10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended July 31, 2022

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

Commission file number: 000-13301

RF INDUSTRIES, LTD.

(Exact name of registrant as specified in its charter)

Nevada	88-0168936
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7610 Miramar Road, Building 6000 San Diego, California	92126
(Address of principal executive offices)	(Zip Code)
(858) 549-6340
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	RFIL	NASDAQ Global Market

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

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

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

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

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

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

The number of shares of the issuer’s Common Stock, par value $0.01 per share, outstanding as of September 2, 2022 was 10,156,191.

1

Part I. FINANCIAL INFORMATION

Item 1: Financial Statements

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	July 31,		October 31,
	2022		2021
	(Unaudited)		(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,086	$	13,053
Trade accounts receivable, net of allowance for doubtful accounts of $124 and $87, respectively		16,161		13,523
Inventories		19,161		11,179
Other current assets		6,647		2,893
TOTAL CURRENT ASSETS		47,055		40,648
Property and equipment:
Equipment and tooling		4,353		3,986
Furniture and office equipment		1,347		1,086
		5,700		5,072
Less accumulated depreciation		4,669		4,364
Total property and equipment, net		1,031		708
Operating lease right of use assets, net		13,967		1,453
Goodwill		7,682		2,467
Amortizable intangible assets, net		15,728		2,739
Non-amortizable intangible assets		1,174		1,174
Deferred tax assets		263		389
Other assets		295		70
TOTAL ASSETS	$	87,195	$	49,648

2

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	July 31,		October 31,
	2022		2021
	(Unaudited)		(Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	6,050	$	3,504
Accrued expenses		6,913		5,034
Current portion of Term Loan		2,424		-
Current portion of operating lease liabilities		1,576		832
TOTAL CURRENT LIABILITIES		16,963		9,370
Operating lease liabilities		15,263		675
Term Loan, net of debt issuance cost		13,740		-
TOTAL LIABILITIES		45,966		10,045
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,156,191 and 10,058,571 shares issued and outstanding at July 31, 2022 and October 31, 2021, respectively		102		101
Additional paid-in capital		24,929		24,301
Retained earnings		16,198		15,201
TOTAL STOCKHOLDERS' EQUITY		41,229		39,603
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	87,195	$	49,648

See Notes to Unaudited Condensed Consolidated Financial Statements.

3

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except share and per share amounts)

	Three Months Ended July 31,					Nine Months Ended July 31,
	2022			2021		2022			2021
Net sales	$	23,842		$	15,257	$	62,265		$	36,316
Cost of sales		16,594			10,198		44,853			23,881
Gross profit		7,248			5,059		17,412			12,435
Operating expenses:
Engineering		791			411		2,101			1,044
Selling and general		5,369			3,452		13,838			8,099
Total operating expenses		6,160			3,863		15,939			9,143
Operating income		1,088			1,196		1,473			3,292
Other (expense) income		(177	)		2		(280	)		2,803
Income before provision for income taxes		911			1,198		1,193			6,095
Provision for income taxes		140			272		196			727
Consolidated net income	$	771		$	926	$	997		$	5,368
Earnings per share:
Basic	$	0.08		$	0.09	$	0.10		$	0.54
Diluted	$	0.08		$	0.09	$	0.10		$	0.53
Weighted average shares outstanding:
Basic		10,127,244			9,979,578		10,100,767			9,955,193
Diluted		10,238,932			10,150,396		10,233,209			10,131,172

See Notes to Unaudited Condensed Consolidated Financial Statements.

4

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except share amounts)

	For the Three Months Ended July 31, 2022
						Additional
	Common Stock					Paid-in			Retained
	Shares			Amount		Capital			Earnings		Total
Balance, May 1, 2022		10,118,685		$	102	$	24,648		$	15,427	$	40,177
Exercise of stock options		37,927			-		93			-		93
Stock-based compensation expense		-			-		191			-		191
Tax withholding related to vesting of restricted stock		(421	)		-		(3	)		-		(3	)
Consolidated net income		-			-		-			771		771
Balance, July 31, 2022		10,156,191		$	102	$	24,929		$	16,198	$	41,229

	For the Nine Months Ended July 31, 2022
						Additional
	Common Stock					Paid-in			Retained
	Shares			Amount		Capital			Earnings		Total
Balance, November 1, 2021		10,058,571		$	101	$	24,301		$	15,201	$	39,603
Exercise of stock options		60,854			1		149			-		150
Stock-based compensation expense		-			-		498			-		498
Issuance of restricted stock		39,666			-		-			-		-
Tax withholding related to vesting of restricted stock		(2,900	)		-		(19	)		-		(19	)
Consolidated net income		-			-		-			997		997
Balance, July 31, 2022		10,156,191		$	102	$	24,929		$	16,198	$	41,229

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except share amounts)

	For the Three Months ended July 31, 2021
						Additional
	Common Stock					Paid-In			Retained
	Shares			Amount		Capital			Earnings		Total
Balance, May 1, 2021		10,001,056		$	100	$	23,678		$	13,462	$	37,240
Exercise of stock options		23,827			-		82			-		82
Stock-based compensation expense		-			-		374			-		374
Issuance of restricted stock		1,840			-		-			-		-
Forfeiture of restricted stock		(864	)		-		-			-		-
Tax withholding related to vesting of restricted stock		(261	)		-		(2	)		-		(2	)
Consolidated net income		-			-		-			926		926
Balance, July 31, 2021		10,025,598		$	100	$	24,132		$	14,388	$	38,620

	For the Nine Months ended July 31, 2021
						Additional
	Common Stock					Paid-In			Retained
	Shares			Amount		Capital			Earnings		Total
Balance, November 1, 2020		9,814,118		$	98	$	22,946		$	9,020	$	32,064
Exercise of stock options		180,528			1		566			-		567
Stock-based compensation expense		-			-		634			-		634
Issuance of restricted stock		38,674			1		(1	)		-		-
Forfeiture of restricted stock		(5,182	)		-		-			-		-
Tax withholding related to vesting of restricted stock		(2,540	)		-		(13	)		-		(13	)
Consolidated net income		-			-		-			5,368		5,368
Balance, July 31, 2021		10,025,598		$	100	$	24,132		$	14,388	$	38,620

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Nine Months Ended July 31,
	2022			2021
OPERATING ACTIVITIES:
Consolidated net income	$	997		$	5,368
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Bad debt expense		13			17
Depreciation and amortization		1,155			592
Stock-based compensation expense		498			634
Amortization of debt issuance cost		4			-
Tax payments related to shares cancelled for vested restricted stock awards		(19	)		(13	)
Deferred income taxes		126			924
PPP Loan and interest forgiveness		-			(2,807	)
Changes in operating assets and liabilities:
Trade accounts receivable		229			(4,874	)
Inventories		(3,980	)		(1,814	)
Other current assets		(1,006	)		(3,311	)
Right of use assets		78			(24	)
Other long-term assets		(224	)		-
Accounts payable		1,464			986
Accrued expenses		1,261			1,143
Income taxes payable		-			(43	)
Other long-term liabilities		-			(370	)
Net cash provided by (used in) operating activities		596			(3,592	)
INVESTING ACTIVITIES:
Capital expenditures		(430	)		(194	)
Purchase of Microlab, net of cash acquired ($33)		(24,442	)		-
Net cash used in investing activities		(24,872	)		(194	)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options		149			567
Debt issuance cost		(32	)		-
Term Loan payments		(808	)		-
Term Loan		17,000			-
Net cash provided by financing activities		16,309			567
Net decrease in cash and cash equivalents		(7,967	)		(3,219	)
Cash and cash equivalents, beginning of period		13,053			15,797
Cash and cash equivalents, end of period	$	5,086		$	12,578
Supplemental cash flow information – income taxes paid	$	223		$	309

See Notes to Unaudited Condensed Consolidated Financial Statements.

7

RF INDUSTRIES, LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Unaudited interim condensed consolidated financial statements

Our accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information not misleading. Information included in the consolidated balance sheet as of October 31, 2021 has been derived from, and certain terms used herein are defined in, the audited consolidated financial statements of RF Industries, Ltd. as of October 31, 2021 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2021 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the nine months ended July 31, 2022 are not necessarily indicative of the results that may be expected for the year ending October 31, 2022. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Form 10-K.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements for the periods ended on or before January 31, 2022 include the accounts of RF Industries, Ltd. and our four wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), and Schroff Technologies International, Inc. (“Schrofftech”).  The unaudited condensed consolidated financial statements for the three and nine months ended July 31, 2022 include the accounts of RF Industries, Ltd. and our five wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Inc. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”).  Microlab is a wholly-owned subsidiary that RF Industries, Ltd. acquired on March 1, 2022.  For periods on or before January 31, 2022, references herein to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech and for all periods after January 31, 2022, reference to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech and Microlab.  All intercompany balances and transactions have been eliminated in consolidation.

Risks and uncertainties

In March 2020, the World Health Organization (the “WHO”) declared coronavirus (“COVID-19”) a pandemic emergency. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted.

During the periods covered by this report, the operations at all locations were affected intermittently as some of our employee schedules were impacted, and as certain customers scaled back operations or otherwise delayed or deferred orders for our products. Because of the impact that COVID-19 had on our operations, in May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (“CARES Act”) totaling approximately $2.8 million (“PPP Loans”).

In March 2021, the Internal Revenue Service (“IRS”) released Notice 2021-20, which retroactively eliminated the restriction that prevented employers who received a PPP loan from qualifying for the Employee Retention Credit (“ERC”), which is a refundable tax credit against certain employment taxes. Upon determination that the employer has complied with all of the conditions required to receive the credit, a receivable is recognized and the credit reduces salaries and wages. For the fiscal year ended October 31, 2021, we qualified and filed to claim the ERC and have recorded this as an other receivable classified in other current assets. As of July 31, 2022, the ERC in other receivable classified in other current assets were $1.7 million.

We considered the impact of the COVID-19 related economic slowdown on our evaluation of goodwill and non-amortizable intangibles impairment indicators as of July 31, 2022. Although no impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material.

Fair value measurement

We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets;

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

8

As of July 31, 2022 and October 31, 2021, the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximated their carrying value due to their short-term nature. See Note 5 for discussion on the fair value of other current liabilities.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact the adoption of this new standard will have on our consolidated financial statements.

Recently issued accounting pronouncements adopted:

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The guidance also still gives entities the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted the standard as of November 1, 2020, the beginning of our fiscal 2021, applying this prospectively. The adoption of the standard did not result in an impairment charge as of July 31, 2022 or October 31, 2021.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new ASU also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates. These changes aim to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. The guidance was effective for the Company beginning on November 1, 2021 and prescribes different transition methods for the various provisions. The adoption of this standard had no material impact on the Company’s financial statements or related disclosures.

Note 2 – Business acquisition

On March 1, 2022, the Company completed its purchase (the “Purchase Transaction”) of 100% of the issued and outstanding membership interests of Microlab, a New Jersey limited liability company, from Wireless Telecom Group, Inc, a New Jersey corporation (the “Seller”) pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated December 16, 2021, with the Seller. The consideration for the Purchase Transaction was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. The Company funded $17 million of the cash purchase price from the funds obtained under the Term Loan (as defined in Note 13) and paid the remaining amount of the cash purchase price with cash on hand. During the three months ended July 31, 2022, we paid an additional $225,000 in purchase consideration as a result of certain post-closing adjustments relating to net working capital.

The acquisition was accounted for with the acquisition method of accounting. The acquired assets and assumed liabilities have been recorded at their estimated fair values. We determined the estimated fair values with the assistance of appraisals or valuations performed by an independent third-party specialist. Microlab designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. The Microlab acquisition further diversifies and strengthens the portfolio of products that we offer to the market and allows us to provide a more complete solution to our customers in key market segments. All manufacturing operations are performed at Microlab’s facilities in New Jersey.

The acquisition closed on March 1, 2022, accordingly, subsequent to March 1, 2022, Microlab’s financial results have been included in the results of the RF Connector and Cable Assembly (“RF Connector”) segment as well as in the consolidated statements of operations. The Company expects the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives ranging from one to ten years. Total costs, as of July 31, 2022, related to the acquisition of Microlab were approximately $1.3 million and have been expensed as incurred and categorized in selling and general expenses.

9

The following table summarizes the components of the purchase price at fair values at March 1, 2022:

Cash consideration paid at closing	$	24,250,000
Post-closing adjustment		225,000
Total consideration transferred	$	24,475,000

The following table summarizes the allocation of the preliminary purchase price at fair value at March 1, 2022:

Current assets	$	6,924,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,215,000
Non-interest bearing liabilities		(1,702,000	)
Net assets acquired at fair value	$	24,475,000

The current purchase price allocation is preliminary. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. Any adjustments to the preliminary purchase price allocation identified during the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively.

The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if both acquisitions had occurred as of the beginning of the earliest period presented. Pro forma data is subject to various assumptions and estimates and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results.

Unaudited pro forma financial information assuming the acquisition of Microlab as of November 1, 2021 is presented in the following table:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Revenue	$	23,842	$	19,633	$	68,369	$	47,621
Net income		771		1,326		1,510		5,992
Earnings per share
Basic	$	0.08	$	0.13	$	0.15	$	0.60
Diluted	$	0.08	$	0.13	$	0.15	$	0.59
Basic		10,127,244		9,979,578		10,100,767		9,955,193
Diluted		10,238,932		10,150,396		10,233,209		10,131,172

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Note 3 – Inventories and major vendors

Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or net realizable value. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands): 

	July 31, 2022		October 31, 2021
Raw materials and supplies	$	12,116	$	6,422
Work in process		361		381
Finished goods		6,684		4,376
Totals	$	19,161	$	11,179

For the three months ended July 31, 2022, one vendor accounted for 17% of inventory purchases, while one vendor accounted for 27% of inventory purchases for the three months ended July 31, 2021. For the nine months ended July 31, 2022, one vendor accounted for 28% of inventory purchases and one vendor accounted for 17% of inventory purchases for the nine months ended July 31, 2021. We have arrangements with our vendors to purchase products based on purchase orders that we periodically issue.

Note 4 – Other current assets

Other current assets consist of the following (in thousands): 

	July 31, 2022		October 31, 2021
Employee retention credit ("ERC")	$	1,685	$	1,774
Prepaid taxes		537		314
Prepaid expense		805		439
Reimbursement for tenant improvements		2,741		-
Other		879		366
Totals
	$	6,647	$	2,893

Pursuant to the CARES Act, eligible employers are able to claim an ERC, which is a refundable tax credit against certain employment taxes. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. The period assessed for eligibility of the ERC is on a calendar year basis. As of July 31, 2022, the remaining portion of the ERC that we have not yet received is included as other receivables in other current assets.

Note 5 – Accrued expenses

Accrued expenses consist of the following (in thousands):

	July 31, 2022		October 31, 2021
Wages payable	$	2,851	$	2,607
Accrued receipts		2,068		1,711
Other accrued expenses		1,994		716
Totals	$	6,913	$	5,034

Accrued receipts represent purchased inventory for which invoices have not been received.

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Note 6 – Earnings per share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. Potentially issuable securities totaling 471,464 and 298,015 shares for the three months ended July 31, 2022 and 2021, respectively, and 482,889 and 371,338 shares for the nine months ended July 31, 2022 and 2021, respectively, were excluded from the calculation of diluted per share amounts because of their anti-dilutive effect. 

The following table summarizes the computation of basic and diluted weighted average shares outstanding:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Weighted average shares outstanding for basic earnings per share		10,127,244		9,979,578		10,100,767		9,955,193
Add effects of potentially dilutive securities-assumed exercise of stock options		111,688		170,818		132,442		175,979
Weighted average shares outstanding for diluted earnings per share		10,238,932		10,150,396		10,233,209		10,131,172

Note 7 – Stock-based compensation and equity transactions

On January 12, 2021, we granted a total of 33,500 shares of restricted stock and 67,000 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one-quarter of the restricted shares and options shall vest on January 12, 2022; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

On July 16, 2021, we granted our Chief Executive Officer incentive stock options to purchase 50,000 shares. These options immediately vested on the date of grant, and expire ten years from the date of grant.

On January 10, 2022, we granted a total of 39,666 shares of restricted stock and 106,001 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one-quarter of the restricted shares and options shall vest on January 10, 2023; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

On May 2, 2022, we granted a total of 39,000 incentive stock options to the following:

● One employee was granted 12,000 incentive stock options. These options vested with respesct to 3,000 shares on the date of grant, and the remaining shares vests in equal installments thereafter on each of the next three anniversaries of May 2, 2022. The options expire ten years from the date of grant.

● Three employees were each granted 5,000 incentive stock options. These options will vest in two equal installments on the first two anniversaries of May 2, 2022, and expire ten years from the date of grant.

● Two employees were each granted 6,000 incentive stock options. These options will vest in three equal installments on the first three anniversaries of May 2, 2022, and expire ten years from the date of grant.

No other shares or options were granted to Company employees during the three and nine months ended July 31, 2022 and 2021.

The weighted average fair value of employee stock options that were granted during the nine months ended July 31, 2022 and 2021 was estimated to be $3.77 and $3.38, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Nine Months Ended July 31,
	2022			2021
Risk-free interest rate		1.47	%		0.58	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (years)		7.00			7.00
Volatility factor		53.36	%		52.34	%

Expected volatilities are based on historical volatility of our stock price and other factors. We used the historical method to calculate the expected life of the 2022 and 2021 option grants. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options’ expected life. The dividend yield is based upon the historical dividend yield.

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Company stock option plans

Descriptions of our stock option plans are included in Note 9 of our Annual Report on Form 10-K for the year ended October 31, 2021. A summary of the status of the options granted under our stock option plans as of July 31, 2022 and the changes in options outstanding during the nine months then ended is presented in the table that follows:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2021		618,858		$	5.31
Options granted		145,001		$	6.94
Options exercised		(60,854	)	$	2.45
Options cancelled		(12,000	)	$	7.58
Options outstanding at July 31, 2022		691,005		$	5.87
Options exercisable at July 31, 2022		357,715		$	6.14
Options vested and expected to vest at July 31, 2022		685,154		$	5.88

Weighted average remaining contractual life of options outstanding as of July 31, 2022: 6.86 years

Weighted average remaining contractual life of options exercisable as of July 31, 2022: 6.12 years

Weighted average remaining contractual life of options vested and expected to vest as of July 31, 2022: 6.87 years

Aggregate intrinsic value of options outstanding at July 31, 2022: $992,000

Aggregate intrinsic value of options exercisable at July 31, 2022: $497,000

Aggregate intrinsic value of options vested and expected to vest at July 31, 2022: $984,000

As of July 31, 2022, $778,000 and $442,000 of expenses with respect to nonvested stock options and restricted shares, respectively, has yet to be recognized but is expected to be recognized over a weighted average period of 2.39 and 1.32 years, respectively.

Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or employees of the Company do not receive any compensation for serving on the Board. For their service as directors beginning in 2020 until the annual meeting of stockholders held in 2021, non-employee directors (i.e., directors who are not employed by the Company as officers or employees) were awarded $50,000 as Board fees, which amount was payable (a) one-half in cash ($25,000), with payments made on a quarterly basis, and (b) one-half through the grant of restricted shares that vest on a quarterly basis. In addition, the Chairman of the Board of Directors and the Chair of each committee of the Board of Directors received an annual retainer of $15,000, also payable in restricted shares, that vests in four equal quarterly installments commencing on September 15, 2020 and ending on the earlier of September 15, 2021 or the next annual meeting of stockholders. In each case, the equity portion of the award was calculated based on the 20-day average trailing closing price of the Company's common stock from the date of grant ($4.34); and cash and stock payments were pro-rated for board members who served less than the entire service period during fiscal 2021.

On September 8, 2021, the Board of Directors determined that the compensation payable to directors as Board fees for the next year ending with the 2022 annual meeting of stockholders was the same as they received in 2021 (i.e., $50,000). In addition, effective September 8, 2021, the Board determined that both Board fees and additional chair fees would be paid half in cash and half in restricted stock, and, in light of the additional work required by the chairs, revised the chair fees as follows, $25,000 for the Chairman of the Board, $25,000 for the Audit Committee Chair, $20,000 for the Compensation Committee Chair, $20,000 for the Strategic Planning and Capital Allocation Chair, and $10,000 for the Nominating & Governance Chair. The cash and restricted stock fees vest in four equal quarterly installments commencing on December 8, 2021, with the restricted stock portion determined by dividing the amount of the fee by the 20-day average trailing closing price of the Company’s common stock from the date of grant ($8.21). Accordingly, on September 8, 2021, Mr. Holdsworth was granted 5,785 shares of restricted stock; Ms. Cefali, 4,871 shares; Mr. Garland, 4,567 shares; and Mr. Fink, 3,044 shares.

Stock option expense

During the three months ended July 31, 2022 and 2021, stock-based compensation expense totaled $191,000 and $374,000, respectively, and was classified in selling and general expenses. During the nine months ended July 31, 2022 and 2021, stock-based compensation expense totaled $498,000 and $634,000, respectively, and was classified in selling and general expenses.

Note 8 – Concentrations of credit risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We maintain our cash and cash equivalents with high-credit quality financial institutions. At July 31, 2022, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $3.8 million.

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Sales from each customer that were 10% or greater of net sales were as follows:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Wireless provider		16%		21%		23%		11%
Distributor A		*		10%		*		12%
Distributor B		*		10%		*		11%

* Less than 10%

For the nine months ended July 31, 2022, one wireless carrier customer accounted for 23% of net sales and 19% of total net accounts receivable balance. Two customers, both distributors, accounted for approximately 12% and 11% of net sales and had accounts receivable balances that accounted for 8% and 8%, respectively, of the total net accounts receivable balance for the nine months ended July 31, 2021. Although these customers have been on-going major customers of the Company, the written agreements with these customers do not have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.

Note 9 – Segment information

We aggregate operating divisions into two reporting segments that have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; and (5) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of July 31, 2022, we had two segments – the RF Connector segment and the Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

The RF Connector segment consists of two divisions and the Custom Cabling segment consists of four divisions. The six divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly division (“RF Connector division”), Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech, and Microlab. While each segment has similar products and services, there was little overlapping of these services to their customer base. The biggest difference in segments is in the channels of sales: sales or product and services for the RF Connector segment were primarily through the distribution channel, while the Custom Cabling segment sales were through a combination of distribution and direct to the end customer.

Management identifies segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the RF Connector and Microlab divisions constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment.

As reviewed by our chief operating decision maker, we evaluate the performance of each segment based on income or loss before income taxes. We charge depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, right of use assets, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole.

All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the three and nine months ended July 31, 2022 and 2021 (in thousands):

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
United States	$	19,925	$	14,624	$	56,292	$	34,341
Foreign Countries:
Canada		2,218		499		3,179		1,591
Mexico		29		51		106		77
All Other		1,670		83		2,688		307
		3,917		633		5,973		1,975
Totals	$	23,842	$	15,257	$	62,265	$	36,316

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Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the three months ended July 31, 2022 and 2021 were as follows (in thousands): 

	RF Connector		Custom Cabling
	and		Manufacturing and
2022	Cable Assembly		Assembly		Corporate			Total
Net sales	$	10,495	$	13,347	$	-		$	23,842
Income (loss) before provision for income taxes		998		600		(677	)		911
Depreciation and amortization		390		147		-			537
Total assets		48,351		26,553		12,291			87,195
2021
Net sales	$	3,933	$	11,324	$	-		$	15,257
Income (loss) before provision for income taxes		255		941		2			1,198
Depreciation and amortization		35		143		-			178
Total assets		7,188		22,524		16,702			46,414

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the nine months ended July 31, 2022 and 2021 were as follows (in thousands): 

	RF Connector		Custom Cabling
	and		Manufacturing and
2022	Cable Assembly		Assembly		Corporate			Total
Net sales	$	21,928	$	40,337	$	-		$	62,265
Income (loss) before benefit from income taxes		1,621		1,721		(2,149	)		1,193
Depreciation and amortization		720		435		-			1,155
Total assets		48,351		26,553		12,291			87,195
2021
Net sales	$	11,060	$	25,256	$	-		$	36,316
Income (loss) before benefit from income taxes		2,202		1,090		2,803			6,095
Depreciation and amortization		105		487		-			592
Total assets		7,188		22,524		16,702			46,414

Note 10 – Income taxes

We use an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate, to determine our quarterly provision (benefit) for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

We recorded income tax provisions of $140,000 and $272,000 for the three months ended July 31, 2022 and 2021, respectively. The effective tax rate was 15.4% for the three months ended July 31, 2022, compared to 15.2% for the three months ended July 31, 2021. For the nine months ended July 31, 2022 and 2021, we recorded income tax provisions of $196,000 and $727,000, respectively. The effective tax rate was 16.4% for the nine months ended July 31, 2022, compared to 22.1% for the nine months ended July 31, 2021. The change in effective tax rate for the nine months ended July 31, 2022 compared to the nine months ended July 31, 2021 was primarily driven by stock compensation windfall benefits and increased benefit from research and development tax credits.

We had $211,000 and $141,000 of unrecognized tax benefits, inclusive of interest and penalties, as of July 31, 2022 and October 31, 2021, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $206,000 as of July 31, 2022.

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Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	July 31, 2022			October 31, 2021
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(322	)		(289	)
		101			134
Customer relationships (estimated lives 7 - 15 years)		6,058			5,058
Accumulated amortization		(2,978	)		(2,711	)
		3,080			2,347
Backlog (estimated life 1 - 2 years)		327			287
Accumulated amortization		(303	)		(287	)
		24			-
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(135	)		(110	)
		233			258
Tradename (estimated life 15 years)		1,700			-
Accumulated amortization		(47	)		-
		1,653			-
Proprietary Technology (estimated life 10 years)		11,100			-
Accumulated amortization		(463	)		-
		10,637			-
Totals	$	15,728		$	2,739
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the nine months ended July 31, 2022 and the year ended October 31, 2021 was $850,000 and $442,000, respectively. As of July 31, 2022, the weighted-average amortization period for the amortizable intangible assets is 9.72 years.

Note 12 – Commitments

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 5 years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ended July 31, 2022 were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	July 31, 2022		July 31, 2022
Operating lease cost	$	477	$	1,048
Short-term lease cost		-		1

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Other information related to leases was as follows (in thousands):

	July 31, 2022			October 31, 2021
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	13,967		$	1,453
Weighted Average Remaining Lease Term
Operating leases (in months)		116.40			25.26
Weighted Average Discount Rate
Operating leases		3.75	%		3.54	%

Future minimum lease payments under non-cancellable leases as of July 31, 2022 were as follows:

Year ending October 31,	Operating Leases
2022 (excluding nine months ended July 31, 2022)	$	267
2023		2,286
2024		1,991
2025		1,796
2026		1,835
Thereafter		12,123
Total future minimum lease payments		20,298
Less imputed interest		(3,459	)
Total	$	16,839

Reported as of July 31, 2022	Operating Leases
Other current liabilities	$	1,576
Operating lease liabilities		15,263
Finance lease liabilities		-
Total	$	16,839

As of July 31, 2022, operating lease ROU asset was $14 million and operating lease liability totaled $16.8 million, of which $1.6 million is classified as current. There were no finance leases as of July 31, 2022.

The Cables and Connectors facilities, consisting of four buildings for a total of 21,908 square feet, are leased by RF Industries, Ltd. We renewed the lease effective as of effective August 1, 2022, for 6 month term expiring on January 31, 2023. The monthly rental payment under the new lease currently is $33,957.40 per month.

The Cables and Connectors and C Enterprises facilities will relocate and consolidate into one building consisting of a total86,952 square feet, which is leased by RF Industries, Ltd. The lease will commence December 1, 2022, for a 120-month term expiring November 30, 2032. The monthly rental payments under the lease will be $139,123 per month for the first year and will increase annually. During the three months ended July 31, 2022, the Company obtained possession of the building to begin construction and renovation, which resulted in a lease liability of $15.6 million ($14.9 million in long-term and $726,000 in current lease liability), a right of use asset of $12.8 million and other receivables related to tenant improvement allowance of $2.7 million being recorded. The discount rate used to calculate the lease liability was 3.76%. Further, as a result of the early possession, the Company recognized additional rent expense of $135,000 for the three months ended July 31, 2022.

Note 13 – Term Loan, Line of credit and PPP loans

In February 2022, we entered into an agreement for a revolving line of credit (the “Revolving Credit Facility”) in the amount of $3.0 million and a $17.0 million term loan (the “Term Loan”, and together with the Revolving Credit Facility, the “Credit Facility”). Amounts outstanding under the Revolving Credit Facility shall bear interest at a rate of 2.0% plus the Bloomberg Short-Term Bank Yield Index Rate (“base interest rate”). The maturity date of the Revolving Credit Facility is March 1, 2024. The Company drew down the entire amount of the Term Loan on March 1, 2022. The primary interest rate for Term Loan is 3.76% per annum. The maturity date of the Term Loan is March 1, 2027.

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Borrowings under the Credit Facility are secured by a security interest in certain assets of the Company and contains certain loan covenants. The Credit Facility requires the maintenance of certain financial covenants, including: (i) consolidated debt to EBITDA ratio not to exceed 3.00 to 1.00; (ii) consolidated fixed charge coverage ratio of at least 1.25 to 1.00; and (iii) consolidated minimum EBITDA of at least $600,000 for the discrete quarter ending January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants. 

As of July 31, 2022, we have borrowed $16,192,000 under the Term Loan while we have not borrowed any amounts under the Revolving Credit Facility.

In May 2020, we applied for and received loans under the PPP of the CARES Act totaling approximately $2.8 million. The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at our New York Facility). As of April 30, 2021, the full amount of the PPP Loans has been forgiven and considered paid in full (including applicable interest).

Note 14 – Cash dividend and declared dividends

We did not pay any dividends during the three or nine months ended July 31, 2022, nor did we pay any dividends during the three or nine months ended July 31, 2021.

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

This report contains forward-looking statements. These statements relate to future events or the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “except,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company, nor any other person, assumes responsibility for the accuracy and completeness of the forward-looking statements. The Company is under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report on Form 10-Q to conform such statements to actual results or to changes in its expectations.

The following discussion should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Form 10-Q. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company’s business, including without limitation the disclosures made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the caption “Risk Factors,” and the audited consolidated financial statements and related notes included in the Company’s Annual Report filed on Form 10-K for the year ended October 31, 2021 and other reports and filings made with the Securities and Exchange Commission.

Critical Accounting Policies

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these consolidated financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to bad debts, inventory reserves, earn-out liabilities, and contingencies on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Inventories

Inventories are stated at the lower of cost or net realizable value, with cost determined using the weighted average cost method of accounting. Certain items in inventory may be considered obsolete or excess and, as such, we periodically review our inventories for excess and slow moving items and make provisions as necessary to properly reflect inventory value. Because inventories have, during the past few years, represented up to one-fourth of our total assets, any reduction in the value of our inventories would require us to take write-offs that would affect our net worth and future earnings. 

Allowance for Doubtful Accounts

We record an allowance for doubtful accounts based upon our assessment of various factors. We consider historical experience, the age of the accounts receivable balance, credit quality of our customers, current economic conditions and other factors that may affect a customer’s ability to pay. 

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Long-Lived Assets Including Goodwill

We assess property, plant and equipment and intangible assets, which are considered definite-lived assets, for impairment. Definite-lived assets are reviewed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value.

We amortize our intangible assets with definite useful lives over their estimated useful lives and review these assets for impairment.

We test our goodwill and trademarks and indefinite-lived assets for impairment at least annually or more frequently if events or changes in circumstances indicate these assets may be impaired. These events or circumstances require significant judgment and could include a significant change in the business climate, legal factors, operating performance indicators, competition and sale or disposition of all or a portion of a division. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

Income Taxes

We record a tax provision for the anticipated tax consequences of the reported results of operations. Income taxes are accounted for under the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates as of the date of the financial statements that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The calculation of the tax provision involves significant judgment in estimating the impact of uncertainties in the application of GAAP and complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our financial condition and operating results. 

Stock-based Compensation

We use the Black-Scholes model to value the stock option grants. This valuation is affected by our stock price as well as assumptions regarding a number of inputs which involve significant judgments and estimates. These inputs include the expected term of employee stock options, the expected volatility of the stock price, the risk-free interest rate and expected dividends.

Overview

RF Industries, Ltd. (together with subsidiaries, the “Company,” we,” “us,” or “our”) is a national manufacturer and marketer of interconnect products and systems, including high-performance components such as RF connectors and adapters, dividers, directional couplers and filters, coaxial cables, data cables, wire harnesses, fiber optic cables, custom cabling, energy-efficient cooling systems and integrated small cell enclosures. Through our manufacturing and production facilities, we provide a wide selection of interconnect products and solutions primarily to telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers and manufacturers and to various original equipment manufacturers (OEMs) in several market segments. Since the acquisition of Schrofftech in November 2019, we also manufacture and sell energy-efficient cooling systems and integrated small cell solutions and related components.

We operate through two reporting segments: (i) the RF Connector and Cable Assembly (“RF Connector”) segment, and (ii) the Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment. The RF Connector segment primarily designs, manufactures, markets and distributes a broad range of RF connector, adapter, coupler, divider, and cable products, including coaxial passives and cable assemblies that are used in telecommunications and information technology, OEM markets and other end markets. The Custom Cabling segment designs, manufactures, markets and distributes custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, electromechanical wiring harnesses, wiring harnesses for a broad range of applications in a diverse set of end markets, energy-efficient cooling systems for wireless base stations and remote equipment shelters and custom designed, pole-ready 5G small cell integrated enclosures.

For the nine months ended July 31, 2022, most of our revenues were generated from the Custom Cabling segment from the sale of fiber optics cable, copper cabling, custom patch cord assemblies, and wiring harnesses, which collectively accounted for 65% of the Company’s total sales. Revenues from the RF Connector segment were generated from the sales of RF connector products and cable assemblies and accounted for 70% of total sales for the nine months ended July 31, 2021. The RF Connector segment mostly sells standardized products regularly used by customers and, therefore, has a more stable revenue stream when compared to the Custom Cabling segment. The Custom Cabling segment mostly designs, manufactures, and sells customized cabling and wireless-related equipment under larger purchase orders. Accordingly, the Custom Cabling segment is more dependent upon larger project orders, and its revenues are, therefore, more volatile than the revenues of the RF Connector segment.

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The COVID-19 coronavirus pandemic, in its various strains, negatively affected both our operations and those of our customers. The extent of the impact of the COVID-19 pandemic on our future operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. The outbreak impacted our performance in fiscal year 2021 and for the three and nine months ended July 31, 2022. During the periods covered by this report, the operations at all locations were affected intermittently as some of our employee schedules were impacted, and as certain customers scaled back operations or otherwise delayed or deferred orders for our products. Because of the impact that COVID-19 had on our operations, in May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (“CARES Act”)  totaling approximately $2.8 million (“PPP Loans”). In February 2021, all of the $2.8 million of PPP Loans were forgiven and considered paid in full (including applicable interest) by the Small Business Administration (“SBA”).

In March 2021, the Internal Revenue Service (“IRS”) released Notice 2021-20, which retroactively eliminated the restriction that prevented employers who received a PPP loan from qualifying for the Employee Retention Credit (“ERC”), which is a refundable tax credit against certain employment taxes. Upon determination that the employer has complied with all of the conditions required to receive the credit, a receivable is recognized and the credit reduces salaries and wages. For the fiscal year ended October 31, 2021, we qualified and filed to claim the ERC and have recorded the credit as a receivable in Other Current Assets. As of July 31, 2022, we carried a $1.7 million the ERC receivable in Other Current Assets.

Liquidity and Capital Resources

Historically, we have been able to fund our liquidity and other capital requirements from funds we generated from operations. On March 1, 2022, we acquired Microlab. The acquisition of Microlab has affected both our liquidity and our capital resources. In order to acquire Microlab, we used $7.3 million of our cash on hand to pay a portion of the purchase price, thereby reducing the amount available for future acquisitions, for investments in the expansion of our existing businesses and assets, or as a reserve for unanticipated financial requirements. In connection with the purchase of Microlab, we entered into the Credit Facility and borrowed the full $17 million amount available under the Term Loan. We believe that our remaining and existing assets and the cash we expect to generate from operations and from our current backlog of unfulfilled orders, will be sufficient to fund our liquidity needs during the next twelve months from the date of this filing based on the following:

As of July 31, 2022, we had a total of $5.1 million of cash and cash equivalents with access to $3.0 million under the Revolving Credit Facility. As of July 31, 2022, we had working capital of $30.1 million and a current ratio of approximately 3:1 with current assets of $47.1 million and current liabilities of $17.0 million.

As of July 31, 2022, we had $30.6 million of backlog, compared to $33.3 million as of October 31, 2021. Since purchase orders are submitted from customers based on the timing of their requirements, our ability to predict orders in future periods or trends in future periods is limited. Furthermore, purchase orders may be subject to cancellation from customers, although we have not historically experienced material cancellations of purchase orders.

In the nine months ended July 31, 2022, we generated $0.6 million of cash in our operating activities. This net inflow of cash is primarily related to our net income of $0.9 million, $1.2 million from depreciation and amortization and $0.5 million from stock-based compensation expense, $1.5 million from accounts payable, and $1.3 million from accrued expenses. The cash usage was primarily due to an increase to our inventory purchases ($4 million). The cash used for other current assets represents ($1 million) which consists of ($0.2 million) in other receivables, ($0.5 million) in prepaid expenses and ($0.3 million) in deposits for inventory purchases.

During the nine months ended July 31, 2022, we also spent $0.4 million on capital expenditures, and $24.4 million on the purchase of Microlab offset by $17 million from the Term Loan as noted above. The cash used in operating activities and the amounts spent on capital expenditures were partially offset by $0.1 million of proceeds that we received from the exercise of stock options.

Our goal to expand and grow our business both organically and through acquisitions may require material additional capital equipment. In the past, we have purchased all additional equipment, or financed some of our equipment and furnishings requirements through leases. Currently, no additional capital equipment purchases have been identified that would require significant additional leasing or capital expenditures during the next twelve months. We also believe that based on our current financial condition, our current backlog of unfulfilled orders and our anticipated future operations, we would be able to finance our expansion, if necessary.

From time to time, we may undertake acquisitions of other companies or product lines in order to diversify our product and solutions offerings and customer base. Conversely, we may undertake the disposition of a division or product line due to changes in our business strategy or market conditions.  Acquisitions may require the outlay of cash, which may reduce our liquidity and capital resources while dispositions may increase our cash position, liquidity and capital resources. Since our goal is to continue to expand our operations and accelerate our growth through future acquisitions, we may use some of our current capital resources to fund any acquisitions we may undertake in the future.

20

Results of Operations

Three Months Ended July 31, 2022 vs. Three Months Ended July 31, 2021

Net sales for the three months ended July 31, 2022 (the “fiscal 2022 quarter”) increased by 56%, or $8.6 million, to $23.8 million as compared to the three months ended July 31, 2021 (the “fiscal 2021 quarter”) due to an increase in net sales at the Custom Cabling segment and a $6.5 million increase as a result of our consolidation of the results of Microlab, which we acquired in March 2022. Net sales in the Custom Cabling segment increased by $2 million, or 18%, to $13.3 million, compared to $11.3 million in the fiscal 2021 quarter primarily because of increased sales of products to wireless carriers, primarily related to hybrid fiber optic cables used in the build out of 4G and 5G networks. Net sales for the fiscal 2022 quarter at the RF Connector segment increased by $6.6 million, or 167%, to $10.5 million as compared to $3.9 million in the fiscal 2021 quarter, due primarily to the acquisition of Microlab whose results are included in the RF Connector segment.

Gross profit for the fiscal 2022 quarter increased by $2.2 million to $7.2 million and gross margins decreased to 30.4% of sales compared to 33.2% of net sales in the fiscal 2021 quarter due primarily to the ERC that the Company was eligible to claim for the production employees in fiscal quarter 2021. The ERC refundable employee tax credit reduced our labor costs and thereby increased our gross profits in fiscal quarter 2021 compared to fiscal quarter 2022. Excluding the benefit of the ERC, our gross profits for the fiscal 2021 quarter would have been $4.2 million with gross margins of 27.7%.

Engineering expenses increased by $0.4 million to $0.8 million in the fiscal 2022 quarter compared to $0.4 million in the fiscal 2021 quarter due primarily to the additional engineering expenses of $0.3 million from Microlab and to the ERC of $0.5 million the Company was eligible to claim for engineering employees in fiscal 2021 quarter. Engineering expenses represent costs incurred relating to the ongoing research and development of new processes and products.

Selling and general expenses increased by $1.9 million to $5.4 million (23% of sales) compared to $3.5 million (23% of sales) in the third quarter last year due to the ERC the Company was eligible to claim for the general and administrative employees. Excluding the benefit of the ERC, selling and general expenses would have been $3.4 million (22% of sales). The increase is largely due to (i) Microlab accounted for $1.4 million of the selling and general expenses and (ii) acquisition related expenses and other one-time charges (including professional fees, system implementation charges and severance) accounted for $114,000 and (iii) additional rent expense of $135,000 (non-cash) related to lease accounting for the fiscal 2022 quarter. Selling and general expenses also increased as a result of the increase in net sales during the current fiscal 2022 quarter.

For the fiscal 2022 quarter, the Custom Cabling segment and the RF Connector segment had pretax income of $0.6 million and $1.0 million, respectively, as compared to $0.9 million and $0.3 million of income, respectively, for the comparable third quarter last year. The pretax income at both the Custom Cabling and RF Connector segments in the fiscal 2021 quarter was primarily due to the ERC the Company was eligible to claim.

For the fiscal 2022 and 2021 quarters, we recorded income tax provisions of $140,000 and $272,000, respectively. The effective tax rate was 15.4% for the fiscal 2022 quarter, compared to 22.7% for the fiscal 2021 quarter. The change in effective tax rate for the fiscal 2022 and 2021 quarters was primarily driven by the disproportionate impact of various permanent book-tax differences with respect to our forecasted book income or loss in each period.

For the fiscal 2022 quarter, net income was $0.8 million and fully diluted earnings per share was $0.08 per share, compared to a net income of $0.9 million and fully diluted earnings per share of $0.09 per share for the fiscal 2021 quarter.  For the fiscal 2022 quarter, the diluted weighted average shares outstanding was 10,238,932 as compared to 10,150,396 for the fiscal 2021 quarter.

Nine Months Ended July 31, 2022 vs. Nine Months Ended July 31, 2021

Net sales for the nine months ended July 31, 2022 (the “fiscal 2022 nine-month period”) of $62.3 million increased by 72%, or $26 million, compared to the nine months ended July 31, 2021 (the “fiscal 2021 nine-month period”) due to a stronger fiscal 2022 first quarter and the acquisition of Microlab in March 2022. The increase in net sales is attributable to the Custom Cabling segment, which increased by $15 million, or 60%, to $40.3 million compared to $25.3 million in the fiscal 2021 nine-month period. The increase was primarily in our project-based business which resulted from the upturn in carrier spending in the fiscal 2022 nine-month period. Net sales for the fiscal 2022 nine-month period at the RF Connector segment increased by $10.8 million, or 98%, to $21.9 million compared to $11.1 million in the fiscal 2021 nine-month period of which $9.9 million was a result of the Microlab acquisition.

Gross profit for the fiscal 2022 nine-month period increased by $5.0 million to $17.4 million and gross margins decreased to 28.0% of sales from 34.2% of sales in the fiscal 2021 nine-month period. The increase in gross profit primarily related to the overall increase in sales and decrease in gross margins was primarily due to the ERC the Company was eligible to claim for production employees for the fiscal 2021 nine-month period. Excluding the benefit of the ERC, our gross profits for the fiscal 2021 nine-month period would have been $9.8 million and gross margins would have been 27.0%.

Engineering expenses increased $1.1 million to $2.1 million for the fiscal 2022 nine-month period compared to $1.0 million in the fiscal 2021 nine-month period primarily due to the ERC the Company was eligible to claim for engineering employees in fiscal 2021 quarter as well as the acquisition of Microlab in March 2022. Excluding the benefit of the ERC, engineering expenses would have been $1.3 million, which is an increase of $0.8 million compared to the fiscal 2022 nine-month period which includes $0.7 million from Microlab. Engineering expenses represent costs incurred relating to the ongoing research and development of new products.

21

Selling and general expenses increased by $5.7 million to $13.8 million (22% of sales) compared to $8.1 million (22% of sales) in the nine-month period last year due to the ERC the Company was eligible to claim on general and administrative employees. Excluding the benefit of the ERC, selling and general expenses would have been $8.7 million (24% of sales), which is an increase of $5.1 million compared to the fiscal 2022 nine-month period. Microlab accounted for $2 million of the selling and general expenses and acquisition related expenses and other one-time charges (including attorney fees, due diligence and broker fees) accounted for $1.6 million for the fiscal 2022 nine-month period. Selling and general expenses also increased as a result of the increase in net sales during the current fiscal 2022 quarter.

For the fiscal 2022 nine-month period, pretax income for the Custom Cabling segment and the RF Connector segment was $1.7 million and $1.6 million, respectively, as compared to $1.1 million and $2.2 million of income, respectively, for the comparable nine-month period last year. The pretax income at the Custom Cabling and RF Connector segments in the nine-month period of fiscal 2021 was primarily due to the ERC the Company was eligible to claim.

For the fiscal 2022 and 2021 nine-month periods, we recorded income tax provisions of $196,000 and $727,000, respectively. The effective tax rate was 16.5% for the fiscal 2022 nine-month period, compared to 22.1% for the fiscal 2021 nine-month period. The change in effective tax rate for the fiscal 2022 and 2021 nine-month periods was primarily driven by the disproportionate impact of various permanent book-tax differences with respect to our forecasted book income or loss in each period.

For the fiscal 2022 nine-month period, net income was $1 million and fully diluted income per share was $0.10 per share as compared to a net income of $5.4 million and fully diluted earnings per share of $0.53 per share for the fiscal 2021 nine-month period.  For the fiscal 2022 nine-month period, the diluted weighted average shares outstanding was 10,233,209 as compared to 10,131,172 for the fiscal 2021 nine-month period.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Nothing to report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide reasonable assurance only of achieving the desired control objectives, and we necessarily are required to apply our judgment in weighing the costs and benefits of possible new or different controls and procedures. Limitations are inherent in all control systems, so no evaluation of controls can provide absolute assurance that all control issues and any fraud have been detected. Because of the inherent limitations, we regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, and to maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, we concluded that our disclosure controls and procedures were effective as of that date.

As described throughout our quarterly report, during the quarter ended April 30, 2022, we acquired Microlab, which is now a wholly owned subsidiary of RF Industries. We are currently integrating policies, processes, technology, and operations for the consolidated company and will continue to evaluate our internal control over financial reporting as we develop and execute our integration plans.

Changes in Internal Control Over Financial Reporting

During the third quarter of fiscal year 2022, other than as described above, there were no changes in the internal control over financial reporting as such term is defined in Rule 13a-15(f) of the exchange Act, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

22

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of the date of this report, we are not subject to any proceeding that is not in the ordinary course of business or that is material to the financial condition of our business.

Item 1A. Risk Factors

The discussion of our business and operations should be read together with the risk factors contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 31, 2021 filed with the SEC, which describe various risks and uncertainties to which we are or may become subject. Further, the current coronavirus (“COVID-19”) pandemic and actions taken to address the pandemic may exacerbate the risks described in our reports filed with the Securities and Exchange Commission (the “SEC”). These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner.

Global economic conditions and any related impact on our supply chain and the markets where we do business could adversely affect our results of operations.

The uncertain state of the global economy (including the current conflict between Russia and Ukraine and related economic and other retaliatory measures taken by the United States, European Union and others) continues to impact businesses around the world. Deteriorating economic conditions or financial uncertainty in any of the markets in which we sell our products could reduce business confidence and adversely impact spending patterns, and thereby could adversely affect our sales and results of operations. In challenging and uncertain economic environments such as the current one, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on our business, financial condition and results of operations, or on the price of our common stock.

Recent inflationary pressures have increased the cost of energy and raw materials and may adversely affect our results of operations. If inflation continues to rise and further impact the cost of energy and raw materials, we may not be able to offset cost increases to our products through price adjustments without negatively impacting consumer demand, which could adversely affect our sales and results of operations.

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

The following table sets forth information regarding the shares of common stock cancelled, and deemed to have been repurchased, during the three months ended July 31, 2022 in connection with employee tax withholding for shares of restricted stock that vested under our 2020 Equity Incentive Plan.

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Approximate dollar value of shares that may yet be purchased under the plans or programs
May 2022		-	$	-		-	$	-
June 2022		-	$	-		-	$	-
July 2022		421	$	6.19		-	$	-

Item 3. Defaults upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Nothing to report.

Item 5. Other Information

Nothing to report.

23

Item 6. Exhibits

Exhibit
Number
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Schema.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

24

SIGNATURES

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

	RF INDUSTRIES, LTD.
Date: September 14, 2022	By:	/s/ Robert Dawson
		Robert Dawson President and Chief Executive Officer (Principal Executive Officer)

Date: September 14, 2022	By:	/s/ Peter Yin
		Peter Yin Chief Financial Officer (Principal Financial and Accounting Officer)

25

EX-31.1

Exhibit 31.1

CERTIFICATIONS PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Robert Dawson, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended July 31, 2022 of RF Industries, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period for which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 14, 2022	/s/ Robert Dawson
	Robert Dawson
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Peter Yin, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended July 31, 2022 of RF Industries, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period for which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 14, 2022	/s/ Peter Yin
	Peter Yin
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RF Industries, Ltd. (the “Company”) on Form 10-Q for the quarter ended July 31, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Robert Dawson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 14, 2022	/s/ Robert Dawson
	Robert Dawson
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RF Industries, Ltd. (the “Company”) on Form 10-Q for the quarter ended July 31, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Peter Yin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 14, 2022	/s/ Peter Yin
	Peter Yin
	Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Jul. 31, 2022	Sep. 02, 2022
Document Information [Line Items]
Entity Central Index Key	0000740664
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 31, 2022
Document Transition Report	false
Entity File Number	000-13301
Entity Registrant Name	R F INDUSTRIES LTD
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	88-0168936
Entity Address, Address Line One	7610 Miramar Road, Building 6000
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92126
City Area Code	858
Local Phone Number	549-6340
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	RFIL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,156,191

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 5,086	$ 13,053
Trade accounts receivable, net of allowance for doubtful accounts of $124 and $87, respectively	16,161	13,523
Inventories	19,161	11,179
Other current assets	6,647	2,893
TOTAL CURRENT ASSETS	47,055	40,648
Property and equipment:
Equipment and tooling	4,353	3,986
Furniture and office equipment	1,347	1,086
Property, Plant and Equipment, Gross, Ending Balance	5,700	5,072
Less accumulated depreciation	4,669	4,364
Total property and equipment, net	1,031	708
Operating lease right of use assets, net	13,967	1,453
Goodwill	7,682	2,467
Amortizable intangible assets, net	15,728	2,739
Non-amortizable intangible assets	1,174	1,174
Deferred tax assets	263	389
Other assets	295	70
TOTAL ASSETS	87,195	49,648
CURRENT LIABILITIES
Accounts payable	6,050	3,504
Accrued expenses	6,913	5,034
Current portion of operating lease liabilities	1,576	832
TOTAL CURRENT LIABILITIES	16,963	9,370
Operating lease liabilities	15,263	675
TOTAL LIABILITIES	45,966	10,045
STOCKHOLDERS' EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,156,191 and 10,058,571 shares issued and outstanding at July 31, 2022 and October 31, 2021, respectively	102	101
Additional paid-in capital	24,929	24,301
Retained earnings	16,198	15,201
TOTAL STOCKHOLDERS' EQUITY	41,229	39,603
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	87,195	49,648
Term Loan [Member]
CURRENT LIABILITIES
Current portion of Term Loan	2,424	0
Term Loan, net of debt issuance cost	$ 13,740	$ 0

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
Trade accounts receivable, allowance for doubtful accounts	$ 124	$ 87
Common Stock, Shares Authorized (in shares)	20,000,000	20,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares, Issued (in shares)	10,156,191	10,058,571
Common Stock, Shares, Outstanding, Ending Balance (in shares)	10,156,191	10,058,571

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Net sales	$ 23,842,000	$ 15,257,000	$ 62,265,000	$ 36,316,000
Cost of sales	16,594,000	10,198,000	44,853,000	23,881,000
Gross profit	7,248,000	5,059,000	17,412,000	12,435,000
Operating expenses:
Engineering	791,000	411,000	2,101,000	1,044,000
Selling and general	5,369,000	3,452,000	13,838,000	8,099,000
Total operating expenses	6,160,000	3,863,000	15,939,000	9,143,000
Operating income	1,088,000	1,196,000	1,473,000	3,292,000
Other (expense) income	(177,000)	2,000	(280,000)	2,803,000
Income before provision for income taxes	911,000	1,198,000	1,193,000	6,095,000
Provision for income taxes	140,000	272,000	196,000	727,000
Consolidated net income	$ 771,000	$ 926,000	$ 997,000	$ 5,368,000
Earnings per share:
Basic (in dollars per share)	$ 0.08	$ 0.09	$ 0.10	$ 0.54
Diluted (in dollars per share)	$ 0.08	$ 0.09	$ 0.10	$ 0.53
Weighted average shares outstanding:
Basic (in shares)	10,127,244	9,979,578	10,100,767	9,955,193
Diluted (in shares)	10,238,932	10,150,396	10,233,209	10,131,172

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Oct. 31, 2020	9,814,118
Balance at Oct. 31, 2020	$ 98	$ 22,946	$ 9,020	$ 32,064
Exercise of stock options (in shares)	180,528
Exercise of stock options	$ 1	566	0	567
Stock-based compensation expense		634		634
Tax withholding related to vesting of restricted stock (in shares)	(2,540)
Tax withholding related to vesting of restricted stock		(13)	0	(13)
Consolidated net income			5,368	5,368
Issuance of restricted stock (in shares)	38,674
Issuance of restricted stock	$ 1	(1)	0	0
Forfeiture of restricted stock (in shares)	(5,182)
Shares (in shares) at Jul. 31, 2021	10,025,598
Balance at Jul. 31, 2021	$ 100	24,132	14,388	38,620
Balance (in shares) at Apr. 30, 2021	10,001,056
Balance at Apr. 30, 2021	$ 100	23,678	13,462	37,240
Exercise of stock options (in shares)	23,827
Exercise of stock options	$ 0	82	0	82
Stock-based compensation expense		374		374
Tax withholding related to vesting of restricted stock (in shares)	(261)
Tax withholding related to vesting of restricted stock	$ 0	(2)	0	(2)
Consolidated net income	$ 0	0	926	926
Issuance of restricted stock (in shares)	1,840
Forfeiture of restricted stock (in shares)	(864)
Forfeiture of restricted stock		0	0	0
Shares (in shares) at Jul. 31, 2021	10,025,598
Balance at Jul. 31, 2021	$ 100	24,132	14,388	38,620
Balance (in shares) at Oct. 31, 2021	10,058,571
Balance at Oct. 31, 2021	$ 101	24,301	15,201	$ 39,603
Exercise of stock options (in shares)	60,854			60,854
Exercise of stock options	$ 1	149		$ 150
Stock-based compensation expense		498		498
Tax withholding related to vesting of restricted stock (in shares)	(2,900)
Tax withholding related to vesting of restricted stock		(19)		(19)
Consolidated net income			997	997
Issuance of restricted stock (in shares)	39,666
Issuance of restricted stock	$ 0	0
Shares (in shares) at Jul. 31, 2022	10,156,191
Balance at Jul. 31, 2022	$ 102	24,929	16,198	41,229
Balance (in shares) at Apr. 30, 2022	10,118,685
Balance at Apr. 30, 2022	$ 102	24,648	15,427	40,177
Exercise of stock options (in shares)	37,927
Exercise of stock options	$ 0	93	0	93
Stock-based compensation expense		191	0	191
Tax withholding related to vesting of restricted stock (in shares)	(421)
Tax withholding related to vesting of restricted stock		(3)	0	(3)
Consolidated net income			771	771
Shares (in shares) at Jul. 31, 2022	10,156,191
Balance at Jul. 31, 2022	$ 102	$ 24,929	$ 16,198	$ 41,229

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
OPERATING ACTIVITIES:
Consolidated net income	$ 997	$ 5,368
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Bad debt expense	13	17
Depreciation and amortization	1,155	592
Stock-based compensation expense	498	634
Amortization of debt issuance cost	4	0
Tax payments related to shares cancelled for vested restricted stock awards	(19)	(13)
Changes in operating assets and liabilities:
Deferred income taxes	126	924
PPP Loan and interest forgiveness	0	(2,807)
Trade accounts receivable	229	(4,874)
Inventories	(3,980)	(1,814)
Other current assets	(1,006)	(3,311)
Right of use assets	78	(24)
Other long-term assets	(224)	0
Accounts payable	1,464	986
Accrued expenses	1,261	1,143
Income taxes payable	0	(43)
Other long-term liabilities	0	(370)
Net cash provided by (used in) operating activities	596	(3,592)
INVESTING ACTIVITIES:
Capital expenditures	(430)	(194)
Purchase of company, net of cash acquired	(24,442)	0
Net cash used in investing activities	(24,872)	(194)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	149	567
Debt issuance cost	(32)	0
Term Loan payments	(808)
Net cash provided by financing activities	16,309	567
Net decrease in cash and cash equivalents	(7,967)	(3,219)
Cash and cash equivalents, beginning of period	13,053	15,797
Cash and cash equivalents, end of period	5,086	12,578
Supplemental cash flow information – income taxes paid	223	309
Term Loan [Member]
FINANCING ACTIVITIES:
Term Loan payments		0
Term Loan	$ 17,000	$ 0

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Condensed Consolidated Statements of Cash Flows (Unaudited)-parentheticals (Parentheticals) $ in Thousands	9 Months Ended
	Jul. 31, 2022 USD ($)
Cash Acquired from Acquisition	$ 33

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Note 1 - Unaudited Interim Condensed Consolidated Financial Statements

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

Note 1 – Unaudited interim condensed consolidated financial statements

Our accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information not misleading. Information included in the consolidated balance sheet as of October 31, 2021 has been derived from, and certain terms used herein are defined in, the audited consolidated financial statements of RF Industries, Ltd. as of October 31, 2021 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2021 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the nine months ended July 31, 2022 are not necessarily indicative of the results that may be expected for the year ending October 31, 2022. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Form 10-K.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements for the periods ended on or before January 31, 2022 include the accounts of RF Industries, Ltd. and our four wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), and Schroff Technologies International, Inc. (“Schrofftech”).  The unaudited condensed consolidated financial statements for the three and nine months ended July 31, 2022 include the accounts of RF Industries, Ltd. and our five wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Inc. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”).  Microlab is a wholly-owned subsidiary that RF Industries, Ltd. acquired on March 1, 2022.  For periods on or before January 31, 2022, references herein to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech and for all periods after January 31, 2022, reference to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech and Microlab.  All intercompany balances and transactions have been eliminated in consolidation.

Risks and uncertainties

In March 2020, the World Health Organization (the “WHO”) declared coronavirus (“COVID-19”) a pandemic emergency. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted.

During the periods covered by this report, the operations at all locations were affected intermittently as some of our employee schedules were impacted, and as certain customers scaled back operations or otherwise delayed or deferred orders for our products. Because of the impact that COVID-19 had on our operations, in May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (“CARES Act”) totaling approximately $2.8 million (“PPP Loans”).

In March 2021, the Internal Revenue Service (“IRS”) released Notice 2021-20, which retroactively eliminated the restriction that prevented employers who received a PPP loan from qualifying for the Employee Retention Credit (“ERC”), which is a refundable tax credit against certain employment taxes. Upon determination that the employer has complied with all of the conditions required to receive the credit, a receivable is recognized and the credit reduces salaries and wages. For the fiscal year ended October 31, 2021, we qualified and filed to claim the ERC and have recorded this as an other receivable classified in other current assets. As of July 31, 2022, the ERC in other receivable classified in other current assets were $1.7 million.

We considered the impact of the COVID-19 related economic slowdown on our evaluation of goodwill and non-amortizable intangibles impairment indicators as of July 31, 2022. Although no impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material.

Fair value measurement

We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets;

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 

As of July 31, 2022 and October 31, 2021, the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximated their carrying value due to their short-term nature. See Note 5 for discussion on the fair value of other current liabilities.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact the adoption of this new standard will have on our consolidated financial statements.

Recently issued accounting pronouncements adopted:

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The guidance also still gives entities the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted the standard as of November 1, 2020, the beginning of our fiscal 2021, applying this prospectively. The adoption of the standard did not result in an impairment charge as of July 31, 2022 or October 31, 2021.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new ASU also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates. These changes aim to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. The guidance was effective for the Company beginning on November 1, 2021 and prescribes different transition methods for the various provisions. The adoption of this standard had no material impact on the Company’s financial statements or related disclosures.

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Note 2 - Business Acquisition

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note 2 – Business acquisition

On March 1, 2022, the Company completed its purchase (the “Purchase Transaction”) of 100% of the issued and outstanding membership interests of Microlab, a New Jersey limited liability company, from Wireless Telecom Group, Inc, a New Jersey corporation (the “Seller”) pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated December 16, 2021, with the Seller. The consideration for the Purchase Transaction was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. The Company funded $17 million of the cash purchase price from the funds obtained under the Term Loan (as defined in Note 13) and paid the remaining amount of the cash purchase price with cash on hand. During the three months ended July 31, 2022, we paid an additional $225,000 in purchase consideration as a result of certain post-closing adjustments relating to net working capital.

The acquisition was accounted for with the acquisition method of accounting. The acquired assets and assumed liabilities have been recorded at their estimated fair values. We determined the estimated fair values with the assistance of appraisals or valuations performed by an independent third-party specialist. Microlab designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. The Microlab acquisition further diversifies and strengthens the portfolio of products that we offer to the market and allows us to provide a more complete solution to our customers in key market segments. All manufacturing operations are performed at Microlab’s facilities in New Jersey.

The acquisition closed on March 1, 2022, accordingly, subsequent to March 1, 2022, Microlab’s financial results have been included in the results of the RF Connector and Cable Assembly (“RF Connector”) segment as well as in the consolidated statements of operations. The Company expects the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives ranging from one to ten years. Total costs, as of July 31, 2022, related to the acquisition of Microlab were approximately $1.3 million and have been expensed as incurred and categorized in selling and general expenses.

The following table summarizes the components of the purchase price at fair values at March 1, 2022:

Cash consideration paid at closing	$	24,250,000
Post-closing adjustment		225,000
Total consideration transferred	$	24,475,000

The following table summarizes the allocation of the preliminary purchase price at fair value at March 1, 2022:

Current assets	$	6,924,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,215,000
Non-interest bearing liabilities		(1,702,000	)
Net assets acquired at fair value	$	24,475,000

The current purchase price allocation is preliminary. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. Any adjustments to the preliminary purchase price allocation identified during the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively.

The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if both acquisitions had occurred as of the beginning of the earliest period presented. Pro forma data is subject to various assumptions and estimates and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results.

Unaudited pro forma financial information assuming the acquisition of Microlab as of November 1, 2021 is presented in the following table:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Revenue	$	23,842	$	19,633	$	68,369	$	47,621
Net income		771		1,326		1,510		5,992
Earnings per share
Basic	$	0.08	$	0.13	$	0.15	$	0.60
Diluted	$	0.08	$	0.13	$	0.15	$	0.59
Basic		10,127,244		9,979,578		10,100,767		9,955,193
Diluted		10,238,932		10,150,396		10,233,209		10,131,172

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Note 3 - Inventories and Major Vendors

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 3 – Inventories and major vendors

Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or net realizable value. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands): 

	July 31, 2022		October 31, 2021
Raw materials and supplies	$	12,116	$	6,422
Work in process		361		381
Finished goods		6,684		4,376
Totals	$	19,161	$	11,179

For the three months ended July 31, 2022, one vendor accounted for 17% of inventory purchases, while one vendor accounted for 27% of inventory purchases for the three months ended July 31, 2021. For the nine months ended July 31, 2022, one vendor accounted for 28% of inventory purchases and one vendor accounted for 17% of inventory purchases for the nine months ended July 31, 2021. We have arrangements with our vendors to purchase products based on purchase orders that we periodically issue.

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Note 4 - Other Current Assets

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Other Current Assets [Text Block]

Note 4 – Other current assets

Other current assets consist of the following (in thousands): 

	July 31, 2022		October 31, 2021
Employee retention credit ("ERC")	$	1,685	$	1,774
Prepaid taxes		537		314
Prepaid expense		805		439
Reimbursement for tenant improvements		2,741		-
Other		879		366
Totals
	$	6,647	$	2,893

Pursuant to the CARES Act, eligible employers are able to claim an ERC, which is a refundable tax credit against certain employment taxes. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. The period assessed for eligibility of the ERC is on a calendar year basis. As of July 31, 2022, the remaining portion of the ERC that we have not yet received is included as other receivables in other current assets.

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Note 5 - Accrued Expenses

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Noncurrent [Text Block]

Note 5 – Accrued expenses

Accrued expenses consist of the following (in thousands):

	July 31, 2022		October 31, 2021
Wages payable	$	2,851	$	2,607
Accrued receipts		2,068		1,711
Other accrued expenses		1,994		716
Totals	$	6,913	$	5,034

Accrued receipts represent purchased inventory for which invoices have not been received.

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Note 6 - Earnings Per Share

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 6 – Earnings per share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. Potentially issuable securities totaling 471,464 and 298,015 shares for the three months ended July 31, 2022 and 2021, respectively, and 482,889 and 371,338 shares for the nine months ended July 31, 2022 and 2021, respectively, were excluded from the calculation of diluted per share amounts because of their anti-dilutive effect. 

The following table summarizes the computation of basic and diluted weighted average shares outstanding:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Weighted average shares outstanding for basic earnings per share		10,127,244		9,979,578		10,100,767		9,955,193
Add effects of potentially dilutive securities-assumed exercise of stock options		111,688		170,818		132,442		175,979
Weighted average shares outstanding for diluted earnings per share		10,238,932		10,150,396		10,233,209		10,131,172

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Note 7 - Stock-based Compensation and Equity Transactions

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 7 – Stock-based compensation and equity transactions

On January 12, 2021, we granted a total of 33,500 shares of restricted stock and 67,000 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one-quarter of the restricted shares and options shall vest on January 12, 2022; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

On July 16, 2021, we granted our Chief Executive Officer incentive stock options to purchase 50,000 shares. These options immediately vested on the date of grant, and expire ten years from the date of grant.

On January 10, 2022, we granted a total of 39,666 shares of restricted stock and 106,001 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one-quarter of the restricted shares and options shall vest on January 10, 2023; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

On May 2, 2022, we granted a total of 39,000 incentive stock options to the following:

● One employee was granted 12,000 incentive stock options. These options vested with respesct to 3,000 shares on the date of grant, and the remaining shares vests in equal installments thereafter on each of the next three anniversaries of May 2, 2022. The options expire ten years from the date of grant.

● Three employees were each granted 5,000 incentive stock options. These options will vest in two equal installments on the first two anniversaries of May 2, 2022, and expire ten years from the date of grant.

● Two employees were each granted 6,000 incentive stock options. These options will vest in three equal installments on the first three anniversaries of May 2, 2022, and expire ten years from the date of grant.

No other shares or options were granted to Company employees during the three and nine months ended July 31, 2022 and 2021.

The weighted average fair value of employee stock options that were granted during the nine months ended July 31, 2022 and 2021 was estimated to be $3.77 and $3.38, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Nine Months Ended July 31,
	2022			2021
Risk-free interest rate		1.47	%		0.58	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (years)		7.00			7.00
Volatility factor		53.36	%		52.34	%

Expected volatilities are based on historical volatility of our stock price and other factors. We used the historical method to calculate the expected life of the 2022 and 2021 option grants. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options’ expected life. The dividend yield is based upon the historical dividend yield.

Company stock option plans

Descriptions of our stock option plans are included in Note 9 of our Annual Report on Form 10-K for the year ended October 31, 2021. A summary of the status of the options granted under our stock option plans as of July 31, 2022 and the changes in options outstanding during the nine months then ended is presented in the table that follows:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2021		618,858		$	5.31
Options granted		145,001		$	6.94
Options exercised		(60,854	)	$	2.45
Options cancelled		(12,000	)	$	7.58
Options outstanding at July 31, 2022		691,005		$	5.87
Options exercisable at July 31, 2022		357,715		$	6.14
Options vested and expected to vest at July 31, 2022		685,154		$	5.88

Weighted average remaining contractual life of options outstanding as of July 31, 2022: 6.86 years

Weighted average remaining contractual life of options exercisable as of July 31, 2022: 6.12 years

Weighted average remaining contractual life of options vested and expected to vest as of July 31, 2022: 6.87 years

Aggregate intrinsic value of options outstanding at July 31, 2022: $992,000

Aggregate intrinsic value of options exercisable at July 31, 2022: $497,000

Aggregate intrinsic value of options vested and expected to vest at July 31, 2022: $984,000

As of July 31, 2022, $778,000 and $442,000 of expenses with respect to nonvested stock options and restricted shares, respectively, has yet to be recognized but is expected to be recognized over a weighted average period of 2.39 and 1.32 years, respectively.

Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or employees of the Company do not receive any compensation for serving on the Board. For their service as directors beginning in 2020 until the annual meeting of stockholders held in 2021, non-employee directors (i.e., directors who are not employed by the Company as officers or employees) were awarded $50,000 as Board fees, which amount was payable (a) one-half in cash ($25,000), with payments made on a quarterly basis, and (b) one-half through the grant of restricted shares that vest on a quarterly basis. In addition, the Chairman of the Board of Directors and the Chair of each committee of the Board of Directors received an annual retainer of $15,000, also payable in restricted shares, that vests in four equal quarterly installments commencing on September 15, 2020 and ending on the earlier of September 15, 2021 or the next annual meeting of stockholders. In each case, the equity portion of the award was calculated based on the 20-day average trailing closing price of the Company's common stock from the date of grant ($4.34); and cash and stock payments were pro-rated for board members who served less than the entire service period during fiscal 2021.

On September 8, 2021, the Board of Directors determined that the compensation payable to directors as Board fees for the next year ending with the 2022 annual meeting of stockholders was the same as they received in 2021 (i.e., $50,000). In addition, effective September 8, 2021, the Board determined that both Board fees and additional chair fees would be paid half in cash and half in restricted stock, and, in light of the additional work required by the chairs, revised the chair fees as follows, $25,000 for the Chairman of the Board, $25,000 for the Audit Committee Chair, $20,000 for the Compensation Committee Chair, $20,000 for the Strategic Planning and Capital Allocation Chair, and $10,000 for the Nominating & Governance Chair. The cash and restricted stock fees vest in four equal quarterly installments commencing on December 8, 2021, with the restricted stock portion determined by dividing the amount of the fee by the 20-day average trailing closing price of the Company’s common stock from the date of grant ($8.21). Accordingly, on September 8, 2021, Mr. Holdsworth was granted 5,785 shares of restricted stock; Ms. Cefali, 4,871 shares; Mr. Garland, 4,567 shares; and Mr. Fink, 3,044 shares.

Stock option expense

During the three months ended July 31, 2022 and 2021, stock-based compensation expense totaled $191,000 and $374,000, respectively, and was classified in selling and general expenses. During the nine months ended July 31, 2022 and 2021, stock-based compensation expense totaled $498,000 and $634,000, respectively, and was classified in selling and general expenses.

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Note 8 - Concentrations of Credit Risk

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note 8 – Concentrations of credit risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We maintain our cash and cash equivalents with high-credit quality financial institutions. At July 31, 2022, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $3.8 million.

Sales from each customer that were 10% or greater of net sales were as follows:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Wireless provider		16%		21%		23%		11%
Distributor A		*		10%		*		12%
Distributor B		*		10%		*		11%

* Less than 10%

For the nine months ended July 31, 2022, one wireless carrier customer accounted for 23% of net sales and 19% of total net accounts receivable balance. Two customers, both distributors, accounted for approximately 12% and 11% of net sales and had accounts receivable balances that accounted for 8% and 8%, respectively, of the total net accounts receivable balance for the nine months ended July 31, 2021. Although these customers have been on-going major customers of the Company, the written agreements with these customers do not have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.

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Note 9 - Segment Information

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 9 – Segment information

We aggregate operating divisions into two reporting segments that have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; and (5) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of July 31, 2022, we had two segments – the RF Connector segment and the Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

The RF Connector segment consists of two divisions and the Custom Cabling segment consists of four divisions. The six divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly division (“RF Connector division”), Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech, and Microlab. While each segment has similar products and services, there was little overlapping of these services to their customer base. The biggest difference in segments is in the channels of sales: sales or product and services for the RF Connector segment were primarily through the distribution channel, while the Custom Cabling segment sales were through a combination of distribution and direct to the end customer.

Management identifies segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the RF Connector and Microlab divisions constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment.

As reviewed by our chief operating decision maker, we evaluate the performance of each segment based on income or loss before income taxes. We charge depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, right of use assets, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole.

All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the three and nine months ended July 31, 2022 and 2021 (in thousands):

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
United States	$	19,925	$	14,624	$	56,292	$	34,341
Foreign Countries:
Canada		2,218		499		3,179		1,591
Mexico		29		51		106		77
All Other		1,670		83		2,688		307
		3,917		633		5,973		1,975
Totals	$	23,842	$	15,257	$	62,265	$	36,316

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the three months ended July 31, 2022 and 2021 were as follows (in thousands): 

	RF Connector		Custom Cabling
	and		Manufacturing and
2022	Cable Assembly		Assembly		Corporate			Total
Net sales	$	10,495	$	13,347	$	-		$	23,842
Income (loss) before provision for income taxes		998		600		(677	)		911
Depreciation and amortization		390		147		-			537
Total assets		48,351		26,553		12,291			87,195
2021
Net sales	$	3,933	$	11,324	$	-		$	15,257
Income (loss) before provision for income taxes		255		941		2			1,198
Depreciation and amortization		35		143		-			178
Total assets		7,188		22,524		16,702			46,414

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the nine months ended July 31, 2022 and 2021 were as follows (in thousands): 

	RF Connector		Custom Cabling
	and		Manufacturing and
2022	Cable Assembly		Assembly		Corporate			Total
Net sales	$	21,928	$	40,337	$	-		$	62,265
Income (loss) before benefit from income taxes		1,621		1,721		(2,149	)		1,193
Depreciation and amortization		720		435		-			1,155
Total assets		48,351		26,553		12,291			87,195
2021
Net sales	$	11,060	$	25,256	$	-		$	36,316
Income (loss) before benefit from income taxes		2,202		1,090		2,803			6,095
Depreciation and amortization		105		487		-			592
Total assets		7,188		22,524		16,702			46,414

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Note 10 - Income Taxes

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 10 – Income taxes

We use an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate, to determine our quarterly provision (benefit) for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

We recorded income tax provisions of $140,000 and $272,000 for the three months ended July 31, 2022 and 2021, respectively. The effective tax rate was 15.4% for the three months ended July 31, 2022, compared to 15.2% for the three months ended July 31, 2021. For the nine months ended July 31, 2022 and 2021, we recorded income tax provisions of $196,000 and $727,000, respectively. The effective tax rate was 16.4% for the nine months ended July 31, 2022, compared to 22.1% for the nine months ended July 31, 2021. The change in effective tax rate for the nine months ended July 31, 2022 compared to the nine months ended July 31, 2021 was primarily driven by stock compensation windfall benefits and increased benefit from research and development tax credits.

We had $211,000 and $141,000 of unrecognized tax benefits, inclusive of interest and penalties, as of July 31, 2022 and October 31, 2021, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $206,000 as of July 31, 2022.

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Note 11 - Intangible Assets

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	July 31, 2022			October 31, 2021
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(322	)		(289	)
		101			134
Customer relationships (estimated lives 7 - 15 years)		6,058			5,058
Accumulated amortization		(2,978	)		(2,711	)
		3,080			2,347
Backlog (estimated life 1 - 2 years)		327			287
Accumulated amortization		(303	)		(287	)
		24			-
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(135	)		(110	)
		233			258
Tradename (estimated life 15 years)		1,700			-
Accumulated amortization		(47	)		-
		1,653			-
Proprietary Technology (estimated life 10 years)		11,100			-
Accumulated amortization		(463	)		-
		10,637			-
Totals	$	15,728		$	2,739
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the nine months ended July 31, 2022 and the year ended October 31, 2021 was $850,000 and $442,000, respectively. As of July 31, 2022, the weighted-average amortization period for the amortizable intangible assets is 9.72 years.

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Note 12 - Commitments

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 12 – Commitments

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 5 years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ended July 31, 2022 were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	July 31, 2022		July 31, 2022
Operating lease cost	$	477	$	1,048
Short-term lease cost		-		1

Other information related to leases was as follows (in thousands):

	July 31, 2022			October 31, 2021
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	13,967		$	1,453
Weighted Average Remaining Lease Term
Operating leases (in months)		116.40			25.26
Weighted Average Discount Rate
Operating leases		3.75	%		3.54	%

Future minimum lease payments under non-cancellable leases as of July 31, 2022 were as follows:

Year ending October 31,	Operating Leases
2022 (excluding nine months ended July 31, 2022)	$	267
2023		2,286
2024		1,991
2025		1,796
2026		1,835
Thereafter		12,123
Total future minimum lease payments		20,298
Less imputed interest		(3,459	)
Total	$	16,839

Reported as of July 31, 2022	Operating Leases
Other current liabilities	$	1,576
Operating lease liabilities		15,263
Finance lease liabilities		-
Total	$	16,839

As of July 31, 2022, operating lease ROU asset was $14 million and operating lease liability totaled $16.8 million, of which $1.6 million is classified as current. There were no finance leases as of July 31, 2022.

The Cables and Connectors facilities, consisting of four buildings for a total of 21,908 square feet, are leased by RF Industries, Ltd. We renewed the lease effective as of effective August 1, 2022, for 6 month term expiring on January 31, 2023. The monthly rental payment under the new lease currently is $33,957.40 per month.

The Cables and Connectors and C Enterprises facilities will relocate and consolidate into one building consisting of a total86,952 square feet, which is leased by RF Industries, Ltd. The lease will commence December 1, 2022, for a 120-month term expiring November 30, 2032. The monthly rental payments under the lease will be $139,123 per month for the first year and will increase annually. During the three months ended July 31, 2022, the Company obtained possession of the building to begin construction and renovation, which resulted in a lease liability of $15.6 million ($14.9 million in long-term and $726,000 in current lease liability), a right of use asset of $12.8 million and other receivables related to tenant improvement allowance of $2.7 million being recorded. The discount rate used to calculate the lease liability was 3.76%. Further, as a result of the early possession, the Company recognized additional rent expense of $135,000 for the three months ended July 31, 2022.

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Note 13 - Term Loan, Line of Credit and PPP loans

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 13 – Term Loan, Line of credit and PPP loans

In February 2022, we entered into an agreement for a revolving line of credit (the “Revolving Credit Facility”) in the amount of $3.0 million and a $17.0 million term loan (the “Term Loan”, and together with the Revolving Credit Facility, the “Credit Facility”). Amounts outstanding under the Revolving Credit Facility shall bear interest at a rate of 2.0% plus the Bloomberg Short-Term Bank Yield Index Rate (“base interest rate”). The maturity date of the Revolving Credit Facility is March 1, 2024. The Company drew down the entire amount of the Term Loan on March 1, 2022. The primary interest rate for Term Loan is 3.76% per annum. The maturity date of the Term Loan is March 1, 2027.

Borrowings under the Credit Facility are secured by a security interest in certain assets of the Company and contains certain loan covenants. The Credit Facility requires the maintenance of certain financial covenants, including: (i) consolidated debt to EBITDA ratio not to exceed 3.00 to 1.00; (ii) consolidated fixed charge coverage ratio of at least 1.25 to 1.00; and (iii) consolidated minimum EBITDA of at least $600,000 for the discrete quarter ending January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants. 

As of July 31, 2022, we have borrowed $16,192,000 under the Term Loan while we have not borrowed any amounts under the Revolving Credit Facility.

In May 2020, we applied for and received loans under the PPP of the CARES Act totaling approximately $2.8 million. The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at our New York Facility). As of April 30, 2021, the full amount of the PPP Loans has been forgiven and considered paid in full (including applicable interest).

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Note 14 - Cash Dividend and Declared Dividends

9 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Cash Dividend and Declared Dividends [Text Block]

Note 14 – Cash dividend and declared dividends

We did not pay any dividends during the three or nine months ended July 31, 2022, nor did we pay any dividends during the three or nine months ended July 31, 2021.

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Significant Accounting Policies (Policies)	9 Months Ended
	Jul. 31, 2022
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]	Principles of consolidation The accompanying unaudited condensed consolidated financial statements for the periods ended on or before January 31, 2022 include the accounts of RF Industries, Ltd. and our four wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), and Schroff Technologies International, Inc. (“Schrofftech”).  The unaudited condensed consolidated financial statements for the three and nine months ended July 31, 2022 include the accounts of RF Industries, Ltd. and our five wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Inc. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”).  Microlab is a wholly-owned subsidiary that RF Industries, Ltd. acquired on March 1, 2022.  For periods on or before January 31, 2022, references herein to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech and for all periods after January 31, 2022, reference to the “Company” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech and Microlab.  All intercompany balances and transactions have been eliminated in consolidation.
Risks and Uncertainties [Policy Text Block]	Risks and uncertainties In March 2020, the World Health Organization (the “WHO”) declared coronavirus (“COVID-19”) a pandemic emergency. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. During the periods covered by this report, the operations at all locations were affected intermittently as some of our employee schedules were impacted, and as certain customers scaled back operations or otherwise delayed or deferred orders for our products. Because of the impact that COVID-19 had on our operations, in May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (“CARES Act”) totaling approximately $2.8 million (“PPP Loans”). In March 2021, the Internal Revenue Service (“IRS”) released Notice 2021-20, which retroactively eliminated the restriction that prevented employers who received a PPP loan from qualifying for the Employee Retention Credit (“ERC”), which is a refundable tax credit against certain employment taxes. Upon determination that the employer has complied with all of the conditions required to receive the credit, a receivable is recognized and the credit reduces salaries and wages. For the fiscal year ended October 31, 2021, we qualified and filed to claim the ERC and have recorded this as an other receivable classified in other current assets. As of July 31, 2022, the ERC in other receivable classified in other current assets were $1.7 million. We considered the impact of the COVID-19 related economic slowdown on our evaluation of goodwill and non-amortizable intangibles impairment indicators as of July 31, 2022. Although no impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material.
Fair Value Measurement, Policy [Policy Text Block]	Fair value measurement We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets; Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.  As of July 31, 2022 and October 31, 2021, the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximated their carrying value due to their short-term nature. See Note 5 for discussion on the fair value of other current liabilities.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent accounting standards Recently issued accounting pronouncements not yet adopted: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact the adoption of this new standard will have on our consolidated financial statements. Recently issued accounting pronouncements adopted: In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The guidance also still gives entities the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted the standard as of November 1, 2020, the beginning of our fiscal 2021, applying this prospectively. The adoption of the standard did not result in an impairment charge as of July 31, 2022 or October 31, 2021. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new ASU also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates. These changes aim to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. The guidance was effective for the Company beginning on November 1, 2021 and prescribes different transition methods for the various provisions. The adoption of this standard had no material impact on the Company’s financial statements or related disclosures.

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Note 2 - Business Acquisition (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Revenue	$	23,842	$	19,633	$	68,369	$	47,621
Net income		771		1,326		1,510		5,992
Earnings per share
Basic	$	0.08	$	0.13	$	0.15	$	0.60
Diluted	$	0.08	$	0.13	$	0.15	$	0.59
Basic		10,127,244		9,979,578		10,100,767		9,955,193
Diluted		10,238,932		10,150,396		10,233,209		10,131,172

Microlab/FXR LLC [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Cash consideration paid at closing	$	24,250,000
Post-closing adjustment		225,000
Total consideration transferred	$	24,475,000

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Current assets	$	6,924,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,215,000
Non-interest bearing liabilities		(1,702,000	)
Net assets acquired at fair value	$	24,475,000

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Note 3 - Inventories and Major Vendors (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	July 31, 2022		October 31, 2021
Raw materials and supplies	$	12,116	$	6,422
Work in process		361		381
Finished goods		6,684		4,376
Totals	$	19,161	$	11,179

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Note 4 - Other Current Assets (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Other Current Assets [Table Text Block]

	July 31, 2022		October 31, 2021
Employee retention credit ("ERC")	$	1,685	$	1,774
Prepaid taxes		537		314
Prepaid expense		805		439
Reimbursement for tenant improvements		2,741		-
Other		879		366
Totals
	$	6,647	$	2,893

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Note 5 - Accrued Expenses (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	July 31, 2022		October 31, 2021
Wages payable	$	2,851	$	2,607
Accrued receipts		2,068		1,711
Other accrued expenses		1,994		716
Totals	$	6,913	$	5,034

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Note 6 - Earnings Per Share (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Weighted average shares outstanding for basic earnings per share		10,127,244		9,979,578		10,100,767		9,955,193
Add effects of potentially dilutive securities-assumed exercise of stock options		111,688		170,818		132,442		175,979
Weighted average shares outstanding for diluted earnings per share		10,238,932		10,150,396		10,233,209		10,131,172

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Note 7 - Stock-based Compensation and Equity Transactions (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Nine Months Ended July 31,
	2022			2021
Risk-free interest rate		1.47	%		0.58	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (years)		7.00			7.00
Volatility factor		53.36	%		52.34	%

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2021		618,858		$	5.31
Options granted		145,001		$	6.94
Options exercised		(60,854	)	$	2.45
Options cancelled		(12,000	)	$	7.58
Options outstanding at July 31, 2022		691,005		$	5.87
Options exercisable at July 31, 2022		357,715		$	6.14
Options vested and expected to vest at July 31, 2022		685,154		$	5.88

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Note 8 - Concentrations of Credit Risk (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
Wireless provider		16%		21%		23%		11%
Distributor A		*		10%		*		12%
Distributor B		*		10%		*		11%

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Note 9 - Segment Information (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

	Three Months Ended July 31,				Nine Months Ended July 31,
	2022		2021		2022		2021
United States	$	19,925	$	14,624	$	56,292	$	34,341
Foreign Countries:
Canada		2,218		499		3,179		1,591
Mexico		29		51		106		77
All Other		1,670		83		2,688		307
		3,917		633		5,973		1,975
Totals	$	23,842	$	15,257	$	62,265	$	36,316

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	RF Connector		Custom Cabling
	and		Manufacturing and
2022	Cable Assembly		Assembly		Corporate			Total
Net sales	$	10,495	$	13,347	$	-		$	23,842
Income (loss) before provision for income taxes		998		600		(677	)		911
Depreciation and amortization		390		147		-			537
Total assets		48,351		26,553		12,291			87,195
2021
Net sales	$	3,933	$	11,324	$	-		$	15,257
Income (loss) before provision for income taxes		255		941		2			1,198
Depreciation and amortization		35		143		-			178
Total assets		7,188		22,524		16,702			46,414

	RF Connector		Custom Cabling
	and		Manufacturing and
2022	Cable Assembly		Assembly		Corporate			Total
Net sales	$	21,928	$	40,337	$	-		$	62,265
Income (loss) before benefit from income taxes		1,621		1,721		(2,149	)		1,193
Depreciation and amortization		720		435		-			1,155
Total assets		48,351		26,553		12,291			87,195
2021
Net sales	$	11,060	$	25,256	$	-		$	36,316
Income (loss) before benefit from income taxes		2,202		1,090		2,803			6,095
Depreciation and amortization		105		487		-			592
Total assets		7,188		22,524		16,702			46,414

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Note 11 - Intangible Assets (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Schedule of Finite-lived and Indefinite-lived Intangible Assets [Table Text Block]

	July 31, 2022			October 31, 2021
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(322	)		(289	)
		101			134
Customer relationships (estimated lives 7 - 15 years)		6,058			5,058
Accumulated amortization		(2,978	)		(2,711	)
		3,080			2,347
Backlog (estimated life 1 - 2 years)		327			287
Accumulated amortization		(303	)		(287	)
		24			-
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(135	)		(110	)
		233			258
Tradename (estimated life 15 years)		1,700			-
Accumulated amortization		(47	)		-
		1,653			-
Proprietary Technology (estimated life 10 years)		11,100			-
Accumulated amortization		(463	)		-
		10,637			-
Totals	$	15,728		$	2,739
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

XML

Note 12 - Commitments (Tables)

9 Months Ended

Jul. 31, 2022

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended		Nine Months Ended
	July 31, 2022		July 31, 2022
Operating lease cost	$	477	$	1,048
Short-term lease cost		-		1

Lessee, Leases, Other Information [Table Text Block]

	July 31, 2022			October 31, 2021
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	13,967		$	1,453
Weighted Average Remaining Lease Term
Operating leases (in months)		116.40			25.26
Weighted Average Discount Rate
Operating leases		3.75	%		3.54	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year ending October 31,	Operating Leases
2022 (excluding nine months ended July 31, 2022)	$	267
2023		2,286
2024		1,991
2025		1,796
2026		1,835
Thereafter		12,123
Total future minimum lease payments		20,298
Less imputed interest		(3,459	)
Total	$	16,839

Reported as of July 31, 2022	Operating Leases
Other current liabilities	$	1,576
Operating lease liabilities		15,263
Finance lease liabilities		-
Total	$	16,839

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Note 1 - Unaudited Interim Condensed Consolidated Financial Statements (Details Textual) - USD ($) $ in Thousands		1 Months Ended
	May 01, 2020	May 31, 2020	Jul. 31, 2022	Oct. 31, 2021
Employee Retention Tax Credit Receivable			$ 1,685	$ 1,774
Other Current Assets [Member]
Employee Retention Tax Credit Receivable			$ 1,700
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Long-Term Debt, Total	$ 2,800	$ 2,800

XML

Note 2 - Business Acquisition (Details Textual) - USD ($)		3 Months Ended	6 Months Ended
	Mar. 01, 2022	Jul. 31, 2022	Jul. 31, 2022	Feb. 28, 2022	Feb. 25, 2022
Bank of America, N.A. [Member]
Debt Instrument, Face Amount				$ 17,000,000.0	$ 17,000,000
Microlab/FXR LLC [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Combination, Consideration Transferred, Before Post-closing Adjustment	$ 24,250,000
Payments for Previous Acquisition	$ 225,000	$ 225,000
Microlab/FXR LLC [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs			$ 1,300,000
Microlab/FXR LLC [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	1 year
Microlab/FXR LLC [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	10 years

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Note 2 - Business Acquisition - Components of the Purchase Price (Details) - Microlab/FXR LLC [Member] - USD ($)		3 Months Ended
	Mar. 01, 2022	Jul. 31, 2022
Cash consideration paid at closing	$ 24,250,000
Post-closing adjustment	225,000	$ 225,000
Total consideration transferred	$ 24,475,000

XML

Note 2 - Business Acquisition - Allocation of Estimated Purchase Price (Details) - Microlab/FXR LLC [Member]	Mar. 01, 2022 USD ($)
Current assets	$ 6,924,000
Property and equipment	198,000
Intangible assets	13,840,000
Goodwill	5,215,000
Non-interest bearing liabilities	(1,702,000)
Net assets acquired at fair value	$ 24,475,000

XML

Note 2 - Business Acquisition - Unaudited Pro Forma Financial Information (Details) - Microlab/FXR LLC [Member] - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Revenue	$ 23,842	$ 19,633	$ 68,369	$ 47,621
Net income	$ 771	$ 1,326	$ 1,510	$ 5,992
Basic (in dollars per share)	$ 0.08	$ 0.13	$ 0.15	$ 0.60
Diluted (in dollars per share)	$ 0.08	$ 0.13	$ 0.15	$ 0.59
Basic (in shares)	10,127,244	9,979,578	10,100,767	9,955,193
Diluted (in shares)	10,238,932	10,150,396	10,233,209	10,131,172

XML

Note 3 - Inventories and Major Vendors (Details Textual) - Supplier Concentration Risk [Member] - Inventory Purchases [Member]	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Number of Major Vendors	1	1	1	0
One Vendor [Member]
Concentration Risk, Percentage	17.00%	27.00%	28.00%	17.00%

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Note 3 - Inventories and Major Vendors - Inventories (Details) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
Raw materials and supplies	$ 12,116	$ 6,422
Work in process	361	381
Finished goods	6,684	4,376
Inventories	$ 19,161	$ 11,179

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Note 4 - Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
Employee retention credit ("ERC")	$ 1,685	$ 1,774
Prepaid taxes	537	314
Prepaid expense	805	439
Reimbursement for tenant improvements	2,741	0
Other	879	366
Other Assets, Current	$ 6,647	$ 2,893

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Note 5 - Accrued Expenses and Other Current Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
Wages payable	$ 2,851	$ 2,607
Accrued receipts	2,068	1,711
Other accrued expenses	1,994	716
Totals	$ 6,913	$ 5,034

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Note 6 - Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	471,464	298,015	482,889	371,338

XML

Note 6 - Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Basic (in shares)	10,127,244	9,979,578	10,100,767	9,955,193
Add effects of potentially dilutive securities-assumed exercise of stock options (in shares)	111,688	170,818	132,442	175,979
Diluted (in shares)	10,238,932	10,150,396	10,233,209	10,131,172

XML

Note 7 - Stock-based Compensation and Equity Transactions (Details Textual) - USD ($)						3 Months Ended		9 Months Ended
	May 02, 2022	Jan. 10, 2022	Sep. 08, 2021	Jul. 16, 2021	Jan. 12, 2021	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Sep. 15, 2020
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term						6 years 10 months 9 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term						6 years 1 month 13 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term						6 years 10 months 13 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value						$ 992,000		$ 992,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value						497,000		497,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value						984,000		984,000
Selling, General and Administrative Expenses [Member]
Share-Based Payment Arrangement, Expense						191,000	$ 374,000	498,000	$ 634,000
Share-Based Payment Arrangement, Nonemployee [Member]
Nonemployee Director, Annual Compensation			$ 50,000							$ 50,000
Restricted Stock [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total						$ 442,000		$ 442,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition						1 year 3 months 25 days
Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross	39,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value								$ 3.77	$ 3.38
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total						$ 778,000		$ 778,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition						2 years 4 months 20 days
One Manager and Three Officers [Member] | Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period		39,666			33,500
One Manager and Three Officers [Member] | One Manager and Three Officers [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross		106,001			67,000
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period		4 years			4 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period					10 years
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 12, 2022 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage					25.00%
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 10, 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage		25.00%
One Manager and Three Officers [Member] | Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period		10 years
Chief Executive Officer [Member] | Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross				50,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period				10 years
Non-employee Directors and Chairperson of Committee on Board [Member]
Annual Payable, Additional Compensation										$ 15,000
Share Price, 20 Day Average (in dollars per share)			$ 8.21							$ 4.34
Non-employee Directors and Chairman of the Board [Member]
Annual Payable, Additional Compensation			$ 25,000
Non-employee Directors and Audit Committee Chair [Member]
Annual Payable, Additional Compensation			25,000
Non-employee Directors and Compensation Committee Chair [Member]
Annual Payable, Additional Compensation			20,000
Non-employee Directors and Strategic Planning and Capital Allocation Chair [Member]
Annual Payable, Additional Compensation			20,000
Non-employee Directors and Nominating & Governance Chair [Member]
Annual Payable, Additional Compensation			$ 10,000
Mr. Holdsworth [Member] | Restricted Stock [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			5,785
Ms. Cefali [Member] | Restricted Stock [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			4,871
Mr. Garland [Member] | Restricted Stock [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			4,567
Mr. Fink [Member] | Restricted Stock [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			3,044

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Note 7 - Stock-based Compensation and Equity Transactions - Assumptions (Details)	9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Risk-free interest rate	1.47%	0.58%
Dividend yield	0.00%	0.00%
Expected life of the option (years) (Year)	7 years	7 years
Volatility factor	53.36%	52.34%

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Note 7 - Stock-based Compensation and Equity Transactions - Options Outstanding (Details) - $ / shares	9 Months Ended
	Jul. 31, 2022
Outstanding at beginning of year (in shares)	618,858
Options outstanding at end of year, weighted average exercise price (in dollars per share)	$ 5.31
Options granted (in shares)	145,001
Options granted, weighted average exercise price (in dollars per share)	$ 6.94
Options exercised (in shares)	(60,854)
Options exercised, weighted average exercise price (in dollars per share)	$ 2.45
Options cancelled (in shares)	(12,000)
Options canceled or expired, weighted average exercise price (in dollars per share)	$ 7.58
Options outstanding at end of year (in shares)	691,005
Options outstanding at end of year, weighted average exercise price (in dollars per share)	$ 5.87
Options exercisable at end of year (in shares)	357,715
Options exercisable, weighted average exercise price (in dollars per share)	$ 6.14
Options vested and expected to vest at end of year (in shares)	685,154
Options vested and expected to vest, weighted average exercise price (in dollars per share)	$ 5.88

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Note 8 - Concentrations of Credit Risk (Details Textual) - USD ($) $ in Millions	9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Cash, Uninsured Amount	$ 3.8
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Carrier Customer [Member]
Concentration Risk, Percentage	23.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Distributor One [Member]
Concentration Risk, Percentage		12.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Distributor Two [Member]
Concentration Risk, Percentage		11.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Wireless Carrier Customer [Member]
Concentration Risk, Percentage	19.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor One [Member]
Concentration Risk, Percentage		8.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor Two [Member]
Concentration Risk, Percentage		8.00%

XML

Note 8 - Concentrations of Credit Risk - Sales (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member]		3 Months Ended		9 Months Ended
		Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Wireless Provider [Member]
Concentration Risk, Percentage		16.00%	21.00%	23.00%	11.00%
Distributor A [Member]
Concentration Risk, Percentage	[1]		10.00%		12.00%
Distributor B [Member]
Concentration Risk, Percentage			10.00%		11.00%

[1] Less than 10%

XML

Note 9 - Segment Information (Details Textual)	9 Months Ended
	Jul. 31, 2022
Number of Reportable Segments	2

XML

Note 9 - Segment Information - Sales by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Net sales	$ 23,842	$ 15,257	$ 62,265	$ 36,316
UNITED STATES
Net sales	19,925	14,624	56,292	34,341
CANADA
Net sales	2,218	499	3,179	1,591
MEXICO
Net sales	29	51	106	77
All Other Foreign Countries [Member]
Net sales	1,670	83	2,688	307
Non-US [Member]
Net sales	$ 3,917	$ 633	$ 5,973	$ 1,975

XML

Note 9 - Segment Information - Net Sales, Income Before Provision for Income Taxes and Other Related Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021
Net sales	$ 23,842	$ 15,257	$ 62,265	$ 36,316
Income (loss) before provision for income taxes	911	1,198	1,193	6,095
Depreciation and amortization	537	178	1,155	592
Total assets	87,195	46,414	87,195	46,414	$ 49,648
Corporate, Non-Segment [Member]
Net sales	0	0	0	0
Income (loss) before provision for income taxes	(677)	2	(2,149)	2,803
Depreciation and amortization	0	0	0	0
Total assets	12,291	16,702	12,291	16,702
RF Connector and Cable Assembly [Member] | Operating Segments [Member]
Net sales	10,495	3,933	21,928	11,060
Income (loss) before provision for income taxes	998	255	1,621	2,202
Depreciation and amortization	390	35	720	105
Total assets	48,351	7,188	48,351	7,188
Custom Cabling Manufacturing and Assembly [Member] | Operating Segments [Member]
Net sales	13,347	11,324	40,337	25,256
Income (loss) before provision for income taxes	600	941	1,721	1,090
Depreciation and amortization	147	143	435	487
Total assets	$ 26,553	$ 22,524	$ 26,553	$ 22,524

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Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021
Income Tax Expense (Benefit), Total	$ 140,000	$ 272,000	$ 196,000	$ 727,000
Effective Income Tax Rate Reconciliation, Percent, Total	15.40%	15.20%	16.40%	22.10%
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 211,000		$ 211,000		$ 141,000
Unrecognized Tax Benefits, Ending Balance	$ 206,000		$ 206,000

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Note 11 - Intangible Assets (Details Textual) - USD ($)	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021
Amortization of Intangible Assets	$ 850,000	$ 442,000
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life (Year)	9 years 8 months 19 days

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Note 11 - Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
Amortizable intangible assets, net	$ 15,728	$ 2,739
Non-amortizable intangible assets, trademarks	1,174	1,174
Trademarks [Member]
Non-amortizable intangible assets, trademarks	1,174	1,174
Noncompete Agreements [Member]
Amortizable intangible assets, gross	423	423
Accumulated amortization	(322)	(289)
Amortizable intangible assets, net	101	134
Customer Relationships [Member]
Amortizable intangible assets, gross	6,058	5,058
Accumulated amortization	(2,978)	(2,711)
Amortizable intangible assets, net	3,080	2,347
Order or Production Backlog [Member]
Amortizable intangible assets, gross	327	287
Accumulated amortization	(303)	(287)
Amortizable intangible assets, net	24	0
Patents [Member]
Amortizable intangible assets, gross	368	368
Accumulated amortization	(135)	(110)
Amortizable intangible assets, net	233	258
Trade Names [Member]
Amortizable intangible assets, gross	1,700	0
Accumulated amortization	(47)	0
Amortizable intangible assets, net	1,653	0
Technology-Based Intangible Assets [Member]
Amortizable intangible assets, gross	11,100	0
Accumulated amortization	(463)	0
Amortizable intangible assets, net	$ 10,637	$ 0

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Note 11 - Intangible Assets - Intangible Assets-parentheticals (Details)	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021
Order or Production Backlog [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	1 year	1 year

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Note 11 - Intangible Assets - Intangible Assets-parentheticals (Details) (Parentheticals)	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021
Noncompete Agreements [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	5 years	5 years
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	7 years	7 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	15 years	15 years
Order or Production Backlog [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	1 year	1 year
Order or Production Backlog [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	2 years	2 years
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	10 years	10 years
Patents [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	14 years	14 years
Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	15 years	15 years
Technology-Based Intangible Assets [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	10 years	10 years

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Note 12 - Commitments (Details Textual)	3 Months Ended	9 Months Ended
	Jul. 31, 2022 USD ($) ft²	Jul. 31, 2022 USD ($) ft²	Apr. 30, 2022 USD ($)	Oct. 31, 2021 USD ($)
Lessee, Operating Lease, Remaining Lease Term (Year)	5 years	5 years
Operating Lease, Right-of-Use Asset	$ 13,967,000	$ 13,967,000	$ 14,000,000	$ 1,453,000
Operating Lease, Liability, Total	16,839,000	16,839,000	16,800,000
Operating Lease, Liability, Current	1,576,000	1,576,000		832,000
Operating Lease, Liability, Noncurrent	15,263,000	15,263,000		$ 675,000
Tenant Improvement Allowance [Member]
Other Receivables	2,700,000	2,700,000
Cables and Connectors Facilities [Member[
Lessee, Operating Lease, Monthly Rent	$ 33,957	$ 33,957
Area of Real Estate Property (Square Foot) | ft²	21,908	21,908
Lessee, Operating Lease, Renewal Term (Month)	6 months	6 months
Cables and Connectors and C Enterprises Facilities [Member]
Operating Lease, Right-of-Use Asset	$ 12,800,000	$ 12,800,000
Operating Lease, Liability, Total	15,600,000	15,600,000
Operating Lease, Liability, Current	$ 726,000	$ 726,000
Area of Real Estate Property (Square Foot) | ft²	86,952	86,952
Lessee, Operating Lease, Term of Contract (Month)	120 months	120 months
Lessee, Operating Lease, Monthly Rent Payment		$ 139,123
Operating Lease, Liability, Noncurrent	$ 14,900,000	$ 14,900,000
Lessee, Operating Lease, Discount Rate	3.76%	3.76%
Operating Lease, Expense	$ 135,000
Other Current Liabilities [Member]
Operating Lease, Liability, Current	1,576,000	$ 1,576,000	$ 1,600,000
K and K Unlimited [Member]
Lessee, Operating Lease, Monthly Rent	$ 16,000	$ 16,000
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	1 year	1 year
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	10 years	10 years

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Note 12 - Commitments - Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jul. 31, 2022	Jul. 31, 2022
Operating lease cost	$ 477	$ 1,048
Short-term lease cost	$ 0	$ 1

XML

Note 12 - Commitments - Other Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021
Operating leases	$ 13,967	$ 1,453
Operating leases (in months) (Month)	116 months 12 days	25 months 7 days
Operating leases	3.75%	3.54%

XML

Note 12 - Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jul. 31, 2022	Apr. 30, 2022	Oct. 31, 2021
2022 (excluding nine months ended July 31, 2022)	$ 267
Current portion of operating lease liabilities	1,576		$ 832
Lessee, Operating Lease, Liability, to be Paid, Year One	2,286
Operating lease liabilities	15,263		$ 675
Lessee, Operating Lease, Liability, to be Paid, Year Two	1,991
Finance lease liabilities	0
Lessee, Operating Lease, Liability, to be Paid, Year Three	1,796
Total	16,839	$ 16,800
Lessee, Operating Lease, Liability, to be Paid, Year Four	1,835
Thereafter	12,123
Total future minimum lease payments	20,298
Less imputed interest	(3,459)
Other Current Liabilities [Member]
Current portion of operating lease liabilities	$ 1,576	$ 1,600

XML

Note 13 - Term Loan, Line of Credit and PPP loans (Details Textual)		1 Months Ended		9 Months Ended
	May 01, 2020 USD ($)	Feb. 28, 2022 USD ($)	May 31, 2020 USD ($)	Jul. 31, 2022 USD ($)	Jul. 31, 2021 USD ($)	Feb. 25, 2022 USD ($)
Paycheck Protection Program CARES Act [Member]
Term Loan	$ 2,800,000		$ 2,800,000
Term Loan [Member]
Debt Instrument, Interest Rate, Stated Percentage		3.76%
Long-Term Debt, Gross				$ 16,192,000
Term Loan				$ 17,000,000	$ 0
Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate		2.00%
Bank of America, N.A. [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 3,000,000.0
Debt Instrument, Face Amount		$ 17,000,000.0				$ 17,000,000
Debt Instrument, Covenant, Maximum EBITDA Ratio				3.00
Debt Instrument, Covenant, Fixed Charge Coverage Ratio				1.25
Dent Instrument, Covenant Required Ebitda				$ 600,000

XML

Note 14 - Cash Dividend and Declared Dividends (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Payments of Ordinary Dividends, Common Stock	$ 0	$ 0	$ 0	$ 0