SEC Form 10-K filed by RF Industries Ltd.

Forward-Looking Statements:

 

Certain statements in this Annual Report on Form 10-K (this “Annual Report”), and other oral and written statements made by the Company from time to time are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that discuss strategies, goals, outlook or other non-historical matters, or projected revenues, income, returns or other financial measures. In some cases forward-looking statements can be identified 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 forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those contained in such statements. Among the most important of these risks and uncertainties are the ability of the Company to meet customer demand through pricing and product offerings and efficient inventory and distribution channel management, to continue to source our raw materials and products from our suppliers and manufacturers, particularly those in Asia, the market demand for our products, which market demand is dependent in large part on the state of the telecommunications industry, the Company’s ability to continue as a going concern, the Company’s ability to remain in compliance with its existing capital loan terms and financial covenants and whether plans to develop 5G networks accelerate as expected, as well as our ability to meet any such demand, the effect of future business acquisitions and dispositions, the incurrence of impairment charges, and competition.

 

Important factors which may cause actual results to differ materially from the forward-looking statements are described in the Section entitled “Risk Factors” in this Form 10-K, and other risks identified from time to time in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

 

Summary Risk Factors

 

Our business is subject to numerous risks and uncertainties, including those highlighted in Part I, Item 1A titled “Risk Factors.” These risks include, but are not limited to, the following:

 

Risks Related to Our Business

 

•  We are heavily dependent upon wireless and broadband communications providers.

 

•  We have entered into a credit facility, which may expose us to additional risks, including risks associated with the inability to repay the loan on a timely basis.

 

•  Due to the nature of our business, we need continued access to capital, which if not available to us or if not available on favorable terms, could harm our ability to operate or expand our business.

 

•  If our third-party contract manufacturers are unable to manufacture and deliver a sufficient quantity of high-quality products on a timely and cost-efficient basis, our net revenue and profitability would be harmed and our reputation may suffer.

 

•  Our business strategy to expand through acquisitions of other businesses could increase operating costs and expose us to additional risks.

 

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

 

•  Our business, financial condition and results of operations could be harmed by the effects of public health crises.

 

•  Our dependence on third-party manufacturers increases the risk that we will not have an adequate supply of products or that our product costs will be higher than expected.

 

•  An impairment in the carrying value of goodwill, trade names and other long-lived assets could negatively affect our consolidated results of operations and net worth.

 

•  Changes in technology may reduce the demand for some of our products.

 

•  If the manufacturers of our coaxial connectors or other products discontinue the manufacturing processes needed to meet our demands or fail to upgrade their technologies, we may face production delays.

 

 

•  Our dependence upon independent distributors to sell and market our products exposes us to the risk that such distributors may decrease their sales of our products or terminate their relationship with us.

 

•  A material portion of our sales is dependent upon a few principal customers, the loss of whom could materially negatively affect our total sales.

 

•  Difficult conditions in the global economy may adversely affect our business and results of operations.

 

•  Because the markets in which we compete are highly competitive, a failure to effectively compete could result in an immediate and substantial loss of market share.

 

•  If the industries into which we sell our products experience recession or other cyclical effects impacting the budgets of our customers, our operating results could be negatively impacted.

 

•  We are subject to risks from changes to the trade policies, tariffs and import and export regulations of the U.S. and foreign governments.

 

•  Because we sell our products to foreign customers, we are exposed to all of the risks associated with international sales, including foreign currency exposure.

 

•  The inability to hire or retain certain key professionals, management and staff could adversely affect our business, financial condition and results of operations.

 

•  We have few patent rights in the technology employed in our products, which may limit our ability to compete.

 

•  Claims by other companies that we infringe their intellectual property could adversely affect our business.

 

•  A cyber incident could result in information theft, data corruption, operational disruption, and/or financial loss.

 

Risks Related to Our Common Stock

 

•  Volatility of trading prices of our stock could result in a loss on an investment in our stock.

 

•  Failure to maintain an effective system of internal control over financial reporting or to remediate weaknesses could materially harm our revenues, erode stockholder confidence in our ability to pursue business and report our financial results/condition, and negatively affect the trading price of our common stock.

 

•  While we have in the past paid dividends, no assurance can be given that we will declare or pay cash dividends in the future.

 

•  Future sales of our common stock in the public market could cause our stock price to fall.

 

•  Provisions of our certificate of incorporation and bylaws and Nevada law may make a takeover more difficult.

 

•  We are a “smaller reporting company” and we have elected to comply with certain reduced reporting and disclosure requirements which could make our common stock less attractive to investors.

 

 

PART I

 

ITEM 1.

BUSINESS

 

General

 

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 previously managed our business as two reportable segments: (i) the RF Connector and Cable Assembly (“RF Connector”) segment, and (ii) the Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment. During the fourth quarter of fiscal year 2025, we completed changes to the structure of our organization in connection with broader restructuring initiatives, including consolidation of manufacturing operations, headcount reductions, and the transition of our sales organization to a unified, customer‑centric model. As a result of these changes, our previous RF Connector and Custom Cabling operating segments were combined into a single reportable segment. The Company’s operations are managed and reported to the Chief Executive Officer, our chief operating decision maker (“CODM”), on a consolidated basis.

 

We have one reportable business segment. The products and solutions that we offer are discussed below and a summary of our net revenue by these product and solution categories is found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of this Report. A discussion of factors potentially affecting our net revenue and other operating results is set forth in “Risk Factors” included in Part I, Item 1A of this Report.

 

Recent Events

 

On March 15, 2024, we entered into a loan and security agreement (the “EBC Credit Agreement”) with Eclipse Business Capital, as administrative agent (“EBC”) and used proceeds from the initial drawings under the EBC Credit Facilities (as defined below) to repay in full outstanding obligations under our previous loan agreement and to pay fees, premiums, costs and expenses, including fees payable in connection with the EBC Credit Agreement. Our previous loan agreement with Bank of America, N.A. was terminated upon entry into the EBC Credit Agreement and is no longer in effect.

 

The EBC Credit Agreement provides for (i) a senior secured revolving loan facility of up to $15.0 million (the “EBC Revolving Loan Facility”) and (ii) a senior secured revolving credit facility of up to $1.0 million (the “EBC Additional Line” and, together with the EBC Revolving Loan Facility, the “EBC Credit Facilities”) (with a $3.0 million swingline loan sublimit). On June 14, 2024, the parties entered into the First Amendment to the EBC Credit Agreement (the “First Amendment”), which provided for a modified EBC Additional Line of $1.0 million through July 12, 2024, $666,666.67 from July 13, 2024 through August 11, 2024 and $333,333.34 from August 12, 2024 through September 10, 2024. Availability of borrowings under the EBC Credit Facilities are based upon a borrowing base formula and periodic borrowing base certifications valuing certain of our accounts receivable and inventories, as reduced by certain reserves, if any.

 

In the absence of an Event of Default (as defined in the EBC Credit Agreement) or certain other events (including the inability of EBC to determine the secured overnight financing rate “SOFR”), borrowings under (a) the EBC Revolving Loan Facility accrue interest at a rate of the one-month term SOFR reference rate plus an adjustment of 0.11448% (“Adjusted Term SOFR”) plus 5.00%, and (b) the EBC Additional Line accrue interest at a rate of Adjusted Term SOFR plus 6.50%, in each case subject to a floor of 2.00% for Adjusted Term SOFR. We will be required to pay a commitment fee of 0.50% per annum for the unused portion of the EBC Revolving Loan Facility. In addition to the foregoing unused commitment fee, we are required to pay certain other administrative fees pursuant to the terms of the EBC Credit Agreement.

 

Borrowings under the EBC Credit Agreement are secured by a security interest in certain assets of the Company and are subject to certain loan covenants. The EBC Credit Facilities require the maintenance of certain financial covenants, including (i) Excess Availability (as defined in the EBC Credit Agreement) of at least, as of any date of determination, an amount equal to the greater of (a) $1.0 million and (b) 10% of the Adjusted Borrowing Base (as defined in the EBC Credit Agreement), unless as of the last day of the most recent month for which the monthly financial statements and the related compliance certificate have been or are required to have been delivered to EBC, the Fixed Charge Coverage Ratio (as defined in the EBC Credit Agreement) for the 12 consecutive calendar month period then ended is greater than 1.10 to 1.00; and (ii) a capital expenditure limitation limiting the aggregate cost of all Capital Expenditure (as defined in the EBC Credit Agreement) to $2.5 million during any fiscal year. In addition, the EBC Credit Facilities contain customary affirmative and negative covenants.

 

On November 5, 2025, the parties entered into the Second Amendment to the EBC Credit Agreement (the “Second Amendment”). The Second Amendment amended the EBC Credit Agreement to, among other things, (i) extend the maturity date of the EBC Revolving Loan Facility to March 15, 2029, (ii) decrease the minimum EBC Revolving Loan Facility outstanding principal amount to $4.0 million and (iii) decrease the interest rate for the EBC Revolving Loan Facility to Adjusted Term SOFR or the base rate, as applicable, plus the Applicable Margin (as defined in the EBC Credit Agreement). The Applicable Margin is determined quarterly under a two-prong pricing grid based on both the Average Excess Availability (as defined in the EBC Credit Agreement) and Fixed Charge Coverage Ratio for the most recently ended fiscal quarter, as set forth on Annex IV to the EBC Credit Agreement, as amended.

 

 

Strategy

 

Our overall strategy is to provide our customers with a broad selection of products and solutions, rapid and high-quality service, and custom design capabilities, all at competitive prices. Specifically, our strategy is the following:

 

Provide rapid and flexible design and manufacturing services. We are focused on providing a standardized portfolio, allowing for quick-turn readily available products, while having the capabilities, flexible design and manufacturing services to customize our offering to address customer specific requirements or applications.

 

Competitive pricing. Our manufacturing and distribution arrangements have been designed to lower costs and enable us to offer prices on both our standard and custom manufactured products and solutions that are competitive with the marketplace, all while keeping quality as a priority.

 

Leverage our manufacturing and distribution capabilities and facilities. Our strategy is to operate our manufacturing and distribution locations to best provide our customers with a competitively priced, high-quality product and solution offering delivered with a fast turnaround time. As part of this strategy, we utilize a “one-company” approach to production and distribution locations and allocate our resources based on each location’s production specialization capabilities, its proximity to the shipment destination, and other factors. Using this “one-company” approach, our goal is to leverage available capacity and shorten delivery times, while potentially providing lower shipping costs. We operate manufacturing and distribution locations in California and in the Northeastern United States.

 

Integrate marketing and selling efforts. Our strategy is to integrate and cross-sell our various historical and acquired products and solutions. We have integrated our customer-centric marketing and sales efforts, thereby expanding the number and type of solutions we can offer to our existing client base, while also using this cross-sell approach to win new customers.

 

Broad range of immediately available products. Our strategy is to provide a high level of availability where we stock a large selection of standard products that are available for immediate delivery, including availability from multiple distributors. Additionally, we augment this “on-the-shelf” availability of several cable assembly and interconnect products with fast-turn production and assembly providing better lead times for our customers.

 

Targeted focus of product lines. Our strategy is to focus on passive products rather than manufacturing and selling operating or active components or products. Our product line focus is to support and leverage our distribution channels with our core passive interconnect and cable assemblies offering, while in parallel we continue to expand our portfolio of integrated solutions to address key end customer and market applications. As we have grown in recent years, we have placed a specific emphasis on expanding our solutions to offer more of the bill of materials required to deploy specific connectivity systems and applications in key markets, such as wireless and public safety communications.

 

Increase long-term relationships with customers. Our goal is to establish long-term relationships with the customers who have used us for specialized projects by having our solutions built into the customer’s product specifications and bills of materials. As we remain focused on maintaining and expanding our national distributor relationships through our dedicated sales and account management teams, we have invested in targeted business development efforts to assist in getting more closely aligned with the requirements of strategic end customers.

 

Expand our reach in existing markets while moving into new markets. We are focused on leveraging our successes in key existing markets and applications to expand our reach within those markets and our current customers. Additionally, we have a growth focus to leverage our experience and expertise to move into similar applications in new markets and customers.

 

Grow through strategic and targeted acquisitions. We will continue to consider strategic acquisitions of companies or technologies that can increase our customer penetration and/or diversify our customer base, supplement our management team, expand our product offerings, and/or expand our footprint in relevant market segments.

 

Operations

 

We previously managed our business as two reportable segments: the RF Connector segment and the Custom Cabling segment. During the fourth quarter of fiscal year 2025, we completed changes to the structure of our organization in connection with broader restructuring initiatives, including consolidation of manufacturing operations, headcount reductions, and the transition of our sales organization. As a result of these changes, our previous RF Connector and Custom Cabling operating segments were combined into a single reportable segment.

 

 

The RF Connector and Cable Assembly division (“RF Connector division”), which is based at our headquarters in San Diego, California, is primarily engaged in the design, manufacture and distribution of coaxial connector solutions for companies that design, build, operate, maintain and use a variety of connectivity/communication applications. Coaxial connector products consist primarily of connectors which, when attached to a coaxial cable, facilitate the transmission of analog and digital signals in various frequencies. Although most of the connectors are designed to fit standard cable products, the RF Connector division also sells custom connectors specifically designed and manufactured to suit its customers’ requirements. Additionally, during fiscal year 2023, the Company integrated the former C Enterprises division into the RF Connector division and San Diego headquarters.

 

The RF Connector division typically carries over 1,500 different types of connectors, adapters, tools, and test and measurements kits. This division’s connectors are used in thousands of different devices, products and types of equipment. Since the RF Connector division’s standard connectors can be used in a number of different products and devices, the discontinuation of one product typically does not make our connectors obsolete. Accordingly, most connectors that we carry can be marketed for a number of years. Furthermore, because our connector products are not dependent on any single line of products or any market segment, our overall sales of connectors tend to fluctuate less when there are material changes or disruption to a single product line or market segment.

 

Cable assembly products manufactured and sold by the RF Connector division consist of various types of coaxial cables that are attached to connectors (usually our connectors) for use in a variety of communications applications. Cable assemblies manufactured for the RF Connector division are primarily manufactured at our San Diego, California facilities using state-of-the-art automation equipment and are sold through distributors or directly to major OEM accounts. Our cable assembly portfolio consists of both standard and custom cable assemblies designed for specific customer requirements. We offer a line of cable assemblies with over 100,000 cable product combinations.

 

We design our connectors at our headquarters in San Diego, California; however, most of the connectors are manufactured for us by third-party foreign manufacturers located in Asia.

 

Microlab/FXR LLC. Microlab/FXR LLC (“Microlab”) was acquired in March 2022, and is based in Parsippany, New Jersey. Microlab designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. Manufacturing operations are performed at Microlab’s facilities in Parsippany, New Jersey. However, most of the connectors are manufactured for us by third-party foreign manufacturers located in Asia.

 

Cables Unlimited, Inc. Cables Unlimited, Inc. (“Cables Unlimited”) is a custom cable manufacturer located in Yaphank, New York, that we acquired in 2011. Cables Unlimited is a Corning Cable Systems CAH Connections^SM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems’ extended warranty. Cables Unlimited designs, develops and manufactures custom connectivity solutions for the industrial, defense, telecommunications and wireless markets.  The products sold by Cables Unlimited include custom and standard copper and fiber optic cable assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive fiber optic and medical equipment.

 

Rel-Tech Electronics, Inc. Rel-Tech Electronics, Inc. (“Rel-Tech”) was acquired in June 2015. Rel-Tech’s offices and manufacturing facilities are located in Milford, Connecticut. Rel-Tech is a designer and manufacturer of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, medical and military customers. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, and networking and communications cabling.

 

Schroff Technologies International, Inc. Schroff Technologies International, Inc. (“Schrofftech”) was acquired in November 2019. Schrofftech is a Rhode Island based manufacturer and marketer of intelligent thermal cooling control systems, along with pole-ready wireless small cell shrouds and enclosures, custom designed for plug-and-play installation. These products are typically used by telecommunications companies across the U.S. and Canada.

 

Product and Solutions Description

 

We produce a large variety of products and solutions that enable communications and connectivity that are used in networks, industrial applications, and a range of other markets and industries. The solutions that we offer and sell consist of the following three areas:

 

Interconnect

 

We design, develop and manufacture standard and custom coaxial, fiber optic, copper, and data cables, jumpers and assemblies to provide connectivity solutions for numerous applications in commercial, industrial, automotive, transportation, scientific, aerospace and military markets.

 

We market and manufacture cable assemblies in a variety of sizes and combinations of RF coaxial connectors and coaxial cabling. Cabling is purchased from a variety of major unaffiliated suppliers and is assembled predominately with our connectors as complete cable assemblies. Coaxial cable assemblies have numerous applications including low PIM, Wi-Fi and wireless local area networks, wide area networks, internet systems, cellular systems including 2.5G, 3G, 4G, 5G, LTE, DAS and Small Cell installations, TV/dish network systems, test equipment, military/aerospace (mil-standard and COTS (Commercial Off–The-Shelf)) and entertainment systems. Cable assemblies are manufactured to customer requirements.

 

 

We design, manufacture and market a broad range of coaxial connectors and adapters for numerous applications in commercial, industrial, automotive, transportation, scientific, aerospace and military markets.

 

There are numerous applications for these connectors, some of which include digital applications, 2.5G, 3G, 4G, 5G, LTE, Wi-Fi and other broadband wireless infrastructure, GPS, mobile radio products, aircraft, video surveillance systems, cable assemblies and test equipment. Users of our connectors include telecommunications companies, circuit board manufacturers, OEMs, consumer electronics manufacturers, audio and video product manufacturers and installers, and satellite companies. We market over 1,500 types of connectors, adapters, tools, assembly, test and measurement kits, which range in price from under $1 to over $1,000 per unit. The kits satisfy a variety of applications including, but not limited to, lab operations, site requirements and adapter needs.

 

We carry thousands of separate types of connectors, most of which are available in standard sizes and configurations and that are also offered by other companies. However, we also have some proprietary products, including the CompPro product line, CompPro is a patented compression technology that offers advantages for a water-tight, ruggedized connection, providing easier installation, and improved system reliability on braided cables. CompPro is used by wireless network operators, installers and distributors in North America and other parts of the world.

 

We also design and sell a variety of connector tools and hand tools that are assembled into kits used by lab and field technicians, research and development technicians and engineers. These tools are manufactured for us by outside contractors. Tool products are carried as an accommodation to our customers and have not materially contributed to our revenues.

 

Custom Cabling

 

We design, manufacture, and sell cable assemblies and wiring harnesses for industrial, oilfield, instrumentation, medical, manufacturing, and aerospace and defense applications. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, networking and communications cabling. DIN and Mini DIN connector assemblies include power cord, coaxial, Mil-spec and testing.

 

Additionally, we design, manufacture, and sell custom and unique fiber optic solutions. Our Cables Unlimited division is a Corning Cable Systems CAH Connections SM Gold Program member that is authorized to manufacture fiber optic products that are backed by Corning Cable Systems’ extended warranty. Through Cables Unlimited, we offer a broad range of interconnect products and systems that have the ability to combine radio frequency and fiber optic interconnect components, with various connectors and power cables through customized solutions for these customers. Cables Unlimited also manufactures OptiFlex, a custom designed hybrid fiber optic and DC power cabling solution manufactured for wireless service providers engaged in upgrading their cell towers. The custom hybrid cable is significantly lighter and possesses greater flexibility than cables previously used for wireless service.

 

Integrated Systems

 

Our integrated systems products and solutions consist of technology-centric systems that are designed and engineered for key communications and industrial applications. In many cases these systems combine products, components, and technologies from several different areas of our offering to deliver high value solutions to challenging customer applications.

 

Thermal Control Systems

 

We engineer, design, manufacture and sell patented intelligent thermal control systems for cabinets, enclosures, and small buildings that house communications equipment. The thermal control systems, which can be controlled offsite using networked software, maintain the interior temperature of these facilities.

 

Concealment Solutions

 

We design and sell integrated shrouds and enclosures for small cell deployments that reduce installation time and improve aesthetics by eliminating the exterior cabling used with current configurations.

 

Passive RF Products

 

We design and manufacture high-performance RF and microwave high-performance components such as dividers, directional couplers and filters enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks.

 

 

Foreign Sales

 

Net sales to foreign customers accounted for $6,750,000 (or approximately 8%) of our net sales, and $6,014,000 (or approximately 9%) of our net sales for the fiscal years ended October 31, 2025 and 2024, respectively. The majority of the export sales during these periods were to Canada.

 

We do not own or directly operate any manufacturing operations or sales offices in foreign countries.

 

Distribution and Marketing

 

We currently sell our products through independent warehousing distributors and through our in-house marketing and sales team. Sales through independent distributors accounted for approximately 28% of our net sales for the fiscal year ended October 31, 2025. Our agreements with most of the distributors are nonexclusive and generally may be terminated by either party upon 30-60 days’ written notice. The Company directly sells certain of its products to large, national telecommunication equipment and solution providers who include the Company’s products in their own product offerings.

 

Manufacturing

 

We contract with outside third parties for the manufacture of a significant portion of our coaxial connectors. However, virtually all of the RF cable assemblies sold during the fiscal year ended October 31, 2025 were assembled at the International Organization for Standardization (“ISO”) approved factory in San Diego, California. We procure our raw cable from manufacturers with ISO-approved factories in the United States, China, and Taiwan. The Company primarily relies on several third-party partners for the manufacture of its coaxial connectors, tools and other passive components and receives bulk cable from multiple manufacturing plants. Although we do not have manufacturing contracts with these manufacturers for our connectors and cable products, we do have long-term purchasing relationships. There are certain risks associated with our dependence on third-party manufacturers for some of our products. See “Risk Factors” below. We have in-house design engineers who create the engineering drawings for fabrication and assembly of connectors and cable assemblies. Accordingly, the third-party manufacturers are not primarily responsible for design work related to the manufacture of our connectors and cable assemblies. Although our current facilities are set up to manufacture certain lines of products, manufacturing of certain products is often shifted to other facilities to alleviate capacity limitations or to address a customer’s product manufacturing schedule requirements.

 

We manufacture custom cable assemblies, adapters and electromechanical wiring harnesses and other products through Cables Unlimited at its Yaphank, New York manufacturing facility. The Yaphank facility is an ISO-approved and AS9100 certified factory (AS9100 certification is an international standard for a Quality Management System (QMS) in the aviation, space, and defense industries, requiring companies to meet specific aerospace-related requirements). Cables Unlimited is a Corning Cable Systems CAH Connections ^SM Gold Program member, authorized to manufacture fiber optic products and assemblies that are backed by Corning Cable Systems’ extended warranty.

 

The Milford, Connecticut facility of Rel-Tech is an ISO-approved manufacturing facility that is primarily used to manufacture cable assemblies, electromechanical assemblies, wiring harnesses and other similar products. 

 

Our ISO-approved manufacturing facility in Parsippany, New Jersey oversees the design and manufacture of a wide selection of RF components and integrated subsystems branded Microlab. Additionally, this location designs and manufactures both our DAC thermal cooling systems and concealment solutions in accordance with the ETL Listing standards (ETL listing is a certification mark indicating that a product has been tested and verified to meet safety and performance standards for use in North America. It is administered by Intertek, an organization recognized by the U.S. Occupational Safety and Health Administration (OSHA) as a Nationally Recognized Testing Laboratory (NRTL)). These efforts are supported by a design and engineering office in North Kingstown, Rhode Island.

 

Raw Materials

 

Connector materials are typically made of commodity metals such as copper, brass and zinc and include small applications of precious materials, including silver and gold. The RF Connector division and Microlab division purchase most of their connector products from contract manufacturers located in Asia and the United States. We believe that the raw materials used in our products are readily available and that we are not currently dependent on any supplier for our raw materials. We do not currently have any long-term purchase or supply agreements with our connector suppliers. We believe there are numerous domestic and international suppliers of other coaxial connectors that we may utilize for any of our cabling products.

 

The Cables Unlimited, Rel-Tech, Schrofftech, and former C Enterprises divisions purchase largely all of the raw materials used in their products from sources located in the United States. Fiber optic cables are available from various manufacturers located throughout the United States, however, Cables Unlimited purchases most of its fiber optic cables from Corning Cables Systems LLC. The Company believes that the raw materials used by Cables Unlimited in its products are readily available and that Cables Unlimited is not currently dependent on any supplier for its raw materials except where Corning Extended Warranty certification is required. Neither Cables Unlimited nor Rel-Tech Electronics currently have any long-term purchase or supply agreements with their connector and cable suppliers.

 

 

Backlog

 

As of October 31, 2025, our estimated backlog of unfilled firm orders was approximately $15.5 million compared with backlog of approximately $19.5 million as of October 31, 2024. Orders typically fluctuate from quarter to quarter based on customer demand and general business conditions and, in particular, for project-based orders from wireless carrier customers for custom cable assemblies at our Cables Unlimited division. Since purchase orders are submitted from customers based on the estimated 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 shipment delays and to cancellation from customers, although we have not historically experienced material cancellations of purchase orders.

 

It is expected that a substantial portion of the backlog will be filled within the next 12 months. Most of the orders that we receive, particularly for our interconnect products, generally have short lead times. Therefore, backlog may not be indicative of future demand.

 

Human Capital

 

As of October 31, 2025, we employed 289 full-time employees, of whom 67 were in accounting, administration, sales and management, 208 were in manufacturing, distribution and assembly, and 14 were engineers engaged in design, engineering and research and development. The employees were based at our facilities in San Diego, California (132 employees), Yaphank, New York (64 employees), Milford, Connecticut (47 employees), Parsippany, New Jersey (43 employees), and North Kingstown, Rhode Island (3 employees). We also occasionally hire part-time employees. We believe that we have a good relationship with our employees.

 

Patents, Trademarks and Licenses

 

We own ten U.S. patents related to the CompPro Product Line that we acquired in May 2015. The CompPro Product Line utilizes a patented compression technology that offers revolutionary advantages for a water-tight connection, easier installation, and improved system reliability on braided cables. The CompPro Product Line is used by wireless network operators, installers and distributors in North America and other parts of the world. 

 

Our Schrofftech subsidiary owns ten issued patents on its proprietary telecom shelter cooling and control system technology and its equipment room ventilation controls.  Schrofftech has also filed three pending patent application related to ventilation and control equipment and controls. 

 

Our Microlab division carries three additional patents regarding GPS signal repeaters, RF System Monitoring, and RF Tappers. There is also one pending application for RF system conditioning.

 

The trademarks we own include the “CompPro” registered trademark associated with the compression cable product line and the “OptiFlex™” as a trademark for its hybrid cable wireless tower cable solution.  Each of our subsidiaries also use various trademarks (and associated logos and trade names) in their operations, although none of these trademarks have been registered.

 

Because the RF Connector division carries thousands of separate types of connectors and other products, most of which are available in standard sizes and configurations and are also offered by our competitors, we do not believe that our cables and connector business or competitive position is dependent on patent protection. 

 

Under agreements with Corning Cables Systems LLC, Cables Unlimited and C Enterprises are permitted to advertise that they are Corning Cables System CAH Connections ^SM Gold Program members.

 

Warranties and Terms

 

We warrant our products to be free from defects in material and workmanship for varying warranty periods, depending upon the product. Products are generally warranted to the dealer for one year, with the dealer responsible for any additional warranty it may make. The RF Connector products are warranted for the useful life of the connectors. Our thermal cooling systems may include a warranty for one year or more on parts, and in some cases labor, for certain customers. These warranties are generally serviced by third party services companies hired by the end customer. We service these warranties by providing replacements parts or systems. Although we have not experienced any significant warranty claims to date, there can be no assurance that we will not be subjected to such claims in the future.

 

We usually sell to customers on 30 to 60-day terms pursuant to invoices and do not generally grant extended payment terms. Generally, customers may delay, cancel, reduce, or return products after shipment subject to a restocking charge.

 

Under the agreement with Corning Cables Systems LLC, Cables Unlimited is authorized to manufacture optic cable assemblies that are backed by Corning Cables Systems’ extended warranty (referred to as the “Gold Certified Warranty”).

 

 

Competition

 

The industries in which we operate are highly competitive, and we compete with thousands of companies that range from large multinational corporations, most of which have greater assets and financial resources, to local manufacturers. Competition is generally based on breadth of product offering, product innovation, price, quality, delivery, performance and customer service. In addition, rapid technological changes occurring in the communications industry could also lead to the entry of new competitors of all sizes against whom we may not be able to successfully compete.  There can be no assurance that we will be able to compete successfully against existing or new competition, and the inability to do so may result in price reductions, reduced margins, or loss of market share, any of which could have an adverse effect on our business, financial condition and results of operations.

 

Government Regulations

 

Our products are designed to meet all known existing or proposed governmental regulations. We believe that we currently meet existing standards for approvals by government regulatory agencies for our principal products.

 

Our products are Restriction on Hazardous Substances (“RoHS”) compliant.

 

Environmental Regulations

 

We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health matters in the United States. Compliance with these federal, state, and local laws and regulations related to protection of the environment and employee safety and health has had no material effect on our business. There were no material capital expenditures for environmental projects in fiscal year 2025, and there are no material expenditures planned for such purposes in fiscal year 2026.

 

Investor Information

 

Our principal executive office is currently located at 16868 Via Del Campo Court, Suite 200, San Diego, California. RF Industries, Ltd. was incorporated in the State of Nevada on November 1, 1979, completed its initial public offering in March 1984 under the name Celltronics, Inc., and changed its name to RF Industries, Ltd. in November 1990. Unless the context requires otherwise, references to the “Company” in this report include RF Industries, Ltd. and our five wholly-owned subsidiaries, Cables Unlimited, Inc., Rel-Tech Electronics, Inc., C Enterprises, Inc., Schroff Technologies International, Inc., and Microlab/FXR LLC.

 

The Company’s principal Internet website is located at http://www.rfindustries.com. The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on that website as soon as reasonably practicable after we electronically file those documents with, or otherwise furnish them to, the Securities and Exchange Commission (“SEC”). Reports filed with the SEC are also available on the SEC’s website at www.sec.gov. The Company’s Internet website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Annual Report.

 

ITEM 1.A

RISK FACTORS

 

Investors should carefully consider the risks described below and all other information in this Form 10-K. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business and operations.

 

If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. In such case, the trading price of our common stock could decline and investors may lose all or part of their investment in our common stock.

 

Risks Related to Our Business

 

We are heavily dependent upon wireless and broadband communications providers.

 

Most of our revenues and profitability have in recent years been generated from products that we sell, directly or through our distributors, to the wireless and broadband communications industries. In addition, we also sell connectors, cables and other products to companies that incorporate these products into their own wireless and broadband communications products. As a result, our business is heavily dependent upon the wireless and broadband markets. Demand for our products in these markets depends primarily on capital spending by operators for constructing, rebuilding or upgrading their telecommunication systems. The amount of this capital spending and, therefore, our sales and profitability, will be affected by a variety of factors affecting the telecommunications companies, including general economic conditions, consolidation within the telecommunications industry and the financial condition of operators. Although we sell many products into many different markets other than the telecommunications marketplace, because a major portion of our revenues has historically been derived from direct and indirect sales to wireless and broadband communications companies, our financial condition and results of operations are heavily influenced by the health and growth of the wireless and broadband markets, all of which is beyond our control. 

 

 

We have entered into a credit facility, which may expose us to additional risks, including risks associated with the inability to repay the loan on a timely basis.

 

On March 15, 2024, we entered into a loan and security agreement (the “EBC Credit Agreement”), with Eclipse Business Capital as administrative agent (“EBC”), which providing for (i) a senior secured revolving loan facility of up to $15.0 million (the “EBC Revolving Loan Facility”) and (ii) a senior secured revolving credit facility of up to $1.0 million (the “EBC Additional Line” and, together with the EBC Revolving Loan Facility, the “EBC Credit Facilities”) (with a $3.0 million swingline loan sublimit). We used proceeds from the initial drawings under the EBC Credit Facilities to repay in full outstanding obligations under the loan agreement (the “BofA Loan Agreement”) previously entered into by us and Bank of America, N.A. (“BofA”) used to fund our acquisition of Microlab. Additional proceeds from the initial drawings under the EBC Credit Facilities were used to pay fees, premiums, costs and expenses, including fees payable in connection with the EBC Credit Agreement. The BofA Loan Agreement was terminated upon entry into the EBC Credit Agreement and is no longer in effect.

 

Pursuant to the terms of the First Amendment to the EBC Credit Agreement entered into by the parties on June 14, 2024, the EBC Additional Line was modified to provide for $1.0 million through July 12, 2024, $666,666.67 from July 13, 2024 through August 11, 2024 and $333,333.34 from August 12, 2024 through September 10, 2024. Availability of borrowings under the EBC Credit Facilities are based upon a borrowing base formula and periodic borrowing base certifications valuing certain of our accounts receivable and inventories, as reduced by certain reserves, if any.

 

In the absence of an Event of Default (as defined in the EBC Credit Agreement) or certain other events (including the inability of EBC to determine the secured overnight financing rate “SOFR”), borrowings under (a) the EBC Revolving Loan Facility accrue interest at a rate of the one-month term SOFR reference rate plus an adjustment of 0.11448% (“Adjusted Term SOFR”) plus 5.00%, and (b) the EBC Additional Line accrue interest at a rate of Adjusted term SOFR plus 6.50%, in each case subject to a floor of 2.00% for Adjusted Term SOFR. We are required to pay a commitment fee of 0.50% per annum for the unused portion of the EBC Revolving Loan Facility. In addition to the foregoing unused commitment fee, we are required to pay certain other administrative fees pursuant to the terms of the EBC Credit Agreement.

 

On November 5, 2025, the parties entered into the Second Amendment to the EBC Credit Agreement, which (i) extended the maturity date of the EBC Revolving Loan Facility to March 15, 2029, (ii) decreased the minimum EBC Revolving Loan Facility outstanding principal amount to $4.0 million and (iii) decreased the interest rate for the EBC Revolving Loan Facility to Adjusted Term SOFR or the base rate, as applicable, plus the Applicable Margin (as defined in the EBC Credit Agreement). The Applicable Margin is determined quarterly under a two-prong pricing grid based on both the Average Excess Availability (as defined in the EBC Credit Agreement) and Fixed Charge Coverage Ratio for the most recently ended fiscal quarter, as set forth on Annex IV to the EBC Credit Agreement, as amended.

 

Our failure to comply with the terms of the EBC Credit Agreement could result in a default under the agreement. EBC may accelerate the payment terms of the EBC Credit Agreement upon the occurrence of certain events of default set forth therein. Any event that could require us to repay debt prior to its due date could have a material adverse impact on our financial condition and results of operations and may affect our ability to continue as a going concern. Further, any renegotiation, refinancing or additional indebtedness that we incur in the future may subject us to further covenants.

 

Our ability to comply with terms contained in the EBC Credit Agreement may be affected by events beyond our control, including prevailing economic, financial and industry conditions. Even if we are able to comply with all of the applicable covenants and terms, the restrictions on our ability to manage our business in our sole discretion could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that we believe would be beneficial to us. In addition, our obligations under the EBC Credit Agreement are secured, on a first-priority basis, and such security interests could be enforced by EBC in the event of default by us.

 

Due to the nature of our business, we need continued access to capital, which if not available to us or if not available on favorable terms, could harm our ability to operate or expand our business.

 

Our business requires capital that is not financed by trade creditors when our business is expanding. If cash from available sources is insufficient or cash is used for unanticipated needs, we may require additional capital sooner than anticipated.

 

We believe that our existing sources of liquidity, including cash resources and cash provided by operating activities will provide sufficient resources to meet our working capital and cash requirements for at least the next twelve months; however, there can be no assurance that our cash resources will fund our operating plan for the period anticipated by us, especially if there is a material adverse impact on our business from unforeseen events or a desire to reduce our outstanding indebtedness. Any such events could have an effect on our liquidity and our ability to continue as a going concern in the future, and result in a need to raise additional capital. Alternatively, we could decide to liquidate assets, raise capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if we pursue additional acquisitions. In the event we are required, or elect, to raise additional funds, we may be unable to do so on favorable terms, or at all, and may incur expenses in raising the additional funds and increase our interest rate exposure, and any future indebtedness could adversely affect our operating results and severely limit our ability to plan for, or react to, changes in our business or industry. Further, under the EBC Credit Agreement, we are limited by financial and other negative covenants in our credit arrangements. If we cannot raise funds on acceptable terms, we may be unable to continue as a going concern and may not be able to take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. Any inability to raise additional capital when required could have an adverse effect on our business and operating results.

 

 

In the event that we are unable to pay our obligations on the EBC Credit Facilities on a timely basis, maintain the financial covenants under the EBC Credit Agreement, as amended, including the Excess Availability requirements and capital expenditure limitation, or otherwise default on our obligations under the EBC Credit Agreement, EBC will have a right to foreclose on personal property of the Company and certain of its subsidiaries.

 

We depend on third-party contract manufacturers for a majority of our connector manufacturing needs. If they are unable to manufacture and deliver a sufficient quantity of high-quality products on a timely and cost-efficient basis, our net revenue and profitability would be harmed and our reputation may suffer.

 

Substantially all of the RF Connector division’s connector products are manufactured by third-party contract manufacturers. We rely on them to procure components for RF connectors and in certain cases to design, assemble and test the products on a timely and cost-efficient basis. If our contract manufacturers are unable to complete design work on a timely basis, we will experience delays in product development and our ability to compete may be harmed. In addition, because some of our manufacturers have manufacturing facilities in Taiwan and China, their ability to provide us with adequate supplies of high-quality products on a timely and cost-efficient basis is subject to a number of additional risks and uncertainties, including political, social and economic instability and factors that could impact the shipment of supplies. Further, health crises, including epidemics or pandemics and government and business responses thereto, could affect our manufacturers, including by resulting in quarantines and/or closures, which could result in potential closures and disruptions to our manufacturing needs. If our manufacturers are unable to provide us with adequate supplies of high-quality products on a timely and cost-efficient basis, our operations would be disrupted and our net revenue and profitability would suffer. Moreover, if our third-party contract manufacturers cannot consistently produce high-quality products that are free of defects, we may experience a higher rate of product returns, which would also reduce our profitability and may harm our reputation and brand.

 

Our third-party contract manufacturers are based in Asia. Recently, our third-party contract manufacturers have been subject to various supply chain disruptions. These supply chain disruptions have slowed the delivery of products to us and have increased the price of certain materials due to the significant increase in costs of raw materials and shipping costs. Our ability to produce and timely deliver our products may be materially impacted in the future if these supply chain disruptions continue or worsen. In addition, because of the rising cost, we may be forced to increase the price of our products to our customers, or we may have to reduce our gross margins on the products that we sell. Because some of our custom manufacturing contracts call for deliveries over a longer period of time, cost increases during the term of these agreements at times cannot be passed through to our customers and therefore will have to be borne by us.

 

We do not currently have any long-term supply agreements with any of our contract manufacturers, and such manufacturers could stop manufacturing products for us at any time. Although we believe that we could locate alternate contract manufacturers if any of our manufacturers terminated our business, our operations could be impacted until alternate manufacturers are found.

 

Our business strategy to expand through acquisitions of other businesses could increase operating costs and expose us to additional risks.

 

As part of our plan to operate businesses that are profitable and that reflect the changing market, we from time to time sell unprofitable divisions and purchase new businesses. In addition, we have previously disclosed that, as part of our growth strategy, we intend to make additional acquisitions of businesses in the future. While we believe that restructuring our operations and acquiring other businesses will benefit us in the longer term, these acquisitions have in the short-term caused us to incur additional legal, accounting and administrative expenses, including the cost of integrating the various accounting systems of our new subsidiaries, upgrading our information systems, and the cost of managing various divisions in separate locations and states. We may in the future make additional acquisitions. Accordingly, we will be subject to numerous risks associated with the acquisition of additional businesses, including:

 

●

diversion of management’s attention;

 

●

the effect on our financial statements of the amortization of acquired intangible assets;

 

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the cost associated with acquisitions and the integration of acquired operations;

 

●

we may not be able to secure capital to finance future acquisitions to the extent additional debt or equity is needed; and

 

●

assumption of unknown liabilities, or other unanticipated events or circumstances.

 

Any of these risks could materially harm our business, financial condition and results of operations. There can be no assurance that any business that we acquire will achieve anticipated revenues or operating results.

 

 

In addition to the normal risks associated with purchasing a new business and operating at a new location, the Company’s acquisition of Microlab in 2022 reduced our cash on hand by over $7.3 million and we took on $17 million of indebtedness and related financial covenants under the BofA Term Loan. In March 2024, we entered into the EBC Credit Agreement, which replaced the BofA Term Loan. The new credit facility requires the maintenance of certain financial covenants, including Excess Availability requirements and capital expenditure limitations. A breach of any of the covenants could result in a default under the credit facility. Upon the occurrence of an event of default under the credit facility, the commercial bank could terminate all commitments to extend further credit and elect to declare amounts outstanding thereunder to be immediately due and payable. The credit facility is secured by a lien on substantially all personal property of the Company and certain of its subsidiaries.

 

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

 

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

 

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

 

Our business, financial condition and results of operations could be harmed by the effects of public health crises.

 

We are subject to risks associated with public health threats, including epidemics or pandemics, which could have an adverse impact on certain aspects of our business. The extent to which a public health crisis impacts our business, results of operations, and financial condition will depend on a number of developments which are highly uncertain and are difficult to predict. These developments include, but are not limited to, the duration, spread and severity of outbreaks, government responses and other actions to mitigate the spread of and to treat such outbreaks and when and to what extent business, economic and social activity and conditions are disrupted.

 

Our dependence on third-party manufacturers increases the risk that we will not have an adequate supply of products or that our product costs will be higher than expected.

 

The risks associated with our dependence upon third parties which develop and manufacture and assemble the Company’s products include:

 

●

reduced control over delivery schedules and quality;

 

●

risks of inadequate manufacturing yields and excessive costs;

 

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the potential lack of adequate capacity during periods of excess demand; and

 

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potential increases in prices due to raw material and/or labor costs.

 

These risks may lead to increased costs or delay product delivery, which would harm our profitability and customer relationships.

 

An impairment in the carrying value of goodwill, trade names and other long-lived assets could negatively affect our consolidated results of operations and net worth.

 

Goodwill and indefinite-lived intangible assets, such as trade names, are recorded at fair value at the time of acquisition and are not amortized, but are reviewed for impairment annually or more frequently if impairment indicators arise. In evaluating the potential for impairment of goodwill and trade names, we make assumptions regarding future operating performance, business trends and market and economic conditions. There are inherent uncertainties related to these factors and in applying these factors to the assessment of goodwill and trade name recoverability. Goodwill reviews are prepared using estimates of fair value based on the estimated present value of future discounted cash flows. We could be required to evaluate the recoverability of goodwill or trade names prior to the annual assessment upon unexpected significant declines in operating results, the divestiture of a significant component of our business or other factors.

 

No assurance can be given that events or circumstances will not change regarding the carrying value of goodwill of the Cables Unlimited, Microlab, Rel-Tech, C-Enterprises and Schrofftech subsidiaries or the CompPro product line. Should we in the future determine that the carrying value of the goodwill associated with some or all of these assets no longer is recoverable, we will have to record additional impairment losses. In the event that we have to record material impairment charges on the Cables Unlimited, Microlab, Rel-Tech, C-Enterprises or Schrofftech subsidiaries or the CompPro product line, such future charges could materially reduce future earnings, which would negatively affect our stock price.

 

 

Changes in technology may reduce the demand for some of our products.

 

The wireless and telecommunications industry is rapidly changing. Changes in the product demands by telecommunications and other infrastructure companies may make certain of our current products obsolete. Accordingly, we must quickly and efficiently react to technological developments and provide new products to meet the shifting demands of our customers. Our failure to successfully introduce new or enhanced products on a timely and cost-competitive basis could have a material adverse effect on the results of our operations and financial condition.

 

If the manufacturers of our coaxial connectors or other products discontinue the manufacturing processes needed to meet our demands or fail to upgrade their technologies, we may face production delays.

 

Our coaxial connector and other product requirements typically represent a small portion of the total production of the third-party manufacturers. As a result, we are subject to the risk that a third-party manufacturer will cease production of some of our products or fail to continue to advance the process design technologies on which the manufacturing of our products are based. Each of these events could increase our costs or harm our ability to deliver products on time or develop new products.

 

Our dependence upon independent distributors to sell and market our products exposes us to the risk that such distributors may decrease their sales of our products or terminate their relationship with us.

 

Our sales efforts are primarily effected through independent distributors. Although we have entered into written agreements with most of the distributors, the agreements are nonexclusive and generally may be terminated by either party upon 30-60 days’ written notice. Our distributors are not within our control, are not obligated to purchase products from us, and may also sell other lines of products. There can be no assurance that these distributors will continue their current relationships with us or that they will not give higher priority to the sale of other products, which could include products of competitors. A reduction in sales efforts or discontinuance of sales of our products by our distributors would lead to reduced sales and could materially adversely affect our financial condition, results of operations and business. Selling through indirect channels such as distributors may limit our contact with our ultimate customers and our ability to assure customer satisfaction.

 

A material portion of our sales is dependent upon a few principal customers, the loss of whom could materially negatively affect our total sales.

 

We generate much of our revenue from a limited number of customers. For the year ended October 31, 2025, a wireless provider customer accounted for approximately 10% of total sales and approximately 26% of the total net accounts receivable balance, and an aerospace customer accounted for less than 10% of total sales and approximately 18% of the total net accounts receivable balance. For the year ended October 31, 2024, a wireless provider customer and a distributor customer both accounted for less than 10% of total sales, and accounted for approximately 15% and 10% of the total net accounts receivable balance, respectively. Although the distributors have been on-going major customers of the Company and the wireless carrier is a newer customer to the Company, the written agreements with these customers do not have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay, or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits. Adverse events affecting our principal customers could also negatively affect our ability to retain their business and obtain new orders, which could adversely affect our revenue and results of operations.

 

Difficult conditions in the global economy may adversely affect our business and results of operations.

 

A prolonged economic downturn, both in the U.S. and worldwide, could lead to lower sales or reduced sales growth, reduced prices, lower gross margins, and increased bad debt risks, all of which could adversely affect our results of operations, financial condition and cash flows. Slowing economic activity, particularly in the telecommunication and data communication and wireless communications industries that represent our largest target market, may adversely impact the demand for our products. If the current economic condition in the U.S. deteriorates, our results could be adversely affected as demand for wireless products lessens. There could also be a number of other adverse follow-on effects on our business from a deterioration of economic conditions or from a credit crisis, including insolvency of certain key distributors, key suppliers, contract manufacturers and customers.

 

Because the markets in which we compete are highly competitive, a failure to effectively compete could result in an immediate and substantial loss of market share.

 

The markets in which we operate are highly competitive and we expect that competition will increase in these markets. In particular, the wireless and telecommunications markets in which most of our products are sold are intensely competitive. A failure to effectively compete in these markets could result in an immediate and substantial loss of revenues and market share. Because most of our sales are derived from products that are neither proprietary nor can be used to distinguish us from our competitors, our ability to compete successfully in these markets depends on a number of factors, including:

 

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product quality;

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reliability;

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customer support;

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time-to-market;

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price;

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market acceptance of competitors’ products;

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general economic conditions.

 

 

Our revenues may suffer if we are not able to effectively satisfy our customers in each of the foregoing ways. In addition, our competitors or customers may offer enhancements to their existing products or offer new products based on new technologies, industry standards or customer requirements that have the potential to replace or provide lower cost or higher performance alternatives to our products. The introduction of enhancements or new products by our competitors could render our existing and future products obsolete or unmarketable.

 

Many of our competitors have significantly greater financial and other resources. In certain circumstances, our customers or potential customers have internal or may in the future institute manufacturing capabilities with which we may compete.

 

If the industries into which we sell our products experience recession or other cyclical effects impacting the budgets of our customers, our operating results could be negatively impacted.

 

The primary customers for our connector and cable products are in the wireless communications industries. Any significant downturn in our customers’ markets, in particular, or in general economic conditions which result in the reduction of budgets would likely result in a reduction in demand for our products and services and could harm our business. Historically, the communications industry has been cyclical, affected by both economic conditions and industry-specific cycles. Depressed general economic conditions and cyclical downturns in the communications industry have each had an adverse effect on sales of communications equipment, OEMs and their suppliers, including us. No assurance can be given that the wireless communications industry will not experience a material downturn in the near future. Any cyclical downturn in the communications industry could have a material adverse effect on us.

 

We are subject to risks from changes to the trade policies, tariffs and import and export regulations of the U.S. and foreign governments.

 

Changes in the import and export policies, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards or customs restrictions by the U.S. and foreign governments, could require us to change the way we conduct business and negatively affect our business performance, financial condition, results of operations, and our relationships with customers, suppliers, and employees. Likewise, changes in laws and policies governing foreign trade, manufacturing, development, and investment in the territories or countries where we currently sell our products or conduct our business could adversely affect our business.

 

For example, recently, the U.S. government imposed significant tariffs on foreign imports into the United States, including higher tariff levels on imports from China, Mexico and Canada. The U.S. continues to implement new, reinstated or adjusted tariffs, and we expect that it will continue with this practice. These actions have and are expected to continue to result in retaliatory measures on U.S. goods. The current situation is dynamic, and we cannot predict at this time whether the imposed tariffs will be maintained. If maintained, such tariffs and the potential escalation of trade disputes could pose a significant risk to our business, including an increase to the cost of our products and, to the extent we absorb the costs of tariffs and do not pass them through to our customers, higher cost of goods sold and lower gross profit and margins. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, including negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets. Further, actions we take to adapt to new tariffs or trade restrictions may cause us to modify our operations or forgo business opportunities. Likewise, tariffs and import and export regulations could also limit the availability of our products, prompt consumers to seek alternative products and provide an opportunity for competitors not subject to such tariffs to establish a presence in markets where we conduct our business. 

 

Because we sell our products to foreign customers, we are exposed to risks associated with international sales, including foreign currency exposure.

 

Sales to customers located outside the United States, either directly or through U.S. and foreign distributors, accounted for approximately 8% and 9% of our net sales during the years ended October 31, 2025 and 2024, respectively. International revenues are subject to a number of risks, including:

 

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longer accounts receivable payment cycles;

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difficulty in enforcing agreements and in collecting accounts receivable;

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tariffs and other restrictions on foreign trade;

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economic and political instability; and the

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burdens of complying with a wide variety of foreign laws.

 

 

Our foreign sales are also affected by general economic conditions in international markets. A prolonged economic downturn in our foreign markets could have an adverse effect on our business. There can be no assurance that the factors described above will not have an adverse material effect on our future international revenues and, consequently, on our financial condition, results of operations and business.

 

Since sales made to foreign customers have historically been in U.S. dollars, previously we have not been exposed to the risks of foreign currency fluctuations. However, with the acquisition of Microlab, sales made to certain foreign customers were denominated in the currencies of the countries where sales are made and for the fiscal years ended October 31, 2025 and 2024, we recognized $19,000 and $33,000 in foreign currency exchange gain at time of collection, respectively.

 

The inability to hire or retain certain key professionals, management and staff could adversely affect our business, financial condition and results of operations.

 

Our future success depends largely upon the continued service of our executive officers and other key management and technical personnel, and on our ability to continue to identify, attract, retain and motivate them. However, other than the employment agreement we have entered into with Mr. Dawson, the Company’s Chief Executive Officer, we currently do not have any other written employment agreements with our executive officers and managers. The market for employees in our industry is extremely competitive and the cost for new employees may exceed the cost of existing employees. The loss of key management and technical personnel could have an adverse effect on our business, financial position and results of operations.

 

We have few patent rights in the technology employed in our products, which may limit our ability to compete.

 

We own patents related to the CompPro proprietary product line, the Schrofftech telecom shelter cooling products and control systems, and patents recently acquired from Microlab relating to GPS signal repeaters as well as RF broadband non directional tap couplers. We have additional filings pending for RF system monitoring and GPS systems. Other than these existing and prospective patents, we do not hold any other United States or foreign patents. Historically, we have not sought to protect our rights in the technology that we develop or that our third-party contract manufacturers develop for us by means of the patent laws, and as a result, competitors can and do sell most of the same products as us, and we have not tried to prevent or restrict such competition. 

 

We may determine that we need to litigate or arbitrate to enforce our contract and intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others. As a result of any such litigation or arbitration, we could lose our ability to enforce one or more patents or other intellectual property rights. Any action we take to enforce our contract or intellectual property rights could be costly and could absorb significant management time and attention, which, in turn, could negatively impact our results of operations and cash flows. Further, even a positive resolution to our enforcement efforts may take time to conclude, which may reduce our revenues and cash resources available for other purposes, such as research and development, in the periods prior to conclusion.

 

Claims by other companies that we infringe their intellectual property could adversely affect our business 

 

Companies may assert patent, copyright or other intellectual property claims against our products or products using our technologies or other technologies used in our industry, which claims could result in our involvement in litigation. We may not prevail in such litigation given, among other factors, the complex technical issues and inherent uncertainties in intellectual property litigation. If any of our products were found to infringe another company’s intellectual property, we could be subject to an injunction or be required to redesign our products, or to license such intellectual property or pay damages or other compensation to such other company (any of which could be costly). If we are unable to redesign our products, license such intellectual property used in our products or otherwise distribute our products (e.g., through a licensed supplier), we could be prohibited from making and selling our products. 

 

Similarly, our suppliers could be found to infringe another company’s intellectual property, and such suppliers could then be enjoined from providing products or services to us.

 

A cyber incident could result in information theft, data corruption, operational disruption, and/or financial loss.

 

Businesses have become increasingly dependent on digital technologies to conduct day-to-day operations. Additionally, we may be exposed to increased cybersecurity risks as a result of remote working. At the same time, cyber incidents, including deliberate attacks or unintentional events, have increased. A cyberattack could include gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption or result in denial of service on websites. We depend on digital technology, including information systems and related infrastructure, to process and record financial and operating data, and communicate with our employees and business partners. Our technologies, systems, networks, and those of our business partners may become the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption of our business operations. Although to date we have not experienced any material losses relating to cyberattacks, there can be no assurance that we will not suffer such losses in the future. Cyberattacks are increasing in their frequency, sophistication and intensity. As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance its protective measures or to investigate and remediate any information security vulnerabilities. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyberattacks and other related breaches.

 

 

Risks Related to Our Common Stock

 

Volatility of trading prices of our stock could result in a loss on an investment in our stock.

 

As a company with a relatively small public float, we may experience greater stock price volatility, price run-ups, lower trading volume and less liquidity than large-capitalization companies. The market price of our common stock has varied greatly, and the trading volume of our common stock has historically fluctuated greatly as well. These fluctuations often occur independently of our performance or any of our announcements. Factors that may result in such fluctuations include:

 

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any shortfall in revenues or net income from revenues or net income expected by securities analysts, or a net loss in our quarterly or annual operations;

 

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fluctuations in our financial results or the results of other communications-related companies, including those of our direct competitors;

 

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general conditions in the connector and communications industries;

 

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changes in our revenue growth rates or the growth rates of our competitors;

 

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sales of large blocks of our common stock; and

 

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conditions in the financial markets in general.

 

In addition, the stock market may, from time to time, experience extreme price and volume fluctuations, which may be unrelated to the operating performance of any specific company. Accordingly, the market prices of our common stock may be expected to experience significant fluctuations in the future.

 

Failure to maintain an effective system of internal control over financial reporting or to remediate weaknesses could materially harm our revenues, erode stockholder confidence in our ability to pursue business and report our financial results/condition, and negatively affect the trading price of our common stock.

 

As a public reporting company, we are required to establish and maintain effective internal control over financial reporting. Failure to establish such internal control, or any failure of such internal control once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of our internal control over financial reporting could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.

 

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. The standards that must be met for management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. Any assessment by management that there are weaknesses in our internal control over financial reporting may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in the internal controls over financial reporting (including those weaknesses identified in periodic reports), or disclosure of management’s assessment of the internal controls over financial reporting may have an adverse impact on the price of our common stock.

 

As of October 31, 2025 and 2024, we determined that our internal control over financial reporting was effective. However, no assurance can be given that there will not be failures in our internal controls in future periods.   

 

While we have in the past paid dividends, no assurance can be given that we will declare or pay cash dividends in the future.

 

During fiscal 2025, we did not make any dividend distributions to our stockholders. Dividends are declared and paid at the discretion of the Board of Directors subject to applicable laws, and depend on a number of factors, including our financial condition, results of operations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and other factors that our Board of Directors may deem relevant. Therefore, even if our operations return to their prior level of profitability, any decision to pay dividends in the future will depend on various other factors that the Board may consider relevant. Accordingly, no assurance can be given that we will once again pay dividends in the future. If we do not pay a cash dividend, our stockholders will not realize a return on their investment in the common stock except to the extent of any appreciation in the value of the common stock. 

 

 

Future sales of our common stock in the public market could cause our stock price to fall.

 

As a smaller capitalized company, the average trading volume of our shares of common stock is relatively small. As a result, sales of a significant number of shares, or the perception that significant sales could occur, could result in a decline in our stock price. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

 

As of October 31, 2025, we had 10,713,801 shares of common stock outstanding. In addition, we had outstanding options for the purchase of 1,005,693 shares of common stock, the exercise of which would increase the number of common stock outstanding. The issuance and subsequent sale of the shares underlying these stock options could depress the trading price of our common stock. As of October 31, 2025, we also had 974,022 shares available for future grant as stock options or restricted shares, the issuance and sale of which could also impact our stock price.

 

Provisions of our certificate of incorporation and bylaws and Nevada law may make a takeover more difficult.

 

There are provisions in our basic corporate documents and under Nevada law that could discourage, delay or prevent a change in control, even if a change in control may be regarded as beneficial to some or all of our stockholders.

We are a “smaller reporting company” and we have elected to comply with certain reduced reporting and disclosure requirements which could make our common stock less attractive to investors.

 

We are a “smaller reporting company,” as defined in the Regulation S-K of the Securities Act of 1933, as amended (“Regulation S-K”), which allows us to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and (2) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. In addition, we are only required to provide two years of audited financial statements in our SEC reports. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until we are no longer a “smaller reporting company”. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal controls in the future.

 

ITEM 1B.

UNRESOLVED STAFF COMMENTS

 

Not applicable.

 

ITEM 1C.

CYBERSECURITY

 

Risk Management and Strategy

 

The Company has adopted policies and implemented certain controls and procedures that allow its management to assess, identify and manage material risks from cybersecurity threats and for its Board of Directors, through its Audit Committee, to actively oversee the strategic direction, objectives, and effectiveness of the Company’s cybersecurity risk management framework.

 

The Company’s processes are integrated into its overall enterprise risk management program and compliments the Company’s enterprise-wide risk assessment architecture, as implemented by the Company’s management and as overseen by the Company’s Board of Directors through its Audit Committee. The Company has in the past, and may continue to do so in the future, engage third-party consultants, to review and assess the Company’s information technology and security.

 

The Company seeks to address cybersecurity risks through a cross-functional approach that is focused on preserving the confidentiality, security, and availability of the information that the Company collects and stores by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

 

To identify and assess material risks from cybersecurity threats, we follow best practices in routine network and endpoint auditing, vulnerability assessments, penetration testing, and other forms of security auditing. We continuously monitor endpoint activity and network traffic for unusual or prohibited behavior to prevent, identify, and contain malicious actions.

 

We have developed incident response plans by using the information gained through testing and monitoring to manage any identified vulnerabilities and further improve our cybersecurity preparedness and response infrastructure. Such plans set forth the actions to be taken in responding to and recovering from cybersecurity incidents, which include triage, assessing the severity of incidents, escalation protocols, containment of incidents, investigation of incidents, and remediation. We also regularly perform phishing tests of our employees and provide annual privacy and security training for all employees. Our security training incorporates awareness of cyber threats including but not limited to malware, ransomware, and social engineering attacks, password hygiene and incident reporting processes.

 

19

---

 

 

We review our cybersecurity risk framework and related policies annually with senior management to help identify areas for continued focus and improvement. We also engage third-party experts to review and assess our processes to ensure they are robust and consistent with the current security landscape. The data center where we host our critical data is SOC II complaint.

 

The Company has also implemented processes to identify, monitor and address material risks from cybersecurity threats associated with our use of third-party service providers, including those in our supply chain or who have access to our systems, data or facilities that house such systems or data by discussing issues to be addressed and recommending securities measures to be improved where possible.

 

Although in the periods reported we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents, including penalties and settlements, were immaterial, we may experience such incidents in the future and the scope and impact of any such future incidents cannot be predicted. To prepare for any such event, we have a Full Disaster Recovery Plan in place that is tested annually to ensure resilience against a myriad of threats.

 

Governance

 

Role of the Board of Directors and the Audit Committee

 

As part of the Board of Directors’ role in overseeing the Company’s enterprise risk management program, which includes our cybersecurity risk management framework, the Board is responsible for exercising oversight of management’s identification and management of, and planning for, material cybersecurity risks that may reasonably be expected to impact the Company. While the full Board has overall responsibility for risk oversight, the Board has delegated oversight responsibility related to risks from cybersecurity threats to the Audit Committee. The Audit Committee is responsible for overseeing the strategic direction, objectives, and effectiveness of the Company’s cybersecurity risk management framework, taking into account the Company’s risk exposures and progress of its risk management processes. The Audit Committee is informed of the Company’s cybersecurity risk management and receives an overview of its cybersecurity program from management as part of its review, which may cover topics including, among others, recent cybersecurity risk landscape and trends, data security posture, results from third-party assessments, training and vulnerability testing, our incident response plan, material cybersecurity risks, whether developing or actual, as well as the steps management has taken to respond to such risks, emerging cybersecurity regulations, technologies and best practices. Material cybersecurity risks are also discussed during separate Board meetings as part of the Board’s risk oversight generally.

 

Role of Management

 

Our Chief Financial Officer is responsible for management’s oversight of cybersecurity governance, decision-making, risk management, awareness, and compliance across the Company. Our Chief Financial Officer works to employ a cybersecurity program designed to protect the Company’s information systems from cybersecurity threats and to respond to incidents in accordance with the Company’s incident response plan and other policies and procedures.

 

In the event of a material cybersecurity incident or investigation, management will, in compliance with escalation protocols in place, promptly report to the Audit Committee and the Board, as appropriate, in accordance with the Company’s incident response plan, and other policies and determine the timing of action, and necessary response.

 

The Company places a high priority on safeguarding its data, systems, and infrastructure from cybersecurity threats. To manage this critical aspect of operations, the Company partners with a third-party IT provider that specializes in cybersecurity services. Established in 1997, this provider brings over two decades of expertise in managing and mitigating cyber risks, including network security, vulnerability assessments, and incident response planning. The provider’s comprehensive approach ensures the protection of the Company’s sensitive information and critical systems, while also adhering to industry best practices and regulatory requirements. By leveraging the expertise of its third-party IT provider, the Company is able to implement robust cybersecurity measures that support operational continuity and reduce exposure to potential security incidents.

 

ITEM 2.

DESCRIPTION OF PROPERTY

 

We currently lease 86,952 square feet of space for our corporate headquarters and RF connector and cable assembly manufacturing facilities in San Diego, California. On June 27, 2023, we entered into a Managed Client Agreement with RGN-MCA San Diego II, LLC (“IWG”) pursuant to which IWG agreed to provide managed services for flexible workspaces under the “Regus” brand for 39,979 square feet on the 1^st and 2^nd floor(s) of the adjacent and vacant office spaces of our corporate headquarters. We occupy 46,973 square feet of office, warehouse and manufacturing space that house our corporate administration, sales and marketing, and engineering departments.  The buildings are also used for production and warehousing by our RF Connector and Cable Assembly division. We also lease 38,200 square feet of office and commercial lab space in Parsippany, New Jersey, where we operate the Microlab division. Additionally, we lease spaces in three other locations in the United States that house the administration offices and manufacturing facilities for our other divisions.  The table below shows a summary of the square footage of these locations as of October 31, 2025:

 

 

Divisions	Lease Location	Square Footage
Rel-Tech	Milford, CT	13,750
Schroff	North Kingstown, RI	7,000
Cables Unlimited	Yaphank, NY	19,500

 

 

ITEM 3.

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. Except as discussed below, 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.

 

Employee Class Action

 

On July 24, 2024, a former employee (“Plaintiff”) filed a class action lawsuit against the Company and its subsidiary, C Enterprises, Inc., in San Diego County Superior Court. The case is before the Honorable Gregory W. Pollack, and asserts allegations of California state law violations pertaining to: (1) straight time wages; (2) overtime wages; (3) meal periods; (4) rest periods; (5) business expense reimbursement; (6) timely payment of wages at termination; (7) provision of accurate itemized wage statements; and (8) California’s unfair competition law. This action seeks damages on behalf of a putative class of non-exempt employees who worked for the Company in California at any time from July 24, 2020, through the present.

 

On July 23, 2024, Plaintiff provided notice of the alleged violations of law above to California’s Labor and Workforce Development Agency (“LWDA”) under the Private Attorneys General Act of 2004 (“PAGA”). On or about October 18, 2024, Plaintiff filed her First Amended Complaint (“FAC”), which amended her class complaint to include a cause of action under PAGA, whereby Plaintiff seeks penalties on behalf of the State of California and other similarly situated employees for the period of August 14, 2023, through the present.

 

As of January 14, 2025, no class certification deadline or trial date has been set. The parties attended private mediation on August 7, 2025. The parties thereafter reached a settlement in principle, for which the parties are in the final stages of negotiating a long-form settlement agreement.

 

On October 30, 2025, we executed a memorandum of understanding, pursuant to which the Company agrees to pay, on an all-in and non-reversionary basis, a total settlement amount of $855,000, which has been accrued as of October 31, 2025.

 

The settlement will be subject to Court approval. Once the long-form settlement agreement is fully executed, a Preliminary Approval Hearing date will be scheduled. A case management conference is currently scheduled for December 4, 2026.

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

Not applicable.

 

PART II

 

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information. RF Industries, Ltd.’s common stock is listed on The Nasdaq Global Market and is traded under the “RFIL” trading symbol.

 

Stockholders. As of October 31, 2025, there were 240 holders of our common stock according to the records of our transfer agent, Continental Stock Transfer & Trust Company, New York, New York, not including holders who hold their stock in “street name.”

 

Issuer Purchases of Equity Securities. We did not repurchase any of our equity securities during the fourth quarter of fiscal 2025.

 

Recent Sales of Unregistered Securities. There were no previously unreported sales of equity securities by us that were not registered under the Securities Act during fiscal 2025.

 

 

Dividend Policy. Due to the current economic uncertainty and other financial considerations, our Board did not issue any dividend payments in fiscal year 2025. In the past our Board has approved dividend payments, but no assurance can be given if, or when the Board will resume dividend payments. The declaration and amount of any actual cash dividend are in the sole discretion of the Board and are subject to numerous factors that ordinarily affect dividend policy, including the results of our operations and financial position, as well as general economic and business conditions. Accordingly, if and when any dividends will be declared in the future will be determined by our Board based on the Company’s future operations and on the Board’s decision regarding the use of any future earnings.

 

ITEM 6.

RESERVED

 

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

CRITICAL ACCOUNTING ESTIMATES

 

The consolidated financial statements and related disclosures have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these consolidated financial statements requires us to make significant accounting estimates 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, allowances for slow-moving or obsolete inventory 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.

 

Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our statement of operations and financial position. For the fiscal year ended October 31, 2025 the critical accounting estimates identified are described below: 

 

Impairment Assessments of Finite-life Intangibles and Other Long-Lived Assets

 

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.

 

Impairment Assessment of Goodwill and Indefinite-lived Intangibles

 

We test our goodwill and trademarks and indefinite-lived intangible 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.

 

We test goodwill for impairment at the reporting unit level. The goodwill impairment guidance in GAAP provides entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment requires significant judgments by management about macro-economic conditions including our operating environment, industry and other market considerations, entity-specific events related to financial performance or loss of key personnel, and other events that could negatively impact the financial results and cash flows of the reporting unit. If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed. The quantitative assessment compares the fair value of the reporting unit with its carrying value, including goodwill. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, the amount by which the carrying value exceeds the fair value is recognized as an impairment loss.

 

We estimate the fair value of our reporting units using the income approach based upon a discounted cash flow ("DCF") model. The income approach requires the use of many assumptions and estimates including future revenues, expenses, capital expenditures, and working capital, as well as discount factors and income tax rates. The discount rates used in the DCF model were based on a weighted-average cost of capital (“WACC”) determined from relevant market comparisons, adjusted for specific reporting unit risks (primarily the uncertainty of achieving forecasted operating cash flows). A terminal value growth rate was applied to the final year of the forecasted period, which reflects our estimate of stable, perpetual growth in cash flows from the reporting unit. We then calculated a present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the income approach. Finally, we compared the total of our estimates of all reporting units fair values to our total market capitalization to assess the reasonableness of our reporting units fair value.

 

 

Key assumptions of the cash flow forecast included in the DCF model are expected revenues, expenses, capital expenditures, and working capital, as well as discount factors and income tax rates as they are subject to a high degree of judgement and complexity. We make every effort to forecast future financial performance as accurately as possible with the information available to management at the time the forecast is developed.

 

There are inherent uncertainties in our cash flow forecast and it requires management to anticipate risks to the forecast such as execution of sales strategy, production execution, industry related make-buy decisions, and global market conditions. Changes in these estimates and assumptions could materially affect the future results of our tests for goodwill impairment. We continuously monitor and evaluate relevant events and circumstances that could impact our significant assumptions used in testing goodwill, including macroeconomic conditions, industry and market considerations, financial performance and expectations of forecasted financial performance and cash flows, and changes in our stock price in relation to the carrying value of its reporting units, among other relevant factors. It is possible that future changes in such circumstances, or in the inputs and assumptions used in estimating the fair value of our reporting units, could require us to perform an interim impairment assessment and record an impairment charge.

 

In addition to the DCF, we use also the market approach, which compares the reporting unit fair value to the fair value of publicly traded companies and recent sale transactions involving similar businesses.

 

As part of our goodwill impairment testing, as of October 31, 2024 and April 30, 2024, we performed a quantitative impairment test analysis for our Microlab reporting unit. In the DCF model, we utilized a discount rate that we believe represents the risks that our businesses face, considering their sizes, the current economic environment, and other industry data we believe is appropriate. The discount rates for Microlab were 17.0%, and 18.0% at October 31, 2024 and April 30, 2024, respectively. We assigned a 75% weight to the indicated fair value under the DCF model and 25% weight to the indicated fair value under the market approach in deriving a fair value of $21.6 million and $23.4 million for the Microlab reporting unit at October 31, 2024 and April 30, 2024, respectively.

 

These quantitative tests at October 31, 2024 and April 30, 2024 indicated that the Microlab reporting unit had an estimated fair value in excess of its carrying value of 8.9% and 8.6%, respectively, and no impairment was recorded.

 

As of October 31, 2024, Microlab has a carrying value of $19.8 million, which includes $5.6 million in goodwill and $10.3 million in net amortizable intangible assets.

 

The Company determined that there were no events or circumstances as of October 31, 2025 that indicated that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount. Since there was no indication that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company determined that a quantitative goodwill impairment test was not necessary. Based on the qualitative assessment performed, we concluded that there were no indicators of impairment as of October 31, 2025.

 

Valuation Allowance on Deferred 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 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 assess all positive and negative evidence in determining if a valuation allowance is required to be recorded against the deferred tax assets. Further, we evaluated future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In making such judgements, significant weight is given to evidence that can be objectively verified, which includes the recent trend of losses. As of October 31, 2025, we recorded a valuation allowance of $4.7 million against our federal and combined state deferred tax assets.

 

The change in valuation allowance was an increase of $0.8 million and $3.8 million for fiscal 2025 and 2024, respectively.

 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

For recently issued accounting pronouncements that may affect us, see Note 1 of Notes to Consolidated Financial Statements.

 

OVERVIEW

 

During the periods covered by this Annual Report, we marketed a variety of connector products, including connectors and cables, standard and custom cable assemblies, wiring harnesses and fiber optic cable products to numerous industries for use in thousands of applications. We previously aggregated our operating divisions into two reportable segments, the RF Connector and Cable Assembly (“RF Connector”) segment and the Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment. During the fourth quarter of fiscal 2025, we completed changes to the structure of our organization in connection with broader restructuring initiatives, including consolidation of manufacturing operations, headcount reductions, and the transition of our sales organization to a unified, customer‑centric model. As a result of these changes, our previous RF Connector and Custom Cabling operating segments were combined into a single reportable segment.

 

 

Revenues generated from our interconnect products were 31% of the Company’s total sales for fiscal 2025, revenues from our custom cabling products were 32% of the Company’s total sales for fiscal 2025, and revenues from our integrated systems were 37% of total sales for fiscal 2025. Our interconnect products are primarily standardized products regularly used by customers and, therefore, have a more stable revenue stream when compared to our other offerings. Our custom cabling products are more customized cabling and wire-related equipment under larger project-based purchase orders. The integrated systems solutions are a blend of a standardized offering where we expect a more stable revenue stream with several more customized solutions that tend to be purchased in large project-based orders.

 

Financial Condition

 

The following table presents certain key measures of financial condition as of October 31, 2025 and 2024 (in thousands, except percentages):

 

		2025								2024
		Amount				% Total Assets				Amount				% Total Assets
Cash and cash equivalents		$	5,079				7.0	%		$	839				1.2	%
Current assets			34,969				47.9	%			29,113				41.0	%
Current liabilities			20,896				28.6	%			18,090				25.5	%
Working capital			14,073				19.3	%			11,023				15.5	%
Property and equipment, net			4,229				5.8	%			4,813				6.8	%
Total assets			73,046				100.0	%			71,046				100.0	%
Stockholders' equity			35,204				48.2	%			34,066				47.9	%

 

Liquidity and Capital Resources

 

Historically, we have been able to fund our liquidity and other capital requirements from funds we generated from operations. We generated operating income during fiscal 2025, as we saw sales continue to recover during the period. Further, the cost-cutting measures that were implemented to reduce our operating expenses and to help drive positive operating cash flow and increase liquidity have started to be realized. These cost-cutting efforts included consolidating facilities and recognizing the related operating efficiencies and synergies in our production operations. We intend to continue to pursue additional continuous improvement and cost reduction measures, as well as organic growth in revenue and profitability.

 

As of October 31, 2025, we had a total of $5.1 million of cash and cash equivalents compared to a total of $0.8 million of cash and cash equivalents as of October 31, 2024. As of October 31, 2025, we had working capital of $14.1 million and a current ratio of approximately 1.7:1 with current assets of $35.0 million and current liabilities of $20.9 million. We believe that the amount of cash remaining, plus the amount available to us under the EBC Revolving Loan Facility, will be sufficient to fund our anticipated liquidity needs.

 

As of October 31, 2025, we had $15.5 million of backlog, compared to $19.5 million as of October 31, 2024. The decrease in backlog relates primarily to shipments made against orders in our integrated systems products, where we saw an increase in sales of approximately $8.6 million year over year.  Our backlog may fluctuate from period to period based on customer demand, general business conditions and, in particular, the timing of project-based orders from large customers, which impacts our integrated systems offer. 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.

 

As of October 31, 2025, we generated $4.6 million of cash in our operating activities. This net inflow of cash is primarily related to net income of $0.1 million, a decrease in inventories of $1.0 million as a result of better inventory management and supply chain conditions improving allowing us to carry less inventory on hand, $2.5 million from depreciation and amortization, $0.9 million from stock-based compensation expense, $3.4 million from the change in accrued expenses, $0.3 million from income tax payable, $0.2 million from amortization of debt issuance costs, $50,000 from bad debt expense, $0.1 million from the change in other current assets and $37,000 from deferred income taxes. The cash usage was primarily due to the change in accounts receivable of $2.8 million, the change in accounts payable of $0.7 million, right-of-use assets of $0.4 million, $54,000 tax payments on cancelled shares of restricted stock and $12,000 gain on disposal of fixed assets.

 

As of October 31, 2025, we also spent $0.2 million on capital expenditures, repaid $0.4 million on the revolving credit facility with EBC, received $0.2 million in proceeds from the exercise of stock options and received $12,000 in proceeds from sales of fixed assets.

 

 

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

 

The following summarizes the key components of our consolidated results of operations for the fiscal years ended October 31, 2025 and 2024 (in thousands, except percentages):

 

		2025								2024
		Amount				% of Net Sales				Amount				% of Net Sales
Net sales		$	80,586				100.0	%		$	64,857				100.0	%
Cost of sales			53,850				66.8	%			45,986				70.9	%
Gross profit			26,736				33.2	%			18,871				29.1	%
Engineering expenses			2,982				3.7	%			2,782				4.3	%
Selling and general expenses			21,969				27.3	%			18,912				29.2	%
Operating income (loss)			1,785				2.2	%			(2,823	)			-4.4	%
Other expense			(972	)			-1.2	%			(980	)			-1.5	%
Income (loss) before provision for income taxes			813				1.0	%			(3,803	)			-5.9	%
Provision for income taxes			738				0.9	%			2,796				4.3	%
Consolidated net income (loss)		$	75				0.1	%		$	(6,599	)			-10.2	%

 

Net sales for the year ended October 31, 2025 of $80.6 million increased by 24.2%, or $15.7 million, compared to the year ended October 31, 2024. The increase in net sales is attributable mainly to the integrated systems product offering, which increased by $8.6 million, or 41.0%, to $29.6 million compared to $21.0 million in fiscal 2024, primarily driven by an increase in small cell and thermal cooling offerings to our tier one customers. The custom cabling product offering also increased by $8.1 million, or 45.0% to $26.1 million, primarily driven by increased market penetration into the aerospace industry. Net sales of the interconnect product offering decreased by $0.9 million, or 3.5%, to $25.0 million compared to $25.9 million, primarily driven by lower customer demand for fiber applications.

 

Gross profit for fiscal 2025 increased by $7.8 million to $26.7 million and gross margins increased to 33.2% of sales from 29.1% of sales in fiscal 2024. The increases in gross profit and gross margins were primarily driven by stronger overall revenue and a more favorable mix from our direct air cooling and small cell enclosure offerings and our diverse custom cabling product offerings into the aerospace and enterprise market.

 

Engineering expenses increased by $0.2 million to $3.0 million for fiscal 2025 compared to $2.8 million in fiscal 2024. The increase was the result of routine increases in personnel-related costs and continued investment in product development. Engineering expenses represent costs incurred relating to the ongoing research and development of new products.

 

Selling and general expenses increased by $3.1 million to $22.0 million (27.3% of sales) compared to $18.9 million (29.2% of sales) in fiscal 2024 primarily due to an increase in variable compensation related to commissions as a result of higher sales, bonuses and investment in additional resources. We incurred one-time charges of $1.0 million relating to severance and related legal expenses in fiscal 2025.

 

For fiscal 2025, we recorded a pretax income of $0.8 million as compared to a $3.8 million loss for fiscal 2024, primarily due to increased gross margin through higher sales and product mix, increased operational efficiencies and the continued impact of our cost savings initiatives.

 

The provision for income taxes was $0.7 million or 91% and $2.8 million or (73.5%) of income before income taxes for fiscal 2025 and 2024, respectively. The fiscal 2025 effective tax rate differed from the statutory federal rate of 21% primarily as a result of the tax benefit from research and development tax credits, the change in valuation allowance and state taxes.

 

 

For fiscal 2025, net income was $0.1 million and fully diluted earnings per share was $0.01 as compared to a net loss of $6.6 million and fully diluted loss per share of $0.63 for fiscal 2024. For fiscal 2025, the diluted weighted average shares outstanding was 10,770,802 as compared to 10,481,835 for fiscal 2024.

 

Inflation and Rising Costs

 

The cost to manufacture the Company’s products is influenced by the cost of raw materials and labor. The Company has recently experienced higher costs as a result of the increasing cost of labor and the increasing cost of raw materials. The cost of raw materials is due in part to a shortage in the availability of certain products, the higher cost of shipping, and inflation. Labor costs have risen recently as a result of increases in the minimum wage laws and an increased demand for workers. The Company may, from time to time, try to offset these cost increases by increasing the prices of its products. However, because the prices of certain of the Company’s products, particularly those under longer-term manufacturing contracts for communications related products, are fixed until the goods are manufactured and delivered, implementing price increases frequently is often not feasible.

 

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

 

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

The Company’s financial statements required by this item are set forth as a separate section of this Annual Report on Form 10-K and incorporated by reference in this Item 8. The following Financial Statements of the Company with related Notes and Report of Independent Registered Public Accounting Firm are attached hereto as pages F-1 to F-23 and filed as part of this Annual Report:

 

●

Report of CohnReznick LLP, Independent Registered Public Accounting Firm

 

●

Consolidated Balance Sheets as of October 31, 2025 and 2024

 

●

Consolidated Statements of Operations for the years ended October 31, 2025 and 2024

 

●

Consolidated Statements of Stockholders’ Equity for the years ended October 31, 2025 and 2024

 

●

Consolidated Statements of Cash Flows for the years ended October 31, 2025 and 2024

 

●

Notes to Consolidated Financial Statements

 

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

ITEM 9A.

CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

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

 

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

 

As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of October 31, 2025.

 

 

Management’s Report on Internal Control over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

 

Our system of internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

 

Under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the above evaluation, management has concluded that our internal control over financial reporting was effective as of October 31, 2025.

 

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

 

Changes in Internal Controls

 

There were no changes in our internal control over financial reporting during the most recent fiscal quarter ended October 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Inherent Limitations of Internal Controls

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

ITEM 9B.

OTHER INFORMATION

 

During the quarter ended October 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

 

 

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 

Not applicable.

 

PART III

 

 

ITEM 11.

EXECUTIVE COMPENSATION

 

The following table discloses the compensation awarded to, earned by, paid to or accrued to our named executive officers for services rendered to us for the years ended October 31, 2025 and 2024. Our named executive officers are Robert D. Dawson, our Chief Executive Officer, Peter Yin, our Chief Financial Officer, and Ray Bibisi, our President and Chief Operating Officer.

 

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Summary Compensation Table

 

																											Nonqualified
																							Non-Equity				Deferred
															Stock				Option				Incentive Plan				Compensation				All Other
			Salary				Severance				Bonus				Awards				Awards				Compensation				Earnings				Compensation				Total
Name and Principal Position	Year		($)				($)				($)				($)				($)				($)				($)				($) (4)				($)
Robert D. Dawson
Chief Executive Officer and Director (1)	2025			452,333				-				-				169,750	(5)			165,134	(5)			475,600	(12)			-				80,100				1,342,917
	2024			400,000				-				-				220,580	(6)			205,264	(7)			15,000	(13)			-				69,231				910,075
Peter Yin
Chief Financial Officer (2)	2025			297,500				-				-				60,625	(8)			58,976	(8)			196,050	(12)			-				23,616				636,767
	2024			285,000				-				-				62,858	(9)			73,309	(9)			15,000	(13)			-				21,317				457,484
Ray Bibisi
President and Chief Operating Officer (3)	2025			287,500				-				-				60,625	(10)			58,976	(10)			202,050	(12)			-				28,018				637,169
	2024			242,500				-				-				62,858	(11)			73,309	(11)			15,000	(13)			-				28,702				422,369

 

(1)

Effective November 1, 2023, Mr. Dawson’s annual salary was $445,000, of which $45,000 was issued through restricted shares on November 1, 2023 in order to conserve cash. Effective January 6, 2025, Mr. Dawson’s annual salary increased to $462,800.

 

(2)

Effective January 6, 2025, Mr. Yin’s annual salary increased to $300,000.

 

(3)

Effective February 1, 2024, Mr. Bibisi’s annual salary increased to $250,000. For the fiscal year ended October 31, 2024, Mr. Bibisi was paid $242,500. On February 29, 2024, Mr. Bibisi was promoted to President, adding to his role as Chief Operating Officer. Effective January 6, 2025, Mr. Bibisi’s annual salary increased to $275,000. Effective May 1, 2025, Mr. Bibisi’s annual salary increased to $300,000.

 

(4)

Represents accrued vacation.

 

(5)

On January 13, 2025, Mr. Dawson was granted 43,750 shares of restricted stock valued at $169,750 and options to purchase 87,500 shares of common stock at an exercise price of $3.88 (the closing price of the Company’s common stock on the date of grant) valued at $165,134.

 

(6)

On November 1, 2023, Mr. Dawson was granted 15,202 shares of restricted stock valued at $44,998 in lieu of cash. On January 11, 2024, Mr. Dawson was granted 58,333 shares of restricted stock valued at $175,582.

 

(7)

On January 11, 2024, Mr. Dawson was granted options to purchase 116,667 shares of common stock at an exercise price of $3.01 (the closing price of the Company’s common stock on the date of grant) valued at $205,264.

 

(8)

On January 13, 2025, Mr. Yin was granted 15,625 shares of restricted stock valued at $60,625 and options to purchase 31,250 shares of common stock at an exercise price of $3.88 (the closing price of the Company’s common stock on the date of grant) valued at $58,976.

 

(9)

On January 11, 2024, Mr. Yin was granted 20,883 shares of restricted stock valued at $62,858 and options to purchase 41,667 shares of common stock at an exercise price of $3.01 (the closing price of the Company’s common stock on the date of grant) valued at $73,309.

 

(10)

On January 13, 2025, Mr. Bibisi was granted 15,625 shares of restricted stock valued at $60,625 and options to purchase 31,250 shares of common stock at an exercise price of $3.88 (the closing price of the Company’s common stock on the date of grant) valued at $58,976.

 

(11)

On January 11, 2024, Mr. Bibisi was granted 20,883 shares of restricted stock valued at $62,858 and options to purchase 41,667 shares of common stock at an exercise price of $3.01 (the closing price of the Company’s common stock on the date of grant) valued at $73,309.

 

(12)

On January 8, 2025, the Board adopted an incentive compensation plan for officers (including the named executive officers) and senior managers of the Company pursuant to which officers and managers were entitled to cash bonuses based upon (i) the Company’s achievement of specified corporate goals and (ii) the satisfaction of subjective personal performance and contribution goals established for that participant. The minimum, target and maximum cash bonus target for Mr. Dawson was 0%, 75% and 112.5% and for Mr. Yin and Mr. Bibisi was 0%, 50% and 75% of their respective annual base salaries. The Board determined that each of these officers achieved at varying amounts their respective subjective personal performance and contribution goals, and therefore earned a bonus based on their individual achievement percentages of these goals for the fiscal year ended October 31, 2025.

 

(13)

On April 16, 2024, the Board adopted an incentive compensation plan for officers (including the named executive officers) and senior managers of the Company pursuant to which officers and managers were entitled to cash bonuses based upon (i) the Company’s achievement of specified corporate goals and (ii) the satisfaction of subjective personal performance and contribution goals established for that participant. The personal bonus target for Mr. Dawson was 75% and for Mr. Yin and Mr. Bibisi was 50% of their respective annual base salaries.  The Board determined that each of these officers achieved a portion of their respective subjective personal performance and contribution goals, and therefore earned a bonus based on the achievement of these goals for the fiscal year ended October 31, 2024.

 

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2025 Option Grants

 

On December 2, 2024, we granted a total of 47,500 incentive stock options to seven managers. The shares of incentive stock options vest equally over four years as follows: (i) one-quarter of the options shall vest on December 2, 2025 and (ii) the remaining options shall vest in three equal annual installments over the next three years.

 

On January 13, 2025, we granted incentive stock options to Mr. Dawson for the purchase of 87,500 shares, Mr. Yin for the purchase of 31,250 shares, Mr. Bibisi for the purchase of 31,250 shares, and to two managers for a the purchase of 15,000 shares. The incentive stock options vest over four years as follows: (i) one-quarter of the options shall vest on January 13, 2026 and (ii) the remaining 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. No other options were granted to the named executive officers during the year ended October 31, 2025.

 

Holdings of Previously Awarded Equity

 

Equity awards held as of October 31, 2025 by each of our named executive officers were issued under our 2020 Equity Incentive Plan, as amended (the “2020 Plan”) and 2010 Stock Incentive Plan (the “2010 Plan”). The following table sets forth outstanding equity awards held by our named executive officers as of October 31, 2025:

 

Outstanding Equity Awards As Of October 31, 2025

 

		Option Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)			Option Expiration Date
Robert D. Dawson			25,000.00					-				1.90		7/17/2027
			42,000.00					-				6.40		1/9/2030
			42,000.00					-				4.98		1/12/2031
			50,000.00					-				8.69		7/16/2031
			35,000.00					11,667.00	(1)			7.11		1/10/2032
			31,818.00					31,818.00	(2)			5.46		1/11/2033
			51,042.00					65,625.00	(3)			3.01		1/11/2034
			-					87,500.00	(4)			3.88		1/13/2035
Peter Yin			40,000.00					16,000.00	(5)			2.40		12/13/2027
			7,500.00					-				6.40		1/9/2030
			10,000.00					-				4.98		1/12/2031
			32,501.00					10,833.00	(1)			7.11		1/10/2032
			11,364.00					11,363.00	(2)			5.46		1/11/2033
			18,229.00					23,438.00	(3)			3.01		1/11/2034
			-					31,250.00	(4)			3.88		1/13/2035
Ray Bibisi			50,000.00					-				6.74		1/6/2030
			10,000.00					-				6.40		1/9/2030
			7,500.00					-				4.98		1/12/2031
			6,000.00					2,000.00	(1)			7.11		1/10/2032
			5,455.00					5,454.00	(2)			5.46		1/11/2033
			18,229.00					23,438.00	(3)			3.01		1/11/2034
			-					31,250.00	(4)			3.88		1/13/2035

 

(1)	Vests over four years as follows: (i) one-quarter shall vest on January 10, 2023; and (ii) the remaining options shall vest in twelve equal quarterly installments over the next three years, commencing with the first quarter following January 10, 2023.

(2)	Vests over four years as follows: (i) one-quarter shall vest on January 11, 2024; and (ii) the remaining options shall vest in twelve equal quarterly installments over the next three years, commencing with the first quarter following January 11, 2024.

(3)	Vests over four years as follows: (i) one-quarter shall vest on January 11, 2025; and (ii) the remaining options shall vest in twelve equal quarterly installments over the next three years, commencing with the first quarter following January 11, 2025.

(4)	Vests over four years as follows: (i) one-quarter shall vest on January 13, 2026; and (ii) the remaining options shall vest in twelve equal quarterly installments over the next three years, commencing with the first quarter following January 13, 2026.

(5)	Vests as to 8,000 shares annually following grant on December 13, 2017.

 

During the fiscal year ended October 31, 2025, we did not adjust or amend the exercise price of stock options awarded to the named executive officers.

 

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Employment Agreements; Incentive Plan; Change of Control Arrangements

 

Employment Agreements

 

Robert Dawson. On July 16, 2021, the Company entered into an employment agreement (the “CEO Employment Agreement”) with Robert D. Dawson, pursuant to which he continues to serve as the Company’s Chief Executive Officer. The CEO Employment Agreement became effective on July 17, 2021 and replaced Mr. Dawson’s prior employment agreement that expired on July 17, 2021. The initial term of the CEO Employment Agreement ended on January 31, 2023, after which the CEO Employment Agreement automatically renews for an additional one (1) year period, unless either Mr. Dawson or the Company provides the other party with written notice of non-renewal at least ninety (90) days prior to the date of automatic renewal.

 

Under the CEO Employment Agreement, the Company agreed to pay Mr. Dawson an annual base salary of $425,000.  Mr. Dawson will also be eligible to participate in the Company’s annual bonus plan, pursuant to which he will have the opportunity to earn a year-end bonus equal to fifty percent (50%) of his annual base salary.  Under the CEO Employment Agreement, if Mr. Dawson’s employment is terminated by the Company for any reason other than for “cause”, the Company is obligated to, concurrently with such termination, pay Mr. Dawson (x) an amount equal to one year’s base salary as in effect at such time, and (y) the estimated pro rata portion of his target bonus that was earned that year through the date of termination, and the vesting period of all of Mr. Dawson’s unvested stock options and all unvested time-based restricted stock grants will automatically be fully accelerated as of the termination date.  The foregoing provisions will not apply if Mr. Dawson voluntarily terminates his employment with the Company or is terminated for cause.  Mr. Dawson’s annual base salary for fiscal year 2025 was $462,800.

 

Also, effective July 17, 2021, Mr. Dawson received a fully vested, ten-year immediately exercisable stock option to purchase 50,000 shares of the Company’s common stock. The exercise price of this option is $8.69, which was the closing price on the date of the CEO Employment Agreement. The CEO Employment Agreement also provided that the vesting schedule of the remaining unvested portion of an option that was granted to him in 2017 was revised. On July 17, 2017, Mr. Dawson received stock options to purchase 100,000 shares of the Company’s common stock (the “2017 Option”). The award has an exercise price of $1.90 and vests as to 10,000 shares per year on each anniversary of July 17, 2017 (with 10,000 shares having vested on July 17, 2017) while he is employed by the Company. As of July 17, 2021, 50,000 shares remained unvested under the 2017 Option. Under the revised vesting schedule, provided Mr. Dawson is still employed by the Company, 25,000 shares of those unvested options under the 2017 Option vested on July 17, 2022, and the remaining 25,000 shares vested on July 17, 2023.

 

Peter Yin.  Mr. Yin was promoted to Chief Financial Officer on January 12, 2021.  Mr. Yin is currently employed on an at-will basis without a written employment agreement. Mr. Yin’s annual base salary for fiscal year 2025 was $300,000.

 

Ray Bibisi.  Mr. Bibisi was appointed as Chief Operating Officer in May 2022 and was promoted to President in February 2024, and is currently employed on an at-will basis without a written employment agreement.  Mr. Bibisi’s annual base salary for fiscal year 2025 was $300,000. 

 

Adoption of Fiscal Year 2025 Management Incentive Equity and Cash Compensation Plan

 

On January 8, 2025, the Board adopted an annual incentive compensation plan for officers (including the Company’s named executive officers) and certain senior managers of the Company and its subsidiaries for the fiscal year ended October 31, 2025 (the “2025 Compensation Plan”). Under the 2025 Compensation Plan, each participant (i) received an equity award as a long-term incentive, and (ii) is eligible to receive a cash payment after the end of the fiscal year as a short-term incentive.

 

Equity Awards. In order to provide long-term incentives to the Company’s officers and managers, on January 13, 2025, the Board granted participating officers and managers shares of restricted stock and options to purchase the Company’s common stock pursuant to the 2020 Plan. Provided the participating officer or manager is still employed with the Corporation or its subsidiaries on the following dates, the shares of restricted stock and the options shall vest over four years as follows: (i) one-quarter of the restricted shares and options shall vest on January 13, 2026; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years, commencing with the first quarter following January 13, 2026. The options have a ten-year term and an exercise price of $3.88 per share (which was the closing price of the Company’s common stock on the date of grant).

 

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Mr. Dawson, the Company’s Chief Executive Officer, was granted 43,750 shares of restricted stock and options to purchase 87,500 shares of common stock at an exercise price of $3.88 per share (the closing price of the Company’s common stock on the date of grant); Mr. Yin, the Company’s Chief Financial Officer, was granted 15,625 shares of restricted stock and options to purchase 31,250 shares of common stock at an exercise price of $3.88 per share; and Mr. Bibisi, the Company’s President and Chief Operating Officer, was granted 15,625 shares of restricted stock and options to purchase 31,250 shares of common stock at an exercise price of $3.88 per share.

 

Cash Incentives. Under the 2025 Compensation Plan, cash incentive bonuses, if any, will be paid to certain officers and senior managers based upon (i) the Company’s achievement of specified financial goals and (ii) the Board’s discretionary review of each participant’s performance during fiscal 2025. The subjective performance of each officer will be evaluated and determined by the Compensation Committee, in its sole discretion, after consultation with the Company’s Chief Executive Officer, other than with respect to the performance of the Chief Executive Officer.

 

The minimum, target and maximum cash bonus payable to the Chief Executive Officer is, respectively, 0%, 75% and 112.5% of his annual base salary, depending on achievement of the specified goals. For the other participants, the minimum bonus is 0%, the target bonuses range from 15% to 50% of base pay, and the maximum cash bonus payable ranges from 22.5% to 75% of the recipient’s fiscal 2025 annual base salary. 

 

For the Chief Executive Officer and other employees, bonuses will be weighted and based on (i) the Company’s achievement of certain fiscal 2025 revenues (weighted 30%), (ii) fiscal 2025 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) (weighted 50%), (iii) adjusted EBITDA, less interest expense on a per share basis (weighted 10%), and (iv) a subjective evaluation of each individual’s performance (weighted 10%).

 

For the Chief Financial Officer, President and Chief Operating Officer, bonuses will be weighted and based on (i) the Company’s achievement of certain fiscal 2025 revenues (weighted 20%), (ii) fiscal 2025 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) (weighted 50%), (iii) adjusted EBITDA, less interest expense on a per share basis (weighted 10%), and (iv) a subjective evaluation of each individual’s performance (weighted 20%).

 

The calculation of adjusted EBITDA will exclude the impact of one-time charges related to any business acquisitions or dispositions effected during the year, severance payments, moving costs, the impact of the Federal Paycheck Protection Program loans the Company has received, earn-out payments or reversals, other non-recurring items, executive bonus payments and equity compensation expenses accrued to management. The Board and the Compensation Committee reserve the right to modify these goals, criteria and target percentage at any time, and to grant bonuses to the participants even if the performance goals are not met. In addition, the Board and Compensation Committee may modify the bonus plan targets to reflect significant changes in Company’s business, including changes due to acquisitions or dispositions of businesses or product lines. The 2025 bonuses will be paid within 75 days after the end to the fiscal year to participating officers and managers who are employed with the Company or its subsidiaries on the date of payment.

 

Change of Control Arrangements

 

Each of Mr. Dawson, Mr. Yin and Mr. Bibisi have entered into the RF Industries, Ltd. Executive Change in Control and Severance Benefit Plan, effective January 12, 2026 (the “Change in Control Plan”). Pursuant to the Change in Control Plan, if either within 30 days before or 12 months after a Change in Control (the “Change in Control Period”), Mr. Dawson’s employment is terminated by the Company without Cause (other than as a result of death or Disability) or Mr. Dawson resigns for Good Reason (in each case as defined in the Change in Control Plan), Mr. Dawson will be entitled to receive the following severance benefits: (a) a cash severance benefit payment consisting of (i) an amount equal to 18 months of his base salary, (ii) 150% of his annual target cash bonus, and (iii) any earned but unpaid annual bonus for a performance period completed prior to the termination date; and (b) COBRA premiums for continued coverage under the Company’s group health plans for up to 18 months.  

 

Pursuant to the Change in Control Plan, if during the Change in Control Period, Mr. Yin’s or Mr. Bibisi’s, as applicable, employment is terminated by the Company without Cause (other than as a result of death or Disability) or Mr. Yin or Mr. Bibisi, as applicable, resigns for Good Reason, Mr. Yin or Mr. Bibisi, as applicable, will be entitled to receive the following severance benefits: (a) a cash severance benefit payment consisting of (i) an amount equal to 12 months of his base salary, (ii) 100% of his annual target cash bonus, and (iii) any earned but unpaid annual bonus for a performance period completed prior to the termination date; and (b) COBRA premiums for continued coverage under the Company’s group health plans for up to 12 months.

 

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Outstanding stock options issued pursuant to the 2020 Plan provide that all unvested stock options will vest in full and become exercisable immediately prior to a Corporate Transaction (as defined in the 2020 Plan) if, but only if, the holder’s continuous service has not terminated prior to the consummation of the Corporate Transaction; provided, however, that such option will terminate and no longer be exercisable if the option is not exercised at or prior to the effective time of the Corporate Transaction. In addition, shares of restricted stock granted pursuant to the 2020 Plan, will also vest in full immediately prior to the consummation of a Corporate Transaction if, but only if, the holder’s continuous service has not terminated prior to the consummation of the Corporate Transaction.

 

Further, outstanding stock options issued pursuant to the 2010 Plan provide that, immediately prior to a Corporate Transaction (as defined in the 2010 Plan), all unvested stock options will vest in full and become exercisable, if the options have not expired by the terms of the governing option agreement prior to the consummation of the Corporate Transaction and the holder’s service has not terminated prior to the consummation of the Corporate Transaction; provided, however, that the option will terminate and no longer be exercisable if the option is not exercised at or prior to the effective time of the Corporate Transaction.

 

Compensation of Directors

 

Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or employees of the Company do not receive any compensation for serving on the Board. On September 5, 2024, the Board determined that the compensation payable to directors as Board fees for the next year ending with the 2025 annual meeting of stockholders would be $90,000 ($40,000 in cash and $50,000 in restricted stock). In addition, effective September 5, 2024, the Board determined that additional chair fees and committee member fees would be paid in cash as follows:

 

		Chair				Member
Board		$	25,000
Audit Committee		$	8,000			$	5,000
Compensation Committee		$	6,000			$	5,000
Nominating and Corporate Governance Committee		$	4,000			$	4,000

 

The restricted stock fee vests on the earlier of (i) one year from the date of grant, or (ii) the Company’s next annual meeting of stockholders.  The number of restricted shares granted to each director was 13,476, determined by dividing the amount of the fee by the closing price of the Company’s common stock from the date of grant ($3.71).  Accordingly, on September 5, 2024, Mr. Holdsworth, Ms. Cefali, Mr. Garland, and Ms. Tidwell were each granted 13,476 shares of restricted stock.  The cash fee vests in four equal quarterly installments, paid in arrears commencing November 1, 2024.

 

DIRECTOR COMPENSATION FOR 2025

 

		Fees
		Earned or
		Paid in				Stock				Option				All Other
Name		Cash				Awards				Awards				Compensation				Total
Sheryl Cefali		$	60,000			$	50,000			$	-			$	-			$	110,000
Gerald T. Garland		$	58,000			$	50,000			$	-			$	-			$	108,000
Mark K. Holdsworth		$	74,000			$	50,000			$	-			$	-			$	124,000
Kay L. Tidwell		$	53,000			$	50,000			$	-			$	-			$	103,000

 

On September 10, 2025, the Board determined that the compensation payable to directors as Board fees for the next year ending with the 2026 annual meeting of stockholders will be $125,000 ($45,000 in cash and $80,000 in restricted stock). In addition, effective September 10, 2025, the Board determined that additional chair fees and committee member fees would be paid in cash as follows:

 

		Chair				Member
Board		$	35,000
Audit Committee		$	12,000			$	7,500
Compensation Committee		$	10,000			$	5,000
Nominating and Corporate Governance Committee		$	7,500			$	5,000

 

The restricted stock fees vest on the earlier of (i) one year from the date of grant, or (ii) the Company’s next annual meeting of stockholders.  The number of restricted shares granted to each director was 10,416 determined by dividing the amount of the fee by the closing price of the Company’s common stock from the date of grant ($7.68).  Accordingly, on September 10, 2025, Mr. Holdsworth, Ms. Cefali, Mr. Garland, and Ms. Tidwell were each granted 10,416 shares of restricted stock.  The cash fees vest in four equal quarterly installments paid in arrears commencing November 1, 2025.

 

35

---

 

 

Granting of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

 

We  have not timed the disclosure of material nonpublic information based on equity award grant dates or otherwise for the purpose of affecting the value of executive compensation. We have historically granted annual equity awards to our named executive officers on a predetermined schedule that coincides with the first regularly scheduled Board and Compensation Committee meeting that is held in January each calendar year.

 

On January 13, 2025, we granted incentive stock options to our named executive officers as part of our first regularly scheduled 2025 Board and Compensation Committee meetings. On January 16, 2025, we filed a Current Report on Form 8-K  announcing our fourth quarter and fiscal year 2024 financial results. Accordingly, the January 13, 2025 grants occurred during a period beginning four business days before the filing of a Current Report on Form 8-K and ending one business day after such filing.

 

The table below provides the information required by Item 402(x) of Regulation S-K. The options were granted with an exercise price equal to the closing market price of our common stock on the date of grant. The stock options vest over four years as follows: (i) one-quarter of the options shall vest on January 13, 2026, and (ii) the remaining options shall vest in 12 equal quarterly installments over the next three years, subject to continued services.

 

Name		Grant Date		Number of shares of common stock underlying the award				Exercise price of the award ($/Sh)				Grant date fair value of the award				Percentage change in the closing market price of the securities underlying the award between the trading day ending immediately prior to the disclosure of material nonpublic information and the trading day beginning immediately following the disclosure of material nonpublic information
Robert D. Dawson		January 13, 2025			87,500			$	3.88			$	165,134				0.95
Peter Yin		January 13, 2025			31,250			$	3.88			$	58,976				0.95
Ray Bibisi		January 13, 2025			31,250			$	3.88			$	58,976				0.95

 

36

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ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information regarding the ownership of the Company’s Common Stock as of January 14, 2026 for: (i) each director; (ii) the Company’s named executive officers; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than 5% of the Common Stock.  As of January 14, 2026, there were 10,713,801 shares of Common Stock issued and outstanding. Except to the extent indicated in the footnotes to the following table, the person or entity listed has sole voting and dispositive power with respect to the shares that are deemed beneficially owned by the person or entity, subject to community property laws, where applicable. Unless otherwise indicated, the address for each listed beneficial owner is c/o RF Industries, Ltd., 16868 Via Del Campo Court, Suite 200, San Diego, CA 92127.

 

		Number of Shares				Percentage
Name and Address of Beneficial Owner		Beneficially Owned (1)				Beneficially Owned
Mark K. Holdsworth			887,665	(2)			8.3	%
Robert D. Dawson			578,632	(3)			5.3	%
Peter Yin			245,834	(4)			2.3	%
Ray Bibisi			149,100	(5)			1.4	%
Gerald T. Garland			144,460				1.3	%
Sheryl Cefali			83,169				*
Kay L. Tidwell			51,466				*
All Directors and Officers as a Group (7 Persons)			2,140,326	(6)			19.1	%
Greater than 5% stockholders
Punch & Associates Investment Management, Inc.
7701 France Ave. So., Suite 300
Edina, MN 55435			810,859	(7)			7.6	%
Hytek International, Ltd
9642 Penshurst Trace
Charlotte, North Carolina 28210			720,759	(8)			6.7	%
Affiliates of THG Securities Fund, L.P.
140 S. Lake Ave., Suite 304
Pasadena, CA 91101			900,215	(2)			8.4	%

 

* Less than 1%

 

(1)

Shares of common stock that could be acquired by a beneficial owner upon exercise of an option within 60 days from January 14, 2026 are considered outstanding for the purpose of computing the percentage of shares beneficially owned by such owner, but are not considered to be outstanding for any other purpose.

 

 

(2)

Mr. Holdsworth is the founder of The Holdsworth Group, LLC, which is a managing member of THG Securities Advisors, LLC (the “Manager”), the general partner and the investment manager of THG Securities Fund, L.P. (the “Fund”). Mr. Levenick is a member of the Manager, the general partner and the investment manager of the Fund. In such capacity, each of Messrs. Holdsworth and Levenick exercise voting and investment power over all of the shares held by the Fund and may be deemed to be a beneficial owner of all of these shares. The amount of beneficial shares owned in the table reflect the following:

 

(# of Shares)		Mark K. Holdsworth				Zachary Levenick				THG Securities Fund, L.P.
Sole voting power			78,662				12,550				-
Shared voting power			629,352				629,352				629,352
Sole investment power			78,662				12,550				-
Shared investment power			629,352				629,352				629,352
Information based solely on SEC Filing (Filing Date)		SC 13D/A				SC 13D/A				SC 13D/A
		(04/24/2023)				(04/24/2023)				(04/24/2023)

 

	(3)	Includes 276,860 shares that Mr. Dawson has the right to acquire upon exercise of options.
	(4)	Includes 127,594 shares that Mr. Yin has the right to acquire upon exercise of options.
	(5)	Includes 97,183 shares that Mr. Bibisi has the right to acquire upon exercise of options.
	(6)	Includes 501,637 shares that the directors and officers have the right to acquire upon exercise of options.
	(7)	Based on a Schedule 13G/A filed with the SEC by Punch & Associates Investment Management, Inc. on August 14, 2025.
	(8)	Based on the list of record holders maintained by the Company’s transfer agent and representation from Hytek International Ltd.’s representatives.

 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table provides information as of October 31, 2025 with respect to the shares of Company common stock that may be issued under the Company’s existing equity compensation plans:

 

		A				B				C
Plan Category		Number of Securities to be Issued Upon Exercise of Outstanding Options				Weighted Average Exercise Price of Outstanding Options ($)				Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A)
Equity compensation plans approved by security holders			1,005,693				4.81				974,022
Equity compensation plans not approved by security holders			-				-				-
Total			1,005,693				4.81				974,022

 

 

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

None.

 

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Audit Fees

 

The following is a summary of the fees billed to the Company by CohnReznick LLP, the Company’s independent registered public accounting firm, for professional services rendered related to the fiscal years ended October 31, 2025 and 2024:

 

 

Fee Category		2025				2024
Audit Fees		$	361,925			$	325,405
Audit-Related Fees			-				-
Tax Fees			-				-
All Other Fees			-				-
Total Fees		$	361,925			$	325,405

 

 

Audit Fees. Consists of fees billed for professional services rendered for the audit of the Company’s annual financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by CohnReznick LLP in connection with statutory and regulatory filings or engagements.

 

Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit and review of the Company’s financial statements and are not reported under “Audit Fees.” We did not incur such audit-related fees from CohnReznick LLP during fiscal years 2025 and 2024.

 

Tax Fees. Includes fees associated with tax compliance at international locations, domestic and international tax advice and planning and assistance with tax audits and appeals.

 

All Other Fees. Includes the aggregate fees recognized for professional services provided by CohnReznick LLP, other than those services described above, including services related to other permissible advisory services.

 

Pre-Approval Policies and Procedures

 

The Audit Committee is required to review and approve the proposed retention of independent auditors to perform any proposed auditing and non-auditing services as outlined in its charter. The Audit Committee has not established policies and procedures separate from its charter concerning the pre-approval of auditing and non-auditing related services. As required by Section 10A of the Exchange Act, our Audit Committee has authorized all auditing and non-auditing services provided by CohnReznick LLP during fiscal 2025 and fiscal 2024 and the fees paid for such services.

 

ITEM 15.

EXHIBITS

 

The Company’s consolidated financial statements and related notes thereto are listed and included in this Annual Report on Form 10-K beginning on page F-1. The following exhibits are filed as part of this Annual Report:

 

 

3.1	Amended and Restated Articles of Incorporation (previously filed as an exhibit to the Company’s Form 8-K, dated August 31, 2012, which exhibit is incorporated herein by reference)
3.2	Amended and Restated Bylaws (previously filed as an exhibit to the Company’s Form 10-Q, for the quarterly period ended April 30, 2023, which exhibit is incorporated herein by reference)
4.1	Description of Registrant’s Securities (as previously filed as an exhibit to the Company’s Form 10-K for the year ended October 31, 2022, which exhibit is incorporated herein by reference)

 

 

10.1	Single Tenant Commercial Lease, dated June 15, 2011, between K&K and RF Industries, Ltd. regarding the Company’s lease in Yaphank, New York (previously filed as an exhibit to the Company’s Form 10- K for the year ended October 31, 2011, which exhibit is incorporated herein by reference)
10.2#	Form of 2010 Stock Incentive Plan (previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 20, 2010, which exhibit is incorporated herein by reference)
10.3#	Form of Stock Option Agreement for the Company’s 2010 Stock Incentive Plan (previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 20, 2010, which exhibit is incorporated herein by reference)
10.4	Stock Purchase Agreement, dated January 20, 2014, between RF Industries, Ltd. and Robert A. Portera (previously filed as an exhibit to the Company’s Form 8-K, dated January 21, 2015, which exhibit is incorporated herein by reference)
10.5	Stock Purchase Agreement, dated June 5, 2015, between RF Industries, Ltd., Rel-Tech Electronics, Inc., and the Shareholders. (previously filed as an exhibit to the Company’s Form 8-K, dated June 5, 2015, which exhibit is incorporated herein by reference)
10.6	Multi-Tenant Industrial Gross Lease, effective December 1, 2007, between Rel-Tech Electronics, Inc. and D’Amato Investments, LLC regarding the Company’s lease in Milford, CT, as amended to date (previously filed as an exhibit to the Company’s Form 8-K, dated May 1, 2014, which exhibit is incorporated herein by reference)
10.7	Amendment To Lease, by and between K & K Unlimited and Cables Unlimited, Inc., dated June 9, 2017 (previously filed as an exhibit to the Company’s Form 8-K, dated June 9, 2017, which exhibit is incorporated herein by reference)
10.8	Lease Agreement by and between D’Amato Investments, LLC and Rel-Tech Electronics, Inc., dated July 25, 2017 (previously filed as an exhibit to the Company’s Form 8-K, dated July 28, 2017, which exhibit is incorporated herein by reference)
10.9#	Form of Indemnification Agreement (previously filed as an exhibit to the Company’s Form 8-K, dated September 12, 2017, which is incorporated herein by reference)
10.10	Amendment To Lease, by and between K & K Unlimited and Cables Unlimited, Inc., dated June 6, 2018 (previously filed as an exhibit to the Company’s Form 8-K, dated June 6, 2018, which exhibit is incorporated herein by reference)
10.11	Stock Purchase Agreement between RF Industries, Ltd. and RAP Acquisition Inc., dated October 31, 2018 (previously filed as an exhibit to the Company’s Form 8-K, dated October 31, 2018, which exhibit is incorporated herein by reference)
10.12#	Option Agreement Amendment - 2010 Stock Incentive Plan (previously filed as an exhibit to the Company’s Form 10-K for the year ended October 31, 2018, which exhibit is incorporated herein by reference)
10.13	Stock Purchase Agreement between RF Industries, Ltd., DRC Technologies, Inc. and Stockholders of DRC Technologies, Inc., dated November 4, 2019 (previously filed as an exhibit to the Company’s Form 8-K, dated November 5, 2019, which exhibit is incorporated herein by reference)
10.14#	RF Industries, Ltd. 2020 Equity Incentive Plan (Amended) (previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 14, 2020, which exhibit is incorporated herein by reference)
10.15	Amendment To Lease, by and between K&K Unlimited and Cables Unlimited, Inc., dated June 30, 2021 (previously filed as an exhibit to the Company’s Form 8-K, filed on July 2, 2021, which exhibit is incorporated herein by reference)
10.16#	Employment Agreement, dated July 16, 2021, by and between RF Industries, Ltd. and Robert D. Dawson (previously filed as an exhibit to the Company’s Form 8-K, dated July 20, 2021, which exhibit is incorporated herein by reference)
10.17	Membership Interest Purchase Agreement dated as of December 16, 2021 by and among RF Industries, Ltd., Wireless Telecom Group, Inc., and Microlab/FXR LLC (previously filed as an exhibit to the Company’s Form 8-K, filed December 17, 2021, which exhibit is incorporated herein by reference.)
10.18	AIRCRE Standard Industrial/Commercial Single-Tenant Lease – Net by and between RF Industries, Ltd. and Sorrento West Properties, Inc., dated February 1, 2022, together with addenda thereto (previously filed as an exhibit to the Company’s Form 8-K, dated February 7, 2022, which exhibit is incorporated herein by reference)
10.19	Lease by and between RF Industries, Ltd. and Monarch Owner LLC, dated October 19, 2022, together with addenda thereto, for the property at 300 Interpace Parkway, Suite B100, Parsippany, New Jersey 07054 (previously filed as an exhibit to the Company’s Form 8-K, dated October 20, 2022, which exhibit is incorporated herein by reference)

 

 

10.20	Lease by and between RF Industries, Ltd. and Monarch Owner LLC, dated October 19, 2022, together with addenda thereto, for the property at 300 Interpace Parkway, Suite B200, Parsippany, New Jersey 07054 (previously filed as an exhibit to the Company’s Form 8-K, dated October 20, 2022, which exhibit is incorporated herein by reference)
10.21	First Amendment to Lease, dated October 31, 2022 by and between RF Industries, Ltd. and Sorrento West Properties, Inc. (previously filed as an exhibit to the Company’s Form 10-K for the year ended October 31, 2022, which exhibit is incorporated herein by reference)
10.22	Third Amendment to Lease, dated July 11, 2023, by and between Sorrento West Properties, Inc. and RF Industries, Ltd. (previously filed as an exhibit to the Company’s Form 8-K, dated July 13, 2023, which exhibit is incorporated herein by reference)
10.23*	Managed Client Agreement, dated June 27, 2023, between RF Industries, Ltd. and RGN-MCA San Diego II, LLC (previously filed as an exhibit to the Company’s Form 10-K for the year ended October 31, 2023, which exhibit is incorporated herein by reference)
10.24	Loan and Security Agreement, dated March 15, 2024, by and among RF Industries, Ltd., its subsidiaries, the lenders and Eclipse Business Capital LLC (previously filed as an exhibit to the Company’s Form 10-Q for the quarterly period ended January 31, 2024, which exhibit is incorporated herein by reference)
10.25	First Amendment to Loan and Security Agreement, dated June 14, 2024, by and among RF Industries, Ltd., its subsidiaries, the lenders and Eclipse Business Capital LLC (previously filed as an exhibit to the Company’s Form 10-Q for the quarterly period ended July 31, 2024, which exhibit is incorporated herein by reference)
10.26#	Amendment No. 1 to RF Industries, Ltd. 2020 Equity Incentive Plan (Amended) (previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on October 24, 2024, which exhibit is incorporated herein by reference)
10.27	Second Amendment to Loan and Security Agreement, dated as of November 5, 2025, by and among RF Industries, Ltd., Cables Unlimited, Inc., Rel-Tech Electronics, Inc., C Enterprises, Inc., Schroff Technologies International, Inc., and Microlab/FXR LLC, as Borrowers, Eclipse Business Capital LLC, as agent, and the lenders party thereto  (previously filed as an exhibit to the Company’s Form 8-K, dated November 6, 2025, which exhibit is incorporated herein by reference)
10.28#	Form of Restricted Stock Award under RF Industries, Ltd. 2020 Equity Incentive Plan (Amended) (previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 14, 2020, which exhibit is incorporated herein by reference)
10.29#	Form of Stock Option Grant Notice under RF Industries, Ltd. 2020 Equity Incentive Plan (Amended) (previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 14, 2020, which exhibit is incorporated herein by reference)
10.30#	Executive Change in Control and Severance Benefit Plan
19	Insider Trading Policy (previously filed as an exhibit to the Company’s Form 10-K for the year ended October 31, 2024, which exhibit is incorporated herein by reference)
21.1	List of Subsidiaries
23.1	Consent of Independent Registered Public Accounting Firm CohnReznick LLP
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
97	RF Industries, Ltd. Policy for Recovery of Erroneously Awarded Incentive Compensation (previously filed as an exhibit to the Company’s Form 10-K for the year ended October 31, 2023, which exhibit is incorporated herein by reference)

 

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

 

 

---

 

#	Indicates a management contract or compensatory plan or arrangement.

*	Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

**

This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that RF Industries, Ltd. specifically incorporates it by reference.

 

 

Stockholders of the Company may obtain a copy of any exhibit referenced in this Annual Report on Form 10-K by writing to: Secretary, RF Industries, Ltd., 16868 Via Del Campo Court, Suite 200, San Diego, CA 92127. The written request must specify the stockholder’s good faith representation that such stockholder is a stockholder of the Company.

 

ITEM 16.         FORM 10-K SUMMARY

 

We may voluntarily include a summary of information required by Form 10-K under this Item 16. We have elected not to include such summary information.

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

OCTOBER 31, 2025 AND 2024

(In thousands, except share and per share amounts)

 

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

OCTOBER 31, 2025 AND 2024

(In thousands, except share and per share amounts)

 

 

 

See Notes to Consolidated Financial Statements.

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED OCTOBER 31, 2025 AND 2024

(In thousands, except share and per share amounts)

 

 

 

See Notes to Consolidated Financial Statements.

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED OCTOBER 31, 2025 AND 2024

(In thousands, except share amounts)

 

 

 

See Notes to Consolidated Financial Statements.

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED OCTOBER 31, 2025 AND 2024

(In thousands)

 

 

 

See Notes to Consolidated Financial Statements.

 

 

RF INDUSTRIES, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 – Business activities and summary of significant accounting policies

 

Business activities

 

RF Industries, Ltd., together with its five wholly-owned subsidiaries (collectively, hereinafter the “Company”, ”we”, “us”, or “our”), primarily engages in the design, manufacture, and marketing of interconnect products, custom cabling products, and integrated systems. As of the end of the fiscal year ended October 31, 2025, we have five reporting units and one operating segment. We classified our reporting units into the following five divisions: (i) The RF Connector and Cable Assembly division designs, manufactures and distributes coaxial connectors and cable assemblies that are integrated with coaxial connectors (during fiscal year 2023, the Company integrated the former C Enterprises division into the RF Connector division); (ii) Cables Unlimited, Inc., the subsidiary that manufactures custom and standard cable assemblies, complex hybrid fiber optic power solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive and medical equipment; (iii) Rel-Tech Electronics, Inc., the subsidiary that designs and manufacturers cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers; (iv) Schroff Technologies International, Ltd., the subsidiary that manufactures and markets intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation, and (v) Microlab, the subsidiary that designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. 

 

Use of estimates 

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates.

 

Principles of consolidation

 

The accompanying consolidated financial statements include the accounts of RF Industries, Ltd., Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Ltd. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”), wholly-owned subsidiaries of RF Industries, Ltd. All intercompany balances and transactions have been eliminated in consolidation.

 

Cash equivalents

 

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

 

Revenue recognition

 

On November 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”) applying the modified retrospective method. The core principle of ASC 606 is that revenue should be recorded in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, we follow a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. In accordance with this accounting principle, we recognize revenue using the output method at a point in time when finished goods have been transferred to the customer and there are no other obligations to customers after the title of the goods have transferred. Title of goods are transferred based on shipping terms for each customer – for shipments with terms of FOB Shipping Point, title is transferred upon shipment; for shipments with terms of FOB Destination, title is transferred upon delivery.

 

Inventories

 

Inventories are stated at the lower of cost or net realizable value, with cost determined using the weighted average cost of accounting. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value due to damage, physical deterioration, obsolescence, changes in price levels, or other causes, we reduce our inventory to a new cost basis through a charge to cost of sales in the period in which it occurs. The determination of market value and the estimated volume of demand used in the lower of cost or market analysis requires significant judgment.

 

F-8

---

 

 

Property and equipment

 

Equipment, tooling and furniture are recorded at cost and depreciated over their estimated useful lives (generally three to five years) using the straight-line method. Expenditures for repairs and maintenance are charged to operations in the period incurred.

 

Goodwill

 

Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. Goodwill is not amortized, but is subject to impairment analysis at least once annually, which we perform in October, or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value.

 

We assess whether a goodwill impairment exists using both qualitative and quantitative assessments at the reporting level. Our qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, we will not perform a quantitative assessment.

 

Under the quantitative assessment, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

 

We test our goodwill, trademarks and other 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.

 

As of October 31, 2024, we performed a quantitative impairment test analysis for the Microlab reporting unit.

 

As of October 31, 2025, there was no indication that it is more likely than not that the fair value of the reporting unit is less than its carrying amount; therefore, the Company determined that a quantitative goodwill impairment test was not necessary.

 

No goodwill impairment was recorded in the years ended October 31, 2025 and 2024.

 

Goodwill by reporting unit as of October 31, 2025 and 2024, is as follows:

 

Reporting Unit		Amount
Cables Unlimited		$	382,685
Rel-Tech			832,556
Schrofftech			1,127,189
RF Connector and Cable Assembly			125,000
Microlab			5,617,139

 

Long-lived assets

 

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 whenever there are impairment indicators.

 

We test our goodwill, trademarks and other 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.

 

As of October 31, 2024 and as of April 30, 2024, we performed an impairment test analysis for the Microlab goodwill reporting unit. 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.

 

F-9

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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. Microlab’s operating results were below forecast for the fiscal year ended October 31, 2024 and the three and six-months ended April 30, 2024 triggered an impairment analysis.

 

As of October 31, 2024, Microlab has a carrying value of $19.8 million, which includes $5.6 million in goodwill and $10.3 million in net amortizable intangible assets. The analyses performed included a blend of the income approach (discounted cash flow method) and market approach (guideline public company method) to reach an estimate of Microlab reporting unit fair value of $21.6 which is in excess of the reporting unit’s carrying amount.

 

The analyses performed in blending the income approach and the market approach incorporates several significant judgments and assumptions about projected revenue and expenses growth, future operating margins, discount rates and the selection of guideline public companies. 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.

 

The Company determined that there were no events or circumstances as of October 31, 2025 that indicated that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount. Since there was no indication that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company determined that a quantitative goodwill impairment test was not necessary.

 

No impairment was recorded for the years ended October 31, 2025 or 2024.

 

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 October 31, 2025 and 2024, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

 

F-10

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Intangible assets

 

Intangible assets consist of the following as of October 31, 2025 and 2024 (in thousands): 

 

		2025				2024
Amortizable intangible assets:
Non-compete agreement (estimated life five years)		$	423			$	423
Accumulated amortization			(423	)			(423	)
			-				-
Customer relationships (estimated lives 7 - 15 years)			6,058				6,058
Accumulated amortization			(4,235	)			(3,848	)
			1,823				2,210
Backlog (estimated life one - two years)			327				327
Accumulated amortization			(327	)			(327	)
			-				-
Patents (estimated life 10 - 14 years)			368				368
Accumulated amortization			(241	)			(208	)
			127				160
Tradename (estimated life 15 years)			1,700				1,700
Accumulated amortization			(416	)			(302	)
			1,284				1,398
Proprietary technology (estimated life 10 years)			11,100				11,100
Accumulated amortization			(4,070	)			(2,960	)
			7,030				8,140
Totals		$	10,264			$	11,908
Non-amortizable intangible assets:
Trademarks		$	1,174			$	1,174

 

Amortization expense was $1,643,000 and $1,688,000 for the years ended October 31, 2025 and 2024, respectively. The weighted-average amortization period for the amortizable intangible assets is 6.68 years.

 

There was no impairment to trademarks for the years ended October 31, 2025 and 2024.

 

Estimated amortization expense related to finite-lived intangible assets is as follows (in thousands):

 

 

October 31,		Amount
2026		$	1,643
2027			1,643
2028			1,643
2029			1,639
2030			1,364
Thereafter			2,332
Total		$	10,264

 

Segment Reporting

 

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company operates as a single reportable segment. The chief operating decision maker, which is our Chief Executive Officer, regularly reviews the business on a consolidated basis. We leverage consolidated processes such as sales, procurement, human resources, and finance and accounting policies which provides for commonality and consistency across the Company. Segment information is prepared in accordance with GAAP and relevant accounting standards. The Company will periodically review its operations to determine if additional segment disclosures are required.

 

Advertising

 

Advertising costs are expensed as incurred and are included in selling and general expense. Advertising expenses were not material for the periods presented.

 

F-11

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Research and development

 

Research and development costs are expensed as incurred. Our research and development expenses relate to engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. During the years ended October 31, 2025 and 2024, we recognized $2,982,000 and $2,782,000 in engineering expenses, respectively.

 

Income taxes

 

We account for income taxes under the asset and liability method, based on the income tax laws and rates in the jurisdictions in which operations are conducted and income is earned. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Developing the provision (benefit) for income taxes requires significant judgment and expertise in federal, international and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Management’s judgments and tax strategies are subject to audit by various taxing authorities.

 

We have adopted the provisions of ASC 740-10, which clarifies the accounting for uncertain tax positions. ASC 740-10 requires that we recognize the benefit of tax positions taken or expected to be taken in its tax returns in the consolidated financial statements when it is more likely than not that the position will be sustained upon examination by authorities. We recognize interest and penalties related to certain uncertain tax positions as a component of income tax expense and the accrued interest and penalties are included in deferred and income taxes payable in our consolidated balance sheets. See Note 7 to the consolidated financial statements included in this report for more information on the Company’s accounting for uncertain tax positions.

 

Stock options

 

For stock option grants to employees, we recognize compensation expense based on the estimated fair value of the options at the date of grant. Stock-based employee compensation expense is recognized on a straight-line basis over the requisite service period. We issue previously unissued common shares upon the exercise of stock options.

 

For the fiscal years ended October 31, 2025 and 2024, charges related to stock-based compensation amounted to approximately $872,000 and $924,000, respectively, and is classified in selling and general expense.

 

Earnings per share

 

Basic earnings per share is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally those issuable upon the exercise of stock options, were issued and the treasury stock method had been applied during the period. The greatest number of shares potentially issuable upon the exercise of stock options in any period for the years ended October 31, 2025 and 2024, that were not included in the computation because they were anti-dilutive, totaled 1,005,693 and 874,816, respectively.

 

F-12

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The following table summarizes the computation of basic and diluted earnings per share:

 

		2025				2024
Numerators:
Consolidated net income (loss) (A)		$	75,000			$	(6,599,000	)
Denominators:
Weighted average shares outstanding for basic earnings per share (B)			10,647,587				10,481,835
Add effects of potentially dilutive securities - assumed exercise of stock options			123,215				-
Weighted average shares outstanding for diluted earnings per share (C)			10,770,802				10,481,835
Basic earnings (loss) per share (A)/(B)		$	0.01			$	(0.63	)
Diluted earnings (loss) per share (A)/(C)		$	0.01			$	(0.63	)

 

Recent accounting standards

 

Recently issued accounting pronouncements adopted:

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our fiscal year ending October 31, 2025, and for interim periods within our fiscal year ending October 31, 2026, with early adoption permitted. The adoption of this ASU on a retrospective basis did not have a material effect on our consolidated financial statements. However, our segment disclosures have been expanded to include significant segment expenses as reviewed by our chief operating decision maker (“CODM”). Please see Note 6 for more details.

 

Recently issued accounting pronouncements not yet adopted:

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes, specifically related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for our fiscal year ending October 31, 2026, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

 

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures, which will require disclosure, in the notes to financial statements, of specified information about certain costs and expenses, including disclosure of amounts for (i) purchases of inventory, (ii) employee compensation, (iii) depreciation and (iv) intangible asset amortization, included in each relevant expense caption such as cost of sales, selling, general and administrative expense, and research and development. In January 2025, the FASB issued ASU 2025-01, which clarified the effective date of ASU 2024-03. The standard will be effective for our annual financial statements beginning in the fiscal year ending October 31, 2028, with early adoption permitted. We are currently evaluating the impact of this accounting standard on our financial statement presentation and its related disclosures.

 

Note 2 – 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 October 31, 2025, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $4.1 million.

 

Sales from each customer that were 10% or greater of net sales for the years ended October 31, 2025 and 2024 were as follows:

 

		2025				2024
Wireless provider			10	%			-

 

Accounts receivable from each customer that were 10% or greater of net accounts receivable for the years ended October 31, 2025 and 2024 were as follows:

 

		2025				2024
Wireless provider			26	%			15	%
Aerospace customer			18	%			-
Distributor customer			-				10	%

 

For the year ended October 31, 2025, a wireless provider customer accounted for approximately 10% of total sales and approximately 26% of the total net accounts receivable balance, and an aerospace customer accounted for less than 10% of total sales and approximately 18% of the total net accounts receivable balance. For the year ended October 31, 2024, a wireless provider customer and a distributor customer both accounted for less than 10% of total sales, and accounted for approximately 15% and 10% of the total net accounts receivable balance, respectively. Although the distributors have been on-going major customers of the Company and the wireless carrier is a newer customer to the Company, the written agreements with these customers do not have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay, or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.

 

F-13

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Note 3 – Inventories and major vendors

 

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

 

		2025				2024
Raw materials and supplies		$	9,269			$	10,886
Work in process			715				530
Finished goods			3,751				3,309
Totals		$	13,735			$	14,725

 

No vendors accounted for 10% of inventory purchases during the fiscal years ended October 31, 2025 and 2024. We have arrangements with our vendors to purchase products based on purchase orders that we periodically issue.

 

Note 4 – Other current assets

 

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

 

		2025				2024
Prepaid taxes		$	-			$	262
Prepaid expense			774				699
Deposits			426				329
Other			84				140
Totals		$	1,284			$	1,430

  

Note 5 – Accrued expenses and other long-term liabilities

 

Accrued expenses consist of the following (in thousands):

 

		2025				2024
Wages payable		$	3,957			$	2,357
Accrued receipts			1,408				762
Deferred revenue			232				-
Other accrued expenses			1,186				1,128
Accrued settlement			855				-
Totals		$	7,638			$	4,247

 

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

 

Note 6 – Segment information

 

We previously managed our business as two reportable segments, the RF Connector segment and the Custom Cabling segment. During the fourth quarter of fiscal year 2025, we completed changes to the structure of our organization in connection with broader restructuring initiatives, including consolidation of manufacturing operations, headcount reductions, and the transition of our sales organization to a unified, customer‑centric model. As a result of these changes, we now operate as a single reportable segment. Comparative prior‑period segment disclosures that reflected the previous two segments have been revised to conform to this change in our reportable segment.

 

F-14

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Our chief operating decision maker (“CODM”), which is our Chief Executive Officer, evaluates our financial information such as revenue, margins, operating expenses, net income or loss, and other non- generally accepted accounting principles (“GAAP”) financial measures on a consolidated basis to allocate resources and assess performance. However, while the Company’s CODM uses more than one measure to assess performance, the Company’s segment disclosures do not include non-GAAP disclosures. The Company has determined that the disclosures below correspond with the amounts in the consolidated financial statements and are most consistent with GAAP.

 

The following table presents our single segment revenue, gross profit, significant expenses, and net income (loss) for the years ended October 31, 2025 and 2024 (in thousands):

 

		2025				2024
Net sales		$	80,586			$	64,857
Cost of goods sold:
Material cost			36,233				29,601
Salaries and benefits			13,441				12,730
Depreciation			528				557
Other costs of sales			3,648				3,098
Total cost of goods sold			53,850				45,986
Gross profit			26,736				18,871
Operating expenses:
Salaries and benefits			8,841				8,152
Engineering expense			2,982				2,782
Stock-based compensation expense			872				924
Commission and bonus			3,121				1,599
Depreciation			292				292
Amortization			1,643				1,687
Corporate and public company fees			1,615				1,513
Selling and general			4,556				4,544
Non-cash and one-time charges			1,029				201
Total operating expenses			24,951				21,694
Operating income (loss)			1,785				(2,823	)
Other expense			(972	)			(980	)
Income (loss) before provision for income taxes			813				(3,803	)
Provision for income taxes			738				2,796
Consolidated net income (loss)		$	75			$	(6,599	)
Total assets		$	73,046			$	71,046
Expenditures for Segment Assets		$	235			$	738

 

The Company’s single reportable segment total assets equal consolidated total assets.

 

F-15

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The following table presents revenue for the products and solutions that we offer as of October 31, 2025 and 2024 (in thousands):

 

		2025								2024
Interconnect		$	24,958				31	%		$	25,883				40	%
Custom Cabling			26,062				32	%			17,986				28	%
Integrated Solutions			29,566				37	%			21,006				32	%
Total net sales		$	80,586				100	%		$	64,875				100	%

 

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 years ended October 31, 2025 and 2024 (in thousands):

 

		2025				2024
United States		$	73,836			$	58,843
Foreign Countries:
Canada			4,814				3,825
Germany			626				166
China			368				531
All Other			942				1,492
			6,750				6,014
Totals		$	80,586			$	64,857

 

Note 7 – Income tax provision

 

The provision for income taxes for the fiscal years ended October 31, 2025 and 2024 consists of the following (in thousands):

 

		2025				2024
Current:
Federal		$	619			$	-
State			82				93
			701				93
Deferred:
Federal			21				1,942
State			16				761
			37				2,703
		$	738			$	2,796

 

F-16

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Income tax at the federal statutory rate is reconciled to our actual net provision for income taxes as follows (in thousands, except percentages):

 

		2025								2024
						% of Pretax								% of Pretax
		Amount				Income				Amount				Loss
U.S. federal statutory tax rate		$	171				21.1	%		$	(799	)			21.0	%
State and local taxes, net of federal tax benefit			(105	)			-12.9	%			(170	)			4.5	%
Permanent differences			16				2.0	%			14				-0.4	%
Stock options			12				1.5	%			45				-1.2	%
Foreign derived intangible income deduction			(27	)			-3.3	%			-				0.0	%
IRC 162(m) disallowance			45				5.5	%			-				0.0	%
R&D credits			(153	)			-18.8	%			(102	)			2.7	%
Uncertain tax position reserves			5				0.6	%			3				-0.1	%
Return-to-provision adjustments			19				2.3	%			(34	)			0.9	%
Change in the valuation allowance on deferred tax assets			755				93.0	%			3,839				-100.9	%
Income tax expense		$	738				91.0	%		$	2,796				-73.5	%

 

The significant components of deferred income taxes were as follows (in thousands):

 

		2025				2024
Deferred Tax Assets:
Reserves		$	1,001			$	561
Compensation accruals			294				264
Stock-based compensation awards			278				328
Uniform capitalization			404				277
Lease liability			4,761				5,221
Others			88				55
Capitalized Section 174 Costs			1,543				1,209
Research and development tax credits			219				282
163(j) interest carryforward			181				347
Gross deferred tax assets			8,769				8,544
Valuation allowance			(4,716	)			(3,962	)
Total deferred tax assets			4,053				4,582
Deferred Tax Liabilities:
Amortization / intangible assets			(158	)			(172	)
ROU assets			(3,514	)			(3,880	)
Depreciation / equipment and furnishings			(628	)			(740	)
Gross deferred tax liabilities			(4,300	)			(4,792	)
Net deferred tax asset/(liabilities)		$	(247	)		$	(210	)

 

Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company assesses all positive and negative evidence in determining if, based on the weight of such evidence, a valuation allowance is required to be maintained against the deferred tax assets as of October 31, 2025. The Company has evaluated future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In making such judgements, significant weight is given to evidence that can be objectively verified. After analyzing all available evidence, the Company continues to maintain that it is not more likely than not that all of its deferred tax assets will be realized, and therefore, has maintained a partial valuation allowance of $4.7 million and $4.0 million against its federal and state deferred tax assets as of October 31, 2025 and 2024, respectively.

 

F-17

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At October 31, 2025, the Company has gross state net operating loss (NOL) carryforwards of $1.2 million. The state NOL carryforwards of $0.3 million will begin to expire in 2044 unless previously utilized and the remainder will carry forward indefinitely. At October 31, 2025, the Company also has IRC 163(j) interest carryforwards of $0.8 million, which will carry forward indefinitely. At October 31, 2025, the Company also has state research and development credit carryforwards of $0.3 million, respectively. The state credit carryforwards of $0.3 million will begin to expire in 2029 unless previously utilized and the remainder will carry forward indefinitely.

 

The provision for income taxes was $0.7 million or 91% and $2.8 million or (73.5%) of income before income taxes for fiscal 2025 and 2024, respectively. The fiscal 2025 effective tax rate differed from the statutory federal rate of 21% primarily as a result of the tax benefit from research and development tax credits, the change in valuation allowance and state taxes.

 

The Company recognizes the benefit of tax positions taken or expected to be taken in its tax returns in the consolidated financial statements when it is more likely than not that the position will be sustained upon examination by authorities. Recognized tax positions are measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement.         

 

A reconciliation of the beginning and ending balance to total uncertain tax positions in fiscal years ended October 31, 2025 and 2024 are as follows:

 

		2025				2024
Balance, at beginning of year		$	186			$	178
Increase for tax positions related to the current year			57				47
Increase (decrease) for tax positions related to prior years			(10	)			(10	)
Statute of limitations expirations			(16	)			(29	)
Balance, at end of year		$	217			$	186

 

We had gross unrecognized tax benefits of $217,000 and $186,000 attributable to U.S. federal and state research tax credits as of October 31, 2025 and 2024 respectively. During fiscal 2025, the increase in our gross unrecognized tax benefit was primarily related to increased federal and state research tax credits being generated. The uncertain tax benefit of $69,000 is recorded as a reduction to deferred tax assets and the remainder is recorded in income taxes payable in our consolidated balance sheet and if recognized in the future would impact our effective tax rate. We recognize interest and penalties related to uncertain tax positions in income tax expense. We recognized expense of approximately $32,000 and $28,000 during the years ended October 31, 2025 and 2024, respectively. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, it is possible that certain changes may occur within the next twelve months, but we do not anticipate that our accrual for uncertain tax positions will change by a material amount over the next twelve-month period.

 

We are subject to taxation in the United States and state jurisdictions. Our tax years for October 31, 2022 and forward are subject to examination by the United States and October 31, 2021 and forward with state tax authorities.

Note 8 – Stock options

 

Incentive and non-qualified stock option plans

 

On July 22, 2020, the Company’s Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”). In September 2020, the Company’s stockholders approved the 2020 Plan by vote as required by NASDAQ. An aggregate of 1,250,000 shares of common stock was set aside and reserved for issuance under the 2020 Plan. At its annual meeting held on September 5, 2024, the Company’s stockholders approved an amendment to the 2020 Plan to increase the number of shares of common stock available for issuance under the plan by 1,000,000 shares. As of October 31, 2025, 974,022 shares of common stock were remaining for future grants of stock options under the 2020 Plan.

 

Additional disclosures related to stock option plans  

 

On January 11, 2024, we granted incentive stock options to Mr. Dawson for the purchase of 116,667 shares, Mr. Yin for the purchase of 41,667 shares, and Mr. Bibisi for the purchase of 41,667 shares. The incentive stock options vest over four years as follows: (i) one-quarter of the options shall vest on January 11, 2025 and (ii) the remaining 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 April 16, 2024, we granted a total of 25,000 incentive stock options to three managers. The shares of incentive stock options vest over four years as follows: (i) one-quarter of the options shall vest on April 16, 2025 and (ii) the remaining and options shall vest in 12 equal quarterly installments over the next three years.

 

On December 2, 2024, we granted a total of 47,500 incentive stock options to seven managers. The shares of incentive stock options vest equally over four years as follows: (i) one-quarter of the options shall vest on December 2, 2025 and (ii) the remaining options shall vest in three equal annual installments over the next three years.

 

F-18

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On January 13, 2025, we granted incentive stock options to Mr. Dawson for the purchase of 87,500 shares, Mr. Yin for the purchase of 31,250 shares, Mr. Bibisi for the purchase of 31,250 shares, and to two managers for a the purchase of 15,000 shares. The incentive stock options vest over four years as follows: (i) one-quarter of the options shall vest on January 13, 2026 and (ii) the remaining options shall vest in 12 equal quarterly installments over the next three years.

 

No other shares or options were granted to Company employees during fiscal 2025.

 

The fair value of each option granted in 2025 and 2024 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:

 

		2025				2024
Weighted average volatility			44.37	%			53.16	%
Expected dividends			0.00	%			0.00	%
Expected term (in years)			6.1				7.0
Risk-free interest rate			4.54	%			4.00	%
Weighted average fair value of options granted during the year		$	1.85			$	1.76
Weighted average fair value of options vested during the year		$	2.32			$	2.88

 

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 2025 and 2024 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 on the Company’s common stock.

 

Additional information regarding all of our outstanding stock options at October 31, 2025 and 2024 and changes in outstanding stock options in 2025 and 2024 follows:

 

		2025								2024
		Shares or				Weighted				Shares or				Weighted
		Price Per				Average				Price Per				Average
		Share				Exercise Price				Share				Exercise Price
Outstanding at beginning of year			874,816			$	5.10				754,186			$	6.04
Options granted			212,500			$	3.97				245,001			$	3.01
Options exercised			(56,623	)		$	4.32				-			$	-
Options canceled or expired			(25,000	)		$	8.69				(124,371	)		$	6.42
Options outstanding at end of year			1,005,693			$	4.81				874,816			$	5.10
Options exercisable at end of year			573,431			$	5.44				478,986			$	5.95
Options vested and expected to vest at end of year			1,005,693			$	4.81				874,816			$	5.10
Option price range at end of year		$1.90 - $8.69								$1.90 - $8.69
Aggregate intrinsic value of options exercised during year		$	57,756							$	-

 

Weighted average remaining contractual life of options outstanding as of October 31, 2025: 6.66 years

 

Weighted average remaining contractual life of options exercisable as of October 31, 2025: 5.48 years

 

Weighted average remaining contractual life of options vested and expected to vest as of October 31, 2025: 6.66 years

 

Aggregate intrinsic value of options outstanding at October 31, 2025: $3,068,000

 

Aggregate intrinsic value of options exercisable at October 31, 2025: $1,406,000

 

Aggregate intrinsic value of options vested and expected to vest at October 31, 2025: $3,068,000

 

F-19

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As of October 31, 2025, $888,000 and $904,000 of expense 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 1.2 and 1.1 years, respectively.

 

Note 9 – Retirement plan

 

We have a 401(k) plan available to our employees. For the years ended October 31, 2025 and 2024, we contributed and recognized as an expense of $523,000 and $533,000, respectively, which amounts represented 3% of eligible employee earnings under the Company’s Safe Harbor Non-elective Employer Contribution Plan.

 

Note 10 – Term Loan and Line of credit

 

On March 15, 2024, we entered into a loan and security agreement (the “EBC Credit Agreement”) with Eclipse Business Capital, as administrative agent (“EBC”) and used proceeds from the initial drawings under the EBC Credit Facilities (as defined below) to repay in full outstanding obligations under the our previous loan agreement and to pay fees, premiums, costs and expenses, including fees payable in connection with the EBC Credit Agreement. Our previous loan agreement with Bank of America, N.A. was terminated upon entry into the EBC Credit Agreement and is no longer in effect.

 

The EBC Credit Agreement provides for (i) a senior secured revolving loan facility of up to $15.0 million (the “EBC Revolving Loan Facility”) and (ii) a senior secured revolving credit facility of up to $1.0 million (the “EBC Additional Line” and, together with the EBC Revolving Loan Facility, the “EBC Credit Facilities”) (with a $3.0 million swingline loan sublimit). On June 14, 2024, the parties entered into the First Amendment to the EBC Credit Agreement (the “First Amendment”), which provided for a modified EBC Additional Line of $1.0 million through July 12, 2024, $666,666.67 from July 13, 2024 through August 11, 2024 and $333,333.34 from August 12, 2024 through September 10, 2024. Availability of borrowings under the EBC Credit Facilities are based upon a borrowing base formula and periodic borrowing base certifications valuing certain of our accounts receivable and inventories, as reduced by certain reserves, if any.

 

In the absence of an Event of Default (as defined in the EBC Credit Agreement) or certain other events (including the inability of EBC to determine the secured overnight financing rate “SOFR”), borrowings under (a) the EBC Revolving Loan Facility accrue interest at a rate of the one-month term SOFR reference rate plus an adjustment of 0.11448% (“Adjusted Term SOFR”) plus 5.00%, and (b) the EBC Additional Line accrue interest at a rate of Adjusted Term SOFR plus 6.50%, in each case subject to a floor of 2.00% for Adjusted Term SOFR. We will be required to pay a commitment fee of 0.50% per annum for the unused portion of the EBC Revolving Loan Facility. In addition to the foregoing unused commitment fee, we are required to pay certain other administrative fees pursuant to the terms of the EBC Credit Agreement.

 

Borrowings under the EBC Credit Agreement are secured by a security interest in certain assets of the Company and are subject to certain loan covenants. The EBC Credit Facilities require the maintenance of certain financial covenants, including (i) Excess Availability (as defined in the EBC Credit Agreement) of at least, as of any date of determination, an amount equal to the greater of (a) $1.0 million and (b) 10% of the Adjusted Borrowing Base (as defined in the EBC Credit Agreement), unless as of the last day of the most recent month for which the monthly financial statements and the related compliance certificate have been or are required to have been delivered to EBC, the Fixed Charge Coverage Ratio (as defined in the EBC Credit Agreement) for the 12 consecutive calendar month period then ended is greater than 1.10 to 1.00; and (ii) a capital expenditure limitation limiting the aggregate cost of all Capital Expenditure (as defined in the EBC Credit Agreement) to $2.5 million during any fiscal year. In addition, the EBC Credit Facilities contain customary affirmative and negative covenants.

 

On November 5, 2025, the parties entered into the Second Amendment to the EBC Credit Agreement (the “Second Amendment”). The Second Amendment amended the EBC Credit Agreement to, among other things, (i) extend the maturity date of the EBC Revolving Loan Facility to March 15, 2029, (ii) decrease the minimum EBC Revolving Loan Facility outstanding principal amount to $4.0 million and (iii) decrease the interest rate for the EBC Revolving Loan Facility to Adjusted Term SOFR or the base rate, as applicable, plus the Applicable Margin (as defined in the EBC Credit Agreement). The Applicable Margin is determined quarterly under a two-prong pricing grid based on both the Average Excess Availability (as defined in the EBC Credit Agreement) and Fixed Charge Coverage Ratio for the most recently ended fiscal quarter, as set forth on Annex IV to the EBC Credit Agreement, as amended.

 

We filed the EBC Credit Agreement as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended January 31, 2024, the First Amendment as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended July 31, 2024 and the Second Amendment as Exhibit 10.1 to our Current Report on Form 8-K filed on November 6, 2025.

 

Debt issuance costs related to the EBC Credit Agreement totaled $238,000 and were included as part of our other long-term assets balance.

 

As of October 31, 2025, our outstanding borrowings under the EBC Credit Agreement were $7,836,000. In accordance with ASC 470-10-45, Other Presentations Matters - General, we have classified the outstanding borrowings as part of current liabilities.

 

F-20

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Note 11 – Related party transactions

 

A portion of our operating space is leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited. Cables Unlimited monthly rent expense under the lease was $18,000 through May 30, 2025 then the monthly expense increased to $18,540 for the remainder of the year. The monthly payments also include all utilities, janitorial expense routine maintenance costs, and costs of insurance for Cables Unlimited’s business operations and equipment. During the fiscal years ended October 31, 2025 and 2024, we paid a total of $237,000 and $218,000 under the leases, respectively.

 

Note 12 – Cash dividend and declared dividends

 

We did not pay or declare any dividends during fiscal year 2025, nor during fiscal year 2024.

 

Note 13 – Commitments

 

The lease contracts for the corporate headquarters, RF Connector division manufacturing facilities, Cables Unlimited, Rel-Tech, and C Enterprises commenced prior to the effective date of November 1, 2019, and were determined to be operating leases. All other new contracts have been assessed for the existence of a lease and for the proper classification into operating leases. The rate implicit in the leases was undeterminable and, therefore, the discount rate used in all lease contracts is our incremental borrowing rate.

 

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year 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 of $18,000 to $18,500 per month.

 

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the years ended October 31, 2025 and 2024 were as follows (in thousands):

 

		2025				2024
Operating lease cost		$	2,954			$	2,956

 

On June 27, 2023, we entered into a Managed Client Agreement with RGN-MCA San Diego II, LLC (“IWG”) pursuant to which IWG agreed to provide managed services for flexible workspaces under the “Regus” brand for 39,979 square feet on the 1st and 2nd floor(s) of the adjacent and vacant office spaces of our corporate headquarters. For the fiscal year ended October 31, 2025, we recognized $212,000 in rental income, which offset our operating leases, which is included as part of our selling and general operating expense. The rental income noted here is excluded from operating lease cost in the table above.

 

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

 

		2025				2024
Supplemental Cash Flows Information
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		$	73			$	1,078
Weighted Average Remaining Lease Term
Operating leases (in months)			89.87				100.92
Weighted Average Discount Rate
Operating leases			7.01	%			6.99	%

 

F-21

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Future minimum lease payments under non-cancellable leases as of October 31, 2025 were as follows (in thousands):

 

Year ended October 31,		Operating Leases
2026		$	3,303
2027			3,169
2028			2,997
2029			3,070
Thereafter			11,807
Total future minimum lease payments			24,346
Less imputed interest			(5,593	)
Total		$	18,753

 

Reported as of October 31, 2025		Operating Leases
Current portion of operating lease liabilities		$	2,054
Operating lease liabilities			16,699
Total		$	18,753

 

 

As of October 31, 2025, operating lease right-of-use asset was $13.8 million and operating lease liability totaled $18.8 million, of which $2.0 million is classified as current. There were no finance leases as of October 31, 2025 or 2024.

 

F-22

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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: January 14, 2026	By:	/s/ ROBERT D. DAWSON
	Robert D. Dawson Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: January 14, 2026	By:	/s/ ROBERT D. DAWSON
	Robert D. Dawson, Director and Chief Executive Officer (Principal Executive Officer)
Date: January 14, 2026	By:	/s/ PETER YIN
	Peter Yin, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date: January 14, 2026	By:	/s/ MARK K. HOLDSWORTH
	Mark Holdsworth, Chairman of the Board of Directors
Date: January 14, 2026	By:	/s/ SHERYL CEFALI
	Sheryl Cefali, Director
Date: January 14, 2026	By:	/s/ GERALD T. GARLAND
	Gerald Garland, Director
Date: January 14, 2026	By:	/s/ KAY L. TIDWELL
	Kay L. Tidwell, Director