UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.  20549








FORM 10-Q





(Mark One)





x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011





OR





o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





FOR THE TRANSITION FROM _______ TO ________.





COMMISSION FILE NUMBER: 333-146441





RELIABRAND INC.





(Exact Name of Small Business Issuer as Specified in its Charter)





Nevada

75-3260541(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer ID No.)





23890 Copper Hill Drive, #206, Valencia CA

91354(Address of principal executive offices)

(Zip code)







Issuer's telephone number: (661) 414-7125





A & J VENTURE CAPITAL GROUP, INC.


444 Seabreeze Blvd., Suite 660, Daytona Beach, FL 32118





(Former name, former address and former fiscal year, if changed since last report.)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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. Yes x No o





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x





At May 4, 2011, 68,122,500shares of the Registrant's Common Stock were issued and outstanding.





Transitional Small Business Disclosure Format: Yes o No x


1


RELIABRAND INC.





TABLE OF CONTENTS





Page No.PART I
FINANCIAL INFORMATION
3ITEM 1
Condensed Financial Statements
3Condensed Balance Sheets as of March 31, 2011 (unaudited) and June 30, 2010
3Unaudited Condensed Statements of Operations for the three and nine months ended March 31, 2011 and 2010, cumulative during development stage from February 22, 2007 (inception) through March 31, 2011
4Unaudited Condensed Statements of Cash Flows for the nine months ended March 31, 2011 and 2010, and cumulative during development stage from February 22, 2007 (inception) through March 31, 2011
5Notes to Condensed Financial Statements (unaudited)
6ITEM 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10ITEM 3
Quantitative and Qualitative Disclosures about Market Risk
15ITEM 4T
Controls and Procedures
15PART II
OTHER INFORMATION
15ITEM 6
Exhibits
15SIGNATURE

16





























2





RELIABRAND, INC.(Formerly known as A&J Venture Capital Group, Inc.)(A DEVELOPMENT STAGE ENTERPRISE)CONDENSED BALANCE SHEETSMarch 31,


June 30,2011


2010(unaudited)ASSETSCURRENT ASSETSCash


$
-


$
19,602Prepaid expenses



-



7,500Deferred Expenses



5,215



20,215TOTAL CURRENT ASSETS


5,215



47,317Total Assets


$
5,215


$
47,317LIABILITIES AND STOCKHOLDERS' (DEFICIT)CURRENT LIABILITIESAccounts payable


$
1,023


$
4,214Accounts payable - related party


30,000



3,000Shareholder advances


67,631



94,775TOTAL CURRENT LIABILITIES


98,654



101,989COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' (DEFICIT)Preferred stock, par value $.0001, 10,000,000shares authorized, 10,000 issued and outstanding - 2010,none issued and outstanding - 2011


-



1Common stock, par value $.0001, 100,000,000shares authorized, 18,077,500 issued and outstanding - 201033,122,500 issued and outstanding - 2011


3,312



1,808Paid in Capital



347,711



201,402(Deficit) accumulated during the development stage


(444,462
)


(257,883
)Total Stockholders' (Deficit)


(93,439
)


(54,672
)Total Liabilities and Stockholders' Equity (Deficit)

$
5,215


$
47,317SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS





3







RELIABRAND, INC.(Formerly known as A&J Venture Capital Group, Inc.)(A DEVELOPMENT STAGE ENTERPRISE)CONDENSED STATEMENTS OF OPERATIONS(unaudited)CumulativefromFebruary 22, 2007For the three months ended


For the nine months ended


(Inception)March 31,


March 31,


to2011


2010


2011


2010


March 31, 2011REVENUES

$
-


$
-


$
-


$
-


$
-EXPENSESAmortization


5,000



5,000



15,000



14,785



34,785Accounting, Audit, and Legal fees


45,219



3,851



87,502



23,016



142,733Consulting Fees


19,925



102,000



64,925



111,000



185,425Rent expense


4,200



2,808



5,923



8,635



25,267General and administrative


6,107



1,703



13,229



713



55,748Total expenses


80,451



115,363



186,579



158,150



443,958NET OPERATING (LOSS)


(80,451
)


(115,363
)


(186,579
)


(158,150
)


(443,958
)OTHER INCOME (EXPENSE)Interest Expense


-



-



-



-



(504
)NET (LOSS)

$
(80,451
)

$
(115,363
)

$
(186,579
)

$
(158,150
)

$
(444,462
)NET (LOSS) PER SHARE - BASIC


*


$
(0.35
)


*


$
(0.50
)WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING


32,972,500



327,500



29,629,167



319,167*  less than $(.01) per shareSEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS








4








RELIABRAND, INC.(Formerly known as A&J Venture Capital Group, Inc.)(A DEVELOPMENT STAGE ENTERPRISE)CONDENSED STATEMENTS OF CASH FLOWS(unaudited)CumulativefromFebruary 22, 2007For the nine months ended

(Inception)March 31,


to2011


2010


March 31, 2011OPERATING ACTIVITIESNet (loss)

$
(186,579
)

$
(158,150
)

$
(444,462
)Adjustments to reconcile net income (loss) to net cash used byoperating activitiesStock issued for services


52,500



97,500



150,000Depreciation and amortization


15,000



14,785



34,834Changes in operating assets and liabilitiesAccounts payable


(3,191
)


4,529



(780
)Accounts payable - Related party


27,537



(2,450
)


33,244Prepaid expenses


7,500



(502
)


-Deferred Charges


-



(40,000
)


(40,000
)NET CASH (USED BY) OPERATING ACTIVITIES


(87,233
)


(84,288
)


(267,164
)INVESTING ACTIVITIESPurchase of property and equipment


-



-



(1,622
)NET CASH (USED BY) INVESTING ACTIVITIES


-



-



(1,622
)FINANCING ACTIVITIESProceeds from sale of common stock


-



-



70,693Proceeds from shareholder advances


67,631



92,126



198,092NET CASH PROVIDED BY FINANCING ACTIVITIES


67,631



92,126



268,785NET INCREASE (DECREASE) IN CASH


(19,602
)


7,838



-CASH, BEGINNING OF PERIOD


19,602



-



-CASH, END OF PERIOD

$
-


$
7,838


$
-SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIESShareholder advances on behalf of company

$
95,312






$
131,903Property and equipment net of depreciation exchanged for debt


-







(1,573
)Account payable - related party contributed to capital


(537
)






(537
)Shareholder's debt contributed to capital


(94,775
)






(129,793
)$
-






$
-SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS





5
 
 RELIABRAND, INC.
 (FORMERLY A & J VENTURE CAPITAL GROUP, INC.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the nine months ended March 31, 2011 and 2010
 (Unaudited)





NOTE 1 - BASIS OF PRESENTATION


In the opinion of management, the accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of March 31, 2011 and the results of its operations and cash flows for the three and nine months ended March 31, 2011 and 2010 have been made.  Operating results for the nine months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ended June 30, 2011.
 
 These condensed financial statements should be read in conjunction with the financial statements and notes for the years ended June 30, 2010, thereto contained in the Company’s Form 10-K.
 
 Change of Auditors
 
 On January 4, 2011, we terminated the engagement of R.R. Hawkins and Associates, an independent registered public accounting firm, as our auditors, and on January 5, 2011, we engaged the services of Farber Hass Hurley LLP, an independent registered public accounting firm, as our new auditors
 
 Change of Name
 
 On February 3, 2011, we changed our name from “A&J Venture Capital Group, Inc.” to “Reliabrand, Inc.” in order to better reflect our current business plan, and to comply with the requirements of closing the asset purchase agreement discussed in Note 6.
 
 
 NOTE 2 – GOING CONCERN
 
 Our financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  We have sustained operating losses since inception.
 
 As of March 31, 2011 we have a working capital deficit of $93,439, and accumulated deficit of $444,462. During the period ending March 31, 2011 we had a net loss of $186,579 and cash used in operating activities of $87,233. The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plan is to aggressively pursue its present business plan. Since inception we have funded our operations through the issuance of common stock and related party loans and advances, and will seek additional debt or equity financing as required. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS
 
 We have examined all recent accounting pronouncements and believe that none of them will have a material impact on the financial statements of our company.
 
  6
 RELIABRAND, INC.
 (FORMERLY A & J VENTURE CAPITAL GROUP, INC.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the nine months ended March 31, 2011 and 2010
 (Unaudited)
  
 NOTE 4 – RELATED PARTY TRANSACTIONS AND BALANCES
 
 Resignation and appointment of officers and directors
 
 On August 18, 2010, our President, Chief Financial Officer, and Director resigned. Prior to his resignation, he appointed a replacement Director to serve as our Board of directors, and our sole officer until further members and officers are elected. On September 30, 2010, we issued 7,500,000 shares of our restricted common stock to our new sole officer and sole director for agreeing to serve our Company in that capacity, valued at $.002 per share for a total expense of $15,000 which is reflected in consulting fees.
 
 Related party transactions
 
 For the nine month period ended March 31, 2011 and 2010, we accrued $-0- and $13,500, respectively, for consulting fees for our previous President. For the nine month period ended March 31, 2011 and 2010, we also paid $1,723 and $8,635, respectively, rent for our office space in Heidelberg, Germany, to the same officer. As of March 31, 2011 and 2010, we owed our previous President $-0- and $92,815 in shareholder advances. As a result of the below binding letter of intent our former President closed our bank account in Germany, and retained the balance as payment towards his consulting fees balance owed of $3,000, the payment made to him against this balance was $2,463, leaving a balance of $537 which was contributed to capital.
 
 For the period ended March 31, 2011, we incurred consulting fees to our current President in the amount of $5,000 per month for a total of $45,000 in consulting expense.  Of the total amount of consulting expense recorded, $15,000 was paid through the issuance of 7,500,000 shares of restricted common stock to our current President on September 30, 2010, valued at a share price of $.002.  As of March 31, 2011, we owe our current President $30,000, which is reflected in accounts payable – related party.
 
 Binding letter of intent
 
 On September 18, 2010 we entered in a binding letter of agreement with our former President to let him retain the active business contacts, contracts and assets of the Company’s business plan at that time in exchange for his returning 10,000 shares of series “A” preferred stock that he was issued in January 2010 for cancellation and 180,000 shares of common stock for cancellation. As part of this agreement, our previous President contributed outstanding debt owed to him of $95,312 including advances of $94,775 and $537 in accounts payable – related party.
 
 Shareholder advances
 
 In the nine month period ended March 31, 2011, our current President paid operating bills totaling $67,631, including $4,201 paid for rent of an office in Canada on a month to month basis. These payments are recorded as a shareholder’s advances and are on a non-collateralized, non-interest bearing due on demand basis.
 
 
 
 
  7
 RELIABRAND, INC.
 (FORMERLY A & J VENTURE CAPITAL GROUP, INC.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the nine months ended March 31, 2011 and 2010
 (Unaudited)
  NOTE 5 – STOCKHOLDER’S EQUITY
 
 Stock Shares – Authorized
 
 The Company has 100,000,000 common shares authorized at a par value of $0.0001 per share and 10,000,000 shares of preferred stock, par value $0.0001 per share.  All common stock shares have equal voting rights, are non-assessable and have one vote per share.  Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all the directors of the Company. There is currently only one designated class of preferred shares, “A,” see below. The holders of the preferred stock shall have such rights, preferences and privileges as may be determined by the Board of Director’s prior to the issuance of such shares. The preferred stock may be issued in such series as are designated by the Board of Director’s and the Board of Director’s may fix the number of authorized shares of preferred stock for each series and the rights, preferences, and privileges of each series of preferred stock. As of the period ended March 31, 2011 and June 30, 2010, there were 33,122,500 and 18,077,500 shares of our common stock issued and outstanding, respectively. As of the period ended March 31, 2011 and June 30, 2010, there were -0- and 10,000 shares of our preferred stock issued and outstanding, respectively.
 
 Preferred Stock – Series A
 
 On February 26, 2010, we filed with the Secretary of State of the State of Nevada a Certificate of Designation of Series A Preferred Stock (the "Certificate of Designations") designating ten thousand (10,000) of the Company's previously authorized preferred stock.
 
 The 10,000 Series A Preferred Stock shall have an aggregate voting power of 45% of the combined voting power of the entire Company’s shares, Common Stock and Preferred Stock as long as the Company is in existence. Each holder of the Series A Preferred Stock shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the by-laws of the Company, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote.
 
 Without the vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, the Company may not (i) authorize, create or issue, or increase the authorized number of shares of, any class or series of capital stock ranking prior to or on a parity with the Series A Preferred Stock, (ii) authorize, create or issue any class or series of common stock of the Company other than the Common Stock, (iii) authorize any reclassification of the Series A Preferred Stock, (iv) authorize, create or issue any securities convertible into or exercisable for capital stock prohibited by (i) or (ii), (v) amend this Certificate of Designations or (vi) enter into any merger or reorganization, or disposal of assets involving 20% of the total capitalization of the Company.
 
 Subject to the rights of the holders of any other series of Preferred Stock ranking senior to or on a parity with the Series A Preferred Stock with respect to liquidation and any other class or series of capital stock of the Company ranking senior to or on a parity with the Series A Preferred Stock with respect to liquidation, in the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of record of the issued and outstanding shares of Series A Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to the holders of shares of Series A Preferred Stock, prior and in preference to any distribution of any of the assets of the Company to the holders of Common Stock and any other series of Preferred Stock ranking junior to the Series A Preferred Stock with respect to liquidation.
  8
 
 RELIABRAND, INC.
 (FORMERLY A & J VENTURE CAPITAL GROUP, INC.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the nine months ended March 31, 2011 and 2010
 (Unaudited)
  NOTE 5 – STOCKHOLDER’S EQUITY - continued
 
 The holders of the Series A Preferred Stock shall not be entitled to receive dividends per share of Series A Preferred Stock.  The Company shall have no rights to redeem Series A Preferred Stock.
 
 On March 1, 2010, we granted and issued our former President 10,000 series A preferred stock shares with a value of $10,000 for consulting services rendered, and the expense was included in consulting fees in the statements of operations. On September 18, 2010, these shares were returned and cancelled as per the term of the Binding Letter of Intent discussed in Note 4.
 
 Reverse stock split
 
 In May 2010, a 1 for 100 reverse stock split was approved by the Board of Directors and a majority of shareholders.  This was completed by the transfer agent in February  2011, and included a stock trading symbol change, to reflect our name change, from “AJVE” to “RLIA.”  The effect of this transaction has been retroactively reflected in the accompanying financial statement.
 
 Stock Based Compensation
 
 On January 3, 2011, we issued 150,000 restricted shares of our common stock for payment of debt owed to our corporate counsel for services performed between October and December 2010, in the amount of $15,000. On March 3, 2011, we resolved to cancel the above issuance and replace it by issuing 200,000 restricted shares of our common stock for payment of debt owed to our corporate counsel for services performed between October 2010 and March 2011, in the amount of $20,000.
 
 On March 22, 2011, we issued 25,000 restricted shares of our common stock for payment of debt owed to our outside accountant for services performed between January and March 2011, in the amount of $2,500.
 
 
 NOTE 6 – SUBSEQUENT EVENTS
 
 Asset Purchase Agreement
 
 On January 20, 2011, we entered into an Asset Purchase Agreement (the “Agreement”) with 0875505 B.C. Ltd. (“0875505 BC”), a British Columbia, Canada company.  The Agreement provides for us to acquire multiple patents and trademarks acquired by 0875505 BC through a receivership proceeding of Adiri, Inc. (Adiri”). Adiri was granted the initial patents and trademarks.  These patents and trademarks relate to a baby bottle and related components that 0875505 BC has expended approximately $1,500,000 in cash in acquiring and further development.  As part of the Agreement, the Company also acquired $100,000 in cash, total note receivables and accrued interest in the amount of $63,296,   resin inventory of $8,160, pacifier inventory of $6,000 and assumed an executory contract with a plastics manufacturer and will assume accounts payable of approximately $45,176.  In exchange, at the closing on April 6, 2011 we issued 35,000,000 shares of our common stock, par value $.001, post-split.  We closed this transaction on April 6, 2011.  As a condition to closing the transaction, we had to implement our previously authorized 100-to-1 reverse stock split (Note 5) and change the Company’s name to “Reliabrand, Inc.” (Note 1).
 
 Preferred Stock Issuance
 
 On May 2, 2011, we  issued to our President 10,000 shares of Class A Preferred Stock in exchange for him returning and cancelling nine million (9,000,000) shares of our common stock. These Class A preferred stock have the same terms and conditions as discussed in Note 5.


9





ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations





You should read this section in conjunction with our financial statements and the related notes included in this Form 10-Q.  Some of the information contained in this section or set forth


elsewhere in this Form 10-Q, including information with respect to our plans and strategies for our business, statements regarding the industry outlook, our expectations regarding the future performance of our business, and the other non-historical statements contained herein are forward-looking statements.





The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.





The following discussion and analysis of the Company’s financial condition and results of operations are based on the Company’s financial statements, which the Company has prepared in accordance with U.S. generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.





Plan of Operations





On January 20, 2011, Reliabrand Inc. fka A & J Venture Capital Group, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Agreement”) with 0875505 B.C. Ltd. (“0875505 BC”), a British Columbia, Canada company.  This transaction closed on April 6, 2011.





The Company has acquired multiple patents and trademarks previously owned by Adiri, Inc. (“Adiri”) and ultimately acquired by 0875505 BC.  These patents and trademarks relate to a baby bottle and related components that 0875505 BC expended approximately $1,500,000 in acquiring and further development.  The Company issued 35,000,000 shares of its common stock, par value $.001, to 0875505 BC for these assets.





The Company acquired from 0875505 BC  all right, title, interest, applications and registrations of all the trademarks and patents of Adiri acquired by 0875505 BC in the following jurisdictions:  Australia, Brazil, Canada, Chile, China, Columbia, the European Union, Hong Kong, Israel, Japan, Mexico, New Zealand, Russia, South Africa, South Korea, Switzerland, Taiwan, and the United States.  There are four U.S. patents, one European Patent (EP) patent application (valid until 2019), and one Canadian patent covering Adiri’s unique breast shaped nipple (5,690,679, 5,993,479).  There are additional U.S. utility & design patent applications pending as well as a Patent Cooperation Treaty (PCT) application filed along with numerous International Registered Trademarks.





With the acquisition of these assets including the patents and trademarks, the Company will soon commence operations in the baby bottle industry.  It is currently developing a newer version of the baby bottle that Adiri was previously producing that it hopes will be one of the first baby bottles that will be free of Estrogenic Activity (EA) as well as being Bisphenol A (BPA)-free.  The Company intends to aggressively promote and market the bottles and hopes to secure retail distribution outlets for the bottles.  To achieve that goal, the Company has begun negotiation with large retail chains to supply the Adiri bottles for sale to retail customers.  The Company is also seeking production agreements with manufacturers to produce the baby bottles.





10


ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued
 
 Overall, during the next 12 months, we cannot predict accurately the amount of capital that we will need to accomplish our plan of operations. The capital needed will vary depending on the projects that we seek.  If during the next 12 months, we are unsuccessful in effectuating our plan of operations as described above, we expect to incur total expenditures of at least $500,000. In this regard and during such period; we anticipate spending $50,000 on professional fees attributable to fulfilling our reporting obligations under the federal securities laws and $50,000 on general administrative costs and expenditures associated with complying with reporting obligations.  We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our marketing plan and operations. We believe that debt financing will not be an alternative for funding the marketing plan. We do not have any agreements or arrangements in place for any future equity financing event. If we are required to raise additional funds, substantial dilution may result to existing shareholders. Our auditors have raised substantial doubt concerning our ability to continue as a going concern. Please see our audited financial statements contained in our Form 10-K for the period ended June 30, 2010.





In May 2010, a 1 for 100 reverse stock split was approved by the Board of Directors and a majority of shareholders. This was completed by the transfer agent in February 2011, and included a stock trading symbol change, to reflect our name change, from “AJVE” to “RLIA.”  The effect of this transaction has been retroactively reflected in the accompanying financial statements.





Results of Operations for the Three Months Ended March 31, 2011 and the Three Months Ended March 31, 2010





We did not earn any revenues for the period ended March 31, 2011 and 2010.





As of March 31, 2011, we had total assets of $5,215 and total liabilities of $98,654 compared to total assets of $47,317 and total liabilities of $101,989 as of June 30, 2010.





During the three months ended March 31, 2011, we incurred operating expenses in the amount of $80,451. These operating expenses were comprised of accounting and audit fees, general and management expenses, and transfer agent fees, compared to operating expenses of $115,363 for the three months ended March 31, 2010.





For the three month period ending March 31, 2011, we accrued $15,000 for consulting fees owed to our President.  For the three month period ending March 31, 2010, we paid $4,500 for consulting fees to our former President.





Beginning June 1, 2009, we leased office space in Heidelberg, Germany from our former President under a non-cancelable operating lease. Rent expense under this lease was $2,808 for the three months ended March 31, 2010. The lease expired on May 31, 2010, and converted to a month to month basis, and we kept the office open through August 31, 2010, and closed it when our former President resigned.





In January 2011, we rented office space in Canada on a month to month basis for approximately $1,600 USD. For the three months ended March 31, 2011, our current President advanced funds for rent totaling $4,201; this amount is included in the balance owed to him classified under shareholder advances.


We have not generated any revenue since inception and are dependent upon obtaining financing to pursue marketing and distribution activities. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.


11


ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued


Results of Operations for the Nine months Ended March 31, 2011 and the Nine months Ended March 31, 2010





During the nine months ended March 31, 2011, we incurred operating expenses in the amount of $186,579. These operating expenses were comprised of accounting and audit fees, general and management expenses, and transfer agent fees.  This compared to operating expenses of $158,150 for the nine months ended March 31, 2010.





For the nine month period ending March 31, 2011, we expensed $45,000 for consulting fees to our current President, and expensed an additional $15,000 for agreeing to serve as our President and as a Director on our Corporate Board. On May 2, 2011, we issued 10,000 shares of series “A” preferred stock to our current President in exchange for his returning 9,000,000 shares of the Company’s common stock to the Company for cancelation.





Before the issuance of the shares to 0875505 BC, Mr. Markus was the majority shareholder of the Company owning approximately 58% of the Company’s common stock.  Since the issuance of the 0875505 BC shares, Mr. Markus’ share holdings were reduced to approximately 25%.  By issuing Mr. Markus the Series A Preferred Shares, his common share holdings were reduced to approximately 12% of the issued and outstanding shares of common stock.  However, the Series A Preferred Shares which he owns will maintain his status as the majority shareholder of the Company in voting on matters on which shareholders may vote, thus ensuring continuity of the Company’s operations and with the ultimate result that the issuance of the 0875505 BC shares did not result in a change of control in the Company and ensuring that Mr. Markus’ services will be retained by the Company.





In addition to other terms and conditions, the 10,000 Series A Preferred Stock have an aggregate voting power of 45% of the combined voting power of the entire Company’s shares, Common Stock and Preferred Stock, for so long as the Company is in existence.  Without the vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, the Company may not (i) authorize, create or issue, or increase the authorized number of shares of, any class or series of capital stock ranking prior to or on a parity with the Series A Preferred Stock, (ii) authorize, create or issue any class or series of common stock of the Company other than the Common Stock, (iii) authorize any reclassification of the Series A Preferred Stock, (iv) authorize, create or issue any securities convertible into or exercisable for capital stock prohibited by (i) or (ii), (v) amend the Certificate of Designations or (vi) enter into any merger or reorganization, or disposal of assets involving 20% of the total capitalization of the Company.  The holders of the Series A Preferred Stock are not entitled to receive dividends for the shares of Series A Preferred Stock.  The Company has no rights to redeem the Series A Preferred Stock.


As of March 31, 2011, we owed our President $67,631 which amount is classified as a shareholder’s advance, is non-interest bearing and payable on demand.





As of March 31, 2010, we owed our former President $92,815, consisting of $8,689 in shareholder advances, and on July 2, 2009, we received an advance of $84,126 from our former President in connection with a non-collateralized note payable.  This debt was canceled in August 2010 when our former President and the Company entered into a binding letter of intent disposing of the Company’s assets and interest in its German operations.





Beginning June 1, 2009, we leased office space from our former President under a 12 month non-cancelable operating lease; rent expense under this lease was $1,723 and $8,635 for the nine months ended March 31, 2011 and 2010, respectively. We let the lease expire on May 31, 2010, and converted it to a month to month basis on June 1, 2010; we continued the month to month rental from June 2010 through August 2010, when our former President resigned and we closed this office.


12


ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued





Liquidity and Capital Resources


As of March 31, 2011, the Company had no cash and as of June 30, 2010, the Company had a cash balance of $19,602.





Through December 31, 2009, we had sold $42,000 in equity securities to pay for our business operations. We sold 135,000 post-split (13,500,000 pre-split) shares of common stock to 30 unaffiliated shareholders on August 23, 2007 for total proceeds of $36,000 pursuant to Regulation S of the Securities Act.  We subsequently filed a Registration Statement on the Form SB-2 for this offering on October 2, 2007 and became effective on October 12, 2007. We have used these funds as working capital for administrative expenses and professional fee payments to third parties.  Also, we sold a total of 180,000 post-split (18,000,000 pre-split) shares of common stock to a former officer and directors on June 29, 2007 and August 6, 2007 for total proceeds of $36,000, which shares were returned to treasury and canceled in September 2010.





On May 25, 2010, we sold $35,500 in equity securities to pay for our business operations.  We issued a total of 17,750,000 shares of our common stock in this private placement pursuant to Regulation S of the Securities Act.  Additionally, we issued 15,000,000 shares of our common stock to our President and Director for his services through September 30, 2010.  We also issued 225,000 shares as payment to two different vendors for services during the quarter ended March 31, 2011.


If the Company is not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to it, this could have a material adverse effect on its business, results of operations liquidity and financial condition.


The Company presently does not have any available credit, bank financing or other external sources of liquidity, other than the net proceeds from the August 2007 common stock offering. Due to its brief history and historical operating losses, the Company’s operations have not been a source of liquidity. The Company will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, the Company may need to sell additional shares of its common stock or borrow funds from private lenders. There can be no assurance that the Company will be successful in obtaining additional funding.


The Company will need additional investments in order to continue operations. Additional investments are being sought, but the Company cannot guarantee that it will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of the Company’s common stock and a downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if the Company is able to raise the funds required, it is possible that it could incur unexpected costs and expenses, fail to collect significant amounts owed to it, or experience unexpected cash requirements that would force it to seek alternative financing. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of the Company’s common stock. If additional financing is not available or is not available on acceptable terms, the Company will have to curtail its operations.


Critical Accounting Policies


Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management's application of accounting policies.


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ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued


Stock-based compensation





The Company adopted FASB ASC 718-10 and valued our employee stock based awards based on the grant-date fair value estimated in accordance with the provisions of FASB ASC 718-10.  The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached in FASB ASC 505-10.  Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable.  The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-10.


Contractual Obligations





Beginning June 1, 2009, we leased office space from our former President under a 12 month non-cancelable operating lease for 670 Euros per month (approximately $960 USD per month).  Rent expense was $2,808 and $8,635 for the three and nine months ended March 31, 2010, respectively.  Rent expense under this same lease was $0 and $1,723 for the three and nine months ended March 31, 2011, respectively. The lease expired on May 31, 2010, and converted to a month to month basis on June 1, 2010; we continued the month to month rental from June 2010 through August 2010, when our former President resigned and we closed this office.


We presently share office space with our attorney at no charge. In January 2011, we rented office space in Canada on a month to month basis for approximately $1,600 USD. For the nine months ended March 31, 2011, our current President advanced funds for rent totaling $4,201; this amount is included in the balance owed to him classified under shareholder advances.


Off-Balance Sheet Commitments and Arrangements


We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholder’s equity, or that are not reflected in our condensed financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.


Inflation





Inflation has not materially impacted our results of operations in recent years.








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ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk





As a “smaller reporting company” (as defined by Item 10 of Regulation S-K), the Company is not required to provide information required by this Item, as defined by Regulation S-K Item 305(e).





ITEM 4T - Controls and Procedures


Disclosure controls and procedures


As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report, being March 31, 2011, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision of our Chief Executive Officer. Based upon that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are effective at the end of the period covered by this report. There have been no significant changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.


Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to our Chief Executive Officer to allow timely decisions regarding required disclosure.


Our Chief Executive Officer and Chief Accounting Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.


Changes in Internal Control over Financial Reporting


There were no changes in our internal controls over financial reporting during the nine month period ended March 31, 2011 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.





PART II OTHER INFORMATION








ITEM 6 - Exhibits





ExhibitNumber

Description of Exhibit31.1


Section 302 Certification of Chief Executive Officer31.2


Section 302 Certification of Chief Financial Officer32.1


Section 906 Certification of Chief Executive Officer32.2


Section 906 Certification of Chief Financial Officer















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SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.








RELIABRAND INC.Date: May 12, 2011
By:
/s/ Antal MarkusName: Antal MarkusTitle: President, CEO















































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