As filed with the Securities and Exchange Commission on October 27, 2016

Registration No. 333-

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

Reliant Holdings, Inc.

(Name of registrant in its charter)

  

Nevada   1700   47-2200506
(State or jurisdiction of
incorporation or organization)
  (Primary Standard Industrial Classification Code Number)   (IRS Employer
Identification No.)

 

12343 Hymeadow Drive, Suite 3-A

Austin, Texas 78750

(512) 407-2623

(Address and telephone number of principal executive offices and principal place

of business or intended principal place of business)

 

Michael Chavez, President

12343 Hymeadow Drive, Suite 3-A

Austin, Texas 78750

(512) 407-2623

 

 (Name, address and telephone number of agent for service)

Copies to:

David M. Loev    John S. Gillies
The Loev Law Firm, PC   The Loev Law Firm, PC
6300 West Loop South, & 6300 West Loop South,
Suite 280   Suite 280
Bellaire, Texas 77401   Bellaire, Texas 77401
Phone: (713) 524-4110   Phone: (713) 524-4110
Fax: (713) 524-4122   Fax: (713) 456-7908

 

Approximate date of proposed sale to the public:

as soon as practicable after the effective date of this Registration Statement.

 

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statement number of earlier effective Registration Statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ☐

 

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

 

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

 

CALCULATION OF REGISTRATION FEE

  

Title of Each Class of Securities To be Registered   Amount Being
Registered(1)
  Proposed
Maximum
Price Per
Share(2)
  Proposed
Maximum
Aggregate
Price(1)
  Amount of
Registration
Fee
Common Stock, par value $0.001 per share     3,585,000     $ 0.05     $ 179,250     $ 20.78  
Total     3,585,000     $ 0.05     $ 179,250     $ 20.78  

 

(1) In the event of a stock split, stock dividend or similar transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares of common stock issuable pursuant to Rule 416 under the Securities Act of 1933, as amended.

 

(2) The price of $0.05 is a fixed price, arbitrarily determined by Reliant Holdings, Inc., at which the selling stockholders may sell their shares until our common stock is quoted on the OTCQB market, the Pink Sheet trading market, a national securities exchange or the NASDAQ trading market, at which time the shares may be sold at prevailing market prices or privately negotiated prices. Estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended.

 

The Registrant hereby amends its registration statement, on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED OCTOBER 27, 2016

 

PROSPECTUS

 

RELIANT HOLDINGS, INC.

 

INITIAL PUBLIC OFFERING

 

Relating to the Resale of 3,585,000 Shares of Common Stock

 

The selling stockholders named in this prospectus are offering 3,585,000 shares of common stock offered through this prospectus for their own account.

 

We will not receive any proceeds from this offering and have not made any arrangements for the sale of these securities.

 

There is no current market for our common stock. The offering price is the stated, fixed price of $0.05 per share until the securities are quoted on the OTCQB Market, the Pink Sheets market, a national securities exchange or the NASDAQ trading market, and thereafter will be based upon fluctuating market prices.

 

A current prospectus must be in effect at the time of the sale of the shares of common stock discussed above. The selling stockholders will be responsible for any commissions or discounts due to brokers or dealers. We will pay all of the other offering expenses.

 

Each selling stockholder or dealer selling the common stock is required to deliver a current prospectus upon the sale. In addition, for the purposes of the Securities Act of 1933, as amended, the selling stockholders may be deemed to be underwriters.

 

Our common stock will be considered a “ penny stock ”, and subject to the requirements of Rule 15g-9, promulgated under the Exchange Act of 1934, as amended. “ Penny stock ” is generally defined as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser’s consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined as a penny stock.

 

The required penny stock disclosures include the required delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of purchasers to sell their securities in the secondary market. In addition, various state securities laws impose restrictions on transferring “ penny stocks ” and as a result, investors in the common stock may have their ability to sell their shares of the common stock impaired.

 

We are an “ emerging growth company ” as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “ JOBS Act ”) and, as such, have elected to comply with certain reduced public company reporting requirements for future filings. See “ Description of Business: Government Regulations ” and “ Risk Factors ” contained herein.

 

The purchase of the securities offered through this prospectus involves a high degree of risk. See the section entitled “ Risk Factors ” starting on page 9.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

THE DATE OF THIS PROSPECTUS IS ________________ , 2016

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
Prospectus Summary   1
Summary of the Offering    4
Summary Financial Data    5
Forward-Looking Statements    8
Risk Factors    9
Use of Proceeds    25
Legal Proceedings    25
Directors, Executive Officers and Corporate Governance    26
Executive and Director Compensation    29
Security Ownership of Certain Beneficial Owners and Management    30
Interest of Named Experts and Counsel    31
Experts    31
Indemnification of Directors and Officers    31
Description of Business    32
Description of Property    40
Management’s Discussion and Analysis of Financial Condition and Results of Operations    40
Certain Relationships and Related Transactions    44
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure    45
Descriptions of Capital Stock    45
Market for Common Equity and Related Stockholder Matters    47
Selling Stockholders    47
Shares Available for Future Sale    49
Plan of Distribution    50
Where You Can Find More Information    52
Legal Matters    53
Financial Statements      53

 

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ABOUT THIS PROSPECTUS 

 

You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. No offers are being made hereby in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus is accurate only as of the date on the cover. Our business, financial condition, results of operations and prospects may have changed since that date.

 

Unless otherwise indicated, information contained in this prospectus concerning our industry, including our market opportunity, is based on information from independent industry analysts, third-party sources and management estimates. Management estimates are derived from publicly-available information released by independent industry analysts and third party sources, as well as data from our internal research, and are based on assumptions made by us using data and our knowledge of such industry and market, which we believe to be reasonable. In addition, while we believe the market opportunity information included in this prospectus is generally reliable and is based on reasonable assumptions, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the heading “ Risk Factors .”

 

For investors outside the United States: we have not taken any action to permit a public offering of the shares of our common stock or the possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

 

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

 

In addition, unless the context otherwise requires:

 

  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.

 

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PROSPECTUS SUMMARY

 

The following summary highlights material information found in more detail elsewhere in the prospectus. It does not contain all of the information you should consider. As such, before you decide to buy our common stock, in addition to the following summary, we urge you to carefully read the entire prospectus, especially the risks of investing in our common stock as discussed under “ Risk Factors .” 

 

Organizational History

 

We were formed as a Nevada corporation on May 19, 2014.

 

On May 23, 2014, we, along with Reliant Pools, Inc. (“ Reliant Pools ”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock (the “ Exchange Agreement ”). Pursuant to the Exchange Agreement, the shareholders of Reliant Pools exchanged 2.1 million shares of common stock, representing 100% of the outstanding common stock of Reliant Pools, for 2.1 million shares of our common stock (the “ Exchange ”). As a result of the Exchange, Reliant Pools became our wholly-owned subsidiary. The President of Reliant Pools, and its largest shareholder at the time of the Exchange was Michael Chavez, our President. The following shares of restricted common stock were issued in connection with the Exchange: 900,000 shares of common stock to Michael Chavez, our current Chief Executive Officer and sole director; 750,000 shares of common stock to Elijah May our current Chief Operating Officer; and 450,000 shares of common stock to Becky Spohn our current Controller.

 

Description of Business Operations

 

We, through our wholly-owned subsidiary, Reliant Pools, are an award winning, custom, swimming pool construction located in the greater Austin, Texas market. In the future we plan to offer maintenance services for residential pools as well. 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 (which have won awards) and water features (e.g., waterfalls and negative edge pools) which provide the relaxing sounds of moving water. Moving forward, we plan on expanding our operations through an accretive business model in which we plan to acquire competitors in both the custom pool construction and pool maintenance/service industries locally, 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 team meets 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.

 

Risks Relating to Our Business and Our Industry

 

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “ Risk Factors ” below. Some of these risks are:

 

  the need for additional funding;
  our lack of a significant operating history;
  the fact that our majority stockholder 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;

 

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  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;
  economic downturns both in the United States and globally;
  risk of increased regulation of our operations; and
  other risk factors included under “ Risk Factors ” below.

 

Plan of Operations

 

We had working capital of $42,062 as of June 30, 2016. We estimate the need for approximately $200,000 in additional funding to support our planned business operations over the next approximately 12 months, which we hope to raise through the sale of debt or equity securities (subsequent to the effectiveness of this registration statement) and/or through traditional bank funding. 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. As our business continues to grow, customer feedback will be integral in making small adjustments to improve the product and overall customer experience. With our current cash on hand and based on our current average monthly expenses, we do not anticipate the need for any additional funding in order to continue our operations as their current levels, but may seek to raise additional funding in the future to expand or complete acquisitions. In the event we require additional funding, we plan to raise that 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.

 

Penny Stock Rules

 

Our common stock will be considered a “ penny stock ”, and subject to the requirements of Rule 15g-9, promulgated under the Securities Exchange Act of 1934, as amended. “ Penny stock ” is generally defined as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser’s consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined as a penny stock.

 

The required penny stock disclosures include the required delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of purchasers to sell their securities in the secondary market. In addition, various state securities laws impose restrictions on transferring “ penny stocks ” and as a result, investors in the common stock may have their ability to sell their shares of the common stock impaired.

 

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Implications of Being an Emerging Growth Company

 

As a company with less than $1.0 billion in revenue during our last completed fiscal year, we qualify as an “ emerging growth company ” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements that are otherwise applicable generally to public companies. These reduced reporting requirements include:

 

  an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting; 
  an exemption from compliance with any requirement that the Public Company Accounting Oversight Board, or PCAOB, may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; 
  reduced disclosure about our executive compensation arrangements; 
  an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or stockholder approval of any golden parachute arrangements; 
  extended transition periods for complying with new or revised accounting standards; and 
  the ability to present more limited financial data, including presenting only three years of selected financial data in the registration statement, of which this prospectus is a part.

 

We will remain an emerging growth company until the earliest to occur of: (i) the end of the first fiscal year in which our annual gross revenue is $1.0 billion or more; (ii) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the end of the fiscal year during which the fifth anniversary of this offering occurs. We may choose to take advantage of some, but not all, of the available benefits under the JOBS Act.

 

We are choosing to irrevocably “ opt in ” to the extended transition periods available under Section 107 of the JOBS Act for complying with new or revised accounting standards, but we currently intend to take advantage of the other exemptions discussed above. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you invest.

 

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. Our website address is www.reliantpools.com. The information on, or that may be accessed through, our website is not incorporated by reference into this registration statement and should not be considered a part of this registration statement.

 

Our logo, and other trade names, trademarks, and service marks of the Company appearing in this prospectus are the property of the Company. Other trade names, trademarks, and service marks appearing in this prospectus are the property of their respective holders.

 

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SUMMARY OF THE OFFERING:

 

Common Stock Offered by Selling Stockholders:   3,585,000 shares of common stock
     
Common Stock Outstanding Before The Offering:   14,585,000 shares
     
Common Stock Outstanding After The Offering:   14,585,000 shares
     
Use Of Proceeds:   We will not receive any proceeds from the shares offered by the selling stockholders in this offering, see also “ Use of Proceeds ”, below.
     
Limited Market:   There is currently no market for our common stock. We intend to apply to the OTCQB Market, the Pink Sheets market, a national securities exchange or the NASDAQ trading market, through a market maker that is a licensed broker dealer, to allow the trading of our common stock upon our becoming a reporting company. We can provide no assurance that there will be a market for our securities in the future. If in the future a market does exist for our securities, it is likely to be highly illiquid and sporadic. 
     
Risk Factors:   You should read the “ Risk Factors ” section of this prospectus beginning on page 9 and all of the other information set forth in this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
     
Potential Need for Additional Financing:   We had working capital of $42,062 as of June 30, 2016. We estimate the need for approximately $200,000 in additional funding to support our planned business operations over the next approximately 12 months, which we hope to raise through the sale of debt or equity securities (subsequent to the effectiveness of this registration statement) and/or through traditional bank funding. 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. As our business continues to grow, customer feedback will be integral in making small adjustments to improve the product and overall customer experience. With our current cash on hand and based on our current average monthly expenses, we do not anticipate the need for any additional funding in order to continue our operations as their current levels, but may seek to raise additional funding in the future to expand or complete acquisitions. In the event we require additional funding, we plan to raise that 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.
     
Address:   12343 Hymeadow Drive, Suite 3-A, Austin, Texas 78750
     
Telephone Number:   (512) 407-2623

 

General Information About This Prospectus

 

Unless otherwise noted, throughout this prospectus the number of shares of our common stock to be outstanding following this Offering is based on 14,585,000 shares of our common stock outstanding as of October 27, 2016.

 

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SUMMARY FINANCIAL DATA

 

You should read the summary consolidated financial information presented below for June 30, 2016 and December 31, 2015, and the six months and two years then ended. We derived the summary financial information from our audited consolidated financial statements for the period ending December 31, 2015 and our unaudited consolidated financial statements for the period ending June 30, 2016, appearing elsewhere in this prospectus. You should read this summary consolidated financial information in conjunction with our plan of operation, financial statements and related notes to the financial statements, each appearing elsewhere in this prospectus.

 

SUMMARY BALANCE SHEETS:

 

    June 30, 2016   December 31, 2015
    (Unaudited)    
ASSETS                
Current Assets                
Cash   $ 126,471     $ 186,000  
Accounts Receivable     21,683       1,500  
Federal income tax receivable     10,000        
Earnings in excess of billings and estimated earnings of uncompleted contracts     23,473       31,028  
Total current assets     181,627       218,528  
                 
Equipment, net     32,103       421  
                 
Total Assets   $ 213,730     $ 218,949  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 64,945     $ 43,845  
Billings in excess of costs and estimated earnings on uncompleted jobs     69,246       128,701  
Current portion of long- term note payable     5,374        
Total current liabilities     139,565       172,546  
                 
Long-term note payable     21,760        
                 
Total Liabilities     161,325       172,546  
                 
Stockholders’ Equity                
                 
Preferred stock, ($0.001 par value, 5,000,000 shares authorized, zero issued and outstanding as of June 30, 2016 and December 31, 2015 and 2014)            
Common stock, ($.001 par value, 70,000,000 shares authorized, 15,210,000 and 14,400,000 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively)     15,210       14,400  
Stock subscription receivable     (700 )     (1,200 )
Additional paid-in capital     39,690        
Retained Earnings     (1,795 )     33,203  
                 
Total Stockholders’ Equity     52,405       46,403  
                 
Total Liabilities and Stockholders’ Equity   $ 213,730     $ 218,949  

 

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SUMMARY STATEMENTS OF OPERATIONS: 

 

    For the Six Months Ended
June 30,
    2016   2015
    (Unaudited)   (Unaudited)
Revenue   $ 1,274,365     $ 476,895  
Cost of Goods Sold     (972,766 )     (372,836 )
Gross Margin     301,599       104,059  
                 
Operating Expenses                
 General and administrative     335,684       100,273  
                 
Total Operating Expenses     (335,684 )     (100,273 )
                 
Income (Loss) From Operations     (34,085 )     3,786  
Other income / (expense)                
                 
 Interest income     29       7  
 Interest expense     (942 )     (236 )
                 
Total other income     (913 )     (229 )
                 
Income (Loss) /Before Income Taxes     (34,998 )     3,557  
                 
Provision for Income Tax            
                 
Net Income (Loss)     (34,998 )     3,557  

 

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    For the year ended
December 31,
    2015   2014
Revenue   $ 1,118,665     $ 874,043  
Cost of Goods Sold     (821,911 )     (711,268 )
Gross Margin     296,754       162,775  
                 
Operating Expenses                
General and administrative     292,077       88,908  
Share Based Compensation Expense           9,400  
                 
Total Operating Expenses     (292,077 )     (98,308 )
                 
Income From Operations     4,677       64,467  
Other income / (expense)                
                 
Interest income           7  
Other Income              
Interest expense     (212 )     (700 )
                 
Total other income     (212 )     (693 )
                 
Net Income Before Income Taxes     4,465       63,774  
                 
Provision for Income Tax              
                 
Net Income     4,465       63,774  

 

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FORWARD-LOOKING STATEMENTS

 

Portions of this prospectus, including disclosure under “ Management’s Discussion and Analysis or Plan of Operation ,” contain forward-looking statements. These forward-looking statements which include words such as “ anticipates ”, “ believes ”, “ expects ”, “ intends ”, “ forecasts ”, “ plans ”, “ future ”, “ strategy ” or words of similar meaning, are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements. Forward-looking statements involve assumptions and describe our plans, strategies, and expectations. You can generally identify a forward-looking statement by words such as may, will, should, expect, anticipate, estimate, believe, intend, contemplate or project. Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include among others set forth under “ Risk Factors ”:

  

  the need for additional funding;
  our lack of a significant operating history;
  the fact that our majority stockholder 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;
  economic downturns both in the United States and globally;
  risk of increased regulation of our operations; and
  other risk factors included under “ Risk Factors ” below.

   

With respect to any forward-looking statement that includes a statement of its underlying assumptions or basis, we caution that, while we believe such assumptions or basis to be reasonable and have formed them in good faith, assumed facts or basis almost always vary from actual results, and the differences between assumed facts or basis and actual results can be material depending on the circumstances. When, in any forward-looking statement, we or our management express an expectation or belief as to future results, that expectation or belief is expressed in good faith and is believed to have a reasonable basis, but there can be no assurance that the stated expectation or belief will result or be achieved or accomplished. All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Except as required by applicable law, including the securities laws of the United States and/or if the existing disclosure fundamentally or materially changes, we do not undertake any obligation to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect unanticipated events that may occur.

 

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RISK FACTORS

 

The securities offered herein are highly speculative and should only be purchased by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this prospectus before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent. The below risk factors include a discussion of all material risks which we believe are applicable to the Company, its operations and its securities.

 

Risks Related to Our Business Operations and Our Industry :

 

We require additional financing, and we may not be able to raise funds on favorable terms or at all.

 

We had working capital of $42,062 as of June 30, 2016. We estimate the need for approximately $200,000 in additional funding to support our operations over the next approximately 12 months, which we hope to raise through the sale of debt or equity securities (subsequent to the effectiveness of this registration statement) and/or through traditional bank funding. We do not currently have any arrangements for financing and may not be able to raise such funding if required. The most likely source of future funds presently available to us will be through the sale of equity capital. Any sale of share capital will result in dilution to existing stockholders. Furthermore, we may incur debt in the future, and may not have sufficient funds to repay our future indebtedness or may default on our future debts, jeopardizing our business viability.

 

We may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct business, which might result in the value of our common stock decreasing in value or becoming worthless. There can be no assurance that additional financing will be available to us on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans. Substantial additional funds will still be required if we are to reach our goals that are outlined in this prospectus. Without additional funding, we may not continue our planned business operations.

 

Obtaining additional financing contains risks, including:

 

  additional equity financing may not be available to us on satisfactory terms and any equity we are able to issue could lead to dilution for current stockholders;
   
  loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation provisions, which are not acceptable to management or our sole director;
     
  the current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing; and
     
  if we fail to obtain required additional financing to grow our business, we would need to delay or scale back our business plan, reduce our operating costs, or reduce our headcount, each of which would have a material adverse effect on our business, future prospects, and financial condition.

 

We may have difficulty obtaining future funding sources, if needed, and we may have to accept terms that would adversely affect stockholders.

 

We will need to raise funds from additional financing. We have no commitments for any financing and any financing commitments may result in dilution to our existing stockholders. We may have difficulty obtaining additional funding, and we may have to accept terms that would adversely affect our stockholders. For example, the terms of any future financings may impose restrictions on our right to declare dividends or on the manner in which we conduct our business. Additionally, we may raise funding by issuing convertible notes, which if converted into shares of our common stock would dilute our then stockholders’ interests. Lending institutions or private investors may impose restrictions on a future decision by us to make capital expenditures, acquisitions or significant asset sales. If we are unable to raise additional funds, we may be forced to curtail or even abandon our business plan.

 

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Our ability to grow and compete in the future will be adversely affected if adequate capital is not available.

 

The ability of our business to grow and compete depends on the availability of adequate capital, which in turn depends in large part on our cash flow from operations and the availability of equity and debt financing. Our cash flow from operations may not be sufficient or we may not be able to obtain equity or debt financing on acceptable terms or at all to implement our growth strategy. As a result, adequate capital may not be available to finance our current growth plans, take advantage of business opportunities or respond to competitive pressures, any of which could harm our business.

 

Because we have a limited operating history there is no assurance that our future operations will result in profitable operations.

 

There is no significant operating history upon which to base any assumption as to the likelihood that we will prove successful, and we cannot provide investors with assurances that we will ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail. We had net income of $4,465 for the year ended December 31, 2015, compared to net income of $63,774 for the year ended December 31, 2014, a decrease of $59,309 or 93% from the prior period. We had a net loss of $34,998 for the six months ended June 30, 2016, compared to a net loss of $3,557 for the six months ended June 30, 2015, an increase in net loss of $31,441. We cannot guarantee that we will be successful in generating profitable operations in the future to ensure our continuation.

 

The demand for our swimming pool construction and future planned maintenance services has been and will be adversely affected by unfavorable economic conditions.

 

Consumer discretionary spending affects our sales and is impacted by factors outside of our control, including general economic conditions, disposable income levels, consumer confidence and access to credit. In economic downturns, the demand for swimming pool construction and maintenance services may decline, often corresponding with declines in discretionary consumer spending, the growth rate of pool eligible households and swimming pool construction. Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market could have a material adverse impact on our financial performance. Such downturns expose us to certain additional risks, including but not limited to the risk of customer closures or bankruptcies, which could shrink our potential customer base and inhibit our ability to collect on those customers’ receivables.

 

We believe that homeowners’ access to consumer credit is a critical factor enabling the purchase of new pools. If there are prolonged unfavorable economic conditions and downturns in the housing market, it may result in significant tightening of credit markets, which limit the ability of consumers to access financing for new swimming pools, which could negatively impact our sales.

 

If we make any acquisitions, they may disrupt or have a negative impact on our business.

 

If we make acquisitions in the future, funding permitting, of which there can be no assurance, we could have difficulty integrating the acquired company’s assets, personnel and operations with our own. We do not anticipate that any acquisitions or mergers we may enter into in the future would result in a change of control of the Company. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:

 

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the difficulty of integrating acquired products, services or operations;
     
the potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies;
     
difficulties in maintaining uniform standards, controls, procedures and policies;
     
the potential impairment of relationships with employees and customers as a result of any integration of new management personnel;
     
the potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products to new and existing customers;
     
the effect of any government regulations which relate to the business acquired;
     
potential unknown liabilities associated with acquired businesses or product lines, or the need to spend significant amounts to retool, reposition or modify the marketing and sales of acquired products or operations, or the defense of any litigation, whether or not successful, resulting from actions of the acquired company prior to our acquisition; and
     
potential expenses under the labor, environmental and other laws of various jurisdictions.

 

Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with an acquisition, many of which cannot be presently identified. These risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.

 

We face intense competition both from within our industry and from other leisure product alternatives.

 

We face competition from both inside and outside of our industry. Within our industry, we directly compete against various regional and local pool construction companies and will compete directly in the future with regional and local maintenance companies. Outside of our industry, we compete indirectly with alternative suppliers of big ticket consumer discretionary products, such as boat and motor home distributors, and with other companies who rely on discretionary homeowner expenditures, such as home remodelers. New competitors may emerge as there are low barriers to entry in our industry.

 

We rely on our management and if they were to leave our company our business plan could be adversely effected.

 

We are largely dependent upon the personal efforts and abilities of our existing management, Michael Chavez (President and sole member of the Board of Directors); Elijah May (Chief Operating Officer); and Becky Spohn (Controller) who all play active roles in our operations. Moving forward, should any of the individuals described above be lost for any reason, the Company will incur costs associated with recruiting replacements and any potential delays in operations which this may cause. If we are unable to replace such individuals with suitably trained alternative individuals, we may be forced to scale back or curtail our business plan.

 

We do not currently have any employment agreements or maintain key person life insurance policies on our executive officers. If our executive officers do not devote sufficient time towards our business, we may never be able to effectuate our business plan.

 

We do not currently have any employment agreements in place with management.

 

The Company has not entered into an employment agreement with Michael Chavez (President and sole member of the Board of Directors), Elijah May (Chief Operating Officer), or Becky Spohn (Controller). As such, there are no contractual relationships guaranteeing these individuals will stay with the Company and continue its operations. In the event any of these individuals resign, the Company may be unable to get another officer and director to fill the void and performance may be significantly affected.

 

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We are susceptible to adverse weather conditions.

 

Weather is one of the principal external factors affecting our business. For example, unseasonably late warming trends in the spring or early cooling trends in the fall can shorten the length of the pool season. Also, unseasonably cool weather or extraordinary rainfall during the peak season can decrease swimming pool use, installation and maintenance. These weather conditions adversely affect our sales. While warmer weather conditions favorably impact our sales, global warming trends and other significant climate changes can create more variability in the short term or lead to other unfavorable weather conditions that could adversely impact our sales or operations. Drought conditions or water management initiatives may lead to municipal ordinances related to water use restrictions, which could result in decreased pool installations and negatively impact our sales.

 

Our business is highly seasonal. Our results of operation fluctuate as a result of weather conditions.

 

Although we hope to reduce the seasonality of our sales over time by expanding our presence through acquisitions and expansion in other areas in the State of Texas (e.g., Houston, San Antonio, and Dallas/Fort Worth), at present our business remains highly seasonal and subject to the weather in the greater Austin, Texas area. Historically, approximately 60% of our net sales have been generated in the second and third quarters of the year. These quarters represent the peak months of both swimming pool use, installation, remodeling, repair and maintenance. Moreover, we typically incur net losses during the first quarter of the year. Unseasonably cold weather or extraordinary amounts of rainfall during the peak sales season can significantly reduce pool purchases and disrupt installation schedules, thereby adversely affecting sales and operating revenues. Our business is significantly affected by weather patterns. For example, unseasonably late warming trends can decrease the length of the pool season, and unseasonably cool weather and/or extraordinary amounts of rainfall in the peak season may decrease swimming pool use, resulting in lower maintenance needs and decreased sales.

 

We may be adversely affected by weather conditions and natural disasters.

 

Weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts and floods can harm our business. These can delay construction, adversely affect the cost or availability of materials or labor, or damage projects under construction. In particular, because we operate in Austin, Texas our operations are subject to increased risk of wildfires. Furthermore, if our insurance does not fully cover losses resulting from these events or any related business interruption, our assets, financial condition and capital resources could be adversely affected.

 

We depend on a network of suppliers to source our products. Product quality or safety concerns could negatively impact our sales and expose us to legal claims.

 

We rely on manufacturers and other suppliers to provide us with the products we sell and distribute. As we increase the number of products we distribute, our exposure to potential liability claims may increase. The risk of claims may also be greater with respect to products manufactured by third-party suppliers outside the United States, particularly in China. Uncertainties with respect to foreign legal systems may adversely affect us in resolving claims arising from our foreign sourced products. Even if we are successful in defending any claim relating to the products we distribute, claims of this nature could negatively impact customer confidence in our products and our company. 

 

A terrorist attack or the threat of a terrorist attack could have a material adverse effect on our business.

 

Discretionary spending on leisure product offerings such as ours is generally adversely affected during times of economic or political uncertainty. The potential for terrorist attacks, the national and international responses to terrorist attacks, and other acts of war or hostility could create these types of uncertainties and negatively impact our business for the short or long term in ways that cannot presently be predicted.

 

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Our inability to diversify our customer base could adversely impact our business and operating results, and expanding to new target markets may open us up to additional risks and challenges.

 

While we anticipate that a significant portion of our revenues will continue to be derived from customers in and around Austin, Texas, in the near-term, in order to achieve our long-term growth goals, we will need to diversify our customer base and product offerings and penetrate additional markets.

 

Our efforts to penetrate additional markets are generally in the early stages, and we cannot provide any assurance we will be successful. We may dedicate significant resources to a targeted customer or industry before we achieve meaningful results or are able to effectively evaluate our success. As we target new customers and markets, we will also face different technological, pricing, supply, regulatory and competitive challenges that we may not have experience with. As a result, our efforts to expand to new markets may not succeed, may divert management resources from our existing operations and may require significant financial commitments to unproven areas of our business, all of which may harm our financial performance.

 

If we are unable to manage future growth effectively, our profitability and liquidity could be adversely affected.

 

Our ability to achieve our desired growth depends on our execution in functional areas such as management, sales and marketing, finance and general administration and operations. To manage any future growth, we must continue to improve our operational and financial processes and systems and expand, train and manage our employee base and control associated costs. Our efforts to grow our business, both in terms of size and in diversity of customer bases served, will require rapid expansion in certain functional areas and put a significant strain on our resources. We may incur significant expenses as we attempt to scale our resources and make investments in our business that we believe are necessary to achieve long-term growth goals. If we are unable to manage our growth effectively, our expenses could increase without a proportionate increase in revenue, our margins could decrease, and our business and results of operations could be adversely affected.

 

A significant amount of our revenues are due to only a small number of customers, and if we were to lose any of those customers, our results of operations would be adversely affected .

 

We had gross sales of $1,274,365 and $476,895 for the six months ended June 30, 2016 and 2015, respectively. We had one customer representing approximately 12% of gross revenue for the six months ended June 30, 2016 and six customers, each representing more than 10% of gross revenue, for the six months ended June 30, 2015. We had gross sales of $1,118,665 and $874,043 for the years ended December 31, 2015 and 2014, respectively. We had one customer representing 11% of gross revenue for the year ended December 31, 2105 and two customers each representing approximately 24% and 12% of gross revenue for the year ended December 31, 2014.

 

As a result, the majority of our revenues are due to only a small number of customers, and we anticipate this trend continuing moving forward. As a result, in the event our customers do not pay us amounts owed, terminate work in progress or we are unable to find new customers moving forward, it could have a materially adverse effect on our results of operations and could force us to curtail or abandon our current business operations.

 

Our operating results may fluctuate due to factors that are difficult to forecast and not within our control.

 

Our past operating results may not be accurate indicators of future performance, and you should not rely on such results to predict our future performance. Our operating results have fluctuated significantly in the past, and could fluctuate in the future. Factors that may contribute to fluctuations include:

 

changes in aggregate capital spending, cyclicality and other economic conditions;
     
the timing of large customer projects, to which we may have limited visibility and cannot control;

 

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  our ability to effectively manage our working capital;
     
  our ability to generate increased demand in our targeted markets, particularly those in which we have limited experience;
     
  our ability to satisfy consumer demands in a timely and cost-effective manner;
     
  pricing and availability of labor and materials;
     
  our inability to adjust certain fixed costs and expenses for changes in demand and the timing and significance of expenditures that may be incurred to facilitate our growth;
     
  seasonal fluctuations in demand and our revenue; and  
     
  disruption in the supply of materials.

 

Our executive officers control a majority of our voting securities and therefore they have the ability to influence matters affecting our stockholders.

 

Our executive officers beneficially own approximately 75.4% of the issued and outstanding shares of our common stock. As a result, they have the ability to influence matters affecting our stockholders and will therefore exercise control in determining the outcome of all corporate transactions or other matters, including the election of directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. Any investor who purchases shares will be a minority stockholder and as such will have little to no say in the direction of the Company and the election of directors. Additionally, it will be difficult if not impossible for investors to remove our current directors, which will mean they will remain in control of who serves as officers of the Company as well as whether any changes are made in the Board of Directors (currently consisting solely of Mr. Chavez). As a potential investor in the Company, you should keep in mind that even if you own shares of the Company’s common stock and wish to vote them at annual or special stockholder meetings, your shares will likely have little effect on the outcome of corporate decisions. Because our executive officers control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Additionally, the interests of our executive officers may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other stockholders.

 

Our officers and director lack experience in and with publicly-traded companies.

 

While we rely heavily on Michael Chavez (President and Chairman of the Board); Elijah May (Chief Operating Officer); and Becky Spohn (Controller), it is our goal to become a publicly traded company and they have no experience serving as an officer or director of a publicly-traded company, or experience with the reporting requirements which public companies are subject to. Additionally, such persons have no significant experience with the financial accounting and preparation requirements of financial statements which we will be required to file on a quarterly and annual basis under the Exchange Act, assuming the registration statement, of which this prospectus forms a part, is declared effective. We plan to initially rely on our outside accountants and bookkeepers to help us create a system of accounting controls and procedures to maintain the Company’s accounting records, until such time, if ever, as we generate the revenues required to engage a separate Chief Accounting Officer, with accounting experience with publicly reporting companies. Consequently, our operations, earnings and ultimate financial success could suffer irreparable harm due to our executives’ ultimate lack of experience with publicly-traded companies in general and especially in connection with their lack of experience with the financial accounting and preparation requirements of the Exchange Act.

 

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Because our executive officers are unable to devote their services to our company on a full-time basis, the performance of our business may suffer, our business could fail and investors could lose their entire investment.

 

Michael Chavez our President and sole director, currently devotes approximately 30 hours per week to our company;
Elijah May our Chief Operating Officer, currently devotes approximately 40 hours per week to our company; and
Becky Spohn our Controller, currently devotes approximately 30 hours per week to our company.

 

We depend heavily on the services of our executive officers and director. As a result, the management of our company could under-perform, our business could fail and investors could lose their entire investment.

 

If we are not able to compete effectively against companies with greater resources, our prospects for future success will be jeopardized.

 

The recreational pool construction and maintenance industry is highly competitive. We compete with numerous local competitors for such services. Many of our competitors are larger, more established companies with greater resources to devote to marketing, as well as greater brand recognition. In addition, the relatively low barriers to entry also permit new competitors to enter the industry easily. Moreover, if one or more of our competitors or suppliers were to merge, the change in the competitive landscape could adversely affect our competitive position. Additionally, to the extent that competition in our markets intensifies, we may be required to reduce our prices in order to remain competitive. If we do not compete effectively, or if we reduce our prices without making commensurate reductions in our costs, our net sales, margins, and profitability and our future prospects for success may be harmed.

 

The products we install and/or our services could contain defects or they may be installed or operated incorrectly, which could result in claims against us.

 

Defects may be found in our existing or future pool installations. This could result in, among other things, a delay in the recognition or loss of net sales and loss of market share. These defects could cause us to incur significant warranty, support, and repair costs, divert the attention of our employees from new projects, and harm our relationships with our customers. Defects or other problems in our installations could result in personal injury or financial or other damages to customers or third parties. Our customers and third parties could also seek damages from us for their losses. A product liability claim brought against us, even if unsuccessful, would likely be time consuming and costly to defend and the adverse publicity generated by such a claim against us or others in our industry could negatively impact our reputation.

 

We may be subject to various lawsuits and claims from time to time from customers, subcontractors, employees and third parties, which lawsuits and claims could have a material adverse effect on our results of operations.

 

Due to the nature of our business operations, we may become party to various lawsuits and claims which arise in the ordinary course of our business. These may include, but are not limited to, claims for personal injuries, product liability and personal property damage caused by our actions or actions that we fail to take, the actions or inactions of subcontractors we hire from time to time, products we install, our construction activities, or the actions of third parties which take place at our job sites. Although specific allegations may differ, we believe the majority of the lawsuits and claims we may face in the future will likely involve claims that we failed to construct pools and spas in accordance with plans and specifications or applicable construction codes and seek reimbursement for sums allegedly needed to remedy the alleged deficiencies, assert contract issues or will relate to personal injuries. We may also file lawsuits in certain cases pursuant to which we may seek contribution from our subcontractors and third parties for any damages and costs. The outcome of litigation is difficult to assess or quantify. Lawsuits can result in the payment of substantial damages by defendants. Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from our operations. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. Any resources that we, our management or employees are forced to expend in the future, defending or prosecuting lawsuits, including, but not limited to legal fees and expenses, time spent away from our business activities and customers, and damages and other liabilities we are forced to pay in any lawsuits, could have a material adverse effect on our results of operations, could force us to curtail our business operations or if material enough, could force us to seek bankruptcy protection in the future, which could cause the value of any investment in the Company to decline to zero.

 

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A failure to meet customer specifications or expectations could result in lost revenues, increased expenses, negative publicity, claims for damages and harm to our reputation.

 

A failure or inability by us to meet a future client’s expectations could damage our reputation and adversely affect our ability to attract new business and result in delayed or lost revenue. In the event the pools we complete are not up to the expectations and standards of our clients, we face negative publicity and our reputation could be hurt. Furthermore, we may be sued or unable to collect accounts receivable if a future client is not satisfied with our services.

 

In addition, any failure to meet customers’ specifications or expectations could result in:

 

  delayed or lost revenue;
     
  requirements to provide additional services to a customer at reduced charges or no charge; and
     
  claims by customers for substantial damages against us, regardless of our responsibility for such failure, which may not be covered by insurance policies and which may not be limited by contractual terms.

 

Because many of our customers require financing for pool and spa installations, increases in interest rates could lower demand for our services.

 

A significant percentage of our customers finance their pool and spa installations. Increases in interest rates could lower demand for our services because borrowing costs to potential customers seeking to add pools or spas would increase. Even if potential customers do not need financing, changes in interest rates could make it harder for them to sell their existing homes to potential buyers who need financing and could therefore make them less willing to increase the value of their homes through the construction of pools and spas. This could prevent or limit our ability to attract new customers and decrease demand for our services, which could have a material adverse effect on our results of operations.

 

Government regulations could increase the cost of our construction and remodeling projects and adversely affect our business or financial results.

 

We are subject to extensive and complex regulations that affect land development and home construction, including zoning, design and building standards. These regulations often provide broad discretion to the administering governmental authorities as to the conditions we must meet prior to being approved, if approved at all. We are subject to determinations by these authorities as to the adequacy of water and sewage facilities and other local services. Any of these regulatory issues can limit or delay construction and increase our operating costs. We are also subject to a variety of local, state and federal laws and regulations concerning protection of health, safety and the environment. These matters may result in delays, may cause us to incur substantial compliance, remediation, mitigation and other costs or subject us to costs from fines, penalties and related litigation. These laws and regulations can also prohibit or severely restrict homebuilding and remodeling activity in environmentally sensitive areas.

 

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We may incur additional operating expenses or delays due to compliance requirements or fines, penalties and remediation costs pertaining to environmental regulations.

 

We are subject to a variety of local, state and federal statutes, ordinances, rules and regulations concerning land use and the protection of health and the environment including those governing the discharge of pollutants to water and air, the handling of hazardous materials and the cleanup of contaminated sites. The particular impact and requirements of environmental regulations vary greatly according to the site, the site’s environmental conditions and the present and former use of the site. We expect that increasingly stringent requirements will be imposed on construction companies in the future. Environmental laws may result in delays, cause us to implement time consuming and expensive compliance programs and prohibit or severely restrict projects in certain environmentally sensitive regions or areas. Environmental regulations can also have an adverse impact on the availability and price of certain raw materials. Furthermore, we could incur substantial costs, including cleanup costs, fines, penalties and other sanctions and damages from third-party claims for property damage or personal injury, as a result of our failure to comply with, or liabilities under, applicable environmental laws and regulations.

 

We could be adversely affected if any of our significant customers default in their obligations to us.

 

Defaults by any of our customers could have a significant adverse effect on our revenues, profitability and cash flow, which may be exacerbated by the fact that we have a limited number of customers. Our customers may in the future default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons deriving from the current general economic environment. If a customer defaults on its obligations to us, it could have a material adverse effect on our business, financial condition, results of operations or cash flows.

 

Corporate governance and reporting risks :

 

We face corporate governance risks and negative perceptions of investors associated with the fact that we currently have only one director, who is not independent.

 

Currently, Michael Chavez, our Chief Executive Officer, serves as our sole director. As such, Mr. Chavez can, among other things, declare himself discretionary bonuses, and determine his own compensation level. As such, Mr. Chavez has significant control over our business direction. Additionally, there are no independent members of the Board of Directors available to second and/or approve related party transactions involving Mr. Chavez, including the compensation paid to Mr. Chavez, and any future employment agreements we enter into with such individual. Therefore, investors may perceive that because no other directors are approving related party transactions involving Mr. Chavez, that such transactions are not fair to the Company. The price of our common stock may be adversely affected and/or devalued compared to similarly sized companies with multiple unrelated and independent officers and directors due to the investing public’s perception of limitations facing our Company due to the above.

 

Any material weaknesses in our internal control over financial reporting could, if not remediated, result in material misstatements in our financial statements.

 

As a public company reporting to the Securities and Exchange Commission, we will be subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, including Section 404(a), subject to the phase in described in greater detail below under “ The JOBS Act also allows us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC . ”, that requires that we annually evaluate and report on our systems of internal controls. If material weaknesses or significant deficiencies in our internal controls are discovered or occur in the future, our financial statements may contain material misstatements and we could be required to restate our financial results. This could result in a decrease in our stock price (if any), securities litigation, and the diversion of significant management and financial resources.

 

In the future, if we cease to meet the criteria to be considered an “ emerging growth company ” or a “ smaller reporting company ,” we will also become subject to Section 404(b) of the Sarbanes-Oxley Act, which requires an auditor attestation of the effectiveness of our internal controls over financial reporting. This additional requirement will increase our financial, accounting and administrative costs, and other related expenses, which may be significant to our financial results. In addition, due to our limited internal resources, further compliance efforts put additional strain on our resources. Despite our efforts, if our auditors are unable to attest to the effectiveness of our internal controls, we may be subject to regulatory scrutiny and higher risk of stockholder litigation, which could harm our reputation, lower our stock price or cause us to incur additional expenses.

 

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Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protections against interested director transactions, conflicts of interest and similar matters.

 

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.

 

Because we only have one director, who is not independent, we do not currently have an independent audit or compensation committee. As a result, our directors have the ability to, among other things, determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be reluctant to provide us with funds necessary to expand our operations.

 

We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.

 

We will incur ongoing costs and expenses for SEC reporting and compliance and without sufficient revenues we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.

 

Once our registration statement, of which this prospectus forms a part, becomes effective, in order for us to remain in compliance with our on-going reporting requirements, we will require additional capital and/or future revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources. If we are unable to further capitalize the Company or generate sufficient revenues to remain in compliance, it may be difficult for you to resell any shares you may purchase, if at all. There will be ongoing costs and expenses for SEC reporting, including the general booking and accounting costs for the preparation of the financial quarterly (Form 10-Qs) and annual filings (Form 10-Ks), and auditor’s fees. Further, there will be processing costs in preparing and converting documents and disclosures through the EDGAR filing system, including certain cost for the XBRL that will be required as part of the EDGAR filing. We estimate that these costs could result in up to $75,000 per year of initial ongoing costs that would need to be included in the financing of the Company.

 

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Our Articles of Incorporation and Bylaws limit the liability of, and provide indemnification for, our officers and directors.

 

Our Articles of Incorporation and Bylaws, as amended, generally limit our officers’ and directors’ personal liability to the Company and its stockholders for breach of fiduciary duty as an officer or director except for breach of the duty of loyalty or acts or omissions not made in good faith or which involve intentional misconduct or a knowing violation of law. Our Articles of Incorporation, and Bylaws, each as amended and restated, provide indemnification for our officers and directors to the fullest extent authorized by the Nevada Revised Statutes against all expense, liability, and loss, including attorney’s fees, judgments, fines excise taxes or penalties and amounts to be paid in settlement reasonably incurred or suffered by an officer or director in connection with any action, suit or proceeding, whether civil or criminal, administrative or investigative (hereinafter a “ Proceeding ”) to which the officer or director is made a party or is threatened to be made a party, or in which the officer or director is involved by reason of the fact that he is or was an officer or director of the Company, or is or was serving at the request of the Company as an officer or director of another corporation or of a partnership, joint venture, trust or other enterprise whether the basis of the Proceeding is an alleged action in an official capacity as an officer or director, or in any other capacity while serving as an officer or director. Thus, the Company may be prevented from recovering damages for certain alleged errors or omissions by the officers and directors for liabilities incurred in connection with their good faith acts for the Company. Such an indemnification payment might deplete the Company’s assets. Stockholders who have questions regarding the fiduciary obligations of the officers and directors of the Company should consult with independent legal counsel. It is the position of the Securities and Exchange Commission that exculpation from and indemnification for liabilities arising under the Securities Act, and the rules and regulations thereunder is against public policy and therefore unenforceable.

 

We will incur significant increased costs as a result of operating as a fully reporting company as well as in connection with Section 404 of the Sarbanes Oxley Act.

 

We will incur legal, accounting and other expenses in connection with our future status as a fully reporting public company. The Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”) and rules subsequently implemented by the SEC have imposed various requirements on public companies, including requiring changes in corporate governance practices. As such, our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly. The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure of controls and procedures. In particular, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting. Our testing may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Our compliance with Section 404 and our future status as a publicly reporting company will require that we incur substantial accounting, legal and filing expenses and expend significant management efforts. We currently do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

 

Risks relating to this offering and our common stock :

 

Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of additional shares of our common stock.

 

We have no committed source of financing. Wherever possible, our Board of Directors (currently consisting solely of Mr. Chavez) will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our Board of Directors has authority, without action or vote of the stockholders, to issue all or part of the authorized but unissued shares of common stock. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing stockholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.

 

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Nevada law and our articles of incorporation authorize us to issue shares of stock, which shares may cause substantial dilution to our existing stockholders.

 

We have authorized capital stock consisting of 70,000,000 shares of common stock, $0.001 par value per share and 5,000,000 shares of preferred stock, $0.001 par value per share. As of the date of this prospectus, we have 14,585,000 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. As a result, our Board of Directors (currently consisting solely of Mr. Chavez) has the ability to issue a large number of additional shares of common stock without stockholder approval, which if issued could cause substantial dilution to our then stockholders. Additionally, shares of preferred stock may be issued by our Board of Directors without stockholder approval with voting powers, and such preferences and relative, participating, optional or other special rights and powers as determined by our Board of Directors, which may be greater than the shares of common stock currently outstanding. As a result, shares of preferred stock may be issued by our Board of Directors which cause the holders to have super majority voting power over our shares, provide the holders of the preferred stock the right to convert the shares of preferred stock they hold into shares of our common stock, which may cause substantial dilution to our then common stock stockholders and/or have other rights and preferences greater than those of our common stock stockholders. Investors should keep in mind that the Board of Directors has the authority to issue additional shares of common stock and preferred stock, which could cause substantial dilution to our existing stockholders. Additionally, the dilutive effect of any preferred stock, which we may issue may be exacerbated given the fact that such preferred stock may have super majority voting rights and/or other rights or preferences which could provide the preferred stockholders with voting control over us subsequent to this offering and/or give those holders the power to prevent or cause a change in control. As a result, the issuance of shares of common stock and/or preferred stock may cause the value of our securities to decrease and/or become worthless.

 

Because there is no public market for our common stock, our stockholders may not be able to resell their shares at or above the price at which they purchased their shares, or at all.

 

There is currently no market for our common stock and we can provide no assurance that a market will develop. We intend to have our common stock quoted on the OTCQB market after the registration statement, of which this prospectus is a part, is declared effective by the SEC. If for any reason our common stock is not quoted on the OTCQB or a public trading market does not otherwise develop, purchasers of the shares may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so.

 

Even if a trading market develops, we cannot predict how liquid that market might become. The initial public offering price may not be indicative of prices that will prevail in the trading market. The initial public offering price of the common stock was determined by us arbitrarily. The price is not based on our financial condition and prospects, market prices of similar securities of comparable publicly-traded companies, certain financial and operating information of companies engaged in similar activities to ours, or general conditions of the securities market. The price may not be indicative of the market price, if any, for the common stock in the trading market after this offering. The market price of the securities offered herein, if any, may decline below the initial public offering price. The trading price of our common stock following the offering is therefore likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control.

 

These factors include:

 

  Quarterly variations in our results of operations or those of our competitors;
     
  Announcements by us or our competitors;
     
  Disruption to our operations;
     
  Commencement of, or our involvement in, litigation;

  

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  Any major change in our board or management;
     
  Changes in governmental regulations or in the status of our regulatory approvals; and
     
  General market conditions and other factors, including factors unrelated to our own operating performance.

 

In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such public companies. Such fluctuations may be even more pronounced in the trading market shortly following this offering. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This type of litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

 

Because future sales by our stockholders could cause the stock price to decline, our investors may lose money on the purchase of our stock.

 

No predictions can be made of the effect, if any, that market sales of shares of our common stock or the availability of such shares for sale will have on the market price prevailing from time to time. Nevertheless, sales of significant amounts of our common stock could adversely affect the prevailing market price of the common stock, as well as impair our ability to raise capital through the issuance of additional equity securities.

 

We may continue to have potential liability for certain issuances of shares of common stock in possible violation of federal and state securities laws .

 

In September 2016, we discovered that we may have not provided the investors in our January 2016 to September 2016 offering all information and materials (including current audited financial statements), as is required under the Securities Act in order to claim an exemption from registration pursuant to Rule 506 of the Securities Act, provided that we believe that all such transactions still complied with, and were exempt from registration under Section 4(a)(2) of the Securities Act. Nevertheless, based on the above, we offered the January 2016 to September 2016 purchasers of our common stock the right to rescind their previous purchases and receive, in exchange for any shares relinquished to us, 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 purchasers 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, we may continue to be potentially liable under certain securities laws for the offer and sale of the shares sold between January 2016 and September 2016, totaling $44,250 of securities in aggregate, along with statutory interest on such shares, even after we completed our rescission offer.

 

State securities laws may limit secondary trading, which may restrict the states in which you can sell the shares offered by this prospectus.

 

If you purchase shares of our common stock sold in this offering, you may not be able to resell the shares in any state unless and until the shares of our common stock are qualified for secondary trading under the applicable securities laws of such state, or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifying our common stock for secondary trading, or identifying an available exemption for secondary trading in our common stock in every state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our common stock in any particular state, the shares of common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the market for the common stock will be limited which could drive down the market price of our common stock and reduce the liquidity of the shares of our common stock and limit a stockholder’s ability to resell shares of our common stock at all or at current market prices, which could increase a stockholder’s risk of losing some or all of their investment.

 

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The initial offering price of this offering has been arbitrarily determined by our management.

 

The initial offering price of the shares registered in the registration statement of which this prospectus forms a part, has been arbitrarily determined by us. The offering price of the shares bears no relationship to our assets, earnings or book value, or any other objective standard of value. Because of this, the actual value of our securities may be significantly less than the offering price of $0.05 per share, which selling stockholders will be required to sell their shares at prior to us obtaining a market for our common stock. As a result, if you purchase shares of our common stock at the fixed offering price of $0.05 per share, the value of your securities may decline in value or have significantly less value when you attempt to sell such shares.

 

We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could cause the value of our common stock to have a lower value than other similar companies which do pay cash dividends.

 

We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As we have no plans to issue cash dividends in the future, our common stock could be less desirable to other investors and as a result, the value of our common stock may decline, or fail to reach the valuations of other similarly situated companies who have historically paid cash dividends in the past.

 

Stockholders may face significant restrictions on the resale of our common stock due to federal regulations of penny stocks.

 

Our common stock will be subject to the requirements of Rule 15g-9, promulgated under the Securities Exchange Act of 1934, as amended, as long as the price of our common stock is below $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser’s consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined as a penny stock. Generally, the Commission defines a penny stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of Company stockholders to sell their securities in the secondary market.

 

If our common stock is not approved for quotation on the OTCQB, a national securities exchange or the Nasdaq trading market, it could make it difficult to sell shares of our common stock and/or cause the value of our common stock to decline in value.

 

In order to have our common stock quoted on the OTCQB, a national securities exchange or the Nasdaq trading market, we will need to first have our registration statement, of which this prospectus forms a part, declared effective by the SEC; then engage a market maker, who will file a Form 15c2-11 with the Financial Industry Regulatory Authority (“ FINRA ”); and clear FINRA comments to obtain a trading symbol on the OTCQB, the national securities exchange or the NASDAQ trading market. Assuming we clear SEC comments and assuming we clear FINRA comments, we anticipate receiving a trading symbol and having our shares of common stock quoted on the OTCQB in approximately one (1) to two (2) months after the effectiveness of our registration statement. In the event we are unable to have our registration statement declared effective by the SEC or our Form 15c2-11 is not approved by FINRA, we may be unable to have our common stock quoted or listed publicly, which could make it more difficult for our then stockholders to sell shares of common stock which they own. As a result, the value of our common stock will likely be less than it would otherwise due to the difficulty stockholders will have in selling their shares. If we are unable to obtain clearance to quote our securities on the OTCQB, a national securities exchange or the NASDAQ trading market, it may be difficult for us to raise capital and we could be forced to curtail or abandon our business operations, and as a result, the value of our common stock could become worthless.

 

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Sales of our common stock under Rule 144 could reduce the price of our stock.

 

As of the date of this prospectus, we have 3,585,000 shares of our common stock held by non-affiliates (all of which shares are being registered herein) and 11,000,000 shares held by affiliates which Rule 144 of the Securities Act defines as “ restricted securities .” A total of 3,585,000 shares of common stock being registered hereunder will be available for resale as of the date of effectiveness of the registration statement of which this prospectus is a part. All of the restricted shares outstanding that are not being registered hereunder will be available for sale under Rule 144 beginning six months after the date our registration statement is declared effective by the Commission, although shares held by affiliates will be subject to restrictions relating to the amount that may be sold in any 90 day period and manner in which such sales may be made, among other limitations. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities.

 

This prospectus permits the selling stockholders to resell their shares. If they do so, the market price for our shares may fall and purchasers of our shares may be unable to resell them.

 

This prospectus includes 3,585,000 shares being offered by existing stockholders. To the extent that these shares are sold into the market, there may be an oversupply of shares and an undersupply of purchasers. If this occurs the market price for our shares may decline significantly and investors may be unable to sell their shares at a profit, or at all.

 

We do not currently have a public market for our securities. If there is a market for our securities in the future, such market may be volatile and illiquid.

 

There is currently no public market for our common stock. In the future, we hope to quote our securities on the OTCQB Market. However, there may not be a public market for our common stock in the future. If there is a market for our common stock in the future, we anticipate that such market would be illiquid and would be subject to wide fluctuations in response to several factors, including, but not limited to:

 

  (1) actual or anticipated variations in our results of operations;
  (2) our ability or inability to generate new revenues;
  (3) the number of shares in our public float;
  (4) increased competition; and
  (5) conditions and trends in the market for recreational pool and spa installation and maintenance services.

 

Furthermore, if our common stock becomes quoted on the OTCQB in the future, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. Additionally, moving forward we anticipate having a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock.

 

 

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Risks relating to the JOBS Act :

 

The JOBS Act allows us to postpone the date by which we must comply with certain laws and regulations and to reduce the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “ emerging growth companies ” will make our common stock less attractive to investors.

 

We are and we will remain an “ emerging growth company ” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a “ large accelerated filer ” (with at least $700 million in public float) under the Exchange Act. For so long as we remain an “ emerging growth company ” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “ emerging growth companies ” as described in further detail in the risk factors below. We cannot predict if investors will find our common stock less attractive because we will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. If we avail ourselves of certain exemptions from various reporting requirements, as is currently our plan, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.

 

Our election not to opt out of JOBS Act extended accounting transition period may not make our financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act, as an “ emerging growth company ”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an “ emerging growth company ”, can adopt the standard for the private company. This may make a comparison of our financial statements with any other public company which is not either an “ emerging growth company ” nor an “ emerging growth company ” which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

The JOBS Act also allows us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The JOBS Act is intended to reduce the regulatory burden on “ emerging growth companies ”. The Company meets the definition of an “ emerging growth company ” and so long as it qualifies as an “ emerging growth company ,” it will, among other things:

 

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;
   
be exempt from the “ say on pay ” provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the “ say on golden parachute ” provisions (requiring a non-binding stockholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;
   
be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended and instead provide a reduced level of disclosure concerning executive compensation; and
   
be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

 

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Although the Company is still evaluating the JOBS Act, it currently intends to take advantage of all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “ emerging growth company ”. The Company has elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that the Company’s independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of the Company’s internal control over financial reporting so long as it qualifies as an “ emerging growth company ”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an “ emerging growth company ”, the Company may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which it would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidence in the Company and the market price of its common stock may be adversely affected.

 

Notwithstanding the above, we are also currently a “ smaller reporting company ”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “ smaller reporting company ”, at such time are we cease being an “ emerging growth company ”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “ emerging growth company ” or a “ smaller reporting company ”. Specifically, similar to “ emerging growth companies ”, “ smaller reporting companies ” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an “ emerging growth company ” or “ smaller reporting company ” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

 

Please read this prospectus carefully. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information provided by the prospectus is accurate as of any date other than the date on the front of this prospectus.

 

USE OF PROCEEDS

 

We will not receive any proceeds from the resale of already issued and outstanding shares of common stock by the selling stockholders which are offered in this prospectus.

 

LEGAL PROCEEDINGS

 

We are not aware of any pending legal proceeding to which we are a party or to which our property is subject to any pending legal proceeding.

 

However, from time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not involved currently in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

 

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  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The following table sets forth the name, age and position of each director and executive officer of the Company. There are no other persons who can be classified as a promoter or controlling person of the Company. The officers and sole director of the Company are as follows:

 

Name   Age   Position   Date First Appointed as Officer or Director
Michael Chavez   38   President, Chief Executive Officer, and Chairman of the Board of Directors (sole director)   May 2014
             
Elijah May   38   Chief Operating Officer   May 2014
             
Becky Spohn   56   Controller   May 2014

  

Our director and any additional directors we may appoint in the future are elected annually and will hold office until our next annual meeting of the shareholders and until their successors are elected and qualified. Officers will hold their positions at the pleasure of the Board of Directors (currently consisting solely of Mr. Chavez), absent any employment agreement. Our officers and directors may receive compensation as determined by us from time to time by vote of the Board of Directors. Such compensation might be in the form of stock options. Directors may be reimbursed by the Company for expenses incurred in attending meetings of the Board of Directors. Vacancies in the Board are filled by majority vote of the remaining directors.

 

The business experience of each of the persons listed above is as follows:

 

Michael Chavez – President, Treasurer, Secretary, and Chairman (sole director)

 

Mr. Chavez, who helped co-found the Company, has served as the founder and President of Ridge Point Capital, LLC, a private equity firm focused on investing in small and micro-cap public companies, since May 2007. He is responsible for leading the development and implementation of the Company’s strategy. Mr. Chavez started his career at Morgan Stanley Dean Witter and has over 17 years of experience in the financial industry. In 1999, Mr. Chavez led the procurement of an Austin based circuit board manufacturing company, CCM Manufacturing Technologies, to becoming a publicly traded entity. Prior to forming Ridge Point Capital, Mr. Chavez provided investment banking services to small and intermediate emerging growth companies for the Oxford Corporate Finance Company and as principal of JLML Holdings, Inc. Mr. Chavez directed the acquisition and management of the company’s commercial and residential development holdings. Mr. Chavez is currently an active member of the Greater Austin Hispanic and Texas Association of Mexican American Chambers of Commerce, a Member of the Hispanic Austin Leadership Alumni, and a member of the Mexi-Arte Museum in Austin, Texas.

 

Elijah May – Chief Operating Officer

 

Mr. May is our co-founder and COO. In this role he helps with strategic planning, marketing, web design, SEO (search engine optimization), new business development, as well as overseeing our day-to-day operations. Before helping to co-found the Company, Mr. May was a custom pool designer in Austin, Texas. Mr. May is a member of the Association of Pool & Spa Professionals and has received numerous commendations over the years for his work. Mr. May served as a sales representative of World Travel from September 2010 to August 2012. Mr. May received a Bachelors of Science degree in Finance and Real Estate from Florida State University.

 

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Becky Spohn – Controller

 

Ms. Spohn has served as the owner of Lee Roman Enterprises, in Austin, Texas, a factoring company and broker, since June 2010. From February 2015 to April 2016, Ms. Spohn served as a trainer, training accountants at RealWorld Training in Dallas, Texas. From March 1999 to August 2011, Ms. Spohn served as the Chief Financial Officer of Spohn & Associates a financial accounting and human resources company. Her varied background includes over 20 years in finance, human resource management, sales, corporate credit and training. She holds a Bachelor’s degree in Business Management from the University of Texas at Dallas.

 

Board Leadership Structure

 

Our Board of Directors (currently consisting solely of Mr. Chavez) has the responsibility for selecting the appropriate leadership structure for the Company. In making leadership structure determinations, the Board of Directors considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders. Our current leadership structure is comprised of a combined Chairman of the Board and Chief Executive Officer (“ CEO ”), Mr. Chavez. The Board of Directors believes that this leadership structure is the most effective and efficient for the Company at this time. Mr. Chavez possesses detailed and in-depth knowledge of the issues, opportunities, and challenges facing the Company. Combining the Chairman of the Board and CEO roles promotes decisive leadership, fosters clear accountability and enhances the Company’s ability to communicate its message and strategy clearly and consistently to our stockholders, particularly during periods of turbulent economic and industry conditions.

 

Risk Oversight 

 

Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors (currently consisting solely of Mr. Chavez) discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight, and fostering an appropriate culture of integrity and compliance with legal responsibilities. The directors exercise direct oversight of strategic risks to the Company.

 

Family Relationships

 

None of our directors are related by blood, marriage, or adoption to any other director, executive officer, or other key employees.

 

Arrangements between Officers and Directors

 

To our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which the officer was selected to serve as an officer.

 

Other Directorships

 

No director of the Company is also a director of issuers with a class of securities registered under Section 12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act).

 

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Involvement in Certain Legal Proceedings

 

To the best of our knowledge, during the past ten years, none of our directors or executive officers were involved in any of the following: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being a named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, (5) being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation; (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (6) being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Committees of the Board 

 

Our Company currently does not have nominating, compensation or audit committees or committees performing similar functions, nor does our Company have a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by our Board of Directors (consisting solely of Mr. Chavez).

 

Our Company does not have any defined policy or procedural requirements for stockholders to submit recommendations or nominations for directors. Our sole director believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors (consisting solely of Mr. Chavez) will assess all candidates, whether submitted by management or stockholders, and make recommendations for election or appointment.

 

Stockholder Communications with the Board 

 

A stockholder who wishes to communicate with our Board of Directors (consisting solely of Mr. Chavez) may do so by directing a written request addressed to our Secretary, 12343 Hymeadow Drive, Suite 3-A, Austin, Texas 78750, who, upon receipt of any communication other than one that is clearly marked “ Confidential ,” will note the date the communication was received, open the communication, make a copy of it for our files and promptly forward the communication to the director(s) to whom it is addressed. Upon receipt of any communication that is clearly marked “ Confidential ,” our Secretary will not open the communication, but will note the date the communication was received and promptly forward the communication to the director(s) to whom it is addressed.

 

Corporate Governance 

 

The Company promotes accountability for adherence to honest and ethical conduct and strives to be compliant with applicable governmental laws, rules and regulations. 

 

In lieu of an Audit Committee, the Company’s Board of Directors (consisting solely of Mr. Chavez) is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company’s financial statements and other services provided by the Company’s independent public accountants. The Board of Directors reviews the Company’s internal accounting controls, practices and policies. 

 

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Director Independence

 

There is no current market for our common stock and we are not required to have independent members of our Board of Directors. We do not identify our sole member of our Board of Directors, Mr. Chavez, as being independent.

 

As described above, we do not currently have a separately designated audit, nominating or compensation committee. 

 

Code of Ethics and Code of Conduct

 

We have adopted a Code of Ethics and a Code of Conduct that apply to all of our directors, officers and employees.

 

EXECUTIVE AND DIRECTOR COMPENSATION

 

The following table sets forth information concerning the compensation of (i) all individuals serving as our principal executive officer or acting in a similar capacity during the last completed fiscal year (“ PEO ”), regardless of compensation level; (ii) our two most highly compensated executive officers other than the PEO who were serving as executive officers at the end of the last completed fiscal year, if any; and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to paragraph (ii) but for the fact that the individual was not serving as an executive officer at the end of the last completed fiscal year (collectively, the “ Named Executive Officers ”).

  

Summary Compensation Table*
                             
Name And Principal Position   Fiscal Year
Ended
December 31
  Salary
($)
  Bonus
($)
  Stock
Awards
($)#
  Option
Awards
($)#
  All Other
Compensation
($)
  Total
($)
Michael Chavez CEO(1)     2015                               13,579 (2)     13,579  
      2014                   3,100                   3,100  
Elijah May COO     2015       72,000                               72,000  
      2014       60,000             3,750                   63,750  
Becky Spohn Controller     2015             500                   3,036 (2)     3,536  
      2014                   2,050                   2,050  

 

* Does not include perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is more than $10,000. No executive officer earned any non-equity incentive plan compensation or nonqualified deferred compensation during the periods reported above. There have been no changes in the Company’s compensation policies since December 31, 2015.
# The fair value of stock issued for services computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 on the date of grant. The fair value of options granted computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 on the date of grant.
(1) Mr. Chavez did not receive any consideration, other than as described in the table above, if any, in consideration for his services to the Company as a member of the Board of Directors.
(2) Tax reimbursement.

 

We do not provide our officers or employees with pension, stock appreciation rights, long-term incentive, profit sharing, retirement or other plans, although we may adopt one or more of such plans in the future.

 

We do not maintain any life or disability insurance on any of our officers.

 

We do not have any outstanding options, warrants or other securities which provide for the issuance of additional shares of our common stock as compensation for services of directors or officers.

 

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Employment Agreements; Key Man Insurance and Stock Incentive Plans

 

Employment Agreements

 

The Company does not have any employment agreements in place with any of its executive officers.

 

Key Man Insurance

 

The Company does not hold “ Key Man ” life insurance on any of its officers or directors.

 

Stock Incentive Plans

 

To date, the Company has not adopted any stock incentive or equity incentive plans.

 

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table presents certain information regarding the beneficial ownership of all shares of common stock as of October 27, 2016 by (i) each person who owns beneficially more than five percent (5%) of the outstanding shares of common stock based on 14,585,000 shares outstanding as of October 27, 2016, (ii) each of our directors, (iii) each named executive officer and (iv) all directors and officers as a group. Except as otherwise indicated, all shares are owned directly.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and/or investing power with respect to securities. We believe that, except as otherwise noted and subject to applicable community property laws, each person named in the following table has sole investment and voting power with respect to the shares of common stock shown as beneficially owned by such person. Additionally, shares of common stock subject to options, warrants or other convertible securities that are currently exercisable or convertible, or exercisable or convertible within 60 days of October 27, 2016, are deemed to be outstanding and to be beneficially owned by the person or group holding such options, warrants or other convertible securities for the purpose of computing the percentage ownership of such person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group.

 

We believe that, except as otherwise noted and subject to applicable community property laws, each person named in the following table has sole investment and voting power with respect to the shares of common stock shown as beneficially owned by such person. Unless otherwise indicated, the address for each of the officers or directors listed in the table below is 12343 Hymeadow Drive, Suite 3-A, Austin, Texas 78750.

 

Name   Number of Common
Stock Shares
Beneficially Owned
  Percent of
Common Stock
Michael Chavez     4,000,000       27.4 %
Elijah May     4,500,000       30.9 %
Becky Spohn     2,500,000       17.1 %
                 
All of the officers and director as a group (three persons)     11,000,000       75.4 %
                 
5% Stockholders                
                 
None.                

 

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INTEREST OF NAMED EXPERTS AND COUNSEL

 

This Form S-1 registration statement was prepared by our counsel, The Loev Law Firm, PC. The financial statements attached hereto for the years ended December 31, 2015 and 2014, were audited by LBB & Associates Ltd., LLP. The Loev Law Firm, PC, and LBB & Associates Ltd., LLP do not have any interest contingent or otherwise in the Company.

 

EXPERTS

 

The financial statements of the Company as of December 31, 2015 and, 2014, included in this prospectus, have been audited by LBB & Associates Ltd., LLP, our independent registered public accounting firm, as stated in their report appearing herein and have been so included in reliance upon the reports of such firm, given upon their authority as experts in accounting and auditing.

 

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, any interest, directly or indirectly, in our Company or any of our parents or subsidiaries, nor was any such person connected with us or any of our parents or subsidiaries, if any, as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

 

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

The Nevada Revised Statutes and our Articles of Incorporation allow us to indemnify our officers and directors from certain liabilities and our Bylaws, as amended and restated, state that we shall indemnify every (i) present or former director, advisory director or officer of us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each an “ Indemnitee ”).

 

Our Bylaws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is or is threatened to be named as defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his Official Capacity, that his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c) in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the Proceeding and (ii) shall not be made in respect of any Proceeding in which the Indemnitee shall have been found liable for willful or intentional misconduct in the performance of his duty to us.

 

Other than in the limited situation described above, our Bylaws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indemnitee’s official capacity, or (b) found liable to us. The termination of any proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the requirements set forth in clauses (a) or (b) above. An Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. Reasonable expenses shall, include, without limitation, all court costs and all fees and disbursements of attorneys for the Indemnitee. The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.

 

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Neither our Bylaws nor our Articles of Incorporation include any specific indemnification provisions for our officers or directors against liability under the Securities Act. Additionally, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

DESCRIPTION OF BUSINESS

 

Organizational History

 

We were formed as a Nevada corporation on May 19, 2014.

 

On May 23, 2014, we, along with Reliant Pools, Inc. (“ Reliant Pools ”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of Common Stock (the “ Exchange Agreement ”). Pursuant to the Exchange Agreement, the shareholders of Reliant Pools exchanged 2.1 million shares of common stock, representing 100% of the outstanding common stock of Reliant Pools, for 2.1 million shares of our common stock (the “ Exchange ”). As a result of the Exchange, Reliant Pools became our wholly-owned subsidiary. The President of Reliant Pools, and its largest shareholder at the time of the Exchange was Michael Chavez, our President. The following shares of restricted common stock were issued in connection with the Exchange: 900,000 shares of common stock to Michael Chavez, our current Chief Executive Officer and sole director; 750,000 shares of common stock to Elijah May, our current Chief Operating Officer; and 450,000 shares of common stock to Becky Spohn, our current Controller.

 

Description of Business Operations :

 

We, through our wholly-owned subsidiary, Reliant Pools, are an award winning, custom, swimming pool construction company located in the greater Austin, Texas market. In the future we also plan to offer residential swimming pool maintenance services. 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 (which have won awards) and water features (e.g., waterfalls and negative edge pools) which provide the relaxing sounds of moving water. Moving forward, we plan on expanding our operations through an accretive business model in which we plan to acquire competitors in both the custom pool construction and pool maintenance/service industries locally, 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 team meets 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.

 

Types of Pools

 

The most common type of pools that we build are either a “ Freeform Pool ” or “ Geometric Pool ” which are described as follows:

 

Freeform Pool ” - A “ Freeform ” pool is usually accomplished with some combination of the following:

 

  Gentle curves; non-traditional shapes;
     
  Natural rock, flagstone or “ rolled beams ” around the perimeter;
     
  Natural rock or stone built-in at various places around the pool; and/or
     
  Rock or stone pavers, exposed aggregate, scrolled or stamped concrete.

 

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Geometric Pool ” - A “ Geometric ” pool is usually accomplished with some combination of the following:

 

  Clean, straight lines and/or geometric shapes;
     
  Brick coping or “ paving tiles ” around the perimeter; and/or
     
  Brick or tiled decking, or stamped concrete.

 

Geometric pool designs often utilize sleek and straight lines. This style of pool is usually a more formal design, even without additional water features or spa included.

 

Competitive Strengths

 

We believe we have a strong competitive position in the custom pool construction industry in Austin, Texas, due to, among other things:

 

Industry Expertise . We believe our pool development team are among the most skilled and experienced in the region. With over 40 years of industry experience (combined experience of the management, plan designers, and the construction team), we are dedicated to customer satisfaction from the moment they contract with a customer to the day their project is completed.
     
Reputation and Name Recognition . Our name recognition, reputation and quality of workmanship has resulted in referral business and established relationships with home builders that wish to be associated with our brand.
     
Innovative Sales and Marketing Approach . Our experienced sales designers provide us with significant advantages over competitors that have less qualified sales personnel and/or utilize less sophisticated sales methods.
     
Customer Satisfaction . Customer satisfaction is a key component of our marketing strategy which is based upon referral business. We use only top quality materials and equipment.

 

Growth Strategy

 

We believe that our competitive strengths provide a platform for expansion. Our growth strategy includes the following components:

 

Pursue Pool Cleaning and Maintenance . We plan on expanding our operations into pool cleaning and maintenance.
     
Pursue Vertical Business Opportunities . We also plan on expanding our revenue centers by either acquiring or developing vertical businesses that complement the pool building business.

 

Swimming Pool Sales and Industry

 

Swimming pools can be constructed as (1) residential in-ground swimming pools, (2) residential above-ground swimming pools (usually 12 to 24 feet in diameter), or (3) commercial swimming pools. Our operations are focused solely on construction of residential in-ground swimming pools, provided we plan to expand into maintenance services related to residential in-ground swimming pools in the future. Specifically, we focus on the installation of concrete, in-ground residential swimming pools.

 

Types of In-ground Pools

 

In-ground pools come in three basic varieties: vinyl-lined, fiberglass, and gunite/shotcrete or concrete.

 

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Gunite or Shotcrete pools

 

Are similar to concrete pools and can be finished with tile, plaster, paint, aggregate or fiberglass. These pools are often well suited to areas that are prone to extremely high temperature and areas where the soil is known to expand. Pools made from concrete, gunite or shotcrete are generally strong and durable so potential buyers often take comfort in the fact that these structures usually don’t require much in terms of maintenance and repair.

 

We use Shotcrete in the construction of our pools. Shotcrete is concrete (or sometimes mortar) conveyed through a hose and pneumatically projected at high velocity onto a surface, as a construction technique. It is reinforced by conventional steel rods, steel mesh, and/or fibers. Fiber reinforcement (steel or synthetic) is also used for stabilization in applications such as slopes or tunneling.

 

Shotcrete is usually an all-inclusive term for both the wet-mix and dry-mix versions. In pool construction, however, the term “ shotcrete ” refers to wet-mix and “ gunite ” to dry-mix. In this context, these terms are not interchangeable.

 

Shotcrete is placed and compacted at the same time, due to the force with the nozzle. It can be sprayed onto any type or shape of surface, including vertical or overhead areas. This allows us to tailor the shape of pools to a client’s needs.

 

Vinyl-lined pools

 

Vinyl-lined pools are structurally similar to above ground pools. When this type of pool is installed, a hole is dug in the ground and a frame is assembled around the perimeter of the hole. Sand is then laid in the bottom of the hole and a vinyl liner is attached to the structure’s wall. Vinyl-lined pools can be attractive because they tend to be the least expensive in-ground pool to install but this also means that they can be less durable.

 

Fiberglass pools

 

Fiberglass pools can be quite attractive to potential buyers. These pools are built in a factory in one piece out of fiberglass-reinforced plastic that is molded into a basin-shape that resembles a giant bathtub. Fiberglass pools can be initially more expensive to purchase, but the maintenance cost is generally lower than it is with other in-ground pools. Unlike the vinyl-lined variety, this type of pool doesn’t have a liner that needs to be replaced. In addition, fiberglass pools usually require fewer chemicals than are necessary in the maintenance of a concrete pool. These factors might entice potential buyers because maintenance costs are always a concern when it comes to large investments.

 

Principal Suppliers and Subcontractors

 

We regularly evaluate supplier relationships and consider alternate sourcing as appropriate to assure competitive costs and quality standards. We currently do not have long-term contracts with our suppliers. We also believe there are currently a number of other suppliers that offer comparable terms.

 

We utilize independent subcontractors to install pools. Our personnel act as field supervisors to oversee all aspects of the installation process and as schedulers to coordinate the activities of the subcontractors and communicate with the customer. 

 

Seasonality

 

Our business exhibits substantial seasonality, which we believe is typical of the swimming pool supply industry. Peak activity occurs during the warmest months of the year, typically April through September. Unseasonable warming or cooling trends can accelerate or delay the start or end of the pool season, which could impact our future planned maintenance services and our construction services. Weather also impacts our construction and installation products to the extent that above average precipitation, late spring thaws and other extreme weather conditions delay, interrupt or cancel current or planned construction and installation activities. The likelihood that unusual weather patterns will severely impact our results of operations is exacerbated by the concentration of our operations in Austin, Texas.

 

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Our Pool Construction Operations

 

We estimate that it takes 45 working days to complete each pool we construct (not including days lost to rain or other inclement weather). Our standard arrangement with customers provides for a one year limited warranty for our work, and subject to certain exceptions, warrants that the pool structure will remain structurally sound (i.e., will remain capable of retaining water), during the period that the pool is owned by the original customer.

 

Dependence on a Limited Number of Customers

 

We had gross sales of $1,274,365 and $476,895 for the six months ended June 30, 2016 and 2015, respectively. We had one customer representing approximately 12% of gross revenue for the six months ended June 30, 2016 and six customers, each representing more than 10% of gross revenue, for the six months ended June 30, 2015. We had gross sales of $1,118,665 and $874,043 for the years ended December 31, 2015 and 2014, respectively. We had one customer representing 11% of gross revenue for the year ended December 31, 2015 and two customers each representing approximately 24% and 12% of gross revenue for the year ended December 31, 2014.

 

Our Industry

 

We believe that the swimming pool industry is relatively young, with room for continued growth. According to Aqua Magazine, there are approximately 25 million households in the United States that have the right kind of home (i.e., don’t have an above ground pool and don’t live in an apartment or other multi-family housing), who meet all of the criteria for the purchase of a pool and don’t already one. We also believe that significant growth opportunities exist with pool remodel activities due to the aging of the installed base of swimming pools, technological advancements and the development of energy-efficient products.

 

Maintaining proper chemical balance and the related upkeep and repair of swimming pool equipment, such as pumps, heaters, filters and safety equipment, creates a non-discretionary demand for pool chemicals, equipment and other related parts and supplies. We also believe cosmetic considerations such as a pool’s appearance and the overall look of backyard environments create an ongoing demand for other maintenance-related goods and certain discretionary products.

 

The following tables reflect growth in the domestic installed base of in-ground and above-ground swimming pools over the past 11 years (based on Company estimates and information from 2014 P.K. Data, Inc. reports):

 

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New swimming pool construction comprises the bulk of consumer spending in the pool industry. The demand for new pools is driven by the perceived benefits of pool ownership including relaxation, entertainment, family activity, exercise and convenience. The industry competes for new pool sales against other discretionary consumer purchases such as home remodeling, boats, motorcycles, recreational vehicles and vacations. The industry is also affected by other factors including, but not limited to, consumer preferences or attitudes toward pool and landscape products for aesthetic, environmental, safety or other reasons.

 

Certain trends in the housing market, the availability of consumer credit and general economic conditions (as commonly measured by Gross Domestic Product or GDP) affect our industry. We believe that over the long term, housing turnover and single-family home value appreciation may correlate with demand for new pool construction, with higher rates of home turnover and appreciation having a positive impact on new pool starts over time. We also believe that homeowners’ access to consumer credit is a critical factor enabling the purchase of new swimming pools and irrigation systems. Similar to other discretionary purchases, replacement and refurbishment activities are more heavily impacted by economic factors such as consumer confidence, GDP and employment.

 

Planned Swimming Pool Maintenance Services

 

In the future we plan to offer swimming pool maintenance operations including the following services:

 

Skimming   The first step in any pool maintenance routine is skimming. A skimmer is a fine mesh net attached to a long pole. It’s used to remove floating debris such as leaves and drowned insects. If left untended, debris may clog filters and/or sink to the bottom of the pool where it can leave unsightly stains. Skimming is recommended on a daily basis or as the need arises.
     
Vacuuming   Even with routine skimming, fine particles like dust and dirt eventually sink and settle to the bottom of a pool. There are two kinds of pool vacuums: automatic and manual. Automatic vacuums run along the bottom of the pool and generate suction in random patterns; manual vacuums attach to a long pole that allows you to steer the suction yourself. Vacuuming is recommended at least once per week. The average pool requires 30 minutes of vacuuming.
     
Brushing   Brushing keeps the walls of a pool clean. It is recommended that pools are brushed once a week before vacuuming.

 

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Cleaning Filters   Filters come in three types: sand, cartridge and diatomaceous earth (DE). Each type has unique cleaning requirements. Sand filters must be “ backwashed ” and treated with a special sand-cleaning chemical. Cartridge filters are removed and sprayed with a garden hose. DE filters are backwashed like sand filters, but more DE must be added. Filters typically need to be changed once every nine to twelve months.
     
Pool Heater Maintenance   The typical pool heater can go at least a few years before it needs servicing. Sometimes, calcium and other minerals build up in the heater’s tubes, restricting its operation. When this happens, it’s necessary to disassemble and repair the heater.
     
Water Level   A pool can lose water through natural evaporation and from people splashing and getting in and out of the pool. Water levels should not be allowed to fall below the intake tubes for the skimmer basket as it can ruin the pool pump. If the water is low, it’s necessary to fill the pool using a garden hose.
     
Maintaining pH   pH is a measure of how acidic/basic water is. A certain level of acidity must be maintained in a pool. A pH level of 7 is considered ideal; less than 7 is considered too acidic. Acidic water can damage a pool liner, pool equipment and even human skin. Water that is too alkaline can clog filters and cloud the water — and it can cause swimmers eyes and nose to burn and cause dry and itchy skin. pH typically needs to be checked once a week.
     
Shocking the Pool   Over time, organic contaminants such as ammonia and nitrogen can build up in a pool. These contaminants interact with the pool’s chlorine to form chloramines (a combination of chlorine and ammonia), which create a chlorine-like odor that in a pool. Adding more chlorine can remedy this situation. This is known as “ shocking ” the pool. Some pool owners shock their pools as frequently as once a week; others go longer.
     
Winterizing   Winterizing (required in climates which experience winter weather below freezing) entails removing water from a pool’s plumbing with an air compressor and draining as much water as possible from the filter and the heater, disconnecting the heater, the pump and any chemical feeders, then giving the pool a good cleaning and finally, shocking the pool and covering it to prevent debris from getting in the pool.

  

Competition

 

The sales and installation industry of in-ground residential swimming pools is highly fragmented. We face competition primarily from regional and local installers. We believe that there are a small number of swimming pool companies that compete with us on a national basis. Barriers to entry in the swimming pool sales and installation industry are relatively low.

 

We believe that the principal competitive factors in the pool design and installation business are the quality and level of customer service, product pricing, breadth and quality of products offered, ability to procure labor and materials on a market by market basis from local and regional sources, financial integrity and stability, and consistency of business relationships with customers. We believe we compare favorably with respect to each of these factors.

 

The swimming pool cleaning services industry has a low level of market share concentration. To our knowledge, the majority of the industry is characterized by self-employed individuals who work as independent contractors or small operators with fewer than three employees. Since companies typically offer swimming pool cleaning within a limited geographic scope in order to limit transportation expenses, there are limited benefits to economies of scale; consequently there is a low level of market share concentration.

 

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Employees

 

We have fo ur (4) employees which we employ on a full-time basis. No employees are covered by collective bargaining agreements. We believe we have satisfactory relations with our employees.

 

We utilize independent subcontractors to install pools. Our personnel act as field supervisors to oversee all aspects of the installation process and as schedulers to coordinate the activities of the subcontractors and communicate with the customer.

 

Government Regulations

 

Our assets and operations are subject to regulation by federal, state and local authorities, including regulation by various authorities under federal, state and local environmental laws. Regulation affects almost every aspect of our business. Changes in such regulations may affect our capacity to conduct our business effectively and/or to operate profitably.

 

In Austin, Texas, we are required to obtain building permits for each pool we construct, based on our submitted plans for such pools. We are also required to abide by certain pool construction guidelines, which require among other things, that each pool is enclosed by a fence at least four feet high.

 

Jumpstart Our Business Startups Act

 

In April 2012, the Jumpstart Our Business Startups Act (“ JOBS Act ”) was enacted into law. The JOBS Act provides, among other things:

 

  Exemptions for “ emerging growth companies ” from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;
     
  Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934, as amended;
     
  Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings;
     
  Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and
     
  Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.

 

In general, under the JOBS Act a company is an “ emerging growth company ” if its initial public offering (“ IPO ”) of common equity securities was effected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an “ emerging growth company ” after the earliest of

 

  (i) the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,  
     
  (ii) the completion of the fiscal year of the fifth anniversary of the company’s IPO;
     
  (iii) the company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or  
     
  (iv) the company becoming a “ larger accelerated filer ” as defined under the Securities Exchange Act of 1934, as amended.  

 

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The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.

 

Financial Disclosure.  The financial disclosure in a registration statement filed by an “ emerging growth company ” pursuant to the Securities Act of 1933, as amended, will differ from registration statements filed by other companies as follows:

  

  (i) audited financial statements required for only two fiscal years (provided that “ smaller reporting companies ” such as the Company are only required to provide two years of financial statements);
     
  (ii) selected financial data required for only the fiscal years that were audited (provided that “ smaller reporting companies ” such as the Company are not required to provide selected financial data as required by Item 301 of Regulation S-K); and
     
  (iii) executive compensation only needs to be presented in the limited format now required for “ smaller reporting companies ”.

  

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs to include audited financial statements for its two most current fiscal years with no required tabular disclosure of contractual obligations.

 

The JOBS Act also exempts the Company’s independent registered public accounting firm from having to comply with any rules adopted by the Public Company Accounting Oversight Board (“ PCAOB ”) after the date of the JOBS Act’s enactment, except as otherwise required by SEC rule.

 

The JOBS Act further exempts an “ emerging growth company ” from any requirement adopted by the PCAOB for mandatory rotation of the Company’s accounting firm or for a supplemental auditor report about the audit.

 

Internal Control Attestation.  The JOBS Act also provides an exemption from the requirement of the Company’s independent registered public accounting firm to file a report on the Company’s internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company’s internal control over financial reporting.

 

Section 102(a) of the JOBS Act exempts “ emerging growth companies ” from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the Securities Exchange Act of 1934, as amended, to hold stockholder votes for executive compensation and golden parachutes.

 

Other Items of the JOBS Act.  The JOBS Act also provides that an “ emerging growth company ” can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The JOBS Act also permits research reports by a broker or dealer about an “ emerging growth company ” regardless of whether such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of research reports on the “ emerging growth company’s ” initial public offerings (IPOs).

 

Section 106 of the JOBS Act permits “ emerging growth companies ” to submit registration statements under the Securities Act of 1933, as amended, on a confidential basis provided that the registration statement and all amendments thereto are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow “ emerging growth companies ” to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.

 

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Election to Opt Out of Transition Period.  Section 102(b)(1) of the JOBS Act exempts “ emerging growth companies ” from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standard.

 

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of the transition period.

 

DESCRIPTION OF PROPERTY

 

We lease approximately 1,000 square feet of office space at 12343 Hymeadow Drive, Suite 3-A in Austin, Texas pursuant to a lease agreement. The lease agreement has a term through September 30, 2017, and a monthly rental cost of $1,695 per month.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF  

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included elsewhere in this registration statement. This discussion and analysis contains forward-looking statements that are based upon current expectations and involve risks, assumptions and uncertainties. You should review the “ Risk Factors ” section of this registration statement for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis.

 

Plan of Operations

 

We had working capital of $42,062 as of June 30, 2016. We estimate the need for approximately $200,000 in additional funding to support our planned business operations over the next approximately 12 months, which we hope to raise through the sale of debt or equity securities (subsequent to the effectiveness of this registration statement) and/or through traditional bank funding. 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. As our business continues to grow, customer feedback will be integral in making small adjustments to improve the product and overall customer experience. With our current cash on hand and based on our current average monthly expenses, we do not anticipate the need for any additional funding in order to continue our operations at their current levels, but may seek to raise additional funding in the future to expand or complete acquisitions. In the event we require additional funding, we plan to raise that 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.

 

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Results of Operations

 

For the Six Months Ended June 30, 2016 Compared to the Six Months Ended June 30, 2015

 

We had revenue of $1,274,365 for the six months ended June 30, 2016, compared to revenue of $476,895 for the six months ended June 30, 2015, an increase of $797,470 or 167% from the prior period. Revenue increased mainly due to referral business.

 

We had cost of goods sold of $972,766 for the six months ended June 30, 2016, compared to cost of goods sold of $372,836 for the six months ended June 30, 2015, an increase of $599,930 or 161% from the prior period. Cost of goods sold increased mainly due to the increase in revenues described above.

 

We had a gross margin of $301,599 for the six months ended June 30, 2016, compared to a gross margin of $104,059 for the six months ended June 30, 2015, an increase of $197,540 or 190% from the prior period due to the reasons described above.

 

We had operating expenses consisting solely of general and administrative expenses of $335,684 for the six months ended June 30, 2016, compared to operating expenses consisting solely of general and administrative expenses of $100,273 for the six months ended June 30, 2015. Operating expenses increased due to increases in work load and the addition of additional personnel to help with our increased operations.

 

We had interest income of $29 and $7, for the six months ended June 30, 2016 and 2015.

 

We had interest expense of $942 and $236, for the six months ended June 30, 2016 and 2015, respectively, due to amounts owed in connection with an equipment purchase.

 

We had a net loss of $34,998 for the six months ended June 30, 2016, compared to a net loss of $3,557 for the six months ended June 30, 2015, an increase in net loss of $31,441, due to the reasons described above.

 

For the Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

 

We had revenue of $1,118,665 for the year ended December 31, 2015, compared to revenue of $874,043 for the year ended December 31, 2014, an increase of $244,622 or 28% from the prior period. Revenue increased mainly due to referral business.

 

We had cost of goods sold of $821,911 for the year ended December 31, 2015, compared to costs of goods sold of $711,268 for the year ended December 31, 2014, an increase of $110,643 or 16% from the prior period. Cost of goods sold increased mainly due to the increase in revenues described above.

 

We had a gross margin of $296,754 for the year ended December 31, 2015, compared to a gross margin of $162,775 for the year ended December 31, 2014, an increase of $133,979 or 83% from the prior period due to the reasons described above.

 

We had operating expenses consisting solely of general and administrative expenses of $292,077 for the year ended December 31, 2015, compared to operating expenses of $98,308, consisting of general and administrative expenses of $88,908 and share based compensation expense of $9,400, for the year ended December 31, 2014. Operating expenses increased due to increases in work load and the addition of additional personnel to help with our increased operations.

 

We had interest income of $7 for the year ended December 31, 2014.

 

We had interest expense of $212 and $700, for the years ended December 31, 2015 and 2014, respectively, due to amounts owed in connection with an equipment purchase.

 

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We had net income of $4,465 for the year ended December 31, 2015, compared to net income of $63,774 for the year ended December 31, 2014, a decrease of $59,309 or 93% from the prior period, due to the reasons described above.

 

Liquidity and Capital Resources

 

We had total assets of $213,730 as of June 30, 2016, consisting of total current assets of $181,627, which included cash of $126,471, accounts receivable of $21,683, federal income tax receivable of $10,000 and earnings in excess of billings and estimated earnings of uncompleted contacts of $23,473, and equipment, net of depreciation of $32,103.

 

We had total liabilities of $161,325 as of June 30, 2016, which included total current liabilities of $139,565, consisting of accounts payable and accrued liabilities of $64,945, billings in excess of costs and estimated earnings on uncompleted jobs of $69,246 and current portion of long-term note payable of $5,374, and long-term liabilities consisting of long-term note payable of $21,760.

 

We had working capital of $42,062 as of June 30, 2016.

 

We had $93,789 of net cash used in operating activities for the six months ended June 30, 2016, which was mainly due to $34,998 of net loss, $59,455 of billings on uncompleted contracts and $20,183 of increase in accounts receivable.

 

We had $34,260 of net cash provided by financing activities for the six months ended June 30, 2016, which included $41,000 from the sale of common stock (from January to June 30, 2016) in connection with our January 2016 through September 2016 offering, offset by $6,740 of payment on note payable.

 

As of June 30, 2016, we owed $5,374 in current portion of, and $21,760 of long-term portion of, note payable, in connection with our purchase of a Ford F-150 truck for work purposes. The note payable accrues interest at the rate of 4.35% per annum and requires that we pay $537 per month until February 2021.

 

On or about May 31, 2014, pursuant to stock subscription agreements, we sold an aggregate of 2.9 million shares of rest ricted common stock to seven investors for $2,900 ($0.001 per share). In January 2015, the Company collected $1,700 of the subscription receivables. In January 2016, the Company collected $500 of the subscription receivables. In September 2016, the Company cancelled 700,000 of the shares sold on May 31, 2014 for non-payment.

 

From January 2016 to September 2016, we 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 include Lilia Chavez, the mother of Michael Chavez (10,000 shares for $500), Alexander Spohn, the adult son of Becky Spohn our Controller (5,000 shares for $250), and Phyllis Laws, the mother of Becky Spohn, our Controller (5,000 shares for $250).

 

We do not currently have any additional commitments or identified sources of additional capital from third parties or from our officers, directors or majority shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we are not able to raise the capital necessary to continue our business operations, we may be forced to abandon or curtail our business plan and/or suspend our exploration activities.

 

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. We provide no assurance that financing will 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 will be forced to curtail or abandon our business operations, and any investment in the Company could become worthless.

 

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Critical Accounting Policies :

 

Emerging Growth Company Section 107 of the JOBS Act provides that an “ emerging growth company ” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “ emerging growth company ” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

Revenue Recognition. Revenues under long-term contracts are accounted for under the percentage-of-completion method of accounting. Under the percentage-of-completion method, the Company estimates profit as the difference between total estimated revenue and total estimated cost of a contract and recognizes that profit over the contract term based on either input (e.g., costs incurred under the cost-to-cost method) or output (e.g., units delivered under the units-of-delivery method), as appropriate under the circumstances. Revenues from the Company’s construction services are performed under fixed-price, time-and-equipment, time-and-materials, unit-price, and cost-plus fee contracts. For fixed-price contracts, the Company uses the ratio of cost incurred to date on the contract (excluding uninstalled direct materials) to management’s estimate of the contract’s total cost, to determine the percentage of completion on each contract. This method is used as management considers expended costs to be the best available measure of progression of these contracts. Contract cost includes all direct costs on contracts, including labor and material, subcontractor costs and those indirect costs related to contract performance, such as supplies, fuel, tool repairs and depreciation. The Company recognizes revenues from construction services with fees based on time-and-materials, unit prices, or cost-plus fee as the services are performed and amounts are earned.

 

Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts and therefore, the Company’s profit recognition. These changes, which include contracts with estimated costs in excess of estimated revenues, are recognized in contract costs in the period in which the revisions are determined. At the point the Company anticipates a loss on a contract, the Company estimates the ultimate loss through completion and recognizes that loss in the period in which the possible loss was identified. If contracts include contract incentives or bonuses, they are included in estimated contract revenues only when the achievement of such incentives or bonuses is reasonably certain.

 

A change order is a modification to a contract that changes the provisions of the contract, typically resulting from changes in scope, specifications, design, manner of performance, facilities, equipment, materials, sites, or period of completion of the work under the contract. A claim is an amount in excess of the agreed-upon contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes. Costs related to change orders and claims are recognized when incurred. Revenue from a change order is included in total estimated contract revenue when it is probable that the change order will result in an addition to contract value and can be reliably estimated. Revenue from a claim is included in total estimated contract revenues, only to the extent that contract costs related to the claim have been incurred, when it is probable that the claim will result in an addition to contract value which can be reliably estimated. No profit is recognized on a claim until final settlement occurs.

 

The Company recognizes revenue from the design and installation of swimming pools.

 

Accounts Receivable and Allowances. The Company does not charge interest to its customers and carries its customer 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.

 

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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. Costs and estimated earnings in excess of billings on uncompleted contracts are presented as a current asset in the accompanying consolidated balance sheets, and billings in excess of costs and estimated earnings on uncompleted contracts 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.

 

CERTAIN RELATIONSHIPS AND  

RELATED TRANSACTIONS

 

Except as discussed below, or otherwise disclosed above under “ Executive and Director Compensation ”, there have been no transactions since January 1, 2014, and there is not currently any proposed transaction, in which the Company was or is to be a participant, where the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year end, for the last two completed fiscal years, and in which any officer, director, or any stock holder owning greater than five percent (5%) of our outstanding voting shares, nor any member of the above referenced individual’s immediate family, had or will have a direct or indirect material interest.

 

In April 2013, Becky Spohn, our Controller, loaned Reliant Pools $30,000, which was evidenced by a promissory note. The note accrued interest at the rate of 8% per annum, payable in monthly installments of $200 each, beginning on September 1, 2013, with the principal balance thereof due on March 31, 2014. The loan was repaid in full in April 2014, together with $700 of accrued interest thereon.

 

From January 2016 to September 2016, we 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 include Lilia Chavez, the mother of Michael Chavez (10,000 shares for $500), Alexander Spohn, the adult son of Becky Spohn, our Controller (5,000 shares for $250), and Phyllis Laws, the mother of Becky Spohn, our Controller (5,000 shares for $250).

 

Review, Approval and Ratifi cation of Related Party Transactions

 

Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officers, directors and significant stockholders. However, all of the transactions described above were approved and ratified by our sole director. In connection with the approval of the transactions described above, our sole director took into account various factors, including his fiduciary duty to the Company; the relationships of the related parties described above to the Company; the material facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available; and the terms the Company could receive from an unrelated third party.

 

We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional directors. On a moving forward basis, our sole director will continue to approve any related party transaction based on the criteria set forth above.

 

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Conflict of Interest

 

The officers and directors (consisting solely of Mr. Chavez) of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The policy of the Board is that any personal business or corporate opportunity incurred by an officer or director of the Company must be examined by the Board and turned down by the Board in a timely basis before an officer or director can engage or take advantage of a business opportunity which could result in a conflict of interest.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  

ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

DESCRIPTION OF CAPITAL STOCK

 

We have authorized capital stock consisting of 70,000,000 shares of common stock, $0.001 par value per share and 5,000,000 shares of preferred stock, $0.001 par value per share (“ Preferred Stock ”). We have 14,585,000 shares of common stock issued and outstanding and no shares of Preferred Stock issued and outstanding.

 

Common Stock

 

Voting Rights . Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. Directors are appointed by a plurality of the votes present at any special or annual meeting of stockholders (by proxy or in person), and a majority of the votes present at any special or annual meeting of stockholders (by proxy or in person) shall determine all other matters. There is no cumulative voting of the election of directors then standing for election. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption.

 

Dividend Rights . The holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends at such times and in such amounts as the board from time to time may determine.

 

Liquidation . Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.

 

Other Rights . All of our outstanding shares of common stock are fully paid and non-assessable. The holders of our common stock have no preemptive rights and no rights to convert their common stock into any other securities, and our common stock is not subject to any redemption or sinking fund provisions.

 

Preferred Stock

 

Shares of Preferred Stock may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by our Board prior to the issuance of any shares thereof. Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board prior to the issuance of any shares thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of our capital stock entitled to vote generally in the election of the directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.

 

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Additionally, while it is not possible to state the actual effect of the issuance of any additional shares of Preferred Stock on the rights of holders of the common stock until the Board determines the specific rights of the holders of any additional shares of Preferred Stock, such rights may be superior to those associated with our common stock, and may include:

 

  ο Restricting dividends on the common stock;
 
  ο Rights and preferences including dividend and dissolution rights, which are superior to our common stock;
 
  ο Diluting the voting power of the common stock;
 
  ο Impairing the liquidation rights of the common stock; or
 
  ο Delaying or preventing a change in control of the Company without further action by the stockholders.

 

Anti-Takeover Provisions Under The Nevada Revised Statutes

 

Business Combinations

 

Sections 78.411 to 78.444 of the Nevada revised statues (the “ NRS ”) prohibit a Nevada corporation from engaging in a “ combination ” with an “ interested stockholder ” for three years following the date that such person becomes an interested shareholder and place certain restrictions on such combinations even after the expiration of the three-year period. With certain exceptions, an interested stockholder is a person or group that owns 10% or more of the corporation’s outstanding voting power (including stock with respect to which the person has voting rights and any rights to acquire stock pursuant to an option, warrant, agreement, arrangement, or understanding or upon the exercise of conversion or exchange rights) or is an affiliate or associate of the corporation and was the owner of 10% or more of such voting stock at any time within the previous three years.

 

A Nevada corporation may elect not to be governed by Sections 78.411 to 78.444 by a provision in its articles of incorporation or bylaws. We have such a provision in our Articles of Incorporation, as amended and Bylaws, as amended, pursuant to which we have elected to opt out of Sections 78.411 to 78.444; therefore, these sections do not apply to us.

 

Control Shares

 

Nevada law also seeks to impede “ unfriendly ” corporate takeovers by providing in Sections 78.378 to 78.3793 of the NRS that an “ acquiring person ” shall only obtain voting rights in the “ control shares ” purchased by such person to the extent approved by the other shareholders at a meeting. With certain exceptions, an acquiring person is one who acquires or offers to acquire a “ controlling interest ” in the corporation, defined as one-fifth or more of the voting power. Control shares include not only shares acquired or offered to be acquired in connection with the acquisition of a controlling interest, but also all shares acquired by the acquiring person within the preceding 90 days. The statute covers not only the acquiring person but also any persons acting in association with the acquiring person.

 

A Nevada corporation may elect to opt out of the provisions of Sections 78.378 to 78.3793 of the NRS. We have a provision in our Articles of Incorporation, as amended, pursuant to which we have elected to opt out of Sections 78.378 to 78.3793; therefore, these sections do not apply to us.

 

Removal of Directors

 

Section 78.335 of the NRS provides that 2/3rds of the voting power of the issued and outstanding shares of the Company are required to remove a Director from office. As such, it may be more difficult for shareholders to remove directors due to the fact the NRS requires greater than majority approval of the shareholders for such removal.

 

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MARKET FOR COMMON EQUITY 

AND RELATED STOCKHOLDER MATTERS

 

Market for Common Stock

 

No established public trading market exists for our common stock and our common stock has never been quoted on any market or exchange. There is not currently any common stock that is being, or has been proposed to be, publicly offered. In the future, we plan to file a registration statement with the SEC, and assuming the effectiveness of such registration statement, we plan to apply for quotation on the OTCQB Market, the Pink Sheets market,  a national securities exchange or the NASDAQ trading market, depending on where our management decides to quote/list our common stock in their sole discretion, and provided that we meet any and all applicable listing criteria.

 

Holders of Our Common Stock and Preferred Stock

 

As of October 27, 2016, we had 14,585,000 shares of common stock outstanding, held by 45 stockholders of record, no shares of Preferred Stock issued or outstanding.

 

Dividends

 

To date, we have not declared or paid any dividends on our outstanding shares. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings to finance our operations and future growth, our Board of Directors (currently consisting solely of Mr. Chavez) will have discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements and other factors, which our Board of Directors may deem relevant.

 

There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

 

  1. We would not be able to pay our debts as they become due in the usual course of business, or;
     
  2. Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

 

Equity Compensation Plan Information

 

 We have no equity compensation plans or outstanding options or restricted stock.

 

SELLING STOCKHOLDERS

 

This prospectus relates to the resale of 3,585,000 shares of common stock by the selling stockholders. The table below sets forth information with respect to the resale of shares of common stock by the selling stockholders. We will not receive any proceeds from the resale of common stock by the selling stockholders for shares currently outstanding. The selling stockholders are not broker/dealers and/or affiliated with a broker/dealer. Except as described in footnotes below, the selling stockholders have not had a material relationship with us, our predecessors or affiliates during the past three years.

 

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Selling Stockholder   Common Stock Beneficially Owned Before Resale       Amount Offered   Shares Beneficially Owned After Resale (1)   Percentage Owned After Offering
Adrian Alvarez     5,000       (2 )     5,000              
Alex Vandewalle     200,000       (2 )     200,000              
Alexander Spohn (a)     5,000       (2 )     5,000              
Andrew Vasquez     5,000       (2 )     5,000              
Angela Murcia     5,000       (2 )     5,000              
Arturo Barraza     5,000       (2 )     5,000              
CN Capital, LLC (b)     5,000       (2 )     5,000              
Dana and Linda Adelgren     10,000       (2 )     10,000              
Daniel Kolas     5,000       (2 )     5,000              
Don Maler     700,000       (3 )     700,000              
Donald Ross     10,000       (2 )     10,000              
Elvia Saenz     5,000       (2 )     5,000              
James Brock     5,000       (2 )     5,000              
Joel Allen     5,000       (2 )     5,000              
Joel Heffner (c)     450,000       (4 )     450,000              
Jude Samson     5,000       (2 )     5,000              
Julie Hale     500,000       (3 )     500,000              
Khoi Nguyen     10,000       (2 )     10,000              
Lilia Chavez (d)     10,000       (2 )     10,000              
Marcillino Acosta     50,000       (4 )     50,000              
Marlon Irias     10,000       (2 )     10,000              
Marsha Hash     500,000       (3 )     500,000              
Martin Clawson Jr. and Eva Clawson     10,000       (2 )     10,000              
Matthew Greiner     50,000       (2 )     50,000              
Matthew Mena     20,000       (2 )     20,000              
Michael Hale     50,000       (2 )     50,000              
Michael Miller     5,000       (2 )     5,000              
Michelle Stafford     5,000       (2 )     5,000              
Paul Guerrero     5,000       (2 )     5,000              
Phyllis Laws (e)     5,000       (2 )     5,000              
Rene Martinez     100,000       (2 )     100,000              
River North Equity (f)     500,000       (3 )     500,000              
Robert Taylor     200,000       (2 )     200,000              
Roehelen Giselle Arias Garcia     5,000       (2 )     5,000              
Ronald Schuler     10,000       (2 )     10,000              
Sara Johnson     5,000       (2 )     5,000              
Sergio Sierra     100,000       (2 )     100,000              
Shahnil Merchant     5,000       (2 )     5,000              
Zachary Hirsch     5,000       (2 )     5,000              
      3,585,000               3,585,000                  

  

(1) Assuming the sale of all shares registered herein.

 

(2) All shares were purchased from the Company at $0.05 per share pursuant to private placements between January and September 2016.

 

48

 

 

(3) All shares were purchased from the Company at $0.001 per share pursuant to private placements in May 2014.

 

(4) All shares were issued by the Company in consideration for services rendered on May 20, 2014, valued at $0.001 per share.

 

(a) Alexander Spohn is the adult son of Becky Spohn, our Controller.

 

(b) Eilon Natan, is the beneficial owner of the shares held in the name of CN Capital, LLC and also serves as the President of such entity.

 

(c) Our non-executive Vice President.

 

(d) Lilia Chavez is the mother of Michael Chavez, our President and sole director.

 

(e) Phyllis Laws is the mother of Becky Spohn, our Controller.

 

(f) Ed Liceaga, is the beneficial owner of the shares held in the name of River North Equity and also serves as the President of such entity.

 

SHARES AVAILABLE FOR FUTURE SALE

 

Future sales of substantial amounts of our common stock could adversely affect market prices prevailing from time to time, and could impair our ability to raise capital through the sale of equity securities.

 

Upon the date of this prospectus, there are  14,585,000  shares of common stock issued and outstanding. Upon the effectiveness of this registration statement, 3,585,000 shares of common stock to be resold pursuant to this prospectus will be eligible for immediate resale in the public market if and when any market for the common stock develops. Additionally, 11,000,000 shares of our currently issued and outstanding common stock which are not being registered pursuant to this registration statement will constitute “ restricted securities ” as that term is defined by Rule 144 of the Securities Act of 1933, as amended (the “ Act ”) and bear appropriate legends, restricting transferability. The Company may also raise capital in the future by issuing additional restricted shares to investors.

 

Restricted securities ” may not be sold except pursuant to an effective registration statement filed by us or an applicable exemption from registration, including an exemption under Rule 144 promulgated under the Act.

 

Pursuant to Rule 144 of the Securities Act of 1933, as amended (“ Rule 144 ”), a “ shell company ” is defined as a company that has no or nominal operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets. Assuming our registration statement is declared effective by the Commission and we are not deemed to be a “ shell company ” in the future and we otherwise meet the requirements of Rule 144, including our status as a “ reporting company ”, a person (or persons whose shares are aggregated) who owns “ restricted securities ” that were purchased from us (or any affiliate) at least one year previously (six months previously in the event we are current in our reporting obligations with the Commission and at least 90 days have passed after the date the registration statement is declared effective), would be entitled to sell such securities without restrictions. A person who may be deemed our affiliate, who owns “ restricted securities ” that were purchased from us (or any affiliate) at least one year previously (six months previously in the event we are current in our reporting obligations with the Commission and at least 90 days have passed after the date the registration statement is declared effective), would be entitled to sell within any three-month period a number of shares that does not exceed 1% of the then outstanding shares of the Company’s common stock. Sales by affiliates are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.

 

49  

 

 

In the event we become a “ shell company ” in the future, under Rule 144, no sales of our “ restricted securities ” would be eligible to be made pursuant to Rule 144 until we comply with the requirements of Rule 144 relating to “ shell companies ” which require that we cease being a “ shell company ”, are subject to Section 13 or 15(d) of the Exchange Act, and have filed all of our required periodic reports for at least the previous one year period prior to any sale pursuant to Rule 144; and a period of at least twelve months has elapsed from the date “ Form 10 information ” has been filed with the Commission reflecting the Company’s status as a non-” shell company .”

 

PLAN OF DISTRIBUTION

 

This prospectus relates to the registration of 3,585,000 shares of common stock on behalf of the selling stockholders.

 

Blue Sky

 

The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having our shares of common stock quoted on the OTCQB Market, the Pink Sheets market, a national securities exchange or the NASDAQ trading market, investors should consider any secondary market for the Company’s securities to be a limited one. We intend to seek coverage and publication of information regarding the Company in an accepted publication which permits a “ manual exemption .” This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “ recognize securities manuals ” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, California, Illinois, Kentucky, Louisiana, Montana, New York, Pennsylvania, and Tennessee.

 

Market for our Shares

 

There is no current market for our securities. In the future, following the effectiveness of our registration statement, of which this prospectus is a part, we plan to apply for quotation on the OTCQB Market, the Pink Sheets market, a national securities exchange or the NASDAQ trading market, depending on where our management decides to quote/list our common stock in their sole discretion, and provided that we meet any and all applicable listing criteria.

 

The securities quoted on the OTCQB Market are not listed or traded on the floor of an organized national or regional stock exchange. Instead, these securities transactions are conducted through a telephone and computer network connecting dealers in stocks. Over-the-counter stocks are traditionally stocks of smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

50  

 

 

If our shares are quoted on the OTCQB Market in the future, a purchaser of our shares may not be able to resell the shares. Broker-dealers may be discouraged from effecting transactions in our shares because they will be considered penny stocks and will be subject to the penny stock rules. Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on FINRA brokers-dealers who make a market in a “ penny stock .” A penny stock generally includes any non-exchange listed, non-NASDAQ equity security that has a market price of less than $5.00 per share. Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or “ accredited investor ” (generally, an individual with net worth in excess of $1,000,000 (not including the value of the individual’s principal residence) or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer’s account and information with respect to the limited market in penny stocks.

 

The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market, assuming one develops.

 

The shares may be sold or distributed from time to time by the selling stockholders or by pledgees, donees or transferees of, or successors in interest to, the selling stockholders, directly to one or more purchasers (including pledgees) or through brokers or dealers who act solely as agents. The distribution of the shares may be effected in one or more of the following methods:

 

  ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;
     
  block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
     
  purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
     
  an exchange distribution in accordance with the rules of the applicable exchange;
     
  privately-negotiated transactions;
     
  broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
     
  a combination of any such methods of sale; and
     
  Any other method permitted pursuant to applicable law.

  

The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.

 

In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in sales in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus.

 

Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or the purchasers of shares for whom such broker-dealers may act as agent (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We do not anticipate that either our stockholders or we will engage an underwriter in the selling or distribution of our shares.

 

51  

 

 

We will not receive any proceeds from the sale of the shares of the selling stockholders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees.

 

The selling stockholders named in this prospectus must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock being offered by them. The selling stockholders and any broker-dealers who execute sales for the selling stockholders may be deemed to be an “ underwriter ” within the meaning of the Securities Act in connection with such sales. In particular, during such times as the selling stockholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable laws and may among other things:

 

  Not engage in any stabilization activities in connection with our common stock;
     
  Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus from time to time, as may be required by such broker or dealer; and
     
  Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities permitted under the Exchange Act.

 

Any commissions received by broker-dealers and any profit on the resale of shares sold by them while acting as principals might be deemed to be underwriting discounts or commissions under the Securities Act.

 

Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. It is not expected that these commissions and discounts will exceed what is customary in the types of transactions involved.

 

The selling stockholders may be deemed to be “ underwriters ” within the meaning of the Securities Act in connection with such sales. Therefore, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information pertaining to us and our common stock, you should refer to the registration statement and to its exhibits. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

 

Our fiscal year ends on December 31. Once the registration statement of which this prospectus forms a part is declared effective by the Commission, we plan to furnish our stockholders annual reports containing audited financial statements and other appropriate reports, where applicable. In addition, the effectiveness of the registration statement of which this prospectus is a part will trigger the Company’s obligation to file current and periodic reports with the Commission under Section 15(d) of the Securities Act of 1934, as amended. You may read and copy any reports, statements, or other information we file at the SEC’s public reference room at 100 F. Street, N.E., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC’s Internet site at http\\www.sec.gov.

 

52  

 

 

You should read this prospectus and any prospectus supplement together with the registration statement and the exhibits filed with or incorporated by reference into the registration statement. The information contained in this prospectus speaks only as of its date unless the information specifically indicates that another date applies.

 

We have not authorized any person to give any information or to make any representations that differ from, or add to, the information discussed in this prospectus. Therefore, if anyone gives you different or additional information, you should not rely on it.

 

No finder, dealer, sales person or other person has been authorized to give any information or to make any representation in connection with this offering other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by our Company. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

 

LEGAL MATTERS

 

Certain legal matters with respect to the validity of the shares of common stock covered by this prospectus will be passed upon by The Loev Law Firm, PC, Bellaire, Texas.

 

FINANCIAL STATEMENTS

 

The Financial Statements included below are stated in U.S. dollars and are prepared in accordance with U.S. Generally Accepted Accounting Principles. The following financial statements pertaining to Reliant Holdings, Inc. are filed as part of this prospectus. 

 

53  

 

 

TABLE OF CONTENTS TO FINANCIAL STATEMENTS

 

Reliant Holdings, Inc. and Subsidiary

Financial Statements

Table of Contents

 

 

Unaudited Consolidated Balance Sheets F-2
Unaudited Consolidated Statements of Operations F-3
Unaudited Consolidated Statements of Stockholders’ Equity F-4
Unaudited Consolidated Statements of Cash Flows F-5
Notes to Unaudited Consolidated Financial Statements F-6
   
Report of Independent Registered Public Accounting Firm F-11
Consolidated Balance Sheets F-12
Consolidated Statements of Operations F-13
Consolidated Statements of Stockholders’ Equity F-14
Consolidated Statements of Cash Flows F-15
Notes to Consolidated Financial Statements F-16

 

F- 1  

 

 

Reliant Holdings, Inc. and Subsidiary

Consolidated Balance Sheets

(Unaudited)

  

    June 30, 2016   December 31, 2015
ASSETS        
Current Assets        
Cash   $ 126,471     $ 186,000  
Accounts receivable, net     21,683       1,500  
Federal income tax receivable     10,000        
Earnings in excess of billings and estimated earnings of uncompleted contracts     23,473       31,028  
Total current assets     181,627       218,528  
                 
Equipment, net     32,103       421  
                 
Total Assets   $ 213,730     $ 218,949  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 64,945     $ 43,845  
Billings in excess of costs and estimated earnings on uncompleted jobs     69,246       128,701  
Current portion of long term note payable     5,374        
Total current liabilities     139,565       172,546  
                 
Long-term note payable     21,760        
                 
Total Liabilities     161,325       172,546  
Commitments                
Stockholders’ Equity                
                 
Preferred stock, ($0.001 par value, 5,000,000 shares authorized, zero issued and outstanding as of June 30, 2016 and December 31, 2015)            
Common stock, ($.001 par value, 70,000,000 shares authorized, 15,210,000 and 14,400,000 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively)     15,210       14,400  
Stock subscription receivable     (700 )     (1,200 )
Additional paid-in capital     39,690        
Retained earnings (deficit)     (1,795 )     33,203  
                 
Total Stockholders’ Equity     52,405       46,403  
                 
Total Liabilities and Stockholders’ Equity   $ 213,730     $ 218,949  

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 2  

 

 

Reliant Holdings, Inc. and Subsidiary

Consolidated Statements of Operations

(Unaudited)

 

    For the six months ended
June 30,
    2016   2015
Revenue   $ 1,274,365     $ 476,895  
Cost of Goods Sold     (972,766 )     (372,836 )
Gross Margin     301,599       104,059  
                 
Operating Expenses                
General and administrative     335,684       100,273  
Total Operating Expenses     (335,684 )     (100,273 )
                 
Income (Loss) From Operations     (34,085 )     3,786  
Other income / (expense)                
                 
Interest income     29       7  
Interest expense     (942 )     (236 )
                 
Total other income     (913 )     (229 )
                 
Income (Loss) /Before Income Taxes     (34,998 )     3,557  
                 
Provision for Income Tax            
                 
Net Income (Loss)   $ (34,998 )   $ 3,557  
                 
Net Income (Loss) Per Common Share - Basic and Diluted   $ 0.00     $ 0.00  
                 
Weighted Average Common Shares Outstanding - Basic and Diluted     14,422,231       14,400,000  

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 3  

 

 

Reliant Holdings, Inc . and Subsidiary

Consolidated Statements of Stockholders’ Equity

(Unaudited)  

 

    Preferred Stock   Common Stock   Additional   Retained   Subscription    
    Shares   Par Value   Shares   Par Value   Paid in Capital   Earnings   Receivable   Total
                                 
Balance December 31, 2013         $       2,100,000     $ 2,100     $     $ (35,036 )   $     $ (32,936 )
                                                                 
Stock issued for services rendered                 9,400,000       9,400                         9,400  
Sale of common stock                 2,900,000       2,900                   (2,900 )      
Net income for the period                                   63,774             63,774  
Balance December 31, 2014                 14,400,000       14,400             28,738       (2,900 )     40,238  
                                                                 
Collections on subscription receivable                                         1,700       1,700  
Net (loss) income for the period                                   4,465             4,465  
Balance December 31, 2015                 14,400,000       14,400             33,203       (1,200 )     46,403  
                                                                 
Sale of common stock                     810,000       810       39,690                       40,500  
Collections on subscription receivable                                                     500       500  
Net (loss) for the period                                     (34,998 )           (34,998 )
Balance June 30, 2016         $       15,210,000     $ 15,210     $ 39,690     $ (1,795 )   $ (700 )   $ 52,405  

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 4  

 

 

Reliant Holdings, Inc. and Subsidiary

Consolidated Statements of Cash Flows

(Unaudited)

 

    For the six months ended
June 30,
    2016   2015
Operating Activities        
Net income (loss)   $ (34,998 )   $ 3,557  
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
Depreciation and amortization     2,192        
                 
Changes in operating assets and liabilities:                
Accounts Receivable     (20,183 )     (512 )
Federal income tax receivable     (10,000 )      
Costs and estimated earnings in excess of billings on uncompleted contracts     (59,455 )     (158,867 )
Earnings in excess of costs and billings     7,555       196,959  
Accounts payable and accrued liabilities     21,100       95  
Net Cash Used In Operating Activities     (93,789 )     41,232  
                 
Cash Flows from Investing Activities                
Purchases of property and equipment            
Net Cash Used in Investing Activities            
                 
Cash Flows from Financing Activities                
Payments on note payable     (6,740 )      
Proceeds from sale of common stock, net     41,000       1,700  
Net Cash Provided By Financing Activities     34,260       1,700  
                 
Net change in Cash     (59,529 )     42,932  
Cash - Beginning of Period     186,000       63,057  
Cash - End of Period   $ 126,471     $ 105,989  
                 
Supplemental Disclosures                
Interest paid   $ 942     $ 236  
Income taxes paid   $ 10,000     $  
                 
Non-cash investing and financing activities:                
Note payable with purchase of truck   $ 33,874     $  

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 5  

 

 

Reliant Holdings, Inc. and Subsidiary 

Notes to Unaudited Financial Statements

 

Note 1. The Company and Summary of Significant Accounting Policies

The Company

Reliant Holdings, Inc. (the “ Company ”) was incorporated in the State of Nevada on or around May 20, 2014. Reliant Pools, Inc. a Nevada corporation (the “ Wholly Owned Subsidiary ”), was incorporated in the State of Nevada on May 20, 2014. On May 23, 2014, the Company acquired Reliant Pools, Inc. in exchange for 2,100,000 shares of its common stock. The acquisition was accounted for as a combination of entities under common control. All historical financial information is presented as combined for all periods presented.

Reliant Holdings, Inc. designs, and installs swimming pools. The Company is headquartered in Austin, Texas. 

Basis of Presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) for interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2015 and notes thereto dated June 9, 2016.  

The Company evaluated subsequent events for recognition or disclosure through September 8, 2016. 

Use of Estimates  

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. 

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-term investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. 

Income Taxes  

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income taxes and liabilities are determined based on the difference between financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

F- 6  

 

Note 1. The Company and Summary of Significant Accounting Policies (cont’d)  

Revenue Recognition  

Revenues under long-term contracts are accounted for under the percentage-of-completion method of accounting. Under the percentage-of-completion method, the Company estimates profit as the difference between total estimated revenue and total estimated cost of a contract and recognizes that profit over the contract term based on either input (e.g., costs incurred under the cost-to-cost method) or output (e.g., units delivered under the units-of-delivery method), as appropriate under the circumstances. 

Revenues from the Company’s construction services are performed under fixed-price, time-and-equipment, time-and-materials, unit-price, and cost-plus fee contracts. For fixed-price contracts, the Company uses the ratio of cost incurred to date on the contract (excluding uninstalled direct materials) to management’s estimate of the contract’s total cost, to determine the percentage of completion on each contract. This method is used as management considers expended costs to be the best available measure of progression of these contracts. Contract cost includes all direct costs on contracts, including labor and material, subcontractor costs and those indirect costs related to contract performance, such as supplies, fuel, tool repairs and depreciation. The Company recognizes revenues from construction services with fees based on time-and-materials, unit prices, or cost-plus fee as the services are performed and amounts are earned. 

Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts and therefore, the Company’s profit recognition. These changes, which include contracts with estimated costs in excess of estimated revenues, are recognized in contract costs in the period in which the revisions are determined. At the point the Company anticipates a loss on a contract, the Company estimates the ultimate loss through completion and recognizes that loss in the period in which the possible loss was identified. If contracts include contract incentives or bonuses, they are included in estimated contract revenues only when the achievement of such incentives or bonuses is reasonably certain. 

A change order is a modification to a contract that changes the provisions of the contract, typically resulting from changes in scope, specifications, design, manner of performance, facilities, equipment, materials, sites, or period of completion of the work under the contract. A claim is an amount in excess of the agreed-upon contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes. Costs related to change orders and claims are recognized when incurred. Revenue from a change order is included in total estimated contract revenue when it is probable that the change order will result in an addition to contract value and can be reliably estimated. Revenue from a claim is included in total estimated contract revenues, only to the extent that contract costs related to the claim have been incurred, when it is probable that the claim will result in an addition to contract value which can be reliably estimated. No profit is recognized on a claim until final settlement occurs. 

The Company recognizes revenue from the design and installation of swimming pools. 

Accounts Receivable and Allowances  

The Company does not charge interest to its customers and carries its customer 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.  

F- 7  

 

Note 1. The Company and Summary of Significant Accounting Policies (cont’d)  

Classification of Construction Contract-related Assets and Liabilities  

Costs and estimated earnings in excess of billings on uncompleted contracts are presented as a current asset in the accompanying consolidated balance sheets, and billings in excess of costs and estimated earnings on uncompleted contracts 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. 

Fair Value of Financial Instruments  

Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “ Fair Value Measurements and Disclosures” , we are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Consistent with the Fair Value Measurement Topic of the FASB ASC 820, we implemented guidelines relating to the disclosure of our methodology for periodic measurement of our assets and liabilities recorded at fair market value. 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

●           Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

●           Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

  

●           Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The carrying amounts of cash, accounts receivable, trade accounts payable, and other accrued expenses approximate fair value because of the short maturity of those instruments. 

Earnings Per Share  

In accordance with accounting guidance now codified as ASC Topic 260, “Earnings 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. 

New Accounting Pronouncements

Management does not expect adoption of recently issued but not yet effective pronouncements to have a material impact on the Company’s financial statements.

F- 8  

 

 

Note 2. Accounts Receivable

 

Accounts receivable consisted of the following at June 30, 2016 and December 31, 2015:

 

    June 30, 2016   December 31, 2015
Contract receivables   $ 21,683     $ 1,500  
Less: Allowance for doubtful accounts            
    $ 21,683     $ 1,500  

 

The Company recognized bad debt expense of $0 and $450 during the six months ending June 30, 2016 and 2015, respectively.

 

Note 3. Contracts in Process

 

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

 

    June 30, 2016   December 31, 2015
Costs and estimated earnings on uncompleted contracts   $ 550,051     $ 242,322  
Estimated earnings     190,273       118,197  
    $ 740,324     $ 360,519  
Less: Progress billings     (786,097 )     (458,192 )
    $ (45,773 )   $ (97,673 )

  

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

 

    June 30, 2016   December 31, 2015
Costs and estimated earnings in excess of billings on uncompleted contracts   $ 23,473     $ 31,028  
Billings in excess of costs and estimated earnings on uncompleted contracts     (69,246 )     (128,701 )
    $ (45,773 )   $ (97,673 )

 

F- 9  

 

 

Note 4. Equity

 

On August 23, 2013, Reliant Pools, G.P, was formed, subsequently the Company completed a share exchange with Reliant Pools, Inc. for 2,100,000 common shares.

 

In May 2014, the Company issued 9,400,000 shares of common stock to consultants in exchange for services rendered valued at $9,400.

 

In May 2014, the Company sold 2,900,000 shares of common stock for $2,900 and subscription receivables of $2,900. In January 2015, the Company collected $1,700 of the subscription receivables. In January 2016, the Company collected $500 of the subscription receivables.

 

During the six months ended June 30, 2016, the Company sold 810,000 shares of common stock for $40,500 in cash.

 

Note 5. Concentration of Risk

 

The Company had gross sales of $1,274,365 and $476,895 for the six months ended June 30, 2016 and 2015, respectively. The Company had one customer representing approximately 12% of gross revenue for the six months ended June 30, 2016 and six customers, each representing more than 10% of gross revenue, for the six months ended June 30, 2015.

 

Note 6. Commitments  

 

The Company leases approximately 1,000 square feet of office space in Austin, Texas. The lease agreement has a term through September 30, 2017, and a monthly rental cost of $1,695 per month.

 

The related total lease expense was $9,600 and $8,100 for the six months ended June 30, 2016 and 2015, respectively.

 

F- 10  

 

  

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and
Stockholders of Reliant Holdings, Inc.

 

We have audited the accompanying consolidated balance sheets of Reliant Holdings, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2015. Reliant Holdings, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Reliant Holdings, Inc . as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

 

LBB & Associates Ltd., LLP 

Houston, Texas 

June 9, 2016

  

F- 11  

 

 

Reliant Holdings, Inc. and Subsidiary

Consolidated Balance Sheets

 

    December 31,
2015
  December 31,
2014
ASSETS        
Current Assets        
Cash   $ 186,000     $ 63,057  
Accounts receivable, net     1,500       1,100  
Earnings in excess of billings and estimated earnings of uncompleted contracts     31,028       1,212  
Total current assets     218,528       65,369  
                 
Equipment     421       —    
                 
Total Assets   $ 218,949     $ 65,369  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 43,845     $ 12,898  
Billings in excess of costs and estimated earnings on uncompleted jobs     128,701       12,233  
Total current liabilities     172,546       25,131  
                 
Total Liabilities     172,546       25,131  
                 
Commitments                
                 
Stockholders’ Equity                
Preferred stock, ($0.001 par value, 5,000,000 shares authorized, zero issued and outstanding as of December 31, 2015 and 2014)     —         —    
Common stock, ($.001 par value, 70,000,000 shares authorized, 14,400,000 and zero issued and outstanding as of December 31, 2015 and December 31, 2014, respectively)     14,400       14,400  
Stock subscription receivable     (1,200 )     (2,900 )
Additional paid-in capital     —            
Retained Earnings     33,203       28,738  
Total Stockholders’ Equity     46,403       40,238  
                 
Total Liabilities and Stockholders’ Equity   $ 218,949     $ 65,369  

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 12  

 

 

Reliant Holdings, Inc. and Subsidiary

Consolidated Statements of Operations

 

    For the year ended
December 31,
    2015   2014
Revenue   $ 1,118,665     $ 874,043  
Cost of Goods Sold     (821,911 )     (711,268 )
Gross Margin     296,754       162,775  
                 
Operating Expenses                
General and administrative     292,077       88,908  
Share Based Compensation Expense     —         9,400  
Total Operating Expenses     (292,077 )     (98,308 )
                 
Income From Operations     4,677       64,467  
Other income / (expense)                
                 
Interest income     —         7  
Other Income     —          
Interest expense     (212 )     (700 )
Total other income     (212 )     (693 )
                 
Net Income Before Income Taxes     4,465       63,774  
                 
Provision for Income Tax     —            
Net Income     4,465       63,774  
                 
Net Income Per Common Share - Basic and Diluted   $ 0.00     $ 0.01  
                 
Weighted Average Common Shares Outstanding - Basic and Diluted     14,400,000       8,772,055

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 13  

 

 

Reliant Holdings, Inc . and Subsidiary

Consolidated Statements of Stockholders’ Equity

 

    Preferred Stock   Common Stock   Retained   Subscription    
    Shares   Par Value   Shares   Par Value   Earnings   Receivable   Total
                             
Balance December 31, 2013         $       2,100,000     $ 2,100     $ (35,036 )   $     $ (32,936 )
                                                         
Stock issued for services rendered                 9,400,000       9,400                   9,400  
Sale of common stock                     2,900,000       2,900             (2,900 )      
Net income for the period                             63,774             63,774  
Balance December 31, 2014                 14,400,000       14,400       28,738       (2,900 )     40,238  
                                                         
Collections on subscriptinon  receivable                                   1,700       1,700  
Net (loss) income for the period                             4,465             4,465  
Balance December 31, 2015         $       14,400,000     $ 14,400     $ 33,203     $ (1,200 )   $ 46,403  

  

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 14  

 

 

Reliant Holdings, Inc. and Subsidiary

Consolidated Statements of Cash Flows

 

    For the year ended
December 31,
    2015   2014
Operating Activities        
Net income   $ 4,465     $ 63,774  
Adjustments to reconcile net income to net cash used in operating activities:                
Depreciation and amortization     631        
Stock based compensation           9,400  
Bad debt expense     1,550        
Changes in operating assets and liabilities:                
Accounts Receivable     (1,950 )     (1,100 )
Costs and estimated earnings in excess of billings on uncompleted contracts     (29,816 )     (1,212 )
Earnings in excess of costs and billings     116,468       12,233  
Accounts payable and accrued liabilities     30,947       5,334  
Net Cash Provided by Operating Activities     122,295       88,429  
                 
Cash Flows from Investing Activities                
Purchases of property and equipment     (1,052 )      
Net Cash Used in Investing Activities     (1,052 )      
                 
Cash Flows from Financing Activities                
Payments on related party advances           (30,000 )
Proceeds from issuance of common stock     1,700        
Net Cash Provided By (Used in) Financing Activities     1,700       (30,000 )
                 
Net change in Cash     122,943       58,429  
Cash - Beginning of Period     63,057       4,628  
Cash - End of Period   $ 186,000     $ 63,057  
                 
Supplemental Disclosures                
Interest paid   $ 212     $ 700  
Income taxes paid   $     $  

 

The accompanying footnotes are an integral part of these consolidated financial statements.

 

F- 15  

 

 

Reliant Holdings, Inc. and Subsidiary

Notes to Audited Financial Statements

 

Note 1. The Company and Summary of Significant Accounting Policies

 

The Company

 

Reliant Holdings, Inc. (the “ Company ”) was incorporated in the State of Nevada on or around May 20, 2014. Reliant Pools, Inc. a Nevada corporation (the “ Wholly Owned Subsidiary ”), was incorporated in the State of Nevada on May 20, 2014. On May 23, 2014, the Company acquired Reliant Pools, Inc. in exchange for 2,100,000 shares of its common stock. The acquisition was accounted for as a combination of entities under common control. All historical financial information is presented as combined for all periods presented.

 

Reliant Holdings, Inc. designs, and installs swimming pools. The Company is headquartered in Austin, Texas.

 

Basis of Presentation .

 

The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“ US GAAP ”). The Company evaluated subsequent events for recognition or disclosure through June 9, 2016.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all short-term investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents.

 

Income Taxes

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income taxes and liabilities are determined based on the difference between financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

F- 16  

 

 

Note 1. The Company and Summary of Significant Accounting Policies (cont’d)

 

Revenue Recognition

 

Revenues under long-term contracts are accounted for under the percentage-of-completion method of accounting. Under the percentage-of-completion method, the Company estimates profit as the difference between total estimated revenue and total estimated cost of a contract and recognizes that profit over the contract term based on either input (e.g., costs incurred under the cost-to-cost method) or output (e.g., units delivered under the units-of-delivery method), as appropriate under the circumstances.

 

Revenues from the Company’s construction services are performed under fixed-price, time-and-equipment, time-and-materials, unit-price, and cost-plus fee contracts. For fixed-price contracts, the Company uses the ratio of cost incurred to date on the contract (excluding uninstalled direct materials) to management’s estimate of the contract’s total cost, to determine the percentage of completion on each contract. This method is used as management considers expended costs to be the best available measure of progression of these contracts. Contract cost includes all direct costs on contracts, including labor and material, subcontractor costs and those indirect costs related to contract performance, such as supplies, fuel, tool repairs and depreciation. The Company recognizes revenues from construction services with fees based on time-and-materials, unit prices, or cost-plus fee as the services are performed and amounts are earned.

 

Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and the total estimated costs to complete those contracts and therefore, the Company’s profit recognition. These changes, which include contracts with estimated costs in excess of estimated revenues, are recognized in contract costs in the period in which the revisions are determined. At the point the Company anticipates a loss on a contract, the Company estimates the ultimate loss through completion and recognizes that loss in the period in which the possible loss was identified. If contracts include contract incentives or bonuses, they are included in estimated contract revenues only when the achievement of such incentives or bonuses is reasonably certain.

 

A change order is a modification to a contract that changes the provisions of the contract, typically resulting from changes in scope, specifications, design, manner of performance, facilities, equipment, materials, sites, or period of completion of the work under the contract. A claim is an amount in excess of the agreed-upon contract price that the Company seeks to collect from its clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes. Costs related to change orders and claims are recognized when incurred. Revenue from a change order is included in total estimated contract revenue when it is probable that the change order will result in an addition to contract value and can be reliably estimated. Revenue from a claim is included in total estimated contract revenues, only to the extent that contract costs related to the claim have been incurred, when it is probable that the claim will result in an addition to contract value which can be reliably estimated. No profit is recognized on a claim until final settlement occurs.

 

The Company recognizes revenue from the design and installation of swimming pools.

 

Accounts Receivable and Allowances

 

The Company does not charge interest to its customers and carries its customer 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.

 

F- 17  

 

 

Note 1. The Company and Summary of Significant Accounting Policies (cont’d)

 

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

 

Costs and estimated earnings in excess of billings on uncompleted contracts are presented as a current asset in the accompanying consolidated balance sheets, and billings in excess of costs and estimated earnings on uncompleted contracts 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.

 

Fair Value of Financial Instruments

 

Under Financial Accounting Standards Board (“ FASB ”) Accounting Standards Codification (“ ASC ”) 820, “ Fair Value Measurements and Disclosures , we are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Consistent with the Fair Value Measurement Topic of the FASB ASC 820, we implemented guidelines relating to the disclosure of our methodology for periodic measurement of our assets and liabilities recorded at fair market value.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

 

  Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
     
  Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
     
  Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

The carrying amounts of cash, accounts receivable, trade accounts payable, and other accrued expenses approximate fair value because of the short maturity of those instruments.

 

Earnings Per Share

 

In accordance with accounting guidance now codified as ASC Topic 260, Earnings 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.

 

F- 18  

 

 

Note 1. The Company and Summary of Significant Accounting Policies (cont’d)

 

New Accounting Pronouncements

 

Management does not expect adoption of recently issued but not yet effective pronouncements to have a material impact on the Company’s financial statements.

 

N ote 2. Accounts Receivable

 

Accounts receivable consisted of the following at December 31:

 

    2015   2014
Contract receivables   $ 1,500     $ 1,100  
Less: Allowance for doubtful accounts            
    $ 1,500     $ 1,100  

 

The Company recognized bad debt expense of $1,550 and $0 during the years ending December 31, 2015 and 2014, respectively.

 

Note 3. Contracts in Process

 

The net asset (liability) position for contracts in process consisted of the following at December 31:

 

    2015   2014
Costs and estimated earnings on uncompleted contracts   $ 242,322     $ 24,090  
Estimated earnings     118,197       8,511  
    $ 360,519     $ 32,601  
Less: Progress billings     (458,192 )     (43,622 )
    $ (97,673 )   $ (11,021 )

  

The net asset (liability) position for contracts in process is included in the accompanying consolidated balance sheets as follows at December 31:

 

    2015   2014
Costs and estimated earnings in excess of billings on uncompleted contracts   $ 31,028     $ 1,212  
Billings in excess of costs and estimated earnings on uncompleted contracts     (128,701 )     (12,233 )
    $ (97,673 )   $ (11,021 )

 

Note 4. Income Taxes

 

Income tax (benefit) provision for the years ended December 31, 2015 and 2014 is as follows: 

 

    2015   2014
Federal income tax expense (benefit) attributed to:        
Federal income tax at statutory rate of 34%   $ 2,000     $ 10,000  
Valuation allowance     (2,000 )     (10,000 )
Net expense (benefit)   $     $  

 

F- 19  

 

 

Significant items comprising our net deferred tax amount are as follows:

 

  2015   2014
Deferred tax attributed:        
Net operating loss carryforward   $ 8,000     $ 10,000  
Less: valuation allowance     (8,000 )     (10,000 )
    $     $  

 

As of December 31, 2015, the Company had unused net operating loss carryforwards of approximately $26,000 to reduce future federal income tax liabilities. Management has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s combined financial statements. All tax years remain open to examination by the major taxing jurisdictions in which the Company is subject to tax.

 

Note 5. Equity

 

In May 2014, the Company issued 9,400,000 shares of common stock to consultants in exchange for services rendered valued at $9,400.

 

In May 2014, the Company sold 2,900,000 shares of common stock for $2,900 and subscription receivables of $2,900. In January 2015, the Company collected $1,700 of the subscription receivables.

 

Note 6. Concentration of Risk

 

The Company had gross sales of $1,118,665 and $874,043 for the years ended December 31, 2015 and 2014, respectively. The Company had one customer representing 11% of gross revenue for the year ended December 31, 2105 and two customers each representing approximately 24% and 12% of gross revenue for the year ended December 31, 2014.

 

Note 7. Commitments  

 

The Company leases approximately 1,000 square feet of office space in Austin, Texas. The term of the lease is from June 30, 2012 through September 30, 2016. Rent due under the lease is $1,350 per month through September 30, 2015 and $1,600 per month from October 2015 through September 30, 2016. The lease agreement has a term through September 30, 2017, and a monthly rental cost of $1,695 per month.

 

The related total lease expense was $16,950 and $14,350 for the years ended December 31, 2015 and 2014, respectively.

 

F- 20  

 

  

[Back Page of Prospectus]

 

PROSPECTUS

 

RELIANT HOLDINGS, INC.

 

3,585,000 Shares of Common Stock

 

We have not authorized any dealer, salesperson or other person to give you written information other than this prospectus or to make representations as to matters not stated in this prospectus. You must not rely on unauthorized information. This prospectus is not an offer to sell these securities or a solicitation of your offer to buy the securities in any jurisdiction where that would not be permitted or legal. Neither the delivery of this prospectus nor any sales made hereunder after the date of this prospectus shall create an implication that the information contained herein nor the affairs of the Issuer have not changed since the date hereof.

 

Until ninety (90) Days after the later of (1) the effective date of the registration statement or (2) the first date on which the securities are offered publicly, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 

THE DATE OF THIS PROSPECTUS IS ____________, 2016

 

 

 

 

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

The following table sets forth the expenses in connection with this registration statement. All of such expenses are estimates, other than the filing fees payable to the Securities and Exchange Commission. 

 

Description   Amount to be Paid
     
Filing Fee - Securities and Exchange Commission   $ 21  
Attorney’s fees and expenses     35,000 *
Accountant’s fees and expenses     30,000 *
Transfer agent’s and registrar fees and expenses     5,000 *
Printing and engraving expenses     5,000 *
Miscellaneous expenses     5,000 *
Total   $ 80,021  

 

* Estimated

 

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

See Indemnification of Directors and Officers above.

 

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

 

On or about May 20, 2014, we issued () 3,100,000 shares of restricted common stock to Michael Chavez (our CEO and sole director) in exchange for services valued at $3,100 ($0.001 per share); () 3,750,000 shares of restricted common stock to Elijah May (our COO) in exchange for services valued at $3,750 ($0.001 per share); () 2,050,000 shares of restricted common stock to Becky Spohn (our Controller) in exchange for services valued at $2,050 ($0.001 per share); () 450,000 shares of restricted common stock to Joel Heffner (our non-executive Vice President) in exchange for services valued at $450 ($0.001 per share); and () 50,000 shares of restricted common stock to Marcillino Acosta in exchange for contract services valued at $50 ($0.001 per share).

 

On May 23, 2014, we, along with Reliant Pools and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of Common Stock. Pursuant to the Exchange Agreement, the shareholders of Reliant Pools exchanged 2.1 million shares of common stock, representing 100% of the outstanding common stock of Reliant Pools, for 2.1 million shares of our common stock. As a result of the Exchange, Reliant Pools became our wholly-owned subsidiary. The President of Reliant Pools, and its largest shareholder at the time of the Exchange was Michael Chavez, our President. The following shares of restricted common stock were issued in connection with the Exchange: 900,000 shares of common stock to Michael Chavez, our Chief Executive Officer and sole director; 750,000 shares of common stock to Elijah May our Chief Operating Officer; and 450,000 shares of common stock to Becky Spohn, our Controller.

 

On or about May 31, 2014, pursuant to stock subscription agreements, we sold an aggregate of 2.9 million shares of restricted common stock to seven investors for $2,900 ($0.001 per share). In January 2015, the Company collected $1,700 of the subscription receivables. In January 2016, the Company collected $500 of the subscription receivables. In September 2016, the Company cancelled 700,000 of the shares sold on May 31, 2014 for non-payment.

 

II- 1  

 

 

We claim an exemption from registration for the issuances and sales of such shares described above pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act, since the foregoing issuances did not involve a public offering, the recipients were (a) “ accredited investors ”; and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act, 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 our representatives. No underwriters or agents were involved in the foregoing issuances and we 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. 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.

 

From January 2016 to September 2016, we 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 include Lilia Chavez, the mother of Michael Chavez, our President and sole director (10,000 shares for $500), Alexander Spohn, the adult son of Becky Spohn, our Controller (5,000 shares for $250), and Phyllis Laws, the mother of Becky Spohn, our Controller (5,000 shares for $250).

 

In September 2016, we discovered that we may have not provided the investors in our January 2016 to September 2016 offering all information and materials (including current audited financial statements), as is required under the Securities Act in order to claim an exemption from registration pursuant to Rule 506 of the Securities Act, provided that we believe 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 our representatives; no underwriters or agents were involved in the foregoing issuances and we 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, we offered the January 2016 to September 2016 purchasers of our common stock the right to rescind their previous common stock acquisitions and receive, in exchange for any shares relinquished to us, 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 purchasers in connection with the rescission offer.

 

ITEM 16. EXHIBITS

 

(a) Exhibits Pursuant to Item 601 of Regulation S-K:

 

A list of exhibits filed with this registration statement on Form S-1 is set forth on the Exhibit Index and is incorporated herein by reference.

 

ITEM 17. UNDERTAKINGS

 

The undersigned registrant hereby undertakes:

 

(1)           To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “ Calculation of Registration Fee ” table in the effective registration statement; and

 

II- 2  

 

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

(2)           That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4)           That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to the offering shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5)           Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

 

II- 3  

 

 

SIGNATURES

 

In accordance with the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements of filing on Form S-1 and authorized this registration statement to be signed on its behalf by the undersigned in the City of Austin, Texas, on October 27, 2016. 

 

  RELIANT HOLDINGS, INC.
   
  /s/ Michael Chavez
  Michael Chavez
  President, Chief Executive Officer and Chairman (sole director)
(Principal Executive Officer and Principal Financial/Accounting Officer)

 

Know all men by these presents, that each of the undersigned directors and officers of the registrant hereby constitutes and appoints Michael Chavez, with full power of substitution and resubstitution, as the true and lawful attorney-in-fact or attorneys-in-fact of the undersigned to sign this registration statement and any or all amendments, including post-effective amendments to the registration statement, including a prospectus or an amended prospectus therein and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933 and all other documents in connection therewith to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

NAME   TITLE   DATE
         
/s/ Michael Chavez   President, Chief Executive Officer and   October 27, 2016
Michael Chavez   Chairman (sole director) (Principal Executive Officer
and Principal Financial/Accounting Officer)
   
         
/s/ Elijah May   Chief Operating Officer   October 27, 2016
Elijah May        
         
/s/ Becky Spohn   Controller   October 27, 2016
Becky Spohn        

  

II- 4

 

 

EXHIBIT INDEX

  

            Incorporated by Reference
Exhibit Number   Description of Exhibit   Filed With
This Form S-1
  Form   Exhibit   Filing Date/Period End Date
2.1*   Agreement for the Exchange of Common Stock dated May 23, 2014, by and between Reliant Holdings, Inc., Reliant Pools, Inc. and the shareholders of Reliant Pools, Inc.   X            
3.1*   Articles of Incorporation as amended and restated   X            
3.2*   Amended and Restated Bylaws   X            
5.1*   Form of Opinion and consent of The Loev Law Firm, PC   X            
10.1*   Standard Form of Construction Contract   X            
14.1*   Code of Ethics and Code of Conduct                
23.1*   Consent of LBB & Associates Ltd., LLP   X            
23.2*   Consent of The Loev Law Firm, PC (included in Exhibit 5.1)   X            
24.1*   Power of Attorney (included in the signature page to this registration statement)   X            

* Filed herewith.  

**  Indicates management contract or compensatory plan or arrangement.

 

II-5

 

 

Reliant Holdings, Inc. S-1

Exhibit 2.1

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “1933 ACT”) NOR REGISTERED UNDER ANY STATE SECURITIES LAWS AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144, UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

AGREEMENT FOR THE EXCHANGE OF COMMON STOCK

This Agreement for the Exchange of Common Stock (hereinafter referred to as the “Agreement”) is made 23rd day of May, 2014, by and between Reliant Holdings, Inc. , a Nevada corporation (the “Issuer”), Reliant Pools, Inc. , a Nevada corporation (the “Company”) and the Shareholders of the Company listed in Exhibit “A” (hereinafter referred to as the “Shareholders”). The Issuer, Company, and Shareholders are hereinafter referred to collectively as the “Parties”.

Inconsideration of the mutual promises, covenants, and representations contained herein, and other good and valuable consideration,

THE PARTIES HERETO AGREE AS FOLLOWS:

1.       

TERMS .

Subject to the terms and conditions of this Agreement, the Issuer, Company and the Shareholders agree to and confirm the following:

(a)       

the consummation of the share exchange and the delivery of proceeds in conjunction with the transactions contemplated by this Agreement shall be complete on or before May 23, 2014 (the “Closing”) by that date the Parties shall have delivered of all documents required to be delivered by each Issuer and the Company to the other. In the event this transaction has not closed on or before May 23, 2014, this Agreement shall become null and void, unless extended by mutual written consent of the Parties. The Closing is subject to the completion of due diligence by both Parties to this agreement;

(b)       

the total capital stock of the Issuer before the consummation of this Agreement was no shares of preferred stock issued and outstanding AND Eight Million, Nine Hundred Thousand (8,900,000) shares of common stock, par value $0.001, issued and outstanding, held by four (4) shareholders of record;

  1  
 

 

(c)       

the total capital stock of the Company before the consummation of this Agreement was no shares of preferred stock issued and outstanding AND Two Million, One Hundred Thousand (2,100,000) of common stock, par value $0.001, issued and outstanding, issued and outstanding, held by three (3) shareholders of record;

(d)       

the Issuer at Closing shall issue to the Shareholders, Two Million, One Hundred Thousand (2,100,000) shares of common stock of Issuer, $.001 par value (according to the delivery schedule as outlined in Exhibit “A’’), in exchange for 100% of the issued and outstanding shares of Company (the “Exchange Stock”), such that Company shall be acquired by the Issuer and shall become a wholly-owned subsidiary of the Issuer;

(e)       

the full net effect and purpose of this Agreement is to issue to the Shareholders one (1) share of the Common Stock of the Issuer for every one (1) shares of Common Stock of the Company that each of the Shareholders own and control (see Exhibit “A”), and make the Company upon execution and closing of this Agreement, a wholly-owned subsidiary of the Issuer;

(f)       

upon consummation of this Agreement, the Issuer’s capital stock shall be made up of no shares of preferred stock issued and outstanding AND Eleven Million (11,000,000) of common stock, par value $0.001, issued and outstanding;

(g)       

the Issuer shall execute any and all documentation to reflect the intent of the Parties that the Company shall be retained as a wholly owned subsidiary of the Issuer;

(h)       

this transaction is subject to delivery by the Issuer, Company, and Shareholders of all required documents pre and post closing to effectuate the transaction;

(i)       

the Issuer and Company shall take all necessary corporate actions so that at closing, all actions required of Issuer will be in accordance with the Bylaws of Issuer; and

(j)       

It is intended that the transaction underlying this Agreement to qualify for United States federal income tax purposes as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended. However, both parties recognize that in the event the transaction underlying this Agreement does not qualify for United States federal income tax purposes as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, each party is separately responsible for any tax consequences and indemnifies and holds harmless the other party from and against any and all claims, demands, actions, suits, proceedings, assessments, judgments, damages, costs, losses and expenses, resulting from the that parties failure to pay their tax liability for this transaction.

2.       

REPRESENTATIONS OF ISSUER .

The Issuer is in good standing under the laws of Nevada, and has all necessary corporate powers to own properties and carry on a business, and is duly qualified to do business and is in good standing in Nevada. All actions taken by the incorporators, directors and shareholders of Issuer have been valid and in accordance with the laws of the State of Nevada.

  2  
 

 

(a)       

Organization . The Issuer is a corporation duly organized, validly existing, and in good standing under the laws of Nevada, and it has all necessary corporate powers to own properties and carry on a business, and is duly qualified to do business and is in good standing in the jurisdictions where qualification is required. All actions taken by the incorporators, directors, and stockholders of Issuer have been valid and in accordance with the laws of the State of Nevada. The Issuer was organized in the State of Nevada on May 19, 2014.

(b)       

Capital . The authorized capital stock of Issuer consists of 5,000,000, shares of preferred stock, $.001 par value of which no shares are issued and outstanding, and (70,000,000) shares of common stock, $.001 par value, of which, as the date of this Agreement, Eight Million, Nine Hundred Thousand (8,900,000) are issued and outstanding, held by four (4) shareholders of record. All outstanding shares are fully paid and non-assessable, free of pre-emptive rights. At the Closing, there will be no outstanding subscriptions, options, rights, warrants, convertible securities, or other agreements or commitments obligating Issuer to issue or to transfer from treasury any additional shares of its common capital stock, except as may be disclosed in the Issuer SEC filings.

(c)       

Ability to Carry Out Obligations . The Issuer has the right, power, and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement by Issuer and the performance by Issuer of its obligations hereunder will not cause, constitute, or conflict with or result in: (a) any breach or violation or any of the provisions of or constitute a default under any license, indenture, mortgage, charter, instrument, articles of incorporation, bylaw, or other agreement or instrument to which Issuer is a party, or by which it may be bound, nor will any consents or authorizations of any party other than those hereto be required, (b) an event that would cause Issuer to be liable to any party, or (c) an event that would result in the creation or imposition of any lien, charge, encumbrance on any asset of Issuer.

(d)       

Full Disclosure . None of the representations and warranties made by the Issuer in this Agreement, contains any untrue statement of a material fact, or omits any material fact the omission of which would be misleading.

(e)       

Contract and Leases . Issuer is currently carrying on its business and is not a party to contracts, agreements, or lease other than those items disclosed on the Issuer Balance Sheet No person holds a power of attorney from Issuer.

(f)       

Compliance with Laws . To the best of its knowledge, Issuer has complied with all federal, state, and local statutes, laws, and regulations pertaining to Issuer. To the best of its knowledge, Issuer has complied with all federal and state securities laws in connection with the issuance, sale, and distribution of its securities.

  3  
 

 

(g)       

Litigation . Issuer is not and has not been a party to any suit, action, arbitration, or legal, administrative, or other proceeding, or pending governmental investigation. To the best knowledge of the Issuer, there is no basis for any such action or proceeding and no such action or proceeding is threatened against Issuer, and Issuer is not subject to or in default with respect to any order, writ, injunction, or decree of any federal, state, local, or foreign court, department, agency, or instrumentality. Issuer represents and warrants that there are no outstanding judgments, lawsuits or material claims against the Issuer as of the date of this agreement.

(h)       

Conduct of Business . From inception to the date of this Agreement, the Issuer has conducted its business in the normal course, and has not (1) sold, pledged, or assigned any assets, other than in the ordinary course of business; (2) amended its Certificate of Incorporation or ByLaws; (3) declared dividends; (4) redeemed or sold stock or other securities; (5) incurred any liabilities, other than in the ordinary course of business; (6) acquired or disposed of any assets, other than in the ordinary course of business; (7) entered into any contract, other than in the ordinary course of business; (8) guaranteed obligations of any third party; or (9) entered into any other transaction, other than in the ordinary course of business.

(i)       

Documents . All minutes, consents, or other documents pertaining to Issuer to be delivered at Closing shall be valid and in accordance with the laws of the State of Nevada.

(j)

Title . At the Closing all shares issued to Shareholders shall be: (i) fully paid; (ii) non- assessable; and (iii) free and clear of all liens, security interests, pledges, charges, claims, encumbrances and restrictions of any kind. There is no applicable local, state, or federal law, rule, regulation, or decree which would, as a result of the issuance of the Shares to Shareholders, impair, restrict, or delay Shareholders voting rights with respect to the Issuer Shares.

(k)       

SEC Exemption . Upon execution of this Agreement, the Exchange Stock will be issued pursuant to a federal transactional exemption from registration as provided under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and as such, will contain a restrictive legend which shall state it cannot be resold except under an effective registration statement pursuant to the Securities Act or pursuant to Rule 144.

(1)       

Brokers . Issuer has not retained any broker or finder to which compensation would be due in connection with this transaction.

  4  
 

 

3.       

REPRESENTATIONS AND WARRANTIES OF COMPANY .

The Company represents and warrants to Issuer the following:

(a)       

Organization . The Company is a corporation duly organized, validly existing, and in good standing under the laws of Nevada, and it has all necessary corporate powers to own properties and carry on a business, and is duly qualified to do business and is in good standing in the jurisdictions where qualification is required. All actions taken by the incorporators, directors, and stockholders of Company have been valid and in accordance with the laws of the State of Nevada. The Company was organized in the State of Nevada on May 20, 2014.

(b)       

Capital . The authorized capital stock of Company consists of consists of 5,000,000, shares of preferred stock, $.001 par value of which no shares are issued and outstanding, and (70,000,000) shares of common stock, $.001 par value, of which Two Million, One Hundred Thousand (2,100,000) are issued and outstanding (the “Company Shares”), held by three (3) shareholders of record. These Company shares are held by the shareholders of the Company as listed in Exhibit “A”. The Company Shares were validly issued and are fully paid, non-assessable and free of pre-emptive rights. At Closing, there will be no outstanding subscriptions, options, rights, warrants, convertible securities, or other agreements or commitments obligating the Company to issue or to transfer from treasury any additional shares of its capital stock.

(c)       

Wholly-Owned Subsidiary . Upon execution of this Agreement and completion of the transaction contemplated herein, the Company will become a wholly-owned subsidiary of the Issuer.

(d)       

Financial Statements . The Company is a private corporation and to date has not prepared any audited financial statements.

(e)       

Ability to Carry Out Obligations . The Company has the right, power, and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement by Company and the performance by Company of its obligations hereunder will not cause, constitute, or conflict with or result in (a) any breach of violation or any of the provisions of or constitute a default under any license, indenture, mortgage, charter, instrument, articles of incorporation, bylaw, or other agreement or instrument to which Company is a party, or by which either of them may be bound, nor will any consents or authorizations of any party other than those hereto be required; (b) an event that would cause Company to be liable to any party; or (c) an event that would result in the creation or imposition of any lien, charge, encumbrance on any asset of Company.

(f)       

Full Disclosure . None of the representations and warranties made by Company herein contains any untrue statement of a material fact, or omits any material fact the omission of which would be misleading.

(g)       

Compliance with Laws . Company has complied with, and is not in violation of any federal, state, or local statute, law, and/or regulation pertaining to them. Company has complied with all federal and state securities Jaws in connection with the issuance, sale, and distribution of its securities.

  5  
 

 

(h)       

Litigation . The Company is not currently, or at any time since inception of the Company until the execution of this Agreement. As stated above in Section 3(e) of this Agreement, the Company is not aware of any pending, threatened, or asserted claims, lawsuits or contingencies involving its capital stock.

(i)       

Conduct of Business . From inception to the date of this Agreement, the Company has conducted its business in the normal course, and has not (1) sold, pledged, or assigned any assets other than in the ordinary course of business; (2) amended its Certificate of Incorporation or Bylaws; (3) declared dividends; (4) redeemed or sold stock or other securities except in the ordinary course of business; (5) incurred any liabilities not in the ordinary course of business; (6) acquired or disposed of any assets other than in the ordinary course of business; (7) entered into any contract other than in the ordinary course of business; (8) guaranteed obligations of any third party; or (9) entered into any other transactions other than in the ordinary course of business.

(j)       

Documents . All minutes, consents, or other documents pertaining to Company and to be delivered by Company to Issuer, are true, complete, and correct, and are valid and in accordance with applicable Jaw.

(k)       

Title . The Company Shares to be delivered to Issuer will be, at closing, free and clear of all liens, security interests, pledges, charges, claims, encumbrances and restrictions of any kind. None of the Company Shares are subject to any voting trust or agreement. No person holds or has the right to receive any proxy or similar instrument with respect to the Company Shares, except as provided in this Agreement. Company is not a party to any agreement that offers or grants to any person the right to purchase or acquire any of the Company Shares. There is no applicable local, state, or federal law, rule, regulation, or decree which would, as a result of the transfer of the Company Shares to Issuer, impair, restrict, or delay Issuer’s voting rights with respect to the Company Shares.

(1)       

Counsel . The Company and the Shareholders represent and warrant that prior to Closing, that they are represented by independent counsel or have had the opportunity to retain independent counsel to represent them in this transaction and that prior to Closing, Counsel for the Company and the Shareholders have not represented either the Issuer or Issuer’s stockholders in any manner whatsoever known to the Company.

(m)       

Brokers . Company and/or the Shareholders have not retained any broker or incurred any obligation to pay a commission to any third party.

(n)       

Conflicts of Interests of Issuer . The Company and the Shareholders have reviewed and understand the conflicts of interests, if any, between the Issuer, and its officers and directors, if any.

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4.       

INVESTMENT INTENT .

(a)       

Restricted Shares . The Shareholders understands the following: (i) the Exchange Stock has not and will not be registered under the Securities Act of 1933, as amended (“the Act”) or the securities laws of any state, based upon an exemption from such registration requirements pursuant to Section 4(2) of the Act; (ii) the Exchange Stock are and will be “restricted securities”, as said term is defined in Rule 144 of the Rules and Regulations promulgated under the Act; and (iii) the Exchange Stock may not be sold or otherwise transferred unless exemptions from such registration provisions are available with respect to said resale or transfer or the shares have been registered under the Act.

(b)       

Transferability . The Shareholders will not sell or otherwise transfer any of the Exchange Stocks, any interest therein unless and until: (i) the Exchange Stock shall have first been registered under the Act and/or all applicable state securities laws; or (ii) the Shareholders shall have first delivered to Issuer a written opinion of counsel, which counsel and opinion (in form and substance) shall be reasonably satisfactory to Issuer, to the extent that the proposed sale or transfer is exempt from the registration provisions of the Act and all applicable state securities laws.

(c)       

Investment Intent . The Shareholders are acquiring the Exchange Stock for Investment purposes only, without a view for resale or distribution thereof.

(d)       

Legend . The Shareholders understands that the certificates representing the Exchange Stock will bear the following or similar legend:

The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, transferred, further pledged, hypothecated or otherwise disposed of in absence of (i) an effective registration statement for such securities under said Act or (ii) an opinion of company counsel that such registration is not required.

5.       

DOCUMENTS TO BE DELIVERED AT CLOSING .

BY ISSUER:

(1)       

Resolution of the Board of Directors authorizing the issuance of a certificate for the number of shares to be delivered to Shareholders pursuant to this Agreement.

(2)       

Certificates for the number of Issuer shares to be registered in the name of the Shareholders.

(3)       

Such other resolutions of Issuer directors as may reasonably be required by Company and the Shareholders.

(4)       

Such other agreements relating to the transaction as may reasonably be required by the Company or the Shareholders.

  7  
 

 

(5)       

Receipt from the Issuer of all due diligence materials requested by the Company or its representatives, in a form satisfactory to the Company in its sole discretion.

BY THE COMPANY AND THE SHAREHOLDERS:

(1)       

Delivery to the Issuer, certificates evidencing the Company Shares, and such stock powers as are required in order to transfer to Issuer good and marketable title to the Company Shares.

(2)       

Copies of the basic corporate records, Articles of Incorporation and Bylaws. Company shall retain all other records at its current principal address.

(3)       

Such other resolutions of Company and the Shareholders and/or directors as may reasonably be required by Issuer.

(4)       

Such other agreements relating to the transaction as may reasonably be required by the Issuer.

6.       

ARBITRATION .

Any controversy or claim arising out of, or relating to, this Agreement, or the making, performance, or interpretation thereof, shall be settled by arbitration in Las Vegas, Nevada in accordance with the Commercial Rules of the American Arbitration Association then existing. The arbitrator assigned shall have authority and power to decide all arbitration issues. Judgment on the arbitration award may be entered in any court having jurisdiction over the subject matter of the controversy. The prevailing party in such claim or controversy shall be entitled to recover all costs and expenses of such claim or controversy, including attorney’s fees from the non- prevailing party.

7.       

POST-CLOSING AGREEMENTS .

i.       

Further Assurances . The Parties shall execute such further documents and perform such further acts, as may be necessary to effect the transactions contemplated hereby, on the terms herein contained and otherwise to comply with the terms of this Agreement, provided, that, except as contemplated by this Agreement, no party shall be required to waive any right or incur an obligation in connection therewith.

ii.

Indemnification of Directors and Officers . For at least seven (7) years after the Closing Date, Issuer shall (a) maintain in effect the current provisions regarding the indemnification of officers and directors contained in Issuer’s Certificate of Incorporation and Bylaws; provided, however, Issuer may adopt new indemnification provisions no less favorable than the current provisions as to the persons who served as directors and officers of Issuer prior to the Closing Date; and (b) indemnify the persons who served as directors and officers of Issuer prior to the Closing Date to the fullest extent to which Issuer is permitted to indemnify such officers and directors under its Certificate of Incorporation and ByLaws and applicable law as in effect immediately prior to the Closing Date.

  8  
 

 

8.       

MISCELLANEOUS .

i.       

Captions and Headings . The headings throughout this Agreement are for convenience and reference only, and shall in no way be deemed to define, limit, or add to the meaning of any provision of this Agreement.

ii.

No Oral Change . This Agreement and any provision hereof may not be waived, changed, modified, or discharged orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought.

iii.

Non Waiver . Except as otherwise expressly provided herein, no waiver of any covenant, condition, or provision of this Agreement shall be deemed to have been made unless expressly in writing and signed by the party against whom such waiver is charged; and (1) the failure of any party to insist in any one or more cases upon the performance of any of the provisions, covenants, or conditions of this Agreement or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants, or conditions; (2) the acceptance of performance of any thing required by this Agreement to be performed with knowledge of the breach or failure of a covenant, condition, or provision hereof shall not be deemed a waiver of such breach or failure; and (3) no waiver of any party of one breach by another party shall be construed as a waiver with respect to any subsequent breach.

iv.

Time of Essence . Time is of the essence of this Agreement and of each and every provision hereof.

  9  
 

 

v.        

Entire Agreement . This Agreement contains the entire Agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings.

vii.        

Notices . All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the third day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified , postage prepaid, and properly addressed, and by fax, as follows:

Shareholders and Company

Michael Chavez, President

12343 Spicewood Springs Road Suite 3a

Austin, Texas 78750

 

 

Michael Chavez, President

12343 Spicewood Springs Road Suite 3a Austin, Texas 78750

 

vi.       

Counterparts . This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(END OF PAGE-Signatures on the next page)

  10  
 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this 23rd day of May, 2014.

  11  
 

 

EXHIBIT “A”

Name of Shareholders

Of

Reliant Pools, Inc.

Name of Shareholder Address of Shareholder Reliant Pools, Inc. Common Stock Held (“Company Shares”) Reliant Holdings, Inc. Common Stock Received (“Exchange Stock”)
Michael Chavez

12343 Spicewood Springs Road Suite 3a

Austin, Texas 78750

900,000 900,000
Elijah May

12343 Spicewood Springs Road Suite 3a

Austin, Texas 78750

750,000 750,000
Becky Spohn

12343 Spicewood Springs Road Suite 3a

Austin, Texas 78750

450,000 450,000

 

  12  

 

 

Reliant Holdings, Inc. S-1

Exhibit 3.1

 

PAGES FROM RESTATEDARTICLES-FILING-FILE-STAMPED-10-12-16

 

 
 

 

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

RELIANT HOLDINGS, INC.

[E0264582014-6]

 

The Chief Executive Officer of Reliant Holdings, Inc. (the “ Corporation ”), a corporation organized under the laws of the State of Nevada, by signing below, does hereby certify that:

 

1.

Pursuant to the provisions of Sections 78.390 and 78.403 of the Nevada Revised Statutes (“ NRS ”), the Corporation amends and restates its articles of incorporation as set forth below.

 

2.

The amendment and restatement of the Articles of Incorporation as set forth below was adopted by the Corporation’s sole director by unanimous written consent on October 3, 2016, in accordance with the provisions of NRS 78.315 and NRS 78.390.

 

3.

The amendment and restatement of the Articles of Incorporation as set forth below was approved by the written consent of stockholders holding a majority of the voting power of the Corporation on October 3, 2016.

 

4.

The undersigned officer has been authorized and directed by the sole director and the majority stockholders to execute and file this certificate setting forth the text of the Articles of Incorporation of the Corporation as amended and restated in its entirety to this date as follows:

 

ARTICLE I.

 

The name of the Corporation is Reliant Holdings, Inc.

 

ARTICLE II.

 

The Resident Agent for this corporation shall be InCorp Services, Inc. The address of the Resident Agent and the registered or statutory address of this Corporation in the state of Nevada shall be InCorp Services, Inc., 3773 Howard Hughes Parkway, Suite 500S, Las Vegas, Nevada 89169-6014.

 

ARTICLE III.

 

The total number of shares of stock that Reliant Holdings, Inc. (the “ Corporation ”) shall have authority to issue is 75,000,000, consisting of 70,000,000 shares of common stock, par value $0.001 per share (“ Common Stock ”), and 5,000,000 shares of “ blank check ” preferred stock par value $0.001 per share (“ Preferred Stock ”).

 

Page 1 of 5

Amended and Restated Articles of Incorporation of

Reliant Holdings, Inc.

 

 

Shares of Preferred Stock of the Corporation may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by the Board of Directors of the Corporation (“ Board of Directors ”) prior to the issuance of any shares thereof. Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof.

 

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of the capital stock of the corporation entitled to vote generally in the election of the directors (the “ Voting Stock ”), voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.

 

ARTICLE IV.

 

The number of directors of the Corporation may be increased or decreased in the manner provided in the Bylaws of the Corporation; provided, that the number of directors shall never be less than one. In the interim between elections of directors by stockholders entitled to vote, all vacancies, including vacancies caused by an increase in the number of directors and including vacancies resulting from the removal of directors by the stockholders entitled to vote which are not filled by said stockholders, may be filled by the remaining directors, though less than a quorum.

 

ARTICLE V.

 

The purpose of the Corporation shall be any and all legal purposes.

 

ARTICLE VI.

 

No fully paid shares of any class of stock of the Corporation shall be subject to any further call or assessment in any manner or for any cause. The good faith determination of the Board of Directors of the Corporation shall be final as to the value received in consideration of the issuance of fully paid shares.

 

ARTICLE VII.

 

The Corporation shall have perpetual existence.

 

Page 2 of 5

Amended and Restated Articles of Incorporation of

Reliant Holdings, Inc.

 

 

ARTICLE VIII.

 

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to fix the amount to be reserved as working capital over and above its paid-in capital stock, and to authorize and cause to be executed, mortgages and liens upon the real and personal property of the Corporation.

 

Any action required to be taken at any annual or special meeting of stockholders of the Corporation or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing setting forth the action so taken, shall have been signed by the holder or holders of all the shares entitled to vote with respect to the action that is the subject of the consent. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

 

ARTICLE IX.

 

The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the Nevada Revised Statutes, as the same may be amended and supplemented.

 

ARTICLE X.

 

The Corporation shall, to the fullest extent permitted by the Nevada Revised Statutes, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Law from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Law, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

 

ARTICLE XI.

 

The Corporation reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

 

Page 3 of 5

Amended and Restated Articles of Incorporation of

Reliant Holdings, Inc.

 

 

ARTICLE XII.

 

Shareholders of the Corporation shall not have cumulative voting rights nor preemptive rights.

 

ARTICLE XIII.

 

No contract or other transaction between the Corporation and any other entity, whether or not a majority of the shares of the capital stock of such other entity is owned by this Corporation, and no act of this Corporation shall be in any way affected or invalidated by the fact that any of the directors of this Corporation are pecuniarily or otherwise interested in, or are directors, officers, members, managers, partners or control persons of such other entity. Any director of this Corporation, individually, or any firm of which such director may be an affiliate, may be a party to, or may be pecuniarily or otherwise interested in any contract or transaction of the Corporation; provided, however, that the fact that he, she or such firm is so interested shall be disclosed or shall have been known to the Board of Directors of this Corporation, or a majority thereof; and any director of this Corporation who is also an affiliate of such other entity, or who is so interested, may be counted in determining the existence of a quorum at any meeting of the Board of Directors of this Corporation that shall authorize such contract or transaction, and may vote thereat to authorize such contract or transaction, with like force and effect as if he were no such director or officer of such other entity or not so interested.

 

ARTICLE XIV.

 

The Corporation, pursuant to Section 78.434 of the Nevada Revised Statutes (“ NRS ”), elects not to be governed by Sections 78.411 to 78.444 of the NRS, inclusive.

 

Additionally, the Corporation elects not to be governed by the provisions of NRS 78.378 to 78.3793, inclusive, of the NRS.

 

ARTICLE XV.

 

The Board of Directors shall adopt the initial Bylaws of the Corporation. The Board of Directors shall also have the power to alter, amend or repeal the Bylaws, or to adopt new Bylaws, except as otherwise may be specifically provided in the Bylaws.

 

 

 

 

 

[Remainder of page left intentionally blank. Signature page follows.]

 

 

Page 4 of 5

Amended and Restated Articles of Incorporation of

Reliant Holdings, Inc.

 

 

The undersigned Chief Executive Officer of the Corporation has executed these Amended and Restated Articles of Incorporation, certifying that the facts herein stated are true, this October 10, 2016.

 

 

 

 

Page 5 of 5

Amended and Restated Articles of Incorporation of

Reliant Holdings, Inc.

 

 

PAGES FROM RESTATEDARTICLES-FILING-FILE-STAMPED-10-12-16-2

 

 

 

 

Reliant Holdings, Inc. S-1

 

Exhibit 3.2

 

 

 

AMENDED AND RESTATED BYLAWS

OF

RELIANT HOLDINGS, INC.

a Nevada corporation

Adopted September 22, 2016

ARTICLE 1.

DEFINITIONS

 

1.1       

Definitions . Unless the context clearly requires otherwise, in these Amended and Restated Bylaws:

(a)       

Articles of Incorporation ” or “ Articles ” means the Articles of Incorporation of Reliant Holdings, Inc., as filed with the Secretary of State of the State of Nevada and includes all amendments thereto and restatements thereof subsequently filed.

(b)       

Board ” means the board of directors of the Company and/or an authorized Committee of the Board, as applicable.

(c)       

Bylaws ” means these Amended and Restated Bylaws as adopted by the Board and includes amendments subsequently adopted by the Board or by the Stockholders.

(d)       

Company ” means Reliant Holdings, Inc., a Nevada corporation.

(e)       

Section ” refers to sections of these Bylaws.

(f)       

Stockholder ” means stockholders of record of the Company.

(g)       

Nevada Law ” means the Nevada Revised Statutes, as amended from time to time.

(h)       

Stockholder ” means stockholders of record of the Company.

1.2       

Offices . The title of an office refers to the person or persons who at any given time perform the duties of that particular office for the Company.

  1 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

ARTICLE 2.

OFFICES

 

2.1       

Principal Office . The Company may locate its principal office within or without the state of incorporation as the Board may determine.

2.2       

Registered Office . The registered office of the Company required by law to be maintained in the state of incorporation may be, but need not be, the same as the principal place of business of the Company. The Board may change the address of the registered office from time to time.

2.3       

Other Offices . The Company may have offices at such other places, either within or without the state of incorporation, as the Board may designate or as the business of the Company may require from time to time.

ARTICLE 3.

MEETINGS OF STOCKHOLDERS

 

3.1       

Annual Meetings . The Stockholders of the Company shall hold their annual meetings for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings at such time, date and place as the Board shall determine by resolution.

3.2       

Special Meetings . The Board, the Chairman of the Board, the President, a majority of the members of the Board or a committee of the Board duly designated and whose powers and authority include the power to call meetings may call special meetings of the Stockholders of the Company at any time for any purpose or purposes. Special meetings of the Stockholders of the Company may also be called by the holders of at least 25% of all shares entitled to vote at the proposed special meeting.

If any person(s) other than the Board or the Chairman call a special meeting, the request shall:

(i)       

be in writing;

(ii)       

specify the general nature of the business proposed to be transacted; and

(iii)       

be delivered personally or sent by registered mail or by facsimile transmission to the Secretary of the Company.

(iv)       

additionally, if the special meeting is called by Stockholders as provided above, the request shall include documentation sufficient to confirm the Stockholder(s) total ownership of shares entitled to vote at the proposed special meeting.

Upon receipt of such a request, the Board shall determine the date, time and place of such special meeting, which must be scheduled to be held on a date that is within ninety (90) days of receipt by the Secretary of the request therefor, and the Secretary of the Company shall prepare a proper notice thereof. No business may be transacted at such special meeting other than the business specified in the notice to Stockholders of such meeting.

3.3       

Place of Meetings . The Stockholders shall hold all meetings at such places, within or without the State of Nevada, as the Board or a committee of the Board shall specify in the notice or waiver of notice for such meetings.

  2 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

3.4       

Notice of Meetings . Except as otherwise required by law, the Board or a committee of the Board shall give notice of each meeting of Stockholders, whether annual or special, not less than 10 nor more than 60 days before the date of the meeting. The Board or a committee of the Board shall deliver a notice to each Stockholder entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his address as it appears on the records of the Company, or by transmitting a notice thereof to him at such address by telegraph, telecopy, cable or wireless. If mailed, notice is given on the date deposited in the United States mail, postage prepaid, directed to the Stockholder at his address as it appears on the records of the Company. An affidavit of the Secretary or an Assistant Secretary or of the Transfer Agent of the Company that he has given notice shall constitute, in the absence of fraud, prima facie evidence of the facts stated therein.

Every notice of a meeting of the Stockholders shall state the place, date and hour of the meeting and, in the case of a special meeting, also shall state the purpose or purposes of the meeting. Furthermore, if the Company will maintain the list at a place other than where the meeting will take place, every notice of a meeting of the Stockholders shall specify where the Company will maintain the list of Stockholders entitled to vote at the meeting.

3.5       

Notice of Stockholder Business and Nominations . Subject to the Articles of Incorporation, the Stockholders who intend to nominate persons to the Board of Directors, subject where applicable to these Bylaws and applicable law, or propose any other action at an annual meeting of Stockholders must timely notify the Secretary of the Company of such intent. To be timely, a Stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Company not earlier than the close of business on the day which falls 120 days prior to the one year anniversary of the Company’s last annual meeting of Stockholders and not later than the close of business on the day which falls 90 days prior to the one year anniversary of the Company’s last annual meeting of Stockholders, together with written notice of the shareholder’s intention to present a proposal for action at the meeting, unless the Company’s annual meeting date occurs more than 30 days before or 30 days after the one year anniversary of the Company’s last annual meeting of Stockholders. In that case, the Company must receive proposals not earlier than the close of business on the 120th day prior to the date of the annual meeting and not later than the close of business on the later of the 90th day prior to the date of the annual meeting or, if the first public announcement of the date of the annual meeting is less than 100 days prior to the date of the meeting, the 10th day following the day on which the Company first makes a public announcement of the date of the annual meeting. Such notice must be in writing and must include (a) the name and record address of the Stockholder who intends to propose the business and the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such Stockholder; (b) a representation that the Stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to introduce the business specified in the notice; (c) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (d) any material interest of the Stockholder in such business; and (e) any other information that is required to be provided by the Stockholder pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “ Exchange Act ”), if the Company is subject to the Exchange Act. In the event the Stockholder proposal relates to a nomination for appointment of a director of the Company, the notice shall also forth (a) as to each person whom the Stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

  3 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

Nominations of persons for election to the Board of Directors may be made at any annual meeting of Stockholders, or at any special meeting of Stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any Stockholder of the Company (i) who is a Stockholder of record on the date of the giving of the notice provided for in this Section 3.5 and on the record date for the determination of Stockholders entitled to notice of and to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 3.5.

Notwithstanding the foregoing, in order to include information with respect to a Stockholder proposal in the proxy statement and form of proxy for a stockholder’s meeting, Stockholders must provide notice as required by, and otherwise comply with the requirements of, the Exchange Act and the regulations promulgated thereunder. The Board of Directors reserves the right to refuse to submit any such proposal to Stockholders at an annual meeting if, in its judgment, the information provided in the notice is inaccurate or incomplete. For the avoidance of doubt, the foregoing Section 3.5 shall be the exclusive means for a Stockholder to make nominations or propose business (other than business included in the Corporation’s proxy materials pursuant to Rule 14a-8 under the Exchange Act, if the Company is subject to the Exchange Act) at an annual meeting of stockholders. For purposes of these Bylaws, “ public announcement ” shall mean disclosure in a press release reported by a national service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding the foregoing provisions of this Section 3.5, a stockholder shall also comply with all applicable requirements of the Exchange Act and applicable state law with respect to matters set forth in this Section 3.5. Nothing in this Section 3.5 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, or the Company’s or the Board of Director’s rights and obligations under the Exchange Act and state law, as applicable.

  4 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

3.6       

Waiver of Notice . Whenever these Bylaws require written notice, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall constitute the equivalent of notice. Attendance of a person at any meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. No written waiver of notice need specify either the business to be transacted at, or the purpose or purposes of any regular or special meeting of the Stockholders, directors or members of a committee of the Board.

3.7       

Adjournment of Meeting . When the Stockholders, the Board of Directors, or an officer (as provided in Section 3.8 below), adjourn a meeting to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Stockholders may transact any business which they may have transacted at the original meeting. If the adjournment is for more than 30 days or, if after the adjournment, the Board or a committee of the Board fixes a new record date for the adjourned meeting, the Board or a committee of the Board shall give notice of the adjourned meeting to each Stockholder of record entitled to vote at the meeting.

3.8       

Quorum . Except as otherwise required by law, the holders of 33-1/3% of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes at any meeting of the Stockholders except as otherwise provided by applicable law, by the Articles of Incorporation or by these Bylaws. In the absence of a quorum at any meeting or any adjournment thereof, (A) the Board of Directors, without a vote of the Stockholders, may (1) postpone, reschedule, or cancel any previously scheduled annual meeting of stockholders and (2) postpone, reschedule, or cancel any previously scheduled special meeting of the Stockholders called by the Board of Directors or management (but not by the Stockholders); or (B) the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, or, in the absence therefrom of all the Stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting to another place, date or time.

If the chairman of the meeting gives notice of any adjourned special meeting of Stockholders to all Stockholders entitled to vote thereat, stating that the minimum percentage of Stockholders for a quorum as provided by Nevada Law shall constitute a quorum, then, except as otherwise required by law, that percentage at such adjourned meeting shall constitute a quorum and a majority of the votes cast at such meeting shall determine all matters.

Votes cast shall include votes cast against any proposal and shall exclude abstentions and broker non-votes, provided that votes cast against any proposal, abstentions and broker non-votes shall be counted in determining a quorum at any meeting.

3.9       

Organization . Such person as the Board may have designated or, in the absence of such a person, the highest ranking officer of the Company who is present shall call to order any meeting of the Stockholders, determine the presence of a quorum, and act as chairman of the meeting. In the absence of the Secretary or an Assistant Secretary of the Company, the chairman shall appoint someone to act as the secretary of the meeting.

  5 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

3.10       

Conduct of Business . The chairman of any meeting of Stockholders shall determine the order of business and the procedure at the meeting, including such regulations of the manner of voting and the conduct of discussion as he deems in order.

3.11       

List of Stockholders . At least 10 days before every meeting of Stockholders, the Secretary shall prepare a list of the Stockholders entitled to vote at the meeting or any adjournment thereof, arranged in alphabetical order, showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. The Company shall make the list available for examination by any Stockholder for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting will take place or at the place designated in the notice of the meeting.

The Secretary shall produce and keep the list at the time and place of the meeting during the entire duration of the meeting, and any Stockholder who is present may inspect the list at the meeting. The list shall constitute presumptive proof of the identity of the Stockholders entitled to vote at the meeting and the number of shares each Stockholder holds.

A determination of Stockholders entitled to vote at any meeting of Stockholders pursuant to this Section shall apply to any adjournment thereof.

3.12       

Fixing of Record Date . For the purpose of determining Stockholders entitled to notice of or to vote at any meeting of Stockholders or any adjournment thereof, or Stockholders entitled to receive payment of any dividend, or in order to make a determination of Stockholders for any other proper purpose, the Board or a committee of the Board may fix in advance a date as the record date for any such determination of Stockholders. However, the Board shall not fix such date, in any case, more than 60 days nor less than 10 days prior to the date of the particular action.

If the Board or a committee of the Board does not fix a record date for the determination of Stockholders entitled to notice of or to vote at a meeting of Stockholders, the record date shall be at the close of business on the day next preceding the day on which notice is given or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held or the date on which the Board adopts the resolution declaring a dividend.

3.13       

Voting of Shares . Except as otherwise required by Nevada Law, the Articles or the Bylaws, (i) at all meetings of Stockholders for the election of directors, a plurality of votes cast shall be sufficient to elect such directors; (ii) any other action taken by Stockholders shall be valid and binding upon the Company if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, at a meeting at which a quorum is present, except that adoption, amendment or repeal of the Bylaws by Stockholders will require the vote of a majority of the shares entitled to vote; and (iii) broker non-votes and abstentions are considered for purposes of establishing a quorum but not considered as votes cast for or against a proposal or director nominee. Each Stockholder shall have one vote for every share of stock having voting rights registered in his name on the record date for the meeting, except as otherwise provided in any preferred stock designation setting forth the right of preferred stock shareholders. The Company shall not have the right to vote treasury stock of the Company, nor shall another corporation have the right to vote its stock of the Company if the Company holds, directly or indirectly, a majority of the shares entitled to vote in the election of directors of such other corporation. Persons holding stock of the Company in a fiduciary capacity shall have the right to vote such stock. Persons who have pledged their stock of the Company shall have the right to vote such stock unless in the transfer on the books of the Company the pledgor expressly empowered the pledgee to vote such stock. In that event, only the pledgee, or his proxy, may represent such stock and vote thereon.

  6 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

Where a separate vote by a class or classes is required, a majority of the outstanding shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter and the affirmative vote of the majority of shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class.

3.14       

Inspectors . At any meeting in which the Stockholders vote by ballot, the chairman may appoint one or more inspectors. Each inspector shall take and sign an oath to execute the duties of inspector at such meeting faithfully, with strict impartiality, and according to the best of his ability. The inspectors shall ascertain the number of shares outstanding and the voting power of each; determine the shares represented at a meeting and the validity of proxies and ballots; count all votes and ballots; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The certification required herein shall take the form of a subscribed, written report prepared by the inspectors and delivered to the Secretary of the Company. An inspector need not be a Stockholder of the Company, and any officer of the Company may be an inspector on any question other than a vote for or against a proposal in which he has a material interest.

3.15       

Proxies . A Stockholder may exercise any voting rights in person or by his proxy appointed by an instrument in writing, which he or his authorized attorney-in-fact has subscribed and which the proxy has delivered to the Secretary of the meeting pursuant to the manner prescribed by law.

A proxy is not valid after the expiration of 6 months after the date of its execution, unless the person executing it specifies thereon the length of time for which it is to continue in force (which length may not exceed 7 years, unless coupled with an interest) or limits its use to a particular meeting. Each proxy is irrevocable if it expressly states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.

The attendance at any meeting of a Stockholder who previously has given a proxy shall not have the effect of revoking the same unless he notifies the Secretary in writing prior to the voting of the proxy.

  7 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

3.16       

Action by Consent . Any action required to be taken at any annual or special meeting of Stockholders of the Company or any action which may be taken at any annual or special meeting of such Stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action that is the subject of the consent at a meeting in which each Stockholder entitled to vote on the action is present and votes, and shall be delivered to the Company by delivery to its registered office, its principal place of business, or an officer or agent of the Company having custody of the book in which proceedings of meetings of stockholders are recorded.

Every written consent shall bear the date of signature of each Stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days (or such other period as provided by applicable law) of the earliest dated consent delivered in the manner required by this section to the Company, written consents signed by a sufficient number of holders to take action are delivered to the Company by delivery to its registered office, its principal place of business or an officer or agent of the Company having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Company’s registered office shall be by hand or by certified or registered mail, return receipt requested.

Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those Stockholders who have not consented in writing, provided further that failure to provide such notice shall not effect the validity of such action.

3.17       

Cumulative Voting . Cumulative voting is expressly forbidden.

ARTICLE 4.

BOARD OF DIRECTORS

 

4.1       

General Powers . The Board shall manage the property, business and affairs of the Company.

4.2       

Number . The number of directors who shall constitute the Board shall equal not less than 1 nor more than 10, as the Board or majority Stockholders may determine by resolution from time to time.

4.3       

Election of Directors and Term of Office . The Stockholders of the Company shall elect the directors at the annual or adjourned annual meeting (except as otherwise provided herein for the filling of vacancies). Each director shall hold office until his death, resignation, retirement, removal, or disqualification, or until his successor shall have been elected and qualified.

4.4       

Resignations . Any director of the Company may resign at any time by giving written notice to the Board or to the Secretary of the Company. Any resignation shall take effect upon receipt or at the time specified in the notice. Unless the notice specifies otherwise, the effectiveness of the resignation shall not depend upon its acceptance.

  8 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

4.5       

Removal . Stockholders holding 2/3 of the outstanding shares entitled to vote at an election of directors may remove any director or the entire Board of Directors at any time, with or without cause.

4.6       

Vacancies . Any vacancy on the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause may be filled by a majority of the remaining directors, a sole remaining director, or the majority Stockholders. Any director elected to fill a vacancy shall hold office until his death, resignation, retirement, removal, or disqualification, or until his successor shall have been elected and qualified.

4.7       

Chairman of the Board . At the initial and annual meeting of the Board, the directors may elect from their number a Chairman of the Board of Directors. The Chairman shall preside at all meetings of the Board and shall perform such other duties as the Board may direct. The Board also may elect a Vice Chairman and other officers of the Board, with such powers and duties as the Board may designate from time to time.

4.8       

Compensation . The Board may compensate directors for their services and may provide for the payment of all expenses the directors incur by attending meetings of the Board or otherwise.

4.9       

Insuring Directors, Officers, and Employees . The Company may purchase and maintain insurance on behalf of any director, officer, employee, or agent of the Company, or on behalf of any person serving at the request of the Company as a director, officer, employee, or agent of another company, partnership, joint venture, trust, or other enterprise, against any liability asserted against that person and incurred by that person in any such company, whether or not the Company has the power to indemnify that person against liability for any of those acts.

4.10       

Delegation of Authority . Notwithstanding any provision of these Bylaws to the contrary, the Board may delegate the powers or duties of any officer to any other officer or agent.

ARTICLE 5.

MEETINGS OF DIRECTORS

 

5.1       

Regular Meetings . The Board may hold regular meetings at such places, dates and times as the Board shall establish by resolution. If any day fixed for a meeting falls on a legal holiday, the Board shall hold the meeting at the same place and time on the next succeeding business day. The Board need not give notice of regular meetings.

5.2       

Place of Meetings . The Board may hold any of its meetings in or out of the State of Nevada, at such places as the Board may designate, at such places as the notice or waiver of notice of any such meeting may designate, or at such places as the persons calling the meeting may designate.

  9 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

5.3       

Meetings by Telecommunications . The Board or any committee of the Board may hold meetings by means of conference telephone or similar telecommunications equipment that enable all persons participating in the meeting to hear each other. Such participation shall constitute presence in person at such meeting.

5.4       

Special Meetings . The Chairman of the Board (or if there is no Chairman, any member of the Board of Directors), the President (or any Vice President if the President is absent or unable or refuses to act), or any two directors then in office (not including the Chairman, if the Company has a Chairman) may call a special meeting of the Board. The person or persons authorized to call special meetings of the Board may fix any place, either in or out of the State of Nevada as the place for the meeting.

5.5       

Notice of Special Meetings . The person or persons calling a special meeting of the Board shall give written notice to each director of the time, place, date and purpose of the meeting of not less than three business days if by mail and not less than 24 hours if by facsimile (with confirmation of delivery), email or in person before the date of the meeting, or as otherwise provided by law. If mailed, notice is given on the date deposited in the United States mail, postage prepaid, to such director. A director may waive notice of any special meeting, and any meeting shall constitute a legal meeting without notice if all the directors are present or if those not present sign either before or after the meeting a written waiver of notice, a consent to such meeting, or an approval of the minutes of the meeting. A notice or waiver of notice need not specify the purposes of the meeting or the business which the Board will transact at the meeting. Generally, a tentative agenda will be included, but the meeting shall not be confined to any agenda included with the notice.

Upon providing notice, the Secretary or other officer sending notice shall sign and file in the Corporate Record Book a statement of the details of the notice given to each director. If such statement should later not be found in the Corporate Record Book, due notice shall be presumed.

5.6       

Waiver by Presence . Except when expressly for the purpose of objecting to the legality of a meeting, a director’s presence at a meeting shall constitute a waiver of notice of such meeting.

5.7       

Quorum . A majority of the directors then in office shall constitute a quorum for all purposes at any meeting of the Board. In the absence of a quorum, a majority of directors present at any meeting may adjourn the meeting to another place, date or time without further notice. No proxies shall be given by directors to any person for purposes of voting or establishing a quorum at a directors’ meeting.

5.8       

Conduct of Business . The Board shall transact business in such order and manner as the Board may determine. Except as the law requires otherwise, the Board shall determine all matters by the vote of a majority of the directors present at a meeting at which a quorum is present. The directors shall act as a Board, and the individual directors shall have no power as such. At every meeting of the Board of Directors, the Chairman of the Board, if there is such an officer, and if not, the President, or in the President’s absence, a Vice President designated by the President, or in the absence of such designation, a Chairman chosen by a majority of the directors present, shall preside. The Secretary of the Company shall act as Secretary of the Board of Directors’ meetings. When the Secretary is absent from any meeting or in the discretion of the Chairman, the Chairman may appoint any person to act as Secretary of that meeting.

  10 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

5.9       

Action by Consent . The Board or a committee of the Board may take any required or permitted action without a meeting if all members of the Board or committee consent thereto in writing and file such consent with the minutes of the proceedings of the Board or committee.

5.10       

Transactions with Interested Directors . Any contract or other transaction between the Company and any of its directors (or any corporation or firm in which any of its directors are directly or indirectly interested) shall be valid for all purposes notwithstanding the presence of that director at the meeting during which the contract or transaction was authorized, and notwithstanding the directors’ participation in that meeting. This section shall apply only if the contract or transaction is just and reasonable to the Company at the time it is authorized and ratified, the interest of each director is known or disclosed to the Board of Directors, and the Board (or an authorized committee thereof) nevertheless authorizes or ratifies the contract or transaction by a majority of the disinterested directors present (or by authorized committee of the Board). Each interested director is to be counted in determining whether a quorum is present, but shall not vote and shall not be counted in calculating the majority necessary to carry the vote. This section shall not be construed to invalidate contracts or transactions that would be valid in its absence.

ARTICLE 6.

COMMITTEES

 

6.1       

Committees of the Board . The Board may designate, by a vote of a majority of the directors then in office, committees of the Board. The committees shall serve at the pleasure of the Board and shall possess such lawfully delegable powers and duties as the Board may confer.

6.2       

Selection of Committee Members . The Board shall elect by a vote of a majority of the directors then in office a director or directors to serve as the member or members of a committee. By the same vote, the Board may designate other directors as alternate members who may replace any absent or disqualified member at any meeting of a committee. In the absence or disqualification of any member of any committee and any alternate member in his place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or they constitute a quorum, may appoint by unanimous vote another member of the Board to act at the meeting in the place of the absent or disqualified member.

6.3       

Conduct of Business . Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as the law or these Bylaws require otherwise and except as the Board shall otherwise determine. Each committee shall make adequate provision for notice of all meetings to members. A majority of the members of the committee shall constitute a quorum, unless the committee consists of one or two members. In that event, one member shall constitute a quorum. A majority vote of the members present shall determine all matters. A committee may take action without a meeting if all the members of the committee consent in writing and file the consent or consents with the minutes of the proceedings of the committee.

  11 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

6.4       

Authority . Any committee, to the extent the Board provides, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company, and may authorize the affixation of the Company’s seal to all instruments which may require or permit it. However, no committee shall have any power or authority with regard to amending the Articles of Incorporation, adopting an agreement of merger or consolidation, recommending to the Stockholders the sale, lease or exchange of all or substantially all of the Company’s property and assets, recommending to the Stockholders a dissolution of the Company or a revocation of a dissolution of the Company, or amending these Bylaws of the Company. Unless a resolution of the Board expressly provides, no committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger.

6.5       

Minutes . Each committee shall keep regular minutes of its proceedings and report the same to the Board when required.

6.6       

Committees . All Committees and all powers provided to such Committees shall be consistent with Nevada Law, the Articles and the rules and regulations of the principal market or exchange on which the Company’s capital stock then trades.

ARTICLE 7.

OFFICERS

 

7.1       

Officers of the Company . The officers of the Company shall consist of a President, a Secretary, a Treasurer and such Vice Presidents, a Chief Financial Officer, Assistant Secretaries, Assistant Treasurers, and other officers as the Board may designate and elect from time to time. The same person may hold at the same time any two or more offices.

7.2       

Election and Term . The Board shall elect the officers of the Company. Each officer shall hold office until his death, resignation, retirement, removal or disqualification, or until his successor shall have been elected and qualified.

7.3       

Compensation of Officers . The Board shall fix the compensation of all officers of the Company. No officer shall serve the Company in any other capacity and receive compensation, unless the Board authorizes the additional compensation.

7.4       

Removal of Officers and Agents . The Board may remove any officer or agent it has elected or appointed at any time, with or without cause.

7.5       

Resignation of Officers and Agents . Any officer or agent the Board has elected or appointed may resign at any time by giving written notice to the Board, the Chairman of the Board, the President, or the Secretary of the Company. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified. Unless otherwise specified in the notice, the Board need not accept the resignation to make it effective.

  12 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

7.6       

Bond . The Board may require by resolution any officer, agent, or employee of the Company to give bond to the Company, with sufficient sureties conditioned on the faithful performance of the duties of his respective office or agency. The Board also may require by resolution any officer, agent or employee to comply with such other conditions as the Board may require from time to time.

7.7       

President . The President shall be the chief operating officer of the Company and, subject to the Board’s control, shall supervise and direct all of the business and affairs of the Company. When present, he shall sign (with or without the Secretary, an Assistant Secretary, or any other officer or agent of the Company which the Board has authorized) deeds, mortgages, bonds, contracts or other instruments which the Board has authorized an officer or agent of the Company to execute. However, the President shall not sign any instrument which the law, these Bylaws, or the Board expressly require some other officer or agent of the Company to sign and execute. In general, the President shall perform all duties incident to the office of President and such other duties as the Board may prescribe from time to time.

7.8       

Vice Presidents . In the absence of the President or in the event of his death, inability or refusal to act, the Vice Presidents in the order of their length of service as Vice Presidents, unless the Board determines otherwise, shall perform the duties of the President. When acting as the President, a Vice President shall have all the powers and restrictions of the Presidency. A Vice President shall perform such other duties as the President or the Board may assign to him from time to time.

7.9       

Chief Financial Officer . The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall at all reasonable times be open to inspection by any director.

The Chief Financial Officer shall deposit all money and other valuables in the name and to the credit of the Company with such depositories as the Board may designate. The Chief Financial Officer shall disburse the funds of the Company as may be ordered by the Board, shall render to the Chief Executive Officer or, in the absence of a Chief Executive Officer, any president and directors, whenever they request it, an account of all of his or her transactions as Chief Financial Officer and of the financial condition of the Company, and shall have other powers and perform such other duties as may be prescribed by the Board or these Bylaws.

The Chief Financial Officer may be the Treasurer of the Company.

  13 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

7.10       

Secretary . The Secretary shall (a) keep the minutes of the meetings of the Stockholders and of the Board in one or more books for that purpose, (b) give all notices which these Bylaws or the law requires, (c) serve as custodian of the records and seal of the Company, (d) affix the seal of the Company to all documents which the Board has authorized execution on behalf of the Company under seal, (e) maintain a register of the address of each Stockholder of the Company (unless maintained by a duly appointed Transfer Agent), (f) sign, with the President, a Vice President, or any other officer or agent of the Company which the Board has authorized, certificates for shares of the Company, (g) have charge of the stock transfer books of the Company, and (h) perform all duties which the President or the Board may assign to him from time to time.

7.11       

Assistant Secretaries . In the absence of the Secretary or in the event of his death, inability or refusal to act, the Assistant Secretaries in the order of their length of service as Assistant Secretary, unless the Board determines otherwise, shall perform the duties of the Secretary. When acting as the Secretary, an Assistant Secretary shall have the powers and restrictions of the Secretary. An Assistant Secretary shall perform such other duties as the President, Secretary or Board may assign from time to time.

7.12       

Treasurer . The Treasurer shall (a) have responsibility for all funds and securities of the Company, (b) receive and give receipts for moneys due and payable to the Company from any source whatsoever, (c) deposit all moneys in the name of the Company in depositories which the Board selects, and (d) perform all of the duties which the President or the Board may assign to him from time to time.

7.13       

Assistant Treasurers . In the absence of the Treasurer or in the event of his death, inability or refusal to act, the Assistant Treasurers in the order of their length of service as Assistant Treasurer, unless the Board determines otherwise, shall perform the duties of the Treasurer. When acting as the Treasurer, an Assistant Treasurer shall have the powers and restrictions of the Treasurer. An Assistant Treasurer shall perform such other duties as the Treasurer, the President, or the Board may assign to him from time to time.

7.14       

Other Officers . The Board may appoint, or empower the Chief Executive Officer, or any other duly appointed officer of the Company, to appoint, such other officers and agents as the business of the Company may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these Bylaws or as the Board, Chief Executive Officer, or other designated officer may from time to time determine.

7.15       

Delegation of Authority . Notwithstanding any provision of these Bylaws to the contrary, the Board may delegate the powers or duties of any officer to any other officer or agent.

7.16       

Action with Respect to Securities of Other Corporations . Unless the Board directs otherwise, the President shall have the power to vote and otherwise act on behalf of the Company, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which the Company holds securities. Furthermore, unless the Board directs otherwise, the President shall exercise any and all rights and powers which the Company possesses by reason of its ownership of securities in another corporation.

  14 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

7.17       

Vacancies . The Board may fill any vacancy in any office because of death, resignation, removal, disqualification or any other cause in the manner which these Bylaws prescribe for the regular appointment to such office.

7.18       

Corporate Governance Compliance . Without otherwise limiting the powers of the Board set forth herein and provided that shares of capital stock of the Company are listed for trading on either the NASDAQ Stock Market (“ NASDAQ ”) or the New York Stock Exchange (“ NYSE ”)(including the NYSE MKT), the Company shall comply with the corporate governance rules and requirements of the NASDAQ or the NYSE, as applicable.

ARTICLE 8.

CONTRACTS, DRAFTS, DEPOSITS AND ACCOUNTS

 

8.1       

Contracts . Except as otherwise provided in these Bylaws, the Board, or any officers of the corporation authorized thereby, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Company; such authority may be general or confined to specific instances.

8.2       

Drafts . From time to time, the Board shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

8.3       

Deposits . The Treasurer shall deposit all funds of the Company not otherwise employed in such banks, trust companies, or other depositories as the Board may select or as any officer, assistant, agent or attorney of the Company to whom the Board has delegated such power may select. For the purpose of deposit and collection for the account of the Company, the President or the Treasurer (or any other officer, assistant, agent or attorney of the Company whom the Board has authorized) may endorse, assign and deliver checks, drafts and other orders for the payment of money payable to the order of the Company.

8.4       

General and Special Bank Accounts . The Board may authorize the opening and keeping of general and special bank accounts with such banks, trust companies, or other depositories as the Board may select or as any officer, assistant, agent or attorney of the Company to whom the Board has delegated such power may select. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.

  15 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

ARTICLE 9.

CERTIFICATES FOR SHARES AND THEIR TRANSFER

 

9.1       

Certificates for Shares . Shares of the capital stock of the Company may be certificated or uncertificated, as provided under Nevada Law. Each Stockholder, upon written request to the Transfer Agent or registrar of the Company, shall be entitled to a certificate of the capital stock of the Company in such form as may from time to time be prescribed by the Board of Directors. The Secretary, Transfer Agent, or registrar of the Company shall number the certificates representing shares of the stock of the Company in the order in which the Company issues them. The President or any Vice President and the Secretary or any Assistant Secretary shall sign the certificates in the name of the Company. Any or all certificates may contain facsimile signatures. In case any officer, Transfer Agent, or registrar who has signed a certificate, or whose facsimile signature appears on a certificate, ceases to serve as such officer, Transfer Agent, or registrar before the Company issues the certificate, the Company may issue the certificate with the same effect as though the person who signed such certificate, or whose facsimile signature appears on the certificate, was such officer, Transfer Agent, or registrar at the date of issue. The Secretary, Transfer Agent, or registrar of the Company shall keep a record in the stock transfer books of the Company of the names of the persons, firms or corporations owning the stock represented by the certificates, the number and class of shares represented by the certificates and the dates thereof and, in the case of cancellation, the dates of cancellation. The Secretary, Transfer Agent, or registrar of the Company shall cancel every certificate surrendered to the Company for exchange or transfer. Except in the case of a lost, destroyed, stolen or mutilated certificate, the Secretary, Transfer Agent, or registrar of the Company shall not issue a new certificate in exchange for an existing certificate until he has canceled the existing certificate.

9.2       

Transfer of Shares . A holder of record of shares of the Company’s stock, or his attorney-in-fact authorized by power of attorney duly executed and filed with the Secretary, Transfer Agent or registrar of the Company, may transfer his shares only on the stock transfer books of the Company. Such person shall furnish to the Secretary, Transfer Agent, or registrar of the Company proper evidence of his authority to make the transfer and shall properly endorse and surrender for cancellation his existing certificate or certificates for such shares. Whenever a holder of record of shares of the Company’s stock makes a transfer of shares for collateral security, the Secretary, Transfer Agent, or registrar of the Company shall state such fact in the entry of transfer if the transferor and the transferee request. When a transfer of shares is requested and there is reasonable doubt as to the right of the person seeking the transfer, the Company or its Transfer Agent, before recording the transfer of the shares on its books or issuing any certificate there for, may require from the person seeking the transfer reasonable proof of that person’s right to the transfer. If there remains a reasonable doubt of the right to the transfer, the Company may refuse a transfer unless the person gives adequate security or a bond of indemnity executed by a corporate surety or by two individual sureties satisfactory to the Company as to form, amount, and responsibility of sureties. The bond shall be conditioned to protect the Company, its officers, Transfer Agents, and registrars, or any of them, against any loss, damage, expense, or other liability for the transfer or the issuance of a new certificate for shares.

9.3       

Lost Certificates . The Board may direct the Secretary, Transfer Agent, or registrar of the Company to issue a new certificate to any holder of record of shares of the Company’s stock claiming that he has lost such certificate, or that someone has stolen, destroyed or mutilated such certificate, upon the receipt of an affidavit from such holder to such fact. When authorizing the issue of a new certificate, the Board, in its discretion may require as a condition precedent to the issuance that the owner of such certificate give the Company a bond of indemnity in such form and amount as the Board may direct.

  16 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

9.4       

Regulations . The Board may make such rules and regulations, not inconsistent with these Bylaws, as it deems expedient concerning the issue, transfer and registration of certificates for shares of the stock of the Company. The Board may appoint or authorize any officer or officers to appoint one or more Transfer Agents, or one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.

9.5       

Holder of Record . The Company may treat as absolute owners of shares the person in whose name the shares stand of record as if that person had full competency, capacity and authority to exercise all rights of ownership, despite any knowledge or notice to the contrary or any description indicating a representative, pledge or other fiduciary relation, or any reference to any other instrument or to the rights of any other person appearing upon its record or upon the share certificate. However, the Company may treat any person furnishing proof of his appointment as a fiduciary as if he were the holder of record of the shares.

9.6       

Treasury Shares . Treasury shares of the Company shall consist of shares which the Company has issued and thereafter acquired but not canceled. Treasury shares shall not carry voting or dividend rights.

9.7       

Consideration For Shares . Shares may be issued for such consideration as may be fixed from time to time by the Board of Directors, but not less than the par value stated in the Articles.

ARTICLE 10.

INDEMNIFICATION

 

10.1       

Definitions . In this Article:

(a)       

Indemnitee ” means (i) any present or former director, advisory director or officer of the Company, (ii) any person who while serving in any of the capacities referred to in clause (i) hereof served at the Company’s request as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) hereof.

(b)       

Official Capacity ” means (i) when used with respect to a director, the office of director of the Company, and (ii) when used with respect to a person other than a director, the elective or appointive office of the Company held by such person or the employment or agency relationship undertaken by such person on behalf of the Company, but in each case does not include service for any other foreign or domestic corporation or any partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise.

  17 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

(c)       

Proceeding ” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding.

10.2       

Indemnification . The Company shall indemnify every Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any Proceeding in which he was, is or is threatened to be named defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, in any of the capacities referred to in Section 10.1, if it is determined in accordance with Section 10.4 that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his Official Capacity, that his conduct was in the Company’s best interests and, in all other cases, that his conduct was at least not opposed to the Company’s best interests, and (c) in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to the Company or is found liable on the basis that personal benefit was improperly received by the Indemnitee the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the Proceeding and (ii) shall not be made in respect of any Proceeding in which the Indemnitee shall have been found liable for willful or intentional misconduct in the performance of his duty to the Company. Except as provided in the immediately preceding proviso to the first sentence of this Section 10.2, no indemnification shall be made under this Section 10.2 in respect of any Proceeding in which such Indemnitee shall have been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indemnitee’s Official Capacity, or (b) found liable to the Company. The termination of any Proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the requirements set forth in clauses (a), (b) or (c) in the first sentence of this Section 10.2. An Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. Reasonable expenses shall, include, without limitation, all court costs and all fees and disbursements of attorneys for the Indemnitee. The indemnification provided herein shall be applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.

10.3       

Successful Defense . Without limitation of Section 10.2 and in addition to the indemnification provided for in Section 10.2, the Company shall indemnify every Indemnitee against reasonable expenses incurred by such person in connection with any Proceeding in which he is a witness or a named defendant or respondent because he served in any of the capacities referred to in Section 10.1, if such person has been wholly successful, on the merits or otherwise, in defense of the Proceeding.

  18 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

10.4       

Determinations . Any indemnification under Section 10.2 (unless ordered by a court of competent jurisdiction) shall be made by the Company only upon a determination that indemnification of the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who, at the time of such vote, are not named defendants or respondents in the Proceeding; (b) if such a quorum cannot be obtained, then by a majority vote of a committee of the Board of Directors, duly designated to act in the matter by a majority vote of all directors (in which designated directors who are named defendants or respondents in the Proceeding may participate), such committee to consist solely of two (2) or more directors who, at the time of the committee vote, are not named defendants or respondents in the Proceeding; (c) by special legal counsel selected by the Board of Directors or a committee thereof by vote as set forth in clauses (a) or (b) of this Section 10.4 or, if the requisite quorum of all of the directors cannot be obtained therefor and such committee cannot be established, by a majority vote of all of the directors (in which directors who are named defendants or respondents in the Proceeding may participate); or (d) by the shareholders in a vote that excludes the shares held by directors that are named defendants or respondents in the Proceeding. Determination as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination that indemnification is permissible is made by special legal counsel, determination as to reasonableness of expenses must be made in the manner specified in clause (c) of the preceding sentence for the selection of special legal counsel. In the event a determination is made under this Section 10.4 that the Indemnitee has met the applicable standard of conduct as to some matters but not as to others, amounts to be indemnified may be reasonably prorated.

10.5       

Advancement of Expenses . Reasonable expenses (including court costs and attorneys’ fees) incurred by an Indemnitee who was or is a witness or was, is or is threatened to be made a named defendant or respondent in a Proceeding shall be paid by the Company at reasonable intervals in advance of the final disposition of such Proceeding, and without making any of the determinations specified in Section 10.4, after receipt by the Company of (a) a written affirmation by such Indemnitee of his good faith belief that he has met the standard of conduct necessary for indemnification by the Company under this Article and (b) a written undertaking by or on behalf of such Indemnitee to repay the amount paid or reimbursed by the Company if it shall ultimately be determined that he is not entitled to be indemnified by the Company as authorized in this Article. Such written undertaking shall be an unlimited obligation of the Indemnitee but need not be secured and it may be accepted without reference to financial ability to make repayment. Notwithstanding any other provision of this Article, the Company may pay or reimburse expenses incurred by an Indemnitee in connection with his appearance as a witness or other participation in a Proceeding at a time when he is not named a defendant or respondent in the Proceeding.

  19 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

10.6       

Employee Benefit Plans . For purposes of this Article, the Company shall be deemed to have requested an Indemnitee to serve an employee benefit plan whenever the performance by him of his duties to the Company also imposes duties on or otherwise involves services by him to the plan or participants or beneficiaries of the plan. Excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall be deemed fines. Action taken or omitted by an Indemnitee with respect to an employee benefit plan in the performance of his duties for a purpose reasonably believed by him to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Company.

10.7       

Other Indemnification and Insurance . The indemnification provided by this Article shall (a) not be deemed exclusive of, or to preclude, any other rights to which those seeking indemnification may at any time be entitled under the Company’s Articles of Incorporation, any law, agreement or vote of shareholders or disinterested directors, or otherwise, or under any policy or policies of insurance purchased and maintained by the Company on behalf of any Indemnitee, both as to action in his Official Capacity and as to action in any other capacity, (b) continue as to a person who has ceased to be in the capacity by reason of which he was an Indemnitee with respect to matters arising during the period he was in such capacity, (c) inure to the benefit of the heirs, executors and administrators of such a person and (d) not be required if and to the extent that the person otherwise entitled to payment of such amounts hereunder has actually received payment therefor under any insurance policy, contract or otherwise.

10.8       

Notice . Any indemnification of or advance of expenses to an Indemnitee in accordance with this Article shall be reported in writing to the shareholders of the Company with or before the notice or waiver of notice of the next shareholders’ meeting or with or before the next submission to shareholders of a consent to action without a meeting and, in any case, within the 12-month period immediately following the date of the indemnification or advance.

10.9       

Construction . The indemnification provided by this Article shall be subject to all valid and applicable laws, including, without limitation, Nevada Law, and, in the event this Article or any of the provisions hereof or the indemnification contemplated hereby are found to be inconsistent with or contrary to any such valid laws, the latter shall be deemed to control and this Article shall be regarded as modified accordingly, and, as so modified, to continue in full force and effect.

10.10       

Continuing Offer, Reliance, etc. The provisions of this Article (a) are for the benefit of, and may be enforced by, each Indemnitee of the Company, the same as if set forth in their entirety in a written instrument duly executed and delivered by the Company and such Indemnitee and (b) constitute a continuing offer to all present and future Indemnitees. The Company, by its adoption of these Bylaws, (a) acknowledges and agrees that each Indemnitee of the Company has relied upon and will continue to rely upon the provisions of this Article in becoming, and serving in any of the capacities referred to in Section 10.1 of this Article, (b) waives reliance upon, and all notices of acceptance of, such provisions by such Indemnitees and (c) acknowledges and agrees that no present or future Indemnitee shall be prejudiced in his right to enforce the provisions of this Article in accordance with its terms by any act or failure to act on the part of the Company.

  20 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

10.11       

Effect of Amendment . No amendment, modification or repeal of this Article or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitees to be indemnified by the Company, nor the obligation of the Company to indemnify any such Indemnitees, under and in accordance with the provisions of the Article as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

ARTICLE 11.

TAKEOVER OFFERS; ACQUISITION OF CONTROLLING INTEREST

 

11.1       

Takeover Offers . In the event the Company receives a takeover offer, the Board of Directors shall consider all relevant factors in evaluating such offer, including, but not limited to, the terms of the offer, and the potential economic and social impact of such offer on the Company’s Stockholders, employees, customers, creditors and community in which it operates.

11.2       

Nevada Controlling Interest Statutes . Pursuant to Nevada Revised Statutes (“ NRS ”) Section 78.378, the Company shall not be governed by the provisions of NRS 78.378 to 78.3793, inclusive, of the NRS, and such sections shall not apply to the Company or to an acquisition of a controlling interest by any stockholder of the Company.

ARTICLE 12.

DIVIDENDS

 

12.1       

General . The Board, subject to any restrictions contained in either (i) Nevada Law, or (ii) the Articles, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the Company’s capital stock.

12.2       

Dividend Reserve . The Board may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.  

  21 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

ARTICLE 13.

NOTICES

 

13.1       

General . Whenever these Bylaws require notice to any Stockholder, director, officer or agent, such notice does not mean personal notice. A person may give effective notice under these Bylaws in every case by depositing a writing in a post office or letter box in a postpaid, sealed wrapper, or by dispatching a prepaid telegram addressed to such Stockholder, director, officer or agent at his address on the books of the Company. Unless these Bylaws expressly provide to the contrary, the time when the person sends notice shall constitute the time of the giving of notice.

13.2       

Waiver of Notice . Whenever the law or these Bylaws require notice, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein.

13.3       

Electronic Notice . Without limiting the manner by which notice otherwise may be given effectively to Stockholders pursuant to Nevada Law, the Articles or these Bylaws, any notice to Stockholders given by the Company under any provision of Nevada Law, the Articles or these Bylaws shall be effective if given by a form of electronic transmission consented to by the Stockholder to whom the notice is given. Any such consent shall be revocable by the Stockholder by written notice to the Company. Any such consent shall be deemed revoked if:

(i)       

the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent; and

(ii)       

such inability becomes known to the Secretary or an Assistant Secretary of the Company or to the Transfer Agent, or other person responsible for the giving of notice.

However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

Any notice given pursuant to the preceding paragraph shall be deemed given:

(i)       

if by facsimile telecommunication, when directed to a number at which the Stockholder has consented to receive notice;

(ii)       

if by electronic mail, when directed to an electronic mail address at which the Stockholder has consented to receive notice;

(iii)       

if by a posting on an electronic network together with separate notice to the Stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and

(iv)       

if by any other form of electronic transmission, when directed to the Stockholder.

  22 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

An affidavit of the Secretary or an Assistant Secretary or of the Transfer Agent or other agent of the Company that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein. An “ electronic transmission ” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Notwithstanding the above, no notice by a form of electronic transmission shall be effective if prohibited by Nevada Law, the Articles or these Bylaws.

13.4       

Undeliverable Notices . Whenever notice is required to be given, under any provision of the Nevada Law, the Articles or these Bylaws, to any Stockholder to whom (a) notice of two (2) consecutive annual meetings, or (b) all, and at least two (2) payments (if sent by first-class mail) of dividends or interest on securities during a twelve (12) month period, have been mailed addressed to such person at such person’s address as shown on the records of the Company and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the Company a written notice setting forth such person’s then current address, the requirement that notice be given to such person shall be reinstated. In the event that the action taken by the Company is such as to require the filing of an amendment to the Articles with the Secretary of State of Nevada, the amendment need not state that notice was not given to persons to whom notice was not required to be given pursuant to Nevada Law.

ARTICLE 14.

MISCELLANEOUS

 

14.1       

Facsimile Signatures . In addition to the use of facsimile signatures which these Bylaws specifically authorize, the Company may use such facsimile signatures of any officer or officers, agents or agent, of the Company as the Board or a committee of the Board may authorize.

14.2       

Corporate Seal . The Board may provide for a suitable seal containing the name of the Company, of which the Secretary shall be in charge. The Treasurer, any Assistant Secretary, or any Assistant Treasurer may keep and use the seal or duplicates of the seal if and when the Board or a committee of the Board so directs.

14.3       

Fiscal Year . The Board shall have the authority to fix and change the fiscal year of the Company.

14.4       

Bylaw Provisions Additional and Supplemental to Provisions of Law . All restrictions, limitations, requirements and other provisions of these Bylaws shall be construed, insofar as possible, as supplemental and additional to all provisions of law applicable to the subject matter thereof and shall be fully complied with in addition to the said provisions of law unless such compliance shall be illegal.

  23 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  
 

 

14.5       

Bylaw Provisions Contrary to or Inconsistent with Provisions of Law . Any article, section, subsection, subdivision, sentence, clause or phrase of these Bylaws which, upon being construed in the manner provided in Section 14.4 of these Bylaws, shall be contrary to or inconsistent with any applicable provision of law, shall not apply so long as said provisions of law shall remain in effect, but such result shall not affect the validity or applicability of any other portions of these Bylaws, it being hereby declared that these Bylaws, and each article, section, subsection, subdivision, sentence, clause, or phrase thereof, would have been adopted irrespective of the fact that any one or more articles, sections, subsections, subdivisions, sentences, clauses or phrases is or are illegal.

ARTICLE 15.

AMENDMENTS

 

15.1       

Subject to the provisions of the Articles, the Stockholders or the Board may amend or repeal these Bylaws at any shareholders or directors meeting, subject to the voting and approval requirements of the shareholders and the directors, as applicable, set forth herein for general Company matters. All amendments shall be upon advice of counsel as to legality, except in emergency. Bylaw changes shall take effect upon adoption unless otherwise specified.

 

  24 / 24  
  Amended and Restated Bylaws of Reliant Holdings, Inc.  

 

Reliant Holdings, Inc. S-1 

 

 

Exhibit 5.1

 

 

 

October 27, 2016

 

Reliant Holdings, Inc.

12343 Hymeadow Drive, Suite 3-A

Austin, Texas 78750

 

  Re: Form S-1 Resale Registration Statement
    Reliant Holdings, Inc.

 

Ladies and Gentlemen:

 

We have acted as counsel to Reliant Holdings, Inc., a Nevada corporation (the “ Company ”), in connection with the filing, with the Securities and Exchange Commission (the “ Commission ”), by the Company, of a Registration Statement on Form S-1 (the “ Registration Statement ”) under the Securities Act of 1933, as amended (the “ Securities Act ”), relating to the resale from time to time by the selling stockholders identified in the prospectus constituting a part of the Registration Statement of up to 3,585,000 shares of common stock, par value $0.001 per share of the Company (the “ Common Stock ” and the “ Shares ”), as described in greater detail in the Registration Statement to which this opinion has been filed as an exhibit. This opinion is being furnished in accordance with the requirements of Item 16 of Form S-1 and Item 601(b)(5)(i) of Regulation S-K.

 

In reaching the opinions set forth herein, we have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of such documents and records of the Company and such statutes, regulations and other instruments as we deemed necessary or advisable for purposes of this opinion, including (i) the Company’s Articles of Incorporation, as amended and restated, (ii) the Company’s Bylaws, as amended and restated, (iii) the Registration Statement and the exhibits thereto, (iv) certain resolutions adopted by the Board of Directors of the Company, (v) the minutes and applicable agreements relating to the sale and issuance of the Shares, and (vi) such other certificates, agreements, instruments, and documents as we have considered necessary for purposes of this opinion letter. We have also reviewed such matters of law as we considered necessary or appropriate as a basis for the opinion expressed below.

 

 As to various questions of fact material to the opinions expressed below, we have, without independent third party verification of their accuracy, relied in part, and to the extent we deemed reasonably necessary or appropriate, upon the representations and warranties of the Company contained in such documents, records, certificates, instruments or representations furnished or made available to us by the Company, including the Registration Statement and, to the extent that we deemed such reliance proper, upon certificates of public officials and officers or other representatives of the Company.

 

With your permission, we have made and relied upon the following assumptions, without any independent investigation or inquiry by us, and our opinion expressed below is subject to, and limited and qualified by the effect of, such assumptions: (1) all corporate records furnished to us by the Company are accurate and complete; (2) the Registration Statement to be filed by the Company with the Commission will be identical to the form of the document that we have reviewed; (3) all statements as to factual matters that are contained in the Registration Statement (including the exhibits to the Registration Statement) are accurate and complete; and (4) the Company will at all times remain duly organized, validly existing, and in good standing under the laws of the State of Nevada.

 

 
 

The Loev Law Firm PC

October 27, 2016

Page 2 of 2

 

 

 

We have also assumed (i) the legal capacity of all natural persons, (ii) the genuineness of all signatures, (iii) the authority of all persons signing all documents submitted to us on behalf of the parties to such documents, (iv) the authenticity of all documents submitted to us as originals, (v) the conformity to authentic original documents of all documents submitted to us as copies, and (vi) that all information contained in all documents reviewed by us is true, correct and complete.

 

Based upon the foregoing, and subject to the qualifications, assumptions and limitations, and exceptions set forth stated herein, and having due regard for the legal considerations we deem relevant, we are of the opinion that the Shares are validly issued, fully paid and non-assessable.

 

This opinion is expressly limited in scope to the Shares enumerated herein which are to be expressly covered by the referenced Registration Statement. Without limiting the generality of the foregoing, we neither express nor imply any opinion regarding the contents of the Registration Statement, other than as expressly stated above with respect to the Shares.

 

We express no opinion as to the laws of any state or jurisdiction other than the laws governing corporations of the State of Nevada and the federal laws of the United States of America. No opinion is expressed herein with respect to the qualification of the Shares under the securities or blue sky laws of any state or any foreign jurisdiction. We have made such examination of Nevada law as we have deemed relevant for purposes of this opinion. We express no opinion as to any county, municipal, city, town or village ordinance, rule, regulation or administrative decision.

 

This opinion (i) is rendered in connection with the filing of the Registration Statement, (ii) is rendered as of the date hereof, and we undertake no, and hereby disclaim any kind of, obligation to advise you of any change or any new developments that might affect any matters or opinions set forth herein, and (iii) is limited to the matters stated herein and no opinions may be inferred or implied beyond the matters expressly stated herein.

 

We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement and further consent to statements made therein regarding our firm and use of our name under the heading “ Legal Matters ” in the prospectus constituting a part of such Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.

 

  Sincerely,
   
   

 

 

 

 

 

Reliant Holdings, Inc. S-1

Exhibit 10.1

 

Reliant Pools

 

NAME:

JOB ADDRESS:

CITY/STATE/ZIP:

 

DATE OF CONTRACT

LOT/BLOCK

SUBDIVISION

 

HOME #

WORK #

CELL #

 

FAX #

EMAIL

 

POOL SIZE

PERIMETER

WIDTH

 

DEPTH

AREA SQ/FT

MAX LENGTH

THIS AGREEMENT IS SUBJECT TO BINDING ARBITRATION

 

Completion time is a good faith estimate only. Average construction completion to be 45 working days after day of start barring time delays beyond Reliant Pools reasonable control. Large custom projects may take longer.

 

GENERAL TERMS AND CONDITIONS AT THE END ARE PART OF THE AGREEMENT.

The price specifications and conditions are satisfactory and are hereby accepted. Reliant Pools is authorized to do the work as specified. Payments will be made payable as outlined below. Buyer will deliver payment to the office at each stage of construction as specified below.

Reliant Pools

12343 Hymeadow Drive, Suite 3-A
Austin, TX  78750

512.407.2623

www.reliantpools.com

Project Price $ A. At excavation $
Buyers Allowance $ B. At completion of gunite $
Total Contract Amount $ C. At tile & coping $
Down Payment $ D. At decks $
Balance of Contract $ E. Prior to equipment & plaster $
  Make Checks Payable To Reliant Pools
Buyer (owner) acknowledges that he has read the contract in its entirety and received a legible copy of this contract including the terms and Conditions contained  at the bottom of this document  thereof and that all  representatives made orally are included herein, and that no oral representations have been made except those specifically included notice of cancelation.
Submitted by:_____________________________________________ Date:_______________________
Accepted by Buyer:_____________________ Date:____________ Buyer:___________________ Date:____________ 
This agreement subject to the approval of an officer of Reliant Pools
(Copies do not require written approval) Reliant Pools Representative:_____________________ 
NOTE TO THE BUYER, DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES, YOU ARE ENTITTLED TO AN EXACT COPY OF THE CONTRACT YOU HAVE SIGNED. DO NOT SIGN THIS CONTRACT UNTIL YOU HAVE READ IN FULL AND UNDERSTAND THE ADDITIONAL TERMS AND CONDITION TO THIS CONTRACT WHICH ARE CONTAINED ON THE BACK OF THIS DOCUMENT.

 

Notice of Cancellation :   Date:______________________

You may cancel this transaction, without any penalty or obligation, within three business days from the above date. If you cancel, any property traded in any payments made by you under the contract or sale, and any negotiable instrument executed by you will be refunded within 10 days following receipt by the seller of your cancellation notice any security interest arising out to the transaction will be cancelled. If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale, or you may if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller’s expense and risk. If you do not make the goods available to the seller and the seller does not pick them up within 20 days of the date of your notice of cancelation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under this contract. To cancel this transaction, mail or deliver a signed copy of this cancellation notice, or send a telegram to Reliant Pools at: 12343 Hymeadow Drive, Suite 3-A , Austin, TX 78750

 

 

NO LATER THAN MIDNIGHT OF THE DATE: _____________ I /we hereby cancel this transaction

 

Date (Buyer’s Signature)_________________ _____________

 

THE UNDERSIBNED HEREBY ACKNOWLEDGES HE/SHE HAS BEEN TOLD VERBALLY OF HIS OR HER RIGHT TO CANCEL THIS CONTRACT.

 

 

  (Buyer’s) Signature                                  Date  

(Buyer’s) Signature                                                  Date

 

Page # 1 of 4 Buyers Initials________

 

 
             

 

 
 

 

Customer: Project Information & Specifications Address:

 

1. Plans RP to supply construction plans

2. Engineers Letter

3. RP to layout for approval

4. Building Permit (RP to act as owners agent)

Homeowner’s Association Approval

5. Excavation RP to any pregrade

A. Additional excavation for hard digging &

Jack-hammering of rock $20 per cubic foot

B. Additional Grading Hours @ $ 100 per hour

C. Trees in access and to be removed & hauled off

D. RP to uproot 4’ high stumps at time of excavation

In access or project area only total #

E. Additional Topsoil

F. Concrete removal (SQ/FT)

G. Access Bobcat Only

6. Access Walls, Air Conditioners & Storage Units

A. Fence removed by RP

(type of fence)

B. A/C or Storage removed by RP

(type of structure)

7. Misc. _______________________________

8. Misc. _______________________________

9. RP Swimming Pool Equipment

A. Hayward Filter (Type & Size)

B. Hayward Pump (Type & Hp.)

C. Additional Pump

D. Controller Type

E. Controller Remote

F. Automatic Chlorinating System Type

G. Water Purification System

H. Deluxe Skimmer #

I. Directional Returns #

J. Schedule 40 PVC plumbing thru-out

K. Dual Main Drains

Misc. _______________________________

10. Masonry

A. Retaining Walls by RP

(height & Length)

B. Chop Block Wall (No Footer) Sq./Ft.=

C. Chop Block Wall (W/ Footer) Sq./Ft.=

D. Misc. _______________________________

E. Misc _______________________________

F. ____________________________________

11. Water Feature’s

A. Waterfall (Per ton)

B. Accent Boulders #

C. Wet Wall 18” High (Per Lin./Ft)

D. Stone Scuppers (# & length )

E. Misc. _______________________________

 

Included

Yes □ No □

Yes □ No □

Yes □ No □

(By Customer)

Yes □ No □

 

Yes □ No □

Yes □ No □

Yes □ No □

 

Yes □ No □

(By Customer)

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

 

Yes □ No □

 

Yes □ No □

Yes □ No □

 

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Included

Included

Yes □ No □

 

Yes □ No □

 

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

 

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

 

 

12. Lighting

A. Path Lights (type & #)

B. Tall Light (type & #)

C. Step Lights (type & #)

D. Spot Lights (type & #)

E. Misc. ______________________________________

F. Misc. ______________________________________

13. Electrical:

A. G.F.C.I. Plugs and switches (#)

B. Ceiling lights or ceiling fan wiring

C. Misc. ______________________________________

D. Misc. ______________________________________

14. Decking

A. Natural concrete (Sq./Ft.)

B. Acrylic Lace Pattern over concrete (Sq./Ft.)

C. Flagstone Decking

D. Steps (Per./Lin. Ft)

E. Top over Existing Concrete

F. Deck Drains

G. Volleyball or Umbrella Sleeves #

H. Misc. ______________________________________

15. Allowance

 

 

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Included

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

 

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

Yes □ No □

A. __________________________________________________________________

 

B. __________________________________________________________________

 

C. __________________________________________________________________

16. Any items not listed in the afore mentioned outline.

 

__________________________________________________________________________

 

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17. Extended Limited Warranty

A. RP Limited Lifetime Structural warranty

B. 3 Years Hayward Manufacturers warranty

18. Permit Package

Customer always responsible for fees associated with permitting over and above $500.00

19. Additional Work to Home or Yard to be added to Price

In the event customer chooses to have other work performed by RP. such as landscaping, patio covers, decks, gazebos & outdoor kitchens, etc. Said items will require an additional form to be attached to this contract.

 

 

Included

Included

Yes □ No □

 

 

  

 

   

Yes □ No □

       

 

 

 

  Page # 2 of 4 Buyers Initials________

 

 
 

 

THIS AGREEMENT IS SUBJECT TO BINDING ARBITRATION

 

ORAL AGREEMENT OR PRIOR PROPOSALS BETWEEN CUSTOMERS AND SALESPERSONS WILL NOT BE HONORED UNLESS SPECIFIED IN WRITING ON THIS CONTRACT.

 

1.        

WARRANTIES

Limited Warranties- Reliant Pools (hereinafter referred to as RP) warrants its work to be free from defects in the material and workmanship for a period of one year from the date the pool is plastered. RP further warrants the pool structure will remain structurally sound for the period of time that the pool is owned by the original Customer. The term structurally sound means that the swimming pool is capable of retaining water, and, in the event of failure to do so, RP will repair the pool structure so that it will retain water. The Lifetime warranty does not extend to, or cover coping, tile, decking, coloring, plaster, plumbing, electrical, filter, heater, or other pool accessories, which are by definition not part of the pool structure. Glass Block has no guarantee against leaking, cracking or chipping .RP may issue a new warranty that the pool structure will remain structurally sound to second owner after a complete inspection by RP. Instructions to such new owner and payment to RP of inspection fee therefore, transferred structural warranty to second owner is for a period of 3 years .In the event RP contracts to install sidewalks and decking, Customer understands that sidewalks and concrete decking are not warranted against cracking, chipping or shifting. Plaster is not warranted against discoloration, staining, chipping or cracking since these things generally result from local water conditions, improper use of chemicals or improper cleaning of the pool. Concrete, mortar, deck toppings, tile, coping, colored plaster or pebble finishes have no guarantee as to final coloring. All pool equipment and accessories installed as provided for herein carry a warranty as provided by the manufacturer of the same. When the customer has work performed by others, RP does not warrant such work and RP shall not be held liable for such work or loss damages, which may result therefrom. Pool and Spa jets are not guaranteed to have equal pressure flow of water and/or air bubbles. Customer shall notify RP of any alleged defects or breach of the above warranty within a reasonable time after discovery, in no event later than ten (10) days after discovery; such notice shall be sent to RP as its place of business set forth on the other side of this contract. The above warranties are effective only if Customer has complied with all terms and conditions, payment and other provisions of the contract. The warranties become void if: the pool is not kept full except for a ten (10) day maintenance period each year, if the pool structure is damaged by reason of the water rising above the lowest point of the pool when the pool is not kept full; or by reason of any earth or fill ground movement, Acts of God, war, riots, or other civil disturbance, acts of others; or if there was a transfer or change of ownership of the real property on which the pool is located. Defects or failures resulting from mistreatment or neglect by Customer will be repaired or serviced at Customer’s expense. If Customer has work performed by others that is not provided for in this contract, such as, but not limited to, electrical panel changes, landscaping, erection of fences and retaining walls, RP does not warrant such work, and RP shall not be held liable for such work or loss or damages which may result therefrom. The site and exclusive remedy of the Customer and obligation of RP for the matter set forth herein whether on warranty, contract, negligence, or strict liability, is the repair of the defect. RP shall in no event be liable for special or consequential damages. A Diagnostic fee will be charged by RP for each service call to determine the problem and offer a remedy. Owner understands that Salt Water Systems are corrosive and RP is not responsible for damage done to any part of the pool, including but not limited to coping, plaster, deck, landscaping, or equipment damaged by any type Salt (Chlorine Generator) systems.

 

2.        

CONTRACTS AND SPECIFICATION

If excavation has not started within ninety (90) days from date of the contract for reasons beyond RP control, RP shall have the right to cancel the contract upon notice to Customer. This contract constitutes the entire contract and the parties are not bound by any oral expression or representation by any agent of either party purporting to act for or on behalf of either party or by a commitment or arrangement not specified in the contract. No additional work shall be done without written authorization by Customer. Any such authorization shall be on change order form showing the agreement terms and the reason for such change and approved by both parties. For such additional work so added to the contract, it is agreed that the total price under this contract shall be increased by the price of such additional work, that installments may be increased proportionally and that all terms and conditions of this contract shall apply to such additional work. Both parties agree that the contract completion date shall be extended five (5) days for each additional day necessitated by the change order. If any provision (or portion thereof) of this contract shall be deemed invalid if it is agreed that such invalidity shall only effect such provisions (or portion thereof) and the remainder of this contract shall remain in force in effect. Customer will not schedule other contractors that may interfere with RP work schedule such as landscaping, water sprinklers, etc., until ten (10) days after RP has completed plaster of pool. Owner can schedule fencing before plaster, but leave access for plaster truck and cleanup.

 

3.        

RESPONSIBILITIES OF RP CONDITIONS AND LIMITATIONS

RP agrees to do all work provided in this contract in good and workmanlike manner, but shall not be responsible for delay or failure to perform work when such delay or failure is due to: Acts of God, in climate weather, war, riot or other civil disturbance, labor dispute, government prohibition, non-issuance of all required permits affecting the swimming pool and adjacent areas, failure of Customer to perform any obligation to be performed by him hereunder, or other reason beyond RP control. The date of completion provided for herein shall be extended three (3) working days for each calendar day of delay caused by any or all of the events referred to in this paragraph. RP is not responsible for damage to improvement and appurtenance located in or reasonably adjacent to the access route or the pool site, including but not limited to such items as curbs, sidewalks, driveways, patios, lawns, trees, shrubs and sprinkler systems. RP is not responsible for damages caused by ground compaction by excavation equipment. RP is not responsible for flotation of pool. All pool dimensions are approximate with reasonable tolerance either way. The parties agree that RP shall have substantially completed performance in a good and workmanlike manner if all final surface dimensions are within 4% of the width and 2% of the length of the specific specified surface dimensions, and all final vertical dimensions are within 10% of the specified vertical dimension. Customer and RP agree that it is difficult and impractical to compute the actual damages in the event of deviation in pool dimensions. Customer and RP agree that liquidated damages for errors by RP shall be computed as follows: $30.00 per square foot multiplied by the difference between the water surface square foot area of the pool specified herein (less the 2% to 4% variance), and the actual water surface of the pool as construction and $50.00 an inch for variance of more than 10% of the vertical dimensions of the pool specified herein. However, in the event that specified pool depth is not attainable with the normal excavation equipment due to underground water, said, rock, or other unusual subsurface condition, beyond RP control, then RP and Customer shall agree upon attained depth with no penalty on RP. All allowance specified in this contract to be paid to owner for extra work done by owner or by owner’s agent, will be paid to owner at the completion of pool and extra work will not be the responsibility of RP.

 

4.        

RESPONSIBILITIES OF CUSTOMER

If Customer authorizes access to adjacent properties for RP use during construction, Customer is required to obtain permission from the owner(s) of adjacent property for such use, and Customer agrees to be responsible and to hold RP harmless from any risks thereof. Customer receives permission from neighbors, in writing, and gives RP permission to cross neighbor’s property. Customer is required at his expense to do all construction and other acts necessary, and to meet all conditions necessary, to allow RP to complete the work as provided in this contract. Customer to finish all soils reports. Customer has directed the location of the pool and other improvements and equipment as shown on the attached pool drawing and where such location (or other location approved or directed by Customer) is used there shall be no liability on the part of RP for incorrect location of such pool, other improvement and equipment, or for encroachment or interference thereby upon the property, easements or rights of any third parties. Customer approves elevation of the pool. Customer understands trees and/or tree limbs may need to be cut for access purposes. Customer shall furnish any necessary variance and association permits or fees. Drainage beyond the pool site is to be provided by Customer and is to meet city and/or county requirements. If engineer’s letter is required before or during construction that alters the normal RP construction method, owner agrees to pay all engineering expenses and additional work required. No grading will be done by RP unless specified on the reverse side of this contract. Customer agrees to make payment called for by this contract on time, even though repairs under this contract may have been scheduled but not yet performed. All payment received later than three (3) days than the time due extended the completion date hereunder an additional three days for each late day. If completion of swimming pool is delayed by causes under Customer’s control for a period of more than thirty (30) days, Customer agrees to pay the increased labor and material, and equipment cost resulting from Customer’s delay. Contractor retains title to all pool equipment until purchase price and any extras are paid for in full. Customer will deliver payments to RP office (address at the top of this agreement) at each stage of construction as spelled out at the top of this agreement. Failure or delay of payment may halt construction. The pool is deemed complete when plastered. Owner or RP representative may not alter any portion of the Policies, Procedures and Conditions of this contract without prior written approval from an officer of RP.

 

  Page #3 of 4 Buyers Initials________

TERMS, SPECIFICATIONS AND CONDITIONS

 

 
 

 

5.        

Unless otherwise specified at the top of this contract, the Customer’s responsibility to the contractor is to furnish a clear access to pool site without any obstruction for a normal backhoe tractor and dump truck. In the event access is cut off before or during excavation through plaster, any extra expense to RP is not included under the terms of this contract, and becomes the Customer’s responsibility. Customer’s responsibility includes, but is not limited to, removal of fence, air conditioning, retaining walls, trees, low lines, gas meters, water sprinklers, water meters, etc. Unless otherwise specifically provided in their plans and specifications of this contract, RP has entered into this contract based upon the following assumptions of the facts and warranties of Customer.

 

The Customer will provide adequate access to Customer’s own property or through adjacent property for RP normal construction equipment to do the work, at no cost and no liability to RP.

 

That soil at and around the agreed upon pool site is compacted to at least ninety (90) percent of ASTM Standards for local area and has a bearing capacity of at least 1,000 pounds per square foot.

 

That soil at and around the agreed upon pool site is not of such and unstable nature and that water conditions are not of such a mature so as to preclude construction and operation of the pool in a normal manner and normal expense.

 

That there are no additional load conditions that may be imposed on the pool structure by existing or proposed adjacent structure which will require extra engineering.

 

That there are no rock formations, hard pan conditions, underground water, boulders, cesspools, septic tanks, gas lines, water pipes, sewer pipes, drain pipes, irrigation pipes, underground electrical conduit or other underground obstruction which would require blasting, jackhammer work, larger than normal excavation equipment or which would normally be required.

 

That owner’s electrical service and panel box will accommodate all the pool pumps and equipment necessary for the pool and no alteration or sub-panels are required.

 

Customer understands that the freeze guard devices which are intended to activate the pumps at near freezing temperatures is not in itself assurance that the pool, water, or equipment will not freeze and cause damage. It is also understood that the automatic water fill, if applicable, is not itself assurance that the pool water leveler will not operate and cause damage. It is the Customer’s sole responsibility to monitor freezing conditions and control proper water level in the pool.

 

If any of the foregoing assumptions of fact are not true, RP may, at its option, require additional cost for expenses or terminate this Contract with no further liability to either Customer or RP, except that Customer agrees to pay RP the actual cost or labor, materials, equipment, and permits already furnished and required to restore the premises plus 10%. It is understood, however, that the parties or owner may, by mutual agreement in written or arbitration deal with such event, or agree to a new Contract Agreement.

 

6.        

GRADING, RETAINING WALLS AND FENCING:

Unless specified otherwise on the front of the Contract herein, none of the following is RP responsibility and shall specifically be Customer’s responsibility: grading and drainage beyond pool site, retaining walls removal or replacement of fencing, top soil and grass planting. Customer will assume full responsibility for hand rails, fence, and gates meeting code requirements and must be installed prior to plaster. Contractor recommends Customer install a fence around pool, whether required or not.

 

7.       

PLUMBING AND UTILITIES:

Unless specified otherwise on the front of the Contract herein, existing plumbing lines, gas and water lines are not to be changed, and labor materials and equipment necessary for reroute or for replacement of water supply systems and utilities, including overhead and underground, and gas line hook up to pool equipment are not included under the terms of the Contract and shall be the responsibility of the Customer.

 

8.       

ELECTRICAL SERVICE:

Unless specifically included, electrical work contemplates no change to existing service panel other than the addition of circuit breakers to distribute electrical current to new outlets. Changes to existing wiring not included. NEW SUB-PANELS IF NEEDED, WILL BE ADDED AT ADDITIONAL CUSTOMER CHARGE.

 

9.        

DAMAGE TO WORK:

In the event work already performed is damaged by any cause beyond RP control and Customer elects to cancel work, or the work is ordered terminated by public authority, RP shall be paid for such work the amount agreed to in writing for such work, or if not so agreed, the cost price for such labor and material plus 20% of such cost necessary to replace work already performed shall be considered additional work to be paid for by the Customer in accordance with the preceding sentence. RP is not responsible for rain damage during construction.

 

10.        

ASSIGNMENTS AND SUB-CONTRACT:

RP may assign or sub-Contract all or any portion of the work to be done.

 

11       

DEFAULT:

In the event of default by Customer of any provisions of this Contract, Customer agrees to pay all collection cost and interest from date of default. Reasonable attorney’s fees shall be awarded to the prevailing party in any action brought under this Contract. Owners agree that in the event of breach or cancellation by Owner, Owner shall be responsible for changes to date of breach plus Contract profits.

 

12.       

FINANCING:

RP may assist the Customer in obtaining financing but in no event are the financing agreements, as may be required by the Customer, a condition to this Contract and it is expressly agreed that the Customer is responsible solely for any such financing that may be required.

 

13.        

COMPLETION:

Customer understands that completion time is a good faith estimate only and there will be no penalty to RP for exceeding time stated on the front of this Contract. (Definition of working day is Monday through Friday, not to include holidays, rainy days, and days delayed by city inspections, city change orders, or additional work orders by Customer. Pool is deemed complete when plastered.) Estimated completion time starts when excavation is completed.

 

14.       

ARBITRATION:

All claims, disputes, and any other matters in question between the parties to this agreement which have not been resolved through either negotiations of the parties or mediation, which arise out of, or relate to this contract, shall be decided by binding arbitration in accordance with the rules of the American Arbitration Association then in effect, shall be heard and decided in Travis County, Texas, and judgment upon the award may be entered in any court having jurisdiction.

 

ACKNOWLEDGMENT PURSUANT TO MAGNUSON-MOSS FEDERAL WARRANTY ACT: CUSTOMER ACKNOWLEDGES THAT THE SALES REPRESENTATIVE FOR RELIANT POOLS HAS ORALLY INFORMED CUSTOMER THAT HE/SHE HAS COPIES IN A BINDER OF THE WARRANTIES FOR THE WARRANTED PRODUCTS BEING OFFERED FOR SALE. CUSTOMER ALSO ACKNOWLEDGES THAT HE/SHE HAS BEEN GIVEN THE OPPORTUNITY TO INSPECT THE WARRANTIES AT ANY TIME DURING THE SALES PRESENTATION. RELIANT POOLS IS NOT RESPONSIBLE FOR DAMAGES IN ACCESS OR AREAS WHICH EQUIPMENT MUST TRAVEL. RELIANT POOLS IS NOT RESPONSIBLE FOR DECKS, SETTLING, CRACKS, OR DISCOLORING. HOMEOWNER CAN NOT HIRE RELIANT POOLS CONTRACTORS OR EMPLOYEES FOR A PERIOD OF ONE YEAR DATE FROM DATE OF COMPLETION OF POOL .WHEN ALLOWANCES ARE SPECIFIED, CUSTOMER IS RESPONSIBLE FOR ANY AMOUNT OVER THE ALLOWANCE AMOUNT STATED IN THE FRONT OF THIS CONTRACT.

 

  Page #4 of 4 Buyers Initials________                                    

 

 

 

Reliant Holdings, Inc. S-1

Exhibit 14.1

 

 

 

 

   
 

 

 

 

 

 

   
 

 

 

 

 

 

   
 

 

 

 

 

 

   
 

 

 

 

 

 

   
 

 

 

 

 

   
 

 

 

 

 

   
 

 

 

 

   
 

 

 

 

 

   
 

 

 

 

 

 

   
 

 

 

 

 

   
 

 

 

 

 

 

   
 

 

 

 

 

   
 

 

 

 

 

   
 

 

 

 

 

   

 

Reliant Holdings, Inc. S-1

 

Exhibit 23.1

 

LBB & ASSOCIATES LTD., LLP

10260 Westheimer Road, Suite 310

Houston, TX 77042

Phone: (713) 800-4343 Fax: (713) 456-2408

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

We consent to the incorporation by reference in this Registration Statement on Form S-1 of Reliant Holdings, Inc. (the “Company”), of our report dated June 9, 2016, relating to the consolidated financial statements of the Company for the years ended December 31, 2015 and 2014.

 

We also consent to the reference to us under the heading “Experts” in this registration statement.

 

/s/ LBB & Associates Ltd., LLP

LBB & Associates Ltd., LLP

 

Houston, Texas

October 27, 2016