Reliability (RLBY) 10-K 29 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2017	Feb. 28, 2017
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, 2017
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		$ 538,140
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,017

Balance Sheets

Balance Sheets - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 8,043	$ 30,479
Total current assets	8,043	30,479
Total Assets	8,043	30,479
Current liabilities:
Accounts payable and accrued liabilities	7,670	9,955
Total current liabilities	7,670	9,955
Long-term Liabilities:
Loans from stockholder and affiliate	90,000	90,000
Interest on loans	23,524	14,524
Total Long-term Liabilities	113,524	104,524
Total Liabilities	121,194	114,479
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	(8,930,784)	(8,901,633)
Less treasury stock at cost, 354,300 shares	(1,094,517)	(1,094,517)
Total stockholders' deficit	(113,151)	(84,000)
Total Liabilities and Stockholders' Deficit	$ 8,043	$ 30,479

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
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
Common stock shares, authorized	300,000,000	300,000,000
Common stock shares, issued	17,268,993	13,867,633
Common stock shares, outstanding	17,268,993	13,867,633
Treasury stock shares	354,300	354,300

Statements of Operations

Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Operating expenses:
General and administrative	$ 19,901	$ 23,115
Interest expense	9,000	6,661
Total Operating Expenses	28,901	29,776
Net Loss Before Income Taxes	(28,901)	(29,776)
Income Taxes	250	250
Net Loss	$ (29,151)	$ (30,026)
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, 2015	17,268	(354)
Beginning 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)
Net loss			(29,151)	(29,151)
Ending Balance, shares at Dec. 31, 2017	17,268	(354)
Ending Balance, value at Dec. 31, 2017	$ 9,912,150	$ (1,094,517)	$ (8,930,784)	$ (113,151)

Statements of Cash Flows

Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net loss	$ (29,151)	$ (30,026)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Accrued interest on loans from stockholder and affiliate	9,000	6,661
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities	(2,285)	1,920
Net cash used in operating activities	(22,436)	(21,445)
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	(22,436)	18,555
Cash and cash equivalents:
Beginning of year	30,479	11,924
End of year	8,043	30,479
Cash paid during the year for:
Interest
Income taxes	$ 250	$ 250

1 Summary of Significant Accoun

1 Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2017
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 2017 and 2016, 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, 2017 and 2016 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 affiliate due to the related party nature of the amounts. 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, 2017
Notes to Financial Statements
INCOME TAXES	2. INCOME TAXES At December 31, 2017, the Company had U.S. net operating loss carryforwards of approximately $15 million that will expire commencing in 2023 through 2037. 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 2014 through 2017 for federal and state purposes.

3 Accounts Payable And Accrued

3 Accounts Payable And Accrued Liabilities	12 Months Ended
	Dec. 31, 2017
Payables and Accruals [Abstract]
Accounts Payable And Accrued Liabilities	3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities as of December 31, 2017 and 2016 consist of the following: December 31, 2017 2016 Legal and accounting costs $ 7,670 $ 9,955 Total $ 7,670 $ 9,955

4 Stock Option Plan

4 Stock Option Plan	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
STOCK OPTION PLAN	4. STOCK OPTION PLAN Under the Company's Amended and Restated 1997 Stock Option Plan (the

5 Stockholders' Equity (Deficit

5 Stockholders' Equity (Deficit)	12 Months Ended
	Dec. 31, 2017
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, 2017
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, 2017 and 2016, the Company recognized interest expense in the amount of $9,000 and $6,661, respectively, on these promissory notes. Such accrued interest in the amount of $23,524 and $14,524 as of December 31, 2017 and 2016, respectively, are reflected in interest on loans on the accompanying balance sheets.

7 Subsequent Events

7 Subsequent Events	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
SUBSEQUENT EVENTS	7. SUBSEQUENT EVENTS The Company has evaluated subsequent events through March 27, 2018 and determined that there are no material subsequent events that have occurred since December 31, 2017 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, 2017
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 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 2017 and 2016, 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, 2017 and 2016 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 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

3 Accounts Payable And Accrue15

3 Accounts Payable And Accrued Liabilities (Tables)	12 Months Ended
	Dec. 31, 2017
Payables and Accruals [Abstract]
Accounts payable and accrued liabilities	December 31, 2017 2016 Legal and accounting costs $ 7,670 $ 9,955 Total $ 7,670 $ 9,955

2 Income Taxes (Details Narrati

2 Income Taxes (Details Narrative)	12 Months Ended
	Dec. 31, 2017USD ($)
Income Taxes
U.S. net operating loss carryforwards	$ 15,000,000
Net operating loss carryforwards expiration dates	2023 THROUGH 2037

3 Accounts Payable And Accrue17

3 Accounts Payable And Accrued Liabilities (Details Narrative) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Legal and accounting costs	$ 7,670	$ 9,955
Total	$ 7,670	$ 9,955

4 Stock Option Plan (Details Na

4 Stock Option Plan (Details Narrative) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Stock Option Plan
Date after which no further option grants are allowed	Feb. 26, 2007
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	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, 2017	Dec. 31, 2016	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	$ 5,000	$ 2,863