10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal quarter ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _____________ TO _____________

Commission File Number 000-56012

 

 Reliant Holdings, Inc.

(Exact name of registrant as specified in its charter)

Nevada	47-2200506
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
12343 Hymeadow Drive, Suite 3-A Austin, Texas	78750
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (512) 407-2623

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date: 16,785,000 shares of common stock are issued and outstanding as of December 12, 2023.

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION		3
PART I – FINANCIAL INFORMATION		4
ITEM 1.	FINANCIAL STATEMENTS	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Stockholders’ Equity (Deficit)	6
	Consolidated Statements of Cash Flows	7
	Notes to the Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26
ITEM 4.	CONTROLS AND PROCEDURES	26
PART II – OTHER INFORMATION		26
ITEM 1.	LEGAL PROCEEDINGS	27
ITEM 1A.	RISK FACTORS.	27
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	29
ITEM 4.	MINE SAFETY DISCLOSURES	29
ITEM 5.	OTHER INFORMATION	29
ITEM 6.	EXHIBITS	30

2

Cautionary Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report. These factors include:

● the need for additional funding;

● the fact that we have filed periodic reports late in the past;

● our lack of a significant operating history;

● the fact that our sole officer and director has control over our voting stock;

● the loss of key personnel or failure to attract, integrate and retain additional personnel;

● corporate governance risks;

● economic downturns;

● the level of competition in our industry and our ability to compete;

● our ability to respond to changes in our industry;

● our ability to protect our intellectual property and not infringe on others’ intellectual property;

● our ability to scale our business;

● our ability to maintain supplier relationships;

● our ability to obtain and retain customers;

● our ability to execute our business strategy in a very competitive environment;

● trends in and the market for recreational pools and services;

● lack of insurance policies;

● dependence on a small number of customers;

● changes in laws and regulations;

● the market for our common stock;

● our ability to effectively manage our growth;

● dilution to existing stockholders;

● costs and expenses associated with being a public company;

● client lawsuits, damages, judgments and settlements required to be paid in connection therewith and the effects thereof on our reputation;

● health risks, economic slowdowns and recessions and other negative outcomes caused by COVID-19 and governmental responses thereto;

● increased inflation, interest rates and supply constraints, and possible recessions caused thereby;

● economic downturns both in the United States and globally;

● strategic transactions in the future which may result in a material change in our operations, board of directors, management, and/or a change of control;

● risk of increased regulation of our operations; and

● other risk factors included and discussed under “Risk Factors” below.

You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

3

Part I – Financial Information

Item 1. Financial Statements

Reliant Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
(Unaudited)
	September 30,			December 31,
	2023			2022
ASSETS
Current Assets
Cash	$	215,589		$	282,621
Accounts receivable		1,500			-
House and real estate inventory		439,158			339,074
Contract assets		-			30,571
Prepaid expenses		4,032			22,177
Other current assets		1,405			1,405
Total current assets		661,684			675,848
Equipment, net of accumulated depreciation of $81,189 and $69,484 as of September 30, 2023 and December 31, 2022, respectively		31,173			42,878
Right-of-use asset		11,132			32,520
Total Assets	$	703,989		$	751,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	91,848		$	33,246
Accrued liabilities - related parties		53,500			48,000
Contract liabilities		243,960			336,373
Construction loan		220,309			186,404
Current portion of note payable		3,206			9,630
Current portion of right-of-use liability		11,244			25,940
Total current liabilities		624,067			639,593
Long-term note payable, net of current portion		-			2,864
Right-of-use liability		-			6,783
Total Liabilities		624,067			649,240
Commitments and Contingencies
Stockholders' Equity
Preferred stock, 5,000,000 shares authorized, $0.001 par value, 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Preferred stock Series A, 1,000 shares authorized, $0.001 par value, 1,000 and 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		1			1
Common stock, 70,000,000 shares authorized, $0.001 par value, 16,785,000 and 16,385,000  issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		16,785			16,385
Additional paid-in capital		437,989			396,564
Accumulated deficit		(374,853	)		(310,944	)
Total Stockholders' Equity		79,922			102,006
Total Liabilities and Stockholders' Equity	$	703,989		$	751,246
The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

Reliant Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)
	For the Three Months ended						For the Nine Months ended
	September 30						September 30
	2023			2022			2023			2022
Revenue	$	597,400		$	1,360,476		$	1,773,539		$	3,438,580
Cost of goods sold		(457,697	)		(910,152	)		(1,186,669	)		(2,458,261	)
Gross margin		139,703			450,324			586,870			980,319
Operating expenses
General and administrative		168,628			211,817			642,529			626,748
Total operating expenses		(168,628	)		(211,817	)		(642,529	)		(626,748	)
Income (loss) from operations		(28,925	)		238,507			(55,659	)		353,571
Other income (expense)
Interest income		86			187			612			393
Interest expense		(5,140	)		(1,022	)		(8,862	)		(2,681	)
Total other income (expense)		(5,054	)		(835	)		(8,250	)		(2,288	)
Income (loss) before income taxes		(33,979	)		237,672			(63,909	)		351,283
Provision for income tax		-			-			-			-
Net income (loss)	$	(33,979	)	$	237,672		$	(63,909	)	$	351,283
Net income per share - basic and diluted	$	(0.00	)	$	0.01		$	(0.00	)	$	0.02
Weighted average common shares outstanding -basic and diluted		16,785,000			16,385,000			16,584,443			16,385,000
The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

Reliant Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (Deficit)
For the Nine Months Ended September 30, 2023 and 2022
(unaudited)
	Preferred Stock				Common Stock				Additional Paid in		Accumulated
	Shares		Par Value		Shares		Par Value		Capital		Deficit			Total
Balance December 31, 2022		1,000	$	1		16,385,000	$	16,385	$	396,564	$	(310,944	)	$	102,006
Shares issued for services		-		-		400,000		400		35,600		-			36,000
Net income		-		-		-		-		-		29,969			29,969
Balance March 31, 2023		1,000		1		16,785,000		16,785		432,164		(280,975	)		167,975
Net loss		-		-		-		-		-		(59,899	)		(59,899	)
Balance June 30, 2023		1,000		1		16,785,000		16,785		432,164		(340,874	)		108,076
Shareholder contributions		-		-		-		-		5,825		-			5,825
Net income		-		-		-		-		-		(33,979	)		(33,979	)
Balance September 30, 2023		1,000	$	1		16,785,000	$	16,785	$	437,989	$	(374,853	)	$	79,922
Balance December 31, 2021		1,000	$	1		16,385,000	$	16,385	$	396,564	$	(644,820	)	$	(231,870	)
Net loss		-		-		-		-		-		(2,829	)		(2,829	)
															-
Balance March 31, 2022		1,000		1		16,385,000		16,385		396,564		(647,649	)		(234,699	)
Net income		-		-		-		-		-		116,440			116,440
															-
Balance June 30, 2022		1,000	$	1		16,385,000	$	16,385	$	396,564	$	(531,209	)	$	(118,259	)
Net income		-		-		-		-		-		237,672			237,672
Balance September 30, 2022		1,000	$	1		16,385,000	$	16,385	$	396,564	$	(293,537	)	$	119,413
The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

Reliant Holdings, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(unaudited)
	For the Nine Months Ended
	September 30
	2023			2022
Operating Activities
Net income (loss)	$	(63,909	)	$	351,283
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation		36,000			-
Depreciation		11,705			11,724
Changes in operating assets and liabilities:
Accounts receivable		(1,500	)		-
Contract assets		30,571			7,325
House and real estate inventory		(100,084	)		(175,907	)
Prepaid and other current assets		18,145			11,748
Right-of-use asset		21,388			12,107
Contract liabilities		(92,413	)		(160,537	)
Accounts payable and accrued liabilities		58,602			1,434
Accrued liabilities - related parties		5,500			-
Net cash provided by (used in) operating activities		(75,995	)		59,177
Financing Activities
Proceeds from construction loan		33,905			102,177
Payments on note payable		(9,288	)		(15,293	)
Payments on right-of-use liability		(21,479	)		(11,972	)
Contributions from shareholders		5,825			-
Net cash provided by financing activities		8,963			74,912
Net change in cash		(67,032	)		134,089
Cash - beginning of period		282,621			339,996
Cash - end of period	$	215,589		$	474,085
Supplemental Disclosures
Interest paid	$	8,862		$	2,681
Income taxes paid	$	15,029		$	-
Non-cash Disclosures
Purchase of equipment with note payable	$	-		$	-
Establishment of right-of-use asset	$	-		$	50,825
The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

Reliant Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements

For the three and nine months ended September 30, 2023 and 2022

Note 1. The Company and Summary of Significant Accounting Policies

The Company

Reliant Holdings, Inc. (the “Company”) was formed as a Nevada corporation on May 19, 2014. On May 23, 2014, Reliant Holdings, Inc., along with Reliant Pools, Inc., formerly Reliant Pools, G.P., which was formed in September 2013 (“Reliant Pools”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock whereby Reliant Pools, Inc. became a wholly-owned subsidiary of Reliant Holdings, Inc. Reliant Holdings, Inc. designs, and installs swimming pools. On October 10, 2018, the Company incorporated a new wholly-owned subsidiary in Texas, Reliant Custom Homes, Inc. During the third quarter of 2019, the Company purchased land on which it has built a custom home which is now for sale. The Company is headquartered in Austin, Texas. In September 2021, we formed Reliant Solar Energy, Inc., a wholly-owned Texas subsidiary.

Basis of Presentation

The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The consolidated financial statements and related disclosures as of September 30, 2023 are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2022 and 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on April 10, 2023. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ended December 31, 2023.

Going Concern

As shown in the accompanying consolidated financial statements, as of September 30, 2023, the Company had negative cash flows from operations, accumulated recurring losses, and $215,589 of cash on hand, which may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short-term operations. Management believes these factors will contribute toward achieving profitability.

The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to 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.

8

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition

On January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (the “new revenue standard”) to all contracts using the modified retrospective method. The adoption of the new revenue standard had no material impact on our condensed consolidated financial statements as it did not require a change in revenue recognition. As such, comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.     

Revenue is recognized based on the following five step model:

- Identification of the contract with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when, or as, the Company satisfies a performance obligation

All of the Company’s revenue is currently generated from the design and installation of swimming pools. As such no further disaggregation of revenue information is provided.

Pool Sale Revenues

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for our contracts that satisfy the criteria for over-time recognition are recognized as the work progresses. The majority of our revenue is derived from construction contracts and projects that typically span between 4 to 12 months. Our construction contracts will continue to be recognized over time because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed.  Contract costs include labor, material, and indirect costs.

9

Performance Obligations Satisfied at a Point in Time

Revenues for our contracts that do not satisfy the criteria for over-time recognition are recognized at a point in time. Substantially all of our revenue recognized at a point in time is for work performed for pool maintenance or repairs.  Unlike our construction contracts that use a cost-to-cost input measure for performance, the pool maintenance or repairs utilize an output measure for performance based on the completion of a unit of work. The typical time frame for completion of these services is less than one month. Upon fulfillment of the performance obligation, the customer is provided an invoice (or equivalent) demonstrating transfer of control or completion of service to the customer. We believe that point in time recognition remains appropriate for these contracts and will continue to recognize revenues upon completion of the performance obligation and issuance of an invoice.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.

Backlog

On September 30, 2023, we had approximately $1,158,579 of remaining performance obligations on our construction contracts, which we also refer to as backlog. We expect to recognize our backlog as revenue during 2023.

Contract Estimates

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.

Variable Consideration

Transaction prices for our contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. No adjustments on any one contract were material to our consolidated financial statements for the three or nine months ended September 30, 2023.

10

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet. On our construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs prior to revenue recognition, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.

Home sale revenues - Home sale revenues and related profit are generally recognized when title to and possession of the home are transferred to the buyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied at the home closing date. Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit and classified as cash. Contract liabilities, include customer deposit liabilities related to homes sold but not yet delivered to buyers, totaled $0 at September 30, 2023 and 2022, respectively, related to Home revenue. Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit.

Accounts Receivable and Allowances

The Company does not charge interest to its customers and carries its customers’ receivables at their face amounts, less an allowance for doubtful accounts. Included in accounts receivable are balances billed to customers pursuant to retainage provisions in certain contracts that are due upon completion of the contract and acceptance by the customer, or earlier as provided by the contract. Based on the Company’s experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable, including retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year.

The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases), to its customers and is subject to potential credit risk related to changes in business and overall economic activity. The Company analyzes specific accounts receivable balances, historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer balance is deemed to be uncollectible, the account balance is written-off against the allowance for doubtful accounts.

Classification of Construction Contract-related Assets and Liabilities

Contract assets are presented as a current asset in the accompanying consolidated balance sheets, and contract liabilities are presented as a current liability in the accompanying consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices, the Company includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities. The vast majority of these balances are settled within one year.

Equipment

Equipment, consisting mainly of vehicles, is stated at cost. The Company depreciates the cost of equipment using the straight-line method over the estimated useful lives of the assets of 5-7 years for equipment. The estimated useful lives of the Company vehicles are five years. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations for the period. The cost of maintenance and repairs is charged to operations as incurred; significant renewal improvements are capitalized. During the nine months ended September 30, 2023 and 2022, depreciation expense was $11,705 and $11,724, respectively.

Home and Real Estate Inventory

Inventory is stated at cost unless the carrying value is determined to not be recoverable, in which case the affected inventory is written down to fair value. Cost includes land acquisition, land development, and home construction costs, including interest, real estate taxes, and certain direct and indirect overhead costs related to development and construction. The specific identification method is used to accumulate home construction costs.

11

We capitalize interest cost into homebuilding inventories. Interest expense is allocated over the period based on the timing of home closings.

Cost of revenues includes the construction cost, average lot cost, estimated warranty costs, and closing costs applicable to the home. Sales commissions are classified within selling, general, and administrative expenses. The construction cost of the home includes amounts paid through the closing date of the home, plus an accrual for costs incurred but not yet paid.

We assess the recoverability of our land inventory in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360, “Property, Plant, and Equipment.” We review our home and real estate inventory for indicators of impairment by property during each reporting period. If indicators of impairment are present for a property, generally, an undiscounted cash flow analysis is prepared in order to determine if the carrying value of the assets in that community exceeds the undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, the assets are potentially impaired, requiring a fair value analysis. Our determination of fair value is primarily based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. However, fair value can be determined through other methods, such as appraisals, contractual purchase offers, and other third-party opinions of value. Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions. For the nine months ended September 30, 2023 and 2022, we recorded $0 of impairment charges.    

Earnings (Loss) Per Share

In accordance with accounting guidance now codified as ASC Topic 260, “Earnings (Loss) per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There were no dilutive shares outstanding during the nine months ended September 30, 2023 and 2022.

Recent Accounting Pronouncements

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Reclassifications

Certain prior period amounts have been reclassified for consistency with the current period presentation.

Note 2. Accounts Receivable

Accounts receivable consisted of the following:
	September 30,			December 31,
	2023			2022
Contract receivables	$	4,500		$	3,000
Less: Allowance for doubtful accounts		(3,000	)		(3,000	)
Accounts receivable, net	$	1,500		$	-

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The Company recognized no bad debt expense during the nine months ended September 30, 2023 and 2022, respectively.

Note 3. Contracts in Process

The net asset (liability) position for contracts in process consisted of the following:

	September 30,			December 31,
	2023			2022
Costs on uncompleted contracts	$	458,661		$	1,185,212
Estimated earnings		161,151			416,426
		619,812			1,601,638
Less: Progress billings		863,772			1,907,440
Contract liabilities, net	$	(243,960	)	$	(305,802	)

The net asset (liability) position for contracts in process is included in the accompanying consolidated balance sheets as follows:

	September 30, 2023			December 31, 2022
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	-		$	30,571
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)		(243,960	)		(336,373	)
Contract liabilities, net	$	(243,960	)	$	(305,802	)

Note 4. Concentration of Risk

The Company had gross revenue of $1,773,489 and $3,438,580 for the nine months ended September 30, 2023 and 2022, respectively.  There was one customer representing more than 10% of gross revenue for the nine months ended September 30, 2023, representing 14% of total revenue. There were no customers representing more than 10% of gross revenue for the nine months ended September 30, 2022. 

Note 5. Related Party Transactions

The Company accrued bonus compensation related to services performed in the construction of the custom home to Michael Chavez, a greater than 10% shareholder of the Company, as a consultant to the Company, in the amount totaling $18,000 and $54,000, for the nine months ended September 30, 2023 and 2022, respectively. In addition, during the nine months ended September 30, 2023, the Company paid $50,000 of the accrued bonus compensation to Mr. Chavez. As of September 30, 2023, the Company has accrued a total of $16,000 in accrued bonus compensation.

In addition, during the nine months ended September 30, 2023, Mr. Chavez contributed $5,825 to the Company to pay for expenses which have been recorded as a shareholder contribution.

The Company accrued $37,500 in commission expenses to its CEO and sole board member, Mr. May, for services performed during the nine months ended September 30, 2023. As of September 30, 2023, the Company has accrued a total of $37,500 in accrued commission compensation.

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Note 6. Equity

Preferred Shares

On June 15, 2021, the Company issued 1,000 shares of Series A Preferred Stock to Elijah May, the Company’s Chief Executive Officer and sole director in consideration for services rendered and to be rendered to the Company. Such shares of Series A Preferred Stock vote in aggregate fifty-one percent (51%) of the total vote on all shareholder matters, voting separately as a class. Notwithstanding such voting rights, no change in control of the Company was deemed to have occurred in connection with the issuance since Mr. May controlled the vote of 59.1% of the Company’s outstanding common stock at the time of the issuance of the Series A Preferred Stock and therefore controlled the Company prior to such issuance. The holder of the Series A Preferred Stock is not entitled to receive dividends, has no liquidation preference and no conversion rights. With the unanimous consent or approval of the board members, the Company has the option at its sole discretion to redeem any and all outstanding shares of Series A Preferred Stock for $1.00 per share.

Common Shares

From January 2016 to September 2016, the Company sold 885,000 shares of restricted common stock for $44,250, or $0.05 per share in a private offering pursuant to a private placement memorandum. Purchasers in the offering included Lilia Chavez, the mother of Michael Chavez, the Company’s then President and then sole director (10,000 shares for $500), Alexander Spohn, the adult son of Becky Spohn, the Company’s then Controller (5,000 shares for $250), and Phyllis Laws, the mother of Becky Spohn, the Company’s then Controller (5,000 shares for $250).

In September 2016, the Company discovered that the investors in the January 2016 to September 2016 offering may not have been provided all of the information and materials (including current audited financial statements), as is required under the Securities Act of 1933, as amended (the “Securities Act”) in order to claim an exemption from registration pursuant to Rule 506(b) of the Securities Act. The Company believes that all such transactions still complied with, and were exempt from registration under Section 4(a)(2) of the Securities Act because the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof; the securities were offered without any general solicitation by the Company or the Company’s representatives; no underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions; the securities sold are subject to transfer restrictions, and the certificates evidencing the securities (or book entry issuances) contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom; and the securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Nevertheless, based on the above, the Company offered the January 2016 to September 2016 purchasers of the Company’s common stock the right to rescind their previous common stock acquisitions and receive, in exchange for any shares relinquished to the Company, a payment equal to their original purchase price plus interest at the applicable statutory rate in the state in which they reside. The rescission offer expired at 5:00 pm (CST) on October 26, 2016. None of the prior purchasers opted to rescind their prior purchases in connection with the rescission offer.

During the first quarter of fiscal 2017, the Company learned that in 2009, Michael Chavez, the former President and former sole director, was barred from association with any Financial Industry Regulatory Authority, Inc. (FINRA) member in any capability. Mr. Chavez similarly became aware of the FINRA bar at the same time. Pursuant to Rule 506(d), Rule 506 of the Securities Act, is not available for a sale of securities if among other persons, any director or executive officer of an issuer has been subject to certain disqualifying events after September 23, 2013, including suspension or expulsion from membership in a self-regulatory organization (SRO), such as FINRA. However, in the event the disqualifying event occurred prior to September 23, 2013, the issuer is not prohibited from relying on Rule 506, provided that pursuant to Rule 506(e) of the Securities Act, an issuer is required to furnish to each purchaser, a reasonable time prior to sale, a description in writing of any matters that would have triggered disqualification under Rule 506(d)(1), but occurred before September 23, 2013.

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As Mr. Chavez’s FINRA bar constituted a disqualifying event under Rule 506(d), the Company was required to furnish to each purchaser of shares of the Company, a reasonable time prior to sale, a description in writing of such event. The Company did not do that, because as described above, the Company and Mr. Chavez only became aware of the FINRA bar after the close of the offering. Notwithstanding the fact that the Company was not aware of Mr. Chavez’s FINRA bar, the Company determined that the failure to provide such information may prohibit the Company from relying on a Rule 506 exemption for the prior issuances and sales of shares. The Company believes that all such transactions still complied with, and were exempt from registration under Section 4(a)(2) of the Securities Act, because the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof; the securities were offered without any general solicitation by us or the Company’s representatives; no underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions, the securities sold/issued were subject to transfer restrictions, and the certificates evidencing the securities (or book entry issuances) contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom; and the securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Nevertheless, management determined that the Company would offer rescission to all of its stockholders in April 2017. In connection therewith, in April 2017, the Company offered every stockholder of the Company’s common stock the right to rescind their previous purchases and acquisitions and to receive, in exchange for any shares relinquished to us, a payment equal to their original purchase price or consideration provided, plus interest at the applicable statutory rate in the state in which they reside. The rescission offer expired at 5:00 pm (CST) on April 29, 2017. None of the Company’s stockholders opted to rescind their prior purchase/acquisitions in connection with the rescission offer.

The federal securities laws and certain state securities laws do not expressly provide that a rescission offer will terminate a purchaser’s right to rescind a sale of securities that was not registered under the relevant securities laws as required. Accordingly, the Company may continue to be potentially liable under certain securities laws for the offer and sale of the shares sold and issued between May 2014 and September 2016, totaling $57,950 of securities in aggregate, along with statutory interest on such shares, even after the Company completed the rescission offers.

This amount is recorded in equity in the accompanying balance sheets. This will be evaluated at each reporting period for reclassification to a liability if a rescission request is made.

Effective on November 3, 2017, Michael Chavez, the Company’s former sole director, Chief Executive Officer and President of the Company, entered into a Voting Agreement with Elijah May, the Company’s then Chief Operating Officer (COO), and current sole director, Chief Executive Officer and President as well as the Company’s COO (the “Voting Agreement”), resulting in a change in control of the Company.

Pursuant to the Voting Agreement, Mr. Chavez provided complete authority to Mr. May to vote the 4,000,000 shares of common stock which Mr. Chavez then held (and any other securities of the Company obtained by Mr. Chavez in the future) at any and all meetings of stockholders of the Company and via any written consents. Those 4,000,000 shares represented 27.4% of the Company’s common stock as of the parties’ entry into the Voting Agreement and together with the 4,500,000 shares held by Mr. May prior to the parties’ entry into the Voting Agreement, constituted 58.3% of the Company’s total outstanding shares of common stock. The Voting Agreement has a term of ten years, through November 3, 2027, but can be terminated at any time by Mr. May and terminates automatically upon the death of Mr. May. In connection with his entry into the Voting Agreement, Mr. Chavez provided Mr. May an irrevocable voting proxy to vote the shares covered by the Voting Agreement. Additionally, during the term of such agreement, Mr. Chavez agreed not to transfer the shares covered by the Voting Agreement except pursuant to certain limited exceptions. Due to the Voting Agreement, Mr. May held voting control over the Company due to his ability to vote 58.3% of the Company’s total outstanding shares of voting stock as of the date of the Voting Agreement.

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During the six months ended June 30, 2023, the Company issued 400,000 shares of restricted common stock to an employee of the Company for services rendered with a fair value of $36,000.

Note 7. Leases

The Company leases approximately 1,000 square feet of office space in Austin, Texas. On March 28, 2022, the Company entered into a new lease agreement for the office space, which has a term of 24 months, through March 31, 2024, and a monthly rental cost of $1,515 for the period from April 1, 2022 to March 31, 2023 and $1,560 per month from April 1, 2023 to March 31, 2024, together with costs and expenses of approximately $725 per month for 2022. The real property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The components of lease expense were as follows:

	For the Nine
	Months Ended
	September 30,
	2023		2022
Right of Use (ROU) Operating lease cost:
Amortization of assets		21,388		6,006
Interest on lease liabilities		1,237		782
Total net lease cost	$	22,625	$	6,788

Supplemental balance sheet information related to leases was as follows:

	September 30,			December 31,
	2023			2022
Operating lease:
ROU Real Estate Asset	$	50,825		$	50,825
Accumulated amortization		(39,693	)		(18,305	)
Right of Use, net	$	11,132		$	32,520
Current portion of lease liabilities	$	11,244		$	25,940
Noncurrent lease liabilities		-			6,783
Total lease liabilities	$	11,244		$	32,723
Weighted average remaining lease term:
Operating leases	0.75 years			1.25 years
Weighted average discount rate:
Operating lease		6.40	%		6.40	%

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Note 8. Note Payable

	September 30, 2023			December 31, 2022
Term note with a bank secured by car, payable in monthly installments of $660, including interest at 3.99% through February 27, 2025	$	3,206		$	10,494
Term note with a bank secured by car, payable in monthly installments of $1,000, including interest at 6.54% through May 26, 2027		-			2,000
Total long-term debt		3,206			12,494
Less: current portion		(3,206	)		(9,630	)
Long-term debt net of current portion	$	-		$	2,864

Note 9. Construction Loan

Effective on November 1, 2021, the Company’s wholly–owned subsidiary, Reliant Custom Homes, Inc., entered into an Extension of Real Estate Note and Lien with First United Bank and Trust Co. (“First United”), pursuant to which First United agreed to extend the due date of our 221,000 borrowing facility in connection with the construction loan on our custom home, the construction of which has been completed, from October 28, 2021 to April 28, 2022. Effective on April 26, 2022, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to October 28, 2022, and effective on October 28, 2022, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to April 28, 2023. Effective May 1, 2023, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to October 28, 2023, and effective on October 28, 2023, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to April 28, 2024. Amounts borrowed under the loan bear interest at the rate of 6.25%, are secured by the land on which the Company has built a custom home, and are guaranteed by Reliant Pools, Inc., our wholly-owned subsidiary. As of September 30, 2023, the Company had borrowed $220,309 under the construction loan.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report, and incorporated by reference herein, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on April 10, 2023 (the “Annual Report”).

Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our consolidated financial statements included above under “Part I - Financial Information” – “Item 1. Financial Statements”.

In this Quarterly Report on Form 10-Q, we may rely on and refer to information regarding the industries in which we operate in general from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, we have not independently verified any of it, and we have not commissioned any such information.

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “Reliant”, “Reliant Holdings” and “Reliant Holdings, Inc.” refer specifically to Reliant Holdings, Inc. and its consolidated subsidiaries.

In addition, unless the context otherwise requires and for the purposes of this Report only:

● “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

● “SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and

● “Securities Act” refers to the Securities Act of 1933, as amended.

Where You Can Find Other Information

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC like us at http://www.sec.gov (our filings can be found at https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001682265). Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. Our website address is https://www.reliantholdingsinc.com. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

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Summary of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

● Overview. Summary of our operations.

● Plan of Operations. A description of our plan of operations for the next 12 months including required funding.

● Results of Operations. An analysis of our financial results comparing the three and nine months ended September 30, 2023 and 2022.

● Liquidity and Capital Resources. An analysis of changes in our consolidated balance sheets and cash flows and discussion of our financial condition.

● Critical Accounting Policies and Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

Overview

Corporate Information

Our principal executive offices are located at 12343 Hymeadow Drive, Suite 3-A, Austin, Texas 78750, and our telephone number is (512) 407-2623.

Summary Description of Business Operations

Residential Pools

We, through our wholly-owned subsidiary Reliant Pools (which has been in operation since September 2013), are an award winning, custom, swimming pool construction company located in the greater Austin, Texas market. We assist customers with the design of, and then construct, recreational pools which blend in with the surroundings, geometric pools which complement the home’s architecture and water features (e.g., waterfalls and negative edge pools) which provide the relaxing sounds of moving water. Moving forward, we may expand our custom pool construction operations locally and regionally, and nationally.

To date, the majority of our growth has been through referral business. We offer a wide variety of pool projects based upon price and the desires of the client. When our sales personnel meet with a prospective customer, we provide them with an array of projects from the basic pool building to more high-end projects that may include waterfalls, mason work, backyard lighting and in-ground spas to highlight the outdoor living experience.

Custom Homes

On October 10, 2018, the Company incorporated a new wholly-owned subsidiary in Texas, Reliant Custom Homes, Inc. and is attempting to expand its operations in the Austin, Texas area as a custom home builder. To date, the Company purchased land located in Lago Vista, Texas, in the Texas Hill Country, outside of Austin, Texas, on which it has finished construction of an approximately 2,230 square foot home which it is currently marketing for sale. In April 2020, the Company obtained a construction loan for $221,000 for the construction costs associated with the build, of which $220,309 was outstanding as of September 30, 2023, which funds were used for building materials purchases. The loan was renewed on May 1, 2023 and has been extended through October 28, 2023.

The Company has listed the custom home for sale and is marketing the home, with a current offering price of $599,500; however, we may not be able to sell the home for the current offering price, the sale of the home may take longer to accomplish than expected, we may be forced to pay significant expenses paying utilities and other costs on the custom home and amounts due on the construction loan, prior to the date we can sell the home. Additionally, we may not be able to recoup our costs of construction and may be forced to sell the home at a loss.

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Moving forward, funding permitting, and pending the sale of our first custom home, we hope to purchase additional lots and construct additional custom homes in the future.

Plan of Operations

We had working capital of $47,617 as of September 30, 2023. With our current cash on hand, expected revenues, and based on our current average monthly expenses, we don’t currently anticipate the need for additional funding in order to continue our operations at their current levels and to pay the costs associated with being a public company for the next 12 months. We may, however, require additional funding in the future to expand or complete acquisitions. Our plan for the next twelve months is to continue using the same marketing and management strategies and continue providing a quality product with excellent customer service while also seeking to expand our operations organically or through acquisitions as funding and opportunities arise, and, as discussed above, we have also purchased a homesite on which we have constructed a custom home, which we are in the process of selling. As our business continues to grow, customer feedback will be integral in making small adjustments to improve the product and overall customer experience. We plan to raise additional required funding when required through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.

Separately, management is exploring, and we may enter into, strategic transactions in the future, as discussed in greater detail below under “Review of Strategic Alternatives”.

Results of Operations

For the Three months Ended September 30, 2023, compared to the Three months Ended September 30, 2022

We had revenue of $597,400 for the three months ended September 30, 2023, compared to revenue of $1,360,476 for the three months ended September 30, 2022, a decrease of $763,076 or 56.1% from the prior period. We recognize revenue based on the percentage that a job is complete rather than upon completion. As such, total revenue recognized for each period may be different than the product of total completed pools during each period multiplied by the average pool contract price of each pool during such period, as the construction of certain pools may have started in one period and ended in another. Revenue decreased during the current period due to a decrease in pools completed in the current period resulting from a downturn in the demand for in ground swimming pools after the increasing interest rates and the increasing costs making pools un-affordable for most residents in the Company’s operating area.

We had cost of goods sold of $457,697 for the three months ended September 30, 2023, compared to cost of goods sold of $910,152 for the three months ended September 30, 2022, a decrease of $452,455 or 49.7% from the prior period.

Cost of goods sold decreased mainly due to the reduction in the number of pools being built. The timing of our cost of goods sold is materially impacted based on the overall scope and timing of the projects we are working on. In general, cost of goods sold for the three months ended September 30, 2023, was lower than for the three months ended September 30, 2022, due to a decrease in the number of pools we were building. The expenses making up cost of goods sold for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, were as follows:

20

Cost of Goods Sold Expense	For the Three Months Ended September 30, 2023		For the Three Months Ended September 30, 2022		Increase / (Decrease)			Percentage Change
Cost of decking	$	16,757	$	104,811	$	(88,054	)		(84.0	)%
Plaster used in the construction of pools		16,869		96,843		(79,974	)		(82.6	)%
Gunite used in the construction of pools		70,646		104,193		(33,547	)		(32.2	)%
Pool equipment used to filter and circulate the water used in our pools		59,037		145,707		(86,670	)		(59.5	)%
Masonry, stone and tile installed in and around our pools and coping expenses associated therewith		46,581		128,163		(81,582	)		(63.7	)%
Excavation and steel expenses		132,200		131,632		568			0.4	%
Other, including labor		115,607		198,803		(83,196	)		(41.8	)%
Total	$	457,697	$	910,152	$	(452,455	)		(49.7	)%

Cost of goods sold represents our pool construction costs, including raw materials, outsourced labor, installed equipment, tile and coping expenses, excavation costs and permit expenses. We anticipate our cost of goods sold increasing in approximate proportion to increases in revenue and decreasing in approximate proportion to decreases in revenue, moving forward, as our cost of goods sold are factored into the price we charge for our pools and represent the cost of pool construction, the majority of which is not fixed and varies depending on the total number of pools and construction projects we complete during each period and the size and complexity of such projects.

We had a gross margin of $139,703 for the three months ended September 30, 2023, compared to a gross margin of $450,324 for the three months ended September 30, 2022, a decrease of $310,621 or 69.0% from the prior period due to the reasons described above. Gross margin as a percentage of revenue was 23.4% and 33.1% for the three months ended September 30, 2023, and 2022, respectively. Gross margin as a percentage of revenue decreased slightly due to the inability to pass increased costs on to the customers.

We had operating expenses consisting solely of general and administrative expenses of $168,628 for the three months ended September 30, 2023, compared to operating expenses consisting solely of general and administrative expenses of $211,817 for the three months ended September 30, 2022 (including $36,000 of stock-based expenses described below under “Liquidity and Capital Resources”). Operating expenses increased by $43,189 or 420.3% from the prior period.

We had interest income of $86 for the three months ended September 30, 2023, compared to interest income of $187 for the three months ended September 30, 2022. Interest income was in connection with interest generated by funds the Company maintained in its savings account.

We had interest expense of $5,140 for the three months ended September 30, 2023, compared to interest expense of $1,022 for the three months ended September 30, 2022, due to interest paid in connection with loans for Company vehicles, including a car used by our Chief Executive Officer and amounts outstanding on our construction loan, each as described in greater detail under “Liquidity and Capital Resources” below.

We had net loss of $33,979 for the three months ended September 30, 2023, compared to net income of $237,672 for the three months ended September 30, 2022, a decrease in net income of $271,651 or 114.3%, mainly due to the $706,055 decrease in revenues, offset by the $452,455 decrease in cost of goods sold, each as described above.

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For the Nine months Ended September 30, 2023, compared to the Nine months Ended September 30, 2022

We had revenue of $1,773,539 for the nine months ended September 30, 2023, compared to revenue of $3,438,580 for the nine months ended September 30, 2022, a decrease of $1,665,041 or 48.4% from the prior period. We recognize revenue based on the percentage that a job is complete rather than upon completion. As such, total revenue recognized for each period may be different than the product of total completed pools during each period multiplied by the average pool contract price of each pool during such period, as the construction of certain pools may have started in one period and ended in another. Revenue decreased during the current period due to a decrease in pools completed in the current period resulting from a downturn in the demand for in ground swimming pools after the increasing interest rates and the increasing costs making pools un-affordable for most residents in the Company’s operating area.

We had cost of goods sold of $1,186,669 for the nine months ended September 30, 2023, compared to cost of goods sold of $2,458,261 for the nine months ended September 30, 2022, a decrease of $1,271,592 or 51.7% from the prior period.

Cost of goods sold decreased mainly due to the reduction in the number of pools being built. The timing of our cost of goods sold is materially impacted based on the overall scope and timing of the projects we are working on. In general, costs of goods sold for the nine months ended September 30, 2023, were lower than for the nine months ended September 30, 2022, due to a decrease in the number of pools we were building. The expenses making up cost of goods sold for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, were as follows:

Cost of Goods Sold Expense	For the Nine months Ended September 30, 2023		For the Nine months Ended September 30, 2022		Increase / (Decrease)			Percentage Change
Cost of decking	$	99,158	$	280,325	$	(181,167	)		(64.6	)%
Plaster used in the construction of pools		119,032		170,099		(51,067	)		(30.0	)%
Gunite used in the construction of pools		115,006		259,232		(144,226	)		(55.6	)%
Pool equipment used to filter and circulate the water used in our pools		166,851		378,315		(211,464	)		(55.9	)%
Masonry, stone and tile installed in and around our pools and coping expenses associated therewith		132,480		387,845		(255,365	)		(65.8	)%
Excavation and steel expenses		177,495		321,285		(143,790	)		(44.8	)%
Other, including labor		376,647		661,160		(284,513	)		(43.0	)%
Total	$	1,186,669	$	2,458,261	$	(1,271,592	)		(51.7	)%

Cost of goods sold represents our pool construction costs, including raw materials, outsourced labor, installed equipment, tile and coping expenses, excavation costs and permit expenses. We anticipate our cost of goods sold increasing in approximate proportion to increases in revenue and decreasing in approximate proportion to decreases in revenue, moving forward, as our cost of goods sold are factored into the price we charge for our pools and represent the cost of pool construction, the majority of which is not fixed and varies depending on the total number of pools and construction projects we complete during each period and the size and complexity of such projects.

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We had a gross margin of $586,870 for the nine months ended September 30, 2023, compared to a gross margin of $980,319 for the nine months ended September 30, 2022, a decrease of $393,449 or 40.1% from the prior period due to the reasons described above. Gross margin as a percentage of revenue was 33.1% and 28.5% for the nine months ended September 30, 2023, and 2022, respectively. Gross margin as a percentage of revenue increased due to a slight decrease in average cost of our pools.

We had operating expenses consisting solely of general and administrative expenses of $642,529 for the nine months ended September 30, 2023, compared to operating expenses consisting solely of general and administrative expenses of $626,748 for the nine months ended September 30, 2022 (including $36,000 of stock-based expenses described below under “Liquidity and Capital Resources”). Operating expenses increased by $15,781 or 2.5% from the prior period mainly due to increased professional fees and stock-based compensation, offset by a reduction in marketing expenses.

We had interest income of $612 for the nine months ended September 30, 2023, compared to interest income of $393 for the nine months ended September 30, 2022. Interest income was in connection with interest generated by funds the Company maintained in its savings account.

We had interest expense of $8,862 for the nine months ended September 30, 2023, compared to interest expense of $2,681 for the nine months ended September 30, 2022, due to interest paid in connection with loans for Company vehicles, including a car used by our Chief Executive Officer and amounts outstanding on our construction loan, each as described in greater detail under “Liquidity and Capital Resources” below.

We had net loss of $63,909 for the nine months ended September 30, 2023, compared to net income of $351,283 for the nine months ended September 30, 2022, a decrease in net income of $287,374 or 81.8%, mainly due to the $1,608,020 decrease in revenue and the $30,003 increase in general and administrative expenses, offset by the $1,271,592 decrease in cost of goods sold, each as described above.

Liquidity and Capital Resources

We had total assets of $703,989 as of September 30, 2023, consisting of total current assets of $661,684, which included cash of $215,589, accounts receivable of $1,500, house and real estate inventory of $439,158, prepaid expenses of $4,032 and other current assets of $1,405, and equipment, net of accumulated depreciation, of $31,173 and right-of-use asset of $11,132. Included in real estate inventory as of September 30, 2023, is the value of the land and construction costs incurred to date, which the Company acquired in the third quarter of 2019, and is currently marketing the completed home, as discussed above. Contract assets include estimated earnings in excess of billings on uncompleted contracts. Equipment relates to the vehicle discussed below. Total cash decreased from $282,621 as of December 31, 2022, to $215,589 as of September 30, 2023, due to funding of operations with cash on hand while the Company continues to generate additional pool contracts.

We had total liabilities of $624,067 as of September 30, 2023, all of which are current liabilities, including accounts payable and accrued liabilities of $91,848, related party accrued liabilities of $53,500, contract liabilities, relating to billings in excess of costs and estimated earnings on uncompleted jobs of $243,960, current portion of note payable of $3,206, construction loan of $220,309, and current portion of right-of-use liability of $11,244.

The Company accrued bonus compensation to Michael Chavez related to service performed in the construction of the custom home, a greater than 10% shareholder of the Company, as a consultant to the Company, in the amount totaling $18,000 and $54,000, for the nine months ended September 30, 2023 and 2022, respectively. In addition, during the three months ended June 30, 2023, the Company paid $50,000 of the accrued bonus compensation to Mr. Chavez. As of September 30, 2023, the Company has accrued a total of $16,000 in accrued bonus compensation, which is included in accrued liabilities related parties on the Company’s balance sheet.

23

The Company accrued $37,500 in commission expenses to its CEO and sole board member, Mr. May, for services performed during the nine months ended September 30, 2023. As of September 30, 2023, the Company has accrued a total of $37,500 in accrued commission compensation.

On February 11, 2020, we purchased a Hyundai Genesis G80. The Vehicle had a total purchase price of $50,616, including $11,000 which was paid as a down payment in cash. We entered into a term note, secured by the vehicle, for the remaining amount of the purchase price, which amount accrues interest at the rate of 3.99% per annum and is payable at the rate of $660 per month through maturity on February 27, 2025.

On October 26, 2021, we purchased a Nissan Rogue for use by Mr. May. The vehicle had a total purchase price of $29,931, including $10,000 which was paid as a down payment in cash. We entered into a term note, secured by the vehicle, for the remaining amount of the purchase price, which amount accrues interest at the rate of 6.54% per annum and is payable at the rate of $336 per month through maturity on May 26, 2027.

On April 28, 2020, the Company secured a construction loan from First United Bank and Trust Company to be used to develop the land purchased in the third quarter of 2019. The loan is in the amount of up to $221,000, bears interest at the rate of 6.25% per annum and is currently due on April 28, 2024. As of September 30, 2023, a total of $220,309 was outstanding on the loan.

We had working capital of $37,617 as of September 30, 2023, compared to working capital of $36,255 as of December 31, 2022. Working capital increased as of September 30, 2023, compared to December 31, 2022, due to the reduction in net contract liabilities and increase in house and real estate, offset by the increase in accounts payable and accrued liabilities. We had cash of $215,589 as of September 30, 2023, compared to cash of $282,621 as of December 31, 2022.

	For the Nine Months Ended
	September 30
	2023			2022
Net cash provided by (used in) operating activities		(75,995	)		59,177
Net cash provided by financing activities		8,963			74,912
Net change in cash		(67,032	)		134,089

We had $75,995 of net cash used in operating activities for the nine months ended September 30, 2023, as compared to $59,177 of net cash provided by operating activities for the nine months ended September 30, 2022. Net cash used in operating activities for the 2023 period was mainly due to $100,084 of increase in house and real estate inventory and $92,413 of decrease in contract liabilities, offset by $58,602 of increase in accounts payable and accrued liabilities and $30,571 of decrease in contract assets. Net cash provided by operating activities for the 2022 period was mainly due to $351,283 of net income, offset by an increase of $175,907 in house and real estate inventory and a $160,537 decrease in contract liabilities.

We had $8,963 of net cash provided by financing activities for the nine months ended September 30, 2023, which was mainly due to $33,905 of proceeds from our construction loan offset by $9,288 of payments on the notes payable related to our vehicle loans and $21,479 of payments on right-of-use liability, as compared to $74,912 of cash used in financing activities for the nine months ended September 30, 2022, which was mainly due to $102,177 of proceeds from our construction loan offset by $15,293 of payments on the notes payable related to our vehicle loans and $11,972 of payments on right-of-use liability.

We do not currently have any additional commitments or identified sources of additional capital from third parties or from our officers, directors or majority stockholders. Additional financing may not be available on favorable terms, if at all.

24

In the future, we may be required to seek additional capital by selling additional debt or equity securities, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then stockholders. Financing may not be available in amounts or on terms acceptable to us, or at all. In the event we are unable to raise additional funding and/or obtain revenues sufficient to support our expenses, we may be forced to curtail or abandon our business operations, and any investment in the Company could become worthless.

Review of Strategic Alternatives

The costs and expenses of our public reporting obligations are material, and materially affect our quarterly results of operations and profitability. As a result, the Company has initiated a formal review process to evaluate strategic alternatives for the Company. Mr. May, as sole officer and director, is committed to acting in the best interests of the Company, its stockholders and its stakeholders.

In the future, we or our majority stockholders (including Elijah May, our sole officer and director and Michael Chavez, a significant shareholder of the Company), may enter into transactions with parties seeking to merge and/or acquire us and/or our operations. While we have not entered into any agreements or understandings with any such parties to date, in the event that we do enter into such a transaction or transactions in the future, our majority stockholders will likely change and new shares of common stock or preferred stock could be issued resulting in substantial dilution to our then current stockholders. As a result, our new majority stockholders may change the composition of our Board of Directors (currently consisting solely of Mr. May) and replace our current management. Any future transaction may also result in a change in our business focus. We have not entered into any definitive agreements relating to any strategic transaction involving the Company as of the date of this filing and may not enter into such agreements in the future. Any future strategic transaction involving the Company or its operations may have a material effect on our operations, cash flows, results of operations, prospects, plan of operations, the quotation of our common stock on the OTCQB Market, our officers, directors and majority stockholders, and ultimately the value of our securities.

There is no deadline or definitive timetable set for completion of the strategic alternatives review process and there can be no assurance that this process will result in the Company pursuing a transaction or any other strategic outcome. The Company does not intend to make any further public comment regarding the review of strategic alternatives until it has been completed or the Company determines that a disclosure is required by law or otherwise deemed appropriate.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.

“Note 1. The Company and Summary of Significant Accounting Policies” in Part I, Item 1 of this Form 10-Q and “Note 1. The Company and Significant Accounting Policies” in the Notes to Consolidated Financial Statements in Part II, Item 8, of the 2022 Annual Report, describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements.

25

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established and maintain a system of disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), to allow timely decisions regarding required disclosures.

In connection with the preparation of this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer (our Principal Executive Officer and Principal Financial Officer), carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2023, as required by Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on the evaluation described above, our management, including our Principal Executive Officer and Principal Financial Officer, concluded that, as of September 30, 2023, our disclosure controls and procedures were not effective.

Changes in Internal Control Over Financial Reporting

We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment.  There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Material Weakness in Internal Controls Over Financial Reporting

We identified a material weakness in our internal control over financial reporting that exists as of September 30, 2023. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We determined that we had a material weakness because, due to our small size, and our limited number of personnel, we did not have in place an effective internal control environment with formal processes and procedures, to allow for a detailed review of accounting transactions that would identify errors in a timely manner.

Notwithstanding the material weaknesses in our internal control over financial reporting, we have concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

26

Part Ii – Other Information

Item 1. Legal Proceedings

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us. 

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on April 10, 2023, under the heading “Item 1A. Risk Factors”, except as discussed below, and investors should review the risks provided in the Annual Report, and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report, under “Item 1A. Risk Factors”, and below, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

Adverse macro-economic conditions, including inflation and high interest rates, have in the past, and could in the future, adversely impact our operating results.

Heightened levels of inflation and the potential worsening of macro-economic conditions, including slower growth or recession, changes to fiscal and monetary policy, tighter credit, higher interest rates and currency fluctuations, present a risk for us, our suppliers and the stability of our industry. We believe our revenues decreased for the three and nine months ended September 30, 2023, mainly as a result of decreased demand for pools resulting from increasing interest rates and increasing costs of pool construction, making pools un-affordable for most residents in the Company’s operating area. If inflation and interest rates remain at current levels for an extended period, or increase even further, and we are unable to successfully mitigate the impact, our costs are likely to increase, resulting in pressure on our profits, margins and cash flows, and we expect continued and/or further declines in demand for pool construction services. Any of the above may have a material adverse effect on our results of operations and the value of our securities.

We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements, a failure to meet our reporting and financial obligations, loss of revenue and theft, and such failure to maintain ineffective controls and procedures has already resulted in, and may in the future result in, a non-approved transaction, which could have a material adverse effect on our financial condition and the trading price of our common stock.

Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. As reported under “Item 4. Controls and Procedures”, as of September 30, 2023, our Chief Executive Officer has determined that our disclosure controls and procedures were not effective. Separately, as of September 30, 2023, management has identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We determined that we had a material weakness because, due to our small size, and our limited number of personnel, and because we did not have in place an effective internal control environment with formal processes and procedures, to allow for a detailed review of accounting transactions that would identify errors in a timely manner. Separately, the Company did not implement appropriate approval requirements for non-routine transactions.

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A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.

The Company has in the past, and may in the future, be subject to non-routine transactions that were not pre-approved by management. Such transactions may result in material losses, unrecoverable payments, significant decreases in assets and working capital, and ultimately result in a material adverse effect on the Company, its operations and results, any of which may cause the value of the Company’s securities to decline in value or become worthless.

Maintaining effective disclosure controls and procedures and effective internal control over financial reporting are necessary for us to produce reliable financial statements and the Company is committed to remediating its material weaknesses in such controls as promptly as possible. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading price of our common stock, and/or result in litigation against us or our management. In addition, even if we are successful in strengthening our controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or facilitate the fair presentation of our financial statements or our periodic reports filed with the SEC.

We may not be able to sell our customer home for the price sought, and we may lose money on the sale of our custom home.

To date we have completed the construction of our first custom home located in Lago Vista, Texas. We are currently in the process of marketing the custom home for sale, at a current purchase price of $599,500. We originally listed the house in August 2023 for $645,000 and have reduced our offering price by $45,500 through the date of this Report. We may not be able to sell the home for the current offering price, the sale of the home may take longer to accomplish than expected, we may be forced to pay significant expenses paying utilities and other costs on the custom home and amounts due on the construction loan, prior to the date we can sell the home. Additionally, we may not be able to recoup our costs of construction and may be forced to sell the home at a loss. Any of the above may have a material adverse effect on our results of operations and the value of our securities.

We may enter into strategic transactions in the future which may result in a material change in our operations and/or a change of control.

The costs and expenses of our public reporting obligations are material, and materially affect our quarterly results of operations and profitability. In the future, we or our majority stockholders, may enter into transactions with parties seeking to merge and/or acquire us and/or our operations. While we have not entered into any agreements or understandings with any such parties to date, in the event that we do enter into such a transaction or transactions in the future, our majority stockholders will likely change and new shares of common stock or preferred stock could be issued resulting in substantial dilution to our then current stockholders. As a result, our new majority stockholders may change the composition of our Board of Directors (currently consisting solely of Mr. May) and replace our current management. Any future transaction may also result in a change in our business focus. We have not entered into any agreements relating to any strategic transaction involving the Company as of the date of this filing and may not enter into such agreements in the future. There is no deadline or definitive timetable set for completion of the strategic alternatives review process and there can be no assurance that this process will result in the Company pursuing a transaction or any other strategic outcome. The Company does not intend to make any further public comment regarding the review of strategic alternatives until it has been completed or the Company determines that a disclosure is required by law or otherwise deemed appropriate. Any future strategic transaction involving the Company or its operations may have a material effect on our operations, cash flows, results of operations, prospects, plan of operations, the listing of our common stock on the OTCQB Market, our officers, directors and majority stockholders, and the value of our securities.

28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

There have been no sales of unregistered securities during the quarter ended September 30, 2023 and from the period from October 1, 2023 to the filing date of this Report.

Use of Proceeds From Sale of Registered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits

Exhibit		Filed/ Furnished	Incorporated By Reference
Number	Description of Exhibit	Herewith	Form	Exhibit	Filing Date	File Number
3.1	Articles of Incorporation as amended and restated		S-1	3.1	10/27/2016	333-214274
3.2	Certificate of Designations of Reliant Holdings, Inc., Establishing the Designations, Preferences, Limitations and Relative Rights of Its Series A Preferred Stock, filed with the Secretary of State of Nevada on June 15, 2021		8-K	3.1	6/17/2021	000-56012
3.3	Amended and Restated Bylaws		S-1	3.2	10/27/2016	333-214274
10.1	Standard Form of Construction Contract		S-1	10.1	10/27/2016	333-214274
10.2†	Voting Agreement, dated as of November 3, 2017, by and among Michael Chavez and Elijah May		8-K	10.1	11/7/2017	333-214274
10.3	Form of Construction Loan Agreement dated April 28, 2020, by and between Reliant Custom Homes, Inc. and First United Bank and Trust Co.		10-Q	10.7	5/19/2020	000-56012
10.4	Form of Promissory Note in the amount of $221,000, dated April 28, 2020, by Reliant Custom Homes, Inc. in favor of First United Bank and Trust Co.		10-Q	10.8	5/19/2020	000-56012
10.5	Form of Commercial Guaranty dated April 28, 2020, by Reliant Holdings, Inc., in favor of First United Bank and Trust Co.		10-Q	10.9	5/19/2020	000-56012
10.6	Form of Commercial Guaranty dated April 28, 2020, by Reliant Pools, Inc., in favor of First United Bank and Trust Co.		10-Q	10.1	5/19/2020	000-56012
10.7	Form of Construction Deed of Trust Form dated April 28, 2020, by Reliant Custom Homes, Inc. in favor of First United Bank and Trust Co.		10-Q	10.11	5/19/2020	000-56012
10.8†	Reliant Holdings, Inc. 2021 Equity Incentive Plan		8-K	10.2	6/17/2021	000-56012
10.9†	Form of 2021 Equity Incentive Plan Option Award Grant Agreement		S-8	4.1	8/3/2021	333-258392
10.10†	Form of 2021 Equity Incentive Plan Restricted Stock Grant Agreement		S-8	4.2	8/3/2021	333-258392

30

10.11	Extension of Real Estate Note and Lien dated April 26, 2021, by and between Reliant Custom Homes, Inc. and Frist United Bank and Trust Co.		10-Q	10.13	8/16/2021	000-56012
10.12	Extension of Real Estate Note and Lien dated November 1, 2021, by and between Reliant Custom Homes, Inc. and Frist United Bank and Trust Co.		10-K	10.14	4/13/2022	000-56012
10.13	Extension of Real Estate Note and Lien dated April 26, 2022, by and between Reliant Custom Homes, Inc. and First United Bank and Trust Co.		10-Q	10.15	5/18/2022	000-56012
10.14	Extension of Real Estate Note and Lien dated October 28, 2022, by and between Reliant Custom Homes, Inc. and First United Bank and Trust Co.		10-K	10.16	4/10/2023	000-56012
10.15	Extension of Real Estate Note and Lien dated May 1, 2023, by and between Reliant Custom Homes, Inc. and First United Bank and Trust Co.		10-Q	10.17	05/15/2023	000-56012
31.1*	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act	☒
32.1**	Certification of Principal Executive and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act	☒
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	☒
101.SCH*	Inline XBRL Taxonomy Extension Schema Document	☒
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document	☒
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document	☒
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document	☒
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document	☒
104*	Inline XBRL for the cover page of this Annual Report on Form 10-K included in the Exhibit 101 Inline XBRL Document Set	☒

* Filed herewith.

** Furnished Herewith.

† Exhibit constitutes a management contract or compensatory plan or agreement.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	RELIANT HOLDINGS, INC.
Date: December 12, 2023	By:	/s/ Elijah May
		Elijah May
		Chief Executive Officer and President
		(Principal Executive Officer and Principal Financial/Accounting Officer)

32

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Elijah May, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Reliant Holdings, Inc.;
2.	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;
3.	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;
4.	I am 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, including its consolidated subsidiaries, is made known to us by others within those entities, 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 the 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
(d)	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

5. I have disclosed, based on my 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)	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)	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.

Date: December 12, 2023	By:	/s/ Elijah May
		Elijah May
		Chief Executive Officer and President
		(Principal Executive Officer and Principal Financial/Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SS. 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Reliant Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), I, Elijah May, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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 at the dates and for the periods indicated.

Date: December 12, 2023	By:	/s/ Elijah May
		Elijah May
		Chief Executive Officer and President
		(Principal Executive Officer and Principal Financial/Accounting Officer)

XML

Cover - shares	9 Months Ended
	Sep. 30, 2023	Dec. 12, 2023
Cover [Abstract]
Entity Registrant Name	Reliant Holdings, Inc.
Entity Central Index Key	0001682265
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		16,785,000
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	000-56012
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	47-2200506
Entity Address Address Line 1	12343 Hymeadow Drive
Entity Address Address Line 2	Suite 3-A
Entity Address City Or Town	Austin
Entity Address State Or Province	TX
Entity Address Postal Zip Code	78750
City Area Code	512
Local Phone Number	407-2623

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Current Assets
Cash	$ 215,589	$ 282,621
Accounts receivable	1,500	0
House and real estate inventory	439,158	339,074
Contract assets	0	30,571
Prepaid expenses	4,032	22,177
Other current assets	1,405	1,405
Total current assets	661,684	675,848
Equipment, net of accumulated depreciation of $81,189 and $69,484 as of September 30, 2023 and December 31, 2022, respectively	31,173	42,878
Right-of-use asset	11,132	32,520
Total Assets	703,989	751,246
Current Liabilities
Accounts payable and accrued liabilities	91,848	33,246
Accrued liabilities - related parties	53,500	48,000
Contract liabilities	243,960	336,373
Construction loan	220,309	186,404
Current portion of note payable	3,206	9,630
Current portion of right-of-use liability	11,244	25,940
Total current liabilities	624,067	639,593
Long-term note payable, net of current portion	0	2,864
Right-of-use liability	0	6,783
Total Liabilities	624,067	649,240
Stockholders' Equity
Preferred stock Series A, 1,000 shares authorized, $0.001 par value, 1,000 and 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	0	0
Common stock, 70,000,000 shares authorized, $0.001 par value, 16,785,000 and 16,385,000 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	16,785	16,385
Additional paid-in capital	437,989	396,564
Accumulated deficit	(374,853)	(310,944)
Total Stockholders' Equity	79,922	102,006
Total Liabilities and Stockholders' Equity	703,989	751,246
Series A Preferred Stock[Member]
Stockholders' Equity
Preferred stock Series A, 1,000 shares authorized, $0.001 par value, 1,000 and 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	$ 1	$ 1

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Equipment, accumulated depreciation	$ 81,189	$ 69,484
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	70,000,000	70,000,000
Common stock, shares issued	16,785,000	16,385,000
Common stock, shares outstanding	16,785,000	16,385,000
Series A Preferred Stock[Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	1,000	0
Preferred stock, shares outstanding	1,000	0

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Consolidated Statements of Operations (Unaudited)
Revenue	$ 597,400	$ 1,360,476	$ 1,773,539	$ 3,438,580
Cost of goods sold	(457,697)	(910,152)	(1,186,669)	(2,458,261)
Gross margin	139,703	450,324	586,870	980,319
Operating expenses
General and administrative	168,628	211,817	642,529	626,748
Total operating expenses	(168,628)	(211,817)	(642,529)	(626,748)
Income (loss) from operations	(28,925)	238,507	(55,659)	353,571
Other income (expense)
Interest income	86	187	612	393
Interest expense	(5,140)	(1,022)	(8,862)	(2,681)
Total other income (expense)	(5,054)	(835)	(8,250)	(2,288)
Income (loss) before income taxes	(33,979)	237,672	(63,909)	351,283
Provision for income tax	0	0	0	0
Net income (loss)	$ (33,979)	$ 237,672	$ (63,909)	$ 351,283
Net income per share - basic and diluted	$ (0.00)	$ 0.01	$ (0.00)	$ 0.02
Weighted average common shares outstanding -basic and diluted	16,785,000	16,385,000	16,584,443	16,385,000

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Consolidated Statements of Stockholders Deficit (Unaudited) - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)
Balance, shares at Dec. 31, 2021		1,000	16,385,000
Balance, amount at Dec. 31, 2021	$ (231,870)	$ 1	$ 16,385	$ 396,564	$ (644,820)
Net loss	(2,829)	$ 0	$ 0	0	(2,829)
Balance, shares at Mar. 31, 2022		1,000	16,385,000
Balance, amount at Mar. 31, 2022	(234,699)	$ 1	$ 16,385	396,564	(647,649)
Balance, shares at Dec. 31, 2021		1,000	16,385,000
Balance, amount at Dec. 31, 2021	(231,870)	$ 1	$ 16,385	396,564	(644,820)
Net loss	351,283
Balance, shares at Sep. 30, 2022		1,000	16,385,000
Balance, amount at Sep. 30, 2022	119,413	$ 1	$ 16,385	396,564	(293,537)
Balance, shares at Mar. 31, 2022		1,000	16,385,000
Balance, amount at Mar. 31, 2022	(234,699)	$ 1	$ 16,385	396,564	(647,649)
Net loss	116,440	$ 0	$ 0	0	116,440
Balance, shares at Jun. 30, 2022		1,000	16,385,000
Balance, amount at Jun. 30, 2022	(118,259)	$ 1	$ 16,385	396,564	(531,209)
Net loss	237,672	$ 0	$ 0	0	237,672
Balance, shares at Sep. 30, 2022		1,000	16,385,000
Balance, amount at Sep. 30, 2022	119,413	$ 1	$ 16,385	396,564	(293,537)
Balance, shares at Dec. 31, 2022		1,000	16,385,000
Balance, amount at Dec. 31, 2022	102,006	$ 1	$ 16,385	396,564	(310,944)
Net loss	29,969	0	$ 0	0	29,969
Shares issued for services, shares			400,000
Shares issued for services, amount	36,000	$ 0	$ 400	35,600	0
Balance, shares at Mar. 31, 2023		1,000	16,785,000
Balance, amount at Mar. 31, 2023	167,975	$ 1	$ 16,785	432,164	(280,975)
Balance, shares at Dec. 31, 2022		1,000	16,385,000
Balance, amount at Dec. 31, 2022	102,006	$ 1	$ 16,385	396,564	(310,944)
Net loss	(63,909)
Balance, shares at Sep. 30, 2023		1,000	16,785,000
Balance, amount at Sep. 30, 2023	79,922	$ 1	$ 16,785	437,989	(374,853)
Balance, shares at Mar. 31, 2023		1,000	16,785,000
Balance, amount at Mar. 31, 2023	167,975	$ 1	$ 16,785	432,164	(280,975)
Net loss	(59,899)	$ 0	$ 0	0	(59,899)
Balance, shares at Jun. 30, 2023		1,000	16,785,000
Balance, amount at Jun. 30, 2023	108,076	$ 1	$ 16,785	432,164	(340,874)
Net loss	(33,979)	0	0	0	(33,979)
Shareholder contributions	5,825	$ 0	$ 0	5,825	0
Balance, shares at Sep. 30, 2023		1,000	16,785,000
Balance, amount at Sep. 30, 2023	$ 79,922	$ 1	$ 16,785	$ 437,989	$ (374,853)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating Activities
Net income (loss)	$ (63,909)	$ 351,283
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation	36,000	0
Depreciation	11,705	11,724
Changes in operating assets and liabilities:
Accounts receivable	(1,500)	0
Contract assets	30,571	7,325
House and real estate inventory	(100,084)	(175,907)
Prepaid and other current assets	18,145	11,748
Right-of-use asset	21,388	12,107
Contract liabilities	(92,413)	(160,537)
Accounts payable and accrued liabilities	58,602	1,434
Accrued liabilities - related parties	5,500	0
Net cash provided by (used in) operating activities	(75,995)	59,177
Financing Activities
Proceeds from construction loan	33,905	102,177
Payments on note payable	(9,288)	(15,293)
Payments on right-of-use liability	(21,479)	(11,972)
Contributions from shareholders	5,825	0
Net cash provided by financing activities	8,963	74,912
Net change in cash	(67,032)	134,089
Cash - beginning of period	282,621	339,996
Cash - end of period	215,589	474,085
Supplemental Disclosures
Interest paid	8,862	2,681
Income taxes paid	15,029	0
Non-cash Disclosures
Purchase of equipment with note payable	0	0
Establishment of right-of-use asset	$ 0	$ 50,825

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The Company and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

The Company and Summary of Significant Accounting Policies

The Company and Summary of Significant Accounting Policies

Note 1. The Company and Summary of Significant Accounting Policies

The Company

Reliant Holdings, Inc. (the “Company”) was formed as a Nevada corporation on May 19, 2014. On May 23, 2014, Reliant Holdings, Inc., along with Reliant Pools, Inc., formerly Reliant Pools, G.P., which was formed in September 2013 (“Reliant Pools”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock whereby Reliant Pools, Inc. became a wholly-owned subsidiary of Reliant Holdings, Inc. Reliant Holdings, Inc. designs, and installs swimming pools. On October 10, 2018, the Company incorporated a new wholly-owned subsidiary in Texas, Reliant Custom Homes, Inc. During the third quarter of 2019, the Company purchased land on which it has built a custom home which is now for sale. The Company is headquartered in Austin, Texas. In September 2021, we formed Reliant Solar Energy, Inc., a wholly-owned Texas subsidiary.

Basis of Presentation

The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The consolidated financial statements and related disclosures as of September 30, 2023 are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2022 and 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on April 10, 2023. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ended December 31, 2023.

Going Concern

As shown in the accompanying consolidated financial statements, as of September 30, 2023, the Company had negative cash flows from operations, accumulated recurring losses, and $215,589 of cash on hand, which may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short-term operations. Management believes these factors will contribute toward achieving profitability.

The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to 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.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition

On January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (the “new revenue standard”) to all contracts using the modified retrospective method. The adoption of the new revenue standard had no material impact on our condensed consolidated financial statements as it did not require a change in revenue recognition. As such, comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.     

Revenue is recognized based on the following five step model:

- Identification of the contract with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when, or as, the Company satisfies a performance obligation

All of the Company’s revenue is currently generated from the design and installation of swimming pools. As such no further disaggregation of revenue information is provided.

Pool Sale Revenues

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for our contracts that satisfy the criteria for over-time recognition are recognized as the work progresses. The majority of our revenue is derived from construction contracts and projects that typically span between 4 to 12 months. Our construction contracts will continue to be recognized over time because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed.  Contract costs include labor, material, and indirect costs.

Performance Obligations Satisfied at a Point in Time

Revenues for our contracts that do not satisfy the criteria for over-time recognition are recognized at a point in time. Substantially all of our revenue recognized at a point in time is for work performed for pool maintenance or repairs.  Unlike our construction contracts that use a cost-to-cost input measure for performance, the pool maintenance or repairs utilize an output measure for performance based on the completion of a unit of work. The typical time frame for completion of these services is less than one month. Upon fulfillment of the performance obligation, the customer is provided an invoice (or equivalent) demonstrating transfer of control or completion of service to the customer. We believe that point in time recognition remains appropriate for these contracts and will continue to recognize revenues upon completion of the performance obligation and issuance of an invoice.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.

Backlog

On September 30, 2023, we had approximately $1,158,579 of remaining performance obligations on our construction contracts, which we also refer to as backlog. We expect to recognize our backlog as revenue during 2023.

Contract Estimates

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.

Variable Consideration

Transaction prices for our contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. No adjustments on any one contract were material to our consolidated financial statements for the three or nine months ended September 30, 2023.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet. On our construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs prior to revenue recognition, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.

Home sale revenues - Home sale revenues and related profit are generally recognized when title to and possession of the home are transferred to the buyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied at the home closing date. Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit and classified as cash. Contract liabilities, include customer deposit liabilities related to homes sold but not yet delivered to buyers, totaled $0 at September 30, 2023 and 2022, respectively, related to Home revenue. Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit.

Accounts Receivable and Allowances

The Company does not charge interest to its customers and carries its customers’ receivables at their face amounts, less an allowance for doubtful accounts. Included in accounts receivable are balances billed to customers pursuant to retainage provisions in certain contracts that are due upon completion of the contract and acceptance by the customer, or earlier as provided by the contract. Based on the Company’s experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable, including retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year.

The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases), to its customers and is subject to potential credit risk related to changes in business and overall economic activity. The Company analyzes specific accounts receivable balances, historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer balance is deemed to be uncollectible, the account balance is written-off against the allowance for doubtful accounts.

Classification of Construction Contract-related Assets and Liabilities

Contract assets are presented as a current asset in the accompanying consolidated balance sheets, and contract liabilities are presented as a current liability in the accompanying consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices, the Company includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities. The vast majority of these balances are settled within one year.

Equipment

Equipment, consisting mainly of vehicles, is stated at cost. The Company depreciates the cost of equipment using the straight-line method over the estimated useful lives of the assets of 5-7 years for equipment. The estimated useful lives of the Company vehicles are five years. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations for the period. The cost of maintenance and repairs is charged to operations as incurred; significant renewal improvements are capitalized. During the nine months ended September 30, 2023 and 2022, depreciation expense was $11,705 and $11,724, respectively.

Home and Real Estate Inventory

Inventory is stated at cost unless the carrying value is determined to not be recoverable, in which case the affected inventory is written down to fair value. Cost includes land acquisition, land development, and home construction costs, including interest, real estate taxes, and certain direct and indirect overhead costs related to development and construction. The specific identification method is used to accumulate home construction costs.

We capitalize interest cost into homebuilding inventories. Interest expense is allocated over the period based on the timing of home closings.

Cost of revenues includes the construction cost, average lot cost, estimated warranty costs, and closing costs applicable to the home. Sales commissions are classified within selling, general, and administrative expenses. The construction cost of the home includes amounts paid through the closing date of the home, plus an accrual for costs incurred but not yet paid.

We assess the recoverability of our land inventory in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360, “Property, Plant, and Equipment.” We review our home and real estate inventory for indicators of impairment by property during each reporting period. If indicators of impairment are present for a property, generally, an undiscounted cash flow analysis is prepared in order to determine if the carrying value of the assets in that community exceeds the undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, the assets are potentially impaired, requiring a fair value analysis. Our determination of fair value is primarily based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. However, fair value can be determined through other methods, such as appraisals, contractual purchase offers, and other third-party opinions of value. Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions. For the nine months ended September 30, 2023 and 2022, we recorded $0 of impairment charges.    

Earnings (Loss) Per Share

In accordance with accounting guidance now codified as ASC Topic 260, “Earnings (Loss) per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There were no dilutive shares outstanding during the nine months ended September 30, 2023 and 2022.

Recent Accounting Pronouncements

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Reclassifications

Certain prior period amounts have been reclassified for consistency with the current period presentation.

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Accounts Receivable

9 Months Ended

Sep. 30, 2023

Accounts Receivable

Accounts Receivable

Note 2. Accounts Receivable

Accounts receivable consisted of the following:
	September 30,			December 31,
	2023			2022
Contract receivables	$	4,500		$	3,000
Less: Allowance for doubtful accounts		(3,000	)		(3,000	)
Accounts receivable, net	$	1,500		$	-

The Company recognized no bad debt expense during the nine months ended September 30, 2023 and 2022, respectively.

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Contracts in Process

9 Months Ended

Sep. 30, 2023

Contracts in Process

Contracts in Process

Note 3. Contracts in Process

The net asset (liability) position for contracts in process consisted of the following:

	September 30,			December 31,
	2023			2022
Costs on uncompleted contracts	$	458,661		$	1,185,212
Estimated earnings		161,151			416,426
		619,812			1,601,638
Less: Progress billings		863,772			1,907,440
Contract liabilities, net	$	(243,960	)	$	(305,802	)

The net asset (liability) position for contracts in process is included in the accompanying consolidated balance sheets as follows:

	September 30, 2023			December 31, 2022
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	-		$	30,571
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)		(243,960	)		(336,373	)
Contract liabilities, net	$	(243,960	)	$	(305,802	)

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Concentration of Risk

9 Months Ended

Sep. 30, 2023

Concentration of Risk

Concentration of Risk

Note 4. Concentration of Risk

The Company had gross revenue of $1,773,489 and $3,438,580 for the nine months ended September 30, 2023 and 2022, respectively.  There was one customer representing more than 10% of gross revenue for the nine months ended September 30, 2023, representing 14% of total revenue. There were no customers representing more than 10% of gross revenue for the nine months ended September 30, 2022. 

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Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions

Related Party Transactions

Note 5. Related Party Transactions

The Company accrued bonus compensation related to services performed in the construction of the custom home to Michael Chavez, a greater than 10% shareholder of the Company, as a consultant to the Company, in the amount totaling $18,000 and $54,000, for the nine months ended September 30, 2023 and 2022, respectively. In addition, during the nine months ended September 30, 2023, the Company paid $50,000 of the accrued bonus compensation to Mr. Chavez. As of September 30, 2023, the Company has accrued a total of $16,000 in accrued bonus compensation.

In addition, during the nine months ended September 30, 2023, Mr. Chavez contributed $5,825 to the Company to pay for expenses which have been recorded as a shareholder contribution.

The Company accrued $37,500 in commission expenses to its CEO and sole board member, Mr. May, for services performed during the nine months ended September 30, 2023. As of September 30, 2023, the Company has accrued a total of $37,500 in accrued commission compensation.

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Equity

9 Months Ended

Sep. 30, 2023

Equity

Equity

Note 6. Equity

Preferred Shares

On June 15, 2021, the Company issued 1,000 shares of Series A Preferred Stock to Elijah May, the Company’s Chief Executive Officer and sole director in consideration for services rendered and to be rendered to the Company. Such shares of Series A Preferred Stock vote in aggregate fifty-one percent (51%) of the total vote on all shareholder matters, voting separately as a class. Notwithstanding such voting rights, no change in control of the Company was deemed to have occurred in connection with the issuance since Mr. May controlled the vote of 59.1% of the Company’s outstanding common stock at the time of the issuance of the Series A Preferred Stock and therefore controlled the Company prior to such issuance. The holder of the Series A Preferred Stock is not entitled to receive dividends, has no liquidation preference and no conversion rights. With the unanimous consent or approval of the board members, the Company has the option at its sole discretion to redeem any and all outstanding shares of Series A Preferred Stock for $1.00 per share.

Common Shares

From January 2016 to September 2016, the Company sold 885,000 shares of restricted common stock for $44,250, or $0.05 per share in a private offering pursuant to a private placement memorandum. Purchasers in the offering included Lilia Chavez, the mother of Michael Chavez, the Company’s then President and then sole director (10,000 shares for $500), Alexander Spohn, the adult son of Becky Spohn, the Company’s then Controller (5,000 shares for $250), and Phyllis Laws, the mother of Becky Spohn, the Company’s then Controller (5,000 shares for $250).

In September 2016, the Company discovered that the investors in the January 2016 to September 2016 offering may not have been provided all of the information and materials (including current audited financial statements), as is required under the Securities Act of 1933, as amended (the “Securities Act”) in order to claim an exemption from registration pursuant to Rule 506(b) of the Securities Act. The Company believes that all such transactions still complied with, and were exempt from registration under Section 4(a)(2) of the Securities Act because the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof; the securities were offered without any general solicitation by the Company or the Company’s representatives; no underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions; the securities sold are subject to transfer restrictions, and the certificates evidencing the securities (or book entry issuances) contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom; and the securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Nevertheless, based on the above, the Company offered the January 2016 to September 2016 purchasers of the Company’s common stock the right to rescind their previous common stock acquisitions and receive, in exchange for any shares relinquished to the Company, a payment equal to their original purchase price plus interest at the applicable statutory rate in the state in which they reside. The rescission offer expired at 5:00 pm (CST) on October 26, 2016. None of the prior purchasers opted to rescind their prior purchases in connection with the rescission offer.

During the first quarter of fiscal 2017, the Company learned that in 2009, Michael Chavez, the former President and former sole director, was barred from association with any Financial Industry Regulatory Authority, Inc. (FINRA) member in any capability. Mr. Chavez similarly became aware of the FINRA bar at the same time. Pursuant to Rule 506(d), Rule 506 of the Securities Act, is not available for a sale of securities if among other persons, any director or executive officer of an issuer has been subject to certain disqualifying events after September 23, 2013, including suspension or expulsion from membership in a self-regulatory organization (SRO), such as FINRA. However, in the event the disqualifying event occurred prior to September 23, 2013, the issuer is not prohibited from relying on Rule 506, provided that pursuant to Rule 506(e) of the Securities Act, an issuer is required to furnish to each purchaser, a reasonable time prior to sale, a description in writing of any matters that would have triggered disqualification under Rule 506(d)(1), but occurred before September 23, 2013.

As Mr. Chavez’s FINRA bar constituted a disqualifying event under Rule 506(d), the Company was required to furnish to each purchaser of shares of the Company, a reasonable time prior to sale, a description in writing of such event. The Company did not do that, because as described above, the Company and Mr. Chavez only became aware of the FINRA bar after the close of the offering. Notwithstanding the fact that the Company was not aware of Mr. Chavez’s FINRA bar, the Company determined that the failure to provide such information may prohibit the Company from relying on a Rule 506 exemption for the prior issuances and sales of shares. The Company believes that all such transactions still complied with, and were exempt from registration under Section 4(a)(2) of the Securities Act, because the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof; the securities were offered without any general solicitation by us or the Company’s representatives; no underwriters or agents were involved in the foregoing issuances and the Company paid no underwriting discounts or commissions, the securities sold/issued were subject to transfer restrictions, and the certificates evidencing the securities (or book entry issuances) contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom; and the securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Nevertheless, management determined that the Company would offer rescission to all of its stockholders in April 2017. In connection therewith, in April 2017, the Company offered every stockholder of the Company’s common stock the right to rescind their previous purchases and acquisitions and to receive, in exchange for any shares relinquished to us, a payment equal to their original purchase price or consideration provided, plus interest at the applicable statutory rate in the state in which they reside. The rescission offer expired at 5:00 pm (CST) on April 29, 2017. None of the Company’s stockholders opted to rescind their prior purchase/acquisitions in connection with the rescission offer.

The federal securities laws and certain state securities laws do not expressly provide that a rescission offer will terminate a purchaser’s right to rescind a sale of securities that was not registered under the relevant securities laws as required. Accordingly, the Company may continue to be potentially liable under certain securities laws for the offer and sale of the shares sold and issued between May 2014 and September 2016, totaling $57,950 of securities in aggregate, along with statutory interest on such shares, even after the Company completed the rescission offers.

This amount is recorded in equity in the accompanying balance sheets. This will be evaluated at each reporting period for reclassification to a liability if a rescission request is made.

Effective on November 3, 2017, Michael Chavez, the Company’s former sole director, Chief Executive Officer and President of the Company, entered into a Voting Agreement with Elijah May, the Company’s then Chief Operating Officer (COO), and current sole director, Chief Executive Officer and President as well as the Company’s COO (the “Voting Agreement”), resulting in a change in control of the Company.

Pursuant to the Voting Agreement, Mr. Chavez provided complete authority to Mr. May to vote the 4,000,000 shares of common stock which Mr. Chavez then held (and any other securities of the Company obtained by Mr. Chavez in the future) at any and all meetings of stockholders of the Company and via any written consents. Those 4,000,000 shares represented 27.4% of the Company’s common stock as of the parties’ entry into the Voting Agreement and together with the 4,500,000 shares held by Mr. May prior to the parties’ entry into the Voting Agreement, constituted 58.3% of the Company’s total outstanding shares of common stock. The Voting Agreement has a term of ten years, through November 3, 2027, but can be terminated at any time by Mr. May and terminates automatically upon the death of Mr. May. In connection with his entry into the Voting Agreement, Mr. Chavez provided Mr. May an irrevocable voting proxy to vote the shares covered by the Voting Agreement. Additionally, during the term of such agreement, Mr. Chavez agreed not to transfer the shares covered by the Voting Agreement except pursuant to certain limited exceptions. Due to the Voting Agreement, Mr. May held voting control over the Company due to his ability to vote 58.3% of the Company’s total outstanding shares of voting stock as of the date of the Voting Agreement.

During the six months ended June 30, 2023, the Company issued 400,000 shares of restricted common stock to an employee of the Company for services rendered with a fair value of $36,000.

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Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

Note 7. Leases

The Company leases approximately 1,000 square feet of office space in Austin, Texas. On March 28, 2022, the Company entered into a new lease agreement for the office space, which has a term of 24 months, through March 31, 2024, and a monthly rental cost of $1,515 for the period from April 1, 2022 to March 31, 2023 and $1,560 per month from April 1, 2023 to March 31, 2024, together with costs and expenses of approximately $725 per month for 2022. The real property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The components of lease expense were as follows:

	For the Nine
	Months Ended
	September 30,
	2023		2022
Right of Use (ROU) Operating lease cost:
Amortization of assets		21,388		6,006
Interest on lease liabilities		1,237		782
Total net lease cost	$	22,625	$	6,788

Supplemental balance sheet information related to leases was as follows:

	September 30,			December 31,
	2023			2022
Operating lease:
ROU Real Estate Asset	$	50,825		$	50,825
Accumulated amortization		(39,693	)		(18,305	)
Right of Use, net	$	11,132		$	32,520
Current portion of lease liabilities	$	11,244		$	25,940
Noncurrent lease liabilities		-			6,783
Total lease liabilities	$	11,244		$	32,723
Weighted average remaining lease term:
Operating leases	0.75 years			1.25 years
Weighted average discount rate:
Operating lease		6.40	%		6.40	%

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Note Payable

9 Months Ended

Sep. 30, 2023

Note Payable

Note Payable

Note 8. Note Payable

	September 30, 2023			December 31, 2022
Term note with a bank secured by car, payable in monthly installments of $660, including interest at 3.99% through February 27, 2025	$	3,206		$	10,494
Term note with a bank secured by car, payable in monthly installments of $1,000, including interest at 6.54% through May 26, 2027		-			2,000
Total long-term debt		3,206			12,494
Less: current portion		(3,206	)		(9,630	)
Long-term debt net of current portion	$	-		$	2,864

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Construction Loan

9 Months Ended

Sep. 30, 2023

Construction Loan

Construction Loan

Note 9. Construction Loan

Effective on November 1, 2021, the Company’s wholly–owned subsidiary, Reliant Custom Homes, Inc., entered into an Extension of Real Estate Note and Lien with First United Bank and Trust Co. (“First United”), pursuant to which First United agreed to extend the due date of our 221,000 borrowing facility in connection with the construction loan on our custom home, the construction of which has been completed, from October 28, 2021 to April 28, 2022. Effective on April 26, 2022, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to October 28, 2022, and effective on October 28, 2022, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to April 28, 2023. Effective May 1, 2023, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to October 28, 2023, and effective on October 28, 2023, Reliant Custom Homes, Inc., entered into another Extension of Real Estate Note and Lien with First United pursuant to which First United agreed to extend the due date to April 28, 2024. Amounts borrowed under the loan bear interest at the rate of 6.25%, are secured by the land on which the Company has built a custom home, and are guaranteed by Reliant Pools, Inc., our wholly-owned subsidiary. As of September 30, 2023, the Company had borrowed $220,309 under the construction loan.

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The Company and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

The Company and Summary of Significant Accounting Policies

The Company

Reliant Holdings, Inc. (the “Company”) was formed as a Nevada corporation on May 19, 2014. On May 23, 2014, Reliant Holdings, Inc., along with Reliant Pools, Inc., formerly Reliant Pools, G.P., which was formed in September 2013 (“Reliant Pools”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock whereby Reliant Pools, Inc. became a wholly-owned subsidiary of Reliant Holdings, Inc. Reliant Holdings, Inc. designs, and installs swimming pools. On October 10, 2018, the Company incorporated a new wholly-owned subsidiary in Texas, Reliant Custom Homes, Inc. During the third quarter of 2019, the Company purchased land on which it has built a custom home which is now for sale. The Company is headquartered in Austin, Texas. In September 2021, we formed Reliant Solar Energy, Inc., a wholly-owned Texas subsidiary.

Basis of Presentation

The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The consolidated financial statements and related disclosures as of September 30, 2023 are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2022 and 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on April 10, 2023. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ended December 31, 2023.

Going concern

As shown in the accompanying consolidated financial statements, as of September 30, 2023, the Company had negative cash flows from operations, accumulated recurring losses, and $215,589 of cash on hand, which may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short-term operations. Management believes these factors will contribute toward achieving profitability.

The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to 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.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition

On January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (the “new revenue standard”) to all contracts using the modified retrospective method. The adoption of the new revenue standard had no material impact on our condensed consolidated financial statements as it did not require a change in revenue recognition. As such, comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.     

Revenue is recognized based on the following five step model:

- Identification of the contract with a customer

- Identification of the performance obligations in the contract

- Determination of the transaction price

- Allocation of the transaction price to the performance obligations in the contract

- Recognition of revenue when, or as, the Company satisfies a performance obligation

All of the Company’s revenue is currently generated from the design and installation of swimming pools. As such no further disaggregation of revenue information is provided.

Pool Sale Revenues

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for our contracts that satisfy the criteria for over-time recognition are recognized as the work progresses. The majority of our revenue is derived from construction contracts and projects that typically span between 4 to 12 months. Our construction contracts will continue to be recognized over time because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed.  Contract costs include labor, material, and indirect costs.

Performance Obligations Satisfied at a Point in Time

Revenues for our contracts that do not satisfy the criteria for over-time recognition are recognized at a point in time. Substantially all of our revenue recognized at a point in time is for work performed for pool maintenance or repairs.  Unlike our construction contracts that use a cost-to-cost input measure for performance, the pool maintenance or repairs utilize an output measure for performance based on the completion of a unit of work. The typical time frame for completion of these services is less than one month. Upon fulfillment of the performance obligation, the customer is provided an invoice (or equivalent) demonstrating transfer of control or completion of service to the customer. We believe that point in time recognition remains appropriate for these contracts and will continue to recognize revenues upon completion of the performance obligation and issuance of an invoice.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.

Backlog

On September 30, 2023, we had approximately $1,158,579 of remaining performance obligations on our construction contracts, which we also refer to as backlog. We expect to recognize our backlog as revenue during 2023.

Contract Estimates

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.

Variable Consideration

Transaction prices for our contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. No adjustments on any one contract were material to our consolidated financial statements for the three or nine months ended September 30, 2023.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet. On our construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs prior to revenue recognition, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.

Home sale revenues - Home sale revenues and related profit are generally recognized when title to and possession of the home are transferred to the buyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied at the home closing date. Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit and classified as cash. Contract liabilities, include customer deposit liabilities related to homes sold but not yet delivered to buyers, totaled $0 at September 30, 2023 and 2022, respectively, related to Home revenue. Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit.

Accounts Receivable and Allowances

The Company does not charge interest to its customers and carries its customers’ receivables at their face amounts, less an allowance for doubtful accounts. Included in accounts receivable are balances billed to customers pursuant to retainage provisions in certain contracts that are due upon completion of the contract and acceptance by the customer, or earlier as provided by the contract. Based on the Company’s experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable, including retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year.

The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases), to its customers and is subject to potential credit risk related to changes in business and overall economic activity. The Company analyzes specific accounts receivable balances, historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In the event that a customer balance is deemed to be uncollectible, the account balance is written-off against the allowance for doubtful accounts.

Classification of Construction Contract-related Assets and Liabilities

Contract assets are presented as a current asset in the accompanying consolidated balance sheets, and contract liabilities are presented as a current liability in the accompanying consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices, the Company includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities. The vast majority of these balances are settled within one year.

Equipment

Equipment, consisting mainly of vehicles, is stated at cost. The Company depreciates the cost of equipment using the straight-line method over the estimated useful lives of the assets of 5-7 years for equipment. The estimated useful lives of the Company vehicles are five years. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations for the period. The cost of maintenance and repairs is charged to operations as incurred; significant renewal improvements are capitalized. During the nine months ended September 30, 2023 and 2022, depreciation expense was $11,705 and $11,724, respectively.

Home and Real Estate Inventory

Inventory is stated at cost unless the carrying value is determined to not be recoverable, in which case the affected inventory is written down to fair value. Cost includes land acquisition, land development, and home construction costs, including interest, real estate taxes, and certain direct and indirect overhead costs related to development and construction. The specific identification method is used to accumulate home construction costs.

We capitalize interest cost into homebuilding inventories. Interest expense is allocated over the period based on the timing of home closings.

Cost of revenues includes the construction cost, average lot cost, estimated warranty costs, and closing costs applicable to the home. Sales commissions are classified within selling, general, and administrative expenses. The construction cost of the home includes amounts paid through the closing date of the home, plus an accrual for costs incurred but not yet paid.

We assess the recoverability of our land inventory in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360, “Property, Plant, and Equipment.” We review our home and real estate inventory for indicators of impairment by property during each reporting period. If indicators of impairment are present for a property, generally, an undiscounted cash flow analysis is prepared in order to determine if the carrying value of the assets in that community exceeds the undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, the assets are potentially impaired, requiring a fair value analysis. Our determination of fair value is primarily based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. However, fair value can be determined through other methods, such as appraisals, contractual purchase offers, and other third-party opinions of value. Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions. For the nine months ended September 30, 2023 and 2022, we recorded $0 of impairment charges.    

Earnings (Loss) Per Share

In accordance with accounting guidance now codified as ASC Topic 260, “Earnings (Loss) per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There were no dilutive shares outstanding during the nine months ended September 30, 2023 and 2022.

Recent Accounting Pronouncements

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Reclassification

Certain prior period amounts have been reclassified for consistency with the current period presentation.

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Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2023

Accounts Receivable

Schedule of accounts receivable

Accounts receivable consisted of the following:
	September 30,			December 31,
	2023			2022
Contract receivables	$	4,500		$	3,000
Less: Allowance for doubtful accounts		(3,000	)		(3,000	)
Accounts receivable, net	$	1,500		$	-

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Contracts in Process (Tables)

9 Months Ended

Sep. 30, 2023

Contracts in Process

Schedule of net asset (liability) position for contracts in process

	September 30,			December 31,
	2023			2022
Costs on uncompleted contracts	$	458,661		$	1,185,212
Estimated earnings		161,151			416,426
		619,812			1,601,638
Less: Progress billings		863,772			1,907,440
Contract liabilities, net	$	(243,960	)	$	(305,802	)

Schedule for contracts in process included in consolidated balance sheets

	September 30, 2023			December 31, 2022
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	-		$	30,571
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)		(243,960	)		(336,373	)
Contract liabilities, net	$	(243,960	)	$	(305,802	)

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases

Schedule Of Components of lease expense

	For the Nine
	Months Ended
	September 30,
	2023		2022
Right of Use (ROU) Operating lease cost:
Amortization of assets		21,388		6,006
Interest on lease liabilities		1,237		782
Total net lease cost	$	22,625	$	6,788

Schedule for Supplemental balance sheet

	September 30,			December 31,
	2023			2022
Operating lease:
ROU Real Estate Asset	$	50,825		$	50,825
Accumulated amortization		(39,693	)		(18,305	)
Right of Use, net	$	11,132		$	32,520
Current portion of lease liabilities	$	11,244		$	25,940
Noncurrent lease liabilities		-			6,783
Total lease liabilities	$	11,244		$	32,723
Weighted average remaining lease term:
Operating leases	0.75 years			1.25 years
Weighted average discount rate:
Operating lease		6.40	%		6.40	%

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Note Payable (Tables)

9 Months Ended

Sep. 30, 2023

Note Payable

Schedule of long term debt

	September 30, 2023			December 31, 2022
Term note with a bank secured by car, payable in monthly installments of $660, including interest at 3.99% through February 27, 2025	$	3,206		$	10,494
Term note with a bank secured by car, payable in monthly installments of $1,000, including interest at 6.54% through May 26, 2027		-			2,000
Total long-term debt		3,206			12,494
Less: current portion		(3,206	)		(9,630	)
Long-term debt net of current portion	$	-		$	2,864

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The Company and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Revenue recognition related to Home and Land revenue	$ 0	$ 0
Cash on hand	215,589
Depreciation expense	$ 11,705	11,724
Construction contracts description	The majority of our revenue is derived from construction contracts and projects that typically span between 4 to 12 months
Impairment charges	$ 0	$ 0
Remaining performance obligations	$ 1,158,579
Minimum [Member]
Estimated useful lives	5 years
Maximum [Member]
Estimated useful lives	7 years

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Accounts Receivable (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accounts Receivable
Contract receivables	$ 4,500	$ 3,000
Less: Allowance for doubtful accounts	(3,000)	(3,000)
Accounts receivable, net	$ 1,500	$ 0

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Contracts in Process (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Contracts in Process
Costs on uncompleted contracts	$ 458,661	$ 1,185,212
Estimated earnings	161,151	416,426
Total Costs and Estimated Earnings	619,812	1,601,638
Less: Progress billings	863,772	1,907,440
Contract liabilities, net	$ (243,960)	$ (305,802)

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Contracts in Process (Details 1) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Contracts in Process
Costs and estimated earnings in excess of billings on uncompleted contracts	$ 0	$ 30,571
Billings in excess of costs and estimated earnings on uncompleted contracts	(243,960)	(336,373)
Contract liabilities, net	$ (243,960)	$ (305,802)

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Concentration of Risk (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Revenue	$ 1,773,489	$ 3,438,580
Concentration Risk		10.00%
Revenue [Member]
Concentration Risk	14.00%
One Customer [Member]
Concentration Risk	10.00%

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Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Accrued commission compensation	$ 37,500	$ 37,500
Shareholder contribution	5,825
Mr. Chavez [Member]
Compensation to related party		18,000	$ 54,000
Accrued bonus compensation total	16,000	16,000
Payment of bonus compensation amount		50,000
Shareholder contribution		5,825
Mr. May [Member]
Accrued commission compensation	$ 37,500	$ 37,500

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Equity (Details Narrative) - USD ($)		1 Months Ended		6 Months Ended	9 Months Ended	29 Months Ended
	Nov. 03, 2017	Jun. 15, 2021	Jan. 27, 2021	Jun. 30, 2023	Sep. 30, 2016	Sep. 30, 2016
Sale of stock, amount						$ 57,950
Shares issued for services, shares				400,000
Shares issued for services, amount				$ 36,000
Elijah May [Member] | Voting Agreement [Member]
Common stock shares held by related party	4,500,000
Ownership percentage	58.30%
Michael Chavez [Member]
Common stock shares held by related party	4,000,000		4,000,000
Ownership percentage	27.40%
Restricted Stock Member
Sale of stock, amount					$ 44,250
Sale of stock, shares					885,000
Share price (per share)					$ 0.05	$ 0.05
Restricted Stock Member | Lilia Chavez [Member]
Sale of stock, amount					$ 500
Sale of stock, shares					10,000
Restricted Stock Member | Phyllis Laws [Member]
Sale of stock, amount					$ 250
Sale of stock, shares					5,000
Restricted Stock Member | Alexander Spohn [Member]
Sale of stock, amount					$ 250
Sale of stock, shares					5,000
Series A Preferred Stock[Member] | Elijah May [Member]
Share price (per share)		$ 1.00
Preferred stock designated shares		1,000
Preferred stock voting description		Such shares of Series A Preferred Stock vote in aggregate fifty-one percent (51%) of the total vote on all shareholder matters, voting separately as a class

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Leases (Details) - USD ($)	6 Months Ended	9 Months Ended
	Jun. 30, 2023	Sep. 30, 2022
Leases
Amortization of assets	$ 21,388	$ 6,006
Interest on lease liabilities	1,237	782
Total net lease cost	$ 22,625	$ 6,788

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Leases (Details 1) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Operating lease:
ROU Real Estate Asset	$ 50,825	$ 50,825
Accumulated amortization	(39,693)	(18,305)
Right of Use, net	11,132	32,520
Current portion of lease liabilities	11,244	25,940
Noncurrent lease liabilities	0	6,783
Total lease liabilities	$ 11,244	$ 32,723
Weighted average remaining lease term operating leases	9 months	1 year 3 months
Weighted average discount rate operating leases	6.40%	6.40%

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Leases (Details Narrative)	1 Months Ended	9 Months Ended
	Mar. 28, 2022	Sep. 30, 2023 USD ($) ft²
Office space | ft²		1,000
Lease term	24 months
Costs and expenses per month		$ 725
April 1, 2022 to March 31, 2023
Monthly rental cost		1,515
April 1, 2023 to March 31, 2024
Monthly rental cost		$ 1,560

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Note Payable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Debt instrument maturity date	Oct. 28, 2023
Total long term debt	$ 3,206	$ 12,494
Less: current portion	(3,206)	(9,630)
Long-term debt net of current portion	0	2,864
Note payable
Debt instrument monthly installments	$ 660
Debt instrument interest rate	3.99%
Debt instrument maturity date	Feb. 27, 2025
Total long term debt	$ 3,206	10,494
Note payable one
Debt instrument monthly installments	$ 1,000
Debt instrument interest rate	6.54%
Debt instrument maturity date	May 26, 2027
Total long term debt	$ 0	$ 2,000

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Construction Loan (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Loan amount	$ 221,000
Construction loan maturity date	Apr. 28, 2023
Extension maturity date	Oct. 28, 2023
Rate of interest	6.25%
Construction loan	$ 220,309	$ 186,404
Reliant Custom Homes, Inc. [Member]
Extension maturity date	Apr. 28, 2024