Reliability (RLBY) 10-K 28 Mar 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Mar. 18, 2019	Jun. 30, 2018
Document And Entity Information
Entity Registrant Name	RELIABILITY INC
Entity Central Index Key	0000034285
Document Type	10-K
Document Period End Date	Dec. 31, 2018
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	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Ex Transition Period	false
Entity Shell Company	true
Entity Common Stock, Shares Outstanding		16,914,693
Public Float			$ 302,704
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2018

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 8,098	$ 8,043
Total current assets	8,098	8,043
Total Assets	8,098	8,043
Current liabilities:
Accounts payable and accrued liabilities	15,961	7,670
Loan from stockholder and affiliate, current portion	50,000	0
Interest on loans, current portion	22,864	0
Total current liabilities	88,825	7,670
Long-term Liabilities:
Loans from stockholder and affiliate	55,000	90,000
Interest on loans	10,218	23,524
Total Long-term Liabilities	65,218	113,524
Total Liabilities	154,043	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	(8,963,578)	(8,930,784)
Less treasury stock at cost, 354,300 shares	(1,094,517)	(1,094,517)
Total stockholders' deficit	(145,945)	(113,151)
Total Liabilities and Stockholders' Deficit	$ 8,098	$ 8,043

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 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

STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Operating expenses:
General and administrative	$ 23,236	$ 19,901
Interest expense	9,558	9,000
Total Operating Expenses	32,794	28,901
Net Loss Before Income Taxes	(32,694)	(28,901)
Income Taxes	100	250
Net Loss	$ (32,794)	$ (29,151)
Basic and diluted loss per share:	$ 0	$ 0
Weighted average shares outstanding:
Basic	16,914,693	16,914,693
Diluted	16,914,693	16,914,693

STATEMENTS OF STOCKHOLDERS' EQU

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)	Common Stock	Treasury Stock	Accumulated Deficit	Total
Beginning Balance, shares at Dec. 31, 2016	17,268,000	(354,000)
Beginning 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	17,268,000	(354,000)
Ending Balance, value at Dec. 31, 2017	$ 9,912,150	$ (1,094,517)	(8,930,784)	(113,151)
Net loss			(32,794)	(32,794)
Ending Balance, shares at Dec. 31, 2018	17,268,000	(354,000)
Ending Balance, value at Dec. 31, 2018	$ 9,912,150	$ (1,094,517)	$ (8,963,578)	$ (145,945)

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (32,794)	$ (29,151)
Adjustments to reconcile net loss to net cash used in operating activities:
Accrued interest on loans from stockholder and affiliate	9,558	9,000
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities	8,291	(2,285)
Net cash used in operating activities	(14,945)	(22,436)
Cash flows from financing activities:
Proceeds from loan from affiliate	15,000
Net cash provided by financing activities	15,000
Net increase (decrease) in cash and cash equivalents	15,000	(22,436)
Cash and cash equivalents:
Beginning of year	8,043	30,479
End of year	8,098	8,043
Cash paid during the year for:
Interest
Income taxes	$ 100	$ 250

1 Summary of Significant Accoun

1 Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2018
Notes to Financial Statements
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 (LOSS) 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 2018 and 2017, 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, 2018 and 2017 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. RECLASSIFICATION Certain amounts in the 2017 financial statements have been reclassified to conform to the 2018 presentation.

2 Income Taxes

2 Income Taxes	12 Months Ended
	Dec. 31, 2018
Notes to Financial Statements
INCOME TAXES	2. INCOME TAXES At December 31, 2018, the Company had U.S. net operating loss carryforwards of approximately $15 million that will expire commencing in 2023 through 2038. 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 2015 through 2018 for federal and state purposes.

3 Accounts Payable And Accrued

3 Accounts Payable And Accrued Liabilities	12 Months Ended
	Dec. 31, 2018
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES	3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities as of December 31, 2018 and 2017 consist of the following: December 31, 2018 2017 Legal and accounting costs $ 15,140 7,670 Amount owed to related party- Loan Star Value Management 821 Total $ 15,961 $ 7,670

4 Stock Option Plan

4 Stock Option Plan	12 Months Ended
	Dec. 31, 2018
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, 2018
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, 2018
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 (the 2014 Note) , and all amounts outstanding under this note are due and payable on or before June 30, 2019. Given the maturity date of 2019, the 2014 Note and related accrued interest have been classified as current liabilities on the 2018 balance sheet. Also on August 2, 2016 and August 13, 2018, Lone Star Value Co-Invest I, LP issued promissory notes in the principal amount of $40,000 and $15,000, respectively, with interest accruing at a rate of 10% per annum, and all amounts outstanding under these notes are due and payable on or before August 21, 2021. Given the maturity dates, these notes, they have been classified as long-term liabilities on the 2018 balance sheet. During the years ended December 31, 2018 and 2017, the Company recognized interest expense in the amount of $9,557 and $9,000, respectively, on these promissory notes. Such accrued interest in the amount of $33,082 and $23,524 as of December 31, 2018 and 2017, respectively, are reflected in interest on loans on the accompanying balance sheets. Included in accounts payable and accrued liabilities at December 31, 2018 is $821 payable to Loan Star Value Management (Loan Star) for professional fees paid by Lone Start on behalf of the Company.

7 Subsequent Events

7 Subsequent Events	12 Months Ended
	Dec. 31, 2018
Notes to Financial Statements
SUBSEQUENT EVENTS	7. SUBSEQUENT EVENTS The Company has evaluated subsequent events through March 28, 2019 and determined that there are no material subsequent events that have occurred since December 31, 2018 that require recognition or disclosure in the financial statements.

1 Summary of Significant Acco_2

1 Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 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 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 (Loss) Per Share	EARNINGS (LOSS) 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 2018 and 2017, 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, 2018 and 2017 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.
Reclassification	RECLASSIFICATION Certain amounts in the 2017 financial statements have been reclassified to conform to the 2018 presentation.

3 Accounts Payable And Accrue_2

3 Accounts Payable And Accrued Liabilities (Tables)	12 Months Ended
	Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities as of December 31, 2018 and 2017 consist of the following: December 31, 2018 2017 Legal and accounting costs $ 15,140 7,670 Amount owed to related party- Loan Star Value Management 821 Total $ 15,961 $ 7,670

2 Income Taxes (Details Narrati

2 Income Taxes (Details Narrative)	12 Months Ended
	Dec. 31, 2018USD ($)
Income Taxes
U.S. net operating loss carryforwards	$ 15,000,000
Net operating loss carryforwards expiration dates	2023 through 2038

3 Accounts Payable And Accrue_3

3 Accounts Payable And Accrued Liabilities (Details Narrative) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Legal and accounting costs	$ 15,140	$ 7,670
Amount owed to related party- Loan Star Value Management	821
Total	$ 15,961	$ 7,670

4 Stock Option Plan (Details Na

4 Stock Option Plan (Details Narrative)	12 Months Ended
	Dec. 31, 2018shares
Stock Option Plan
Date after which no further option grants are allowed	Feb. 26, 2007
Options outstanding	370,000
Expiration date	Jul. 19, 2016

5 Stockholders' Equity (Defic_2

5 Stockholders' Equity (Deficit) (Details Narrative) - USD ($)	Jan. 15, 2014	Dec. 31, 2018	Dec. 31, 2017
Equity [Abstract]
Number of shares issued during period in a private placement	3,401,360
Value per share	$ 0.0147	$ 0	$ 0
Value of shares issued during period in a private placement	$ 50,000
Stock issued for transaction	6,786,588

6 Related Party Transactions (D

6 Related Party Transactions (Details Narrative) - USD ($)	Aug. 13, 2018	Aug. 02, 2018	Dec. 31, 2018	Dec. 31, 2017	Aug. 13, 2014	Aug. 02, 2014	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	$ 15,000	$ 40,000		$ 50,000
Interest rate of promissory note per annum					10.00%	10.00%	10.00%	10.00%
All amounts under the note are due and payble	Aug. 21, 2021	Aug. 21, 2021	Jun. 30, 2019
Interest expense on promissory note			$ 9,557	9,000
Accrued interest			33,082	$ 23,524
Professional fees			$ 821