x
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QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2015
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o
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TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to ________.
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RELIABILITY INCORPORATED
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(Name of registrant in its charter)
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TEXAS
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75-0868913
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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53 Forest Avenue, First Floor, Old Greenwich, Connecticut
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06870
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(Address of principal executive offices)
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(Zip Code)
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(203) 489-9500
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(Issuer’s telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report.)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company x
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PART I. FINANCIAL INFORMATION
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2
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Item 1.
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Unaudited Financial Statements
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2
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Balance Sheets as of September 30, 2015 and December 31, 2014
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2
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Statements of Operations for the Three Months Ended September 30, 2015 and 2014
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3
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Statements of Operations for the Nine Months Ended September 30, 2015 and 2014
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4
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Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014
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5
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Notes to Unaudited Financial Statements
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6-8
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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9-10
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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10
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Item 4.
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Risk Controls and Procedures
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10
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PART II. OTHER INFORMATION
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||
Item 1.
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Legal Proceedings
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11
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Item 1a.
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Risk Factors
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11
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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11
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Item 3.
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Defaults Upon Senior Securities
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11
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Item 4.
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Mine Safety Disclosures
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11
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Item 5.
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Other Information
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11
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Item 6.
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Exhibits
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11
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Signatures
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12
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Exhibits
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13
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Item 1. Financial Statements
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||||||||
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September 30,
2015
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December 31,
2014
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||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$
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14,785
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$
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37,735
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||||
Total current assets
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14,785
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37,735
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||||||||
Total assets
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$
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14,785
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$
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37,735
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||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued liabilities
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$
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8,273
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$
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11,534
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||||
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||||||||
Total current liabilities
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8,273
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11,534
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||||||
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||||||||
Long term liabilities:
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||||||||
Loan from shareholder
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50,000
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50,000
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||||||
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||||||||
Total long term liabilities
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50,000
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50,000
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||||||
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||||||||
Total liabilities
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58,273
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61,534
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||||||
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||||||||
Stockholders' equity (deficit):
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||||||||
Preferred stock, without par value; 1,000,000 shares authorized, none issued and outstanding
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||||||||
Common stock, without par value; 300,000,000 shares authorized; 17,268,993 shares issued
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9,912,150
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9,912,150
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||||||
Accumulated deficit
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(8,861,121
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)
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(8,841,432
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)
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Less treasury stock at cost, 354,300 shares
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(1,094,517
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)
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(1,094,517
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)
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||||||||
Total stockholders' deficit
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(43,488
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)
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(23,799
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)
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Total Liabilities and stockholders' deficit
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$
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14,785
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$
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37,735
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Three months ended
September 30,
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|||||||
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2015
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2014
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||||||
Operating expenses:
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||||||||
General and administrative
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$
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4,809
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$
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3,178
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Interest expense
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1,260
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1,269
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Total expenses
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6,069
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4,447
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Operating loss
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(6,069
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)
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(4,447
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)
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Net loss
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$
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(6,069
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)
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$
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(4,447
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)
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Basic and diluted loss per share
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(0.00
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)
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(0.00
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)
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Weighted average shares:
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||||||||
Basic
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16,914,693
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16,914,693
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Diluted
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16,914,693
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16,914,693
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Nine months ended
September 30,
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|||||||
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2015
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2014
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Operating expenses:
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General and administrative
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$
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15,949
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$
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26,310
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Interest expense
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3,740
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1,603
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Total expenses
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19,689
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27,913
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Loss before income taxes
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(19,689
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)
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(27,913
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)
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Income taxes
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-
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250
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Net loss
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$
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(19,689
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)
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$
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(28,163
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)
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Basic and diluted loss per share
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(0.00
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)
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(0.00
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)
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Weighted average shares:
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||||||||
Basic
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16,914,693
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16,740,264
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Diluted
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16,914,693
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16,740,264
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Nine months ended
September 30,
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|||||||
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2015
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2014
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Cash flows from operating activities:
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Net loss
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$
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(19,689
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)
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$
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(28,163
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
Changes in operating assets and liabilities:
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||||||||
Accounts payable and accrued liabilities
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(3,261
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)
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(31,007
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)
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Net cash used in operating activities
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(22,950
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)
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(59,170
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)
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Cash flows from financing activities:
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Issuance of stock for cash
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-
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50,000
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Loans from officers
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-
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-
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Loan from shareholder
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-
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50,000
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Net cash provided by financing activities
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-
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100,000
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Net (decrease) increase in cash and cash equivalents
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(22,950
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)
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40,830
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Cash and cash equivalents:
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Beginning of period
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37,735
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450
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End of period
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$
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14,785
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$
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41,280
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Supplemental disclosure of cash flow information:
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||||||||
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Cash paid during the period for:
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Interest
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$
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-
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$
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-
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Income taxes
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$
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-
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$
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250
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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Item 4. Risk Controls and Procedures
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Item 6.
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Exhibits:
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Exhibit No.
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Descriptiom
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31.1
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CEO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
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31.2
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CFO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
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32.1
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CEO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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CFO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail (XBRL).
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RELIABILITY INCORPORATED
(Registrant)
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November 12, 2015
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/s/ Kyle Hartley
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Kyle Hartley
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President and Chief Executive Officer
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/s/ Kyle Hartley
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Kyle Hartley
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Chief Financial Officer
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Exhibit No.
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Descriptiom
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31.1
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CEO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
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31.2
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CFO Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
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32.1
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CEO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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CFO Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail (XBRL).
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1.
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I have reviewed this quarterly report on Form 10-Q of Reliability Incorporated for the period ended September 30, 2015;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant is made known to us by others
within that entity, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Dated November 12, 2015
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|||
/s/ Kyle Hartley
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|||
Kyle Hartley
|
|||
Chief Executive Officer and Principal Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Reliability Incorporated for the period ended September 30, 2015;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant is made known to us by others
within that entity, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: November 12, 2015
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/s/ Kyle Hartley
|
|
Kyle Hartley
|
|
Chief Financial Officer and Principal Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 12, 2015
|
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/s/ Kyle Hartley
|
|
Kyle Hartley
|
|
Chief Executive Officer and Principal Executive Officer
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|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 12, 2015
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/s/ Kyle Hartley
|
|
Kyle Hartley
|
|
Chief Financial Officer and Principal Financial Officer
|
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Stockholders' Equity |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes to Financial Statements | |
Note 4. STOCKHOLDERS' EQUITY |
4. 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. |
Stock Option Plan |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes to Financial Statements | |
Note 3. STOCK OPTION PLAN |
3. STOCK OPTION PLAN
Under the Company's Amended and Restated 1997 Stock Option Plan (the "Option Plan"), no further option grants are allowed after February 26, 2007, but options theretofore granted remain in effect until satisfied or terminated pursuant to the Option Plan.
At December 31, 2006, all options were fully vested; thus no further stock option expense has been recorded related to the Option Plan. The weighted-average remaining contractual term, as of December 31, 2014, was 1.5 years for outstanding and exercisable options. There were no options exercised and none that expired or were canceled during the years ended December 31, 2014 and 2013 or during the three and nine months ended September 30, 2015. As of September 30, 2015 and December 31, 2014, there were 370,000 options outstanding under the Company's Stock Option Plan which are exercisable at a weighted average price of $0.21 until July 19, 2016, when they expire. |
Unaudited Balance Sheets - USD ($) |
Sep. 30, 2015 |
Dec. 31, 2014 |
---|---|---|
Current assets: | ||
Cash and cash equivalents | $ 14,785 | $ 37,735 |
Total current assets | 14,785 | 37,735 |
Total Assets | 14,785 | 37,735 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 8,273 | 11,534 |
Total current liabilities | 8,273 | 11,534 |
Long term liabilities: | ||
Loan from shareholder | 50,000 | 50,000 |
Total long term liabilities | 50,000 | 50,000 |
Total liabilities | 58,273 | 61,534 |
Stockholders' equity (deficit): | ||
Common stock, without par value; 300,000,000 shares authorized; 17,268,993 shares issued | 9,912,150 | 9,912,150 |
Accumulated deficit | (8,861,121) | (8,841,432) |
Less treasury stock at cost, 354,300 shares | (1,094,517) | (1,094,517) |
Total stockholders' (deficit) | (43,488) | (23,799) |
Total liabilities and stockholders' (deficit) | $ 14,785 | $ 37,735 |
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Operations and Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes to Financial Statements | |
Note 1. 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. 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, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.
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, 2014.
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 loan from shareholder due to the related party nature of the amount.
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, which provides guidance under U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The ASU is effective for all entities and for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a significant impact on the Company's financial statements and related disclosures. |
Income Taxes |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes to Financial Statements | |
Note 2. INCOME TAXES |
2. INCOME TAXES
The Company has substantial U.S. net operating loss carryforwards that will expire in 2023 through 2033. 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, 2014.
The Company's income tax returns remain subject to examination for the years 2011 through 2014 for federal and state purposes. |
Unaudited Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2015 |
Dec. 31, 2014 |
---|---|---|
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 |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2015 |
Nov. 10, 2015 |
|
Document And Entity Information | ||
Entity Registrant Name | RELIABILITY INCORPORATED | |
Entity Central Index Key | 0000034285 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
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 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2015 |
Unaudited Statements of Operations - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Sep. 30, 2014 |
|
Operating expenses: | ||||
General and administrative | $ 4,809 | $ 3,178 | $ 15,949 | $ 26,310 |
Interest expense | 1,260 | 1,269 | 3,740 | 1,603 |
Total expenses | 6,069 | 4,447 | $ 19,689 | $ 27,913 |
Operating loss | $ (6,069) | $ (4,447) | ||
Loss Before Income Taxes | $ (19,689) | $ (27,913) | ||
Income Taxes | 250 | |||
Net Loss | $ (6,069) | $ (4,447) | $ (19,689) | $ (28,163) |
Basic and diluted loss per share | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average shares: | ||||
Basic | 16,914,693 | 16,914,693 | 16,914,693 | 16,740,264 |
Diluted | 16,914,693 | 16,914,693 | 16,914,693 | 16,740,264 |
Operations and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
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 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 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, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.
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, 2014. |
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 period.
|
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 Companys 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 |
Fair Value of Financial Instruments The carrying values of the Companys 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 loan from shareholder due to the related party nature of the amount.
|
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, which provides guidance under U.S. GAAP about managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The ASU is effective for all entities and for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a significant impact on the Companys financial statements and related disclosures. |
Subsequent Events |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes to Financial Statements | |
Note 6. SUBSEQUENT EVENTS |
6. SUBSEQUENT EVENTS
No material subsequent events have occurred since September 30, 2015 that require recognition or disclosure in the financial statements. |
STOCKHOLDERS' EQUITY (Details Narrative) |
9 Months Ended |
---|---|
Sep. 30, 2015
USD ($)
| |
Equity [Abstract] | |
Shares issued for cash | $ 3,401,360 |
Cash proceeds from issuance of stock | $ 50,000 |
Income Taxes (Details Narrative) |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Income Taxes | |
Net operating loss carryforwards expiration dates | 2023 through 2033 |
Stock Option Plan (Details Narrative) - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2015 |
Dec. 31, 2014 |
|
Stock Option Plan | ||
Date after which no further option grants are allowed | Feb. 26, 2007 | |
Weighted-average remaining contractual term | 1 year 6 months | |
Options outstanding | 370,000 | 370,000 |
Exercisable at a weighted average price | $ 0.21 | $ 0.21 |
Expiration date | Jul. 19, 2016 | Jul. 19, 2016 |
Loan From Shareholder (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Sep. 30, 2014 |
|
Receivables [Abstract] | ||||
Promissory note issued on June 6, 2015 | $ 50,000 | |||
Repayment Date | Jun. 19, 2019 | |||
Interest rate per annum | 10.00% | 10.00% | ||
Interest expense | $ 1,260 | $ 1,269 | $ 3,740 | $ 1,603 |
Accrued interest | $ 6,603 |
Unaudited Statements of Cash Flows - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
|
Cash flows from operating activities: | ||
Net loss | $ (19,689) | $ (28,163) |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued liabilities | (3,261) | (31,007) |
Net cash used in operating activities | $ (22,950) | (59,170) |
Cash flows from financing activities: | ||
Issuance of stock for cash | $ 50,000 | |
Loans from officers | ||
Loan from shareholder | $ 50,000 | |
Net cash provided by financing activities | 100,000 | |
Net increase (decrease) in cash and cash equivalents | $ (22,950) | 40,830 |
Cash and cash equivalents: | ||
Beginning of period | 37,735 | 450 |
End of period | $ 14,785 | $ 41,280 |
Cash paid during the period for: | ||
Interest | ||
Income taxes | $ 250 |
Loan From Shareholder |
9 Months Ended |
---|---|
Sep. 30, 2015 | |
Receivables [Abstract] | |
Note 5. LOAN FROM SHAREHOLDER |
5. LOAN FROM SHAREHOLDER
On June 6, 2014, a shareholder issued a promissory note to the Company in the amount of $50,000. The proceeds of the note are 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. During the three and nine months ended September 30, 2015, the Company recognized interest expense in the amount of $1,260 and $3,740, respectively. Total accrued interest on the loan is $6,603 as of September 30, 2015 and is included as a component of accounts payable and accrued expenses on the accompanying balance sheet. |