Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | RELIABILITY INCORPORATED | |
Entity Central Index Key | 34,285 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity an Emerging Growth Company? | false | |
Is Entity a Small Business? | true | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,914,693 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Unaudited Balance Sheets
Unaudited Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 8,148 | $ 8,043 |
Total current assets | 8,148 | 8,043 |
Total Assets | 8,148 | 8,043 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 3,395 | 7,670 |
Total current liabilities | 3,395 | 7,670 |
Long term liabilities: | ||
Accrued interest on loans | 30,436 | 23,524 |
Loans from shareholder and affiliate | 105,000 | 90,000 |
Total Long term Liabilities | 135,436 | 113,524 |
Total Liabilities | 138,831 | 121,194 |
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 | (8,948,316) | (8,930,784) |
Less treasury stock at cost, 354,300 shares | (1,094,517) | (1,094,517) |
Total stockholders' deficit | (130,683) | (113,151) |
Total liabilities and stockholders' deficit | $ 8,148 | $ 8,043 |
Unaudited Balance Sheets (Paren
Unaudited Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 |
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 |
Unaudited Statements of Operati
Unaudited Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating expenses: | ||||
General and administrative | $ 3,734 | $ 3,623 | $ 10,570 | $ 9,693 |
Interest expense | 2,449 | 2,281 | 6,912 | 6,732 |
Total expenses | 6,183 | 5,904 | 17,482 | 16,425 |
Operating loss | (6,183) | (5,904) | (17,482) | (16,425) |
Loss before taxes | (6,183) | (5,904) | (17,482) | (16,425) |
Income taxes | 50 | 50 | 250 | |
Net Loss | $ (6,232) | $ (5,904) | $ (17,532) | $ (16,675) |
Basic and diluted loss per share | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average shares: | ||||
Basic | 16,914,693 | 16,914,693 | 16,914,693 | |
Diluted | 16,914,693 | 16,914,693 | 16,914,693 | 16,914,693 |
Unaudited Statements of Cash Fl
Unaudited Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (17,532) | $ (16,675) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accrued interest on loans from stockholders and affiliate | 6,912 | 6,732 |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued liabilities | (4,275) | (3,945) |
Net cash used in operating activities | (14,895) | (13,888) |
Cash flows from financing activities: | ||
Loan from shareholder and affiliate | 15,000 | |
Net cash provided by financing activities | 15,000 | |
Net (decrease) increase in cash and cash equivalents | 105 | (13,888) |
Cash and cash equivalents: | ||
Beginning of period | 8,043 | 30,479 |
End of period | 8,148 | 16,591 |
Cash paid during the period for: | ||
Interest | ||
Income taxes | $ 50 | $ 250 |
OPERATIONS AND SUMMARY OF SIGNI
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. OPERATIONS AND 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 concluded that it should look for acquisitions or identify a merger partner and is actively in discussions with interested parties. 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. The Company is quoted on the OTC Marketplace under the symbol “RLBY”. Basis of presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. Accordingly they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 period. 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 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 significant 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 exercise price of the Company’s outstanding stock options exceeded the average market price of its common shares during the periods presented and the Company reported losses, the options would have been anti-dilutive and were not considered in these calculations. Fair Value of Financial Instruments The carrying values of the Company’s current assets and current liabilities 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 amount. Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current year 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 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
INCOME TAXES | 2. INCOME TAXES The Company has substantial U.S. net operating loss carryforwards that will expire in 2023 through 2037. These carryforwards are subject to certain limitations on annual utilization and in the event of a change in ownership, as defined by tax law. See Note 2 to the Company’s financial statements in its Form 10-K for the year ended December 31, 2017. The Company’s income tax returns remain subject to examination for the years 2014 through 2017 for federal and state purposes. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
STOCKHOLDERS' EQUITY | 3. STOCKHOLDERS' EQUITY On January 15, 2014, the Company issued 3,401,360 shares of unregistered common stock in a private placement to Lone Star Value Investors, LP, an entity controlled by a former director and officer of the Company, for cash proceeds of $50,000. The proceeds of this issuance were used to assist in funding the Company's operating expenses. |
LOANS FROM STOCKHOLDER AND AFFI
LOANS FROM STOCKHOLDER AND AFFILIATE | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
LOANS FROM STOCKHOLDER AND AFFILIATE | 4. LOANS FROM SHAREHOLDER AND RELATED PARTY TRANSACTIONS On June 6, 2014, a shareholder, Lone Star Value Investors, LP was issued a promissory note by the Company in the amount of $50,000 (2014 Note). The proceeds of the note are being used for ongoing operating expenses. The loan bears interest at 10% per annum. Interest on the loan and the full amount of the principal is to be repaid on June 30, 2019. On August 2, 2016, the Company issued a promissory note to an affiliate of Lone Star Value Investors, LP in the amount of $40,000 (2016 Note). The proceeds of the 2016 Note will be used for ongoing operating expenses. The 2016 Note bears interest at 10% per annum. Interest and principal on the 2016 Note is to be repaid on August 31, 2021, and all payments are subordinate to the payment of all outstanding amounts due under the 2014 Note. On August 10, 2018, the Company issued a promissory note to an affiliate of a shareholder in the amount of $15,000 (“2018 Note”). The proceeds of the 2018 Note will be used for ongoing operating expenses. The loan bears interest at 10% per annum. Interest and principal on the loan is to be repaid on August 31, 2021, and all payments are subordinate to the payment of all outstanding amounts due under the 2014 Note. During the nine months ended September 30, 2018 and September 30, 2017, the Company recognized aggregate interest expense in the amounts of $6,912 and $6,732, respectively. During the three months ended September 30, 2018 and September 30, 2017, the Company recognized aggregate interest expense in the amounts of $2,449 and $2,281, respectively. Total accrued interest on the 2014 Note, 2016 Note, and 2018 Note is $30,436 and $23,524 as of the September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, the Company had $821 payable to Lone Star Value Management as reimbursement for a payment made to the Company’s transfer agent on the Company’s behalf. This amount is included in accounts payable and accrued liabilities on the accompanying September 30, 2018 balance sheet. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
SUBSEQUENT EVENTS | 5. SUBSEQUENT EVENTS No material subsequent events have occurred since September 30, 2018 that require recognition or disclosure in the financial statements. |
Operations and Summary of Sig_2
Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Operations And Summary Of Significant Accounting Policies Policies | |
Nature of Operations | 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 concluded that it should look for acquisitions or identify a merger partner and is actively in discussions with interested parties. 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. The Company is quoted on the OTC Marketplace under the symbol "RLBY". |
Basis of presentation | Basis of presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. Accordingly they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. |
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 period. 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 |
Income Taxes | Income Taxes 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 significant 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 exercise price of the Company's outstanding stock options exceeded the average market price of its common shares during the periods presented, the 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 the Company's current assets and current liabilities approximated fair value due to their short maturity or nature. It is not practicable to estimate the fair value of the loans from stockholder and affiliate due to the related party nature of the amounts |
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 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Net operating loss carryforwards expiration dates | 2023 through 2037 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) | Jan. 15, 2014USD ($)shares |
Equity [Abstract] | |
Shares issued for cash | shares | 3,401,360 |
Cash proceeds from issuance of stock | $ | $ 50,000 |
Loan From Shareholder (Details
Loan From Shareholder (Details Narrative) - USD ($) | Jan. 15, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Receivables [Abstract] | |||||
Promissory note amount | $ 50,000 | ||||
Interest rate of promissory note | 10.00% | ||||
Date the loan is to be repaid in full (interest and principle) | Jun. 30, 2019 | ||||
Interest expense | $ 2,449 | $ 2,281 | $ 6,912 | $ 6,732 | |
Accrued interest | $ 30,436 | $ 23,524 |