**SECURITIES
AND EXCHANGE COMMISSION**


**Washington,
D.C. 20549**





_____________________





FORM
10-QSB





QUARTERLY
REPORT UNDER SECTION 13 OR 15(d)


SECURITIES
EXCHANGE ACT OF 1934





**FOR
THE QUARTER ENDED APRIL 30, 2005.**





Commission
file number: 0-13301





**RF
INDUSTRIES, LTD.**


(Exact
name of registrant as specified in its charter)





Nevada
    88-0168936(State of Incorporation)
    (I.R.S. Employer Identification
    No.)








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


(Address
of principal executive
offices) (Zip
Code)





(858)
549-6340          FAX (858)
549-6345


(Issuer’s
telephone and fax numbers, including area code)





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





Check
whether the issuer (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 filing requirements for the past 90 days.


Yes
[X]   No [  ]





State the
number of shares outstanding of each of the issuer’s classes of common stock at
the latest practicable date.





As of
June 14, 2005, the registrant had 3,054,022 shares of Common Stock, $.01 par
value, issued.





Transitional
Small Business Disclosure Format (check one): Yes [  ]   No
[X]










**Part
I. FINANCIAL INFORMATION**





**Item
1: Financial Statements**













**RF
      INDUSTRIES, LTD.**
      **CONDENSED
      BALANCE SHEETS****ASSETS**
    
    **April
      30, 2005**
      **(Unaudited)**
    
    **October
      31, 2004****CURRENT
      ASSETS**Cash
      and cash equivalents
    
    $
    4,564,823
    
    $
    4,497,322Trade
      accounts receivable, net of allowance for doubtful accounts of $50,469 and
      $38,513
    
    
    2,044,027
    
    
    1,516,035Notes
      receivable
    
    
    2,500
    
    
    12,000Inventories
    
    
    3,932,877
    
    
    3,789,958Other
      current assets
    
    
    352,669
    
    
    303,138Deferred
      tax assets
    
    
    141,000
    
    
    141,000**TOTAL
      CURRENT ASSETS**
    
    
    **11,037,896**
    
    
    **10,259,453**Equipment
      and tooling
    
    
    1,503,842
    
    
    1,489,297Furniture
      and office equipment
    
    
    323,577
    
    
    299,4231,827,419
    
    
    1,788,720Less
      accumulated depreciation
    
    
    1,330,357
    
    
    1,225,680**Total**
    
    
    497,062
    
    
    563,040Goodwill
    
    
    137,328
    
    
    137,328Notes
      receivable from related parties
    
    
    26,730
    
    
    26,730Note
      receivable from stockholder
    
    
    70,000
    
    
    70,000Other
      assets
    
    
    22,091
    
    
    14,171**TOTAL
      ASSETS**
    
    **$**
    **11,791,107**
    
    **$**
    **11,070,722**





2




**Item
1: Financial Statements** (continued)







**RF
      INDUSTRIES, LTD.**
      **CONDENSED
      BALANCE SHEETS******
      ****
    
    **April 30, 2005**(Unaudited)****
    
    **October
      31, 2004****LIABILITIES
      AND****STOCKHOLDERS’
      EQUITY****CURRENT
      LIABILITIES**Accounts
      payable
    
    $
    511,318
    
    $
    209,956Accrued
      expenses
    
    
    263,294
    
    
    353,100**Total
      current liabilities**
    
    
    774,612
    
    
    563,056Deferred
      tax liabilities
    
    
    53,000
    
    
    53,000**TOTAL
      LIABILITIES**
    
    
    827,612
    
    
    616,056**COMMITMENTS
      AND CONTINGENCIES****STOCKHOLDERS’
      EQUITY**Common
      stock - authorized $10,000,000 shares of $0.01 par value; 3,054,022 and
      2,996,937 shares issued and outstanding
    
    
    30,540
    
    
    29,970Additional
      paid-in capital
    
    
    3,705,418
    
    
    3,566,760Retained
      earnings
    
    
    7,227,537
    
    
    6,857,936**TOTAL
      STOCKHOLDERS’ EQUITY**
    
    
    10,963,495
    
    
    10,454,666**TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY**
    
    **$**
    **11,791,107**
    
    **$**
    **11,070,722**








See Notes
to Condensed Unaudited Financial Statements




3




**Item
1: Financial Statements** (continued)




**RF
      INDUSTRIES, LTD.**
      **CONDENSED
      STATEMENTS OF INCOME**Three Months Ended April 30(Unaudited)
    Six
      Months Ended April 30
      (Unaudited)2005
    
    
    2004
    
    
    2005
    
    
    2004Net
      sales
    
    $
    3,577,922
    
    $
    2,821,431
    
    $
    6,446,024
    
    $
    5,270,790Cost
      of sales
    
    
    1,983,194
    
    
    1,396,053
    
    
    3,384,784
    
    
    2,600,528Gross
      profit
    
    
    1,594,728
    
    
    1,425,378
    
    
    3,061,240
    
    
    2,670,262Operating
      expenses:Engineering
    
    
    135,175
    
    
    101,652
    
    
    288,998
    
    
    217,034Selling
      and general
    
    
    1,193,155
    
    
    726,348
    
    
    2,184,227
    
    
    1,485,714Totals
    
    
    1,328,330
    
    
    828,000
    
    
    2,473,225
    
    
    1,702,748Operating
      income
    
    
    266,398
    
    
    597,378
    
    
    588,015
    
    
    967,514Other
      income - interest
    
    
    21,868
    
    
    1,075
    
    
    38,336
    
    
    6,808Income
      before provision for income taxes
    
    
    288,266
    
    
    598,453
    
    
    626,351
    
    
    974,322Provision
      for income taxes
    
    
    125,150
    
    
    247,000
    
    
    256,750
    
    
    389,000**Net
      income**
    
    $
    163,116
    
    $
    351,453
    
    
    369,601
    
    $
    585,322Basic
      earnings per share
    
    $
    0.05
    
    $
    0.12
    
    $
    0.12
    
    $
    0.21Diluted
      earnings per share
    
    $
    0.04
    
    $
    0.10
    
    $
    0.10
    
    $
    0.16Basic
      weighted average shares outstanding
    
    
    3,046,960
    
    
    2,882,408
    
    
    3,027,543
    
    
    2,835,294Diluted
      weighted average shares outstanding
    
    
    3,807,905
    
    
    3,656,887
    
    
    3,813,817
    
    
    3,595,492







See Notes
to Condensed Unaudited Financial Statements




4




**Item
1: Financial Statements** (continued)




**RF
      INDUSTRIES, LTD.**
      **CONDENSED
      STATEMENTS OF CASH FLOWS**(Unaudited)
      Six
      months ended April 30OPERATING
      ACTIVITIES
    
    
    2005
    
    
    2004Net
      income
    
    $
    369,601
    
    $
    585,322Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Provision
      for bad debts
    
    
    11,224
    
    
    18,000Depreciation
      and amortization
    
    
    104,677
    
    
    74,449Changes
      in operating assets and liabilities:Trade
      accounts receivable
    
    
    (539,216
    )
    
    154,805Inventories
    
    
    (142,919
    )
    
    (325,683
    )Repayments
      of advances
    
    
    9,500
    
    
    -Other
      current assets
    
    
    (49,531
    )
    
    (27,331
    )Other
      assets
    
    
    (7,920
    )
    
    -Accounts
      payable
    
    
    301,362
    
    
    177,707Accrued
      expenses
    
    
    (89,806
    )
    
    221,703Net
      cash provided by (used in)operating activities
    
    
    (33,028
    )
    
    878,972INVESTING
      ACTIVITIESCapital
      expenditures
    
    
    (38,699
    )
    
    (135,357
    )Repayments
      of related party notes
    
    
    -
    
    
    22,854Net
      cash used in investing activities
    
    
    (38,699
    )
    
    (112,503
    )FINANCING
      ACTIVITIES
      
      Proceeds
      from exercise of stock options
    
    
    139,228
    
    
    897,856Net
      increase in cash and cash equivalents
    
    
    67,501
    
    
    1,664,325Cash
      and cash equivalents at the beginning of the period
    
    
    4,497,322
    
    
    2,683,896Cash
      and cash equivalents at the end of the period
    
    $
    4,564,823
    
    $
    4,348,221








See Notes
to Condensed Unaudited Financial Statements




5




**RF
INDUSTRIES, LTD. NOTES TO**




**CONDENSED
UNAUDITED FINANCIAL STATEMENTS**




**Note
1 - Unaudited interim financial statements:**




The
accompanying unaudited condensed financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments have been included. Operating results for the three and six-month
periods ended April 30, 2005, are not necessarily indicative of the results that
may be expected for the year ending October 31, 2005. The unaudited condensed
financial statements should be read in conjunction with the financial statements
and footnotes thereto included in the Company’s Annual Report on Form 10-KSB for
the year ended October 31, 2004.




**Note
2 - Components of inventory**




Inventories,
consisting of materials, labor and manufacturing overhead, are stated at the
lower of cost or market. Cost has been determined using the weighted average
cost method.







April
      30, 2005
      (Unaudited)
    
    October
      31, 2004Raw
      materials and supplies
    
    $
    835,005
    
    $
    777,765Finished
      goods, less inventory reserve
    
    
    3,097,872
    
    
    3,012,193Total
    
    $
    3,932,877
    
    $
    3,789,958





**Note
3 - Earnings per share:**




As
further explained in Note 1 of the notes to the audited financial statements of
the Company, included in Form 10-KSB for the fiscal year ended October 31, 2004,
basic earnings per share is computed by dividing net earnings by the weighted
average number of common stock outstanding during the period. Diluted earnings
per share is computed by dividing net earnings by the weighted average number of
shares of common stock 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.




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




6




Three
      Months Ended April 30
    
    Six
      Months Ended April 302005
    
    
    2004
    
    
    2005
    
    
    2004Weighted
      average shares outstanding for basic net earnings per
share
    
    
    3,046,960
    
    
    2,882,408
    
    
    3,027,543
    
    
    2,835,294Add
      effects of potentially dilutive securities-assumed exercised of stock
      options
    
    
    760,945
    
    
    774,479
    
    
    786,274
    
    
    760,198Weighted
      average shares for diluted net earnings per share
    
    
    3,807,905
    
    
    3,656,887
    
    
    3,813,817
    
    
    3,595,492





**Note
4 - Stock Option Plan**




A
description of the Company’s 2000 Stock Option Plan and other information
related to stock options are included in Note 7 in its Annual Report on Form
10-KSB for the year ended October 31, 2004.




The
Company continues to measure compensation cost related to stock options issued
to employees using the intrinsic value method of accounting prescribed by
Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock
Issued to Employees.” The Company had adopted the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting
for Stock-Based Compensation.” Accordingly, no earned or unearned compensation
cost was recognized in the accompanying condensed consolidated financial
statements for the stock options granted by the Company to its employees since
all of those options have been granted at exercise prices that equaled or
exceeded the market value at the date of grant. The Company’s historical net
income and earnings per common share and pro forma net income and earnings per
share assuming compensation cost had been determined based on the fair value at
the grant date for all awards by the Company consistent with the provisions of
SFAS 123 are set forth below:




7




Three
      Months Ended April 30
    
    Six
      Months Ended April 302005
    
    2004
    
    2005
    
    2004Net
      income - as reported
    
    $
    163,116
    
    $
    351,453
    
    $
    369,601
    
    $
    585,322Deduct
      total stock-based employee compensation expensed determined under fair
      value-based method for all awards
    
    
    (97,000
    )
    
    (67,000
    )
    
    (194,000
    )
    
    (134,000
    )Net
      income - pro forma
    
    $
    66,116
    
    $
    284,453
    
    $
    175,601
    
    $
    451,322Basic
      earnings per share -as
      reported
    
    $
    0.05
    
    $
    0.12
    
    $
    0.12
    
    $
    0.21Basic
      earnings per share -pro
      forma
    
    $
    0.02
    
    $
    0.10
    
    $
    0.06
    
    $
    0.16Diluted
      earnings per share - as reported
    
    $
    0.04
    
    $
    0.10
    
    $
    0.10
    
    $
    0.16Diluted
      earnings per share - pro forma
    
    $
    0.02
    
    $
    0.08
    
    $
    0.05
    
    $
    0.13





**Note
5 - Concentration of Credit Risk**




One
customer accounted for approximately 14% and 15% of the Company’s net sales for
the three and six-month periods ended April 30, 2005, respectively. Although
this customer has been an on-going major customer of the Company during the past
five years, the written agreement with this customer does not have any minimum
purchase obligations and the customer could stop buying the Company’s products
at any time for any reason. A reduction, delay or cancellation of orders from
this customer or the loss of this customer could significantly reduce the
Company’s revenues and profits. The Company cannot provide assurance that this
customer or any of its current customers will continue to place orders, that
orders by existing customers will continue at current or historical levels or
that the Company will be able to obtain orders from new customers.




**Note
6 - Geographical Information**




The
Company attributes sales to geographic areas based on the location of the
customers. The following table presents the sales of the Company by geographic
area for the three and six-month periods ended April 30, 2005 and
2004:




Three
      Months Ended April 30
    
    Six
      Months Ended April 302005
    
    
    2004
    
    
    2005
    
    
    2004United
      States
    
    $
    3,301,299
    
    $
    2,640,510
    
    $
    5,835,138
    
    $
    4,800,556Foreign
      countries
    
    
    276,623
    
    
    180,921
    
    
    610,886
    
    
    470,234$
    3,577,922
    
    $
    2,821,431
    
    $
    6,446,024
    
    $
    5,270,790




8




**Item
2:**  **Management’s
discussion and analysis of financial condition and results of
operations**




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




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




The
following discussion should be read in conjunction with the Company’s financial
statements and the related notes and other financial information appearing
elsewhere in this Form 10-QSB. Readers are also urged to carefully review and
consider the various disclosures made by the Company which attempt to advise
interested parties of the factors which affect the Company’s business, including
without limitation the disclosures made under the caption “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” under
the caption “Risk Factors,” and the audited financial statements and related
notes included in the Company’s Annual Report filed on Form 10-KSB for the year
ended October 31, 2004 and other reports and filings made with the Securities
and Exchange Commission.




**Critical
Accounting Policies**




The
financial statements of RF Industries are prepared in conformity with accounting
principles generally accepted in the United States of America (“GAAP”). The
preparation of these financial statements requires our management to make
estimates and assumptions about future events that affect the amounts reported
in the financial statements and related notes. Future events and their effects
cannot be determined with absolute certainty. Therefore, the determination of
estimates requires the exercise of judgment. The Company believes the following
critical accounting policies affect its more significant judgments and estimates
used in the preparation of financial statements. The Company’s significant
accounting policies are summarized in Note 1 to the financial statements
contained in its Annual Report on Form 10-KSB filed for the fiscal year ended
October 31, 2004. The following critical accounting policies affect the more
significant judgments and estimates used in the preparation of the Company’s
financial statements.




Use of
estimates:




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.







Cash
equivalents:




The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents.




9




Revenue
recognition:




Revenue
from product sales is recognized when the product is shipped. The Company’s
maintains a policy with certain distributors which allows them a limited ability
to exchange product. The effect of such exchanges has historically been
immaterial. Any material exceptions are recognized if and when they
occur.




Allowance
for doubtful accounts:




The
Company maintains an allowance for doubtful accounts based on historical
collections of accounts receivable. The Company monitors its accounts receivable
balances on a continual basis. If the financial condition of customers
deteriorates, additional allowances may be required.




Income
taxes:




The
Company accounts for income taxes pursuant to the asset and liability method
which requires deferred tax assets and liabilities to be computed for temporary
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable, or deductible amounts in future periods
based on enacted laws and rates applicable to the periods in which the temporary
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. The income tax provision is the tax payable or refundable for
the period plus or minus the change during the period in deferred tax assets and
liabilities.




Inventory
valuation:




Inventories
are valued at the weighted average cost value. Certain items in the inventory
may be considered obsolete or excess and, as such, the Company may establish an
allowance to reduce the carrying value of these items to their net realizable
value. Based on estimates, assumptions and judgments made from the information
available at the time, the Company determines the amounts of these allowances.
If these estimates and related assumptions are incorrect or the market changes,
the Company may be required to record additional reserves, which may decrease
future earnings. Inventories as of April 30, 2005 represented approximately 33%
of total assets. As a result, any reduction in the value of our inventories
would require the Company to take write-downs that would affect the Company’s
financial position and results of operations to the extent of any such
write-downs.




In
November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). SFAS
151 clarifies that abnormal inventory costs such as costs of idle facilities,
excess freight and handling costs, and wasted materials (spoilage) are required
to be recognized as current period charges. The provisions of SFAS 151 are
effective for fiscal years beginning after June 15, 2005. The adoption of SFAS
151 is not expected to have a significant impact on the Company’s financial
position or results of operations.




Stock-Based
Compensation




SFAS No.
123, "Accounting for Stock-Based Compensation," as in effect prior to December
2004, established and encouraged the use of the fair value based method of
accounting for stock-based compensation arrangements under which compensation
cost is determined using the fair value of stock-based compensation determined
as of the date of grant and is recognized over the periods in which the related
services are rendered. The statement also permitted companies to elect to
continue using the current intrinsic value accounting method specified in
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees," to account for stock-based compensation. The Company uses the
intrinsic value-based method and has disclosed the pro forma effect of using the
fair value based method to account for our stock-based compensation. For
non-employee stock based compensation, we recognized an expense in accordance
with SFAS No. 123 and value the equity securities based on the fair value of the
security on the date of grant.




10




In
December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” (“SFAS
123R”), a revision of SFAS No. 123, “Accounting for Stock-Based Compensation,”
requiring that the compensation cost relating to share-based payment
transactions, including grants of employee stock options, be measured and
recognized in the financial statements using the fair value of the compensation
awards. The provisions of SFAS 123R are effective for the first interim or
annual period that begins after December 15, 2005; therefore, the Company will
adopt the new requirements no later than the beginning of its second quarter of
its fiscal year ending October 31, 2006. Adoption of the expensing requirements
will reduce the Company’s reported earnings. Management is currently evaluating
the two methods of adoption allowed by SFAS 123R; the modified-prospective
transition method and the modified-retrospective transition method. The impact
of such adoption upon the Company’s financial position or results of operations
is not presently known.




**Executive
Overview**




RF
Industries markets connectors and cables to numerous industries for use in
thousands of products, primarily for the wireless marketplace. In addition, to a
limited extent, the Company also markets wireless products that incorporate
connectors and cables. In the past, RF Industries has reported results of
operations in three segments that, in general terms, defined the primary
markets. However, since sales of connectors and cable assemblies represent over
84 % of the Company’s net sales during the three and six-month periods ended
April 30, 2005, and since the operations to all of the Company’s smaller
business units effectively operate as subunits of the Company’s principal
business unit, the Company no longer reports the results of these other, smaller
business units as separate business segments.




**Liquidity
and Capital Resources**




Management
believes that 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.
The Company does not, however, currently have any commercial banking
arrangements providing for loans, credit facilities or similar matters should
the Company need to obtain additional capital. Management’s beliefs that its
existing assets and the cash expected to be generated from operations will be
sufficient during the current fiscal year are based on the
following:




§
    As
      of April 30, 2005, the amount of cash and cash equivalents was equal to
      $4,564,823 in the aggregate.




§
    As
      of April 30, 2005, the Company had $11,037,896 in current assets, and
      $774,612 in current liabilities.




§
    As
      of April 30, 2005, the Company had no outstanding indebtedness (other than
      accounts payable and accrued expenses).




The
Company does not believe it will need material additional capital equipment in
the next twelve months. In the past, the Company has financed some of its
equipment and furnishings requirements through capital leases. No additional
capital equipment purchases have been currently identified that would require
significant additional leasing or capital expenditures during the next twelve
months. Management also believes that based on the Company’s current financial
condition, the absence of outstanding bank debt and recent operating results,
the Company would be able to obtain bank loans to finance its expansion, if
necessary, although there can be no assurance any bank loan would be obtainable
or, if obtained, would be on favorable terms or conditions.




11




Although
the Company recognized net income of $369,601 for the six months ended April 30,
2005, the Company had a cash flow loss of $33,028 from its operating activities.
The Company’s overall cash position, however, increased by $67,501 during the
six month period ended April 30, 2005. The principal reasons for the amount of
net cash used in operations were the increases in trade accounts receivable and
in inventories, which were partially offset by an increase in accounts payable.
Trade accounts receivable (net of allowances for doubtful accounts) at April 30,
2005 increased approximately 34.8%, or by $539,216, to $2,044,027 compared to
the October 31, 2004 balance of $1,516,035. The increase in accounts receivable
is in relation to the 26.8% increase in net sales for the second fiscal quarter
of 2005 compared with the same period in the prior year.




Inventories
at April 30, 2005 increased 3.8%, or $142,919, to $3,932,877 compared to
$3,789,958 on October 31, 2004. The Company increased its inventory levels
based on anticipated customer demand for certain of its products. Since the
Company considers its ability to fill customer orders on short notice to be an
important aspect of its marketing strategy, the Company normally increases
inventory levels in anticipation of customer orders in order to be able to
maintain the product mix its customers may need. Accordingly, the Company may
increase its inventory levels in future periods if sales continue to
rise.




The
Company’s cash position was also negatively affected as other current assets,
including prepaid expenses and deposits, increased $49,351 to $352,669, from
$303,138 on October 31, 2004. This increase is primarily due to an increase
in prepaid taxes, which was partially offset by reductions in prepaid insurance
costs.




Accounts
payable at April 30, 2005 increased $301,362 to $511,318 from $209,956 on
October 31, 2004 primarily due to the aforementioned increases in inventory
levels.




Net cash
used in investing activities was $38,699 for the six months ended April 30, 2005
as a result of capital expenditures made by the Company.




Net cash
provided by financing activities was $139,228 for the six months ended April 30,
2005, and was attributable to proceeds received from the exercise of stock
options.




As of
April 30, 2005, the Company had a total of $4,564,823 of cash and cash
equivalents compared to a total of $4,497,322 of cash and cash equivalents on
October 31, 2004. The $33,028 net decrease in cash from operating activities,
together with the decrease in cash of $38,699 from its investing activities,
were more than offset by the net increase of $139,228 from its financing
activities. As a result, the Company’s overall cash and cash equivalent position
increased by $67,501 during the past six months.




**Results
Of Operations**




**Three
Months 2005 vs. Three Months 2004**




Net sales
in the current fiscal quarter ended April 30, 2005, increased 26.8%, or
$756,491, to $3,577,922 from $2,821,431 in the comparable fiscal quarter in the
prior year, due to increased demand for the Company’s connector, cable assembly
and wireless products. The increase in sales reflects a general increase in
demand for wireless connectors and cable products. The Company believes this
increase is due, in part, to a revival in some sectors of the telecommunication
industries and the continuing overall market increase in the demand for wireless
products. In addition, the increased revenues during the current quarter reflect
the addition of the new Aviel Electronics division in Nevada, which operations
were not owned during the comparable fiscal quarter last year. Aviel Electronics
added $223,211 to the Company’s sales during the April 30, 2005 fiscal quarter.




The
Company’s gross profit as a percentage of sales declined from 50.5% to 44.6%
during the current fiscal quarter compared to the same fiscal quarter last year.
The decline in gross margins during the current quarter resulted from costs of
materials and production in its main connector division having increased more
than increases in selling prices in the 2005 period from the comparable period
in 2004, resulting in a decline in gross margins from 53.9% to 47.9%. In
addition, the Company’s gross margins were affected by lower margins division
and additions to allowances for inventory obsolescence in the RF Neulink
division. Overall, the Company’s three smaller divisions have lower margins than
the RFConnectors division, which accounted for 84% of net sales in the current
three-month period, compared with 90% in the comparable period of the prior
year. Accordingly, the greater sales from the lower margin division exerted a
downward influence on the combined gross margins in the current
period.




12




Engineering
expenses increased 33.0%, or $33,523, to $135,175 from $101,652 in the
comparable quarter of the prior year due to development costs for new product
enhancements. Engineering expenses fluctuate based on design engineering
expenses incurred by the Company at the request of its customers.




Selling
and general expenses increased 64.3% or $466,807 to $1,193,155 from $726,348 in
the comparable quarter of the prior fiscal year. Selling and general expenses
were higher in the second quarter of the current fiscal year due primarily to
the substantial cost of compliance with the provisions of Section 404 of the
Sarbanes-Oxley Act of 2002 which were $269,000 in the current quarter. Although
the Company believes that its administrative expenses will be higher in future
periods due to the on-going provisions of the Sarbanes-Oxley Act, the Company
believes that most of the amounts incurred during the past fiscal quarter
represent one-time expenses incurred to set up and document the Company’s
controls and procedures. Accordingly, the Company does not expect its
Sarbanes-Oxley expenses to be $269,000 during any future fiscal quarter. The
increase in selling and general expenses also resulted from increased
compensation expenses (including the salaries of the additional personnel
retained to improve the Company’s reporting systems), increased selling expenses
and increased insurance costs compared to the prior fiscal year. Also, the
current period general and administrative expenses reflect the acquisition of
Aviel Electronics in August, 2004. Aviel’s selling and general expenses in the
current quarter were $86,240, compared with $0 in the comparable period of the
prior year. After eliminating the effect of the Sarbanes-Oxley and Aviel
expenses, the selling and general expenses for the current period increased
$111,567 over the comparable period in the prior year, and, as a percentage of
sales, declined to 23.4% from 25.7% in the prior year.




Other
income for the second quarter of 2005 increased over the same period in the
prior year due to higher investment interest.




**Six
Months 2005 vs. Six Months 2004**




Net sales
in the six months ended April 30, 2005 increased 22.3% or $1,175,234 to
$6,446,024 from $5,270,790 in the comparable period in the prior year, due to
increased demand for the Company’s connector, cable assembly and wireless
products. The increase in sales reflects a general increase in demand for
wireless connectors and cable products. The Company believes this increase is
due, in part, to a revival in some sectors of the telecommunication industries
and the continuing overall market increase in the demand for wireless products.
In addition, Aviel Electronics, which was owned and in operation during the
entire six-month period ended April 30, 2005 but not owned in the comparable
six-month period of the prior year, contributed $385,941 to net sales during the
current six month period.




The
Company’s gross profit as a percentage of sales declined from 50.7% to 47.5%
during the current fiscal quarter compared to the same six-month period last
year. The decline in the Company’s gross margins during the current six-month
period resulted from costs of materials and production in its main connector
division having increased more than increases in selling prices in the 2005
period from the comparable period in 2004, resulting in a decline in gross
margins from 54.6% to 52.3%. In addition, the Company’s gross margins were
affected by lower margins in its Bioconnect division, and additions to
allowances for inventory obsolescence in its RFNeulink division. Overall, the
Company’s three smaller divisions have lower margins than the RFConnectors
division, which accounted for 84% of net sales in the current six-month period,
compared with 89% in the comparable period of the prior year. Accordingly, the
greater sales from the lower margin division exerted a downward influence on the
combined gross margins in the current period.




13




Engineering
expenses for the first six months of fiscal 2005 increased 33.2%, or $71,964, to
$288,998 from $217,034 in the comparable period of the prior year due to
development costs for new product enhancements.




Selling
and general expenses increased 47.0% or $698,513 to $2,184,227 from $1,485,714
in the comparable period of the prior fiscal year. The $698,513 increase in
selling and general expenses includes approximately $524,000 of expense items
that were not present (Sarbanes-Oxley Act costs and the new Aviel division)
during the comparable six-month period in the prior fiscal year, plus additional
expenses related to additional personnel and general increases in costs. Selling
and general expenses were higher in the first six months of the current fiscal
year due primarily to the substantial cost of compliance with the provisions of
Section 404 of the Sarbanes-Oxley Act of 2002 in the current fiscal year, which
were $340,000 in the first six months of the current year, plus capitalized
costs of $15,000. The increase in selling and general expenses also resulted
from increased compensation expenses (due to normal annual increases and to
additional employees), increased selling expenses and increased insurance costs
compared to the prior fiscal year. Also, the current period general and
administrative expenses reflect the acquisition of Aviel Electronics in August,
2004. Aviel’s selling and general expenses in the current period were $183,748,
compared with $0 in the comparable period of the prior year. After eliminating
the effect of the Sarbanes-Oxley and Aviel expenses, the selling and general
expenses for the current period increased $174,765 over the comparable period in
the prior year, and, as a percentage of sales, declined to 25.8% from 28.2% in
the prior year.




Although
the Company expects that selling and general expenses will be higher in the
future due to the addition of the new Aviel Electronics division in Nevada and
the increased on-going expenses related to the Sarbanes-Oxley Act, future
expenses are not expected to be as large as the expenses during the most current
six month period.




Other
income for the first six months of fiscal 2005 increased over the same period in
the prior year due to higher investment interest.




**Risk
Factors**




Investors
should carefully consider the risks described below and in the Company’s Annual
Report on Form 10-KSB for the fiscal year ended October 31, 2004. The risks and
uncertainties described below and in the Annual Report are not the only ones
facing the Company. If any of the following risks actually occur, the Company’s
business, financial condition or results of operations could be materially
adversely affected.




Dependence
On RFConnector Division Products




Of the
Company’s four operating divisions, the RFConnectors division is the largest,
accounting for approximately 88% of the Company’s net sales for the fiscal year
ended October 31, 2004, and approximately 84% of net sales during the three and
six-month periods ended April 30, 2005, respectively. The Company expects the
RFConnectors division products will continue to account for the majority of the
Company’s revenues for the near future. Accordingly, an adverse change in the
operations of the RFConnectors division could materially adversely affect the
Company’s business, operating results and financial condition. Factors that
could adversely affect the RFConnectors division are described below.




The
Company Depends On Third-Party Contract Manufacturers For Substantially All Of
Its Connector Manufacturing Needs.




Substantially
all of the Company’s RFConnectors products are manufactured by third-party
contract manufacturers. The Company relies on them to procure components for
RFConnectors 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 Korea, 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
earthquakes and other natural disasters and political, social and economic
instability. 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.




14




The
Company does not currently have any 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 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 that develop and
manufacture and assemble the Company’s products include:




§
    reduced
      control over delivery schedules and
quality;




§
    risks
      of inadequate manufacturing yields and excessive
costs;




§
    the
      potential lack of adequate capacity during periods of excess demand;
      and




§
    potential
      increases in prices.




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




Dependence
Upon Independent Distributors To Sell And Market The Company’s
Products




The
Company’s sales efforts are primarily conducted through independent
distributors. Sales through independent distributors accounted for approximately
75% of the net sales of the Company for the fiscal year ended October 31, 2004,
and approximately 60% for the three and six-month periods ended April 30, 2005,
respectively. 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.




15




Dependence
On Principal Customer




One
customer accounted for approximately 16% of the net sales of the Company’s
RFConnectors division for the fiscal year ended October 31, 2004 and 14% and 15%
of net sales for the three and six-month periods ended April 30, 2005,
respectively. Although this customer has been an on-going major customer of the
Company during the past five years, the Company does not have a written
agreement with this customer that requires this customer to purchase any minimum
amount of products. Accordingly, the Company’s largest customer could stop
buying the Company’s products at any time. A reduction, delay or cancellation of
orders from this customer or the loss of this customer could significantly
reduce the Company’s revenues and profits. The Company cannot provide assurance
that this customer or any of its current customers will continue to place
orders, that orders by existing customers will continue at current or historical
levels or that the Company will be able to obtain orders from new
customers.




Certain
Of The Company’s Markets Are Subject to Rapid Technological Change, So The
Company’s Success In These Markets Depends On Its Ability To Develop And
Introduce New Products.




Although
most of the Company’s products have a stable market and are only gradually
phased out, certain of the new and emerging market, such as the wireless digital
transmission markets, are characterized by:




§
    rapidly
      changing technologies;




§
    evolving
      and competing industry standards;




§
    short
      product life cycles;




§
    changing
      customer needs;




§
    emerging
      competition;




§
    frequent
      new product introductions and enhancements;
and




§
    rapid
      product obsolescence.




To
develop new products for the connector and wireless digital transmission
markets, the Company must develop, gain access to and use new technologies in a
cost-effective and timely manner. In addition, the Company must maintain close
working relationship with key customers in order to develop new products that
meet customers’ changing needs. The Company also must respond to changing
industry standards and technological changes on a timely and cost-effective
basis.




Products
for connector applications are based on industry standards that are continually
evolving. The Company’s ability to compete in the future will depend on its
ability to identify and ensure compliance with these evolving industry
standards. If the Company is not successful in developing or using new
technologies or in developing new products or product enhancements, its future
revenues may be materially affected. The Company’s attempt to keep up with
technological advances may require substantial time and expense.




The
Markets In Which The Company Competes Are Highly Competitive.




The
markets in which the Company operates are highly competitive and the Company
expects that competition will increase in these markets. In particular, the
connector and communications markets in which the Company’s products are sold
are intensely competitive. Because the Company does not own any proprietary
property 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:




16




§
    success
      in subcontracting the design and manufacture of existing and new products
      that implement new technologies;




§
    product
      quality;




§
    reliability;




§
    customer
      support;




§
    time-to-market;




§
    price;




§
    market
      acceptance of competitors’ products; and




§
    general
      economic conditions.




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 coaxial connectors are in the connector and
communications industries. Any significant downturn in the Company’s customers’
markets, in particular, or in general economic conditions that 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 connector industry will not
experience a material downturn in the near future. Any cyclical downturn in the
connector and/or communications industry could have a material adverse effect on
the Company.




The
Company May Make Future Acquisitions That Will Involve Numerous
Risks.




The
Company periodically considers other potential acquisitions of other companies
that could expand the Company’s product line or customer base. Accordingly, the
Company may in the future acquire one or more additional companies. The risks
involved with future acquisitions include:




§
    diversion
      of management’s attention;




§
    the
      affect on the Company’s financial statements of the amortization of
      acquired intangible assets;




17




§
    the
      cost associated with acquisitions and the integration of acquired
      operations; and




§
    the
      assumption of unknown liabilities, or other unanticipated events or
      circumstances.




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.




International
Sales And Operations




Sales to
customers located outside the United States, either directly or through U.S. and
foreign distributors, accounted for approximately 7.7% and 9.5% of net sales
during the three and six-month periods ended April 30, 2005, and approximately
6.4% and 8.9% for the comparable periods in 2004. The increases in sales in the
2005 periods were due to increased cooperative advertising, primarily in
Mexico.




International
revenues are subject to a number of risks, including:




§
    longer
      accounts receivable payment cycles;




§
    difficulty
      in enforcing agreements and in collecting accounts receivable;




§
    tariffs
      and other restrictions on foreign trade;




§
    economic
      and political instability; and




§
    the
      burdens of complying with a wide variety of foreign laws.




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 thereafter may also be exposed to currency fluctuation risks.




Changes
In Stock Option Accounting Rules May Adversely Affect Our Reported Operating
Results, Our Stock Price, And Our Ability To Attract And
Retain Employees.




In
December 2004, the Financial Accounting Standards Board published new rules that
will require companies in 2005 to
record all stock-based employee compensation as an expense. The new rules apply
to stock options grants, as well as a wide range of other share-based
compensation arrangements. Small business issuers such as the Company will have
to apply the new rules in their first reporting period beginning after December
15, 2005. As a small company with limited financial resources, the Company has
depended upon compensating its officers, directors, employees and consultants
with such stock-based compensation awards in the past in order to limit its cash
expenditures and to attract and retain officers, directors, employees and
consultants. Accordingly, if the Company continues to grant stock options or
other stock-based compensation awards to its officers, directors, employees, and
consultants after the new rules apply to us, its future earnings, if any, will
be reduced (or its future losses will be increased) by the expenses recorded for
those grants. Since it is a small company, the expenses it may have to record as
a result of future options grants may be significant and may materially
negatively affect its reported financial results. The adverse effects that the
new accounting rules may have on the Company’s future financial statements,
should it continue to rely heavily on stock-based compensation, may reduce its
stock price and make it more difficult for the Company to attract new
investors.




18


****


**Item
3. Controls and Procedures.**




Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange
Act”), the Company’s management, with the participation of the Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of the
Company’s disclosure controls and procedures, as of the end of the period
covered by this report. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company’s disclosure controls and
procedures are effective.




Since the
end of the Company’s fiscal year on October 31, 2004, the
Company has undertaken a number of remediation actions to improve the Company’s
internal controls over financial reporting, including the
following:




·
    Upgrading
      its legacy computer accounting system with significant new
      enhancements.




·
    Hiring
      an acting, part-time Chief Financial Officer who is experienced in SEC
      reporting.




·
    Improving
      the Company’s prior stock option record
system.




·
    Replacing
      certain of its accounting department
personnel.




·
    Implementing
      extensive new procedures to bring the Company’s controls and procedures
      into compliance with Section 404 of the Sarbanes-Oxley Act of 2002 within
      the time frame required under the Act.




The
upgrade of the computer accounting system has been accomplished, and additional
enhancements are underway. The hiring of apart-time, interim Acting Chief
Financial Officer occurred early in the second fiscal quarter of 2005. The
Company is in the process of selecting a permanent Chief Financial Officer. The
other remediation actions described above are in process and are in varying
stages of completion.







19







**PART
II. OTHER INFORMATION**




**Item
6. Exhibits**




(a)  Exhibits:




§
    31.1:Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.




§
    31.2:Certification
      of the Acting Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.




§
    32.1:Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
    *




§
    32.2:Certification
      of Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
      *





*
Pursuant to Commission Release No. 33-8238, this certification will be treated
as “accompanying” this Quarterly Report of Form 10-QSB and not “filed” as part
of such report for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of Section 18 of the
Securities Exchange Act of 1934, as amended, and this certification will not be
deemed to be incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except
to the extent that the registrant specifically incorporates it by
reference.







20




**SIGNATURES**




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




RF
      INDUSTRIES, LTD.Dated:
      June 14, 2005
    By:/s/
      Howard F. Hill
      Howard
      F. Hill, President
      Chief
      Executive OfficerDated:
      June 14, 2005
    By:/s/
      William T. Gochnauer
      William
      T. Gochnauer
      Acting
      Chief Financial Officer







21




**INDEX
TO EXHIBITS**







Exhibit


Number




31.1
    Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
    Certification
      of Acting Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
    Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    Certification
      of Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.





22