**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 JULY 31, 2007**





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 principalexecutive offices)
              (Zip
                  Code)




(858)
                    549-6340
                FAX
                    (858) 549-6345(Issuer’s
                    telephone and fax numbers, including
                    area code)




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 xNo
o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes oNo x





State
      the
      number of shares outstanding of each of the issuer’s classes of common stock at
      the latest practicable date. As of August 24, 2007, the registrant had 3,318,233
      shares of Common Stock, $.01 par value, issued.





Transitional
      Small Business Disclosure Format (check one): Yes oNo x




1




**Part
      I. FINANCIAL INFORMATION**





**Item
      1: Financial Statements**





**RF
      INDUSTRIES, LTD.**


**CONDENSED
      BALANCE SHEETS**


**(Unaudited)**




**ASSETS**
            
            **July
                31, 2007**
            
            **October
                31, 2006****(Unaudited)**
            
            **(Note
                1)****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            4,959,070
            
            $
            4,612,935Investments
                in available-for-sale securities
            
            
            2,856,696
            
            
            2,252,589Trade
                accounts receivable, net of allowance for doubtful accounts of $42,305
                and
                $45,653
            
            
            1,877,402
            
            
            2,053,402Inventories
            
            
            4,737,444
            
            
            5,250,484Other
                current assets
            
            
            228,066
            
            
            208,156Deferred
                tax assets
            
            
            259,900
            
            
            196,075**TOTAL
                CURRENT ASSETS**
            
            
            14,918,578
            
            
            14,573,641**Equipment
                and furnishings:**Equipment
                and tooling
            
            
            1,760,538
            
            
            1,662,822Furniture
                and office equipment
            
            
            386,799
            
            
            386,1372,147,337
            
            
            2,048,959Less
                accumulated depreciation
            
            
            1,843,530
            
            
            1,672,813**TOTAL**
            
            
            303,807
            
            
            376,146Goodwill
            
            
            200,848
            
            
            200,848Amortizable
                intangible asset, net
            
            
            43,333
            
            
            73,333Note
                receivable from stockholder
            
            
            66,980
            
            
            66,980Other
                assets
            
            
            28,087
            
            
            28,087**TOTAL
                ASSETS**
            
            **$**
            **15,561,633**
            
            **$**
            **15,319,035**




2




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





**RF
      INDUSTRIES, LTD.**


**CONDENSED
      BALANCE SHEETS**


**(Unaudited)**




**July
                31, 2007**
            
            **October
                31, 2006****(Unaudited)**
            
            **(Note
                1)****LIABILITIES
                AND**
              **STOCKHOLDERS’
                EQUITY****CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            372,440
            
            $
            441,203Accrued
                expenses
            
            
            434,690
            
            
            603,351Income
                taxes payable
            
            
            381,126
            
            
            719,864**TOTAL
                CURRENT LIABILITIES**
            
            
            1,188,256
            
            
            1,764,418Deferred
                tax liabilities
            
            
            124,900
            
            
            90,618**TOTAL
                LIABILITIES**
            
            
            1,313,156
            
            
            1,855,036**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS’
                EQUITY**Common
                stock - authorized 10,000,000 shares of $0.01 par value; 3,318,233
                and
                3,252,613 shares issued
            
            
            33,182
            
            
            32,526Additional
                paid-in capital
            
            
            5,315,135
            
            
            4,582,897Treasury
                stock, at cost, 78,792 shares
            
            
            (458,824
            )Retained
                earnings
            
            
            9,357,288
            
            
            8,843,268Accumulated
                other comprehensive income
            
            
            1,696
            
            
            5,308**TOTAL
                STOCKHOLDERS’ EQUITY**
            
            
            14,248,477
            
            
            13,463,999**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            **$**
            **15,561,633**
            
            **$**
            **15,319,035**






See
      Notes
      to Condensed Unaudited Financial Statements




3




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




**RF
                INDUSTRIES, LTD.**
              **CONDENSED
                STATEMENTS OF INCOME**
              **(Unaudited)**Three
                Months Ended July 31
            
            Nine
                Months Ended July 312007
            
            2006
            
            2007
            
            2006Net
                sales
            
            $
            4,313,346
            
            $
            3,920,233
            
            $
            10,848,465
            
            $
            11,064,465Cost
                of sales
            
            
            2,264,283
            
            
            1,989,226
            
            
            6,016,255
            
            
            5,781,047Gross
                profit
            
            
            2,049,063
            
            
            1,931,007
            
            
            4,832,210
            
            
            5,283,418Operating
                expenses:Engineering
            
            
            117,171
            
            
            118,712
            
            
            350,104
            
            
            398,875Selling
                and general
            
            
            1,125,974
            
            
            1,131,938
            
            
            3,407,451
            
            
            3,182,084Totals
            
            
            1,243,145
            
            
            1,250,650
            
            
            3,757,555
            
            
            3,580,959Operating
                income
            
            
            805,918
            
            
            680,357
            
            
            1,074,655
            
            
            1,702,459Other
                income - interest
            
            
            89,608
            
            
            76,291
            
            
            287,278
            
            
            182,374Income
                before provision for income taxes
            
            
            895,526
            
            
            756,648
            
            
            1,361,933
            
            
            1,884,833Provision
                for income taxes
            
            
            461,457
            
            
            349,164
            
            
            716,557
            
            
            817,464Net
                income
            
            $
            434,069
            
            $
            407,484
            
            $
            645,376
            
            $
            1,067,369Basic
                earnings per share
            
            $
            0.13
            
            $
            0.13
            
            $
            0.20
            
            $
            0.34Diluted
                earnings per share
            
            $
            0.12
            
            $
            0.11
            
            $
            0.17
            
            $
            0.29Basic
                weighted average shares outstanding
            
            
            3,248,058
            
            
            3,209,484
            
            
            3,265,739
            
            
            3,171,260Diluted
                weighted average shares outstanding
            
            
            3,693,613
            
            
            3,723,927
            
            
            3,766,200
            
            
            3,694,522Dividends
                paid
            
            $
            64,991
            
            
            
            
            $
            131,356







See
      Notes
      to Condensed Unaudited Financial Statements




4




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





**RF
      INDUSTRIES, LTD.**


**CONDENSED
      STATEMENTS OF CASH FLOWS**


**NINE
      MONTHS ENDED JULY 31**


**(Unaudited)**





**2007**
            
            **2006**OPERATING
                ACTIVITIES:Net
                income
            
            $
            645,376
            
            $
            1,067,369Adjustments
                to reconcile net income to net cash provided by operating
                activities:Provision
                for bad debts
            
            
            (2,143
            )
            
            11,140Depreciation
                and amortization
            
            
            200,717
            
            
            200,173Income
                tax benefit on non-qualified stock options
            
            
            (114,000
            )
            
            188,900Deferred
                income tax
            
            
            (29,543
            )
            
            (92,096
            )Stock-based
                compensation expense
            
            
            442,946
            
            
            103,041Changes
                in operating assets and liabilities:Trade
                accounts receivable
            
            
            178,142
            
            
            108,586Inventories
            
            
            513,040
            
            
            19,098Income
                tax refund receivable/payable
            
            
            (224,737
            )
            
            736,483Other
                current assets
            
            
            (19,910
            )
            
            (59,764
            )Accounts
                payable
            
            
            (68,763
            )
            
            216,509Accrued
                expenses
            
            
            (168,661
            )
            
            131,986Net
                cash provided by operating activities
            
            
            1,352,464
            
            
            2,631,425INVESTING
                ACTIVITIES:Purchase
                of available-for-sale securities
            
            
            (607,719
            )
            
            (4,680,869
            )Maturity
                of available-for-sale securities
            
            
            -
            
            
            1,035,000Capital
                expenditures
            
            
            (98,378
            )
            
            (117,229
            )Collection
                of notes receivable
            
            
            -
            
            
            2,500Collection
                of notes receivable from related parties
            
            
            -
            
            
            29,750Net
                cash used in investing activities
            
            
            (706,097
            )
            
            (3,730,848
            )FINANCING
                ACTIVITIES:Proceeds
                from exercise of stock options
            
            
            175,948
            
            
            157,035Purchase
                of treasury stock
            
            
            (458,824
            )
            
            -Income
                tax benefit on non-qualified stock options
            
            
            114,000
            
            
            -Dividends
                paid
            
            
            (131,356
            )
            
            -Net
                cash (used in) provided by financing activities
            
            
            (300,232
            )
            
            157,035Net
                increase (decrease) in cash and cash equivalents
            
            
            346,135
            
            
            (942,388
            )Cash
                and cash equivalents at the beginning of the period
            
            
            4,612,935
            
            
            4,507,219Cash
                and cash equivalents at the end of the period
            
            $
            4,959,070
            
            $
            3,564,831Supplemental
                disclosure of cash flow information:Income
                taxes paid
            
            $
            966,551
            
            
            -Effect
                of net increase (decrease) in fair value of available-for-sale
                securities
            
            $
            (3,612
            )
            $
            21,148






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 (consisting only of normal recurring adjustments) have been included
      in order to make the information not misleading. Information included in the
      balance sheet as of October 31, 2006 has been derived from, and certain terms
      used herein are defined in, the audited financial statements of the Company
      as
      of October 31, 2006 included in the Company’s Annual Report on Form 10-KSB for
      the year ended October 31, 2006 that was previously filed with the Securities
      and Exchange Commission. Operating results for the three and nine month periods
      ended July 31, 2007, are not necessarily indicative of the results that may
      be
      expected for the year ending October 31, 2007. 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, 2006.




**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.




July
                31, 2007
            
            October
                31, 2006(Unaudited)Raw
                materials and supplies
            
            $
            928,466
            
            $
            1,038,857Work
                in process
            
            
            11,844
            
            
            20,024Finished
                goods
            
            
            3,892,756
            
            
            4,259,125Inventory
                reserve
            
            
            (95,622
            )
            
            (67,522
            )Total
            
            $
            4,737,444
            
            $
            5,250,484





Purchases
      of connector products from two major vendors in the nine month period ended
      July
      31, 2007, represented 13% and 12% compared to 46% and 12% of the total inventory
      purchases for the period ended July 31, 2006. The Company has arrangements
      with
      these vendors to purchase product based on purchase orders periodically issued
      by the Company.





**Note
      3 - Earnings per share**




Basic
      earnings per share is computed by dividing net income 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. The
      greatest number of the assumed exercise of options to purchase 163,923 shares
      of
      the Company’s common stock, at a price of $7.50 and $6.38 per share in any
      quarter of the nine months ended July 31, 2007, were not included in the
      computation of diluted per share amounts because they were anti-dilutive for
      that purpose.




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




6




Three
                Months Ended July 31
            
            Nine
                Months Ended July 312007
            
            2006
            
            2007
            
            2006Weighted
                average shares outstanding for basic net earnings per
                share
            
            
            3,248,058
            
            
            3,209,484
            
            
            3,265,739
            
            
            3,171,260Add
                effects of potentially dilutive securities-assumed exercise of stock
                options
            
            
            445,555
            
            
            514,443
            
            
            500,461
            
            
            523,262Weighted
                average shares for diluted net earnings per share
            
            
            3,693,613
            
            
            3,723,927
            
            
            3,766,200
            
            
            3,694,522





**Note
      4 - Stock Option Plan**




Effective
      November 1, 2006, the Company adopted Statement of Financial Accounting
      Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”). The
      Company elected to use the modified prospective transition method. This method
      requires compensation cost to be recognized in the financial statements over
      the
      service period for the fair value of all awards (including awards to employees)
      granted after the date of adoption as well as for existing awards for which
      the
      requisite service had not been rendered as of the date of adoption and requires
      that prior periods not be restated. The stock incentive plans provide for the
      granting of qualified and nonqualified options to our officers, directors and
      employees. Outstanding options are generally exercisable one year after the
      date
      of the grant and expire no more than ten years after the grant. The Company
      satisfies the exercise of options by issuing previously unissued common shares.
      Prior to the adoption of SFAS 123R, the Company used the intrinsic value method
      to account for stock options granted to employees and generally made no charges
      against earnings with respect to those options at the date of grant since the
      employee options had exercise prices that were equal to the market price of
      the
      Company’s stock on the grant date.




SFAS
      123R
      requires that the Company elect an approved method to calculate the historical
      pool of windfall tax benefits upon adoption of SFAS 123R within one year of
      its
      adoption. As of July 31, 2007, the Company has not made that election.




For
      the
      three and nine months ended July 31, 2007, the adoption of SFAS 123R reduced
      income from operations by $183,244 and $442,946, reduced net income by
      approximately $168,000 and $402,000  and
      reduced basic earnings per share by $0.05 and $0.12, respectively, and diluted
      earnings per share by $0.05 and $0.11, respectively.




Also,
      in
      accordance with SFAS 123R, the Company presents the tax benefits from exercise
      of stock options in excess of recognized expense as a cash flow from financing
      activities in the statement of cash flows.




No
      stock
      options were granted during the three months ended July 31, 2007. The weighted
      average fair value of employee stock options granted in the nine months ended
      July 31, 2007 was estimated to be $3.64 per share using the Black-Scholes option
      pricing model with the following assumptions:




Risk-free
                interest rate
            
            
            5.00
            %Dividend
                yield
            
            
            0.00
            %Expected
                life of the option
            
            
            5
                yearsVolatility
                factor
            
            
            57.00
            %




7




Expected
      volatilities are based on historical volatility of the Company’s stock. The
      Company uses historical experience with exercise and post-vesting employment
      termination behavior to determine the options’ expected life. 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
      Company’s historical net income and earnings per common share and pro forma net
      income and earnings per common share assuming compensation cost had been
      determined for the nine months ended July 31, 2006 based on the fair value
      instead of the intrinsic value at the grant date for all awards to the Company’s
      employees, using the Black-Scholes option pricing model consistent with the
      provisions of SFAS 123R and amortized ratably over the vesting period, are
      set
      forth below:




Three
                Months Ended July 31, 2006
            
            Nine
                Months Ended July 31, 2006Net
                income - as reported
            
            $
            407,484
            
            $
            1,067,369Add
                stock-based compensation recognized under APB 25
            
            
            103,041
            
            
            103,041Deduct
                total stock-based employee compensation expense determined under
                fair
                value-based method for all awards - net of income tax
                effects
            
            
            (176,480
            )
            
            (253,045
            )Net
                income - pro forma
            
            $
            334,045
            
            $
            917,365Basic
                earnings per share - as reported
            
            $
            0.13
            
            $
            0.34Basic
                earnings per share - pro forma
            
            $
            0.10
            
            $
            0.29Diluted
                earnings per share - as reported
            
            $
            0.11
            
            $
            0.29Diluted
                earnings per share - pro forma
            
            $
            0.09
            
            $
            0.25




In
      accordance with the provisions of SFAS 123R, all other issuances of common
      stock, stock options to employees and non-employees as the consideration for
      goods or services received by the Company are accounted for based on the fair
      value of the equity instruments issued (unless the fair value of the
      consideration received can be more reliably measured). Generally, the fair
      value
      of any options, warrants or similar equity instruments issued is estimated
      based
      on the Black-Scholes option pricing model.





**Issuances
      of Common Stock by the Company**


During
      the nine months ended July 31, 2007, the Company received cash proceeds of $175,948 from the
      exercise of options for the purchase of 65,620 shares of common
      stock.





**RF
      Industries, Ltd. Stock Option Plans**


Descriptions
      of the Company’s stock option plans are included in Note 7 of the Company’s
      Annual Report on Form 10-KSB for the year ended October 31, 2006. A summary
      of
      the status of the options granted under the Company’s stock option plans as of
      July 31, 2007 and the changes in options outstanding during the nine months
      then
      ended is presented in the table that follows:




8




Shares
            
            Weighted
              Average
                Exercise Price
            
            Weighted Average
              Remaining
              Contractual Term
            
            Aggregate
              Intrinsic
              ValueOutstanding
                at beginning of period
            
            
            974,122
            
            $
            3.05Options
                granted
            
            
            10,000
            
            $
            6.72Options
                exercised
            
            
            (65,620
            )
            $
            2.68Options
                canceled or expired
            
            
            (780
            )
            $
            6.58Options
                outstanding at end of period
            
            
            917,722
            
            $
            3.12
            
            
            7.04
                years
            
            $
            2,651,781Options
                exercisable at end of period
            
            
            634,464
            
            $
            2.22
            
            
            6.65
                years
            
            $
            2,173,381





As
      of
      July 31, 2007, $237,181 of expense with respect to nonvested share-based
      arrangements has yet to be recognized and is expected to be recognized over
      a
      weighted average period of 0.9 years.





The
      total
      intrinsic value of stock options exercised during the nine months ended July
      31,
      2007 was $350,292.




**Note
      5 - Concentration of Credit Risk**




One
      customer accounted for approximately 18% and 17% of the Company’s net sales for
      the three and nine months ended July 31, 2007. One customer accounted for 16%
      and 18% of the Company’s net sales for the three and nine month periods ended
      July 31, 2006. Although this customer has been a customer of the Company
      continuously during the past six 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 and 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 - Geographic 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 nine month periods ended July 31, 2007 and
      2006:




Three
                Months Ended July 31
            
            Nine
                Months Ended July 312007
            
            2006
            
            2007
            
            2006United
                States
            
            $
            3,823,593
            
            $
            3,491,307
            
            $
            9,299,607
            
            $
            9,907,119Foreign
                countries
            
            
            489,753
            
            
            428,926
            
            
            1,548,858
            
            
            1,157,346$
            4,313,346
            
            $
            3,920,233
            
            $
            10,848,465
            
            $
            11,064,465





9




**Note
      7 -** **Income
      tax provision**




The
      income tax provision reflected in the accompanying unaudited condensed statement
      of income for the three and nine months ended July 31, 2007 is different than
      the expected tax provision computed based on the pre-tax income and the
      applicable statutory Federal income tax rate of 34% and the state income tax
      rate, net of Federal tax effects, of 5.83%. Interim tax provisions are
      determined using an estimate of the annual effective tax rate. As of July 31,
      2007, the Company estimated that its effective annual tax rate for the year
      ending October 31, 2007 will be approximately 53%, which is above the expected
      statutory rate primarily as a result of permanent differences between income
      before taxes for financial reporting purposes and taxable income. The most
      significant permanent difference was related to the portion of compensation
      expense recognized for financial reporting purposes that was attributed to
      the
      noncash charges recorded under SFAS 123R for the fair value of qualified
      incentive stock options, or ISOs, granted to employees, which are generally
      not
      deductible for tax reporting purposes. The Company’s provision for income taxes
      was approximately $461,500 and $716,600 for the three and nine months ended
      July
      31, 2007, respectively. ****




**Note
      8 - Investments**




As
      of
      July 31, 2007, available-for-sale securities consisted of investments in
      auction-rate securities consisting of various municipal bonds. Although the
      auction-rate securities have long-term maturities, their dividend rates reset
      every seven to ten days through a Dutch auction process and management believes,
      but cannot assure, that the Company can liquidate them on a short-term basis
      at
      their original cost, Accordingly, they have been classified as current
      assets.




**Note
      9 - Subsequent Events**




Effective
      September 1, 2007, the Company acquired the business and substantially all
      of
      the assets of Radiomobile Inc., a privately held San Diego, California, based
      OEM provider of end-to-end mobile management solutions implemented over wireless
      networks. Radiomobile Inc. will operate as a separate division and will
      supplement the operations of the Company’s Neulink division. The aggregate
      purchase price that the Company is required to pay for the Radiomobile Inc.
      assets depends upon the revenues generated by the new Radiomobile division
      during the next three years. If all of the revenue targets are met, the total
      purchase price payable by the Company for the Radiomobile Inc. business will
      be
      $700,000, of which $400,000 will be payable in shares of the Company’s common
      stock and the balance will be payable in cash. The shares to be issued by the
      Company as part of the purchase price are valued at $5.66 per share.




On
      September 7, 2007, the Board of Directors of the Company declared a quarterly
      cash dividend of $0.02 per share. The dividend date of record is September
      30,
      2007 and the payment date to stockholders will be October 16, 2007. Based on
      the
      Company’s current financial condition and its current operations, the foregoing
      dividend payment is not expected to have a material impact on the Company’s
      liquidity or capital resources.




**Item
      2:**  **Management’s
      Discussion and Analysis or Plan of Operation**




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.




10




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 and Plan of Operation,” 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, 2006
      and other reports and filings made with the Securities and Exchange
      Commission.




**Critical
      Accounting Policies**




The
      financial statements of the Company are prepared in conformity with accounting
      principles generally accepted in the United States of America (“GAAP”). The
      preparation of these financial statements requires the Company’s 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’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, 2006.




**Executive
      Overview**




The
      Company 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. Since sales of Company’s RF connectors and cable
      assemblies divisions represented 81% and 86% of the Company’s net sales during
      the three and nine month periods ended July 31, 2007, the Company’s results of
      operations and liquidity are principally dependent upon the results of its
      RF
      connector and cable operations.




**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 July 31, 2007, the amount of cash and cash equivalents was equal
                to
                $4,959,070 in aggregate and the Company had $2,856,696 of investments
                in
                available-for-sale securities.




§
            As
                of July 31, 2007, the Company had $14,918,578 in current assets and
                $1,188,256 in current liabilities.




§
            As
                of July 31, 2007, the Company had no outstanding indebtedness (other
                than
                accounts payable, income taxes 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




The
      Company recognized net income of $645,376 for the nine months ended July 31,
      2007. The Company realized positive cash flows of $1,352,464 from its operating
      activities for the same period.




Trade
      accounts receivable (net of allowances for doubtful accounts) at July 31, 2007
      decreased approximately 9%, or by $176,000 to $1,877,402 compared to the October
      31, 2006 balance of $2,053,402. The decrease in accounts receivable is due
      to
      both decrease in net sales for the nine months ended July 31, 2007 compared
      with
      the same period in the prior year and to improved receivables management and
      collection efforts by the Company.




Inventories
      at July 31, 2007 decreased approximately 10%, or $513,040 to $4,737,444 compared
      to $5,250,484 on October 31, 2006. The Company has been adjusting its
      inventory purchases during the last fiscal quarter to reflect the decrease
      in
      sales.




Other
      current assets, including prepaid expenses and deposits, increased $19,910
      to
      $228,066 as of July 31, 2007, from $208,156 on October 31, 2006.




Accounts
      payable at July 31, 2007 decreased $68,763 to $372,440 from $441,203 on October
      31, 2006. The change in accounts payable is merely the result of the timing
      of
      invoices received and payments made.




Net
      cash
      used in investing activities was $706,097 for the nine months ended July 31,
      2007 and was attributed to the purchase of available-for-sale securities and
      capital asset acquisitions.




Net
      cash
      used in financing activities was $300,232 for the nine months ended July 31,
      2007, and was attributable to $175,948 of proceeds from the exercise of stock
      options and $114,000 to the tax benefit on non-qualified stock options, $458,824
      used to purchase 78,792 shares of treasury stock, and $131,356 used to
      pay cash dividends.




As
      of
      July 31, 2007, the Company had a total of $4,959,070 of cash and cash
      equivalents compared to a total of $4,612,935 of cash and cash equivalents
      on
      October 31, 2006. However, the amount of investments in available-for-sale
      securities increased by $604,107 to $2,856,696 from $2,252,589 on October 31,
      2006. The Company had working capital of $13,730,322 as of July 31, 2007 and
      a
      current ratio of approximately 13:1.




On
      September 7, 2007, the Board of Directors of the Company declared a quarterly
      cash dividend of $0.02 per share. The dividend date of record is September
      30,
      2007 and the payment date to stockholders is October 16, 2007. Based on the
      Company’s current financial condition and its current operations, the foregoing
      dividend payment is not expected to have a material impact on the Company’s
      liquidity or capital resources.




**Results
      of Operations**




**Three
      Months Ended July 31, 2007 vs. Three Months Ended July 31,
      2006**




Net
      sales
      in the current fiscal quarter ended July 31, 2007, increased 10%, or $393,113
      to
      $4,313,346 from $3,920,233 in the comparable fiscal quarter in the prior year,
      due primarily to increased sales of the RF connectors and increased sale of
      RF
      Neulink products. The increase in RF Neulink sales reflects increased purchases
      by the US Military of wireless connector and cable products. The increase in
      RF
      connector sales is due primarily to the build out of infrastructure by wireless
      providers during this period. The Company believes demand for its RF connectors
      should remain strong during the next quarter as the recent consolidation of
      wireless providers that caused a slow-down in sales appears to have been
      completed.




Foreign
      sales represent $428,926 or approximately 11% of net sales for the period ended
      July 31, 2006 and accounted for approximately 11% of net sales during the three
      month period ended July 31, 2007. Foreign sales for the fiscal quarter ended
      July 31, 2007 increased by $60,827 to $489,753 as compared to the fiscal quarter
      in the prior year. Approximately 8% of the Company’s net sales are primarily due
      to cable assembly sales to one major international customer.




12




The
      Company’s gross profit as a percentage of sales declined from 49% to 48% during
      the current fiscal quarter compared to the same fiscal quarter last year. The
      decline in gross margins during the current quarter resulted from the increase
      in sales of lower margin cable assembly products compared to sales of higher
      margin connector products. The revenue mix of connectors to cable assembly
      products was different in this three month period compared to the current three
      month period last year. The Company’s labor costs also increased during the 2007
      fiscal quarter compared to the comparable quarter last year due to changes
      in
      the accounting for stock options. As a result of the adoption of FAS 123R,
      the
      Company incurred an additional $31,807 cost of sales expense related to employee
      stock options. Overall, the Company’s four smaller divisions have significantly
      lower gross margins than the RF Connector and Cable Assembly division. Since
      the
      connector and cable assembly products net sales decreased as a percentage of
      the
      Company’s total sales (overall connector and cable sales represented 81% of net
      sales in the current three month period, compared to 86% in the comparable
      period of the prior year), the increase in sales of lower margin divisions
      reduced the combined gross margins in the current period.




Engineering
      expenses decreased 1%, or $1,541 to $117,171 from $118,712 in the comparable
      quarter of the prior year due to a decrease in 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 decreased 1% or $5,964 to $1,125,974 from $1,131,938 in
      the
      comparable quarter of the prior year despite the increase in net sales. Selling
      and general expenses were lower in the third quarter of the current fiscal
      year
      due primarily to the company freezing wages and hiring during the third quarter.
      This was in response to lower than expected sales during the first two quarters.
      Office expenses and salaries were lower for the quarter, but this was offset
      partially by incurring an additional $48,396 expense related to the adoption
      of
      FAS 123R, expensing employee stock options. Under the new accounting for stock
      based compensation regulations, the Company is required to expense the value
      of
      equity securities (stock options) previously granted over the periods in which
      the related services are rendered. Accordingly, since the new accounting
      regulations went into effect on November 1, 2006, stock option expense was
      recognized during the third quarter ended July 31, 2007. Additionally, employee
      benefits costs increased for all divisions from the comparable period in 2006.
      Due to the combination of an increase in net sales and decrease of selling
      and
      general expenses, the selling and general expenses for the current period as
      a
      percentage of sales were 26% compared with 29% in the prior year.




Other
      income for the third quarter of 2007 increased $13,317 over the same period
      in
      the prior year due to higher investment interest income, reflecting higher
      balances held in interest bearing accounts.




As
      a
      result of the increase in revenues, the slight decrease in gross profit as
      a
      percentage of sales, and the decrease in selling and general expenses, income
      before provision for income taxes during the fiscal quarter ended July 31,
      2007
      increased by $138,878 to $895,526 from $756,648 in the comparable fiscal quarter
      in the prior year.




The
      provision for income taxes during the fiscal quarter ended July 31, 2007 was
      $461,457 (or a combined estimated Federal and state income tax rate of
      approximately 51.5%), compared to $349,164 in the fiscal quarter ended July
      31,
      2006 (or a combined estimated Federal and state income tax rate of approximately
      46%). The significant increase in the combined statutory Federal and state
      tax
      rate in the 2007 fiscal quarter is the result of the difference between income
      before taxes for financial reporting purposes and income for tax reporting
      purposes. Accordingly, income tax was determined based on the income the Company
      would have realized had it excluded all of the noncash securities compensation
      expenses. During the same period of 2006, the Company incurred $143,188 of
      stock
      compensation expense that required expensing at the time. The Company had to
      exclude all the noncash expense when determining income tax last year.




Accordingly,
      net income for the fiscal quarter ended July 31, 2007 was $434,069 compared
      to
      $407,484 for the same period last year.




13




**Nine
      Months Ended July 31, 2007 vs. Nine Months Ended July 31,
      2006**




Net
      sales
      in the nine months ended July 31, 2007 decreased 2%, or $216,000 to $10,848,465
      from $11,064,465 in the comparable period in the prior year. The decrease in
      net
      sales reflects the slowdown in net sales during the first two fiscal quarters
      of
      the year, which overall decline was partially offset by the significant increase
      in net sales in the third fiscal quarter and an increase in foreign sales to
      one
      customer of $677,772. Net sales during the first two fiscal quarters of this
      year declined due to decreased in sales of the Company’s RF connector products,
      cable assembly products, and Bioconnect products. The Company believes that
      the
      decrease in RF connector and cable assembly sales in the first two fiscal
      quarters of fiscal 2007 reflects a general industry-wide decrease in sales
      of
      wireless connectors and cable products due to consolidation in the wireless
      industry. The Company believes that the effects of the industry consolidation
      have run their course and that demand for wireless products is again increasing.




The
      Company’s gross profit as a percentage of sales decreased to 45% from 48% during
      the first nine months of fiscal 2007 compared to the same period in fiscal
      2006.
      As indicated above, the Company’s RF connector sales decreased during the first
      two fiscal quarters of fiscal 2007. The RF connector division has a
      significantly higher gross profit margin than its other divisions. As a result,
      the decrease in sales of RF connectors decreased the Company’s overall gross
      profits as a percentage of net sales.




Engineering
      expenses for the first nine months of fiscal 2007 decreased 12%, or $48,771,
      to
      $350,104 from $398,875 in the comparable period of the prior year due to lower
      overall requests by the Company’s clients for new product enhancements during
      the first two fiscal quarters of fiscal 2007.




Selling
      and general expenses increased 7%, or $225,367 to $3,407,451 from $3,182,084
      in
      the comparable period of the prior fiscal year. The primary reasons for the
      increase is due to an additional $184,283 stock option compensation and $40,000
      increase in accounting fees compared to the nine months ended July 31, 2006.
      The
      increase in stock option compensation expense in the current nine-month period
      is the result of the new accounting policies that were implemented in the
      current fiscal year.




The
      provision for income taxes during the nine months ended July 31, 2007 was
      $716,557 (or a combined estimated Federal and state income tax rate of
      approximately 53%), compared to $817,464 in the nine months ended July 31,
      2006
      (or a combined estimated Federal and state income tax rate of approximately
      43%). The increase in the combined statutory Federal and state tax rate for
      the
      nine months ended July 31, 2007 is the result of the difference between income
      before taxes for financial reporting purposes and income for tax reporting
      purposes. Compensation expense attributed to the noncash charges recorded under
      SFAS 123R for the fair value of qualified incentive stock options granted to
      employees are recognized for financial reporting purposes but are generally
      not
      deductible for tax reporting purposes.




Other
      income for the first nine months of fiscal 2007 increased $104,904 over the
      same
      period in the prior year due to more cash available for investments and a higher
      rate of return on those investments.




**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, 2006. 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 RF Connector and Cable Assembly Products




Of
      the
      Company’s five operating divisions, the three divisions that market RF
      connectors and cables account for approximately 78% of the Company’s net sales
      for the fiscal year ended October 31, 2006, and approximately 81% and 86% of
      net
      sales during the three months and nine months ended July 31, 2007, respectively.
      The Company expects that sales of RF connector and cable 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 three RF connector
      and
      cable divisions could materially adversely affect the Company’s business,
      operating results and financial condition. Factors that could adversely affect
      the RF Connector and Cable Assembly division, the largest of these three
      divisions, are described below.




14




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




Substantially
      all of the Company’s RF Connector and Cable Assembly products are manufactured
      by third-party contract manufacturers. The Company relies on them to procure
      components for RF Connector and Cable Assembly 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 adequate supplies of high-quality products on a timely and
      cost-efficient basis, the Company’s operations would be disrupted and its net
      sales 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 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,
      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, 2006,
      and approximately 46% and 48% for the three months and nine months ended July
      31, 2007. 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 17% of the net sales of the Company’s RF
      Connector and Cable Assembly division for the fiscal year ended October 31,
      2006
      and one customer accounted for 18% and 17% of net sales for the three and nine
      month periods ended July 30, 2007. Although this customer has been an on-going
      major customer of the Company during the past five years, the
      Company does have a written distributor agreement with this customer. However,
      this customer does not have any minimum purchase obligations and could stop
      buying the Company’s products at any time. 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
      other 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 markets, 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 relationships 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.




Since
      August 2004, the Company has purchased the operations of three smaller
      businesses (Aviel Electronics in Las Vegas, Nevada, August 2004, Worswick
      Industries Inc. in San Diego, California, September 2005, and Radiomobile,
      Inc.
      in San Diego, California, September 2007). The
      Company periodically may make acquisitions of other companies that could expand
      the Company’s product line or customer base. The risks involved with both the
      recent acquisitions and with any possible future acquisitions
      include:




§
            diversion
                of management’s attention;




17




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




§
            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 11% and 14% of net sales
      during the three months and nine months ended July 31, 2007, and approximately
      11% and 9% for the comparable periods in 2006. The $60,827 increase in foreign
      sales for the three months ended July 31, 2007 was due to increased cooperative
      advertising, primarily in Mexico and cable assembly in Israel. 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 have Adversely Affected The Company’s Reported
      Operating Results, And Therefore May Adversely Affect The Company’s Stock Price
      And The Company’s Ability To Attract And Retain Employees




Since
      November 1, 2006, the Company is now subject to the new rules of the Financial
      Accounting Standards Board, SFAS No. 123 (R), "Share-Based Payment," which
      rules
      require it 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. Historically, the Company has compensated
      almost all of its full-time employees, and all of its officers and directors,
      with such share- based compensation awards in the past in order to limit its
      cash expenditures and to attract and retain its employees, officers and
      directors. Accordingly, if the Company continues to grant stock options or
      other
      share-based compensation awards to its officers, directors, employees, and
      consultants, its future earnings, if any, will be reduced (or the Company’s
      future losses will be increased) by the expenses recorded for those grants.
      Since the Company 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. Furthermore, under certain circumstances,
      the Company will in the future have to recognize expenses for options previously
      granted prior to the adoption of SFAS No. 123(R), thereby reducing its future
      net income even if no new options are granted. The adverse effects that the
      new
      accounting rules may have on the Company’s future financial statements may
      reduce the Company’s stock price and make it more difficult for it to attract
      new investors.




18




The
      Company Has No Exclusive Intellectual Property Rights In The Technology Employed
      In Its Products, Which May Limit the Company’s Ability To
      Compete.




The
      Company does not hold any United States or foreign patents and does not have any
      patents pending. In addition, the Company does not have any other exclusive
      intellectual property rights in the technology employed in its products. The
      Company does not actively seek to protect its rights in the technology that
      it
      develops or that the Company’s third-party contract manufacturers develop. In
      addition, these parties share the technologies with other parties, including
      some of the Company’s competitors. Accordingly, competitors can and do sell the
      same products as the Company, and the Company cannot prevent or restrict such
      competition.




Volatility
      of Stock Trading Prices




In
      the
      past several years the market price of the Company’s common stock has fluctuated
      greatly, and the 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:




§
            any
                shortfall in revenues or net income from revenues or net income expected
                by securities analysts




§
            fluctuations
                in the Company’s financial results or the results of other connector and
                communications-related companies, including those of the Company’s direct
                competitors




§
            changes
                in analysts’ estimates of the Company’s financial performance, the
                financial performance of the Company’s competitors, or the financial
                performance of connector and communications-related public companies
                in
                general




§
            general
                conditions in the connector and communications
                industries




§
            changes
                in the Company’s revenue growth rates or the growth rates of the Company’s
                competitors




§
            sales
                of large blocks of the Company’s common
                stock




§
            conditions
                in the financial markets in general




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.




**Item
      3.**  **Controls
      and Procedures**




The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the Company’s 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 this Company’s management,
      including the Company’s Chief Executive Officer and Chief Financial Officer, as
      appropriate, to allow for timely decisions regarding required disclosure. 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 only reasonable assurance of achieving the desired control
      objectives, and management is required to apply its judgment in evaluating
      the
      cost-benefit relationship of possible controls and procedures.




19




As
      required by Securities and Exchange Commission Rule 13a-15(b), the Company
      carried out an evaluation, under the supervision and with the participation
      of
      the Company’s management, including the Company’s Chief Executive Officer and
      the Company’s Chief Financial Officer, of the effectiveness of the design and
      operation of the Company’s disclosure controls and procedures as of the end of
      the fiscal quarter covered by this report. The Company’s Chief Executive Officer
      and Chief Financial Officer concluded that the Company’s disclosure controls and
      procedures were not effective as of July 31, 2007. The Company became aware
      that
      its existing procedures were not sufficient to timely and accurately correct
      the
      material weakness prior to review by the Company’s independent registered public
      accountants. The weakness is related to reports generated by the stock option
      software implemented prior to the end of the third quarter
      by the Company. The Company has notified the software provider and expects
      the
      weakness to be corrected prior to the end of the fourth quarter.




Effective
      November 1, 2006, the Company was required to adopt Statement of Financial
      Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS
      123R”). Prior to the adoption of SFAS 123R, the Company used the intrinsic value
      method to account for stock options granted to employees. The Company has taken
      certain actions to improve the Company’s internal controls over financial
      reporting, including the following:




·
            In
                order to remedy the material weakness in implementing SFAS 123R,
                the
                Company has purchased, and has implemented, a new computer software
                program specifically designed to account for its stock options. In
                addition, the Company has retained additional consultants to provide
                future assistance in addressing the implementation of SFAS 123R.




·
            In
                order to remedy the material weakness related to the Company’s quarterly
                tax provision, the Company retained the services of a CPA firm to
                provide
                assistance in preparing and evaluating the Company’s tax provision
                calculation.




Except
      for the matters discussed above, there has been no change in the Company’s
      internal control over financial reporting during the fiscal quarter ended July
      31, 2007 that has materially affected, or is reasonably likely to materially
      affect, the Company’s internal control over financial reporting.




**Part
      II. OTHER INFORMATION**




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





During
      the nine month period ended July 31, 2007, the Company repurchased the following
      shares:





**Period**
              **(2007)**
            
            **(a)**
              **Total
                Number of shares (or units) purchased**
            
            **(b)**
              **Average
                price paid per share (or unit)**
            
            **(c)**
              **Total
                number of shares (or units) purchased as part of publicly announced
                plans
                or programs**
            
            **(d)**
              **Maximum
                number (or approximate dollar value) of shares (or units) that may
                yet be
                purchased under the plans or programs**April 10
                to April 18
            
            
            68,663
            
            $
            5.82
            
            
            68,663
            
            
            31,337July 19
                to July 31
            
            
            10,129
            
            $
            5.82
            
            
            10,129
            
            
            21,208Total
            
            
            78,792
            
            $
            5.82
            
            
            78,792




20




The
      Company announced on April 4, 2007 that its Board of Directors had authorized
      $600,000 for the repurchase of up to 100,000 shares of the Company’s common
      stock, from time to time, in open market, privately negotiated or block
      transactions at the discretion of the Company’s management, subject to market
      conditions and other factors. As of July 31, 2007, the Company had repurchased
      a
      total of 78,792 shares in the open market.




**Item
      6. Exhibits**




Exhibit


Number




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




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





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




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




21









**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:
                September 14, 2007
            By:
            /s/ Howard F. HillHoward
                F. Hill, President
              Chief
                Executive Officer


Dated:
                  September 14, 2007
              By:
              /s/ James DossJames
                    Doss
                  Acting
                    Chief Financial Officer
  22