What changed in this filing

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Item 1. Business

2025-03-27 compared with 2024-03-14 · 41 added, 42 removed, 179 unchanged (32% of the section changed)

BK Technologies Corporation (NYSE American:

BKTI) (together with its wholly owned subsidiaries, “BK,” the “Company,” “we” or “us”) is a holding company that, through BK Technologies, Inc., its operating subsidiary, provides public safety grade communications products and services which make first responders safer and more efficient.

BKTI) (together with its wholly owned subsidiaries, “BK,” the “Company,” “we” or “us”) is a holding company that, through BK Technologies, Inc., its operating subsidiary, provides public safety grade communications products and services designed to make first responders safer and more efficient.

All operating activities described herein are undertaken by our operating subsidiary.

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The SaaS business unit focuses on delivering innovative, public safety smartphone applications which operate ubiquitously over public cellular networks.

Our BKRplay branded smartphone application offers multiple services which make the first responder safer and more efficient.

Our BKRplay branded smartphone application offers multiple services designed to make the first responder safer and more efficient.

When tethered to our radios, the combined solution offers an enhanced user experience with more unique capability which increases the sales reach of our radios.

As we move forward into 2025 the SaaS business unit will expand to include public safety solutions that provide for improved interoperability which will make the first responder safer and more efficient when operating in the field.

The new Solutions business will build a portfolio of solutions under a new brand, BK ONE.

BK ONE will include SaaS solutions such as InteropONE as well as future software and hardware applications.

We were incorporated under the laws of the State of Nevada on October 24, 1997.

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Our Internet website address is www.bktechnologies.com.

The information contained on our website is not incorporated by reference in this report.

The information contained on or accessible from our website is not incorporated by reference in this report.

Any reference to our website is intended to be an inactive textual reference only.

We make available on our Internet website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to these reports as soon as practicable after we file such material with, or furnish it to, the U.S.

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Significant Events

On November 6, 2023, the Company entered into a Master Service Agreement (the “EW MSA”) with East West Manufacturing, LLC, a Georgia limited liability company (“EW”), for the manufacturing production of certain land mobile radio (“LMR”) products and accessories.

On October 30, 2024, a wholly owned subsidiary of the Company entered into a new credit facility with Fifth Third Bank, National Association, which provides for a one-year revolving line of credit with a maximum commitment of $6 million, with an accordion feature, if certain conditions are met, for up to a maximum commitment of $10 million.

For additional information, see "Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 6 of the accompanying consolidated financial statements.

On November 6, 2023, the Company entered into a Master Supply Agreement (the “EW MSA”) with East West Manufacturing, LLC, a Georgia limited liability company (“EW”), for the manufacturing production of certain LMR products and accessories.

In connection with the EW MSA, the Company and EW also entered into a Transition Services Agreement to govern the transition of manufacturing production to EW.

Also, in connection with the EW MSA, the Company and EW entered into a Stock Purchase Agreement, pursuant to which EW purchased 77,520 shares of Common Stock with a value equal to $1,000,000.

Also, in connection with the EW MSA, the Company and EW entered into a Stock Purchase Agreement, pursuant to which EW purchased 77,520 shares of the Company's common stock, par value $0.60 per share (the "Common Stock") with a value equal to $1,000,000.

The number of shares of stock was determined based upon a price per share of $12.90, which is equal to the average of the closing price of the Common Stock on the NYSE American exchange for the 30 most recent trading days prior to November 6, 2023, rounded up to the nearest whole number of shares.

Additionally, EW purchased a warrant (“Warrant”), with a five-year term to purchase up to 135,300 shares of Common Stock at an exercise price per share of $15.00.

The Company executed a Reverse Stock Split approved by the board of directors on March 23, 2023, which became effective at 5:00 p.m.

The Company completed the transition of its manufacturing production to EW in the third quarter of 2024.

On March 23, 2023, the board of directors (the “Board” or “Board of Directors”) of the Company approved a one (1)-for-five (5) reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of Common Stock, and on April 4, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Change to its Articles of Incorporation to effect the Reverse Stock Split.

The Reverse Stock Split became effective at 5:00 p.m.

Eastern Time on April 21, 2023.

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Accordingly, all shares and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the Reverse Stock Split.

On March 23, 2023, the board of directors (the “Board” or “Board of Directors”) of the Company approved a one (1)-for-five (5) reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of common stock, par value $0.60 per share (the “Common Stock”), and on April 4, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Change to its Articles of Incorporation to effect the Reverse Stock Split.

On January 31, 2023, the Company entered into a sales agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), relating to the sale of shares of our Common Stock.

In accordance with the terms of the Sales Agreement, we may offer and sell shares of our Common Stock from time to time up to an aggregate offering price of $15,000,000 through or to the Sales Agent, acting as sales agent or principal.

After adjusting for the Reverse Stock Split, the number of shares issuable under the terms of the Sales Agreement is 845,070 shares of our Common Stock.

The Company intends to use the net proceeds from the offering primarily for general corporate purposes, which may include working capital, capital expenditures, operational purposes, strategic investments and potential acquisitions in complementary businesses.

On December 27, 2023, the Company notified the Sales Agent that it was terminating the Sales Agreement as of December 29, 2023, as per the terms of the Sales Agreement.

The Company’s “shelf” registration statement on Form S-3 that was filed with the SEC on December 11, 2020, and amended December 21, 2020, expired on December 29, 2023.

During 2022, pursuant to our capital return program, we declared and paid three quarterly dividends.

The dividends declared in April, June and September 2022 were $0.03 per share.

The Company announced the suspension of its quarterly cash dividend program in March 2023.

On December 17, 2021, a share repurchase program was authorized under which we may repurchase up to an aggregate of $5 million of our Common Stock.

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The actual timing, manner and number of shares repurchased under the program will be determined by management and the Board of Directors at their discretion, and will depend on several factors, including the market price of our Common Stock, general market and economic conditions, alternative investment opportunities, and other business considerations in accordance with applicable securities laws and exchange rules.

The authorization of the share repurchase program does not require BK Technologies to acquire any particular number of shares and repurchases may be suspended or terminated at any time at our discretion.

The authorization of the share repurchase program does not require BK to acquire any particular number of shares and repurchases may be suspended or terminated at any time at our discretion.

Industry Overview

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Likewise, the cost of end user LMR radios can range from under$ 100 for a basic analog portable, to thousands of dollars for a fully featured P25 digital unit.

LMR systems are the most widely used and longest-used form of wireless dispatch communications in the U.S., having been first placed in service in 1921.

LMR systems are the most widely used and longest-used form of wireless dispatch communications in the U.S., having been first placed into service in 1921.

LMR was initially used almost exclusively by law enforcement, and all radio communications were transmitted in an analog format.

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Cellular (LTE or 5G) is typically used to support broadband data applications in the field.

Since the introduction of broadband data LTE cellular technology by US cellular carriers in 2010, the industry has seen a rapid growth of public safety mobile applications which have made the first responder safer and more efficient.

Since the introduction of broadband data LTE cellular technology by U.S.

cellular carriers in 2010, the industry has seen a rapid growth of public safety mobile applications which have made the first responder safer and more efficient.

As cellular coverage continues to improve terrestrially and soon from low earth orbit satellites, the opportunity to further extend mobile applications from public safety vehicles to the first responder’s smartphone opens a new era of services and opportunities.

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We offer products under the company brand name BK Technologies.

Our KNG Series and BKR Series radios operate in both the P25 digital and analog modes of operations in the Federal Communications Commission (“FCC”) licensed bands;

Our KNG Series and BKR Series radios operate in both the P25 digital and analog modes of operations in the FCC licensed bands;

very high frequency (“VHF”) (136MHz - 174MHz), ultra-high frequency (“UHF”) (380MHz - 470MHz, 450MHz - 520MHz), and 700-800 MHz bands.

Our P25 digital technology is compliant with the Project 25 standard for digital LMR equipment.

P25 has been adopted by representatives from APCO, NASTD, the United States (“U.S.”) Federal Government and other public safety user organizations.

The Department of Homeland Security’s P25 Compliance Assessment Program (“CAP”) is a voluntary program that allows LMR equipment suppliers to formally demonstrate their products’ compliance with P25 requirements.

P25 has been adopted by representatives from APCO, NASTD, the U.S.

Federal Government and other public safety user organizations.

The Department of Homeland Security’s ("DHS") P25 Compliance Assessment Program (“CAP”) is a voluntary program that allows LMR equipment suppliers to formally demonstrate their products’ compliance with P25 requirements.

The purpose of the program is to provide federal, state and local emergency response agencies with evidence that the communications equipment they are purchasing satisfies the P25 standard for performance, conformance and interoperability.

The program is a result of legislation passed by the U.S.

Congress to improve communication interoperability for first responders and is a partnership of the U.S Department of Homeland Security (“DHS”)’s Command, Control and Interoperability Division, the National Institute of Standards and Technology (“NIST”), radio equipment manufacturers and the emergency response community.

Congress to improve communication interoperability for first responders and is a partnership of the DHS’s Command, Control and Interoperability Division, the National Institute of Standards and Technology (“NIST”), radio equipment manufacturers and the emergency response community.

Both the KNG and BKR series radios have been validated under the CAP as being P25 compliant.

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InteropONE addresses this interoperability gap by enabling emergency management personnel to quickly bring together any person with a smartphone regardless of which carrier they subscribed to or whether the smartphone user subscribes to a PTTOC service.

This capability is vitally important for effectively managing unplanned incidents that may involve groups of people that don’t normally collaborate.

BKRplay is BK’s public safety smartphone application which provides access to the InteropONE service, as well as a host of other capabilities which make the first responder safer and more efficient.

This capability is vitally important for effectively managing unplanned incidents that may involve groups of people that normally do not collaborate.

BKRplay is BK’s public safety smartphone application which provides access to the InteropONE service, as well as a host of other capabilities designed to make the first responder safer and more efficient.

Built around an intelligent interface between a smartphone and our BK radio, BKRplay services deliver an enhanced customer experience which increases the sales reach of our radios.

BKRplay is available to download from the Google Play or Apple App stores.

We presently have three pending U.S.

We presently have one U.S.

patent awarded and two pending U.S.

patent applications for the SaaS services products.

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In most instances, our KNG and BKR-branded products serve this market and are sold either directly to end-users or through two-way communications dealers.

The BKRplay smartphone application and InteropONE POC service have been designed to service this market and are sold directly to end-users or through SaaS resellers.

The BKRplay smartphone application and InteropONE PTTOC service have been designed to service this market and are sold directly to end-users or through SaaS resellers.

Sales to government and public safety users represented substantially all of our sales for 2024 and 2023.

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The first product in this line, the VHF BKR5000 portable radio was introduced in August 2020.

The second product, the all-band BKR9000 portable radio was released in April 2023.

Our KNG and BKR products also provide P25 compliant encrypted operation for secured communication, GPS location and network authentication capabilities.

The second product, the all-band BKR9000 portable radio was released in April 2023 and our third product, the all-band BKR9500 mobile radio is currently under development.

A segment of our engineering team is responsible for product specifications based on customer requirements and participates in quality assurance activities.

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For 2024 and 2023, our engineering and development expenses were approximately $7.8 million and $9.3 million, respectively.

For 2024, the Company also capitalized approximately $1.3 million of costs related to the development of the all-band BKR9500 mobile radio described above.

Intellectual Property

We presently have four U.S.

patents in force, and we have four pending U.S.

patent applications.

We presently have five U.S.

patents in force, and we have four U.S.

and two international pending patent applications.

We have registered U.S.

trademarks related to the names “BK Technologies,” “BK Radio” and “Radios for Heroes”, and have applied for registration of “BKR”, “BKRplay” and “InteropONE”.

trademarks related to the names “BK Technologies,” “BK Radio” and “Radios for Heroes”, and seek to trademark registrations to protect our proprietary positions whenever possible and wherever practical.

We rely on trade secret laws and employee and third-party nondisclosure agreements to protect our intellectual property rights.

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We also work with our contract manufacturers to improve process control and product design and conduct periodic on-site inspections.

We rely upon a limited number of both American and foreign suppliers for several key products and components.

Approximately 69% of our material, subassembly and product procurements in 2023 were sourced from twelve suppliers.

The Company relies upon a limited number of manufacturers to produce its products and on a limited number of component suppliers.

Some of these manufacturers and suppliers are in other countries.

Approximately 17.0% of the Company’s material, subassembly and product procurements in 2024 were sourced internationally, of which approximately 79.9% were sourced from seven suppliers.

We place purchase orders from time to time with these suppliers and have no guaranteed supply arrangements.

In addition, certain components are obtained from single sources.

During 2022, due to lingering COVID-related supply chain disruptions, our operations were materially impaired due to delays from single-source suppliers.

We manage the risk of such delays by securing secondary sources, where possible, and redesigning products in response to component shortages or obsolescence.

We strive to maintain strong relationships with all of our suppliers.

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These sales were primarily to various government agencies, including those within the DHS, the U.S.

Department of Defense (“DOD”), the USFS and the U.S.

Department of Defense (“DOD”), the U.S.

Forest Service and the U.S.

Department of Interior (“DoI”).

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As of December 31, 2024, we had 113 employees, most of whom are located at our West Melbourne, Florida facility;

79 of these employees are engaged in direct manufacturing or manufacturing support, 32 in engineering, 22 in sales and marketing, and 12 in headquarters, accounting and human resources activities.

39 of these employees are engaged in customer service and distribution, 7 in direct manufacturing or manufacturing support, 34 in engineering, 21 in sales and marketing, and 12 in headquarters, accounting and human resources activities.

Our employees are not represented by any collective bargaining agreements, nor has there ever been a labor-related work stoppage.

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growth, tenacious commitment to quality, continuous improvement, and a keen focus on being customer-centric, continuously drive our efforts to be the best partner for our customers, investment for our shareholders, neighbor in our community and to provide an empowering work environment for our employees.

The Company is committed to the health, safety and wellness of its employees.

During the COVID-19 pandemic, we modified our business practices and implemented certain policies at our offices in accordance with best practices to accommodate, and at times mandate, social distancing and remote work practices, including restricting employee travel, modifying employee work locations, implementing social distancing and enhanced sanitary measures in our facilities, and cancelling attendance at events and conferences.

In addition, we have invested in employee safety equipment, additional cleaning supplies and measures, re-designed production lines and workplaces as necessary and adapted new processes for interactions with our suppliers and customers to safely manage our operations.

Information Relating to Domestic and Export Sales

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business