UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








Form
10-Q







x
              Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act
      of 1934For
      the quarterly period ended April 30,
2009




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 o




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




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 o
            Accelerated
      filer o
            Non-accelerated
      filer o
            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 o  No x




The
number of shares of the issuer’s Common Stock, par value $0.01 per share,
outstanding as of June 1, 2009 was 2,876,439.













Part
I. FINANCIAL INFORMATION





Item
1: Financial Statements




RF
INDUSTRIES, LTD.


CONDENSED
BALANCE SHEETS


(UNAUDITED)





April
      30,
                                                2009
                                              
                                              
                                              October
      31,
                                                2008(Note
      1)ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                              
                                              $
                                              1,140,215
                                              
                                              
                                              $
                                              1,060,838Certificates
      of deposit
                                              
                                              
                                              5,580,592
                                              
                                              
                                              
                                              6,315,864Investments
      in available-for-sale securities
                                              
                                              
                                              
                                              
                                              
                                              
                                              547,847Trade
      accounts receivable, net of allowance for doubtful accounts of $48,921 and
      $46,775
                                              
                                              
                                              1,877,681
                                              
                                              
                                              
                                              2,071,349Inventories
                                              
                                              
                                              5,707,534
                                              
                                              
                                              
                                              5,949,708Other
      current assets
                                              
                                              
                                              401,830
                                              
                                              
                                              
                                              217,443Deferred
      tax assets
                                              
                                              
                                              542,100
                                              
                                              
                                              
                                              542,100TOTAL
      CURRENT ASSETS
                                              
                                              
                                              15,249,952
                                              
                                              
                                              
                                              16,705,149Equipment
      and furnishings:Equipment
      and tooling
                                              
                                              
                                              2,339,518
                                              
                                              
                                              
                                              2,205,525Furniture
      and office equipment
                                              
                                              
                                              389,446
                                              
                                              
                                              
                                              377,2862,728,964
                                              
                                              
                                              
                                              2,582,811Less
      accumulated depreciation
                                              
                                              
                                              2,131,293
                                              
                                              
                                              
                                              2,016,951TOTALS
                                              
                                              
                                              597,671
                                              
                                              
                                              
                                              565,860Goodwill
                                              
                                              
                                              347,091
                                              
                                              
                                              
                                              347,091Amortizable
      intangible asset, net
                                              
                                              
                                              40,734
                                              
                                              
                                              
                                              54,311Note
      receivable from stockholder
                                              
                                              
                                              66,980
                                              
                                              
                                              
                                              66,980Other
      assets
                                              
                                              
                                              34,776
                                              
                                              
                                              
                                              28,382TOTAL
      ASSETS
                                              
                                              $
                                              16,337,204
                                              
                                              
                                              $
                                              17,767,773




2


Item 1: Financial Statements
(continued)




RF
INDUSTRIES, LTD.


CONDENSED
BALANCE SHEETS


(UNAUDITED)





April
      30,
                                            2009
                                          
                                          
                                          October
      31,
                                            2008(Note
      1)LIABILITIES AND STOCKHOLDERS’
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
                                          
                                          $
                                          203,571
                                          
                                          
                                          $
                                          329,509Accrued
      expenses
                                          
                                          
                                          677,072
                                          
                                          
                                          
                                          760,762Income
      taxes payable
                                          
                                          
                                          18,519
                                          
                                          
                                          
                                          232,927TOTAL
      CURRENT LIABILITIES
                                          
                                          
                                          899,162
                                          
                                          
                                          
                                          1,323,198Deferred
      tax liabilities
                                          
                                          
                                          105,700
                                          
                                          
                                          
                                          105,700Other
      long-term liabilities
                                          
                                          
                                          235,045
                                          
                                          
                                          
                                          217,185TOTAL
      LIABILITIES
                                          
                                          
                                          1,239,907
                                          
                                          
                                          
                                          1,646,083COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS’
      EQUITYCommon
      stock - authorized 10,000,000 shares of $0.01 par value; 2,898,939 and
      3,226,264 shares issued and outstanding
                                          
                                          
                                          28,989
                                          
                                          
                                          
                                          32,263Additional
      paid-in capital
                                          
                                          
                                          6,438,611
                                          
                                          
                                          
                                          6,411,810Retained
      earnings
                                          
                                          
                                          8,629,697
                                          
                                          
                                          
                                          9,677,617TOTAL
      STOCKHOLDERS’ EQUITY
                                          
                                          
                                          15,097,297
                                          
                                          
                                          
                                          16,121,690TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                                          
                                          $
                                          16,337,204
                                          
                                          
                                          $
                                          17,767,773




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 30,2009
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        2009
                                                        
                                                        
                                                        2008Net
      sales
                                                        
                                                        $
                                                        3,524,716
                                                        
                                                        
                                                        $
                                                        4,507,879
                                                        
                                                        
                                                        $
                                                        7,107,299
                                                        
                                                        
                                                        $
                                                        8,334,445Cost
      of sales
                                                        
                                                        
                                                        1,802,049
                                                        
                                                        
                                                        
                                                        2,147,264
                                                        
                                                        
                                                        
                                                        3,738,946
                                                        
                                                        
                                                        
                                                        4,102,757Gross
      profit
                                                        
                                                        
                                                        1,722,667
                                                        
                                                        
                                                        
                                                        2,360,615
                                                        
                                                        
                                                        
                                                        3,368,353
                                                        
                                                        
                                                        
                                                        4,231,688Operating
      expenses:Engineering
                                                        
                                                        
                                                        294,514
                                                        
                                                        
                                                        
                                                        224,472
                                                        
                                                        
                                                        
                                                        550,239
                                                        
                                                        
                                                        
                                                        496,864Selling
      and general
                                                        
                                                        
                                                        1,147,488
                                                        
                                                        
                                                        
                                                        1,330,084
                                                        
                                                        
                                                        
                                                        2,396,279
                                                        
                                                        
                                                        
                                                        2,661,627Totals
                                                        
                                                        
                                                        1,442,002
                                                        
                                                        
                                                        
                                                        1,554,556
                                                        
                                                        
                                                        
                                                        2,946,518
                                                        
                                                        
                                                        
                                                        3,158,491Operating
      income
                                                        
                                                        
                                                        280,665
                                                        
                                                        
                                                        
                                                        806,059
                                                        
                                                        
                                                        
                                                        421,835
                                                        
                                                        
                                                        
                                                        1,073,197Other
      income - interest
                                                        
                                                        
                                                        43,765
                                                        
                                                        
                                                        
                                                        68,337
                                                        
                                                        
                                                        
                                                        126,113
                                                        
                                                        
                                                        
                                                        138,043Income
      before provision for income taxes
                                                        
                                                        
                                                        324,430
                                                        
                                                        
                                                        
                                                        874,396
                                                        
                                                        
                                                        
                                                        547,948
                                                        
                                                        
                                                        
                                                        1,211,240Provision
      for income taxes
                                                        
                                                        
                                                        109,817
                                                        
                                                        
                                                        
                                                        332,644
                                                        
                                                        
                                                        
                                                        170,895
                                                        
                                                        
                                                        
                                                        497,247Net
      income
                                                        
                                                        $
                                                        214,613
                                                        
                                                        
                                                        $
                                                        541,752
                                                        
                                                        
                                                        $
                                                        377,053
                                                        
                                                        
                                                        $
                                                        713,993Basic
      earnings per share
                                                        
                                                        $
                                                        0.07
                                                        
                                                        
                                                        $
                                                        0.16
                                                        
                                                        
                                                        $
                                                        0.12
                                                        
                                                        
                                                        $
                                                        0.22Diluted
      earnings per share
                                                        
                                                        $
                                                        0.07
                                                        
                                                        
                                                        $
                                                        0.15
                                                        
                                                        
                                                        $
                                                        0.11
                                                        
                                                        
                                                        $
                                                        0.19Basic
      weighted average shares outstanding
                                                        
                                                        
                                                        2,962,620
                                                        
                                                        
                                                        
                                                        3,292,801
                                                        
                                                        
                                                        
                                                        3,042,660
                                                        
                                                        
                                                        
                                                        3,292,144Diluted
      weighted average shares outstanding
                                                        
                                                        
                                                        3,225,956
                                                        
                                                        
                                                        
                                                        3,696,618
                                                        
                                                        
                                                        
                                                        3,336,811
                                                        
                                                        
                                                        
                                                        3,709,668Dividends
      paid
                                                        
                                                        $
                                                        0
                                                        
                                                        
                                                        $
                                                        196,460
                                                        
                                                        
                                                        $
                                                        94,780
                                                        
                                                        
                                                        $
                                                        196,460




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)





2009
                                                                                                                      
                                                                                                                      
                                                                                                                      2008OPERATING
      ACTIVITIES:Net
      income
                                                                                                                      
                                                                                                                      $
                                                                                                                      377,053
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      713,993Adjustments
      to reconcile net income to net cash provided by operating
      activities:Bad
      debt expense adjustment
                                                                                                                      
                                                                                                                      
                                                                                                                      4,956
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (6,087
                                                                                                                      )Depreciation
      and amortization
                                                                                                                      
                                                                                                                      
                                                                                                                      132,747
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      138,404Loss
      on disposal of equipment
                                                                                                                      
                                                                                                                      
                                                                                                                      4,827Deferred
      income taxes
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (29,400
                                                                                                                      )Stock-based
      compensation expense
                                                                                                                      
                                                                                                                      
                                                                                                                      77,210
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      268,310Changes
      in operating assets and liabilities:Trade
      accounts receivable
                                                                                                                      
                                                                                                                      
                                                                                                                      188,711
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (47,643
                                                                                                                      )Inventories
                                                                                                                      
                                                                                                                      
                                                                                                                      242,174
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (690,103
                                                                                                                      )Income
      taxes payable
                                                                                                                      
                                                                                                                      
                                                                                                                      (214,408
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      67,823Other
      current assets
                                                                                                                      
                                                                                                                      
                                                                                                                      (184,387
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (36,827
                                                                                                                      )Other
      long term assets
                                                                                                                      
                                                                                                                      
                                                                                                                      (6,394
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      2,552Accounts
      payable
                                                                                                                      
                                                                                                                      
                                                                                                                      (125,938
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      191,830Accrued
      expenses
                                                                                                                      
                                                                                                                      
                                                                                                                      (51,651
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      289,967Other
      long-term liabilities
                                                                                                                      
                                                                                                                      
                                                                                                                      17,860
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      17,471Net
      cash provided by operating activities
                                                                                                                      
                                                                                                                      
                                                                                                                      462,760
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      880,290INVESTING
      ACTIVITIES:Purchases
      of short term investments
                                                                                                                      
                                                                                                                      
                                                                                                                      (2,117,184
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (5,957,797
                                                                                                                      )Sales
      of short term investments
                                                                                                                      
                                                                                                                      
                                                                                                                      3,400,303
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      5,730,000Capital
      expenditures
                                                                                                                      
                                                                                                                      
                                                                                                                      (155,807
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (5,729
                                                                                                                      )Net
      cash provided by (used in) investing activities
                                                                                                                      
                                                                                                                      
                                                                                                                      1,127,312
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (233,526
                                                                                                                      )FINANCING
      ACTIVITIES:Proceeds
      from exercise of stock options
                                                                                                                      
                                                                                                                      
                                                                                                                      -
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      41,941Purchases
      of treasury stock
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,415,915
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      -Dividends
      paid
                                                                                                                      
                                                                                                                      
                                                                                                                      (94,780
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (196,460
                                                                                                                      )Net
      cash used in financing activities
                                                                                                                      
                                                                                                                      
                                                                                                                      (1,510,695
                                                                                                                      )
                                                                                                                      
                                                                                                                      
                                                                                                                      (154,519
                                                                                                                      )Net
      increase (decrease) in cash and cash equivalents
                                                                                                                      
                                                                                                                      
                                                                                                                      79,377
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      (492,245
                                                                                                                      )Cash
      and cash equivalents, beginning of period
                                                                                                                      
                                                                                                                      
                                                                                                                      1,060,838
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      3,400,566Cash
      and cash equivalents, end of period
                                                                                                                      
                                                                                                                      $
                                                                                                                      1,140,215
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      3,892,811Supplemental
      cash flow information:Income
      taxes paid
                                                                                                                      
                                                                                                                      $
                                                                                                                      295,000
                                                                                                                      
                                                                                                                      
                                                                                                                      $
                                                                                                                      450,000Retirement
      of treasury stock
                                                                                                                      
                                                                                                                      $
                                                                                                                      1,415,915Stock
      issuance related to contingent liability
                                                                                                                      
                                                                                                                      $
                                                                                                                      30,000




See Notes
to Condensed Unaudited Financial Statements.


5


RF
INDUSTRIES, LTD.


NOTES
TO CONDENSED UNAUDITED CONDENSED 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, 2008 has been
derived from, and certain terms used herein are defined in, the audited
financial statements of the Company as of October 31, 2008 included in the
Company’s Annual Report on Form 10-K (“Form 10-K”) for the year ended October
31, 2008 that was previously filed with the Securities and Exchange Commission
(“SEC”). Operating results for the three and six months period ended April 30,
2009, are not necessarily indicative of the results that may be expected for the
year ending October 31, 2009. 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, 2008.




Revenue
Recognition




The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No.
104, “Revenue Recognition in Financial Statements” (“SAB 104”). SAB 104 requires
that 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, which contain fixed prices, are received and the products are
shipped. Most of the Company’s products are sold to continuing customers with
established credit histories.




Note
2 - Fair value measurements





Effective
November 1, 2008, the Company adopted the methods of fair value as
described  in SFAS No. 157 ”Fair Value Measurements” (“SFAS 157”), to
value its financial assets and liabilities. As defined in SFAS 157, fair value
is based on the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. In order to increase consistency and comparability in fair
value measurements, SFAS 157 establishes a fair value hierarchy that prioritizes
observable and unobservable inputs used to measure fair value.  The
adoption of SFAS 157 did not impact our financial position, results of
operations or cash flows.





In
addition, on November 1, 2008 the Company adopted SFAS No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities” (“SFAS 159”). Under SFAS
159, companies may elect to measure certain financial instruments and certain
other items at fair value. SFAS 159 requires that unrealized gains and losses on
items for which the fair value option has been elected be reported in earnings.
We did not elect to use the fair value option.  Therefore, the
adoption of SFAS 159 did not impact our condensed financial position, results of
operations or cash flows.


6


Note
3 - Components of inventories




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,
                        2009
                      
                      
                      October
      31,
                        2008Raw
      materials and supplies
                      
                      $
                      1,602,502
                      
                      
                      $
                      1,496,364Work
      in process
                      
                      
                      9,120
                      
                      
                      
                      31,131Finished
      goods
                      
                      
                      4,124,614
                      
                      
                      
                      4,502,890Inventory
      reserve
                      
                      
                      (28,702
                      )
                      
                      
                      (80,677
                      )Totals
                      
                      $
                      5,707,534
                      
                      
                      $
                      5,949,708





Purchases
of connector products from one major vendor in the six month period ended April
30, 2009 represented 22% compared to two major vendors who represented 22% and
13% of the total inventory purchases for the same period in 2008 respectively.
The Company has arrangements with these vendors to purchase product based on
purchase orders periodically issued by the Company.





Note
4 - 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, 2009, the effects of the assumed exercise of options to purchase
407,699 shares of the Company’s common stock, at a price range 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. At April 30, 2008, the effects
of the assumed exercise of options to purchase 305,001 shares of the Company’s
common stock, at a price of $6.38 to $7.56 per share, were not included in the
computation of diluted per share amounts because they were anti-dilutive for
that purpose.





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




Three
      Months Ended April 30
                                              
                                              Six
      Months Ended April 302009
                                              
                                              2008
                                              
                                              2009
                                              
                                              2008Weighted
      average shares outstanding for basic net earnings per
share
                                              
                                              
                                              2,962,620
                                              
                                              3,292,801
                                              
                                              
                                              3,042,660
                                              
                                              3,292,144Add
      effects of potentially dilutive securities-assumed exercise of stock
      options
                                              
                                              
                                              263,336
                                              
                                              403,817
                                              
                                              
                                              294,151
                                              
                                              417,524Weighted
      average shares for diluted net earnings per share
                                              
                                              
                                              3,225,956
                                              
                                              3,696,618
                                              
                                              
                                              3,336,811
                                              
                                              3,709,668





Note
5 - 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. Non-qualified stock options
granted during the quarter ended January 31, 2009 vest and are exercisable
immediately and expire in five years from date of grant.  Options
granted prior to fiscal 2008 were generally exercisable one year after the date
of the grant and expire no more than ten years after date of grant. No options
were granted during the quarter ended April 30, 2009. The Company satisfies the
exercise of options by issuing previously unissued common
shares.


7





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




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




Expected
volatilities are based on historical volatility of the Company’s stock, and
other factors. The Company uses historical experience with exercise and
post-vesting employment termination behavior to determine the options’ expected
life. The expected life represents the period of time that options granted are
expected to be outstanding. The risk-free rate is based on the U.S. Treasury
rate with a maturity date corresponding to the options’ expected life. The
dividend yield is based upon the historical dividend yield.




Issuances
of common stock by the Company




During
the six months ended April 30, 2009, the Company issued 7,407 shares of common
stock to the former owner of Radiomobile.  This transaction related to
the Radiomobile Purchase Agreement earn-out contingency as more fully described
in Note 11 of the Company’s Annual Report on Form 10-K for the year ended
October 31, 2008.





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, 2008. A summary of the
status of the options granted under the Company’s stock option plans as of April
30, 2009 and the changes in options outstanding during the six months then ended
is presented in the table that follows:




Shares
                                      
                                      Weighted
                                        Average
      Exercise
                                        Price
                                      
                                      Weighted Average
                                        Remaining
                                        Contractual Term
                                      
                                      Aggregate
                                        Intrinsic
                                        ValueOutstanding
      at November 1, 2008
                                      1,067,041
                                      
                                      $
                                      3.77Options
      granted
                                      16,000
                                      
                                      $
                                      4.05Options
      exercised
                                      -
                                      
                                      $
                                      -Options
      canceled or expired
                                      (22,210)
                                      
                                      $
                                      6.08Options
      outstanding at April 30, 2009
                                      1,060,831
                                      
                                      $
                                      3.72
                                      
                                      5.14
      years
                                      
                                      $
                                      1,031,183Options
      exercisable at April 30, 2009
                                      853,648
                                      
                                      $
                                      3.75
                                      
                                      5.40
      years
                                      
                                      $
                                      949,483





As of
April 30, 2009, $291,509 of expense with respect to nonvested share-based
arrangements has yet to be recognized which is expected to be recognized over a
weighted average period of 2.89 years.





Stock
Option Expense





During
the six-month ended April 30, 2009 and April 30, 2008, stock based compensation
expense totaled $77,210 and $268,310 respectively. The three-month ended April
30, 2009 and April 30, 2008, stock based compensation expense totaled $27,564
and $128,329 respectively.





Note
6 - Concentration of Credit Risk





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.
One customer accounted for approximately 17% and 16% of the Company’s net sales
for the three and six-month period ended April 30, 2008. Although these
customers have been on-going major customers of the Company continuously during
the past eight and eleven 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.


8





Note
7 - Segment Information




The
Company follows the provisions of SFAS No. 131, “Disclosures about Segments of
an Enterprise and Related Information (“SFAS 131”).” Pursuant to the provisions
of SFAS No. 131, the Company reports segment sales in the same format reviewed
by the Company’s management chief decision maker (the “management
approach”).




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; (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 segment is comprised of one division while
the RF Wireless segment is comprised of two divisions. 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 that 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 Connector
and Cable Assembly, Aviel Electronics and Worswick divisions into the RF
Connector Cables 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.  The Company had
previously aggregated BioConnect within the RF Connector and Cables Assembly
segment as it represented only a small portion and had similar economic
characteristics of the overall segment. During Fiscal Year 2008, the BioConnect
division met one of the quantitative threshold required for separate segment
reporting. Prior year’s information has been revised to conform with the current
year’s presentation.





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
Cable Assembly segment. 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, 2009 and 2008:




Three
      Months Ended April 30,
                          
                          Six
      Months Ended April 30,2009
                          
                          2008
                          
                          2009
                          
                          2008United
      States
                          
                          $
                          2,979,452
                          
                          
                          $
                          3,871,413
                          
                          
                          $
                          5,753,749
                          
                          
                          $
                          7,038,553Foreign
      countries:Israel
                          
                          
                          173,570
                          
                          
                          
                          148,142
                          
                          
                          
                          685,718
                          
                          
                          
                          373,276All
      other
                          
                          
                          371,694
                          
                          
                          
                          488,324
                          
                          
                          
                          667,832
                          
                          
                          
                          922,616$
                          3,524,716
                          
                          
                          $
                          4,507,879
                          
                          
                          $
                          7,107,299
                          
                          
                          $
                          8,334,445


9





Net
Sales, income (loss) before provision for income taxes and other related segment
information for the three months ended April 31, 2009 and 2008 are as
follows:







2009
                  
                  RF
      Connectors
                    and
                    Cable Assembly
                  
                  
                  Medical
                    Cabling
      and
                    Interconnector
                  
                  
                  RF
                    Wireless
                  
                  
                  Corporate
                  
                  
                  TotalNet
      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
                  
                  
                  
                  
                  
                  
                  
                  70,3272008Net
      sales
                  
                  $
                  3,330,459
                  
                  
                  
                  428,562
                  
                  
                  $
                  748,858
                  
                  
                  
                  
                  
                  
                  $
                  4,507,879Income
      (loss) before provision for income taxes
                  
                  
                  512,557
                  
                  
                  
                  95,406
                  
                  
                  
                  198,096
                  
                  
                  $
                  68,337
                  
                  
                  
                  874,396Depreciation
      and amortization
                  
                  
                  46,454
                  
                  
                  
                  5,571
                  
                  
                  
                  7,677
                  
                  
                  
                  
                  
                  
                  
                  59,702




Net
Sales, income (loss) before provision for income taxes and other related segment
information for the six months ended April 31, 2009 and 2008 are as
follows:







2009
                  
                  RF
      Connectors
                    and
                    Cable Assembly
                  
                  
                  Medical
                    Cabling
      and
                    Interconnector
                  
                  
                  RF
                    Wireless
                  
                  
                  Corporate
                  
                  
                  TotalNet
      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
                  
                  
                  
                  
                  
                  
                  
                  132,7472008Net
      sales
                  
                  $
                  6,607,828
                  
                  
                  $
                  630,965
                  
                  
                  $
                  1,095,652
                  
                  
                  
                  
                  
                  
                  $
                  8,334,445Income
      (loss) before provision for income taxes
                  
                  
                  851,183
                  
                  
                  
                  78,986
                  
                  
                  
                  143,028
                  
                  
                  $
                  138,043
                  
                  
                  
                  1,211,240Depreciation
      and amortization
                  
                  
                  111,906
                  
                  
                  
                  11,143
                  
                  
                  
                  15,355
                  
                  
                  
                  
                  
                  
                  
                  138,404





Note 8 - 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, 2009 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 6.4%. Interim tax
provisions are determined using an estimate of the annual effective tax rate. As
of April 30, 2009, the Company estimated that its effective annual tax rate for
the year ending October 31, 2009 will be approximately 38.5%, 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, 2009 was
$170,895 (or an effective tax rate of approximately 31%), compared to $497,247
in the six-month period ended April 30, 2008 (or an effective tax rate of
approximately 41%). The significant decrease in the tax rate in the six-month
period ended April 30, 2009 is the result of the Company recognizing a one-time
tax benefit of approximately $39,000 that related to a domestic product activity
adjustment in the first quarter of current fiscal year. Without this adjustment,
the effective tax rate for the six-months ended April 30, 2009 would have
approximated the projected effective rate for fiscal 2009.





Note
9 - Dividend Declaration




On
December 15, 2008, the Board of Directors of the Company declared a quarterly
cash dividend of $0.03 per share.  The dividend date of record was
December 31, 2008 and the dividends were paid to stockholders on January 15,
2009.  However, in March 2009, the Company suspended its quarterly cash
dividends in order to maximize resources available for acquisitions, new product
development and the purchase of equipment to improve manufacturing
efficiency.   Accordingly, no dividends were paid during the
three month period ended April 30, 2009.


10


Note
10 - Amortizable Intangible assets:





Amortizable
intangible assets are comprised of the following:




April
      30,
                                  2009
                                
                                
                                October
      31,
                                  2008Intangible
      assetsNon-compete
      agreement
                                
                                $
                                120,000
                                
                                
                                $
                                120,000Accumulated amortization
                                
                                
                                (120,000
                                )
                                
                                
                                (120,000
                                )—
                                
                                
                                
                                —Software
                                
                                
                                47,522
                                
                                
                                
                                47,522Accumulated
      amortization
                                
                                
                                (23,761
                                )
                                
                                
                                (15,841
                                )23,761
                                
                                
                                
                                31,681Customer
      List
                                
                                
                                33,945
                                
                                
                                
                                33,945Accumulated
      amortization
                                
                                
                                (16,972
                                )
                                
                                
                                (11,315
                                )16,973
                                
                                
                                
                                22,630Totals
                                
                                $
                                40,734
                                
                                
                                $
                                54,311





Note
11 – Related party transactions:





The note
receivable from stockholder of $66,980 at April 30, 2009 and October 31, 2008 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.  During the three and six months ended April 30,
2009 and 2008, $4,020 of interest was paid.





Note
12 – Repurchase and retirement of treasury stock:





In
September 2008, the Company announced that our Board of Directors had authorized
a stock repurchase program to repurchase up to 100,000 shares of the Company’s
common stock.  In October 2008, the Company announced that our Board
of Directors had authorized a stock repurchase program to repurchase up to an
additional 100,000 shares of the Company’s common stock. In February 2009, the
Company announced that our Board of Directors had authorized a stock repurchase
program to repurchase up to an additional 300,000 shares of the Company’s common stock.
The repurchases were to be made from time to time in the open market
transactions in compliance with the Securities Exchange Act of 1934, or the
Exchange Act, Rule 10b-18.  During the six month period ended April
30, 2009, the Company repurchased 184,732 shares of its common stock in
accordance with this plan for $804,415.  In addition to the Rule
10b-18 public repurchase program, the Company also repurchased 150,000 shares in
private transactions during the six month period ended April 30, 2009 for
$611,500.


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, 2008
and other reports and filings made with the Securities and Exchange
Commission.




Critical
Accounting Policies




The
financial statements of the Company are prepared in conformity with accounting
principles generally accepted in the United States of America (“GAAP”). The
preparation of these financial statements requires the Company’s management to
make estimates and assumptions about future events that affect the amounts
reported in the financial statements and related notes. Future events and their
effects cannot be determined with absolute certainty. Therefore, the
determination of estimates requires the exercise of judgment. The Company’s
significant accounting policies are summarized in Note 1 to the financial
statements contained in its Annual Report on Form 10-K filed for the fiscal year
ended October 31, 2008.




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 83% and 85% of the Company’s net sales during the three and six
month periods ended April 30, 2009, the Company’s results of operations and
liquidity are principally dependent upon the results of its RF connector and
cable operations.




Liquidity
and Capital Resources




Management
believes that existing current assets and the amount of cash it anticipates it
will generate from current operations will be sufficient to fund the anticipated
liquidity and capital resource needs of the Company for at least twelve months.
The Company does not, however, currently have any commercial banking
arrangements providing for loans, credit facilities or similar matters should
the Company need to obtain additional capital. Management’s beliefs that its
existing assets and the cash expected to be generated from operations will be
sufficient during the current fiscal year are based on the
following:


·
              As
      of April 30, 2009, the amount of cash and cash equivalents was equal to
      $1,140,215 in the aggregate and the Company had $5,580,592 of investments
      in certificates of deposit.
  ·
              As
      of April 30, 2009, the Company had $15,249,952 in current assets, and
      $899,162 in current liabilities.
  ·
                As
      of April 30, 2009, the Company had no outstanding indebtedness (other than
      accounts payable, accrued expenses and income taxes
    payable).




The
Company does not anticipate needing material additional capital equipment in the
next twelve months as it purchased most of the necessary additions during the
first quarter of fiscal 2009. 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.


12


The
Company earned net income of $377,053 for the six months ended April 30,
2009.  The Company used $214,408 of cash to pay income taxes, $125,938
to further reduce its accounts payable and $184,387 for prepaid expenses and
deposits, all of which further reduced the Company’s cash.  However,
because the Company generated $242,174 by reducing its inventories and $188,711
from increased collections of its accounts receivable, the Company had a
positive net cash flow of $462,760 from operating activities during the six
months ended April 30, 2009.  The Company liquidated $3,400,303 of
certificates of deposit during the six months ended April 30, 2009 and invested
$2,117,184 of those funds in other certificates of deposit as well as purchased
$155,807 of new assets.  As a result of these investing activities,
the Company realized $1,127,312 of net cash from investing
activities.  During the six month period, the Company also used
$1,415,915 to repurchase shares of its outstanding common stock pursuant to the
publicly announced stock repurchase program and used $94,780 to pay dividends in
January 2009.  As a result of the $462,760 of net cash provided by its
operating activities and the $1,127,312 of net cash provided by investing
activities, the Company’s overall cash position increased by $79,377 during the
six month period ended April 30, 2009 despite the use of $1,510,695 for
financing activities.




Trade
accounts receivable (net of allowances for doubtful accounts) at April 30, 2008
decreased approximately 9% or by $193,668 to $1,877,681 compared to the October
31, 2008 balance of $2,071,349. The decrease in accounts receivable is due to
improved receivables management, tighter credit policies and increased
collection efforts by the Company.




Inventories
at April 30, 2009 decreased 4% or $242,174 to $5,707,534 compared to $5,949,708
at October 31, 2008. The decrease in inventories is the result of lower
inventory purchases as the Company adjusted its inventory levels in anticipation
of anticipated lower levels of sales in the near future.




Other
current assets, including prepaid expenses and deposits, increased $184,387 to
$401,830 as of April 30, 2009, from $217,443 on October 31, 2008 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, 2009 decreased $125,938 to $203,571 from $329,509 on
October 31, 2008. The change in accounts payable is related to a decrease in
sales and a decrease in the purchase of inventories during the current
period.




Net cash
provided by investing activities was $1,127,312 for the six months ended April
30, 2009 and was attributable to the sale of $3,400,303 of certificates of
deposit, which funds were partially reduces by the Company’ purchase of
$2,117,184 of certificates of deposit securities and the use of $155,807 for
capital expenditures.




Net cash
used in financing activities was $1,510,695 for the six months ended April 30,
2009, and was attributable to the purchase of $1,415,915 of treasury stock and
$94,780 to pay cash dividends.




As of April 30, 2009, the Company had a
total of $1,140,215 of cash and cash equivalents compared to a total of
$1,060,838 of cash and cash equivalents as of October 31, 2008. However, the
amount of investments in available-for-sale securities decreased by $1,283,119
to $5,580,592 from $6,863,711 on October 31, 2008 due to certain of the
Company’s certificates of deposit maturing. Collectively, the amount of cash,
available-for-sale securities and certificates of deposit that the Company held
on April 30, 2009 decreased by $1,203,742 from the amount held on October 31,
2008 due primarily to the use of $1,415,915 to repurchase and retire outstanding
shares of common stock. As of April 30, 2009, the Company had
working capital of $14,350,790 and a current ratio of approximately
17:1.





Results
Of Operations




Three
Months Ended April 30, 2009 vs. Three Months Ended April 30, 2008




Net sales
in the current fiscal quarter ended April 30, 2009, decreased by 22%, or
$983,163, to $3,524,716 from $4,507,879 in the comparable fiscal quarter of
prior year, as a result of decreased sales in all three of the Company’s
business segments.  The RF Connectors and Cable Assembly segment, the
Company’s largest business unit, experienced a $394,000 decrease in sales during
the April 30, 2009 fiscal quarter compared to the sales in the comparable
quarter in 2008.  Sales at the Medical Cabling and Interconnector
division decreased by $125,000, and sales at the RF Wireless division decreased
by $464,000. Sales decreased in all of the business units compared to the prior
year’s period due to current negative economic conditions, which has caused some
of the Company’s distributors to carry lower inventory levels and in turn
resulted in lower sales to these distributors in the second quarter of fiscal
2009.   The Company believes that the decrease in sales is the
result of a general slowdown of economic activity as a result of the worldwide
recession and financial crisis, and not due to any shift in demand for the
Company’s products.





Foreign
sales during the fiscal quarter ended April 30, 2009 decreased by $91,202 to
$545,264 compared to foreign sales of $636,466 during the fiscal quarter ended
April 30, 2008. Foreign sales represented approximately 15% and 14% of the
Company’s net sales during the fiscal quarters ended April 30, 2009 and 2008,
respectively. The decrease in foreign sales is primarily due to a decrease in
cable assembly sales to one major international customer.


13


The
Company’s gross profit as a percentage of sales decreased 3% to 49% during the
current fiscal quarter compared to 52% in the comparable fiscal quarter of prior
year.  The Company operates in three segments.  Although the
gross profit margin of the RF Connector and Cable Assembly segment decreased
slightly (by 1%), the principal decreases in gross profits occurred in the RF
Wireless segment and in the Bioconnect segment.  The gross profit
margin of the RF Wireless segment decreased by 8% to 47% compared with 55% in
the prior comparable quarter due to a decrease in sales of wireless radio modems
(net sales decreased by $464,398 to $284,460 in the current period from $748,858
in the prior year’s 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 decreased by 17% to 22% compared with 39% in the prior
comparable quarter.  This was due to a decrease in sales of $125,148
from the prior comparable quarter and a decrease of $22,838 in cost of goods
sold from the prior comparable quarter. During the second quarter of fiscal
2009, the Company’s fixed component cost of labor was higher than in the prior
comparable quarter of fiscal 2008, which caused a decrease in gross margins in
its segments.  Sales of the RF Connector and Cable assembly segment
accounted for approximately 83% of the Company’s total sales and 78% of the
total cost of goods sold in the current three month period, compared to 74% of
the Company’s total sales and 72% of the total cost of goods sold in the
comparable quarter of prior year.




Engineering
expenses increased 31%, or $70,042, to $294,514 from $224,472 in the comparable
quarter of the prior year due to an increase in projects at the RF Wireless
Division started in the second quarter of fiscal 2009, offset by lower contract
labor and stock option expense.  The Company continues to invest in
the development of new and improved products in its RF Wireless business
segment.




Selling
and general expenses decreased by 14% in the 2009 fiscal quarter to $1,147,488
from $1,330,084 in the comparable quarter of the prior fiscal year. The decrease
in selling and general expenses was due primarily to a decrease in accounting
and legal fees and stock option expense from the comparable period in 2008 and
to other cost cutting initiatives that the Company commenced implementing as a
result of future market uncertainties.




Other
income for the second quarter of 2009 decreased $24,572 compared to the same
period in the prior year as a result of lower investment balances and lower
rates of return.




As a
result of the decrease in revenues and the decrease in gross profit as a
percentage of sales, income before the provision for income taxes during the
fiscal quarter ended April 30, 2009 decreased by $549,966 to $324,430. Income
before provision for income taxes for the fiscal quarter ended April 30, 2008
was $874,396.





The
provision for income taxes during the second fiscal quarter of 2009 was $109,817
(or a combined estimated Federal and state income tax rate of approximately
34%), compared to $332,644 in the fiscal quarter ended April 30, 2008 (or a
combined estimated Federal and state income tax rate of approximately 38%). The
34% tax rate for the second quarter resulted from recording our expected annual
tax rate of 38% (before the effects of a $39,000 expense reduction related to a
domestic product activity).




The
combination of an overall decrease in sales compared to prior period and a
decrease in gross margins resulted in a $637,948 decrease in gross profits. The
decrease in gross profits was offset slightly by decreases in selling and
general expenses.  As a result, the Company’s operating income for the
first fiscal quarter of 2009 decreased by $525,394 to $280,665 from prior
comparable quarter of 2008.  Operating income for the three months
ended April 30, 2008 was $806,059. The decrease in operating income was
partially offset by lower income taxes. Accordingly, net income for the fiscal
quarter ended April 30, 2009 was $214,613 compared to $541,752 for the same
quarterly period last year.





Six
Months Ended April 30, 2009 vs. Six Months Ended April 30, 2008




Net sales
in the six months ended April 30, 2009, decreased 15%, or $1,227,146 to
$7,107,299 from $8,334,445 in the comparable fiscal quarter of prior year, due
to decreased sales of the Company’s connectors and radio modems. Sales decreased
during the six month period ended April 30, 2009 from the prior year’s period
due lower sales in all three of the Company’s business segments as a result of
the current negative economic conditions, which caused some of the Company’s
distributors to carry lower inventory levels and in turn resulted in lower sales
to these distributors.  The largest decreases in sales occurred in the
RF Wireless segment, whose sales decreased by $630,000 in the six-months ended
April 30, 2009.  Sales of RF Wireless products in the six-month period
of 2008 reflected revenues from a large sales order of wireless transponders
from the US Military. The RF Connector and Cable Assembly segment also had
a significant decrease in net sales during the 2009 fiscal period (a decrease of
$542,000), which decrease is attributable to a general industry wide slowdown
due to the worldwide recession.


14


The
decrease in domestic sales during the six-months ended April 30, 2009 was
partially offset by increased foreign sales.  Foreign sales during the
six-month period ended April 30, 2009 increased by $57,658 to $1,353,550
compared to foreign sales of $1,295,892 during the six-month period ended April
30, 2008.  Foreign sales represented approximately 19% and 16% of the
Company’s net sales during the six-month period ended April 30, 2009 and 2008,
respectively. The increase 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 decreased 4% to 47% during the
six-month period ended April 30, 2009 compared to 51% in the comparable
six-month period of prior year.  The Company operates in three
segments. Although the gross profit margin of the RF Connector and Cable
Assembly segment decreased slightly (by 1%), the principal decreases in
gross profits occurred in the RF Wireless segment and in the Bioconnect
segment.  The gross profit margin of the RF Wireless segment decreased
13% to 40% compared with 53% in the prior comparable six-month period
ended. This was due to a decrease in sales of wireless radio modems, which
caused net sales to decrease by $630,023 to $465,629 from $1,095,652 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 decreased by 18% to 16% compared with 34% in the
prior comparable quarter.  This was due to a decrease in sales of
$54,394 from the prior comparable quarter coupled with an increase of $66,970 in
cost of goods sold from the prior comparable quarter. During the six-month
period ended April 30, 2009, the Company’s fixed component cost of labor was
higher than in the prior comparable period of fiscal 2008, which caused a
decrease in gross margins in its segments. Sales of the RF Connector and
Cable assembly segment accounted for approximately 85% of the Company’s total
sales and 80% of the total cost of goods sold in the current six-month period,
compared to 79% of the Company’s total sales and 77% of the total cost of
goods sold in the comparable six-month period of prior year.




Engineering
expenses increased 11% or $53,375 to $550,239 from $496,864 in the comparable
six-month period of the prior year due to increased investment in the
development of products for the RF Wireless segment.




Selling
and general expenses decreased 10% or $265,348 to $2,396,279 from $2,661,627 in
the comparable six-month period of the prior year. The decrease in selling and
general expenses was due primarily to a decrease in accounting and legal fees
and stock option expense from the comparable period in 2008 and to other cost
cutting initiatives that the Company commenced implementing as a result of
future market uncertainties.




Other
income for the six months ended April 30, 2009 decreased $11,930 compared with
the same six-month period of the prior year due to lower rates of return on the
Company’s investment portfolio and also lower investment balances compared with
prior period.




As a
result of the decrease in revenues, the decrease in gross profit as a percentage
of sales and the increase in engineering expenses, income before provision for
income taxes during the six months ended April 30, 2009 decreased by 55% or
$663,292 to $547,948 from $1,211,240 in the comparable six-month period of the
prior year.





The
provision for income taxes during the six months ended April, 30 2009 was
$170,895 (or a combined estimated Federal and state income tax rate of
approximately 31%), compared to $497,247 in the six months ended April 30,
2008 (or a combined estimated Federal and state income tax rate of approximately
41%). The 10% decrease in the tax rate in the six-month period of fiscal year
2009 compared to the prior year comparable period is the result of the company
recognized a one time tax benefit of approximately $39,000 related to a domestic
product activity. Without this adjustment, the effective tax rate would have
approximated the projected rate for fiscal 2009.




The
combination of an overall decrease in sales compared to prior period and a
decrease in gross margins resulted in a $863,335 decrease in gross profits. The
decrease in gross profits was offset slightly by decreases in selling and
general expenses.  As a result, the Company’s operating income for the
six months ended April 30, 2009 decreased $651,362 to $421,835 from prior
comparable six-month period.  The decrease in operating income was
partially offset by lower income taxes. Accordingly, net income for the fiscal
quarter ended April 30, 2009 was $377,053 compared to $713,993 for the same
period last year.




Item
3.  Quantitative and Qualitative Disclosures about Market
Risk





Not applicable


15


Item 4T.   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,
2009.





There has
been no change in the Company’s internal control over financial reporting during
the quarter ended April 30, 2009 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, 2008 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, strategies or prospects in a
material and adverse manner. We are updating the risk factors set forth in our
Annual Report on Form 10-K by including the following risk factor:





Difficult
conditions in the global economy in general have affected our business and
results of operations and these conditions are not expected to improve in the
near future and may worsen.





A
prolonged economic downturn, both in the U.S. and worldwide, may lead to lower
sales or reduced sales growth, reduced prices, lower gross margins, and
increased bad debt risks, all of which could adversely affect the Company’s
results of operations, financial condition and cash flows.  Slowing
economic growth, particularly in the telecommunication and data communication
and wireless communications industries that represent the Company’s largest
target market, may adversely impact the demand for the Company’s
products.  Although the Company’s results of operations have to date
only been moderately affected by the factors noted above, if the current
economic downturn continues or intensifies, the Company’s results could be more
adversely affected in the future.  There could be a number of other
follow-on effects from the credit crisis on the Company’s business, including
insolvency of certain key distributors, key suppliers, contract manufacturers
and customers.





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





Unregistered Sales of Equity
Securities.  In April  2009, the Company issued 7,407
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.





Repurchase of
Securities.  In September 2008, the Company announced that our
Board of Directors had authorized a stock repurchase program to repurchase up to
100,000 shares of the Company’s common stock.  In October 2008, the
Company announced that our Board of Directors had authorized a stock repurchase
program to repurchase up to an additional 100,000 shares of the Company’s common
stock. In February 2009, the Company announced that our Board of Directors had
authorized a stock repurchase program to repurchase up to an additional 300,000
shares of the Company’s common stock. The repurchases may be made from time to
time in the open market transactions in compliance with the Securities Exchange
Act of 1934, or the Exchange Act, Rule 10b-18.  In addition to the
Rule 10b-18 public repurchase program, the Company also repurchased 100,000
shares in private transactions during the three-month period ended April 30,
2009.




16





Period:
                                      
                                      Total
      Number
                                        of
      Shares
                                        Purchased
                                      
                                      Average
      Price
                                        Paid
      per Share
                                      
                                      Total
      Number of
                                        Shares
                                        Purchased
      as
                                        Part
      of Publicly
                                        Announced Plans
                                        of
      Programs
                                      
                                      Approximate
                                        Dollar
      Value of
                                        Shares
      that May
                                        Yet
      Be
                                        Purchased
                                        Under
      the Plans
                                        or
      ProgramsFebruary
      1, 2009 through February 28, 2009
                                      
                                      119,521
                                      (1)
                                      $
                                      4.09
                                      
                                      19,521
                                      
                                      $
                                      0March
      1, 2009 through March 31, 2009
                                      
                                      19,701
                                      
                                      $
                                      3.83
                                      
                                      19,701
                                      
                                      $
                                      0April
      1, 2009 through April 30, 2009
                                      
                                      45,510
                                      
                                      $
                                      3.22
                                      
                                      45,510
                                      
                                      $
                                      0Totals
                                      
                                      184,732
                                      
                                      
                                      
                                      
                                      84,732





(1)
            In
      February of 2009, the Company purchased 100,000 shares of common stock in
      a privately negotiated transaction at a price of $4.05 per
      share.





Item
3.  Defaults upon Senior Securities




Nothing
to report.




Item
4.  Submission of Matters to a Vote of Security Holders




Nothing
to report.




Item
5.  Other Information




Nothing
to report.




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.


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 12, 2009
              By:
              /s/
      Howard F. HillHoward
      F. Hill, PresidentChief
      Executive Officer




Dated:
      June 12, 2009
              By:
              /s/
      James DossJames
      DossChief
      Financial Officer


18