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, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-13301

RF INDUSTRIES, LTD.

(Exact name of registrant as specified in its charter)

Nevada	88-0168936
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
16868 Via Del Campo Court, Suite 200 San Diego, California	92127
(Address of principal executive offices)	(Zip Code)
(858) 549-6340
(Registrant’s telephone number, including area code) 7610 Miramar Road, Bldg. 6000, San Diego, CA 92126-4202 (Former address)

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, 2023 was 10,291,067.

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,
	2023		2022
	(Unaudited)		(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3,770	$	4,532
Trade accounts receivable, net of allowance for doubtful accounts of $271 and $126, respectively		13,905		14,812
Inventories		20,937		21,054
Other current assets		3,184		5,849
TOTAL CURRENT ASSETS		41,796		46,247
Property and equipment:
Equipment and tooling		4,622		4,497
Furniture and office equipment		4,452		3,447
		9,074		7,944
Less accumulated depreciation		4,881		4,771
Total property and equipment, net		4,193		3,173
Operating lease right of use assets, net		12,708		13,480
Goodwill		8,085		8,085
Amortizable intangible assets, net		14,865		15,296
Non-amortizable intangible assets		1,174		1,174
Deferred tax assets		1,952		1,816
Other assets		295		295
TOTAL ASSETS	$	85,140	$	89,566

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,
	2023		2022
	(Unaudited)		(Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	4,849	$	5,652
Accrued expenses		5,568		8,814
Deferred revenue		1,133		-
Current portion of Term Loan		2,424		2,424
Current portion of operating lease liabilities		1,728		1,887
Income taxes payable		1,042		759
TOTAL CURRENT LIABILITIES		16,744		19,536
Operating lease liabilities		14,866		15,025
Term Loan, net of debt issuance cost		12,532		13,136
TOTAL LIABILITIES		44,142		47,697
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,291,067 and 10,193,287 shares issued and outstanding at January 31, 2023 and October 31, 2022, respectively		103		102
Additional paid-in capital		25,408		25,118
Retained earnings		15,487		16,649
TOTAL STOCKHOLDERS' EQUITY		40,998		41,869
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	85,140	$	89,566

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,
	2023			2022
Net sales	$	18,343		$	16,918
Cost of sales		13,257			12,834
Gross profit		5,086			4,084
Operating expenses:
Engineering		961			454
Selling and general		5,294			3,992
Total operating expenses		6,255			4,446
Operating loss		(1,169	)		(362	)
Other (expense) income		(153	)		5
Loss before provision for income taxes		(1,322	)		(357	)
Benefit from income taxes		(160	)		(80	)
Consolidated net loss	$	(1,162	)	$	(277	)
Loss per share:
Basic	$	(0.11	)	$	(0.03	)
Diluted	$	(0.11	)	$	(0.03	)
Weighted average shares outstanding:
Basic		10,222,540			10,067,186
Diluted		10,222,540			10,067,186

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, 2023
						Additional
	Common Stock					Paid-in			Retained
	Shares			Amount		Capital			Earnings			Total
Balance, November 1, 2022		10,193,287		$	102	$	25,118		$	16,649		$	41,869
Exercise of stock options		45,000			-		85			-			85
Stock-based compensation expense		-			-		212			-			212
Issuance of restricted stock		54,092			1		-			-			1
Tax withholding related to vesting of restricted stock		(1,312	)		-		(7	)		-			(7	)
Consolidated net loss		-			-		-			(1,162	)		(1,162	)
Balance, January 31, 2023		10,291,067		$	103	$	25,408		$	15,487		$	40,998

	For the Three Months ended January 31, 2022
						Additional
	Common Stock					Paid-In			Retained
	Shares			Amount		Capital			Earnings			Total
Balance, November 1, 2021		10,058,571		$	101	$	24,301		$	15,201		$	39,603
Stock-based compensation expense		-			-		139			-			139
Issuance of restricted stock		39,666			-		-			-			-
Tax withholding related to vesting of restricted stock		(2,062	)		-		(13	)		-			(13	)
Consolidated net loss		-			-		-			(277	)		(277	)
Balance, January 31, 2022		10,096,175		$	101	$	24,427		$	14,924		$	39,452

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,
	2023			2022
OPERATING ACTIVITIES:
Consolidated net loss	$	(1,162	)	$	(277	)
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Bad debt expense		64			(4	)
Depreciation and amortization		541			180
Stock-based compensation expense		212			139
Amortization of debt issuance cost		2			-
Tax payments related to shares cancelled for vested restricted stock awards		(7	)		(13	)
Deferred income taxes		(136	)		23
Changes in operating assets and liabilities:
Trade accounts receivable		843			3,013
Inventories		117			(2,299	)
Other current assets		2,665			(693	)
Right of use assets		383			(15	)
Accounts payable		(803	)		(122	)
Accrued expenses		(3,246	)		625
Deferred revenue		1,133			-
Income taxes payable		283			-
Net cash provided by operating activities		889			557
INVESTING ACTIVITIES:
Capital expenditures		(1,130	)		(103	)
Net cash used in investing activities		(1,130	)		(103	)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options		85			-
Term Loan payments		(606	)		-
Net cash used in financing activities		(521	)		-
Net (decrease) increase in cash and cash equivalents		(762	)		454
Cash and cash equivalents, beginning of period		4,532			13,053
Cash and cash equivalents, end of period	$	3,770		$	13,507
Supplemental cash flow information – income taxes paid	$	-		$	156

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 (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information not misleading. Information included in the consolidated balance sheet as of October 31, 2022 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, 2022 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2022 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the three months ended January 31, 2023 are not necessarily indicative of the results that may be expected for the year ending October 31, 2023. 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 for the periods ended on or before January 31, 2022 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”). The unaudited condensed consolidated financial statements for the three months ended January 31, 2023 include the accounts of RF Industries, Ltd. and our five wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Inc. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”). Microlab is a wholly-owned subsidiary that RF Industries, Ltd. acquired on March 1, 2022. For periods on or before January 31, 2022, references herein to the “Company”, “we”, “ us”, or “ our”  shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech and for all periods after January 31, 2022, reference to the “Company”, “ we”, “ us”, or “our” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech and Microlab. All intercompany balances and transactions have been eliminated in consolidation.

Fair value measurement

We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair-value hierarchy:

Level 1— Quoted prices for identical instruments in active markets;

Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

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

As of January 31, 2023 and October 31, 2022, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued 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 SEC, 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 unaudited condensed consolidated financial statements.

7

Note 2 – Business acquisition

On March 1, 2022, the Company completed its purchase (the “Purchase Transaction”) of 100% of the issued and outstanding membership interests of Microlab, a New Jersey limited liability company, from Wireless Telecom Group, Inc, a New Jersey corporation (the “Seller”) pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated December 16, 2021, with the Seller. The consideration for the Purchase Transaction was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. The Company funded $17 million of the cash purchase price from the funds obtained under the Term Loan (as defined in Note 11) and paid the remaining amount of the cash purchase price with cash on hand. During the three months ended July 31, 2022, we paid an additional $225,000 in purchase consideration as a result of certain post-closing adjustments relating to net working capital.

The acquisition was accounted for 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. Microlab designs and manufactures high-performance radio frequency and microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. The Microlab acquisition further diversifies and strengthens the portfolio of products that we offer to the market and allows us to provide a more complete solution to our customers in key market segments. All manufacturing operations are performed at Microlab’s facilities in New Jersey.

The acquisition closed on March 1, 2022, accordingly, subsequent to March 1, 2022, Microlab’s financial results have been included in the results of the RF Connector and Cable Assembly (“RF Connector”) segment as well as in the consolidated statements of operations. The Company expects the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives ranging from one to 15 years. Total costs, as of October 31, 2022, related to the acquisition of Microlab were approximately $1.3 million and have been expensed as incurred and categorized in selling and general expenses.

The following table summarizes the components of the purchase price at fair values at March 1, 2022:

Cash consideration paid at closing	$	24,250,000
Post-closing adjustment		225,000
Total consideration transferred	$	24,475,000

The following table summarizes the allocation of the preliminary purchase price at fair value at March 1, 2022:

Current assets	$	6,620,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,617,000
Non-interest bearing liabilities		(1,800,000	)
Net assets acquired at fair value	$	24,475,000

The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if both acquisitions had occurred as of the beginning of the earliest period presented. Pro forma data is subject to various assumptions and estimates and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results.

8

Unaudited pro forma financial information assuming the acquisition of Microlab as of November 1, 2021 is presented in the following table:

	Three Months Ended January 31,
	2023			2022
Revenue	$	18,343		$	21,969
Net (loss) income		(1,162	)		839
Earnings per share
Basic	$	(0.11	)	$	0.08
Diluted	$	(0.11	)	$	0.08
Basic		10,222,540			10,067,186
Diluted		10,222,540			10,215,815

Note 3 – 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, 2023, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $2.6 million.

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

	Three Months Ended January 31,
	2023			2022
Wireless provider		15	%		32	%

For the three months ended January 31, 2023, one wireless carrier customer accounted for 15% of net sales and 16% of total net accounts receivable balance. For the three months ended January 31, 2022, one wireless carrier customer accounted for 32% of net sales and 37% of total net accounts receivable balance. Although this customer has been a significant customer of the Company, the written agreements with this customer do not have any minimum purchase obligations and this customer could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from this customer or the loss of this customer could significantly reduce our future revenues and profits.

Note 4 – 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, 2023		October 31, 2022
Raw materials and supplies	$	14,823	$	15,238
Work in process		615		439
Finished goods		5,499		5,377
Totals	$	20,937	$	21,054

For the three months ended January 31, 2023, two vendors accounted for 12% and 10% of inventory purchases. For the three months ended January 31, 2022, two vendors accounted for 30% and 10% of inventory purchases. We have arrangements with these vendors to purchase products based on purchase orders that we periodically issue.

9

Note 5 – Other current assets

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

	January 31, 2023		October 31, 2022
Employee retention credit ("ERC")	$	396	$	1,636
Prepaid expense		1,188		972
Reimbursement for tenant improvements		1,321		2,810
Other		279		431
Totals
	$	3,184	$	5,849

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act), eligible employers are able to claim an ERC, which is a refundable tax credit against certain employment taxes. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. The period assessed for eligibility of the ERC is on a calendar year basis. As of January 31, 2023, the remaining portion of the ERC that we have not yet received is included as other receivables in other current assets.

Note 6 – Accrued expenses and other current liabilities

Accrued expenses consist of the following (in thousands):

	January 31, 2023		October 31, 2022
Wages payable	$	2,400	$	3,634
Accrued receipts		998		2,136
Other accrued expenses		1,712		1,847
Tenant improvements payable		458		1,197
Totals	$	5,568	$	8,814

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

Note 7 – Loss per share

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. During the three months ended January 31, 2023 and 2022, we reported a net loss, and in periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect. Potentially issuable securities that are out-of-the-money totaled 749,488 and 459,889 shares for the three months ended January 31, 2023 and 2022, 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,
	2023		2022
Weighted average shares outstanding for basic earnings per share		10,222,540		10,067,186
Add effects of potentially dilutive securities-assumed exercise of stock options		-		-
Weighted average shares outstanding for diluted earnings per share		10,222,540		10,067,186

10

Note 8 – Stock-based compensation and equity transactions

On January 10, 2022, we granted a total of 39,666 shares of restricted stock and 106,001 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 10, 2023; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. All incentive stock options expire 10 years from the date of grant.

On January 10, 2023, we granted a total of 54,092 shares of restricted stock and 108,181 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 10, 2024; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. Also on January 10, 2023, we granted another manager 50,000 incentive stock options. These options vested in five equal installments on the anniversaries of January 10, 2023. All incentive stock options expire 10 years from the date of grant.

No other shares or options were granted to company employees during the three months ended January 31, 2023 and 2022.

The weighted average fair value of employee stock options that were granted during the three months ended January 31, 2023 and 2022 was estimated to be $3.21 and $3.84, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended January 31,
	2023			2022
Risk-free interest rate		3.76	%		1.23	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (years)	7.00			7.00
Volatility factor		54.30	%		53.35	%

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 2023 and 2022 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, 2022. A summary of the status of the options granted under our stock option plans as of January 31, 2023 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, 2022		691,005		$	5.87
Options granted		158,181		$	5.46
Options exercised		(45,000	)	$	1.90
Options cancelled		-		$	-
Options outstanding at January 31, 2023		804,186		$	6.01
Options exercisable at January 31, 2023		385,216		$	6.69
Options vested and expected to vest at January 31, 2023		798,697		$	6.02

Weighted average remaining contractual life of options outstanding as of January 31, 2023: 7.18 years

Weighted average remaining contractual life of options exercisable as of January 31, 2023: 6.09 years

Weighted average remaining contractual life of options vested and expected to vest as of January 31, 2023: 7.18 years

Aggregate intrinsic value of options outstanding at January 31, 2023: $341,674

Aggregate intrinsic value of options exercisable at January 31, 2023: $124,696

Aggregate intrinsic value of options vested and expected to vest at January 31, 2023: $337,451

As of January 31, 2023, $1,096,683 and $777,069 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 2.83 and 1.32 years, respectively.

11

Stock option expense

During the three months ended January 31, 2023 and 2022, stock-based compensation expense totaled $212,000 and $139,000, respectively, and was classified in selling and general expense.

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, 2023, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

The RF Connector segment consists of two divisions and the Custom Cabling segment consists of four divisions. The six 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, Schrofftech, and Microlab. 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 user.

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 and Microlab divisions constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment.

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 years ended January 31, 2023 and 2022 (in thousands):

	Three Months Ended January 31,
	2023		2022
United States	$	16,104	$	16,418
Foreign Countries:
Canada		584		297
Italy		1,098		-
Mexico		1		25
All Other		556		178
		2,239		500
Totals	$	18,343	$	16,918

12

Net sales, income (loss) before benefit for income taxes and other related segment information for the three months ended January 31, 2023 and 2022 are as follows (in thousands):

	RF Connector		Custom Cabling
	and		Manufacturing and
2023	Cable Assembly		Assembly			Corporate			Total
Net sales	$	9,057	$	9,286		$	-		$	18,343
Income (loss) before benefit for income taxes		246		(921	)		(647	)		(1,322	)
Depreciation and amortization		394		147			-			541
Total assets		50,973		24,966			9,201			85,140
2022
Net sales	$	3,923	$	12,995		$	-		$	16,918
Income (loss) before provision for income taxes		56		314			(727	)		(357	)
Depreciation and amortization		37		143			-			180
Total assets		7,572		24,635			17,529			49,736

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 the 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.

We recorded income tax benefits of $160,000 and $80,000 for the three months ended January 31, 2023 and 2022, respectively. The effective tax rate was 12.3% for the three months ended January 31, 2023, compared to 22.3% for the three months ended January 31, 2022 was primarily driven by the increased benefit from research and development tax credits.

We had $199,000 and $121,000 of unrecognized tax benefits, inclusive of interest and penalties, as of January 31, 2023 and October 31, 2022, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $195,000 as of January 31, 2023.

13

Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	January 31, 2023			October 31, 2022
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(345	)		(334	)
		78			89
Customer relationships (estimated lives 7 - 15 years)		6,058			6,058
Accumulated amortization		(3,170	)		(3,074	)
		2,888			2,984
Backlog (estimated life 1 - 2 years)		327			327
Accumulated amortization		(323	)		(313	)
		4			14
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(151	)		(143	)
		217			225
Tradename (estimated life 15 years)		1,700			1,700
Accumulated amortization		(104	)		(76	)
		1,596			1,624
Proprietary Technology (estimated life 10 years)		11,100			11,100
Accumulated amortization		(1,018	)		(740	)
		10,082			10,360
Totals	$	14,865		$	15,296
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the three months ended January 31, 2023 and the year ended October 31, 2022 was $431,000 and $1,282,000, respectively. As of January 31, 2023, the weighted-average amortization period for the amortizable intangible assets is 9.25 years.

Note 12 – Commitments

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to three years, some of which include options to extend the leases for up to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 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, 2023 were as follows (in thousands):

	Three Months Ended
	January 31, 2023
Operating lease cost	$	762

14

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

	January 31, 2023			October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	-		$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		113.94			113.72
Weighted Average Discount Rate
Operating leases		3.75	%		3.75	%

Future minimum lease payments under non-cancellable leases as of January 31, 2023 were as follows:

Year ending October 31,	Operating Leases
2023 (excluding three months ended January 31, 2023)	$	1,810
2024		1,991
2025		1,796
2026		1,835
2027		1,874
Thereafter		10,618
Total future minimum lease payments		19,924
Less imputed interest		(3,330	)
Total	$	16,594

Reported as of January 31, 2023	Operating Leases
Other current liabilities	$	1,728
Operating lease liabilities		14,866
Total	$	16,594

As of January 31, 2023, operating lease ROU asset was $12.7 million and operating lease liability totaled $16.5 million, of which $1.7 million is classified as current. There were no finance leases as of January 31, 2023.

The Schrofftech facilities, consisting of two buildings for a total of 10,700 square feet, are leased by RF Industries, Ltd. under two leases that were renewed effective February 1, 2022 for two years expiring January 31, 2024. The aggregate monthly rental payment under the new leases currently is $6,720 per month.

Note 13 – Term Loan and Line of credit

In February 2022, we entered into an agreement for a revolving line of credit (the “Revolving Credit Facility”) in the amount of $3.0 million and a $17.0 million term loan (the “Term Loan”, and together with the Revolving Credit Facility, the “Credit Facility”). Amounts outstanding under the Revolving Credit Facility shall bear interest at a rate of 2.0% plus the Bloomberg Short-Term Bank Yield Index Rate (“base interest rate”). The maturity date of the Revolving Credit Facility is March 1, 2024. The Company drew down the entire amount of the Term Loan on March 1, 2022. The primary interest rate for Term Loan is 3.76% per annum. The maturity date of the Term Loan is March 1, 2027.

Borrowings under the Credit Facility are secured by a security interest in certain assets of the Company and contains certain loan covenants. The Credit Facility requires the maintenance of certain financial covenants, including: (i) consolidated debt to EBITDA ratio not to exceed 3.00 to 1.00; (ii) consolidated fixed charge coverage ratio of at least 1.25 to 1.00; and (iii) consolidated minimum EBITDA of at least $600,000 for the discrete quarter ending January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants.

As of January 31, 2023, we have borrowed $14,980,000 under the Term Loan while we have not borrowed any amounts under the Revolving Credit Facility.

15

Note 14 – Cash dividend and declared dividends

We did not pay any dividends during the three months ended January 31, 2023, nor did we pay any dividends during the three months ended January 31, 2022.

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 our 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 we believe that the expectations reflected in the forward-looking statements are reasonable, we 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. We are 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 our 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 our business, including without limitation the disclosures made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the caption “Risk Factors,” and the audited consolidated financial statements and related notes included in our Annual Report filed on Form 10-K for the year ended October 31, 2022 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.

16

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 high-performance components such as RF connectors and adapters, dividers, directional couplers and filters, coaxial cables, data cables, wire harnesses, fiber optic cables, custom cabling, energy-efficient cooling systems and integrated small cell enclosures. Through our manufacturing and production facilities, we provide a wide selection of interconnect products and solutions primarily to telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers and manufacturers and to various original equipment manufacturers (“OEMs”) in several market segments. We also design, engineer, manufacture and sell energy-efficient cooling systems and integrated small cell solutions and related components.

We 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 RF connector, adapter, coupler, divider, and cable products, including coaxial passives and cable assemblies that are 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 4G and 5G small cell integrated enclosures.

For the three months ended January 31, 2023, approximately half 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 51% 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 49% of total sales for the three months ended January 31, 2023. 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.

We recently moved into new corporate headquarters located at 16868 Via Del Campo Court, Suite 200, San Diego, CA 92127. Our phone number remains (858) 549-6340.

Liquidity and Capital Resources

Historically, we have been able to fund our liquidity and other capital requirements from funds we generated from operations. On March 1, 2022, we acquired Microlab. In connection with the purchase of Microlab, we entered into the Credit Facility and borrowed the full $17 million amount available under the Term Loan. As of the date of this report, we have not borrowed any amounts under the Revolving Credit Facility. We believe that our existing assets and the cash we expect to generate from operations (including those of Microlab) and from our current backlog of unfulfilled orders, will be sufficient to fund our liquidity needs during the next 12 months from the date of this filing based on the following:

As of January 31, 2023, we had a total of $3.8 million of cash and cash equivalents compared to a total of $4.5 million of cash and cash equivalents as of October 31, 2022. As of January 31, 2023, we had working capital of $25.1 million and a current ratio of approximately 2.5:1 with current assets of $41.8 million and current liabilities of $16.7 million. On March 1, 2022, we used $7.3 million of our cash to fund a portion of the purchase price paid to acquire Microlab. Nevertheless, we believe that the amount of cash remaining, plus the amount available to us under the Revolving Credit Facility, will be sufficient to fund our anticipated liquidity needs.

17

As of January 31, 2023, we had $24.5 million of backlog, compared to $27.8 million as of October 31, 2022. The decrease in backlog relates primarily to shipments made against orders for our hybrid fiber cables. 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, 2023, we generated $0.9 million of cash in our operating activities. This net inflow of cash is primarily related to an increase in other current assets of $2.7 million, the increase in deferred revenue of $1.1 million, the collections of accounts receivable of $0.8 million, $0.5 million from depreciation and amortization, and $0.2 million from stock-based compensation expense. The cash usage was primarily due to accrued expenses of $3.2 million, payments made to our accounts payable $0.8 million and our net loss of $1.2 million. The cash generated by other current assets represents $2.7 million which primarily consists of $1.5 million of reimbursement for tenant improvements and $1.2 million received from ERC.

During the three months ended January 31, 2023, we also spent $1.1 million on capital expenditures, and $0.6 million in Term Loan payments. The cash used in operating activities and the amounts spent on capital expenditures were partially offset by $0.1 million of proceeds that we received from the exercise of stock options.

Our goal to expand and grow our business both organically and through acquisitions may require material additional capital equipment. In the past, we have purchased all additional equipment, or financed some of our equipment and furnishings requirements through capital leases. At this time, we have not identified any additional capital equipment purchases that would require significant additional leasing or capital expenditures during the next 12 months. We also believe that based on our current financial condition, our current backlog of unfulfilled orders and our anticipated future operations, we would be able to finance our expansion, if necessary.

From time to time, we may undertake acquisitions of other companies or product lines in order to diversify our product and solutions offerings and customer base. Conversely, we may undertake the disposition of a division or product line due to changes in our business strategy or market conditions. Acquisitions may require the outlay of cash, which may reduce our liquidity and capital resources while dispositions may increase our cash position, liquidity and capital resources. Since our goal is to continue to expand our operations and accelerate our growth through future acquisitions, we may use some of our current capital resources to fund any acquisitions we may undertake in the future.

Results of Operations

Three Months Ended January 31, 2023 vs. Three Months Ended January 31, 2022

Net sales for the three months ended January 31, 2023 (the “fiscal 2023 quarter”) increased by 8.4%, or $1.4 million, to $18.3 million as compared to the three months ended January 31, 2022 (the “fiscal 2022 quarter”). Net sales for the fiscal 2023 quarter at the Custom Cabling segment decreased by $3.7 million, or 28.5%, to $9.3 million, compared to $13.0 million in the fiscal 2022 quarter. The decrease was primarily the result of decreases in sales to customers in the Tier-1 wireless carrier ecosystem related to our small cell products and systems and our hybrid fiber cables compared to the prior year first quarter. Net sales for the fiscal 2023 quarter at the RF Connector segment increased by $5.2 million, or 130.9%, to $9.1 million as compared to $3.9 million in the fiscal 2022 quarter, primarily due to the addition of Microlab which accounted for $5.1 million in sales.

Gross profit for the fiscal 2023 quarter increased by $1.0 million to $5.1 million due to the increase in net sales, and gross margins increased to 27.7% of sales compared to 24.1% of sales in the fiscal 2022 quarter. This is primarily driven by the addition of Microlab.

Engineering expenses increased by $0.5 million to $1.0 million in the fiscal 2023 quarter compared to $0.5 million in the fiscal 2022 quarter primarily due to the addition of Microlab which accounted for $0.3 million of the increase. We also incurred additional engineering expenses during the quarter related to the engineering efforts associated with our integrated systems products. Engineering expenses represent costs incurred relating to the ongoing research and development of current and new products.

Selling and general expenses increased by $1.3 million to $5.3 million (28.9% of sales) compared to $4.0 million (23.6% of sales) in the first quarter last year primarily due to Microlab expenses of $1.3 million. We also incurred a one-time expense related to severance of $50,000 and additional rent expense of $444,000 (of which $387,000 was non-cash) related to lease accounting in the fiscal 2023 quarter.

For the fiscal 2023 quarter, the Custom Cabling segment had a pretax loss of $921,000 while the RF Connector segment had pretax income of $246,000, as compared to $314,000 income and $56,000 of income, respectively, for the comparable first quarter last year. The increase in the pretax net income at the RF Connector segment was primarily due to the acquisition of Microlab. The decrease in pretax income at the Custom Cabling segment was due primarily to the decrease in sales of hybrid fiber cables to a tier-1 wireless customer and a decrease in sales of small cell products and systems to customers in the Tier-1 wireless ecosystem.

18

The benefit for income taxes was 12% and 22% of loss before income taxes for the fiscal 2023 quarter and the fiscal 2022 quarter, respectively. The change in the effective tax rate from the fiscal 2022 quarter to fiscal 2023 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 2023 quarter, net loss was $1.2 million and fully diluted loss per share was $0.11 per share, compared to a net loss of $277,000 and fully diluted loss per share of $0.03 per share for the fiscal 2022 quarter. For the fiscal 2023 quarter, the diluted weighted average shares outstanding was 10,222,540 as compared to 10,067,186 for the fiscal 2022 quarter.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

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 described throughout our quarterly report, during the quarter ended April 30, 2022, we acquired Microlab, which is now a wholly owned subsidiary of RF Industries. We are currently integrating policies, processes, technology, and operations for the consolidated company and will continue to evaluate our internal control over financial reporting as we develop and execute our integration plans. Until we are fully integrated, we will maintain the operational integrity of each division’s internal control over financial reporting.

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.

Changes in Internal Control Over Financial Reporting

During the first quarter of fiscal 2023, 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.

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

Our business, financial condition, and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or the interconnect industry, as well as risks that affect businesses in general. In addition to the information and risk factors set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2022, filed with the SEC on January 24, 2023. The risks disclosed in such Annual Report and in this Quarterly Report could materially adversely affect our business, financial condition, cash flows, or results of operations and thus our stock price. We believe there have been no material changes in our risk factors from those disclosed in the Annual Report. However, additional risks and uncertainties not currently known or which we currently deem to be immaterial may also materially adversely affect our business, financial condition, or results of operations.

These risk factors may be important to understanding other statements in this Quarterly Report and should be read in conjunction with the consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q. Because of such risk factors, as well as other factors affecting the Company’s financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

19

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

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, 2023 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 2022		-	$	-		-	$	-
December 2022		-	$	-		-	$	-
January 2023		1,312	$	5.46		-	$	-

Item 3. Defaults upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Nothing to report.

Item 5. Other Information

Nothing to report.

Item 6. Exhibits

Exhibit
Number
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Schema.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

20

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 13, 2023	By:	/s/ Robert Dawson
		Robert Dawson President and Chief Executive Officer (Principal Executive Officer)

Date: March 13, 2023	By:	/s/ Peter Yin
		Peter Yin Chief Financial Officer (Principal Financial and Accounting Officer)

21

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, 2023 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  unaudited condensed consolidated 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.

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 13, 2023	/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, 2023 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 unaudited condensed consolidated 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.

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 13, 2023	/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, 2023, 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 13, 2023	/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, 2023, 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 13, 2023	/s/ Peter Yin
	Peter Yin
	Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Jan. 31, 2023	Mar. 10, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jan. 31, 2023
Document Transition Report	false
Entity File Number	000-13301
Entity Registrant Name	R F INDUSTRIES LTD
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	88-0168936
Entity Address, Address Line One	16868 Via Del Campo Court, Suite 200
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92127
City Area Code	858
Local Phone Number	549-6340
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	RFIL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		10,291,067
Entity Central Index Key	0000740664
Current Fiscal Year End Date	--10-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jan. 31, 2023	Oct. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 3,770	$ 4,532
Trade accounts receivable, net of allowance for doubtful accounts of $271 and $126, respectively	13,905	14,812
Inventories	20,937	21,054
Other current assets	3,184	5,849
TOTAL CURRENT ASSETS	41,796	46,247
Property and equipment:
Equipment and tooling	4,622	4,497
Furniture and office equipment	4,452	3,447
Property, Plant and Equipment, Gross, Ending Balance	9,074	7,944
Less accumulated depreciation	4,881	4,771
Total property and equipment, net	4,193	3,173
Operating lease right of use assets, net	12,708	13,480
Goodwill	8,085	8,085
Amortizable intangible assets, net	14,865	15,296
Non-amortizable intangible assets	1,174	1,174
Deferred tax assets	1,952	1,816
Other assets	295	295
TOTAL ASSETS	85,140	89,566
CURRENT LIABILITIES
Accounts payable	4,849	5,652
Accrued expenses	5,568	8,814
Deferred revenue	1,133	0
Current portion of Term Loan	2,424	2,424
Current portion of operating lease liabilities	1,728	1,887
Income taxes payable	1,042	759
TOTAL CURRENT LIABILITIES	16,744	19,536
Operating lease liabilities	14,866	15,025
Term Loan, net of debt issuance cost	12,532	13,136
TOTAL LIABILITIES	44,142	47,697
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Common stock - authorized 20,000,000 shares of $0.01 par value; 10,291,067 and 10,193,287 shares issued and outstanding at January 31, 2023 and October 31, 2022, respectively	103	102
Additional paid-in capital	25,408	25,118
Retained earnings	15,487	16,649
TOTAL STOCKHOLDERS' EQUITY	40,998	41,869
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 85,140	$ 89,566

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jan. 31, 2023	Oct. 31, 2021
Accounts Receivable, Allowance for Credit Loss, Current	$ 271	$ 126
Common stock, shares authorized (in shares)	20,000,000
Common stock, par value (in dollars per share)	$ 0.01
Common Stock, Shares, Issued (in shares)	10,291,067
Common stock, shares outstanding (in shares)	10,291,067

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Jan. 31, 2023	Oct. 31, 2022
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares, Issued (in shares)	10,291,067	10,193,287
Common stock, shares outstanding (in shares)	10,291,067	10,193,287

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Net sales	$ 18,343,000	$ 16,918,000
Cost of sales	13,257,000	12,834,000
Gross profit	5,086,000	4,084,000
Operating expenses:
Engineering	961,000	454,000
Selling and general	5,294,000	3,992,000
Total operating expenses	6,255,000	4,446,000
Operating loss	(1,169,000)	(362,000)
Other (expense) income	(153,000)	5,000
Loss before provision for income taxes	(1,322,000)	(357,000)
Benefit from income taxes	(160,000)	(80,000)
Consolidated net loss	$ (1,162,000)	$ (277,000)
Loss per share:
Basic (in dollars per share)	$ (0.11)	$ (0.03)
Diluted (in dollars per share)	$ (0.11)	$ (0.03)
Weighted average shares outstanding:
Basic (in shares)	10,222,540	10,067,186
Diluted (in shares)	10,222,540	10,067,186

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, 2021	10,058,571
Balance at Oct. 31, 2021	$ 101	$ 24,301	$ 15,201	$ 39,603
Stock-based compensation expense	$ 0	139	0	139
Issuance of restricted stock (in shares)	39,666
Issuance of restricted stock	$ 0	0	0	0
Tax withholding related to vesting of restricted stock (in shares)	(2,062)
Tax withholding related to vesting of restricted stock	$ 0	(13)	0	(13)
Consolidated net loss	$ 0	0	(277)	(277)
Balance (in shares) at Jan. 31, 2022	10,096,175
Balance at Jan. 31, 2022	$ 101	24,427	14,924	39,452
Balance (in shares) at Oct. 31, 2022	10,193,287
Balance at Oct. 31, 2022	$ 102	25,118	16,649	$ 41,869
Exercise of stock options (in shares)	45,000			45,000
Exercise of stock options	$ 0	85		$ 85
Stock-based compensation expense		212		212
Issuance of restricted stock (in shares)	54,092
Issuance of restricted stock	$ 1
Issuance of restricted stock		0
Tax withholding related to vesting of restricted stock (in shares)	(1,312)
Tax withholding related to vesting of restricted stock		(7)		(7)
Consolidated net loss			(1,162)	(1,162)
Balance (in shares) at Jan. 31, 2023	10,291,067
Balance at Jan. 31, 2023	$ 103	$ 25,408	$ 15,487	$ 40,998

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
OPERATING ACTIVITIES:
Consolidated net loss	$ (1,162)	$ (277)
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Bad debt expense	64	(4)
Depreciation and amortization	541	180
Stock-based compensation expense	212	139
Amortization of debt issuance cost	2	0
Tax payments related to shares cancelled for vested restricted stock awards	(7)	(13)
Deferred income taxes	(136)	23
Changes in operating assets and liabilities:
Trade accounts receivable	843	3,013
Inventories	117	(2,299)
Other current assets	2,665	(693)
Right of use assets	383	(15)
Accounts payable	(803)	(122)
Accrued expenses	(3,246)	625
Deferred revenue	1,133	0
Income taxes payable	283	0
Net cash provided by operating activities	889	557
INVESTING ACTIVITIES:
Capital expenditures	(1,130)	(103)
Net cash used in investing activities	(1,130)	(103)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	85	0
Term Loan payments	(606)	0
Net cash used in financing activities	(521)	0
Net (decrease) increase in cash and cash equivalents	(762)	454
Cash and cash equivalents, beginning of period	4,532	13,053
Cash and cash equivalents, end of period	3,770	13,507
Supplemental cash flow information – income taxes paid	$ 0	$ 156

XML

Note 1 - Unaudited Interim Condensed Consolidated Financial Statements

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [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 (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, have been included in order to make the information not misleading. Information included in the consolidated balance sheet as of October 31, 2022 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, 2022 included in our Annual Report on Form 10-K (“Form 10-K”) for the year ended October 31, 2022 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the three months ended January 31, 2023 are not necessarily indicative of the results that may be expected for the year ending October 31, 2023. 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 for the periods ended on or before January 31, 2022 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”). The unaudited condensed consolidated financial statements for the three months ended January 31, 2023 include the accounts of RF Industries, Ltd. and our five wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Inc. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”). Microlab is a wholly-owned subsidiary that RF Industries, Ltd. acquired on March 1, 2022. For periods on or before January 31, 2022, references herein to the “Company”, “we”, “ us”, or “ our”  shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech and for all periods after January 31, 2022, reference to the “Company”, “ we”, “ us”, or “our” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech and Microlab. All intercompany balances and transactions have been eliminated in consolidation.

Fair value measurement

We measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair-value hierarchy:

Level 1— Quoted prices for identical instruments in active markets;

Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

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

As of January 31, 2023 and October 31, 2022, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

Recent accounting standards

Recently issued accounting pronouncements not yet adopted:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued 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 SEC, 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 unaudited condensed consolidated financial statements.

XML

Note 2 - Business Acquisition

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note 2 – Business acquisition

On March 1, 2022, the Company completed its purchase (the “Purchase Transaction”) of 100% of the issued and outstanding membership interests of Microlab, a New Jersey limited liability company, from Wireless Telecom Group, Inc, a New Jersey corporation (the “Seller”) pursuant to the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated December 16, 2021, with the Seller. The consideration for the Purchase Transaction was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. The Company funded $17 million of the cash purchase price from the funds obtained under the Term Loan (as defined in Note 11) and paid the remaining amount of the cash purchase price with cash on hand. During the three months ended July 31, 2022, we paid an additional $225,000 in purchase consideration as a result of certain post-closing adjustments relating to net working capital.

The acquisition was accounted for 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. Microlab designs and manufactures high-performance radio frequency and microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. The Microlab acquisition further diversifies and strengthens the portfolio of products that we offer to the market and allows us to provide a more complete solution to our customers in key market segments. All manufacturing operations are performed at Microlab’s facilities in New Jersey.

The acquisition closed on March 1, 2022, accordingly, subsequent to March 1, 2022, Microlab’s financial results have been included in the results of the RF Connector and Cable Assembly (“RF Connector”) segment as well as in the consolidated statements of operations. The Company expects the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives ranging from one to 15 years. Total costs, as of October 31, 2022, related to the acquisition of Microlab were approximately $1.3 million and have been expensed as incurred and categorized in selling and general expenses.

The following table summarizes the components of the purchase price at fair values at March 1, 2022:

Cash consideration paid at closing	$	24,250,000
Post-closing adjustment		225,000
Total consideration transferred	$	24,475,000

The following table summarizes the allocation of the preliminary purchase price at fair value at March 1, 2022:

Current assets	$	6,620,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,617,000
Non-interest bearing liabilities		(1,800,000	)
Net assets acquired at fair value	$	24,475,000

The following unaudited pro forma financial information presents the combined operating results of the Company and Microlab as if both acquisitions had occurred as of the beginning of the earliest period presented. Pro forma data is subject to various assumptions and estimates and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results.

Unaudited pro forma financial information assuming the acquisition of Microlab as of November 1, 2021 is presented in the following table:

	Three Months Ended January 31,
	2023			2022
Revenue	$	18,343		$	21,969
Net (loss) income		(1,162	)		839
Earnings per share
Basic	$	(0.11	)	$	0.08
Diluted	$	(0.11	)	$	0.08
Basic		10,222,540			10,067,186
Diluted		10,222,540			10,215,815

XML

Note 3 - Concentrations of Credit Risk

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note 3 – 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, 2023, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $2.6 million.

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

	Three Months Ended January 31,
	2023			2022
Wireless provider		15	%		32	%

For the three months ended January 31, 2023, one wireless carrier customer accounted for 15% of net sales and 16% of total net accounts receivable balance. For the three months ended January 31, 2022, one wireless carrier customer accounted for 32% of net sales and 37% of total net accounts receivable balance. Although this customer has been a significant customer of the Company, the written agreements with this customer do not have any minimum purchase obligations and this customer could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from this customer or the loss of this customer could significantly reduce our future revenues and profits.

XML

Note 4 - Inventories and Major Vendors

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 4 – 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, 2023		October 31, 2022
Raw materials and supplies	$	14,823	$	15,238
Work in process		615		439
Finished goods		5,499		5,377
Totals	$	20,937	$	21,054

For the three months ended January 31, 2023, two vendors accounted for 12% and 10% of inventory purchases. For the three months ended January 31, 2022, two vendors accounted for 30% and 10% of inventory purchases. We have arrangements with these vendors to purchase products based on purchase orders that we periodically issue.

XML

Note 5 - Other Current Assets

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Other Current Assets [Text Block]

Note 5 – Other current assets

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

	January 31, 2023		October 31, 2022
Employee retention credit ("ERC")	$	396	$	1,636
Prepaid expense		1,188		972
Reimbursement for tenant improvements		1,321		2,810
Other		279		431
Totals
	$	3,184	$	5,849

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act), eligible employers are able to claim an ERC, which is a refundable tax credit against certain employment taxes. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. The period assessed for eligibility of the ERC is on a calendar year basis. As of January 31, 2023, the remaining portion of the ERC that we have not yet received is included as other receivables in other current assets.

XML

Note 6 - Accrued Expenses and Other Long-term Liabilities

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

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

Note 6 – Accrued expenses and other current liabilities

Accrued expenses consist of the following (in thousands):

	January 31, 2023		October 31, 2022
Wages payable	$	2,400	$	3,634
Accrued receipts		998		2,136
Other accrued expenses		1,712		1,847
Tenant improvements payable		458		1,197
Totals	$	5,568	$	8,814

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

XML

Note 7 - Loss Per Share

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 7 – Loss per share

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. During the three months ended January 31, 2023 and 2022, we reported a net loss, and in periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect. Potentially issuable securities that are out-of-the-money totaled 749,488 and 459,889 shares for the three months ended January 31, 2023 and 2022, 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,
	2023		2022
Weighted average shares outstanding for basic earnings per share		10,222,540		10,067,186
Add effects of potentially dilutive securities-assumed exercise of stock options		-		-
Weighted average shares outstanding for diluted earnings per share		10,222,540		10,067,186

XML

Note 8 - Stock-based Compensation and Equity Transactions

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 8 – Stock-based compensation and equity transactions

On January 10, 2022, we granted a total of 39,666 shares of restricted stock and 106,001 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 10, 2023; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. All incentive stock options expire 10 years from the date of grant.

On January 10, 2023, we granted a total of 54,092 shares of restricted stock and 108,181 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 10, 2024; and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years. Also on January 10, 2023, we granted another manager 50,000 incentive stock options. These options vested in five equal installments on the anniversaries of January 10, 2023. All incentive stock options expire 10 years from the date of grant.

No other shares or options were granted to company employees during the three months ended January 31, 2023 and 2022.

The weighted average fair value of employee stock options that were granted during the three months ended January 31, 2023 and 2022 was estimated to be $3.21 and $3.84, respectively, per share, using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended January 31,
	2023			2022
Risk-free interest rate		3.76	%		1.23	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (years)	7.00			7.00
Volatility factor		54.30	%		53.35	%

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 2023 and 2022 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, 2022. A summary of the status of the options granted under our stock option plans as of January 31, 2023 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, 2022		691,005		$	5.87
Options granted		158,181		$	5.46
Options exercised		(45,000	)	$	1.90
Options cancelled		-		$	-
Options outstanding at January 31, 2023		804,186		$	6.01
Options exercisable at January 31, 2023		385,216		$	6.69
Options vested and expected to vest at January 31, 2023		798,697		$	6.02

Weighted average remaining contractual life of options outstanding as of January 31, 2023: 7.18 years

Weighted average remaining contractual life of options exercisable as of January 31, 2023: 6.09 years

Weighted average remaining contractual life of options vested and expected to vest as of January 31, 2023: 7.18 years

Aggregate intrinsic value of options outstanding at January 31, 2023: $341,674

Aggregate intrinsic value of options exercisable at January 31, 2023: $124,696

Aggregate intrinsic value of options vested and expected to vest at January 31, 2023: $337,451

As of January 31, 2023, $1,096,683 and $777,069 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 2.83 and 1.32 years, respectively.

Stock option expense

During the three months ended January 31, 2023 and 2022, stock-based compensation expense totaled $212,000 and $139,000, respectively, and was classified in selling and general expense.

XML

Note 9 - Segment Information

3 Months Ended

Jan. 31, 2023

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, 2023, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

The RF Connector segment consists of two divisions and the Custom Cabling segment consists of four divisions. The six 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, Schrofftech, and Microlab. 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 user.

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 and Microlab divisions constitutes the RF Connector segment, and the Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions constitute the Custom Cabling segment.

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 years ended January 31, 2023 and 2022 (in thousands):

	Three Months Ended January 31,
	2023		2022
United States	$	16,104	$	16,418
Foreign Countries:
Canada		584		297
Italy		1,098		-
Mexico		1		25
All Other		556		178
		2,239		500
Totals	$	18,343	$	16,918

Net sales, income (loss) before benefit for income taxes and other related segment information for the three months ended January 31, 2023 and 2022 are as follows (in thousands):

	RF Connector		Custom Cabling
	and		Manufacturing and
2023	Cable Assembly		Assembly			Corporate			Total
Net sales	$	9,057	$	9,286		$	-		$	18,343
Income (loss) before benefit for income taxes		246		(921	)		(647	)		(1,322	)
Depreciation and amortization		394		147			-			541
Total assets		50,973		24,966			9,201			85,140
2022
Net sales	$	3,923	$	12,995		$	-		$	16,918
Income (loss) before provision for income taxes		56		314			(727	)		(357	)
Depreciation and amortization		37		143			-			180
Total assets		7,572		24,635			17,529			49,736

XML

Note 10 - Income Taxes

3 Months Ended

Jan. 31, 2023

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 the 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.

We recorded income tax benefits of $160,000 and $80,000 for the three months ended January 31, 2023 and 2022, respectively. The effective tax rate was 12.3% for the three months ended January 31, 2023, compared to 22.3% for the three months ended January 31, 2022 was primarily driven by the increased benefit from research and development tax credits.

We had $199,000 and $121,000 of unrecognized tax benefits, inclusive of interest and penalties, as of January 31, 2023 and October 31, 2022, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $195,000 as of January 31, 2023.

XML

Note 11 - Intangible Assets

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note 11 – Intangible assets

Intangible assets consist of the following (in thousands):

	January 31, 2023			October 31, 2022
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(345	)		(334	)
		78			89
Customer relationships (estimated lives 7 - 15 years)		6,058			6,058
Accumulated amortization		(3,170	)		(3,074	)
		2,888			2,984
Backlog (estimated life 1 - 2 years)		327			327
Accumulated amortization		(323	)		(313	)
		4			14
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(151	)		(143	)
		217			225
Tradename (estimated life 15 years)		1,700			1,700
Accumulated amortization		(104	)		(76	)
		1,596			1,624
Proprietary Technology (estimated life 10 years)		11,100			11,100
Accumulated amortization		(1,018	)		(740	)
		10,082			10,360
Totals	$	14,865		$	15,296
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

Amortization expense for the three months ended January 31, 2023 and the year ended October 31, 2022 was $431,000 and $1,282,000, respectively. As of January 31, 2023, the weighted-average amortization period for the amortizable intangible assets is 9.25 years.

XML

Note 12 - Commitments

3 Months Ended

Jan. 31, 2023

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 one year to three years, some of which include options to extend the leases for up to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 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, 2023 were as follows (in thousands):

	Three Months Ended
	January 31, 2023
Operating lease cost	$	762

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

	January 31, 2023			October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	-		$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		113.94			113.72
Weighted Average Discount Rate
Operating leases		3.75	%		3.75	%

Future minimum lease payments under non-cancellable leases as of January 31, 2023 were as follows:

Year ending October 31,	Operating Leases
2023 (excluding three months ended January 31, 2023)	$	1,810
2024		1,991
2025		1,796
2026		1,835
2027		1,874
Thereafter		10,618
Total future minimum lease payments		19,924
Less imputed interest		(3,330	)
Total	$	16,594

Reported as of January 31, 2023	Operating Leases
Other current liabilities	$	1,728
Operating lease liabilities		14,866
Total	$	16,594

As of January 31, 2023, operating lease ROU asset was $12.7 million and operating lease liability totaled $16.5 million, of which $1.7 million is classified as current. There were no finance leases as of January 31, 2023.

The Schrofftech facilities, consisting of two buildings for a total of 10,700 square feet, are leased by RF Industries, Ltd. under two leases that were renewed effective February 1, 2022 for two years expiring January 31, 2024. The aggregate monthly rental payment under the new leases currently is $6,720 per month.

XML

Note 13 - Term Loan and Line of Credit

3 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 13 – Term Loan and Line of credit

In February 2022, we entered into an agreement for a revolving line of credit (the “Revolving Credit Facility”) in the amount of $3.0 million and a $17.0 million term loan (the “Term Loan”, and together with the Revolving Credit Facility, the “Credit Facility”). Amounts outstanding under the Revolving Credit Facility shall bear interest at a rate of 2.0% plus the Bloomberg Short-Term Bank Yield Index Rate (“base interest rate”). The maturity date of the Revolving Credit Facility is March 1, 2024. The Company drew down the entire amount of the Term Loan on March 1, 2022. The primary interest rate for Term Loan is 3.76% per annum. The maturity date of the Term Loan is March 1, 2027.

Borrowings under the Credit Facility are secured by a security interest in certain assets of the Company and contains certain loan covenants. The Credit Facility requires the maintenance of certain financial covenants, including: (i) consolidated debt to EBITDA ratio not to exceed 3.00 to 1.00; (ii) consolidated fixed charge coverage ratio of at least 1.25 to 1.00; and (iii) consolidated minimum EBITDA of at least $600,000 for the discrete quarter ending January 31, 2022. In addition, the Credit Facility contains customary affirmative and negative covenants.

As of January 31, 2023, we have borrowed $14,980,000 under the Term Loan while we have not borrowed any amounts under the Revolving Credit Facility.

XML

Note 14 - Cash Dividend and Declared Dividends

3 Months Ended

Jan. 31, 2023

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, 2023, nor did we pay any dividends during the three months ended January 31, 2022.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Jan. 31, 2023

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of consolidationThe accompanying unaudited condensed consolidated financial statements for the periods ended on or before January 31, 2022 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”). The unaudited condensed consolidated financial statements for the three months ended January 31, 2023 include the accounts of RF Industries, Ltd. and our five wholly-owned subsidiaries: Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Inc. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”). Microlab is a wholly-owned subsidiary that RF Industries, Ltd. acquired on March 1, 2022. For periods on or before January 31, 2022, references herein to the “Company”, “we”, “ us”, or “ our”  shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech and for all periods after January 31, 2022, reference to the “Company”, “ we”, “ us”, or “our” shall refer to RF Industries, Ltd., Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech and Microlab. All intercompany balances and transactions have been eliminated in consolidation.

Fair Value Measurement, Policy [Policy Text Block]

Fair value measurementWe measure at fair value certain financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair-value hierarchy:Level 1— Quoted prices for identical instruments in active markets;Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; andLevel 3— Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.As of January 31, 2023 and October 31, 2022, the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying value due to their short-term nature.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting standardsRecently issued accounting pronouncements not yet adopted:In June 2016, the Financial Accounting Standards Board (“FASB”) issued 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 SEC, 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 unaudited condensed consolidated financial statements.

7

XML

Note 2 - Business Acquisition (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

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

Cash consideration paid at closing	$	24,250,000
Post-closing adjustment		225,000
Total consideration transferred	$	24,475,000

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

Current assets	$	6,620,000
Property and equipment		198,000
Intangible assets		13,840,000
Goodwill		5,617,000
Non-interest bearing liabilities		(1,800,000	)
Net assets acquired at fair value	$	24,475,000

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended January 31,
	2023			2022
Revenue	$	18,343		$	21,969
Net (loss) income		(1,162	)		839
Earnings per share
Basic	$	(0.11	)	$	0.08
Diluted	$	(0.11	)	$	0.08
Basic		10,222,540			10,067,186
Diluted		10,222,540			10,215,815

XML

Note 3 - Concentrations of Credit Risk (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

	Three Months Ended January 31,
	2023			2022
Wireless provider		15	%		32	%

XML

Note 4 - Inventories and Major Vendors (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	January 31, 2023		October 31, 2022
Raw materials and supplies	$	14,823	$	15,238
Work in process		615		439
Finished goods		5,499		5,377
Totals	$	20,937	$	21,054

XML

Note 5 - Other Current Assets (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

Schedule of Other Current Assets [Table Text Block]

	January 31, 2023		October 31, 2022
Employee retention credit ("ERC")	$	396	$	1,636
Prepaid expense		1,188		972
Reimbursement for tenant improvements		1,321		2,810
Other		279		431
Totals
	$	3,184	$	5,849

XML

Note 6 - Accrued Expenses and Other Long-term Liabilities (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	January 31, 2023		October 31, 2022
Wages payable	$	2,400	$	3,634
Accrued receipts		998		2,136
Other accrued expenses		1,712		1,847
Tenant improvements payable		458		1,197
Totals	$	5,568	$	8,814

XML

Note 7 - Loss Per Share (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended January 31,
	2023		2022
Weighted average shares outstanding for basic earnings per share		10,222,540		10,067,186
Add effects of potentially dilutive securities-assumed exercise of stock options		-		-
Weighted average shares outstanding for diluted earnings per share		10,222,540		10,067,186

XML

Note 8 - Stock-based Compensation and Equity Transactions (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

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

	Three Months Ended January 31,
	2023			2022
Risk-free interest rate		3.76	%		1.23	%
Dividend yield		0.00	%		0.00	%
Expected life of the option (years)	7.00			7.00
Volatility factor		54.30	%		53.35	%

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

				Weighted
				Average
	Shares			Exercise Price
Outstanding at November 1, 2022		691,005		$	5.87
Options granted		158,181		$	5.46
Options exercised		(45,000	)	$	1.90
Options cancelled		-		$	-
Options outstanding at January 31, 2023		804,186		$	6.01
Options exercisable at January 31, 2023		385,216		$	6.69
Options vested and expected to vest at January 31, 2023		798,697		$	6.02

XML

Note 9 - Segment Information (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

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

	Three Months Ended January 31,
	2023		2022
United States	$	16,104	$	16,418
Foreign Countries:
Canada		584		297
Italy		1,098		-
Mexico		1		25
All Other		556		178
		2,239		500
Totals	$	18,343	$	16,918

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

	RF Connector		Custom Cabling
	and		Manufacturing and
2023	Cable Assembly		Assembly			Corporate			Total
Net sales	$	9,057	$	9,286		$	-		$	18,343
Income (loss) before benefit for income taxes		246		(921	)		(647	)		(1,322	)
Depreciation and amortization		394		147			-			541
Total assets		50,973		24,966			9,201			85,140
2022
Net sales	$	3,923	$	12,995		$	-		$	16,918
Income (loss) before provision for income taxes		56		314			(727	)		(357	)
Depreciation and amortization		37		143			-			180
Total assets		7,572		24,635			17,529			49,736

XML

Note 11 - Intangible Assets (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

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

	January 31, 2023			October 31, 2022
Amortizable intangible assets:
Non-compete agreement (estimated life 5 years)	$	423		$	423
Accumulated amortization		(345	)		(334	)
		78			89
Customer relationships (estimated lives 7 - 15 years)		6,058			6,058
Accumulated amortization		(3,170	)		(3,074	)
		2,888			2,984
Backlog (estimated life 1 - 2 years)		327			327
Accumulated amortization		(323	)		(313	)
		4			14
Patents (estimated life 10 - 14 years)		368			368
Accumulated amortization		(151	)		(143	)
		217			225
Tradename (estimated life 15 years)		1,700			1,700
Accumulated amortization		(104	)		(76	)
		1,596			1,624
Proprietary Technology (estimated life 10 years)		11,100			11,100
Accumulated amortization		(1,018	)		(740	)
		10,082			10,360
Totals	$	14,865		$	15,296
Non-amortizable intangible assets:
Trademarks	$	1,174		$	1,174

XML

Note 12 - Commitments (Tables)

3 Months Ended

Jan. 31, 2023

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended
	January 31, 2023
Operating lease cost	$	762

Lessee, Leases, Other Information [Table Text Block]

	January 31, 2023			October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	-		$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		113.94			113.72
Weighted Average Discount Rate
Operating leases		3.75	%		3.75	%

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

Year ending October 31,	Operating Leases
2023 (excluding three months ended January 31, 2023)	$	1,810
2024		1,991
2025		1,796
2026		1,835
2027		1,874
Thereafter		10,618
Total future minimum lease payments		19,924
Less imputed interest		(3,330	)
Total	$	16,594

Reported as of January 31, 2023	Operating Leases
Other current liabilities	$	1,728
Operating lease liabilities		14,866
Total	$	16,594

XML

Note 2 - Business Acquisition (Details Textual) - USD ($)		3 Months Ended	11 Months Ended
	Mar. 01, 2022	Jul. 31, 2022	Jan. 31, 2023	Feb. 28, 2022
Bank of America, N.A. [Member]
Debt Instrument, Face Amount				$ 17,000,000
Microlab/FXR LLC [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Combination, Consideration Transferred, Total	$ 24,250,000
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred		$ 225,000
Microlab/FXR LLC [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs			$ 1,300,000
Microlab/FXR LLC [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life			1 year
Microlab/FXR LLC [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life			15 years

XML

Note 2 - Business Acquisition - Components of the Purchase Price of Schroff Technologies International, Inc. (Details) - Schrofftech [Member]	Mar. 01, 2022 USD ($)
Cash consideration paid at closing	$ 24,250,000
Post-closing adjustment	225,000
Total consideration transferred	$ 24,475,000

XML

Note 2 - Business Acquisition - Allocation of Estimated Purchase Price of Schroff Technologies International, Inc. (Details) - USD ($)	Jan. 31, 2023	Oct. 31, 2022	Mar. 01, 2022
Goodwill	$ 8,085,000	$ 8,085,000
Schrofftech [Member]
Current assets			$ 6,620,000
Property and equipment			198,000
Intangible assets			13,840,000
Goodwill			5,617,000
Non-interest bearing liabilities			(1,800,000)
Net assets acquired at fair value			$ 24,475,000

XML

Note 2 - Business Acquisition - Unaudited Pro Forma Financial Information (Details) - Microlab/FXR LLC [Member] - USD ($)	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Revenue	$ 18,343	$ 21,969
Net (loss) income	$ (1,162)	$ 839
Basic (in dollars per share)	$ (0.11)	$ 0.08
Diluted (in dollars per share)	$ (0.11)	$ 0.08
Basic (in shares)	10,222,540	10,067,186
Diluted (in shares)	10,222,540	10,215,815

XML

Note 3 - Concentrations of Credit Risk (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Cash, Uninsured Amount	$ 2.6
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member]
Concentration Risk, Percentage	15.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Distributor [Member]
Concentration Risk, Percentage		32.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Wireless Carrier [Member]
Concentration Risk, Percentage	16.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor One [Member]
Concentration Risk, Percentage		37.00%

XML

Note 3 - Concentrations of Credit Risk - Sales (Details)	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Wireless Provider [Member]
Wireless provider	15.00%	32.00%

XML

Note 4 - Inventories and Major Vendors (Details Textual) - Supplier Concentration Risk [Member] - Inventory Purchases [Member]	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Number of Major Vendors	1	1
One Vendor [Member]
Concentration Risk, Percentage	12.00%	30.00%
Vendors Two [Member]
Concentration Risk, Percentage	10.00%	10.00%

XML

Note 4 - Inventories and Major Vendors - Inventories (Details) - USD ($) $ in Thousands	Jan. 31, 2023	Oct. 31, 2022
Raw materials and supplies	$ 14,823	$ 15,238
Work in process	615	439
Finished goods	5,499	5,377
Totals	$ 20,937	$ 21,054

XML

Note 5 - Other Current Assets - Other Current Assets (Details) - USD ($) $ in Thousands	Jan. 31, 2023	Oct. 31, 2022
Employee retention credit ("ERC")	$ 396	$ 1,636
Prepaid expense	1,188	972
Reimbursement for tenant improvements	1,321	2,810
Other	279	431
Other Assets, Current	$ 3,184	$ 5,849

XML

Note 6 - Accrued Expenses and Other Long-term Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands	Jan. 31, 2023	Oct. 31, 2022
Wages payable	$ 2,400	$ 3,634
Accrued receipts	998	2,136
Other accrued expenses	1,712	1,847
Tenant improvements payable	458	1,197
Totals	$ 5,568	$ 8,814

XML

Note 7 - Loss Per Share (Details Textual) - shares	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	749,488	459,889

XML

Note 7 - Loss Per Share - Basic and Diluted Earnings Per Share (Details) - shares	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Basic (in shares)	10,222,540	10,067,186
Add effects of potentially dilutive securities-assumed exercise of stock options (in shares)	0	0
Diluted (in shares)	10,222,540	10,067,186

XML

Note 8 - Stock-based Compensation and Equity Transactions (Details Textual) - USD ($)					3 Months Ended
	Jan. 10, 2023	May 02, 2022	Jan. 10, 2022	Jan. 12, 2021	Jan. 31, 2023	Jan. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term					7 years 2 months 4 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term					6 years 1 month 2 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term					7 years 2 months 4 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value					$ 341,674
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value					124,696
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value					337,451
Selling, General and Administrative Expenses [Member]
Share-Based Payment Arrangement, Expense					212,000	$ 139,000
Restricted Stock [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total					$ 777,069
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition					1 year 3 months 25 days
Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)		0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value					$ 3.21	$ 3.84
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total					$ 1,096,683
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition					2 years 9 months 29 days
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)	54,092		39,666
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		4 years
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 10, 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			25.00%
One Manager and Three Officers [Member] | Restricted Stock and Incentive Stock Options [Member] | Vesting on January 10, 2024 [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)	108,181
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)			10 years
Incentive Stock Options [Member] | One Manager and Three Officers [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)			106,001
Another Manager [Member] | Restricted Stock and Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period (Year)				10 years
Another Manager [Member] | Incentive Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	50,000

XML

Note 8 - Stock-based Compensation and Equity Transactions - Assumptions (Details)	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Risk-free interest rate	3.76%	1.23%
Dividend yield	0.00%	0.00%
Expected life of the option (years) (Year)	7 years	7 years
Volatility factor	54.30%	53.35%

XML

Note 8 - Stock-based Compensation and Equity Transactions - Options Outstanding (Details)	3 Months Ended
	Jan. 31, 2023 $ / shares shares
Outstanding (in shares)	691,005
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 5.87
Options granted (in shares)	158,181
Options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 5.46
Options exercised (in shares)	(45,000)
Options exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 1.90
Options cancelled (in shares)	0
Options outstanding (in shares)	804,186
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 6.01
Options exercisable (in shares)	385,216
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 6.69
Options vested and expected to vest (in shares)	798,697
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares	$ 6.02

XML

Note 9 - Segment Information (Details Textual)	3 Months Ended	12 Months Ended
	Jan. 31, 2023	Oct. 31, 2022
Number of Reportable Segments	2	2

XML

Note 9 - Segment Information - Sales by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Net sales	$ 18,343	$ 16,918
UNITED STATES
Net sales	16,104	16,418
CANADA
Net sales	584	297
ITALY
Net sales	1,098	0
MEXICO
Net sales	1	25
All Other Foreign Countries [Member]
Net sales	556	178
Non-US [Member]
Net sales	$ 2,239	$ 500

XML

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, 2023	Jan. 31, 2022	Oct. 31, 2022
Net sales	$ 18,343	$ 16,918
Income (loss) before benefit for income taxes	(1,322)	(357)
Depreciation and amortization	541	180
Total assets	85,140	49,736	$ 89,566
Operating Segments [Member] | RF Connector and Cable Assembly [Member]
Net sales	9,057	3,923
Income (loss) before benefit for income taxes	246	56
Depreciation and amortization	394	37
Total assets	50,973	7,572
Operating Segments [Member] | Custom Cabling Manufacturing and Assembly [Member]
Net sales	9,286	12,995
Income (loss) before benefit for income taxes	(921)	314
Depreciation and amortization	147	143
Total assets	24,966	24,635
Corporate, Non-Segment [Member]
Net sales	0	0
Income (loss) before benefit for income taxes	(647)	(727)
Depreciation and amortization	0	0
Total assets	$ 9,201	$ 17,529

XML

Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022	Oct. 31, 2022
Income Tax Expense (Benefit), Total	$ 160,000	$ 80,000
Effective Income Tax Rate Reconciliation, Percent, Total	12.30%	22.30%
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	$ 199,000		$ 121,000
Unrecognized Tax Benefits, Ending Balance	$ 195,000

XML

Note 11 - Intangible Assets (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Jan. 31, 2023	Oct. 31, 2022
Amortization of Intangible Assets	$ 431,000	$ 1,282,000
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life (Year)	9 years 3 months

XML

Note 11 - Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021	Jan. 31, 2023	Oct. 31, 2022
Finite-Lived Intangible Assets, Net, Ending Balance			$ 14,865	$ 15,296
Trademarks			1,174	1,174
Trademarks [Member]
Trademarks			1,174	1,174
Noncompete Agreements [Member]
Non-compete agreement (estimated life 5 years)			423	423
Accumulated amortization			(345)	(334)
Finite-Lived Intangible Assets, Net, Ending Balance			78	89
Finite-Lived Intangible Asset, Useful Life	5 years	5 years
Customer Relationships [Member]
Non-compete agreement (estimated life 5 years)			6,058	6,058
Accumulated amortization			(3,170)	(3,074)
Finite-Lived Intangible Assets, Net, Ending Balance			2,888	2,984
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	7 years	7 years
Order or Production Backlog [Member]
Non-compete agreement (estimated life 5 years)			327	327
Accumulated amortization			(323)	(313)
Finite-Lived Intangible Assets, Net, Ending Balance			4	14
Order or Production Backlog [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	1 year	1 year
Patents [Member]
Non-compete agreement (estimated life 5 years)			368	368
Accumulated amortization			(151)	(143)
Finite-Lived Intangible Assets, Net, Ending Balance			217	225
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Trade Names [Member]
Non-compete agreement (estimated life 5 years)			1,700	1,700
Accumulated amortization			(104)	(76)
Finite-Lived Intangible Assets, Net, Ending Balance			1,596	1,624
Finite-Lived Intangible Asset, Useful Life	15 years	15 years
Technology-Based Intangible Assets [Member]
Non-compete agreement (estimated life 5 years)			11,100	11,100
Accumulated amortization			(1,018)	(740)
Finite-Lived Intangible Assets, Net, Ending Balance			$ 10,082	$ 10,360
Finite-Lived Intangible Asset, Useful Life	10 years	10 years

XML

Note 11 - Intangible Assets - Intangible Assets (Details) (Parentheticals)	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021
Noncompete Agreements [Member]
Finite-Lived Intangible Asset, Useful Life	5 years	5 years
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	7 years	7 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	15 years	15 years
Order or Production Backlog [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	1 year	1 year
Order or Production Backlog [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	2 years	2 years
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Patents [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	14 years	14 years
Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life	15 years	15 years
Technology-Based Intangible Assets [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years

XML

Note 12 - Commitments (Details Textual)	Jan. 31, 2023 USD ($) ft²	Oct. 31, 2022 USD ($)
Lessor, Operating Lease, Renewal Term	5 years
Operating Lease, Right-of-Use Asset	$ 12,708,000	$ 13,480,000
Operating Lease, Liability, Total	16,594,000
Operating Lease, Liability, Current	1,728,000	$ 1,887,000
Finance Lease, Liability, Total	$ 0
Schrofftech Facilities [Member]
Lessor, Operating Lease, Renewal Term	2 years
Lessee, Operating Lease, Monthly Rent	$ 6,720
Number of Buildings	2
Area of Real Estate Property | ft²	10,700
Number of Leases	2
Other Current Liabilities [Member]
Operating Lease, Liability, Current	$ 1,728,000
K and K Unlimited [Member]
Lessee, Operating Lease, Monthly Rent	$ 16,000
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	1 year
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term (Year)	3 years

XML

Note 12 - Commitments - Operating Lease Expense (Details) $ in Thousands	3 Months Ended
	Jan. 31, 2023 USD ($)
Operating lease cost	$ 762

XML

Note 12 - Commitments - Other Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 31, 2023	Oct. 31, 2022
ROU assets obtained in exchange for lease obligations, Operating leases	$ 0	$ 13,352
Weighted Average Remaining Lease Term, Operating leases (in months) (Month)	113 months 28 days	113 months 21 days
Weighted Average Discount Rate, Operating leases	3.75%	3.75%

XML

Note 12 - Commitments - Future Minimum Lease Payments (Details) - USD ($)	Jan. 31, 2023	Oct. 31, 2022
2023 (excluding three months ended January 31, 2023)	$ 1,810,000
Other current liabilities	1,728,000	$ 1,887,000
2024	1,991,000
Operating lease liabilities	14,866,000	$ 15,025,000
2025	1,796,000
Total	16,594,000
2026	1,835,000
2027	1,874,000
Thereafter	10,618,000
Total future minimum lease payments	19,924,000
Less imputed interest	(3,330,000)
Total	16,594,000
Other Current Liabilities [Member]
Other current liabilities	$ 1,728,000

XML

Note 13 - Term Loan and Line of Credit (Details Textual)	1 Months Ended	3 Months Ended
	Feb. 28, 2022 USD ($)	Jan. 31, 2023 USD ($)
Term Loan [Member]
Debt Instrument, Interest Rate, Stated Percentage	3.76%
Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Long-Term Line of Credit, Total		$ 0
Bank of America, N.A. [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 3,000,000.0
Debt Instrument, Face Amount	$ 17,000,000
Debt Instrument, Covenant, Maximum EBITDA Ratio		3.00
Debt Instrument, Covenant, Fixed Charge Coverage Ratio		1.25
Dent Instrument, Covenant Required Ebitda		$ 600,000
Term Loan [Member]
Long-Term Debt, Gross		$ 14,980,000

XML

Note 14 - Cash Dividend and Declared Dividends (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2023	Jan. 31, 2022
Payments of Ordinary Dividends, Common Stock	$ 0	$ 0