Cover
Cover | 9 Months Ended |
Sep. 30, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Sep. 30, 2023 |
Document Fiscal Period Focus | Q3 |
Document Fiscal Year Focus | 2023 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 0-7092 |
Entity Registrant Name | RELIABILITY INCORPORATED |
Entity Central Index Key | 0000034285 |
Entity Tax Identification Number | 75-0868913 |
Entity Incorporation, State or Country Code | TX |
Entity Address, Address Line One | 22505 Gateway Center Drive |
Entity Address, Address Line Two | P.O. Box 71 |
Entity Address, City or Town | Clarksburg |
Entity Address, State or Province | MD |
Entity Address, Postal Zip Code | 20871 |
City Area Code | (202) |
Local Phone Number | 965-1100 |
Title of 12(b) Security | Common Stock, no par value |
Trading Symbol | RLBY |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 300,000,000 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 751 | $ 227 |
Trade receivables, net of allowance for doubtful accounts | 3,094 | 6,337 |
Retention credit receivable | 10 | 1,219 |
Prepaid expenses and other current assets | 358 | 430 |
Total current assets | 9,630 | 13,464 |
Property, plant, and equipment, net | 16 | 26 |
Other intangible assets | 3 | |
Total assets | 9,649 | 13,490 |
CURRENT LIABILITIES | ||
Factoring liability | 2,619 | |
Accounts payable | 414 | 698 |
Accrued expenses | 318 | 339 |
Accrued payroll | 677 | 981 |
Deferred revenue | 176 | 176 |
Income taxes payable | 5 | 6 |
Total current liabilities | 1,590 | 4,819 |
Total liabilities | 1,590 | 4,819 |
Commitment and contingencies (Note 6) | ||
Subsequent events (Note 10) | ||
SHAREHOLDERS’ EQUITY | ||
Additional paid-in capital | 750 | 750 |
Retained earnings | 7,309 | 7,921 |
Total shareholders’ equity | 8,059 | 8,671 |
Total liabilities and shareholders’ equity | 9,649 | 13,490 |
Related Party [Member] | ||
CURRENT ASSETS | ||
Notes receivable from related parties | $ 5,417 | $ 5,251 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 300,000,000 | 300,000,000 |
Common stock, shares, outstanding | 300,000,000 | 300,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue earned | ||||
Service revenue | $ 5,341 | $ 6,464 | $ 15,992 | $ 18,729 |
Cost of revenue | ||||
Cost of revenue | 4,569 | 5,573 | 13,769 | 16,222 |
Gross profit | 772 | 891 | 2,223 | 2,507 |
Selling, general, and administrative expenses | 998 | 941 | 2,843 | 3,343 |
Operating loss | (226) | (50) | (620) | (836) |
Other income (expense) | ||||
Interest income from related parties | 68 | 23 | 200 | 196 |
Interest income | 7 | 63 | 21 | |
Interest expense | (12) | (46) | (77) | (111) |
Other income (expense) | (13) | 210 | (133) | 210 |
Income (loss) before income tax expense | (176) | 200 | (609) | (541) |
Income tax expense | (91) | (3) | (117) | |
Consolidated net income (loss) | $ (176) | $ 109 | $ (612) | $ (658) |
Net loss per share: | ||||
Basic | $ 0 | $ 0 | $ 0 | $ 0 |
Diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Shares used in per share computation: | ||||
Basic | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 |
Diluted | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 |
Consolidated Statements of Chan
Consolidated Statements of Change in Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2021 | $ 9,410 | $ 750 | $ 8,660 | |
Balance, shares at Dec. 31, 2021 | 300,000,000 | |||
Net Loss | (658) | (658) | ||
Balance at Sep. 30, 2022 | 8,752 | 750 | 8,002 | |
Balance, shares at Sep. 30, 2022 | 300,000,000 | |||
Balance at Dec. 31, 2022 | 8,671 | 750 | 7,921 | |
Balance, shares at Dec. 31, 2022 | 300,000,000 | |||
Net Loss | (612) | (612) | ||
Balance at Sep. 30, 2023 | $ 8,059 | $ 750 | $ 7,309 | |
Balance, shares at Sep. 30, 2023 | 300,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (612) | $ (658) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 14 | 23 |
Accrued interest | (165) | (172) |
Changes in operating assets and liabilities: | ||
Trade receivables | 3,243 | 2,634 |
Retention credit receivable | 1,195 | |
Other receivable | 14 | |
Prepaid expenses and other current assets | 72 | (35) |
Accounts payable | (284) | (828) |
Accrued payroll | (304) | (627) |
Accrued expenses | (21) | (59) |
Other liabilities | (1) | |
Income taxes payable | (1) | (241) |
Net cash provided by operating activities | 3,151 | 36 |
Cash flows from investing activities: | ||
Purchase of fixed assets | (8) | (1) |
Net cash used in investing activities | (8) | (1) |
Cash flows from financing activities: | ||
Net borrowing/(repayment) of line-of-credit | (2,619) | 1,068 |
Net cash provided by (used in) financing activities | (2,619) | 1,068 |
Net increase in cash and cash equivalents | 524 | 1,103 |
Cash and cash equivalents, beginning of year | 227 | 24 |
Cash and cash equivalents, end of year | 751 | 1,127 |
Cash paid during the year for: | ||
Interest | 77 | 111 |
Income taxes | $ 5 | $ 735 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Nature of Operations Reliability, Inc. is a leading provider of employer workforce management solutions 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 Placements, and Video and Multimedia Production Services, which provides script to screen media talent. 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 staff and/or crews with equipment for live or taped programming. This service can be provided within client facilities or on location across the globe and cover pre-production planning to post-production services. 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. Company Background Linda Maslow founded Maslow Group initially in 1988 and incorporated the firm under the name the Maslow Media Group Inc. (“MMG”) in March 1992. On November 9, 2016, MMG was sold to Vivos Holdings, LLC (“Vivos Holdings”), owned by Dr. Naveen Doki (“Dr. Doki”) and Silvija Valleru (“Ms. Valleru”). In 2018, Vivos Holdings and several other Vivos companies engaged an investment banker who approached management of Reliability to discuss a potential reverse merger transaction. The other investors who collaborated on a share swap of MMG for other Vivos companies were Shirisha Janumpally (“Mrs. Janumpally”), wife of Dr. Doki, and Kalyan Pathuri (“Mr. Pathuri”), husband of Silvija Valleru. These individuals included, but were not limited to, Dr. Doki, Mrs. Janumpally, Mr. Pathuri, Mrs. Valleru, Igly Trust, and Judos Trust 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”)). The reverse merger was consummated on October 29, 2019. As a result of the Merger, the Vivos Group (Vivos Holdings LLC, officially) acquired approximately 84 On October 29, 2019, MMG became a wholly owned subsidiary of Reliability by merging R-M Merger Sub, Inc., a Virginia corporation and a wholly owned subsidiary of Reliability, with and into Maslow, with MMG being the surviving corporation. The Company ceased to be a “shell” company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) by virtue of its ownership of MMG following the Merger. The acquisition of MMG also resulted in a “change in control” of Reliability. RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) Upon purchasing MMG and thereafter, the Vivos Group began borrowing monies from MMG starting with $ 1,400 3,418 3,000 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. (See below and Item 1 for complete summary). We refer below to the disputes between Reliability and the Vivos Group as the “Vivos Matter.” A series of legal actions and hearings took place starting in March 2020 through September 2021. At that time, arbitration was agreed to by both the Vivos Group and MMG. The proceedings began in February 2022 and were completed in March 2022. On August 31, 2022, the Arbitrator issued an award (the “Award”) with the Company prevailing on their claims. The Company was awarded the following: ● an award in favor of MMG against Vivos Holdings, LLC under Note I (as defined in the Award) in the amount of $ 3,458 4.5 ● no award as to Note II (as defined in the Award) until and at such time as the automatic stay imposed by the United States Bankruptcy Court as a result of the filing of a petition in bankruptcy by VREH is lifted or the bankruptcy proceeding is terminated; ● an award in favor of MMG against Vivos Holdings, LLC under Note III (as defined in the Award) in the amount of $ 800 2.5 ● an award in favor of MMG against Dr. Doki under the Personal Guaranty (as defined in the Award) in the amount of $ 2,309 6 ● an award in favor of the Company against Dr. Doki, Mrs. Valleru, Mrs. Janumpally, individually and as Trustee of Judos Trust, and Mr. Pathuri, as Trustee of Igly Trust, jointly and severally, for contract damages of $ 1,000 1,000 ● an award appointing a Rehabilitative Receiver for the Company under the deadlock situation provisions of Section 11.404(a)(1)(B) of the Texas Business Organizations Code, the primary function of which is to collect the contract and fraud damages, including costs, expenses and fees provided in the Award, due to the Company, with matters regarding such receivership to be set forth in a supplemental award; and ● declaratory relief in favor of the Company and its officers and directors. With respect to the receivership, the owners or holders of all of the shares of common stock of the Company received as a result of the conversion of 1,600 RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) On May 17, 2023, the Arbitrator issued an Amended and Supplemental Arbitration Award (the “Amended Award”), which included the following: ● Arbitrator will appoint a Rehabilitative Receiver in a Supplemental Award under Maryland law; ● an award in favor of MMG and against VREH under Note II in the amount of $ 835 5.5 On June 16, 2023, we learned that the principal amount due on 22 Baltimore Road had been satisfied via bankruptcy sale and thus the Fairfax, Virginia court released the VREH confessed judgement, meaning MMG was no longer listed as a guarantor. Subsequently, there were two supplemental awards issued by the Arbitrator on May 17, 2023 and October 10, 2023, the latter appointing a Rehabilitative Receiver whose primary purpose is to collect the Award, and who also has been granted specified powers as described in the 8-K released on October 19, 2023. On October 27, 2023, the Arbitrator entered a third Supplemental Award of attorneys’ fees and expenses in favor of Reliability, Incorporated., individually and as agent for Maslow Media Group, Inc.; management and certain other named persons and parties against Naveen Doki; Silvija Valleru; Shirisha Janumpally, individually and as Trustee of Judos Trust; and Kaylan Pathuri, individually and as Trustee of Igly Trust, jointly and severally, in the amount of $1,209 (See Note 10). Additionally, the Arbitrator stated the actual amounts of interest that would be due will depend on when and how much is collected by the Rehabilitative Receiver on each award and will leave the determination of such interest to the Rehabilitative Receiver at the time that payments are made subject to review thereof by the Arbitrator at the request of any party. Upon final resolution as to the underlying ownership and rights of certain shareholders, the Company intends to hold an annual meeting of shareholders within a reasonable time thereafter. As of September 30, 2023, the Vivos Debtor balance was $ 5,417 6,348 Basis of presentation The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 100 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 RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) 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. 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, 2022. Concentration of Credit Risk For the nine months ended September 30, 2023, 24.6 13.8 38.4 47.9 the top five customers accounted for 61.8% of revenue versus a year ago, when the top five comprised 66.2% |
MANAGEMENT_S PLAN
MANAGEMENT’S PLAN | 9 Months Ended |
Sep. 30, 2023 | |
Managements Plan | |
MANAGEMENT’S PLAN | NOTE 2. MANAGEMENT’S PLAN Although the Company continues to experience net operating losses, management believes it has the ability to continue as a going concern and meet its financial obligation as they become due in 2023 and beyond. The factors impacting this view include, but are not limited to, the following: ● cash flow forecasts showing sufficient cash and working capital for at least the next 12 months; ● the prospect of receiving the amounts awarded in the arbitration hearing in 2023, which include $ 5,417 1,000 ● the reduction in legal fees associated with Vivos Matter year to date at $ 460 ● new sales plan implementation by recently hired Vice President of Sales, who has experience and success in managing contingent and direct hire staffing organizations; and ● additional factoring line availability of up to 93 2,468 As a result of the foregoing, the Company believes that it has sufficient cash to meet its financial obligations for the next 12 months and beyond as they become due. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Adopted Accounting Pronouncements The Company does not believe any other recently issued but not yet effective accounting pronouncement, if adopted, would have a material effect on its present or future consolidated financial statements. RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 4. ACCOUNTS RECEIVABLE Accounts receivable can be broken down as follows: SCHEDULE OF ACCOUNTS RECEIVABLE September 30, December 31, Accounts receivable, unfactored $ 2,653 3,131 Unbilled receivables 441 587 Accounts receivable, factored - 2,619 Total Accounts Receivable $ 3,094 6,337 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5. DEBT Tax Liabilities As of September 30, 2023, the Company’s overall tax liability was $ 5 6 Factoring Facility The Company has a factoring and security agreement with Gulf Coast Bank and Trust (“Gulf”), which enables the Company to receive advances on its accounts receivable (i.e., invoices) through Gulf to fund growth and operations. The proceeds of this agreement are most frequently used to pay operating costs of the business, which include employee salaries, vendor payments, and overhead expenses. Our arrangement calls for interest at prime plus 2 In accordance with the agreement, a reserve amount is required for the total unpaid balance of all purchased accounts multiplied by a percentage equal to the difference between one hundred percent and the advanced rate percentage. As of August 1, 2023, the required amount was 10 Accounts receivables were sold with full recourse. Proceeds from the sale of receivables were $ 0 3,429 3,297 10,388 0 2,619 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. Total finance line fees for the three months ended September 30, 2023 and 2022 were $ 0 46 44 111 RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6. COMMITMENTS AND CONTINGENCIES There are a number of debts and confessions of judgement (“COJ”) related to the Vivos Group that included Maslow as a co-signer or guarantor at some stage in the Vivos Group debt process from November 2016 through October 29, 2019, when Vivos Holdings, LLC owned Maslow. All known debts disclosed to Maslow management and Reliability prior to the Merger were addressed by various safeguards such as the Liquidation Agreement, and the Naveen Doki personal guarantee. However, there were certain non-disclosures by Vivos Holdings, LLC that are included below. . In September 2022, MMG learned that Vivos IT, LLC filed a lawsuit against Second Wind Consultants (“SWC”) in May 2019, which included MMG as a plaintiff. The lawsuit included claims of fraud in inducement and unjust enrichment against SWC. The five parties suing SWC, included Vivos, LLC, The Maslow Media Group, Suresh Venkat Doki, Naveen Doki, and Silvija Valleru. The lawsuit related to a debt restructuring services agreement secured by Suresh Doki, Naveen Doki and Silvija Valleru to assist the following then owned Vivos entities: Maslow Media Group, Inc.; Health Care Resources Network, Inc.; Mettler & Michael, Inc.; 360 IT Professionals, Inc.; and US IT Solutions, Inc. SWC countersued all plaintiffs on September 30, 2019, seeking to collect the balance of $ 402 55 At the present time, the Company is uncertain as to whether any of the above items will have a material impact on their consolidated financial statements. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 7. EQUITY The Company’s authorized capital stock consists of 300,000,000 no |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8. RELATED PARTY TRANSACTIONS Stock Purchase Agreement On November 9, 2016, Vivos Holdings, LLC, the former owner of MMG, acquired 100 1,750 1,400 350 The promissory note was to be paid in 24 equal installments, including interest at 4.5%, in the amount of approximately $15, commencing nine months after closing, with the last payment on March 1, 2019. 2,503 As of September 30, 2023 and December 31, 2022, the receivable totaled $ 5,417 5,251 RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) Notes Receivable The Company has notes receivable from Vivos Holdings, LLC and VREH, both related party affiliates due to their ownership percentage in the Company. Per Code of Virginia, the legal rate of interest shall be implied when there is an obligation to pay interest and no express contract to pay interest at a specified rate. However, it was determined in 2021 that the two notes had clauses capping the default interest at 4.5 5.5 In connection with the Vivos/MMG Purchase Agreement, on November 15, 2016, MMG executed a promissory note receivable with Vivos Holdings, LLC in the amount of $ 1,400 3,698 51 On November 15, 2017, MMG executed an intercompany promissory note receivable with VREH in the amount of $ 772 893 12 On June 12, 2019, MMG entered into a Personal Guaranty agreement with Dr. Doki, pursuant to which Dr. Doki personally guaranteed to MMG repayment of $ 3,000 5 As of February 2020, the Company filed a lawsuit against the majority shareholder, pursuant to the personal guaranty agreement for defaulting on the outstanding notes receivable. Between November 2016 and September 30, 2023, the Vivos Group borrowed an additional $ 2,547 3,647 On September 5, 2019, MMG entered into a Secured Promissory Note agreement with Vivos, pursuant to which MMG issued a secured promissory note to the Vivos Group in the principal amount of $ 750 2.5 10 November 1, 2026 30,000,000 5 825 5 Debt Settlement Agreements On July 21, 2022, Maslow settled the obligation which Vivos Holdings, LLC had obligated Maslow to a note in July 2018, with Libertas Funding, LLC and Kinetic which a portion was paid and subsequently included in the additional borrowing cited above. RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) Related Party Relationships On October 29, 2019, prior to the Merger, pursuant to the Merger Agreement, Naveen Doki and Silvija Valleru became beneficial owners of 206,606,528 51,652,908 68.9 17.2 1,000 In 2019, the Company entered into transactions with two executive officers, Nick Tsahalis and Mark Speck, of the Company, resulting in the issuance of warrants to purchase 163,232 The term “warrant” herein refers to warrants issued by MMG and assumed by the Company as a result of the Merger. The terms of all warrants are the same other than as to the number of shares covered thereby. The warrant may be exercised at any time or from time to time during the period commencing at 10:00 a.m. Eastern time on first business day following the completion of the Qualified Financing (as defined below) and expiring at 5:00 p.m. Eastern time on the fifth annual anniversary thereof (the “Exercise Period”). For purposes herein, a “Qualified Financing” means the issuance by the Company, other than certain excluded issuances of shares of Common Stock, in one transaction or series of related transactions, which transaction(s) result in aggregate gross proceeds actually received by the Company of at least $ 5,000 120 5,000 |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 9. BUSINESS SEGMENTS The Company operates within four industry segments: EOR, Recruiting and 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 segment provides skilled Media, IT, accounting and finance, human resources (HR), and general administrative talent on a nationwide basis for customers in a myriad of industries. Direct Hire fulfills direct placement requests by MMG clients for a wide variety of posts, including administrative, media, and IT professionals. The Video and Multimedia Production segment provides script-to-screen services for corporate, government, and non-profit clients, globally. The following table provides a reconciliation of revenue by reportable segment to consolidated results for the three months ended September 30, 2023 and 2022, respectively: SCHEDULE OF RECONCILIATION OF REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS 2023 2022 Revenue: EOR $ 4,467 5,494 Recruiting and Staffing 710 848 Direct Hire 64 60 Video and Multimedia Production 100 62 Total Revenue $ 5,341 6,464 RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) The following table provides a reconciliation of revenue by reportable segment to consolidated results for the nine months ended September 30, 2023 and 2022, respectively: 2023 2022 Revenue: EOR $ 13,240 15,783 Recruiting and Staffing 2,338 2,671 Direct Hire 115 99 Video and Multimedia Production 299 176 Total $ 15,992 18,729 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10. SUBSEQUENT EVENTS The Company has evaluated subsequent events through November 14, 2023, the date on which the unaudited condensed consolidated financial statements were available to be issued. Based upon this evaluation, management has determined that no material subsequent events have occurred that would require recognition in or disclosures in the accompanying unaudited condensed consolidated financial statements, except as follows: On October 10, 2023, the Arbitrator issued a Supplemental Award appointing Rehabilitative Receiver who is appointed to collect the Award. On October 27, 2023, the Arbitrator entered a third Supplemental Award of attorneys’ fees and expenses in favor of Reliability, Incorporated., individually and as agent for Maslow Media Group, Inc.; management and certain other named persons and parties against Naveen Doki; Silvija Valleru; Shirisha Janumpally, individually and as Trustee of Judos Trust; and Kaylan Pathuri, individually and as Trustee of Igly Trust, jointly and severally, in the amount of $ 1,209 Additionally, the Arbitrator stated the actual amounts of interest that would be due will depend on when and how much is collected by the Rehabilitative Receiver on each award and will leave the determination of such interest to the Rehabilitative Receiver at the time that payments are made subject to review thereof by the Arbitrator at the request of any party. On November 7, 2023 MMG filed a petition to confirm the arbitration award with Montgomery County Circuit Court in Rockville, Maryland. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Adopted Accounting Pronouncements | Adopted Accounting Pronouncements The Company does not believe any other recently issued but not yet effective accounting pronouncement, if adopted, would have a material effect on its present or future consolidated financial statements. RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable can be broken down as follows: SCHEDULE OF ACCOUNTS RECEIVABLE September 30, December 31, Accounts receivable, unfactored $ 2,653 3,131 Unbilled receivables 441 587 Accounts receivable, factored - 2,619 Total Accounts Receivable $ 3,094 6,337 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF RECONCILIATION OF REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS | The following table provides a reconciliation of revenue by reportable segment to consolidated results for the three months ended September 30, 2023 and 2022, respectively: SCHEDULE OF RECONCILIATION OF REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS 2023 2022 Revenue: EOR $ 4,467 5,494 Recruiting and Staffing 710 848 Direct Hire 64 60 Video and Multimedia Production 100 62 Total Revenue $ 5,341 6,464 RELIABILITY INCORPORATED AND SUBSIDIARY NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (amounts in thousands, except per share data) The following table provides a reconciliation of revenue by reportable segment to consolidated results for the nine months ended September 30, 2023 and 2022, respectively: 2023 2022 Revenue: EOR $ 13,240 15,783 Recruiting and Staffing 2,338 2,671 Direct Hire 115 99 Video and Multimedia Production 299 176 Total $ 15,992 18,729 |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |||||||
Aug. 31, 2022 | Oct. 29, 2019 | Sep. 30, 2019 | Nov. 08, 2016 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2019 | |
Product Information [Line Items] | ||||||||
Loss contingency damages sought value | $ 402 | |||||||
Common stock, shares, issued | 300,000,000 | 300,000,000 | ||||||
Concentration of credit risk | the top five customers accounted for 61.8% of revenue versus a year ago, when the top five comprised 66.2% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration of credit risk | 24.60% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Second Customer [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration of credit risk | 13.80% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customers [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration of credit risk | 38.40% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration of credit risk | 47.90% | |||||||
MMG [Member] | ||||||||
Product Information [Line Items] | ||||||||
Business acquisition percentage of voting interest acquired | 100% | |||||||
Merger Agreement [Member] | ||||||||
Product Information [Line Items] | ||||||||
Loss contingency value in common stock | $ 1,000 | |||||||
Common stock, shares, issued | 1,600 | |||||||
Merger Agreement [Member] | Naveen Valleru Janumpally [Member] | ||||||||
Product Information [Line Items] | ||||||||
Loss contingency damages sought value | $ 1,000 | |||||||
Loss contingency value in common stock | 1,000 | |||||||
Vivos Debtor [Member] | ||||||||
Product Information [Line Items] | ||||||||
Financing receivable after allowance for credit loss | $ 5,417 | |||||||
Payments for other fees | $ 6,348 | |||||||
Vivos Holdings, LLC. [Member] | ||||||||
Product Information [Line Items] | ||||||||
Shares issued and outstanding percentage | 84% | |||||||
Maslow Media Group, Inc. [Member] | Naveen Doki [Member] | ||||||||
Product Information [Line Items] | ||||||||
Arbitrator issued value | $ 2,309 | |||||||
Arbitrator issued value, Pecentage | 6% | |||||||
Maslow Media Group, Inc. [Member] | Vivos Holdings, LLC. [Member] | Stock Purchase Agreement [Member] | ||||||||
Product Information [Line Items] | ||||||||
Borrowing from acquisition | $ 1,400 | |||||||
Notes payable | $ 3,418 | |||||||
Maslow Media Group, Inc. [Member] | Vivos Holdings, LLC. [Member] | Stock Purchase Agreement [Member] | Payment Guarantee [Member] | ||||||||
Product Information [Line Items] | ||||||||
Notes payable | $ 3,000 | |||||||
Maslow Media Group, Inc. [Member] | Vivos Holdings, LLC under Note I [Member] | ||||||||
Product Information [Line Items] | ||||||||
Arbitrator issued value | $ 3,458 | |||||||
Arbitrator issued value, Pecentage | 4.50% | |||||||
Maslow Media Group, Inc. [Member] | Vivos Holdings, LLC under Note III [Member] | ||||||||
Product Information [Line Items] | ||||||||
Arbitrator issued value | $ 800 | |||||||
Arbitrator issued value, Pecentage | 2.50% | |||||||
Maslow Media Group, Inc. [Member] | VREH Under Note II [Member] | ||||||||
Product Information [Line Items] | ||||||||
Arbitrator issued value | $ 835 | |||||||
Arbitrator issued value, Pecentage | 5.50% |
MANAGEMENT_S PLAN (Details Narr
MANAGEMENT’S PLAN (Details Narrative) | 9 Months Ended | |||
Sep. 11, 2023 USD ($) | Sep. 30, 2023 USD ($) | Aug. 01, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Awards for fraud | $ 1,000,000 | |||
Reduction in legal fees | $ 55 | 460,000 | ||
Extended borrowing percentage | 0.93 | |||
Maximum borrowing capacity | $ 2,468,000 | |||
Related Party [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Notes receivable related parties current | $ 5,417,000 | $ 5,251,000 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable, unfactored | $ 2,653 | $ 3,131 |
Unbilled receivables | 441 | 587 |
Accounts receivable, factored | 2,619 | |
Total Accounts Receivable | $ 3,094 | $ 6,337 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Tax liabilities | $ 5 | $ 5 | $ 6 | ||
Reserve interest percentage | 10% | ||||
Proceeds from sale of receivables | 0 | $ 3,429 | $ 3,297 | $ 10,388 | |
Accounts receivable factored | $ 2,619 | ||||
Finance line fees | $ 0 | $ 46 | $ 44 | $ 111 | |
Factoring and Security Agreement [Member] | Prime Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 2% | 2% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 11, 2023 | Sep. 30, 2019 | Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Loss contingency damages sought value | $ 402,000 | ||
Legal fees | $ 55 | $ 460,000 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Equity [Abstract] | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 300,000,000 | 300,000,000 |
Common stock, shares, outstanding | 300,000,000 | 300,000,000 |
Common stock, no par value | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 69 Months Ended | ||||||||||
Dec. 02, 2019 | Oct. 29, 2019 | Sep. 05, 2019 | Jun. 12, 2019 | Nov. 09, 2016 | Nov. 08, 2016 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | Nov. 15, 2017 | |
Related Party Transaction [Line Items] | ||||||||||||
Proceeds from related party debt | $ 5,000 | |||||||||||
Average sale price percentage | 120% | |||||||||||
Warrant [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Issuance of warrants to purchase, shares | 163,232 | |||||||||||
Convertible Note Warrants [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Convertible note warrants trigger value | $ 5,000 | $ 5,000 | ||||||||||
Secured Promissory Note Agreement [Member] | Vivos [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Equity method ownership percentage | 5% | |||||||||||
Secured Promissory Note Agreement [Member] | Maslow Media Group, Inc. [Member] | Vivos [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest receivable | 5 | 5 | ||||||||||
Outstanding balance | 825 | 825 | ||||||||||
Merger Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Loss contingency value in common stock | $ 1,000 | |||||||||||
Vivos Holdings, LLC. [Member] | Maslow Media Group, Inc. [Member] | Notes One [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate | 4.50% | |||||||||||
Vivos Holdings, LLC. [Member] | Maslow Media Group, Inc. [Member] | Notes Two [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate | 5.50% | |||||||||||
Vivos Holdings, LLC. [Member] | Stock Purchase Agreement [Member] | Maslow Media Group, Inc. [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Proceeds from previous acquisition | $ 1,400 | |||||||||||
Notes payable | $ 3,418 | |||||||||||
Vivos Holdings, LLC. [Member] | Vivos/MMG Purchase Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes payable | 3,698 | 3,698 | ||||||||||
Notes receivable from related parties | 3,647 | 3,647 | ||||||||||
Notes receivable, related parties | 1,400 | 1,400 | ||||||||||
Interest receivable | 51 | 51 | ||||||||||
Outstanding balance | 2,547 | 2,547 | ||||||||||
Vivos Holdings, LLC. [Member] | Maslow Media Group, Inc. [Member] | Stock Purchase Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Business combination, equity interest percentage | 100% | |||||||||||
Business combination, equity interest percentage | $ 1,750 | |||||||||||
Proceeds from previous acquisition | 1,400 | |||||||||||
Notes payable | $ 350 | |||||||||||
Debt instrument, description | The promissory note was to be paid in 24 equal installments, including interest at 4.5%, in the amount of approximately $15, commencing nine months after closing, with the last payment on March 1, 2019. | |||||||||||
Additional borrowing | 2,503 | |||||||||||
Related Party [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable from related parties | 5,417 | 5,417 | $ 5,251 | |||||||||
Vivos Real Estate [Member] | Vivos RE Promissory Note [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes payable | 893 | 893 | $ 772 | |||||||||
Interest receivable | $ 12 | $ 12 | ||||||||||
Mr. Naveen Doki [Member] | Personal Guaranty Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Repayments of debt | $ 3,000 | |||||||||||
Mr. Naveen Doki [Member] | Maslow Media Group, Inc. [Member] | Personal Guaranty Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Business combination, equity interest percentage | 5% | |||||||||||
Vivos [Member] | Secured Promissory Note Agreement [Member] | Maslow Media Group, Inc. [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate | 2.50% | |||||||||||
Outstanding balance | $ 750 | |||||||||||
Debt instrument, periodic payment | $ 10 | |||||||||||
Debt instrument, maturity date | Nov. 01, 2026 | |||||||||||
Conversion of shares issued | 30,000,000 | |||||||||||
Naveen Doki [Member] | Merger Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Conversion of shares issued | 206,606,528 | |||||||||||
Debt conversion converted instrument rate | 68.90% | |||||||||||
Silvija Valleru [Member] | Merger Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Conversion of shares issued | 51,652,908 | |||||||||||
Debt conversion converted instrument rate | 17.20% |
SCHEDULE OF RECONCILIATION OF R
SCHEDULE OF RECONCILIATION OF REVENUE AND OPERATING INCOME BY REPORTABLE SEGMENT TO CONSOLIDATED RESULTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from External Customer [Line Items] | ||||
Total | $ 5,341 | $ 6,464 | $ 15,992 | $ 18,729 |
EOR [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | 4,467 | 5,494 | 13,240 | 15,783 |
Recruiting and Staffing [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | 710 | 848 | 2,338 | 2,671 |
Direct Hire [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | 64 | 60 | 115 | 99 |
Video and Multimedia Production [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total | $ 100 | $ 62 | $ 299 | $ 176 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) $ in Thousands | Oct. 27, 2023 USD ($) |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Fees and expenses | $ 1,209 |