MANAGEMENT’S PLAN

9 Months Ended

Sep. 30, 2024

Managements Plan

MANAGEMENT’S PLAN

NOTE 2. MANAGEMENT’S PLAN

Although the Company experienced net losses after taxes for the nine months ended September 30, 2024, and, in the years, ended December 31, 2023 and 2022 of $334, $740, and $739, respectively, management believes it has the ability to continue as a going concern and meet its financial obligation as they become due in 2024 and beyond. The factors impacting this view include, but are not limited to, the following:

● Cash flow forecast showing sufficient cash and working capital 52 weeks from November 6, 2024;

● The expected reductions in continuing legal fees in 2024 given the Company has collectible judgments that the Receiver is now pursuing;

● An expectation that the notes receivable from related parties will be remunerated in cash and/or stock, and that stock will provide capital market access over the long term;

● Expected progress in sales, new agreements that will begin fulfillment in early 2025, our current pipeline, and current larger clients who indicated increases in media activity for 2024, which in the first nine months of 2024, were realized; and

● The Company has additional availability to use its factoring line to extend borrowing of up to 93% of unfactored invoices which, as of November 14, 2024, was $2,617.

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.

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

(amounts in thousands, except per share data)