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Reflect Scientific Inc – ‘10QSB’ for 9/30/04

On:  Friday, 11/12/04, at 9:58am ET   ·   For:  9/30/04   ·   Accession #:  1010412-4-407   ·   File #:  0-31377

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/12/04  Reflect Scientific Inc            10QSB       9/30/04    6:54K                                    Burningham Leonard W/FA

Quarterly Report — Small Business   —   Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report on Form 10QSB for the Quarter        10     44K 
                          Ended September 30, 2004                               
 3: EX-3        Amendment to the Bylaws                                1      6K 
 2: EX-3        Articles of Amendment to the Articles of              10±    34K 
                          Incorporation                                          
 4: EX-31       302 Certification of Kim Boyce                         2±     8K 
 5: EX-31       302 Certification of Pamela Boyce                      2±     8K 
 6: EX-32       906 Certification                                      1      7K 


10QSB   —   Quarterly Report on Form 10QSB for the Quarter Ended September 30, 2004
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
2Item 1. Financial Statements
10Item 2. Management's Discussion and Analysis or Plan of Operation
"Item 3. Controls and Procedures
"Item 1. Legal Proceedings
"Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
"Item 3. Defaults Upon Senior Securities
"Item 4. Submission of Matters to a Vote of Security Holders
"Item 5. Other Information
"Item 6. Exhibits and Reports on Form 8-K
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U. S. Securities and Exchange Commission Washington, D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------------- --------------- Commission File No. 000-31377 REFLECT SCIENTIFIC, INC. ------------------------ (Name of Small Business Issuer in its Charter) UTAH 87-0642556 ---- ---------- (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 970 Terra Bella Avenue Mountain View, California, 94043 -------------------------------- (Address of Principal Executive Offices) Issuer's Telephone Number: (650) 960-0300 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes X No (2) Yes X No --- --- --- ---
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Not applicable. APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: September 30, 2004 Common Stock - 24,000,000 ------------------------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements. ------------------------------- The Financial Statements of the Company required to be filed with this 10-QSB Quarterly Report were prepared by management, and commence on the following page, together with Related Notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Company.
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REFLECT SCIENTIFIC, INC. CONSOLIDATED FINANCIAL STATEMENTS September 30, 2004 and December 31, 2003
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[Download Table] REFLECT SCIENTIFIC, INC. Consolidated Balance Sheets ASSETS September 30, December 31, 2004 2003 (Unaudited) CURRENT ASSETS Cash $ 34,668 $ 99,924 Accounts receivable, net 319,129 232,464 Inventory, net 241,525 210,447 Prepaid expenses 800 800 ----------- ----------- Total Current Assets 596,122 543,635 ----------- ----------- FIXED ASSETS (NET) 20,247 21,923 ----------- ----------- OTHER ASSETS Deposits 5,350 5,350 Capitalized loan costs, net 5,775 6,125 ----------- ----------- Total Other Assets 11,125 11,475 ----------- ----------- TOTAL ASSETS $ 627,494 $ 577,033 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 2
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[Download Table] REFLECT SCIENTIFIC, INC. Consolidated Balance Sheets (Continued) LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 31, 2004 2003 (Unaudited) CURRENT LIABILITIES Accounts payable $ 161,228 $ 199,375 Accrued expenses 27,201 15,179 ------------ ------------ Total Current Liabilities 188,429 214,554 ------------ ------------ NON-CURRENT LIABILITIES Long term line of credit 268,985 269,011 ------------ ------------ Total Non-Current Liabilities 268,985 269,011 ------------ ------------ Total Liabilities 457,414 483,565 ------------ ------------ COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preferred stock, $0.01 par value, authorized 5,000,000 shares; no issued or outstanding shares - - Common stock, $0.01 par value, authorized 50,000,000 shares; 24,000,000 shares issued and outstanding 240,000 240,000 Additional paid-in capital (deficit) (188,319) (210,841) Retained earnings 118,399 64,309 ------------- ------------ Total Shareholders' Equity 170,080 93,468 ------------- ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 627,494 $ 577,033 ============= ============ The accompanying notes are an integral part of these consolidated financial statements. 3
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[Download Table] REFLECT SCIENTIFIC, INC. Consolidated Statements of Operations (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2004 2003 2004 2003 REVENUES $ 522,600 $ 457,067 $ 1,604,307 $ 1,425,762 COST OF GOODS SOLD 319,435 254,829 963,470 854,396 -------- --------- ----------- ----------- GROSS PROFIT 203,165 202,238 640,837 571,366 -------- --------- ----------- ----------- OPERATING EXPENSES Salaries and wages 87,091 70,137 263,273 230,007 Payroll taxes 7,127 5,920 22,558 19,644 Rent expense 19,306 18,870 57,364 56,596 General and administrative expense 88,124 35,374 226,292 93,526 -------- --------- ----------- ----------- Total Operating Expenses 201,648 130,301 569,487 399,773 -------- --------- ----------- ----------- OPERATING INCOME 1,517 71,937 71,350 171,593 -------- --------- ----------- ----------- OTHER INCOME (EXPENSE) Sundry income - - 5,000 - Miscellaneous income (expense) - - (301) - Interest expense (3,051) (1,780) (8,759) (11,262) -------- --------- ----------- ----------- Total Other Income (Expense) (3,051) (1,780) (4,060) (11,262) -------- --------- ----------- ----------- NET INCOME BEFORE INCOME TAX (1,534) 70,157 67,290 160,331 -------- --------- ----------- ----------- INCOME TAX EXPENSE - - 13,200 - NET INCOME $ (1,534) $ 70,157 $ 54,090 $ 160,331 ======== ========= =========== =========== EARNINGS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.01 ======== ========= =========== =========== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 24,000,000 22,914,949 24,000,000 22,914,949 ========== ========== =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 4
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[Download Table] REFLECT SCIENTIFIC, INC. Consolidated Statements of Shareholders' Equity Additional Common Stock Preferred Stock Paid-in Retained Shares Amount Shares Amount Capital Earnings Balance, December 31, 2001 22,914,949 $ 10,000 - $ - $ - $ 83,619 Dividend - - - - - (63,000) Net income for the year ended December 31, 2002 - - - - - 141,018 ---------- -------- ---- ------ ------- ----------- Balance, December 31, 2002 22,914,949 10,000 - - - 161,637 Dividend - - - - - (156,000) Contributed Capital - - - - 26,950 - Recapitalization (Note 2) 1,085,051 230,000 - - (237,791) - Net income for the year ended December 31, 2003 - - - - - 58,672 ---------- -------- ---- ------ --------- ----------- Balance, December 31, 2003 24,000,000 240,000 - - (210,841) 64,309 Contributed capital (unaudited) - - - - 22,522 - Net income for the nine months ended September 30, 2004 (unaudited) - - - - - 54,090 ---------- -------- ---- ------ --------- ---------- Balances, September 30, 2004 (unaudited) 24,000,000 $240,000 - $ - $(188,319) $ 118,399 ========== ======== ==== ====== ========= ========== The accompanying notes are an integral part of these consolidated financial statements. 5
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[Download Table] REFLECT SCIENTIFIC, INC. Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 54,090 $ 160,331 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,676 1,776 Amortization of capitalized loan costs 350 630 Changes in operating assets and liabilities: (Increase) in accounts receivable (86,666) (93,967) Decrease in prepaid expenses - 6,124 (Increase) decrease in inventory (31,079) 5,988 Increase (decrease) in accounts payable and accrued expenses (26,124) 37,643 ---------- ----------- Net Cash Used by Operating Activities (87,753) 118,525 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of fixed assets - (450) ---------- ----------- Net Cash Used by Investing Activities - (450) CASH FLOWS FROM FINANCING ACTIVITIES Payments on short term lines of credit - (103,049) Change in long term line of credit (25) 101,470 Contributed capital 22,522 - Distributions to sole shareholder - (101,000) ---------- ----------- Net Cash Provided (Used) by Financing Activities 22,497 (102,579) ---------- ----------- NET INCREASE (DECREASE) IN CASH (65,256) 15,496 CASH AT BEGINNING OF PERIOD 99,924 115,644 ---------- ----------- CASH AT END OF PERIOD $ 34,668 $ 131,140 ========== =========== NON-CASH INVESTING AND FINANCING ACTIVITIES: Cash Paid For: Interest $ 3,051 $ 11,380 Income taxes $ - $ - The accompanying notes are an integral part of these consolidated financial statements. 6
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REFLECT SCIENTIFIC, INC. Notes to the Consolidated Financial Statements September 30, 2004 and December 31, 2003 NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company's most recent audited consolidated financial statements and notes thereto included in its December 31, 2003 financial statements. Operating results for the nine months ended September 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. NOTE 2 - ACQUISITION OF REFLECT SCIENTIFIC On December 30, 2003, pursuant to an agreement and plan of reorganization, the Company completed a reverse merger with the shareholder of Reflect Scientific, Inc. in which it acquired 100% of Reflect Scientific, Inc., a California Company in exchange for 22,914,949 common shares of the Company. The terms of the acquisition are detailed in an 8-K filing dated December 31, 2003. Under the terms of the agreement, the President of Reflect Scientific, Inc. became the President of the Company and was elected to the Board of Directors, the acquisition was accounted for as a recapitalization of Reflect Scientific, Inc. because the members of Reflect Scientific, Inc. controlled the Company after the acquisition. Reflect Scientific, Inc. was treated as the acquiring entity for accounting purposes and Cole, Inc. was the surviving entity for legal purposes. There was no adjustment to the carrying values of the assets or liabilities of Reflect Scientific, Inc. and no goodwill was recorded. 7
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Item 2. Management's Discussion and Analysis or Plan of Operation. -------------------------------------------------------------------- Results of Operations. ---------------------- Our revenues increased during the quarter ended September 30, 2004, to $522,600 from $457,067 for the quarter ended September 30, 2003, primarily as a result of a general improvement in sales across several new product lines and improving market conditions. Our cost of goods increased in the period ending September 30, 2004, as compared to September 30, 2003, to $319,435 from $254,829. The difference was partly as a result of an increase in sales, increased raw material costs and increased labor costs. General and administrative expenses increased to $88,124 during the quarter ended September 30, 2004, from $35,374 during the quarter ended September 30, 2003. This increase was due to the addition of one full-time employee, increased payroll and increased operational expenses, like legal and accounting fees. Liquidity and Capital Resources. -------------------------------- Our cash resources at September 30, 2004, were $34,668, with accounts receivable of $319,129. We have relied on revenues and lines of credit for our cash resources. At September 30, 2004, we had utilized $268,985 of our $400,000 line of credit. These funds should be adequate for the next 12 months for continuing operations; however, plans for expansion will require additional capital of between $500,000 and $750,000. Forward-Looking Statements. --------------------------- The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe harbor for forward-looking statements made by or on behalf of our Company. Our Company and its representatives may from time to time make written or oral statements that are "forward- looking," including statements contained in this Quarterly Report and other filings with the Securities and Exchange Commission and in reports to our Company's stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company's control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management's views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management's expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following: Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company's access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations. This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Item 3. Controls and Procedures. ---------------------------------- As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President and Treasurer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our President and Treasurer concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic Securities and Exchange Commission reports. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our internal controls or in other factors in the last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting. PART II - OTHER INFORMATION Item 1. Legal Proceedings. ---------------------------- None; not applicable. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. ---------------------------------------------------------------------- None; not applicable. Item 3. Defaults Upon Senior Securities. ------------------------------------------ None; not applicable. Item 4. Submission of Matters to a Vote of Security Holders. -------------------------------------------------------------- None; not applicable. Item 5. Other Information. ---------------------------- November 9, 2004, we filed Articles of Amendment to our Articles of Incorporation that designated 750,000 shares of our preferred stock as "2004 Series A Convertible Preferred Stock". For a detailed description of the rights, privileges and preferences of the 2004 Series A Convertible Preferred Stock, see a copy of the Articles of Amendment that is attached hereto and incorporated herein by reference as Exhibit 3.1. See Item 6. We also have attached hereto and incorporated herein as Exhibit 3.2 an Amendment to our Bylaws that was adopted July 28, 2003. See Item 6. Item 6. Exhibits and Reports on Form 8-K. ------------------------------------------- (a) Exhibits. 3.1 Articles of Amendment 3.2 Amendment to Bylaws 31.1 302 Certification of Kim Boyce 31.2 302 Certification of Pamela Boyce 32 906 Certification. (b) Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. REFLECT SCIENTIFIC, INC. Date: 11/11/2004 /s/Kim Boyce ------------------------------------ Kim Boyce, President Date: 11/11/2004 /s/Pamela Boyce ------------------------------------ Pamela Boyce, Secretary

Dates Referenced Herein   and   Documents Incorporated by Reference

Referenced-On Page
This ‘10QSB’ Filing    Date First  Last      Other Filings
12/31/04910KSB
Filed on:11/12/04
11/9/0410
For Period End:9/30/04110
12/31/033910KSB,  3,  8-K,  8-K/A,  NT 10-K
12/30/039
9/30/031010QSB
7/28/0310
12/31/02710KSB
 List all Filings 


14 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/13/24  Reflect Scientific, Inc.          10-Q        3/31/24   39:1.8M                                   Goff Shelley/FA
11/09/23  Reflect Scientific, Inc.          10-Q        9/30/23   41:2.2M                                   Goff Shelley/FA
 8/08/23  Reflect Scientific, Inc.          10-Q        6/30/23   41:2.1M                                   Goff Shelley/FA
 5/11/23  Reflect Scientific, Inc.          10-Q        3/31/23   41:1.8M                                   Goff Shelley/FA
 3/31/23  Reflect Scientific, Inc.          10-K       12/31/22   54:3.1M                                   Goff Shelley/FA
11/09/22  Reflect Scientific, Inc.          10-Q        9/30/22   41:2.1M                                   Goff Shelley/FA
 8/10/22  Reflect Scientific, Inc.          10-Q        6/30/22   41:2M                                     Goff Shelley/FA
 5/13/22  Reflect Scientific, Inc.          10-Q        3/31/22   37:1.9M                                   Goff Shelley/FA
 3/31/22  Reflect Scientific, Inc.          10-K       12/31/21   53:3.3M                                   Goff Shelley/FA
 6/01/21  Reflect Scientific, Inc.          10-12G/A               1:749K                                   Goff Shelley/FA
 5/21/21  Reflect Scientific, Inc.          10-12G/A               1:749K                                   Goff Shelley/FA
 5/13/21  Reflect Scientific, Inc.          10-12G/A5/13/21    2:507K                                   Goff Shelley/FA
 4/29/21  Reflect Scientific, Inc.          10-12G/A4/29/21    2:516K                                   Goff Shelley/FA
 3/30/21  Reflect Scientific, Inc.          10-12G                 4:8.3M                                   Goff Shelley/FA
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