rfil20260731c_10q.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2026
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-13301
RF INDUSTRIES, LTD.
(Exact name of registrant as specified in its charter)
Nevada
88-0168936
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
16868 Via Del Campo Court, Suite 200
San Diego , California
92127
(Address of principal executive offices)
(Zip Code)
( 858 ) 549-6340
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
RFIL
NASDAQ Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
1
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.) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
The number of shares of the issuer’s Common Stock, par value $0.01 per share, outstanding as of September 14, 2026 was 10,847,761 .
2
Part I. FINANCIAL INFORMATION
Item 1: Financial Statements
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
July 31,
October 31,
2026
2025
(Unaudited)
(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 4,454
$ 5,079
Trade accounts receivable, net of allowance for credit losses of $ 162 and $ 141 , respectively
17,047
14,871
Inventories
13,177
13,735
Other current assets
1,766
1,284
TOTAL CURRENT ASSETS
36,444
34,969
Property and equipment:
Equipment and tooling
5,023
5,020
Furniture and office equipment
6,255
6,328
11,278
11,348
Less accumulated depreciation
7,294
7,119
Total property and equipment, net
3,984
4,229
Operating lease right-of-use assets, net
12,890
13,848
Goodwill
8,085
8,085
Amortizable intangible assets, net
9,032
10,264
Non-amortizable intangible assets
1,174
1,174
Other assets
488
477
TOTAL ASSETS
$ 72,097
$ 73,046
3
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
July 31,
October 31,
2026
2025
(Unaudited)
(Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$ 3,290
$ 3,108
Accrued expenses
6,783
7,638
Line of credit
5,718
7,836
Current portion of operating lease liabilities
2,263
2,054
Income taxes payable
-
260
TOTAL CURRENT LIABILITIES
18,054
20,896
Operating lease liabilities
15,212
16,699
Deferred tax liabilities
286
247
TOTAL LIABILITIES
33,552
37,842
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $ 0.01 par value; 10,847,761 and 10,713,801 shares issued and outstanding at July 31, 2026 and October 31, 2025, respectively
109
107
Additional paid-in capital
29,118
28,050
Retained earnings
9,318
7,047
TOTAL STOCKHOLDERS' EQUITY
38,545
35,204
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 72,097
$ 73,046
See Notes to Unaudited Condensed Consolidated Financial Statements.
4
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except share and per share amounts)
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Net sales
$ 23,960
$ 19,790
$ 63,621
$ 57,900
Cost of sales
15,422
13,071
41,696
39,514
Gross profit
8,538
6,719
21,925
18,386
Operating expenses:
Engineering
1,074
759
2,842
2,124
Selling and general
5,705
5,240
16,049
15,380
Total operating expenses
6,779
5,999
18,891
17,504
Operating income
1,759
720
3,034
882
Other expense
( 233
)
( 240
)
( 585
)
( 721
)
Income before provision for income taxes
1,526
480
2,449
161
Provision for income taxes
84
88
178
259
Consolidated net income (loss)
$ 1,442
$ 392
$ 2,271
$ ( 98
)
Income (loss) per share:
Basic
$ 0.13
$ 0.04
$ 0.21
$ ( 0.01
)
Diluted
$ 0.12
$ 0.04
$ 0.20
$ ( 0.01
)
Weighted average shares outstanding:
Basic
10,850,483
10,668,375
10,806,219
10,632,566
Diluted
11,600,299
10,774,304
11,397,571
10,632,566
See Notes to Unaudited Condensed Consolidated Financial Statements.
5
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY
(UNAUDITED)
(In thousands, except share amounts)
For the Three Months Ended July 31, 2026
Additional
Common Stock
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance, May 1, 2026
10,851,265
$ 109
$ 28,895
$ 7,876
$ 36,880
Stock-based compensation expense
-
-
283
-
283
Tax withholding related to vesting of restricted stock
( 3,504
)
-
( 60
)
-
( 60
)
Consolidated net income
-
-
-
1,442
1,442
Balance, July 31, 2026
10,847,761
$ 109
$ 29,118
$ 9,318
$ 38,545
For the Nine Months Ended July 31, 2026
Additional
Common Stock
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance, November 1, 2025
10,713,801
$
107
$
28,050
$
7,047
$
35,204
Exercise of stock options
65,063
1
387
-
388
Stock-based compensation expense
-
-
824
-
824
Issuance of restricted stock
82,500
1
( 1
)
-
-
Tax withholding related to vesting of restricted stock
( 13,603
)
-
( 142
)
-
( 142
)
Consolidated net income
-
-
-
2,271
2,271
Balance, July 31, 2026
10,847,761
$
109
$
29,118
$
9,318
$
38,545
See Notes to Unaudited Condensed Consolidated Financial Statements.
6
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY
(UNAUDITED)
(In thousands, except share amounts)
For the Three Months Ended July 31, 2025
Additional
Common Stock
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance, May 1, 2025
10,668,653
$
107
$
27,581
$
6,482
$
34,170
Stock-based compensation expense
-
-
219
-
219
Tax withholding related to vesting of restricted stock
( 1,206
)
-
( 9
)
-
( 9
)
Consolidated net income
-
-
-
392
392
Balance, July 31, 2025
10,667,447
$
107
$
27,791
$
6,874
$
34,772
For the Nine Months Ended July 31, 2025
Additional
Common Stock
Paid-in
Retained
Shares
Amount
Capital
Earnings
Total
Balance, November 1, 2024
10,544,431
$
106
$
26,988
$
6,972
$
34,066
Exercise of stock options
50,623
1
206
-
207
Stock-based compensation expense
-
-
640
-
640
Issuance of restricted stock
82,500
-
-
-
-
Tax withholding related to vesting of restricted stock
( 10,107
)
-
( 43
)
-
( 43
)
Consolidated net loss
-
-
-
( 98
)
( 98
)
Balance, July 31, 2025
10,667,447
$
107
$
27,791
$
6,874
$
34,772
See Notes to Unaudited Condensed Consolidated Financial Statements.
7
Item 1: Financial Statements (continued)
RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
Nine Months Ended July 31,
2026
2025
OPERATING ACTIVITIES:
Consolidated net income (loss)
$ 2,271
$ ( 98
)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Bad debt expense
20
31
Depreciation and amortization
1,842
1,848
Loss (gain) on disposal of fixed assets
12
( 12
)
Stock-based compensation expense
824
640
Amortization of debt issuance cost
71
130
Tax payments related to shares cancelled for vested restricted stock awards
( 142
)
( 43
)
Deferred income taxes
39
( 3
)
Changes in operating assets and liabilities:
Trade accounts receivable
( 2,196
)
( 3,260
)
Inventories
558
556
Other current assets
( 482
)
( 139
)
Right-of-use assets
( 320
)
( 264
)
Accounts payable
182
1,008
Accrued expenses
( 855
)
2,087
Income taxes payable
( 260
)
-
Net cash provided by operating activities
1,564
2,481
INVESTING ACTIVITIES:
Proceeds from sale of fixed assets
-
12
Capital expenditures
( 377
)
( 170
)
Net cash used in investing activities
( 377
)
( 158
)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options
388
207
Debt issuance cost
( 82
)
-
Line of credit payments
( 2,118
)
( 369
)
Net cash used in financing activities
( 1,812
)
( 162
)
Net (decrease) increase in cash and cash equivalents
( 625
)
2,161
Cash and cash equivalents, beginning of period
5,079
839
Cash and cash equivalents, end of period
$ 4,454
$ 3,000
Supplemental cash flow information – income taxes paid
$ 901
$ 169
See Notes to Unaudited Condensed Consolidated Financial Statements.
8
RF INDUSTRIES, LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Unaudited interim condensed consolidated financial statements
The accompanying unaudited condensed consolidated financial statements of RF Industries, Ltd., together with its five wholly-owned subsidiaries (collectively, hereinafter the “Company”, “we”, “us”, or “our”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10 -Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, and other items of gain (loss) and expense required in our review under Accounting Standards Codification (“ASC”) Topic 270, Interim Reporting, have been included for a fair statement of the financial position. Information included in the condensed consolidated balance sheet as of October 31, 2025 has been derived from, and certain terms used herein are defined in, the audited consolidated financial statements of RF Industries, Ltd. as of October 31, 2025 included in our Annual Report on Form 10 -K (the “Form 10 -K”) for the fiscal year ended October 31, 2025 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the nine months ended July 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2026 . The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Form 10 -K.
Our accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. 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 nine months ended July 31, 2026 , we generated operating income of $ 1,759 ,000 and $ 3,034 ,000, respectively, compared to operating income of $ 720 ,000 and $ 882 ,000 for the same periods last year. This was primarily a result of an increase in sales along with cost management and implementation of certain cost-cutting measures to improve our gross margins as well as our operating expenses, 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.
Principles of consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of RF Industries, Ltd., and each of 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.
9
Fair value measurement
We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy:
Level 1— Quoted prices for identical instruments in active markets;
Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3— Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
As of July 31, 2026 and October 31, 2025 , 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
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 was effective for our fiscal year ended 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 8 for more details.
10
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 will be 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 our 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 July 31, 2026 , we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $ 3.7 million.
Sales from each customer that accounted for 10% or greater of net sales were as follows:
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Aerospace customer
11
%
15
%
12
%
-
Wireless provider A
-
11
%
-
-
Accounts receivable from each customer that accounted for 10% or greater of net accounts receivable were as follows:
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Aerospace customer
16
%
22
%
16
%
22
%
Wireless provider A
-
17
%
-
17
%
Wireless provider B
17
%
-
17
%
-
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. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.
11
Note 3 – Inventories and major vendors
Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or net realizable value. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands):
July 31, 2026
October 31, 2025
Raw materials and supplies
$ 7,851
$ 9,269
Work in process
1,145
715
Finished goods
4,181
3,751
Totals
$ 13,177
$ 13,735
For the three and nine months ended July 31, 2026 and 2025 , 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.
Note 4 – Other current assets
Other current assets consist of the following (in thousands):
July 31, 2026
October 31, 2025
Prepaid taxes
$ 503
$ -
Prepaid expense
740
774
Deposits
394
426
Other
129
84
Totals
$ 1,766
$ 1,284
Note 5 – Accrued expenses
Accrued expenses consist of the following (in thousands):
July 31, 2026
October 31, 2025
Wages payable
$ 3,478
$ 3,957
Accrued receipts
1,556
1,408
Deferred revenue
11
232
Other accrued expenses
883
1,186
Accrued settlement
855
855
Totals
$ 6,783
$ 7,638
Accrued receipts represent purchased inventory for which invoices have not been received.
12
Note 6 – Income (loss) per share
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 and nine months ended July 31, 2026 , we reported 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 0 and 50,000 shares for the three months ended July 31, 2026 and 2025 , respectively, and 0 and 50,000 shares for the nine months ended July 31, 2026 and 2025 , 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 July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Weighted average shares outstanding for basic earnings per share
10,850,483
10,668,375
10,806,219
10,632,566
Add effects of potentially dilutive securities-assumed exercise of stock options
749,816
105,929
591,352
-
Weighted average shares outstanding for diluted earnings per share
11,600,299
10,774,304
11,397,571
10,632,566
Note 7 – Stock-based compensation and equity transactions
On December 2, 2024, we granted 47,500 incentive stock options. The incentive stock options vest equally over four years as follows: (i) one -quarter of the options vested 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 a total of 82,500 shares of restricted stock and 165,000 incentive stock options. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one -quarter of the restricted shares and options vested on January 13, 2026 and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years.
13
On December 1, 2025, we granted 55,500 incentive stock options. The incentive stock options vest equally over four years as follows: (i) one -quarter of the options shall vest on December 1, 2026 and (ii) the remaining options shall vest in three equal annual installments over the next three years.
On January 7, 2026, we granted a total of 82,500 shares of restricted stock and 165,000 incentive stock options. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one -quarter of the restricted shares and options shall vest on January 7, 2027 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 nine months ended July 31, 2026 and 2025 .
The fair value of each option granted during the nine months ended July 31, 2026 and 2025 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:
Nine Months Ended July 31,
2026
2025
Weighted average volatility
49.86
%
44.37
%
Expected dividends
0.00
%
0.00
%
Expected term (in years)
6.14
6.14
Risk-free interest rate
3.81
%
4.54
%
Weighted average fair value of options granted during the period
$ 3.16
$ 1.85
Weighted average fair value of options vested during the period
$ 2.26
$ 2.38
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 2026 and 2025 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 expected dividend yield is based upon the historical dividend yield.
14
Company stock option plans
Descriptions of our stock option plans are set forth in Note 8 to our audited financial statements included in our Form 10 -K for the fiscal year ended October 31, 2025 . A summary of the status of the options granted under our stock option plans as of July 31, 2026 and the changes in options outstanding during the nine months then ended is presented in the table that follows:
2026
Shares or
Weighted
Price Per
Average
Share
Exercise Price
Outstanding at beginning of November 1, 2025
1,005,693
$ 4.81
Options granted
220,000
$ 6.01
Options exercised
( 65,063
)
$ 5.96
Options canceled or expired
-
$ -
Options outstanding at July 31, 2026
1,160,630
$ 4.98
Options exercisable at July 31, 2026
681,125
$ 5.11
Options vested and expected to vest at July 31, 2026
1,160,630
$ 4.98
Option price range at July 31, 2026
$ 1.90 - $ 8.69
Aggregate intrinsic value of options exercised during period
$ 333,797
Weighted average remaining contractual life of options outstanding as of July 31, 2026 : 6.64 years
Weighted average remaining contractual life of options exercisable as of July 31, 2026 : 5.35 years
Weighted average remaining contractual life of options vested and expected to vest as of July 31, 2026 : 6.64 years
Aggregate intrinsic value of options outstanding at July 31, 2026 : $ 8,524,000
Aggregate intrinsic value of options exercisable at July 31, 2026 : $ 4,913,000
Aggregate intrinsic value of options vested and expected to vest at July 31, 2026 : $ 8,524,000
As of July 31, 2026 , $ 1,193,000 and $ 921,000 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 1.3 and 1.3 years, respectively.
Stock option expense
During the three months ended July 31, 2026 and 2025 , stock-based compensation expense totaled $ 283 ,000 and $ 219 ,000 respectively, and was classified in selling and general expense. During the nine months ended July 31, 2026 and 2025 , stock-based compensation expense totaled $ 824 ,000 and $ 640 ,000, respectively, and was classified in selling and general expense.
15
Note 8 – Segment information
We previously managed our business as two reportable segments, the RF Connector and Cable Assembly segment and the Custom Cabling Manufacturing and Assembly segment. During the fourth quarter of the fiscal year ended October 31, 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 CODM, which is our Chief Executive Officer, evaluates our financial information such as revenue, margins, operating expenses, net income or loss, and other non-GAAP financial measures on a consolidated basis to allocate resources and assess performance. However, while our 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 three and nine months ended July 31, 2026 and 2025 (in thousands):
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Net sales
$ 23,960
$ 19,790
$ 63,621
$ 57,900
Cost of goods sold:
Material cost
10,327
8,595
27,190
26,485
Salaries and benefits
3,864
3,391
10,873
9,966
Depreciation
121
133
371
397
Other costs of sales
1,110
952
3,262
2,666
Total cost of goods sold
15,422
13,071
41,696
39,514
Gross profit
8,538
6,719
21,925
18,386
Operating expenses:
Salaries and benefits
2,089
2,208
6,542
6,654
Engineering expense
1,074
759
2,842
2,124
Stock-based compensation expense
283
219
824
640
Commission and bonus
1,280
991
2,320
1,994
Depreciation
81
73
238
218
Amortization
411
411
1,233
1,233
Corporate and public company fees
434
366
1,480
1,175
Selling and general
1,127
972
3,412
3,343
Non-cash and one-time charges
-
-
-
123
Total operating expenses
6,779
5,999
18,891
17,504
Operating income
1,759
720
3,034
882
Other expense
( 233
)
( 240
)
( 585
)
( 721
)
Income before provision for income taxes
1,526
480
2,449
161
Provision for income taxes
84
88
178
259
Consolidated net income (loss)
$ 1,442
$ 392
$ 2,271
$ ( 98
)
Total assets
$ 72,097
$ 73,201
$ 72,097
$ 73,201
Expenditures for Segment Assets
$ 127
$ 108
$ 377
$ 170
The Company’s single reportable segment total assets equal consolidated total assets.
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The following table presents revenue for the products and solutions that we offer as of the three and nine months ended July 31, 2026 and 2025 (in thousands):
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Interconnect
$ 7,835
33
%
$ 6,212
32
%
$ 21,640
34
%
$ 17,602
30
%
Custom Cabling
10,135
42
%
7,157
36
%
24,979
39
%
18,382
32
%
Integrated Systems
5,990
25
%
6,421
32
%
17,002
27
%
21,916
38
%
Total net sales
$ 23,960
100
%
$ 19,790
100
%
$ 63,621
100
%
$ 57,900
100
%
All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the three and nine months ended July 31, 2026 and 2025 (in thousands):
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
United States
$ 21,808
$ 18,432
$ 58,354
$ 52,952
Foreign Countries:
Canada
1,755
1,052
3,560
3,678
All Other
397
306
1,707
1,270
2,152
1,358
5,267
4,948
Totals
$ 23,960
$ 19,790
$ 63,621
$ 57,900
Note 9 – Income taxes
In accordance with applicable accounting guidance, the Company is required to use an estimated annual effective tax rate to compute its tax provision during an interim period. However, there is an exception to the use of this method when a reliable estimate of the annual effective tax rate cannot be made due to the sensitivity of changes in estimates of ordinary income (loss). 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 nine months ended July 31, 2026 .
We recorded income tax provisions of $ 84,000 and $ 88,000 for the three months ended July 31, 2026 and 2025 , respectively. The effective tax rate for the three months ended July 31, 2026 and 2025 was 5.5 % and 18.3 %, respectively. For the nine months ended July 31, 2026 and 2025 , we recorded income tax provisions of $ 178,000 and $ 259,000 , respectively. The effective tax rate for the nine months ended July 31, 2026 and 2025 was 7.3 % and 160.9 %, respectively. The effective tax rate for the three months and nine months ended July 31, 2026 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 $ 295,000 and $ 217,000 of unrecognized tax benefits, as of July 31, 2026 and October 31, 2025 , respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $ 192,000 as of July 31, 2026 .
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 July 31, 2026. 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 judgments, significant weight is given to evidence that can be objectively verified. After analyzing all available evidence, including the Company's cumulative losses, 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 against its federal and state deferred tax assets. The Company's valuation allowance was $ 4,200,000 and $ 4,716,000 as of July 31, 2026 and October 31, 2025 , respectively.
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Note 10 – Intangible assets
Intangible assets consist of the following as of July 31, 2026 and October 31, 2025 (in thousands):
July 31, 2026
October 31, 2025
Amortizable intangible assets:
Non-compete agreement (estimated life five years)
$ 423
$ 423
Accumulated amortization
( 423
)
( 423
)
-
-
Customer relationships (estimated lives 7 - 15 years)
6,058
6,058
Accumulated amortization
( 4,525
)
( 4,235
)
1,533
1,823
Backlog (estimated life one - two years)
327
327
Accumulated amortization
( 327
)
( 327
)
-
-
Patents (estimated life 10 - 14 years)
368
368
Accumulated amortization
( 266
)
( 241
)
102
127
Tradename (estimated life 15 years)
1,700
1,700
Accumulated amortization
( 501
)
( 416
)
1,199
1,284
Proprietary technology (estimated life 10 years)
11,100
11,100
Accumulated amortization
( 4,902
)
( 4,070
)
6,198
7,030
Totals
$ 9,032
$ 10,264
Non-amortizable intangible assets:
Trademarks
$ 1,174
$ 1,174
Amortization expense for the nine months ended July 31, 2026 and the fiscal year ended October 31, 2025 was $ 1,233,000 and $ 1,643,000 , respectively. As of July 31, 2026 , the weighted-average amortization period for the amortizable intangible assets was 5.99 years.
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Note 11 – Commitments
We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments of $ 18,540 per month.
We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the periods ended July 31, 2026 and 2025 were as follows (in thousands):
Three Months Ended July 31,
Nine Months Ended July 31,
2026
2025
2026
2025
Operating lease cost
$ 746
$ 733
$ 2,236
$ 2,212
As of July 31, 2026 , operating lease right-of-use assets were $ 12.9 million and operating lease liabilities totaled $ 17.5 million, of which $ 2.3 million is classified as current. There were no finance leases as of July 31, 2026 . Future minimum lease payments under non-cancellable leases as of July 31, 2026 are a total of $ 22.2 million.
Note 12 – Term Loan and Line of credit
On March 15, 2024, we entered into a loan and security agreement (the “EBC Credit Agreement”) with EBC, as administrative agent, and used proceeds from the initial drawings under the EBC Credit Facilities (as defined below) to repay in full outstanding obligations under the loan agreement we had entered into in February 2022 with Bank of America, N.A. (the “BofA Loan Agreement”) and 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.
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, as amended, 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, $ 666,667 from July 13, 2024 through August 11, 2024 and $ 333,333 from August 12, 2024 through September 10, 2024. Availability of borrowings under the EBC Credit Facilities is 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.
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Borrowings under the EBC Credit Agreement are secured by a security interest in certain assets of the Company and are subject to certain loan covenants. The EBC Credit Facilities require the maintenance of certain financial covenants, including (i) Excess Availability (as defined in the EBC Credit Agreement) of at least, as of any date of determination, an amount equal to the greater of (a) $ 1.0 million and (b) 10 % of the Adjusted Borrowing Base (as defined in the EBC Credit Agreement), unless as of the last day of the most recent month for which the monthly financial statements and the related compliance certificate have been or are required to have been delivered to EBC, the Fixed Charge Coverage Ratio (as defined in the EBC Credit Agreement) for the 12 consecutive calendar month period then ended is greater than 1.10 to 1.00; and (ii) a capital expenditure limitation limiting the aggregate cost of all Capital Expenditure (as defined in the EBC Credit Agreement) to $ 2.5 million during any fiscal year. In addition, the EBC Credit Facilities contain customary affirmative and negative covenants.
On November 5, 2025, the parties entered into the Second Amendment to the EBC Credit Agreement (the “Second Amendment”). The Second Amendment amended the EBC Credit Agreement to, among other things, (i) extend the maturity date of the EBC Revolving Loan Facility to March 15, 2029, ( ii) decrease the minimum EBC Revolving Loan Facility outstanding principal amount to $ 4.0 million and (iii) decrease the interest rate for the EBC Revolving Loan Facility to Adjusted Term SOFR or the base rate, as applicable, plus the Applicable Margin (as defined in the EBC Credit Agreement). The Applicable Margin is determined quarterly under a two -prong pricing grid based on both the Average Excess Availability (as defined in the EBC Credit Agreement) and Fixed Charge Coverage Ratio for the most recently ended fiscal quarter, as set forth on Annex IV to the EBC Credit Agreement, as amended.
We filed the EBC Credit Agreement as Exhibit 10.3 to our Quarterly Report on Form 10 -Q for the quarter ended January 31, 2024, the First Amendment as Exhibit 10.1 to our Quarterly Report on Form 10 -Q for the quarter ended July 31, 2024 and the Second Amendment as Exhibit 10.1 to our Current Report on Form 8 -K filed on November 6, 2025.
Debt issuance costs related to the EBC Credit Agreement totaled $ 249,000 as of July 31, 2026 and were included as part of our other long-term assets balance.
As of July 31, 2026 , our outstanding borrowings under the EBC Credit Agreement were $ 5,718 ,000. In accordance with ASC 470 - 10 - 45, Other Presentation Matters - General, we have classified the outstanding borrowings as part of current liabilities in the condensed consolidated balance sheet.
Note 13 – Cash dividends and declared dividends
We did not pay or declare any dividends during the three or nine months ended July 31, 2026 , nor during the three or nine months ended July 31, 2025 .
20
Item 2: Management ’ s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q (this “ Quarterly Report ” ), and other oral and written statements made by RF Industries, Ltd., together with its five wholly-owned subsidiaries (collectively, hereinafter the “ Company ” , ” we ” , “ us ” , or “ our ” ), 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, including the potential for expansion of our business or the completion of acquisitions, 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, ” “ expect, ” “ 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, our ability to continue to source our raw materials and products from our suppliers and manufacturers, particularly those in Asia, the impact of enacted and proposed tariffs that may affect the cost or availability of our products or raw materials sourced internationally, 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, whether plans to develop 5G networks accelerate as expected, as well as our ability to meet any such demand, our ability to finance the expansion of our business or complete acquisitions, 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 Sections entitled “ Risk Factors ” in this Quarterly Report and in our Annual Report filed on Form 10-K for the fiscal year ended October 31, 2025, and other risks identified from time to time in the Company ’ s filings with the Securities and Exchange Commission ("SEC"). 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.
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made under the caption “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations, ” under the caption “ Risk Factors, ” and the audited consolidated financial statements and related notes included in our Annual Report filed on Form 10-K for the fiscal year ended October 31, 2025 and our other reports and filings made with the SEC.
21
Critical Accounting Estimates
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these condensed consolidated 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 July 31, 2026 to the items that we disclosed as our critical accounting estimates in the MD&A in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, except as set forth below with respect to the valuation allowance on our deferred income taxes.
The Company continues to evaluate the realizability of its deferred tax assets on a quarterly basis. In prior periods, the Company recorded a valuation allowance due primarily to cumulative losses and other negative evidence.
The Company has generated pre-tax income in each of the most recent four consecutive fiscal quarters and has experienced improved operating results over that period. This recent profitability represents positive evidence that the Company is weighing against the historical negative evidence in assessing the realizability of its deferred tax assets.
If the Company is able to sustain its current level of profitability and generate sufficient future taxable income, it is reasonably possible that a reduction of a significant portion of the valuation allowance may be appropriate in a future reporting period. Any such reduction could result in a material income tax benefit in the period recognized and could have a significant impact on the Company’s effective tax rate and results of operations.
The Company’s assessment remains dependent on the level and sustainability of future earnings and other relevant factors.
Overview
RF Industries, Ltd. (together with its five wholly-owned subsidiaries, the “Company,” “we”, “us”, or “our”) is a national manufacturer and marketer of interconnect products and systems. We market 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 our 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.
For the nine months ended July 31, 2026, revenues generated from our interconnect products were 34% of the Company’s total sales, revenues from our custom cabling products were 39% of the Company’s total sales and revenues from our integrated systems product offering were 27% of total sales. Our interconnect products are primarily standardized products regularly used by customers and, therefore, have a more stable revenue stream as compared to our other offerings. Our custom cabling products are more customized cabling and wire-related equipment sold under larger project-based purchase orders. Our integrated systems product offering is a blend of standardized offerings, where we expect a more stable revenue stream, with several more customized solutions that tend to be purchased in large project-based orders.
Our corporate headquarters are located at 16868 Via Del Campo Court, Suite 200, San Diego, CA 92127. Our phone number is (858) 549-6340.
22
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 the nine months ended July 31, 2026. The cost-cutting measures that were implemented to reduce our operating expenses and to help drive positive operating cash flow and increase liquidity continue 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 July 31, 2026, we had a total of $4.5 million of cash and cash equivalents compared to a total of $5.1 million of cash and cash equivalents as of October 31, 2025. As of July 31, 2026, we had working capital of $18.4 million and a current ratio of approximately 2.0:1 with current assets of $36.4 million and current liabilities of $18.1 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 for at least the next 12 months from the date of filing of this Quarterly Report.
As of July 31, 2026, we had $18.6 million of backlog, compared to $15.5 million as of October 31, 2025. The increase in backlog relates primarily to shipments made against orders in our integrated systems product offering. Our backlog may fluctuate from period to period based on customer demand, general business conditions, and particularly the timing of project-based orders from large customers, which impacts our integrated systems product offering. Since purchase orders are submitted by customers based on the timing of their requirements, our ability to predict orders in future periods or trends in future periods is limited. Furthermore, purchase orders may be subject to cancellation from customers, although we have not historically experienced material cancellations of purchase orders.
In the nine months ended July 31, 2026, $1.6 million was provided by our operating activities. The net inflow of cash is primarily related to net income of $2.3 million, $1.8 million from depreciation and amortization, $0.8 million from stock-based compensation expense, a $0.6 million decrease in inventories, a change in accounts payable of $0.2 million, $71,000 from amortization of debt issuance costs, $39,000 in deferred income taxes, $20,000 in bad debt expense and a $12,000 loss on disposal of fixed assets. The cash usage was primarily due to the change in accounts receivable of $2.2 million, accrued expenses of $0.9 million, the change in other current assets of $0.5 million, right of use assets of $0.3 million, income tax payable of $0.3 million and $0.1 million of tax payments on cancelled shares of restricted stock.
During the nine months ended July 31, 2026, we also spent $0.4 million on capital expenditures, repaid $2.1 million on the revolving credit facility with EBC, paid $0.1 million in debt issuance cost, and received $0.4 million in proceeds from the exercise of stock options.
Our goal to expand and grow our business both organically and through acquisitions may require material additional capital equipment. In the past, we have purchased all additional equipment or financed some of our equipment and furnishings requirements through capital leases. At this time, we have not identified any additional capital equipment purchases that would require significant additional leasing or capital expenditures during the next 12 months. We also believe that based on our current financial condition, our current backlog of unfulfilled orders, and our anticipated future operations, we would be able to finance our expansion, if necessary. However, there can be no assurance that our cash resources will fund our operating plan, including any organic expansion or acquisitions, for the period anticipated by us, especially if there is a material adverse impact on our business from unforeseen events.
23
From time to time, we may undertake acquisitions of other companies or product lines in order to diversify our product and solutions offerings and customer base. Conversely, we may undertake the disposition of a division or product line due to changes in our business strategy or market conditions. Acquisitions may require the outlay of cash, which may reduce our liquidity and capital resources while dispositions may increase our cash position, liquidity and capital resources. Since our goal is to continue to expand our operations and accelerate our growth through future acquisitions, we may use some of our current capital resources to fund acquisitions we may undertake in the future.
Results of Operations
Three Months Ended July 31, 2026 vs. Three Months Ended July 31, 2025
Net sales for the three months ended July 31, 2026 (the “fiscal 2026 quarter”) increased by 21.1%, or $4.2 million, to $24.0 million compared to $19.8 million in the three months ended July 31, 2025 (the “fiscal 2025 quarter”). The increase in net sales was primarily attributable to net sales of our custom cabling products, which increased by $2.9 million, or 41.6%, to $10.1 million in the fiscal 2026 quarter compared to $7.2 million in the fiscal 2025 quarter, primarily driven by organic growth in industrial market segments and increased demand from a tier one carrier. Net sales of the interconnect products also increased by $1.6 million, or 26.1%, to $7.8 million in fiscal 2026 quarter compared to $6.2 million in the fiscal 2025 quarter, primarily driven by more wireless infrastructure deployments. Net sales of the integrated systems product offering decreased by $0.4 million, or 6.7%, to $6.0 million in the fiscal 2026 quarter compared to $6.4 million in the fiscal 2025 quarter, primarily driven by a decrease in sales of small cell solutions to our wireless carrier customers due to the timing of orders and shipments based on budget cycles, offset by an increase in thermal cooling within the same ecosystem.
Gross profit increased by $1.8 million to $8.5 million in the fiscal 2026 quarter compared to $6.7 million in the fiscal 2025 quarter, and gross margin increased to 35.6% of sales in the fiscal 2026 quarter compared to 34.0% of sales in the fiscal 2025 quarter. The increase in gross profit and gross margin was primarily related to the overall product mix and improved operational efficiencies across the organization. In addition, we received a $0.3 million refund of previously paid tariffs on imported components, which was recognized as a reduction to cost of goods sold during the fiscal 2026 quarter. Excluding the impact of this one-time tariff refund, normalized gross margin would have been 34.2% for the fiscal 2026 quarter.
Engineering expenses increased by $0.3 million to $1.1 million in the fiscal 2026 quarter compared to $0.8 million in the fiscal 2025 quarter. The increase was the result of resource allocation associated with new product development in addition to an increase in variable compensation. Engineering expenses represent costs incurred relating to the ongoing research and development of current and new products.
Selling and general expenses increased by $0.5 million to $5.7 million (23.8% of sales) in the fiscal 2026 quarter compared to $5.2 million (26.5% of sales) in the fiscal 2025 quarter primarily due to an increase in variable compensation related to commissions and bonuses as a result of higher sales, an increase in public company fees and an increase in stock-based compensation.
For the fiscal 2026 and 2025 quarters, we recorded income tax provision of $84,000 and $88,000, respectively. The effective tax rate was 5.5% for the fiscal 2026 quarter, compared to 18.3% for the fiscal 2025 quarter. The change in the effective tax rate from the fiscal 2026 quarter to fiscal 2025 quarter was primarily driven by the change in valuation allowance, research and development credits, unrecognized tax benefits, state income taxes, and other expected permanent differences.
For the fiscal 2026 quarter, net income was $1.4 million and fully diluted income per share was $0.12, compared to a net income of $0.4 million and fully diluted income per share of $0.04 for the fiscal 2025 quarter. For the fiscal 2026 quarter, the diluted weighted average shares outstanding were 11,600,299 as compared to 10,774,304 for the fiscal 2025 quarter.
24
Nine Months Ended July 31, 2026 vs. Nine Months Ended July 31, 2025
Net sales for the nine months ended July 31, 2026 (the “fiscal 2026 nine-month period”) increased by 9.9%, or $5.7 million, to $63.6 million compared to $57.9 million in the nine months ended July 31, 2025 (the “fiscal 2025 nine-month period”). The increase in net sales was primarily attributable to net sales of our custom cabling products, which increased by $6.6 million, or 35.9%, to $25.0 million in the fiscal 2026 nine-month period compared to $18.4 million in the fiscal 2025 nine-month period, primarily driven by increased aerospace demand and organic growth within industrial market segments. Net sales of the interconnect products also increased by $4.0 million, or 22.9% to $21.6 million in the fiscal 2026 nine-month period compared to $17.6 million in the fiscal 2025 nine-month period, primarily driven by more wireless infrastructure deployments. Net sales of the integrated systems product offering decreased by $4.9 million, or 22.4%, to $17.0 million in the fiscal 2026 nine-month period compared to $21.9 million in fiscal 2025 nine-month period, primarily driven by timing delays in small cell deployments within tier one wireless carriers, resulting in delayed orders and deferred shipments.
Gross profit increased by $3.5 million to $21.9 million for the fiscal 2026 nine-month period compared to $18.4 million in the fiscal 2025 nine-month period, and gross margin increased to 34.5% of sales in the fiscal 2026 nine-month period compared to 31.8% of sales in the fiscal 2025 nine-month period. The increases in gross profit and gross margin were primarily related to the overall increase in sales, product mix and continued operational efficiencies. In addition, we received a $0.3 million refund of previously paid tariffs on imported components, which was recognized as a reduction to cost of goods sold during the fiscal 2026 nine-month period. Excluding the impact of this one-time tariff refund, normalized gross margin would have been 33.9% for the fiscal 2026 nine-month period.
Engineering expenses increased by $0.7 million to $2.8 million in the fiscal 2026 nine-month period compared to $2.1 million in the fiscal 2025 nine-month period. The increase was the result of resource allocation associated with new product development in addition to an increase in variable compensation. Engineering expenses represent costs incurred relating to the ongoing research and development of new products.
Selling and general expenses increased by $0.6 million to $16.0 million (25.2% of sales) in the fiscal 2026 nine-month period compared to $15.4 million (26.6% of sales) in the fiscal 2025 nine-month period primarily due to an increase in variable compensation related to commissions and bonuses as a result of higher sales, an increase in public company fees and an increase in stock-based compensation.
For the fiscal 2026 and 2025 nine-month periods, we recorded income tax provision of $178,000 and $259,000, respectively. The effective tax rate was 7.3% for the fiscal 2026 nine-month period, compared to 160.9% for the fiscal 2025 nine-month period. The change in effective tax rate for the fiscal 2026 and 2025 nine-month periods was primarily driven by the effects of the change in valuation allowance, research and development credits, state income taxes, unrecognized tax benefits, and other expected permanent differences.
For the fiscal 2026 nine-month period, net income was $2.3 million and fully diluted income per share was $0.20 per share as compared to a net loss of $(0.1) million and fully diluted loss per share of $(0.01) per share for the fiscal 2025 nine-month period. For the fiscal 2026 nine-month period, the diluted weighted average shares outstanding were 11,397,571 as compared to 10,632,566 for the fiscal 2025 nine-month period.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required under this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’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 July 31, 2026.
Changes in Internal Control Over Financial Reporting
During the third quarter of fiscal 2026, there were no changes in the internal control over financial reporting as such term is defined in Rule 13a-15(f) of the Exchange Act, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company is a party to various claims and legal proceedings that arise in the ordinary course of business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain and we cannot assure you that their ultimate disposition will not have a material adverse effect on our business, financial condition, cash flows, or results of operations. Except as discussed below, the Company is not currently a party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect on its financial condition, results of operations, or cash flows. The Company discloses contingent liabilities even if the liability is not probable or estimable, or both, if there is a reasonable possibility that a material loss may have been incurred.
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.
On March 5, 2026 we executed a long-form settlement agreement, pursuant to which the Company agrees to pay, on an all-in and non-reversionary basis, a total settlement amount of $855,000, which was accrued for as of October 31, 2025.
As of September 14, 2026, 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 agreement, which will be subject to Court approval. The Motion for Preliminary Approval of the settlement was granted on August 7, 2026. The Motion for Final Approval of the settlement is scheduled to be heard in Court on January 22, 2027.
Item 1A. Risk Factors
Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or our industry, as well as risks that affect businesses in general. In addition to the information and risk factors set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, filed with the SEC on January 14, 2026 (the “Annual Report”). The risks disclosed in such Annual Report and in this Quarterly Report could materially adversely affect our business, financial condition, cash flows, or results of operations and thus our stock price. We believe there have been no material changes in our risk factors from those disclosed in the Annual Report. However, additional risks and uncertainties not currently known or which we currently deem to be immaterial may also materially adversely affect our business, financial condition, or results of operations.
These risk factors may be important to understanding other statements in this Quarterly Report and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report. Because of such risk factors, as well as other factors affecting the Company’s financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
During the quarterly period ended July 31, 2026 , no director or officer of the Company adopted or terminated any Rule 10b5 - 1 trading arrangement, and/or any non-Rule 10b5 - 1 trading arrangement (as such terms are defined pursuant to Item 408 of Regulation S-K).
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Item 6. Exhibits
Exhibit
Number
3.1
Amended and Restated Articles of Incorporation (previously filed as Exhibit 3.1 to the Company’s Form 8-K, dated August 31, 2012, which exhibit is incorporated herein by reference)
3.2
Amended and Restated Bylaws (previously filed as Exhibit 3.1 to the Company’s Form 10-Q for the quarterly period ended April 30, 2023, which exhibit is incorporated herein by reference)
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Schema.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
RF INDUSTRIES, LTD.
Date: September 14, 2026
By:
/s/ Robert Dawson
Robert Dawson
Chief Executive Officer
(Principal Executive Officer)
Date: September 14, 2026
By:
/s/ Peter Yin
Peter Yin
Chief Financial Officer
(Principal Financial and Accounting Officer)
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.