R F Industries Ltd 10-K for FY2025
R F Industries Ltd (RFIL)
About this 10-K
R F Industries Ltd filed this 10-K on January 14, 2026, covering the fiscal year ended October 31, 2025 (FY2025).
Headline figures
Fiscal year ended October 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $80.59M
- up 24.3% from $64.86M a year earlier
- Net income
- $75K
- compared with a net loss of $6.6M a year earlier
- Diluted EPS
- $0.01
- compared with -$0.63 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________ to ________________.
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $
On January 14, 2026 the Registrant had
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
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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 ConnectionsSM 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.
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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:
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diversion of management’s attention; |
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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; |
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we may not be able to secure capital to finance future acquisitions to the extent additional debt or equity is needed; and |
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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:
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reduced control over delivery schedules and quality; |
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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:
|
● |
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; |
|
● |
fluctuations in our financial results or the results of other communications-related companies, including those of our direct competitors; |
|
● |
general conditions in the connector and communications industries; |
|
● |
changes in our revenue growth rates or the growth rates of our competitors; |
|
● |
sales of large blocks of our common stock; and |
|
● |
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’s processes are
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.
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
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.
Role of Management
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.
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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 1st and 2nd 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.
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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.
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ITEM 6. |
RESERVED |
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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, 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 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Set forth below is information regarding the Company’s directors, including information furnished by them as to their principal occupations for the last five years, and their ages as of January 14, 2026. Other than Robert Dawson, our current Chief Executive Officer, all of the directors are “independent directors” as defined by the listing standards of the NASDAQ Stock Market, and the Board of Directors (the “Board”) has determined that such independent directors have no relationship with the Company that would interfere with the exercise of their independent judgment in carrying out the responsibilities of a director.
|
Name |
Age |
Director Since |
||
|
Mark K. Holdsworth, Chairman |
60 |
2020 |
||
|
Sheryl Cefali |
63 |
2019 |
||
|
Robert Dawson |
52 |
2018 |
||
| Gerald T. Garland | 75 | 2017 | ||
|
Kay L. Tidwell |
48 |
2022 |
Mark K. Holdsworth was appointed to the Board on December 31, 2020 and currently serves as the Chair of the Board and a member on the Audit Committee and Nominating and Corporate Governance Committee. Mr. Holdsworth is the Managing Partner of The Holdsworth Group, LLC (“THG”), which he founded in 2019. THG is a capital partner, advisor, and curator of alternative investments for family offices and corporations worldwide. From 1999 to 2018, Mr. Holdsworth was a Co-Founder, Managing Partner and Operating Partner of Tennenbaum Capital Partners, LLC, a Los Angeles-based private multi-strategy investment firm that was acquired by BlackRock, Inc. in August 2018, and was a Managing Director of BlackRock until April 2019. Mr. Holdsworth is currently a director of Parsons Corporation (NYSE: PSN), where he previously held the position of Chair of the Corporate Governance and Responsibility Committee, and was a former member of the Executive Committee. Mr. Holdsworth earned a Bachelor of Arts degree from Pomona College, a Bachelor of Science degree (with Honors) from the California Institute of Technology and a Master of Business Administration degree from Harvard Business School.
Sheryl Cefali was appointed to the Board in 2019 and currently serves as the Chair of the Compensation Committee and a member on the Audit Committee and the Nominating and Corporate Governance Committee. Ms. Cefali is a Managing Director in the Duff & Phelps Opinions Practice of Kroll, LLC. Ms. Cefali has over 30 years of experience rendering fairness and solvency opinions and determining valuations of companies and securities. She is a member of the Fairness and Solvency Opinion Senior Review Committee at Duff & Phelps. Prior to joining Duff & Phelps in 1990, she was a Vice President at Houlihan Lokey. Ms. Cefali received her M.B.A. with a concentration in finance from the University of Southern California and her B.A. degree from the University of California at Santa Barbara.
Robert Dawson has been the Company’s Chief Executive Officer since July 17, 2017, and served as the Company’s President from July 2017 until February 2024. Effective July 21, 2018, Mr. Dawson was appointed to the Board to also serve as a director. Prior to joining RF Industries, Mr. Dawson was President and Chief Executive Officer of Vision Technology Services, an information technology consulting and project management company that was acquired by BG Staffing. He spent 2007 to 2013 at TESSCO Technologies (“TESSCO”), a publicly traded distributor of wireless products and services. At TESSCO, Mr. Dawson held multiple executive roles in sales, marketing, product management and strategy, culminating with being Vice President of Sales, responsible for TESSCO’s sales organization and leading a team delivering more than $700 million in sales. He joined TESSCO through the 2007 acquisition of NetForce Solutions, a technology training and consulting firm that he co-founded in 2000 and led as the Chief Executive Officer through seven years of growth before being acquired by TESSCO. Mr. Dawson received his Bachelor's degree in Business Administration from Hillsdale College.
Gerald T. Garland has been a Board member since 2017 and currently serves as Chair of the Audit Committee and a member on the Compensation Committee. He is currently the Chief Executive Officer and Co-Founder of Life, Leadership and Legacy (“LLL”). LLL is a limited liability corporation that exists to broaden C-Suite executive’s definition of success and encourage them to live a more fully integrated life of meaning and purpose. Mr. Garland is also currently Vice Chairman of the World Trade Center Institute and serves on the Executive Committee of the board. From 2003 until 2015, Mr. Garland served as Senior Vice President of Solutions Development and Product Management and SVP of the Commercial Division for TESSCO. He was previously Director of Business Development at American Express Tax and Business Services from 2002 to 2003, where he was involved in an expanded asset recovery capability for Fortune 1000 companies. From 2000 to 2001, he was Chief Financial Officer at Mentor Technologies, a developer of on-line, CISCO certification training products. Mr. Garland was Chief Financial Officer and Treasurer at TESSCO from 1993 to 1999, during which he oversaw the company’s initial public offering as well as TESSCO’s significant sales expansion. Prior to joining TESSCO, Mr. Garland held leadership positions at Bank of America and Stanley Black & Decker. Mr. Garland received his M.B.A., with a concentration in Finance from Loyola University and his Bachelor of Science in Business Management and Accounting from Towson University. Mr. Garland currently serves on the Advisory Board of Greenspring Advisors and the Development Committee of First Fruits Farm, Inc. He also was a board member for SOZO Children from 2011 through 2020 and a Senior Adviser from 2020 to present.
Kay L. Tidwell was appointed to the Board in 2022 and serves as the Chair of the Nominating and Corporate Governance Committee and a member of the Compensation Committee. Ms. Tidwell is the Executive Vice President, General Counsel and Chief Risk Officer of Hudson Pacific Properties Inc. (“Hudson Pacific”) (NYSE: HPP). She joined Hudson Pacific in 2010 and is responsible for the Company’s corporate legal function, overseeing corporate governance matters, SEC and NYSE compliance, insurance and litigation, as well as managing outside counsel. Prior to Hudson Pacific, Ms. Tidwell was an attorney at Latham & Watkins LLP (“Latham & Watkins”), where she began her legal career in the Los Angeles office, advising on a wide variety of corporate and securities matters, including Hudson Pacific’s IPO. Ms. Tidwell also worked as the U.S. associate in the German offices of Latham & Watkins. She received a Bachelor of Arts degree in English, magna cum laude, from Yale College and earned a Juris Doctor degree from Yale Law School.
The Company believes that Messrs. Holdsworth, Dawson and Garland and Ms. Cefali and Tidwell have the following qualifications as members of the Board:
Mark K. Holdsworth: Mr. Holdsworth has significant experience in investment banking and investment management. In addition, Mr. Holdsworth has experience serving on the Boards of Directors of major public companies and as the Chair of a Corporate Governance and Responsibility Committee.
Sheryl Cefali: Ms. Cefali has over 30 years of experience rendering fairness and solvency opinions and determining valuations of companies and securities. Ms. Cefali has significant experience in mergers and acquisitions and advising on strategic matters.
Robert Dawson: Mr. Dawson has significant leadership experience in sales, marketing, product management and strategy for a leading publicly traded distributor of wireless products and services. Mr. Dawson also served as President and Chief Executive Officer of an information technology consulting and project management company and was a co-founder of a successful telecom and wireless technology training and consulting firm that he led for seven years of growth until it was acquired, which further demonstrates his hands-on operating experience and leadership skills.
Gerald T. Garland: Mr. Garland has significant leadership experience in financial management, product management, sales management, solutions development and global sourcing. Mr. Garland has significant industry experience having served as the Chief Financial Officer and Senior Vice President for a leading publicly traded distributor and solutions provider of wireless products and services for over 18 years.
Kay L. Tidwell: Ms. Tidwell has experience advising public companies as a former attorney at Latham & Watkins. In her current role as Executive Vice President, General Counsel and Chief Risk Officer of Hudson Pacific, she also has relevant corporate governance compliance and risk management experience.
Management
Robert Dawson, 52, has been the Company’s Chief Executive Officer since July 17, 2017, and served as the Company’s President from July 2017 until February 2024. Effective July 21, 2018, Mr. Dawson was appointed to the Board to also serve as a director. See preceding section for additional information regarding Mr. Dawson.
Peter Yin, 42, the Company’s Chief Financial Officer, was appointed as the Company’s Interim Chief Financial Officer and Corporate Secretary, effective July 11, 2020, promoted to Chief Financial Officer on January 12, 2021 and additionally appointed Treasurer on December 10, 2021. Mr. Yin, a Certified Public Accountant and a Certified Fraud Examiner, joined the Company in September 2014 and served as the Company’s Senior Vice President, Finance & Operations since November 2019. Prior to joining the Company, Mr. Yin worked at Sony Corporation of America in Corporate Audit from 2010 to 2014, and at Grant Thornton in the Assurance practice from 2006 to 2010. Mr. Yin received a Bachelor’s degree in Accountancy from the University of San Diego.
Ray Bibisi, 61, joined the Company as Chief Revenue Officer in January 2020, was promoted to Chief Operating Officer, effective in May 2022, and was appointed as President, effective in February 2024. Prior to joining the Company, he spent over 30 years at Radio Frequency Systems, where he concurrently held the roles of Vice President of Sales and General Manager of North America, and was a member of the Global Governing Executive Committee, and concurrently also oversaw operations, finance, supply chain, and research and development.
Board of Director Meetings
During the fiscal year ended October 31, 2025, the Board held five meetings. During the fiscal year ended October 31, 2025, each member of the Board attended at least 75% of the meetings of the Board and of the Board committees on which they served.
Board Age Limitation Policy
In December 2020, the Board adopted a policy that no individual shall be eligible to be nominated by the Board for election or re-election as a member of the Board if, at the time of the nomination, the individual has attained the age of 75 years.
Board Committees
During fiscal 2025, the Board maintained three committees: the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee.
The Audit Committee meets periodically with the Company’s management and independent registered public accounting firm to, among other things, review the results of the annual audit and quarterly reviews and discuss the financial statements. The Audit Committee also hires the independent registered public accounting firm and receives and considers the accountant’s comments as to controls, adequacy of staff and management performance and procedures. The Audit Committee is also authorized to review related party transactions for potential conflicts of interest and to conduct internal investigations into whistleblower complaints, and to oversee the Company’s cybersecurity risk, policies and procedures. The Audit Committee currently consists of Mr. Garland (Chair), Ms. Cefali, and Mr. Holdsworth. Each of the current members of the Audit Committee is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. In addition, each of the members of the Audit Committee has significant knowledge of financial matters, and Mr. Garland is an “audit committee financial expert.” The Audit Committee met four times during fiscal 2025.
The Compensation Committee currently consists of Ms. Cefali (Chair), Mr. Garland, and Ms. Tidwell, each of whom is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. The Compensation Committee is responsible for considering and recommending to the Board the compensation arrangements for senior management. As part of its other responsibilities, the Compensation Committee provides general oversight of our compensation structure and, if deemed necessary, retains and approves the terms of the retention of compensation consultants and other compensation experts. Other specific duties and responsibilities of the Compensation Committee include reviewing the performance of executive officers; reviewing and approving objectives relevant to executive officer compensation; recommending equity-based and incentive compensation plans; and recommending compensation policies and practices for service on our Board and its committees and for the Chair of our Board. The Compensation Committee works primarily with our Chief Executive Officer to gather internal data and solicit management’s recommendations regarding compensation. However, the Compensation Committee determines the compensation for each of our individual officers outside the presence of the affected officer. The Compensation Committee also advises and consults with other non-executive board members as it determines appropriate regarding compensation issues. The Compensation Committee held six meetings during fiscal 2025.
The Nominating and Corporate Governance Committee is responsible for developing and recommending corporate governance guidelines to the Board, identifying qualified individuals to become directors, recommending selected nominees to serve on the Board, and performing and overseeing the annual evaluation of the Board and its committees. The Nominating and Corporate Governance Committee currently consists of Ms. Tidwell (Chair), Mr. Holdsworth, and Ms. Cefali, each of whom is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. The Nominating and Corporate Governance Committee held five meetings during fiscal 2025.
The Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, each operate pursuant to a written charter, which charters are available on our website on www.rfindustries.com.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of our Directors, officers and employees, including its principal executive officer and principal financial officer. The Code is posted on our website at www.rfindustries.com. We intend to disclose any amendments to the Code by posting such amendments on its website. In addition, any waivers of the Code for Directors or executive officers of the Company will be disclosed in a report on Form 8-K.
Insider Trading Arrangements and Policies
The Company
|
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.
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. |
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 |
Number of |
Equity Incentive Plan |
Option |
Option |
|||||||||
|
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.
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).
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.
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 ($7.68). Accordingly, on September 10, 2025, Mr. Holdsworth, Ms. Cefali, Mr. Garland, and Ms. Tidwell were each granted 10,416 shares of restricted stock. The cash fees vest in four equal quarterly installments paid in arrears commencing November 1, 2025.
Granting of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
We have
On January 13, 2025, we granted incentive stock options to our named executive officers as part of our first regularly scheduled 2025 Board and Compensation Committee meetings. On January 16, 2025, we filed a Current Report on Form 8-K announcing our fourth quarter and fiscal year 2024 financial results. Accordingly, the January 13, 2025 grants occurred during a period beginning four business days before the filing of a Current Report on Form 8-K and ending one business day after such filing.
The table below provides the information required by Item 402(x) of Regulation S-K. The options were granted with an exercise price equal to the closing market price of our common stock on the date of grant. The stock options vest over four years as follows: (i) one-quarter of the options shall vest on January 13, 2026, and (ii) the remaining options shall vest in 12 equal quarterly installments over the next three years, subject to continued services.
| Name | Grant Date |
Number of shares of common stock underlying the award |
Exercise price of the award ($/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 | |||||||||||
|
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 |
Weighted Average |
Number of Securities |
|||||||||
|
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:
|
10.1 |
|
|
10.2# |
|
|
10.3# |
|
|
10.4 |
|
|
10.5 |
|
|
10.6 |
|
|
10.7 |
|
|
10.8 |
|
|
10.9# |
|
|
10.10 |
|
|
10.11 |
|
|
10.12# |
|
|
10.13 |
|
|
10.14# |
|
|
10.15 |
|
|
10.16# |
|
|
10.17 |
|
|
10.18 |
|
|
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) |
|
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
Index
|
Page |
||
|
Report of Independent Registered Public Accounting Firm (PCAOB ID |
F-2 |
|
|
Consolidated Balance Sheets October 31, 2025 and 2024 |
F-3 – F-4 |
|
|
Consolidated Statements of Operations Years Ended October 31, 2025 and 2024 |
F-5 |
|
|
Consolidated Statements of Stockholders’ Equity Years Ended October 31, 2025 and 2024 |
F-6 |
|
|
Consolidated Statements of Cash Flows Years Ended October 31, 2025 and 2024 |
F-7 |
|
|
Notes to Consolidated Financial Statements |
F-8 – F-22 |
* * *
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Stockholders of RF Industries, Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of RF Industries, Ltd. and Subsidiaries (the “Company”) as of October 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended October 31, 2025, and the related consolidated notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended October 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We have determined that there are no critical audit matters.
/s/
We are uncertain as to the year CohnReznick LLP became the Company’s auditor as 1995 is the earliest year of which we have knowledge.
January 14, 2026
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2025 AND 2024
(In thousands, except share and per share amounts)
|
October 31, |
October 31, |
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|
2025 |
2024 |
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|
ASSETS |
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|
CURRENT ASSETS |
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|
Cash and cash equivalents |
$ | $ | ||||||
|
Trade accounts receivable, net of allowance for credit losses of $ |
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|
Inventories |
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|
Other current assets |
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|
TOTAL CURRENT ASSETS |
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|
Property and equipment: |
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|
Equipment and tooling |
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|
Furniture and office equipment |
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|
Less accumulated depreciation |
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|
Total property and equipment, net |
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|
Operating lease right-of-use assets, net |
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|
Goodwill |
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|
Amortizable intangible assets, net |
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|
Non-amortizable intangible assets |
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|
Other assets |
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|
TOTAL ASSETS |
$ | $ | ||||||
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2025 AND 2024
(In thousands, except share and per share amounts)
|
October 31, |
October 31, |
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|
2025 |
2024 |
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|
LIABILITIES AND STOCKHOLDERS' EQUITY |
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|
CURRENT LIABILITIES |
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|
Accounts payable |
$ | $ | ||||||
|
Accrued expenses |
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|
Line of credit |
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|
Current portion of operating lease liabilities |
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|
Income taxes payable |
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|
TOTAL CURRENT LIABILITIES |
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|
Operating lease liabilities |
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Deferred tax liabilities |
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TOTAL LIABILITIES |
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COMMITMENTS AND CONTINGENCIES |
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STOCKHOLDERS’ EQUITY |
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|
Common stock - authorized |
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Additional paid-in capital |
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|
Retained earnings |
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|
TOTAL STOCKHOLDERS' EQUITY |
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|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ | $ | ||||||
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)
|
Twelve Months Ended October 31, |
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|
2025 |
2024 |
|||||||
|
Net sales |
$ | $ | ||||||
|
Cost of sales |
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|
Gross profit |
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Operating expenses: |
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Engineering |
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Selling and general |
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|
Total operating expenses |
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|
Operating income (loss) |
( |
) | ||||||
|
Other expense |
( |
) | ( |
) | ||||
|
Income (loss) before provision (benefit) for income taxes |
( |
) | ||||||
|
Provision for income taxes |
||||||||
|
Consolidated net income (loss) |
$ | $ | ( |
) | ||||
|
Earnings (loss) per share: |
||||||||
|
Basic |
$ | $ | ( |
) | ||||
|
Diluted |
$ | $ | ( |
) | ||||
|
Weighted average shares outstanding: |
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|
Basic |
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|
Diluted |
||||||||
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)
|
Additional |
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|
Common Stock |
Paid-In |
Retained |
||||||||||||||||||
|
Shares |
Amount |
Capital |
Earnings |
Total |
||||||||||||||||
|
Balance, November 1, 2023 |
$ | $ | $ | $ | ||||||||||||||||
|
Stock-based compensation expense |
- | - | ||||||||||||||||||
|
Issuance of restricted stock |
( |
) | ||||||||||||||||||
|
Tax withholding related to vesting of restricted stock |
( |
) | ( |
) | ( |
) | ||||||||||||||
|
Net loss |
- | ( |
) | ( |
) | |||||||||||||||
|
Balance, October 31, 2024 |
||||||||||||||||||||
|
Exercise of stock options |
||||||||||||||||||||
|
Stock-based compensation expense |
- | |||||||||||||||||||
|
Issuance of restricted stock |
( |
) | ||||||||||||||||||
|
Tax withholding related to vesting of restricted stock |
( |
) | ( |
) | ( |
) | ||||||||||||||
| Net income | - | |||||||||||||||||||
|
Balance, October 31, 2025 |
$ | $ | $ | $ | ||||||||||||||||
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)
|
Twelve Months Ended October 31, |
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|
2025 |
2024 |
|||||||
|
OPERATING ACTIVITIES: |
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|
Consolidated net income (loss) |
$ | $ | ( |
) | ||||
|
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities: |
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|
Bad debt expense |
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|
Depreciation and amortization |
||||||||
|
Gain on disposal of fixed assets |
( |
) | ||||||
|
Stock-based compensation expense |
||||||||
|
Amortization of debt issuance cost |
||||||||
|
Tax payments related to shares cancelled for vested restricted stock awards |
( |
) | ( |
) | ||||
|
Deferred income taxes |
||||||||
|
Extinguishment of debt issuance cost |
||||||||
|
Changes in operating assets and liabilities: |
||||||||
|
Trade accounts receivable |
( |
) | ( |
) | ||||
|
Inventories |
||||||||
|
Other current assets |
||||||||
|
Right-of-use assets |
( |
) | ||||||
|
Other long-term assets |
( |
) | ||||||
|
Accounts payable |
( |
) | ||||||
|
Accrued expenses |
( |
) | ||||||
|
Income taxes payable |
||||||||
|
Net cash provided by operating activities |
||||||||
|
INVESTING ACTIVITIES: |
||||||||
|
Proceeds from sale of fixed assets |
||||||||
|
Capital expenditures |
( |
) | ( |
) | ||||
|
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
FINANCING ACTIVITIES: |
||||||||
|
Proceeds from exercise of stock options |
||||||||
|
Debt issuance cost |
( |
) | ||||||
|
Line of credit payments |
( |
) | ( |
) | ||||
|
Line of credit draws |
||||||||
|
Term Loan payments |
( |
) | ||||||
|
Net cash used in financing activities |
( |
) | ( |
) | ||||
|
Net increase (decrease) in cash and cash equivalents |
( |
) | ||||||
|
Cash and cash equivalents, beginning of period |
||||||||
|
Cash and cash equivalents, end of period |
$ | $ | ||||||
|
Supplemental cash flow information – income taxes paid |
$ | $ | ||||||
|
Supplemental cash flow information – interest paid |
$ | $ | ||||||
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.
Property and equipment
Equipment, tooling and furniture are recorded at cost and depreciated over their estimated useful lives (generally to 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.
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 |
$ | |||
|
Rel-Tech |
||||
|
Schrofftech |
||||
|
RF Connector and Cable Assembly |
||||
|
Microlab |
||||
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.
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 $
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.
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.
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 years) |
$ | $ | ||||||
|
Accumulated amortization |
( |
) | ( |
) | ||||
|
Customer relationships (estimated lives |
||||||||
|
Accumulated amortization |
( |
) | ( |
) | ||||
|
Backlog (estimated life - years) |
||||||||
|
Accumulated amortization |
( |
) | ( |
) | ||||
|
Patents (estimated life |
||||||||
|
Accumulated amortization |
( |
) | ( |
) | ||||
|
Tradename (estimated life |
||||||||
|
Accumulated amortization |
( |
) | ( |
) | ||||
|
Proprietary technology (estimated life |
||||||||
|
Accumulated amortization |
( |
) | ( |
) | ||||
|
Totals |
$ | $ | ||||||
|
Non-amortizable intangible assets: |
||||||||
|
Trademarks |
$ | $ | ||||||
Amortization expense was $
There was 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 |
$ | |||
|
2027 |
||||
|
2028 |
||||
|
2029 |
||||
|
2030 |
||||
|
Thereafter |
||||
|
Total |
$ | |||
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.
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 $
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 $
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
The following table summarizes the computation of basic and diluted earnings per share:
|
2025 |
2024 |
|||||||
|
Numerators: |
||||||||
|
Consolidated net income (loss) (A) |
$ | $ | ( |
) | ||||
|
Denominators: |
||||||||
|
Weighted average shares outstanding for basic earnings per share (B) |
||||||||
|
Add effects of potentially dilutive securities - assumed exercise of stock options |
||||||||
|
Weighted average shares outstanding for diluted earnings per share (C) |
||||||||
|
Basic earnings (loss) per share (A)/(B) |
$ | $ | ( |
) | ||||
|
Diluted earnings (loss) per share (A)/(C) |
$ | $ | ( |
) | ||||
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 $
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 |
% | |||||||
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 |
% | % | ||||||
|
Aerospace customer |
% | |||||||
|
Distributor customer |
% | |||||||
For the year ended October 31, 2025, a wireless provider customer accounted for approximately
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 |
$ | $ | ||||||
|
Work in process |
||||||||
|
Finished goods |
||||||||
|
Totals |
$ | $ | ||||||
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 |
$ | $ | ||||||
|
Prepaid expense |
||||||||
|
Deposits |
||||||||
|
Other |
||||||||
|
Totals |
$ | $ | ||||||
Note 5 – Accrued expenses and other long-term liabilities
Accrued expenses consist of the following (in thousands):
|
2025 |
2024 |
|||||||
|
Wages payable |
$ | $ | ||||||
|
Accrued receipts |
||||||||
|
Deferred revenue |
||||||||
|
Other accrued expenses |
||||||||
|
Accrued settlement |
||||||||
|
Totals |
$ | $ | ||||||
Accrued receipts represent purchased inventory for which invoices have not been received.
Note 6 – Segment information
We previously managed our business as 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.
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 |
$ | $ | ||||||
|
Cost of goods sold: |
||||||||
|
Material cost |
||||||||
|
Salaries and benefits |
||||||||
| Depreciation | ||||||||
|
Other costs of sales |
||||||||
|
Total cost of goods sold |
||||||||
|
Gross profit |
||||||||
|
Operating expenses: |
||||||||
| Salaries and benefits | ||||||||
|
Engineering expense |
||||||||
|
Stock-based compensation expense |
||||||||
|
Commission and bonus |
||||||||
|
Depreciation |
||||||||
|
Amortization |
||||||||
|
Corporate and public company fees |
||||||||
|
Selling and general |
||||||||
|
Non-cash and one-time charges |
||||||||
|
Total operating expenses |
||||||||
|
Operating income (loss) |
( |
) | ||||||
|
Other expense |
( |
) | ( |
) | ||||
|
Income (loss) before provision for income taxes |
( |
) | ||||||
|
Provision for income taxes |
||||||||
|
Consolidated net income (loss) |
$ | $ | ( |
) | ||||
|
Total assets |
$ | $ | ||||||
|
Expenditures for Segment Assets |
$ | $ | ||||||
The Company’s single reportable segment total assets equal consolidated total assets.
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 |
$ | % | $ | % | ||||||||||||
|
Custom Cabling |
% | % | ||||||||||||||
|
Integrated Solutions |
% | % | ||||||||||||||
|
Total net sales |
$ | % | $ | % | ||||||||||||
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 |
$ | $ | ||||||
|
Foreign Countries: |
||||||||
|
Canada |
||||||||
|
Germany |
||||||||
|
China |
||||||||
|
All Other |
||||||||
|
Totals |
$ | $ | ||||||
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 |
$ | $ | ||||||
|
State |
||||||||
|
Deferred: |
||||||||
|
Federal |
||||||||
|
State |
||||||||
| $ | $ | |||||||
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 |
$ | % | $ | ( |
) | % | ||||||||||
|
State and local taxes, net of federal tax benefit |
( |
) | - |
% | ( |
) | % | |||||||||
|
Permanent differences |
% | - |
% | |||||||||||||
|
Stock options |
% | - |
% | |||||||||||||
|
Foreign derived intangible income deduction |
( |
) | - |
% | % | |||||||||||
|
IRC 162(m) disallowance |
% | % | ||||||||||||||
|
R&D credits |
( |
) | - |
% | ( |
) | % | |||||||||
|
Uncertain tax position reserves |
% | - |
% | |||||||||||||
|
Return-to-provision adjustments |
% | ( |
) | % | ||||||||||||
|
Change in the valuation allowance on deferred tax assets |
% | - |
% | |||||||||||||
|
Income tax expense |
$ | % | $ | - |
% | |||||||||||
The significant components of deferred income taxes were as follows (in thousands):
|
2025 |
2024 |
|||||||
|
Deferred Tax Assets: |
||||||||
|
Reserves |
$ | $ | ||||||
|
Compensation accruals |
||||||||
|
Stock-based compensation awards |
||||||||
|
Uniform capitalization |
||||||||
|
Lease liability |
||||||||
|
Others |
||||||||
|
Capitalized Section 174 Costs |
||||||||
|
Research and development tax credits |
||||||||
|
163(j) interest carryforward |
||||||||
|
Gross deferred tax assets |
||||||||
|
Valuation allowance |
( |
) | ( |
) | ||||
|
Total deferred tax assets |
||||||||
|
Deferred Tax Liabilities: |
||||||||
|
Amortization / intangible assets |
( |
) | ( |
) | ||||
|
ROU assets |
( |
) | ( |
) | ||||
|
Depreciation / equipment and furnishings |
( |
) | ( |
) | ||||
|
Gross deferred tax liabilities |
( |
) | ( |
) | ||||
|
Net deferred tax asset/(liabilities) |
$ | ( |
) | $ | ( |
) | ||
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 $
At October 31, 2025, the Company has gross state net operating loss (NOL) carryforwards of $
The provision for income taxes was $
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 |
$ | $ | ||||||
|
Increase for tax positions related to the current year |
||||||||
|
Increase (decrease) for tax positions related to prior years |
( |
) | ( |
) | ||||
|
Statute of limitations expirations |
( |
) | ( |
) | ||||
|
Balance, at end of year |
$ | $ | ||||||
We had gross unrecognized tax benefits of $
We are subject to taxation in the United States and state jurisdictions. Our tax years for October 31, and forward are subject to examination by the United States and October 31, 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
Additional disclosures related to stock option plans
On January 11, 2024, we granted incentive stock options to Mr. Dawson for the purchase of
On April 16, 2024, we granted a total of
On December 2, 2024, we granted a total of
On January 13, 2025, we granted incentive stock options to Mr. Dawson for the purchase of
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 |
% | % | ||||||
|
Expected dividends |
% | % | ||||||
|
Expected term (in years) |
||||||||
|
Risk-free interest rate |
% | % | ||||||
|
Weighted average fair value of options granted during the year |
$ | $ | ||||||
|
Weighted average fair value of options vested during the year |
$ | $ | ||||||
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 |
$ | $ | ||||||||||||||
|
Options granted |
$ | $ | ||||||||||||||
|
Options exercised |
( |
) | $ | $ | ||||||||||||
|
Options canceled or expired |
( |
) | $ | ( |
) | $ | ||||||||||
|
Options outstanding at end of year |
$ | $ | ||||||||||||||
|
Options exercisable at end of year |
$ | $ | ||||||||||||||
|
Options vested and expected to vest at end of year |
$ | $ | ||||||||||||||
|
Option price range at end of year |
$ |
$ |
||||||||||||||
|
Aggregate intrinsic value of options exercised during year |
$ | $ | ||||||||||||||
Weighted average remaining contractual life of options outstanding as of October 31, 2025:
Weighted average remaining contractual life of options exercisable as of October 31, 2025:
Weighted average remaining contractual life of options vested and expected to vest as of October 31, 2025:
Aggregate intrinsic value of options outstanding at October 31, 2025: $
Aggregate intrinsic value of options exercisable at October 31, 2025: $
Aggregate intrinsic value of options vested and expected to vest at October 31, 2025: $
As of October 31, 2025, $
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 $
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 $
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
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) $
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 $
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 $
As of October 31, 2025, our outstanding borrowings under the EBC Credit Agreement were $
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 $
Note 12 – Cash dividend and declared dividends
We did 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 year to 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 $
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 |
$ | $ | ||||||
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
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 |
$ | $ | ||||||
|
Weighted Average Remaining Lease Term |
||||||||
|
Operating leases (in months) |
||||||||
|
Weighted Average Discount Rate |
||||||||
|
Operating leases |
% | % | ||||||
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 |
$ | |||
|
2027 |
||||
|
2028 |
||||
|
2029 |
||||
|
Thereafter |
||||
|
Total future minimum lease payments |
||||
|
Less imputed interest |
( |
) | ||
|
Total |
$ | |||
|
Reported as of October 31, 2025 |
Operating Leases |
|||
|
Current portion of operating lease liabilities |
$ | |||
|
Operating lease liabilities |
||||
|
Total |
$ | |||
As of October 31, 2025, operating lease right-of-use asset was $
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 |
||
|
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 | ||
Exhibit 10.30
RF Industries, Ltd.
Executive Change in Control and Severance Benefit Plan
|
Section 1. |
Introduction. |
The RF Industries, Ltd. Executive Change in Control and Severance Benefit Plan (the “Plan”) is hereby established effective January 12, 2026 (the “Effective Date”). The purpose of the Plan is to provide for the payment of change in control and related severance benefits to selected executive employees of RF Industries, Ltd. (the “Company”) as set forth herein. Capitalized terms used in the Plan not otherwise defined have the meanings set forth on Appendix A to the Plan. This Plan document also is the Summary Plan Description for the Plan.
|
Section 2. |
Eligibility for Benefits. |
(a) Eligible Executive. An employee of the Company is an Eligible Executive who is eligible to receive benefits under the Plan if: (i) the Plan Administrator has designated such employee as eligible to participate in the Plan by providing such person with a Participation Agreement; (ii) such employee has signed and returned such Participation Agreement to the Company within the period specified therein; (iii) with respect to eligibility for severance benefits, such employee’s employment with the Company terminates due to a Covered Termination; and (iv) such employee meets the other Plan eligibility requirements set forth in this Section 2. The determination of whether an employee is an Eligible Executive shall be made by the Plan Administrator, in its sole discretion, and such determination shall be binding and conclusive on all persons.
(b) Release Requirement. Except as otherwise provided in an individual Participation Agreement, in order to be eligible to receive benefits under the Plan, the employee also must execute a separation agreement and general release of claims, in such a form as provided by the Company (the “Release”), within the applicable time period set forth therein, and such Release must become effective in accordance with its terms, which must occur in no event more than sixty (60) days following the date of the applicable Covered Termination.
(c) Exceptions to Severance Benefit Entitlement. An employee who otherwise is an Eligible Executive will not receive severance benefits under the Plan in the following circumstances, as determined by the Plan Administrator in its sole discretion:
(1) The employee‘s employment terminates and such termination does not constitute a Covered Termination. An employees resignation without Good Reason, retirement or failure to return to work following a leave of absence, termination due to death or Disability, or termination prior to a Change in Control does not constitute a Covered Termination.
(2) The employee voluntarily terminates employment with the Company in order to accept employment with another entity that is wholly or partly owned (directly or indirectly) by the Company or an Affiliate on terms that are substantially equivalent or comparable (terms that provide the employee substantially the same level of responsibility and compensation and would not give rise to the employee’s right to resign for Good Reason).
(3) The employee is offered an identical or substantially equivalent or comparable position with the Company or an Affiliate. For purposes of the foregoing, a “substantially equivalent or comparable position” is one that provides the employee substantially the same level of responsibility and compensation and would not give rise to the employee’s right to resign for Good Reason.
(4) The employee is offered immediate reemployment by a successor to the Company or an Affiliate or by a purchaser of the Company’s assets, as the case may be, following a Change in Control and the terms of such reemployment would not give rise to the employee’s right to resign for Good Reason and the successor or purchasing entity assumes the Company’s obligations under the Plan. For purposes of the foregoing, “immediate reemployment” means that the employee’s employment with the successor to the Company or an Affiliate or the purchaser of its assets, as the case may be, results in uninterrupted employment such that the employee does not incur a lapse in pay or benefits as a result of the change in ownership of the Company or the sale of its assets. For the avoidance of doubt, an employee who becomes immediately reemployed as described in this Section 2(c)(4) by a successor to the Company or an Affiliate or by a purchaser of the Company’s assets, as the case may be, following a Change in Control shall continue to be an Eligible Executive following the date of such reemployment and eligible to participate in this Plan as assumed or continued by such successor or purchaser entity.
(d) Termination of Severance Benefits. An Eligible Executive’s right to receive severance benefits under this Plan shall terminate immediately if, at any time prior to or during the period for which the Eligible Executive is receiving severance benefits under the Plan, the Eligible Executive, without the prior written approval of the Plan Administrator, engages in a Prohibited Action (as defined below). In addition, if benefits under the Plan have already been paid to the Eligible Executive and the Eligible Executive subsequently engages in a Prohibited Action during the Prohibited Period (or it is determined that an Eligible Executive engaged in a Prohibited Action prior to receipt of such benefits), any benefits previously paid to the Eligible Executive shall be subject to recoupment by the Company on such terms and conditions as shall be determined by the Plan Administrator, in its sole discretion. The “Prohibited Period” shall commence on the date of the Eligible Executive’s Covered Termination and continue for the number of months corresponding to the Severance Period set forth in such Eligible Executive’s Participation Agreement. A “Prohibited Action” is the Eligible Executive’s breach of any material statutory, common law, or contractual obligation to the Company or an Affiliate (including, without limitation, the contractual obligations set forth in the Company’s standard employee confidentiality agreement, the Release and/or any other obligations of confidentiality, non-solicitation, non-competition, non-disparagement, or similar provisions set forth in the Eligible Executive’s employment agreement, offer letter, any other written agreement between the Eligible Executive and the Company, or under applicable law).
|
Section 3. |
Amount of Benefit. |
(a) Severance Benefit. Benefits under the Plan shall be provided to an Eligible Executive as set forth in the Participation Agreement, subject to reduction as provided in this Section 3 below.
(b) Certain Reductions.
(1) The Company, in its sole discretion, shall have the authority to reduce an Eligible Executive’s severance benefits, in whole or in part, by any other severance benefits, pay and benefits provided during a period following written notice of a plant closing or mass layoff, pay and benefits in lieu of such notice, or other similar benefits payable to the Eligible Executive by the Company or an Affiliate that become payable in connection with the Eligible Executive’s termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act or any other similar state law, (ii) any individually negotiated employment contract or agreement or any other written employment or severance agreement with the Company, or (iii) any Company policy or practice providing for the Eligible Executive to remain on the payroll for a limited period of time after being given notice of the termination of the Eligible Executive’s employment, and the Plan Administrator shall so construe and implement the terms of the Plan. Any such reductions that the Company determines to make pursuant to this Section 3(b) shall be made such that any benefit under the Plan shall be reduced solely by any similar type of benefit under such legal requirement, agreement, policy or practice (i.e., any cash severance benefits under the Plan shall be reduced solely by any cash payments or severance benefits under such legal requirement, agreement, policy or practice, and any continued insurance benefits under the Plan shall be reduced solely by any continued insurance benefits under such legal requirement, agreement, policy or practice). The Company’s decision to apply such reductions to the severance benefits of one Eligible Executive and the amount of such reductions shall in no way obligate the Company to apply the same reductions in the same amounts to the severance benefits of any other Eligible Executive, even if similarly situated. In the Company’s sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being re-characterized as payments pursuant to the Company’s statutory obligation.
(c) Parachute Payments. Except as otherwise provided in an individual Participation Agreement, if any payment or benefit an Eligible Executive will or may receive from the Company or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Eligible Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for the Eligible Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).
Notwithstanding any provisions in this Section above to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for the Eligible Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
The Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 3. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. If the Eligible Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) above and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Eligible Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) above) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) above, the Eligible Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
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Section 4. |
Return of Company Property. |
An Eligible Executive will not be entitled to any severance benefit under the Plan unless and until the Eligible Executive returns all Company Property. For this purpose, “Company Property” means all Company documents (and all copies thereof) and other Company property which the Eligible Executive had in his or her possession at any time, including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, servers), credit cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part). As a condition to receiving benefits under the Plan, an Eligible Executive must not make or retain copies, reproductions or summaries of any such Company documents, materials or property. However, an Eligible Executive is not required to return his or her personal copies of documents evidencing the Eligible Executive’s hire, termination, compensation, benefits and equity awards and any other documentation received as a stockholder of the Company.
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Section 5. |
Time of Payment and Form of Benefit. |
The Company shall specify in the applicable Participation Agreement whether severance payments under the Plan will be paid in a single sum, in installments, or in any other form and the timing of such payments. All such payments under the Plan will be subject to applicable withholding for federal, state, local and other applicable withholding taxes. If an Eligible Executive is indebted to the Company on his or her termination date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness. All severance benefits provided under the Plan are intended to satisfy the requirements for an exemption from application of Section 409A to the maximum extent that an exemption is available and any ambiguities herein shall be interpreted accordingly; provided, however, that to the extent such an exemption is not available, the severance benefits provided under the Plan are intended to comply with the requirements of Section 409A to the extent necessary to avoid adverse personal tax consequences and any ambiguities herein shall be interpreted accordingly.
Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under the Plan that constitute “deferred compensation” within the meaning of Section 409A shall not commence in connection with an Eligible Executive’s termination of employment unless and until the Eligible Executive has also incurred a “Separation from Service,”, unless the Company reasonably determines that such amounts may be provided to the Eligible Executive without causing the Eligible Executive to incur the adverse personal tax consequences under Section 409A.
It is intended that (i) each installment of any benefits payable under the Plan to an Eligible Executive be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i), (ii) all payments of any such benefits under the Plan satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (iii) any such benefits consisting of COBRA premiums also satisfy, to the greatest extent possible, the exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v). However, if the Company determines that any such benefits payable under the Plan constitute “deferred compensation” under Section 409A and the Eligible Executive is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the imposition of the adverse personal tax consequences under Section 409A, (A) the timing of such benefit payments shall be delayed until the earlier of (1) the date that is six (6) months and one (1) day after the Eligible Executive’s Separation from Service and (2) the date of the Eligible Executive’s death (such applicable date, the “Delayed Initial Payment Date”), and (B) the Company shall (1) pay the Eligible Executive a lump sum amount equal to the sum of the benefit payments that the Eligible Executive would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the benefits had not been delayed pursuant to this paragraph and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.
In no event shall payment of any benefits under the Plan be made prior to an Eligible Executive’s termination date or prior to the effective date of the Release. If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, and the Eligible Executive’s Separation from Service occurs at a time during the calendar year when the Release could become effective in the calendar year following the calendar year in which the Eligible Executive’s Separation from Service occurs, then regardless of when the Release is returned to the Company and becomes effective, the Release will not be deemed effective any earlier than the latest permitted effective date (the “Release Deadline”). If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, then except to the extent that payments may be delayed until the Delayed Initial Payment Date pursuant to the preceding paragraph, on the first regular payroll date following the effective date of an Eligible Executive’s Release, the Company shall (1) pay the Eligible Executive a lump sum amount equal to the sum of the benefit payments that the Eligible Executive would otherwise have received through such payroll date but for the delay in payment related to the effectiveness of the Release and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.
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Section 6. |
Transfer and Assignment. |
The rights and obligations of an Eligible Executive under this Plan may not be transferred or assigned without the prior written consent of the Company. This Plan shall be binding upon any entity or person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such entity or person actively assumes the obligations hereunder and without regard to whether or not a Change in Control occurs.
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Section 7. |
Mitigation. |
Except as otherwise specifically provided in the Plan or a Participation Agreement, an Eligible Executive will not be required to mitigate damages or the amount of any payment provided under the Plan by seeking other employment or otherwise, nor will the amount of any payment provided for under the Plan be reduced by any compensation earned by an Eligible Executive as a result of employment by another employer or any retirement benefits received by such Eligible Executive after the date of the Eligible Executive’s termination of employment with the Company.
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Section 8. |
Clawback; Recovery. |
All payments and severance benefits provided under the Plan will be subject to recoupment in accordance with the RF Industries, Ltd. Policy for Recovery of Erroneously Awarded Incentive Compensation, as amended from time to time (the “Recoupment Policy”) and any other clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. No recovery of compensation under the Company’s Recoupment Policy or such other clawback policy will be an event giving rise to an Eligible Executive’s a right to resign for Good Reason.
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Section 9. |
Reemployment. |
In the event of an Eligible Executive’s reemployment by the Company during the period of time in respect of which severance benefits pursuant to the Plan have been paid, the Company, in its sole and absolute discretion, may require such Eligible Executive to repay to the Company all or a portion of such severance benefits as a condition of reemployment.
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Section 10. |
Right to Interpret and Administer Plan; Amendment or Termination. |
(a) Interpretation and Administration. Prior to the effective date of a Change in Control, the Committee shall be the Plan Administrator and shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Committee shall be binding and conclusive on all persons. Upon and after the effective date of Change in Control, the Plan will be interpreted and administered in good faith by the Representative who shall be the Plan Administrator during such period. All actions taken by the Representative in interpreting the terms of the Plan and administering the Plan upon and after the effective date of a Change in Control will be final and binding on all Eligible Executives. Any references in this Plan to the “Committee” or “Plan Administrator” with respect to periods following the effective date of a Change in Control shall mean the Representative.
(b) Amendment or Termination. The Plan Administrator reserves the right to amend or terminate this Plan at any time, without advance notice to any Eligible Executive and without regard to the effect of the amendment or termination on any Eligible Executive or on any other individual, except as otherwise provided herein or in an individual Participation Agreement. Any amendment or termination of the Plan shall be in writing. Notwithstanding the foregoing, an Eligible Executive’s rights to receive payments and benefits pursuant to the Plan under an effective Participation Agreement may not be adversely affected, without the Eligible Executive’s written consent, by an amendment or termination of the Plan.
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Section 11. |
No Implied Employment Contract. |
The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, which right is hereby reserved.
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Section 12. |
Legal Construction. |
This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of California.
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Section 13. |
Claims, Inquiries and Appeals. |
(a) Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative). The Plan Administrator is:
RF Industries, Ltd.
Compensation Committee
16868 Via Del Campo Court, Suite 200
San Diego, CA 92127
(b) Denial of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The notice of denial will be set forth in a manner designed to be understood by the applicant and will include the following:
(1) the specific reason or reasons for the denial;
(2) references to the specific Plan provisions upon which the denial is based;
(3) a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and
(4) an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described in Section 13(d) below.
This notice of denial will be given to the applicant within ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional ninety (90) days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.
This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application.
(c) Request for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within sixty (60) days after the application is denied. A request for a review shall be in writing and shall be addressed to:
RF Industries, Ltd.
Compensation Committee
16868 Via Del Campo Court, Suite 200
San Diego, CA 92127
A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The applicant (or his or her representative) shall have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records, and other information relating to his or her claim. The applicant (or his or her representative) shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim. The review shall take into account all comments, documents, records and other information submitted by the applicant (or his or her representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
(d) Decision on Review. The Plan Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the review. The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor. In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will set forth, in a manner calculated to be understood by the applicant, the following:
(1) the specific reason or reasons for the denial;
(2) references to the specific Plan provisions upon which the denial is based;
(3) a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim; and
(4) a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA.
(e) Rules and Procedures. The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.
(f) Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the applicant (i) has submitted a written application for benefits in accordance with the procedures described by Section 13(a) above, (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 13(c) above, and (iv) has been notified that the Plan Administrator has denied the appeal. Notwithstanding the foregoing, if the Plan Administrator does not respond to an Eligible Executive’s claim or appeal within the relevant time limits specified in this Section 13, the Eligible Executive may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA.
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Section 14. |
Basis of Payments to and from Plan. |
The Plan shall be unfunded, and all cash payments under the Plan shall be paid only from the general assets of the Company.
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Section 15. |
Other Plan Information. |
(a) Employer and Plan Identification Numbers. The Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal Revenue Service is 88-0168936. The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is 502.
(b) Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year for the purpose of maintaining the Plan’s records is December 31.
(c) Agent for the Service of Legal Process. The agent for the service of legal process with respect to the Plan is:
RF Industries, Ltd.
Compensation Committee
16868 Via Del Campo Court, Suite 200
San Diego, CA 92127
In addition, service of legal process may be made upon the Plan Administrator.
(d) Plan Sponsor. The “Plan Sponsor” is:
RF Industries, Ltd.
16868 Via Del Campo Court, Suite 200
San Diego, CA 92127
(e) Plan Administrator. The Plan Administrator is the Committee prior to the effective date of a Change in Control and the Representative upon and following such date. The Plan Administrator’s contact information is:
RF Industries, Ltd.
Compensation Committee
16868 Via Del Campo Court, Suite 200
San Diego, CA 92127
The Plan Administrator is the named fiduciary charged with the responsibility for administering the Plan.
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Section 16. |
Statement of ERISA Rights. |
Participants in this Plan (which is a welfare benefit plan sponsored by RF Industries, Ltd.) are entitled to certain rights and protections under ERISA. If you are an Eligible Executive, you are considered a participant in the Plan and, under ERISA, you are entitled to:
(a) Receive Information About Your Plan and Benefits.
(1) Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series), if applicable, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration;
(2) Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series), if applicable, and an updated (as necessary) Summary Plan Description. The Administrator may make a reasonable charge for the copies; and
(3) Receive a summary of the Plan’s annual financial report, if applicable. The Plan Administrator is required by law to furnish each Eligible Executive with a copy of this summary annual report.
(b) Prudent Actions by Plan Fiduciaries. In addition to creating rights for Plan Eligible Executives, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Eligible Executives and beneficiaries. No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under ERISA.
(c) Enforce Your Rights. If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan, if applicable, and do not receive them within thirty (30) days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.
If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court.
If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
(d) Assistance with Your Questions. If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
Appendix A
Definitions
(a) “Affiliate” means any corporation (other than the Company) in an “unbroken chain of corporations” beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
(b) “Base Salary” means base pay (excluding incentive pay, premium pay, commissions, overtime, bonuses and other forms of variable compensation) as in effect prior to any reduction that would give rise to an Executive Employee’s right to resign for Good Reason (if applicable).
(c) “Board” means the Board of Directors of the Company; provided, however, that if the Board has delegated authority to administer the Plan to the Compensation Committee of the Board, then “Board” shall also mean the Compensation Committee of the Board.
(d) “Cause” means that an employee has engaged in any of the following: (A) a material breach by employee of the employee’s employment agreement or employee’s material failure to perform the employee’s duties, which breach or failure are not cured within ten (10) days following receipt of written notice thereof from the Board; (B) the death or disability of employee resulting in the employee’s inability to perform the employee’s duties assigned hereunder for a period of 90 days; (C) theft of the Company’s assets, dishonesty, or falsification of any Corporate documents or records; (D) employee’s conviction (including any plea of guilty or nolo contendere) of any criminal act that in the Board’s judgment may materially damage the business or reputation of the Company; or (E) employee’s failure to follow the Company’s Code of Ethics or Statement of Policy on Securities Trading, and any amendments thereof that the Company may adopt. The determination whether a termination is for Cause shall be made by the Plan Administrator in its sole and exclusive judgment and discretion.
(e) “Change in Control” means (A) the acquisition by any one person or entity of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities; (B) a sale, assignment, lease, conveyance or other disposition of all or substantially all of the assets of the Company, in one transaction or a series of related transactions, or (C) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
(f) “Change in Control Period” means the period commencing thirty (30) days before a Change in Control and ending on the date that is twelve (12) months following the effective date of a Change in Control.
(g) “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.
(h) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(i) “Committee” means the Compensation Committee of the Board.
(j) “Company” means RF Industries, Ltd. or, following a Change in Control, the surviving entity resulting from such event.
(k) “Covered Termination” means an Involuntary Termination that occurs within the Change in Control Period. For such purposes, if the events giving rise to an Executive Employee’s right to resign for Good Reason arise within the Change in Control Period, and the Executive Employee’s resignation occurs not later than thirty (30) days after the expiration of the Cure Period (as defined below), such termination shall be a Covered Termination. An Involuntary Termination that otherwise occurs on a date that is not within the Change in Control Period is not a Covered Termination.
(l) “Director” means a member of the Board.
(m) “Disability” means any physical or mental condition which renders an employee incapable of performing the work for which he or she was employed by the Company or similar work offered by the Company. The Disability of an employee shall be established if (i) the employee satisfies the requirements for benefits under the Company’s long-term disability plan or (ii) if no long-term disability plan, the employee satisfies the requirements for Social Security disability benefits.
(n) “Eligible Executive” means an executive level employee of the Company that meets the requirements to be eligible to receive Plan benefits as set forth in Section 2 and is designated in writing as eligible to participate in the Plan by the Plan Administrator.
(o) “Employment Agreement” means the executive employee’s employment agreement with the Company or an Affiliate.
(p) “Entity” means a corporation, partnership, limited liability company or other entity.
(q) “Equity Awards” means any equity awards granted to an Eligible Executive by the Company under the Company’s Equity Plans or otherwise.
(r) “Equity Plan” means the RF Industries, Ltd. 2020 Equity Incentive Plan, as amended from time to time, or any successor plan thereto.
(s) “Good Reason” means the occurrence of any of the following events, conditions or actions taken by the Company without Cause and without such Eligible Executive’s consent: (i) a material diminution in the Eligible Executive’s authorities, duties or responsibilities; provided that a Change in Control (as defined below) and subsequent conversion of the Company to a non-publicly traded division or unit of the surviving or acquiring entity shall automatically be deemed to result in a material diminution of the Eligible Executive’s authorities, duties or responsibilities with respect to such division or unit if the Eligible Executive is the Company’s Chief Executive Officer or Chief Financial Officer, (ii) a material diminution in the Eligible Executive’s Base Salary (unless pursuant to a compensation reduction program applicable generally to the Company’s similarly situated executive employees), or (iii) a requirement that Executive relocate Executive’s principal place of employment to a location more than fifty (50) miles from Executive’s then-current principal place of employment immediately prior to such relocation.; provided, however, that in each case above, in order for the Eligible Executive’s resignation to be deemed to have been for Good Reason, the Eligible Executive providing written notice thereof to the Company no later than (30) days following the first occurrence of the condition giving rise to Good Reason, which notice shall set forth in reasonable detail the nature of the facts and circumstances which constitute Good Reason for resignation, (ii) providing the Company a period of sixty (60) days after receipt of such resignation notice to remedy the condition which constitutes Good Reason (the “Cure Period”), and (iii) the Eligible Executive must resign from employment within thirty (30) days following the expiration of Cure Period if the Company fails to remedy the condition.
(t) “Involuntary Termination” means a termination of employment that is due to: (1) a termination by the Company without Cause (and other than as a result of the employee’s death or Disability) or (2) an employee’s resignation for Good Reason, provided that in any case such termination is also a Separation from Service.
(u) “Participation Agreement” means an agreement between an employee and the Company in substantially the form of Appendix B attached hereto, and which may include such other terms as the Plan Administrator deems necessary or advisable in the administration of the Plan.
(v) “Plan Administrator” means the Committee prior to the effective date of a Change in Control and the Representative upon and following such date.
(w) “Representative” means one or more members of the Committee or other persons or entities designated by the Committee prior to or in connection with a Change in Control that will have authority to administer and interpret the Plan upon and following the effective date of such Change in Control as provided in Section 10(a).
(x) “Section 409A” means Section 409A of the Code and the treasury regulations and other guidance thereunder and any state law of similar effect.
(y) “Separation from Service” means a “separation from service” within the meaning of Treasury Regulations Section 1.409A-1(h), without regard to any alternative definition thereunder.
(z) “Separate Agreement” means any severance or change in control benefits set forth in any individual employment letter, employment agreement, or other similar agreement between the Company and an Eligible Executive.
Appendix B
RF Industries, Ltd.
Executive Change in Control and Severance Benefit Plan
Participation Agreement
Name: ___________________
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Section 1. |
Eligibility. |
You have been designated as eligible to participate in the RF Industries, Ltd. Executive Change in Control and Severance Benefit Plan (the “Plan”), a copy of which is attached as Annex I to this Participation Agreement (the “Agreement”). Capitalized terms not explicitly defined in this Agreement but defined in the Plan (including Appendix A to the Plan) shall have the same definitions as in the Plan.
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Section 2. |
Severance Benefits. |
Subject to the terms of the Plan and Section 4 of this Agreement, if you are terminated in a Covered Termination, and meet all the other eligibility requirements set forth in the Plan, including, without limitation, executing the required Release within the applicable time period set forth therein and provided that such Release becomes effective in accordance with its terms, you will receive the severance benefits set forth in this Section 2, subject to any reduction as provided in Section 3 of the Plan. Notwithstanding the schedule for provision of severance benefits as set forth below, the provision of any severance benefits under this Section 2 is subject to any delay in payment that may be required under Section 5 of the Plan and no benefits will be paid or provided prior to the effective date of the Release. In all cases your severance benefits will be calculated ignoring any reduction in your Base Salary that would give rise to your right to resign for Good Reason.
(a) Covered Termination. Upon a Covered Termination, you shall be eligible to receive the following severance benefits. For the avoidance of doubt, in no event shall you be entitled to benefits under a Separate Agreement and this Plan as it relates to any duplicative severance benefits as provided in this Section 2(a)), and the severance benefits otherwise to be provided to you under the Plan will be accordingly reduced, on a benefit-by-benefit basis, by any severance benefits that are provided to you under a Separate Agreement. Benefits provided under the Plan shall supplement, but not supersede or duplicate, any benefits provided to you under any Separate Agreement.
(1) Cash Severance Benefit. You will receive the following cash severance benefit payable to you at the applicable times specified below; provided however that any such payments otherwise scheduled to be made prior to the effective date of your Release will instead accrue and be paid to you on the first payroll period following your Release effective date:
(i) an amount equal to [eighteen (18)/twelve (12)]1 months of your Base Salary payable in a single lump sum on the first payroll period following the effective date of your Release; plus
(ii) [150%/100%]2 of your annual target cash bonus, if any, established for you by the Board (or an authorized committee or designee thereof) for the year in which your Covered Termination occurs, and payable in a single lump sum on the first payroll period following the effective date of your Release. If at the time of the Covered Termination you are eligible for the annual target cash bonus for the year in which the Covered Termination occurs, but the target percentage (or target dollar amount, if specified as such in the applicable bonus plan) for such bonus has not yet been established for such year, the target percentage shall be the target percentage established for you for the preceding year (but adjusted, if necessary for your position for the year in which the Covered Termination occurs). For the avoidance of doubt, the percentage of the annual target bonus to which you are entitled under this Section 2(b)(1)(ii) will be calculated (1) assuming all articulated performance goals for such bonus (including, but not limited to, corporate and individual performance, if applicable), for the year of the Covered Termination was achieved at 100% of the target levels; and (2) as if you had provided services for the entire year for which the bonus relates; plus
1 NTD: Insert 18 months for the CEO and 12 months for all other executives.
2 NTD: Insert 150% for the CEO and 100% for all other executives.
(2) an additional amount equal to any performance bonus for any annual performance period that had been completed prior to the date of your Covered Termination (for the calendar year preceding the Covered Termination), but which has not yet been paid as of the date of your Covered Termination, and which was otherwise eligible to be earned subject to your continued employment through the payment date, if and to the extent applicable, based on the applicable performance level attained for such performance period. Such annual cash bonus shall be paid to you in a lump sum during the calendar year in which your Covered Termination occurs, at the same time as annual cash bonuses are paid to other continuing executives.
(3) Payment of Continued Group Health Plan Benefits.
(i) If you timely elect continued group health plan continuation coverage under COBRA following your termination date, the Company shall pay directly to the carrier the full amount of your COBRA premiums on behalf of you for your continued coverage under the Company’s group health plans, including coverage for your eligible dependents, until the earliest of (i) the end of [eighteen (18)/twelve (12)]3 months period following the date of your termination, (ii) the expiration of your eligibility for the continuation coverage under COBRA or any state law of similar effect, or (iii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment (such period from your termination date through the earliest of (i) through (iii), the “COBRA Payment Period”). Upon the conclusion of such period of insurance premium payments made by the Company, you will be responsible for the entire payment of premiums (or payment for the cost of coverage) required under COBRA for the duration of your eligible COBRA coverage period. For purposes of this Section, (i) references to COBRA shall be deemed to refer also to analogous provisions of state law and (ii) any applicable insurance premiums that are paid by the Company shall not include any amounts payable by you under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are your sole responsibility. You agree to promptly notify the Company as soon as you become eligible for health insurance coverage in connection with new employment or self-employment.
(ii) Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums directly to the carrier on your behalf, the Company will instead pay you on the last day of each remaining month of the COBRA Payment Period a fully taxable cash payment equal to the COBRA premium for that month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to your election of COBRA coverage or payment of COBRA premiums and without regard to your continued eligibility for COBRA coverage during the COBRA Payment Period. Such Special Severance Payment shall end upon expiration of the COBRA Payment Period.
3 NTD: Insert 18 months for the CEO and 12 months for all other executives.
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Section 3. |
Change in Control Vesting Acceleration and Settlement. |
Subject to your continued employment with the Company through the date of a Change in Control, , then your Equity Awards will fully vest and settle upon such Change in Control, with the applicable performance vesting conditions for any Equity Awards with multiple potential vesting levels deemed satisfied at the greater of: (i) the applicable level of performance attained through the date of the Change in Control, or (ii) the target performance level for such Equity Awards.
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Section 4. |
Requirements During Severance Period. |
Your eligibility for and receipt of any severance benefits to which you may become entitled as described in Section 2 above is expressly contingent upon your timely execution of an effective Release. Severance benefits under the Plan shall immediately cease in the event you engage in a Prohibited Action, to the extent permitted under applicable law.
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Section 5. |
Acknowledgements. |
As a condition to participation in the Plan, you hereby acknowledge each of the following:
(a) The severance benefits that may be provided to you under this Agreement are subject to all of the terms of the Plan which is incorporated into and becomes part of this Agreement, including but not limited to the reductions under Section 3 of the Plan.
(b) [You acknowledge and agree that in the event of a Covered Transactions any severance benefits provided to you under the Plan will be reduced by any termination benefits that you may become entitled to as set forth in Section 7.1 and 7.2 of your Employment Agreement with the Company dated July 16, 20214].
(c) You may not sell, transfer, or otherwise assign or pledge your right to benefits under this Agreement and the Plan to either your creditors or to your beneficiary, except to the extent permitted by the Plan Administrator if such action would not result in adverse tax consequences under Section 409A.
(d) Notwithstanding anything to the contrary in the Plan or this Agreement, your rights under this Agreement may not be adversely affected by an amendment or termination of the Plan without your written consent.
To accept the terms of this Agreement and participate in the Plan, please sign and date this Agreement in the space provided below and return it to [_____________________] no later than ________ __, 2026.
4 Include only for CEO Participation Agreement
RF Industries, Ltd.
| By: |
| Name: |
| Title: |
| [Eligible Executive] | Date |
Annex I
RF Industries, Ltd. Executive Change in Control and Severance Benefit Plan5
5 NTD: Attach copy of the Plan as most recently approved by the Committee.
Exhibit 21.1
Subsidiaries
RF Industries, Ltd. owns 100% of the capital stock of each of the following subsidiaries:
● | Cables Unlimited, Inc., a New York corporation |
● | Rel-Tech Electronics, Inc., a Connecticut corporation |
● | C Enterprises, Inc., a California corporation |
● | Schroff Technologies International, Inc., a Rhode Island corporation |
● | Microlab/FXR LLC, a New Jersey limited liability company |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements on Form S-3 (No. 333-260851) and Form S-8 (Nos. 333-282821, 333-248791, 333-207569, 333-114932, 333-62188, 333-169490, 333-205748 and 333-220561) of RF Industries, Ltd. and Subsidiaries, of our report dated January 14, 2026 on our audits of the consolidated financial statements of RF Industries, Ltd. and Subsidiaries as of October 31, 2025 and 2024 and for the years then ended, included in this Annual Report on Form 10-K of RF Industries, Ltd. and Subsidiaries for the year ended October 31, 2025.
/s/ CohnReznick LLP
Tysons, Virginia
January 14, 2026
Exhibit 31.1
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Robert D. Dawson, certify that:
1. I have reviewed this report on Form 10-K for the fiscal year ended October 31, 2025 of RF Industries, Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: January 14, 2026 |
/s/ Robert D. Dawson |
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Robert D. Dawson Chief Executive Officer (Principal Executive Officer) |
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Exhibit 31.2
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Peter Yin, certify that:
1. I have reviewed this report on Form 10-K for the fiscal year ended October 31, 2025 of RF Industries, Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: January 14, 2026 |
/s/ Peter Yin |
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Peter Yin |
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Chief Financial Officer (Principal Financial Officer) |
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of RF Industries, Ltd. (“Company”) on Form 10-K for the fiscal year ended October 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Robert D. Dawson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: January 14, 2026 |
/s/ Robert D. Dawson |
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Robert D. Dawson |
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Chief Executive Officer |
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Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of RF Industries, Ltd. (“Company”) on Form 10-K for the fiscal year ended October 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Peter Yin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: January 14, 2026 |
/s/ Peter Yin |
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Peter Yin |
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Chief Financial Officer |
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