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 April 30, 2023

☐ 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.)
16868 Via Del Campo Court, Suite 200 San Diego, California	92127
(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 (§232.405 of this chapter) 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 June 14, 2023 was 10,290,377.

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)

	April 30,		October 31,
	2023		2022
	(Unaudited)		(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,326	$	4,532
Trade accounts receivable, net of allowance for doubtful accounts of $237 and $126, respectively		14,493		14,812
Inventories		20,386		21,054
Other current assets		1,823		5,849
TOTAL CURRENT ASSETS		41,028		46,247
Property and equipment:
Equipment and tooling		4,634		4,497
Furniture and office equipment		4,612		3,447
		9,246		7,944
Less accumulated depreciation		5,078		4,771
Total property and equipment, net		4,168		3,173
Operating lease right of use assets, net		12,408		13,480
Goodwill		8,085		8,085
Amortizable intangible assets, net		14,439		15,296
Non-amortizable intangible assets		1,174		1,174
Deferred tax assets		2,522		1,816
Other assets		295		295
TOTAL ASSETS	$	84,119	$	89,566

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Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	April 30,		October 31,
	2023		2022
	(Unaudited)		(Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	6,105	$	5,652
Accrued expenses		5,373		8,814
Current portion of Term Loan		2,424		2,424
Current portion of operating lease liabilities		1,692		1,887
Income taxes payable		298		759
TOTAL CURRENT LIABILITIES		15,892		19,536
Operating lease liabilities		14,493		15,025
Term Loan, net of current portion of debt issuance cost		11,929		13,136
TOTAL LIABILITIES		42,314		47,697
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,290,377 and 10,193,287 shares issued and outstanding at April 30, 2023 and October 31, 2022, respectively		103		102
Additional paid-in capital		25,634		25,118
Retained earnings		16,068		16,649
TOTAL STOCKHOLDERS' EQUITY		41,805		41,869
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	84,119	$	89,566

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 April 30,						Six Months Ended April 30,
	2023			2022			2023			2022
Net sales	$	22,298		$	21,505		$	40,642		$	38,423
Cost of sales		16,178			15,425			29,435			28,259
Gross profit		6,120			6,080			11,207			10,164
Operating expenses:
Engineering		882			857			1,845			1,310
Selling and general		4,749			4,477			10,042			8,470
Total operating expenses		5,631			5,334			11,887			9,780
Operating income (loss)		489			746			(680	)		384
Other expense		(72	)		(107	)		(225	)		(102	)
Income (loss) before (benefit) provision for income taxes		417			639			(905	)		282
(Benefit) provision for income taxes		(164	)		136			(324	)		56
Consolidated net income (loss)	$	581		$	503		$	(581	)	$	226
Earnings (loss) per share:
Basic	$	0.06		$	0.05		$	(0.06	)	$	0.02
Diluted	$	0.06		$	0.05		$	(0.06	)	$	0.02
Weighted average shares outstanding:
Basic		10,290,911			10,107,687			10,256,158			10,087,309
Diluted		10,327,271			10,243,636			10,256,158			10,229,704

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 April 30, 2023
						Additional
	Common Stock					Paid-in			Retained
	Shares			Amount		Capital			Earnings		Total
Balance, January 31, 2023		10,291,067		$	103	$	25,408		$	15,487	$	40,998
Stock-based compensation expense		-			-		229			-		229
Tax withholding related to vesting of restricted stock		(690	)		-		(3	)		-		(3	)
Consolidated net income		-			-		-			581		581
Balance, April 30, 2023		10,290,377		$	103	$	25,634		$	16,068	$	41,805

	For the Six Months Ended April 30, 2023
						Additional
	Common Stock					Paid-in			Retained
	Shares			Amount		Capital			Earnings			Total
Balance, November 1, 2022		10,193,287		$	102	$	25,118		$	16,649		$	41,869
Exercise of stock options		45,000			-		85			-			85
Stock-based compensation expense		-			-		441			-			441
Issuance of restricted stock		54,092			1		-			-			1
Tax withholding related to vesting of restricted stock		(2,002	)		-		(10	)		-			(10	)
Consolidated net loss		-			-		-			(581	)		(581	)
Balance, April 30, 2023		10,290,377		$	103	$	25,634		$	16,068		$	41,805

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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 April 30, 2022
						Additional
	Common Stock					Paid-In			Retained
	Shares			Amount		Capital			Earnings		Total
Balance, January 31, 2022		10,096,175		$	101	$	24,427		$	14,924	$	39,452
Exercise of stock options		22,927			1		56			-		57
Stock-based compensation expense		-			-		168			-		168
Tax withholding related to vesting of restricted stock		(417	)		-		(3	)		-		(3	)
Consolidated net income		-			-		-			503		503
Balance, April 30, 2022		10,118,685		$	102	$	24,648		$	15,427	$	40,177

	For the Six Months ended April 30, 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		22,927			1		56			-		57
Stock-based compensation expense		-			-		307			-		307
Issuance of restricted stock		39,666			-		-			-		-
Tax withholding related to vesting of restricted stock		(2,479	)		-		(16	)		-		(16	)
Consolidated net income		-			-		-			226		226
Balance, April 30, 2022		10,118,685		$	102	$	24,648		$	15,427	$	40,177

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)

	Six Months Ended April 30,
	2023			2022
OPERATING ACTIVITIES:
Consolidated net (loss) income	$	(581	)	$	226
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Bad debt expense		80			6
Depreciation and amortization		1,165			618
Stock-based compensation expense		441			307
Amortization of debt issuance cost		4			1
Tax payments related to shares cancelled for vested restricted stock awards		(10	)		(16	)
Deferred income taxes		(706	)		64
Changes in operating assets and liabilities:
Trade accounts receivable		240			1,692
Inventories		668			(3,987	)
Other current assets		4,026			(1,026	)
Right of use assets		346			(25	)
Other long-term assets		-			(363	)
Accounts payable		454			(1,579	)
Accrued expenses		(3,441	)		2,443
Income taxes payable		(462	)		-
Net cash provided by (used in) operating activities		2,224			(1,639	)
INVESTING ACTIVITIES:
Capital expenditures		(1,303	)		(268	)
Purchase of Microlab, net of cash acquired ($33)		-			(24,217	)
Net cash used in investing activities		(1,303	)		(24,485	)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options		85			57
Debt issuance cost		-			(32	)
Term Loan payments		(1,212	)		(202	)
Term Loan		-			17,000
Net cash (used in) provided by financing activities		(1,127	)		16,823
Net decrease in cash and cash equivalents		(206	)		(9,301	)
Cash and cash equivalents, beginning of period		4,532			13,053
Cash and cash equivalents, end of period	$	4,326		$	3,752
Supplemental cash flow information – income taxes paid	$	-		$	340

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 for a fair statement of the financial position. Information included in the condensed consolidated balance sheet as of October 31, 2022 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, 2022 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2022 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the six months ended April 30, 2023 are not necessarily indicative of the results that may be expected for the year ended October 31, 2023. 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 six months ended April 30, 2023 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”, “we”, “us”, or “our” 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”, “we”, “us”, or “our” 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.

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 April 30, 2023 and October 31, 2022, the carrying amounts reflected in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued 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 unaudited condensed consolidated financial statements.

8

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 radio frequency 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 condensed 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 15 years. Total costs, as of October 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	$	6,620,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,617,000
Noninterest-bearing liabilities		(1,800,000	)
Net assets acquired at fair value	$	24,475,000

The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if the acquisition 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.

9

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

	Three Months Ended April 30,				Six Months Ended April 30,
	2023		2022		2023			2022
Revenue	$	22,298	$	22,559	$	40,642		$	44,527
Net income (loss)		581		429		(581	)		739
Earnings (loss) per share
Basic	$	0.06	$	0.04	$	(0.06	)	$	0.07
Diluted	$	0.06	$	0.04	$	(0.06	)	$	0.07
Basic		10,290,911		10,107,687		10,256,158			10,087,309
Diluted		10,327,271		10,243,636		10,256,158			10,229,704

Note 3 – 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 April 30, 2023, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $3.1 million.

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

	Three Months Ended April 30,						Six Months Ended April 30,
	2023			2022			2023			2022
Wireless provider		20	%		24	%		18	%		28	%

For the three months ended April 30, 2023, a single wireless carrier customer accounted for 20% of net sales and 24% of total net accounts receivable balance. For the six months ended April 30, 2023, the same wireless carrier customer accounted for 18% of net sales and 24% of total net accounts receivable balance; for the three months ended April 30, 2022, it accounted for 24% of net sales and 21% of total net accounts receivable balance; for the six months ended April 30, 2022, it accounted for 28% of net sales and 21% of total net accounts receivable balance. Although this customer has been a significant customer of the Company, the written agreements with this customer do not have any minimum purchase obligations and this customer could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from this customer or the loss of this customer could significantly reduce our future revenues and profits.

Note 4 – 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):

	April 30, 2023		October 31, 2022
Raw materials and supplies	$	14,485	$	15,238
Work in process		543		439
Finished goods		5,358		5,377
Totals	$	20,386	$	21,054

For the three months ended April 30, 2023, two vendors accounted for 27% and 12% of inventory purchases. For the three months ended April 30, 2022, one vendor accounted for 35% of inventory purchases. For the six months ended April 30, 2023, one vendor accounted for 20% of inventory purchases and one vendor accounted for 32% of inventory purchases for the six months ended April 30, 2022. We have arrangements with these vendors to purchase products based on purchase orders that we periodically issue.

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Note 5 – Other current assets

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

	April 30, 2023		October 31, 2022
Employee retention credit ("ERC")	$	396	$	1,636
Prepaid expense		1,070		972
Reimbursement for tenant improvements		-		2,810
Other		357		431
Totals	$	1,823	$	5,849

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“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 April 30, 2023, the remaining portion of the ERC that we have not yet received is included as other receivables in other current assets.

Note 6 – Accrued expenses and other current liabilities

Accrued expenses consist of the following (in thousands):

	April 30, 2023		October 31, 2022
Wages payable	$	2,374	$	3,634
Accrued receipts		1,713		2,136
Other accrued expenses		1,286		1,847
Tenant improvements payable		-		1,197
Totals	$	5,373	$	8,814

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

Note 7 – Loss per share

Basic loss per share is computed by dividing net loss 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. During the three months ended April 30, 2023 and 2022, we reported a net loss, and in periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect. Potentially issuable securities that are out-of-the-money totaled 755,229 and 420,223 shares for the three months ended April 30, 2023 and 2022, respectively, and 745,229 and 459,889 shares for the six months ended April 30, 2023 and 2022, respectively, and 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 April 30,				Six Months Ended April 30,
	2023		2022		2023		2022
Weighted average shares outstanding for basic earnings per share		10,290,911		10,107,687		10,256,158		10,087,309
Add effects of potentially dilutive securities-assumed exercise of stock options		36,360		135,949		-		142,395
Weighted average shares outstanding for diluted earnings per share		10,327,271		10,243,636		10,256,158		10,229,704

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Note 8 – Stock-based compensation and equity transactions

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 vested on January 10, 2023; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. All incentive stock options expire 10 years from the date of grant.

On January 10, 2023, we granted a total of 54,092 shares of restricted stock and 108,181 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, 2024; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. Also on January 10, 2023, we granted another manager 50,000 incentive stock options. These options shall vest in five equal installments on each of the next five anniversaries of January 10, 2023. All incentive stock options expire 10 years from the date of grant.

No other shares or options were granted to company employees during the three and six months ended April 30, 2023 and 2022.

The weighted average fair value of employee stock options that were granted during the six months ended April 30, 2023 and 2022 was estimated to be $3.21 and $3.84, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Six Months Ended April 30,
	2023			2022
Risk-free interest rate		3.76	%		1.23	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (in years)	7.00			7.00
Volatility factor		54.30	%		53.35	%

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 2023 and 2022 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 to our audited financial statements included in our Annual Report on Form 10-K for the year ended October 31, 2022. A summary of the status of the options granted under our stock option plans as of April 30, 2023 and the changes in options outstanding during the six months then ended is presented in the table that follows:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2022		691,005		$	5.87
Options granted		158,181		$	5.46
Options exercised		(45,000	)	$	1.90
Options cancelled		-		$	-
Options outstanding at April 30, 2023		804,186		$	6.01
Options exercisable at April 30, 2023		405,840		$	6.68
Options vested and expected to vest at April 30, 2023		798,697		$	6.02

Weighted average remaining contractual life of options outstanding as of April 30, 2023: 6.93 years

Weighted average remaining contractual life of options exercisable as of April 30, 2023: 5.92 years

Weighted average remaining contractual life of options vested and expected to vest as of April 30, 2023: 6.94 years

Aggregate intrinsic value of options outstanding at April 30, 2023: $146,555

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Aggregate intrinsic value of options exercisable at April 30, 2023: $39,720

Aggregate intrinsic value of options vested and expected to vest at April 30, 2023: $144,162

As of April 30, 2023, $987,788 and $652,629 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 2.67 and 1.29 years, respectively.

Stock option expense

During the three months ended April 30, 2023 and 2022, stock-based compensation expense totaled $230,000 and $168,000, respectively, and was classified in selling and general expense. During the six months ended April 30, 2023 and 2022, stock-based compensation expense totaled $441,000 and $307,000, respectively, and was classified in selling and general expenses.

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 April 30, 2023, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and 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 user.

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.

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 six months ended April 30, 2023 and 2022 (in thousands):

	Three Months Ended April 30,				Six Months Ended April 30,
	2023		2022		2023		2022
United States	$	20,908	$	19,950	$	37,012	$	36,366
Foreign Countries:
Canada		588		663		1,172		961
Italy		294		173		1,392		173
Mexico		1		53		3		78
All Other		507		666		1,063		845
		1,390		1,555		3,630		2,057
Totals	$	22,298	$	21,505	$	40,642	$	38,423

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Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the three months ended April 30, 2023 and 2022 are as follows (in thousands):

	RF Connector			Custom Cabling
	and			Manufacturing and
2023	Cable Assembly			Assembly		Corporate			Total
Net sales	$	8,650		$	13,648	$	-		$	22,298
(Loss) income before benefit for income taxes		(306	)		812		(89	)		417
Depreciation and amortization		477			146		-			623
Total assets		50,314			24,837		8,968			84,119
2022
Net sales	$	7,510		$	13,995	$	-		$	21,505
Income (loss) before provision for income taxes		577			807		(745	)		639
Depreciation and amortization		293			145		-			438
Total assets		34,398			26,812		8,437			69,647

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the six months ended April 30, 2023 and 2022 are as follows (in thousands):

	RF Connector			Custom Cabling
	and			Manufacturing and
2023	Cable Assembly			Assembly			Corporate			Total
Net sales	$	17,708		$	22,934		$	-		$	40,642
Loss before benefit from income taxes		(60	)		(109	)		(736	)		(905	)
Depreciation and amortization		872			293			-			1,165
Total assets		50,314			24,837			8,968			84,119
2022
Net sales	$	11,433		$	26,990		$	-		$	38,423
Income (loss) before benefit from income taxes		633			1,121			(1,472	)		282
Depreciation and amortization		330			288			-			618
Total assets		34,398			26,812			8,437			69,647

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 its 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 (benefits) provisions of ($164,000) and $136,000for the three months ended April 30, 2023 and 2022, respectively. The effective tax rate was (39.3%) for the three months ended April 30, 2023, compared to 21.3% for the three months ended April 30, 2022. For the six months ended April 30, 2023 and 2022, we recorded income tax (benefits) provisions of ($324,000) and $56,000, respectively. The effective tax rate was 35.8% for the six months ended April 30, 2023, compared to 20.4% for the six months ended April 30, 2022. The change in effective tax rate for the six months ended April 30, 2023 compared to the six months ended April 30, 2022 was primarily driven by the increased benefit from research and development credits and the Company's full year forecasted financial loss.

We had $182,000 and $121,000 of unrecognized tax benefits, as of April 30, 2023 and October 31, 2022, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $178,000 as of April 30, 2023.

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Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	April 30, 2023			October 31, 2022
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(356	)		(334	)
		67			89
Customer relationships (estimated lives 7 - 15 years)		6,058			6,058
Accumulated amortization		(3,267	)		(3,074	)
		2,791			2,984
Backlog (estimated life 1 - 2 years)		327			327
Accumulated amortization		(327	)		(313	)
		-			14
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(160	)		(143	)
		208			225
Tradename (estimated life 15 years)		1,700			1,700
Accumulated amortization		(132	)		(76	)
		1,568			1,624
Proprietary Technology (estimated life 10 years)		11,100			11,100
Accumulated amortization		(1,295	)		(740	)
		9,805			10,360
Totals	$	14,439		$	15,296
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the six months ended April 30, 2023 and the year ended October 31, 2022 was $857,000 and $1,282,000, respectively. As of April 30, 2023, the weighted-average amortization period for the amortizable intangible assets is 9.02 years.

Note 12 – Commitments

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to three years, some of which include options to extend the leases for up to five 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 April 30, 2023 were as follows (in thousands):

	Three Months Ended		Six Months Ended
	April 30, 2023		April 30, 2023
Operating lease cost	$	703	$	1,467

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

	April 30, 2023			October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	141		$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		111.7			113.72
Weighted Average Discount Rate
Operating leases		3.75	%		3.75	%

Future minimum lease payments under non-cancellable leases as of April 30, 2023 were as follows:

Year ending October 31,	Operating Leases
2023 (excluding six months ended April 30, 2023)	$	1,245
2024		1,991
2025		1,796
2026		1,835
2027		1,874
Thereafter		10,619
Total future minimum lease payments		19,360
Less imputed interest		(3,175	)
Total	$	16,185

Reported as of April 30, 2023	Operating Leases
Other current liabilities	$	1,692
Operating lease liabilities		14,493
Total	$	16,185

As of April 30, 2023, operating lease ROU asset was $12.4 million and operating lease liability totaled $16.2 million, of which $1.7 million is classified as current. There were no finance leases as of April 30, 2023.

Note 13 – Term Loan and Line of credit

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 are subject to 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 ended January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants.

As of April 30, 2023, we have borrowed $14,374,000 under the Term Loan while we have not borrowed any amounts under the Revolving Credit Facility. Subsequent to April 30, 2023, we have drawn $1.0 million from the Revolving Credit Facility for leasehold improvements.

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Note 14 – Cash dividend and declared dividends

We did not pay any dividends during the three or six months ended April 30, 2023, nor did we pay any dividends during the three or six months ended April 30, 2022.

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 our 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 we believe that the expectations reflected in the forward-looking statements are reasonable, we 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. We are 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 our 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 our 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 our Annual Report filed on Form 10-K for the year ended October 31, 2022 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 unaudited condensed 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.

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.

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As of April 30, 2023, we performed an impairment test analyses for Schrofftech. As noted above, we test our goodwill, trademarks, and indefinite-lived intangible assets for impairment at least annually, which we have traditionally done in the fourth quarter, or on an interim basis when events or changes in circumstances suggest these assets may be impaired. Impairment is measured as the excess of the carrying value of the goodwill or indefinite-lived intangible asset over its fair value.

Impairment may result from a number of factors, including performance deterioration, negative cash flows from operations and/or changes in anticipated future cash flows, changes in business plans, adverse economic or market conditions, or other factors beyond our control. The amount of any impairment must be expensed as a charge to operations. Schrofftech’s three- and six-months results ended April 30, 2023 triggered an impairment analysis. Schrofftech was acquired on November 4, 2019 for a total purchase price of $5.3 million, consisting of cash consideration of $4.0 million and $1.3 million in earn-out, of which none was earned. As of April 30, 2023, Schrofftech has a carrying value of $3.2 million, of which includes $1.1 million in goodwill, $0.5 million in non-amortizable intangible assets and $1.6 million in net amortizable intangible assets. The analysis performed included a blend of the income approach (discounted cash flow method) and market approach (guideline public company method) to reach the fair value of equity of $4.2 million. The fair value of equity is in excess of the fair value to the carrying amount.

The analysis performed in blending the income approach and the market approach incorporates several significant judgments and assumptions about projected revenue growth, future operating margins and discount rates. There are inherent uncertainties related to these assumptions and our judgment in applying them to the impairment analysis. Changes in certain events or circumstances could result in changes to our estimated fair values, and may result in future write-downs to the carrying values of these assets. Impairment charges could adversely affect our financial results, financial ratios and could limit our ability to obtain financing in the future.

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 unaudited condensed consolidated 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. We also design, engineer, 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 4G and 5G small cell integrated enclosures.

For the six months ended April 30, 2023, approximately half 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 56% 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 44% of total sales for the six months ended April 30, 2023. The RF Connector segment mostly sells standardized products regularly used by customers and, therefore, has a more stable revenue stream. On the other hand, 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 orders and its revenues can therefore be more volatile than the revenues of the RF Connector segment.

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We recently moved into new corporate headquarters located at 16868 Via Del Campo Court, Suite 200, San Diego, CA 92127. Our phone number remains (858) 549-6340.

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. 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. Subsequent to April 30, 2023, we have drawn $1 million from the Revolving Credit Facility for leasehold improvements to the new corporate headquarters. We believe that our existing assets and the cash we expect to generate from operations (including those of Microlab) and from our current backlog of unfulfilled orders, will be sufficient to fund our liquidity needs during the next 12 months from the date of this filing based on the following:

As of April 30, 2023, we had a total of $4.3 million of cash and cash equivalents compared to a total of $4.5 million of cash and cash equivalents as of October 31, 2022. As of April 30, 2023, we had working capital of $25.1 million and a current ratio of approximately 2.6:1 with current assets of $41.0 million and current liabilities of $15.9 million. We believe that the amount of cash remaining, plus the amount available to us under the Revolving Credit Facility, will be sufficient to fund our anticipated liquidity needs.

As of April 30, 2023, we had $18.9 million of backlog, compared to $27.8 million as of October 31, 2022. The decrease in backlog relates primarily to shipments made against orders for our hybrid fiber cables. 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 six months ended April 30, 2023, we generated $2.2 million of cash in our operating activities. This net inflow of cash is primarily related to an increase in other current assets of $4.0 million, the collections of accounts receivable of $0.2 million, $1.2 million from depreciation and amortization, and $0.4 million from stock-based compensation expense. The cash usage was primarily due to accrued expenses of $3.4 million and our net loss of $0.6 million. The cash generated by other current assets represents $4.0 million which primarily consists of $2.8 million of reimbursement for tenant improvements and $1.2 million received from ERC.

During the six months ended April 30, 2023, we also spent $1.3 million on capital expenditures, and $1.2 million in Term Loan payments. 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 capital leases. At this time, we have not identified any additional capital equipment purchases that would require significant additional leasing or capital expenditures during the next 12 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 acquisitions we may undertake in the future.

Results of Operations

Three Months Ended April 30, 2023 vs. Three Months Ended April 30, 2022

Net sales for the three months ended April 30, 2023 (the “fiscal 2023 quarter”) increased by 3.7%, or $0.8 million, to $22.3 million as compared to the three months ended April 30, 2022 (the “fiscal 2022 quarter”). Net sales for the fiscal 2023 quarter at the Custom Cabling segment decreased by $0.4 million, or 2.9%, to $13.6 million, compared to $14.0 million in the fiscal 2022 quarter. The decrease was primarily the result of decreases in sales to customers in the Tier-1 wireless carrier ecosystem related to our small cell products and systems and our hybrid fiber cables compared to the prior year first quarter. Net sales for the fiscal 2023 quarter at the RF Connector segment increased by $1.2 million, or 16.0%, to $8.7 million as compared to $7.5 million in the fiscal 2022 quarter, primarily due to a full period of Microlab being included in fiscal 2023 quarter, compared to fiscal 2022 quarter.

Gross profit for the fiscal 2023 quarter remained consistent and was $6.1 million in both the fiscal 2023 quarter and fiscal 2022 quarter. While our gross profit remained relatively consistent, Microlab products contributed positively to our gross profit which was offset by the decrease related to our small cell and direct air cooling products in fiscal 2023 quarter compared to fiscal 2022 quarter.

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Engineering expenses remained flat and were $0.9 million in both the fiscal 2023 quarter and the fiscal 2022 quarter. We also incurred additional engineering expenses during the fiscal 2023 quarter related to the engineering efforts associated with our integrated systems products. Engineering expenses represent costs incurred relating to the ongoing research and development of current and new products.

Selling and general expenses increased by $0.2 million to $4.7 million (21.3% of sales) compared to $4.5 million (20.8% of sales) in the second quarter last year. This was primarily due to a full quarter of Microlab compared to two months in the second quarter last year. We also incurred a one-time expense related to the facility move of $70,000 and ERP system upgrades of $20,000 in the fiscal 2023 quarter.

For the fiscal 2023 quarter, the Custom Cabling segment had pretax income of $812,000 while the RF Connector segment had a pretax loss of $306,000, as compared to $807,000 income and $577,000 of income, respectively, for the comparable quarter last year. The increase in the pretax net income at the RF Connector segment was primarily due to the acquisition of Microlab. The decrease in pretax income at the Custom Cabling segment was due primarily to the decrease in sales of hybrid fiber cables to a Tier-1 wireless customer and a decrease in sales of small cell products and systems to customers in the Tier-1 wireless ecosystem.

The benefit for income taxes was (39.3%) and 21.3% of loss before income taxes for the fiscal 2023 quarter and the fiscal 2022 quarter, respectively. The change in the effective tax rate from the fiscal 2022 quarter to fiscal 2023 quarter was primarily driven by the increased benefit from research and development credits and the Company's full year forecasted financial loss.

For the fiscal 2023 quarter, net income was $0.6 million and fully diluted earnings per share was $0.06 per share, compared to a net income of $0.5 million and fully diluted earnings per share of $0.05 per share for the fiscal 2022 quarter. For the fiscal 2023 quarter, the diluted weighted average shares outstanding was 10,327,271 as compared to 10,243,636 for the fiscal 2022 quarter.

Six Months Ended April 30, 2023 vs. Six Months Ended April 30, 2022

Net sales for the six months ended April 30, 2023 (the “fiscal 2023 six-month period”) of $40.6 million increased by 5.7%, or $2.2 million, compared to the six months ended April 30, 2022 (the “fiscal 2022 six-month period”). The increase in net sales is attributable to the RF Connector segment, which increased by $6.3 million, or 55.3%, to $17.7 million compared to $11.4 million in the fiscal 2022 six-month period, primarily a result of the Microlab acquisition. Net sales for the fiscal 2023 six-month period at the Custom Cabling segment decreased by $4.1 million, or 15.2%, to $22.9 million compared to $27.0 million in the fiscal 2022 six-month period. The decrease was primarily in our project-based business relating to small cell and direct air cooling products which resulted from the downturn in carrier spending in the fiscal 2023 six-month period.

Gross profit for the fiscal 2023 six-month period increased by $1.0 million to $11.2 million and gross margins increased to 27.6% of sales from 26.5% of sales in the fiscal 2022 six-month period. The increases in gross profit and gross margins primarily related to the overall increase in sales.

Engineering expenses increased $0.5 million to $1.8 million for the fiscal 2023 six-month period compared to $1.3 million in the fiscal 2022 six-month period. The increase was primarily due to additional engineering expenses during the fiscal 2023 six-month period related to the engineering efforts associated with our integrated systems products and two full quarters of Microlab. Engineering expenses represent costs incurred relating to the ongoing research and development of new products.

Selling and general expenses increased by $1.5 million to $10.0 million (24.7% of sales) compared to $8.5 million (22.0% of sales) in the six-month period last year. Microlab accounted for $2.3 million of the selling and general expenses. We also incurred a one-time expense related to severance of $50,000, additional rent expense of $444,000 (of which $387,000 was non-cash) related to lease accounting, $70,000 in facility move expenses and $20,000 in ERP system upgrades in fiscal 2023 six-month period. Selling and general expenses also increased as a result of the increase in net sales during the current fiscal 2023 six-month period.

For the fiscal 2023 six-month period, pretax loss for the Custom Cabling segment and the RF Connector segment was $109,000 and $60,000, respectively, as compared to $1.1 million and $633,000 of income, respectively, for the comparable six-month period last year.

For the fiscal 2023 and 2022 six-month periods, we recorded income tax (benefit) provision of ($324,000) and $56,000, respectively. The effective tax rate was 35.8% for the fiscal 2023 six-month period, compared to 20.4% for the fiscal 2022 six-month period. The change in effective tax rate for the fiscal 2023 and 2022 six-month periods was primarily driven by the increased benefit from research and development credits and the Company's full year forecasted financial loss.

For the fiscal 2023 six-month period, net loss was $0.6 million and fully diluted loss per share was ($0.06) per share as compared to a net income of $0.2 million and fully diluted earnings per share of $0.02 per share for the fiscal 2022 six-month period. For the fiscal 2023 six-month period, the diluted weighted average shares outstanding was 10,256,158 as compared to 10,229,704 for the fiscal 2022 six-month period.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

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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 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. Until we are fully integrated, we will maintain the operational integrity of each division’s internal control over financial reporting.

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.

Changes in Internal Control Over Financial Reporting

During the second quarter of fiscal 2023, 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.

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

Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or our industry, as well as risks that affect businesses in general. In addition to the information and risk factors set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2022, filed with the SEC on January 24, 2023. The risks disclosed in such Annual Report and in this Quarterly Report could materially adversely affect our business, financial condition, cash flows, or results of operations and thus our stock price. We believe there have been no material changes in our risk factors from those disclosed in the Annual Report. However, additional risks and uncertainties not currently known or which we currently deem to be immaterial may also materially adversely affect our business, financial condition, or results of operations.

These risk factors may be important to understanding other statements in this Quarterly Report and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q. Because of such risk factors, as well as other factors affecting the Company’s financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

21

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 April 30, 2023 in connection with employee tax withholding for shares of restricted stock that vested under our 2020 Equity Incentive Plan:

					Total number of		Approximate dollar
	Total				shares purchased		value of shares that
	number of		Average		as part of publicly		may yet be purchased
	shares		price paid		announced plans or		under the plans or
Period	purchased		per share		programs		programs
February 2023		-	$	-		-	$	-
March 2023		-	$	-		-	$	-
April 2023		690	$	4.30		-	$	-

Item 3. Defaults upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Nothing to report.

Item 5. Other Information

Amended and Restated Bylaws

On June 14, 2023, our Board of Directors (the “Board”) approved the Amended and Restated By-Laws (as so amended and restated, the “Amended By-Laws”), effective as of such date. Among other things, the amendments:

• Revise certain provisions relating to stockholder meetings and provide that stockholders and proxy holders may be deemed to present in person or by remote communication and by means of electronic communications, videoconferencing, teleconferencing or other available technology;

• Address matters relating to Rule 14a-19 promulgated under the Securities Exchange Act of 1934, as amended (the “Universal Proxy Rules”), including (i) providing that stockholders delivering a notice of nomination certify to the Company in writing that they have complied with the Universal Proxy Rules requirements, (ii) providing the Company a remedy if a stockholder fails to satisfy the Universal Proxy Rules requirements, (iii) requiring that a stockholder providing notice pursuant to the advance notice bylaws to later update or supplement its notice, by certain specified dates, such that the notice remains true and correct in all material respects, and (iv) requiring stockholders intending to use the Universal Proxy Rules to provide reasonable evidence of the satisfaction of the requirements under the Universal Proxy Rules at least five business days before the meeting;

• Revise the procedures and disclosure requirements set forth in the advance notice bylaw provisions, including requiring additional information, representations and disclosures from proposing stockholders, proposed nominees and other persons related to a stockholder’s solicitation of proxies;

• Require that a stockholder directly or indirectly soliciting proxies from other stockholders use a proxy card color other than white;

• Require that a stockholder or group own 5% or more of the Corporation’s outstanding common stock continuously for at least three years to nominate a director nominee at an annual meeting;

• Require that the request to hold a special meeting require two-thirds of the voting power of the Corporation’s stock;

• Require that any action to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of the Company;

• Clarify that the Company may indemnify employees and agents as the Board deems appropriate or as otherwise required by law; and

• Incorporate certain ministerial, clarifying, and conforming changes to provide clarification and consistency.

The foregoing summary description of the Amended Bylaws is qualified in its entirety by reference to the complete text of the

Amended By-Laws, a copy of which is included as Exhibit 3.1 and is incorporated herein by reference. 

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Item 6. Exhibits

Exhibit
Number
3.1	Amended and Restated Bylaws of RF Industries, Ltd.
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)

23

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: June 14, 2023	By:	/s/ Robert Dawson
		Robert Dawson
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: June 14, 2023	By:	/s/ Peter Yin
		Peter Yin
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED
BY-LAWS
OF
RF INDUSTRIES, LTD.
(As amended and restated on June 13, 2023)

ARTICLE I.

OFFICES

Section 1. RF Industries, Ltd. (the “Corporation”) may have offices at such places both within and outside the State of Nevada as the Board of Directors of the Corporation (the “Board of Directors” or the “Board”) may from time to time determine or the business of the Corporation may require.

ARTICLE II.

MEETINGS OF STOCKHOLDERS

Section 1. All meetings of the stockholders shall be held at any place within or outside the State of Nevada as shall be designated from time to time by the Board of Directors. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 78.320 of the Revised Nevada Statutes. In the absence of any such designation, stockholders' meetings shall be held at the principal executive office of the Corporation.

Section 2. The annual meeting of stockholders shall be held on such date and at such time and place as may be fixed by the Board of Directors and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of such other business as is properly brought before the meeting in accordance with these By-Laws of the Corporation (the “By-Laws”).

To be properly brought before the annual meeting, business must be either (i) specified in the notice of annual meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the annual meeting by a stockholder. Except as provided in Article III, Section 1 of these By-laws with respect to stockholder nominations of director candidates, any stockholder entitled to vote in the election of directors may propose any action or actions for consideration by the stockholders at any meeting of stockholders only if notice is timely given in writing to the Secretary of the Corporation (the “Secretary”). To be timely, written notice of such stockholder’s intent to propose such action or actions for consideration by the stockholders must be given, either by personal delivery or by registered or certified mail, to the Secretary, by the date specified under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or any amendment or successor to such rule) as the deadline for submitting stockholder proposals for any meeting of stockholders called for purposes of electing directors.

A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder, (iv) any material interest in such business of the stockholder and the beneficial owner, if any, or any affiliate or associate thereof or person acting in concert therewith (each, a “Stockholder Associated Person”) on whose behalf the proposal is made, and (v) any other information that is required to be provided by the stockholder pursuant to Regulation 14A under the Exchange Act, in his or her capacity as a proponent to a stockholder proposal. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2. The chairperson of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section 2, and, if he or she should so determine, he or she shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted.

Section 3. The holders of a majority of the voting power of the Corporation's stock at any meeting of stockholders, which are present in person or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for the transaction of business except as otherwise provided by law, by the Articles of Incorporation of the Corporation (the “Articles of Incorporation”), or by these By-Laws. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum and the votes present may continue to transact business until adjournment. If, however, such quorum shall not be present or represented at any meeting of the stockholders, a majority of the voting stock represented in person or by proxy may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat.

Section 4. When a quorum is present at any meeting, action by the stockholders on a matter other than the election of directors is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, unless the matter is one upon which, by express provisions of the statutes of Nevada or the Articles of Incorporation, a different vote is required, in which case such express provision shall govern and control.

Section 5. At each meeting of the stockholders, each stockholder having the right to vote may vote in person or may authorize another person or persons to act for him or her by proxy appointed in a reasonable manner as may be permitted by law, including, without limitation, a signed writing, telegram, facsimile, and electronic communication. All proxies must be filed with the Secretary of the Corporation at the beginning of each meeting in order to be counted in any vote at the meeting. Each stockholder shall have one vote for each share of stock having voting power, registered in his or her name on the books of the Corporation on the record date set by the Board of Directors as provided in Article V, Section 6 hereof. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors.

Section 6. Special meetings of the stockholders, for any purpose, or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the President of the Corporation (the “President”) and shall be called by the President or the Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of the holders of sixty-six and two-thirds percent (66 2/3%) of the voting power of the Corporation's stock. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 7. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which notice shall state the place, date and time of the meeting, the purpose or purposes for which the meeting is called, and the means of electronic communications, videoconferencing, teleconferencing or other available technology, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting. The written notice of any meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation.

Section 8. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 9. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

ARTICLE III.

DIRECTORS

Section 1. Subject to any limitations in the laws of the State of Nevada, the Articles of Incorporation or these By-Laws, the authorized number of directors of the Corporation shall be not less than two (2) nor more than nine (9) as fixed from time to time by resolution of the Board of Directors, provided that no decrease in the number of directors shall shorten the term of any incumbent directors. A director need not be a stockholder of the Corporation. Nominations of persons for election to the Board of Directors at the annual meeting may be made at such meeting by or at the direction of the Board of Directors, by any committee or persons appointed by the Board of Directors or by any Eligible Stockholder who complies with the notice procedures set forth in this Article III, Section 1. To qualify as an “Eligible Stockholder,” a stockholder or a group as described in this Article III, Section 1 must (i) Own and have Owned (as defined below), continuously for at least three years as of the date of such nomination, a number of shares (as adjusted to account for any stock dividend, stock split, subdivision, combination, reclassification or recapitalization of shares of issued and outstanding stock entitled to vote generally in the election of directors) that represents, at all times during such three-year period, including as of the date of such nomination, at least 5% of all then-outstanding shares of common stock of the Corporation on a fully-diluted basis (the “Required Shares”), and (ii) thereafter continue to Own the Required Shares through such annual meeting of stockholders. A stockholder shall “Own” or “Owned” shares held in the name of a nominee or other intermediary so long as the stockholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A stockholder’s ownership of shares shall be deemed to continue during any period in which the stockholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time by the stockholder. A stockholder’s ownership of shares shall be deemed to continue during any period in which the stockholder has loaned such shares provided that the stockholder has the right to recall such loaned shares on five business days advance notice. The terms “Owned,” “Owning” and other variations of the word “Own” shall have correlative meanings.

A nomination may be made by a stockholder only if written notice of the nomination has been given to the Secretary of the corporation, either by personal delivery or registered or certified mail, not less than the date specified under Rule 14a-8 of the Exchange Act (or any amendment or successor to such rule) as the deadline for submitting stockholder proposals for any meeting of stockholders called for purposes of electing directors. Such stockholder's notice to the Secretary shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (a) the name, age, business address and residence address of the person, (b) the principal occupation or employment of the person, (c) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person, (d) such person’s written consent to being named in the proxy statement and accompanying proxy card as a nominee and to serving as a director if elected, and (e) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors, or is otherwise required, pursuant to and in accordance with Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) as to the Eligible Stockholder giving the notice, the beneficial owner, if any, and/or any Stockholder Associated Person on whose behalf the nomination or proposal is made, (a) the name and record address of the stockholder, (b) the class and number of shares of capital stock of the Corporation which are beneficially owned by such stockholder, beneficial owner and/or Stockholder Associated Person, (c) a representation as to whether such stockholder, beneficial owner and/or such Stockholder Associated Person, if any, intends or is part of a group which intends (1) to solicit proxies from the required number of the Corporation’s voting shares in support of such director nominees in accordance with and as required by Rule 14a-19 promulgated under the Exchange Act, and (2) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's voting shares required to approve or adopt the proposal or elect the nominee, and (d) any other information relating to such stockholder, beneficial owner and/or such Stockholder Associated Person, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

Such notice must also be accompanied by a representation as to whether or not such Eligible Stockholder, beneficial owner and/or any Stockholder Associated Person intends to solicit proxies in support of any director nominees other than the Corporation’s nominees in accordance with Rule 14a-19 under the Exchange Act, and, where such Eligible Stockholder, beneficial owner and/or Stockholder Associated Person intends to so solicit proxies, the notice and information required by Rule 14a-19(b) under the Exchange Act. Notwithstanding anything to the contrary in these By-Laws, unless otherwise required by law, if any Eligible Stockholder, beneficial owner and/or Stockholder Associated Person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act and (ii) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3) under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the corporation that such Eligible Stockholder, beneficial owner and/or Stockholder Associated Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then the nomination of each of the director nominees proposed by such Eligible Stockholder, beneficial owner and/or Stockholder Associated Person shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded). Upon request by the Corporation, if any Eligible Stockholder, beneficial owner and/or Stockholder Associated Person provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such Eligible Stockholder, beneficial owner and/or Stockholder Associated Person shall deliver to the Corporation, no later than five (5) business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) under the Exchange Act.

Notwithstanding the foregoing, a stockholder’s notice as described in this Section 1 shall be further updated and supplemented, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the meeting and (ii) the date that is ten (10) business days prior to the meeting or any adjournment, recess or postponement thereof, and such update and supplement shall be delivered to the Secretary at the Corporation’s principal executive offices by the later of five (5) business days after the record date for the meeting or the deadline for the delivery of the stockholder’s notice, in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment, recess or postponement thereof in the case of the update and supplement required to be made ten (10) business days prior to the meeting or any adjournment, recess or postponement thereof. The obligation to update and supplement as set forth in this paragraph or any other Section or Article of these By-Laws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any nomination or business proposal or to submit any new nomination or business proposal, including by changing or adding nominees, matters, business and/or resolutions proposed to be brought before a meeting of the stockholders.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article III, and each director elected shall hold office until his or her successor is elected and qualified; provided, however, that unless otherwise restricted by the Articles of Incorporation or law, any director or the entire Board of Directors may be removed, either with or without cause, from the Board of Directors at any meeting of stockholders by the holders of sixty-six and two-thirds percent (66 2/3%) of the voting power of the Corporation's stock.

Section 2. Commencing with the election of directors at the 2013 annual meeting of stockholders, the directors shall be divided into three classes designated as Class I, Class II and Class III. Each class shall consist, as nearly as is possible, of one-third of the number of directors constituting the entire Board of Directors. Initial class assignments shall be determined by the Board of Directors. At each annual meeting of stockholders, successors to the directors whose terms expired at that annual meeting shall be elected for a three-year term, except that, the director or directors elected to Class I will be subject to election for a three-year term at the annual meeting of stockholders in 2014 and the director or directors elected to Class II will be subject to election for a three-year term at the annual meeting of stockholders in 2015. If the number of directors changes, any increase or decrease shall be apportioned among the classes such that the number of directors in each class shall remain as nearly equal as possible, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and qualified, subject, however, to such director’s prior death, resignation, retirement, disqualification or removal from office.

Subject to the rights of the holders of any one or more series of preferred stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise provided by law, be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified. No decrease in the authorized number of directors shall shorten the term of any incumbent director. In the event of a vacancy on the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board of Directors until the vacancy is filled.

Section 3. The property and business of the Corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these By-Laws expressly conferred upon them, the Board may exercise all such powers of the Corporation and do all such lawful acts and things, unless any such acts or things are specifically directed or required to be exercised or done by the stockholders as required by statute or by the Articles of Incorporation or by these By-Laws.

ARTICLE IV.

MEETINGS OF THE BOARD OF DIRECTORS

Section 1. The directors may hold their meetings and have one or more offices and keep the books of the Corporation outside of the State of Nevada.

Section 2. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board.

Section 3. Special meetings of the Board of Directors may be called by the President on twenty-four hours' notice to each director, either personally, by telephone, by facsimile, by mail or by telegram; special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors unless the Board consists of only one director; in which case special meetings shall be called by the President or Secretary in like manner or on like notice on the written request of the sole director.

Section 4. At all meetings of the Board of Directors a majority of the authorized number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, by the Articles of Incorporation or by these By-Laws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 5. Unless otherwise restricted by the Articles of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

Section 6. Unless otherwise restricted by the Articles of Incorporation or these By-Laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

ARTICLE V.

COMMITTEES OF DIRECTORS

Section 1. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power in reference to amending the Articles of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-Laws of the Corporation; and, unless the resolution, By-Laws, or the Articles of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend to authorize the issuance of stock, or to adopt Articles of Merger, as provided by the applicable statutes of Nevada.

Section 2. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

ARTICLE VI.

COMPENSATION OF DIRECTORS

Section 1. Unless otherwise restricted by the Articles of Incorporation or these By-Laws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE VII.

INDEMNIFICATION

Section 1. The Corporation shall indemnify any director or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the Corporation, by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. The Corporation may, as the Board of Directors deems appropriate or as otherwise required by law, indemnify employees and agents as though they were directors and officers pursuant to this Section 1.

Section 2. The Corporation shall indemnify any director or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him or her in connection with the defense or settlement of the action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation. Indemnification shall not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Corporation or for amounts paid in settlement to the Corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. The Corporation may, as the Board of Directors deems appropriate or as otherwise required by law, indemnify employees and agents as though they were directors and officers pursuant to this Section 2.

Section 3. To the extent that a director or officer, or, to the extent the Board of Directors deems appropriate or as otherwise required by law, an employee or agent, of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraphs (a) and (b), or in defense of any claim, issue or matter therein, he or she must be indemnified by the Corporation against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection with the defense.

Section 4. Any indemnification under paragraphs (a) and (b), unless ordered by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer, or, where the Board of Directors deems appropriate or as otherwise required by law, an employee or agent, is proper in the circumstances. The determination shall be made (1) by the holders of a majority of the voting power of the corporation's stock, (2) by the Board of Directors by majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding, (3) if a majority vote of a quorum consisting of directors who are not parties to the act, suit or proceeding so order, by independent legal counsel in a written opinion, or (4) if a quorum consisting of directors who were not parties to the act, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

Section 5. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article VII. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate.

Section 6. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to the other paragraphs of this Article VII, (i) does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his or her official capacity or an action in another capacity while holding his or her office except that indemnification, unless ordered by a court pursuant to paragraph (b) or for the advancement of expenses made pursuant to paragraph (e), may not be made to or on behalf of any director or officer if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action; and (ii) continues for a person who has ceased to be a director, officer, employee or agent, as applicable, and inures to the benefit of the heirs, executors and administrators of such a person. If a claim for indemnification or payment of expenses under this Article VII is not paid in full within ninety (90) days after a written claim therefor has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

Section 7. The Board of Directors may authorize, by a vote of a majority of a quorum of the Board of Directors, the Corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article VII.

Section 8. The Board of Directors may authorize the Corporation to enter into a contract with any person who is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another partnership, joint venture, trust or other enterprise providing for indemnification rights equivalent to or, if the Board of Directors so determines, greater than those provided for in this Article VII.

Section 9. For the purposes of this Article VII, references to "the Corporation" shall include, in addition to the resulting Corporation, any constituent Corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent Corporation, or is or was serving at the request of such constituent Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section with respect to the resulting or surviving Corporation as he or she would have with respect to such constituent Corporation if its separate existence had continued.

Section 10. For purposes of this Article VII, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article VII.

ARTICLE VIII.

OFFICERS

Section 1. The officers of this Corporation shall be chosen by the Board of Directors and shall include a President, a Secretary and a Treasurer. The Corporation may also have at the discretion of the Board of Directors such other officers as are desired, including a Chief Executive Officer (the “Chief Executive Officer”), Chairperson of the Board (the “Chairperson”), one or more Vice Presidents (a “Vice President” or “Vice Presidents”), one or more Assistant Secretaries (an “Assistant Secretary” or “Assistant Secretaries”) and Assistant Treasurers (an “Assistant Treasurer” or “Assistant Treasurers”), and such other officers as may be appointed in accordance with the provisions of Section 3 hereof. In the event there are two or more Vice Presidents, then one or more may be designated as Executive Vice President, Senior Vice President, or other similar or dissimilar title. At the time of the election of officers, the directors may by resolution determine the order of their rank. Any number of offices may be held by the same person, unless the Articles of Incorporation or these By-Laws otherwise provide.

Section 2. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall choose the officers of the Corporation.

Section 3. The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.

Section 4. The salaries of all officers and agents of the Corporation may be fixed by the Board of Directors.

Section 5. The officers of the Corporation shall hold office until their successors are chosen and qualify in their stead. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. If the office of any officer or officers becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.

Section 6. The Chairperson, if such an officer be elected, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him or her by the Board of Directors or prescribed by these By-Laws.

Section 7. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairperson, if there be such an officer, the Chief Executive Officer shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. He or she shall preside at all meetings of the stockholders and shall have the general powers and duties of management usually vested in the office of Chief Executive Officer of corporations, and shall have such other powers and duties as may be prescribed by the Board of Directors or these By-Laws.

Section 8. In the absence or disability of the Chief Executive Officer, the President shall perform all duties of the Chief Executive Officer, and when so acting shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. He or she shall be an ex-officio member of all committees and shall have the general powers and duties of management usually vested in the office of President of corporations and shall have such other powers and duties as may be prescribed by the Board of Directors or these By-Laws.

Section 9. In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall have such other duties as from time to time may be prescribed for them, respectively, by the Board of Directors.

Section 10. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required by the Board of Directors. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or these By-Laws. The Secretary shall keep in safe custody the seal of the Corporation, and affix the same to any instrument requiring it, and when so affixed it shall be attested by his or her signature or by the signature of an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature.

Section 11. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, or if there be no such determination, the Assistant Secretary designated by the Board of Directors, shall, in the absence or disability of the Secretary perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 12. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys, and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors. He or she shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, he or she shall give the Corporation a bond, in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors, for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

Section 13. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, or if there be no such determination, the Assistant Treasurer designated by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

ARTICLE IX.

CERTIFICATES OF STOCK

Section 1. Shares of the capital stock of the Corporation may be certificated or uncertificated, as provided under the General Corporation Law of the State of Nevada. Each stockholder, upon written request to the transfer agent or registrar of the Corporation, shall be entitled to a certificate of the capital stock of the Corporation in such form as may from time to time be prescribed by the Board of Directors. Such certificate shall bear the Corporation seal and shall be signed by the Chairperson of the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. The Corporation seal and the signatures by corporation officers may be facsimiles if the certificate is manually countersigned by an authorized person on behalf of a transfer agent or registrar other than the Corporation or its employee. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were such officer, transfer agent or registrar at the time of its issue. Every certificate for shares of stock which are subject to any restriction on transfer and every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall contain such legend with respect thereto as is required by law. The Corporation shall be permitted to issue fractional shares.

Section 2. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the voting powers, designations, preferences, limitations, restrictions and relative rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in section 78.195 of the Revised Nevada Statutes, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue a statement setting forth the office or agency of the Corporation from which the stockholders may obtain a copy of a statement setting forth in full or summarizing the voting powers, designations, preferences, limitations, restrictions and relative rights of each class of stock or series thereof that the Corporation will furnish without charge to each stockholder who so requests.

Section 3. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 4. Subject to any restrictions on transfer and unless otherwise provided by the Board of Directors, shares of stock may be transferred only on the books of the Corporation, if such shares are certificated, by the surrender to the Corporation or its transfer agent of the certificate therefore properly endorsed or accompanied by a written assignment or power of attorney properly executed, or upon proper instructions from the holder of uncertificated shares, in each case with such proof of the authenticity of signature as the Corporation or its transfer agent may reasonably require.

Section 5. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Nevada.

ARTICLE X.

GENERAL PROVISIONS

Section 1. Distributions.

(a) Distributions upon the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law.

(b) Before payment of any distribution there may be set aside out of any funds of the Corporation available for distributions such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing distributions, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation, and the directors may abolish any such reserve.

Section 2. Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers, or such other persons, as the Board of Directors may from time to time designate.

Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 4. Seal. The corporate seal shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Nevada". Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5. Notices. Whenever, under the provisions of the statutes or of the Articles of Incorporation or of these By-Laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, addressed to such director or stockholder, at the stockholder’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to any director may be by any reasonable means, including, without limitation, mail, personal delivery, facsimile, or electronic communication. All notices shall be deemed given when sent.

Section 6. Waiver. Whenever any notice is required to be given under the provisions of the statutes or of the Articles of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE XI.

AMENDMENTS

Section 1. Except as otherwise restricted in the Articles of Incorporation or these By-Laws:

(a)    Any provision of these By-Laws may be altered, amended or repealed at the annual

or any regular meeting of the Board of Directors without prior notice, or at any special meeting of the Board of Directors if notice of such alteration or repeal be contained in the notice of such special meeting.

(b) These By-Laws may also be altered, amended or repealed at a duly convened meeting of the stockholders by the affirmative vote of the holders of a majority of the voting power of the Corporation's stock. The stockholders may provide by resolution that any By-law provision repealed, amended, adopted or altered by them may not be repealed, amended, adopted or altered by the Board of Directors.

I, Peter Yin, hereby certify that the forgoing Amended and Restated By-Laws of RF Industries, Ltd. were duly adopted at a meeting of the Board of Directors held on June 13, 2023.

/s/ Peter Yin

Peter Yin

Secretary

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 Quarterly Report on Form 10-Q 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 in 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 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 financial 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: June 14, 2023	/s/ Robert Dawson
	Robert Dawson
	President and Chief Executive Officer
	(Principal 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 Quarterly Report on Form 10-Q 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 in 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 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 financial 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: June 14, 2023	/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 April 30, 2023, 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: June 14, 2023	/s/ Robert Dawson
	Robert Dawson
	President and Chief Executive Officer

 The foregoing certifications are not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and are not to be incorporated by reference into any filing of RF Industries, Ltd. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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 April 30, 2023, 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: June 14, 2023	/s/ Peter Yin
	Peter Yin
	Chief Financial Officer

The foregoing certifications are not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and are not to be incorporated by reference into any filing of RF Industries, Ltd. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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Document And Entity Information - shares	6 Months Ended
	Apr. 30, 2023	Jun. 14, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2023
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	16868 Via Del Campo Court, Suite 200
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92127
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 (in shares)		10,290,377
Entity Central Index Key	0000740664
Current Fiscal Year End Date	--10-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Apr. 30, 2023	Oct. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 4,326	$ 4,532
Trade accounts receivable, net of allowance for doubtful accounts of $271 and $126, respectively	14,493	14,812
Inventories	20,386	21,054
Other current assets	1,823	5,849
TOTAL CURRENT ASSETS	41,028	46,247
Property and equipment:
Equipment and tooling	4,634	4,497
Furniture and office equipment	4,612	3,447
Property, Plant and Equipment, Gross	9,246	7,944
Less accumulated depreciation	5,078	4,771
Total property and equipment, net	4,168	3,173
Operating lease right of use assets, net	12,408	13,480
Goodwill	8,085	8,085
Amortizable intangible assets, net	14,439	15,296
Non-amortizable intangible assets	1,174	1,174
Deferred tax assets	2,522	1,816
Other assets	295	295
TOTAL ASSETS	84,119	89,566
CURRENT LIABILITIES
Accounts payable	6,105	5,652
Accrued expenses	5,373	8,814
Current portion of Term Loan	2,424	2,424
Current portion of operating lease liabilities	1,692	1,887
Income taxes payable	298	759
TOTAL CURRENT LIABILITIES	15,892	19,536
Operating lease liabilities	14,493	15,025
Term Loan, net of debt issuance cost	11,929	13,136
TOTAL LIABILITIES	42,314	47,697
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,290,377 and 10,193,287 shares issued and outstanding at April 30, 2023 and October 31, 2022, respectively	103	102
Additional paid-in capital	25,634	25,118
Retained earnings	16,068	16,649
TOTAL STOCKHOLDERS' EQUITY	41,805	41,869
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 84,119	$ 89,566

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Apr. 30, 2023	Oct. 31, 2022
Accounts Receivable, Allowance for Credit Loss, Current	$ 237	$ 126
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued (in shares)	10,290,377	10,193,287
Common stock, shares outstanding (in shares)	10,290,377	10,193,287

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Net sales	$ 22,298,000	$ 21,505,000	$ 40,642,000	$ 38,423,000
Cost of sales	16,178,000	15,425,000	29,435,000	28,259,000
Gross profit	6,120,000	6,080,000	11,207,000	10,164,000
Operating expenses:
Engineering	882,000	857,000	1,845,000	1,310,000
Selling and general	4,749,000	4,477,000	10,042,000	8,470,000
Total operating expenses	5,631,000	5,334,000	11,887,000	9,780,000
Operating loss	489,000	746,000	(680,000)	384,000
Other (expense) income	(72,000)	(107,000)	(225,000)	(102,000)
Loss before provision for income taxes	417,000	639,000	(905,000)	282,000
Benefit from income taxes	(164,000)	136,000	(324,000)	56,000
Consolidated net loss	$ 581,000	$ 503,000	$ (581,000)	$ 226,000
Loss per share:
Basic (in dollars per share)	$ 0.06	$ 0.05	$ (0.06)	$ 0.02
Diluted (in dollars per share)	$ 0.06	$ 0.05	$ (0.06)	$ 0.02
Weighted average shares outstanding:
Basic (in shares)	10,290,911	10,107,687	10,256,158	10,087,309
Diluted (in shares)	10,327,271	10,243,636	10,256,158	10,229,704

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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, 2021	10,058,571
Balance at Oct. 31, 2021	$ 101	$ 24,301	$ 15,201	$ 39,603
Exercise of stock options	1	56	0	57
Stock-based compensation expense	$ 0	307	0	307
Tax withholding related to vesting of restricted stock (in shares)	(2,479)
Tax withholding related to vesting of restricted stock	$ 0	(16)	0	(16)
Consolidated net loss	$ 0	0	226	226
Exercise of stock options (in shares)	22,927
Issuance of restricted stock (in shares)	39,666
Issuance of restricted stock	$ 0	0	0	0
Balance (in shares) at Apr. 30, 2022	10,118,685
Balance at Apr. 30, 2022	$ 102	24,648	15,427	40,177
Balance (in shares) at Jan. 31, 2022	10,096,175
Balance at Jan. 31, 2022	$ 101	24,427	14,924	39,452
Exercise of stock options	1	56	0	57
Stock-based compensation expense	$ 0	168	0	168
Tax withholding related to vesting of restricted stock (in shares)	(417)
Tax withholding related to vesting of restricted stock	$ 0	(3)	0	(3)
Consolidated net loss	$ 0	0	503	503
Exercise of stock options (in shares)	22,927
Issuance of restricted stock	$ 0		0
Balance (in shares) at Apr. 30, 2022	10,118,685
Balance at Apr. 30, 2022	$ 102	24,648	15,427	40,177
Balance (in shares) at Oct. 31, 2022	10,193,287
Balance at Oct. 31, 2022	$ 102	25,118	16,649	41,869
Exercise of stock options	$ 0	85		85
Stock-based compensation expense		441		441
Tax withholding related to vesting of restricted stock (in shares)	(2,002)
Tax withholding related to vesting of restricted stock		(10)		(10)
Issuance of restricted stock		0
Consolidated net loss			(581)	$ (581)
Exercise of stock options (in shares)	45,000			45,000
Issuance of restricted stock (in shares)	54,092
Issuance of restricted stock	$ 1
Balance (in shares) at Apr. 30, 2023	10,290,377
Balance at Apr. 30, 2023	$ 103	25,634	16,068	$ 41,805
Balance (in shares) at Jan. 31, 2023	10,291,067
Balance at Jan. 31, 2023	$ 103	25,408	15,487	40,998
Exercise of stock options	$ 0
Stock-based compensation expense		229		229
Tax withholding related to vesting of restricted stock (in shares)	(690)
Tax withholding related to vesting of restricted stock		(3)		(3)
Issuance of restricted stock		0
Consolidated net loss			581	581
Balance (in shares) at Apr. 30, 2023	10,290,377
Balance at Apr. 30, 2023	$ 103	$ 25,634	$ 16,068	$ 41,805

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
OPERATING ACTIVITIES:
Consolidated net loss	$ (581)	$ 226
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Bad debt expense	80	6
Depreciation and amortization	1,165	618
Stock-based compensation expense	441	307
Amortization of debt issuance cost	4	1
Tax payments related to shares cancelled for vested restricted stock awards	(10)	(16)
Deferred income taxes	(706)	64
Changes in operating assets and liabilities:
Trade accounts receivable	240	1,692
Inventories	668	(3,987)
Other current assets	4,026	(1,026)
Right of use assets	346	(25)
Other long-term assets	(0)	363
Accounts payable	454	(1,579)
Accrued expenses	(3,441)	2,443
Income taxes payable	(462)	0
Net cash provided by operating activities	2,224	(1,639)
INVESTING ACTIVITIES:
Capital expenditures	(1,303)	(268)
Purchase of Microlab, net of cash acquired ($33)	0	(24,217)
Net cash used in investing activities	(1,303)	(24,485)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	85	57
Debt issuance cost	0	(32)
Term Loan payments	(1,212)	(202)
Term Loan	0	17,000
Net cash used in financing activities	(1,127)	16,823
Net (decrease) increase in cash and cash equivalents	(206)	(9,301)
Cash and cash equivalents, beginning of period	4,532	13,053
Cash and cash equivalents, end of period	4,326	3,752
Supplemental cash flow information – income taxes paid	$ 0	$ 340

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) $ in Thousands	6 Months Ended
	Apr. 30, 2023 USD ($)
Cash Acquired from Acquisition	$ 33

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Note 1 - Unaudited Interim Condensed Consolidated Financial Statements

6 Months Ended

Apr. 30, 2023

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 for a fair statement of the financial position. Information included in the condensed consolidated balance sheet as of October 31, 2022 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, 2022 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2022 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the six months ended April 30, 2023 are not necessarily indicative of the results that may be expected for the year ended October 31, 2023. 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 six months ended April 30, 2023 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”, “we”, “us”, or “our” 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”, “we”, “us”, or “our” 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.

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 April 30, 2023 and October 31, 2022, the carrying amounts reflected in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued 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 unaudited condensed consolidated financial statements.

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Note 2 - Business Acquisition

6 Months Ended

Apr. 30, 2023

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 radio frequency 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 condensed 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 15 years. Total costs, as of October 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	$	6,620,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,617,000
Noninterest-bearing liabilities		(1,800,000	)
Net assets acquired at fair value	$	24,475,000

The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if the acquisition 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 April 30,				Six Months Ended April 30,
	2023		2022		2023			2022
Revenue	$	22,298	$	22,559	$	40,642		$	44,527
Net income (loss)		581		429		(581	)		739
Earnings (loss) per share
Basic	$	0.06	$	0.04	$	(0.06	)	$	0.07
Diluted	$	0.06	$	0.04	$	(0.06	)	$	0.07
Basic		10,290,911		10,107,687		10,256,158			10,087,309
Diluted		10,327,271		10,243,636		10,256,158			10,229,704

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Note 3 - Concentrations of Credit Risk

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note 3 – 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 April 30, 2023, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $3.1 million.

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

	Three Months Ended April 30,						Six Months Ended April 30,
	2023			2022			2023			2022
Wireless provider		20	%		24	%		18	%		28	%

For the three months ended April 30, 2023, a single wireless carrier customer accounted for 20% of net sales and 24% of total net accounts receivable balance. For the six months ended April 30, 2023, the same wireless carrier customer accounted for 18% of net sales and 24% of total net accounts receivable balance; for the three months ended April 30, 2022, it accounted for 24% of net sales and 21% of total net accounts receivable balance; for the six months ended April 30, 2022, it accounted for 28% of net sales and 21% of total net accounts receivable balance. Although this customer has been a significant customer of the Company, the written agreements with this customer do not have any minimum purchase obligations and this customer could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from this customer or the loss of this customer could significantly reduce our future revenues and profits.

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Note 4 - Inventories and Major Vendors

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 4 – 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):

	April 30, 2023		October 31, 2022
Raw materials and supplies	$	14,485	$	15,238
Work in process		543		439
Finished goods		5,358		5,377
Totals	$	20,386	$	21,054

For the three months ended April 30, 2023, two vendors accounted for 27% and 12% of inventory purchases. For the three months ended April 30, 2022, one vendor accounted for 35% of inventory purchases. For the six months ended April 30, 2023, one vendor accounted for 20% of inventory purchases and one vendor accounted for 32% of inventory purchases for the six months ended April 30, 2022. We have arrangements with these vendors to purchase products based on purchase orders that we periodically issue.

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Note 5 - Other Current Assets

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Other Current Assets [Text Block]

Note 5 – Other current assets

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

	April 30, 2023		October 31, 2022
Employee retention credit ("ERC")	$	396	$	1,636
Prepaid expense		1,070		972
Reimbursement for tenant improvements		-		2,810
Other		357		431
Totals	$	1,823	$	5,849

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“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 April 30, 2023, 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 6 - Accrued Expenses and Other Long-term Liabilities

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

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

Note 6 – Accrued expenses and other current liabilities

Accrued expenses consist of the following (in thousands):

	April 30, 2023		October 31, 2022
Wages payable	$	2,374	$	3,634
Accrued receipts		1,713		2,136
Other accrued expenses		1,286		1,847
Tenant improvements payable		-		1,197
Totals	$	5,373	$	8,814

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

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Note 7 - Loss Per Share

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 7 – Loss per share

Basic loss per share is computed by dividing net loss 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. During the three months ended April 30, 2023 and 2022, we reported a net loss, and in periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect. Potentially issuable securities that are out-of-the-money totaled 755,229 and 420,223 shares for the three months ended April 30, 2023 and 2022, respectively, and 745,229 and 459,889 shares for the six months ended April 30, 2023 and 2022, respectively, and 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 April 30,				Six Months Ended April 30,
	2023		2022		2023		2022
Weighted average shares outstanding for basic earnings per share		10,290,911		10,107,687		10,256,158		10,087,309
Add effects of potentially dilutive securities-assumed exercise of stock options		36,360		135,949		-		142,395
Weighted average shares outstanding for diluted earnings per share		10,327,271		10,243,636		10,256,158		10,229,704

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Note 8 - Stock-based Compensation and Equity Transactions

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 8 – Stock-based compensation and equity transactions

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 vested on January 10, 2023; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. All incentive stock options expire 10 years from the date of grant.

On January 10, 2023, we granted a total of 54,092 shares of restricted stock and 108,181 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, 2024; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. Also on January 10, 2023, we granted another manager 50,000 incentive stock options. These options shall vest in five equal installments on each of the next five anniversaries of January 10, 2023. All incentive stock options expire 10 years from the date of grant.

No other shares or options were granted to company employees during the three and six months ended April 30, 2023 and 2022.

The weighted average fair value of employee stock options that were granted during the six months ended April 30, 2023 and 2022 was estimated to be $3.21 and $3.84, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Six Months Ended April 30,
	2023			2022
Risk-free interest rate		3.76	%		1.23	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (in years)	7.00			7.00
Volatility factor		54.30	%		53.35	%

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 2023 and 2022 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 to our audited financial statements included in our Annual Report on Form 10-K for the year ended October 31, 2022. A summary of the status of the options granted under our stock option plans as of April 30, 2023 and the changes in options outstanding during the six months then ended is presented in the table that follows:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2022		691,005		$	5.87
Options granted		158,181		$	5.46
Options exercised		(45,000	)	$	1.90
Options cancelled		-		$	-
Options outstanding at April 30, 2023		804,186		$	6.01
Options exercisable at April 30, 2023		405,840		$	6.68
Options vested and expected to vest at April 30, 2023		798,697		$	6.02

Weighted average remaining contractual life of options outstanding as of April 30, 2023: 6.93 years

Weighted average remaining contractual life of options exercisable as of April 30, 2023: 5.92 years

Weighted average remaining contractual life of options vested and expected to vest as of April 30, 2023: 6.94 years

Aggregate intrinsic value of options outstanding at April 30, 2023: $146,555

Aggregate intrinsic value of options exercisable at April 30, 2023: $39,720

Aggregate intrinsic value of options vested and expected to vest at April 30, 2023: $144,162

As of April 30, 2023, $987,788 and $652,629 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 2.67 and 1.29 years, respectively.

Stock option expense

During the three months ended April 30, 2023 and 2022, stock-based compensation expense totaled $230,000 and $168,000, respectively, and was classified in selling and general expense. During the six months ended April 30, 2023 and 2022, stock-based compensation expense totaled $441,000 and $307,000, respectively, and was classified in selling and general expenses.

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Note 9 - Segment Information

6 Months Ended

Apr. 30, 2023

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 April 30, 2023, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and 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 user.

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.

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 six months ended April 30, 2023 and 2022 (in thousands):

	Three Months Ended April 30,				Six Months Ended April 30,
	2023		2022		2023		2022
United States	$	20,908	$	19,950	$	37,012	$	36,366
Foreign Countries:
Canada		588		663		1,172		961
Italy		294		173		1,392		173
Mexico		1		53		3		78
All Other		507		666		1,063		845
		1,390		1,555		3,630		2,057
Totals	$	22,298	$	21,505	$	40,642	$	38,423

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the three months ended April 30, 2023 and 2022 are as follows (in thousands):

	RF Connector			Custom Cabling
	and			Manufacturing and
2023	Cable Assembly			Assembly		Corporate			Total
Net sales	$	8,650		$	13,648	$	-		$	22,298
(Loss) income before benefit for income taxes		(306	)		812		(89	)		417
Depreciation and amortization		477			146		-			623
Total assets		50,314			24,837		8,968			84,119
2022
Net sales	$	7,510		$	13,995	$	-		$	21,505
Income (loss) before provision for income taxes		577			807		(745	)		639
Depreciation and amortization		293			145		-			438
Total assets		34,398			26,812		8,437			69,647

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the six months ended April 30, 2023 and 2022 are as follows (in thousands):

	RF Connector			Custom Cabling
	and			Manufacturing and
2023	Cable Assembly			Assembly			Corporate			Total
Net sales	$	17,708		$	22,934		$	-		$	40,642
Loss before benefit from income taxes		(60	)		(109	)		(736	)		(905	)
Depreciation and amortization		872			293			-			1,165
Total assets		50,314			24,837			8,968			84,119
2022
Net sales	$	11,433		$	26,990		$	-		$	38,423
Income (loss) before benefit from income taxes		633			1,121			(1,472	)		282
Depreciation and amortization		330			288			-			618
Total assets		34,398			26,812			8,437			69,647

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Note 10 - Income Taxes

6 Months Ended

Apr. 30, 2023

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 its 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 (benefits) provisions of ($164,000) and $136,000for the three months ended April 30, 2023 and 2022, respectively. The effective tax rate was (39.3%) for the three months ended April 30, 2023, compared to 21.3% for the three months ended April 30, 2022. For the six months ended April 30, 2023 and 2022, we recorded income tax (benefits) provisions of ($324,000) and $56,000, respectively. The effective tax rate was 35.8% for the six months ended April 30, 2023, compared to 20.4% for the six months ended April 30, 2022. The change in effective tax rate for the six months ended April 30, 2023 compared to the six months ended April 30, 2022 was primarily driven by the increased benefit from research and development credits and the Company's full year forecasted financial loss.

We had $182,000 and $121,000 of unrecognized tax benefits, as of April 30, 2023 and October 31, 2022, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $178,000 as of April 30, 2023.

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Note 11 - Intangible Assets

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	April 30, 2023			October 31, 2022
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(356	)		(334	)
		67			89
Customer relationships (estimated lives 7 - 15 years)		6,058			6,058
Accumulated amortization		(3,267	)		(3,074	)
		2,791			2,984
Backlog (estimated life 1 - 2 years)		327			327
Accumulated amortization		(327	)		(313	)
		-			14
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(160	)		(143	)
		208			225
Tradename (estimated life 15 years)		1,700			1,700
Accumulated amortization		(132	)		(76	)
		1,568			1,624
Proprietary Technology (estimated life 10 years)		11,100			11,100
Accumulated amortization		(1,295	)		(740	)
		9,805			10,360
Totals	$	14,439		$	15,296
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the six months ended April 30, 2023 and the year ended October 31, 2022 was $857,000 and $1,282,000, respectively. As of April 30, 2023, the weighted-average amortization period for the amortizable intangible assets is 9.02 years.

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Note 12 - Commitments

6 Months Ended

Apr. 30, 2023

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 one year to three years, some of which include options to extend the leases for up to five 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 April 30, 2023 were as follows (in thousands):

	Three Months Ended		Six Months Ended
	April 30, 2023		April 30, 2023
Operating lease cost	$	703	$	1,467

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

	April 30, 2023			October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	141		$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		111.7			113.72
Weighted Average Discount Rate
Operating leases		3.75	%		3.75	%

Future minimum lease payments under non-cancellable leases as of April 30, 2023 were as follows:

Year ending October 31,	Operating Leases
2023 (excluding six months ended April 30, 2023)	$	1,245
2024		1,991
2025		1,796
2026		1,835
2027		1,874
Thereafter		10,619
Total future minimum lease payments		19,360
Less imputed interest		(3,175	)
Total	$	16,185

Reported as of April 30, 2023	Operating Leases
Other current liabilities	$	1,692
Operating lease liabilities		14,493
Total	$	16,185

As of April 30, 2023, operating lease ROU asset was $12.4 million and operating lease liability totaled $16.2 million, of which $1.7 million is classified as current. There were no finance leases as of April 30, 2023.

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Note 13 - Term Loan and Line of Credit

6 Months Ended

Apr. 30, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 13 – Term Loan and Line of credit

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 are subject to 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 ended January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants.

As of April 30, 2023, we have borrowed $14,374,000 under the Term Loan while we have not borrowed any amounts under the Revolving Credit Facility. Subsequent to April 30, 2023, we have drawn $1.0 million from the Revolving Credit Facility for leasehold improvements.

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Note 14 - Cash Dividend and Declared Dividends

6 Months Ended

Apr. 30, 2023

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 six months ended April 30, 2023, nor did we pay any dividends during the three or six months ended April 30, 2022.

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Significant Accounting Policies (Policies)

6 Months Ended

Apr. 30, 2023

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 six months ended April 30, 2023 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”, “we”, “us”, or “our” 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”, “we”, “us”, or “our” 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.

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 April 30, 2023 and October 31, 2022, the carrying amounts reflected in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

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 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 unaudited condensed consolidated financial statements.

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Note 2 - Business Acquisition (Tables)

6 Months Ended

Apr. 30, 2023

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	$	6,620,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,617,000
Noninterest-bearing liabilities		(1,800,000	)
Net assets acquired at fair value	$	24,475,000

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended April 30,				Six Months Ended April 30,
	2023		2022		2023			2022
Revenue	$	22,298	$	22,559	$	40,642		$	44,527
Net income (loss)		581		429		(581	)		739
Earnings (loss) per share
Basic	$	0.06	$	0.04	$	(0.06	)	$	0.07
Diluted	$	0.06	$	0.04	$	(0.06	)	$	0.07
Basic		10,290,911		10,107,687		10,256,158			10,087,309
Diluted		10,327,271		10,243,636		10,256,158			10,229,704

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Note 3 - Concentrations of Credit Risk (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

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

	Three Months Ended April 30,						Six Months Ended April 30,
	2023			2022			2023			2022
Wireless provider		20	%		24	%		18	%		28	%

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Note 4 - Inventories and Major Vendors (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	April 30, 2023		October 31, 2022
Raw materials and supplies	$	14,485	$	15,238
Work in process		543		439
Finished goods		5,358		5,377
Totals	$	20,386	$	21,054

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Note 5 - Other Current Assets (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

Schedule of Other Current Assets [Table Text Block]

	April 30, 2023		October 31, 2022
Employee retention credit ("ERC")	$	396	$	1,636
Prepaid expense		1,070		972
Reimbursement for tenant improvements		-		2,810
Other		357		431
Totals	$	1,823	$	5,849

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Note 6 - Accrued Expenses and Other Long-term Liabilities (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	April 30, 2023		October 31, 2022
Wages payable	$	2,374	$	3,634
Accrued receipts		1,713		2,136
Other accrued expenses		1,286		1,847
Tenant improvements payable		-		1,197
Totals	$	5,373	$	8,814

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Note 7 - Loss Per Share (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

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

	Three Months Ended April 30,				Six Months Ended April 30,
	2023		2022		2023		2022
Weighted average shares outstanding for basic earnings per share		10,290,911		10,107,687		10,256,158		10,087,309
Add effects of potentially dilutive securities-assumed exercise of stock options		36,360		135,949		-		142,395
Weighted average shares outstanding for diluted earnings per share		10,327,271		10,243,636		10,256,158		10,229,704

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Note 8 - Stock-based Compensation and Equity Transactions (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

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

	Six Months Ended April 30,
	2023			2022
Risk-free interest rate		3.76	%		1.23	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (in years)	7.00			7.00
Volatility factor		54.30	%		53.35	%

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

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2022		691,005		$	5.87
Options granted		158,181		$	5.46
Options exercised		(45,000	)	$	1.90
Options cancelled		-		$	-
Options outstanding at April 30, 2023		804,186		$	6.01
Options exercisable at April 30, 2023		405,840		$	6.68
Options vested and expected to vest at April 30, 2023		798,697		$	6.02

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Note 9 - Segment Information (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

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

	Three Months Ended April 30,				Six Months Ended April 30,
	2023		2022		2023		2022
United States	$	20,908	$	19,950	$	37,012	$	36,366
Foreign Countries:
Canada		588		663		1,172		961
Italy		294		173		1,392		173
Mexico		1		53		3		78
All Other		507		666		1,063		845
		1,390		1,555		3,630		2,057
Totals	$	22,298	$	21,505	$	40,642	$	38,423

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

	RF Connector			Custom Cabling
	and			Manufacturing and
2023	Cable Assembly			Assembly		Corporate			Total
Net sales	$	8,650		$	13,648	$	-		$	22,298
(Loss) income before benefit for income taxes		(306	)		812		(89	)		417
Depreciation and amortization		477			146		-			623
Total assets		50,314			24,837		8,968			84,119
2022
Net sales	$	7,510		$	13,995	$	-		$	21,505
Income (loss) before provision for income taxes		577			807		(745	)		639
Depreciation and amortization		293			145		-			438
Total assets		34,398			26,812		8,437			69,647

	RF Connector			Custom Cabling
	and			Manufacturing and
2023	Cable Assembly			Assembly			Corporate			Total
Net sales	$	17,708		$	22,934		$	-		$	40,642
Loss before benefit from income taxes		(60	)		(109	)		(736	)		(905	)
Depreciation and amortization		872			293			-			1,165
Total assets		50,314			24,837			8,968			84,119
2022
Net sales	$	11,433		$	26,990		$	-		$	38,423
Income (loss) before benefit from income taxes		633			1,121			(1,472	)		282
Depreciation and amortization		330			288			-			618
Total assets		34,398			26,812			8,437			69,647

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Note 11 - Intangible Assets (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

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

	April 30, 2023			October 31, 2022
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(356	)		(334	)
		67			89
Customer relationships (estimated lives 7 - 15 years)		6,058			6,058
Accumulated amortization		(3,267	)		(3,074	)
		2,791			2,984
Backlog (estimated life 1 - 2 years)		327			327
Accumulated amortization		(327	)		(313	)
		-			14
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(160	)		(143	)
		208			225
Tradename (estimated life 15 years)		1,700			1,700
Accumulated amortization		(132	)		(76	)
		1,568			1,624
Proprietary Technology (estimated life 10 years)		11,100			11,100
Accumulated amortization		(1,295	)		(740	)
		9,805			10,360
Totals	$	14,439		$	15,296
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

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Note 12 - Commitments (Tables)

6 Months Ended

Apr. 30, 2023

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended		Six Months Ended
	April 30, 2023		April 30, 2023
Operating lease cost	$	703	$	1,467

Lessee, Leases, Other Information [Table Text Block]

	April 30, 2023			October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	141		$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		111.7			113.72
Weighted Average Discount Rate
Operating leases		3.75	%		3.75	%

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year ending October 31,	Operating Leases
2023 (excluding six months ended April 30, 2023)	$	1,245
2024		1,991
2025		1,796
2026		1,835
2027		1,874
Thereafter		10,619
Total future minimum lease payments		19,360
Less imputed interest		(3,175	)
Total	$	16,185

Reported as of April 30, 2023	Operating Leases
Other current liabilities	$	1,692
Operating lease liabilities		14,493
Total	$	16,185

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Note 2 - Business Acquisition (Details Textual) - USD ($)		3 Months Ended	11 Months Ended
	Mar. 01, 2022	Jul. 31, 2022	Jan. 31, 2023	Feb. 28, 2022
Bank of America, N.A. [Member]
Debt Instrument, Face Amount				$ 17,000,000
Microlab/FXR LLC [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Combination, Consideration Transferred	$ 24,250,000
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred		$ 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			1 year
Microlab/FXR LLC [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life			15 years

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Note 2 - Business Acquisition - Components of the Purchase Price of Schroff Technologies International, Inc. (Details) - Schrofftech [Member]	Mar. 01, 2022 USD ($)
Cash consideration paid at closing	$ 24,250,000
Post-closing adjustment	225,000
Total consideration transferred	$ 24,475,000

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Note 2 - Business Acquisition - Allocation of Estimated Purchase Price of Schroff Technologies International, Inc. (Details) - USD ($)	Apr. 30, 2023	Oct. 31, 2022	Mar. 01, 2022
Goodwill	$ 8,085,000	$ 8,085,000
Schrofftech [Member]
Current assets			$ 6,620,000
Property and equipment			198,000
Intangible assets			13,840,000
Goodwill			5,617,000
Non-interest bearing liabilities			(1,800,000)
Net assets acquired at fair value			$ 24,475,000

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Note 2 - Business Acquisition - Unaudited Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Revenue			$ 40,642	$ 44,527
Net (loss) income			$ (581)	$ 739
Basic (in dollars per share)			$ (0.06)	$ 0.07
Diluted (in dollars per share)			$ (0.06)	$ 0.07
Basic (in shares)			10,256,158	10,087,309
Diluted (in shares)			10,256,158	10,229,704
Microlab/FXR LLC [Member]
Revenue	$ 22,298	$ 22,559
Net (loss) income	$ 581	$ 429
Basic (in dollars per share)	$ 0.06	$ 0.04
Diluted (in dollars per share)	$ 0.06	$ 0.04
Basic (in shares)	10,290,911	10,107,687
Diluted (in shares)	10,327,271	10,243,636

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Note 3 - Concentrations of Credit Risk (Details Textual) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jan. 31, 2023	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2023	Apr. 30, 2022
Cash, Uninsured Amount	$ 3.1
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member]
Concentration Risk, Percentage	20.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Distributor [Member]
Concentration Risk, Percentage		24.00%	18.00%	28.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member]
Concentration Risk, Percentage	24.00%	21.00%			21.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor One [Member]
Concentration Risk, Percentage			24.00%

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Note 3 - Concentrations of Credit Risk - Sales (Details)	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Provider [Member]
Wireless provider	20.00%	24.00%	18.00%	28.00%

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Note 4 - Inventories and Major Vendors (Details Textual) - Supplier Concentration Risk [Member] - Inventory Purchases [Member]	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Number of Major Vendors	2	1	1
One Vendor [Member]
Concentration Risk, Percentage	27.00%	35.00%		32.00%
Vendors Two [Member]
Concentration Risk, Percentage	12.00%		20.00%

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Note 4 - Inventories and Major Vendors - Inventories (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Oct. 31, 2022
Raw materials and supplies	$ 14,485	$ 15,238
Work in process	543	439
Finished goods	5,358	5,377
Totals	$ 20,386	$ 21,054

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Note 5 - Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Oct. 31, 2022
Employee retention credit ("ERC")	$ 396	$ 1,636
Prepaid expense	1,070	972
Reimbursement for tenant improvements	0	2,810
Other	357	431
Totals	$ 1,823	$ 5,849

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Note 6 - Accrued Expenses and Other Long-term Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Oct. 31, 2022
Wages payable	$ 2,374	$ 3,634
Accrued receipts	1,713	2,136
Other accrued expenses	1,286	1,847
Tenant improvements payable	0	1,197
Totals	$ 5,373	$ 8,814

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Note 7 - Loss Per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	755,229	420,223	745,229	459,889

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Note 7 - Loss Per Share - Basic and Diluted Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Basic (in shares)	10,290,911	10,107,687	10,256,158	10,087,309
Add effects of potentially dilutive securities-assumed exercise of stock options (in shares)	36,360	135,949	0	142,395
Diluted (in shares)	10,327,271	10,243,636	10,256,158	10,229,704

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Note 8 - Stock-based Compensation and Equity Transactions (Details Textual) - USD ($)					3 Months Ended		6 Months Ended
	Jan. 10, 2023	May 02, 2022	Jan. 10, 2022	Jan. 12, 2021	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term							6 years 11 months 4 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term							5 years 11 months 1 day
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term							6 years 11 months 8 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value					$ 146,555		$ 146,555
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value					39,720		39,720
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value					144,162		144,162
Share-Based Payment Arrangement, Expense							441,000	$ 307,000
Selling, General and Administrative Expenses [Member]
Share-Based Payment Arrangement, Expense					230,000	$ 168,000
Restricted Stock [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount					652,629		$ 652,629
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition							1 year 3 months 14 days
Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)		0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value							$ 3.21	$ 3.84
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount					$ 987,788		$ 987,788
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition							2 years 8 months 1 day
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 (in shares)	54,092		39,666
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 (Year)	4 years		4 years
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] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 10, 2024 [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, Options, Grants in Period, Gross (in shares)	108,181
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)			10 years
Incentive Stock Options [Member] | One Manager and Three Officers [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)			106,001
Another Manager [Member] | Restricted Stock and Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)				10 years
Another Manager [Member] | Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	50,000

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Note 8 - Stock-based Compensation and Equity Transactions - Assumptions (Details)	6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Risk-free interest rate	3.76%	1.23%
Dividend yield	0.00%	0.00%
Expected life of the option (years) (Year)	7 years	7 years
Volatility factor	54.30%	53.35%

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Note 8 - Stock-based Compensation and Equity Transactions - Options Outstanding (Details)	6 Months Ended
	Apr. 30, 2023 $ / shares shares
Outstanding (in shares)	691,005
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 5.87
Options granted (in shares)	158,181
Options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 5.46
Exercise of stock options (in shares)	45,000
Options exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 1.90
Options cancelled (in shares)	0
Options outstanding (in shares)	804,186
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 6.01
Options exercisable at April 30, 2023 (in shares)	405,840
Options exercisable at April 30, 2023 (in dollars per share) | $ / shares	$ 6.68
Options vested and expected to vest (in shares)	798,697
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares	$ 6.02

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Note 9 - Segment Information (Details Textual)	3 Months Ended	12 Months Ended
	Jan. 31, 2023	Oct. 31, 2022
Number of Reportable Segments	2	2

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Note 9 - Segment Information - Sales by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022
Net sales	$ 22,298	$ 21,505	$ 40,642	$ 38,423
UNITED STATES
Net sales	20,908	19,950	37,012	36,366
CANADA
Net sales	588	663	1,172	961
ITALY
Net sales	294	173	1,392	173
MEXICO
Net sales	1	53	3	78
All Other Foreign Countries [Member]
Net sales	507	666	1,063	845
Non-US [Member]
Net sales	$ 1,390	$ 1,555	$ 3,630	$ 2,057

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Note 9 - Segment Information - Net Sales, Income Before Provision for Income Taxes and Other Related Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022	Oct. 31, 2022
Net sales	$ 22,298	$ 21,505	$ 40,642	$ 38,423
Income (loss) before benefit for income taxes	417	639	(905)	282
Depreciation and amortization	623	438	1,165	618
Total assets	84,119	69,647	84,119	69,647	$ 89,566
Operating Segments [Member] | RF Connector and Cable Assembly [Member]
Net sales	8,650	7,510	17,708	11,433
Income (loss) before benefit for income taxes	(306)	577	(60)	633
Depreciation and amortization	477	293	872	330
Total assets	50,314	34,398	50,314	34,398
Operating Segments [Member] | Custom Cabling Manufacturing and Assembly [Member]
Net sales	13,648	13,995	22,934	26,990
Income (loss) before benefit for income taxes	812	807	(109)	1,121
Depreciation and amortization	146	145	293	288
Total assets	24,837	26,812	24,837	26,812
Corporate, Non-Segment [Member]
Net sales	0	0	0	0
Income (loss) before benefit for income taxes	(89)	(745)	(736)	(1,472)
Depreciation and amortization	0	0	0	0
Total assets	$ 8,968	$ 8,437	$ 8,968	$ 8,437

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Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Apr. 30, 2023	Apr. 30, 2022	Oct. 31, 2022
Income Tax Expense (Benefit), Total	$ 164,000	$ (136,000)	$ 324,000	$ (56,000)
Benefit from income taxes	$ (164,000)	$ 136,000	$ (324,000)	$ 56,000
Effective Income Tax Rate Reconciliation, Percent, Total	39.30%	21.30%	35.80%	20.40%
Income Tax Expense (Benefit)	$ (164,000)	$ 136,000	$ (324,000)	$ 56,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	182,000		182,000		$ 121,000
Unrecognized Tax Benefits, Ending Balance	$ 178,000		$ 178,000

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Note 11 - Intangible Assets (Details Textual) - USD ($)	6 Months Ended	12 Months Ended
	Apr. 30, 2023	Oct. 31, 2022
Amortization of Intangible Assets	$ 857,000	$ 1,282,000
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life (Year)	9 years 7 days

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Note 11 - Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 31, 2023	Oct. 31, 2022	Jul. 31, 2022	Oct. 31, 2021
Finite-Lived Intangible Assets, Net	$ 14,439	$ 14,439	$ 15,296
Trademarks	$ 1,174		1,174
Trademarks [Member]
Trademarks		1,174	1,174
Noncompete Agreements [Member]
Non-compete agreement (estimated life 5 years)		423	423
Accumulated amortization		(356)	(334)
Finite-Lived Intangible Assets, Net		67	89
Finite-Lived Intangible Asset, Useful Life				5 years	5 years
Customer Relationships [Member]
Non-compete agreement (estimated life 5 years)		6,058	6,058
Accumulated amortization		(3,267)	(3,074)
Finite-Lived Intangible Assets, Net		2,791	2,984
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life				7 years	7 years
Order or Production Backlog [Member]
Non-compete agreement (estimated life 5 years)		327	327
Accumulated amortization		(327)	(313)
Finite-Lived Intangible Assets, Net		0	14
Order or Production Backlog [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life				1 year	1 year
Patents [Member]
Non-compete agreement (estimated life 5 years)		368	368
Accumulated amortization		(160)	(143)
Finite-Lived Intangible Assets, Net		208	225
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life				10 years	10 years
Trade Names [Member]
Non-compete agreement (estimated life 5 years)		1,700	1,700
Accumulated amortization		(132)	(76)
Finite-Lived Intangible Assets, Net		1,568	1,624
Finite-Lived Intangible Asset, Useful Life				15 years	15 years
Technology-Based Intangible Assets [Member]
Non-compete agreement (estimated life 5 years)		11,100	11,100
Accumulated amortization		(1,295)	(740)
Finite-Lived Intangible Assets, Net		$ 9,805	$ 10,360
Finite-Lived Intangible Asset, Useful Life				10 years	10 years

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

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Note 12 - Commitments (Details Textual) - USD ($)	Apr. 30, 2023	Oct. 31, 2022
Lessor, Operating Lease, Renewal Term	5 years
Operating Lease, Right-of-Use Asset	$ 12,408,000	$ 13,480,000
Operating Lease, Liability	16,185,000	16,185,000
Operating Lease, Liability, Current	1,692,000	$ 1,887,000
Finance Lease, Liability, Total	0
Other Current Liabilities [Member]
Operating Lease, Liability, Current	1,692,000
K and K Unlimited [Member]
Lessee, Operating Lease, Monthly Rent	$ 16,000
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	1 year
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	3 years

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Note 12 - Commitments - Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Operating lease cost	$ 703	$ 1,467

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Note 12 - Commitments - Other Information Related to Leases (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Apr. 30, 2023	Oct. 31, 2022
ROU assets obtained in exchange for lease obligations, Operating leases	$ 141	$ 13,352
Operating leases (in months) (Month)	111 months 21 days	113 months 21 days
Weighted Average Discount Rate, Operating leases	3.75%	3.75%

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Note 12 - Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Oct. 31, 2022
2023 (excluding six months ended April 30, 2023)		$ 1,245
Other current liabilities	$ 1,692	1,887
2024		1,991
Operating lease liabilities	14,493	15,025
2025		1,796
Total	16,185	16,185
2026		1,835
2027		1,874
Thereafter		10,619
Total future minimum lease payments		19,360
Less imputed interest		(3,175)
Total	16,185	$ 16,185
Other Current Liabilities [Member]
Other current liabilities	$ 1,692

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Note 13 - Term Loan and Line of Credit (Details Textual)	1 Months Ended	6 Months Ended
	Feb. 28, 2022 USD ($)	Apr. 30, 2023 USD ($)	May 01, 2023 USD ($)
Term Loan [Member]
Debt Instrument, Interest Rate, Stated Percentage	3.76%
Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Long-Term Line of Credit, Total		$ 0
Revolving Credit Facility [Member] | Subsequent Event [Member]
Long-Term Line of Credit, Total			$ 1,000,000.0
Bank of America, N.A. [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 3,000,000.0
Debt Instrument, Face Amount	$ 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
Term Loan [Member]
Long-Term Debt, Gross		$ 14,374,000

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Note 14 - Cash Dividend and Declared Dividends (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Payments of Ordinary Dividends, Common Stock	$ 0	$ 0