RF Industries : RFIL 2023 Annual Report

Connecting the Next Generation

RF INDUSTRIES	2022
REPORT
ANNUAL

CORPORATE

1

LETTER FROM THE CEO

2

July 26, 2023

Fellow Shareholders,

2022 was an outstanding year for RF Industries and I am very proud of what our team accomplished in transforming our company for sustained growth in the years ahead. Even though we encountered the challenges of inflation, higher interest rates and lingering supply chain disruptions in 2022, we made significant headway in executing our five-year strategy to shift our business to a higher margin value proposition while still growing our traditional core business that generates strong cash flow.

Strong Growth and Disciplined Execution Delivered Record Performance

We delivered record annual sales of $85.3 million, which was a 48% increase over last year and a high mark in our company's history. Our gross profit margin expanded significantly throughout the year, with a standout fourth quarter of 31%. Our year-over-year adjusted EBITDA also increased 143% to $6.6 million.

Fully integrating our acquisition of Microlab was a highlight of 2022, and it made a strong impact on our annual results by contributing $15 million to product sales in the eight months following the transaction close. Importantly, we financed this acquisition with cash and low-interest rate debt and with no dilution to our shareholders. Since acquiring Microlab, we have meaningfully paid down debt from our free cash flow. Managing capital well is a cornerstone of our business success and the completion of this acquisition was no exception.

These are impressive numbers for one year. But what's equally impressive is that we've nearly quadrupled our revenue in five years - during a global pandemic, supply chain shortages and turbulent markets. Plus, our core cable assembly business has grown organically for five consecutive years. These positive results reflected the disciplined execution of our plan including our strategic shift to higher value products and solutions, our focus on managing expenses in an inflationary environment, and our commitment to balancing organic growth with strategic acquisitions.

Our RF Industries family of products, including coaxial jumpers and fiber optic jumpers, is recognized for its consistent high quality, and we are committed to innovating new products that meet the evolving and mission-critical needs of our customers. Our OptiFlexTM hybrid fiber solutions, for example, deliver the optimal solutions for wireless carriers seeking to upgrade existing infrastructure to 5G technology. This is just one of many products that have technical and intellectual property advantages that go well beyond commoditized solutions. These systems were developed by Cables Unlimited, one of our two brands that have qualified for the coveted Corning Assembly House Connection Gold Program, the highest standard for fiber optic cable production.

Our Microlab acquisition was a big step forward in strengthening our signal distribution capabilities with proprietary patented technology. Microlab gives us access to distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. These product lines will continue to produce significant project opportunities in stadiums and other key applications. Our Schrofftech brand offers energy efficient cooling/temperature control and filtration systems for telecom shelters, outdoor enclosures and battery/power rooms. We also retrofit existing communications equipment infrastructure for capacity upgrades and thermal efficiencies through Direct Air Cooling (DAC) systems for wireless base stations and remote equipment shelters, supporting our customers' green initiatives and energy cost savings programs by eliminating toxic chemicals and decreasing air conditioning costs up to 75%. We are excited about the state-of-the-art solutions these products bring to the marketplace.

Positioned To Deliver Long-Term Growth and Returns

Our executive team is passionate about driving growth and creating value for all of our stakeholders. We are a mix of industry veterans, who bring valuable experience from larger companies in our space, and trusted colleagues who have worked well together in the past. We also have a tremendous Board of Directors, who

this letter, we have already completed our first half of 2023 during which we encountered a continued slowdown in wireless carrier spending and some related delays in both customer bookings and shipments. Most of the delayed shipments were related to the rollout of 4G and 5G technologies by wireless carriers. As with similar companies in the wireless industry, our customers are re-thinking their capital expenditure plans based on persistent inflation, higher cost of capital and an economic slowdown.

We have been through these cycles before, most recently during the COVID pandemic, when wireless carriers pulled back on certain infrastructure investments. That said, it does not diminish the need for wireless carriers to meet the connectivity and speed demands of their customers with 4G and 5G buildouts. Granted, these delays are very frustrating, but we are confident that the carriers will resume their infrastructure deployments. They are already running from behind and their businesses models require them to stay on the sharp edge of competition or lose valuable customers. We are now slowly starting to see project-related orders flow through and expect them to accelerate in the second half of 2023.

Quarter to quarter, our business has always been lumpy-it's the nature of projects and ordering and fulfillment patterns. Regardless, RF Industries serves all Tier-1 wireless carriers, and this presents a significant opportunity to capture greater market share and to realize our vision of being at the forefront of the wireless industry.

As mentioned earlier, we are very excited about the potential of our higher-value products, such as OptiFlexTM hybrid fiber, Direct Air Cooling (DAC) and integrated small cell shrouds for the wireless buildout. DAC has broad applications across many industries and both Small Cell and DAC products are next-generation technology products with compelling value propositions.

We also will continue to improve margins by reducing redundancies during 2023. The consolidation of our two West Coast facilities into a single San Diego location was completed in early Summer, and we are accelerating our plan to consolidate some of our East Coast operations in New Jersey. We expect that this will allow us to take advantage of economies of scale, reduce overhead costs and better serve our East Coast customers. With these moves, we will be well positioned to continue providing the high-quality products and services our customers expect from us while also improving overall profitability.

Finally, we recently conducted research to understand more about the relationship customers have with our products and the relative importance of our RF Industries family of brands. Based on our findings, during fiscal year 2023, we introduced a new brand architecture that unifies our house of brands and creates touch points for our customers to connect each brand to the RFI reputation for quality products and service. This will evolve our go- to-market strategy as we enter new adjacencies and industries.

I am both excited and confident in our ability to continue creating value for our shareholders well into the future, and I would like to take this opportunity to thank our employees for their hard work and dedication. Fiscal `22 was a transformative year for RF Industries, and we are just beginning to scratch the surface of what is to come.

Sincerely,

Robert Dawson, President and CEO

Bolstered Our Strong Customer Value Proposition Through Product Expansion

Our customers count on us for quality products, inventory availability and speed. We are a highly reliable partner, and we make it easy for our customers to work with us. Our growth plan, whether it's organic growth or through acquisitions, is to provide more of the bill of materials of interconnect products for telecom, wireless and industrial customer applications. The continued expansion of our product offering allows customers to buy more from RF Industries across multiple product categories. It also helps them reduce complexity and supply chain costs, while procuring the products they need to complete jobs quickly.

are aligned with our strategy and are dedicated to the company's initiatives and our governance agendas. Other than myself, all of our other five board members are independent, and they bring sophisticated financial expertise, risk management and industry experience to the table.

We will continue to deploy our strong cash flow from operations and capital resources prudently to fund growth initiatives that strengthen our competitive position and create value for our shareholders.

At the end of 2022, we had built a healthy $28 million backlog that gave us some considerable visibility going into 2023. As I write

• Our customers count on us for quality products, inventory availability and speed. We are a highly reliable partner, and we make it easy for our customers to work with us. Our growth plan, whether it's organic growth or through acquisitions, is to provide more of the bill of materials of interconnect products for telecom, wireless and industrial customer applications.

RF Industries, Ltd. | www.rfindustries.com

Annual Report 2022

3

FORM 10-K

4

Annual Report Under Section 13 or 15(d) of

The Securities Exchange Act of 1934

For the fiscal year ended October 31, 2022

Commission File Number 0-13301

RF INDUSTRIES, LTD.

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

[phone]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed

by reference to the price at which the common equity was last sold as of the last business day of the

registrant's most recently completed second fiscal quarter was approximately $59.9 million.

On January 2, 2023, the Registrant had 10,193,287 outstanding shares of Common Stock, $.01 par value.

PART I

ITEM 1. BUSINESS

General

RF Industries, Ltd. (together with subsidiaries, the "Company", "we", "us", or "our") is a national manufacturer and marketer of interconnect products and systems, including high-performance components such as RF connectors and adapters, dividers, directional couplers and filters, coaxial cables, data cables, wire harnesses, fiber optic cables, custom cabling, energy-efficient cooling systems and integrated small cell enclosures. Through our manufacturing and production facilities, we provide a wide selection of interconnect products and solutions primarily to telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers and manufacturers and to various original equipment manufacturers ("OEMs") in several market segments. We also design, engineer, manufacture and sell energy-efficient cooling systems and integrated small cell solutions and related components.

Revolving Credit Facility are available for general working capital purposes and Borrowings under the Term Loan are available for the acquisition of Microlab. See, "Item 1. Business-Acquisition of Microlab/FXR LLC," below.

Microlab designs and manufactures a wide selection of RF components and integrated subsystems for signal conditioning and distribution in the wireless infrastructure markets as well as for use in medical devices. Microlab products are used in small cell deployments, distributed antenna systems, in-building wireless solutions and cellular base-stations. Microlab's portfolio includes RF components for ultra-wideband frequency ranges deployed in commercial wireless networks utilizing mid-band spectrum allocations for 5G mobile broadband. We believe Microlab components possess unique capabilities in the area of broadband frequency coverage, minimal loss and low passive intermodulation ("PIM"). Microlab's high performance components - such as power combiners, directional couplers, attenuators, terminators and filters - are used in broadband applications to support commercial in-building wireless networks, public safety networks, rail and

Forward-Looking Statements:

Certain statements in this Annual Report on Form 10-K (this "Annual Report"), and other oral and written statements made by the Company from time to time are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that discuss strategies, goals, outlook or other non-historical matters, or projected revenues, income, returns or other financial measures. In some cases forward-looking statements can be identified 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 forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those contained in such statements. Among the most important of these risks and uncertainties are the ability of the Company to meet customer demand through pricing and product offerings and efficient inventory and distribution channel management, to continue to

source our raw materials and products from our suppliers and manufacturers, particularly those in Asia, the market demand for our products, which market demand is dependent in large part on the state of the telecommunications industry and whether plans to develop 4G and 5G networks accelerate as expected, as well as our ability to meet any such demand, the effect of future business acquisitions and dispositions, the incurrence of impairment charges, and competition.

Important factors which may cause actual results to differ materially from the forward-looking statements are described in the Section entitled "Risk Factors" in this Form 10-K, and other risks identified from time to time in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward- looking statements.

We operate through two reporting segments: (i) the RF Connector and Cable Assembly ("RF Connector") segment, and (ii) the Custom Cabling Manufacturing and Assembly ("Custom Cabling") segment. The RF Connector segment primarily designs, manufactures, markets and distributes a broad range of RF connector, adapter, coupler, divider, and cable products, including coaxial passives and cable assemblies that are used in telecommunications and information technology, OEM markets and other end markets. The Custom Cabling segment designs, manufactures, markets and distributes custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, electromechanical wiring harnesses, wiring harnesses for a broad range of applications in a diverse set of end markets, energy-efficient cooling systems for wireless base stations and remote equipment shelters and custom designed, pole-ready 5G small cell integrated enclosures.

Recent Events

On March 1, 2022, we purchased 100% of the issued and outstanding membership interests of Microlab/FXR LLC, a New Jersey limited liability company ("Microlab") from Wireless Telecom Group, Inc, a New Jersey corporation (the "Seller") pursuant to the Membership Interest Purchase Agreement (the "Purchase Agreement") dated December 16, 2021. The consideration for the acquisition was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. The Company funded $17 million of the cash purchase price from the funds obtained under a $17 million term loan (the "Term Loan") with Bank of America, N.A. and paid the remaining amount of the cash purchase price with cash on hand. The Term Loan was issued as part of a loan agreement with Bank of America, N.A. which also provided the Company with a $3 million revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan, the "Credit Facility").

The primary interest rate for the Revolving Credit Facility is based on the Bloomberg Short-Term Bank Yield Index Rate plus a margin of 2.00%. The maturity date of the Revolving Credit Facility is March 1, 2024. The Term Loan may be drawn in one disbursement, at the election of the Company. As described above, we drew down the entire amount of the Term Loan on March 1, 2022. The primary interest rate for Term Loan is 3.76% per annum. The maturity date of the Term Loan is March 1, 2027. Borrowings under the

transportation deployments, and global positioning system ("GPS") signal distribution. Microlab also produces and sells various other products, including a portfolio of GPS digital repeaters and splitters for cellular timing synchronization as well as a passive systems monitor for real-time diagnostics of an in-building distributed antenna system ("DAS"). We have operated the Microlab business at Seller's facilities in Hanover Township, Parsippany, New Jersey, pursuant to a sublease since closing of the acquisition. On October 19, 2022, we entered into two lease agreements for contiguous office and production space in Parsippany, New Jersey and will move the Microlab operations upon completion of certain improvements negotiated under the lease agreements. We expect Microlab to occupy this space on or around our second quarter of fiscal year 2023. The Microlab acquisition is in line with our previously announced strategy for driving revenue growth both organically and through the acquisition of companies that offer access to new products that can be sold to a growing customer base, including through an extensive distribution channel. Microlab's products are known worldwide for their superior quality and performance and are considered the gold standard in RF and microwave distribution systems. We believe that there are significant growth opportunities in the small cell and DAS markets, and that Microlab's products will provide the Company with additional scale and opportunity for further revenue growth.

Strategy

Our overall strategy is to provide our customers with a broad selection of products, rapid and high-quality service, and custom design capabilities, all at competitive prices. Specifically, our strategy is the following:

Provide rapid and flexible design and manufacturing services. Over the past few years we have focused our organization on providing a standardized portfolio, allowing for quick-turnreadily available products, while having the capabilities, flexible design and manufacturing services to customize our offering to address customer specific requirements or applications.

Competitive pricing. Our manufacturing and distribution arrangements have been designed to lower costs and enable us to offer prices on both our standard and custom manufactured products that are competitive with the marketplace, all while keeping quality as a priority.

RF Industries, Ltd. | www.rfindustries.com

Annual Report 2022

5

6

Leverage our manufacturing and distribution capabilities and facilities. Our strategy is to operate our manufacturing and distribution locations to best provide our customers with a competitively priced, high-qualityproduct offering delivered with a fast turnaround time. As part of this strategy, we utilize a "one- company" approach to production and distribution locations and allocate our resources based on each location's production specialization capabilities, its proximity to the shipment destination, and on other factors. Using this "one-company"approach, our goal is to leverage available capacity and shorten delivery times, while potentially providing lower shipping costs. We operate manufacturing and distribution locations in California, and in the Northeastern United States.

Integrate marketing and selling efforts. Our strategy is to integrate and cross-sellour various historical and acquired product lines. We have been integrating our marketing and sales efforts, thereby expanding the number and type of products we can offer to our existing client base, while also using this cross-sellapproach to win new customers.

Broad range of immediately available products. Our strategy is to provide a high level of availability where we stock a large selection of standard products that are available for immediate delivery, including availability from multiple distributors. Additionally, we augment this "on-the-shelf"availability of several cable assembly and interconnect products with fast-turnproduction and assembly providing better lead times for our customers.

Targeted focus of product lines. Our strategy is to focus on passive products rather than manufacturing and selling operating or active components or products. Our product line focus remains on supporting and leveraging our distribution channels with our core passive interconnect and cable assemblies offering, while in parallel we continue to expand our portfolio of integrated solutions to address key end customer and market applications.

Increase long-term relationships with customers. Our goal is to establish long-termrelationships with the customers who have used us for specialized projects by having our solutions built into the customer's product specifications and bills of materials. As we remain focused on maintaining and expanding our national distributor relationships through our dedicated sales and account management teams, we have invested in targeted business development efforts to assist in getting more closely aligned with the requirements of strategic end customers.

Grow through strategic and targeted acquisitions. We will continue to consider strategic acquisitions of companies or technologies that can increase our customer penetration and/ or diversify our customer base, supplement our management team, expand our product offerings, and/or expand our footprint in relevant market segments.

Operations

We currently conduct operations through our six divisions with our product areas divided into two reporting segments.

RF Connector and Cable Assembly Segment.

Our RF Connector and Cable Assembly segment ("RF Connector segment") consists of the RF Connector and Cable Assembly division ("RF Connector division") that is based at our headquarters in San Diego, California and recently expanded in New Jersey through our acquisition of Microlab. The RF Connector division is engaged in the design, manufacture and distribution of coaxial

connector solutions for companies that design, build, operate, maintain and use a variety of connectivity/communication applications. Coaxial connector products consist primarily of connectors which, when attached to a coaxial cable, facilitate the transmission of analog and digital signals in various frequencies. Although most of the connectors are designed to fit standard cable products, the RF Connector division also sells custom connectors specifically designed and manufactured to suit its customers' requirements.

The Microlab division is included in the RF Connector segment. Microlab was acquired in March 2022, and is based in Parsippany, New Jersey. Microlab designs and manufactures high-performance RF and Microwave products enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks. Manufacturing operations are performed at Microlab's facilities in New Jersey.

The RF Connector division typically carries over 1,500 different types of connectors, adapters, tools, and test and measurements kits. This division's RF connectors are used in thousands of different devices, products and types of equipment. Since the RF Connector division's standard connectors can be used in a number of different products and devices, the discontinuation of one product typically does not make our connectors obsolete. Accordingly, most connectors that we carry can be marketed for a number of years. Furthermore, because our connector products are not dependent on any single line of products or any market segment, our overall sales of connectors tend to fluctuate less when there are material changes or disruption to a single product line or market segment.

Cable assembly products manufactured and sold by the RF Connector division consist of various types of coaxial cables that are attached to connectors (usually our connectors) for use in a variety of communications applications. Cable assemblies manufactured for the RF Connector division are primarily manufactured at our San Diego, California facilities using state-of-the-art automation equipment and are sold through distributors or directly to major OEM accounts. Our cable assembly portfolio consists of both standard and custom cable assemblies designed for specific customer requirements. We offer a line of cable assemblies with over 100,000 cable product combinations.

We design our connectors at our headquarters in San Diego, California, and Microlab designs and manufactures a wide selection of RF components and integrated subsystems for signal conditioning and distribution in the wireless infrastructure markets as well as for use in medical devices. However, most of the RF connectors are manufactured for us by third-party foreign manufacturers located in Asia.

Custom Cabling Manufacturing and Assembly Segment.

The Custom Cabling segment currently consists of four wholly- owned subsidiaries - three located in the Northeastern United States and one located in Southern California. Our plan is to integrate certain aspects of the manufacturing, sales and marketing functions of these divisions so as to better address overlapping market opportunities and to more efficiently manufacture, market, and ship products to our customers.

The four divisions that comprise the current Custom Cabling segment consist of the following:

Cables Unlimited, Inc.Cables Unlimited, Inc. ("Cables Unlimited") is a custom cable manufacturer located in Yaphank, New York,

that we acquired in 2011. Cables Unlimited is a Corning Cable Systems CAH ConnectionsSM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems' extended warranty. Cables Unlimited designs, develops and manufactures custom connectivity solutions for the industrial, defense, telecommunications and wireless markets. The products sold by Cables Unlimited include custom and standard copper and fiber optic cable assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive fiber optic and medical equipment.

Rel-TechElectronics, Inc.Rel-Tech Electronics, Inc. ("Rel-Tech") was acquired in June 2015. Rel-Tech's offices and manufacturing facilities are located in Milford, Connecticut. Rel-Tech is a designer and manufacturer of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, medical and military customers. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, and networking and communications cabling.

C Enterprises, Inc.C Enterprises, Inc. ("C Enterprises") is a fiber optic and copper cable manufacturer located in Vista, California. This subsidiary acquired the business and assets of C Enterprises, L.P. on March 15, 2019. C Enterprises is a Corning Cable Systems CAH ConnectionsSM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems' extended warranty. C Enterprises designs, develops and manufactures connectivity solutions to telecommunications and data communications distributors.

Schroff Technologies International, Inc. Schroff Technologies International, Inc. ("Schrofftech") was acquired in November 2019. Schrofftech is a Rhode Island based manufacturer and marketer of intelligent thermal cooling control systems, along with pole-ready wireless small cell shrouds and enclosures, custom designed for plug-and-play installation. These products are typically used by telecommunications companies across the U.S. and Canada.

Impact of COVID-19 Pandemic

In March 2020, the World Health Organization (the "WHO") declared coronavirus ("COVID-19") a pandemic emergency. The COVID-19 pandemic has negatively impacted regional and global economies, disrupted global supply chains, and created significant volatility and disruption of financial markets. The global impact of the outbreak has been rapidly evolving and certain jurisdictions, including those where we or third parties on which we rely have manufacturing facilities, have also reacted by instituting quarantines, restrictions on travel, social distancing protocols and restrictions on types of business that may continue to operate. While we have continued our operations during the pandemic, the impact of the COVID-19 pandemic has affected both our operations and those of our customers. Our operations in fiscal 2021 and 2022 were negatively affected by partial shutdowns of our facilities (particularly in the Northeast United States), by changes that we had to make to our operating methods and procedures, and by a fluctuating workforce as at times, some of our employees stayed at home. Many of our customers and vendors have likewise had temporary closures of their facilities and have otherwise been impacted by changes in their industries. Further, recently, our third-party contract manufacturers have been subject to various supply chain disruptions. These supply chain disruptions have slowed the delivery of products to us. As a result, there has been some volatility in the overall demand for our products, and certain costs have increased. We have taken measures to protect

the health and safety of our employees, and we continue to work with our customers and vendors to minimize potential disruptions in addressing the challenges posed by this global pandemic.

Our third-party contract manufacturers are based in Asia. Recently, our third-party contract manufacturers have been subject to various supply chain disruptions. These supply chain disruptions have slowed the delivery of products to us, and have increased the price of certain materials due to the significant increase in costs of raw materials and shipping costs. Our ability to produce and timely deliver our products may be materially impacted in the future if these supply chain disruptions continue and worsen. In addition, because of the rising cost, we may be forced to increase the price of our products to our customers, or we may have to reduce our gross margins on the products that we sell. Because some of our custom manufacturing contracts call for deliveries over a longer period of time, cost increases during the term of these agreements at times cannot be passed through to our customers and therefore will have to be borne by us.

The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by domestic and international jurisdictions to prevent disease spread, all of which are uncertain and cannot be predicted. While the majority of the outbreak impacted our performance for the years ended October 31, 2021 and October 31, 2022, during the periods covered by this report, we generally saw a recovery to a more normal environment though the operations at all locations were affected intermittently as some of our employee schedules were impacted, and as certain macro-economic conditions persisted. Because of the impact that COVID-19 had on our operations, in May 2020 we applied for and received loans under the Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 ("CARES Act") totaling approximately $2.8 million ("PPP Loans"). All of our PPP Loans have been forgiven and are considered paid in full (including applicable interest).

Product Description

We produce a large variety of interconnect products and assemblies that are used in telecommunications and a range of other industries. The products that we offer and sell consist of the following:

Connector and Cable Products

We design, manufacture and market a broad range of coaxial connectors, adapters and cable assemblies fornumerous applications in commercial, industrial, automotive, transportation, scientific, aerospace and military markets.

There are numerous applications for these connectors, some of which include digital applications, 2.5G, 3G, 4G, 5G, LTE, WiFi and other broadband wireless infrastructure, GPS, mobile radio products, aircraft, video surveillance systems, cable assemblies and test equipment. Users of our connectors include telecommunications companies, circuit board manufacturers, OEMs, consumer electronics manufacturers, audio and video product manufacturers and installers, and satellite companies. We market over 1,500 types of connectors, adapters, tools, assembly, test and measurement kits, which range in price from under $1 to over $1,000 per unit. The kits satisfy a variety of applications including, but not limited to, lab operations, site requirements and adapter needs.

RF Industries, Ltd. | www.rfindustries.com

Annual Report 2022

7

8

We also design and sell a variety of connector tools and hand tools that are assembled into kits used by lab and field technicians, research and development technicians and engineers. These tools are manufactured for us by outside contractors. Tool products are carried as an accommodation to our customers and have not materially contributed to our revenues.

We market and manufacture cable assemblies in a variety of sizes and combinations of RF coaxial connectors and coaxial cabling. Cabling is purchased from a variety of major unaffiliated suppliers and is assembled predominately with our connectors as complete cable assemblies. Coaxial cable assemblies have numerous applications including low PIM, Wi-Fi and wireless local area networks, wide area networks, internet systems, cellular systems including 2.5G, 3G, 4G, 5G, LTE, DAS and Small Cell installations, TV/dish network systems, test equipment, military/ aerospace (mil-standard and COTS (Commercial Off-The-Shelf)) and entertainment systems. Cable assemblies are manufactured to customer requirements.

We carry thousands of separate types of connectors, most of which are available in standard sizes and configurations and that are also offered by other companies. However, we also have some proprietary products, including the CompPro product line, OptiFlex cables, and the Schrofftech telecom shelter cooling and control system products. CompPro is a patented compression technology that offers advantages for a water-tight, ruggedized connection, providing easier installation, and improved system reliability on braided cables. CompPro is used by wireless network operators, installers and distributors in North America and other parts of the world. OptiFlex is a hybrid fiber optic and DC power cabling solution that we designed and manufactured, and the Schrofftech products are energy efficient cooling/temperature control and filtration systems for use in telecom shelters, outdoor enclosures and battery/power rooms.

Passive RF Products

We design and manufacture high-performance RF and microwave high-performance components such as dividers, directional couplers and filters enabling signal distribution and deployment of in-building DAS (distributed antenna systems), wireless base stations and small cell networks.

Fiber Optic Products

Cables Unlimited is a Corning Cable Systems CAH ConnectionsSM Gold Program member that is authorized to manufacture fiber optic products that are backed by Corning Cable Systems' extended warranty. Through our Cables Unlimited division, we offer a broad range of interconnect products and systems that have the ability to combine radio frequency and fiber optic interconnect components, with various connectors and power cables through customized solutions for these customers. Cables Unlimited also manufactures OptiFlex, a custom designed hybrid fiber optic and DC power cabling solution manufactured for wireless service providers engaged in upgrading their cell towers. The custom hybrid cable is significantly lighter and possesses greater flexibility than cables previously used for wireless service.

C Enterprises is a Corning Cable Systems CAH ConnectionsSM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems' extended warranty. C Enterprises designs, develops and manufactures connectivity solutions to telecommunications and data communications distributors.

Other Cabling Products

We design, manufacture, and sell cable assemblies and wiring harnesses for industrial, oilfield, instrumentation, medical, and military customers. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, networking and communications cabling. DIN and Mini DIN connector assemblies include power cord, coaxial, Mil-spec and testing.

Telecommunications Thermal Control Systems and Shrouds

We engineer, design, manufacture and sell intelligent thermal control systems for outdoor telecommunications equipment. The thermal control systems, which can be controlled offsite using networked software at the telecommunication company's own data center, maintain the interior temperature of telecommunications and other networking equipment. We also design and sell integrated shrouds and enclosures for small cell deployments that reduce installation time and improve aesthetics by eliminating the exterior cabling used with current configurations.

Foreign Sales

Net sales to foreign customers accounted for $10,335,000 (or approximately 12%) of our net sales, and $2,464,000 (or approximately 4%) of our net sales for the fiscal years ended October 31, 2022 and 2021, respectively. The majority of the export sales during these periods were to Canada.

We do not own, or directly operate any manufacturing operations or sales offices in foreign countries.

Distribution and Marketing

We currently sell our products through independent warehousing distributors and through our in-house marketing and sales team. Sales through independent distributors accounted for approximately 38% of our net sales for the fiscal year ended October 31, 2022. Our agreements with most of the distributors are nonexclusive and generally may be terminated by either party upon 30-60 days' written notice. The Company directly sells certain of its products to large, national telecommunication equipment and solution providers who include the Company's products in their own product offerings.

Manufacturing

We contract with outside third parties for the manufacture of a significant portion of our coaxial connectors. However, virtually all of the RF cable assemblies sold during the fiscal year ended October 31, 2022 were assembled at the International Organization for Standardization ("ISO") approved factories in San Diego, California and Parsippany, New Jersey. We procure our raw cable from manufacturers with ISO approved factories in the United States, China, and Taiwan. The Company primarily relies on several third-party partners for the manufacture of its coaxial connectors, tools and other passive components and receives bulk cable from multiple manufacturing plants. Although we do not have manufacturing contracts with these manufacturers for our connectors and cable products, we do have long-term purchasing relationships. There are certain risks associated with our dependence on third-party manufacturers for some of our products. See "Risk Factors" below. We have in-house design engineers who create the engineering drawings for fabrication and assembly of connectors and cable assemblies. Accordingly, the third-party manufacturers are not primarily responsible for design work related to the manufacture of our connectors and

cable assemblies. Although our current facilities are set up to manufacture certain lines of products, manufacturing of certain products is often shifted to other facilities to alleviate capacity limitations or to address a customer's product manufacturing schedule requirements.

We manufacture custom cable assemblies, adapters and electromechanical wiring harnesses and other products through Cables Unlimited at its Yaphank, New York manufacturing facility. The Yaphank facility is an ISO approved factory. Cables Unlimited is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic products and assemblies that are backed by Corning Cable Systems' extended warranty.

The Milford, Connecticut facility of Rel-Tech is an ISO approved manufacturing facility that is primarily used to manufacture cable assemblies, electromechanical assemblies, wiring harnesses and other similar products.

The Vista, California facility operated by C Enterprises is an ISO approved manufacturing facility that is primarily used to manufacture fiber optic and copper cable assemblies that are backed by Corning Cable Systems' extended warranty.

The products sold by Schrofftech are designed and manufactured at its ISO approved manufacturing facility in North Kingstown, Rhode Island. Schrofftech's products are manufactured and tested in accordance with the ETL Listing standards.

Microlab designs and manufactures a wide selection of RF components and integrated subsystems in our design and manufacturing facility in Parsippany, New Jersey. We are currently subleasing space and are in the process of building out new space, also in Parsippany, New Jersey.

Raw Materials

Connector materials are typically made of commodity metals such as copper, brass and zinc and include small applications of precious materials, including silver and gold. The RF Connector division purchases most of its connector products from contract manufacturers located in Asia and the United States. We believe that the raw materials used in our products are readily available and that we are not currently dependent on any supplier for our raw materials. We do not currently have any long-term purchase or supply agreements with our connector suppliers. The Custom Cabling divisions obtain coaxial connectors from the RF Connector division. We believe there are numerous domestic and international suppliers of other coaxial connectors that we may utilize for any of our cabling products.

The Cables Unlimited, Rel-Tech, C Enterprises, and Schrofftech divisions purchase largely all of the raw materials used in their products from sources located in the United States. Fiber optic cables are available from various manufacturers located throughout the United States, however, Cables Unlimited purchases most of its fiber optic cables from Corning Cables Systems LLC. The Company believes that the raw materials used by Cables Unlimited in its products are readily available and that Cables Unlimited is not currently dependent on any supplier for its raw materials except where Corning Extended Warranty certification is required. Neither Cables Unlimited nor Rel-Tech Electronics currently have any long- term purchase or supply agreements with their connector and cable suppliers.

Backlog

As of October 31, 2022, our estimated backlog of unfilled firm

orders was approximately $27.8 million compared with backlog of approximately $33.3 million as of October 31, 2021. Orders typically fluctuate from quarter to quarter based on customer demand, general business conditions and, in particular, for project- based orders from wireless carrier customers for custom cable assemblies at our Cables Unlimited division. Since purchase orders are submitted from customers based on the estimated timing of their requirements, our ability to predict orders in future periods or trends in future periods is limited. Furthermore, purchase orders may be subject to shipment delays and to cancellation from customers, although we have not historically experienced material cancellations of purchase orders.

It is expected that a substantial portion of the backlog will be filled within the next 12 months. Most of the orders that we receive, particularly in the RF Connector and Cable Assembly segment, generally have short lead times. Therefore, backlog may not be indicative of future demand.

Acquisition of Microlab/FXR LLC

On December 16, 2021, the Company entered into the Purchase Agreement with Seller (Wireless Telecom Group, Inc.), and its wholly-owned subsidiary Microlab, pursuant to which we purchased 100% of the issued and outstanding membership interests of Microlab from the Seller on March 1, 2022. The consideration for the acquisition was $24,250,000, subject to certain post-closing adjustments as set forth in the Purchase Agreement. The purchase price was paid in cash at the closing. We funded most of the cash purchase price from the funds obtained under the $17 million "Term Loan" with Bank of America, N.A. and paid the remaining amount of the cash purchase price with $7.3 million of cash on hand. The Term Loan was issued as part of a loan agreement with Bank of America, N.A. which also provided the Company with the $3 million "Revolving Credit Facility". Microlab is a New Jersey based company that designs and manufactures high-performance RF and microwave products such as dividers, directional couplers and filters enabling signal distribution and deployment of in- building DAS (distributed antenna systems), wireless base stations and small cell networks.

We obtained representation and warranty insurance to cover any breach of Seller's representations.

Seller also agreed not to, directly or indirectly, (i) engage in any activities that compete with Microlab's business and (ii) hire or solicit any employee, independent contractor, or consultant of Microlab's business for a period of five years from the closing date, subject to certain carve-outs.

Human Capital

As of October 31, 2022, we employed 344 full-time employees, of whom 76 were in accounting, administration, sales and management, 255 were in manufacturing, distribution and assembly, and 13 were engineers engaged in design, engineering and research and development. The employees were based at our facilities in San Diego, California (94 employees), Yaphank, New York (65 employees), Milford, Connecticut (52 employees), Vista, California (73 employees), Parsippany, New Jersey (45 employees), and North Kingstown, Rhode Island (15 employees). We also occasionally hire part-time employees. We believe that we have a good relationship with our employees.

Patents, Trademarks and Licenses

We own ten U.S. patents related to the CompPro Product Line that we acquired in May 2015. The CompPro Product Line utilizes

RF Industries, Ltd. | www.rfindustries.com

Annual Report 2022