UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 20162019

or

For the transition period from ______________ to ________________.

Commission File Number 0-13301

RF INDUSTRIES, LTD.

(Name of registrant as specified in its charter)

7610 Miramar Road, Bldg. 6000, San Diego, California 92126-4202

(Address of principal executive offices) (Zip Code)

(858) 549-6340

(Registrant’s telephone number, including area code)

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

Common Stock, $.01 par value.

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.¨ Yesx No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.¨ Yesx No

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.   x Yes   ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  x Yes    ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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.

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   x No

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $18.4$47.1 million.

On January 23, 2017,December 13, 2019, the Registrant had 8,835,4839,614,617 outstanding shares of Common Stock, $.01 par value.

Forward-Looking Statements:

Certain statements in this Annual Report on Form 10-K, and other oral and written statements made by the Company from time to time are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that discuss strategies, goals, outlook or other non-historical matters, or projected revenues, income, returns or other financial measures. In some cases forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “except,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those contained in such statements. Among the most important of these risks and uncertainties are the ability of the Company to continue to source its raw materials and products from its suppliers and manufacturers, particularly those in Asia, the market demand for its products, which market demand is dependent to a large part on the state of the telecommunications industry, the effect of future business acquisitions and dispositions, the incurrence of impairment charges, and competition.

Important factors which may cause actual results to differ materially from the forward-looking statements are described in the Section entitled “Risk Factors” in thethis Form 10-K, and other risks identified from time to time in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

PART I

General

RF Industries, Ltd., through its divisions and its three wholly-owned (together with subsidiaries, (collectively, hereinafter the “Company”), primarily engages in the design, manufacture, is a national manufacturer and marketingmarketer of interconnect products and systems, including coaxial and specialty cables and connectors, fiber optic cables and connectors, and electrical and electronic specialty cables.cables and components. The Company conductsalso manufactures and markets a line of ambient thermal systems for wireless telecom companies, as well as shrouds for small cell installations for the wireless industry. Through its operationsfive manufacturing and production facilities, the Company provides 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.

The Company operates through two reporting segments: (i) the following four divisions/subsidiaries: (i)“RF Connector and Cable Assembly” (RF Connector) segment, and (ii) the “Custom Cabling Manufacturing and Assembly” (Custom Cabling) segment. The RF Connector and Cable Assembly Division based in California,segment primarily designs, manufactures, markets and distributes a broad range of connector and cable products, including coaxial connectors and cable assemblies that are integrated with coaxial connectors; (ii) Cables Unlimited, Inc., a New York based subsidiary thatconnectors, used in telecommunications, information technology, OEM markets and other end markets. The Custom Cabling Manufacturing and Assembly segment designs, manufactures, markets and distributes custom copper and standardfiber cable assemblies, complex hybrid fiber optic and power solution cables, adapters, and electromechanical wiring harnesses, for communication, computer, LAN, automotive and medical equipment; (iii) Comnet Telecom Supply, Inc., a New Jersey based subsidiary that manufactures and sells fiber optics cable, distinctive cabling technologies and custom patch cord assemblies, as well as other data center products; and (iv) Rel-Tech Electronics, Inc., a Connecticut based subsidiary that designs and manufactures cable assemblies and wiring harnesses, ambient thermal systems, and shrouds for blue chip industrial, oilfield, instrumentation and military customers. Both Cables Unlimited and Comnet Telecom are Corning Cables Systems CAH Connections SM Gold Program members that are authorized to manufacture fiber optic cable assemblies that are backed by Corning Cables Systems’ extended warranty.small cell installations.

Until its sale on December 22, 2015, the Company also operated the Aviel Electronics Division, a Nevada based division that designed, manufactured and distributed specialty and custom RF connectors primarily for aerospace and military customers.  On November 17, 2015, the Company decided to sell its Aviel Electronics Division and on December 22, 2015 the Company sold this division. In March 2016, the Company announced the shutdown of its Bioconnect division, which comprised the entire operations of the Medical Cabling and Interconnect segment. Accordingly, the Company has segregated Bioconnect’s results from continuing operations and reported it as discontinued operations for the years ended October 31, 2016 and 2015. The closure is part of the Company’s ongoing plan to close or dispose of underperforming divisions that are not part of the Company’s core operations.

The Company’s principal executive office is currently located at 7610 Miramar Road, Building #6000, San Diego, California. The Company was incorporated in the State of Nevada on November 1, 1979, completed its initial public offering in March 1984 under the name Celltronics, Inc., and changed its name to RF Industries, Ltd. in November 1990. Unless the context requires otherwise, references to the “Company” in this report include RF Industries, Ltd. and Cables Unlimited, Inc., a New York company. In addition, all references to this Company for periods after November 1, 2014 also include Comnet Telecom Supply, Inc., a wholly owned subsidiary that RF Industries, Ltd. acquired on that date. Also, all references to this Company for periods after June 1, 2015 also include Rel-Tech Electronics, Inc., a wholly owned subsidiary that RF Industries, Ltd. acquired on that date.

The Company’s principal Internet website is located athttp://www.rfindustries.com. The Company’s annual reports, quarterly reports, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on that website as soon as we electronically file those documents with, or otherwise furnish them to, the Securities and Exchange Commission (“SEC”). The Company’s Internet website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Annual Report on Form 10-K.

Corporate Reorganization in fiscal 2016

Shutdown of Bioconnect division

In March 2016, the Company announced the shutdown of its Bioconnect division, which comprised the entire operations of the Medical Cabling and Interconnect segment. The closure is part of the Company’s ongoing plan to close or dispose of underperforming divisions that are not part of the Company’s core operations. For fiscal year ended October 31, 2016, the Company recognized a loss of approximately $148,000 for the Bioconnect division (which loss is attributed to discontinued operations in the fiscal 2016 financial statements) after Bioconnect lost its principal customer. For the prior fiscal year ended October 31, 2015, the Company recognized approximately $419,000 of income for the Bioconnect division. The Bioconnect Division operated out of the Company’s San Diego, California, facilities and was primarily engaged in product development, design, manufacture and sale of high-end or specialty cables and interconnects for medical monitoring applications.

Sale of Aviel Electronics division

On December 22, 2015, the Company sold the assets of its Aviel Electronics Division to an unaffiliated third party for $400,000. The purchase price for the Aviel assets was paid as follows: $150,000 was paid at the closing, and a $250,000 was paid by the delivery of a secured promissory note. The promissory note bears interest at a rate of 5% per annum and is payable over a three-year period. Aviel Electronics Division generated sales of $884,000 in the fiscal year ended October 31, 2015 (the operations of Aviel included in the Company’s RF Connector and Cable Assembly business segment). Aviel Electronics Division was based in Las Vegas, Nevada, and was primarily engaged in the design, manufacture and sale of custom, specialty or precision connectors and cable systems for specialized purposes, such as commercial aerospace and military systems.

Acquisitions in 2015

Rel-Tech Electronics, Inc.

On June 5, 2015, the Company purchased 100% of the issued and outstanding shares of Rel-Tech Electronics, Inc. (“Rel-Tech”) from four shareholders, including Ralph Palumbo. RF Industries, Ltd. paid the sellers $3,100,000, which consisted of $2,100,000 in cash, 50,467 shares of the Company’s unregistered common stock valued at $200,000 based on a per share price of $3.96 (the volume weighted average price of the Company’s common stock during the five trading days before the closing date) and, if certain financial targets are met by Rel-Tech over a three-year period, additional cash earn-out payments of up to $800,000. Mr. Palumbo agreed to serve as President of Rel-Tech at a base salary of $150,000 per year. Mr. Palumbo will also be entitled to earn an annual bonus of up to 50% of his base salary. Financial results for Rel-Tech have been included in the results of the Custom Cabling Manufacturing and Assembly segment subsequent to June 1, 2015.

CompPro Product Line

On May 19, 2015, the Company purchased the CompPro braided product line (“CompPro”), including the intellectual property rights to that product line, for a total purchase price of $700,000 cash. CompPro utilizes a patented compression technology that offers revolutionary advantages for a water-tight connection, easier installation, and improved system reliability on braided cables. CompPro is used by wireless network operators, installers and distributors in North America and other parts of the world. Included in the purchase is inventory, designs, intellectual property rights and rights to manufacture and sell CompPro products. Financial results for the CompPro products have been included in the results of the Company since May 19, 2015.

Comnet Telecom Supply, Inc.Recent Transactions

On January 20, 2015,October 31, 2018, the Company purchased 100% of the issued and outstanding shares ofsold Comnet Telecom Supply, Inc. (“Comnet Telecom”Comnet”) from Robert Portera, the sole shareholder of Comnet Telecom. Comnet Telecom is a, its New Jersey basedJersey-based manufacturer and supplier of telecommunications and data products, including fiber optic cables, cabling technologies, custom patch cord assemblies, data center consoles and other data center equipmentequipment. Comnet was formed in 1993. The Company paid Mr. Portera $4,150,000 in casha wholly-owned subsidiary that operated with a different sales model and stock, and agreed to pay him up to an additional $1,360,000 in cash as an earn-out overmargin profile than the next two years if Comnet Telecom meets certain financial milestones in the next two years. The purchase price paid at the closing consisted of $3,090,000 in cash and 252,381 sharesrest of the Company’s unregistered common stock, which shares were valued at $1.1 million based on a per share price of $4.20 (the volume weighted average price ofCompany. This divestiture reflected the Company’s common stock during the five trading days before the closing date). Comnet Telecom has, to date, been operated as a stand-alone subsidiary. The Company entered into a two-year employment agreement with Mr. Portera pursuant to which Mr. Portera has served as the Presidenttransformation of Comnet Telecom for a base salary will be $210,000 per year. Because the acquisition of Comnet was effective for financial accounting purposes as of November 1, 2014, Comnet’s financial results have been included in the Company’s results for the entire fiscal year ended October 31, 2015.its operating culture and marketing strategies.

Net Loss in Fiscal 2016

For the first time in over two decades, the Company experienced an annual net loss in the fiscal year ended October 31, 2016. Also, for the first time during that period, the Company had negative cash flow from its operations. The Company believes that there were various extraordinary factors that contributed to these adverse results, including certain non-recurring charges and expenses. The following factors contributed to the Company’s financial results in fiscal 2016:

(a)         On JuneMarch 15, 2011,2019, the Company purchased Cables Unlimited, Inc.the business and in connection therewith, recorded $3.1 millionassets of C Enterprises L.P., a California based designer and $410,000 for Cables Unlimited’s goodwillmanufacturer of quality connectivity solutions to telecommunications and the tradename (an intangible asset with indefinite life), respectively.  Purchased goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually or when indicators of impairment exist.  For the fiscal year 2016, Cables Unlimited did not meet its sales volume and revenue goals, and the mix of product sold had lower margins than planned. These results, along with changes in the competitive marketplace and an evaluation of business priorities, led to a shift in strategic direction and reduced future revenue and profitability expectations for the business. The results of these changes and circumstances lead to the determination that Cables Unlimited did not pass our qualitative assessment and, therefore, a quantitative assessment was required. In connection with the fiscal year ended October 31, 2016,data communications distributors.

On November 4, 2019, the Company quantitatively evaluatedpurchased Schroff Technologies International, Inc. (“Schrofftech”), a Rhode Island based manufacturer and marketer of  intelligent thermal control systems used by telecommunications companies across the goodwillU.S. and intangiblesCanada, and shrouds for small cell integration and installation.

Strategy

The Company’s overall strategy is to provide its customers with a broad selection of Cables Unlimitedproducts, rapid and determined that the carrying value of Cables Unlimited onhigh-quality service, and custom design capabilities, all at competitive prices. Specifically, the Company’s financial statements exceeded its fair market value.  As a result, an impairment to Cables Unlimited's goodwill and tradename was determined andoverall strategy is the Company recorded a non-cash impairment charge to goodwill and tradename of $2.6 million and $150,000, respectively, for the 2016 fiscal year.following:

(b)       As a result of the continuing change in the wireless marketplace, there has been a decreased demand for certain of the Company’s wireless products (including in particular for the Company’s wireless cabling products used by cell towers)Provide rapid and flexible design and manufacturing services. During the past few years, the Company benefitted from the demand for the products it sold to wireless service providers who were updating their networks to 4G technologies. Now that much of that upgrading work has been completed, the demand for the Company’s products has softened, resulting in lower sales and narrower gross margins. The decrease in sales was particularly significant in the Company’s Cables Unlimited subsidiary as demand for its Optiflex and other cell tower solutions dried up. This decrease in sales at Cables Unlimited triggered the impairment charge described above. Because of the reduced demand, the Company also reserved or disposed of excess inventory, which resulted in a $900,000 decrease in its inventory balance from the prior year end and negatively impacted the Company’s income. In order to react to this decrease in net sales, during the last two years, the Company redirectedhas been restructuring its operations to focus on certain newproviding rapid, flexible and high quality custom manufacturing services.

Competitive Pricing. The Company’s manufacturing and distribution arrangements have been designed to lower costs and, thereby, to enable the Company to offer prices on both the custom manufactured products and incurred significant additionalon most standard connector and cable products that are competitive with the marketplace.

Leverage its manufacturing and distribution capabilities and facilities. The Company’s strategy is to operate its five manufacturing and distribution locations to best provide our customers with a competitively priced, high quality customized product delivered with a fast turnaround time. As part of this strategy, the Company utilizes a “one-company” approach to its five production and distribution locations and allocates its resources based on their production specialization capabilities, proximity to the shipment destination and many other factors. Using this “one-company” approach, the Company’s goal is to not only shorten delivery times but to also lower shipping costs. The Company currently operates from its five manufacturing and distribution locations in the U.S.; two in California, and three in the Northeast.

Integrate marketing and personnel expenses. Theseselling efforts increased. The Company’s strategy is to integrate and cross-sell the product lines manufactured at, or distributed by its five facilities. The Company has been integrating the marketing and sales efforts of the five divisions, thereby expanding the number and type of products each division can offer to its existing client base.

Broad range of immediately available connector products. The Company’s selling and general administrative expenses in fiscal 2016, but did not produce satisfactory returns.strategy is to stock a very large selection of connector parts, including parts for older or discontinued products that are available for immediate delivery. As a result, the Company has now ended certainis able to fill smaller orders for unique connector parts, as well as provide a broad range of these unsuccessful programsstandard connector products.

Targeted focus of product lines. The Company’s revised strategy is to focus on passive products that are integrated into telecommunications, infrastructure and has made employee changes, which changes are expectedsimilar products manufactured by others, rather than manufacturing and selling operating components or products. As a result, the Company no longer manufactures radio modems, no longer provides mobile management solutions and services, and no longer manufactures medical monitoring products.

Increase long-term relationships with customers. The Company’s goal is to resultestablish longer-term relationships with the customers who have to date used the Company for specialized projects by having the Company’s customized solutions built into the customer’s product specifications and bill of materials.

Grow through strategic and targeted acquisitions. The Company will continue to consider strategic acquisitions of companies or technologies that can increase or diversify the Company’s customer base, supplement the Company’s management team, expand the Company’s product offerings, and/or expand the Company’s footprint in a significant decrease in selling and general expenses in fiscal 2017.relevant market segment.

(c)       The Company has, during the past two years, made material changes in the composition of its business units, which have resulted in one-time additional legal, accounting, personnel and infrastructure expenses. As described above, in fiscal 2015 the Company purchased its Comnet and Rel-Tech subsidiaries and, in fiscal 2016 the Company sold its Aviel division and closed its Bioconnect division. The Company incurred significant legal, accounting and other expenses in connection with these acquisitions and dispositions. In addition, the Company has also incurred significant additional expenses in integrating the Comnet and Rel-Tech businesses with the Company’s existing operations. For example, in fiscal 2016 the Company incurred $171,000 of expenses in connection with implementing a new enterprise resource planning (ERP) system that now integrates all of the Company’s operations on both the East Coast and California.Operations

(d)       During fiscal 2016, the Company considered a strategic transaction with another wireless company. After a due diligence and financial review, the Company determined that the transaction was not in the best interests of the Company’s stockholders and, therefore, the proposed transaction was terminated. The Company incurred over $256,000 of professional fees and expenses in connection with the abandoned transaction, which fees and expenses negatively affected the Company’s cash flow and profitability in fiscal 2016.currently conducts its operations through its five divisions.

Operating Divisions/Subsidiaries

RF Connector and Cable Assembly DivisionSegment.

The Company’s RF Connector and Cable Assembly Divisionsegment (“RF Connector segment”) consists of the RF Connector and Cable Assembly division (“RF Connector division”) that is based at the Company’s headquarters in San Diego, California. Although most of the Company’s RF connector and cable products are inventoried and distributed from its San Diego facilities, some of these products also are inventoried and distributed from the Company’s other facilities. The RF Connector division is engaged in the design, manufacture and distribution of coaxial connector solutions for companies that design, build, operate, maintain and use wireless voice, data, messaging, and location tracking systems. Coaxial connector products consist primarily of connectors which, when attached to a coaxial cable, facilitate the transmission of analog and digital signals in various frequencies. Although most of the connectors are designed to fit standard products, the CompanyRF Connector division also sells custom connectors specifically designed and manufactured to suit its customers’ requirements such as the Wi-Fi and broadband wireless markets.

The Company’s RF Connector and Cable Assembly Divisiondivision typically carrycarries over 1,500 different types of connectors, adapters, tools, and test and measurements kits. The Company’sThis division’s RF connectors are used in thousands of different devices, products and types of equipment. WhileSince the models and types of devices, products and equipment may change from year to year, the demand for the types of connectors used in such products and offered by the Company does not fluctuate with the changes in the end product incorporating the connectors. In addition, since the Company’sRF Connector division’s standard connectors can be used in a number of different products and devices, the discontinuation of one product typically does not make the Company’s connectors obsolete. Accordingly, most connectors carried by the Company can be marketed for a number of years and are only gradually phased out. Furthermore, because the Company’s connector products are not dependent on any single line of products or any market segment, the Company’s overall sales of connectors do nottend to fluctuate materiallyless when there are material changes or disruption to anya single product line or market segment. Sales of the Company’s connector products are, however, dependent upon the overall economy, infrastructure build outbuild-out by large telecommunications firms and on the Company’s ability to market its products.products to these customers.

Cable assembly products manufactured and sold by the RF Connector division consist of various types of coaxial cables that are attached to connectors (usually the Company’s connectors) for use in a variety of communications applications. Cable assemblies manufactured for the RF Connector and Cable Assembly Divisiondivision are primarily manufactured at the Company’s San Diego, California facilities using state-of-the-art automation equipment and are sold through distributors or directly to major OEM accounts. Cable assemblies consist of both standard cable assemblies and assemblies that are custom manufactured for the Company’s clients. The Company offers a line of cable assemblies with over 100,000 cable product combinations. The Company launched its cable assembly operations in 2000.

The Connector and Cable Assembly Division also includes Oddcables.com, formerly a stand-alone division that sells coaxial, fiber optic and other connectors and cable assemblies on a retail basis. Effective November 1, 2013, the Oddcables.com Division was integrated with the Connector and Cable Division.

The Company designs its connectors at its headquarters in San Diego, California. However, most of the RF connectors are manufactured for the Company by third partythird-party foreign manufacturers located in Asia.

Custom Cabling Manufacturing and Assembly Segment.

The Custom Cabling segment currently consists of four wholly-owned subsidiaries – three located in the Northeastern U.S and one located in Southern California. Until its sale on October 31, 2018, Comnet Telecom was part of the Custom Cabling segment. C Enterprises, Inc., which the Company acquired in March 2019, and Schrofftech, which was acquired in November 2019, are now part of the Custom Cabling Manufacturing and Assembly segment. Certain of the products manufactured and sold by these East Coast are similar and can be manufactured at either of the East Coast facilities. The Company’s Connector and Cable Assembly operations are conducted outplan is to integrate certain of the manufacturing and marketing functions of these divisions so as to better address overlapping market opportunities and to more efficiently manufacture, market and ship products to the Company’s San Diego,customers. The newly acquired Southern California facilities.custom cabling manufacturing and assembly facility provides similar products and services to their customers compared to the other East Coast facilities focusing largely on fiber optic and copper cable assemblies. The four subsidiaries that comprise the current Custom Cabling segment consist of the following:

Cables Unlimited, DivisionInc. Cables Unlimited, Inc. ("Cables Unlimited") is a custom cable manufacturer that RF Industries, Ltd. purchased in 2011. Cables Unlimited is located in Yaphank, New York, and is operated as a separate division.that RF Industries, Ltd. acquired in 2011. Cables Unlimited is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems' extended warranty. Cables Unlimited designs, develops and manufactures custom connectivity solutions for the industrial, defense, telecommunications and wireless markets.  The products sold by Cables Unlimited include custom and standard copper and fiber optic cable assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive fiber optic and medical equipment. In 2012, Cables Unlimited introduced a new custom cabling solution known as OptiFlex. The OptiFlex cable is a hybrid power and communications cable designed and built for wireless service providers who are updating their networks to 4G technologies such as WiMAX, LTE and other technologies.

Comnet Telecom Supply Division RF Industries, Ltd. purchased Comnet Telecom Supply, Inc. in January 2015. Comnet Telecom’s offices and manufacturing facilities are located in East Brunswick, New Jersey. Formed in 1995, Comnet Telecom is a Corning Cable Systems CAH Connections SM Gold Program member that is authorized to manufacture fiber optic telecommunications products that are backed by Corning Cable Systems' extended warranty and is a Telcordia GR-326 certified manufacturer. Comnet Telecommunications manufactures and distributes telecom equipment and cabling infrastructure products used by telecommunications carriers, co-location service companies, and other telecommunication and data center companies in the U.S. across multiple industries. This division is also a supplier of Hot/Cold Aisle Containment as well as Technology Furnishing Solutions. Data center filler panel containment products have recently been developed by this division with production commencing in 2016.

Rel-Tech Electronics, DivisionInc. RF Industries, Ltd. purchasedacquired Rel-Tech Electronics, Inc. ("Rel-Tech") in June 2015. Rel-Tech’s offices and manufacturing facilities are located in Milford, Connecticut. Founded in 1986, Rel-Tech is a designer and manufacturer of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, medical and military customers. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, and networking and communications cabling. DIN and Mini-DIN connector assemblies include power cord, coaxial, Mil-spec, and testing.

The Company aggregates operating divisions into operating segments which have similar economic characteristicsC Enterprises, Inc. C Enterprises, Inc. ("C Enterprises") is a fiber optic and copper cable manufacturer located in Vista, California. This subsidiary acquired the business and assets of C Enterprises, L.P. on March 15, 2019. C Enterprises is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic products that are similar in the majority of the following areas: (1) the nature of the productbacked by Corning Cable Systems’ extended warranty. C Enterprises designs, develops and services; (2) the nature of the production process; (3) the type or class of customer for their productsmanufactures connectivity solutions to telecommunications 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 the end of fiscal 2016, the Company has two segments - the “RF Connector and Cable Assembly” segment and the “Custom Cabling Manufacturing and Assembly” segment. For the fiscal year ended October 31, 2016, the RF Connector and Cable Assembly segment was comprised of the Connector and Cable Assembly Division and of Aviel Electronics. Since Aviel Electronics was sold in December 2015, the Connector and Cable Assembly Division currently is the only division in this financial reporting segment. The Custom Cabling Manufacturing and Assembly segment is comprised of the Company’s three operating subsidiaries (Cables Unlimited, Comnet and Rel-Tech). Both Comnet Telecom and Rel-Tech are included in the Custom Cabling Manufacturing and Assembly segment in the fiscal years ended October 31, 2016 and 2015. Since the acquisition of Comnet Telecom was effective for financial accounting purposes as of November 1, 2014, Comnet Telecom’s financial results are included in the results of the Custom Cabling Manufacturing and Assembly segment for the entire fiscal year ended October 31, 2016 and 2015. Financial results for Rel-Tech have been included in the results of the Custom Cabling Manufacturing and Assembly segment beginning June 1, 2015.data communications distributors.

Schroff Technologies International, Inc. RF Industries, Ltd acquired Schroff Technologies (“Schrofftech”) in November 2019. Schrofftech is a Rhode Island-based manufacturer and marketer of  intelligent thermal control systems used by telecommunications companies across the U.S. and Canada, and shrouds for small cell integration and installation.

Product Description

The Company produces a broad range of interconnect products and assemblies.assemblies and other products used in the telecommunications and a broad range of other industries. The products that are offered and sold by the Company’s various divisionsCompany consist of the following:

Connector and Cable Products

The Company’s Connector and Cable Assembly DivisionCompany designs, manufactures and markets a broad range of coaxial connectors, coaxial adapters and coaxial cable assemblies for the numerous products with applications in commercial, industrial, automotive, transportation, scientific, aerospace and military markets. Various types of products/connectors are offered by the RF Connector Division includinginclude passive Distributed Antenna Systems (DAS)DAS related items such as connectors, adapters, splitters, couplers and loads, Mini-DIN, 4.3/10, Compression Connectors, 2.4mm, 3.5mm, 7-16 DIN, BNC, MCX, MHV, Mini-UHF, MMCX, N, SMA, SMB, TNC, QMA and UHF.loads. These connectors are offered in several configurations and cable attachment methods for customer applications. There are numerous applications for these connectors, some of which include digital applications, 2.5G, 3G, 4G, Wi-MAX,5G, LTE, Wi-Fi and other broadband wireless infrastructure, GPS (Global Positioning Systems), mobile radio products, aircraft, video surveillance systems, cable assemblies and test equipment. Users of the Company’s connectors include telecommunications companies, circuit board manufacturers, OEM,OEMs, consumer electronics manufacturers, audio and video product manufacturers and installers, and satellite companies. The Connector DivisionCompany markets over 1,500 types of connectors, adapters, tools, assembly, test and measurement kits, which range in price from under $1 to over $1,000 per unit. The kits satisfy a variety of applications including, but not limited to, lab operations, site requirements and adapter needs.

The Connector DivisionCompany also designs and sells a variety of connector tools and hand tools that are assembled into kits used by lab and field technicians, R&Dresearch and development technicians and engineers. The Company also designs and offers some of its own tools, which differ from those offered elsewhere in the market. These tools are manufactured for the Company by outside contractors. Tool products are carried as an accommodation to the Company’s customers and have not materially contributed to the Company’s revenues.

In addition and as a result of the acquisition of the CompPro Product Line, the Connector Division markets and manufactures a patented compression technology that offers revolutionary advantages for a water-tight, ruggedized connection, providing easier installation, and improved system reliability on braided cables. CompPro is used by wireless network operators, installers and distributors in North America and other parts of the world.

The Cable Assembly component of the Connector and Cable Assembly DivisionCompany markets and manufactures cable assemblies in a variety of sizes and combinations of RF coaxial connectors and coaxcoaxial cabling. Cabling is purchased from a variety of major unaffiliated suppliers and is assembled predominately with the Company’s connectors or other brands of connectors as complete cable assemblies. Coaxial cable assemblies have numerous applications including low PIM, wirelessWi-Fi and wireless local area networks, wide area networks, internet systems, PCS/cellular systems including 2.5G, 3G, 4G, Wi-MAX,5G, LTE, wireless infrastructure, DAS and Small Cell installations, TV/dish network systems, test equipment, military/aerospace (mil-standard and COTS (Commercial Off The Shelf)Off–The-Shelf)) and entertainment systems. Cable assemblies are manufactured to customer requirements.

Through its Oddcables.com website,

The Company carries thousands of separate types of connectors, most of which are available in standard sizes and configurations and that are also offered by other companies. However, the Company offers hundreds of audio cables, video cables, S-video cables, VGA cables, DVI cables, HDMI cables, RF coax adapters, coax cables, coax tools kits, computer cables, USB and firewirealso has some proprietary products, including the CompPro product line, its OptiFlex cables, and Schrofftech telecom shelter cooling and control system products. CompPro is a patented compression technology that offers advantages for a water-tight, ruggedized connection, providing easier installation, and improved system reliability on braided cables. CompPro is used by wireless network operators, installers and distributors in North America and other networking cables to retail customers.parts of the world. OptiFlex is a hybrid fiber optic and DC power cabling solution that the Company designed and manufactures, and the Schrofftech products are energy efficient cooling/temperature control and filtration systems for use in telecom shelters, outdoor enclosures and battery/power rooms.

Cables UnlimitedFiber Optic Products

The Company’s Cables Unlimited division is an International Standards Organization (ISO) approved factory that manufactures custom cable assemblies. Cables Unlimited is also a Corning Cable Systems CAH Connections SM Gold Program member that is authorized to manufacture fiber optic products that are backed by Corning Cable Systems'Systems’ extended warranty. Products manufactured byThrough its Cables Unlimited include custom copper and fiber optic cable assemblies, adapters and electromechanical wiring harnesses for telecommunications, computer, LAN, automotive and medical equipment companies. Cables Unlimited also provides cable installation services in the New York regional area. In April 2012, Cables Unlimited commercially released a cabling solution for wireless service providers engaged in upgrading their cell towers for 4G technologies. The custom hybrid cable, called OptiFlex, is significantly lighter and possesses greater flexibility than cables previously used for wireless service. Most of the products that Cables Unlimited develops and sells are built specifically for its customers’ needs.

The acquisition of Cables Unlimited in 2011 gavedivision, the Company the ability to offeroffers a broad range of interconnect products and systems to the Company’s largest customers. These interconnect systemsthat have the ability to combine radio frequency and fiber optic interconnect components, with various connectors and power cables through customized solutions for these customers. The Company continues to actively market its ability to provide theseCables Unlimited also manufactures OptiFlex, a custom designed hybrid fiber optic interconnectand DC power cabling solution manufactured for wireless service providers engaged in upgrading their cell towers. The custom hybrid cable is significantly lighter and possesses greater flexibility than cables previously used for wireless service.

C Enterprises is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems’ extended warranty. C Enterprises designs, develops and manufactures connectivity solutions to its larger customers.telecommunications and data communications distributors.

Comnet TelecomOther Cabling Products

Comnet TelecomThe Company also designs, manufactures and distributes both standard and custom equipment and cabling products used by telecommunications carriers, co-location center operators and other telecommunication and data center companies in the U.S. Such products include fiber optics cable, copper cabling, custom patch cord assemblies, transceivers/converters, data center consoles and other data center equipment (such as server cabinets and network racks). The acquisition of Comnet Telecom expands the Company’s fiber optic cabling capabilities and the customer base to which the Company can sell its other cabling products. The opportunities are further enhanced to sell Comnet data center infrastructure and telecom products into our cable product customer base.

Rel-Tech Electronics Products

Rel-Tech is a designer and manufacturer ofsells cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, medical and military customers. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, networking and communications cabling. DIN and Mini DIN connector assemblies include power cord, coaxial, Mil-spec and testing.

Telecommunications Thermal Control Systems and Shrouds

Since its acquisition of Schrofftech in November 2019, the Company now also manufactures and sells intelligent thermal control systems for outdoor telecommunications equipment. The thermal control systems, which can be controlled offsite using networked software at the telecommunication company’s own data center, maintain the interior temperature of telecommunications equipment. Schrofftech has also introduced shrouds for small cell deployments that reduce installation time and improve aesthetics by eliminating the exterior cabling used with current configurations.

Foreign Sales

Net sales to foreign customers accounted for $1.0 million$960,000 (or approximately 3%2%) of the Company’s net sales, and $1.2 million$662,000 (or approximately 4%1%) of the Company’s net sales respectively, for the fiscal years ended October 31, 20162019 and 2015.2018, respectively. The majority of the export sales during these periods were to Canada Mexico and Israel.Mexico.

The Company does not own, or directly operate any manufacturing operations or sales offices in foreign countries.

Distribution Marketing and CustomersMarketing

Sales methods vary greatly between the Company’s divisions. The Connector and Cable Assembly Division, the Cables Unlimited Division and the Rel-Tech Electronics DivisionCompany currently sell their products primarily through warehousing distributors and OEM customers who utilize coaxial connectors and cable assemblies in the manufacture of their products.

Comnet Telecom sells its products directly to its own customersthrough independent warehousing distributors and through its in-house marketing and sales team. Comnet Telecom’s principal customers include co-location centers, data processing centers, telecommunicationsSales through independent distributors accounted for approximately 45% of the net sales of the Company for the fiscal year ended October 31, 2019. The Company’s agreements with most of the distributors are nonexclusive and telephone companies, and wireless carriers. Comnet Telecom alsogenerally may be terminated by either party upon 30-60 days’ written notice. The Company directly sells certain of its products to large, national telecommunication equipment and solution providers who include Comnet Telecom’sthe Company’s products in their own product offerings.

Manufacturing

The Connector and Cable Assembly DivisionCompany contracts with outside third parties for the manufacture of a significant portion of its coaxial connectors. However, virtually all of the RF cable assemblies sold by the Connector and Cable Assembly DivisionCompany during the fiscal year ended October 31, 20162019 were assembled by the Cable Assembly side of the Connector and Cable Assembly Division at the Company’sInternational Organization for Standardization (ISO) approved ISO factory in San Diego, California. The Connector and Cable Assembly DivisionCompany procures its raw cable from manufacturers with ISO approved factories in the United States, China and Taiwan. The Company is dependent primarily relies on elevenfourteen manufacturers for its coaxial connectors, tools and other passive components and several plants for raw cable. Although the Company does not have manufacturing agreements with these manufacturers for its connectors and cable products, the Company does have long-term purchasing relationships with these manufacturers. There are certain risks associated with the Company’s dependence on third-party manufacturers for some of its products. See “Risk Factors” below. The Company has in-house design engineers who create the engineering drawings for fabrication and assembly of connectors and cable assemblies. Accordingly, the manufacturers are not primarily responsible for design work related to the manufacture of the connectors and cable assemblies.

Cables UnlimitedThe Company manufactures its custom cable assemblies, adapters and electromechanical wiring harnesses and other products inthrough Cables Unlimited, Inc. at its Yaphank, New York manufacturing facility. Cables UnlimitedThe Yaphank facility is an ISO approved factory, as well asfactory. Cables Unlimited is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic products and assemblies that are backed by Corning Cable Systems' extended warranty. Cables Unlimited outsources the assembly of a portion of its proprietary OptiFlex cable to a third party manufacturer. The final assembly and termination of the OptiFlex cable is completed by Cables Unlimited at its Yaphank, New York facilities.

Comnet Telecom manufactures, assembles and tests its cabling products at its facilities in East Brunswick, New Jersey. Comnet Telecom is a Corning Cable Systems CAH Connections SM Gold Program approved fiber optic member and a Telcordia GR-326 approved manufacturer also authorized to produce fiber optic products and assemblies that are backed by Corning Cable Systems' extended warranty.

The Milford, Connecticut facility of Rel-Tech Electronics, manufactures itsInc. is an ISO approved manufacturing facility that is primarily used to manufacture cable assemblies, electromechanical assemblies, wiring harnesses and other products in its Milford, Connecticut,similar products. 

The Vista, California facility operated by C Enterprises, Inc. is an ISO approved manufacturing facility. facility that is primarily used to manufacture fiber optic and copper cable assemblies that are backed by Corning Cable Systems’ extended warranty.

The products sold by Schrofftech are designed and manufactured at that company’s ISO approved manufacturing facility in North Kingstown, Rhode Island. Schrofftech’s products are manufactured and tested in accordance with the ETL Listing standards.

Raw Materials

Connector materials are typically made of commodity metals such as copper, brass and zinc and include small applications of precious materials, including silver and gold. The RF Connector and Cable Divisiondivision purchases most of its connector products from contract manufacturers located in Asia and the United States. The Company believes that the raw materials used in its products are readily available and that the Company is not currently dependent on any supplier for its raw materials. The Company does not currently have any long-term purchase or supply agreements with its connector or suppliers. The Cable Assembly Group obtainsCustom Cabling divisions obtain coaxial connectors from the RF Connector group.division. The Company believes there are numerous domestic and international suppliers of other coaxial connectors.connectors that the Company may need for any of its cabling products.

The Cables Unlimited, Division, Comnet Telecom Division and the Rel-Tech Electronics, DivisionC Enterprises, and Schrofftech divisions purchase largely all of the raw materials used in their products from manufacturerssources located in the United States. Fiber optic cables are available from various manufacturers located throughout the United States; however, both Cables Unlimited and Comnet Telecom purchasepurchases most of theirits fiber optic cables from Corning Cables Systems LLC. The Company believes that the raw materials used by Cables Unlimited and Comnet Telecom in theirits products are readily available and that neither divisionCables Unlimited is not currently dependent on any supplier for its raw materials except where Corning Extended Warranty certification is required. Neither Cables Unlimited nor Comnet Telecom nor Rel-Tech Electronics currently have any long-term purchase or supply agreements with their connector and cable suppliers.

Employees

As of October 31, 2016,2019, the Company employed 189281 full-time employees, of whom 6051 were in accounting, administration, sales and management, 123224 were in manufacturing, distribution and assembly, and 6 were engineers engaged in design, engineering and research and development. The employees were based at the Company’s officesfacilities in San Diego, California (64(78 employees), Yaphank, New York (33(76 employees), Milford, Connecticut (62(51 employees), and East Brunswick, New Jersey (30Vista, California (76 employees). RF Industries purchased Schrofftech in November 2019. As of the date of this Annual Report, Schrofftech had 12 full-time employees, of whom six were in administration and the rest were in engineering and manufacturing. The Company also occasionally hires part-time employees.

The Company believes that it has a good relationship with its employees. The Cables Unlimited Divisiondivision employs sixfive cable installers who are currently represented by a union. Other than the foregoing installers that belong to a union, none of the Company’s other employees are unionized.

Research and Development

The Company’s research and development expenses relate to its engineering activities, which consist of the design and development of new products for specific customers, as well as the design and engineering of new or redesigned products for the industry in general. During the years ended October 31, 2016 and 2015, the Company recognized $747,000 and $775,000 in engineering expenses, respectively. Research and development costs are expensed as incurred.

Patents, Trademarks and Licenses

The Company owns 13ten U.S. patents related to CompPro Product Line that it acquired in May 2015. The CompPro Product Line utilizes a patented compression technology that offers revolutionary advantages for a water-tight connection, easier installation, and improved system reliability on braided cables. The CompPro Product Line is used by wireless network operators, installers and distributors in North America and other parts of the world.

The Company’s Schrofftech subsidiary owns three issued patents (two are owned jointly) on its proprietary telecom shelter cooling and control system technology and its equipment room ventilation controls. Schrofftech has also filed five pending patent applications related to ventilation and control equipment and controls.

The trademarks the Company also owns includes the “CompPro” registered trademark associated with the compression cable product line.

The Company usesline and the “OptiFlex™” as a trademark for its hybrid cable wireless tower cable solution. The Company and each of its subsidiaries also use various trademarks (and associated logos and trade names) in their operations, although none of these trademarks have been registered.

Because the CompanyRF Connectors division carries thousands of separate types of connectors and other products, most of which are available in standard sizes and configurationconfigurations and are also offered by the Company’s competitors, the Company does not believe that its cables and connector business or competitive position is dependent on patent protection.

Under its agreements with Corning Cables Systems LLC, Cables Unlimited and Comnet TelecomC Enterprises are permitted to advertise that they are Corning Cables System CAH Connections SM Gold Program members.

Warranties and Terms

The Company warrants its products to be free from defects in material and workmanship for varying warranty periods, depending upon the product. Products are generally warranted to the dealer for one year, with the dealer responsible for any additional warranty it may make. The RF Connector products are warranted for the useful life of the connectors. Although the Company has not experienced any significant warranty claims to date, there can be no assurance that it will not be subjected to such claims in the future.

The Company usually sells to customers on 30-day terms pursuant to invoices and does not generally grant extended payment terms. Sales to most foreign customers are made on cash terms at time of shipment. Customers may delay, cancel, reduce, or return products after shipment subject to a restocking charge.

Under its agreements with Corning Cables Systems LLC, Cables Unlimited and Comnet TelecomC Enterprises are authorized to manufacture optic cable assemblies that are backed by Corning Cables Systems’ extended warranty (referred to as the “Gold Certified Warranty”).

Competition

The Companyindustries in which we operate are highly competitive, and we compete with thousands of companies that range from large multinational corporations,some of which have greater assets and financial resources than the Company,to local manufacturers. Competition is generally based on breadth of product offering, product innovation, price, quality, delivery, performance and customer service. In addition, rapid technological changes occurring in the communications industry analysts estimate worldwide salescould also lead to the entry of interconnect productsnew competitors of approximately $54 billion in 2016. The Company believesall sizes against whom we may not be able to successfully compete.  There can be no assurance that the worldwide industry for interconnect productsCompany will be able to compete successfully against existing or new competition, and systems is highly fragmented, with no one competitor having over a 20%the inability to do so may result in price reductions, reduced margins, or loss of market share, any of the total market. The Company and industry analysts estimate worldwide sales of cable assembly products of approximately $142 billion in 2015. In North America, there arewhich could have an estimated 1,105 companies participating in the cable assembly business with approximately 23% of the companies serving the industrial market sector. Many of the competitors of the Connector and Cable Assembly Division have significantly greater financial resources and broader product lines. The Connector and Cable Assembly Division competesadverse effect on the basisCompany’s business, financial condition and results of product quality, product availability, price, service, delivery time and value-added support to its distributors and OEM customers. Since the Company’s strategy is to provide a broad selection of products in the areas in which it competes and to have a ready supply of those products available at all times, the Company normally carries a significant amount of inventory of its connector products.

Cables Unlimited competes on the basis of product quality, custom design, service, delivery time and value-added support to its customers. Since Cables Unlimited and Comnet Telecom are Corning Cables System CAH Connections Gold Program members, along with 13 companies permitted to manufacture fiber optic cable assemblies that are backed by Corning Cables Systems’ extended warranty. Cables Unlimited and Comnet Telecom believes that being part of a limited number of Corning Cables System CAH Connections Gold Program members provides a competitive advantage in certain fiber optic markets.

Cables Unlimited, Comnet Telecom and Rel-Tech Electronics compete with both smaller, local cable assembly houses as well as large, national manufacturers and distributors of telecommunications equipment and products.operations

Government Regulations

The Company’s products are designed to meet all known existing or proposed governmental regulations. Management believes that the Company currently meets existing standards for approvals by government regulatory agencies for its principal products.

The Company’s products are Restriction on Hazardous Substances (“RoHS”) compliant.

Investor Information.

The Company’s principal executive office is currently located at 7610 Miramar Road, Building #6000, San Diego, California. The Company was incorporated in the State of Nevada on November 1, 1979, completed its initial public offering in March 1984 under the name Celltronics, Inc., and changed its name to RF Industries, Ltd. in November 1990. Unless the context requires otherwise, references to the “Company” in this report include RF Industries, Ltd. and its four wholly-owned subsidiaries, Cables Unlimited, Inc., Rel-Tech Electronics, Inc., C Enterprises, Inc., and Schroff Technologies International, Inc.

The Company’s principal Internet website is located athttp://www.rfindustries.com. The Company’s annual reports, quarterly reports, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on that website as soon as we electronically file those documents with, or otherwise furnish them to, the Securities and Exchange Commission (“SEC”). Reports filed with the SEC are also available on the SEC’s website atwww.sec.gov. The Company’s Internet website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Annual Report on Form 10-K.

Investors should carefully consider the risks described below and all other information in this Form 10-K. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to the Company or that it currently deems immaterial may also impair the Company’s business and operations.

If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected. In such case, the trading price of the Company’s common stock could decline and investors may lose all or part of the money they paid to buytheir investment in the Company’s common stock.

The Company Is Heavily Dependent Upon Wireless And Broadband Communications Providers.

TheMost of the Company’s revenues and profitability of bothwere generated from products that the RF Connector and Cable Assembly division and the Cables Unlimited division are,Company sells, directly or through its distributors, to a large extent, dependent upon the wireless and broadband communications industries. Accordingly, revenuesIn addition, the Company also sells connectors, cables and profits atother products to companies that incorporate these two divisions increased a few years ago as theproducts into their own wireless and broadband markets increased. However,communications products. As a result, the revenues and profitability of the RF Connector and Cable Assembly division and the Cables Unlimited division have decreased during the past two years as these markets have experienced an industry-wide slowdown in growth. The operations RF Connector and Cable Assembly division and the Cables Unlimited division are expected in the future to continue to beCompany’s business is heavily dependent upon the wireless and broadband industries. The Company acquired Comnet Telecom in January 2015 and Rel-Tech Electronics in June 2015 in part to reducemarkets.  Demand for the Company’s dependenceproducts in these markets depends primarily on these two divisionscapital spending by operators for constructing, rebuilding or upgrading their telecommunication systems. The amount of this capital spending and, to provide other communications productstherefore, the Company’s sales and profitability, will be affected by a variety of factors, including general economic conditions, consolidation within the telecommunications industry and the financial condition of operators. There can be no assurance that areexisting levels of capital spending will continue or that spending will not as dependent upon thedecrease. A significant decline in capital expenditures by wireless and broadband markets. However, becausecommunications companies could have a material adverse effect on the RF ConnectorCompany’s business, financial condition and Cable Assembly divisionresults of operations.

The Company’s Recent Increases In Revenues and Profits Are Due In Large Part To Accelerated Spending Related to Upgrades of the Cables Unlimited division represent a largeU.S. Wireless Infrastructure and Networks, And Any Decline In This Activity or the Related Capital Expenditures Could Have A Material Negative Affect On The Company’s Operations And Financial Condition.

A major portion of the Company’s recent growth in both revenues and profitability is due to increased sales by the Company of products, particularly custom made products manufactured by the Company’s Custom Cabling segment, used to build out and/or upgrade the U.S. wireless infrastructure and related networks. The upgrades to the infrastructure are to both support existing 4G networks, as well as to lay the groundwork for mobile 5G networks. The Company’s products used to build out and upgrade cell tower networks include certain types of custom cabling, fiber optic cable, copper cabling, and hybrid fiber and power cables. Most of the Company’s recent sales of cell tower upgrade products were made, directly or through the Company’s distributors, to a small number of end users. The Company’s revenues and profits an adverse change in the operationscould abruptly and materially decrease if any of these two segments could materially adversely affect the Company’s business, operating results and financial condition.primary end user customers slow down or decrease their purchases of the Company’s products. No assurance can be given that the Company will continue to benefit from the recent increase in wireless network improvements by U.S. wireless carriers.

The Company Depends On Third-Party Contract Manufacturers For A Majority Of Its Connector Manufacturing Needs. If They Are Unable To Manufacture A Sufficient Quantity Of High-Quality Products On A Timely And Cost-Efficient Basis, The Company’s Net Revenue And Profitability Would Be Harmed And Its Reputation May Suffer.

Substantially all of the Company’s RF Connector and Cable Division’sdivision’s connector products are manufactured by third-party contract manufacturers. The Company relies on them to procure components for RF Connectorsconnectors and in certain cases to design, assemble and test its products on a timely and cost-efficient basis. If the Company’s contract manufacturers are unable to complete design work on a timely basis, the Company will experience delays in product development and its ability to compete may be harmed. In addition, because some of the Company’s manufacturers have manufacturing facilities in Taiwan and China, their ability to provide the Company with adequate supplies of high-quality products on a timely and cost-efficient basis is subject to a number of additional risks and uncertainties, including political, social and economic instability and factors that could impact the shipment of supplies. If the Company’s manufacturers are unable to provide it with adequate supplies of high-quality products on a timely and cost-efficient basis, the Company’s operations would be disrupted and its net revenue and profitability would suffer. Moreover, if the Company’s third-party contract manufacturers cannot consistently produce high-quality products that are free of defects, the Company may experience a higher rate of product returns, which would also reduce its profitability and may harm the Company’s reputation and brand.

The Company does not currently have any long-term supply agreements with any of its contract manufacturers, and such manufacturers could stop manufacturing products for the Company at any time. Although the Company believes that it could locate alternate contract manufacturers if any of its manufacturers terminated their business, the Company’s operations could be impacted until alternate manufacturers are found.

The Company’s RecentPrior Acquisitions And Potential Additional Future Acquisitions Could Increase Operating Costs And Expose The Company To Additional Risks.

As part of its plan to operate businesses that are profitable and that reflect the changing market, the Company from time to time sells unprofitable divisions and purchases new businesses. DuringSuch recent transactions include the past few years,disposition of its Comnet Telecom subsidiary on October 31, 2018, and the purchase of its new C Enterprises and Schrofftech subsidiaries in 2019. In addition, the Company has soldpreviously disclosed that, as part of its Aviel, RadioMobile and RF Neulink divisions, and has shutdown its Bioconnect division. Thegrowth strategy, the Company has also purchasedintends to make additional acquisitions of businesses in the Cables Unlimited, Comnet Telecom, and Rel-Tech subsidiaries.future. While the Company believes that restructuring its operations to address changes in its principal marketsand acquiring other businesses will benefit the Company in the longer term, these dispositions and acquisitions have in the short term caused the Company to incur additional legal, accounting and administrative expenses, including the cost of integrating the various accounting systems of its new subsidiaries, upgrading its information systems, and the cost of managing various divisions in separate locations and states. The Company may in the future make additional acquisitions. Accordingly, the Company will be subject to numerous risks associated with the acquisition of additional businesses, including:

Any of these risks could materially harm the Company’s business, financial condition and results of operations. There can be no assurance that any business that the Company acquires will achieve anticipated revenues or operating results.

The Company’s Dependence On Third-Party Manufacturers Increases The Risk That It Will Not Have An Adequate Supply Of Products Or That Its Product Costs Will Be Higher Than Expected.

The risks associated with the Company’s dependence upon third parties which develop and manufacture and assemble the Company’s products, include:

These risks may lead to increased costs or delay product delivery, which would harm the Company’s profitability and customer relationships.

An impairment in the carrying value of goodwill, tradenames and other long-lived assets could negatively affect theImpairment In The Carrying Value Of Goodwill, Trade Names And Other Long-Lived Assets Could Negatively Affect The Company’s consolidated results of operations and net worth.Consolidated Results Of Operations And Net Worth.

Goodwill and indefinite-lived intangible assets, such as trade names, are recorded at fair value at the time of acquisition and are not amortized, but are reviewed for impairment annually or more frequently if impairment indicators arise. In evaluating the potential for impairment of goodwill and trade names, we make assumptions regarding future operating performance, business trends and market and economic conditions. There are inherent uncertainties related to these factors and in applying these factors to the assessment of goodwill and trade name recoverability. Goodwill reviews are prepared using estimates of fair value based on the estimated present value of future discounted cash flows. The Company could be required to evaluate the recoverability of goodwill or tradenamestrade names prior to the annual assessment upon unexpected significant declines in operating results, the divestiture of a significant component of the Company’s business or other factors.

In the fourth quarter of the fiscal year ended October 31, 2016, the Company recognized $2.6 million and $150,000 of impairment charges on goodwill and tradename, respectively, related to its Cables Unlimited, Inc. subsidiary. As of October 31, 2016, after the foregoing impairment charge related to Cables Unlimited, Inc., the Company had total consolidated goodwill of approximately $3,219,000 related to its prior acquisitions of the Comnet and Rel-Tech subsidiaries and the CompPro product line as well as $382,000 remaining on Cables Unlimited’s books. The Company has determined as of October 31, 2016 that the goodwill of these subsidiaries and the product line have not been impaired. However, noNo assurance can be given that events or circumstances will not change regarding the carrying value of goodwill of the ComnetCables Unlimited, Rel-Tech, C-Enterprises and Rel-TechSchrofftech subsidiaries or the CompPro product line. Should the Company in the future determine that the carrying value of the goodwill associated with some or all of these assets no longer is recoverable, the Company will have to record additional impairment losses. In the event that the Company does havehas to record material impairment charges on either of the Comnet andCables Unlimited, Rel-Tech, C-Enterprises or Schrofftech subsidiaries or the CompPro product line, as well as Cables Unlimited, such future charges could materially reduce future earnings, which would negatively affect the Company’s stock price.

Changes In Technology May Reduce The Demand For Some Of The Company’s Products.

The wireless and telecommunications industry is rapidly changing. Changes in the product demands by telecommunications and other infrastructure companies may make certain of the Company’s current products obsolete. Accordingly, the Company must timely react to technological developments and provide new products to meet the shifting demands of its customers. The Company’s failure to successfully introduce new or enhanced products on a timely and cost-competitive basis could have a material adverse effect on the Company’s results of operations and financial condition.

If The Manufacturers Of The Company’s Coaxial Connectors Or Other Products Discontinue The Manufacturing Processes Needed To Meet The Company’s Demands Or Fail To Upgrade Their Technologies, The Company May Face Production Delays.

The Company’s coaxial connector and other product requirements typically represent a small portion of the total production of the third-party manufacturers. As a result, the Company is subject to the risk that a third-party manufacturer will cease production of some of the Company’s products or fail to continue to advance the process design technologies on which the manufacturing of the Company’s products are based. Each of these events could increase the Company’s costs, harm its ability to deliver products on time, or develop new products.

While The Company Has In The Past Paid Dividends, No Assurance Can Be Given That The Company Will Declare Or Pay Cash Dividends In The Future.

During fiscal 2016,2019, the Company made four dividends distributions to its shareholdersstockholders (for a total of $0.13$0.08 per share). Dividends are declared and paid at the discretion of the Board of Directors subject to applicable laws, and depend on a number of factors, including our financial condition, results of operations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and other factors that our Board of Directors may deem relevant. If the Company does not pay a cash dividend, the Company’s stockholders will not realize a return on their investment in the Common Stock except to the extent of any appreciation in the value of the Common Stock. 

The Company’s Dependence Upon Independent Distributors To Sell And Market The Company’s Products Exposes The Company To The Risk That Such Distributors May Decrease Their Sales Of The Company’s Products Or Terminate Their Relationship With The Company.

The Company’s sales efforts are primarily affected through independent distributors. Sales through independent distributors accounted for approximately 28% of the net sales of the Company for the fiscal year ended October 31, 2016. Although the Company has entered into written agreements with most of the distributors, the agreements are nonexclusive and generally may be terminated by either party upon 30-60 days’ written notice. The Company’s distributors are not within the control of the Company, are not obligated to purchase products from the Company, and may also sell other lines of products. There can be no assurance that these distributors will continue their current relationships with the Company or that they will not give higher priority to the sale of other products, which could include products of competitors. A reduction in sales efforts or discontinuance of sales of the Company’s products by its distributors would lead to reduced sales and could materially adversely affect the Company’s financial condition, results of operations and business. Selling through indirect channels such as distributors may limit the Company’s contact with its ultimate customers and the Company’s ability to assure customer satisfaction.

A Material Portion Of The Company’s Sales Is Dependent Upon A Few Principal Customers, The Loss Of Whom Could Materially Negatively Affect The Company’s Total Sales.

One customerTwo customers, a distributor and a wireless carrier, accounted for approximately 15%19% and 18%23% of the Company’s net sales, respectively, for the fiscal year ended October 31, 2019. One distributor accounted for approximately 62% of the Company’s net sales for the fiscal yearsyear ended October 31, 2016 and 2015, respectively. Although this customer has been an on-going major customer2018. The wireless carrier’s accounts receivable balance accounted for approximately 56% of the Companytotal net accounts receivable balance at October 31, 2019. The distributor’s accounts receivable balance accounted for approximately 48% of the total net accounts receivable balance at least the past 10 years andOctober 31, 2018.

None of these customers have entered into long-term written agreements with the Company, has entered into a written distributor agreement with this customer, this customer does notnor do they have any minimum purchase obligations andobligations. Accordingly, these customers could stop buying the Company’s products at any time.time and for any reason. Also, a significant portion of the Company’s recently increased sales have been sold indirectly to a few end users for use in upgrading and building out the wireless network infrastructure. A reduction, delay or cancellation of orders from this customerthese customers or the loss of this customerthe distributor or the primary end user customers of the Company’s wireless product could significantly reduce the Company’s future revenues and profits. The Company cannot provide assurance that this customerits existing distributors or any of its currentprimary customers will continue to place orders, that orders by existing customers will continuepurchase at the current or historical levels or that the Company will be able to obtain orders from new customers.

Difficult Conditions In The Global Economy May Adversely Affected the Company’s Business And Results Of Operations.

A prolonged economic downturn, both in the U.S. and worldwide, could lead to lower sales or reduced sales growth, reduced prices, lower gross margins, and increased bad debt risks, all of which could adversely affect the Company’s results of operations, financial condition and cash flows. Slowing economic activity, particularly in the telecommunication and data communication and wireless communications industries that represent the Company’s largest target market, may adversely impact the demand for the Company’s products. If the current economic condition in the U.S. deteriorates, the Company’s results could be adversely affected as demand for wireless products lessens. There could also be a number of other adverse follow-on effects on the Company’s business from a deterioration of economic conditions or from a credit crisis, including insolvency of certain key distributors, key suppliers, contract manufacturers and customers.

Changes In Income Tax And Other Regulatory Legislation.

The Company operates in compliance with applicable laws and regulations and attempts to structure its operations based upon existing laws and anticipated future changes in the law. However, when new legislation is enacted, or when new interpretations or applications of existing laws are made, the Company may need to implement changes in its policies or manner of operations, which changes could negatively affect the Company’s operations. The Company is, therefore, susceptible to unanticipated changes in legislation, especially relating to income and other taxes, import/export laws, hazardous materials, tariffs and other laws related to trade, accounting and business activities. Such changes in legislation may have an adverse effect on our business.

Because The Markets In Which The Company Competes Are Highly Competitive, A Failure To Effectively Compete Could Result In An Immediate And Substantial Loss Of Market Share.

The markets in which the Company operates are highly competitive and the Company expects that competition will increase in these markets. In particular, the connectorwireless and communicationstelecommunications markets in which most of the Company’s products are sold are intensely competitive. A failure to effectively compete in this market could result in an immediate and substantial loss of revenues and market share. Because most of the Company’s sales are derived from products that are not proprietary or that can be used to distinguish the Company from its competitors, the Company’s ability to compete successfully in these markets depends on a number of factors, including:

The Company’s revenues may suffer if the Company is not able to effectively satisfy its customers in each of the foregoing ways. In addition, the Company’s competitors or customers may offer enhancements to its existing products or offer new products based on new technologies, industry standards or customer requirements that have the potential to replace or provide lower-cost or higher performance alternatives to the Company’s products. The introduction of enhancements or new products by the Company’s competitors could render its existing and future products obsolete or unmarketable.

Many of the Company’s competitors have significantly greater financial and other resources. In certain circumstances, the Company’s customers or potential customers have internal manufacturing capabilities with which the Company may compete.

If The Industries Into Which The Company Sells Its Products Experience Recession Or Other Cyclical Effects Impacting The Budgets Of Its Customers, The Company’s Operating Results Could Be Negatively Impacted.

The primary customers for the Company’s connector and cable products are in the wireless communications industries. Any significant downturn in the Company’s customers’ markets, in particular, or in general economic conditions which result in the cut back of budgets would likely result in a reduction in demand for the Company’s products and services and could harm the Company’s business. Historically, the communications industry has been cyclical, affected by both economic conditions and industry-specific cycles. Depressed general economic conditions and cyclical downturns in the communications industry have each had an adverse effect on sales of communications equipment, OEMs and their suppliers, including the Company. No assurance can be given that the wireless communications industry will not experience a material downturn in the near future. Any cyclical downturn in the communications industry could have a material adverse effect on the Company.

Because The Company Sells Its Products To Foreign Customers, The Company Is Exposed To All Of The Risks Associated With International Sales, Including Foreign Currency Exposure.

Sales to customers located outside the United States, either directly or through U.S. and foreign distributors, accounted for approximately 3%2% and 4%1% of the net sales of the Company during the years ended October 31, 20162019 and 2015,2018, respectively. International revenues are subject to a number of risks, including:

The Company’s foreign sales are also affected by general economic conditions in its international markets. A prolonged economic downturn in its foreign markets could have a material adverse effect on the Company’s business. There can be no assurance that the factors described above will not have an adverse material effect on the Company’s future international revenues and, consequently, on the financial condition, results of operations and business of the Company.

Since sales made to foreign customers or foreign distributors have historically been in U.S. dollars, the Company has not been exposed to the risks of foreign currency fluctuations. However, if the Company in the future is required to accept sales denominated in the currencies of the countries where sales are made, the Company will thereafter also be exposed to currency fluctuation risks.

Changes OfThe Inability To Hire or Retain Certain Key PersonnelProfessionals, Management And Staff Could Adversely Affect The Company’sOur Business, Financial Condition And Results Of Operations.

The Company’s future success is dependent to a significant extent ondepends largely upon the continued service of its executive officers and other key management and technical personnel, and on its ability to continue to identify, attract, retain and motivate them. However, other than the employment agreement the entered into with Mr. Dawson, the Company’s senior executives. In October 2016, the services of the President and Chief Executive Officer were terminated, and Howard Hill, the Company’s former President and Chief Executive Officer returned to serve as the Company’s interim President and Chief Executive Officer. Mr. Hill will serve the President and Chief Executive Officer until a new principal executive officer is hired. Since Mr. Hill was a founder of the Company and since he has served as the Company’s principal executive officer for most of the Company’s existence, Mr. Hill is familiar with the Company’s operations. Nevertheless, the recent separation from the prior President and Chief Executive Officer, the return of Mr. Hill,Company currently does not have any other written employment agreements with its executive officers and managers. The market for employees in the Company’s industry is extremely competitive and the possible appointmentcost for new employees may exceed the cost of a new President and Chief Executive Officer, will result in uncertainty, changes in management styles, and a loss of continuity, all of which may adversely affect the Company’s operations. In addition, the Company’s operations are dependent upon the continues services of Mark Turfler, its Chief Financial Officer, as well as the presidents of the Company’s three subsidiaries. existing employees.The loss of the serviceskey management and technical personnel, could have an adverse effect on our business, financial position and results of Messrs. Turfler or one or more of the presidents of Cables Unlimited, Comnet or Rel-Tech, could materially adversely affect the Company’s business, operating results, and financial condition.operations.

The Company Has Few Patent Rights In The Technology Employed In Its Products, Which May Limit the Company’s Ability To Compete.

AlthoughOther than the patents that the Company recently acquired theowns related to its CompPro proprietary product line and its related patent rights,Schrofftech telecom shelter cooling products and control systems, the Company does not hold any other United States or foreign patents, and does not have any patents pending.patents. The Company does not seek to protect its rights in the technology that it develops or that the Company’s third-party contract manufacturers develop by means of the patent laws, although it does protect some aspects of its proprietary products and technologies by means of copyright and trade secret laws. Accordingly, competitors can and do sell many of the same products as the Company, and the Company cannot prevent or restrict such competition.

Volatility of Trading Prices Of The Company’s Stock Could Result In A Loss On An Investment In The Company’s Stock.

The market price of the Company’s common stock has varied greatly, and the trading volume of the Company’s common stock has fluctuated greatly as well. These fluctuations often occur independently of the Company’s performance or any announcements by the Company. Factors that may result in such fluctuations include:

In addition, the stock market may, from time to time, experience extreme price and volume fluctuations, which may be unrelated to the operating performance of any specific company. Accordingly, the market prices of the Company’s common stock may be expected to experience significant fluctuations in the future.

Failure To Maintain An Effective System Of Internal Control Over Financial Reporting Or To Remediate Weaknesses Could Materially Harm The Company’s Revenues, Erode Stockholder Confidence In The Company's Ability To Pursue Business And Report Its Financial Results/Condition, And Negatively Affect The Trading Price Of The Company’s Common Stock.

As a public reporting company, the Company is required to establish and maintain an effective systeminternal control over financial reporting. Failure to establish such internal control, or any failure of such internal control once established, could adversely impact the Company’s public disclosures regarding its business, financial condition or results of operations. Any failure of our internal control over financial reporting or to remediate weaknesses could materially harm the Company’s revenues and trading price of the common stock. Ifalso prevent the Company cannot accurately reportfrom maintaining accurate accounting records and discovering accounting errors and financial results, shareholder confidence is eroded in the Company's ability to pursue business and report its financial results/condition, which will negatively affect the trading price of the Company’s common stock.frauds.

Internal control systems are intended to provide reasonable assurance regarding the preparation and fair presentation of published financial statements. In connection with the Company’s 2016 fiscal year-end procedures, management determined that the Company did not have adequately designed internal controls to ensure the timely review of its accounting for certain complex estimates. Specifically, these weaknesses related to the year-end impairment analysis of goodwill and intangible assets at Cables Unlimited. Based on this determination, management concluded that its internal controls over financial reporting were ineffective as of October 31, 2016. The Company intends to take measures to remediate the foregoing weakness. However, even if the identified weakness is remediated, matters impacting the Company's internal controls may cause it to be unable to report its future financial data on a timely basis, or may cause it to restate previously issued financial data. These events could subject the Company to adverse regulatory consequences, including sanctions or investigationsRules adopted by the SEC or violations of applicable stock exchange listing rules. There could also be a negative reaction in the financial markets duepursuant to a loss of investor confidence in the Company and the reliability of its financial statements. Confidence in the reliabilitySection 404 of the Company's financial statements is also likely to suffer if the Company or its independent registered public accounting firm report a material weakness in the Company'sSarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. As with any material weakness, if remedial measuresThe standards that must be met for management to assess the internal control over financial reporting as effective are insufficientcomplex, and require significant documentation, testing and possible remediation to address these materialmeet the detailed standards. Any assessment by management that there are weaknesses or if additional material weaknesses or significant deficiencies in the Company’s internal control over financial reporting are discoveredmay raise concerns for investors. Any actual or occurperceived weaknesses and conditions that need to be addressed in the internal controls over financial reporting (including those weaknesses identified in periodic reports), or disclosure of management’s assessment of the internal controls over financial reporting may have an adverse impact on the price of the Company’s common stock.

As of October 31, 2019 and 2018, the Company determined that its internal control over financial reporting was effective. However, no assurance can be given that there will not be failures in our internal controls in future the Company's consolidated financial statements may contain material misstatements.periods.

A Cyber Incident Could Result In Information Theft, Data Corruption, Operational Disruption, And/Or Financial Loss.

Businesses have become increasingly dependent on digital technologies to conduct day-to-day operations. At the same time, cyber incidents, including deliberate attacks or unintentional events, have increased. A cyber attack could include gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption or result in denial of service on websites. We dependThe Company depends on digital technology, including information systems and related infrastructure, to process and record financial and operating data, and communicate with ourits employees and business partners. OurThe Company’s technologies, systems, networks, and those of ourits business partners may become the target of cyber attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption of ourthe Company’s business operations. Although to date we havethe Company has not experienced any losses relating to cyber attacks, there can be no assurance that wethe Company will not suffer such losses in the future. As cyber threats continue to evolve, wethe Company may be required to expend significant additional resources to continue to modify or enhance ourits protective measures or to investigate and remediate any information security vulnerabilities.

Not applicable.

The Company currently leases its corporate headquarters and RF connector and cable assembly manufacturing facilities at 7610 Miramar Road, San Diego, California. At that location, the Company leases three buildings, consistingwith a total of approximately 19,60021,908 square feet in the aggregate,of office, warehouse and manufacturing space, that house the Company’s corporate administration, sales and marketing, and engineering departments. The buildings also are used for production and warehousing by the Company’s RF Connector and Cable Assembly division. The lease for this facility was scheduled to expire on March 31, 2017. However, on January 26, 2017, the Company and its landlord entered into an amendment to the existing lease, the terms of which become effective on April 1, 2017. Under the amendment, (i) the term of the lease was extended untilexpires on July 31, 2022, (ii)and the Company is required to pay monthly base rent of $22,721 (which amount shall increase annually by 3% on each anniversaryrental payments under the lease currently are $26,176 per month. The San Diego lease also requires the payment of the amendment),Company’s pro rata share of real estate taxes and (iii)insurance, maintenance and other operating expenses related to the Company was granted an option to renew the lease for one five year period at the then fair market rental rate (which in no event will be less than 103% of the then current base rent).facilities.

The aggregate fiscal 2019 monthly rentalrent for all of the Company’s facilities currently is approximately $52,000$76,000 per month, plus in certain circumstances, utilities, maintenance and insurance.

None.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.

Not applicable.None.

PART II

The Company’s Common StockMarket Information. RF Industries, Ltd.’s common stock is listed and trades on the NASDAQNasdaq Global Market and is traded under the symbol “RFIL.”“RFIL” trading symbol.

The price range per share of common stock presented below represents the highest and lowest intraday sales prices for the Company’s common stock on the NASDAQ during each quarter of the two most recent years.

StockholdersStockholder. As of October 31, 2016,2019, there were 196271 holders of the Company’s Common Stock according to the records of the Company’s transfer agent, Continental Stock Transfer & Trust Company, New York, New York, not including holders who hold their stock in “street name.”

DividendsThe Company paid dividends of $0.02, $0.02, $0.02 and $0.07 per share during the three months ended October 31, 2016, July 31, 2016, April 30, 2016 and January 31, 2016, respectively, for a total of $1.1 million. The Company paid a total of $2.4 million of dividends during the fiscal year ended October 31, 2015 in four quarterly dividend payments of $0.07 per share. Dividends are declared and paid from time to time at the discretion of the Board of Directors subject to applicable laws, and depend on a number of factors, including our financial condition, results of operations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and other factors that our Board of Directors may deem relevant.

Repurchase of SecuritiesSecurities. The Company did not repurchase any securities during the fiscal year October 31, 2016, and the previously announced repurchase program was terminated in September 2016.2019.

Recent Sales of Unregistered SecuritiesSecurities. There were no previously unreported sales of equity securities by the Company that were not registered under the Securities Act during fiscal 2016.2019.

Dividend Policy. The declaration and amount of any actual cash dividend are in the sole discretion of the Company’s Board of Directors and are subject to numerous factors that ordinarily affect dividend policy, including the results of our operations and financial position, as well as general economic and business conditions. The Company has been paying quarterly dividends for over nine years. The amount of the quarterly dividends may differ from quarter to quarter. During the fiscal years ended October 31, 2019 and 2018, the Company paid an aggregate of $748,000 and $730,000, respectively, of dividends.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of October 31, 20162019 with respect to the shares of Company common stock that may be issued under the Company’s existing equity compensation plans.

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

OurThe consolidated financial statements and related disclosures have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these consolidated financial statements requires usthe Company 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 ourThe Company evaluates its estimates, including those related to bad debts, inventory reserves and contingencies on an ongoing basis. We base ourThe Company bases its 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.

Revenue Recognition

On November 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”) applying the modified retrospective method. The core principle of ASC 606 is that revenue should be recorded in an amount that reflects the consideration to which we expect to be entitled in exchange for goods or services promised to customers. Under ASC 606, the Company follows a five-step model to: (1) identify the contract with our customer; (2) identify our performance obligations in our contract; (3) determine the transaction price for our contract; (4) allocate the transaction price to our performance obligations; and (5) recognize revenue when (or as) each performance obligation is satisfied. In accordance with this accounting principle, the Company recognizes revenue using the output method at a point in time when finished goods have been transferred to the customer and there are no other obligations to customers after the title of the goods have transferred. Title of goods are transferred based on shipping terms for each customer – for shipments with terms of FOB Shipping Point, title is transferred upon shipment; for shipments with terms of FOB Destination, title is transferred upon delivery.

Inventories

Inventories are stated at the lower of cost or market,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, wethe Company periodically review ourreviews its inventories for excess and slow moving items and makemakes provisions as necessary to properly reflect inventory value. Because inventories have, during the past fewcouple years, represented approximately one-thirdup to one-fourth of our currenttotal assets, any reduction in the value of our inventories would require usthe Company to take write-offs that would affect ourthe net worth and future earnings. In June 2015, the Company acquired Rel-Tech Electronics, Inc. (“Rel-Tech”), a company that, from the date of its purchase by the Company through the second fiscal quarter of 2016, valued inventories using specific identification (last purchase price) on a FIFO basis. As of July 31, 2016, Rel-Tech values its inventories cost using the weighted average cost of accounting.

Allowance for Doubtful Accounts

The Company records its allowance for doubtful accounts based upon its assessment of various factors. The Company considers historical experience, the age of the accounts receivable balance, credit quality of the Company’s customers, current economic conditions and other factors that may affect a customer’s ability to pay.

Long-Lived Assets Including Goodwill

The Company assesses 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 measureThe Company measures 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.

The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment.

We test ourThe Company tests its 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 requiresrequire 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.

Income Taxes

The Company records 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. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

If a deduction reported onThe Company accounts for uncertain tax positions by determining if it is “more likely than not” that a tax return for an equity-based incentive award exceedsposition will be sustained by the cumulative compensation cost for those instrumentsappropriate taxing authorities upon examination based on the technical merits of the position. An uncertain income tax position is not recognized for financial reporting purposes, any resulting realized tax benefit that exceeds the previously calculated deferred tax asset for those instruments is considered an excess tax benefit, and is recognized as additional paid-in capital.  If the tax deduction isif it has less than a 50% likelihood of being sustained.The Company recognizes interest and penalties related to certain uncertain tax positions as a component of income tax expense and the cumulative book compensation cost,accrued interest and penalties are included in deferred and income taxes payable in the tax effect of the resulting difference is charged first to APIC,Company’s consolidated balance sheets. See Note 9 to the extent ofConsolidated Financial Statements included in this Report for more information on the available pool of windfallCompany’s accounting for uncertain tax benefits, with any remainder recognized in income tax expense.positions.

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 the Company’s financial condition and operating results.

Stock-based Compensation

The Company uses the Black-Scholes model to value the stock option grants. This valuation is affected by the Company’s 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.

Earn-out Liability

The purchase agreements for the Comnet and Rel-Tech acquisitions provides for earn-out payments of up to $1,360,000 and $800,000, respectively. The initial earn-out liability was valued at its fair value using the Monte Carlo simulation and is included as a component of the total purchase price. The earn-outs were and will continue to be revalued quarterly using a present value approach and any resulting increase or decrease will be recorded into selling and general expenses. Any changes in the assumed timing and amount of the probability of payment scenarios could impact the fair value. Significant judgment is employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date. Accordingly, significant variances between actual and forecasted results or changes in the assumptions can materially impact the amount of contingent consideration expense we record in future periods. The Comnet and Rel-Tech acquisitions are more fully described in Note 2 of the consolidated financial statements included with this report.  

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For recently issued accounting pronouncements that may affect us, see Note 1 of Notes to Consolidated Financial Statements.

OVERVIEW

During the periods covered by this Annual Report, the Company marketed a variety of connector products, including connectors and cables, standard and custom cable assemblies, wiring harnesses and fiber optic cable products, and data center products to numerous industries for use in thousands of products. The range of products that the Company sold and the services that the Company provided has changed substantially in the periods covered by the attached financial statements. During the past few years, the Company sold its: (i) RF Neulink RF division (a manufacturer of data links and wireless modems), (ii) the RadioMobile division (a provider of end-to-end mobile management solutions for governmental agencies), and (iii) Aviel Electronics division (a provider of custom RF connectors primarily for aerospace and military customers). In addition, during March 2016, the Company announced the shutdown of its Bioconnect division, which comprised the entire operations of the Medical Cabling and Interconnect segment. RF Industries also purchased Comnet Telecom (a provider of fiber optic and other cabling technologies, custom patch cord assemblies, and other data center products) effective November 2014 and Rel-Tech (a provider of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers) in June 2015. The acquisitions of Comnet and Rel-Tech have diversified the Company’s product line and customer base, and have increased the Company’s presence on the East Coast. As well, the Comnet and Rel-Tech divisions have significantly contributed to the Company’s revenues and profitability since their acquisitions. During 2015, the Company also purchased a new patented connector product line and technology (the CompPro line).

The Company aggregates its operating divisions into operating segments whichthat have similar economic characteristics and are similar in the majority of 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. The Company has two reportable segments -– the “RF Connector and Cable Assembly” (RF Connector) segment and the “Custom Cabling Manufacturing and Assembly” segment-based(Custom Cabling) segment – based upon this evaluation.

DuringIn the fiscal year ended October 31, 2016,years covered by this Annual Report, the RF Connector and Cable Assembly segment was comprised of two divisions and, upon the sale of Aviel Electronics during December 2015, only one division, thereafter, while the Custom Cabling Manufacturing and Assembly segment was comprised of three divisions. The four divisions that met the quantitative thresholds for segment reporting arein the fiscal year ended October 31, 2019 were the RF Connector and Cable Assembly division, Cables Unlimited, ComnetRel-Tech, and Rel-Tech. Each ofC Enterprises subsidiaries. Schrofftech, which the other divisions aggregated into these segments had similar products that were marketed to their respective customer base and production and product development processes that are similar in nature. The specific customers are different for each division; however, there was some overlapping of product sales to them. The methods used to distribute products are similar within each division aggregated. RF Industries purchased Comnet Telecom in January 2015 and Rel-Tech in June 2015. Both Comnet Telecom and Rel-Tech are includedCompany acquired in the Custom Cabling Manufacturing and Assembly segment in thecurrent fiscal years endedyear ending October 31, 2016 and 2015. Since the acquisition of Comnet Telecom was effective for financial accounting purposes as of November 1, 2014, Comnet Telecom’s financial results are included in the results2020, is now part of the Custom Cabling Manufacturing and Assembly segment for the entire fiscal years ended October 31, 2016 and 2015. Financial results for Rel-Tech have been included in the results of the Custom Cabling Manufacturing and Assembly segment beginning June 1, 2015.segment.

For the year ended October 31, 2016,2019, most of the Company’s revenues were generated from the Custom Cabling segment from its sale of RF connector productsfiber optic cable, copper cabling, custom patch cord assemblies and connector cable assemblies (the Connector and Cable Assembly divisionwiring harnesses (which accounted for approximately 31%75% of the Company’s total sales for the fiscal year ended October 31, 2016),2019). This segment largely benefitted from an increase in demand of the segment’s fiber optic cables used primarily in the build out of wireless carrier 4G and anticipated 5G network deployment. This segment also sells customized cable assemblies and wiring harnesses which are integrated into customers’ products.

Revenues from the saleRF Connector segment were generated from the sales of fiber opticsRF connector products and connector cable copper cabling, custom patch cord assemblies transceivers/converters and other data center equipment by Comnet (which accounted for approximately 30%25% of the Company’s total sales for the fiscal year ended October 31, 2016).2019. This segment, which historically produces the largest margins of the four production sites, is known for its quick turnaround of high quality customized solutions in the form of cable assemblies.

For

On October 31, 2018, the Company sold all of the shares of its Comnet subsidiary for a cash purchase price of $4.2 million.The sale of Comnet was consistent with the Company’s business transformation toward a one company culture and operating structure to more efficiently leverage its capabilities across the entire business. Comnet’s business did not match the Company’s go-to-market strategy since it operated with a different sales model and margin profile than the rest of the Company. As a result of the sale, the Company recognized a $0.2 million loss from discontinued operations for the year ended October 31, 2016,2018.Comnet’s results of operations for fiscal 2018 have been excluded from operating results in the financial statements included in this Annual Report.

On March 15, 2019, through C Enterprises, Inc., its newly formed subsidiary, the Company recognized $57,000purchased the business and assets of pretax royalty income fromC Enterprises L.P., a California based designer and manufacturer of quality connectivity solutions to telecommunications and data communications distributors. In consideration for the saleC Enterprises business and assets, the Company paid $600,000 in cash and assumed certain liabilities. The acquisition was determined not to be material and was accounted for in accordance with the acquisition method of accounting, and the acquired assets and assumed liabilities were recorded by the Company at their estimated fair values in accordance with ASC 805, Business Combinations. There were no intangible assets identified as part of the former RF Neulink and RadioMobile divisionsacquisition. The results of C Enterprises, Inc.’s operations subsequent to March 15, 2019 have been included in the results of the Custom Cabling segment as well as $148,000in the Company’s consolidated statements of pretax loss fromoperations. Costs related to the shutdownacquisition of the Bioconnect division, all of which amountsC Enterprises were approximately $100,000 and have been included within discontinued operations.

The Company experienced an annual net lossexpensed as incurred and categorized in selling and general expenses. For the fiscal year ended October 31, 20162019, C Enterprises, Inc. contributed $7.2 million of $4.1 million. The primary factor contributing to this net loss was a $2.8 million non-cash charge related to the impairment of the goodwill and tradename of the Company’s Cables Unlimited subsidiary. However, other factors also contributed to the net loss, such as $256,000 of professional fees and expenses in connection with the business combination transaction thatrevenue.

On November 4, 2019, the Company considered, and then abandoned, in fiscal 2016, $171,000 of expenses incurred in connection with the implementation of a new enterprise resource planning (ERP) system that now integratespurchased all of the Company’s operations onissued and outstanding shares of Schroff Technologies International, Inc. (“Schrofftech”) from DRC Technologies, Inc., an unaffiliated party. Based in Rhode Island, Schrofftech is a Rhode Island based manufacturer and marketer of  intelligent thermal control systems used by telecommunications companies across the East CoastU.S. and Canada, and shrouds for small cell integration and installation. The Company paid $4,000,000 in California,cash at the closing, of which $900,000 was deposited into two separate escrow accounts for a period of one year and two years, respectively, as security for any indemnification claims the legal, accounting and other expenses relatedCompany may have against the seller. In addition to the dispositioncash paid at the closing, the Company agreed to pay up to an additional $2,400,000 as an earn-out payment if Schrofftech achieves certain adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) targets during the two-year period following the closing. Since the acquisition of Schrofftech occurred after the end of the Aviel division andtwo fiscal years covered by this report, the closurefinancial results of Schrofftech are not included in the Bioconnect division.attached consolidated financial statements.

Financial Condition

The following table presents certain key measures of financial condition as of October 31, 20162019 and 20152018 (in thousands, except percentages):

Liquidity and Capital Resources

Management believes that its existing current assets and the amount of cash it anticipates it will generate from current operations will be sufficient to fund the anticipated liquidity and capital resource needs of the Company for at least twelve months subsequent to October 31, 2016.from the date of this filing. Management believes that its existing assets and the cash it expects to generate from operations, including its current backlog of unfulfilled orders, will be sufficient during the current fiscal year based on the following:year.

As of October 31, 2016,2019, the Company had a total of $5.3$12.5 million of cash and cash equivalents compared to a total of $7.6$16.3 million of cash and cash equivalents as of October 31, 2015.2018. As of October 31, 2016,2019, the Company had working capital of $12.9$27.6 million and a current ratio of approximately 4.3:5.5:1. The Company’s cash and cash equivalents decreased compared to its cash and cash equivalents as of October 31, 2018 due to the timing of its sales and the changes in accounts receivable. During the fourth quarter of the fiscal year ended October 31, 2019, the Company’s sales increased significantly compared to the prior year, which increased the Company’s accounts receivable to $12.2 million as of October 31, 2019, compared to $4.3 million as of October 31, 2018. As of October 31, 2019, the Company had $33.7 million in current assets and $6.1 million in current liabilities.

The Company’s cash and cash equivalents decreased by $4.0 million on November 4, 2019 due to the cash payment the Company made on that day to purchase Schrofftech. The decrease in cash is not expected to have a negative impact on the Company’s liquidity and capital resources in the current fiscal year.

The Company’s backlog as of October 31, 2019 was $6.1 million compared to a backlog of $10.9 million as of the fiscal year ended October 31, 2018. Since purchase orders are submitted from customers based on the timing of their requirements, the Company’s 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 the Company has not historically experienced material cancellations of purchase orders.

The Company used $1.3cash of $2.7 million cash fromin operating activities during the year ended October 31, 2016. The cash flow deficit from operating activities was2019 due largely to the net lossan increase in fiscal 2016. However, the net loss significantly exceeded the net cash used in operating activities because of non-cash charges such as a $2.8 million impairment charge to the goodwill and tradename of Cables Unlimited, $1.0 million of depreciation and amortization expenses related to the acquisitions of Comnet, Rel-Tech and CompPro, and a $168,000 write-down in the value of inventory. However, these non-cash charges were offset by certain cash expenditures, such as the $895,000 paid, in the aggregate, to the owners/officers of Comnet and Rel-Tech as earn-out purchase price payments and incentive bonuses and the over $256,000 of professional fees and expenses in connection with a business combination transaction that the Company considered, but abandoned, in fiscal 2016. The earn-outs and incentive payments related to Comnet ended in January 2017 and, accordingly, will not materially affect the Company’s fiscal 2017 cash from operations. Furthermore, in fiscal 2016 the Company incurred over $750,000 in salaries, travel expenses, office rent and certain other expenses that it does not anticipate will be incurred in fiscal 2017accounts receivable ($6.6 million) as a result of recent personnelextending terms for one of its major customer. Other activities that contributed to the increased use of cash was increased inventory purchases ($0.7 million) due to increased sales, increased capital expenditures ($0.5 million) from the expansion of its manufacturing facilities and other changes that the Company implemented.purchase of additional manufacturing equipment, the purchase of C Enterprises ($0.5 million), and dividends paid ($0.7 million) to our shareholders. Partially offsetting these decreases were increases resulting from net income of $3.5 million, in addition to noncash credits of $0.6 million from depreciation and amortization and $0.3 million from stock-based compensation expense.

During the year ended October 31, 2016, the Company generated $26,000 from investing activities, primarily $321,000 of cash received from the sale of Aviel’s inventories and fixed assets, and the repayment of a $67,000 note by the Company’s retiring former CEO and founder. The funds generated from investment activities were partially offset by $384,000 of capital expenditures, which included $171,000 of payments toward the implementation of the Company’s new enterprise resource planning (ERP) system.

The Company does not anticipate needing material additional capital equipment in the next twelve months. In the past, the Company has financed some of its equipment and furnishings requirements through capital leases. No additional capital equipment purchases have been currently identified that would require significant additional leasing or capital expenditures during the next twelve months. Management also believes that based on the Company’s current financial condition, its current backlog of unfulfilled orders and its anticipated future operations, the Company would be able to finance its expansion, if necessary.

As part of its announced business plan,October 31, 2019, the Company had no outstanding indebtedness for borrowed funds. In November 2019 the Company obtained a $5 million revolving line of credit from Bank of America, N.A. The credit facility is secured by all of the assets of RF Industries, Ltd., including by a pledge of the shares of the Company’s four subsidiaries and by guaranties executed by those subsidiaries. The credit facility bears interest per year at a rate equal to the LIBOR Daily Floating Rate plus 2.00%. As of the date of this Annual Report, no advances have been made to the Company under the credit facility.

From time to time, the Company may from time to time acquireundertake acquisitions of other companies or product lines in the future in order to diversify its product and solutions offerings and customer base. Any future acquisitionsConversely, the Company may undertake the disposition of a division or product line due to changes in the Company’s business strategy or market conditions. Acquisitions may require the Company to makeoutlay of cash, payments, which payments may reduce the Company’s futureliquidity and capital resources while dispositions may increase the Company’s cash position, liquidity and capital resources.

In April 2014,The Company is currently evaluating the financial impact of the import tariffs that were recently enacted by the U.S. and certain foreign countries. While the Company announceddoes not believe that it may repurchase up to 500,000 sharesthe direct financial impact on the Company of the Company’s common stock in open market transactions. No shares were repurchased duringenacted tariffs has been material, there is uncertainty related to potential costs resulting from the year ended October 31, 2016,tariffs and the repurchase program was terminated in September 2016.

Duringdisruption related to the year ended October 31, 2016,trade dispute between the Company paid a total of $1.1 million of dividends to its stockholders. In order to improve the Company’s ability to acquireU.S. and certain other companies or product linescountries, and there may be an indirect impact in the future and to maintain a sufficient levelform of liquidity, for the fiscal quarter ended April 30, 2016 the Company reduced its quarterly dividendincreased material costs from $0.07 per share to $0.02 per share.suppliers that cannot be accurately measured.

Results of Operations

The following summarizes the key components of the consolidated results of operations for the fiscal years ended October 31, 20162019 and 20152018 (in thousands, except percentages). of the Company, excluding Comnet. On October 31, 2018, the Company sold its Comnet subsidiary. Except as stated, all information regarding the Company’s results of operations in the fiscal year ended October 31, 2018 exclude the operations of Comnet. As a result of the sale of the Comnet division, Comnet is included in the Company’s results from operations as loss from discontinued operations.

Net sales for the year ended October 31, 2019 ( “fiscal 2019”) increased by $5.1 million (or 10%) to $55.3 million, as compared to net sales of $30.2$50.2 million for the year ended October 31, 2016 (the “fiscal 2016 year”2018 (“fiscal 2018”) decreased $700,000. Net sales for fiscal 2019 at the RF Connector segment increased by $1.9 million, or 2% when16%, to $13.7 million as compared to net sales of $30.9$11.8 million for the year ended October 31, 2015 (the “fiscal 2015 year”) despite the additional net sales of generatedfiscal 2018 as business from the Company’s newly acquired Rel-Tech Electronics division. Rel-Tech, which was acquired in June 2015, contributed $6.8 million of net sales during the fiscal 2016 year, compared to only $3.1distribution channel increased. The Company’s Custom Cabling segment generated $41.6 million of net sales for the fiscal 2015 year. Excluding the net sales that were generated by newly acquired Rel-Tech, the aggregate net sales2019, an increase of the Company’s other divisions decreased by $4.4$3.3 million or 16% during fiscal 20169% when compared to $38.4 million for fiscal 2015. The Company’s “Custom Cabling Manufacturing and Assembly” segment generated $20.92018 as a result of $7.2 million of net sales forcontributed from the fiscal 2016 andC Enterprises division. This increase was the Company’s largest operating segment. While netpartially offset by a sales decline in the Custom Cabling Manufacturing and Assembly segment increasedwireless market due to the acquisitioninclusion of Rel-Tech, net sales at Comnet decreased $1.2 million or 12% forthe largest series of orders in the Company’s history in the fiscal 2016 compared to the2018 second quarter. C Enterprises was acquired in March 2019 and, therefore, no revenues from this subsidiary were recorded in fiscal 2015, while net sales at Cables Unlimited decreased $832,000 or 14% for the same period. The decrease in net sales at Comnet was due to the softening of demand for its telecommunications and data products, while the decline at Cables Unlimited was due to a continuing decline in the sale of Cables Unlimited’s fiber optic products. For the fiscal 2016 year, the RF Connector and Cable Assembly segment had net sales of $9.4 million, a decline of $2.4 million or 20% from net sales of $11.7 million for the fiscal 2015 year. The Company believes that the decrease in net sales at the RF Connector and Cable Assembly segment is attributable to a continuing industry-wide softening of demand for RF cable and connector products. In addition, in December 2015, the Company sold the assets of the Aviel division, which further decreased net sales in the RF Connector and Cable Assembly segment (in the fiscal 2015 year, Aviel generated $884,000 of net sales).2018.

The Company’s gross profit for fiscal 2019 declined $1.5 million when compared to fiscal 2018 due largely to the decrease in sales described above while also facing pricing pressure from some of its customers. In addition, gross margins at C Enterprises are lower than the blended margins at the majority of the other Custom Cabling subsidiaries, and substantially lower than the margins at the RF Connector segment, which contributed to the reduction of the Company’s gross margins. Accordingly, gross margins as a percentage of sales in the fiscal 2016 year decreased by 6% toof 28% declined compared to 34% infor fiscal 2018. Furthermore, the fiscal 2015 year. The decrease in gross margins is primarily due to the decline in 1) higher margin connector sales at the Company’s RF Connector and Cable Assembly division and higher margin Optiflex sales at Cables Unlimited, 2) certain fixed manufacturing costs at the Company’s RF Connector and Cable Assembly and Cables Unlimited divisions spread over a lower revenue base, and 3)cost of labor increased inventory reserves for specific product lines at the Company’s RF Connector and Cable Assembly and Cables Unlimited divisions. Historically, before the acquisitions of Comnet and Rel-Tech, the RF Connector and Cable Assembly segment operated with gross margins above 45%. However, Comnet and Rel-Tech’s gross margins historically have been lower than those of the RF Connector and Cable Assembly segment andas the Company paid more to reward and retain its production workforce and, in general. Since sales at the RF Connector and Cable Assembly segment have been decreasing and the Custom Cabling Manufacturing and Assembly segment now generates a majority of the Company’s net sales, the Company’s aggregate gross margins have decreased and are expectedsome cases, to remain below historical rates in the future.meet increased state mandated minimum wage requirements.

Engineering expenses decreased $28,000 or 4% for fiscal 2019 were consistent with the engineering expenses for fiscal 2016 year to $747,000 compared to $775,000 for the fiscal 2015 year due to decreased salary expense related to engineering activities.2018. Engineering expenses represent costs incurred relating to the ongoing development of new products.

Selling and general expenses increased by $700,000, or 8%,$1.5 million during the fiscal 2016 year2019 to $9.6$9.7 million (17.6% of sales) from $8.9$8.2 million (16.3% of sales) in the prior period.fiscal year. The increase in selling and general expenses in 2019 was primarily due to additional one-time expensesthe addition of approximately $256,000 for professional fees and other costs incurred in an abandoned business combination transaction. In addition,the selling and general expenses for the fiscal 2016 year increased due to a $100,000 bonus the Company paid to its former CEO and founder upon his retirement from the Company after over 35 years of service, and $85,000 of severance and legal costs related to the termination of the newly acquired C Enterprises division ($1.4 million), which expenses did not exist in fiscal 2018.

For fiscal 2019, the Company’s CEOoperating income of $4.5 million decreased $2.9 million compared to operating income of $7.4 million in October 2016.the prior fiscal year. The increasedecrease in operating and net income is the result of smaller gross margins and higher selling and general expenses was also attributable to additional on-going expenses of $379,000 incurred by the Company’s newly acquired Rel-Tech subsidiary, which subsidiary was owned by the Company for two months during the fiscal year 2015, compared to a full twelve months during fiscal 2016 year. Excluding selling and general expenses attributable to the abandoned business combination transaction, the retirement bonus, severance and legal costs, and the addition of Rel-Tech, selling and general expenses for the fiscal year 2016 decreased $148,000 or 2% as compared to the comparable prior year period. In addition, to reduce the Company’s selling and general expenses in fiscalexpenses.

On December 22, 2017, the Company has recently implementedU.S. President signed the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other cost cutting measures (and its interim Presidentthings, lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Chief Executive Officer has agreedJobs Act (SAB 118), which allowed us to serve for no salary).

In connection withrecord provisional amounts during a measurement period not to extend beyond one year of the fiscal year ended October 31, 2016, the Company quantitatively evaluated the goodwill and intangibles of Cables Unlimited and determined that the carrying value of Cables Unlimited on the Company’s financial statements exceeded its fair market value.enactment date. As a result, an impairment to Cables Unlimited's goodwill and tradename was determined and the Companywe previously recorded a non-cash impairment chargeprovisional estimate of the effect of the Tax Act in our financial statements. In the first quarter of 2019, we completed our analysis to goodwilldetermine the effect of the Tax Act and tradenamerecorded no additional adjustments as of $2.6 million and $150,000, respectively, for the 2016 fiscal year.December 22, 2018.

The provision (benefit) for income taxes from continuing operations was $(652,000) or 14%$1.0 million for an effective tax rate of 22.7% and $140,000 or 17%$1.5 million for an effective tax rate of income (loss) before income taxes19.6% for fiscal 20162019 and 2015,2018, respectively. The differenceincrease in the effective income tax rates in each fiscalrate from year to year is primarily attributable todriven by the recognitionelimination of state tax benefitsthe benefit from the reapportionment of state income, R&D Credits, changesdomestic production activities deduction, the one-time benefit recorded in earn-outs, goodwill impairment and other items. Deductionsthe prior year related to the exercisereduction in the Company’s deferred tax liability due to the change in the federal tax rate, both as a result of the Tax Act, during fiscal 2018, and dispositionthe impact of equity-based incentive awards during the periods presented are, in general, available to offset taxable incomeshare-based compensation excess tax benefits recognized which vary from year-to-year depending on the Company’s consolidatedshare price in each period. The Company recorded income from discontinued operations, net of tax, returns. Accordingly, the excess tax benefit related to the exercise and disposition of equity-based incentive awards for the periods presented, was credited to additional paid-in capital, not the provision (benefit) for income taxes.  For the fiscal year 2016 and 2015, the Company incurred approximately $154,000 and $83,000, respectively, of windfalls from the exercise and disposition of equity-based incentive awards, of which $154,000 and $83,000 was recorded against its additional paid-in capital.2018 as disclosed in Note 3.

The Company had a loss of $58,000Loss from discontinued operations, net of tax, during fiscal 2018 was $180,000, resulting from the fiscal 2016 year, compared to $300,000 of income in the fiscal 2015 year. During March 2016, the Company announced the shutdown of its Bioconnect division. The closure is partsale of the Company’s ongoing plan to close or dispose of underperforming divisions that are not part of the Company’s core operations.Comnet subsidiary on October 31, 2018. For the fiscal 2016 and 2015 years,2018, the Company recognized pretax lossesloss of $90,000$221,000 from Comnet’s operations.

Net income and pretax income of $419,000,fully diluted earnings per share for fiscal 2019 were $3.5 million and $0.36 per share, respectively, from the Bioconnect division. Included in the lossas compared to $5.8 million or $0.61 per share for the fiscal 2016 year, the Company recognized a $148,000 pretax write-down on Bioconnect division’s inventory. During the fiscal year ended October 31, 2013, the Company sold its RadioMobile and RF Neulink divisions and, accordingly, the results of these divisions are also included in discontinued operations for all periods presented. The Company recognized royalty income of $57,000 and $93,000, respectively, from RadioMobile and RF Neulink for the fiscal 2016 and 2015 years.prior year.

For the fiscal 2016 year, the Company incurred an operating loss of $4.7 million and a net loss of $4.1 million compared to income from operations of $799,000 and net income of $994,000 for the fiscal 2015 year. The losses in the fiscal 2016 year are attributable primarily to an impairment charge of $2.8 million, a reduction in the Company’s gross margins and to increased selling and general expenses. In part to address these losses, the Company has recently disposed of, or terminated, two underperforming divisions and is taking steps to reduce its expenses including the recent termination of certain officers and other personnel. The compensation and related expense savings from these personnel reductions is expected to be in excess of $750,000 in fiscal 2017.

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.

The following Financial Statements of the Company with related Notes and Report of Independent Registered Public Accounting Firm are attached hereto as pages F-1 to F-22F-19 and filed as part of this Annual Report:

None

Evaluation of Disclosure Controls and Procedures

The Company maintains 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, management recognizes that any controls and procedures, no matter how well designed and operated, can provide reasonable assurance only of achieving the desired control objectives, and management necessarily is required to apply its judgment in weighting 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.

As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, management, under the supervision and with the participation of our then Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, management concluded that the Company’s disclosure controls and procedures were notare effective at a reasonable assurance level as of October 31, 2016 due to the material weakness described below.2019.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s system of internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the above evaluation, the Company’s management has concluded that the system of internal controls over financial reporting were not effective as of October 31, 2016.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility that a material misstatement of the Company's annual or interim financial statements would not be prevented or detected on a timely basis.  Based on its assessment of the Company’s internal control over financial reporting management has determined that a material weakness in its internal control over financial reporting existedwas effective as of October 31, 2016.  Specifically, the material weakness was noted in connection with the untimely review of the impairment analysis for goodwill prepared by third party subject matter experts. Management determined that the Company did not have adequate design or operation of internal controls to ensure the timely review of its accounting for certain complex estimates.  The material weakness resulted in an adjustment to goodwill and intangible assets, which was corrected by management prior to the issuance of the Company’s consolidated financial statement included in this Annual Report.

The Company is committed to maintaining a strong internal control environment. To address and remediate the material weakness in internal control over financial reporting described above, the Company intends to implement additional procedures to more timely review complex accounting estimates that are provided by third-party subject matter experts.

The material weakness cannot be considered to be completely addressed until the applicable additional controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.2019.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Controls

Other than as described below, there were no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter ended October 31, 2019 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Scope of Management's Report on Internal Control over Financial Reporting

As described throughout this Annual Report, during the year ended October 31, 2019 we acquired C Enterprises, which is now a wholly owned subsidiary of RF Industries. While our financial statements for the year ended October 31, 2019 include the results of C Enterprises from the March 15, 2019 date through October 31, 2019, as permitted by the rules and regulations of the SEC, our management's assessment of our internal control over financial reporting did not include an evaluation of the internal control over financial reporting for C Enterprises. Further, our management's conclusion regarding the effectiveness of our internal control over financial reporting as of October 31, 2019 does not extend to the internal control over financial reporting for C Enterprises.

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. Other than as described above, there were no change in

We are currently integrating policies, processes, technology and operations for the Company’sconsolidated company and will continue to evaluate our internal control over financial reporting duringas we develop and execute our integration plans. Until the most recent fiscal quarter ended October 31, 2016 that materially affected, orCompany is reasonably likely to materially affect,fully integrated, we will maintain the Company’soperational integrity of each company's internal control over financial reporting. C Enterprises constituted $1.0 million of total assets as of October 31, 2019 and $7.2 million of revenues for the year then ended.

Inherent Limitations of Internal Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART III

Set forth below is information regarding the Company’s directors, including information furnished by them as to their principal occupations for the last five years, and their ages as of October 31, 2016.2019. Other than Howard Hill, our former Chief Executive Officer, and Robert Dawson, our current President and Chief Executive Officer, all of the Directors are “independent directors” as defined by the listing standards of the NASDAQ Stock Market, and the Board of Directors has determined that such independent directors have no relationship with the Company that would interfere with the exercise of their independent judgment in carrying out the responsibilities of a director.

Joseph Benoit was appointed to the Board of Directors on April 8, 2013. Mr. Benoit retired from Union Bank in June 2012 after serving in various management and leadership roles for over 20 years. Managing over 100 Union Bank branch offices in Southern California and being the head of Business Banking were among his responsibilities. As an Executive Vice President, he also served as Union Bank’s integration manager for FDIC assisted acquisitions. Mr. Benoit has a B.S. in Business Administration from San Diego State University and an MBA from National University. He is also a graduate of Pacific Coast Banking School and serves as a director on various non-profit boards.

Marvin H. Fink is a retired executive. Mr. Fink most recently served as the Chief Executive Officer, President and Chairman of the Board of Recom Managed Systems, Inc. from October 2002 to March 2005. Prior thereto, Mr. Fink was President of Teledyne’s Electronics Group. Mr. Fink was employed at Teledyne for 39 years. He holds a B.E.E. degree from the City College of New York, an M.S.E.E. degree from the University of Southern California and a J.D. degree from the University of San Fernando Valley. He is aan inactive member of the California Bar (inactive).Bar.

Howard F. Hill, a founder of the Company in 1979, served as thisthe Company’s Chief Executive Officer until January 22, 2015. Effective January 22, 2015, Mr. Hill stepped down as the Chief Executive Officer and agreed to serve as thisthe Company’s Chief Operating Officer. Effective April 6, 2015, Mr. Hill announced that he was on a one-yeartaking an indefinite medical leave of absence fromand resigned as the Company’s Chief Operating Officer. On April 6, 2015 until his resignation7, 2016, Mr. Hill retired as an officer and employee in April 2016.of the Company, but continued to serve on the Company’s Board of Directors. On October 31, 2016, Mr. Hill assumed the position of interim President and Chief Executive Officer ofas the Company. Mr. Hill agreed to serve as theunpaid, interim President and Chief Executive Officer of the Company until a newJuly 17, 2017, the date that his successor, Robert Dawson, assumed the duties of President and Chief Executive Officer is hired. FromOfficer. In addition, from January 18, 2013 until June 7, 2013, Mr. Hill also served as the Company’s interim Chief Financial Officer. Mr. Hill has credits in Manufacturing Engineering, Quality Engineering and Industrial Management. He was the President of the Company from July 1993 until July 2011. He has held various positions in the electronics industry over the past 60 years.

William ReynoldsGerald T. Garland was most recently Senior Vice President of Solutions Development and Product Management for TESSCO Technologies, a publicly-traded value-added distributor and solutions provider for the wireless industry. Mr. Garland also served as Senior Vice President of the Commercial division at TESSCO, where he was responsible for sales, business and products development and product management at the Company’s core wireless communications business. He was previously Director of Business Development at American Express Tax and Business Services from 2002 to 2003, where he was involved in an expanded asset recovery capability for Fortune 1000 corporations. From 2000 to 2001, he was Chief Financial Officer at Mentor Technologies, a developer of on-line, Cisco certification training products. Mr. Garland was Chief Financial Officer and Treasurer at TESSCO Technologies from 1993 to 1999 during the Company’s successful Initial Public Offering and oversaw TESSCO’s annual sales expansion from $50 million to over $190 million. Prior to joining TESSCO, Mr. Garland held leadership positions at Bank of America and Stanley Black & Decker. Mr. Garland received his MBA, with a concentration in Finance, from Loyola University, and his Bachelor of Science in Business Management and Accounting from Towson University. He is currently the Managing Director at Inscite Consulting, on the Board of Directors and Chief Adviser to the World Trade Center Institute and on the Executive Advisory Board of Patriot Capital. He is also on the Executive Committee of Communications Electronics, Inc. and the Board of SOZO Children.

Robert Dawson has been the Company’s current President and Chief Executive Officer since July 17, 2017. Effective July 21, 2018, Mr. Dawson was appointed to the Company’s Board to also serve as a director. Prior to joining RF Industries on July 17, 2017, Mr. Dawson was President and CEO of Vision Technology Services, an information technology consulting and project management company that was acquired by BG Staffing. He spent 2007-2013 at TESSCO Technologies, a publicly traded distributor of wireless products and services. At TESSCO Mr. Dawson held multiple executive roles in sales, marketing, product management and strategy culminating with being Vice President of Sales, responsible for TESSCO’s sales organization and leading a team delivering more than $700 million in sales. He joined TESSCO through the 2007 acquisition of NetForce Solutions, a technology training and consulting firm that he co-founded in 2000 and led as the Chief Executive Officer through seven years of growth before being acquired by TESSCO. Mr. Dawson received his Bachelor's degree in Business Administration from Hillsdale College.

Sheryl Cefali is a retired financial executive. Mr. Reynolds most recently was the VPManaging Director at Duff & Phelps and heads their Los Angeles office. In addition, Ms. Cefali is a member of Finance and Administration for Teledyne Controls from 1994 until his retirementDuff & Phelps’ Fairness & Solvency Opinion Senior Review Committee. Prior to joining Duff & Phelps in 1997. Prior thereto, for 22 years he was the Vice-President of Finance and Administration of Teledyne Microelectronics. Mr. Reynolds also1990, Ms. Cefali was a programVice President with Houlihan Lokey. Ms. Cefali received her MBA with a concentration in finance administratorfrom the University of Teledyne Systems Company for five years. He hasSouthern California and her Bachelor’s degree from University of California at Santa Barbara. Ms. Cefali holds FINRA Series 7 and 63 licenses and is a B.B.A. degree in Accounting from Woodbury College.Director on the board of the Women’s Leadership Council.

The Company believes that Messrs. Benoit, Fink, Hill, Garland, and ReynoldsDawson and Ms. Cefali have the following qualifications as members of the Board of Directors:

Joseph Benoit:Mr. Benoit has significant financial management and banking experience, having served in various executive positions at Union Bank.

Marvin Fink: Mr. Fink has significant experience in a variety of areas important to overseeing the management and operations of this Company, including experience as an executive officer, an engineer and a lawyer. Mr. Fink has been the principal executive officer of a public company as well as the President of Teledyne’s Electronics Group. He has degrees in engineering and law and was involved in the electronics industry for over 40 years.

Howard Hill: Mr. Hill is a founder of the Company, has guided the Company’s development for 40 years, and has over 60 years of experience in the electronics industry.

William Reynolds:Gerald T. Garland: Mr. ReynoldsGarland has significant accountingleadership experience in product management, sales management, solutions development, global sourcing and financial management expertise, havingmanagement. Mr. Garland served as VPa Chief Financial Officer and Senior Vice President for a leading distributor and solutions provider to the wireless industry for over 18 years. Mr. Garland has also held senior leadership positions with Bank of FinanceAmerica, Stanley Black & Decker, American Express and AdministrationTESSCO Technologies.

Robert Dawson: Mr. Dawson has significant leadership experience in sales, marketing, and product management and strategy for Teledyne Controls,a leading publicly traded distributor of wireless products and services. Mr. Dawson also served as President and CEO of an information technology consulting and project management company and was a co-founder of a successful telecom and wireless technology training and consulting firm that he led for seven years of growth until it was acquired.

Sheryl Cefali: Ms. Cefali has over 30 years of experience rendering fairness and solvency opinions and determining valuations of companies and securities. Ms. Cefali is currently a Managing Director at Duff & Phelps, is the Vice-Presidenthead of Financethat firm’s Los Angeles office, and Administrationis a member of Teledyne Microelectronics,that firm’s Fairness and asSolvency Opinion Senior Review Committee. Prior to joining Duff & Phelps in 1990, she was a program finance administrator of Teledyne Systems Company. He also has a degree in accounting, which enables him to serve as the “audit committee financial expert” of the Audit Committee.Vice President with Houlihan Lokey.

Management

Howard F. Hill, isRobert Dawson, 45, has been the interimCompany’s current President and Chief Executive Officer of the Company. A description ofsince July 17, 2017. Effective July 21, 2018, Mr. Hill’s biography is set forth above under the description ofDawson was appointed to the Company’s directors.Board to also serve as a director. See preceding section for information regarding Mr. Dawson.

Mark Turfler, Senior Vice President and Chief Financial Officer, was appointed as the Company’s Acting Chief Financial Officer and Corporate Secretary on June 7, 2013. Effective as of January 10, 2014, Mr. Turfler was promoted to Chief Financial Officer. Mr. Turfler joined the Company in January 2013 as our Controller. Prior to joining the Company, Mr. Turfler worked in senior accounting/finance positions at Ligand Pharmaceuticals, Inc. from 2006 to 2009, at Cylene Pharmaceuticals, Inc. from 2010 to 2011, and as an independent financial/accounting consultant from 2012 until he joined the Company in January 2013. Mr. Turfler has more than 35 years of accounting and finance experience including several years with publicly traded companies in a variety of senior financial executive positions with wireless telecommunications, international manufacturing, medical device and software companies. Mr. Turfler began his career with PricewaterhouseCoopers after graduating from Syracuse University with a B.S. in accounting. Mr. Turfler is a Certified Public Accountant and a member of the American Institute of CPAs, California Society of CPAs, Corporate Directors Forum and Financial Executives International.

Board of Director Meetings

During the fiscal year ended October 31, 2016,2019, the Board of Directors held twelveeight meetings. During the fiscal year ended October 31, 2016,2019, each member of the Board of Directors members attended at least 75% of the meetings of the meetingsBoard of Directors and of the Board committees on which hethey served.

Board Committees

During fiscal 2016,2019, the Board of Directors maintained three committees,committees: the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee. William Reynolds was a member of all three of the Board of Directors’ committees until his retirement in September 2019. Mr. Reynolds was an “independent director” as defined under the NASDAQ Stock Market’s listing standards, and an independent committee member.

The Audit Committee meets periodically with the Company’s management and independent registered public accounting firm to, among other things, review the results of the annual audit and quarterly reviews and discuss the financial statements. The Audit Committee also hires the independent registered public accounting firm, and receives and considers the accountant’s comments as to controls, adequacy of staff and management performance and procedures. The Audit Committee is also authorized to review related party transactions for potential conflicts of interest and to conduct internal investigations into whistleblower complaints. TheDuring fiscal 2019, the Audit Committee currently iswas composed of Mr. Reynolds (Chairman), Mr. FinkBenoit and Mr. Benoit.Garland. Following Mr. Reynolds’ retirement, Mr. Garland was appointed as the Chairman of the Audit Committee, and Ms. Cefali was added as a new member of the Audit Committee. Each of these individualsthe current members of the Audit Committee is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. EachIn addition, each of the current members of the Audit Committee has significant knowledge of financial matters.matters, and Mr. Reynolds currently serves as theGarland is an “audit committee financial expert” of the Audit Committee. The Company believes that the current members of the Audit Committee can competently perform the functions required of them as members of the Audit Committee.expert.” The Audit Committee met fourfive times during fiscal 2016.2019. The Audit Committee operates under a formal charter, that governs its duties and conduct, which charter is posted on the Company’s website.

The Compensation Committee currently consists of Messrs.Ms. Cefali (Chair), Mr. Fink, Reynolds,Mr. Garland, and Mr. Benoit, (Chairman) each of whom is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. The Compensation Committee is responsible for considering and authorizing remunerationrecommending to the Board the compensation arrangements for senior management. The Compensation Committee held fourthree formal meetingmeetings during fiscal 2016,2019, which was attended by all committee members.

The Nominating and Corporate Governance Committee is responsible for developing and recommending corporate governance guidelines to the Board, identifying qualified individuals to become directors, recommending selected nominees to serve on the Board, and overseeing the evaluation of the Board and its committees. The Nominating and Corporate Governance Committee currently consists of Messrs.Mr. Mr. Benoit (Chairman), Mr. Fink, (Chairman), Benoit,Ms. Cefali, and ReynoldsMr. Garland, each of whom is a non-employee director and is independent as defined under the NASDAQ Stock Market’s listing standards. The Nominating and Corporate Governance Committee held two formalthree meetings during fiscal 2016,2019, which werewas attended by all committee members.

Code of Business Conduct and Ethics

The Company has adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of the Company’s Directors, officers and employees, including its principal executive officer and principal financial officer. The Code is posted on the Company’s website atwww.rfindustries.com. www.rfindustries.com. The Company intends to disclose any amendments to the Code by posting such amendments on its website. In addition, any waivers of the Code for Directors or executive officers of the Company will be disclosed in a report on Form 8-K.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Executive officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely upon a review of information furnished to the Company, to the Company’s knowledge, during the fiscal year ended October 31, 2016,2019, all Section 16(a) reports were timely filed, except that Howard Hill was late in filing one Form 4 (was filed within one calendar day after the due date).filed.

Summary of Cash and Other Compensation. The following table sets forth compensation for services rendered in all capacities to the Company’s:Company: (i) for each person who served as the Company’s Chief Executive Officer at any time during the past fiscal year, (ii) for each executive officer, other than our Chief Executive Officer, who was employed with the Company on October 31, 20162019 and who earned over $100,000 during the fiscal year ended October 31, 2016,2019, and (iii) for any executive officer who earned over $100,000 during the October 31, 20162019 fiscal year but was no longer employed with the Company on October 31, 20152019 (the foregoing executives are herein collectively referred to as the “Named Executive Officers”). NoExcept for the persons listed below, no other executive officer of the Company received salary and bonus, which exceeded $100,000 in the aggregate, during the fiscal year ended October 31, 2016.

From January 22, 2015 until October 28, 2016, Johnny Walker was the Company’s President and Chief Executive Officer. On October 31, 2016, Howard Hill assumed the position of interim President and Chief Executive Officer of the Company. Mr. Hill agreed to serve as the interim President and Chief Executive Officer of the Company until a new President and Chief Executive Officer is hired. Because both Mr. Walker and Mr. Hill held the offices of President and Chief Executive Officer of the Company during fiscal 2016, both of these officers are listed below as Named Executive Officers. However, Mr. Hill was not compensated in fiscal 2016 for his service in fiscal 2016 (and he agreed to serve as the interim President and Chief Executive Officer without any compensation until his replacement is hired).

Darren Clark was included in the Company’s compensation disclosures as an executive officer of the Company for the fiscal years ended October 31, 2015 and 2014 because he was the President of Cables Unlimited, Inc. Since Cables Unlimited had been the Company’s largest subsidiary, and at times the largest profit center, of the Company for several years, Mr. Clark provided a policy making function over a material portion of the Company’s business. However, in fiscal 2015, the Company purchased Comnet Telecom Supply, Inc. and Rel-Tech Electronics, Inc. The operations and businesses of both Comnet and Rel-Tech overlap with the business of Cables Unlimited, and their operations are larger and more profitable than the operations of Cables Unlimited. As a result of the dilution of Mr. Clark’s duties to the Company, commencing with the beginning of fiscal 2016, the Company no longer considered Mr. Clark to be an executive officer (as such term is defined under the rules of the Exchange Act) of the Company. The Company currently considers each of the presidents of Cables Unlimited, Comnet and Rel-Tech to be the principal operating officer of his respective subsidiary, but not an executive officer of the Company. Accordingly, Mr. Clark is no longer included as a Named Executive Officer in the following compensation disclosures.2019.

Summary Compensation Table

(1)       In fiscal 2015, Howard F. Hill, then the Company’s Chief Operating Officer until April 2015. Mr. Hill thereafter took a medical leave of absence. On April 7, 2016, Mr. Hill retired as an employee of the Company. In gratitude for his services to the Company for over 35 years, the Company’s Board of Directors paid Mr. Hill $100,000 concurrently with his retirement. On October 31, 2016, Mr. Hill assumed the position of interim President and Chief Executive Officer of the Company.

(2)           Mr. Hill’s “Other Compensation” consisted of $76,015 and $11,538 of accrued vacation in fiscal 2016 and 2015, respectively, and $0 and $10,692 for vehicle and apartment rental costs in fiscal 2016 and 2015, respectively. Because Mr. Hill does not live in San Diego, the Company had maintained an apartment in San Diego for Mr. Hill until his medical leave of absence began in April 2015. The compensation attributable to the use of a Company vehicle represents the value of his personal use of a Company vehicle.

(3)           Mr. WalkerDawson joined the Company as President as of October 6, 2014July 17, 2017 at an annual salary of $250,000. OnEffective July 17, 2018, Mr. Dawson’s annual salary was increased to $275,000. As of January 2, 2019, Mr. Dawson’s salary was increased to $300,000. Upon his two-year anniversary on July 17, 2019, Mr. Dawson’s salary was increased to $400,000.

(2)       For the fiscal year ended October 24, 2016,31, 2018, the Company andadopted corporate goals for the determination of cash bonuses to be paid to Robert Dawson, the Company’s Chief Executive Officer.  The target bonus payable to Mr. Walker entered into a Separation and ReleaseDawson was 50% of Claims Agreement pursuanthis 2018 base salary ($250,000) up to which Mr. Walker’s employment with133% based on the achievement by the Company was terminated effectiveof certain EPS targets and the Company’s subjective determination of his performance for the fiscal year ended October 28, 2016. Under31, 2018.  The Company did achieve its maximum EPS targets, and the Separation Agreement,Board of Directors awarded Mr. Dawson a cash bonus of $200,000.

(3)       As part of his employment agreement, the Company agreed to payreimburse Mr. Walker (i) $41,666 on November 1, 2016,Dawson up to $75,000 for relocation expenses, of which amount is equal toMr. Dawson was paid $52,397 in the salary thatfiscal year ended October 31, 2017 and $22,603 of which was paid in the fiscal year ended October 31, 2018. Mr. Walker would have been paid under his employment agreement through its expiration date on December 31, 2016,Dawson’s other compensation for the fiscal 2019 and (ii) a severance payment2018 year also includes $34,946 and $13,845, respectively, of $29,833 on January 15, 2017.accrued vacation.

(4)       For the fiscal year ended October 31, 2018, the Company adopted corporate goals for the determination of cash bonuses to be paid to Mark Turfler, the Company’s Chief Financial Officer.  The target bonus payable to Mr. Walker’s other compensation consistedTurfler was 50% of $18,692his 2018 base salary ($170,000) up to 133% based on the achievement by the Company of certain EPS targets and $19,231the Company’s subjective determination of accrued vacation inhis performance for the fiscal 2016year ended October 31, 2018.  The Company did achieve its maximum EPS targets, and 2015, respectively, and $71,499 severance in fiscal 2016.the Board of Directors awarded Mr. Turfler a cash bonus of $123,050.

(5)       Mr. Turfler’s other compensation for the fiscal 2019 and 2018 year consisted of $15,383$6,862 and $13,077$20,197, respectively, of accrued vacation in fiscal 2016 and 2015, respectively, and $11,454 and $14,220 for vehicle costs.vacation.

(6)       The amounts in this column representFor the aggregate fair value of the option awards recognized byfiscal year ended October 31, 2019, the Company as an expenseadopted corporate goals for financial reporting purposes.the determination of cash bonuses to be paid to Robert Dawson and Mark Turfler. The fair valuetarget bonuses payable to each of these awards andNamed Executive Officers for the amounts expensedfiscal year ended October 31, 2019 has not yet been determined.

2019 Option Grants

No options were determined in accordance with Financial Accounting Standards Board ASC Topic 718. The assumptions we use in calculating these amounts are discussed in Note 10, “Stock options,”granted to the Consolidated Financial Statements.

2016 Option Grants

In fiscal 2016,Named Executive Officers during the Company granted options to purchase 33,744 shares of common stock to Howard Hill.year ended October 31, 2019.

Holdings of Previously Awarded Equity

Equity awards held as of October 31, 20162019 by each of our Named Executive Officers were issued under our 2010 Stock Incentive Plan. The following table sets forth outstanding equity awards held by our Named Executive Officers as of October 31, 2016:2019:

Outstanding Equity Awards As Of October 31, 20162019

During the fiscal year ended October 31, 2016,2019, the Company did not adjust or amend the exercise price of stock options awarded to the Named Executive Officers.

Employment Agreements-ChangeAgreements; Incentive Plan; Change of Control PaymentsArrangements

Employment Agreements

On October 31, 2016, Howard Hill assumedJune 16, 2017, RF Industries, Ltd. entered into an employment letter agreement with Robert D. Dawson, under which Mr. Dawson has served as the position of interimCompany’s President and Chief Executive Officer since July 17, 2017. Under that agreement, the Company agreed to pay Mr. Dawson an annual base salary of $250,000. Mr. Dawson’s salary was increased to $275,000 upon his one year anniversary, July 17, 2018. As of January 2, 2019, Mr. Dawson��s salary was increased to $300,000. Upon his two-year anniversary on July 17, 2019, On July 17, 2019, RF Industries, Ltd. entered into a new employment letter agreement (the “2019 Agreement”) with Mr. Dawson. The term of the Company. Mr. HillAgreement is for the two year period ending July 17, 2021. Under the 2019 Agreement, the Company agreed to serve as the interim President and Chief Executive Officerpay Mr. Dawson an annual base salary of the Company until a new President and Chief Executive Officer is hired, and further agreed$400,000. Mr. Dawson will also be eligible to serve as the interim President and Chief Executive Officer without any compensation. Mr. Hill, who livesparticipate in the Los Angeles metropolitan area,Company’s annual bonus plan, pursuant to which he will however,have the opportunity to earn a year-end bonus equal to fifty percent (50%) of his annual base salary (the “Annual Bonus”). The actual bonus paid may be reimbursed for his travel expenses tohigher or lower than the Company’s headquarters in San Diego, California,Annual Bonus based on the over- or under-achievement of Company and will be reimbursed for his lodging while in San Diegoindividual objectives as the interim President and Chief Executive Officer. Mr. Hill will continue to serve ondetermined by the Company’s Board of Directors or its Compensation Committee. Upon a Change of Control Transaction (as defined in the 2019 Agreement), all of Mr. Dawson’s time based stock options shall immediately vest, whether or not his employment is terminated. If at the time of a Change of Control Transaction Mr. Dawson’s employment is terminated by the Company for any reason other than Cause (as defined), Mr. Dawson will be entitled to receive a change of control cash payment in an amount equal to 12 months of his salary. Mr. Dawson earned a $200,000 cash bonus for fiscal year 2018, but his cash bonus for fiscal year 2019 has not yet been determined.

In addition, on July 17, 2017, Mr. Dawson received stock options to purchase 100,000 shares of the Company’s common stock. The award has an exercise price of $1.90 vests as to 10,000 shares per year on each anniversary of July 17, 2017 (with 10,000 shares having vested on July 17, 2017) while serving ashe is employed by the unpaid interim PresidentCompany. Mr. Dawson is also eligible to participate in the employee benefit plans and Chief Executive Officerprograms generally available to the Company’s senior executives, subject to the terms and will continue to be compensated for his services on the Boardconditions of Directors as a non-employee director.such plans and programs.

During 2016, the Company employed Mark Turfler, as the Company’s Chief Financial Officer, under a one-year writtenis currently employed on an at-will basis pursuant to an unwritten employment agreement that expired on December 31, 2016. Under the foregoing employment agreement,agreement.  Mr. Turfler was paid anTurfler’s current annual base salary of $170,000is $187,000, and washe is entitled to participate in the Company’s pension, retirement, disability, insurance, medical service, or other employee benefit plan that wereare generally available to all employees of the Company. In addition,

Incentive Plan

Both Mr. Dawson and Mr. Turfler hadare eligible to participate in the Company’s cash and equity incentive bonus plan adopted by the Board of Directors for the 2019 fiscal year (the “Incentive Plan”). Under the Incentive Plan, cash and equity bonuses, if any, will be paid to qualified participating officers of the Company and its subsidiaries, including Messrs. Dawson and Turfler, based upon (i) the achievement of specified corporate goals and (ii) a review of the subjective personal performance and contribution of each of the officers. The subjective performance of each officer will be evaluated and determined, in its sole discretion, by the Compensation Committee of the Board after consultation with the Company’s Chief Executive Officer. The corporate goals will apply to all participating officers.

The maximum target bonus payable under the Incentive Plan to participating officers if 100% of the goals are achieved will range from 15% of the recipient’s annual salary to 50% of the recipient’s 2019 base salary for the senior executive officers, including Mr. Dawson and Mr. Turfler. However, the maximum cash bonus payable to all participating officers, including the Chief Executive Officer, may be increased to 75% of the 2019 base salaries of the officers if the Company achieves 150% of its performance targets. Cash bonuses and equity compensation (in the form of either stock options or restricted stock) will be based on the Company’s earnings per share (before payment of bonuses) (“EPS”) for the fiscal year ending October 31, 2019. The maximum bonus payable to each participating officer is subject to reduction based upon the overall performance of such participating officer (performance criteria include the development and execution of strategic plans, the operations of that officer’s business unit, the exercise of leadership by the officer, the support and development of management and other employees, and the contribution of such officer to the improvement in the Company’s overall business activities and profitability). The Board and Compensation Committee reserve the right to earn an annual bonusmodify these goals, criteria and target percentage at any time, and to grant bonuses to the participants even if the performance goals are not met. In addition, the Board and Compensation Committee may modify the incentive plan targets to reflect significant change in Company’s business, including changes due to acquisitions or dispositions of upbusinesses or product lines. The 2019 bonuses will be paid within 75 days after the end to forty percent (40%) of his base salary, subjectthe fiscal year to meeting certain qualitative targets. Althoughparticipating officers who are employed with the employment agreement has not been renewed, Mr. Turfler continues to serve as the Company’s Chief Financial Officer, on an at-will basis,Company on the same financial terms as were included indate of payment. As of the expired written employment agreement.date of this Annual Report, the Board and the Compensation Committee have not determined the amount of bonuses payable to the various participants of the Incentive Plan.

The Company anticipates that it will establish a fiscal October 31, 2020 incentive compensation plan for its officers and division managers, including the Named Executive Officers, early in January 2020.

Change of Control Arrangements

The outstanding stock options currently owned by the Company’s principal officers (including Messrs. Dawson and Turfler) and division managers provide that, immediately prior to a change of control (as defined in the 2010 Stock Option Plan), all unvested stock options will become fully vested and exercisable. In addition, the shares of restricted stock granted to the non-executive director for his/her services to be rendered during the current year shall also become fully vested upon a change of control event.

The Company has no other change of control payment agreements that are currently in effect.effect other than the provision in Mr. Dawson’s employment agreement described above.

Compensation of Directors

Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or employees of the Company do not receive any compensation for serving on the Board. For the year ended October 31, 2016,2019, non-employee directors (i.e. directors who are not employed by the Company as officers or employees) received $30,000,$50,000, which amount iswas paid one-half in cash, and one-half through the grant of stock options to purchase shares of the Company’s common stock.

DIRECTOR COMPENSATION FOR FISCAL YEAR 20162019

For the current fiscal year ending October 31, 2020, the Company has agreed to pay each non-executive director for his/her services as a member of the Board an amount equal to $50,000 per year, payable one-half in cash and one-half in equity. The Board of Directors has increased thedirector’s annual compensation will be payable based on the twelve-month period following the September 2019 annual meeting of stockholders. Accordingly, the compensation has been annualized over a ten-month period end. The number of shares of restricted stock issued to be paid to non-employee directors forwas determined by dividing the fiscal year ended October 31, 2017 from $30,000 to $50,000. Since Mr. Hill will not be compensated for his services asannualized equity compensation amount by the Company’s interim Chief Executive Officer, Mr. Hill is deemed to be a non-employee director. Accordingly, on November 8, 2016, the Board granted five-year non-qualified options to purchase 77,339 shares20-day average trailing closing price of the Company’s common stock. The shares of restricted stock vest quarterly over the one-year term (subject to accelerated vesting upon the closing of a sale, merger or other acquisition of the Company, as specified in the Company’s equity incentive plan). The Chair of each committee of the Board, and that the Chairman of the Board, each earn an annual fee of $15,000 for such services. In accordance with this compensation arrangement, on November 4, 2019, the Company granted the right to acquire 3,270 shares of restricted stock to each of Mr. Marvin Fink (Chairman), Mr. William Reynolds and Joseph Benoit, (Independent Directors) in addition to Mr.Howard Hill, Gerald Garland, and Ms. Sheryl Cefali for their services as directors for the fiscal year ended Octoberperiod ending August 31, 2017. The options have an exercise price of $1.50 per share.2020.

The following table sets forth certain information regarding the ownership of the Company’s Common Stock as of January 20, 2017December 13, 2019 for: (i) each director; (ii) the Company’s Named Executive Officers; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than 5% of the Common Stock. As of January 20, 2017,December 13, 2019, there were 8,835,4839,614,617 shares of Common Stock issued and outstanding.

On April 1, 1997, the Company loaned to Howard Hill, its President at that time, $70,000 pursuant to a Promissory Note which accrued interest at the rate of 6% per annum and which had no specific due date for principal repayment. As of October 31, 2015, the principal balance still outstanding on the loan was $66,980. Mr. Hill has been paying interest on the loan annually. On April 7, 2016, Mr. Hill repaid the foregoing loan, in full (including accrued interest), by paying the Company a total of $72,680.None.

On June 15, 2011, the Company purchased Cables Unlimited, Inc., a New York corporation, from Darren Clark, the sole shareholder of Cables Unlimited, Inc. In connection with the purchase of Cables Unlimited, the Company entered into a five-year lease for the New York facilities from which Cables Unlimited conducts its operations. Cables Unlimited’s monthly rent expense under the lease is $13,000 per month, plus payments of all utilities, janitorial expenses, routine maintenance costs, and costs of insurance for Cables Unlimited’s business operations and equipment. During the fiscal year ended October 31, 2016, the Company paid the landlord a total of $156,000 under the lease. The owner and landlord of the facility is a company controlled by Darren Clark, the former owner of Cables Unlimited and the current President of this subsidiary of the Company.

Audit Fees

The following is a summary of the fees billed to the Company by CohnReznick LLP, the Company’s independent registered public accounting firm, for professional services rendered related to the fiscal years ended October 31, 20162019 and 2015:2018:

Audit Fees. Consists of fees billed and estimated for professional services rendered for the audit of the Company’s annual financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by CohnReznick LLP in connection with statutory and regulatory filings or engagements.

Audit-Related Fees. Consists of fees billed and estimates for assurance and related services that are reasonably related to the performance of the audit and review of the Company’s financial statements and are not reported under “Audit Fees.” These services include professional services requested by the Company in connection with its preparation for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, accounting consultations in connection with acquisitions and consultations concerning financial accounting and reporting standards. The Company did not incur audit-related fees during fiscal 20162019 and 2015.2018.

All Other fees .  The Company used CohnReznick LLP in 2016 and 2015 to perform an audit of the Company’s 401K plan.

Lease

The following exhibits are filed as part of this report:

EX-101.INS XBRL Instance Document

EX-101.SCH XBRL Taxonomy Extension Schema

EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase

EX-101.DEF XBRL Taxonomy Extension Definition Linkbase

EX-101.LAB XBRL Taxonomy Extension Label Linkbase

EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase

(1)           Previously filed as an exhibit to the Company’s Form 10-KSB for the year ended October 31, 2000, which exhibit is hereby incorporated herein by reference.

(2)           Previously filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 1987, which exhibit is hereby incorporated herein by reference.

(3)           Previously filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 1992, which exhibit is hereby incorporated herein by reference.

(4)           Previously filed as an exhibit to the Company’s Form 10-QSB for the quarter ended January 31, 2001, which exhibit is hereby incorporated herein by reference.

(5)           Previously filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 2003, which exhibit is hereby incorporated herein by reference.

(6)(2)           Previously filed as an exhibit to the Company’s Form 8-K, dated August 31, 2012, which exhibit is hereby incorporated herein by reference.

(3)           Previously filed as an exhibit to the Company’s Form 8-K, dated February 12, 2009, which exhibit is hereby incorporated herein by reference.

(4)           Previously filed as an exhibit to the Company’s Form 8-K, dated June 9, 2006,13, 2013, which exhibit is hereby incorporated herein by reference.

(7)           Previously filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 2007, which exhibit is hereby incorporated herein by reference.

(8)           Previously filed as an exhibit to the Company’s Form 8-K, dated June 5, 2008, which exhibit is hereby incorporated herein by reference.

(9)(5)           Previously filed as an exhibit to the Company’s Form 10- K for the year ended October 31, 2009, which exhibit is hereby incorporated herein by reference.

(10)(6)           Previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 20, 2010, which exhibit is hereby incorporated herein by reference.

(11)         Previously filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 20, 2010, which exhibit is hereby incorporated herein by reference.

(12)         Previously filed as an exhibit to the Company’s definitive proxy statement filed on July 12, 2012, which exhibit is hereby incorporated herein by reference.

(13)(7)           Previously filed as an exhibit to the Company’s Form 10- K for the year ended October 31, 2011, which exhibit is hereby incorporated herein by reference.

(14)         Previously filed as an exhibit to the Company’s Form 10-QSB for the quarter ended July 31, 2013, which exhibit is hereby incorporated herein by reference.

(15)         Previously filed as an exhibit to the Company’s Form 8-K, dated January 20, 2015, which exhibit is hereby incorporated herein by reference.

(16)         Previously filed as an exhibit to the Company’s Form 8-K, dated January 22, 2015, which exhibit is hereby incorporated herein by reference.

(17)(8)           Previously filed as an exhibit to the Company’s Form 8-K, dated January 21, 2015, which exhibit is hereby incorporated herein by reference.