes between Reliability and the Vivos Group as the “Vivos Matter.”</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A series of legal actions and hearings took place starting in March of 2020 through September of 2021, culminating in an agreement to settle through arbitration</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white">On August 31, 2022, the Company and MMG were granted arbitration awards against the Vivos Group, with supplemental awards issued on May 17, 2023, October 10, 2023, and October 27, 2023 which included an award citing fraud damages. Summarily, MMG was awarded the totals of all notes the Vivos Group had with MMG for its borrowings, the contracted interest, attorneys’ fees and expenses of $<span id="xdx_90E_eus-gaap--LegalFees_pn3n3_c20231027__20231027__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zZdwpRJqK9d6" title="Attorneys fees and expenses">1,209</span>, and a contract damage of $<span id="xdx_90A_eus-gaap--LossContingencyDamagesAwardedValue_pn3n3_c20231027__20231027__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zDwDIsTgGqX6" title="Contract damage amount">1,000</span> to be satisfied by the transfer of their shares of the Company common stock to the Company equal in value to $<span id="xdx_902_eus-gaap--StockIssued1_pn3n3_c20231027__20231027__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zqCbLaLE7t7l" title="Value to stock to be received">1,000</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These awards were entered as final judgments by the Circuit Court for Montgomery County, Maryland on December 29, 2023, and became final on January 29, 2024. The judgments, which total approximately $<span id="xdx_903_eus-gaap--InterestIncomeOther_pn4n6_c20240129__20240129__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zkzZdvRy4cj9" title="Accrued interest">8.49</span> million plus accrued interest, are enforceable for 12 years and may be enrolled in other states.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While the Company is pursuing enforcement of these judgments, there can be no assurance as to the timing or amount of any recovery, or whether recovery will be in cash, equity, or other assets</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Per Maryland law, the enrolling of judgements enables MMG to apply <span id="xdx_90F_eus-gaap--DebtInstrumentInterestRateEffectivePercentage_iI_dp_uPure_c20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosDebtorMember_zExf8vk7Cmg8" title="Interest rate on debtor">10</span>% interest to the Vivos Debtor balance beginning December 29, 2023. MMG began applying the additional interest in the second quarter 2025.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of June 30, 2025, the Vivos Debtor balance was $<span id="xdx_909_eus-gaap--NotesAndLoansReceivableNetCurrent_iI_pn3n3_c20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosDebtorMember_zermnMCzPbUe" title="Debtor amount receivable">6,100</span>. The Award value in totality currently aggregates $<span id="xdx_902_eus-gaap--LossContingencyReceivableCurrent_iI_pn3n3_c20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosDebtorMember_z1KqoQGEYuS2" title="Litigation awarded value accrued">8,490</span>, independent of legal fees after the award and interest.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 0.84 1400000 3418000 3000000 1209000 1000000 1000000 8490000 0.10 6100000 8490000 <p id="xdx_808_ecustom--ManagementsPlanTextBlock_z3YJVEOrIPi3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 2. <span id="xdx_829_zGanbmAwqQA6">MANAGEMENT’S PLAN</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although the Company incurred net losses after taxes of $<span id="xdx_90F_eus-gaap--NetIncomeLoss_iN_pn3n3_di_c20250101__20250630_zgr01zLacOhg" title="Net income losses after taxes">538</span> for the six months ended June 30, 2025, and $<span id="xdx_903_eus-gaap--NetIncomeLoss_iN_pn3n3_di_c20240101__20241231_zZ5ogkXjZGAd" title="Net income losses after taxes">594</span> and $<span id="xdx_90E_eus-gaap--NetIncomeLoss_iN_pn3n3_di_c20230101__20231231_zWHDNP2c7X3b" title="Net income losses after taxes">740</span> for the years ended December 31, 2024 and 2023, respectively, management has evaluated whether these conditions or events raise substantial doubt about the Company’s ability to continue as a going concern for at least the 12 months following the issuance of these financial statements. Based on this assessment, management believes it is probable the Company will continue as a going concern and meet its financial obligations through August 14, 2026, thereby alleviating substantial doubt. This conclusion reflects management’s view that the Company has sufficient liquidity and working capital resources to fund operations for at least the next 52 weeks, as well as the ability to take actions, if necessary, to align costs with revenue fluctuations. This assessment is based on the following key factors:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash Flow Forecast</b>: Management has prepared a 52-week cash flow forecast from August 14, 2025, which projects sufficient cash and working capital to fund operations.</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reduction in Legal Fees</b>: Legal expenses related to non-operational activities, $<span id="xdx_90B_ecustom--LegalFeesForNonOperationalActivities_pn3n3_c20250101__20250630_zHKk5cR20zQ6" title="Legal expenses for non operational activities">86</span> through the first six months of 2025 and are expected to continue decreasing in 2025. </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Collection of Notes Receivable</b>: Management anticipates that notes receivable from related parties will be settled through a combination of cash and stock, providing additional liquidity and potential access to capital markets in 2025.</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Client Financing Arrangement</b>: A financing arrangement through JPMorgan for the Company’s second-largest client is expected to reduce the cash conversion cycle by approximately 110 days. This acceleration in cash flow will ensure more cash is on hand and reduce our cost of capital.</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Factoring Availability</b>: As of August 14, 2025, the Company had access to additional borrowing under its factoring facility of up to <span id="xdx_90B_ecustom--LineOfCreditFacilityBorrowingPercentage_iI_pid_dp_uPure_c20250814__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zMa2OKZZhR45" title="Extended borrowing percentage">93</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">% of unfactored invoices, totaling approximately $<span id="xdx_908_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_pn3n3_c20250814__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zwMpaL0EvmA5" title="Maximum borrowing capacity">1,361</span>.</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cost Flexibility</b>: If necessary, the Company can align costs more closely with revenues. The Company suspended accrual of all employee bonuses for 2025 in the second quarter.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> -538000 -594000 -740000 86000 0.93 1361000 <p id="xdx_80F_eus-gaap--SignificantAccountingPoliciesTextBlock_zF2LyMr8i1af" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 3. <span id="xdx_820_z6QNKPc28pDe">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> <p id="xdx_849_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_zrScvw74Zq31" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_862_zVG6rffTz5Df">Basis of presentation</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its <span id="xdx_902_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_c20250630__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--MaslowMediaGroupIncMember_zxFGXRmrqtii" title="Ownership percentage">100</span>% owned subsidiary, MMG. All significant intercompany accounts and transactions have been eliminated in consolidation.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the SEC and should be read in conjunction with the audited financial statements and notes thereto contained in our Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented, have been reflected herein. The results of operations for the periods presented herein are not necessarily indicative of the results to be expected for the full year.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There have been no material changes to the accounting policies discussed in Note 3 to the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> <p id="xdx_849_eus-gaap--ConcentrationRiskCreditRisk_zT33FH3gDYbd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86D_zaKghkd7PrCa">Concentration of Credit Risk</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the six months ended June 30, 2025, <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zYTEBubchwSh" title="Concentration risk, percentage">31.0</span>% of revenue came from one customer, and <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--SecondCustomerMember_z68LprSdA30a" title="Concentration risk, percentage">23.6</span>% from a second customer. Combined, this totals <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TwoContributorsMember_zvqTSDCpNdWh" title="Concentration risk, percentage">54.6</span>% of revenue for the top two contributors greater than 10%. In 2024, three companies ascended 10% of revenue contribution accounting for <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zBdT4T6buEph" title="Concentration risk, percentage">27.2</span>%, <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TwoCustomerMember_zfdVppm3XJHf" title="Concentration risk, percentage">21.7</span>%, and <span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCustomerMember_z3NarbNvc2of" title="Concentration risk, percentage">13.5</span>%, respectively, which combined totaled <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCompaniesMember_zgdh3Hfy6fXf" title="Concentration risk, percentage">62.4</span>%. No other client has exceeded 10% of revenues for the six months ended June 30, 2025 or 2024.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From an accounts receivable (A/R) perspective, two clients dominated our balance at the end of the quarter on June 30, 2025, with one at $<span id="xdx_90B_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OneClientMember_zMS4T1PdCYE8" title="Trade receivables">1,357</span> or <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--TradeAccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneClientMember_zflHfZmhkWmc" title="Concentration risk, percentage">52.4</span>% and the other at $<span id="xdx_906_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OtherClientMember_zu4frj8Tv7W9" title="Trade receivables">409</span> or <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--TradeAccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OtherClientMember_zDjJg6qUM7j5" title="Concentration risk, percentage">15.8</span>% of $<span id="xdx_903_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--TwoClientMember_z7G3hbufib1h" title="Trade receivables">2,591</span> in trade receivables. A year ago, the same two clients represented $<span id="xdx_909_eus-gaap--AccountsReceivableNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OneClientMember_z4clBvAzpikb" title="Accounts receivables">1,563</span> or <span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneClientMember_zBL7D7mSlL4f" title="Concentration risk, percentage">41.7</span>%, and $<span id="xdx_907_eus-gaap--AccountsReceivableNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OtherClientMember_z7QXYolMssc8" title="Accounts receivables">885</span> or <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OtherClientMember_zNBs99HejX52" title="Concentration risk, percentage">23.6</span>% of the $<span id="xdx_904_eus-gaap--AccountsReceivableNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--TwoClientMember_zIbIrpAyiL34" title="Accounts receivables">3,746</span> in A/R, respectively. In the periods ended June 30, 2025 and 2024, no other client represented 10% or more in A/R.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> <p id="xdx_84D_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zZGKZY4c9oD7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_867_z9yts4Sdbkj">Recently Issued Accounting Pronouncements Not Yet Adopted</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): <i>Improvements to Income Tax Disclosures</i> (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 largely follows the proposed ASU issued earlier in 2023 with several important modifications and clarifications discussed below. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The Company is currently evaluating how this ASU will impact its year end December 31, 2025 consolidated financial statements and disclosures as the Company did not have an interim tax effect to disclose.</span></p> <p id="xdx_853_zV7dDLzAovj5" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">On November 4, 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): <i>Disaggregation of Income Statement Expenses</i> (ASU 2024-03). The ASU requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The Company is currently evaluating how this ASU will impact its year end December 31, 2025 consolidated financial statements and disclosures.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p id="xdx_849_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_zrScvw74Zq31" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_862_zVG6rffTz5Df">Basis of presentation</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its <span id="xdx_902_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_c20250630__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--MaslowMediaGroupIncMember_zxFGXRmrqtii" title="Ownership percentage">100</span>% owned subsidiary, MMG. All significant intercompany accounts and transactions have been eliminated in consolidation.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the SEC and should be read in conjunction with the audited financial statements and notes thereto contained in our Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented, have been reflected herein. The results of operations for the periods presented herein are not necessarily indicative of the results to be expected for the full year.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There have been no material changes to the accounting policies discussed in Note 3 to the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> 1 <p id="xdx_849_eus-gaap--ConcentrationRiskCreditRisk_zT33FH3gDYbd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86D_zaKghkd7PrCa">Concentration of Credit Risk</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the six months ended June 30, 2025, <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zYTEBubchwSh" title="Concentration risk, percentage">31.0</span>% of revenue came from one customer, and <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--SecondCustomerMember_z68LprSdA30a" title="Concentration risk, percentage">23.6</span>% from a second customer. Combined, this totals <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TwoContributorsMember_zvqTSDCpNdWh" title="Concentration risk, percentage">54.6</span>% of revenue for the top two contributors greater than 10%. In 2024, three companies ascended 10% of revenue contribution accounting for <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneCustomerMember_zBdT4T6buEph" title="Concentration risk, percentage">27.2</span>%, <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TwoCustomerMember_zfdVppm3XJHf" title="Concentration risk, percentage">21.7</span>%, and <span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCustomerMember_z3NarbNvc2of" title="Concentration risk, percentage">13.5</span>%, respectively, which combined totaled <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20240630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCompaniesMember_zgdh3Hfy6fXf" title="Concentration risk, percentage">62.4</span>%. No other client has exceeded 10% of revenues for the six months ended June 30, 2025 or 2024.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From an accounts receivable (A/R) perspective, two clients dominated our balance at the end of the quarter on June 30, 2025, with one at $<span id="xdx_90B_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OneClientMember_zMS4T1PdCYE8" title="Trade receivables">1,357</span> or <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--TradeAccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneClientMember_zflHfZmhkWmc" title="Concentration risk, percentage">52.4</span>% and the other at $<span id="xdx_906_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OtherClientMember_zu4frj8Tv7W9" title="Trade receivables">409</span> or <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--TradeAccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OtherClientMember_zDjJg6qUM7j5" title="Concentration risk, percentage">15.8</span>% of $<span id="xdx_903_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--TwoClientMember_z7G3hbufib1h" title="Trade receivables">2,591</span> in trade receivables. A year ago, the same two clients represented $<span id="xdx_909_eus-gaap--AccountsReceivableNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OneClientMember_z4clBvAzpikb" title="Accounts receivables">1,563</span> or <span id="xdx_90C_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneClientMember_zBL7D7mSlL4f" title="Concentration risk, percentage">41.7</span>%, and $<span id="xdx_907_eus-gaap--AccountsReceivableNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--OtherClientMember_z7QXYolMssc8" title="Accounts receivables">885</span> or <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--OtherClientMember_zNBs99HejX52" title="Concentration risk, percentage">23.6</span>% of the $<span id="xdx_904_eus-gaap--AccountsReceivableNetCurrent_iI_pn3n3_c20250630__srt--TitleOfIndividualAxis__custom--TwoClientMember_zIbIrpAyiL34" title="Accounts receivables">3,746</span> in A/R, respectively. In the periods ended June 30, 2025 and 2024, no other client represented 10% or more in A/R.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> 0.310 0.236 0.546 0.272 0.217 0.135 0.624 1357000 0.524 409000 0.158 2591000 1563000 0.417 885000 0.236 3746000 <p id="xdx_84D_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zZGKZY4c9oD7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_867_z9yts4Sdbkj">Recently Issued Accounting Pronouncements Not Yet Adopted</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): <i>Improvements to Income Tax Disclosures</i> (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 largely follows the proposed ASU issued earlier in 2023 with several important modifications and clarifications discussed below. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The Company is currently evaluating how this ASU will impact its year end December 31, 2025 consolidated financial statements and disclosures as the Company did not have an interim tax effect to disclose.</span></p> <p id="xdx_803_eus-gaap--LoansNotesTradeAndOtherReceivablesDisclosureTextBlock_zSRT32bNMB6e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 4. <span id="xdx_823_zxkSCBaKzrpf">ACCOUNTS RECEIVABLE</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p id="xdx_891_eus-gaap--ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock_zDYXWwctIkM1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable consist of the following:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; display: none; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <span id="xdx_8BE_zOPOLDqamxc1" style="display: none">SCHEDULE OF ACCOUNTS RECEIVABLE</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_495_20250630_zKsbgI9uXDv6" style="border-bottom: Black 1pt solid; text-align: center">June 30, <br/> 2025</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20241231_z7s0e4WtX2nb" style="border-bottom: Black 1pt solid; text-align: center">December 31, <br/> 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_402_ecustom--AccountsReceivableUnfactored_iI_maCzXRN_zHklKXL85Fuh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Accounts receivable, unfactored</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,763</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">2,313</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--UnbilledReceivablesCurrent_iI_pn3n3_maCzXRN_zAuaCQCXKKrl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unbilled receivables</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">62</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">97</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--AccountsReceivableFactored_iI_pn3n3_maCzXRN_zt8K0vDLO5S" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accounts receivable, factored</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">827</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,375</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--AccountsReceivableNetCurrent_iTI_pn3n3_mtCzXRN_ziTnqwrijeDc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total Accounts Receivable</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,652</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,785</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8A4_zPCivs7GGH4i" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p id="xdx_891_eus-gaap--ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock_zDYXWwctIkM1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable consist of the following:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> </p> <p style="font: 10pt Times New Roman, Times, Serif; display: none; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> <span id="xdx_8BE_zOPOLDqamxc1" style="display: none">SCHEDULE OF ACCOUNTS RECEIVABLE</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_495_20250630_zKsbgI9uXDv6" style="border-bottom: Black 1pt solid; text-align: center">June 30, <br/> 2025</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20241231_z7s0e4WtX2nb" style="border-bottom: Black 1pt solid; text-align: center">December 31, <br/> 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_402_ecustom--AccountsReceivableUnfactored_iI_maCzXRN_zHklKXL85Fuh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Accounts receivable, unfactored</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,763</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">2,313</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--UnbilledReceivablesCurrent_iI_pn3n3_maCzXRN_zAuaCQCXKKrl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unbilled receivables</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">62</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">97</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--AccountsReceivableFactored_iI_pn3n3_maCzXRN_zt8K0vDLO5S" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accounts receivable, factored</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">827</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,375</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--AccountsReceivableNetCurrent_iTI_pn3n3_mtCzXRN_ziTnqwrijeDc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total Accounts Receivable</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,652</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,785</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 1763000 2313000 62000 97000 827000 2375000 2652000 4785000 <p id="xdx_803_eus-gaap--DebtDisclosureTextBlock_zJvBrJcHXsk2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 5. <span id="xdx_820_zbjGLo7HeYod">DEBT</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Factoring Facility </span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is party to a factoring and security agreement with Gulf Coast Bank and Trust (“Gulf”), which provides liquidity by enabling the Company to sell eligible accounts receivable (i.e., invoices) to Gulf in exchange for immediate cash advances. The proceeds from this agreement are primarily used to fund operating expenses, including employee compensation, vendor payments, and general overhead.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under the terms of the agreement, Gulf advances funds at an interest rate equal to the prime rate plus <span id="xdx_90B_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pid_dp_uPure_c20250630__us-gaap--TypeOfArrangementAxis__custom--FactoringAndSecurityAgreementMember_zWnBhwiHlfMb" title="Interest rate">2</span>%, with an additional advance fee of 15 basis points. The eligible advance amount is up to <span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pid_dp_uPure_c20250630__us-gaap--TypeOfArrangementAxis__custom--FactoringAndSecurityAgreementMember__srt--RangeAxis__srt--MaximumMember_zOVduw0NcfFh" title="Interest rate">93</span>% of the face value of an invoice. The agreement is structured on a month-to-month basis and requires the Company to comply with certain financial covenants, including those related to invoicing activity and minimum reserve account balances.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Receivables are sold to Gulf on a full recourse basis, meaning the Company retains the risk of collection. Because the factoring arrangement is full recourse, it is accounted for as a secured borrowing under ASC 860, <i>Transfers and Servicing</i>, rather than as a sale of receivables. For the six months ended June 30, 2025, the Company received $<span id="xdx_90E_eus-gaap--ProceedsFromSaleAndCollectionOfReceivables_pn3n3_c20250101__20250630_ziI8bW0JlRke" title="Proceeds from sale and collection of receivables">5,038</span> in proceeds from the sale of receivables and repaid $<span id="xdx_90A_ecustom--RepaymentsToFactoringFacility_pn3n3_c20250101__20250630_z59TAWaRTjC5" title="Repayments to the factoring facility">6,586</span> under the agreement. This compares to $1,405</span> in proceeds and $1,362 in repayments for the period ended June 30, 2024. The outstanding balance under the factoring arrangement was $<span id="xdx_904_ecustom--FactoringLiabilityCurrent_iI_pn3n3_c20250630_zzGr7rwLSYYi" title="Outstanding balance under resource contract">827</span> as of June 30, 2025, $<span id="xdx_902_ecustom--FactoringLiabilityCurrent_iI_pn3n3_c20250331_z9xIqwNYZf99" title="Outstanding balance under resource contract">1,163</span> on March 31, 2025, and $<span id="xdx_90A_ecustom--FactoringLiabilityCurrent_iI_pn3n3_c20241231_zBqtKne7hbod" title="Outstanding balance under resource contract">2,375</span> as of December 31, 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The factoring facility is collateralized by substantially all the assets of the Company. In the event of a default, the factor may demand that the Company repurchase the receivable or debit the reserve account.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Insurance Financing</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MMG also employs short term 10-month loan agreements annually to finance advance payments on crime, EPLI, E&amp;O, and D&amp;O insurances. In 2024-2025, MMG entered into two loans totaling $<span id="xdx_90E_eus-gaap--ProceedsFromIssuanceOfDebt_pn3n3_c20240101__20240630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MaslowMediaGroupIncMember__us-gaap--ShortTermDebtTypeAxis__us-gaap--LoansPayableMember_zfDuEqO3zqy9" title="Loans payable"><span id="xdx_904_eus-gaap--ProceedsFromIssuanceOfDebt_pn3n3_c20250101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MaslowMediaGroupIncMember__us-gaap--ShortTermDebtTypeAxis__us-gaap--LoansPayableMember_zSXbvztkCw21" title="Loans payable">140</span></span> with finance charges each over 10 months totaling approximately $<span id="xdx_90B_ecustom--FinanceCosts_pn3n3_c20240101__20240630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MaslowMediaGroupIncMember__us-gaap--ShortTermDebtTypeAxis__us-gaap--LoansPayableMember_zyMRJtnagrb2" title="Finance charges"><span id="xdx_90C_ecustom--FinanceCosts_pn3n3_c20250101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MaslowMediaGroupIncMember__us-gaap--ShortTermDebtTypeAxis__us-gaap--LoansPayableMember_zHe96kEuQWw4" title="Finance charges">6</span></span>. The combined APR for these loans is <span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20240101__20240630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MaslowMediaGroupIncMember__us-gaap--ShortTermDebtTypeAxis__us-gaap--LoansPayableMember_z5ihHDKotBWa" title="Debt interest rate"><span id="xdx_900_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20250101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MaslowMediaGroupIncMember__us-gaap--ShortTermDebtTypeAxis__us-gaap--LoansPayableMember_zcrebBrr26r7" title="Debt interest rate">5.0</span></span> %.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Software Financing with Long Term Debt</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On October 30, 2024, the Company entered into a deferred payment agreement related to its ADP implementation, completed in January 2024. The total amount of $<span id="xdx_90E_eus-gaap--DebtInstrumentFeeAmount_iI_pn3n3_c20241030_zSsd1DpvhOB1" title="Deferred fee">52</span> is payable over 24 months with an interest rate of <span id="xdx_90D_eus-gaap--DebtInstrumentInterestRateEffectivePercentage_iI_pid_dp_uPure_c20241030_zqmHIVtyu5j1" title="Interest rate">6.21</span>%. On April 4, 2025, the Company entered into a second deferred payment agreement totaling $<span id="xdx_904_eus-gaap--DebtInstrumentFeeAmount_iI_pn3n3_c20250404_zxkP0eKDElga" title="Deferred fee">39</span>, related to the implementation and multi-year licensing of the Datarails, analytics platform. This amount is payable over 36 months and carries a <span id="xdx_906_eus-gaap--DebtInstrumentInterestRateEffectivePercentage_iI_pid_dp_uPure_c20250404_zYb14YgYXpha" title="Interest rate">0.0</span>% interest rate. As of June 30, 2025, the aggregate current portion of these obligations was $<span id="xdx_908_eus-gaap--DebtCurrent_iI_pn3n3_c20250630_zHqYpch8hIfj" title="Debt current">39</span>, with the long-term portion totaling $<span id="xdx_90F_eus-gaap--LongTermDebt_iI_pn3n3_c20250630_zW7cJknok3wj" title="Long term">31</span>.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> 0.02 0.93 5038000 6586000 827000 1163000 2375000 140000 140000 6000 6000 0.050 0.050 52000 0.0621 39000 0.000 39000 31000 <p id="xdx_808_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zJpZFdLp95Y2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 6. <span id="xdx_823_zfj1B7vfpAkk">COMMITMENTS AND CONTINGENCIES</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise from time to time that may harm our business. Except as set forth below, we are not aware of any such legal proceedings or claims against the Company.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A series of legal actions and hearings took place starting in March of 2020 with the Vivos Group over Merger agreement violations and Vivos Group debt obligations. Arbitration was agreed to in the fall of 2021 by both the Vivos Group and MMG with the proceedings commencing in February 2022.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On August 31, 2022, the arbitrator issued an award in favor of the Company and MMG, including fraud damages. Supplemental awards were issued on May 17, 2023, October 10, 2023, and October 27, 2023. The awards granted MMG the total of all notes receivable from the Vivos Group, contracted interest, attorneys’ fees and expenses of $<span id="xdx_902_eus-gaap--LegalFees_pn3n3_c20231027__20231027__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zNrTxkb1TOV8">1,209</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">, and a contract damage of $<span id="xdx_901_eus-gaap--LossContingencyDamagesAwardedValue_pn3n3_c20231027__20231027__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zUzvT4uO97Nf">1,000</span></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to be satisfied by the transfer of the Vivos Group’s shares of the Company Common Stock to the Company equal in value to $<span id="xdx_902_eus-gaap--StockIssued1_pn3n3_c20231027__20231027__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zIGyVb1sHk0d">1,000</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">. </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 October 10, 2023, the Arbitrator issued a Supplemental Award outlining the Receiver’s powers.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On December 29, 2023, the Circuit Court for Montgomery County, Maryland entered all three arbitration awards as final judgments which became effective on January 29, 2024 after the appeal period expired. These judgments, totaling approximately $<span id="xdx_906_eus-gaap--InterestIncomeOther_pn3n3_c20240129__20240129__dei--LegalEntityAxis__custom--MaslowMediaGroupIncMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember_zv9yA2NK9GRa" title="Accrued interest">8,490</span> plus accrued interest, are enforceable for 12 years and may be enrolled in other states. </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">On May 19, 2025, the Receiver submitted final recommendations, calculations, and a proposed order to the arbitrator. The response deadline was initially set for July 7, 2025, but was extended to August 6, 2025 after Vivos Holdings retained new counsel. On August 8, 2025, the arbitrator granted both parties until September 5, 2025 to submit replies to each other’s filings.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">On June 11, 2025, the Company’s subsidiary entered into a Memorandum of Understanding (“MOU”) to settle a California wage-and-hour matter that also included a representative claim under the California Private Attorneys General Act (“PAGA”). The MOU contemplates a gross settlement of $<span id="xdx_902_eus-gaap--ProfessionalFees_pn3n3_c20250611__20250611_zPFz5d2VyzS9" title="Professional fees">125,000</span>, inclusive of all attorneys’ fees, costs, PAGA penalties, an individual settlement amount for the plaintiff, and settlement administration expenses, payable in installments following court approval. The agreement includes an “escalator” provision that may increase the gross settlement if the number of compensable pay periods exceeds agreed thresholds and is contingent upon final court approval.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">As of June 30, 2025, the settlement remains subject to court approval, and no liability has been recorded in the Company’s consolidated financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"> </p> 1209000 1000000 1000000 8490000 125000000 <p id="xdx_80F_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zWV3sqtKvr22" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 7. <span id="xdx_82A_zT2YeWKudhI8">EQUITY</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s authorized capital stock consists of <span id="xdx_901_eus-gaap--CommonStockSharesOutstanding_iI_pid_c20250630_znJ0J7l6tOg3" title="Common stock, shares outstanding">300,000,000</span> shares of common stock, with <span id="xdx_905_eus-gaap--CommonStockParOrStatedValuePerShare_iI_pid_do_c20250630_zUeCYdaWanA4" title="Common stock, par value">no</span> par value. All authorized shares of Company Common Stock are issued and outstanding.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 300000000 0 <p id="xdx_807_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zyk1TFyLeyna" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 8. <span id="xdx_82A_zz3HThMhaAg9">RELATED PARTY TRANSACTIONS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Stock Purchase Agreement</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On November 9, 2016, Vivos Holdings, LLC, the former owner of MMG, acquired <span id="xdx_902_eus-gaap--BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage_iI_pid_dp_uPure_c20161109__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__us-gaap--BusinessAcquisitionAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember_zhtD8nFqKaqd" title="Equity interest acquired">100</span>% of MMG through a stock acquisition exchange for a purchase price of $<span id="xdx_900_eus-gaap--BusinessCombinationStepAcquisitionEquityInterestInAcquireeFairValue1_pn3n3_c20161109__20161109__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__us-gaap--BusinessAcquisitionAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember_zOngkNKV5TGl" title="Equity interest purchase price">1,750</span>, of which $<span id="xdx_90E_eus-gaap--ProceedsFromPreviousAcquisition_pn3n3_c20161109__20161109__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__us-gaap--BusinessAcquisitionAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember_zzCYKQOVGj3f" title="Settlement paid with proceeds">1,400</span> was paid at settlement with proceeds from MMG. The Vivos Debtors subsequently entered into a promissory note receivable with MMG for the full stock purchase price. Between 2018 to present there was $<span id="xdx_90D_ecustom--AdditionalBorrowing_pn3n3_c20180101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosHoldingsLLCMember__us-gaap--BusinessAcquisitionAxis__custom--MaslowMediaGroupIncMember__us-gaap--TypeOfArrangementAxis__custom--StockPurchaseAgreementMember_zolh5jCNBQn4" title="Additional borrowings">2,217</span> in additional borrowings.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Related Party Notes Receivable</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has several notes receivable from related parties. Prior to the Merger, Vivos Holdings collaborated on a share swap of MMG 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], which are collectively referred to as the “Vivos Group.”</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The table below is a summary of Vivos Group related party notes receivable which, as of June 30, 2025, total $<span id="xdx_90C_eus-gaap--NotesReceivableNet_iI_pn3n3_c20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zr5k06H5nyva" title="Related party notes receivable">6,100</span>. Based on management’s current expected credit loss (“CECL”) assessment, which considered legal judgments in favor of Company and the ongoing receivership process supporting recovery and collectability, no allowance for credit losses has been recorded.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p id="xdx_89A_eus-gaap--ScheduleOfRelatedPartyTransactionsTableTextBlock_zq1yE3MlK913" style="font: 10pt Times New Roman, Times, Serif; display: none; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span><span id="xdx_8BD_zxPqkVa4f9V1" style="display: none">SCHEDULE OF RELATED PARTY NOTES RECEIVABLE</span></span></span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Note Description</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Acquisition <br/> Loan to <br/> Vivos, LLC</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Interco Loan <br/> to Vivos <br/> Real Estate, LLC</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Tax Note</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Total Notes Receivable</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%">Balance on December 31, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_z5wHWqJJRva2" style="width: 11%; text-align: right" title="Balance, beginning">        4,039</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zsnzRM6ND6ia" style="width: 11%; text-align: right" title="Balance, beginning">     897</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_zYFezC2OtGLf" style="width: 11%; text-align: right" title="Balance, beginning">911</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zykSpfodOZW5" style="width: 11%; text-align: right" title="Balance, beginning">     5,847</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accrued interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zOQAMi1cfADg" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">86</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zeXaq3nbXyRg" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">20</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_z5UjdPhiy54l" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">20</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zENqizIdfEw2" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">126</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Balance on March 31, 2025</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_986_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zmnWDOVTFey7" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">4,125</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_981_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zSZWuacRTo7f" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">917</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_98B_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_zhpR3eGZGQC8" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">931</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_986_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_z9DtK5RQrgb7" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">5,973</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accrued interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zBJLbTYBHrOa" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">86</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zd9khskq105f" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">21</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_zUtkXhoRy2be" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">20</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zSMKcLi5Idg1" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">127</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Balance on June 30, 2025</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98A_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zx17AW8QMLOd" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance , ending">4,211</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_984_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_z2jq9CAhT5al" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance, ending">938</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98A_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_z48gDDLAbemi" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance, ending">951</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_985_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zeaTkUs6V7Rb" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance, ending">6,100</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <p id="xdx_8AF_zNf9wOLGtNw9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Debt Settlement Agreements</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2023, VREH successfully sold the property at 22 Baltimore Road in Rockville, Maryland, relieving Maslow of any liability related to the building, which MMG had been signed as a guarantor for in 2017 without management’s knowledge. In September 2024, the Company received $<span id="xdx_902_eus-gaap--Cash_iI_pn3n3_c20240930__us-gaap--TypeOfArrangementAxis__custom--DebtSettlementAgreementMember_z7rISz3xMNb4" title="Cash">91</span> from the bankruptcy proceedings and sale of the building. This amount was applied toward reducing the Vivos Group’s outstanding debt to MMG (see table above). In December 2024, the Second Wind Consulting (“SWC”) matter was also resolved with MMG’s portion being $<span id="xdx_90F_eus-gaap--ProceedsFromRepaymentsOfRelatedPartyDebt_pn3n3_c20241201__20241231__us-gaap--TypeOfArrangementAxis__custom--DebtSettlementAgreementMember_zkSZCKsUkPid" title="Debt resolved">10</span>.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Related Party Costs</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RLBY’s Other expense portion of Other Income totaling approximately $<span id="xdx_905_eus-gaap--OtherIncome_pn3n3_c20250401__20250630_zJWsG3c1XU2l" title="Other income">41</span> in the second quarter and $<span id="xdx_90D_eus-gaap--OtherIncome_pn3n3_c20250101__20250630_zBCGc7do6MXg" title="Other income">68</span> for the six months ended June 30, 2025, were exclusively for receivership related costs for recovery of the arbitration award related to the Vivos Group.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Related Party Relationships</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On October 29, 2019, prior to the Merger, Naveen Doki and Silvija Valleru became beneficial owners of Company Common Stock, equal to approximately <span id="xdx_906_eus-gaap--SaleOfStockPercentageOfOwnershipBeforeTransaction_pid_dp_uPure_c20191029__20191029__us-gaap--TypeOfArrangementAxis__custom--MergerAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--NaveenDokiMember_zYkqRxMw6SE1" title="Common stock beneficial ownership percentage">69</span>% and <span id="xdx_90B_eus-gaap--SaleOfStockPercentageOfOwnershipBeforeTransaction_pid_dp_uPure_c20191029__20191029__us-gaap--TypeOfArrangementAxis__custom--MergerAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SilvijaValleruMember_zzxoYTpNkWL8" title="Common stock beneficial ownership percentage">17</span>% of the total number of shares of the Company’s Common Stock outstanding after giving effect to the Merger, respectively.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At the present time, the Vivos Group shall not be entitled to vote any of their shares in Reliability at any annual or special meetings of the shareholders. The Receiver is empowered to recover the awards by seizing shares of the Company held by Dr. Naveen Doki and his affiliates, the Vivos Group. Once the judgments in favor of Reliability are satisfied, the restrictions on the rights of the Vivos Group shareholders imposed by the Award shall be lifted.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 1 1750000 1400000 2217000 6100000 <p id="xdx_89A_eus-gaap--ScheduleOfRelatedPartyTransactionsTableTextBlock_zq1yE3MlK913" style="font: 10pt Times New Roman, Times, Serif; display: none; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span><span id="xdx_8BD_zxPqkVa4f9V1" style="display: none">SCHEDULE OF RELATED PARTY NOTES RECEIVABLE</span></span></span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Note Description</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Acquisition <br/> Loan to <br/> Vivos, LLC</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Interco Loan <br/> to Vivos <br/> Real Estate, LLC</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Tax Note</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Total Notes Receivable</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%">Balance on December 31, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_z5wHWqJJRva2" style="width: 11%; text-align: right" title="Balance, beginning">        4,039</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zsnzRM6ND6ia" style="width: 11%; text-align: right" title="Balance, beginning">     897</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_zYFezC2OtGLf" style="width: 11%; text-align: right" title="Balance, beginning">911</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zykSpfodOZW5" style="width: 11%; text-align: right" title="Balance, beginning">     5,847</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accrued interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zOQAMi1cfADg" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">86</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zeXaq3nbXyRg" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">20</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_z5UjdPhiy54l" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">20</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250101__20250331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zENqizIdfEw2" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">126</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Balance on March 31, 2025</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_986_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zmnWDOVTFey7" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">4,125</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_981_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zSZWuacRTo7f" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">917</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_98B_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_zhpR3eGZGQC8" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">931</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_986_eus-gaap--NotesAndLoansReceivableNetCurrent_iS_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_z9DtK5RQrgb7" style="border-bottom: Black 1pt solid; text-align: right" title="Balance, beginning">5,973</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accrued interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zBJLbTYBHrOa" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">86</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_zd9khskq105f" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">21</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_zUtkXhoRy2be" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">20</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_984_eus-gaap--IncreaseDecreaseInAccruedInterestReceivableNet_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zSMKcLi5Idg1" style="border-bottom: Black 1pt solid; text-align: right" title="Accrued interest">127</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Balance on June 30, 2025</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98A_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivosLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--AcquisitionLoanMember_zx17AW8QMLOd" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance , ending">4,211</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_984_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--RealEstateLlcMember__us-gaap--RelatedPartyTransactionAxis__custom--IntercoLoanMember_z2jq9CAhT5al" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance, ending">938</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98A_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionAxis__custom--TaxNoteMember_z48gDDLAbemi" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance, ending">951</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_985_eus-gaap--NotesAndLoansReceivableNetCurrent_iE_pn3n3_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zeaTkUs6V7Rb" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Balance, ending">6,100</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> 4039000 897000 911000 5847000 86000 20000 20000 126000 4125000 917000 931000 5973000 86000 21000 20000 127000 4211000 938000 951000 6100000 91000 10000 41000 68000 0.69 0.17 <p id="xdx_804_eus-gaap--SegmentReportingDisclosureTextBlock_zRaplksp6AN7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 9. <span id="xdx_827_z50lrtkcJOrb">BUSINESS SEGMENTS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company operates within <span id="xdx_90B_eus-gaap--NumberOfOperatingSegments_pid_dc_c20250101__20250630_zkghw9qsJxic" title="Number of operating segments">four</span> industry segments: EOR, Recruiting and Staffing (“Staffing”), Direct Hire, and Video Production. The EOR segment provides media field talent to a host of large corporate customers in all 50 states. The Recruiting and Staffing (“Staffing”) segment provides skilled Media and IT field talent on a nationwide basis for customers in a myriad of industries. Direct Hire fulfils direct placement requests by MMG clients for a wide variety of posts, including administrative, media, and IT professionals. The Video and Multimedia Production segment provides script-to-screen services for corporate, government, and non-profit clients, globally.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Segment gross profit includes revenue and cost of services only. Currently, the Company is not allocating interest income, interest expense, depreciation expense, other income (expense), income tax benefit (expense) and sales, general, and administrative expenses at the segment level. Our operating segments align with our organizational structure and are regularly reviewed by our Chief Executive Officer (our chief operating decision-maker or “CODM”) to allocate resources and assess performance. No additional segment expense categories (beyond cost of services) are regularly provided to the CODM. We evaluate segments based on revenue and gross profit, which also guide our annual budgeting process. Monthly, our CODM reviews segment revenue and gross profit against the prior year and budget to inform working capital allocation decisions. The measure of segment assets is reported on the consolidated balance sheet as total assets.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p id="xdx_896_eus-gaap--ReconciliationOfRevenueFromSegmentsToConsolidatedTextBlock_z7Cm4Mzsr975" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table provides a reconciliation of revenue and gross profit by reportable segment to consolidated results for the three-month and six-month periods ended June 30, 2025 and 2024, respectively:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; display: none; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span><span id="xdx_8B0_zgPa0CqNRBHl" style="display: none">SCHEDULE OF GROSS PROFIT PERFORMANCE BY SEGMENT</span></span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Gross Profit Performance by Segment</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span><span style="display: none"></span></span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the Three Months Ended June 30:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2024</td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--EORMember_ze4cXjvbIQrj" style="width: 9%; text-align: right">3,573</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--EORMember_zBzcjnND7imh" style="width: 9%; text-align: right">442</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_982_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--EORMember_zn0P5ALxubna" style="width: 9%; text-align: right" title="Gross Margin Percentage">12.3</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--EORMember_zXxnlVxk0CDj" style="width: 9%; text-align: right">5,243</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--EORMember_zjOSaKWSVrfh" style="width: 8%; text-align: right">628</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--EORMember_z1KMRokkLEo7" style="width: 8%; text-align: right">12.0</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_z0soPRznIk99" style="text-align: right">1,098</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98C_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_z2MAxgJReLo1" style="text-align: right">252</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zTbXstYsouV1" style="text-align: right">22.9</td><td style="text-align: left">%</td><td> </td> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zm6Aw6xZtxO1" style="text-align: right">713</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zhFNZAZLKWgg" style="text-align: right">143</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zrJW7Vg9b5qh" style="text-align: right">20.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_984_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_ztIDRGdiIFmh" style="text-align: right">34</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zOo7TLh2ZIEg" style="text-align: right">8</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zU6j828H0Cx6" style="text-align: right">23.9</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zypnwGkXquz4" style="text-align: right">58</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_983_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zCJjfV1EBMWk" style="text-align: right">8</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zNO7sRhQWzSe" style="text-align: right">14.4</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_985_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_ztV8ELKTrKY8" style="border-bottom: Black 1pt solid; text-align: right">13</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_983_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_z5uU9m54db2h" style="border-bottom: Black 1pt solid; text-align: right">11</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_ztLO1o0cgaSa" style="border-bottom: Black 1pt solid; text-align: right">90.0</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_98E_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_z2MNtCxA3DH6" style="border-bottom: Black 1pt solid; text-align: right">27</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_98E_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_z5rvLBG1qNxf" style="border-bottom: Black 1pt solid; text-align: right">25</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_981_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_zWQYOWd8Mlx" style="border-bottom: Black 1pt solid; text-align: right">92.4</td><td style="padding-bottom: 1pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630_zmnPFpWgB2re" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,718</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98E_eus-gaap--GrossProfit_pn3n3_c20250401__20250630_zW6vzRlTshXg" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">713</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_98A_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630_zAEA6kXWYvXi" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">15.1</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_984_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630_zORVDQA0xZd2" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Revenue">6,041</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--GrossProfit_pn3n3_c20240401__20240630_zoXqLUMi7nS4" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">804</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_987_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630_zn7uP6ypsU1a" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">13.3</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the Six Months Ended June 30:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2024</td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--EORMember_zHvA8Ocg7hg6" style="width: 9%; text-align: right">7,328</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--EORMember_zPVT7N9iJLde" style="width: 9%; text-align: right">894</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98E_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--EORMember_zHI52qgyN3th" style="width: 9%; text-align: right">12.2</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--EORMember_zzowycKHGb6b" style="width: 9%; text-align: right">9,815</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--EORMember_zlINh90Hpzsc" style="width: 8%; text-align: right">1,187</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98D_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--EORMember_zbIBy1ZmMYik" style="width: 8%; text-align: right">12.1</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_983_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zt0SnSuNNRTi" style="text-align: right">2,030</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98A_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zbO2zbpJ34Bk" style="text-align: right">419</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zAsI226H6283" style="text-align: right">20.6</td><td style="text-align: left">%</td><td> </td> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98C_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zbVdFRsa8ay" style="text-align: right">1,380</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zwNdtbqN9FZ8" style="text-align: right">265</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zMiZxwa4mYWc" style="text-align: right">19.2</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z48AutGuYePd" style="text-align: right">84</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z9g2feD2O1ad" style="text-align: right">21</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z8QqZvvYzQ56" style="text-align: right">25.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z6bKmVtDijNj" style="text-align: right">90</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_984_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zZ08CRlP2ydg" style="text-align: right">11</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zYgnP6Ne617j" style="text-align: right">11.7</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_986_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_zIuUNgb33rJg" style="border-bottom: Black 1pt solid; text-align: right">23</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_985_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_zYeRkpzmCLGl" style="border-bottom: Black 1pt solid; text-align: right">21</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_zKHhrJG1pYj3" style="border-bottom: Black 1pt solid; text-align: right">91.3</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_988_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_zh8FEWwAcCf" style="border-bottom: Black 1pt solid; text-align: right">51</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_985_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_zjZRUZFBysvg" style="border-bottom: Black 1pt solid; text-align: right">49</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_ziV4RNOyZaRk" style="border-bottom: Black 1pt solid; text-align: right">95.4</td><td style="padding-bottom: 1pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_981_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630_zen2ZrVdCrR7" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Revenue">9,465</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98C_eus-gaap--GrossProfit_pn3n3_c20250101__20250630_zNz38Q5P7Khk" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">1,355</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_982_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630_zoOnFgD7CA3k" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">14.3</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98C_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630_zqgE7w2Hua24" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Revenue">11,336</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--GrossProfit_pn3n3_c20240101__20240630_zfeM8kGAyfmb" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">1,512</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_98F_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630_zEZvCkXYyYug" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">13.3</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td></tr> </table> <p id="xdx_8A7_zcwrDyLIO6X" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 4 <p id="xdx_896_eus-gaap--ReconciliationOfRevenueFromSegmentsToConsolidatedTextBlock_z7Cm4Mzsr975" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table provides a reconciliation of revenue and gross profit by reportable segment to consolidated results for the three-month and six-month periods ended June 30, 2025 and 2024, respectively:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; display: none; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span><span id="xdx_8B0_zgPa0CqNRBHl" style="display: none">SCHEDULE OF GROSS PROFIT PERFORMANCE BY SEGMENT</span></span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Gross Profit Performance by Segment</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span><span style="display: none"></span></span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the Three Months Ended June 30:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2024</td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--EORMember_ze4cXjvbIQrj" style="width: 9%; text-align: right">3,573</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--EORMember_zBzcjnND7imh" style="width: 9%; text-align: right">442</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_982_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--EORMember_zn0P5ALxubna" style="width: 9%; text-align: right" title="Gross Margin Percentage">12.3</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--EORMember_zXxnlVxk0CDj" style="width: 9%; text-align: right">5,243</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--EORMember_zjOSaKWSVrfh" style="width: 8%; text-align: right">628</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--EORMember_z1KMRokkLEo7" style="width: 8%; text-align: right">12.0</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_z0soPRznIk99" style="text-align: right">1,098</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98C_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_z2MAxgJReLo1" style="text-align: right">252</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zTbXstYsouV1" style="text-align: right">22.9</td><td style="text-align: left">%</td><td> </td> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zm6Aw6xZtxO1" style="text-align: right">713</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zhFNZAZLKWgg" style="text-align: right">143</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zrJW7Vg9b5qh" style="text-align: right">20.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_984_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_ztIDRGdiIFmh" style="text-align: right">34</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zOo7TLh2ZIEg" style="text-align: right">8</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zU6j828H0Cx6" style="text-align: right">23.9</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zypnwGkXquz4" style="text-align: right">58</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_983_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zCJjfV1EBMWk" style="text-align: right">8</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zNO7sRhQWzSe" style="text-align: right">14.4</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_985_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_ztV8ELKTrKY8" style="border-bottom: Black 1pt solid; text-align: right">13</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_983_eus-gaap--GrossProfit_pn3n3_c20250401__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_z5uU9m54db2h" style="border-bottom: Black 1pt solid; text-align: right">11</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_ztLO1o0cgaSa" style="border-bottom: Black 1pt solid; text-align: right">90.0</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_98E_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_z2MNtCxA3DH6" style="border-bottom: Black 1pt solid; text-align: right">27</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_98E_eus-gaap--GrossProfit_pn3n3_c20240401__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_z5rvLBG1qNxf" style="border-bottom: Black 1pt solid; text-align: right">25</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_981_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_zWQYOWd8Mlx" style="border-bottom: Black 1pt solid; text-align: right">92.4</td><td style="padding-bottom: 1pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250401__20250630_zmnPFpWgB2re" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,718</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98E_eus-gaap--GrossProfit_pn3n3_c20250401__20250630_zW6vzRlTshXg" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">713</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_98A_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250401__20250630_zAEA6kXWYvXi" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">15.1</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_984_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240401__20240630_zORVDQA0xZd2" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Revenue">6,041</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--GrossProfit_pn3n3_c20240401__20240630_zoXqLUMi7nS4" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">804</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_987_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240401__20240630_zn7uP6ypsU1a" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">13.3</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELIABILITY INCORPORATED AND SUBSIDIARY</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>June 30, 2025</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(amounts in thousands, except per share data)</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the Six Months Ended June 30:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="13" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2024</td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Business Segment</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Revenue</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Gross Profit</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">GM %</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--EORMember_zHvA8Ocg7hg6" style="width: 9%; text-align: right">7,328</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--EORMember_zPVT7N9iJLde" style="width: 9%; text-align: right">894</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98E_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--EORMember_zHI52qgyN3th" style="width: 9%; text-align: right">12.2</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 11%">EOR</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--EORMember_zzowycKHGb6b" style="width: 9%; text-align: right">9,815</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--EORMember_zlINh90Hpzsc" style="width: 8%; text-align: right">1,187</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98D_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--EORMember_zbIBy1ZmMYik" style="width: 8%; text-align: right">12.1</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_983_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zt0SnSuNNRTi" style="text-align: right">2,030</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98A_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zbO2zbpJ34Bk" style="text-align: right">419</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--StaffingMember_zAsI226H6283" style="text-align: right">20.6</td><td style="text-align: left">%</td><td> </td> <td>Staffing</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98C_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zbVdFRsa8ay" style="text-align: right">1,380</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zwNdtbqN9FZ8" style="text-align: right">265</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--StaffingMember_zMiZxwa4mYWc" style="text-align: right">19.2</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z48AutGuYePd" style="text-align: right">84</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z9g2feD2O1ad" style="text-align: right">21</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z8QqZvvYzQ56" style="text-align: right">25.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left">Video Production</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98F_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_z6bKmVtDijNj" style="text-align: right">90</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_984_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zZ08CRlP2ydg" style="text-align: right">11</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--VideoProductionMember_zYgnP6Ne617j" style="text-align: right">11.7</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_986_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_zIuUNgb33rJg" style="border-bottom: Black 1pt solid; text-align: right">23</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_985_eus-gaap--GrossProfit_pn3n3_c20250101__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_zYeRkpzmCLGl" style="border-bottom: Black 1pt solid; text-align: right">21</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630__srt--ProductOrServiceAxis__custom--DirectHireMember_zKHhrJG1pYj3" style="border-bottom: Black 1pt solid; text-align: right">91.3</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left; padding-bottom: 1pt">Direct Hire</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_988_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_zh8FEWwAcCf" style="border-bottom: Black 1pt solid; text-align: right">51</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td id="xdx_985_eus-gaap--GrossProfit_pn3n3_c20240101__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_zjZRUZFBysvg" style="border-bottom: Black 1pt solid; text-align: right">49</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630__srt--ProductOrServiceAxis__custom--DirectHireMember_ziV4RNOyZaRk" style="border-bottom: Black 1pt solid; text-align: right">95.4</td><td style="padding-bottom: 1pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_981_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20250101__20250630_zen2ZrVdCrR7" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Revenue">9,465</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98C_eus-gaap--GrossProfit_pn3n3_c20250101__20250630_zNz38Q5P7Khk" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">1,355</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_982_ecustom--GrossMarginPercentage_pid_dp_uPure_c20250101__20250630_zoOnFgD7CA3k" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">14.3</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98C_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_c20240101__20240630_zqgE7w2Hua24" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Revenue">11,336</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--GrossProfit_pn3n3_c20240101__20240630_zfeM8kGAyfmb" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross profit">1,512</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"> </td><td id="xdx_98F_ecustom--GrossMarginPercentage_pid_dp_uPure_c20240101__20240630_zEZvCkXYyYug" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Gross margin percentage">13.3</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td></tr> </table> 3573000 442000 0.123 5243000 628000 0.120 1098000 252000 0.229 713000 143000 0.200 34000 8000 0.239 58000 8000 0.144 13000 11000 0.900 27000 25000 0.924 4718000 713000 0.151 6041000 804000 0.133 7328000 894000 0.122 9815000 1187000 0.121 2030000 419000 0.206 1380000 265000 0.192 84000 21000 0.250 90000 11000 0.117 23000 21000 0.913 51000 49000 0.954 9465000 1355000 0.143 11336000 1512000 0.133 <p id="xdx_804_eus-gaap--SubsequentEventsTextBlock_z6sN1CbmHBv5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 10. <span id="xdx_826_zKDcdGlMDvH3">SUBSEQUENT EVENTS</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has evaluated subsequent events through August 14, 2025, the date on which the unaudited condensed consolidated financial statements were available to be issued. Based upon this evaluation, management has determined that no material subsequent events have occurred that would require recognition in our disclosures in the accompanying unaudited condensed consolidated financial statements.</span></p>