Reliability Announces Sale of Power Sources Division

March 16, 2006 by Jeff Shepard

Reliability Incorporated has completed the sale of its Power Sources Division under an Asset Purchase Agreement between the company and Reliability Power, Inc., an unaffiliated third party located in Southern California. Proceeds from the sale were $284,000, and will be used to fund operations. The transaction is expected to result in a gain of approximately $120,000, which will be reported in the first quarter of 2006, at which time the Power Sources Division will be reported as discontinued operations.

For the three months ended September 30, 2005 (the most recent report), Reliability, Inc. reported revenues in the Power Sources segment of $142,000, compared to $252,000 in the prior year. The decrease is the result of a 40% decrease in units shipped and a 6% decrease in average selling prices. The decrease in average selling prices is due to a change in product mix, as sales in 2005 included fewer higher output devices.

Sales and service for Reliability Power, Inc. will be handled by Mr. Shree Ramadas, Vice President of Sales and Marketing.