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, 20152018

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 $29.1million.$47.1 million.

On January 22, 2016,December 14, 2018, the Registrant had 8,718,9149,292,701 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, the market demand for its products, which market demand is dependent to a large part on the state of the telecommunications industry, the Company’s dependence oneffect of future business acquisitions and dispositions, the successincurrence of its largest division,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, press releases and other communications.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. Through its three 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 conducts its operationsoperates through two reporting segments: (i) the following five 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 Divisionsegment 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) the Bioconnect Divisionconnectors, used in telecommunications, information technology, OEM markets and other end markets. The Custom Cabling Manufacturing and Assembly segment designs, manufactures, markets and distributes cablingcustom copper and interconnect products to the medical monitoring market; (iii) Cables Unlimited, Inc., the subsidiary that manufactures custom and standardfiber cable assemblies, complex hybrid fiber optic and power solution cables, adapters, and electromechanical wiring harnesses, and wiring harnesses for communication, computer, LAN, automotivea broad range of applications in a diverse set of end markets.

During the past two years covered by this Annual Report, the Company’s Custom Cabling Manufacturing and medical equipment; (iv)Assembly segment included Comnet Telecom Supply, Inc. (“Comnet Telecom”), a wholly-owned subsidiary thatwhose offices and manufacturing facilities are located in East Brunswick, New Jersey. Comnet Telecom manufactures and sells fiber optics cable, distinctivedistributes telecommunications equipment and cabling technologiesinfrastructure products used by telecommunications carriers, co-location service companies, and custom patch cord assemblies, as well as other telecommunication and data center products; and (v) the recently acquired Rel-Tech Electronics, Inc. subsidiary that designs and manufactures cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers. Both the Cables Unlimited division and the Comnet Telecom division 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. Until December 22, 2015, the Company also operated the Aviel Electronics Division, which designed, manufactured and distributed specialty and custom RF connectors primarily for aerospace and military customers.companies. On November 17, 2015, the Company decided to sell its Aviel Electronics Division and on December 22, 2015October 31, 2018, the Company sold this division.

TheComnet Telecom as part of the Company’s principal executive office is currently located at 7610 Miramar Road, Building #6000, San Diego, California. Theon-going one-company goal to better integrate and streamline its operating facilities and divisions and ensure a common sales strategy. Comnet Telecom’s net sales for the fiscal year ended October 31, 2018 represented 14% of the Company’s consolidated net sales, and its operating margin in fiscal 2018 was 7% below the consolidated operating margin of the remaining divisions of the Company was incorporated in(excluding Comnet Telecom). Except as specifically indicated, the Statedescription of Nevada on November 1, 1979, completedthe Company and its initial public offering in March 1984 under the name Celltronics, Inc.,assets 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.operations excludes Comnet Telecom. In addition, all references to this Company for periods after November 1, 2014 also includefinancial accounting purposes, Comnet Telecom Supply, Inc., a wholly owned subsidiary that RF Industries, Ltd. acquired on that date. Also, all references to this Companyhas been classified as discontinued operations, and Comnet Telecom’s results of operations 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.

Recent Events

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. Sales from the Aviel Electronics Division of $884,000 and $1,176,000, respectively, were included in the Company’s RF Connector and Cable Assembly segment for fiscal years ended October 31, 20152018 and 2014. Aviel Electronics Division was based in Las Vegas, Nevada,2017 have been excluded from the continuing operating results of the Company.

Strategy

In July 2017, the Company hired a new Chief Executive Officer. Since then, the Company’s overall strategy has been the following:

Provide rapid and was primarily engaged inflexible design and manufacturing services. The Company has been restructuring its operations to focus on providing 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 design, manufactureCompany to offer prices on both the custom manufactured products and sale of custom, specialty or precision connectorson most standard connector and cable systems for specialized purposes, such as commercial aerospace and military systems.products that are competitive with the marketplace.

AcquisitionsLeverage its manufacturing and distribution capabilities and facilities. The Company’s strategy is to operate its three manufacturing and distribution locations to best provide our customers with a competitively priced, high quality customized product delivered with a fast turnaround time. In order to achieve success on this strategy, the Company utilizes a “one-company” approach to its three 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. As of November 1, 2018, the Company operates three manufacturing and distribution locations in 2015the U.S.; one in California, and two in the Northeast.

Rel-Tech Electronics, Inc.Integrate marketing and selling efforts. The Company’s three manufacturing and distribution operations have, to a large extent, historically served different customers for the product lines manufactured at, or distributed by those facilities. The Company has been integrating the marketing and sales efforts of the three operations, thereby expanding the number and type of products each operation can offer to its existing client base.

Broad range of immediately available connector products

On June 5, 2015,. The Company’s 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 purchased 100%is able to fill smaller orders for unique connector parts, as well as provide a broad range of standard 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 similar products manufactured by others, rather than manufacturing and selling operating components or products. As a result, the issuedCompany no longer manufactures radio modems, no longer provides mobile management solutions and outstanding shares of Rel-Tech Electronics, Inc. (“Rel-Tech”) from Wilfred D. LeBlanc Jr., Ralph Palumboservices, and their respective wives. Rel-Techno longer manufactures medical monitoring products.

Increase long-term relationships with customers. The Company’s goal is a Milford, Connecticut-based manufacturer and supplier of custom cable assemblies and wiring harnesses. Atto establish longer-term relationships with the closing, RF Industries, Ltd. paidcustomers who have to date used the sellers $3,100,000, which consisted of $2,100,000 in cash, 50,467 shares ofCompany for specialized projects by having the Company’s unregistered common stock valued at $200,000 based on a per share pricecustomized solutions built into the customer’s product specifications and bill of $3.96 (the volume weighted average pricematerials.

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 common stock duringcustomer base, supplement the five trading days beforeCompany’s management team, expand the closing date)Company’s product offerings, and/or expand the Company’s footprint in a relevant market segment.

Operations

The Company currently conducts its operations through three divisions.

RF Connector 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. Rel-Tech will be operated as a stand-alone subsidiary for at least the next two years,Cable Assembly Segment.

The Company’s RF Connector and Mr. Palumbo will 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. Rel-Tech has also entered into employment agreements to retain five key managers. Financial results for Rel-Tech have been included in the results of the Custom Cabling Manufacturing andCable Assembly segment subsequent to June 1, 2015.

CompPro Product Line

On May 19, 2015, the Company purchased the CompPro braided product line (“CompPro”RF Connector segment”), 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 consists of the RF Connector and Cable Assembly segment subsequent to May 19, 2015.

Comnet Telecom Supply, Inc.

On January 20, 2015, the Company purchased 100% of the issued and outstanding shares of Comnet Telecom Supply, Inc.division (“Comnet Telecom”RF Connector division”) from Robert Portera, the sole shareholder of Comnet Telecom. Comnet Telecomthat is a New Jersey-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 equipment. Comnet Telecom is a New York corporation that was formed in 1993. At the closing, the Company paid Mr. Portera $4,150,000 in cash and stock, and agreed to pay him up to an additional $1,360,000 in cash as an earn-out over the next two years if Comnet Telecom meets certain financial milestones in the next two years. The purchase price paidbased at the closing consisted of $3,090,000Company’s headquarters in cash (of which $300,000 was deposited into a bank escrow account for one year as security for the seller’s indemnification obligations under the stock purchase agreement), and 252,381 sharesSan Diego, California. Although most of the Company’s unregistered common stock, which shares were valued at $1.1 million based on a per share priceRF connector and cable products are inventoried and distributed from its San Diego facilities, some of $4.20 (the volume weighted average price ofthese products also are inventoried and distributed from the Company’s common stock during the five trading days before the closing date). Comnet Telecom will be operated as a stand-alone subsidiary for at least the next two years.other facilities. The Company entered into a two-year employment agreement with Mr. Portera pursuant to which Mr. Portera will be the President of Comnet Telecom. Under the employment agreement, Mr. Portera’s base salary will be $210,000 per year. Mr. Portera will also be entitled to earn an annual bonus of up to 50% of his base salary. Since the acquisition of Comnet was effective for financial accounting purposes as of November 1, 2014 with an effective closing date of January 20, 2015, Comnet’s financial results have been included in the results of the Custom Cabling Manufacturing and Assembly segment for the entire fiscal year ended October 31, 2015.

Operating Divisions

RF Connector and Cable Assembly Division  The Connector and Cable Assembly Divisiondivision 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 has been designing, producing and selling coaxial connectors since 1987 and the Connector and Cable Assembly Division therefore represents the Company’s oldest and most established 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 Company’s ConnectorCustom Cabling Manufacturing and Cable Assembly operations are conducted outsegment (“Custom Cabling segment”) currently consists of two wholly-owned subsidiaries located in the Northeastern U.S. Until its sale on October 31, 2018, Comnet Telecom was part of the Custom Cabling segment. The two current East Coast facilities have historically provided similar products and services to their own customers. The Company has initiated a realignment of the operations of these two East Coast operations in order to integrate certain of their manufacturing and marketing functions so as to better address overlapping market opportunities and to more efficiently manufacture, market and ship products to the Company’s customers. The Company also has commenced integrating the manufacturing, marketing and distribution functions of the Custom Cabling segment with those of the RF Connector division in San Diego, California. As a result, the San Diego, California, facilities.facility maintains an inventory of, and sells and ships certain products previously only offered by the East Coast Custom Cabling segment companies, and the two Custom Cabling segment companies now likewise carry RF Connector products. The two subsidiaries that comprise the current Custom Cabling segment consist of the following:

Cables Unlimited, DivisionInc. Cables Unlimited, Inc. 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.

Bioconnect Division   The Bioconnect Division is engaged in product development, design, manufacture and sale of high-end or specialty cables and interconnects for medical monitoring applications, such as ECG cables, EEG leads, infant and sleep apnea monitors in hospitals, patient leads, snap leads, several variations of cable assemblies used with cardiac ablation devices and connecting wires.  Bioconnect’s products typically do not directly compete against the mass-produced, lower priced standard medical cables used by medical facilities. The Company acquired the Bioconnect operations in 2000. Bioconnect operates out of the Company’s San Diego, California, facilities.

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 Division RF Industries, Ltd. purchasedacquired Rel-Tech Electronics, Inc. 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.

For financial reporting purposes for the fiscal year ended October 31, 2014, the Company aggregated its operations into three segments. (1) Connector and Cable Assembly and Aviel Electronics divisions were aggregated into one reporting segment (the “RF Connector and Cables Assembly” segment) because they have similar economic characteristics. (2) Bioconnect represented the Company’s “Medical Cabling and Interconnector” segment. (3) The Cables Unlimited subsidiary constituted the Company’s fiber optic and power/electronic cabling segment, which is referred to as the Custom Cabling Manufacturing and Assembly segment. During the fiscal year ended October 31, 2015, the Company purchased Comnet Telecom and Rel-Tech Electronics. Accordingly, for the 2015 fiscal year, the Company aggregated Cables Unlimited, Comnet Telecom and Rel-Tech Electronics into a single segment because of their fiber optic business activities and customer focus. Since the acquisition of Comnet Telecom was effective for financial accounting purposes as of November 1, 2014, Comnet Telecom’s financial results have been included in the results of the Custom Cabling Manufacturing and Assembly segment for the entire fiscal year ended October 31, 2015. The acquisition of Rel-Tech Electronics was effective for financial accounting purposes as of June 1, 2015, accordingly, Rel-Tech Electronics’ financial results have been included in the results of the Custom Cabling Manufacturing and Assembly segment beginning June 1 for the fiscal year ended October 31, 2015.

Product Description

The Company produces a broad range of interconnect products and assemblies. 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 including Passiveinclude passive 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 coax 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, Distributed Antenna Systems (DAS),DAS and Small Cell installations, TV/dish network systems, test equipment, military/aerospace (mil-standard and COTS (Commercial 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 also has some proprietary products, including the CompPro product line and OptiFlex. CompPro is a patented compression technology that 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, USBadvantages for a water-tight, ruggedized connection, providing easier installation, and firewire cablesimproved 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.

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. During 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 hybrid fiber optic interconnect solutions to its larger customers.and DC power cabling solution the Company designed and now manufactures 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.

BioconnectOther Cabling Products

BioconnectThe Company also designs, manufactures sells and provides product development services to OEMs for standard and custom cable assemblies, adapters and electromechanical wiring harnesses for the medical market. These products consist primarily of patient monitoring cables, ECG cables, snap leads, and molded safety leads for neonatal monitoring electrodes. The products, which are used in hospitals, clinics, doctor offices, ambulances and at home are frequently replaced in order to ensure maximum performance of medical diagnostic equipment.

Comnet TelecomProducts

Comnet Telecom 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 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.

Foreign Sales

Net sales to foreign customers accounted for $1.2 million$662,000 (or approximately 4%1%) of the Company’s net sales, and $1.7 million$729,000 (or approximately 7%3%) of the Company’s net sales, respectively, for the fiscal years ended October 31, 20152018 and 2014.2017. 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 Customers

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

The Bioconnect division markets its products to the medical market through major hospital suppliers, dealers and distributors. The Bioconnect Division alsoCompany currently sells its products to OEMs who incorporate the leadsthrough independent warehousing distributors and cables into their product offerings.

Comnet Telecom sells its products directly to its own customers 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 70% of the net sales of the Company for the fiscal year ended October 31, 2018. 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 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 Division,Company 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, 20152018 were assembled by the Cable Assembly side, an approved ISO factory, of the Connector and Cable Assembly Division at the Company’s facilitiesInternational Organization for Standardization (ISO) approved 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 dependentprimarily relies on primarily 8twelve 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 partythird-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.

The Bioconnect Division has designed and manufactured its own products for over 25 years (including as an unaffiliated company before being acquired by the Company in 2000). Bioconnect products are manufactured by the Company at its own ISO approved California facilities. The manufacturing process for the Bioconnect medical cables includes all aspects of the product, from the design to mold design, mold fabrication, assembly and testing. The Bioconnect product line produces its medical interconnect products in both high volume manufacturing and for custom or low volume uses.

Cables Unlimited manufactures its custom cable assemblies, adapters and electromechanical wiring harnesses and other products in its Yaphank, New York manufacturing facility. Cables UnlimitedThe Yaphank facility is an ISO approved factory, as well asfactory. Cables Unlimited, Inc. the subsidiary that operates the Yaphank facility, 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 new 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.

Rel-Tech Electronics manufactures itsThe Milford, Connecticut, facility 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 ISO approved manufacturing facility.similar products. 

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 Divisiondivision and the Rel-Tech Electronics Divisiondivision purchase all of their products from manufacturers 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, 2015,2018, the Company employed 226186 full-time employees, of whom 5547 were in accounting, administration, sales and management, 160132 were in manufacturing, distribution and assembly, and 57 were engineers engaged in design, engineering and research and development. The employees were based at the Company’s offices in San Diego, California (75 employees), Las Vegas, Nevada (5(68 employees), Yaphank, New York (42(55 employees), and Milford, Connecticut (74(63 employees) and East Brunswick, New Jersey (30 employees). In December 2015, the Company sold the Aviel division and, as a result, no longer employs any employees in Nevada. 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’sCompany’s other employees are unionized.

Research and Development

Research and development costs are expensed as incurred. 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, 2015 and 2014, the Company recognized $923,000 and $948,000 in engineering expenses, respectively.

Patents, Trademarks and Licenses

The Company owns 13 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 also owns the “CompPro” registered trademark associated with the compression cable product line.

The Company uses “OptiFlex™” as a trademark for its hybrid cable wireless tower cable solution.

Because the Company 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 business or competitive position is dependent on patent protection.

Under its agreements with Corning Cables Systems LLC, Cables Unlimited and Comnet Telecom areis permitted to advertise that they areit is a Corning Cables System CAH Connections Gold Program members.member.

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 Telecom areis authorized to manufacture optic cable assemblies that are backed by Corning Cables Systems’ extended warranty (referred to as the “Gold Certified Warranty”).

Competition

The Company believes that the worldwide industry for connector products is highly fragmented. The Company and industry analysts estimate North American sales of cable assembly products currently is approximately $33.4 billion. The Company and industry analysts estimate worldwide sales of interconnectconnector products of approximately $52$80.4 billion in 2015. The Company believes that the worldwide industry for interconnect products and systems is highly fragmented, with no one competitor having over a 20% share of the total market.by 2023. Many of the competitors of the RF Connector and Cable Assembly Divisiondivision have significantly greater financial resources and broader product lines. The RF Connector and Cable Assembly Division competeddivision competes on the basis 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.

The Bioconnect division competes with numerous other companies in all areas of its operations, including the manufacture of OEM custom products and medical cable products. Most of the competitors of Bioconnect are larger and have significantly greater financial resources than Bioconnect.

Cables Unlimited competes on the basis of product quality, custom design, service, delivery time and value-added support to its customers. Since Cables Unlimited is a Corning Cables System CAH Connections Gold Program member, it is one of 12along with 11 other companies permitted to manufacture fiber optic cable assemblies that are backed by Corning Cables Systems’ extended warranty. Cables Unlimited believes that being onepart of only a dozenlimited number of Corning Cables System CAH Connections Gold Program members provides it with a competitive advantage in certain fiber optic markets. In addition, Cables Unlimited custom designs a variety of cabling product, including hybrid fiber cable that is utilized by wireless carriers in their roll out of 4G. The carriers are beginning their build-out of 5G which is estimated to be $130 billion in 2024.

Cables Unlimited 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.

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.

Bioconnect products are subject to the regulations of the U.S. Food and Drug Administration.

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 two wholly-owned subsidiaries, Cables Unlimited, Inc. and Rel-Tech Electronics, 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 buy the Company’s common stock.

The Company’s RF Connector And Cable Assembly And Custom Cabling Manufacturing And Assembly Segments AreCompany Is Heavily Dependent Upon Wireless And Broadband Communications Providers.

The revenues and profitability of both the RF Connector and Cable Assembly division and the Cables Unlimited divisionCompany are, to a largesignificant extent, dependent upon the wireless and broadband communications industries. Accordingly, revenues and profits at these two divisions increased a few years ago as the wireless and broadband markets increased. However, 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 will in the future continue to be heavily dependent upon the wireless and broadband industries. The Company acquired Comnet Telecom in January 2015 and Rel-Tech Electronics was acquired in June 2015 in part to reduce the Company’s dependence on these two divisionsthe wireless and broadband customers and to provide other communications products primarily to the OEM markets. However, because the Company anticipates that are not as dependent uponsales to the wireless and broadband markets. However, because the RF Connector and Cable Assembly division and the Cables Unlimited divisionmarkets will continue to represent a large portion of the Company’s revenues, the Company’s revenues and profits an adverse changewill continue to be heavily dependent on the wireless and broadband markets. As a result, any material downturn in the operations of these two segmentswireless and broadband markets could materially adversely affecthave a material and adverse effect on the Company’s business, operating resultsoperations and financial condition.results.

The Company’s Recent Increases In Revenues and Profits Are Due In Large Part To Accelerated Spending Related to Upgrades of the U.S. Wireless Infrastructure and Networks, And Any Decline In This Activity or the Related CAPEX 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 could abruptly and materially decrease if U.S. wireless carriers slow down or decrease their investments in building out and upgrading their networks, or if any of the primary end user customers that the Company has been selling its cabling products to decreases its purchases from the Company. 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 strategic growth plans,plan to operate businesses that are profitable and that reflect the changing market, the Company from time to time the Company sells unprofitable divisions and purchases new businesses. During the past few years, the Company has sold its Comnet Telecom, Aviel, RadioMobile and RF Neulink divisions, and has shutdown its Bioconnect division. The Company has also purchased the Cables Unlimited, Comnet Telecom, and Rel-Tech subsidiaries. While the Company believes that restructuring its operations to address changes in its principal markets 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 fivevarious divisions in four states,separate locations and have increased the Company’s overall overhead expenses.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 companies,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 the Company’s 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 tradenames 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.

As of October 31, 2018 and 2017, the Company determined that there has been no impairment in the goodwill of Cables Unlimited, Inc., Rel-Tech, and CompPro. The goodwill of Comnet no longer exists as the subsidiary was sold as of October 31, 2018.

No assurance can be given that events or circumstances will not change regarding the carrying value of goodwill of the Cables Unlimited and Rel-Tech 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 has to record material impairment charges on either of the Cables Unlimited and Rel-Tech subsidiaries or the CompPro product line, such future charges could materially reduce future earnings, which would negatively affect the Company’s stock price.

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 partythird-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 2015,2018, the Company made four dividends distributions to its shareholders (each in the amountstockholders (for a total of $0.07$0.08 per share). Dividends are declared and paid at the discretion of the Board of Directors subject to applicable laws, and depend upon, among other things, the Company’s net profit after taxes, the anticipated future earningson a number of the Company, the successfactors, including our financial condition, results of the Company’s business activities, the Company’soperations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and the general financial conditionsother factors that our Board of the Company. Accordingly, no assurance can be given that the Company will, in fact, pay any dividends in the future even in a profitable year or if it is otherwise capable of doing so.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 39% of the net sales of the Company for the fiscal year ended October 31, 2015. 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 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 customer, who is a distributor, accounted for approximately 18% and 34%62% of the Company’s net sales for the fiscal yearsyear ended October 31, 2015 and 2014, respectively.2018. This same customer accounted for approximately 27% of the Company’s net sales for the fiscal year ended October 31, 2017. Although this customerdistributor has been an on-going major customer of the Company for at leastin the past, 10 years and the Company has entered into a written distributor agreement with this customer, this customer does not have any minimum purchase obligations and the customer 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 directly and through the foregoing distributor, to a few end users for use in upgrading and building out wireless networks. 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 In General HaveMay Adversely Affected the Company’s Business And Results Of Operations And It Is Uncertain If These Conditions Will Improve In The Near Future, And They May Worsen.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 continues orin the U.S. deteriorates, the Company’s results could be adversely affected in the future.as demand for wireless products lessens. There could also be a number of other adverse follow-on effects from the credit crisis 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 4%1% and 7%3% of the net sales of the Company during the years ended October 31, 20152018 and 2014,2017, 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.

The Loss OfInability 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’sOur future success will depend to a significant extent ondepends largely upon the continued service of our executive officers and other key management and technical personnel, and on our ability to continue to identify, attract, retain and motivate them, which may become increasingly difficult in an environment of cost reductions. Implementing our business strategy requires specialized engineering and other talent. The market for employees in our industry is extremely competitive and the Company’s senior executives including Johnny Walker, its President and Chief Executive Officer, and Mark Turfler, its Chief Financial Officer, as well ascost for new employees may exceed the presidentscost 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. Walker or 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, the Company does not hold any other United States or foreign patents, and does not have any patents pending. 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 traded 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 effective internal 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 could also prevent the Company from maintaining accurate accounting records and discovering accounting errors and financial frauds.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. The standards that must be met for management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. Management’s assessment that there are weaknesses in the Company’s internal control over financial reporting may raise concerns for investors. Any actual or perceived 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, 2018 and 2017, 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 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 buildingand RF connector and cable assembly manufacturing facilities at 7610 Miramar Road, Building 6000, San Diego, California. The building consists of approximately 22,000 square feet which houses itsAt that location, the Company leases three buildings that house the Company’s corporate administration, sales and marketing, and engineering plusdepartments. The buildings also are used for production and warehousing forby the Company’s RF Connector division and, Cable Assembly and Bioconnect Divisions. Theuntil October 31, 2018, Comnet Telecom division. On June 5, 2017, the Company entered into a fifth amendment to its lease for thisits facility in San Diego, California. As a result, the Company now leases a total of approximately 21,908 square feet of office, warehouse and manufacturing space at its San Diego location. The term of the lease expires on MarchJuly 31, 2017. In addition2022, and the rental payments under the lease currently are $22,721 per month. The San Diego lease also requires the payment of the Company’s pro rata share of real estate taxes and insurance, maintenance and other operating expenses related to the foregoing building, the Company currently also leases the following facilities:facilities.

The Rel-Tech Electronics Division leases an approximately 14,000 square feet facility located at 215 Pepe Farm Road #B-D, Milford, Connecticut. The lease for this facility expires in May 2017.

The aggregate fiscal 2018 monthly rentalrent for all of the Company’s facilities currently is approximately $51,000$53,000 per month, plus utilities, maintenance and insurance.

As previously reported, on November 21, 2014, Peter Wyndham filed a complaint for damages against the CompanyFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the United States District Court for the Southern Districtordinary course of California (Peter Wyndham vs. RF Industries, Ltd., Case No. 14CV2792WQHBGS), for violationbusiness. 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 Sarbanes-Oxley Actdate of 2002,this report, we are not subject to any proceeding that is not in the Dodd-Frank Wall Street Reform and Consumer Protection Act, and wrongful termination in violationordinary course of public policy. In September 2015,business or that is material to the parties entered into a written settlement agreement, and the case has been dismissed. The settlement payment was made by the Company’s employment practices liability insurance carrier.financial condition of our business.

Not applicable.None.

PART II

The Company’s Common Stock is listed and trades on the NASDAQ Global Market under the symbol “RFIL.”

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, 2015,2018, there were 196282 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 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. The Company paid a total of $2.3 million of dividends during the fiscal year ended October 31, 2014 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 and depend upon, among other things, the Company’s net profit after taxes, the anticipated future earnings of the Company, the success of the Company’s business activities, the Company’s anticipated capital requirements, and the general financial conditions of the Company. Accordingly, no assurance can be given that the Company will, in fact, pay any dividends in the future even if it has a profitable year or is otherwise capable of doing so.

Repurchase of SecuritiesSecurities. The Company did not repurchase any securities during the fourth quarter of the fiscal year ended October 31, 2015.2018.

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 2015.2018.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of October 31, 20152018 with respect to the shares of Company common stock that may be issued under the Company’s existing equity compensation plans.

ITEM 6. SELECTED FINANCIAL DATA

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

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company recognizes revenue from product sales after purchase orders are received which contain a fixed price and for shipments with terms of FOB Shipping Point, revenue is recognized upon shipment, for shipments with terms of FOB Destination, revenue is recognized upon delivery and revenue from services is recognized when services are performed, and the recovery of the consideration is considered probable.

Inventories

Inventories are valuedstated at theirthe lower of cost or net realizable value, with cost determined using the weighted average cost.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 currently values inventories using specific identification (last purchase price) on a first-in, first-out (FIFO) basis. The Company intends to convert the inventory valuation principles used by Rel-Tech to the weighted average cost during early fiscal 2016.

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. We have made no material adjustments to our long-lived assets in any of the years presented.

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

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

Earn-out Liability

The purchase agreement for the Rel-Tech acquisition provided for earn-out payments of up to $800,000, payable through May 31, 2018. No goodwill impairmentearn-out obligation to Rel-Tech remains as of October 31, 2018. The initial earn-out liability was valued at its fair value using the Monte Carlo simulation and was included as a component of the total purchase price. The earn-out was revalued quarterly using a present value approach and any resulting increase or decrease has been identifiedrecorded into selling and general expenses. Any changes in anythe assumed timing and amount of the years presented.probability of payment scenarios could have impacted the fair value. Significant judgment was employed in determining the appropriateness of the assumptions used in calculating the fair value of the earn-out as of the acquisition date.

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.

The Company accounts for uncertain tax positions by determining if it is “more likely than not” that a tax position will be sustained by the appropriate taxing authorities upon examination based on the technical merits of the position. An uncertain income tax position is not recognized if 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 accrued interest and penalties are included in deferred and other long-term liabilities in the Company’s consolidated balance sheets. See Note 8 to the Consolidated Financial Statements included in this Report for more information on the Company’s accounting for uncertain tax 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 agreement for the Comnet and Rel-Tech acquisitions provides for earn-out payments of up to $1,360,000 and $800,000, respectively.  The earn-out liability is valued at its fair value using the Monte Carlo simulation and is included as a component of the total purchase price.  The earn-outs will be revalued quarterly and any resulting increase or decrease will be recorded into selling, general and administrative 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, 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 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, medical monitoring wiring 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,Most recently, on October 31, 2018, the Company sold its: (i) RF Neulink RF division (a manufacturerall of data linksthe assets and wireless modems), (ii) the RadioMobile division (a providerliabilities 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). RF Industries also purchasedits Comnet Telecom Supply division (a provider of fiber optic and other cabling technologies, custom patch cord assemblies, and other data center products), which had been acquired in January 2015 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 ComPro line).November 2014.

The Company aggregates operating divisions into operating segments which 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 threetwo reportable segments -– the “RF Connector and Cable Assembly” segment; the “Medical Cabling and Interconnector” segment;segment (RF Connector) and the “Custom Cabling Manufacturing and Assembly” segment-basedsegment (Custom Cabling) – based upon this evaluation.

During the fiscal year ended October 31, 2015, theThe RF Connector and Cable Assembly segment was comprised of two divisions; the Medical Cabling and Interconnector segment wasis comprised of one division, andwhile the Custom Cabling Manufacturing and Assembly segment wasis comprised of threetwo divisions. The fivethree divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly Bioconnect,division and the Cables Unlimited Comnet and Rel-Tech. Each of the other divisions aggregated into these segmentsRel-Tech subsidiaries. While each segment had similar products that were marketedand services, with one major exception, there was little overlapping of these services to their respective customer base and production andbase. In addition, sales or 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 included in the Custom Cabling Manufacturing and Assembly segment in the fiscal year ended October 31, 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, 2015. Financial results for Rel-Tech have been included in the results of the Custom Cabling Manufacturing and Assembly segment beginning June 1, 2015.

Management identifies the Company’s segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, as of October 31, 2015 the Company aggregated the Connector and Cable Assembly and Aviel Electronics divisions intofor the RF Connector Cable Assembly segment. The Aviel Electronics divisionsegment was sold in December 2015 and, accordingly, will no longer be included inprimarily through the Connector and Cable Assembly segment. The Bioconnect division makes up the Company’s Medical Cabling and Interconnector segment,distribution channel while the Custom Cabling Manufacturingsales was through a combination of distribution and Assembly segment consisted of Cables Unlimited, Comnet and Rel-Tech as ofdirect to the end of the fiscal year ended October 31, 2015.customer.

For the year ended October 31, 2015,2018, most of the Company’s revenues were generated from the sale of RF connector products and connector cable assemblies (the Connector and Cable Assembly division accounted for approximately 33% of the Company’s total sales for the fiscal year ended October 31, 2015), andCustom Cabling segment from the sale of fiber optics cable, copper cabling, custom patch cord assemblies transceivers/converters and other data center equipment by Comnetwiring harnesses (which accounted for approximately 31%76% of the Company’s total sales for the fiscal year ended October 31, 2015)2018). This segment largely benefitted from an increase in demand of the segment’s fiber optics cable used primarily in the build out of wireless carrier 4G and 5G network deployment. This segment also sells highly customized cable assemblies and wiring harnesses which are integrated into other customers’ products, directly to blue-chip customers.

The net incomeRevenues from the RF Connector segment were generated from the sales of RF connector products and connector cable assemblies and accounted for 24% of the Company’s total sales for the fiscal year ended October 31, 2018. This segment, which historically produces the largest margins of the three production sites, is known for its quick turnaround of high quality customized solutions in fiscal 2015 represented the 22nd consecutive year thatform of cable assemblies.

On October 31, 2018, the Company has been profitable.

Forsold all of the shares of Comnet Telecom division 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 loss from discontinued operations of $0.2 million for the year ended October 31, 2015,2018 and reclassified prior year results to report income from discontinued operations of $0.2 million for the Company recognized $56,000 of royalty income, net of tax, from the sale of the former RF Neulink and RadioMobile divisions, which amount has been included within discontinued operations.year ended October 31, 2017.

Financial Condition

The following table presents certain key measures of financial condition as of October 31, 20152018 and 20142017 (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, 2015. Additionally,from the Company has access to a linedate of credit in the amount of $5.0 million, of which the full amount is available as of October 31, 2015, should the Company need to obtain additional capital.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:

As of October 31, 2015,2018, the Company had a total of $7.6$16.3 million of cash and cash equivalents compared to a total of $14.7$5.2 million of cash and cash equivalents as of October 31, 2014. The decrease in cash and cash equivalents is primarily due to the cash purchase price payments made during the 2015 fiscal year in connection with the acquisitions of the Comnet and Rel-Tech subsidiaries and the CompPro product line (a total of $5,132,000) and dividends paid (a total of $2,382,000).2017. As of October 31, 2015,2018, the Company had working capital of $15.3$23.8 million and a current ratio of approximately 4.5:6:1.

Subsequent to the fiscal year ended October 31, 2017, the Company experienced a substantial increase in orders for its products in the Custom Cabling segment. As a result of these increased orders, the Company’s backlog had increased to $11 million as of October 31, 2018 as compared to $4 million as of October 31, 2017. During the year ended October 31, 2018, while the Company had shipments of over $50 million, the Company generated $57 million of new orders. 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. As a result of the Company’s backlog balance as of October 31, 2018, the Company’s liquidity and available capital resources are expected to continue to improve over the next twelve months.

The Company generated only $168,000cash of cash from operating activities$10.3 million during the year ended October 31, 2015 despite having2018 due largely to $5.3 million of cash generated from continuing operations primarily due to consolidated net income of $994,000 because$5.8 million, the increase in accrued bonuses and commissions of cash used$1.5 million, noncash charges of $0.5 million for depreciation and amortization related to the acquisitions of Rel-Tech and CompPro, and $0.2 million of stock-based compensation expense. This increase inventories and to pay down accounts payable, accrued expenses and other long-term liabilities. The increased use ofin cash was partially offset by non-cash charges such as $996,000 for depreciationan increase in accounts receivable of $1.4 million and amortizationinventories of $1.6 million. The increase in net income, accrued expenses, accounts receivable and inventories were all due primarily related to the acquisitionsincrease in demand from the Company’s Custom Cabling segment for its fiber optics cable used primarily in the build out of Comnet, Rel-Techwireless carrier 4G and CompPro, and $232,000 of stock-based compensation.

During the year ended October 31, 2015, the Company used $5.3 million for investing activities, primarily for the purchase of two companies and a new product line. During the year ended October 31, 2015, the Company used: (i) $2.2 million (net of cash acquired) to purchase Comnet, (ii) $1.9 million (net of cash acquired) to purchase Rel-Tech, and (iii) $700,000 to purchase the CompPro product line.5G network deployment. In addition, the Company also deposited $300,000 into a bank escrow account for one year as security forreceived $4.2 million of cash from the seller’s indemnification obligations undersale of its Comnet subsidiary and $1.1 million of proceeds from the Comnetexercise of stock purchase agreementoptions by its employees. These increases were partially offset by the payment of dividends ($0.7 million) and had capital expenditures of $204,000.$0.3 million.

The Company does not anticipate making anyneeding material additional capital equipment purchases 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 recent operating results, as well as access to its line of credit,anticipated future operations, the Company would be able to finance its expansion, if necessary.

As part of its announced business plan,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.

We are currently evaluating the financial impact of the import tariffs that were recently enacted in the U.S. and abroad. While we do not believe that the financial impact on the Company announced that it may repurchase up to 500,000 shares of the Company’s common stock in open market transactions. The share repurchase program mayenacted tariffs will be suspended or terminated at any time. As of October 31, 2014, the Company has repurchased and retired 22,828 shares pursuantmaterial, we recognize that there is uncertainty related to this program, for a total purchase price of $104,000; the Company did not repurchase any shares in fiscal 2015. In addition, during the year ended October 1, 2015, the Company also paid $2.4 million of dividendspotential costs related to its stockholders.these actions.

Results of Operations

The following summarizes the key components of the consolidated results of operations for the fiscal years ended October 31, 20152018 and 20142017 (in thousands, except percentages). of the Company. On October 31, 2018, the Company sold its Comnet subsidiary. As a result of the sale of the Comnet division, Comnet is included in the Company’s results from operations as discontinued operations.

NetAs it relates to continuing operations, net sales for the year ended October 31, 2015 (the “2015 fiscal year”) increased by 42% (or $9.7 million) to $32.8 million from $23.1of $50.2 million for the year ended October 31, 2014 (the “2014 fiscal year”2018 ( “fiscal 2018”), primarily due to $13.4 increased by $27.2 million of additional sales generated by the Comnet ($10.3 million of net sales during the entire 2015 fiscal year) and Rel-Tech ($3.1 million of net sales during the period from June 1, 2015 through October 31,2015) subsidiaries that the Company acquired during the 2015 fiscal year. The Company did not own Comnet or Rel-Tech in the 2014 fiscal year. Excluding the net sales that were generated by newly acquired Comnet and Rel-Tech, the aggregate118% when compared to net sales of the Company’s other divisions decreased by $3.7 million during the year ended October 31, 2015 compared to the year ended October 31, 2014. The Company’s “Custom Cabling Manufacturing and Assembly” segment (which consisted of Cables Unlimited, Comnet and Rel-Tech during the 2015 fiscal year) generated $19.2 million of net sales for the year ended October 31, 2015 to become the Company’s largest operating segment. While net sales in the Custom Cabling Manufacturing and Assembly segment increased due to the acquisitions of Comnet and Rel-Tech, net sales at Cables Unlimited decreased to $5.8 million for the 2015 fiscal year from $7.2 million for the 2014 fiscal year. The decrease in net sales at Cables Unlimited was due to a continuing decline in the sale of Cables Unlimited’s Optiflex line of special purpose cables and a decline in orders for other fiber optic products. For the year ended October 31, 2015, the RF Connector and Cable Assembly segment had net sales of $11.7 million, a decline of $1.5 million or 11% from net sales of $13.2$23.0 million for the year ended October 31, 2014.2017 (“fiscal 2017”). Net sales for fiscal 2018 at the RF Connector segment increased by $0.4 million, or 3%, to $11.8 million as compared to $11.4 million for fiscal 2017. The Company believes that the decreaseCompany’s Custom Cabling segment generated $38.4 million of net sales for fiscal 2018, an increase of $26.9 million or 234% when compared to $11.5 million for fiscal 2017. The increase in net sales at the RF Connector and Cable Assemblythis segment is primarily attributable to a continuing industry-wide softening ofan increase in demand for RFits fiber optics cable and connector products. The Medical Cabling and Interconnect segment generated net sales of $1.9 millionused primarily in the year ended October 31, 2015, a decreasebuild out of $815,000 or 30% over the prior year’s comparable period. The decrease in medical cabling revenue was primarily due to decreased purchases by Bioconnect’s principal customers.wireless carrier 4G and 5G network deployment.

The Company’s gross profit as a percentage of sales in the 2015 fiscal year decreased2018 increased by 11%3.7% to 34%34.1% compared to 45%30.4% in 2017 fiscal due primarily to the year ended October 31, 2014.increased revenues at the Custom Cabling segment. The decreaseimprovement in gross margins iswas primarily due to: 1)to the decline in higher margin salesrevenue increase at the Custom Cabling segment which had the effect of Optiflex, 2)spreading certain fixed manufacturing costs at the Company’s RF Connector and Cable Assembly segment spread over a lowerlarger revenue base, and 3) the net sales recognized by Comnet and Rel-Tech since the dates of their acquisition in the 2015 fiscal year. Historically, 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 and the Company in general. Since 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 will remain below historical rates in the future.base.

Engineering expenses decreased $25,000 or 3% for the year ended October 31, 2015 to $923,000fiscal 2018 increased as compared to $948,000 for the year ended October 31, 2014fiscal 2017 due to decreased salaryincreased compensation expense related to engineering activities. Engineering expenses represent costs incurred relating to the ongoing development of new products.

Selling and general expenses increased by $1.9$2.2 million, or 26%37.1%, during the year ended October 31, 2015fiscal 2018 to $9.1$8.2 million from $7.2$6.0 million in the prior year.period. The increase in selling and general expenses in 2018 was primarily due to additional expensesthe increased incentive bonus compensation resulting from the increase in net sales. Selling and general as a percentage of approximately $2.1 million incurred bysales declined to 16% for fiscal 2018 as compared to 26% for fiscal 2017 indicating the Company’s new Comnet and Rel-Tech subsidiaries which subsidiaries were not owned, and which expenses therefore were not incurred during the year ended October 31, 2014. Excluding the addition of the selling and general expenses attributable to Comnet and Rel-Tech, the selling and general expenses ofincreased operational efficiencies.

For fiscal 2018, the Company incurred operating income of $7.4 million and net income of $5.8 million, compared to an operating income of $203,000 and net income of $382,000 in the prior fiscal year.

On December 22, 2017, the President signed the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018, which results in a blended statutory income tax rate for the Company of 23.17% for fiscal year ended October 31, 2015 compared to the year ended October 31, 2014 were relatively unchanged.2018. For the fiscal year endedending October 31, 2015,2019 (“fiscal 2019”), the Company’s U.S. federal statutory income tax rate will be 21.0%. The Company incurred approximately $388,000has completed its accounting for the tax effects of amortization expense on intangibles, $176,000the enactment of legalthe Tax Act, which resulted in a tax benefit of $41,000 from remeasuring our U.S. deferred tax assets and accounting costsliabilities at the lower 21% U.S. federal statutory rate.

The provision for income taxes from continuing operations was $1.5 million or 19.6% and $62,000 or 26.7% of income before income taxes for fiscal 2018 and 2017, respectively. The decrease in the effective income tax rate from year to year is primarily attributable to the reduction of the federal corporate income tax rate due to the Tax Act, the benefit of research and development credits, and the recognition of a stock option windfall benefit related to the acquisitionexercise of Comnet and Rel-Tech, and additional compensation and benefit expenses related to additional sales personnel at Cables Unlimited and Connector and Cable Assembly Divisions. These increases were offset by a $318,000 creditnon-qualified stock options resulting from the partial reversalCompany’s adoption of an earn-out liabilityASU 2016-09. Prior to the adoption of ASU 2016-09, the stock option windfall benefit related to the acquisitionexercise and disposition of Comnet and certain stock-based compensation expense incurred in 2014 relatedequity-based incentive awards was credited to significant one-time expenses as a result ofadditional paid-in capital, not the acceleration of certain stock options of a former employee and the significant increase in outside consulting expenses.

Otherprovision for income during the year ended October 31, 2015 included a $16,000 gain on sale of fixed assets.taxes.

The provision for income taxes duringadoption of this standard on share-based compensation in fiscal 2018 will increase or decrease the year ended October 31, 2015 was $315,000 (or an effective tax rate based upon the tax effect of approximately 23%) comparedthe difference between the share-based compensation expenses and the benefits recognized on the Company’s tax returns. The Company anticipates the impact to $959,000 in the comparable prior year period (or an effective tax rate of approximately 42%). The decrease in the effective income tax rate from period to period was primarily driven by the recognition of discreteexcess tax benefits relatedwill vary from year to year depending on the reapportionment of state income.Company’s share price in each period.

IncomeLoss from discontinued operations, net of tax, during fiscal 2018 was $180,000 compared to income of $212,000 in the year endedprior year. On October 31, 2015 was $56,000 compared to $103,000 in2018, the comparable prior year’s period. DuringCompany sold its Comnet subsidiary. For fiscal 2018 and 2017, the fiscal year ended October 31,Company recognized pretax loss of $221,000 and pretax income of $168,000, respectively, from Comnet Telecom’s operations. In 2013, the Company sold its RadioMobile and RF Neulink divisions and, accordingly,division, in exchange for which it received a three-year commitment to receive royalty payments from the operations of RadioMobile. Accordingly, the results of these divisions arethe RadioMobile division have been included inas discontinued operations for all periods presentedthe 2017 fiscal year in the attached financial statements. The Company recognized royalty income in fiscal 2018 and 2017 of $0 and $57,000, respectively, from the sale of RadioMobile. The three-year period for earning royalties from RadioMobile has now expired.

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-20F-22 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 wereare effective at a reasonable assurance level as of that date.October 31, 2018.

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 as of October 31, 2015.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 then 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”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 ofCompany’s internal controlscontrol over financial reporting was effective as of October 31, 2015.2018.

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 permanent 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

ExceptWe 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 set forth below,implementing new, more efficient systems, consolidating activities, and migrating processes. Other than as described above, there waswere no changechanges in the Company’s internal control over financial reporting during the most recent fiscal quarter ended October 31, 20152018 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ScopeInherent Limitations of Management's Report on Internal Control over Financial ReportingControls

As described throughout this Annual Report, during the year ended October 31, 2015 we acquired Rel-Tech, which is now a wholly owned subsidiaryBecause of RF Industries. While our financial statements for the year ended October 31, 2015 include the results of Rel-Tech from the June 1, 2015 date through October 31, 2015, as permitted by the rules and regulations of the SEC, our management's assessment of ourits inherent limitations, internal control over financial reporting didmay not include anprevent or detect misstatements. Also, projections of any evaluation of the internal control over financial reporting for Rel-Tech. Further, our management's conclusion regarding the effectiveness of our internal control over financial reporting as of October 31, 2015 does not extendto future periods are subject to the internal control over financial reporting for Rel-Tech.

We are currently integratingrisks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies processes, technology and operations for the consolidated company and will continue to evaluate our internal control over financial reporting as we develop and execute our integration plans. Until the company is fully integrated, we will maintain the operational integrity of each company's internal control over financial reporting. Rel-Tech constituted $1.8 million of total assets as of October 31, 2015 and $3.1 million of revenues for the year then ended.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, 2015.2018. Other than Howard Hill, our former Chief Executive Officer, and Darren Clark,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.

Darren Clark was appointed to the Board of Directors on June 15, 2011 following the acquisition by the Company of Cables Unlimited, Inc. on that date. Mr. Clark has been an executive officer of Cables Unlimited, Inc. since that company was formed in 1992, and the Chief Executive Officer and sole shareholder of Cables Unlimited since 2005.

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 taking a one-yearan indefinite medical leave of absence and resigned as the Company’s Chief Operating Officer. On April 7, 2016, Mr. Hill retired as an employee of the Company, but continued to serve on the Company’s Board of Directors. On October 31, 2016, Mr. Hill assumed the position as the unpaid, interim President and Chief Executive Officer of the Company until July 17, 2017, the date that his successor, Robert Dawson, assumed the duties of President and Chief Executive Officer. 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 5960 years.

William Reynolds is a retired financial executive. Mr. Reynolds most recently was the VP of Finance and Administration for Teledyne Controls from 1994 until his retirement in 1997. Prior thereto, for 22 years he was the Vice-President of Finance and Administration of Teledyne Microelectronics. Mr. Reynolds also was a program finance administrator of Teledyne Systems Company for five years. He has a B.B.A. degree in Accounting from Woodbury College.

Gerald 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.

The Company believes that Messrs. Benoit, Clark, Fink, Hill, Reynolds, Garland and ReynoldsDawson 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.

Darren Clark: Mr. Clark is the founder and has been a principal executive officer of Cables Unlimited, Inc. and, as a result, is familiar with the operations of that key subsidiary of the Company. In addition, Mr. Clark has expertise in the fiber optic cable industry, an important area of potential growth for the Company.

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 and has over 5960 years of experience in the electronics industry.

William Reynolds: Mr. Reynolds has significant accounting and financial management expertise, having served as VP of Finance and Administration for Teledyne Controls, as the Vice-President of Finance and Administration of Teledyne Microelectronics, and as 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.

Management

Johnny Walker, President and Chief Executive Officer, was hired as the President of the Company on October 6, 2014 and was appointed as Chief Executive Officer on January 22, 2015. Mr. Walker has extensive experience in the communications and wireless industries. Most recently, from 1999 to 2014, he served as the Chief Executive Officer and Chief Financial Officer of Hutton Communications, a major distributor of commercial wireless communications and related equipment. Hutton Communications has been one of the Company’s distributors for over 20 years. From 1993 to 1998, Mr. Walker was the Chief Financial Officer and Chief Operating Officer at River Oaks Furniture. From 1990 to 1993, he was the CEO of Profit Partners International, a court appointed receiver for the rehabilitation and liquidation of troubled Savings and Loans institutions in the State of Texas. From 1984 to 1990, Mr. Walker was the Chief Financial Officer and Chief Operating Officer of Tony Lama. From 1979 to 1983, Mr. Walker was a partner-in-charge of the Haskins & Sells (now Deloitte & Touche) offices in St. Louis, Missouri. Previously, Mr. Walker was a Partner of Haskins & Sells in Dallas, Texas from 1970 to 1979.  Mr. Walker is a CPA and studied Accounting and Finance at Texas Tech University. He received a Bachelor of Business Administration Degree in Accounting from Texas A&M Commerce and a Masters of Science in Accounting degree from Texas Tech University.

Gerald T. Garland: Mr. Garland has significant leadership experience in product management, sales management, solutions development, global sourcing and financial management. Mr. Garland served as a 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 America, Stanley Black & Decker, American Express and TESSCO Technologies.

Robert Dawson: Mr. Dawson has significant leadership experience in sales, marketing, and product management and strategy for 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 co-founded and led for seven years of growth until it was acquired.

Management

Robert Dawson, 44, 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. 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.

Darren Clark is the President of Cables Unlimited, Inc. Mr. Clark has been an executive officer of Cables Unlimited, Inc. since he founded that company in 1992.

Board of Director Meetings

During the fiscal year ended October 31, 2015,2018, the Board of Directors held twelveeight meetings. During the fiscal year ended October 31, 2015,2018, 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 he served.

Board Committees

During fiscal 2015,2018, the Board of Directors maintained three committees, the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee.

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 2018, the Audit Committee currently iswas composed of Mr. Reynolds (Chairman), Mr. FinkBenoit and Mr. Benoit.Garland. Each of these individuals was a non-employee director and was independent as defined under the NASDAQ Stock Market’s listing standards. Each of the members of the Audit Committee has significant knowledge of financial matters, and Mr. Reynolds currently serves as theis 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 2015.2018. The Audit Committee operates under a formal charter, that governs its duties and conduct, which charter is posted on the Company’s website. Effective January 1, 2019, Mr. Garland will replace Mr. Reynolds as the Chairman of the Audit Committee.

The Compensation Committee currently consists of Messrs. Fink, Reynolds, and 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 eightthree formal meetingmeetings during fiscal 2015,2018, 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. Fink (Chairman), Benoit, and Reynolds, 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 one formal meetingtwo meetings during fiscal 2015,2018, 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. 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, 2015,2018, all Forms 4Section 16(a) reports were timely filed except that Joseph Benoit was late in filing two forms, Howard Hill was late in filing four Form 4s,two forms, and Johnny WalkerWilliam Reynolds was late in filing three Forms 4. Eachone form, all of the foregoing late filings waswhich were filed within one to tentwo calendar days after the due dates.date.

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, 20152018 and who earned over $100,000 during the fiscal year ended October 31, 2015,2018, and (iii) for any officer who earned over $100,000 during the October 31,201531, 2018 fiscal year but was no longer employed with the Company on October 31, 20152018 (the foregoing executives are herein collectively referred to as the “Named Executive Officers”). 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, 2015:2018.

Summary Compensation Table

(1)       Mr. Hill’s other compensation consisted of $11,538 and $27,692 of accrued vacation in fiscal 2015 and 2014, respectively, and $10,692 and $23,822 for vehicle and apartment rental costs in fiscal 2015 and 2014, respectively. Because Mr. Hill does not live in San Diego, the Company has maintained an apartment in San Diego for Mr. Hill and some of the other managers since 1994. The compensation attributable to the use of a Company vehicle represents the value of his personal use of a Company vehicle.

(2)        Effective January 22, 2015, Mr. Hill stepped down as Chief Executive Officer and agreed to serve as the Company’s Chief Operating Officer. Mr. Walker was promoted as the new Chief Executive Officer on January 22, 2015.

(3)        Mr. WalkerDawson joined the Company as President as of October 6, 2014July 17, 2017 at an annual salary of $250,000. Accordingly,Effective July 17, 2018, Mr. Walker’sDawson’s annual salary for 2014 represents his salary during the period he was employed in fiscal 2014.increased to $275,000.

(4)        Mr. Turfler was hired January 18, 2013 and appointed Acting Chief Financial Officer and Corporate Secretary effective June 7, 2013. On January 10, 2014, he was appointed Chief Financial Officer of the Company.

(6)        Mr. Turfler’s other compensation consisted of $13,077 of accrued vacation in fiscal 2015, and $14,220 for vehicle costs.

(7)(2)       The amounts in this column represent the aggregate fair value of the option awards recognized by the Company as an expense for financial reporting purposes. The fair value of these awards and the amounts expensed were determined in accordance with Financial Accounting Standards Board Statement ASC Topic 718. The assumptions we use in calculating these amounts are discussed in Note 8,9, “Stock options,” to the Consolidated Financial Statements.

2015(3)       For the fiscal year ended October 31, 2018, the Company adopted 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. Dawson was 50% of his 2018 base salary ($250,000) up to 133% based on the achievement by the Company of certain EPS targets and the Company’s subjective determination of his performance for the fiscal year ended October 31, 2018.  The Company did achieve its maximum EPS targets, and the Board of Directors awarded Mr. Dawson a cash bonus of $200,000.

(4)       As part of his employment agreement, the Company agreed to reimburse Mr. Dawson up to $75,000 for relocation expenses, of which Mr. Dawson was paid $52,397 in the fiscal year ended October 31, 2017 and $22,603 of which was paid in the fiscal year ended October 31, 2018. Mr. Dawson’s other compensation for the fiscal 2018 year also includes $13,845 of accrued vacation.

(5)       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. Turfler was 50% of his 2018 base salary ($170,000) up to 133% based on the achievement by the Company of certain EPS targets and the Company’s subjective determination of his performance for the fiscal year ended October 31, 2018.  The Company did achieve its maximum EPS targets, and the Board of Directors awarded Mr. Turfler a cash bonus of $123,050.

(6)       For the fiscal year ended October 31, 2017, 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. Turfler was 40% of his 2017 base salary ($170,000).  The cash bonus was based upon (i) the Company’s subjective determination of his performance (30% of the bonus) and (ii) the achievement by the Company of certain EBITDA targets for the fiscal year ended October 31, 2017 (70% of the bonus).  The Company did not achieve its EBITDA targets, and Mr. Turfler did not receive this portion of the bonus.  However, the Company determined that Mr. Turfler met certain of his subjective performance goals and, therefore, was awarded a cash bonus of $15,300.

(7)       Mr. Turfler’s other compensation for the fiscal 2018 year consisted of $20,197 of accrued vacation.

2018 Option Grants

In fiscal 2015,No options were granted to the Company granted options to purchase 4,000 shares of common stock to each of Howard Hill (who was then serving as Chief Operating Officer) and to Darren Clark (the President of Cables Unlimited), and options for 19,000 shares to Mark Turfler (the Chief Financial Officer).Named Executive Officers during the year ended October 31, 2018.

Holdings of Previously Awarded Equity

Equity awards held as of October 31, 20152018 by each of our Named Executive Officers were issued under our 2000 Stock Option Plan and 2010 Stock Incentive Plan, except for options to purchase 168,457 shares that were granted to Mr. Hill in 1994 under his employment agreement.Plan. The following table sets forth outstanding equity awards held by our Named Executive Officers as of October 31, 2015:2018:

Outstanding Equity Awards As Of October 31, 2015

2018

During the fiscal year ended October 31, 2015,2018, 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

Johnny Walker, Employment Agreements.

On June 16, 2017, RF Industries, Ltd. entered into an employment letter agreement with Robert D. Dawson, under which Mr. Dawson has served as the Company’s President and Chief Executive Officer since July 17, 2017.

Under Mr. Dawson’s 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 will increase to $300,000. Mr. Dawson also is eligible to participate in the Company’s annual bonus plan, pursuant to which he has the opportunity to earn a year-end bonus equal to fifty percent (50%) of his annual base salary. The actual bonus paid may be higher or lower than the annual bonus based on the over- or under-achievement of Company and individual objectives as determined by the Company’s Board of Directors or its Compensation Committee. It is currently anticipated that 80% of Mr. Dawson’s Annual Bonus will be based on the Company’s performance and 20% will be based on the achievement of individual objectives. Mr. Dawson earned a $200,000 cash bonus for fiscal year 2018.

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 he is employed by the Company. Mr. Dawson is also entitled to be paid or reimbursed up to an aggregate of $75,000 in relocation expenses, and is eligible to participate in the employee benefit plans and programs generally available to the Company’s senior executives, subject to the terms and conditions of such plans and programs.

The term of Mr. Dawson’s agreement is one year. After the first anniversary, Mr. Dawson’s employment will automatically renew, and his period of employment will automatically be extended for an additional one-year period, unless either party provides the other party with written notice of non-renewal at least sixty (60) days prior to the date of automatic renewal. Upon a Change of Control Transaction (as defined in the letter 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.

Mark Turfler, and Darren Clark. The Company employed Johnny Walker as President/CEO, Mark Turfler as the Company’s Chief Financial Officer, and Darren Clark as the President of the Company’s Cables Unlimited, Inc. subsidiary under writtenis currently employed on an at-will basis pursuant to an unwritten employment agreements that expired on December 31, 2015.

On December 24, 2015, the Company entered into new employment agreements with Johnny Walker (as the Company’s President/Chief Executive Officer), Mark Turfler (as the Company’s Chief Financial Officer) and Darren Clark (as the President of the Company’s Cables Unlimited subsidiary). The basic provisions of the foregoing three employment agreements are the same and are as follows: The term of each of the employment agreements continues through December 31, 2016 (the “Term”), subject to earlier termination, as provided in the employment agreements. Under the employment agreements,agreement.  Mr. Walker is entitled to receive anTurfler’s current annual base salary of $250,000, Mr. Turfler is entitled to an annual base salary of $170,000, and Mr. Clarkhe is entitled to an annual base salary of $150,000. Each of the executive officers are also entitled to participate in anythe Company’s pension, retirement, disability, insurance, medical service, or other employee benefit plan that isare generally available to all employees of the Company.  In addition,Effective January 2, 2019, Mr. WalkerTurfler’s salary will increase to $187,000.

Incentive Plan.

Both Mr. Dawson and Mr. Clark shall haveTurfler are 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 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 fifty percent (50%)the fiscal year to participating officers who are employed with the Company on the date of his base salary, subject to meeting certain quantitative and qualitative targets, and Mr. Turfler shall have the right to earn an annual bonuspayment.

Change of up to forty percent (40%) of his base salary, subject to meeting certain qualitative targets.Control Arrangements.

In the event that a Corporate Transaction occurs before the end of the 2019 fiscal year, the Company shall be required to pay each participant of this Incentive Plan his/her estimated pro rata portion of the annual bonus that has been accrued/earned through the date of Corporate Transaction. Prior to the closing of a ChangeCorporate Transaction, the Compensation Committee of Controlthe Board of Directors shall review the performance targets set forth in the Incentive Plan and shall, in good faith based on the information available to the Compensation Committee, estimate which of the performance goals would have been met by the end of the fiscal year had the Corporate Transaction had not occurred. The Compensation Committee shall thereafter pay the participants their pro rata portion (based on the number of calendar days elapsed from the beginning of the fiscal year to the date of the Corporate Transaction) of such estimated annual bonus. The foregoing estimated bonus will be paid in cash at or promptly after the closing of the Corporate Transaction.

Under the Incentive Plan, a “Corporate Transaction” shall mean (i) a sale, lease or other disposition of all or substantially all of the capital stock or assets of the Company, (ii) a merger or consolidation of the Company in which the Company is not the surviving entity, or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise.

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 their employment agreements)the 2010 Stock Option Plan), all unvested stock options will become fully vested and exercisable.

The Company has no other change of control payment agreements in effect other than the provision in Mr. Walker and Mr. Turfler are entitled to receive cash payment in an amount equal to twelve (12) months’ salary (based on the executive officer’s base salary at the time of such termination), plus payment for all accrued and unused vacation time. If a Change of Control occurs and if, within six (6) months after the Change of Control, Mr. Clark’s employment is terminated without cause or Mr. Clark terminates hisDawson’s employment agreement for Good Reason (as defined in his employment agreement), Mr. Clark will be entitled to receive a cash payment equal to six (6) months of his base salary. On October 6, 2014, Mr. Walker was granted a nine-year stock option to purchase up to 100,000 shares of the Company’s common stock. Upon a Change of Control, all of the unvested shares under that 100,000-share stock option will, upon the Change of Control, become fully vested.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, 2015,2018, non-employee directors (i.e. directors who are not employed by the Company as officers or employees) received $30,000 annually,$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.

For the year ending October 31, 2019, the compensation each non-employee director will receive an annual compensation package of $50,000, payable one-half in cash, and one-half through the grant of stock options to purchase shares of the Company’s common stock. Furthermore, for the fiscal year ending October 31, 2019, the Chairman of each committee of the Board of Directors will receive an annual cash retainer of $15,000, which retainer is payable quarterly.

DIRECTOR COMPENSATION FOR FISCAL YEAR 20152018

The following table sets forth certain information regarding the ownership of the Company’s Common Stock as of January 22, 2016December 20, 2018 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 22, 2016,December 20, 2018, there were 8,718,9149,292,701 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 provides for interest at the rate of 6% per annum and which has 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 pays interest on the loan annually. The note is collateralized by property owned by Mr. Hill.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, 2015, 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 a current director 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, 20152018 and 2014:2017:

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 20152018 and 2014.2017.

All Other fees. The Company usedengaged CohnReznick LLP in 2017 to perform an audit of the Company’s 401K plan.

Lease

The following exhibits are filed as part of this report: