What changed in this filing

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Item 1. Financial Statements

2025-09-11 compared with 2025-06-16 · 121 added, 114 removed, 291 unchanged (45% of the section changed)

4 unchanged sentences

(In thousands)

Six Months Ended April 30,

Nine Months Ended July 31,

OPERATING ACTIVITIES:

1 unchanged sentence

Adjustments to reconcile consolidated net loss to net cash provided by operating activities:

Bad debt expense (recovery)

Bad debt expense

Depreciation and amortization

9 unchanged sentences

Right-of-use assets

Other long-term assets

Accounts payable

10 unchanged sentences

Term Loan payments

Net cash provided by (used in) financing activities

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

12 unchanged sentences

as of October 31, 2024 included in our Annual Report on Form 10-K (the “Form 10-K”) for the year ended October 31, 2024 that was previously filed with the Securities and Exchange Commission (“SEC”).

Operating results for the six months ended April 30, 2025 are not necessarily indicative of the results that may be expected for the year ended October 31, 2025.

Operating results for the nine months ended July 31, 2025 are not necessarily indicative of the results that may be expected for the year ended October 31, 2025.

The unaudited condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and footnotes thereto included in our Form 10-K.

1 unchanged sentence

The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations and potential other funding sources, in addition to cash on-hand along with the current credit facility with Eclipse Business Capital (“EBC”) to meet its obligations as they become due.

For the three and six months ended April 30, 2025, we generated operating income of $ 106,000 and $ 162,000 , respectively, compared to an operating loss of $ 415,000 and $ 2,499,000 for the same periods last year.

This is a result of an increase in sales, as well as certain cost-cutting measures we took to reduce our operating expenses and to help drive positive operating cash flow and increase liquidity.

For the three and nine months ended July 31, 2025, we generated operating income of $ 719,000 and $ 882,000 , respectively, compared to an operating loss of $ 419,000 and $ 2,919,000 for the same periods last year.

This is a result of an increase in sales, as well as certain cost-cutting measures we implemented to reduce our operating expenses and to help drive positive operating cash flow and increase liquidity.

Efforts to reduce expenses included consolidating facilities and recognizing the related operating efficiencies and synergies in our production operations.

The Company intends to continue to pursue additional continuous improvement and cost reduction measures, as well as organic growth in revenue and profitability.

On March 15, 2024, the Company entered into the loan and security agreement with EBC, as administrative agent, pursuant to which proceeds from initial drawings under the credit facility with EBC were used to repay in full the outstanding obligations under the prior revolving credit facility and term loan that we had with Bank of America, N.A, which such credit facility with Bank of America, N.A.

was terminated upon entry into the loan and security agreement with EBC.

(the “Term Loan”).

The Term loan was terminated upon entry into the loan and security agreement with EBC.

Principles of consolidation

14 unchanged sentences

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

As of April 30, 2025 and October 31, 2024, the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

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

Recent accounting standards

11 unchanged sentences

We maintain our cash and cash equivalents with high-credit quality financial institutions.

At April 30, 2025, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $ 3.3 million.

At July 31, 2025, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $ 2.7 million.

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

Three Months Ended April 30,

Six Months Ended April 30,

Three Months Ended July 31,

Nine Months Ended July 31,

Wireless provider A

Wireless provider B

For the three months ended April 30, 2025, one wireless provider accounted for 11 % of net sales and 16 % of total net accounts receivable balance.

One distributor with less than 10% of total net sales, accounted for 10 % of total net accounts receivable balance.

For the six months ended April 30, 2025, a different wireless provider accounted for 11% of net sales and less than 10% of total net accounts receivable balance, and a wireless provider and the same distributor, whose sales were both less than 10% of total net sales, accounted for 16 % and 10 % of total net accounts receivable balance, respectively.

For the three months ended April 30, 2024, no customers accounted for 10% or more of net sales, and one wireless provider and one distributor, whose sales were both less than 10% of total net sales, accounted for 15 % and 10 % of total net accounts receivable balance, respectively.

For the six months ended April 30, 2024, no customers accounted for 10% or more of net sales, and two distributor customers, whose sales were both less than 10% of total net sales, accounted for 15 % and 10 % of total net accounts receivable balance, respectively.

Distributor A

Distributor B

For the three months ended July 31, 2025, one wireless provider accounted for 11 % of net sales and 17 % of total net accounts receivable balance, and one distributor customer accounted for 15 % of net sales and 22 % of total net accounts receivable balance.

For the nine months ended July 31, 2025, no customers accounted for 10% or more of net sales, and the same wireless provider and distributor accounted for 17 % and 22 % of total net accounts receivable balance, respectively.

For the three months ended July 31, 2024, the same wireless provider accounted for 11 % of net sales and 18 % of total net accounts receivable balance, and a different distributor customer accounted for 13 % of net sales and 10 % of total net accounts receivable balance.

For the nine months ended July 31, 2024, no customers accounted for 10% or more of net sales, and the wireless provider and one distributor customer accounted for 18 % and 10 % of total net accounts receivable balance, respectively.

Although these customers have been significant customers of the Company, the written agreements with these customers do not have any minimum purchase obligations and these customers could stop buying our products at any time and for any reason.

4 unchanged sentences

Inventories consist of the following (in thousands):

April 30, 2025

July 31, 2025

October 31, 2024

2 unchanged sentences

Finished goods

For the three months ended April 30, 2025 and 2024, no single vendor accounted for 10% or more of inventory purchases.

For the six months ended April 30, 2025 and 2024, no single vendor accounted for 10% or more of inventory purchases.

For the three months ended July 31, 2025 and 2024, no single vendor accounted for 10% or more of inventory purchases.

For the nine months ended July 31, 2025 and 2024, no single vendor accounted for 10% or more of inventory purchases.

We have arrangements with these vendors to purchase products based on purchase orders that we periodically issue.

1 unchanged sentence

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

April 30, 2025

July 31, 2025

October 31, 2024

3 unchanged sentences

Accrued expenses consist of the following (in thousands):

April 30, 2025

July 31, 2025

October 31, 2024

5 unchanged sentences

Note 6 – Income (Loss) per share

Basic income (loss) per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period.

Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied.

During the three months ended April 30, 2025, we reported a net loss and, in periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect.

Potentially issuable securities that are out-of-the-money totaled 405,056 and 1,152,513 shares for the three months ended April 30, 2025 and 2024, respectively, and 405,056 and 1,152,513 shares for the six months ended April 30, 2025 and 2024, respectively, and were excluded from the calculation of diluted per share amounts because of their anti-dilutive effect.

During the three months ended July 31, 2025, we reported a net income.

In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect.

Potentially issuable securities that are out-of-the-money totaled 50,000 and 846,889 shares for the three months ended July 31, 2025 and 2024, respectively, and 50,000 and 846,889 shares for the nine months ended July 31, 2025 and 2024, respectively, and were excluded from the calculation of diluted per share amounts because of their anti-dilutive effect.

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

Three Months Ended April 30,

Six Months Ended April 30,

Three Months Ended July 31,

Nine Months Ended July 31,

Weighted average shares outstanding for basic earnings per share

17 unchanged sentences

(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.

No other shares or options were granted to Company employees during the three and six months ended April 30, 2025 and 2024.

The fair value of each option granted during the six months ended April 30, 2025 and 2024 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:

Six Months Ended April 30,

No other shares or options were granted to Company employees during the three and nine months ended July 31, 2025 and 2024.

The fair value of each option granted during the nine months ended July 31, 2025 and 2024 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:

Nine Months Ended July 31,

Weighted average volatility

12 unchanged sentences

Descriptions of our stock option plans are included in Note 8 to our audited financial statements included in our Annual Report on Form 10-K for the year ended October 31, 2024.

A summary of the status of the options granted under our stock option plans as of April 30, 2025 and the changes in options outstanding during the three months then ended is presented in the table that follows:

A summary of the status of the options granted under our stock option plans as of July 31, 2025 and the changes in options outstanding during the nine months then ended is presented in the table that follows:

Exercise Price

3 unchanged sentences

Options canceled or expired

Options outstanding at April 30, 2025

Options exercisable at April 30, 2025

Options vested and expected to vest at April 30, 2025

Option price range at April 30, 2025

Options outstanding at July 31, 2025

Options exercisable at July 31, 2025

Options vested and expected to vest at July 31, 2025

Option price range at July 31, 2025

Aggregate intrinsic value of options exercised during year

Weighted average remaining contractual life of options outstanding as of April 30, 2025:

Weighted average remaining contractual life of options exercisable as of April 30, 2025:

Weighted average remaining contractual life of options vested and expected to vest as of April 30, 2025:

Aggregate intrinsic value of options outstanding at April 30, 2025:

Aggregate intrinsic value of options exercisable at April 30, 2025:

Aggregate intrinsic value of options vested and expected to vest at April 30, 2025:

As of April 30, 2025, $ 961,000 and $ 787,000 of expenses with respect to nonvested stock options and restricted shares, respectively, have yet to be recognized but are expected to be recognized over a weighted average period of 1.6 and 1.4 years, respectively.

Weighted average remaining contractual life of options outstanding as of July 31, 2025:

Weighted average remaining contractual life of options exercisable as of July 31, 2025:

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

Aggregate intrinsic value of options outstanding at July 31, 2025:

Aggregate intrinsic value of options exercisable at July 31, 2025:

Aggregate intrinsic value of options vested and expected to vest at July 31, 2025:

As of July 31, 2025, $ 919,000 and $ 686,000 of expenses with respect to nonvested stock options and restricted shares, respectively, have yet to be recognized but are expected to be recognized over a weighted average period of 1.4 and 1.3 years, respectively.

Stock option expense

During the three months ended April 30, 2025 and 2024, stock-based compensation expense totaled $ 227,000 and $ 248,000 , respectively, and was classified in selling and general expense.

During the six months ended April 30, 2025 and 2024, stock-based compensation expense totaled $ 421,000 and $ 503,000 , respectively, and was classified in selling and general expense.

During the three months ended July 31, 2025 and 2024, stock-based compensation expense totaled $ 219,000 and $ 241,000 , respectively, and was classified in selling and general expense.

During the nine months ended July 31, 2025 and 2024, stock-based compensation expense totaled $ 640,000 and $ 744,000 , respectively, and was classified in selling and general expense.

Note 8 – Segment information

5 unchanged sentences

and (5) if applicable, the nature of the regulatory environment.

Based upon this evaluation, as of April 30, 2025, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

Based upon this evaluation, as of July 31, 2025, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

The RF Connector segment consists of three divisions and the Custom Cabling segment also consists of three divisions.

10 unchanged sentences

We attribute sales to geographic areas based on the location of the customers.

The following table presents the sales by geographic area for the three and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended April 30,

Six Months Ended April 30,

The following table presents the sales by geographic area for the three and nine months ended July 31, 2025 and 2024 (in thousands):

Three Months Ended July 31,

Nine Months Ended July 31,

United States

Foreign Countries:

United Kingdom

Net sales, (loss) income before provision for income taxes and other related segment information for the three months ended April 30, 2025 and 2024 are as follows (in thousands):

Net sales, (loss) income before provision for income taxes and other related segment information for the three months ended July 31, 2025 and 2024 are as follows (in thousands):

Custom Cabling

7 unchanged sentences

Expenditures for Segment Assets

Net sales, (loss) income before benefit for income taxes and other related segment information for the six months ended April 30, 2025 and 2024 are as follows (in thousands):

Net sales, (loss) income before provision for income taxes and other related segment information for the nine months ended July 31, 2025 and 2024 are as follows (in thousands):

Custom Cabling

1 unchanged sentence

Cable Assembly

(Loss) income before provision from income taxes

(Loss) income before provision for income taxes

Depreciation and amortization

7 unchanged sentences

In that case, an entity may report the actual tax provision or benefit applicable when annual income (loss) cannot be estimated as a discrete item in the interim period.

This exception was used in determining the tax provision for the six months ended April 30, 2025.

We recorded income tax provisions of $ 135,000 and $ 3,649,000 for the three months ended April 30, 2025 and 2024, respectively.

The effective tax rate for the three months ended April 30, 2025 and 2024 was ( 122.7 %) and ( 564.7 %), respectively.

For the six months ended April 30, 2025 and 2024, we recorded income tax provisions of $ 171,000 and $ 2,818,000 , respectively.

The effective tax rate for the six months ended April 30, 2025 and 2024 was ( 53.6 %) and ( 99.3 %), respectively.

The effective tax rate for the three months and six months ended April 30, 2025 differed from the U.S.

This exception was used in determining the tax provision for the nine months ended July 31, 2025.

We recorded income tax provisions (benefits) of $ 88,000 and ($ 52,000 ) for the three months ended July 31, 2025 and 2024, respectively.

The effective tax rate for the three months ended July 31, 2025 and 2024 was 18.3 % and 6.9 %, respectively.

For the nine months ended July 31, 2025 and 2024, we recorded income tax provisions of $ 259,000 and $ 2,766,000 , respectively.

The effective tax rate for the nine months ended July 31, 2025 and 2024 was 160.9 % and ( 76.9 %), respectively.

The effective tax rate for the three months and nine months ended July 31, 2025 differed from the U.S.

statutory tax rate of 21% primarily due to state taxes, various permanent differences, research and development tax credits, unrecognized tax benefits and change in valuation allowance.

We had $ 224,000 and $ 186,000 of unrecognized tax benefits as of April 30, 2025 and October 31, 2024, respectively.

The unrecognized tax benefits, if recognized, would result in a net tax benefit of $ 144,000 as of April 30, 2025.

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 recorded against the deferred tax assets as of April 30, 2025.

We had $ 241,000 and $ 186,000 of unrecognized tax benefits, as of July 31, 2025 and October 31, 2024, respectively.

The unrecognized tax benefits, if recognized, would result in a net tax benefit of $ 195,000 as of July 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.

1 unchanged sentence

After analyzing all available evidence, including the recent trend of losses, the Company has determined that it is not more likely than not that all of its deferred tax assets will be realized, and therefore, has a partial valuation allowance against its deferred tax assets.

The Company's valuation allowance was $ 4,040,000 and $ 3,962,000 as of April 30, 2025 and October 31, 2024, respectively.

The Company's valuation allowance was $ 4,146,000 and $ 3,962,000 as of July 31, 2025 and October 31, 2024.

On July 4, 2025, President Donald Trump signed into law the reconciliation tax bill, commonly referred to as the “One Big Beautiful Bill Act” (OBBBA), which constitutes the enactment date under GAAP.

Key corporate tax provisions of the OBBBA include the restoration of 100% bonus depreciation, the introduction of new Section 174A permitting immediate expensing of domestic research and experimental (R&E) expenditures, modifications to Section 163(j) interest expense limitations, updates to the rules governing foreign-derived intangible income (FDII), and the expansion of Section 162(m) aggregation requirements.

Under GAAP, the effects of changes in tax laws are recognized in the period in which the new law is enacted.

Accordingly, the impact of the OBBBA is reflected in the Company’s financial statements for the third quarter of fiscal 2025, to the extent applicable, as the tax law changes primarily take effect for the fiscal year ending October 31, 2026.

The tax law changes did not change the annual effective tax rate for fiscal 2025 or the valuation allowance assessment.

The Company is currently evaluating the impact of the OBBBA for fiscal 2026, and an estimate of the financial effect is not available yet.

Note 10 – Intangible assets

Intangible assets consist of the following as of April 30, 2025 and October 31, 2024 (in thousands):

April 30, 2025

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

July 31, 2025

October 31, 2024

13 unchanged sentences

Non-amortizable intangible assets:

Amortization expense for the six months ended April 30, 2025 and the year ended October 31, 2024 was $ 822,000 and $ 1,688,000 , respectively.

As of April 30, 2025, the weighted-average amortization period for the amortizable intangible assets is 7.14 years.

Amortization expense for the nine months ended July 31, 2025 and the year ended October 31, 2024 was $ 1,233,000 and $ 1,688,000 , respectively.

As of July 31, 2025, the weighted-average amortization period for the amortizable intangible assets is 6.91 years.

Note 11 – Commitments

3 unchanged sentences

We also have other operating leases for certain equipment.

The components of our facilities and equipment operating lease expenses for the periods ending April 30, 2025 and 2024 were as follows (in thousands):

Three Months Ended April 30,

Six Months Ended April 30,

The components of our facilities and equipment operating lease expenses for the periods ended July 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended July 31,

Nine Months Ended July 31,

Operating lease cost

As of April 30, 2025, operating lease right-of-use assets were $ 14.5 million and operating lease liabilities totaled $ 19.6 million, of which $ 1.9 million is classified as current.

There were no finance leases as of April 30, 2025.

Future minimum lease payments under non-cancellable leases as of April 30, 2025 are a total of $ 25.9 million.

As of July 31, 2025, operating lease right-of-use assets were $ 14.3 million and operating lease liabilities totaled $ 19.3 million, of which $ 2.0 million is classified as current.

There were no finance leases as of July 31, 2025.

Future minimum lease payments under non-cancellable leases as of July 31, 2025 are a total of $ 25.2 million.

Note 12 – Term Loan and Line of credit

5 unchanged sentences

Availability of borrowings under the EBC Credit Facilities will be 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 accrues 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 accrues 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.

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.

5 unchanged sentences

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 and the First Amendment as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended July 31, 2024.

Debt issuance costs related to the EBC Credit Agreement have been capitalized and the remaining balance, which is included as part of our other long-term assets balance, totaled $ 325,000 as of April 30, 2025.

As of April 30, 2025, our outstanding borrowings under the EBC Credit Agreement were $ 7,994,000 .

As of July 31, 2025, our outstanding borrowings under the EBC Credit Agreement were $ 7,828,000 .

In accordance with ASC 470-10-45, Other Presentations Matters - General , we have classified the outstanding borrowings as part of current liabilities in the condensed consolidated balance sheet.

Note 13 – Cash dividend and declared dividends

We did not pay any dividends during the three or six months ended April 30, 2025, nor during the three or six months ended April 30, 2024.

We did not pay any dividends during the three or nine months ended July 31, 2025, nor during the three or nine months ended July 31, 2024.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

13 unchanged sentences

The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent liabilities.

Management believes that there have been no material changes during the three months ended April 30, 2025 to the items that we disclosed as our critical accounting estimates in the MD&A in our Annual Report on Form10-K for the fiscal year ended October 31, 2024.

Management believes that there have been no material changes during the three months ended July 31, 2025 to the items that we disclosed as our critical accounting estimates in the MD&A in our Annual Report on Form10-K for the fiscal year ended October 31, 2024.

RF Industries, Ltd.

6 unchanged sentences

The Custom Cabling segment designs, manufactures, markets and distributes custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, electromechanical wiring harnesses for a broad range of applications in a diverse set of end markets, energy-efficient cooling systems for wireless base stations and remote equipment shelters and custom designed, pole-ready 4G and 5G small cell integrated enclosures.

For the six months ended April 30, 2025, revenues from the Custom Cabling segment were generated from the sale of fiber optics cable, copper cabling, custom patch cord assemblies, and wiring harnesses, which collectively accounted for 53% of the Company’s total sales.

Revenues from the RF Connector segment were generated from the sales of RF Connector products and cable assemblies and accounted for 47% of total sales for the six months ended April 30, 2025.

For the nine months ended July 31, 2025, revenues from the Custom Cabling segment were generated from the sale of fiber optics cable, copper cabling, custom patch cord assemblies, and wiring harnesses, which collectively accounted for 53% of the Company’s total sales.

Revenues from the RF Connector segment were generated from the sales of RF Connector products and cable assemblies and accounted for 47% of total sales for the nine months ended July 31, 2025.

The RF Connector segment mostly sells standardized products regularly used by customers and, therefore, has a more stable revenue stream.

5 unchanged sentences

Historically, we have been able to fund our liquidity and other capital requirements from funds we generated from operations.

We generated operating income during the six months ended April 30, 2025, as we saw sales continue to recover during the current period.

We generated operating income during the nine months ended July 31, 2025, as we saw sales continue to recover during the current 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.

1 unchanged sentence

We intend to continue to pursue additional continuous improvement and cost reduction measures, as well as organic growth in revenue and profitability.

As of April 30, 2025, we had a total of $3.6 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 April 30, 2025, we had working capital of $12.1 million and a current ratio of approximately 1.6:1 with current assets of $32.7 million and current liabilities of $20.6 million.

As of July 31, 2025, we had a total of $3.0 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 July 31, 2025, we had working capital of $13.1 million and a current ratio of approximately 1.6:1 with current assets of $34.1 million and current liabilities of $21.0 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 April 30, 2025, we had $15.0 million of backlog, compared to $19.5 million as of October 31, 2024, due primarily to shipments against our backlog and timing of orders.

As of July 31, 2025, we had $19.7 million of backlog, compared to $19.5 million as of October 31, 2024, due primarily to shipments against our backlog and timing of orders.

Since purchase orders are submitted from customers based on the timing of their requirements, our ability to predict orders in future periods or trends in future periods is limited.

Furthermore, purchase orders may be subject to cancellation from customers, although we have not historically experienced material cancellations of purchase orders.

In the six months ended April 30, 2025, we generated $2.8 million of cash in our operating activities.

This net inflow of cash is primarily related to a decrease in inventories of $2.2 million as a result of better inventory management and supply chain conditions improving allowing us to carry less inventory on hand, $1.2 million from depreciation and amortization, $1.0 million from the change in accounts payable, $0.4 million from stock-based compensation expense, $1.6 million from the change in accrued expenses, $0.1 million from bad debt expense and $87,000 from amortization of debt issuance costs.

The cash usage was primarily due to the net loss of $0.5 million, the change in accounts receivable of $3.0 million, the change in other current assets of $0.1 million, right-of-use assets of $0.2 million, $34,000 tax payments on cancelled shares of restricted stock and $3,000 from deferred income taxes.

During the six months ended April 30, 2025, we also spent $61,000 on capital expenditures, repaid $0.2 million on the revolving credit facility with EBC and received $0.2 million in proceeds from the exercise of stock options.

In the nine months ended July 31, 2025, we generated $2.5 million of cash in our operating activities.

This net inflow of cash is primarily related to a decrease in inventories of $0.6 million as a result of better inventory management and supply chain conditions improving allowing us to carry less inventory on hand, $1.8 million from depreciation and amortization, $1.0 million from the change in accounts payable, $0.6 million from stock-based compensation expense, $2.1 million from the change in accrued expenses, $0.1 million from amortization of debt issuance costs and $31,000 from bad debt expense.

The cash usage was primarily due to the net loss of $0.1 million, the change in accounts receivable of $3.3 million, the change in other current assets of $0.1 million, right-of-use assets of $0.3 million, $43,000 tax payments on cancelled shares of restricted stock, $12,000 gain on disposal of fixed assets and $3,000 from deferred income taxes.

During the nine months ended July 31, 2025, we also spent $170,000 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.

7 unchanged sentences

Results of Operations

Three Months Ended April 30, 2025 vs.

Three Months Ended April 30, 2024

Net sales for the three months ended April 30, 2025 (the “fiscal 2025 quarter”) increased by 17.4%, or $2.8 million, to $18.9 million as compared to the three months ended April 30, 2024 (the “fiscal 2024 quarter”).

Three Months Ended July 31, 2025 vs.

Three Months Ended July 31, 2024

Net sales for the three months ended July 31, 2025 (the “fiscal 2025 quarter”) increased by 17.9%, or $3.0 million, to $19.8 million as compared to the three months ended July 31, 2024 (the “fiscal 2024 quarter”).

Net sales for the fiscal 2025 quarter at the Custom Cabling segment increased by $3.5 million, or 49.3%, to $10.6 million, compared to $7.1 million in the fiscal 2024 quarter.

The increase was primarily driven by tier one carrier applications for our direct air cooling offering and new market penetration in our Custom Cabling segment.

The increase was primarily driven by aerospace and new market penetration in our Custom Cabling segment.

Net sales for the fiscal 2025 quarter at the RF Connector segment decreased by $0.5 million, or 5.2%, to $9.2 million as compared to $9.7 million in the fiscal 2024 quarter, primarily due to timing of small cell applications and deployment.

Gross profit for the fiscal 2025 quarter increased by $1.7 million to $6.7 million, and gross margins increased to 34% of sales compared to 29.5% of sales in the fiscal 2024 quarter.

The increases in gross profit and gross margins were primarily related to the overall increase in sales, direct air cooling product mix and new market penetration.

The increases in gross profit and gross margins were primarily related to the overall product mix and new market penetration.

Engineering expenses increased by $0.1 million to $0.8 million in the fiscal 2025 quarter compared to $0.7 million in the fiscal 2024 quarter.

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Engineering expenses represent costs incurred relating to the ongoing research and development of current and new products.

Selling and general expenses increased by $0.6 million to $5.2 million (27.3% of sales) compared to $4.6 million (28.6% of sales) in the second quarter last year primarily due to an increase in variable compensation related to commissions and bonuses as a result of the higher sales and investment in additional resources.

We incurred one-time charges of $0.2 million relating to severance and related legal expenses in the fiscal 2025 quarter.

Selling and general expenses increased by $0.5 million to $5.2 million (26.5% of sales) compared to $4.7 million (28.1% of sales) in the third quarter last year primarily due to an increase in variable compensation related to commissions and bonuses as a result of the higher sales and investment in additional resources.

For the fiscal 2025 quarter, the Custom Cabling segment had pretax income of $2.1 million and the RF Connector segment had a pretax loss of $1.4 million, as compared to $0.3 million income and $0.7 million loss, respectively, for the comparable quarter last year.

The increase in pretax income at the Custom Cabling segment was due to the increase in sales of direct air cooling to wireless carriers and penetrating new market segments.

The increase in pretax income at the Custom Cabling segment was the result of product mix servicing the aerospace and enterprise markets.

The increase in pretax loss at the RF Connector segment was primarily due to a decrease in sales relating to timing of orders.

For the fiscal 2025 and 2024 quarters, we recorded income tax provision of $135,000 and $3,649,000, respectively.

For the fiscal 2025 and 2024 quarters, we recorded income tax provision of $88,000 and income tax benefit of $52,000, respectively.

The effective tax rate was 18.3% for the fiscal 2025 quarter, compared to 6.9% for the fiscal 2024 quarter.

The change in the effective tax rate from the fiscal 2025 quarter to fiscal 2024 quarter was primarily driven by the effects of the change in valuation allowance, research and development credits, state income taxes, and other expected permanent differences.

For the fiscal 2025 quarter, net loss was $0.2 million and fully diluted loss per share was $0.02, compared to a net loss of $4.3 million and fully diluted loss per share of $0.41 for the fiscal 2024 quarter.

For the fiscal 2025 quarter, net income was $0.4 million and fully diluted earnings per share was $0.04, compared to a net loss of $0.7 million and fully diluted loss per share of $0.07 for the fiscal 2024 quarter.

For the fiscal 2025 quarter, the diluted weighted average shares outstanding were 10,668,375 as compared to 10,495,082 for the fiscal 2024 quarter.

Six Months Ended April 30, 2025 vs.

Six Months Ended April 30, 2024

Net sales for the six months ended April 30, 2025 (the “fiscal 2025 six-month period”) of $38.1 million increased by 28.7%, or $8.5 million, compared to the six months ended April 30, 2024 (the “fiscal 2024 six-month period”).

The increase in net sales is attributable mainly to the Custom Cabling segment, which increased by $9.1 million, or 83.5%, to $20.0 million compared to $10.9 million in the fiscal 2024 six-month period, primarily driven by tier one carrier applications for our direct air cooling offering and new market penetration through our Cables Unlimited business division.

Net sales for the fiscal 2025 six-month period at the RF Connector segment decreased by $0.6 million, or 3.2%, to $18.1 million compared to $18.7 million in the fiscal 2024 six-month period, primarily due to timing of small cell applications and deployment.

Gross profit for the fiscal 2025 six-month period increased by $3.6 million to $11.7 million while gross margins increased to 30.6% of sales compared to 27.5% of sales in the fiscal 2024 six-month period.

The increases in gross profit and gross margins were primarily related to the overall increase in sales, direct air cooling product mix and new market penetration.

Engineering expenses remained consistent at $1.4 million for the fiscal 2025 six-month period compared to the fiscal 2024 six-month period.

Nine Months Ended July 31, 2025 vs.

Nine Months Ended July 31, 2024

Net sales for the nine months ended July 31, 2025 (the “fiscal 2025 nine-month period”) of $57.9 million increased by 24.8%, or $11.5 million, compared to the nine months ended July 31, 2024 (the “fiscal 2024 nine-month period”).

The increase in net sales is attributable mainly to the Custom Cabling segment, which increased by $12.6 million, or 70.0%, to $30.6 million compared to $18.0 million in the fiscal 2024 nine-month period, primarily driven by tier one carrier applications for our direct air cooling and small cell enclosure offering and new market penetration through our Cables Unlimited business division.

Net sales for the fiscal 2025 nine-month period at the RF Connector segment decreased by $1.1 million, or 3.9%, to $27.3 million compared to $28.4 million in the fiscal 2024 nine-month period, primarily due to fluctuations in our distribution business.

Gross profit for the fiscal 2025 nine-month period increased by $5.3 million to $18.4 million while gross margins increased to 31.8% of sales compared to 28.2% of sales in the fiscal 2024 nine-month period.

The increases in gross profit and gross margins were primarily driven by applications for our direct air cooling and small cell enclosure offerings and our diverse custom cabling product offerings into aerospace and enterprise markets.

Engineering expenses remained consistent at $2.1 million for the fiscal 2025 nine-month period compared to the fiscal 2024 nine-month period.

Engineering expenses represent costs incurred relating to the ongoing research and development of new products.

Selling and general expenses increased by $0.9 million to $10.1 million (26.6% of sales) compared to $9.2 million (31.3% of sales) in the six-month period last year primarily due to an increase in variable compensation related to commissions as a result of the higher sales, bonuses and investment in additional resources.

We incurred one-time charges of $0.2 million relating to severance and related legal expenses in fiscal 2025.

For the fiscal 2025 six-month period, pretax income for the Custom Cabling segment was $3.1 million and the pretax loss for the RF Connector segment was $2.8 million, as compared to $0.1 million income and $2.4 million loss, respectively, for the comparable six-month period last year.

For the fiscal 2025 and 2024 six-month periods, we recorded income tax provision of $171,000 and $2,818,000, respectively.

The effective tax rate was (53.6%) for the fiscal 2025 six-month period, compared to (99.3%) for the fiscal 2024 six-month period.

The change in effective tax rate for the fiscal 2025 and 2024 six-month periods was primarily driven by the effects of the change in valuation allowance, research and development credits, state income taxes, and other expected permanent differences.

For the fiscal 2025 six-month period, net loss was $0.5 million and fully diluted loss per share was ($0.05) per share as compared to a net loss of $5.7 million and fully diluted loss per share of ($0.54) per share for the fiscal 2024 six-month period.

For the fiscal 2025 six-month period, the diluted weighted average shares outstanding were 10,614,364 as compared to 10,452,597 for the fiscal 2024 six-month period.

Selling and general expenses increased by $1.5 million to $15.4 million (26.6% of sales) compared to $13.9 million (30.0% of sales) in the nine-month period last year primarily due to an increase in variable compensation related to commissions as a result of the higher sales, bonuses and investment in additional resources.

We incurred one-time charges of $0.2 million relating to severance and related legal expenses in the fiscal 2025 nine-month period.

For the fiscal 2025 nine-month period, pretax income for the Custom Cabling segment was $5.3 million and the pretax loss for the RF Connector segment was $4.2 million, as compared to $0.4 million income and $3.1 million loss, respectively, for the comparable nine-month period last year.

For the fiscal 2025 and 2024 nine-month periods, we recorded income tax provision of $259,000 and $2,766,000, respectively.

The effective tax rate was 160.9% for the fiscal 2025 nine-month period, compared to (76.9%) for the fiscal 2024 nine-month period.

The change in effective tax rate for the fiscal 2025 and 2024 nine-month periods was primarily driven by the effects of the change in valuation allowance, research and development credits, state income taxes, and other expected permanent differences.

For the fiscal 2025 nine-month period, net loss was $0.1 million and fully diluted loss per share was ($0.01) per share as compared to a net loss of $6.4 million and fully diluted loss per share of ($0.61) per share for the fiscal 2024 nine-month period.

For the fiscal 2025 nine-month period, the diluted weighted average shares outstanding were 10,632,566 as compared to 10,466,862 for the fiscal 2024 nine-month period.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-Q

Item 1. Financial Statements