10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

Form 10-Q

_____________________

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended January 31, 2021
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______________ to ________________.

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.)
7610 Miramar Road, Building 6000 San Diego, California	92126
(Address of principal executive offices)	(Zip Code)
(858) 549-6340
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	RFIL	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T 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 March 10, 2021 was 9,972,456.

1

Part I. FINANCIAL INFORMATION

Item 1: Financial Statements

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	January 31,		October 31,
	2021		2020
	(Unaudited)		(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	15,489	$	15,797
Trade accounts receivable, net of allowance for doubtful accounts of $55 and $66, respectively		5,155		5,669
Inventories		9,019		8,586
Other current assets		2,139		813
TOTAL CURRENT ASSETS		31,802		30,865
Property and equipment:
Equipment and tooling		3,916		3,819
Furniture and office equipment		1,092		1,073
		5,008		4,892
Less accumulated depreciation		4,162		4,082
Total property and equipment, net		846		810
Operating lease right of use assets, net		1,184		1,421
Goodwill		2,467		2,467
Amortizable intangible assets, net		3,024		3,181
Non-amortizable intangible assets		1,174		1,174
Deferred tax assets		68		834
Other assets		70		70
TOTAL ASSETS	$	40,635	$	40,822

2

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	January 31,		October 31,
	2021		2020
	(Unaudited)		(Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,510	$	1,475
Accrued expenses		2,617		2,573
Current portion of PPP Loans		2,103		1,699
Current portion of operating lease liabilities		789		874
Income taxes payable		-		43
Other current liabilities		296		-
TOTAL CURRENT LIABILITIES		7,315		6,664
Operating lease liabilities		477		635
PPP Loans		685		1,089
Other long-term liabilities		-		370
TOTAL LIABILITIES		8,477		8,758
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 9,962,456 and 9,814,118 shares issued and outstanding at January 31, 2021 and October 31, 2020, respectively		100		98
Additional paid-in capital		23,441		22,946
Retained earnings		8,617		9,020
TOTAL STOCKHOLDERS' EQUITY		32,158		32,064
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	40,635	$	40,822

See Notes to Unaudited Condensed Consolidated Financial Statements.

3

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except share and per share amounts)

	Three Months Ended January 31,
	2021			2020
Net sales	$	10,002		$	12,414
Cost of sales		7,396			9,161
Gross profit		2,606			3,253
Operating expenses:
Engineering		431			596
Selling and general		2,764			2,656
Total operating expenses		3,195			3,252
Operating (loss) income		(589	)		1
Other (expense) income		(8	)		11
(Loss) income before benefit for income taxes		(597	)		12
Benefit from income taxes		(194	)		(14	)
Consolidated net (loss) income	$	(403	)	$	26
(Loss) earnings per share
Basic	$	(0.04	)	$	0.00
Diluted	$	(0.04	)	$	0.00
Weighted average shares outstanding
Basic		9,864,689			9,564,533
Diluted		9,864,689			9,873,336

See Notes to Unaudited Condensed Consolidated Financial Statements.

4

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except share amounts)

	For the Three Months ended January 31, 2021
						Additional
	Common Stock					Paid-In			Retained
	Shares			Amount		Capital			Earnings			Total
Balance, November 1, 2020		9,814,118		$	98	$	22,946		$	9,020		$	32,064
Exercise of stock options		118,189			1		384			-			385
Stock-based compensation expense		-			-		123			-			123
Issuance of restricted stock		36,834			1		(1	)		-			-
Forfeiture of restricted stock		(4,318	)		-		-			-			-
Tax withholding related to vesting of restricted stock		(2,367	)		-		(11	)		-			(11	)
Consolidated net loss		-			-		-			(403	)		(403	)
Balance, January 31, 2021		9,962,456		$	100	$	23,441		$	8,617		$	32,158

	For the Three Months ended January 31, 2020
					Additional
	Common Stock				Paid-In			Retained
	Shares		Amount		Capital			Earnings			Total
Balance, November 1, 2019		9,462,267	$	95	$	21,949		$	9,489		$	31,533
Exercise of stock options		215,943		2		389			-			391
Stock-based compensation expense		-		-		110			-			110
Issuance of restricted stock		54,850		1		(1	)		-			-
Issuance of common shares		12,075		-		77			-			77
Dividends		-		-		-			(193	)		(193	)
Consolidated net income		-		-		-			26			26
Balance, January 31, 2020		9,745,135	$	98	$	22,524		$	9,322		$	31,944

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

Item 1: Financial Statements (continued)

RF INDUSTRIES, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Three Months Ended January 31,
	2021			2020
OPERATING ACTIVITIES:
Consolidated net (loss) income	$	(403	)	$	26
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Bad debt expense		(15	)		4
Depreciation and amortization		237			255
Stock-based compensation expense		123			187
Tax payments related to shares cancelled for vested restricted stock awards		(11	)		-
Deferred income taxes		766			62
Changes in operating assets and liabilities:
Trade accounts receivable		529			6,711
Inventories		(433	)		638
Other current assets		(1,326	)		(20	)
Right of use assets		(6	)		101
Accounts payable		35			(1,295	)
Accrued expenses		44			(921	)
Income tax payable		(43	)		(21	)
Other current liabilities		296			-
Other long-term liabilities		(370	)		(121	)
Net cash (used in) provided by operating activities		(577	)		5,606
INVESTING ACTIVITIES:
Capital expenditures		(116	)		(53	)
Purchase of Schrofftech, net of cash acquired ($99)		-			(3,901	)
Net cash used in investing activities		(116	)		(3,954	)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options		385			391
Dividends paid		-			(193	)
Net cash provided by financing activities		385			198
Net (decrease) increase in cash and cash equivalents		(308	)		1,850
Cash and cash equivalents, beginning of period		15,797			12,540
Cash and cash equivalents, end of period	$	15,489		$	14,390
Supplemental cash flow information – income taxes paid	$	6		$	-

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

RF INDUSTRIES, LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Unaudited interim condensed consolidated financial statements

Our accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information not misleading. Information included in the consolidated balance sheet as of October 31, 2020 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, 2020 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2020 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the three months ended January 31, 2021 are not necessarily indicative of the results that may be expected for the year ending October 31, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Form 10-K.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of RF Industries, Ltd. and our four wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), and Schroff Technologies International, Inc. (“Schrofftech”). Schrofftech is a wholly-owned subsidiary that RF Industries, Ltd. acquired effective November 1, 2019. All references to the “Company” collectively refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech. All intercompany balances and transactions have been eliminated in consolidation.

Risks and uncertainties

In March 2020, the World Health Organization (the “WHO”) declared coronavirus (“COVID-19”) a pandemic emergency. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The global impact of the outbreak has been rapidly evolving and certain jurisdictions, including those where we have operations, have also reacted by instituting quarantines, restrictions on travel, “shelter in place” rules, social distancing protocols and restrictions on types of business that may continue to operate. While we have been deemed an “essential” business, and therefore have been permitted to continue our operations, the impact of the COVID-19 pandemic has affected both our operations and those of our customers. Our operations have been negatively affected by partial shutdowns of our facilities, by changes that we had to make on our operating methods and procedures, and by our reduced workforce as many of our employees stayed at home. Many of our customers and vendors have likewise had temporary closures of their facilities and have otherwise been impacted by changes in their industries. As a result, overall demand for our products has been reduced, and certain costs have increased. We have taken measures to protect the health and safety of our employees, and we continue to work with our customers and vendors to minimize potential disruptions in addressing the challenges posed by this global pandemic.

The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. The outbreak impacted our performance for the three months ended January 31, 2021. We continue to expect the decline caused by the economic slowdown to persist through the second quarter of 2021. During the periods covered by this report, the operations of our three subsidiaries in the Northeast were affected as many of our employees stayed at home and as local customers shut down or otherwise delayed, deferred or cancelled orders for our products. Because of the impact that COVID-19 had on our operations, in May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately $2.8 million (“PPP Loans”). See Note 13 on discussions of the PPP Loans.

We considered the impact of the COVID-19 related economic slowdown on our evaluation of goodwill impairment indicators as of January 31, 2021. Although no goodwill impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material.

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. U.S. 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.

7

As of January 31, 2021 and October 31, 2020, the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and the current portion of the PPP Loans approximated their carrying value due to their short-term nature. See Note 5 for discussion on the fair value of other current liabilities.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact the adoption of this new standard will have on our consolidated financial statements.

Recently issued accounting pronouncements adopted:

In February 2016, the FASB issued ASU No. 2016-02, Leases. This ASU requires lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under the current GAAP. Under ASU 2016-02, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients. We adopted the standard as of November 1, 2019, the beginning of our fiscal 2020, applying the modified retrospective method. We elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allows us to carryforward the historical lease classification. We elected the policy which allows us to combine the nonlease components with their related lease components rather than separating, and the policy election to keep leases with an initial term of 12 months or less off of the balance sheet. Operating leases are included in our consolidated balance sheet as operating lease right of use (“ROU”) assets, other current liabilities, and operating lease liabilities. Finance leases are included in finance ROU assets, other current liabilities, and finance lease liabilities on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the duration of the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term and is recognized on the consolidated statements of operations. The adoption of the standard resulted in a material recognition of additional right of use assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of November 1, 2019, but did not materially affect our consolidated net income.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The guidance also still gives entities the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted the standard as of November 1, 2020, the beginning of our fiscal 2021, applying this prospectively. The adoption of the standard did not result in an impairment charge as of January 31, 2021.

Note 2 – Business acquisition

On November 4, 2019, we purchased the business of Schroff Technologies International, Inc. (“Schrofftech”), a Rhode Island-based manufacturer and marketer of intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation. At the closing, in consideration for the Schrofftech business, we paid the sellers $4 million in cash, and, if certain financial targets are met by Schrofftech over a two-year period, agreed to pay additional cash earn-out payments of up to $2.4 million.

The acquisition was accounted for as an acquisition of a business in accordance with the acquisition method of accounting. The acquired assets and assumed liabilities have been recorded at their estimated fair values. We determined the estimated fair values with the assistance of appraisals or valuations performed by an independent third-party specialist. Schrofftech serves the high growth wireless, telecom and cable markets. The Schrofftech business allows us to diversify the types of services provided for our customers in these markets. All manufacturing operations are performed at Schrofftech’s facilities in Rhode Island.

Although the closing occurred on November 4, 2019, the acquisition of Schrofftech is deemed to have become effective for financial accounting purposes as of November 1, 2019. Accordingly, subsequent to November 1, 2019, Schrofftech’s financial results have been included in the results of the Custom Cabling Manufacturing and Assembly segment (“Custom Cabling segment”) as well as in the consolidated statements of operations. Total costs related to the acquisition of Schrofftech were approximately $151,000 and have been expensed as incurred and categorized in selling and general expenses during periods prior to November 1, 2020.

8

The following table summarizes the components of the purchase price at fair values at November 1, 2019:

Cash consideration paid	$	4,000,000
Earn-out liability		1,249,000
Total purchase price	$	5,249,000

The following table summarizes the allocation of the purchase price at fair value at November 1, 2019:

Current assets	$	1,168,000
Fixed assets		58,000
Intangible assets		3,299,000
Goodwill		1,127,000
Non-interest bearing liabilities		(403,000	)
Net assets	$	5,249,000

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): 

	January 31, 2021		October 31, 2020
Raw materials and supplies	$	4,668	$	4,410
Work in process		278		196
Finished goods		4,073		3,980
Totals	$	9,019	$	8,586

No vendors accounted for more than 10% of inventory purchases for the three months ended January 31, 2021 or 2020. We have arrangements with our vendors to purchase products based on purchase orders that we periodically issue.

Note 4 – Other current assets

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

	January 31, 2021		October 31, 2020
Prepaid taxes	$	924	$	-
Prepaid expense		591		393
Other		624		420
Totals	$	2,139	$	813

Note 5 – Accrued expenses and other current liabilities

Accrued expenses consist of the following (in thousands):

	January 31, 2021		October 31, 2020
Wages payable	$	1,383	$	1,506
Accrued receipts		823		518
Other accrued expenses		411		549
Totals	$	2,617	$	2,573

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

9

The purchase agreement for the Schrofftech acquisition provides for earn-out payments of up to $2.4 million, which are earned through October 31, 2021. The initial earn-out liability was valued at its fair value using an option pricing based approach with a risk-neutral framework using Black Scholes due to the option-like nature of the earn-out payout structure. The earn-out was and will continue to be revalued quarterly using a present value approach and any resulting increase or decrease will be recorded into selling and general expenses. Any changes in the amount of the actual results and forecasted scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, significant variances between actual and forecasted results or changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods. In determining the fair value of the earn-out liability as of January 31, 2021, we used the most recent projections while giving consideration to actual results versus such projections subsequent to January 31, 2021.

We estimate the fair value of the earn-out liability using an option pricing based approach with a risk-neutral framework using Black Scholes related to Schrofftech calculated at net present value (Level 3 of the fair value hierarchy).

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2021 (in thousands):

Description	Level 3
Earn-out liability	$	296

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2020 (in thousands):

Description	Level 3
Earn-out liability	$	370

The following table summarizes the changes to the Level 3 liabilities measured at fair value for the three months ended January 31, 2021 and for the year ended October 31, 2020 (in thousands):

	Level 3
	January 31, 2021			October 31, 2020
Beginning balance	$	370		$	1,249
Change in value		(74	)		(879	)
Ending balance	$	296		$	370

As of January 31, 2021, the full amount of the $296,000 earn-out was classified as other current liabilities.

Note 6 – (Loss) earnings per share

Basic (loss) earnings per share is computed by dividing net (loss) income 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 January 31, 2021, we reported a net loss and diluted loss per share is computed the same as basic loss per share as the effect of utilizing the fully diluted share count would have reduced the net loss per share which has an anti-dilutive effect.  Therefore, all outstanding stock options are excluded from the computation of diluted loss per share.  Potentially issuable securities that are out-of-the-money totaled 331,338 and 392,838 shares for the three months ended January 31, 2021 and 2020, 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 January 31,
	2021		2020
Weighted average shares outstanding for basic (loss) earnings per share		9,864,689		9,564,533
Add effects of potentially dilutive securities-assumed exercise of stock options		-		308,803
Weighted average shares outstanding for diluted (loss) earnings per share		9,864,689		9,873,336

10

Note 7 – Stock-based compensation and equity transactions

On December 6, 2019, one employee was granted 50,000 incentive stock options. These options vested 10,000 on the date of grant, and the balance vests as to 10,000 shares per year thereafter on each of the next four anniversaries of December 6, 2019, and expire ten years from the date of grant.

On January 9, 2020, we granted the following equity awards to our managers and officers:

● Stock grants for a total of 12,075 common shares to three employees. We accounted for these shares as stock-based compensation totaling $77,000;

● A total of 3,241 incentive stock options to two employees, all of which vested immediately on the date of grant; and

● A total of 38,500 shares of restricted stock and 77,000 incentive stock options to five employees. 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 9, 2021; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

On June 30, 2020, one employee was granted 10,000 incentive stock options. These options vested 2,500 on the date of grant, and the balance vests as to 2,500 shares per year thereafter on each of the next three anniversaries of June 30, 2020, and expire ten years from the date of grant.

On January 12, 2021, we granted a total of 33,500 shares of restricted stock and 67,000 incentive stock options to one manager and three officers. The shares of restricted stock and incentive stock options vest over four years as follows: (i) one-quarter of the restricted shares and options shall vest on January 12, 2022; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

No other shares or options were granted to company employees during the three months ended January 31, 2021 and 2020.

The weighted average fair value of employee stock options that were granted during the three months ended January 31, 2021 and 2020 was estimated to be $2.46 and $3.13, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended January 31,
	2021			2020
Risk-free interest rate		0.39	%		1.57	%
Dividend yield		0.00	%		1.23	%
Expected life of the option (in years)		7.00			6.47
Volatility factor		51.94	%		49.14	%

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 2021 and 2020 option grants. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options’ expected life. The dividend yield is based upon the historical dividend yield.

Company stock option plans

Descriptions of our stock option plans are included in Note 9 of our Annual Report on Form 10-K for the year ended October 31, 2020. A summary of the status of the options granted under our stock option plans as of January 31, 2021 and the changes in options outstanding during the three months then ended is presented in the table that follows:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2020		789,179		$	4.66
Options granted		67,000		$	4.98
Options exercised		(118,189	)	$	3.26
Options cancelled		(91,793	)	$	5.88
Options outstanding at January 31, 2021		646,197		$	4.78
Options exercisable at January 31, 2021		298,781		$	4.85
Options vested and expected to vest at January 31, 2021		645,861		$	4.78

Weighted average remaining contractual life of options outstanding as of January 31, 2021: 6.30 years

Weighted average remaining contractual life of options exercisable as of January 31, 2021: 4.54 years

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Weighted average remaining contractual life of options vested and expected to vest as of January 31, 2021: 6.30 years

Aggregate intrinsic value of options outstanding at January 31, 2021: $1,077,000

Aggregate intrinsic value of options exercisable at January 31, 2021: $531,000

Aggregate intrinsic value of options vested and expected to vest at January 31, 2021: $1,069,000

As of January 31, 2021, $708,000 and $461,000 of expenses with respect to nonvested stock options and restricted shares, respectively, has yet to be recognized but is expected to be recognized over a weighted average period of 3.92 and 1.30 years, respectively.

Non-employee directors receive a compensation package of $50,000 annually, which is paid one-half in cash and one-half through the grant of non-qualified awards. For fiscal 2020, compensation payable to non-employee directors was prorated from November 1, 2019 through August 31, 2020. On November 4, 2019, we granted each of our five non-employee directors 3,270 shares of restricted stock. The number of restricted shares granted to each director was determined by prorating $25,000 for the 10 months ending August 31, 2020 and dividing by the 20-day average closing stock price ($6.36). These restricted shares vested ratably through August 31, 2020. As compensation for services to be provided until the 2021 annual meeting of stockholders in September 2021, we granted each of our five non-employee directors 5,757 shares of restricted stock, which number was determined by dividing $25,000 by the 20-day average closing stock price ($4.34). On December 31, 2020, a new director joined the Board. We granted the new director 3,334 shares of restricted stock as payment for the year ending with the 2021 annual meeting. The number of restricted stock was determined by prorating $25,000 for the 8.5 months of service upon joining the Board through the 2021 annual meeting and dividing by the 20-day average closing stock price ($5.31).

Non-employee directors who are also a chairperson of a committee of the Board receive additional compensation of $15,000 annually. On June 5, 2020, the Board of Directors revised the committee chair compensation so that all future compensation from July 1, 2020 through the next annual meeting of the stockholders will be payable in shares of common stock rather than cash. Shares issued as compensation will be valued at the closing common stock price on the last day of each quarter. Accordingly, on July 31, 2020, each of the four committee chairpersons was awarded 279 shares at $4.47 per share. We account for these shares as stock-based compensation. On September 15, 2020, each of the four committee chairpersons was awarded 3,454 shares of restricted stock as payment for the $15,000 retainer payable to Chairpersons for the year ending with the 2021 annual meeting of stockholders. The number of restricted shares granted to each chairperson was determined by dividing $15,000 by the 20-day average closing stock price ($4.34).

Stock option expense

During the three months ended January 31, 2021 and 2020, stock-based compensation expense totaled $123,000 and $187,000, respectively, and was classified in selling and general expense.

Note 8 – 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 January 31, 2021, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $14.3 million.

For the three months ending January 31, 2021, two customers, both distributors, accounted for approximately 16% and 12% of net sales and had accounts receivable balances that accounted for 15% and 19%, respectively, of the total net accounts receivable balance at January 31, 2021. These same two distributors each accounted for 11% of net sales for the three months ending January 31, 2020, while one other customer, a wireless carrier, accounted for 17% of net sales for the three months ending January 31, 2020. The two distributors had accounts receivable balances that each accounted for 12% of total net accounts receivable balance at January 31, 2020. Although these customers have been on-going major customers of the Company, the written agreements with these customers do not have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.

Note 9 – Segment information

We aggregate operating divisions into two reporting segments that have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; and (5) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of January 31, 2021, we had two segments – RF Connector and Cable Assembly (“RF Connector segment”) and Custom Cabling Manufacturing and Assembly (“Custom Cabling segment”).

The RF Connector segment consisted of one division and the Custom Cabling segment was composed of four divisions. The five divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly division (“RF Connector division”), Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech. While each segment has similar products and services, there was little overlapping of these services to their customer base. The biggest difference in segments is in the channels of sales: sales or product and services for the RF Connector segment were primarily through the distribution channel, while the Custom Cabling segment sales were through a combination of distribution and direct to the end customer.

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Management identifies segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the RF Connector division constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment.

As reviewed by our chief operating decision maker, we evaluate the performance of each segment based on income or loss before income taxes. We charge depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, right of use assets, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole.

All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the three months ended January 31, 2021 and 2020 (in thousands):

	Three Months Ended January 31,
	2021		2020
United States	$	9,379	$	12,173
Foreign Countries:
Canada		525		116
Mexico		-		5
All Other		98		120
		623		241
Totals	$	10,002	$	12,414

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the three months ended January 31, 2021 and 2020 are as follows (in thousands): 

	RF Connector		Custom Cabling
	and		Manufacturing and
	Cable Assembly		Assembly			Corporate			Total
2021
Net sales	$	3,575	$	6,427		$	-		$	10,002
Income (loss) before benefit for income taxes		453		(1,042	)		(8	)		(597	)
Depreciation and amortization		35		202			-			237
Total assets		7,667		15,202			17,766			40,635
2020
Net sales	$	3,189	$	9,225		$	-		$	12,414
Income (loss) before provision for income taxes		282		(281	)		11			12
Depreciation and amortization		42		213			-			255
Total assets		7,496		17,158			15,178			39,832

Note 10 – Income taxes

We use an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate, to determine its quarterly provision (benefit) for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

During the first quarter of fiscal 2021, the Consolidated Appropriations Act was passed which allows for PPP loan expenses to be deducted on the Company’s tax return. This resulted in a decrease to our deferred tax asset and income taxes payable of $0.7 million. The provision or benefit for income taxes was 32% and (120%) of (loss) income before income taxes for the three months ended January 31, 2021 (the “fiscal 2021 quarter”) and 2020 (the “fiscal 2020 quarter”), respectively. The change in the effective tax rate from the fiscal 2020 quarter to fiscal 2021 quarter was primarily driven by the disproportionate impact of various permanent book-tax differences with respect to our forecasted book income or loss in each period.

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We had $134,000 and $107,000 of unrecognized tax benefits, inclusive of interest and penalties, as of January 31, 2021 and October 31, 2020, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $35,000 as of January 31, 2021.

Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	January 31, 2021			October 31, 2020
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(256	)		(245	)
		167			178
Customer relationships (estimated lives 7 - 15 years)		5,058			5,058
Accumulated amortization		(2,483	)		(2,367	)
		2,575			2,691
Backlog (estimated life 1 - 2 years)		287			287
Accumulated amortization		(287	)		(266	)
		-			21
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(86	)		(77	)
		282			291
Totals	$	3,024		$	3,181
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the three months ended January 31, 2021 and the year ended October 31, 2020 was $157,000 and $692,000, respectively. As of January 31, 2021, the weighted-average amortization period for the amortizable intangible assets is 5.66 years.

Note 12 – Commitments

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of 1 year to 3 years, some of which include options to extend the leases for up to 5 years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $14,000 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ending January 31, 2021 were as follows (in thousands):

	Three Months Ended
	January 31, 2021
Operating lease cost	$	247
Short-term lease cost		-

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

	January 31, 2021			October 31, 2020
Supplemental Cash Flows Information
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	1,184		$	1,421
Weighted Average Remaining Lease Term
Operating leases (in months)		20.78			22.94
Weighted Average Discount Rate
Operating leases		3.54	%		3.54	%

Future minimum lease payments under non-cancellable leases as of January 31, 2021 were as follows:

Year ended October 31,	Operating Leases
2021 (excluding three months ended January 31, 2021)	$	667
2022		532
2023		166
2024		-
2025		-
Thereafter		-
Total future minimum lease payments		1,365
Less imputed interest		(99	)
Total	$	1,266

Reported as of January 31, 2021	Operating Leases
Other current liabilities	$	789
Operating lease liabilities		477
Finance lease liabilities		-
Total	$	1,266

As of January 31, 2021, operating lease ROU asset was $1.2 million and operating lease liability totaled $1.3 million, of which $789,000 is classified as current. There were no finance leases as of January 31, 2021.

Note 13 – Line of credit and PPP loans

In November 2019, we entered into an agreement for a revolving line of credit (“LOC”) in the amount of $5.0 million. Amounts outstanding under the LOC shall bear interest at a rate of 2.0% plus LIBOR Daily Floating Rate (“base interest rate”), with interest payable on the first day of each month. Borrowings under the LOC are secured by a security interest in certain assets of the Company. The LOC contains certain loan covenants. Failure to maintain the loan covenants may constitute an event of default, resulting in all outstanding amounts of principal and interest becoming immediately due and payable. All outstanding principal and interest is due and payable on December 1, 2021. On December 30, 2020, we closed the line of credit with no amounts outstanding.

In May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately $2.8 million (“PPP Loans”). The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at Cables Unlimited). We anticipate that most of the PPP Loans will be eligible for forgiveness in accordance with the provisions of the CARES Act. To the extent not forgiven, the PPP Loans have a two-year term, a fixed interest rate of 1%, and principal and interest payments are deferred for six months. As of January 31, 2021, the full amount of the PPP Loans was applied for forgiveness. Subsequent to January 31, 2021, the full amount of the PPP Loans has been forgiven and considered paid in full (including applicable interest).

Future minimum loan payments as of January 31, 2021 were as follows:

Year ended October 31,	PPP Loans
2021 (excluding three months ended January 31, 2021)	$	1,575
2022		1,213
Total future minimum payments	$	2,788

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Note 14 – Cash dividend and declared dividends

We did not pay any dividends during the three months ended January 31, 2021. During the three months ended January 31, 2020, we paid dividends of $0.02 per share for a total of $193,000. 

Note 15 – Subsequent events

In February 2021, the full $2.8 million of PPP Loans was forgiven and considered paid in full (including applicable interest) by the Small Business Administration.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 

This report contains forward-looking statements. These statements relate to future events or the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “except,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company, nor any other person, assumes responsibility for the accuracy and completeness of the forward-looking statements. The Company is under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report on Form 10-Q to conform such statements to actual results or to changes in its expectations.

The following discussion should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Form 10-Q. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company’s 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 the Company’s Annual Report filed on Form 10-K for the year ended October 31, 2020 and other reports and filings made with the Securities and Exchange Commission.

Critical Accounting Policies

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these consolidated financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to bad debts, inventory reserves, earn-out liabilities, and contingencies on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Inventories

Inventories are stated at the lower of cost or net realizable value, with cost determined using the weighted average cost method of accounting. Certain items in inventory may be considered obsolete or excess and, as such, we periodically review our inventories for excess and slow moving items and make provisions as necessary to properly reflect inventory value. Because inventories have, during the past few years, represented up to one-fourth of our total assets, any reduction in the value of our inventories would require us to take write-offs that would affect our net worth and future earnings.

Allowance for Doubtful Accounts

We record an allowance for doubtful accounts based upon our assessment of various factors. We consider historical experience, the age of the accounts receivable balance, credit quality of our customers, current economic conditions and other factors that may affect a customer’s ability to pay.

Long-Lived Assets Including Goodwill

We assess property, plant and equipment and intangible assets, which are considered definite-lived assets, for impairment. Definite-lived assets are reviewed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value.

We amortize our intangible assets with definite useful lives over their estimated useful lives and review these assets for impairment.

We test our goodwill and trademarks and indefinite-lived assets for impairment at least annually or more frequently if events or changes in circumstances indicate these assets may be impaired. These events or circumstances require significant judgment and could include a significant change in the business climate, legal factors, operating performance indicators, competition and sale or disposition of all or a portion of a division. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

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Earn-out Liability

The purchase agreement for the acquisition of Schrofftech provides for an earn-out payment of up to $2.4 million, which amount is earned through October 31, 2021. The initial earn-out liability was valued at its fair value using an option pricing based approach with a risk-neutral framework using Black Scholes due to the option-like nature of the earn-out payout structure. The earn-out was and will continue to be revalued quarterly using a present value approach, and any resulting increase or decrease will be recorded into selling and general expenses. Any changes in the amount of the actual results and forecasted scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, significant variances between actual and forecasted results or changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods.

Income Taxes

We record a tax provision for the anticipated tax consequences of the reported results of operations. Income taxes are accounted for under the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates as of the date of the financial statements that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The calculation of the tax provision involves significant judgment in estimating the impact of uncertainties in the application of GAAP and complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our financial condition and operating results. 

Stock-based Compensation

We use the Black-Scholes model to value the stock option grants. This valuation is affected by our stock price as well as assumptions regarding a number of inputs which involve significant judgments and estimates. These inputs include the expected term of employee stock options, the expected volatility of the stock price, the risk-free interest rate and expected dividends.

Overview

RF Industries, Ltd. (together with subsidiaries, the “Company,” we,” “us,” or “our”) is a national manufacturer and marketer of interconnect products and systems, including coaxial and specialty cables and connectors, fiber optic cables and connectors, and electrical and electronic specialty cables and components. Through our manufacturing and production facilities, we provide a wide selection of interconnect products and solutions primarily to telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers and manufacturers and to various original equipment manufacturers (OEMs) in several market segments. Since the acquisition of Schrofftech in November 2019, we also manufacture and sell energy-efficient cooling systems and integrated small cell solutions and related components.

We operate through two reporting segments: (i) the RF Connector and Cable Assembly (“RF Connector”) segment, and (ii) the Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment. The RF Connector segment primarily designs, manufactures, markets and distributes a broad range of connector and cable products, including coaxial connectors and cable assemblies that are integrated with coaxial connectors, used in telecommunications and information technology OEM markets and other end markets. The Custom Cabling segment designs, manufactures, markets and distributes custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, electromechanical wiring harnesses, wiring harnesses for a broad range of applications in a diverse set of end markets, energy-efficient cooling systems for wireless base stations and remote equipment shelters and custom designed, pole-ready 5G small cell integrated enclosures.

For the three months ended January 31, 2021, most of our revenues were generated from the Custom Cabling segment from the sale of fiber optics cable, copper cabling, custom patch cord assemblies, and wiring harnesses, which collectively accounted for 64% 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 36% of total sales for the three months ended January 31, 2021. The RF Connector segment mostly sells standardized products regularly used by customers and, therefore, has a more stable revenue stream. On the other hand, the Custom Cabling segment mostly designs, manufactures, and sells customized cabling and wireless-related equipment under larger purchase orders. Accordingly, the Custom Cabling segment is more dependent upon larger orders, and its revenues are therefore, more volatile than the revenues of the RF Connector segment.

In March 2020, the World Health Organization (the “WHO”) declared coronavirus (“COVID-19”) a pandemic emergency. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The global impact of the outbreak has been rapidly evolving and certain jurisdictions, including those where we have operations, have also reacted by instituting quarantines, restrictions on travel, “shelter in place” rules, social distancing protocols and restrictions on types of business that may continue to operate. While we have been deemed an “essential” business, and therefore have been permitted to continue our operations, the impact of the COVID-19 pandemic has affected both our operations and those of our customers. Our operations have been negatively affected by partial shutdowns of our facilities (particularly in the Northeast), by changes that we had to make on our operating methods and procedures, and by our reduced workforce as many of our employees stayed at home. Many of our customers and vendors have likewise had temporary closures of their facilities and have otherwise been impacted by changes in their industries. As a result, overall demand for our products has been reduced, and certain costs have increased. We have taken measures to protect the health and safety of our employees, and we continue to work with our customers and vendors to minimize potential disruptions in addressing the challenges posed by this global pandemic.

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The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. The outbreak impacted our performance for the three months ended January 31, 2021. We currently expect the decline caused by the economic slowdown to persist through at least the second quarter of 2021. The operations of our Cables Unlimited, Inc. subsidiary in Long Island, New York, was particularly affected as many employees stayed at home and as local customers shut down or otherwise delayed, deferred or cancelled orders for our products. Because of the impact that COVID-19 had on our Northeastern operations, in May 2020 we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately $2.8 million (“PPP Loans”). The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at Cables Unlimited). In February 2021, the full $2.8 million of PPP Loans was forgiven and considered paid in full (including applicable interest) by the Small Business Administration (“SBA”).

Liquidity and Capital Resources

Historically, we have been able to fund our liquidity and other capital requirements from funds we generated from operations. While we still believe that our existing current assets, the amount of cash we anticipate will be generated from on-going operations, and funds we received from the PPP Loans collectively will be sufficient to fund our anticipated liquidity and capital resource needs for at least twelve months from the date of this filing, there are some uncertainties because of the unknown future impact of the COVID-19 pandemic on our business. Nevertheless, we believe that our existing assets and the cash we expect to generate from operations, including from our current backlog of unfulfilled orders, will be sufficient to fund our liquidity needs during the next twelve months from the date of this filing based on the following:

As of January 31, 2021, we had a total of $15.5 million of cash and cash equivalents compared to a total of $15.8 million of cash and cash equivalents as of October 31, 2020. As of January 31, 2021, we had working capital of $24.5 million and a current ratio of approximately 4.4:1 with current assets of $31.8 million and current liabilities of $7.3 million.

As of January 31, 2021, we had $7.1 million of backlog, compared to $6.3 million as of October 31, 2020. 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 three months ended January 31, 2021, we used $0.6 million of cash in our operating activities. This net outflow of cash is due to our net loss ($0.4 million), inventory purchases resulting in an increase to our inventory balance ($0.4 million), and cash used for other current assets ($1.3 million), which expenditures included an increase of our income taxes receivable of $0.7 million due to the impact of the passage of the Consolidated Appropriations Act (“CAA”) that allows for PPP loan expenses to be deducted on our tax return. The foregoing cash usage was partially offset by an increase in cash from noncash credits of $0.7 million from the decrease of our deferred tax asset as a result of the passage of the CAA, $0.2 million from depreciation and amortization, $0.1 million from stock-based compensation expense, and $0.5 million from the collection in accounts receivable.

During the fiscal quarter ended January 31, 2021, we also spent $0.1 million on capital expenditures, and received $0.4 million of proceeds from the exercise of stock options. As a result of the net cash used in operating and investing activities, and the cash received from the exercise of stock options, our cash and cash equivalent balance decreased by $0.3 million during the January 31, 2021 quarter.

We do not anticipate needing material additional capital equipment in the next twelve months. In the past, we have financed some of our equipment and furnishings requirements through capital leases. No additional capital equipment purchases have been currently identified that would require significant additional leasing or capital expenditures during the next twelve months.

In November 2019, we entered into a $5.0 million revolving line of credit that bore interest at a rate of 2.0% plus LIBOR Daily Floating Rate. We never used the line of credit and on December 30, 2020, we closed the line of credit. Accordingly, we currently do not have a credit facility available to us should we need to borrow amounts to fund either our working capital needs or any future unplanned capital expenditures.

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. On November 4, 2019, we purchased the business of Schroff Technologies International, Inc., a Rhode Island-based manufacturer and marketer of intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation. At the closing, in consideration for Schrofftech, we paid the sellers $4 million in cash, and, if certain financial targets are met by Schrofftech over a two-year period, agreed to pay an additional cash earn-out payment of up to $2.4 million.

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Results of Operations

Three Months Ended January 31, 2021 vs. Three Months Ended January 31, 2020

Net sales for the three months ended January 31, 2021 (the “fiscal 2021 quarter”) decreased by 19%, or $2.4 million, to $10.0 million as compared to the three months ended January 31, 2020 (the “fiscal 2020 quarter”). Net sales for the fiscal 2021 quarter at the Custom Cabling segment decreased by $2.8 million, or 30%, to $6.4 million, compared to $9.2 million in the fiscal 2020 quarter. The decrease was primarily the result of lower project-based wireless carrier macro and tower site business where we continued to see a general slowdown which impacted our sales.   In addition we experienced project delays with small cell deployments due to COVID-19 as there were difficulties gaining site zoning approvals for small cell installations, challenges with building and site access, and limited availability of work crews. Net sales for the fiscal 2021 quarter at the RF Connector segment increased by $0.4 million, or 12%, to $3.6 million as compared to $3.2 million in the fiscal 2020 quarter.

Gross profit for the fiscal 2021 quarter decreased by $0.6 million to $2.6 million due to the decrease in net sales, although gross margins remained fairly consistent at 26.1% of sales compared to 26.2% of sales in the fiscal 2020 quarter.

Engineering expenses decreased by $0.2 million to $0.4 million in the fiscal 2021 quarter compared to $0.6 million in the fiscal 2020 quarter primarily due to the reduction in engineering marketing personnel, which costs are included in the engineering costs. Engineering expenses represent costs incurred relating to the ongoing research and development of new products.

Selling and general expenses increased by $0.1 million to $2.8 million (28% of sales) compared to $2.7 million (21% of sales) in the first quarter last year primarily due to hiring of additional sales people in the last half of the 2020 fiscal year and in the fiscal 2021 quarter.

For the fiscal 2021 quarter, the Custom Cabling segment had a pretax loss of $1.0 million while the RF Connector segment had pretax income of $0.5 million, as compared to $0.3 million loss and $0.3 million of income, respectively, for the comparable first quarter last year. The pretax loss at the Custom Cabling segment in the fiscal 2021 quarter was primarily due to the lower sales in the project-based business resulting from the slowdown in carrier spending.

The provision or benefit for income taxes was 32% and (120%) of (loss) income before income taxes for the fiscal 2021 quarter and the fiscal 2020 quarter, respectively. The change in the effective tax rate from the fiscal 2020 quarter to fiscal 2021 quarter was primarily driven by the disproportionate impact of various permanent book-tax differences with respect to our forecasted book income or loss in each period.

For the fiscal 2021 quarter, net loss was $0.4 million and fully diluted loss per share was $0.04 per share, compared to a net income of $26,000 and fully diluted earnings per share of $0.00 per share for the fiscal 2020 quarter. For the fiscal 2021 quarter, the diluted weighted average shares outstanding was 9,784,760 as compared to 9,873,336 for the fiscal 2020 quarter.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Nothing to report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

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

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

During the first quarter of fiscal 2021, 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.

20

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of the date of this report, we are not subject to any proceeding that is not in the ordinary course of business or that is material to the financial condition of our business.

Item 1A. Risk Factors

The discussion of our business and operations should be read together with the risk factors contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 31, 2020 filed with the SEC, which describe various risks and uncertainties to which we are or may become subject. Further, the current coronavirus (“COVID-19”) pandemic and actions taken to address the pandemic may exacerbate the risks described in our SEC reports. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner.

The COVID-19 pandemic has adversely impacted, and poses risks to, our business, the nature and extent of which are highly uncertain and unpredictable. In March 2020, the WHO characterized COVID-19 as a pandemic. This pandemic has resulted in a global health crisis that is adversely affecting broader economies, financial markets, and the business environment worldwide. We are monitoring the global impact of the COVID-19 pandemic and taking steps to mitigate the accompanying impact on our business by working with our employees, customers, suppliers, and other stakeholders. The pandemic is adversely affecting, and is expected to continue to adversely affect, certain elements of our business. Portions of our workforce may be unable to work effectively due to illness and containment measures, including quarantines, illness precautions, travel restrictions, and other restrictions. We experienced volatility in customer demand as their businesses were impacted by the pandemic. If the pandemic continues and conditions worsen, we may experience additional adverse impacts on our operational and commercial activities, including rising costs, volatility in customer orders and purchases and declines in our collections of accounts receivable. Furthermore, the pandemic has impacted and may further impact the broader U.S. economy, including negatively impacting economic growth, the proper functioning of financial and capital markets and interest rates, all of which could lead to a decline in our net sales. Due to the speed with which the situation is developing, the breadth of its spread and the range of governmental and community reactions thereto, there is uncertainty around its duration, ultimate impact and the timing of recovery. Therefore, the pandemic could lead to an extended disruption of economic activity and the impact on our stock price, access to capital, consolidated results of operations, financial position and cash flows could be material.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 31, 2020, the Company issued a total of 1,116 shares of common stock to the four directors serving as chairpersons on committees of the Company’s Board of Directors. The shares were issued in lieu of $5,000 of cash compensation for services otherwise payable to these directors. The shares were issued to the directors pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act since, among other things, the transactions did not involve a public offering.

The following table sets forth information regarding the shares of common stock cancelled, and deemed to have been repurchased, during the three months ended January 31, 2021 in connection with employee tax withholding for shares of restricted stock that vested under our 2020 Equity Incentive Plan.

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Approximate dollar value of shares that may yet be purchased under the plans or programs
November 2020		-	$	-		-	$	-
December 2020		-	$	-		-	$	-
January 2021		2,367	$	4.89		-	$	-

Item 3. Defaults upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Nothing to report.

Item 5. Other Information

Nothing to report.

21

Item 6. Exhibits

Exhibit
Number
10.1	Description of the Fiscal Year 2021 Management Incentive Equity and Cash Compensation Plan (incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed with the Commission on January 19, 2021).#
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	XBRL Instance Document.
101.SCH	XBRL Taxonomy Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

22

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RF INDUSTRIES, LTD.
Date: March 11, 2021	By:	/s/ Robert Dawson
		Robert Dawson President and Chief Executive Officer (Principal Executive Officer)

Date: March 11, 2021	By:	/s/ Peter Yin
		Peter Yin Chief Financial Officer (Principal Financial and Accounting Officer)

23

EX-31.1

Exhibit 31.1

CERTIFICATIONS PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Robert Dawson, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended January 31, 2021 of RF Industries, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period for which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 11, 2021	/s/ Robert Dawson
	Robert Dawson
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Peter Yin, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended January 31, 2021 of RF Industries, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period for which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 11, 2021	/s/ Peter Yin
	Peter Yin
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RF Industries, Ltd. (the “Company”) on Form 10-Q for the quarter ended January 31, 2021, as filed with the Securities and Exchange Commission (the “Report”), I, Robert Dawson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 11, 2021	/s/ Robert Dawson
	Robert Dawson
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RF Industries, Ltd. (the “Company”) on Form 10-Q for the quarter ended January 31, 2021, as filed with the Securities and Exchange Commission (the “Report”), I, Peter Yin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 11, 2021	/s/ Peter Yin
	Peter Yin
	Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Jan. 31, 2021	Mar. 10, 2021
Document Information [Line Items]
Entity Registrant Name	R F INDUSTRIES LTD
Entity Central Index Key	0000740664
Trading Symbol	rfil
Current Fiscal Year End Date	--10-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		9,972,456
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Jan. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(b) Security	Common Stock, $0.01 par value per share

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
CURRENT ASSETS
Cash and cash equivalents	$ 15,489	$ 15,797
Trade accounts receivable, net of allowance for doubtful accounts of $55 and $66, respectively	5,155	5,669
Inventories	9,019	8,586
Other current assets	2,139	813
TOTAL CURRENT ASSETS	31,802	30,865
Property and equipment:
Equipment and tooling	3,916	3,819
Furniture and office equipment	1,092	1,073
Property, Plant and Equipment, Gross, Ending Balance	5,008	4,892
Less accumulated depreciation	4,162	4,082
Total property and equipment, net	846	810
Operating lease right of use assets, net	1,184	1,421
Goodwill	2,467	2,467
Amortizable intangible assets, net	3,024	3,181
Non-amortizable intangible assets, trademarks	1,174	1,174
Deferred tax assets	68	834
Other assets	70	70
TOTAL ASSETS	40,635	40,822
CURRENT LIABILITIES
Accounts payable	1,510	1,475
Accrued expenses	2,617	2,573
Current portion of PPP Loans	2,103	1,699
Current portion of operating lease liabilities	789	874
Income taxes payable		43
Other current liabilities	296
TOTAL CURRENT LIABILITIES	7,315	6,664
Operating lease liabilities	477	635
PPP Loans	685	1,089
Other long-term liabilities		370
TOTAL LIABILITIES	8,477	8,758
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 9,962,456 and 9,814,118 shares issued and outstanding at January 31, 2021 and October 31, 2020, respectively	100	98
Additional paid-in capital	23,441	22,946
Retained earnings	8,617	9,020
TOTAL STOCKHOLDERS' EQUITY	32,158	32,064
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 40,635	$ 40,822

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
Trade accounts receivable, allowance for doubtful accounts	$ 55	$ 66
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	9,962,456	9,814,118
Common stock, shares outstanding (in shares)	9,962,456	9,814,118

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Net sales	$ 10,002	$ 12,414
Cost of sales	7,396	9,161
Gross profit	2,606	3,253
Operating expenses:
Engineering	431	596
Selling and general	2,764	2,656
Total operating expenses	3,195	3,252
Operating (loss) income	(589)	1
Other (expense) income	(8)	11
(Loss) income before benefit for income taxes	(597)	12
Benefit from income taxes	(194)	(14)
Consolidated net (loss) income	$ (403)	$ 26
(Loss) earnings per share
Basic (in dollars per share)	$ (0.04)	$ 0
Diluted (in dollars per share)	$ (0.04)	$ 0
Weighted average shares outstanding
Basic (in shares)	9,864,689	9,564,533
Diluted (in shares)	9,864,689	9,873,336

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Oct. 31, 2019	9,462,267
Balance at Oct. 31, 2019	$ 95	$ 21,949	$ 9,489	$ 31,533
Exercise of stock options (in shares)	215,943
Exercise of stock options	$ 2	389		391
Stock-based compensation expense		110		110
Issuance of restricted stock (in shares)	54,850
Issuance of restricted stock	$ 1	(1)
Consolidated net income (loss)			26	26
Issuance of common shares (in shares)	12,075
Issuance of common shares		77		77
Dividends			(193)	(193)
Balance (in shares) at Jan. 31, 2020	9,745,135
Balance at Jan. 31, 2020	$ 98	22,524	9,322	31,944
Balance (in shares) at Oct. 31, 2020	9,814,118
Balance at Oct. 31, 2020	$ 98	22,946	9,020	$ 32,064
Exercise of stock options (in shares)	118,189			118,189
Exercise of stock options	$ 1	384		$ 385
Stock-based compensation expense		123		123
Issuance of restricted stock (in shares)	36,834
Issuance of restricted stock	$ 1	(1)
Forfeiture of restricted stock (in shares)	(4,318)
Forfeiture of restricted stock
Tax withholding related to vesting of restricted stock (in shares)	(2,367)
Tax withholding related to vesting of restricted stock		(11)		(11)
Consolidated net income (loss)			(403)	(403)
Balance (in shares) at Jan. 31, 2021	9,962,456
Balance at Jan. 31, 2021	$ 100	$ 23,441	$ 8,617	$ 32,158

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
OPERATING ACTIVITIES:
Consolidated net (loss) income	$ (403,000)	$ 26,000
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Bad debt expense	(15,000)	4,000
Depreciation and amortization	237,000	255,000
Stock-based compensation expense	123,000	187,000
Tax payments related to shares cancelled for vested restricted stock awards	(11,000)
Deferred income taxes	766,000	62,000
Changes in operating assets and liabilities:
Trade accounts receivable	529,000	6,711,000
Inventories	(433,000)	638,000
Other current assets	(1,326,000)	(20,000)
Right of use assets	(6,000)	101,000
Accounts payable	35,000	(1,295,000)
Accrued expenses	44,000	(921,000)
Income tax payable	(43,000)	(21,000)
Other current liabilities	296,000
Other long-term liabilities	(370,000)	(121,000)
Net cash (used in) provided by operating activities	(577,000)	5,606,000
INVESTING ACTIVITIES:
Capital expenditures	(116,000)	(53,000)
Net cash used in investing activities	(116,000)	(3,954,000)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	385,000	391,000
Dividends paid	0	(193,000)
Net cash provided by financing activities	385,000	198,000
Net (decrease) increase in cash and cash equivalents	(308,000)	1,850,000
Cash and cash equivalents, beginning of period	15,797,000	12,540,000
Cash and cash equivalents, end of period	15,489,000	14,390,000
Supplemental cash flow information – income taxes paid	6,000
Schrofftech [Member]
INVESTING ACTIVITIES:
Purchase of company, net of cash acquired		$ (3,901,000)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) $ in Thousands	3 Months Ended
	Jan. 31, 2020 USD ($)
Schrofftech [Member]
Purchase of company, cash acquired	$ 99

XML

Note 1 - Unaudited Interim Condensed Consolidated Financial Statements

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note

1

–

Unaudited interim condensed consolidated financial statements

Our accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information

not

misleading. Information included in the consolidated balance sheet as of

October 31, 2020

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, 2020

included in our Annual Report on Form

10

-K (“Form

10

-K”) for the year ended

October 31, 2020

that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the

three

months ended

January 31, 2021

are

not

necessarily indicative of the results that

may

be expected for the year ending

October 31, 2021.

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

10

-K.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of RF Industries, Ltd. and our

four

wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), and Schroff Technologies International, Inc. (“Schrofftech”). Schrofftech is a wholly-owned subsidiary that RF Industries, Ltd. acquired effective

November 1, 2019.

All references to the “Company” collectively refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech. All intercompany balances and transactions have been eliminated in consolidation.

Risks and uncertainties

In

March 2020,

the World Health Organization (the “WHO”) declared coronavirus (“COVID-

19”

) a pandemic emergency. The COVID-

19

pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The global impact of the outbreak has been rapidly evolving and certain jurisdictions, including those where we have operations, have also reacted by instituting quarantines, restrictions on travel, “shelter in place” rules, social distancing protocols and restrictions on types of business that

may

continue to operate. While we have been deemed an “essential” business, and therefore have been permitted to continue our operations, the impact of the COVID-

19

pandemic has affected both our operations and those of our customers. Our operations have been negatively affected by partial shutdowns of our facilities, by changes that we had to make on our operating methods and procedures, and by our reduced workforce as many of our employees stayed at home. Many of our customers and vendors have likewise had temporary closures of their facilities and have otherwise been impacted by changes in their industries. As a result, overall demand for our products has been reduced, and certain costs have increased. We have taken measures to protect the health and safety of our employees, and we continue to work with our customers and vendors to minimize potential disruptions in addressing the challenges posed by this global pandemic.

The extent of the impact of the COVID-

19

pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. The outbreak impacted our performance for the

three

months ended

January 31, 2021.

We continue to expect the decline caused by the economic slowdown to persist through the

second

quarter of

2021.

During the periods covered by this report, the operations of our

three

subsidiaries in the Northeast were affected as many of our employees stayed at home and as local customers shut down or otherwise delayed, deferred or cancelled orders for our products. Because of the impact that COVID-

19

had on our operations, in

May 2020

we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately

$2.8

million (“PPP Loans”). See Note

13

on discussions of the PPP Loans.

We considered the impact of the COVID-

19

related economic slowdown on our evaluation of goodwill impairment indicators as of

January 31, 2021.

Although

no

goodwill impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material.

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. U.S. 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

January 31, 2021

and

October 31, 2020,

the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and the current portion of the PPP Loans approximated their carrying value due to their short-term nature. See Note

5

for discussion on the fair value of other current liabilities.

Recent accounting standards

Recently issued accounting pronouncements

not

yet adopted:

In

June 2016,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016

-

13,

Financial Instruments—Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The guidance is effective for fiscal years beginning after

December 15, 2019.

In

November 2019,

the FASB issued ASU

2019

-

10,

Financial Instruments—Credit Losses (Topic

326

), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after

December 15, 2022.

Early adoption is permitted. We are currently evaluating the impact the adoption of this new standard will have on our consolidated financial statements.

Recently issued accounting pronouncements adopted:

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases. This ASU requires lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under the current GAAP. Under ASU

2016

-

02,

lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients. We adopted the standard as of

November 1, 2019,

the beginning of our fiscal

2020,

applying the modified retrospective method. We elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allows us to carryforward the historical lease classification. We elected the policy which allows us to combine the nonlease components with their related lease components rather than separating, and the policy election to keep leases with an initial term of

12

months or less off of the balance sheet. Operating leases are included in our consolidated balance sheet as operating lease right of use (“ROU”) assets, other current liabilities, and operating lease liabilities. Finance leases are included in finance ROU assets, other current liabilities, and finance lease liabilities on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the duration of the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms

may

include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term and is recognized on the consolidated statements of operations. The adoption of the standard resulted in a material recognition of additional right of use assets and lease liabilities of approximately

$2.3

million and

$2.4

million, respectively, as of

November 1, 2019,

but did

not

materially affect our consolidated net income.

In

January 2017,

the FASB issued ASU

No.

2017

-

04,

Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step

2

from the goodwill impairment test. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The guidance also still gives entities the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted the standard as of

November 1, 2020,

the beginning of our fiscal

2021,

applying this prospectively. The adoption of the standard did

not

result in an impairment charge as of

January 31, 2021.

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Note 2 - Business Acquisition

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

2

–

Business acquisition

On

November 4, 2019,

we purchased the business of Schroff Technologies International, Inc. (“Schrofftech”), a Rhode Island-based manufacturer and marketer of intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation. At the closing, in consideration for the Schrofftech business, we paid the sellers

$4

million in cash, and, if certain financial targets are met by Schrofftech over a

two

-year period, agreed to pay additional cash earn-out payments of up to

$2.4

million.

The acquisition was accounted for as an acquisition of a business in accordance with the acquisition method of accounting. The acquired assets and assumed liabilities have been recorded at their estimated fair values. We determined the estimated fair values with the assistance of appraisals or valuations performed by an independent

third

-party specialist. Schrofftech serves the high growth wireless, telecom and cable markets. The Schrofftech business allows us to diversify the types of services provided for our customers in these markets. All manufacturing operations are performed at Schrofftech's facilities in Rhode Island.

Although the closing occurred on

November 4, 2019,

the acquisition of Schrofftech is deemed to have become effective for financial accounting purposes as of

November 1, 2019.

Accordingly, subsequent to

November 1, 2019,

Schrofftech's financial results have been included in the results of the Custom Cabling Manufacturing and Assembly segment (“Custom Cabling segment”) as well as in the consolidated statements of operations. Total costs related to the acquisition of Schrofftech were approximately

$151,000

and have been expensed as incurred and categorized in selling and general expenses during periods prior to

November 1, 2020.

The following table summarizes the components of the purchase price at fair values at

November 1, 2019:

Cash consideration paid	$	4,000,000
Earn-out liability		1,249,000
Total purchase price	$	5,249,000

The following table summarizes the allocation of the purchase price at fair value at

November 1, 2019:

Current assets	$	1,168,000
Fixed assets		58,000
Intangible assets		3,299,000
Goodwill		1,127,000
Non-interest bearing liabilities		(403,000	)
Net assets	$	5,249,000

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Note 3 - Inventories and Major Vendors

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Inventory Disclosure [Text Block]

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): 

	January 31, 2021		October 31, 2020
Raw materials and supplies	$	4,668	$	4,410
Work in process		278		196
Finished goods		4,073		3,980
Totals	$	9,019	$	8,586

No

vendors accounted for more than

10%

of inventory purchases for the

three

months ended

January 31, 2021

or

2020.

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

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Note 4 - Other Current Assets

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Other Current Assets [Text Block]

Note

4

–

Other current assets

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

	January 31, 2021		October 31, 2020
Prepaid taxes	$	924	$	-
Prepaid expense		591		393
Other		624		420
Totals	$	2,139	$	813

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Note 5 - Accrued Expenses and Other Current Liabilities

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

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

Note

5

–

Accrued expenses and other current liabilities

Accrued expenses consist of the following (in thousands):

	January 31, 2021		October 31, 2020
Wages payable	$	1,383	$	1,506
Accrued receipts		823		518
Other accrued expenses		411		549
Totals	$	2,617	$	2,573

Accrued receipts represent purchased inventory for which invoices have

not

been received.

The purchase agreement for the Schrofftech acquisition provides for earn-out payments of up to

$2.4

million, which are earned through

October 31, 2021.

The initial earn-out liability was valued at its fair value using an option pricing based approach with a risk-neutral framework using Black Scholes due to the option-like nature of the earn-out payout structure. The earn-out was and will continue to be revalued quarterly using a present value approach and any resulting increase or decrease will be recorded into selling and general expenses. Any changes in the amount of the actual results and forecasted scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, significant variances between actual and forecasted results or changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods. In determining the fair value of the earn-out liability as of

January 31, 2021,

we used the most recent projections while giving consideration to actual results versus such projections subsequent to

January 31, 2021.

We estimate the fair value of the earn-out liability using an option pricing based approach with a risk-neutral framework using Black Scholes related to Schrofftech calculated at net present value (Level

3

of the fair value hierarchy).

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of

January 31, 2021 (

in thousands):

Description	Level 3
Earn-out liability	$	296

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of

October 31, 2020 (

in thousands):

Description	Level 3
Earn-out liability	$	370

The following table summarizes the changes to the Level

3

liabilities measured at fair value for the

three

months ended

January 31, 2021 

and for the year ended

October 31, 2020 (

in thousands):

	Level 3
	January 31, 2021			October 31, 2020
Beginning balance	$	370		$	1,249
Change in value		(74	)		(879	)
Ending balance	$	296		$	370

As of

January 31, 2021,

the full amount of the

$296,000

earn-out was classified as other current liabilities.

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Note 6 - (Loss) Earnings Per Share

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

6

–

(Loss) earnings per share

Basic (loss) earnings per share is computed by dividing net (loss) income 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

January 31, 2021,

we reported a net loss and diluted loss per share is computed the same as basic loss per share as the effect of utilizing the fully diluted share count would have reduced the net loss per share which has an anti-dilutive effect.  Therefore, all outstanding stock options are excluded from the computation of diluted loss per share.  Potentially issuable securities that are out-of-the-money totaled

331,338

and

392,838

shares for the

three

months ended

January 31, 2021

and

2020,

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 January 31,
	2021		2020
Weighted average shares outstanding for basic (loss) earnings per share		9,864,689		9,564,533
Add effects of potentially dilutive securities-assumed exercise of stock options		-		308,803
Weighted average shares outstanding for diluted (loss) earnings per share		9,864,689		9,873,336

XML

Note 7 - Stock-based Compensation and Equity Transactions

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note

7

–

Stock-based compensation and equity transactions

On

December 6, 2019,

one

employee was granted

50,000

incentive stock options. These options vested

10,000

on the date of grant, and the balance vests as to

10,000

shares per year thereafter on each of the next

four

anniversaries of

December 6, 2019,

and expire

ten

years from the date of grant.

On

January 9, 2020,

we granted the following equity awards to our managers and officers:

● Stock grants for a total of 12,075 common shares to three employees. We accounted for these shares as stock-based compensation totaling $77,000;

● A total of 3,241 incentive stock options to two employees, all of which vested immediately on the date of grant; and

● A total of 38,500 shares of restricted stock and 77,000 incentive stock options to five employees. 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 9, 2021; and (ii) the remaining restricted shares and options shall vest in twelve equal quarterly installments over the next three years. All incentive stock options expire ten years from the date of grant.

On

June 30, 2020,

one

employee was granted

10,000

incentive stock options. These options vested

2,500

on the date of grant, and the balance vests as to

2,500

shares per year thereafter on each of the next

three

anniversaries of

June 30, 2020,

and expire

ten

years from the date of grant.

On

January 12, 2021,

we granted a total of

33,500

shares of restricted stock and

67,000

incentive stock options to

one

manager and

three

officers. The shares of restricted stock and incentive stock options vest over

four

years as follows: (i)

one

-quarter of the restricted shares and options shall vest on

January 12, 2022;

and (ii) the remaining restricted shares and options shall vest in

twelve

equal quarterly installments over the next

three

years. All incentive stock options expire

ten

years from the date of grant.

No

other shares or options were granted to company employees during the

three

months ended

January 31, 2021

and

2020.

The weighted average fair value of employee stock options that were granted during the

three

months ended

January 31, 2021

and

2020

was estimated to be

$2.46

and

$3.13,

respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended January 31,
	2021			2020
Risk-free interest rate		0.39	%		1.57	%
Dividend yield		0.00	%		1.23	%
Expected life of the option (in years)		7.00			6.47
Volatility factor		51.94	%		49.14	%

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

2021

and

2020

option grants. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options' expected life. The dividend yield is based upon the historical dividend yield.

Company stock option plans

Descriptions of our stock option plans are included in Note

9

of our Annual Report on Form

10

-K for the year ended

October 31, 2020.

A summary of the status of the options granted under our stock option plans as of

January 31, 2021

and the changes in options outstanding during the

three

months then ended is presented in the table that follows:

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2020		789,179		$	4.66
Options granted		67,000		$	4.98
Options exercised		(118,189	)	$	3.26
Options cancelled		(91,793	)	$	5.88
Options outstanding at January 31, 2021		646,197		$	4.78
Options exercisable at January 31, 2021		298,781		$	4.85
Options vested and expected to vest at January 31, 2021		645,861		$	4.78

Weighted average remaining contractual life of options outstanding as of

January 31, 2021:

6.30

years

Weighted average remaining contractual life of options exercisable as of

January 31, 2021:

4.54

years

Weighted average remaining contractual life of options vested and expected to vest as of

January 31, 2021:

6.30

years

Aggregate intrinsic value of options outstanding at

January 31, 2021:

$1,077,000

Aggregate intrinsic value of options exercisable at

January 31, 2021:

$531,000

Aggregate intrinsic value of options vested and expected to vest at

January 31, 2021:

$1,069,000

As of

January 31, 2021,

$708,000

and

$461,000

of expenses with respect to nonvested stock options and restricted shares, respectively, has yet to be recognized but is expected to be recognized over a weighted average period of

3.92

and

1.30

years, respectively.

Non-employee directors receive a compensation package of

$50,0

00

annually, which is paid

one

-half in cash and

one

-half through the grant of non-qualified awards. For fiscal

2020,

compensation payable to non-employee directors was prorated from

November 1, 2019

through

August 31, 2020.

On

November 4, 2019,

we granted each of our

five

non-employee directors

3,270

shares of restricted stock. The number of restricted shares granted to each director was determined by prorating

$25,000

for the

10

months ending

August 31, 2020

and dividing by the

20

-day average closing stock price (

$6.36

). These restricted shares vested ratably through

August 31, 2020.

As compensation for services to be provided until the

2021

annual meeting of stockholders in

September 2021,

we granted each of our

five

non-employee directors

5,757

shares of restricted stock, which number was determined by dividing

$25,000

by the

20

-day average closing stock price (

$4.34

). On

December 31, 2020,

a new director joined the Board. We granted the new director

3,334

shares of restricted stock as payment for the year ending with the

2021

annual meeting. The number of restricted stock was determined by prorating

$25,000

for the

8.5

months of service upon joining the Board through the

2021

annual meeting and dividing by the

20

-day average closing stock price (

$5.31

).

Non-employee directors who are also a chairperson of a committee of the Board receive additional compensation of

$15,000

annually. On

June 5, 2020,

the Board of Directors revised the committee chair compensation so that all future compensation from

July 1, 2020

through the next annual meeting of the stockholders will be payable in shares of common stock rather than cash. Shares issued as compensation will be valued at the closing common stock price on the last day of each quarter. Accordingly, on

July 31, 2020,

each of the

four

committee chairpersons was awarded

279

shares at

$4.47

per share. We account for these shares as stock-based compensation. On

September 15, 2020,

each of the

four

committee chairpersons was awarded

3,454

shares of restricted stock as payment for the

$15,000

retainer payable to Chairpersons for the year ending with the

2021

annual meeting of stockholders. The number of restricted shares granted to each chairperson was determined by dividing

$15,000

by the

20

-day average closing stock price (

$4.34

).

Stock option expense

During the

three

months ended

January 31, 2021

and

2020,

stock-based compensation expense totaled

$123,000

and

$187,000,

respectively, and was classified in selling and general expense.

XML

Note 8 - Concentrations of Credit Risk

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

8

–

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

January 31, 2021,

we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately

$14.3

million.

For the

three

months ending

January 31, 2021,

two

customers, both distributors, accounted for approximately

16%

and

12%

of net sales and had accounts receivable balances that accounted for

15%

and

19%,

respectively, of the total net accounts receivable balance at

January 31, 2021.

These same

two

distributors each accounted for

11%

of net sales for the

three

months ending

January 31, 2020,

while

one

other customer, a wireless carrier, accounted for

17%

of net sales for the

three

months ending

January 31, 2020.

The

two

distributors had accounts receivable balances that each accounted for

12%

of total net accounts receivable balance at

January 31, 2020.

Although these customers have been on-going major customers of the Company, the written agreements with these customers do

not

have any minimum purchase obligations and they could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.

XML

Note 9 - Segment Information

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

9

–

Segment information

We aggregate operating divisions into

two

reporting segments that have similar economic characteristics primarily in the following areas: (

1

) the nature of the product and services; (

2

) the nature of the production process; (

3

) the type or class of customer for their products and services; (

4

) the methods used to distribute their products or services; and (

5

) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of

January 31, 2021,

we had

two

segments – RF Connector and Cable Assembly (“RF Connector segment”) and Custom Cabling Manufacturing and Assembly (“Custom Cabling segment”).

The RF Connector segment consisted of

one

division and the Custom Cabling segment was composed of

four

divisions. The

five

divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly division (“RF Connector division”), Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech. While each segment has similar products and services, there was little overlapping of these services to their customer base. The biggest difference in segments is in the channels of sales: sales or product and services for the RF Connector segment were primarily through the distribution channel, while the Custom Cabling segment sales were through a combination of distribution and direct to the end customer.

Management identifies segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the RF Connector division constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment.

As reviewed by our chief operating decision maker, we evaluate the performance of each segment based on income or loss before income taxes. We charge depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, right of use assets, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole.

All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the

three

months ended

January 31, 2021

and

2020

(in thousands):

	Three Months Ended January 31,
	2021		2020
United States	$	9,379	$	12,173
Foreign Countries:
Canada		525		116
Mexico		-		5
All Other		98		120
		623		241
Totals	$	10,002	$	12,414

Net sales, income (loss) before provision (benefit) for income taxes and other related segment information for the

three

months ended

January 31, 2021

and

2020

are as follows (in thousands): 

	RF Connector		Custom Cabling
	and		Manufacturing and
	Cable Assembly		Assembly			Corporate			Total
2021
Net sales	$	3,575	$	6,427		$	-		$	10,002
Income (loss) before benefit for income taxes		453		(1,042	)		(8	)		(597	)
Depreciation and amortization		35		202			-			237
Total assets		7,667		15,202			17,766			40,635
2020
Net sales	$	3,189	$	9,225		$	-		$	12,414
Income (loss) before provision for income taxes		282		(281	)		11			12
Depreciation and amortization		42		213			-			255
Total assets		7,496		17,158			15,178			39,832

XML

Note 10 - Income Taxes

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

10

–

Income taxes

We use an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate, to determine its quarterly provision (benefit) for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

During the

first

quarter of fiscal

2021,

the Consolidated Appropriations Act was passed which allows for PPP loan expenses to be deducted on the Company's tax return. This resulted in a decrease to our deferred tax asset and income taxes payable of

$0.7

million. The provision or benefit for income taxes was

32%

and (

120%

) of (loss) income before income taxes for the

three

months ended

January 31, 2021 (

the “fiscal

2021

quarter”) and

2020

(the “fiscal

2020

quarter”), respectively. The change in the effective tax rate from the fiscal

2020

quarter to fiscal

2021

quarter was primarily driven by the disproportionate impact of various permanent book-tax differences with respect to our forecasted book income or loss in each period.

We had

$134,000

and

$107,000

of unrecognized tax benefits, inclusive of interest and penalties, as of

January 31, 2021

and

October 31, 2020,

respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of

$35,000

as of

January 31, 2021.

XML

Note 11 - Intangible Assets

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

11

–

Intangible assets

Intangible assets consist of the following (in thousands):

	January 31, 2021			October 31, 2020
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(256	)		(245	)
		167			178
Customer relationships (estimated lives 7 - 15 years)		5,058			5,058
Accumulated amortization		(2,483	)		(2,367	)
		2,575			2,691
Backlog (estimated life 1 - 2 years)		287			287
Accumulated amortization		(287	)		(266	)
		-			21
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(86	)		(77	)
		282			291
Totals	$	3,024		$	3,181
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the

three

months ended

January 31, 2021

and the year ended

October 31, 2020

was

$157,000

and

$692,000,

respectively. As of

January 31, 2021,

the weighted-average amortization period for the amortizable intangible assets is

5.66

years.

XML

Note 12 - Commitments

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note

12

–

Commitments

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of

1

year to

3

years, some of which include options to extend the leases for up to

5

years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling

$14,000

per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ending

January 31, 2021

were as follows (in thousands):

	Three Months Ended
	January 31, 2021
Operating lease cost	$	247
Short-term lease cost		-

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

	January 31, 2021			October 31, 2020
Supplemental Cash Flows Information
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	1,184		$	1,421
Weighted Average Remaining Lease Term
Operating leases (in months)		20.78			22.94
Weighted Average Discount Rate
Operating leases		3.54	%		3.54	%

Future minimum lease payments under non-cancellable leases as of

January 31, 2021

were as follows:

Year ended October 31,	Operating Leases
2021 (excluding three months ended January 31, 2021)	$	667
2022		532
2023		166
2024		-
2025		-
Thereafter		-
Total future minimum lease payments		1,365
Less imputed interest		(99	)
Total	$	1,266

Reported as of January 31, 2021	Operating Leases
Other current liabilities	$	789
Operating lease liabilities		477
Finance lease liabilities		-
Total	$	1,266

As of

January 31, 2021,

operating lease ROU asset was

$1.2

million and operating lease liability totaled

$1.3

million, of which

$789,000

is classified as current. There were

no

finance leases as of

January 31, 2021.

XML

Note 13 - Line of Credit and PPP Loans

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

13

–

Line of credit and PPP loans

In

November 2019,

we entered into an agreement for a revolving line of credit (“LOC”) in the amount of

$5.0

million. Amounts outstanding under the LOC shall bear interest at a rate of

2.0%

plus LIBOR Daily Floating Rate (“base interest rate”), with interest payable on the

first

day of each month. Borrowings under the LOC are secured by a security interest in certain assets of the Company. The LOC contains certain loan covenants. Failure to maintain the loan covenants

may

constitute an event of default, resulting in all outstanding amounts of principal and interest becoming immediately due and payable. All outstanding principal and interest is due and payable on

December 1, 2021.

On

December 30, 2020,

we closed the line of credit with

no

amounts outstanding.

In

May 2020

we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately

$2.8

million (“PPP Loans”). The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at Cables Unlimited). We anticipate that most of the PPP Loans will be eligible for forgiveness in accordance with the provisions of the CARES Act. To the extent

not

forgiven, the PPP Loans have a

two

-year term, a fixed interest rate of

1%,

and principal and interest payments are deferred for

six

months. As of

January 31, 2021,

the full amount of the PPP Loans was applied for forgiveness. Subsequent to

January 31, 2021,

the full amount of the PPP Loans has been forgiven and considered paid in full (including applicable interest).

Future minimum loan payments as of

January 31, 2021

were as follows:

Year ended October 31,	PPP Loans
2021 (excluding three months ended January 31, 2021)	$	1,575
2022		1,213
Total future minimum payments	$	2,788

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Note 14 - Cash Dividend and Declared Dividends

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Cash Dividend and Declared Dividends [Text Block]

Note

14

–

Cash dividend and declared dividends

We did

not

pay any dividends during the

three

months ended

January 31, 2021.

During the

three

months ended

January 31, 2020,

we paid dividends of

$0.02

per share for a total of

$193,000.

 

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Note 15 - Subsequent Events

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Subsequent Events [Text Block]

Note

15

–

Subsequent events

In

February 2021,

the full

$2.8

million of PPP Loans was forgiven and considered paid in full (including applicable interest) by the Small Business Administration.

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Significant Accounting Policies (Policies)

3 Months Ended

Jan. 31, 2021

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Our accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information

not

misleading. Information included in the consolidated balance sheet as of

October 31, 2020

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, 2020

included in our Annual Report on Form

10

-K (“Form

10

-K”) for the year ended

October 31, 2020

that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the

three

months ended

January 31, 2021

are

not

necessarily indicative of the results that

may

be expected for the year ending

October 31, 2021.

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.

Consolidation, Policy [Policy Text Block]

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of RF Industries, Ltd. and our

four

wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), and Schroff Technologies International, Inc. (“Schrofftech”). Schrofftech is a wholly-owned subsidiary that RF Industries, Ltd. acquired effective

November 1, 2019.

All references to the “Company” collectively refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech. All intercompany balances and transactions have been eliminated in consolidation.

Risks and Uncertainties [Policy Text Block]

Risks and uncertainties

In

March 2020,

the World Health Organization (the “WHO”) declared coronavirus (“COVID-

19”

) a pandemic emergency. The COVID-

19

pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The global impact of the outbreak has been rapidly evolving and certain jurisdictions, including those where we have operations, have also reacted by instituting quarantines, restrictions on travel, “shelter in place” rules, social distancing protocols and restrictions on types of business that

may

continue to operate. While we have been deemed an “essential” business, and therefore have been permitted to continue our operations, the impact of the COVID-

19

pandemic has affected both our operations and those of our customers. Our operations have been negatively affected by partial shutdowns of our facilities, by changes that we had to make on our operating methods and procedures, and by our reduced workforce as many of our employees stayed at home. Many of our customers and vendors have likewise had temporary closures of their facilities and have otherwise been impacted by changes in their industries. As a result, overall demand for our products has been reduced, and certain costs have increased. We have taken measures to protect the health and safety of our employees, and we continue to work with our customers and vendors to minimize potential disruptions in addressing the challenges posed by this global pandemic.

The extent of the impact of the COVID-

19

pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. The outbreak impacted our performance for the

three

months ended

January 31, 2021.

We continue to expect the decline caused by the economic slowdown to persist through the

second

quarter of

2021.

During the periods covered by this report, the operations of our

three

subsidiaries in the Northeast were affected as many of our employees stayed at home and as local customers shut down or otherwise delayed, deferred or cancelled orders for our products. Because of the impact that COVID-

19

had on our operations, in

May 2020

we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately

$2.8

million (“PPP Loans”). See Note

13

on discussions of the PPP Loans.

We considered the impact of the COVID-

19

related economic slowdown on our evaluation of goodwill impairment indicators as of

January 31, 2021.

Although

no

goodwill impairment indicators were identified, it is possible that impairments could emerge as the impact of the crisis becomes clearer, and those impairment losses could be material.

Fair Value Measurement, Policy [Policy Text Block]

Fair value measurement

We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. U.S. 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

January 31, 2021

and

October 31, 2020,

the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and the current portion of the PPP Loans approximated their carrying value due to their short-term nature. See Note

5

for discussion on the fair value of other current liabilities.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting standards

Recently issued accounting pronouncements

not

yet adopted:

In

June 2016,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016

-

13,

Financial Instruments—Credit Losses, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The guidance is effective for fiscal years beginning after

December 15, 2019.

In

November 2019,

the FASB issued ASU

2019

-

10,

Financial Instruments—Credit Losses (Topic

326

), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after

December 15, 2022.

Early adoption is permitted. We are currently evaluating the impact the adoption of this new standard will have on our consolidated financial statements.

Recently issued accounting pronouncements adopted:

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases. This ASU requires lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under the current GAAP. Under ASU

2016

-

02,

lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients. We adopted the standard as of

November 1, 2019,

the beginning of our fiscal

2020,

applying the modified retrospective method. We elected the package of practical expedients permitted under the transition guidance with the new standard, which among other things, allows us to carryforward the historical lease classification. We elected the policy which allows us to combine the nonlease components with their related lease components rather than separating, and the policy election to keep leases with an initial term of

12

months or less off of the balance sheet. Operating leases are included in our consolidated balance sheet as operating lease right of use (“ROU”) assets, other current liabilities, and operating lease liabilities. Finance leases are included in finance ROU assets, other current liabilities, and finance lease liabilities on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the duration of the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms

may

include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term and is recognized on the consolidated statements of operations. The adoption of the standard resulted in a material recognition of additional right of use assets and lease liabilities of approximately

$2.3

million and

$2.4

million, respectively, as of

November 1, 2019,

but did

not

materially affect our consolidated net income.

In

January 2017,

the FASB issued ASU

No.

2017

-

04,

Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step

2

from the goodwill impairment test. Under the amendments of this update, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The guidance also still gives entities the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. We adopted the standard as of

November 1, 2020,

the beginning of our fiscal

2021,

applying this prospectively. The adoption of the standard did

not

result in an impairment charge as of

January 31, 2021.

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Note 2 - Business Acquisition (Tables) - Schrofftech [Member]

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Cash consideration paid	$	4,000,000
Earn-out liability		1,249,000
Total purchase price	$	5,249,000

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Current assets	$	1,168,000
Fixed assets		58,000
Intangible assets		3,299,000
Goodwill		1,127,000
Non-interest bearing liabilities		(403,000	)
Net assets	$	5,249,000

XML

Note 3 - Inventories and Major Vendors (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	January 31, 2021		October 31, 2020
Raw materials and supplies	$	4,668	$	4,410
Work in process		278		196
Finished goods		4,073		3,980
Totals	$	9,019	$	8,586

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Note 4 - Other Current Assets (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Other Current Assets [Table Text Block]

	January 31, 2021		October 31, 2020
Prepaid taxes	$	924	$	-
Prepaid expense		591		393
Other		624		420
Totals	$	2,139	$	813

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Note 5 - Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	January 31, 2021		October 31, 2020
Wages payable	$	1,383	$	1,506
Accrued receipts		823		518
Other accrued expenses		411		549
Totals	$	2,617	$	2,573

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Description	Level 3
Earn-out liability	$	296

Description	Level 3
Earn-out liability	$	370

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Level 3
	January 31, 2021			October 31, 2020
Beginning balance	$	370		$	1,249
Change in value		(74	)		(879	)
Ending balance	$	296		$	370

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Note 6 - (Loss) Earnings Per Share (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three Months Ended January 31,
	2021		2020
Weighted average shares outstanding for basic (loss) earnings per share		9,864,689		9,564,533
Add effects of potentially dilutive securities-assumed exercise of stock options		-		308,803
Weighted average shares outstanding for diluted (loss) earnings per share		9,864,689		9,873,336

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Note 7 - Stock-based Compensation and Equity Transactions (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

	Three Months Ended January 31,
	2021			2020
Risk-free interest rate		0.39	%		1.57	%
Dividend yield		0.00	%		1.23	%
Expected life of the option (in years)		7.00			6.47
Volatility factor		51.94	%		49.14	%

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

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2020		789,179		$	4.66
Options granted		67,000		$	4.98
Options exercised		(118,189	)	$	3.26
Options cancelled		(91,793	)	$	5.88
Options outstanding at January 31, 2021		646,197		$	4.78
Options exercisable at January 31, 2021		298,781		$	4.85
Options vested and expected to vest at January 31, 2021		645,861		$	4.78

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Note 9 - Segment Information (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

	Three Months Ended January 31,
	2021		2020
United States	$	9,379	$	12,173
Foreign Countries:
Canada		525		116
Mexico		-		5
All Other		98		120
		623		241
Totals	$	10,002	$	12,414

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

	RF Connector		Custom Cabling
	and		Manufacturing and
	Cable Assembly		Assembly			Corporate			Total
2021
Net sales	$	3,575	$	6,427		$	-		$	10,002
Income (loss) before benefit for income taxes		453		(1,042	)		(8	)		(597	)
Depreciation and amortization		35		202			-			237
Total assets		7,667		15,202			17,766			40,635
2020
Net sales	$	3,189	$	9,225		$	-		$	12,414
Income (loss) before provision for income taxes		282		(281	)		11			12
Depreciation and amortization		42		213			-			255
Total assets		7,496		17,158			15,178			39,832

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Note 11 - Intangible Assets (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

	January 31, 2021			October 31, 2020
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(256	)		(245	)
		167			178
Customer relationships (estimated lives 7 - 15 years)		5,058			5,058
Accumulated amortization		(2,483	)		(2,367	)
		2,575			2,691
Backlog (estimated life 1 - 2 years)		287			287
Accumulated amortization		(287	)		(266	)
		-			21
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(86	)		(77	)
		282			291
Totals	$	3,024		$	3,181
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

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Note 12 - Commitments (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended
	January 31, 2021
Operating lease cost	$	247
Short-term lease cost		-

Lessee, Leases, Other Information [Table Text Block]

	January 31, 2021			October 31, 2020
Supplemental Cash Flows Information
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	1,184		$	1,421
Weighted Average Remaining Lease Term
Operating leases (in months)		20.78			22.94
Weighted Average Discount Rate
Operating leases		3.54	%		3.54	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year ended October 31,	Operating Leases
2021 (excluding three months ended January 31, 2021)	$	667
2022		532
2023		166
2024		-
2025		-
Thereafter		-
Total future minimum lease payments		1,365
Less imputed interest		(99	)
Total	$	1,266

Reported as of January 31, 2021	Operating Leases
Other current liabilities	$	789
Operating lease liabilities		477
Finance lease liabilities		-
Total	$	1,266

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Note 13 - Line of Credit and PPP Loans (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Maturities of Long-term Debt [Table Text Block]

Year ended October 31,	PPP Loans
2021 (excluding three months ended January 31, 2021)	$	1,575
2022		1,213
Total future minimum payments	$	2,788

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Note 1 - Unaudited Interim Condensed Consolidated Financial Statements (Details Textual) - USD ($) $ in Thousands	1 Months Ended
	May 31, 2020	Jan. 31, 2021	Oct. 31, 2020	Nov. 01, 2019
Operating Lease, Right-of-Use Asset		$ 1,184	$ 1,421
Operating Lease, Liability, Total		$ 1,266
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset				$ 2,300
Operating Lease, Liability, Total				$ 2,400
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Long-term Debt, Total	$ 2,800

XML

Note 2 - Business Acquisition (Details Textual) - Schrofftech [Member] - USD ($)			12 Months Ended
	Nov. 04, 2019	Nov. 01, 2019	Oct. 31, 2020	Jan. 31, 2021
Payments to Acquire Businesses, Gross	$ 4,000,000	$ 4,000,000
Business Combination, Contingent Consideration Arrangements, Target Period (Year)	2 years
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 2,400,000			$ 2,400,000
Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs			$ 151,000

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Note 2 - Business Acquisition - Components of the Purchase Price of Schroff Technologies International, Inc. (Details) - Schrofftech [Member] - USD ($)	Nov. 04, 2019	Nov. 01, 2019
Cash consideration paid	$ 4,000,000	$ 4,000,000
Earn-out liability		1,249,000
Total purchase price		$ 5,249,000

XML

Note 2 - Business Acquisition - Allocation of Estimated Purchase Price of Schroff Technologies International, Inc. (Details) - USD ($)	Jan. 31, 2021	Oct. 31, 2020	Nov. 01, 2019
Goodwill	$ 2,467,000	$ 2,467,000
Schrofftech [Member]
Current assets			$ 1,168,000
Fixed assets			58,000
Intangible assets			3,299,000
Goodwill			1,127,000
Non-interest bearing liabilities			(403,000)
Net assets			$ 5,249,000

XML

Note 3 - Inventories and Major Vendors - Inventories (Details) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
Raw materials and supplies	$ 4,668	$ 4,410
Work in process	278	196
Finished goods	4,073	3,980
Totals	$ 9,019	$ 8,586

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Note 4 - Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
Prepaid taxes	$ 924
Prepaid expense	591	393
Other	624	420
Totals	$ 2,139	$ 813

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Note 5 - Accrued Expenses and Other Current Liabilities (Details Textual) - USD ($)	Jan. 31, 2021	Nov. 04, 2019
Other Current Liabilities [Member]
Business Combination, Contingent Consideration, Liability, Current	$ 296,000
Schrofftech [Member]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 2,400,000	$ 2,400,000

XML

Note 5 - Accrued Expenses and Other Current Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
Wages payable	$ 1,383	$ 1,506
Accrued receipts	823	518
Other accrued expenses	411	549
Totals	$ 2,617	$ 2,573

XML

Note 5 - Accrued Expenses and Other Current Liabilities - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Earn-out liability	$ 296	$ 370

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Note 5 - Accrued Expenses and Other Current Liabilities - Level 3 Transactions (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 31, 2021	Oct. 31, 2020
Beginning balance	$ 370	$ 1,249
Change in value	(74)	(879)
Ending balance	$ 296	$ 370

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Note 6 - (Loss) Earnings Per Share (Details Textual) - shares	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Out-of-the-money Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	331,338	392,838

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Note 6 - (Loss) Earnings Per Share - Computation of Basic and Diluted Weighted Average Shares Outstanding (Details) - shares	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Basic (in shares)	9,864,689	9,564,533
Add effects of potentially dilutive securities-assumed exercise of stock options (in shares)		308,803
Weighted average shares outstanding for diluted (loss) earnings per share (in shares)	9,864,689	9,873,336

XML

Note 7 - Stock-based Compensation and Equity Transactions (Details Textual) - USD ($)									3 Months Ended
	Jan. 12, 2021	Dec. 31, 2020	Sep. 15, 2020	Jul. 31, 2020	Jun. 30, 2020	Jan. 09, 2020	Dec. 06, 2019	Nov. 04, 2019	Jan. 31, 2021	Jan. 31, 2020	Nov. 01, 2020	Nov. 01, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term (Year)									6 years 109 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term (Year)									4 years 197 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term (Year)									6 years 109 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value									$ 1,077,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value									531,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value									1,069,000
Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expense									123,000	$ 187,000
Share-based Payment Arrangement, Nonemployee [Member]
Nonemployee Director, Annual Compensation											$ 50,000	$ 50,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Value								$ 25,000	$ 25,000
Share Price, 20 Day Average (in dollars per share)								$ 6.36	$ 4.34
Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)									$ 2.46	$ 3.13
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total									$ 708,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)									3 years 335 days
Restricted Stock [Member]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total									$ 461,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)									1 year 109 days
One Employee [Member] | Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)					10,000		50,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares (in shares)					2,500		10,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Number to Vest Each Year (in shares)					2,500		10,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)					3 years		4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)					10 years		10 years
Three Employees [Member]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture, Total (in shares)						12,075
Share-based Payment Arrangement, Expense						$ 77,000
Two Employees [Member] | Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)						3,241
Five Employees [Member] | Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)						77,000
Five Employees [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)						38,500
Five Employees [Member] | Restricted Stock and Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)						4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)						10 years
Five Employees [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 9, 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage						25.00%
Five Employees [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 12, 2022 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	25.00%
One Manager and Three Officers [Member] | Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)	67,000
One Manager and Three Officers [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	33,500
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)	10 years
Five Non-employee Directors [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Nonemployee [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Per Director (in shares)								3,270	5,757
New Director [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Nonemployee [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Per Director (in shares)		3,334
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Value		$ 25,000
Share Price, 20 Day Average (in dollars per share)		$ 5.31
Non-employee Directors and Chairperson of Committee on Board [Member]
Annual Payable, Cash, Additional Compensation									$ 15,000
Stock Issued During Period, Shares, Per Person, Issued For Services (in shares)				279
Shares Issued, Price Per Share (in dollars per share)				$ 4.47
Non-employee Directors and Chairperson of Committee on Board [Member] | Restricted Stock [Member]
Share Price, 20 Day Average (in dollars per share)			$ 4.34
Stock Issued During Period, Shares, Per Person, Issued For Services (in shares)			3,454
Annual Payable, Shares, Additional Compensation			$ 15,000

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Note 7 - Stock-based Compensation and Equity Transactions - Assumptions (Details)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Risk-free interest rate	0.39%	1.57%
Dividend yield	0.00%	1.23%
Expected life of the option (in years) (Year)	7 years	6 years 171 days
Volatility factor	51.94%	49.14%

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Note 7 - Stock-based Compensation and Equity Transactions - Options Outstanding (Details)	3 Months Ended
	Jan. 31, 2021 $ / shares shares
Outstanding, shares (in shares) | shares	789,179
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 4.66
Options granted, shares (in shares) | shares	67,000
Options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 4.98
Options exercised, shares (in shares) | shares	(118,189)
Options exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 3.26
Options cancelled, shares (in shares) | shares	(91,793)
Options canceled or expired, weighted average exercise price (in dollars per share) | $ / shares	$ 5.88
Options outstanding, shares (in shares) | shares	646,197
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 4.78
Options exercisable, shares (in shares) | shares	298,781
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 4.85
Options vested and expected to vest, shares (in shares) | shares	645,861
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares	$ 4.78

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Note 8 - Concentrations of Credit Risk (Details Textual) $ in Millions	3 Months Ended
	Jan. 31, 2021 USD ($)	Jan. 31, 2020
Cash, Uninsured Amount	$ 14.3
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Number of Customers	2	2
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Distributors One [Member]
Concentration Risk, Percentage	16.00%	11.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Distributors Two [Member]
Concentration Risk, Percentage	12.00%	11.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Carrier One [Member]
Number of Customers		1
Concentration Risk, Percentage		17.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Number of Customers	2	2
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributors One [Member]
Concentration Risk, Percentage	15.00%	12.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributors Two [Member]
Concentration Risk, Percentage	19.00%	12.00%

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Note 9 - Segment Information (Details Textual)	3 Months Ended
	Jan. 31, 2021
Number of Reportable Segments	2

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Note 9 - Segment Information - Sales by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Net sales	$ 10,002	$ 12,414
UNITED STATES
Net sales	9,379	12,173
CANADA
Net sales	525	116
MEXICO
Net sales		5
All Other Foreign Countries [Member]
Net sales	98	120
Non-US [Member]
Net sales	$ 623	$ 241

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Note 9 - Segment Information - Net Sales, Income Before Provision for Income Taxes and Other Related Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Oct. 31, 2020
Net sales	$ 10,002	$ 12,414
Income (loss) before (benefit) provision for income taxes	(597)	12
Depreciation and amortization	237	255
Total assets	40,635	39,832	$ 40,822
Corporate, Non-Segment [Member]
Net sales
Income (loss) before (benefit) provision for income taxes	(8)	11
Depreciation and amortization
Total assets	17,766	15,178
RF Connector and Cable Assembly [Member] | Operating Segments [Member]
Net sales	3,575	3,189
Income (loss) before (benefit) provision for income taxes	453	282
Depreciation and amortization	35	42
Total assets	7,667	7,496
Custom Cabling Manufacturing and Assembly [Member] | Operating Segments [Member]
Net sales	6,427	9,225
Income (loss) before (benefit) provision for income taxes	(1,042)	(281)
Depreciation and amortization	202	213
Total assets	$ 15,202	$ 17,158

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Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Oct. 31, 2020
Increase (Decrease) in Deferred Tax Asset and Income Taxes Payable	$ 700,000
Effective Income Tax Rate Reconciliation, Percent, Total	32.00%	(120.00%)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 134,000		$ 107,000
Unrecognized Tax Benefits, Ending Balance	$ 35,000

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Note 11 - Intangible Assets (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Jan. 31, 2021	Oct. 31, 2020
Amortization of Intangible Assets, Total	$ 157,000	$ 692,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (Year)	5 years 240 days

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Note 11 - Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Jan. 31, 2021	Oct. 31, 2020
Amortizable intangible assets, net	$ 3,024	$ 3,181
Non-amortizable intangible assets, trademarks	1,174	1,174
Noncompete Agreements [Member]
Amortizable intangible assets, gross	423	423
Accumulated amortization	(256)	(245)
Amortizable intangible assets, net	167	178
Customer Relationships [Member]
Amortizable intangible assets, gross	5,058	5,058
Accumulated amortization	(2,483)	(2,367)
Amortizable intangible assets, net	2,575	2,691
Order or Production Backlog [Member]
Amortizable intangible assets, gross	287	287
Accumulated amortization	(287)	(266)
Amortizable intangible assets, net		21
Patents [Member]
Amortizable intangible assets, gross	368	368
Accumulated amortization	(86)	(77)
Amortizable intangible assets, net	$ 282	$ 291

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Note 11 - Intangible Assets - Intangible Assets (Details) (Parentheticals)	3 Months Ended	12 Months Ended
	Jan. 31, 2021	Oct. 31, 2020
Noncompete Agreements [Member]
Estimated life (Year)	5 years	5 years
Customer Relationships [Member] | Minimum [Member]
Estimated life (Year)	7 years	7 years
Customer Relationships [Member] | Maximum [Member]
Estimated life (Year)	15 years	15 years
Order or Production Backlog [Member] | Minimum [Member]
Estimated life (Year)	1 year	1 year
Order or Production Backlog [Member] | Maximum [Member]
Estimated life (Year)	2 years	2 years
Patents [Member] | Minimum [Member]
Estimated life (Year)	10 years	10 years
Patents [Member] | Maximum [Member]
Estimated life (Year)	14 years	14 years

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Note 12 - Commitments (Details Textual) - USD ($)	Jan. 31, 2021	Oct. 31, 2020
Lessee, Operating Lease, Renewal Term (Year)	5 years
Operating Lease, Right-of-Use Asset	$ 1,184,000	$ 1,421,000
Operating Lease, Liability, Total	1,266,000
Operating Lease, Liability, Current	789,000	$ 874,000
Finance Lease, Liability, Total	0
Other Current Liabilities [Member]
Operating Lease, Liability, Current	789,000
K and K Unlimited [Member]
Lessee, Operating Lease, Monthly Rent	$ 14,000
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	1 year
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	3 years

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Note 12 - Commitments - Operating Lease Expense (Details) $ in Thousands	3 Months Ended
	Jan. 31, 2021 USD ($)
Operating lease cost	$ 247
Short-term lease cost

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Note 12 - Commitments - Other Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 31, 2021	Oct. 31, 2020
Right of use assets obtained in exchange for lease obligations operating leases	$ 1,184	$ 1,421
Weighted Average Remaining Lease Term, Operating leases (months) (Month)	1 year 263 days	1 year 328 days
Weighted Average Discount Rate, Operating leases	3.54%	3.54%

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Note 12 - Commitments - Future Minimum Lease Payments (Details) - USD ($)	Jan. 31, 2021	Oct. 31, 2020
2021 (excluding three months ended January 31, 2021)	$ 667,000
2022	532,000
2023	166,000
2024
2025
Thereafter
Total future minimum lease payments	1,365,000
Less imputed interest	(99,000)
Total	1,266,000
Other current liabilities	789,000	$ 874,000
Operating lease liabilities	477,000	$ 635,000
Finance lease liabilities	0
Total	1,266,000
Other Current Liabilities [Member]
Other current liabilities	$ 789,000

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Note 13 - Line of Credit and PPP Loans (Details Textual) - USD ($) $ in Thousands	1 Months Ended
	May 31, 2020	Nov. 30, 2019	Dec. 30, 2020
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Long-term Debt, Total	$ 2,800
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 5,000
Long-term Line of Credit, Total			$ 0
Revolving Credit Facility [Member] | LIBOR Daily Floating Rate [Member]
Debt Instrument, Basis Spread on Variable Rate		2.00%

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Note 13 - Line of Credit and PPP Loans - Future Minimum Loan Payments (Details) - Paycheck Protection Program CARES Act [Member] $ in Thousands	Jan. 31, 2021 USD ($)
2021 (excluding three months ended January 31, 2021)	$ 1,575
2022	1,213
Total future minimum payments	$ 2,788

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Note 14 - Cash Dividend and Declared Dividends (Details Textual) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Payments of Ordinary Dividends, Common Stock	$ 0	$ 193,000
Common Stock, Dividends, Per Share, Cash Paid (in dollars per share)		$ 0.02

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Note 15 - Subsequent Events (Details Textual) $ in Millions	1 Months Ended
	Feb. 28, 2021 USD ($)
Paycheck Protection Program CARES Act [Member] | Subsequent Event [Member]
Debt Instrument, Forgiveness Amount	$ 2.8