8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  04/18/2006

RELIABILITY INCORPORATED

(Exact name of registrant as specified in its charter)

Commission File Number:  0-7092

TX	75-0868913
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification No.)

P.O. Box 218370, Houston, TX 77218-8370

(Address of principal executive offices, including zip code)

281-492-0550

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Information to be included in the report

Item 1.01.    Entry into a Material Definitive Agreement

On April 12, 2006, Reliability Incorporated ("the Company") entered into a real estate purchase agreement with Fuller Realty Partners, LLC ("Fuller") under which Fuller will acquire the Company's Houston headquarters building. There are no material relationships between the Company and Fuller.

Terms of the agreement call for a "feasibility period" (as defined in the agreement) of 30 days during which Fuller may inspect and perform due diligence procedures with respect to the property. The purchaser may elect to terminate the agreement at any time during this 30-day feasibility period. After this period, the purchaser would forfeit $100,000 of earnest money to the Company, should it elect not to proceed with the transaction. The agreement also subjects both parties to various conditions that must be met prior to closing that are usual and customary in such real estate transactions.

Net proceeds are expected to be approximately $3.9 million and will be used to pay off the Company's term debt and line of cr edit and to fund operations. The closing is expected to occur in late May 2006.

Item 2.05.    Costs Associated with Exit or Disposal Activities

On April 11, 2006, as a result of a significant decrease in projected volumes, the Company made a determination to close its Services Division. This action will result in employee termination costs and may result in other costs such as lease termination costs and other costs to wind down its operations. At this time, the Company is unable in good faith to determine estimates (i) for each major type of cost associated with the action, the total amount or range of amounts expected to be incurred, (ii) the total amount or range of amounts expected to be incurred in connection with the action, or (iii) the amount or range of amounts of the charge that will result in future cash expenditures. The Division will continue to process customer devices through early May, at which time it will terminate substantially all of its 56 Singapore-based employees. Certain administrative employees will remain with the Division for a period of time to wind down its operations.

Item 9.01.    Financial Statements and Exhibits

Exhibit 99.1 Press Release Announcing Agreement to Sell Headquarters Building and to Close Services Division

Signature(s)

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

		RELIABILITY INCORPORATED
Date: April 18, 2006	By:	/s/    Carl V. Schmidt
		Carl V. Schmidt
		Chief Financial Officer, Secretary and Treasurer

Exhibit Index

Exhibit No.	Description
EX-99.1	Press Release Announcing Contract to Sell Houston Building, Plans to Close Services Division

EX-99.1 2 rrd114489_12966.htm PRESS RELEASE ANNOUNCING CONTRACT TO SELL HOUSTON BUILDING, PLANS TO CLOSE SERVICES DIVISION

-FOR IMMEDIATE RELEASE -	Additional Information:
PO Box 218370	Larry Edwards x 200
Houston, TX 77218	Carl Schmidt x 203
	281/492-0550
	281/492-0615 -- fax

RELIABILITY INCORPORATED ANNOUNCES AGREEMENT TO SELL HEADQUARTERS BUILDING AND PLANS TO CLOSE SERVICES OPERATIONS

HOUSTON, TEXAS, April 18, 2006 - Reliability Incorporated (the "Company", OTC Pink Sheets: REAL.PK), today announced that it had entered into an agreement to sell its Houston headquarters building. Terms of the agreement call for a "feasibility period" (as defined in the agreement) of 30 days during which the purchaser may inspect and perform due diligence procedures with respect to the property. The purchaser may elect to terminate the agreement at any time during this 30-day feasibility period. After this period, the purchaser would forfeit $100,000 of earnest money to the Company, should it elect not to proceed with the transaction.

Closing of the transaction is scheduled to take place within 15 days following the expiration of the feasibility period. Estimated net proceeds to the Company are expected to be approximately $3.9 million and will be used to repay borrowings under the Company's term debt and line of credit agreements and to fund operations.

The Company also announced plans to close down its Services Division located in Singapore. The Division will continue to process customer devices through early May, at which time it will terminate substantially all of its 56 Singapore-based employees. Certain administrative employees will remain with the Division for a period of time to wind down its operations.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this report regarding Reliability's business which are not historical facts are "forward looking statements" that involve risks and uncertainties that may affect the operations, performance, development and results of the Company's business and include, but are not limited to, its ability to maintain sufficient liquidity to meet its obligations, maintaining compliance with the terms of its credit agreement, the impact of the significant reduction in research and development expenditures, limitations in its ability to fund capital expenditures to remain competitive, adverse changes in the global economy, sudden decreases in the demand for electronic products and semiconductors, the impact of competition, delays in product development schedules, delays due to technical difficulties related to developing and implementing technology, delays in delivery schedules, the ability to attract and maintain sufficient le vels of people with specific technical talents, future results related to changes in demand for the Company's products and services and the Company's customers' products and services. Actual results may materially differ from projections.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

-FOR IMMEDIATE RELEASE -	Additional Information:
PO Box 218370	Larry Edwards x 200
Houston, TX 77218	Carl Schmidt x 203
	281/492-0550
	281/492-0615 -- fax

RELIABILITY INCORPORATED ANNOUNCES AGREEMENT TO SELL HEADQUARTERS BUILDING AND PLANS TO CLOSE SERVICES OPERATIONS

HOUSTON, TEXAS, April 18, 2006 - Reliability Incorporated (the "Company", OTC Pink Sheets: REAL.PK), today announced that it had entered into an agreement to sell its Houston headquarters building. Terms of the agreement call for a "feasibility period" (as defined in the agreement) of 30 days during which the purchaser may inspect and perform due diligence procedures with respect to the property. The purchaser may elect to terminate the agreement at any time during this 30-day feasibility period. After this period, the purchaser would forfeit $100,000 of earnest money to the Company, should it elect not to proceed with the transaction.

Closing of the transaction is scheduled to take place within 15 days following the expiration of the feasibility period. Estimated net proceeds to the Company are expected to be approximately $3.9 million and will be used to repay borrowings under the Company's term debt and line of credit agreements and to fund operations.

The Company also announced plans to close down its Services Division located in Singapore. The Division will continue to process customer devices through early May, at which time it will terminate substantially all of its 56 Singapore-based employees. Certain administrative employees will remain with the Division for a period of time to wind down its operations.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this report regarding Reliability's business which are not historical facts are "forward looking statements" that involve risks and uncertainties that may affect the operations, performance, development and results of the Company's business and include, but are not limited to, its ability to maintain sufficient liquidity to meet its obligations, maintaining compliance with the terms of its credit agreement, the impact of the significant reduction in research and development expenditures, limitations in its ability to fund capital expenditures to remain competitive, adverse changes in the global economy, sudden decreases in the demand for electronic products and semiconductors, the impact of competition, delays in product development schedules, delays due to technical difficulties related to developing and implementing technology, delays in delivery schedules, the ability to attract and maintain sufficient le vels of people with specific technical talents, future results related to changes in demand for the Company's products and services and the Company's customers' products and services. Actual results may materially differ from projections.