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) December 3, 1998
RELIABILITY INCORPORATED
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(Exact name of registrant as specified in its charter)
Texas 0-7092 75-0868913
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(State or other jurisdiction (Commission File (I.R.S. Employer
of registration) Number) Identification No.)
16400 Park Row, Houston, Texas 77218-8370
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(Address of principal executive offices) (Zip Code)
(281) 492-0550
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(Registrant's telephone number, including area code)
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Item 1. Not applicable.
Item 2. Acquisition or Disposition of Assets.
(a) On December 3, 1998, Reliability Incorporated (the "Company")
acquired certain assets and assumed certain liabilities from Basic Engineering
Services and Technology Labs, Inc. ("BEST"), a California corporation. The
assets acquired included equipment, furniture and fixtures, inventory,
contracts, work-in-progress, backlog, proprietary rights, books and records,
customer lists and goodwill. The liabilities assumed consisted of
employee-related obligations. The purchase price was $1,790,000 payable in cash
and a note, and 475,000 shares of Company common stock. The common stock was
unregistered and is subject to transfer restrictions. One million dollars of
the cash price was paid at closing and $790,000 is payable on June 3, 1999. The
purchase price was based on BEST's cost basis of the assets that were acquired
plus the Company's valuation of future earnings potential of the assets
acquired. The purchase price includes a two-year covenant not to compete with
BEST and with the principal shareholder of BEST. The source of the cash funds
used is Company working capital. There was no prior relationship between the
Company (or any of its affiliates, officers or directors or any associate
thereof) and BEST, although BEST had purchased equipment from the Company from
time to time.
(b) The assets acquired are located in Austin, Texas and Singapore and
are used to operate burn-in and test services laboratories, providing such
services to integrated circuit manufacturers. The Company will continue to
operate services laboratories at the same locations.
Item 3 - 6. Not applicable.
Item 7. Financial Statements and Exhibits
(a) Financial Statements
The financial statements required by Item 7 will be filed by
amendment to this Form 8-K within 60 days after the filing of this
report.
(b) Pro Form Financial Statements
The pro forma financial statements required by Item 7 will be filed
by amendment to this Form 8-K within 60 days after the filing of
this report.
(c) Exhibits. The following exhibits are filed with this report:
1. Asset Purchase Agreement dated November 19, 1998, among
Reliability Incorporated, Basic Engineering Services and Technology
Labs, Inc., and Isam Qubain.
2. Consulting Agreement dated December 3, 1998, between Reliability
Incorporated and Basic Engineering Services and Technology Labs,
Inc.
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Item 8-9. Not applicable.
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.
Date: December 17, 1998 Reliability Incorporated
By: /s/ Max T. Langley
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Max T. Langley, Senior Vice
President, and Chief Financial
Officer
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RELIABILITY INCORPORATED
FORM 8-K
INDEX TO EXHIBITS
Exhibit Page
Number Description of Exhibits Number
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10.1 Asset Purchase Agreement 5
10.2 Consulting Agreement 45
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