Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 10, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | RELIABILITY INCORPORATED | ||
Entity Central Index Key | 34,285 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 16,914,693 | ||
Public Float | $ 470,872 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 30,479 | $ 11,924 |
Total current assets | 30,479 | 11,924 |
Total Assets | 30,479 | 11,924 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 24,479 | 15,898 |
Total current liabilities | 24,479 | 15,898 |
Long-term Liabilities: | ||
Loans from stockholder | 90,000 | 50,000 |
Total Liabilities | 114,479 | 65,898 |
Stockholders' equity (deficit): | ||
Preferred stock, without par value; 1,000,000 shares authorized, none issued and outstanding | ||
Common stock, without par value; 300,000,000 shares authorized; 17,268,993 shares issued | 9,912,150 | 9,912,150 |
Accumulated deficit | (8,901,633) | (8,871,607) |
Less treasury stock at cost, 354,300 shares | (1,094,517) | (1,094,517) |
Total stockholders' deficit | (84,000) | (53,974) |
Total Liabilities and Stockholders' Deficit | $ 30,479 | $ 11,924 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Stockholders' equity (deficit): | ||
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock shares, authorized | 1,000,000 | 1,000,000 |
Preferred stock shares, issued | 0 | 0 |
Preferred stock shares, outstanding | 0 | 0 |
Common stock, par value | $ 0 | $ 0.0147 |
Common stock shares, authorized | 300,000,000 | 300,000,000 |
Common stock shares, issued | 17,268,993 | 17,268,993 |
Treasury stock shares | 354,300 | 354,300 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses: | ||
General and administrative | $ 29,776 | $ 30,175 |
Total Operating Expenses | 29,776 | 30,175 |
Net Income (Loss) Before Income Taxes | (29,776) | (30,175) |
Income Taxes | 250 | |
Net Income (Loss) | $ (30,026) | $ (30,175) |
Basic and diluted loss per share: | ||
Weighted average shares outstanding: | ||
Basic | 16,914,693 | 16,914,693 |
Diluted | 16,914,693 | 16,914,693 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Treasury Stock | Accumulated Deficit | Total |
Beginning Balance, shares at Dec. 31, 2014 | 17,268 | (354) | ||
Beginning Balance, value at Dec. 31, 2014 | $ 9,912,150 | $ (1,094,517) | $ (8,841,432) | $ (23,799) |
Net loss | (30,175) | (30,175) | ||
Ending Balance, shares at Dec. 31, 2015 | 17,268 | (354) | ||
Ending Balance, value at Dec. 31, 2015 | $ 9,912,150 | $ (1,094,517) | (8,871,607) | (53,974) |
Net loss | (30,026) | (30,026) | ||
Ending Balance, shares at Dec. 31, 2016 | 17,268 | (354) | ||
Ending Balance, value at Dec. 31, 2016 | $ 9,912,150 | $ (1,094,517) | $ (8,901,633) | $ (84,000) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (30,026) | $ (30,175) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Accrued interest on loans from stockholder and affiliate | 6,661 | 5,000 |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued liabilities | 1,920 | (636) |
Net cash used in operating activities | (21,445) | (25,811) |
Cash flows from financing activities: | ||
Proceeds from loan from affiliate | 40,000 | |
Net cash provided by financing activities | 40,000 | |
Net increase (decrease) in cash and cash equivalents | 18,555 | (25,811) |
Cash and cash equivalents: | ||
Beginning of year | 11,924 | 37,735 |
End of year | 30,479 | 11,924 |
Cash paid during the year for: | ||
Interest | ||
Income taxes | $ 250 |
1 Summary of Significant Accoun
1 Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Reliability Incorporated (the "Company") was incorporated under the laws of the State of Texas in 1953, but the principal business of the Company started in 1971, and was closed down in 2007. The Company has no further operating activities and is now a shell company. GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has no operating activities and is now a shell company. The Company has concluded that it should look for acquisitions or identify a merger partner. There can be no assurances that the Company will be successful in completing such a transaction or be able to maintain sufficient liquidity over a period of time that will allow it to carry out this action. There can be no assurances that the Company will be successful in completing such a transaction or be able to maintain sufficient liquidity over a period of time that will allow it to carry out these actions, in which case the Company might be forced to liquidate or seek protection under the Federal bankruptcy statutes, or both. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates. CASH EQUIVALENTS For the purposes of the statements of cash flows, the Company considers all highly liquid cash investments that mature in three months or less when purchased, to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. STOCK OPTIONS Compensation cost relating to stock-based payments, including grants of employee stock options, is recognized in financial statements based on the fair value of the equity instruments issued on the grant date. The Company recognized the fair value of stock-based compensation awards as compensation expense in its statement of operations on a straight line basis, over the vesting period. INCOME TAXES Deferred income taxes are provided under the asset and liability method and reflect the net tax effects of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company establishes valuation allowances when the realization of specific deferred tax assets is subject to uncertainty. The Company records no tax benefits on its operating losses, as the losses will have to be carried forward and realization of any benefit is uncertain. EARNINGS PER SHARE Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company generated net losses in 2016 and 2015, outstanding stock options would have been anti-dilutive and were not considered in these calculations. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying values of cash and cash equivalents, and accounts payable and accrued liabilities at December 31, 2016 and 2015 approximated fair value due to their short maturity or nature. It is not practicable to estimate the fair value of the loans from shareholder and affiliates due to the related party nature of the amounts. RECLASSIFICATION Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern |
2 Income Taxes
2 Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
INCOME TAXES | 2. INCOME TAXES At December 31, 2016, the Company had U.S. net operating loss carryforwards of approximately $15 million that will expire commencing in 2023 through 2035. These carryforwards may be subject to certain limitations on annual utilization in the event of a change in ownership, as defined by tax law. The Company has established valuation allowances to fully offset the deferred income tax assets related to these loss carryforwards, based upon the available evidence that indicates that it is more likely than not that the Company will not realize the tax benefits. The Company's income tax returns remain subject to examination for the years 2013 through 2016 for federal and state purposes. |
3 Accounts Payable And Accrued
3 Accounts Payable And Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable And Accrued Liabilities | 3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities as of December 31, 2016 and 2015 consist of the following: December 31, 2016 2015 Legal and accounting costs $ 9,955 $ 8,035 Accrued interest 14,524 7,863 Total $ 24,479 $ 15,898 |
4 Stock Option Plan
4 Stock Option Plan | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
STOCK OPTION PLAN | 4. STOCK OPTION PLAN Under the Company's Amended and Restated 1997 Stock Option Plan (the At December 31, 2006, all options were fully vested; thus no further stock option expense has been recorded related to the Option Plan. As of December 31, 2015, there were 370,000 options outstanding under the Option Plan which expired July 19, 2016. |
5 Stockholders' Equity (Deficit
5 Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | 5. STOCKHOLDERS' EQUITY (DEFICIT) Previously on January 15, 2014, the Company issued 3,401,360 shares of its common stock, in a private placement to Lone Star Value Investors, LP at $0.0147 per share of unregistered shares for total proceeds of $50,000. Jeffrey E. Eberwein is the manager of Lone Star Value Investors LP's general partner and was the president, chief executive officer and a director of the Company and owned 6,786,588 shares of the Company at the time of the transaction. Lone Star Value Investors, LP and its affiliates thus had adequate access to information about the Company. Lone Star Value Investors, LP is an accredited investor, as defined under Rule 501 of the Securities Act. |
6 Related Party Transactions
6 Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. RELATED PARTY TRANSACTIONS As articulated above, on January 15, 2014, the Company issued 3,401,360 shares of common stock to Lone Star Value Investors, LP, an entity at the time of the transaction controlled by a director and officer of the Company, for proceeds of $50,000. The proceeds of this issuance were used to assist in funding the Company's operating expenses. On June 6, 2014, Lone Star Value Investors, LP issued a five year promissory note in the principal amount of $50,000, with interest accruing at a rate of 10% per annum, and all amounts outstanding under this note are due and payable on or before June 30, 2019. Also on August 2, 2016, Lone Star Value Co-Invest I, LP issued a five year promissory note in the principal amount of $40,000, with interest accruing at a rate of 10% per annum, and all amounts outstanding under this note are due and payable on or before August 21, 2021. During the years ended December 31, 2016 and 2015, the Company recognized interest expense in the amount of $6,661 and $5,000, respectively, on these promissory notes. Such accrued amounts are reflected in accounts payable and accrued liabilities on the December 31, 2016 and 2015 balance sheets. |
7 Subsequent Events
7 Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
SUBSEQUENT EVENTS | 7. SUBSEQUENT EVENTS The Company evaluated its subsequent events through March 13, 2017 and determined that no material subsequent events have occurred since December 31, 2016 that require recognition or disclosure in the financial statements. |
1 Summary of Significant Acco14
1 Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Operations And Summary Of Significant Accounting Policies Policies | |
Nature of Operations | Reliability Incorporated (the Company) was incorporated under the laws of the State of Texas in 1953, but the principal business of the Company started in 1971, and was closed down in 2007. The Company has no further operating activities and is now a shell company. |
Going Concern | GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has no operating activities and is now a shell company. The Company has concluded that it should look for acquisitions or identify a merger partner. There can be no assurances that the Company will be successful in completing such a transaction or be able to maintain sufficient liquidity over a period of time that will allow it to carry out this action. There can be no assurances that the Company will be successful in completing such a transaction or be able to maintain sufficient liquidity over a period of time that will allow it to carry out these actions, in which case the Company might be forced to liquidate or seek protection under the Federal bankruptcy statutes, or both. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
Basis of presentation | BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. |
Accounting Estimates | ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates. |
Cash Equivalents | CASH EQUIVALENTS For the purposes of the statements of cash flows, the Company considers all highly liquid cash investments that mature in three months or less when purchased, to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. |
Stock Options | STOCK OPTIONS Compensation cost relating to stock-based payments, including grants of employee stock options, is recognized in financial statements based on the fair value of the equity instruments issued on the grant date. The Company recognized the fair value of stock-based compensation awards as compensation expense in its statement of operations on a straight line basis, over the vesting period. |
Income Taxes | INCOME TAXES Deferred income taxes are provided under the asset and liability method and reflect the net tax effects of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company establishes valuation allowances when the realization of specific deferred tax assets is subject to uncertainty. The Company records no tax benefits on its operating losses, as the losses will have to be carried forward and realization of any benefit is uncertain. |
Earnings Per Share | EARNINGS PER SHARE Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company generated net losses in 2016 and 2015, outstanding stock options would have been anti-dilutive and were not considered in these calculations. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying values of cash and cash equivalents, and accounts payable and accrued liabilities at December 31, 2016 and 2015 approximated fair value due to their short maturity or nature. It is not practicable to estimate the fair value of the loans from shareholder and affiliates due to the related party nature of the amounts. |
Reclassification | RECLASSIFICATION Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern |
3 Accounts Payable And Accrue15
3 Accounts Payable And Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | Accounts payable and accrued liabilities as of December 31, 2016 and 2015 consist of the following: December 31, 2016 2015 Legal and accounting costs $ 9,955 $ 8,035 Accrued interest 14,524 7,863 Total $ 24,479 $ 15,898 |
2 Income Taxes (Details Narrati
2 Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | ||
U.S. net operating loss carryforwards | $ 15,000,000 | |
Net operating loss carryforwards expiration dates | 2023 THROUGH 2034 |
3 Accounts Payable And Accrue17
3 Accounts Payable And Accrued Liabilities (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Legal and accounting costs | $ 9,955 | $ 8,035 |
Accrued interest | 14,524 | 7,863 |
Total | $ 24,479 | $ 15,898 |
4 Stock Option Plan (Details Na
4 Stock Option Plan (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Option Plan | ||
Date after which no further option grants are allowed | Feb. 26, 2007 | |
Weighted-average remaining contractual term | 6 months | 1 year |
Options outstanding | 370,000 | 370,000 |
Exercisable at a weighted average price | $ 0.21 | $ 0.21 |
Options exercised, expired or canceled | 0 | 0 |
Expiration date | Jul. 19, 2016 | Jul. 19, 2016 |
5 Stockholders' Equity (Defic19
5 Stockholders' Equity (Deficit) (Details Narrative) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 15, 2014 |
Equity [Abstract] | |||
Number of shares issued during period in a private placement | 3,401,360 | ||
Value per share | $ 0 | $ 0.0147 |
6 Related Party Transactions (D
6 Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jun. 06, 2014 | Jan. 15, 2014 | |
Related Party Transactions [Abstract] | ||||
Shares issued to related party | 3,401,360 | |||
Proceeds to company from issuance | $ 50,000 | |||
Promissory note issued to company | $ 50,000 | |||
Interest rate of promissory note per annum | 10.00% | 10.00% | ||
All amounts under the note are due and payble | Jun. 30, 2019 | |||
Interest expense on promissory note | $ 2,863 | $ 5,000 |