R F INDUSTRIES LTD

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’** EQUITY**

(In thousands, except share amounts)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’** EQUITY**

(In thousands, except share amounts)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1–** Unaudited interim condensed consolidated financial statements**

The accompanying unaudited condensed consolidated financial statements of RF Industries, Ltd., together with its five wholly-owned subsidiaries (collectively, hereinafter the “Company”, “we”, “us”, or “our”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are normal and recurring, and other items of gain (loss) and expense required in our view under Accounting Standards Codification (“ASC”) Topic 270, Interim Reporting, have been included for a fair statement of the financial position. Information included in the condensed consolidated balance sheet as of October 31, 2025 has been derived from, and certain terms used herein are defined in, the audited consolidated financial statements of RF Industries, Ltd. as of October 31, 2025 included in our Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended October 31, 2025 that was previously filed with the Securities and Exchange Commission (“SEC”). Operating results for the six months ended April 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2026. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Form 10-K.

Our accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations and potential other funding sources, in addition to cash on-hand along with the current credit facility with Eclipse Business Capital (“EBC”) to meet its obligations as they become due.

For the three and six months ended April 30, 2026, we generated operating income of $1,098,000 and $1,275,000, respectively, compared to operating income of $106,000 and $162,000 for the same periods last year. This was primarily a result of an increase in sales along with cost management and implementation of certain cost-cutting measures to improve our gross margins as well as our operating expenses, to help drive positive operating cash flow and increase liquidity. Efforts to reduce expenses included consolidating facilities and recognizing the related operating efficiencies and synergies in our production operations. The Company intends to continue to pursue additional continuous improvement and cost reduction measures, as well as organic growth in revenue and profitability.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of RF Industries, Ltd., and each of Cables Unlimited, Inc. (“Cables Unlimited”), Rel-Tech Electronics, Inc. (“Rel-Tech”), C Enterprises, Inc. (“C Enterprises”), Schroff Technologies International, Ltd. (“Schrofftech”), and Microlab/FXR LLC (“Microlab”), wholly-owned subsidiaries of RF Industries, Ltd. All intercompany balances and transactions have been eliminated in consolidation.

Fair value measurement

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

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

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

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

As of April 30, 2026 and October 31, 2025, the carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate their carrying value due to their short-term nature.

Recent accounting standards

Recently issued accounting pronouncements adopted:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our fiscal year ended October 31, 2025, and for interim periods within our fiscal year ending October 31, 2026, with early adoption permitted. The adoption of this ASU on a retrospective basis did not have a material effect on our consolidated financial statements. However, our segment disclosures have been expanded to include significant segment expenses as reviewed by our chief operating decision maker (“CODM”). Please see Note 8 for more details.

Recently issued accounting pronouncements not yet adopted:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes, specifically related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 will be effective for our fiscal year ending October 31, 2026, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures, which will require disclosure, in the notes to financial statements, of specified information about certain costs and expenses including disclosure of amounts for (i) purchases of inventory, (ii) employee compensation, (iii) depreciation and (iv) intangible asset amortization, included in each relevant expense caption such as cost of sales, selling, general and administrative expense, and research and development. In January 2025, the FASB issued ASU 2025-01, which clarified the effective date of ASU 2024-03. The standard will be effective for our annual financial statements beginning in our fiscal year ending October 31, 2028, with early adoption permitted. We are currently evaluating the impact of this accounting standard on our financial statement presentation and its related disclosures.

Note 2–** Concentrations of credit risk**

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We maintain our cash and cash equivalents with high-credit quality financial institutions. At April 30, 2026, we had cash and cash equivalent balances in excess of federally insured limits in the amount of approximately $2.8 million.

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

Accounts receivable from each customer that accounted for 10% or greater of net accounts receivable were as follows:

Although these customers have been significant customers of the Company, the written agreements with these customers do not have any minimum purchase obligations and these customers could stop buying our products at any time and for any reason. A reduction, delay or cancellation of orders from these customers or the loss of these customers could significantly reduce our future revenues and profits.

Note 3–** Inventories and major vendors**

Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or net realizable value. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands):

For the three and six months ended April 30, 2026 and 2025, no single vendor accounted for 10% or more of inventory purchases. We have arrangements with these vendors to purchase products based on purchase orders that we periodically issue.

Note 4–** Other current assets**

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

Note 5–** Accrued expenses and other current liabilities**

Accrued expenses consist of the following (in thousands):

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

Note 6–** Income (loss) per share**

Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. During the three months ended April 30, 2026, we reported net income. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation due to their anti-dilutive effect. Potentially issuable securities that are out-of-the-money totaled 0 and 405,056 shares for the three months ended April 30, 2026 and 2025, respectively, and 0 and 405,056 shares for the six months ended April 30, 2026 and 2025, respectively, and were excluded from the calculation of diluted per share amounts because of their anti-dilutive effect.

The following table summarizes the computation of basic and diluted weighted average shares outstanding:

Note 7–** Stock-based compensation and equity transactions**

On December 2, 2024, we granted 47,500 incentive stock options. The incentive stock options vest equally over four years as follows: (i)one-quarter of the options vested on December 2, 2025 and (ii) the remaining options shall vest inthree equal annual installments over the next three years.

On January 13, 2025, we granted a total of 82,500 shares of restricted stock and 165,000 incentive stock options. The shares of restricted stock and incentive stock options vest over four years as follows: (i)one-quarter of the restricted shares and options vested on January 13, 2026 and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years.

On December 1, 2025, we granted 55,500 incentive stock options. The incentive stock options vest equally over four years as follows: (i)one-quarter of the options shall vest on December 1, 2026 and (ii) the remaining options shall vest inthree equal annual installments over the next three years.

On January 7, 2026, we granted a total of 82,500 shares of restricted stock and 165,000 incentive stock options. The shares of restricted stock and incentive stock options vest over four years as follows: (i)one-quarter of the restricted shares and options shall vest on January 7, 2027 and (ii) the remaining restricted shares and options shall vest in 12 equal quarterly installments over the next three years.

No other shares or options were granted to Company employees during the three and six months ended April 30, 2026 and 2025.

The fair value of each option granted during the six months ended April 30, 2026 and 2025 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:

Expected volatilities are based on historical volatility of our stock price and other factors. We used the historical method to calculate the expected life of the 2026 and 2025 option grants. The expected life represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options’ expected life. The expected dividend yield is based upon the historical dividend yield.

Company stock option plans

Descriptions of our stock option plans are included in Note 8 to our audited financial statements included in our Form 10-K for the fiscal year ended October 31, 2025. A summary of the status of the options granted under our stock option plans as of April 30, 2026 and the changes in options outstanding during the six months then ended is presented in the table that follows:

Weighted average remaining contractual life of options outstanding as of April 30, 2026:6.89 years

Weighted average remaining contractual life of options exercisable as of April 30, 2026:5.51 years

Weighted average remaining contractual life of options vested and expected to vest as of April 30, 2026:6.89 years

Aggregate intrinsic value of options outstanding at April 30, 2026: $11,089,000

Aggregate intrinsic value of options exercisable at April 30, 2026: $6,146,000

Aggregate intrinsic value of options vested and expected to vest at April 30, 2026: $11,089,000

As of April 30, 2026, $1,238,000 and $1,057,000 of expenses with respect to nonvested stock options and restricted shares, respectively, have yet to be recognized but are expected to be recognized over a weighted average period of 1.5 and 1.4 years, respectively.

Stock option expense

During the three months ended April 30, 2026 and 2025, stock-based compensation expense totaled $277,000, and $227,000 respectively, and was classified in selling and general expense. During the six months ended April 30, 2026 and 2025, stock-based compensation expense totaled $541,000 and $421,000, respectively, and was classified in selling and general expense.

Note 8–** Segment information**

We previously managed our business astwo reportable segments, the RF Connector and Cable Assembly segment and the Custom Cabling Manufacturing and Assembly segment. During the fourth quarter of the fiscal year ended October 31, 2025, we completed changes to the structure of our organization in connection with broader restructuring initiatives, including consolidation of manufacturing operations, headcount reductions, and the transition of our sales organization to a unified, customer‑centric model. As a result of these changes, we now operate as a single reportable segment. Comparative prior‑period segment disclosures that reflected the previoustwo segments have been revised to conform to this change in our reportable segment.

Our CODM, which is our Chief Executive Officer, evaluates our financial information such as revenue, margins, operating expenses, net income or loss, and other non-GAAP financial measures on a consolidated basis to allocate resources and assess performance. However, while our CODM uses more than one measure to assess performance, the Company’s segment disclosures do not include non-GAAP disclosures. The Company has determined that the disclosures below correspond with the amounts in the consolidated financial statements and are most consistent with GAAP.

The following table presents our single segment revenue, gross profit, significant expenses, and net income (loss) for the three and six months ended April 30, 2026 and 2025 (in thousands):

The Company’s single reportable segment total assets equal consolidated total assets.

The following table presents revenue for the products and solutions that we offer as of the three and six months ended April 30, 2026 and 2025 (in thousands):

All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the three and six months ended April 30, 2026 and 2025 (in thousands):

Note 9–** Income taxes**

In accordance with applicable accounting guidance, the Company is required to use an estimated annual effective tax rate to compute its tax provision during an interim period. However, there is an exception to the use of this method when a reliable estimate of the annual effective tax rate cannot be made due to the sensitivity of changes in estimates of ordinary income (loss). In that case, an entity may report the actual tax provision or benefit applicable when annual income (loss) cannot be estimated as a discrete item in the interim period. This exception was used in determining the tax provision for the six months ended April 30, 2026.

We recorded income tax provisions of $60,000 and $135,000 for the three months ended April 30, 2026 and 2025, respectively. The effective tax rate for the three months ended April 30, 2026 and 2025 was 6.4% and (122.7%), respectively. For the six months ended April 30, 2026 and 2025, we recorded income tax provisions of $94,000 and $171,000, respectively. The effective tax rate for the six months ended April 30, 2026 and 2025 was 10.2% and (53.6%), respectively. The effective tax rate for the three months and six months ended April 30, 2026 differed from the U.S. statutory tax rate of 21% primarily due to state taxes, various permanent differences, research and development tax credits, unrecognized tax benefits and change in valuation allowance.

We had $271,000 and $217,000 of unrecognized tax benefits, as of April 30, 2026 and October 31, 2025, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $179,000 as of April 30, 2026.

The Company assesses all positive and negative evidence in determining if, based on the weight of such evidence, a valuation allowance is required to be recorded against the deferred tax assets as of April 30, 2026. The Company has evaluated future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In making such judgments, significant weight is given to evidence that can be objectively verified. After analyzing all available evidence, including the Company's cumulative losses, the Company continues to maintain that it is not more likely than not that all of its deferred tax assets will be realized, and therefore, has maintained a partial valuation allowance against its federal and state deferred tax assets. The Company's valuation allowance was $4,521,000 and $4,716,000 as of April 30, 2026 and October 31, 2025, respectively.

Note 10–** Intangible assets**

Intangible assets consist of the following as of April 30, 2026 and October 31, 2025 (in thousands):

Amortization expense for the six months ended April 30, 2026 and the fiscal year ended October 31, 2025 was $822,000 and $1,643,000, respectively. As of April 30, 2026, the weighted-average amortization period for the amortizable intangible assets was 6.21 years.

Note 11–** Commitments**

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms ofone year tofive years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments of $18,540 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the periods ended April 30, 2026 and 2025 were as follows (in thousands):

As of April 30, 2026, operating lease right-of-use assets were $13.2 million and operating lease liabilities totaled $17.9 million, of which $2.0 million is classified as current. There wereno finance leases as of April 30, 2026. Future minimum lease payments under non-cancellable leases as of April 30, 2026 are a total of $22.8 million.

Note 12–** Term Loan and Line of credit**

On March 15, 2024, we entered into a loan and security agreement (the “EBC Credit Agreement”) with EBC, as administrative agent, and used proceeds from the initial drawings under the EBC Credit Facilities (as defined below) to repay in full outstanding obligations under the loan agreement we had entered into in February 2022 with Bank of America, N.A. (the “BofA Loan Agreement”) and to pay fees, premiums, costs and expenses, including fees payable in connection with the EBC Credit Agreement. The BofA Loan Agreement was terminated upon entry into the EBC Credit Agreement and is no longer in effect.

The EBC Credit Agreement provides for (i) a senior secured revolving loan facility of up to $15.0 million (the “EBC Revolving Loan Facility”) and (ii) a senior secured revolving credit facility of up to $1.0 million (the “EBC Additional Line” and, together with the EBC Revolving Loan Facility, as amended, the “EBC Credit Facilities”) (with a $3.0 million swingline loan sublimit). On June 14, 2024, the parties entered into the First Amendment to the EBC Credit Agreement (the “First Amendment”), which provided for a modified EBC Additional Line of $1.0 million through July 12, 2024, $666,667 from July 13, 2024 through August 11, 2024 and $333,333 from August 12, 2024 through September 10, 2024. Availability of borrowings under the EBC Credit Facilities is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of our accounts receivable and inventories, as reduced by certain reserves, if any.

In the absence of an Event of Default (as defined in the EBC Credit Agreement) or certain other events (including the inability of EBC to determine the Secured Overnight Financing Rate “SOFR”), borrowings under (a) the EBC Revolving Loan Facility accrue interest at a rate of the one-month term SOFR reference rate plus an adjustment of 0.11448% (“Adjusted Term SOFR”) plus 5.00%, and (b) the EBC Additional Line accrue interest at a rate of Adjusted Term SOFR plus 6.50%, in each case subject to a floor of 2.00% for Adjusted Term SOFR. We will be required to pay a commitment fee of 0.50% per annum for the unused portion of the EBC Revolving Loan Facility. In addition to the foregoing unused commitment fee, we are required to pay certain other administrative fees pursuant to the terms of the EBC Credit Agreement.

Borrowings under the EBC Credit Agreement are secured by a security interest in certain assets of the Company and are subject to certain loan covenants. The EBC Credit Facilities require the maintenance of certain financial covenants, including (i) Excess Availability (as defined in the EBC Credit Agreement) of at least, as of any date of determination, an amount equal to the greater of (a) $1.0 million and (b)10% of the Adjusted Borrowing Base (as defined in the EBC Credit Agreement), unless as of the last day of the most recent month for which the monthly financial statements and the related compliance certificate have been or are required to have been delivered to EBC, the Fixed Charge Coverage Ratio (as defined in the EBC Credit Agreement) for the 12 consecutive calendar month period then ended is greater than 1.10 to 1.00; and (ii) a capital expenditure limitation limiting the aggregate cost of all Capital Expenditure (as defined in the EBC Credit Agreement) to $2.5 million during any fiscal year. In addition, the EBC Credit Facilities contain customary affirmative and negative covenants.

On November 5, 2025, the parties entered into the Second Amendment to the EBC Credit Agreement (the “Second Amendment”). The Second Amendment amended the EBC Credit Agreement to, among other things, (i) extend the maturity date of the EBC Revolving Loan Facility to March 15, 2029, (ii) decrease the minimum EBC Revolving Loan Facility outstanding principal amount to $4.0 million and (iii) decrease the interest rate for the EBC Revolving Loan Facility to Adjusted Term SOFR or the base rate, as applicable, plus the Applicable Margin (as defined in the EBC Credit Agreement). The Applicable Margin is determined quarterly under a two-prong pricing grid based on both the Average Excess Availability (as defined in the EBC Credit Agreement) and Fixed Charge Coverage Ratio for the most recently ended fiscal quarter, as set forth on Annex IV to the EBC Credit Agreement, as amended.

We filed the EBC Credit Agreement as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended January 31, 2024, the First Amendment as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended July 31, 2024 and the Second Amendment as Exhibit 10.1 to our Current Report on Form 8-K filed on November 6, 2025.

Debt issuance costs related to the EBC Credit Agreement totaled $273,000 as of April 30, 2026 and were included as part of our other long-term assets balance.

As of April 30, 2026, our outstanding borrowings under the EBC Credit Agreement were $6,142,000. In accordance with ASC 470-10-45,Other Presentation Matters - General, we have classified the outstanding borrowings as part of current liabilities in the condensed consolidated balance sheet.

Note 13–** Cash dividends and declared dividends**

We didnot pay or declare any dividends during the three or six months ended April 30, 2026, nor during the three or six months ended April 30, 2025.