On this page of StockholderLetter.com we present the latest annual shareholder letter from R F INDUSTRIES LTD — ticker symbol RFIL. Reading current and past RFIL letters to shareholders can bring important insights into the investment thesis.

1 LETTER FROM THE CEO July 28, 2026 Fellow Shareholders, Fiscal 2025 was a de ning year for RF Industries. We delivered strong nancial performance, expanded operating leverage, elevated our reputation as a high value technology solutions provider, and most importantly demonstrated that our strategy is working. As I re ect on the year and our continued momentum through the rst half of scal 2026, I am proud of what our team has accomplished. Over the past two years, we have repositioned our business, improved execution, and begun to unlock the operating leverage inherent in our model. In my letter to you last year, I noted that RFI was set up for a successful breakout year in scal 2025, and our team delivered. For the full scal year 2025, net sales increased 24% to $80.6 million, gross pro t margin increased 400 basis points to 33%, and adjusted EBITDA tripled to $6.1 million compared to scal 2024 results. Halfway into scal 2026, the momentum has continued. For the rst six months of scal 2026, we expanded into the mid-30% range, drove higher operating income and increased adjusted EBITDA, re ecting improved mix and disciplined execution. Just as important, we generated strong bookings and exited the six-month period with a backlog of $20 million, providing greater visibility into our anticipated performance for the remainder of the year. Taken together, these results reinforce our con dence in the durability of our model and our ability to deliver more consistent, higher-quality earnings as we scale. Beyond the nancial results, we believe there is a broader transformation underway. Strategic Shift from Components to Solutions We have been very clear about our objective to transform RFI from a component supplier into a solutions provider, and that shift in perception was hard won by our talented team. Their determination to open doors and then the eyes of our customers to the value of our proprietary technologies, engineering expertise, and solutions-oriented approach earned us both customer trust and approval. Customer engagement is increasing, and importantly, the nature of that engagement is evolving. Customers are approaching us more frequently with de ned deployment needs and application-speci c challenges, not just product inquiries. We believe this re ects growing recognition of RF Industries as a partner capable of delivering integrated, high-value solutions across complex environments and applications. We are seeing this traction across key end markets, including telecommunications infrastructure, aerospace, data center infrastructure, and transportation. Our ability to combine engineering expertise with a broad product portfolio and U.S.-based manufacturing is creating a differentiated value proposition that is translating into demand. Diversi cation To Expand Customer Base and Markets Diversi cation has been a deliberate, multi-year focus, and we believe it is now a structural strength of our business. We have worked intentionally to broaden our customer base, expand into new end markets, and reduce reliance on any single program or customer. In scal 2025, this approach delivered improved results across products, customers, and markets, while mitigating historical customer concentration risk. Three strategic initiatives continue to shape our growth trajectory. First, we are deepening relationships with existing customers by partnering earlier and more closely to solve complex application challenges. This collaborative approach has enabled cross selling, expanded share of wallet, and engendered stronger long term partnerships. Second, we are leveraging proven solutions from established markets to enter adjacent and emerging end markets, allowing us to replicate success while expanding our opportunity set. Finally, we are rmly committed to working closely with our distribution and channel partners to create mutual value. Our long-standing relationships are foundational to our success in generating recurring revenue and extending our customer reach. From a market perspective, demand across large infrastructure programs including data centers, venues of all types, and transportation remained robust throughout the year, supported by long term infrastructure investment cycles. Our increased focus on the aerospace and defense markets has been an important driver for our custom-cabling solutions. It requires close collaboration between both our engineering and operations teams to conceive and produce mission-critical systems that have elevated our reputation and credibility beyond this evolving and exciting sector. In the telecommunications and broadband markets, ongoing investments in densi cation, coverage expansion, and reliability resulted in steady demand for our Small Cell, Direct Air Cooling (DAC) thermal cooling, and RF connectivity solutions. Innovation To Drive Growth Our product roadmap is aligned with developing and enhancing solutions that anticipate customer needs and deliver value across our end markets. DAC thermal cooling solutions exemplify this strategy in action. We are expanding adoption across new
2 customers, applications, and markets, particularly in edge and distributed infrastructure environments. Importantly, innovation is already contributing to our nancial performance, with newly developed products generating bookings and shipments. We are not investing in innovation for future potential alone we are converting it into revenue today. Operational and Financial Discipline to Achieve Scale Our manufacturing footprint, supply chain diversi cation and cost management initiatives are enabling us to scale efficiently while maintaining exibility. These capabilities are especially important in an environment where tariffs, supply chain shifts, and customer timing can create variability. We are managing those dynamics proactively with clear visibility across the business and disciplined execution across our teams. In scal 2025, we improved working capital efficiency, reduced net debt by $4.6 million, and strengthened our balance sheet and liquidity position. Improved cost controls, inventory management, and process enhancements contributed to more predictable execution and improved pro tability that in turn lowered our overall cost of capital and increased our nancial exibility. The discipline embedded in our organization has made our business more resilient, more responsive, and better positioned to expand margins as we grow. Growing Visibility, Accelerating Momentum We entered scal 2026 building on the momentum of 2025. Today, our backlog and pipeline provide us with greater visibility than we have had in years. Our clear priority is to build on current momentum through consistent execution of our strategic plan to diversify end markets, advance our product roadmap, and strengthen operational predictability. Most importantly, our progress today and tomorrow would not be possible without the dedication and commitment of our employees, the trust of our customers and partners, and the continued support of our shareholders. Fiscal 2025 was a de ning year in reinforcing our ability to deliver results and unlock the full potential of our Company. Sincerely, Robert Dawson, Chief Executive Officer We entered scal 2026 building on the momentum of 2025. Today, our backlog and pipeline provide us with greater visibility than we have had in years. Our clear priority is to build on current momentum through consistent execution of our strategic plan to diversify end markets, advance our product roadmap, and strengthen operational predictability. Annual Report 2025
3 FORM 10-K Annual Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 For the scal year ended October 31, 2025 Commission File Number 0-13301 RF INDUSTRIES, LTD. 16868 Via Del Campo Court, Suite 200, San Diego, California 92127 (858) 549-6340 The aggregate market value of the voting and non-voting common equity held by non-a liates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant s completed second scal quarter of scal 2025 was approximately $34.6 million. On January 14, 2026 the Registrant had 10,713,801 outstanding shares of Common Stock, $0.01 par value. 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 nancial measures. In some cases forward-looking statements can be identi ed 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, the Company s ability to continue as a going concern, the Company s ability to remain in compliance with its existing capital loan terms and nancial covenants and whether plans to develop 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 the Company s most recent Annual Report on Form 10-K led on January 14, 2026, and other risks identi ed from time to time in the Company s lings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to re ect actual results or changes in factors or assumptions affecting such forward-looking statements.
4 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 lters, coaxial cables, data cables, wire harnesses, ber 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. We previously managed our business as two reportable segments: (i) the RF Connector and Cable Assembly ( RF Connector ) segment, and (ii) the Custom Cabling Manufacturing and Assembly ( Custom Cabling ) segment. During the fourth quarter of scal year 2025, we completed changes to the structure of our organization in connection with broader restructuring initiatives, including consolidation of manufacturing operations, headcount reductions, and the transition of our sales organization to a uni ed, customer-centric model. As a result of these changes, our previous RF Connector and Custom Cabling operating segments were combined into a single reportable segment. The Company s operations are managed and reported to the Chief Executive Officer, our chief operating decision maker ( CODM ), on a consolidated basis. We have one reportable business segment. The products and solutions that we offer are discussed below and a summary of our net revenue by these product and solution categories is found in Management s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of this Report. A discussion of factors potentially affecting our net revenue and other operating results is set forth in the section entitled Risk Factors in our most recent Annual Report on Form 10-K led on January 14, 2026. Recent Events On March 15, 2024, we entered into a loan and security agreement (the EBC Credit Agreement ) with Eclipse Business Capital, as administrative agent ( EBC ) and used proceeds from the initial drawings under the EBC Credit Facilities (as de ned below) to repay in full outstanding obligations under our previous loan agreement and to pay fees, premiums, costs and expenses, including fees payable in connection with the EBC Credit Agreement. Our previous loan agreement with Bank of America, N.A. was terminated upon entry into the EBC Credit Agreement and is no longer in effect. The EBC Credit Agreement provides for (i) a senior secured revolving loan facility of up to $15.0 million (the EBC Revolving Loan Facility ) and (ii) a senior secured revolving credit facility of up to $1.0 million (the EBC Additional Line and, together with the EBC Revolving Loan Facility, the EBC Credit Facilities ) (with a $3.0 million swingline loan sublimit). On June 14, 2024, the parties entered into the First Amendment to the EBC Credit Agreement (the First Amendment ), which provided for a modi ed EBC Additional Line of $1.0 million through July 12, 2024, $666,666.67 from July 13, 2024 through August 11, 2024 and $333,333.34 from August 12, 2024 through September 10, 2024. Availability of borrowings under the EBC Credit Facilities are based upon a borrowing base formula and periodic borrowing base certi cations valuing certain of our accounts receivable and inventories, as reduced by certain reserves, if any. In the absence of an Event of Default (as de ned in the EBC Credit Agreement) or certain other events (including the inability of EBC to determine the secured overnight nancing rate SOFR ), borrowings under (a) the EBC Revolving Loan Facility accrue interest at a rate of the one-month term SOFR reference rate plus an adjustment of 0.11448% ( Adjusted Term SOFR ) plus 5.00%, and (b) the EBC Additional Line accrue interest at a rate of Adjusted Term SOFR plus 6.50%, in each case subject to a oor of 2.00% for Adjusted Term SOFR. We will be required to pay a commitment fee of 0.50% per annum for the unused portion of the EBC Revolving Loan Facility. In addition to the foregoing unused commitment fee, we are required to pay certain other administrative fees pursuant to the terms of the EBC Credit Agreement. Borrowings under the EBC Credit Agreement are secured by a security interest in certain assets of the Company and are subject to certain loan covenants. The EBC Credit Facilities require the maintenance of certain nancial covenants, including (i) Excess Availability (as de ned in the EBC Credit Agreement) of at least, as of any date of determination, an amount equal to the greater of (a) $1.0 million and (b) 10% of the Adjusted Borrowing Base (as de ned in the EBC Credit Agreement), unless as of the last day of the most recent month for which the monthly nancial statements and the related compliance certi cate have been or are required to have been delivered to EBC, the Fixed Charge Coverage Ratio (as de ned in the EBC Credit Agreement) for the 12 consecutive calendar month period then ended is greater than 1.10 to 1.00; and (ii) a capital expenditure limitation limiting the aggregate cost of all Capital Expenditure (as de ned in the EBC Credit Agreement) to $2.5 million during any scal year. In addition, the EBC Credit Facilities contain customary affirmative and negative covenants. On November 5, 2025, the parties entered into the Second Amendment to the EBC Credit Agreement (the Second Amendment ). The Second Amendment amended the EBC Credit Agreement to, among other things, (i) extend the maturity date of the EBC Revolving Loan Facility to March 15, 2029, (ii) decrease the minimum EBC Revolving Loan Facility outstanding principal amount to $4.0 million and (iii) decrease the interest rate for the EBC Revolving Loan Facility to Adjusted Term SOFR or the base rate, as applicable, plus the Applicable Margin (as de ned in the EBC Credit Agreement). The Applicable Margin is determined quarterly under a two-prong pricing grid based on both the Average Excess Availability (as de ned in the EBC Credit Agreement) and Fixed Charge Coverage Ratio for the most recently ended scal quarter, as set forth on Annex IV to the EBC Credit Agreement, as amended. Strategy Our overall strategy is to provide our customers with a broad selection of products and solutions, rapid and high-quality service, and custom design capabilities, all at competitive prices. Speci cally, our strategy is the following: Annual Report 2025
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RFIL Shareholder/Stockholder Letter Transcript:


1
LETTER FROM THE CEO
July 28, 2026
Fellow Shareholders,
Fiscal 2025 was a de   ning year for RF Industries. We delivered
strong    nancial performance, expanded operating leverage,
elevated our reputation as a high value technology solutions
provider, and   most importantly   demonstrated that our
strategy is working. As I re   ect on the year and our continued
momentum through the    rst half of    scal 2026, I am proud of
what our team has accomplished. Over the past two years,
we have repositioned our business, improved execution, and
begun to unlock the operating leverage inherent in our model.
In my letter to you last year, I noted that RFI was set up for a
successful breakout year in    scal 2025, and our team delivered.
For the full    scal year 2025, net sales increased 24% to $80.6
million, gross pro   t margin increased 400 basis points to 33%,
and adjusted EBITDA tripled to $6.1 million compared to    scal
2024 results. Halfway into    scal 2026, the momentum has
continued. For the    rst six months of    scal 2026, we expanded
into the mid-30% range, drove higher operating income and
increased adjusted EBITDA, re   ecting improved mix and
disciplined execution. Just as important, we generated strong
bookings and exited the six-month period with a backlog of
$20 million, providing greater visibility into our anticipated
performance for the remainder of the year. Taken together,
these results reinforce our con   dence in the durability of our
model and our ability to deliver more consistent, higher-quality
earnings as we scale. Beyond the    nancial results, we believe
there is a broader transformation underway.
Strategic Shift from Components to Solutions
We have been very clear about our objective to transform RFI
from a component supplier into a solutions provider, and that
shift in perception was hard won by our talented team. Their
determination to open doors and then the eyes of our customers
to the value of our proprietary technologies, engineering
expertise, and solutions-oriented approach earned us both
customer trust and approval.
Customer engagement is increasing, and importantly, the nature
of that engagement is evolving. Customers are approaching
us more frequently with de   ned deployment needs and
application-speci   c challenges, not just product inquiries. We
believe this re   ects growing recognition of RF Industries as a
partner capable of delivering integrated, high-value solutions
across complex environments and applications.
We are seeing this traction across key end markets, including
telecommunications infrastructure, aerospace, data center
infrastructure, and transportation. Our ability to combine
engineering expertise with a broad product portfolio and
U.S.-based manufacturing is creating a differentiated value
proposition that is translating into demand.
Diversi   cation To Expand Customer Base and Markets
Diversi   cation has been a deliberate, multi-year focus, and we
believe it is now a structural strength of our business. We have
worked intentionally to broaden our customer base, expand
into new end markets, and reduce reliance on any single
program or customer. In    scal 2025, this approach delivered
improved results across products, customers, and markets,
while mitigating historical customer concentration risk.
Three strategic initiatives continue to shape our growth
trajectory. First, we are deepening relationships with existing
customers by partnering earlier and more closely to solve
complex application challenges. This collaborative approach
has enabled cross selling, expanded share of wallet, and
engendered stronger long term partnerships. Second, we are
leveraging proven solutions from established markets to enter
adjacent and emerging end markets, allowing us to replicate
success while expanding our opportunity set. Finally, we are
   rmly committed to working closely with our distribution and
channel partners to create mutual value. Our long-standing
relationships are foundational to our success in generating
recurring revenue and extending our customer reach.
From a market perspective, demand across large infrastructure
programs   including data centers, venues of all types,
and transportation   remained robust throughout the year,
supported by long term infrastructure investment cycles. Our
increased focus on the aerospace and defense markets has
been an important driver for our custom-cabling solutions. It
requires close collaboration between both our engineering
and operations teams to conceive and produce mission-critical
systems that have elevated our reputation and credibility beyond
this evolving and exciting sector. In the telecommunications
and broadband markets, ongoing investments in densi   cation,
coverage expansion, and reliability resulted in steady demand
for our Small Cell, Direct Air Cooling (DAC) thermal cooling, and
RF connectivity solutions.
Innovation To Drive Growth
Our product roadmap is aligned with developing and enhancing
solutions that anticipate customer needs and deliver value
across our end markets. DAC thermal cooling solutions exemplify
this strategy in action. We are expanding adoption across new

2
customers, applications, and markets, particularly in edge and
distributed infrastructure environments. Importantly, innovation
is already contributing to our    nancial performance, with newly
developed products generating bookings and shipments. We
are not investing in innovation for future potential alone   we
are converting it into revenue today.
Operational and Financial Discipline to Achieve Scale
Our manufacturing footprint, supply chain diversi   cation and
cost management initiatives are enabling us to scale efficiently
while maintaining    exibility. These capabilities are especially
important in an environment where tariffs, supply chain shifts,
and customer timing can create variability. We are managing
those dynamics proactively with clear visibility across the
business and disciplined execution across our teams.
In    scal 2025, we improved working capital efficiency, reduced
net debt by $4.6 million, and strengthened our balance sheet
and liquidity position. Improved cost controls, inventory
management, and process enhancements contributed to more
predictable execution and improved pro   tability that in turn
lowered our overall cost of capital and increased our    nancial
   exibility.
The discipline embedded in our organization has made our
business more resilient, more responsive, and better positioned
to expand margins as we grow.

Growing Visibility, Accelerating Momentum
We entered    scal 2026 building on the momentum of 2025.
Today, our backlog and pipeline provide us with greater
visibility than we have had in years. Our clear priority is to build
on current momentum through consistent execution of our
strategic plan to diversify end markets, advance our product
roadmap, and strengthen operational predictability.
Most importantly, our progress today and tomorrow would
not be possible without the dedication and commitment of
our employees, the trust of our customers and partners, and
the continued support of our shareholders. Fiscal 2025 was
a de   ning year in reinforcing our ability to deliver results and
unlock the full potential of our Company.
Sincerely,
Robert Dawson, Chief Executive Officer
We entered    scal 2026 building on the momentum of 2025. Today, our
backlog and pipeline provide us with greater visibility than we have had in
years. Our clear priority is to build on current momentum through consistent
execution of our strategic plan to diversify end markets, advance our product
roadmap, and strengthen operational predictability.
Annual Report 2025

3
FORM 10-K
Annual Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the    scal year ended October 31, 2025
Commission File Number 0-13301
RF INDUSTRIES, LTD.
16868 Via Del Campo Court, Suite 200, San Diego, California 92127
(858) 549-6340
The aggregate market value of the voting and non-voting common equity held by non-a   liates computed by reference to
the price at which the common equity was last sold as of the last business day of the registrant   s completed second    scal
quarter of    scal 2025 was approximately $34.6 million.
On January 14, 2026 the Registrant had 10,713,801 outstanding shares of Common Stock, $0.01 par value.
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    nancial measures. In some cases
forward-looking statements can be identi   ed 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, the Company   s ability
to continue as a going concern, the Company   s ability to remain
in compliance with its existing capital loan terms and    nancial
covenants and whether plans to develop 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 the Company   s most recent
Annual Report on Form 10-K    led on January 14, 2026, and other
risks identi   ed from time to time in the Company   s    lings with the
Securities and Exchange Commission. The Company assumes no
obligation to update these forward-looking statements to re   ect
actual results or changes in factors or assumptions affecting such
forward-looking statements.

4
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    lters, coaxial cables, data cables, wire
harnesses,    ber 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.
We previously managed our business as two reportable segments:
(i) the RF Connector and Cable Assembly (   RF Connector   )
segment, and (ii) the Custom Cabling Manufacturing and Assembly
(   Custom Cabling   ) segment. During the fourth quarter of    scal
year 2025, we completed changes to the structure of our
organization in connection with broader restructuring initiatives,
including consolidation of manufacturing operations, headcount
reductions, and the transition of our sales organization to a
uni   ed, customer-centric model. As a result of these changes, our
previous RF Connector and Custom Cabling operating segments
were combined into a single reportable segment. The Company   s
operations are managed and reported to the Chief Executive
Officer, our chief operating decision maker (   CODM   ), on a
consolidated basis.
We have one reportable business segment. The products and
solutions that we offer are discussed below and a summary of our
net revenue by these product and solution categories is found in
   Management   s Discussion and Analysis of Financial Condition
and Results of Operations    included in Part II, Item 7 of this Report.
A discussion of factors potentially affecting our net revenue and
other operating results is set forth in the section entitled    Risk
Factors    in our most recent Annual Report on Form 10-K    led on
January 14, 2026.
Recent Events
On March 15, 2024, we entered into a loan and security agreement
(the    EBC Credit Agreement   ) with Eclipse Business Capital, as
administrative agent (   EBC   ) and used proceeds from the initial
drawings under the EBC Credit Facilities (as de   ned below)
to repay in full outstanding obligations under our previous loan
agreement and to pay fees, premiums, costs and expenses,
including fees payable in connection with the EBC Credit
Agreement. Our previous loan agreement with Bank of America,
N.A. was terminated upon entry into the EBC Credit Agreement
and is no longer in effect.
The EBC Credit Agreement provides for (i) a senior secured
revolving loan facility of up to $15.0 million (the    EBC Revolving
Loan Facility   ) and (ii) a senior secured revolving credit facility of
up to $1.0 million (the    EBC Additional Line    and, together with
the EBC Revolving Loan Facility, the    EBC Credit Facilities   ) (with a
$3.0 million swingline loan sublimit). On June 14, 2024, the parties
entered into the First Amendment to the EBC Credit Agreement (the
   First Amendment   ), which provided for a modi   ed EBC Additional
Line of $1.0 million through July 12, 2024, $666,666.67 from July
13, 2024 through August 11, 2024 and $333,333.34 from August
12, 2024 through September 10, 2024. Availability of borrowings
under the EBC Credit Facilities are based upon a borrowing base
formula and periodic borrowing base certi   cations valuing certain
of our accounts receivable and inventories, as reduced by certain
reserves, if any.
In the absence of an Event of Default (as de   ned in the EBC Credit
Agreement) or certain other events (including the inability of
EBC to determine the secured overnight    nancing rate    SOFR   ),
borrowings under (a) the EBC Revolving Loan Facility accrue
interest at a rate of the one-month term SOFR reference rate plus
an adjustment of 0.11448% (   Adjusted Term SOFR   ) plus 5.00%, and
(b) the EBC Additional Line accrue interest at a rate of Adjusted
Term SOFR plus 6.50%, in each case subject to a    oor of 2.00% for
Adjusted Term SOFR. We will be required to pay a commitment fee
of 0.50% per annum for the unused portion of the EBC Revolving
Loan Facility. In addition to the foregoing unused commitment fee,
we are required to pay certain other administrative fees pursuant
to the terms of the EBC Credit Agreement.
Borrowings under the EBC Credit Agreement are secured by a
security interest in certain assets of the Company and are subject
to certain loan covenants. The EBC Credit Facilities require the
maintenance of certain    nancial covenants, including (i) Excess
Availability (as de   ned in the EBC Credit Agreement) of at least,
as of any date of determination, an amount equal to the greater
of (a) $1.0 million and (b) 10% of the Adjusted Borrowing Base (as
de   ned in the EBC Credit Agreement), unless as of the last day of
the most recent month for which the monthly    nancial statements
and the related compliance certi   cate have been or are required
to have been delivered to EBC, the Fixed Charge Coverage Ratio
(as de   ned in the EBC Credit Agreement) for the 12 consecutive
calendar month period then ended is greater than 1.10 to 1.00; and
(ii) a capital expenditure limitation limiting the aggregate cost of
all Capital Expenditure (as de   ned in the EBC Credit Agreement)
to $2.5 million during any    scal year. In addition, the EBC Credit
Facilities contain customary affirmative and negative covenants.
On November 5, 2025, the parties entered into the Second
Amendment to the EBC Credit Agreement (the    Second
Amendment   ). The Second Amendment amended the EBC Credit
Agreement to, among other things, (i) extend the maturity date of
the EBC Revolving Loan Facility to March 15, 2029, (ii) decrease
the minimum EBC Revolving Loan Facility outstanding principal
amount to $4.0 million and (iii) decrease the interest rate for the
EBC Revolving Loan Facility to Adjusted Term SOFR or the base
rate, as applicable, plus the Applicable Margin (as de   ned in the
EBC Credit Agreement). The Applicable Margin is determined
quarterly under a two-prong pricing grid based on both the Average
Excess Availability (as de   ned in the EBC Credit Agreement) and
Fixed Charge Coverage Ratio for the most recently ended    scal
quarter, as set forth on Annex IV to the EBC Credit Agreement, as
amended.
Strategy
Our overall strategy is to provide our customers with a broad
selection of products and solutions, rapid and high-quality
service, and custom design capabilities, all at competitive prices.
Speci   cally, our strategy is the following:
Annual Report 2025


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