Note 2 - Business Acquisition

On June 15, 2011, RF Industries, Ltd. completed its acquisition of Cables Unlimited. Cables Unlimited is an established fiber optic custom cable manufacturer based in Long Island, New York. Cables Unlimited is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture optic products that are backed by Corning Cable Systems' extended warranty. The products manufactured by Cables Unlimited include custom fiber optic cable assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive and medical equipment.

All of Cables Unlimited’s assets are located in the United States. There were no earnouts or contingent considerations included in the acquisition agreement.

The acquisition was accounted for in accordance with the acquisition method of accounting. The acquired assets and assumed liabilities were recorded by the Company at their estimated fair values. The Company determined the estimated fair values with the assistance of appraisals or valuations performed by an independent third party specialist. Cables Unlimited is an established fiber optic custom cable manufacturer based in Long Island, New York. Cables Unlimited is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture optic products that are backed by Corning Cable Systems' extended warranty. The products manufactured by Cables Unlimited include custom fiber optic cable assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive and medical equipment. These products supplement and enhance the existing markets of RF Industries as well as tap into new fiber optic cable markets that the Company would not have been able to enter without incurring substantially more costs than incurred in the purchase of Cables Unlimited. The capital and other resources required to enter the fiber optic market would have greatly exceeded the purchase price of $5.6 million. These factors, among others, contributed to a purchase price in excess of the estimated fair value of Cables Unlimited’s net identifiable assets acquired, and as a result, we have recorded goodwill in connection with this transaction.

Goodwill acquired was allocated to our operating segment and reporting unit Cables Unlimited as part of the purchase price allocation. We do not expect the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives ranging from six months to 7.6 years. The purchase price allocation is preliminary as it includes several estimates, which are being refined.

The following table summarizes the components of the purchase price at fair value:

Cash consideration paid	$	2,800,000
RF Industries, Ltd. common shares issued, (762,738 shares)		2,800,000
Total consideration	$	5,600,000

The following table summarizes the allocation of the purchase price at fair value:

Other assets	$	6,000
Accounts Receivable		814,000
Inventories		445,000
Property, plant and equipment		313,000
Intangible assets		2,940,000
Goodwill (all non-deductible for tax purposes)		2,642,000
Interest bearing liabilities		(7,000	)
Non-interest bearing liabilities		(372,000	)
Deferred tax liabilities		(1,181,000	)
Net assets	$	5,600,000

The results of Cables Unlimited operations subsequent to June 15, 2011 have been included in the Company’s consolidated results of operations. In the three month period ended July 31, 2011, Cables Unlimited contributed approximately $909,000 of revenue.

The following unaudited pro forma financial information presents the combined operating results of RFI Industries, Ltd. and Cables Unlimited as if the acquisition had occurred as of the beginning of the periods presented. Pro forma data is subject to various assumptions and estimates, and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results.

Pro forma financial information is presented in the following table:

	Three Months ended July 31,
	2011		2010

Revenue	$	5,657,085	$	5,659,758
Net income	$	110,007	$	316,390

Earnings per share
Basic	$	.02	$	.05
Diluted	$	.01	$	.04

	Nine Months ended July 31,
	2011		2010

Revenue	$	17,053,593	$	15,167,525
Net income	$	920,644	$	806,157

Earnings per share
Basic	$	.13	$	.12
Diluted	$	.12	$	.11