UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







Form
10-Q







Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934




For
the quarterly period ended April 30, 2010




Commission
file number:  0-13301










RF
INDUSTRIES, LTD.


(Exact name of registrant as specified
in its charter)




Nevada
              
              88-0168936(State
      or other jurisdiction of incorporation or organization)
              
              (I.R.S.
      Employer Identification No.)7610
      Miramar Road, Building 6000
                San
      Diego, California
              
              92126(Address
      of principal executive offices)
              
              (Zip
      Code)




(858) 549-6340


(Registrant’s
telephone number, including area code)









Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x  No  ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files.) Yes  ̈  No  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
(Check one):




Large
      accelerated filer  ̈
                  Accelerated
      filer  ̈
                  Non-accelerated
      filer  ̈
                  Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): Yes  ̈  No x




The
number of shares of the issuer’s Common Stock, par value $0.01 per share,
outstanding as of June 1, 2010 was 2,850,928.













Part
I. FINANCIAL INFORMATION





Item
1: Financial Statements




RF
INDUSTRIES, LTD.


CONDENSED
BALANCE SHEETS


(UNAUDITED)





April
      30,
                                  2010
                                
                                
                                October
      31,
                                  2009(Note
      1)ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                
                                $
                                736,483
                                
                                
                                $
                                1,225,927Certificates
      of deposit
                                
                                
                                7,325,506
                                
                                
                                
                                6,476,981Trade
      accounts receivable, net of allowance for doubtful accounts of $45,889 and
      $52,892
                                
                                
                                1,748,577
                                
                                
                                
                                2,263,265Inventories
                                
                                
                                4,893,923
                                
                                
                                
                                4,984,921Other
      current assets
                                
                                
                                345,191
                                
                                
                                
                                340,362Deferred
      tax assets
                                
                                
                                478,200
                                
                                
                                
                                478,200TOTAL
      CURRENT ASSETS
                                
                                
                                15,527,880
                                
                                
                                
                                15,769,656Equipment
      and furnishings:Equipment
      and tooling
                                
                                
                                2,383,016
                                
                                
                                
                                2,365,160Furniture
      and office equipment
                                
                                
                                496,826
                                
                                
                                
                                425,3892,879,842
                                
                                
                                
                                2,790,549Less
      accumulated depreciation
                                
                                
                                2,315,041
                                
                                
                                
                                2,224,745TOTAL
                                
                                
                                564,801
                                
                                
                                
                                565,804Long-term
      certificates of deposit
                                
                                
                                738,172
                                
                                
                                
                                -Goodwill
                                
                                
                                137,328
                                
                                
                                
                                137,328Amortizable
      intangible asset, net
                                
                                
                                13,578
                                
                                
                                
                                27,156Note
      receivable from stockholder
                                
                                
                                66,980
                                
                                
                                
                                66,980Other
      assets
                                
                                
                                32,158
                                
                                
                                
                                31,276TOTAL
      ASSETS
                                
                                $
                                17,080,897
                                
                                
                                $
                                16,598,200




2





Item 1: Financial Statements
(continued)




RF
INDUSTRIES, LTD.


CONDENSED
BALANCE SHEETS


(UNAUDITED)





April
      30,
                                2010
                              
                              
                              October
      31,
                                2009(Note
      1)LIABILITIES AND STOCKHOLDERS’
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
                              
                              $
                              169,272
                              
                              
                              $
                              224,974Accrued
      expenses
                              
                              
                              657,782
                              
                              
                              
                              673,080Income
      taxes payable
                              
                              
                              20,064
                              
                              
                              
                              75,134TOTAL
      CURRENT LIABILITIES
                              
                              
                              847,118
                              
                              
                              
                              973,188Deferred
      tax liabilities
                              
                              
                              50,500
                              
                              
                              
                              50,500Other
      long-term liabilities
                              
                              
                              332,804
                              
                              
                              
                              321,030TOTAL
      LIABILITIES
                              
                              
                              1,230,422
                              
                              
                              
                              1,344,718COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS’
      EQUITYCommon
      stock - authorized 10,000,000 shares of $0.01 par value; 2,850,928 and
      2,848,313 shares issued and outstanding
                              
                              
                              28,509
                              
                              
                              
                              28,483Additional
      paid-in capital
                              
                              
                              6,626,338
                              
                              
                              
                              6,502,447Retained
      earnings
                              
                              
                              9,195,628
                              
                              
                              
                              8,722,552TOTAL
      STOCKHOLDERS’ EQUITY
                              
                              
                              15,850,475
                              
                              
                              
                              15,253,482TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                              
                              $
                              17,080,897
                              
                              
                              $
                              16,598,200




See Notes
to Condensed Unaudited Financial Statements


3





Item 1: Financial Statements
(continued)




RF
INDUSTRIES, LTD.


CONDENSED
STATEMENTS OF INCOME


(UNAUDITED)





Three Months Ended April 30
                                                
                                                
                                                Six Months Ended April 302010
                                                
                                                
                                                2009
                                                
                                                
                                                2010
                                                
                                                
                                                2009Net
      sales
                                                
                                                $
                                                3,778,159
                                                
                                                
                                                $
                                                3,524,716
                                                
                                                
                                                $
                                                7,091,030
                                                
                                                
                                                $
                                                7,107,299Cost
      of sales
                                                
                                                
                                                1,821,552
                                                
                                                
                                                
                                                1,802,049
                                                
                                                
                                                
                                                3,504,483
                                                
                                                
                                                
                                                3,738,946Gross
      profit
                                                
                                                
                                                1,956,607
                                                
                                                
                                                
                                                1,722,667
                                                
                                                
                                                
                                                3,586,547
                                                
                                                
                                                
                                                3,368,353Operating
      expenses:Engineering
                                                
                                                
                                                211,889
                                                
                                                
                                                
                                                294,514
                                                
                                                
                                                
                                                405,611
                                                
                                                
                                                
                                                550,239Selling
      and general
                                                
                                                
                                                1,165,957
                                                
                                                
                                                
                                                1,147,488
                                                
                                                
                                                
                                                2,383,690
                                                
                                                
                                                
                                                2,396,279Totals
                                                
                                                
                                                1,377,846
                                                
                                                
                                                
                                                1,442,002
                                                
                                                
                                                
                                                2,789,301
                                                
                                                
                                                
                                                2,946,518Operating
      income
                                                
                                                
                                                578,761
                                                
                                                
                                                
                                                280,665
                                                
                                                
                                                
                                                797,246
                                                
                                                
                                                
                                                421,835Other
      income - interest
                                                
                                                
                                                13,721
                                                
                                                
                                                
                                                43,765
                                                
                                                
                                                
                                                39,794
                                                
                                                
                                                
                                                126,113Income
      before provision for income taxes
                                                
                                                
                                                592,482
                                                
                                                
                                                
                                                324,430
                                                
                                                
                                                
                                                837,040
                                                
                                                
                                                
                                                547,948Provision
      for income taxes
                                                
                                                
                                                262,784
                                                
                                                
                                                
                                                109,817
                                                
                                                
                                                
                                                363,973
                                                
                                                
                                                
                                                170,895Net
      income
                                                
                                                $
                                                329,698
                                                
                                                
                                                $
                                                214,613
                                                
                                                
                                                $
                                                473,067
                                                
                                                
                                                $
                                                377,053Basic
      earnings per share
                                                
                                                $
                                                0.12
                                                
                                                
                                                $
                                                0.07
                                                
                                                
                                                $
                                                0.17
                                                
                                                
                                                $
                                                0.12Diluted
      earnings per share
                                                
                                                $
                                                0.10
                                                
                                                
                                                $
                                                0.07
                                                
                                                
                                                $
                                                0.15
                                                
                                                
                                                $
                                                0.11Basic
      weighted average shares outstanding
                                                
                                                
                                                2,850,928
                                                
                                                
                                                
                                                2,962,620
                                                
                                                
                                                
                                                2,849,850
                                                
                                                
                                                
                                                3,042,660Diluted
      weighted average shares outstanding
                                                
                                                
                                                3,210,312
                                                
                                                
                                                
                                                3,225,956
                                                
                                                
                                                
                                                3,194,862
                                                
                                                
                                                
                                                3,336,811Dividends
      paid
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                94,780




See Notes
to Condensed Unaudited Financial Statements


4





Item 1: Financial Statements
(continued)




RF
INDUSTRIES, LTD.


CONDENSED
STATEMENTS OF CASH FLOWS


SIX
MONTHS ENDED APRIL 30


(UNAUDITED)




2010
                        
                        
                        2009OPERATING
      ACTIVITIES:Net
      income
                        
                        $
                        473,067
                        
                        
                        $
                        377,053Adjustments
      to reconcile net income to net cash provided by operating
      activities:Bad
      debt expense adjustment
                        
                        
                        (7,003
                        )
                        
                        
                        4,956Depreciation
      and amortization
                        
                        
                        103,659
                        
                        
                        
                        132,747Loss
      on disposal of equipment
                        
                        
                        -
                        
                        
                        
                        4,827Stock-based
      compensation expense
                        
                        
                        113,917
                        
                        
                        
                        77,210Changes
      in operating assets and liabilities:Trade
      accounts receivable
                        
                        
                        521,691
                        
                        
                        
                        188,711Inventories
                        
                        
                        90,998
                        
                        
                        
                        242,174Other
      current assets
                        
                        
                        (4,829
                        )
                        
                        
                        (184,387
                        )Other
      long-term assets
                        
                        
                        (882
                        )
                        
                        
                        (6,394
                        )Accounts
      payable
                        
                        
                        (55,702
                        )
                        
                        
                        (125,938
                        )Income
      taxes payable
                        
                        
                        (55,070
                        )
                        
                        
                        (214,408
                        )Accrued
      expenses
                        
                        
                        (5,289
                        )
                        
                        
                        (51,651
                        )Other
      long-term liabilities
                        
                        
                        11,774
                        
                        
                        
                        17,860Net
      cash provided by operating activities
                        
                        
                        1,186,331
                        
                        
                        
                        462,760INVESTING
      ACTIVITIES:Purchase
      of certificates of deposit
                        
                        
                        (3,400,024
                        )
                        
                        
                        (2,117,184
                        )Sale
      of short-term investments
                        
                        
                        1,813,327
                        
                        
                        
                        3,400,303Capital
      expenditures
                        
                        
                        (89,078
                        )
                        
                        
                        (155,807
                        )Net
      cash provided by (used in) investing activities
                        
                        
                        (1,675,775
                        )
                        
                        
                        1,127,312FINANCING
      ACTIVITIES:Purchases
      of treasury stock
                        
                        
                        -
                        
                        
                        
                        (1,415,915
                        )Dividends
      paid
                        
                        
                        -
                        
                        
                        
                        (94,780
                        )Net
      cash used in financing activities
                        
                        
                        -
                        
                        
                        
                        (1,510,695
                        )Net
      increase (decrease) in cash and cash equivalents
                        
                        
                        (489,444
                        )
                        
                        
                        79,377Cash
      and cash equivalents, beginning of period
                        
                        
                        1,225,927
                        
                        
                        
                        1,060,838Cash
      and cash equivalents, end of period
                        
                        $
                        736,483
                        
                        
                        $
                        1,140,215Supplemental
      cash flow information – income taxes paid
                        
                        $
                        425,000
                        
                        
                        $
                        295,000Noncash
      investing and financing activities:Retirement
      of treasury stock
                        
                        $
                        -
                        
                        
                        $
                        1,415,915Stock
      issuance related to contingent liability
                        
                        $
                        10,000
                        
                        
                        $
                        30,000




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-Q. 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 in order to make the information not misleading.
Information included in the balance sheet as of October 31, 2009 has been
derived from, and certain terms used herein are defined in, the audited
financial statements of the Company as of October 31, 2009 included in the
Company’s Annual Report on Form 10-K (“Form 10-K”) for the year ended October
31, 2009 that was previously filed with the Securities and Exchange Commission
(“SEC”). Operating results for the three and six month periods ended April 30,
2010, are not necessarily indicative of the results that may be expected for the
year ending October 31, 2010. 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-K for the year ended
October 31, 2009. The Company has evaluated subsequent events through the date
of filing for this Form 10-Q.




Revenue
Recognition




Four
basic criteria must be met before revenue can be recognized: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred or services
rendered; (3) the fee is fixed and determinable; and (4) collectability is
reasonably assured. The Company recognizes revenue from product sales after
purchase orders are received which contain a fixed price and the products are
shipped. Most of the Company’s products are sold to continuing customers with
established credit histories.





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,
                        2010
                      
                      
                      October 31,
                        2009Raw
      materials and supplies
                      
                      $
                      1,533,590
                      
                      
                      $
                      1,355,504Work
      in process
                      
                      
                      38,158
                      
                      
                      
                      8,105Finished
      goods
                      
                      
                      3,351,114
                      
                      
                      
                      3,685,950Inventory
      reserve
                      
                      
                      (28,939
                      )
                      
                      
                      (64,638
                      )Total
                      
                      $
                      4,893,923
                      
                      
                      $
                      4,984,921





Purchases
of connector products from three major vendors in the six month period ended
April 30, 2010 represented 19%, 18%, and 13% compared to one major vendor who
represented 22% of total inventory purchases for the same period in 2009. The
Company has arrangements with these vendors to purchase products 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. At
April 30, 2010, the effects of the assumed exercise of options to purchase
356,585 shares of the Company’s common stock, at a price range of $4.94 to $7.56
per share, were not included in the computation of diluted per share amounts
because they were anti-dilutive for that purpose. At April 30, 2009, the effects
of the assumed exercise of options to purchase 407,699 shares of the Company’s
common stock, at a price of $3.95 to $7.56 per share, were not included in the
computation of diluted per share amounts because they were anti-dilutive for
that purpose.


6





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




Three Months Ended April 30
                                      
                                      Six Months Ended April 302010
                                      
                                      
                                      2009
                                      
                                      2010
                                      
                                      
                                      2009Weighted
      average shares outstanding for basic net earnings per
share
                                      
                                      
                                      2,850,928
                                      
                                      
                                      
                                      2,962,620
                                      
                                      
                                      
                                      2,849,850
                                      
                                      
                                      
                                      3,042,660Add
      effects of potentially dilutive securities-assumed exercise of stock
      options
                                      
                                      
                                      359,384
                                      
                                      
                                      
                                      263,336
                                      
                                      
                                      
                                      345,012
                                      
                                      
                                      
                                      294,151Weighted
      average shares for diluted net earnings per share
                                      
                                      
                                      3,210,312
                                      
                                      
                                      
                                      3,225,956
                                      
                                      
                                      
                                      3,194,862
                                      
                                      
                                      
                                      3,336,811





Note
4 - Stock-based compensation and equity transactions





The
stock incentive plans provide for the granting of qualified and nonqualified
options to the Company’s officers, directors and employees. Nonqualified stock
options granted during the six month period ended April 30, 2010 vest and are
exercisable immediately and expire in five years from date of grant. There were
no stock options granted during the quarter ended April 30, 2010.  The
Company satisfies the exercise of options by issuing previously unissued common
shares.





The
weighted average fair value of employee stock options granted by the Company in
the six months ended April 30, 2010 and 2009 was estimated to be $1.63 and $1.32
per share, respectively, using the Black-Scholes option pricing model with the
following assumptions:




2010
                        
                        
                        2009Risk-free
      interest rate
                        
                        
                        1.41
                        %
                        
                        
                        1.01
                        %Dividend
      yield
                        
                        
                        0.00
                        %
                        
                        
                        2.96
                        %Expected
      life of the option
                        
                        
                        2.5 years
                        
                        
                        
                        2.5 yearsVolatility
      factor
                        
                        
                        57.67
                        %
                        
                        
                        60.37
                        %




Expected
volatilities are based on historical volatility of the Company’s stock and other
factors. The Company used the simplified method to calculate the expected life
of the 2010 option grants. The expected life represents the period of time that
options granted are expected to be outstanding. The risk-free rate is based on
the U.S. Treasury rate with a maturity date corresponding to the options’
expected life. The dividend yield is based upon the historical dividend
yield.





Issuances
of common stock by the Company




During
the six months ended April 30, 2010, the Company issued 2,615 shares of common
stock valued at approximately $10,000 to the former owner of RadioMobile to
fully satisfy the earn-out contingency accrual. This transaction related to the
RadioMobile Purchase Agreement earn-out contingency as more fully described in
Note 11 of the Company’s Annual Report 10-K for the year ended October 31,
2009.





Company
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-K for the year ended October 31, 2009. A summary of the
status of the options granted under the Company’s stock option plans as of April
30, 2010 and the changes in options outstanding during the six months then ended
is presented in the table that follows:




Shares
                                        
                                        
                                        Weighted
                                          Average
                                          Exercise PriceOutstanding
      at November 1, 2009
                                        
                                        
                                        1,243,306
                                        
                                        
                                        $
                                        3.74Options
      granted
                                        
                                        
                                        16,000
                                        
                                        
                                        $
                                        4.49Options
      exercised
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        -Options
      canceled or expired
                                        
                                        
                                        (2,000
                                        )
                                        
                                        $
                                        6.76Options
      outstanding at April 30, 2010
                                        
                                        
                                        1,257,306
                                        
                                        
                                        $
                                        3.74Options
      exercisable at April 30, 2010
                                        
                                        
                                        921,909
                                        
                                        
                                        $
                                        3.70Options
      vested and expected to vest at April 30, 2010
                                        
                                        
                                        1,249,021
                                        
                                        
                                        
                                        3.72




7





Weighted
average remaining contractual life of options outstanding as of April 30, 2010:
4.67 years





Weighted
average remaining contractual life of options exercisable as of April 30, 2010:
4.43 years





Weighted
average remaining contractual life of options vested and expected to vest as of
April 30, 2010: 4.64 years





Aggregate
intrinsic value of options outstanding at April 30, 2010:
$2,273,079





Aggregate
intrinsic value of options exercisable at April 30, 2010:
$1,862,863





Aggregate
intrinsic value of options vested and expected to vest at April 30, 2010:
$2,258,100





As of
April 30, 2010, $508,306 of expense with respect to non-vested share-based
arrangements has yet to be recognized which is expected to be recognized over a
weighted average period of 4.79 years.





Stock
Option Expense





During
the six-month period ended April 30, 2010 and April 30, 2009, stock based
compensation expense totaled $113,712 and $77,210 respectively. In the
three-month period ended April 30, 2010 and April 30, 2009, stock based
compensation expense totaled $41,657 and $27,564 respectively. For the six
months ended April, 2010 and 2009, stock-based compensation classified in cost
of sales amounted to $17,243 and $6,615 and stock-based compensation classified
in selling and general expense amounted to $96,469 and $70,595
respectively.





Note
5 - Concentration of Credit Risk





One
customer accounted for approximately 22% and 19% of the Company’s net sales for
the three and six month periods ended April 30, 2010, respectively. One customer
accounted for approximately 14% of the Company’s net sales for the three month
period ended April 30, 2009, while two customers accounted for 13% and
10%  of net sales for the six-month period ended April 30, 2009.
Although these customers have been on-going major customers of the Company
continuously during the past ten and thirteen years respectively, the written
agreements with these customers do not have any minimum purchase obligations and
the customers could stop buying the Company’s products at any time and for any
reason. A reduction, delay or cancellation of orders from these customers or the
loss of these customers could significantly reduce the Company’s revenues and
profits.




Note
6 - Segment Information





The
Company aggregates operating divisions into operating segments which have
similar economic characteristics and divisions are similar in the majority of
the following areas: (1) the nature of the product and services; (2) the nature
of the production process; (3) the type or class of customer for their products
and services; (4) the methods used to distribute their products or services; and
(5) if applicable, the nature of the regulatory environment. The Company has
three segments - RF Connector and Cable Assembly, Medical Cabling and
Interconnector, and RF Wireless based upon this evaluation.





The RF
Connector and Cable Assembly segment is comprised of three divisions, the
Medical Cabling and Interconnector is comprised of one division while the RF
Wireless segment is comprised of two. The three divisions that meet the
quantitative thresholds for segment reporting are Connector / Cable Assembly,
Bioconnect and RF Neulink. Each of the other divisions aggregated into these
segments have similar products that are marketed to their respective customer
base; production and product development processes are similar in nature. The
specific customers are different for each division; however, there is some
overlapping of product sales to them. The methods used to distribute products
are similar within each division aggregated.





Management
identifies the Company’s segments based on strategic business units that are, in
turn, based along market lines. These strategic business units offer products
and services to different markets in accordance with their customer base and
product usage. For segment reporting purposes, the Company aggregates the
Connector and Cable Assembly, Aviel Electronics, and Oddcables.com (formerly
known as Worswick) divisions into the RF Connector and Cable Assembly segment
while RF Neulink and RadioMobile are part of the RF Wireless segment. The
Bioconnect division makes up the Company’s Medical Cabling and Interconnector
segment.


8





As
reviewed by the Company’s chief operating decision maker, the Company evaluates
the performance of each segment based on income or loss before income taxes. The
Company charges depreciation and amortization directly to each division within
the segment. All stock based compensation is attributed to the RF Connector and
Cable Assembly segment. Inventory, fixed assets, goodwill and intangible assets
are the only assets identified by segment. Except as discussed above, the
accounting  policies for segment reporting are the same as for the
Company as a whole.





Substantially
all of the Company’s operations are conducted in the United States; however, the
Company derives a portion of its revenue from export sales. 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, 2010 and 2009:




Three Months Ended April 30
                          
                          
                          Six Months Ended April 302010
                          
                          
                          2009
                          
                          
                          2010
                          
                          
                          2009United
      States
                          
                          $
                          3,375,827
                          
                          
                          $
                          2,979,452
                          
                          
                          $
                          6,182,542
                          
                          
                          $
                          5,753,749Foreign
      countries:Israel
                          
                          
                          157,381
                          
                          
                          
                          173,570
                          
                          
                          
                          348,015
                          
                          
                          
                          685,718All
      other
                          
                          
                          244,951
                          
                          
                          
                          371,694
                          
                          
                          
                          560,473
                          
                          
                          
                          667,832$
                          3,778,159
                          
                          
                          $
                          3,524,716
                          
                          
                          $
                          7,091,030
                          
                          
                          $
                          7,107,299





Net
sales, income (loss) before provision for income taxes and other related segment
information for the three months ended April 30, 2010 and 2009 are as
follows:





2010
                  
                  RF Connectors
                    and
                    Cable Assembly
                  
                  
                  Medical
                    Cabling and
                    Interconnector
                  
                  
                  RF
                    Wireless
                  
                  
                  Corporate
                  
                  
                  TotalNet
      sales
                  
                  $
                  3,271,053
                  
                  
                  $
                  424,618
                  
                  
                  $
                  82,488
                  
                  
                  
                  
                  
                  $
                  3,778,159Income
      (loss) before provision for income taxes
                  
                  
                  674,605
                  
                  
                  
                  95,048
                  
                  
                  
                  (190,892)
                  
                  
                  $
                  13,721
                  
                  
                  
                  592,482Depreciation
      and amortization
                  
                  
                  41,171
                  
                  
                  
                  5,645
                  
                  
                  
                  7,174
                  
                  
                  
                  
                  
                  
                  
                  53,990207
      2009Net
      sales
                  
                  $
                  2,936,842
                  
                  
                  
                  303,414
                  
                  
                  $
                  284,460
                  
                  
                  $
                  
                  
                  
                  $
                  3,524,716Income
      (loss) before provision for income taxes
                  
                  
                  441,659
                  
                  
                  
                  (17,961)
                  
                  
                  
                  (143,033)
                  
                  
                  
                  43,765
                  
                  
                  
                  324,430Depreciation
      and amortization
                  
                  
                  54,836
                  
                  
                  
                  3,875
                  
                  
                  
                  11,616
                  
                  
                  
                  
                  
                  
                  
                  70,327




Net
sales, income (loss) before provision for income taxes and other related segment
information for the six months ended April 30, 2010 and 2009 are as
follows:





2010
                  
                  RF
      Connectors
                    and
                    Cable Assembly
                  
                  
                  Medical
                    Cabling
      and
                    Interconnector
                  
                  
                  RF
                    Wireless
                  
                  
                  Corporate
                  
                  
                  TotalNet
      sales
                  
                  $
                  6,172,929
                  
                  
                  $
                  782,806
                  
                  
                  $
                  135,295
                  
                  
                  
                  
                  
                  $
                  7,091,030Income
      (loss) before provision for income taxes
                  
                  
                  1,017,305
                  
                  
                  
                  143,440
                  
                  
                  
                  (363,499)
                  
                  
                  $
                  39,794
                  
                  
                  
                  837,040Depreciation
      and amortization
                  
                  
                  79,836
                  
                  
                  
                  9,685
                  
                  
                  
                  14,138
                  
                  
                  
                  
                  
                  
                  
                  103,6592009Net
      sales
                  
                  $
                  6,065,099
                  
                  
                  
                  576,571
                  
                  
                  $
                  465,629
                  
                  
                  $
                  
                  
                  
                  $
                  7,107,299Income
      (loss) before provision for income taxes
                  
                  
                  742,008
                  
                  
                  
                  (33,756)
                  
                  
                  
                  (286,417)
                  
                  
                  
                  126,113
                  
                  
                  
                  547,948Depreciation
      and amortization
                  
                  
                  106,751
                  
                  
                  
                  7,296
                  
                  
                  
                  18,700
                  
                  
                  
                  
                  
                  
                  
                  132,747




9





Note 7 - Income tax
provision




The
income tax provision reflected in the accompanying unaudited condensed statement
of income for the three and six months ended April 30, 2010 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 6%. Interim tax provisions are determined
using an estimate of the annual effective tax rate. As of April 30, 2010, the
Company estimated that its effective annual tax rate for the year ending October
31, 2010 will be approximately 43.5% which is above the expected statutory rate
primarily due to state income taxes, net of federal benefit.





The
provision for income taxes during the six-month period ended April 30, 2010 was
$363,973 (or an effective tax rate of approximately 43.5%), compared to $170,895
in the six-month period ended April 30, 2009 (or an effective tax rate of
approximately 31.0%). The increase in the tax rate in the six-month period ended
April 30, 2010 is primarily due to the Company’s recognition of a one-time tax
benefit of approximately $39,000 in the prior comparable period that related to
a domestic production activity adjustment. Without this adjustment, the
effective tax rate for the six month period ended April 30, 2009 would have been
higher and comparable to the 2010 rate.




Note
8 - Amortizable Intangible assets:





Amortizable
intangible assets are comprised of the following:




April 30, 2010
                                
                                
                                October 31, 2009Intangible
      assetsSoftware
                                
                                
                                47,522
                                
                                
                                
                                47,522Accumulated
      amortization
                                
                                
                                (39,601
                                )
                                
                                
                                (31,681
                                )7,921
                                
                                
                                
                                15,841Customer
      list
                                
                                
                                33,945
                                
                                
                                
                                33,945Accumulated
      amortization
                                
                                
                                (28,288
                                )
                                
                                
                                (22,630
                                )5,657
                                
                                
                                
                                11,315Totals
                                
                                $
                                13,578
                                
                                
                                $
                                27,156





Note
9 - Goodwill:





As of
April 30, 2010 and October 31, 2009, the $137,328 goodwill balance related
solely to the Aviel division. Management believes this goodwill balance is not
currently impaired. However, at October 31, 2009 the estimated fair value of the
goodwill balance exceeded the carrying value of the Aviel reporting division by
2%. This indicates that the fair value of the goodwill could be less than the
associated carrying value at some point in the future. The key assumptions that
drive the fair value estimate are sales. For the three and six month periods
ended April 30, 2010, and primarily due to the current effects of the global
recession, the Aviel reporting unit recorded net income of approximately $3,000
and a net loss of $1,000, respectively. Management believes that the Aviel
division will be profitable in future years; however, there is no assurance that
this will in fact be the case. Future recurring losses at the Aviel reporting
unit could cause an impairment charge to goodwill in the future.





Note
10 - Related party transactions:





The note
receivable from stockholder of $66,980 at April 30, 2010 and October 31, 2009 is
due from the President of the Company, bears interest at 6%, payable annually,
and has no specific due date. The note is collateralized by a lien on certain
personal property. Interest income relating to the note receivable was
approximately $2,000 for the six month period ended April 30, 2010 and
2009.


10




Note
11- Accrued expenses and other long-term liabilities




Accrued
expenses consist of the following:




April 30, 2010
                  
                  
                  October 31, 2009Wages
      payable
                  
                  $
                  391,798
                  
                  
                  $
                  426,596Accrued
      receipts
                  
                  
                  192,496
                  
                  
                  
                  183,212Other
      current liabilities
                  
                  
                  73,488
                  
                  
                  
                  63,272Totals
                  
                  $
                  657,782
                  
                  
                  $
                  673,080





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




Other
long-term liabilities consist of the following:




April 30, 2010
                  
                  
                  October 31, 2009Tax
      related liabilities
                  
                  $
                  241,344
                  
                  
                  $
                  241,344Deferred
      lease liability
                  
                  
                  91,460
                  
                  
                  
                  79,686Totals
                  
                  $
                  332,804
                  
                  
                  $
                  321,030





Deferred
lease liabilities represent the excess of recognized rent expense over scheduled
lease payments.





11





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-Q 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-Q. 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-K for the year ended October 31, 2009
and other reports and filings made with the Securities and Exchange
Commission.





Critical
Accounting Policies





The
condensed financial statements of the Company are prepared in conformity with
accounting principles generally accepted in the United States of America
(“GAAP”). One of the accounting policies that involves significant judgments and
estimates concerns our 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, we 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, we
determine the amounts of these allowances. Because inventories have, during the
past few years, represented approximately one-third of our total assets, any
reduction in the value of our inventories would require us to take write-offs
that would affect our net worth and future earnings.





Another
accounting policy that involves significant judgments and estimates is our
accounts receivable allowance valuation. The Company routinely assesses the
financial strength of its customers and maintains an allowance for doubtful
accounts that management believes will adequately provide for credit
losses.





Another
critical accounting policy that involves significant judgments and estimates is
management’s assessment of goodwill for impairments. We review our goodwill for
impairment annually in the fourth quarter at the reporting unit level. We also
analyze each quarter whether any indicators of impairment exist.





The
Company uses the Black-Scholes model to value the stock option grants which
involves significant judgments and estimates.





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 RF connectors and cable assemblies
represented 87% of the Company’s net sales during both the three and six month
periods ended April 30, 2010, 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 believes 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, 2010, the amount
      of cash and cash equivalents was equal to $736,483 in the aggregate and
      the Company had $8,063,678 of investments in certificates of
      deposit.





·
            As of April 30, 2010, the Company
      had $15,527,880 in current assets, and $847,118 in current
      liabilities.




12





·
            As of April 30, 2010, the Company
      had no outstanding indebtedness (other than accounts payable, accrued
      expenses and income taxes
payable).





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.





The
Company recognized net income of $473,067 for the six months ended April 30,
2010. The Company used $55,070 to pay taxes, $4,829 for prepaid expenses and
deposits, and $55,702 to reduce accounts payables. These outlays were
substantially offset by increased collections of accounts receivable of $521,691
and a decrease in purchases of inventory of $90,998, which resulted in cash
provided from operating activities of $1,186,331 during the six months ended
April 30, 2010. The Company liquidated $1,813,327 of short term investments,
which consisted entirely of certificates of deposit, during the six months ended
April 30, 2010 and invested those funds, plus some of its other cash resources,
into $3,400,024 of new certificates of deposit. The Company spent $89,078 on
capital expenditures during the six months ended April 30, 2010. As a result of
these investment activities, the Company used $1,675,775 in investing
activities. The Company’s overall cash position decreased by $489,444 during the
six months ended April 30, 2010 primarily because it shifted some of its cash
position into higher interest bearing certificates of deposit.





Trade
accounts receivable (net of allowances for doubtful accounts) at April 30, 2010
decreased approximately 23%, or by $514,688 to $1,748,577 compared to the
October 31, 2009 balance of $2,263,265. The decrease in accounts receivable is
due to improved receivables management, tighter credit policies, and collection
efforts by the Company.





Inventories
at April 30, 2010 decreased by 2%, or $90,998 to $4,893,923 compared to
$4,984,921 at October 31, 2009.  In order to obtain better
pricing on our inventories, we make larger, less frequent inventory
purchases.  Accordingly, inventory fluctuations reflect, in part, the
timing of our inventory purchases.  In addition, we also adjust our
inventory balances and our inventory purchases to reflect changes in actual and
anticipated sales.





Other
current assets, including prepaid expenses and deposits, increased $4,829 to
$345,191 as of April 30, 2010, from $340,362 on October 31, 2009 mainly as
a result of the renewal of certain insurance contracts as well as the addition
of prepaid inventory purchases.





Accounts
payable at April 30, 2010 decreased $55,702 to $169,272 from $224,974 on October
31, 2009. The change in accounts payable is related to a decrease in the
purchase of inventories during the current period and to the timing of our
payments.





Net cash
used in investing activities was $1,675,775 for the six months ended April 30,
2010 and was attributable to the purchase of $3,400,024 of certificates of
deposit, the redemption of $1,813,327 of certificates of deposit, and $89,078 of
capital expenditures.





As of April 30, 2010, we had a total of
$736,483 of cash and cash equivalents compared to a total of $1,225,927 of cash
and cash equivalents as of October 31, 2009. However, the amount of investments
in certificates of deposit increased by $1,586,697 to $8,063,678 from $6,476,981
on October 31, 2009 due to an increase in investments of certificates of
deposit. Collectively, the amount of cash and certificates of deposit that we
held on April 30, 2010 increased by $1,097,253 from the amount held on October
31, 2009 due to the cash flows from operations and cash flows from investing
activities during the fiscal quarter ended April 30, 2010. The Company had working capital of
$14,680,762 and a current ratio of approximately 18:1.





Results
Of Operations





Three
Months Ended April 30, 2010 vs. Three Months Ended April 30, 2009





Net sales
in the current fiscal quarter ended April 30, 2010, increased 7%, or $253,443 to
$3,778,159 from $3,524,716 in the comparable fiscal quarter of prior year, due
to increased sales at both the Connector and Cable and Medical Cabling segments.
Sales of connectors and cable assemblies increased from the prior year’s period
due to improved economic conditions.  Sales of our Medical Cabling and
Interconnect segment also increased significantly by $121,204.  The
increases in sales in both the Connector and Cable and Medical Cabling segments
were substantially offset by a $201,972 decrease in sales in our RF Wireless
segment.  Our RF Neulink division of the RF Wireless segment has been
developing a new wireless radio modem that it anticipates will be released later
this year, which product is expected to increase sales of the RF Wireless
division.  Our RadioMobile division further negatively impacted the
results of the RF Wireless segment due to lack of sales of its systems to its
target market (mostly municipalities and government agencies) due in part to the
effects of the economic downturn on the budgets of governmental
entities.





13





The
increase in domestic sales was partially offset by decreased foreign
sales.  Foreign sales during the fiscal quarter ended April 30, 2010
decreased by $142,932 to $402,332 compared to foreign sales of $545,264 during
the fiscal quarter ended April 30, 2009. Foreign sales represented approximately
11% and 15% of the Company’s net sales during the fiscal quarters ended April
30, 2010 and 2009, respectively. The decrease in foreign sales is primarily due
to a decrease in cable assembly sales to one major international customer in
Israel.





The
Company’s gross profit as a percentage of sales increased 3% to 52% during the
current fiscal quarter compared to 49% in the comparable fiscal quarter of prior
year.  The Company operates in three segments.  Although the
gross profit margins of the RF Connector and Cable Assembly and the Medical
Cabling and Interconnector segments increased by 3% and 17% respectively, the
gross margin of the RF Wireless segment decreased 47% to an insignificant gross
margin from the prior comparable quarter.  This was due to a decrease
in sales of wireless radio modems, which caused net sales to decrease by
$201,972 to $82,488 from $284,460 in the prior comparable period.  The
Company was unable to reduce its fixed cost of goods in the RF Wireless segment
to match the decrease in sales in that segment.  The gross profit
margin of the Medical Cabling and Interconnector segment increased by 17% to 39%
compared with 22% in the prior comparable quarter.  This was due to an
increase in sales of $121,204 from the prior comparable quarter and an increase
of $21,761 in cost of goods sold from the prior comparable quarter. During the
second quarter of fiscal 2010, the Company’s fixed component cost of labor was
lower than in the prior comparable quarter of fiscal 2009, which caused an
increase in gross margins in its RF Connector and Cable Assembly and the Medical
Cabling and Interconnector segments.  Sales at the RF Connector and
Cable assembly segment accounted for approximately 87% of the Company’s total
sales and 81% of the total cost of goods sold in the current three month period,
compared to 83% of the Company’s total sales and 78% of the total cost of goods
sold in the comparable quarter of prior year.





Engineering
expenses decreased 28%, or $82,625, to $211,889 from $294,514 in the comparable
quarter of the prior year due to certain projects nearing completion at the RF
Wireless division and related decreases in contract labor expense.





Selling
and general expenses remained mostly unchanged, increasing by $18,469 to
$1,165,957 from $1,147,488 in the comparable quarter of the prior fiscal
year.





Other
income for the second quarter of 2010 decreased $30,044 compared to the same
period in the prior year due to lower investment interest income reflecting a
decrease in interest rates on the Company’s investments in certificates of
deposit.





As a
result of the increase in revenues and the increase in gross profit as a
percentage of sales, income before the provision for income taxes during the
fiscal quarter ended April 30, 2010 increased by $268,052 to $592,482. Income
before provision for income taxes for the fiscal quarter ended April 30, 2009
was $324,430.





The
provision for income taxes during the second fiscal quarter of 2010 was $262,784
(or a combined estimated Federal and state income tax rate of approximately
43.5%), compared to $109,817 in the fiscal quarter ended April 30, 2009 (or a
combined estimated Federal and state income tax rate of approximately 34%). The
9.5% increase in the combined statutory Federal and state tax rate in the second
fiscal quarter of 2010 compared with the rate of 34% of the prior comparable
quarter of 2009 is the result of the difference between income before taxes for
financial reporting purposes and income for tax reporting purposes. The
significant increase in the tax rate in the three month period ended April 30,
2010 is primarily due to the Company’s recognition of a one-time tax benefit of
approximately $7,000 in the prior comparable quarter that related to a domestic
production activity adjustment. Without this adjustment, the effective tax rate
for the three month period ended April 30, 2009 would have been comparable to
the 2010 rate.





Net sales
increased in the second fiscal 2010 quarter by $253,443 compared to prior year’s
fiscal period, and gross profit increased  by $233,940 due to an
overall increase in gross margins. The Company’s ability to decrease its
engineering expenses by $82,625 and keep its selling and general expenses
approximately consistent with the prior comparable quarter resulted in an
increase in the Company’s operating income for the second fiscal quarter of 2010
(operating income increased to $578,761 from prior comparable quarter from
$280,665). The increase in operating income was offset by lower interest income
and higher income taxes. Accordingly, net income for the fiscal quarter ended
April 30, 2010 was $329,698 compared to $214,613 for the same period last
year.





Six
Months Ended April 30, 2010 vs. Six Months Ended April 30, 2009





Net sales
in the six month period ended April 30, 2010, were essentially unchanged from
the six month period in 2009.  Sales for the six months ended on April
30, 2010 decreased by $16,269 to $7,091,030 from $7,107,299 in the comparable
fiscal period of prior year.  Sales in both the Connector and Cable
and Medical Cabling and Interconnector segments increased during the 2010
six-month period compared to the 2009 six-month period as the economy improved
and demand of RF products increased.  The increases in those two
segments were offset by a significant decrease in sales in 2010 in the third
segment, the RF Wireless division.  Sales at the RF Wireless segment
decreased from the prior year’s period due to a decrease in the sale of RF
Neulink’s radio modems and minimal sales generated by the RadioMobile division
of that segment.   In the 2009 period, RF Neulink completed a
larger sale of its radio transponders to the U.S. military.  In order
to attract increased interest in its radio modems, the RF Wireless division has
been developing a new radio modem that it expects to release later this
year.





14





The
increase in domestic sales was partially offset by decreased foreign
sales.  Foreign sales during the six month period ended April 30, 2010
decreased by $445,062 to $908,488 compared to foreign sales of $1,353,550 during
the six month period ended April 30, 2009. Foreign sales represented
approximately 13% and 19% of the Company’s net sales during the six month period
ended April 30, 2010 and 2009, respectively. The decrease in foreign sales is
primarily due to cable assembly sales to one major international customer in
Israel.





The
Company’s gross profit as a percentage of sales increased 4% to 51% during the
six month period ended April 30, 2010 compared to 47% in the comparable six
month period of prior year.  The Company operates in three
segments.  Although the gross profit margins of the RF Connector and
Cable Assembly and the Medical Cabling and Interconnector segments increased by
3% and 20% respectively, the gross margin of the RF Wireless segment decreased
43% to a negative gross margin from the prior comparable six month period ended
April 30, 2009.  This was due primarily to a decrease in sales of
wireless radio modems, which caused net sales to decrease by $330,334 to
$135,295 from $465,629 in the prior comparable six month period
ended.  The Company was unable to reduce its fixed cost of goods in
the RF Wireless segment to match the decrease in sales in that
segment.  The gross profit margin of the Medical Cabling
and Interconnector segment increased by 20% to 36% compared with 16% in the
prior comparable six month period ended April 30, 2009.  This was due
to an increase in sales of $206,235 from the prior comparable quarter coupled
with an increase of $17,619 in cost of goods sold from the prior comparable
quarter. During the six-month period ended April 30, 2010, the Company’s fixed
component cost of labor was lower than in the prior comparable period of fiscal
2009, which caused an increase in gross margins in its segments. Sales of the RF
Connector and Cable assembly segment accounted for approximately 87% of the
Company’s total sales and 82% of the total cost of goods sold in the current six
month period, compared to 85% of the Company’s total sales and 80% of the total
cost of goods sold in the comparable six month period of prior
year.





Engineering
expenses decreased 26% or $144,628 to $405,611 from $550,239 in the comparable
six month period of the prior year due to certain projects nearing completion at
the RF Wireless division and related decreases in contract labor
expense.





Selling
and general expenses was unchanged, decreasing insignificantly by 1% or $12,589
to $2,383,690 from $2,396,279 in the comparable six month period of the prior
year. We have actively monitored our selling and general expenses, which is
reflected in the insignificant change in these expenses.





Other
income for the six months ended April 30, 2010 decreased $86,319 compared with
the same six month period of the prior year due to lower investment interest
income reflecting a decrease in interest rates on the Company’s investments in
certificates of deposit.





As a
result of the increase in revenues, the increase in gross profit as a percentage
of sales, the decrease in engineering expenses, and the decrease in selling and
general expenses, income before provision for income taxes during the six months
ended April 30, 2010 increased by 53% or $289,092 to $837,040 from $547,948 in
the comparable six month period of the prior year.





The
provision for income taxes during the six months ended April, 30 2010 was
$363,973 (or a combined estimated Federal and state income tax rate of
approximately 43.5%), compared to $170,895 in the six months ended April 30,
2009 (or a combined estimated Federal and state income tax rate of approximately
31%). The increase in the tax rate in the six month period ended April 30, 2010
compared to prior comparable period is primarily due to the Company’s
recognition of a one-time tax benefit of approximately $39,000 in the prior
comparable period that related to a domestic production activity adjustment.
Without this adjustment, the effective tax rate for the six month period ended
April 30, 2009 would have been comparable to the 2010 rate.





The minor
decrease in sales in the six-month period ended April 30, 2010 compared to prior
year’s six month period was offset by an overall increase in gross margins,
which resulted in a $218,194 increase in gross profits. The increase in gross
profits was supplemented by a slight decrease in this year’s selling and general
expenses.  As a result, the Company’s operating income for the six
months ended April 30, 2010 increased by $375,411 to $797,246 from the prior
comparable six month period.  The increase in operating income was
partially offset by lower interest income and higher income taxes. However, net
income for the six-month period ended April 30, 2010 was $473,067 compared to
$377,053 for the same period of the prior year.





Item 3.  Quantitative and
Qualitative Disclosures about Market Risk





Not
applicable




15




Item 4. 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.





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. Based on the foregoing, the Company’s
Chief Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures were effective as of April 30,
2010.





There has
been no change in the Company’s internal control over financial reporting during
the quarter ended April 30, 2010 that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.





Part II. OTHER
INFORMATION





Item
1.  Legal Proceedings




Nothing
to report.




Item
1A.  Risk Factors




The
discussion of our business and operations should be read together with the risk
factors contained in Item 1A of our Annual Report on Form 10-K for the
fiscal year ended October 31, 2009 filed with the SEC, which describe
various risks and uncertainties to which we are or may become subject. These
risks and uncertainties have the potential to affect our business, financial
condition, results of operations, cash flows or prospects in a material and
adverse manner.





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





Unregistered Sales of Equity
Securities. In January 2010, the Company issued 2,615 shares of its
common stock to RadioMobile, Inc. as additional consideration under an earn-out
provision for the RadioMobile assets that the Company acquired in August 2007.
The foregoing securities were issued without the use of a placement agent or
underwriter and were exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) thereof.





Item
3.  Defaults upon Senior Securities




Nothing
to report.




Item
4.  RESERVED




Item
5.  Other Information




Nothing
to report.





16




Item
6. Exhibits





ExhibitNumber31.1:
                        
                        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
  2002.99.1:
                        
                        Press
      Release dated June 8, 2010 announcing the financial results for the fiscal
      quarter ending April 30,
2010.




17




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
      8, 2010
                By:
                /s/ Howard F. HillHoward
      F. Hill, PresidentChief
      Executive OfficerDated: June
      8, 2010
                By:
                /s/ James DossJames
      DossChief
      Financial Officer




18