LIQUIDITY AND GOING CONCERN

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

LIQUIDITY AND GOING CONCERN

NOTE 2. LIQUIDITY AND GOING CONCERN

Going Concern

Management considers on a regular basis, the Company’s ability to continue as a going concern. The factors which have impacted the business and our liquidity are:

● Uncertainty in outcome of the arbitration hearing with Vivos Group which will likely have decision rendered in the third quarter 2022;

● Operating losses in nine of the last ten quarters starting with the first quarter of 2020 through the second quarter of 2022 ending June 30, 2022, totaling in aggregate $2,081;

● The slow-moving rebound of client demand for our services to pre-pandemic levels;

● Difficulties in raising cash via public markets for organic and inorganic growth, due to lack of unissued authorized shares available for Company use;

● Inability to realize approximately $5,094 in notes receivables from Vivos Group;

● Commitments and Contingencies, described further in Note 6.

All these conditions noted and factored above with the primary risk being that the arbitration (see Item 1) outcome is not in the Company’s favor, and the $5,094 in notes receivable is not realized in full, part, or all, creates substantial doubt about the Company’s ability to continue as a going concern.

Additionally, from an operational view the underlying business has yet to fully recover from COVID-19 with current quarterly comparative revenue levels down 32% from 2019 standards.

Therefore, there can be no assurances that the Company will be successful in managing the impact of the foregoing or its ability to maintain sufficient liquidity over a period of time that will allow it to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome from these uncertainties.

The Company is quoted on the OTC Marketplace under the symbol “RLBY.”

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(amounts in thousands, except per share data)