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rel-tech.com

Stage

Loan | Acquired

Total Raised

$680K

About Rel-Tech Electronics

Rel-Tech Electronics, founded in 1986, is a designer and manufacturer of cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation and military customers. Wire and cable assembly products include custom wire harnesses, ribbon cable, electromechanical and kitted assemblies, and networking and communications cabling. DIN and Mini DIN connector assemblies include power cord, coaxial, Mil-spec, and testing.

Rel-Tech Electronics Headquarter Location

215 Pepes Farm Road

Milford, Connecticut, 06460,

United States

203-877-8770

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Latest Rel-Tech Electronics News

RF Industries : R F INDUSTRIES LTD MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

Jan 27, 2017

(You can enter multiple email addresses separated by commas) Message : CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements and related disclosures have been preparedin accordance with U.S. generally accepted accounting principles ("GAAP"). Thepreparation of these consolidated financial statements requires us to makesignificant estimates and judgments that affect the reported amounts of assets,liabilities, revenues, expenses and related disclosure of contingent assets andliabilities. We evaluate our estimates, including those related to bad debts,inventory reserves and contingencies on an ongoing basis. We base our estimateson historical experience and on various other assumptions that are believed tobe appropriate under the circumstances, the results of which form the basis formaking judgments about the carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differ from theseestimates under different assumptions or conditions. Inventories Inventories are stated at the lower of cost or market, with cost determinedusing the weighted average cost method of accounting. Certain items in inventorymay be considered obsolete or excess and, as such, we periodically review ourinventories for excess and slow moving items and make provisions as necessary toproperly reflect inventory value. Because inventories have, during the past fewyears, represented approximately one-third of our current assets, any reductionin the value of our inventories would require us to take write-offs that wouldaffect our net worth and future earnings. In June 2015 , the Company acquired Rel-Tech Electronics, Inc. ("Rel-Tech"), a company that, from the date of itspurchase by the Company through the second fiscal quarter of 2016, valuedinventories using specific identification (last purchase price) on a FIFO basis.As of July 31, 2016 , Rel-Tech values its inventories cost using the weightedaverage cost of accounting. Allowance for Doubtful Accounts The Company records its allowance for doubtful accounts based upon itsassessment of various factors. The Company considers historical experience, theage of the accounts receivable balance, credit quality of the Company'scustomers, current economic conditions and other factors that may affectcustomer's ability to pay. 15 Long-Lived Assets Including Goodwill The Company assesses property, plant and equipment and intangible assets, whichare considered definite-lived assets for impairment. Definite-lived assets arereviewed when there is evidence that events or changes in circumstances indicatethat the carrying amount of an asset may not be recoverable. We measurerecoverability of these assets by comparing the carrying amounts to the futureundiscounted cash flows the assets are expected to generate. If property andequipment and intangible assets are considered to be impaired, the impairment tobe recognized equals the amount by which the carrying value of the asset exceedsits fair market value. The Company amortizes its intangible assets with definite useful lives overtheir estimated useful lives and reviews these assets for impairment. We test our goodwill and trademarks and indefinite-lived assets for impairmentat least annually or more frequently if events or changes in circumstancesindicate these assets may be impaired. These events or circumstances requiressignificant judgment and could include a significant change in the businessclimate, legal factors, operating performance indicators, competition and saleor disposition of all or a portion of a division. This analysis requiressignificant judgments, including estimation of future cash flows, which isdependent on internal forecasts, estimation of the long-term rate of growth forour business, estimation of the useful life over which cash flows will occur,and determination of our weighted average cost of capital. Income Taxes The Company records a tax provision for the anticipated tax consequences of thereported results of operations. Income taxes are accounted for under the assetand liability method, under which deferred tax assets and liabilities arerecognized for the expected future tax consequences of temporary differencesbetween the financial reporting and tax bases of assets and liabilities, and foroperating losses and tax credit carryforwards. Deferred tax assets andliabilities are measured using the currently enacted tax rates that apply totaxable income in effect for the years in which those tax assets are expected tobe realized or settled. The Company records a valuation allowance to reducedeferred tax assets to the amount that is believed more likely than not to berealized. If a deduction reported on a tax return for an equity-based incentive awardexceeds the cumulative compensation cost for those instruments recognized forfinancial reporting purposes, any resulting realized tax benefit that exceedsthe previously calculated deferred tax asset for those instruments is consideredan excess tax benefit, and is recognized as additional paid-in capital. If thetax deduction is less than the cumulative book compensation cost, the tax effectof the resulting difference is charged first to APIC , to the extent of theavailable pool of windfall tax benefits, with any remainder recognized in incometax expense. The calculation of the tax provision involves significant judgment in estimatingthe impact of uncertainties in the application of GAAP and complex tax laws.Resolution of these uncertainties in a manner inconsistent with management'sexpectations could have a material impact on the Company's financial conditionand operating results. Stock-based Compensation The Company uses the Black-Scholes model to value the stock option grants. Thisvaluation is affected by the Company's stock price as well as assumptionsregarding a number of inputs which involve significant judgments and estimates.These inputs include the expected term of employee stock options, the expectedvolatility of the stock price, the risk-free interest rate and expecteddividends. Earn-out Liability The purchase agreements for the Comnet and Rel-Tech acquisitions provides forearn-out payments of up to $1,360,000 and $800,000 , respectively. The initialearn-out liability was valued at its fair value using the Monte Carlo simulationand is included as a component of the total purchase price. The earn-outs wereand will continue to be revalued quarterly using a present value approach andany resulting increase or decrease will be recorded into selling and generalexpenses. Any changes in the assumed timing and amount of the probability ofpayment scenarios could impact the fair value. Significant judgment is employedin determining the appropriateness of the assumptions used in calculating thefair value of the earn-out as of the acquisition date. Accordingly, significantvariances between actual and forecasted results or changes in the assumptionscan materially impact the amount of contingent consideration expense we recordin future periods. The Comnet and Rel-Tech acquisitions are more fully describedin Note 2 of the consolidated financial statements included with this report. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS For recently issued accounting pronouncements that may affect us, see Note 1 ofNotes to Consolidated Financial Statements. 16OVERVIEW During the periods covered by this Annual Report, the Company marketed a varietyof connector products, including connectors and cables, standard and customcable assemblies, wiring harnesses, fiber optic cable products, and data centerproducts to numerous industries for use in thousands of products. The range ofproducts that the Company sold and the services that the Company provided haschanged substantially in the periods covered by the attached financialstatements. During the past few years, the Company sold its: (i) RF Neulink RFdivision (a manufacturer of data links and wireless modems), (ii) theRadioMobile division (a provider of end-to-end mobile management solutions forgovernmental agencies), and (iii) Aviel Electronics division (a provider ofcustom RF connectors primarily for aerospace and military customers). Inaddition, during March 2016 , the Company announced the shutdown of itsBioconnect division, which comprised the entire operations of the MedicalCabling and Interconnect segment. RF Industries also purchased Comnet Telecom (aprovider of fiber optic and other cabling technologies, custom patch cordassemblies, and other data center products) effective November 2014 and Rel-Tech(a provider of cable assemblies and wiring harnesses for blue chip industrial,oilfield, instrumentation and military customers) in June 2015 . The acquisitionsof Comnet and Rel-Tech have diversified the Company's product line and customerbase, and have increased the Company's presence on the East Coast . As well, theComnet and Rel-Tech divisions have significantly contributed to the Company'srevenues and profitability since their acquisitions. During 2015, the Companyalso purchased a new patented connector product line and technology (the CompProline). The Company aggregates operating divisions into operating segments which havesimilar economic characteristics and are similar in the majority of thefollowing areas: (1) the nature of the product and services; (2) the nature ofthe production process; (3) the type or class of customer for their products andservices; (4) the methods used to distribute their products or services; and (5)if applicable, the nature of the regulatory environment. The Company has twosegments - the " RF Connector and Cable Assembly " segment and the "Custom CablingManufacturing and Assembly" segment-based upon this evaluation. During the fiscal year ended October 31, 2016

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