SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2026

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The unaudited condensed consolidated interim financial statements include the accounts of the Company and all wholly owned divisions, including its 100% owned subsidiary, MMG. All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts presented in this Form 10-Q, unless otherwise specified, are expressed in thousands.

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. GAAP applicable to interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to Quarterly Reports on Form 10-Q. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations, changes in shareholders’ equity, and cash flows for the interim periods presented.

These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Interim operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2026.

Management Estimates

Management Estimates

The consolidated financial statements and related disclosures are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The Company must make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to revenue recognition, allowances for credit losses, and recoverability of notes receivable, useful lives for depreciation and amortization, loss contingencies, and the valuation allowances for deferred income taxes. Actual results may be materially different from those estimated. In making its estimates, the Company considers the current economic and legislative environment.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents.

RELIABILITY INCORPORATED AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2026

(amounts in thousands, except share data and per share data)

Recently Issued Accounting Pronouncements Adopted

Recently Issued Accounting Pronouncements Adopted

In 2025, the FASB issued ASU 2025-05, which provides updated guidance related to the accounting for credit losses on accounts receivable and contract assets under Topic 326. The Company adopted ASU 2025-05 effective January 1, 2026; however, based on its existing receivables portfolio, historical collection experience, and current credit monitoring practices, the adoption did not have a material impact on the Company’s consolidated financial statements, other than the required enhanced disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

In 2025, the FASB issued ASU 2025-06, Internal-Use Software, which provides updated guidance related to the accounting for internal-use software and cloud computing arrangements, including the capitalization and amortization of certain implementation costs. The standard is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods, with early adoption permitted. The Company primarily utilizes third-party hosted software solutions and does not expect adoption of the standard to have a material impact on its consolidated financial statements. However, the Company continues to evaluate the potential impact of the standard on future software implementation costs and system customizations associated with potential growth initiatives.

On November 4, 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), which requires enhanced disclosures regarding certain expense captions presented in the income statement. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard may have on its consolidated financial statement disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments clarify the entities and interim reporting methods subject to Topic 270, consolidate and clarify interim disclosure requirements, and provide a principles-based framework for determining when disclosures about significant events and changes since the most recent annual reporting period are required. The amendments are effective for public business entities for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect of adopting this guidance but does not expect adoption to have a material effect on its consolidated financial statements or related disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The amendments clarify, correct and improve various provisions of the Accounting Standards Codification across a broad range of topics, including earnings per share, credit losses, treasury stock, debt, leases and transfers of financial assets. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods. Early adoption is permitted, including adoption on an issue-by-issue basis. The Company is currently evaluating the effect of adopting the amendments, including those applicable to treasury-stock transactions, but does not expect adoption to have a material effect on its consolidated financial statements or related disclosures.

The Company evaluated ASU 2025-07 through ASU 2025-10 and ASU 2026-01 through ASU 2026-02 and determined that these pronouncements are not applicable to the Company’s current operations. Accordingly, adoption of these pronouncements is not expected to have a material effect on the Company’s consolidated financial statements or related disclosures.