What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-14 · 354 added, 371 removed, 371 unchanged (66% of the section changed)

3 unchanged sentences

( In thousands, except share data)(Unaudited)

September 30,

Current assets:

20 unchanged sentences

Short-term operating lease liabilities

Credit facility

Notes payable-current portion

Deferred revenue

2 unchanged sentences

Long-term operating lease liabilities

Long-term uncertain tax position liability

Deferred revenue

10 unchanged sentences

10,000,000 authorized shares;

3,905,143 and 3,867,082 issued, and 3,563,063 and 3,577,002 outstanding shares as of September 30, 2024 and December 31, 2023, respectively

3,926,426 and 3,913,959 issued, and 3,584,346 and 3,571,879 outstanding shares as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

2 unchanged sentences

( 13,718 ) ( 15,850 )

Treasury stock, at cost, 342,080 and 290,080 shares as of September 30, 2024, and December 31, 2023, respectively

Treasury stock, at cost, 342,080 shares as of March 31, 2025, and December 31, 2024

( 6,053 ) ( 6,053 )

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of products

1 unchanged sentence

Total operating expenses

Operating income (loss)

Operating income

Other (expense) income:

Net interest expense

Net interest income (expense)

Gain on disposal of property, plant and equipment

2 unchanged sentences

Total other (expense), net

Income (loss) before income taxes

Income before income taxes

Provision for income tax (expense)

Net income (loss)

Net income (loss) per share-basic:

Net income (loss) per share-diluted:

Net income per share-basic:

Net income per share-diluted:

Weighted average shares outstanding-basic

4 unchanged sentences

( In thousands ) ( Unaudited )

Nine Months Ended

September 30,

Three Months Ended

Operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Inventories allowances

Allowance for credit losses on accounts receivable

Amortization of deferred financing costs and other assets

Allowance for credit losses

Deferred tax benefit

Depreciation and amortization

1 unchanged sentence

Share-based compensation expense-restricted stock units

Gain on sale of equipment

Loss on investments

5 unchanged sentences

Accounts payable

Long-term uncertain tax position liability

Accrued compensation and related taxes

2 unchanged sentences

Accrued other expenses and other current liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Investing activities

5 unchanged sentences

Repayment of the credit facility and notes payable

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

5 unchanged sentences

Common stock issued under restricted stock units

Cashless exercise of stock options and related conversion of net shares to stockholders' equity

See Accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

Three and Nine Months Ended September 30, 2024 and 2023

Three Months Ended March 31, 2025 and 2024

(In thousands, except share and per share data and percentages or as otherwise noted)

1 unchanged sentence

Basis of Presentation

The condensed consolidated balance sheet as of September 30, 2024 , the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 , and 2023 , and the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 , and 2023 , have been prepared by BK Technologies Corporation (the “Company,” “we,” “us,” “our”), and are unaudited but include all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented.

The condensed consolidated balance sheet as of March 31, 2025 , the condensed consolidated statements of operations for the three months ended March 31, 2025 , and 2024 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2025 , and 2024 , have been prepared by BK Technologies Corporation (the “Company,” “we,” “us,” “our”), and are unaudited but include all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented.

The condensed consolidated balance sheet as of December 31, 2024 , has been derived from the Company’s audited consolidated financial statements at that date.

2 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10 -K for the fiscal year ended December 31, 2024 , as filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025.

The results of operations for the three and nine months ended September 30, 2024 , and 2023 , are not necessarily indicative of the operating results for a full year.

The results of operations for the three months ended March 31, 2025 , and 2024 , are not necessarily indicative of the operating results for a full year.

Principles of Consolidation

The accounts of the Company and its subsidiaries have been included in the accompanying condensed consolidated financial statements.

The accounts of the Company have been included in the accompanying condensed consolidated financial statements.

All significant intercompany balances and transactions have been eliminated in consolidation.

4 unchanged sentences

The Company’s financial instruments consist of cash and cash equivalents, trade accounts receivable, investments, accounts payable, accrued expenses, notes payable, credit facilities, and other liabilities.

As of September 30, 2024 , and December 31, 2023 , the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, credit facilities, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

As of March 31, 2025 , and December 31, 2024 , the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, credit facilities, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

Effective September 14, 2022, the Company had an investment in Series B common membership interests of FG Financial Holdings, LLC (“FG Holdings LLC”).

7 unchanged sentences

The shares received by the Company are held as treasury stock, increasing the total number of treasury shares held by the Company to 342,080 .

On November 22, 2022, the Company’s wholly owned subsidiaries, BK Technologies, Inc.

On October 30, 2024, the Company's subsidiary, BK Technologies, Inc.

entered into a Revolving Loan Commitment (“RLC”) with Fifth Third Bank, National Association, (“Fifth Third”).

The Fifth Third RLC 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 an additional $ 4 million of borrowing capacity, totaling a maximum commitment of $ 10 million.

Each advance shall accrue interest on the outstanding principal amount thereof at a rate of SOFR plus 2.5 % per annum.

Each advance may be prepaid at any time without penalty and the entire line of credit commitment may be permanently terminated by BK Technologies, Inc.

at any time upon 10 days’ prior written notice to the lender without penalty.

The RLC has a borrowing base equal to the sum of (i) 80 % of eligible commercial accounts receivable, plus (ii) 50 % of federal government accounts receivable, plus (iii) the lesser of (a) the sum of (i) and (ii) and (b) 50 % of eligible finished goods inventory.

The Company has not utilized funding and there were no borrowings under the RLC agreement as of March 31, 2025, and as of the date of filing this report.

BK Technologies, Inc.'s repayment obligations under the RLC are guaranteed by the Company and Relm Communications, Inc.

and secured by a pledge of essentially all of the assets of the Company, BK Technologies, Inc.

and Relm Communications, Inc.

(the “Subsidiaries”), entered into an Invoice Purchase and Security Agreement (“IPSA”) with Alterna Capital Solutions, LLC (“Alterna”), providing for a one -year line of credit with total maximum funding up to $ 15 million (the “Line of Credit”).

On November 22, 2023, the IPSA was renewed for one more year.

The Company used funds obtained from the Line of Credit to replace the JPMC Credit Agreement (defined below) (see Note 12 ).

The IPSA was paid off in September 2024.

On October 30, 2024, the Company entered into a new line of credit agreement with Fifth Third Bank, N.A.

(see Note 14 ).

The loan parties are subject to customary negative covenants, including with respect to their ability to incur additional indebtedness, encumber and dispose of their assets and enter into affiliate transactions.

BK Technologies, Inc.

must also comply with:

(i) a maximum total funded debt ratio of 2.00 to 1.00;

(ii) a fixed charge coverage ratio of 1.2 to 1.0 as measured on a rolling twelve -month basis, each measured at the end of each fiscal quarter.

The Fifth Third RLC agreement provided for customary events of default, including:

( 1 ) failure to pay principal, interest or fees under the RLC when due and payable;

( 2 ) failure to comply with other covenants and agreements contained in the Revolving Loan Commitment agreement and the other documents executed in connection therewith;

( 3 ) the making of false or inaccurate representations and warranties;

( 4 ) defaults under other debt or other obligations of BK Technologies, Inc.;

( 5 ) money judgments and material adverse changes;

( 6 ) a change in control or ceasing to operate business in the ordinary course;

and ( 7 ) certain events of bankruptcy or insolvency.

Upon the occurrence of an event of default, Fifth Third Bank may declare the entire unpaid balance immediately due and payable and/or exercise any and all remedial and other rights under the RLC agreement.

Management believes that cash and cash equivalents currently available, combined with anticipated cash to be generated from operations, and borrowing ability are sufficient to meet the Company’s working capital requirements in the foreseeable future.

8 unchanged sentences

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

Recent Accounting Pronouncements

Accounting Pronouncements

The Company does not discuss recent pronouncements that are not anticipated to have a material impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

1 unchanged sentence

Improvements to Reportable Segment Disclosures which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The new standard is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact of the adoption of this standard on its financial statements.

The new standard became effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company evaluated the requirements for ASU 2023 - 07 and reported one reportable segment and included required disclosures.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendment should be applied on a prospective basis while retrospective application is permitted.

The Company will adopt the ASU and will make the applicable disclosure, as required, on its Annual Report Form 10 -K for the year ended December 31, 2025.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses, an accounting standard update to improve income statement expenses disclosures.

The standard requires more detailed information related to the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each interim and annual income statement’s expense caption, as applicable.

This authoritative guidance can be applied prospectively or retrospectively and will be effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The Company is currently evaluating the effect of this pronouncement on its disclosures.

Segment Reporting Disclosures

The Company has one reportable segment - Land Mobile Radio (LMR) Products and Solutions.

The LMR segment provides radio devises that are hand-held (portable) or installed in vehicles (mobile) and operate on private radio systems that are P25 compliant.

The Company derives revenue primarily in North America and manages the business activities on a consolidated basis.

The LMR radio products are used by public safety agencies of the federal government, state and local municipality P25 compliant radio systems.

The radio systems operate on frequencies managed by the Federal Communications Commission (FCC).

The Company’s chief operating decision maker is the senior executive committee that includes the chief technology officer, chief financial officer, and the chief executive officer.

The accounting policies of the LMR segment are the same as those described in the summary of significant accounting policies.

The chief operating decision maker assesses performance for the LMR segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The chief operating decision maker uses operating income and net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the LMR segment or into other parts of the entity, the development of public safety applications utilizing cellular technology or for acquisitions.

Net income is used to monitor budget versus actual results.

The chief operating decision maker also uses net income in competitive analysis by benchmarking to the Company’s competitors.

The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

The table below summarizes the significant categories regularly reviewed by the CODM for the three months ended March 31, 2025, and 2024, respectively:

$ 19,054 $ 18,231

Cost of products

10,104 11,943

Engineering and product development

Marketing and selling

General and administrative

Selling, general and administrative expenses

Operating income

Other (expense) income (a)

( 114 ) ( 190 )

Income tax (expense) benefit

( 670 ) ( 21 )

Segment net income

$ 2,132 $ 772

Reconciliation of profit

Adjustments and reconciling item

Loss on investments

Consolidated net income

$ 2,132 $ 681

(a) Other segment items included interest expense and foreign currency exchange gains/losses

Significant Events and Transactions

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.

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 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 12 of the accompanying consolidated financial statements.

On November 6, 2023, the Company entered into a Master Supply Agreement (the “MSA”) and Transition Services Agreement (the “TSA,” and together with the MSA, the “Agreements”) with East West Manufacturing, LLC, a Georgia limited liability company (“East West”).

5 unchanged sentences

The payment included a $ 950 reduction in accounts payable and $ 50 in cash.

The BKTI Stock, the Warrant and the shares issuable upon exercise of the Warrant are deemed to be issued to an accredited investor in a private placement exempt from the registration pursuant to Section 4 (a)( 2 ) of the Securities Act of 1933, as amended.

The common stock, the Warrant and the shares issuable upon exercise of the Warrant are deemed to be issued to an accredited investor in a private placement exempt from the registration pursuant to Section 4 (a)( 2 ) of the Securities Act of 1933, as amended (“Securities Act”).

The Company’s reliance upon Section 4 (a)( 2 ) of the Securities Act was based in part upon the following factors:

(a) the issuance of the securities was in connection with isolated private transactions which did not involve any public offering;

(b) there were a limited number of offerees;

(c) there will be no subsequent or contemporaneous public offerings of the Warrant or the shares underlying the Warrant by the Company;

and (d) the negotiations for the sale of the securities took place directly between East West and the Company.

Allowance for Credit Losses

The allowance for credit losses on trade receivables was approximately $ 122 and $ 50 on gross trade receivables of $ 9,467 and $ 7,952 as of September 30, 2024 , and December 31, 2023 , respectively.

The allowance for credit losses on trade receivables was approximately $ 50 on gross trade receivables of $ 10,221 and $ 7,399 as of March 31, 2025 , and December 31, 2024 , respectively.

The measurement and recognition of credit losses involves the use of judgment and represents management’s estimate of expected lifetime credit losses based on historical experience and trends, current conditions, and forecasts.

The Company’s assessment of expected credit losses includes consideration of historical credit loss experience, the aging of account balances, customer concentrations, customer creditworthiness, and current and expected economic, market and industry factors affecting the Company’s customers, including their financial condition.

The Company’s assessment of expected credit losses includes consideration of historical credit loss experience, the aging of account balances, customer concentrations, customer creditworthiness, current and expected economic, market and industry factors affecting the Company’s customers, including their financial condition.

The Company evaluates its experience with historical losses and then applies this historical loss ratio to financial assets with similar characteristics.

Based on information available, management believes the allowance for credit losses as of September 30, 2024 and December 31, 2023 is adequate.

The Company may also establish an allowance for credit losses for specific receivables when it is probable that the receivable will not be collected and the loss can be reasonably estimated.

If the Company’s actual collections experience changes, revisions to the allowance may be required.

Amounts are written off against the allowance when all attempts to collect a receivable have failed, and reversals of previously reserved amounts are recognized if a specifically reserved item is settled for an amount exceeding the previous estimate.

Based on information available, management believes the allowance for credit losses as of March 31, 2025 and December 31, 2024 is adequate.

Inventories, Net

Inventories, which are presented net of allowance for slow moving, excess, and obsolete inventory, consisted of the following:

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

$ 16,233 $ 17,636

$ 18,674 $ 23,952

Allowances for slow-moving, excess, or obsolete inventory are used to state the Company’s inventories at the lower of cost or net realizable value.

The allowances were approximately $ 1,354 as of September 30, 2024 , compared with approximately $ 1,838 as of December 31, 2023 .

The Company has recorded $ 247 and $ 488 tax expense for the three and nine months ended September 30, 2024 , respectively.

The Company recorded no tax expense or benefit for the same periods last year.

The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year.

The tax provision (benefit) in any period will be affected by, among other things, permanent, as well as temporary, differences in the deductibility of certain items, changes in the valuation allowance related to net deferred tax assets, in addition to changes in tax legislation.

As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

As of September 30, 2024 , the Company’s net deferred tax assets totaled approximately $ 4,116 and were primarily derived from research and development tax credits, deferred revenue, and net operating loss carryforwards.

The utilization of net operating loss carryforwards in a given year is limited.

In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years.

The Company analyzed all positive and negative evidence to determine if, based on the weight of available evidence, it is more likely than not to realize the benefit of the net deferred tax assets.

The recognition of the net deferred tax assets and related tax benefits is based upon the Company’s conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.

Based on the analysis of all available evidence, both positive and negative, the Company has concluded that it does not have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets.

Accordingly, the Company established a valuation allowance of $ 4,365 and $ 4,398 as of September 30, 2024, and December 31, 2023, respectively.

If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of September 30, 2024.

The allowances were approximately $ 1,624 as of March 31, 2025 , compared with approximately $ 1,694 as of December 31, 2024 .

For the three months ended March 31, 2025, the Company recorded an income tax expense of $ 670 , resulting in an effective tax rate of 24.8 %.

The Company's taxable income is generated in the United Sates and taxed at a federal and state statutory rate of 26.7 %.

Relative to the federal and state statutory rate, the effective tax rate for the three months ended March 31, 2025, was reduced by the tax impact of research and development tax credits.

For the three months ended March 31, 2024, the Company recorded an income tax expense of $ 21 .

The effective tax rate for the three months ended March 31, 2024, was 3.0 %.

Relative to the federal and state statutory rate, the effective tax rate for the three months ended March 31, 2024, was primarily impacted by the tax benefit for research and development tax credits for 2024 as compared to projected income before tax.

Income Taxes (continued)

Based on our analysis of all available evidence, both positive and negative, we have concluded that, except for the capital loss carryforward of approximately $ 0.8 million, we will have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets.

Accordingly, we recorded a decrease in the valuation allowance of approximately $ 3.6 million as of December 31, 2024.

We cannot presently estimate what, if any, changes to the valuation of our deferred tax assets may be deemed appropriate in the future.

If we incur future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of March 31, 2025.

Should the factors underlying management’s analysis change, future valuation adjustments to the Company’s net deferred tax assets may be necessary.

If future losses are incurred, it may be necessary to record an additional valuation allowance related to the Company’s net deferred tax assets recorded as of March 31, 2025.

The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future.

The Company performed a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by GAAP.

In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return or planned to be taken in a future tax return that has not been reflected in measuring income tax expense for financial reporting purposes.

Capitalized Product Development Costs

2 unchanged sentences

Upon the general release of the LMR multi-band mobile radio product currently in development to customers, development costs for that product will be amortized over periods not exceeding ten years, based on future revenue of the product.

Capitalized product development costs are $ 321 and $ 751 for the three and nine months ended September 30, 2024 , respectively.

Capitalized product development costs are $ 440 and $ 147 for the three months ended March 31, 2025 and 2024, respectively.

On January 25, 2024, the Company redeemed its Series B common membership interests (the “Interests”) of FG Holdings LLC and withdrew from FG Holdings LLC.

10 unchanged sentences

The Company did not have any unfunded commitments related to this investment.

As of December 31, 2023 , the members and affiliates of FG Holdings LLC beneficially owned in the aggregate 5,666,111 shares of FGF's common stock, representing approximately 55 % of FGF's outstanding shares.

As of January 25, 2024, the members and affiliates of FG Holdings LLC beneficially owned in the aggregate 5,666,111 shares of FGF's common stock, representing approximately 55 % of FGF's outstanding shares.

Additionally, FG Holdings LLC and its affiliates constituted the largest stockholder of the Company.

2 unchanged sentences

Stockholders ’ Equity

Effective on April 21, 2023, the Company filed a Certificate of Change to the Articles of Incorporation to effect the Reverse Stock Split (see Note 1 ).

All share and per share information in this Quarterly Report on Form 10 -Q have been retroactively adjusted to reflect the Reverse Stock Split.

The changes in condensed consolidated stockholders’ equity for the three and nine months ended September 30, 2024 , and 2023 , are as follows:

The changes in condensed consolidated stockholders’ equity for the three months ended March 31, 2025 , and 2024 , are as follows:

Balance at December 31, 2024

2 unchanged sentences

13,764 7 ( 7 ) — — —

Share-based compensation expense-stock options

— — 55 — — 55

Share-based compensation expense-restricted stock units

— — 121 — — 121

Treasury shares

— — — — ( 651 ) ( 651 )

— — — 681 — 681

Balance at March 31, 2024

3,871,792 2,323 48,775 ( 23,528 ) ( 6,053 ) 21,517

Common stock issued under restricted stock units

6,006 4 ( 4 ) — — —

Share-based compensation expense-stock options

— — 77 — — 77

Share-based compensation expense-restricted stock units

— — 148 — — 148

— — — 1,664 — 1,664

Balance at June 30, 2024

3,877,798 2,327 48,996 ( 21,864 ) ( 6,053 ) 23,406

Common stock issued under restricted stock units

21,327 12 ( 12 ) — — —

Common stock issued - exercised warrants

6,018 4 ( 4 ) — — —

Share-based compensation expense-stock options

— — 78 — — 78

Share-based compensation expense-restricted stock units

— — 146 — — 146

— — — 2,357 — 2,357

Balance at September 30, 2024

3,905,143 $ 2,343 $ 49,204 $ ( 19,507 ) $ ( 6,053 ) $ 25,987

Balance at December 31, 2022

3,686,939 $ 2,212 $ 45,304 $ ( 21,979 ) $ ( 5,402 ) $ 20,135

Common stock issued

858 1 14 — — 15

Common stock issued under restricted stock units

Common stock issued-stock options

1,148 1 12 — — 13

6 unchanged sentences

3,928,871 2,356 49,784 ( 13,718 ) ( 6,053 ) 32,369

Common stock issued

Balance at December 31, 2023

3,867,082 $ 2,320 $ 48,602 $ ( 24,209 ) $ ( 5,402 ) $ 21,311

5 unchanged sentences

— — 121 — — 121

— — — ( 1,340 ) — ( 1,340 )

Balance at June 30, 2023

3,694,298 2,217 45,600 ( 24,589 ) ( 5,402 ) 17,826

Common stock issued

1,254 1 12 — — 13

Common stock issued under restricted stock units

27,418 16 ( 16 ) — — —

Share-based compensation expense-stock options

— — 44 — — 44

Share-based compensation expense-restricted stock units

Treasury shares

— — — — ( 651 ) ( 651 )

— — — 681 — 681

Balance at September 30, 2023

Balance at March 31, 2024

3,871,792 2,323 48,775 ( 23,528 ) ( 6,053 ) 21,517

Income (Loss) Per Share

The following table sets forth the computation of basic and diluted income (loss) per share:

Income Per Share

The following table sets forth the computation of basic and diluted income per share:

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Net income (loss) for basic and diluted earnings per share

March 31, 2025

March 31, 2024

Net income for basic and diluted earnings per share

$ 2,132 $ 681

Denominator for basic income (loss) per share weighted average shares

Denominator for basic income per share weighted average shares

3,572,576 3,538,507

2 unchanged sentences

320,567 15,932

Denominator for diluted income (loss) per share weighted average shares

Denominator for diluted income per share weighted average shares

3,893,143 3,554,439

Basic income (loss) per share

Basic income per share

$ 0.60 $ 0.19

Diluted income (loss) per share

Diluted income per share

$ 0.55 $ 0.19

Approximately 21,700 stock options and 20,435 restricted stock units for the three and nine months ended September 30, 2024, and 168,600 and 224,600 stock options and 28,569 and 29,381 restricted stock units for the three and nine months ended September 30, 2023, respectively, were excluded from the calculation because they were anti-dilutive.

Non-Cash Share-Based Employee Compensation

1 unchanged sentence

The Company has employee and non-employee director share-based incentive compensation plans.

Related to these programs, the Company recorded non-cash share-based employee compensation expense of $ 78 and $ 210 for the three and nine months ended September 30, 2024 , respectively, compared with $ 44 and $ 163 for the same periods last year.

Related to these programs, the Company recorded non-cash share-based employee compensation expense of $ 118 for the three months ended March 31, 2025 , compared with $ 55 for the same period last year.

The Company considers its non-cash share-based employee compensation expenses as a component of cost of products and selling, general and administrative expenses.

1 unchanged sentence

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of stock option grants under this plan.

The non-cash share-based employee compensation expense recorded in the three and nine months ended September 30, 2024 , was calculated using certain assumptions.

The non-cash share-based employee compensation expense recorded in the three months ended March 31, 2025 , was calculated using certain assumptions.

Such assumptions are described more comprehensively in Note 11 (Share-Based Employee Compensation) of the Notes to the Company’s consolidated financial statements included in its Annual Report on Form 10 -K for the fiscal year ended December 31, 2024 .

A summary of activity under the Company’s stock option plans during the nine months ended September 30, 2024 , is presented below:

A summary of activity under the Company’s stock option plans during the three months ended March 31, 2025 , is presented below:

As of January 1, 2025

6 unchanged sentences

1,200 12.23 — 6.36 23,914

As of September 30, 2024

2,340 12.97 — 6.18 —

2,220 15.49 — 5.99 —

As of March 31, 2025

320,168 16.25 7.77 8.45 7,354,353

127,360 14.79 6.47 5.77 3,111,690

192,808 17.22 8.63 10.22 4,242,663

Restricted Stock Units

The Company recorded non-cash restricted stock unit compensation expense of $ 146 and $ 415 for the three and nine months ended September 30, 2024 , compared with $ 641 and $ 773 for the same periods last year.

The Company recorded non-cash restricted stock unit compensation expense of $ 275 for the three months ended March 31, 2025 , compared with $ 121 for the same period last year.

A summary of non-vested restricted stock under the Company’s non-employee director share-based incentive compensation plan is as follows:

6 unchanged sentences

Cancelled/forfeited

Unvested as of September 30, 2024

Unvested as of March 31, 2025

74,016 $ 17.51

2 unchanged sentences

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of its business.

The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings using the latest information available, on a quarterly basis.

Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, it records a liability in its consolidated financial statements.

We assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available.

Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements.

These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis.

Where a loss is not probable or the amount of the loss is not estimable, the Company does not accrue legal reserves, consistent with applicable accounting guidance.

There were no pending material claims or legal matters as of September 30, 2024 .

Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance.

In the opinion of management, while the outcome of such claims and disputes cannot be predicted with certainty, our ultimate liability in connection with these matters is not expected to have a material adverse effect on our results of operations, financial position or cash flows, and the amounts accrued for any individual matter are not material.

However, legal proceedings are inherently uncertain.

As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.

There were no pending material claims or legal matters as of March 31, 2025 .

Purchase Commitments

As of September 30, 2024 , the Company had purchase commitments for inventory totaling approximately $ 7,285 .

As of March 31, 2025 , the Company had purchase commitments for inventory totaling approximately $ 11,835 .

Significant Customers

Sales to United States government agencies represented approximately $ 7,896 ( 39.1 %) and $ 23,879 ( 40.7 %) of the Company’s net total sales for the three and nine months ended September 30, 2024 , respectively, compared with approximately $ 12,142 ( 60.5 %) and $ 29,571 ( 51.2 %), for the same periods last year.

Accounts receivable from agencies of the United States government were $ 1,997 as of September 30, 2024 , compared with approximately $ 4,280 at the same date last year.

Geopolitical Tensions and COVID- 19

and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflicts between Russia and Ukraine, and in the Middle East.

Sales to United States government agencies represented approximately $ 2,078 ( 10.9 %) of the Company’s net total sales for the three months ended March 31, 2025 , compared with approximately $ 9,830 ( 53.9 %) for the same period last year.

Accounts receivable from agencies of the United States government were $ 913 as of March 31, 2025 , compared with approximately $ 5,941 at the same date last year.

In addition, two commercial customers accounted for approximately 34.3 % of net sales for the three months ended March 31, 2025 and approximately 39.1 % of accounts receivable at March 31, 2025.

Geopolitical Tensions

and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflict between Russia and Ukraine and in the Middle East.

Although the length and impact of the ongoing military conflicts is highly unpredictable, the conflict in both of these regions could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

While the impacts of COVID- 19 are reflected in our results of operations for 2023 , we cannot separate the direct COVID- 19 impacts from other factors that cause our performance to vary from quarter to quarter.

The ultimate duration and impact of the COVID- 19 pandemic on our supply chain and geopolitical factors to our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration and severity of the geopolitical factors on the global economy, which are uncertain and cannot be predicted at this time.

Credit Facilities

On November 22, 2022, the Subsidiaries entered into the IPSA with Alterna.

On November 28, 2022, the Subsidiaries and Alterna entered into a rider to the IPSA, to modify the IPSA to, among other things, provide a credit facility for up to 75 % of net orderly liquidation value of inventory, not to exceed 100 % of the eligible accounts receivable balance.

The IPSA, which provides for a one -year Line of Credit with a maximum capacity of up to $ 15 million, unless canceled by either party, as provided in the agreement, was renewed in November 2023.

The Line of Credit bears an interest rate of Prime plus 1.85 %.

The effective borrowing rate under the IPSA was 10.10 % as of September 30, 2024 .

Interest and related servicing fees for the three and nine months ended September 30, 2024 , were approximately $ 18 and $ 356 , respectively.

Under the arrangement, the Company may transfer eligible short-term trade receivables to the conduit, with full recourse, on a daily basis in exchange for cash.

Generally, at the transfer date, the Company may receive cash equal to approximately 85 % of the value of the transferred receivables.

The Company accounts for the transfers of receivables as a secured borrowing due to the Company’s continuing involvement with the accounts receivable.

The Company used approximately $ 4.5 million of IPSA funding to repay the outstanding balance of the previous credit facility with JP Morgan Chase Bank, N.A.

(“JPMC”), which expired on January 31, 2023.

During the three and nine months ended September 30, 2024 , the Company transferred receivables having an aggregate face value of $ 19.5 and $ 54.9 , respectively, to the conduit and received proceeds of approximately $ 17.4 and $ 46.4 , respectively, which also includes draws on available inventory funding.

There were no losses incurred on these transfers during the three and nine months ended September 30, 2024 .

As of September 30, 2024 , there were no outstanding borrowings under the IPSA and the outstanding principal amount of receivables transferred under the IPSA amounted to $ 7.9 million.

On October 30, 2024, the Company entered into a new Line of Credit agreement with Fifth Third Bank, N.A (see Note 14 ) and terminated the Alterna IPSA Line of Credit.

On October 30, 2024, the Company's subsidiary, BK Technologies, Inc.

entered into a Revolving Loan Commitment (“RLC”) with Fifth Third Bank, National Association, (“Fifth Third”) The Fifth Third RLC 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 an additional $ 4 million of borrowing capacity, totaling a maximum commitment of $ 10 million.

Each advance shall accrue interest on the outstanding principal amount thereof at a rate of SOFR plus 2.5 % per annum.

Each advance may be prepaid at any time without penalty and the entire line of credit commitment may be permanently terminated by BK Technologies, Inc.

at any time upon 10 days’ prior written notice to the lender without penalty.

The Company has not utilized funding and there were no borrowings under the RLC agreement as of March 31, 2025, and as of the date of filing this report.

BK Technologies, Inc.'s repayment obligations under the RLC are guaranteed by the Company and Relm Communications, Inc.

and secured by a pledge of essentially all of the assets of the Company, BK Technologies, Inc.

and Relm Communications, Inc.

BK Technologies, Inc.

must also comply with:

(i) a maximum total funded debt ratio of 2.00 to 1.00;

(ii) a fixed charge coverage ratio of 1.2 to 1.0 as measured on a rolling twelve -month basis, each measured at the end of each fiscal quarter.

The Fifth Third RLC agreement provided for customary events of default, including:

( 1 ) failure to pay principal, interest or fees under the RLC when due and payable;

( 2 ) failure to comply with other covenants and agreements contained in the Revolving Loan Commitment agreement and the other documents executed in connection therewith;

( 3 ) the making of false or inaccurate representations and warranties;

( 4 ) defaults under other debt or other obligations of BK Technologies, Inc.;

( 5 ) money judgments and material adverse changes;

( 6 ) a change in control or ceasing to operate business in the ordinary course;

and ( 7 ) certain events of bankruptcy or insolvency.

As of March 31, 2025 , there were no outstanding borrowings under the Fifth Third RLC.

Notes Payable

On April 6, 2021, BK Technologies, Inc., a wholly owned subsidiary of the Company, and JPMC, as a lender, entered into a Master Loan Agreement in the amount of $ 743 to finance various items of manufacturing equipment (the “JPMC Credit Agreement”).

The Company used funds obtained from the Line of Credit to replace the JPMC Credit Agreement.

This note payable was paid in full on June 27, 2023.

On September 25, 2019, BK Technologies, Inc., a wholly owned subsidiary of the Company, and U.S.

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The lease has an expiration date of June 30, 2027.

The lease terms include an option to extend the lease agreement for an additional five ( 5 ) year term.

The lease terms include an option to extend the lease agreement for an additional five ( 5 ) year term commencing July 1, 2027 and terminating at midnight June 30, 2032.

Annual rental, maintenance, and tax expenses for the facility are approximately $ 610 .

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Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Operating lease cost

$ 136 $ 135 $ 406 $ 407

Variable lease cost

Total lease cost

$ 169 $ 168 $ 506 $ 506

Leases (continued)

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows (fixed payments)

$ 155 $ 149 $ 455 $ 445

Operating cash flows (liability reduction)

$ 135 $ 123 $ 390 $ 360

ROU assets obtained in exchange for lease obligations:

Operating leases

$ 4 $ — $ 27 $ —

Other information related to operating leases was as follows:

September 30, 2024

March 31, 2025

Weighted average remaining lease term (in years)

Weighted average discount rate

Maturity of lease liabilities as of September 30, 2024 , were as follows:

September 30, 2024

Remaining three months of 2024

Maturity of lease liabilities as of March 31, 2025 , were as follows:

March 31, 2025

Remaining nine months of 2025

Total payments

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Subsequent Events

On October 30, 2024, BK Technologies, Inc., a wholly owned subsidiary of the Company, as the borrower, entered into a new credit facility with Fifth Third Bank, National Association, as the lender (the “Fifth Third Credit Agreement”).

The Fifth Third Credit Agreement 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 an additional $ 4 million of borrowing capacity, totaling a maximum commitment of $ 10 million.

Each advance shall accrue interest on the outstanding principal amount thereof at a rate of SOFR plus 2.5 % per annum.

Each advance may be prepaid at any time without penalty and the entire line of credit commitment may be permanently terminated by BK Technologies, Inc.

at any time upon 10 days’ prior written notice to the lender without penalty.

BK Technologies, Inc.’s repayment obligations under the credit facility are guaranteed by the Company and RELM Communications, Inc.

and secured by a pledge of essentially all of the assets of BK Technologies, Inc., the Company and RELM Communications, Inc.

(collectively, the “Loan Parties”).

The Loan Parties are subject to customary negative covenants, including with respect to their ability to incur additional indebtedness, encumber and dispose of their assets and enter into affiliate transactions.

BK Technologies, Inc.

must also comply with a maximum total funded debt ratio of 2.00 to 1.00 and a minimum fixed charge coverage ratio of 1.20 to 1.00, each measured at the end of every fiscal quarter.

On May 2, 2025, East West Manufacturing, LLC exercised, through cashless exercise, the warrant issued by the Company on November 6, 2023, to purchase up to 135,300 shares of Common Stock.

As a result of the warrant exercise, the Company issued 89,248 shares of Common Stock to East West.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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We believe that it is important to communicate our future expectations to our security holders and to the public.

This report, including any information incorporated by reference in this report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Exchange Act, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “should,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “are encouraged,” and other similar expressions.

This report, including any information incorporated by reference in this report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “should,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “are encouraged,” and other similar expressions.

Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement.

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changes or advances in technology;

the success of our SaaS and Radio business lines and the products offered thereunder;

successful introduction of new products and technologies, including our ability to successfully develop and sell our anticipated SaaS products, and our new multiband radio product and other related products in the planned new BKR Series product line;

competition in the LMR industry;

general economic and business conditions, including federal, state, and local government budget deficits and spending limitations;

the success of our Solutions and Radio business lines and the products offered thereunder;

successful introduction of new products and technologies, including our ability to successfully develop and sell our anticipated Solutions products, and our new multiband radio product and other related products in the BKR Series product line;

competition in the land mobile radio ("LMR") industry;

general economic and business conditions, including the impacts of high inflation, high interest rates, tariffs and other trade barriers and restrictions, labor and supply shortages and disruptions, federal, state, and local government budget deficits and spending limitations, any impact from a prolonged shutdown of the U.S.

Government, the effects of natural disasters, changes in climate, severe weather events, geopolitical events, acts of war or terrorism, global health crises and other catastrophic events, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, including a potential U.S.

or global downturn or recession;

the availability, terms and deployment of capital;

reliance on contract manufacturers and suppliers;

risks associated with fixed-price contacts;

risks associated with fixed-price contracts;

heavy reliance on sales to agencies of the U.S.

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our ability to manage our growth;

our ability to identify potential candidates for, and consummate, acquisition, disposition or investment transactions, and risks incumbent to being a noncontrolling interest stockholder in a corporation;

our ability to identify potential candidates for, and consummate, acquisition, disposition or investment transactions;

impact of our capital allocation strategy;

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impact of government regulation;

rising health care costs;

our business with manufacturers located in other countries, including changes in the U.S.

Government and foreign governments’ trade and tariff policies;

impact of rising health care costs;

our business with manufacturers located in other countries, including the effects of changes in the U.S.

Government and foreign governments’ trade and tariff policies, such as recent increases in tariffs by the U.S.

and the imposition of increased tariffs and other trade barriers and retaliatory measures by foreign governments;

our inventory and debt levels;

our ability to comply with the terms, including financial covenants, of our outstanding debt, including fluctuating interest rates;

protection of our intellectual property rights;

fluctuation in our operating results and stock price;

acts of war or terrorism, natural disasters and other catastrophic events;

any infringement claims;

data security breaches, cyber-attacks and other factors impacting our technology systems;

data security breaches, cyber-attacks and other factors impacting our technology systems or third-party information technology systems upon which we rely;

widespread outages, interruptions or other failures of operational, communication or other systems;

availability of adequate insurance coverage;

environmental, social and governance matters;

maintenance of our NYSE American listing;

risks related to being a holding company;

our ability to remediate the material weakness in our internal control over financial reporting;

and the effect on our stock price and ability to raise capital through future sales of shares of our common stock.

Although we believe that the plans, objectives, expectations, and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations, and prospects will be achieved.

Although we believe that the plans, objectives, expectations, and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties, and other factors, many of which are outside of our control, that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations, and prospects will be achieved.

Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made.

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You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, or Current Report on Form 8-K.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of, and elsewhere in, our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in our subsequent filings with the SEC, and include, among others, the following:

changes or advances in technology;

our business is dependent on U.S.

Government contracts, which are highly regulated and subject to terminations and oversight audits by U.S.

Government representatives that could result in adverse findings and negatively impact our business;

we depend on the success of our LMR product line;

changes or advances in technology;

our business is dependent on U.S.

Government contracts, which are highly regulated and subject to terminations and oversight audits by U.S.

Government representatives that could result in adverse findings and negatively impact our business;

we depend on the success of our LMR product line;

successful introduction of new products and technologies, including our ability to successfully develop and sell our new multiband product and other related products in the planned new BKR Series product line and our SaaS solution;

engaged in a highly competitive industry;

general economic and business conditions, including federal, state and local government budget deficits and spending limitations, and the ongoing effects of inflation, rising interest rates, bank failures, supply-chain constraints, ongoing geopolitical conflicts, and related sanctions;

the availability, terms, and deployment of capital;

reliance on contract manufacturers and suppliers;

risks associated with fixed-price contracts;

changes in U.S.

trade policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have a material adverse effect on us;

allocations by government agencies among multiple approved suppliers under existing agreements;

operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflicts in Russia, Ukraine, and the Middle East.

Our business, financial condition, and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from such conflicts or any other geopolitical tensions;

our ability to comply with changes in U.S.

federal, state, and local and foreign tax law could adversely affect our business and financial condition;

our ability to attract and retain executive officers, skilled workers, and key personnel;

our ability to manage our growth;

our ability to identify potential candidates and consummate acquisition, disposition, or investment transactions, and risks incumbent to being a noncontrolling interest stockholder in a corporation;

the impact of general business conditions, including those resulting from inflation, rising interest rates, bank failures, ongoing geopolitical conflicts, and related sanctions on the companies in which we hold investments;

impact of our capital allocation strategy;

risks related to maintaining our brand and reputation;

impact of government regulation;

rising health care costs;

our business with manufacturers located in other countries, including changes in the U.S.

Government and foreign governments’ trade and tariff policies, as well as any further impact resulting from inflation, rising interest rates, bank failures, ongoing geopolitical conflicts, and related sanctions;

cyber-attacks and other security threats and disruptions could have a material adverse effect on our business;

our inventory and debt levels;

protection of our intellectual property rights;

fluctuation in our operating results and stock price;

acts of war or terrorism, natural disasters, public health crises, and other catastrophic events;

any infringement claims;

data security breaches, cyber-attacks, and other factors impacting our technology systems;

availability of adequate insurance coverage;

we may not be able to maintain our NYSE American listing;

as a holding company, BK Technologies Corporation is dependent on the operations and funds of its subsidiaries;

the effect on our stock price and ability to raise capital through future sales of shares of our common stock.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in “Part I—Item 1A.

Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in our subsequent filings with the SEC.

We assume no obligation to publicly update or revise any forward-looking statements made in this report, whether as a result of new information, future events, changes in assumptions or otherwise, after the date of this report.

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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,” "BK Technologies," 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.

In business for over 70 years, BK operates two business units through its operating subsidiary, BK Technologies, Inc.:

Radio and SaaS.

Radio and Solutions.

The Radio business unit designs, manufactures, and markets wireless communications products consisting of two-way LMRs.

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Generally, BK Technologies-branded products serve the government markets, including, but not limited to, emergency response, public safety, homeland security, and military customers of federal, state, and municipal government agencies, as well as various industrial and commercial enterprises.

We believe that our products and solutions provide superior value by offering a high specification, ruggedized, durable, reliable, feature-rich, Project 25-compliant radio at a lower cost relative to comparable offerings.

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

We believe that our products and solutions provide superior value by offering a high specification, ruggedized, durable, reliable, feature-rich, Project 25 ("P25") compliant radio at a lower cost relative to comparable offerings.

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

We presently have one U.S.

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patent applications.

Our BKRplay-branded smartphone application offers multiple services that make first responders safer and more efficient.

As we move forward in 2025, we plan to expand the Solutions business unit to include public safety solutions that provide for improved interoperability, intended to make the first responder safer and more efficient when operating in the field.

We intend the new Solutions business to build a portfolio of solutions under a new brand, BK ONE.

BK ONE includes SaaS solutions as well as other future software and hardware applications.

When tethered to our radios, the combined solution will offer a unique capability which increases the sales reach of our radios.

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

We are the corporation resulting from the reincorporation merger of our predecessor, Adage, Inc., a Pennsylvania corporation, which reincorporated from Pennsylvania to Nevada effective as of January 30, 1998.

Effective on June 4, 2018, we changed our corporate name from “RELM Wireless Corporation” to “BK Technologies, Inc.”

Our principal executive offices are located at 7100 Technology Drive, West Melbourne, Florida 32904, and our telephone number is (321) 984-1414.

Customer demand and orders for our products were strong during fiscal year 2023 and continued during the first nine months of 2024.

Our backlog of unshipped customer orders was approximately $27.0 million and $16.0 million as of September 30, 2024, and December 31, 2023, respectively.

We previously introduced InteropONE in October 2022, a Push-to-talk-Over-Cellular SaaS service, and in March 2025, we launched RelayONE, a rapidly deployed portable repeater kit designed to extend range and facilitate interoperability among different types of public safety and military radios.

Customer demand and orders for our products were strong during fiscal year 2024 and continued during the first three months of 2025.

Our backlog of unshipped customer orders was approximately $18.8 million and $21.8 million as of March 31, 2025, and December 31, 2024, respectively.

Changes in the backlog are attributed primarily to the timing of orders and their fulfillment.

For the three months ended September 30, 2024, sales increased approximately 0.5% to approximately $20.2 million, compared with $20.1 million for the prior year period.

The increase was attributed primarily to the shipments of BKR 5000 radio product sales.

Gross profit margins as a percentage of sales for the three months ended September 30, 2024, were 38.8%, compared with 31.9% for the prior comparative quarter, generally reflecting radio product and accessories sales mix and material cost improvements related to cost reduction initiatives.

Selling, general, and administrative (“SG&A”) expenses for the three months ended September 30, 2024, totaled approximately $5.2 million (25.9% of sales), compared with $5.8 million (29.0% of sales) in the same period last year.

We recognized operating income for the three months ended September 30, 2024, of approximately $2.6 million, compared with an operating income of approximately $0.1 million for the same period for the prior year.

For the three months ended September 30, 2024, we recognized other expenses, net totaling less than seven thousand dollars.

This compares with other expenses, net totaling $0.5 million for the same period last year, which included an unrealized loss on the investment in FG Holdings LLC and interest expense on the Alterna IPSA Line of Credit.

For the three months ended September 30, 2024, the pretax income totaled approximately $2.6 million, compared with pretax income of approximately $0.1 million for same period of the prior year.

We recognized a tax expense of $247 for the three-month period ended September 30, 2024, and no tax expense for the same period of the prior year.

Net income for the three months ended September 30, 2024, totaled approximately $2.4 million ($0.67 per basic and $0.63 per diluted share), compared with a net income of approximately $0.1 million ($0.03 per basic and diluted share) for the same period last year.

The primary factors for the improvement for the three months ended September 30, 2024, compared to the same period last year, were radio product and accessories sales mix and lower raw material and freight costs related to cost reduction efforts and easing of electronic component shortages from supply chain disruptions.

As of September 30, 2024, working capital totaled approximately $22.7 million, of which $13.5 million was comprised of cash, cash equivalents, and trade receivables.

For the three months ended March 31, 2025, sales increased approximately 4.5% to approximately $19.1 million, compared with $18.2 million for the same period of 2024.

The increase was attributed primarily to the shipments of BKR series radio product sales.

Gross profit margins as a percentage of sales for the three months ended March 31, 2025, were 47.0%, compared with 34.5% for the comparative fiscal year 2024 quarter, generally reflecting radio product and accessories sales mix and material cost improvements related to cost reduction initiatives.

Selling, general, and administrative (“SG&A”) expenses for the three months ended March 31, 2025, totaled approximately $6.0 million (31.7% of sales), compared with $5.3 million (29.1% of sales) in the same period of fiscal year 2024.

We recognized operating income for the three months ended March 31, 2025, of approximately $2.9 million, compared with an operating income of approximately $1.0 million for the same period of fiscal year 2024.

For the three months ended March 31, 2025, we recognized other expenses, net totaling approximately $0.1 million.

This compares with other expenses, net totaling $0.3 million for the same period of fiscal year 2024, which included interest expense on the Alterna IPSA Line of Credit and a realized loss of approximately $91,000 on the investment in FG Holdings LLC.

For the three months ended March 31, 2025, the pretax income totaled approximately $2.8 million, compared with pretax income of approximately $0.7 million for same period of fiscal year 2024.

We recognized a tax expense of $670,000 for the three-month period ended March 31, 2025, and $21,000 for the same period of fiscal year 2024.

Net income for the three months ended March 31, 2025, totaled approximately $2.1 million ($0.60 per basic and $0.55 per diluted share), compared with a net income of approximately $0.7 million ($0.19 per basic and diluted share) for the same period last year.

The primary factors for the improvement for the three months ended March 31, 2025, compared to the same period of fiscal year 2024, were radio product and accessories sales mix and lower raw material costs related to cost reduction efforts.

As of March 31, 2025, working capital totaled approximately $24.6 million, of which $19.1 million was comprised of cash, cash equivalents, and trade receivables.

This compares with working capital totaling approximately $23.0 million at 2024 year-end, which included $14.4 million of cash, cash equivalents, and trade receivables.

We may experience fluctuations in our quarterly results, in part, due to governmental customer spending patterns that are influenced by government fiscal year-end budgets and appropriations.

We may also experience fluctuations in our quarterly results, in part, due to our sales to federal and state agencies that participate in wildland fire-suppression efforts, which may be greater during the summer season when forest fire activity is heightened.

In some years, these factors may cause an increase in sales for the second and third quarters, compared with the first and fourth quarters of the same fiscal year.

Such increases in sales may cause quarterly variances in our cash flow from operations and overall financial condition.

The Company’s guidance reflects our current understanding of the potential impact of tariffs and the current administration's efforts to reduce federal expenditures, and to the extent it can be calculated, the estimated amount of the impacts are included in current guidance.

Available Information

Our Internet website address is www.bktechnologies.com.

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 SEC).

In addition, our Code of Business Conduct and Ethics, Code of Ethics for the CEO and Senior Financial Officers, Audit Committee Charter, Compensation Committee Charter, Nominating and Governance Committee Charter, and other corporate governance policies are available on our website under “Investor Relations.” The information contained on our website is not incorporated by reference in this report.

A copy of any of these materials may be obtained, free of charge, upon request from our investor relations department by submitting a written request to bktechnologies@imsinvestorrelations.com or calling (203) 972-9200.

Additional information regarding our investor relations department can be found on our website.

All reports that the Company files with or furnishes to the SEC are also available free of charge via the SEC’s website at http://www.sec.gov.

Third Quarter and Nine Months Summary

Customer demand and new orders for our products of $21.8 million continued to be strong during the three months ended September 30, 2024, compared to $19.6 million for the same period of the prior year.

Customer demand and orders for our products of $72.4 million continued to be strong during the nine months ended September 30, 2024, compared to $54.1 million for the same period of the prior year.

For the third quarter 2024, sales increased 0.5% to approximately $20.2 million, compared with approximately $20.1 million of sales for the third quarter last year.

Sales of approximately $58.7 million for the nine-months ended September 30, 2024, increased 1.5% compared with approximately $57.8 million of sales for the same period last year.

Gross profit margin as a percentage of sales for the third quarter of 2024 was approximately 38.8%, compared with 31.9% for the same period last year, generally reflecting radio product and accessories sales mix and material cost improvements related to cost reduction initiatives compared to the third quarter last year.

Gross profit margin as a percentage of sales for the nine months ended September 30, 2024, was approximately 36.9%, compared with 28.6% for the same period last year, generally reflecting radio product and accessories sales mix and material cost improvements related to cost reduction initiatives.

Selling, general, and administrative (“SG&A”) expenses for the third quarter of 2024 totaled approximately $5.2 million, which was 10.1% lower than the SG&A expenses of approximately $5.8 million for the third quarter last year, while SG&A expenses of $16.1 million for the nine-month period ended September 30, 2024, decreased 9.2% compared to the same period last year.

The decrease in SG&A expenses is attributed primarily to capitalization of BKR Mobile radio product development costs in 2024 and marketing initiatives for the BKR 9000 product in 2023.

These factors yielded operating income of approximately $2.6 million for the three-month period ended September 30, 2024, compared with operating income of approximately $0.1 million for the same period last year.

Operating income of approximately $5.6 million for the nine-month period ended September 30, 2024 compares to an operating loss of $1.2 million for the same period last year, related to radio product and accessories sales mix, material cost improvements related to cost reduction initiatives and supply chain challenges for the same period last year.

For the third quarter of 2023, we recognized a net unrealized loss of approximately $0.3 million on the investment in FG Holdings, LLC, that was exited during the first quarter of 2024.

For the nine months ended September 30, 2024, we recognized a net realized loss totaling approximately $0.1 million on our investment in FG Holdings, LLC.

compared with a net unrealized loss of approximately $0.8 million for the same nine-month period last year.

For the third quarter of 2024, we recognized net interest expense of one thousand dollars compared to $0.1 million for the same period last year, while for the nine-month period ended September 30, 2024, we recognized net interest expense of $0.3 million compared to $0.4 million for the same period last year.

Net income for the three months ended September 30, 2024, was approximately $2.4 million ($0.67 per basic and $0.63 per diluted share), compared with net income of approximately $0.1 million ($0.03 per basic and diluted share) for the same quarter last year.

For the nine months ended September 30, 2024, our net income totaled approximately $4.7 million ($1.33 per basic and $1.30 per diluted share), compared with a net loss of approximately $2.5 million ($0.74 per basic and diluted share) for the same period last year.

As of September 30, 2024, working capital totaled approximately $22.7 million, of which approximately $13.5 million was comprised of cash, cash equivalents and trade receivables.

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.

Securities and Exchange Commission (the “SEC”).

In addition, our Code of Business Conduct and Ethics, Code of Ethics for the CEO and Senior Financial Officers, Audit Committee Charter, Compensation Committee Charter, Nominating and Governance Committee Charter, and other corporate governance policies are available on our website under “Investor Relations.” A copy of any of these materials may be obtained, free of charge, upon request from our investor relations department.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information filed by the Company at http://www.sec.gov.

All reports that the Company files with or furnishes to the SEC also are available free of charge via the SEC’s website.

First Quarter and Three Months Summary

Customer demand and new orders for our products of $16.8 million continued to be strong during the three months ended March 31, 2025, compared to $22.3 million for the same period of fiscal year 2024.

For the first quarter 2025, sales increased 4.5% to approximately $19.1 million, compared with approximately $18.2 million of sales for the first quarter of fiscal year 2024.

Gross profit margin as a percentage of sales for the first quarter of 2025 was approximately 47.0%, compared with 34.5% for the same period of fiscal year 2024, generally reflecting radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC compared to the first quarter of fiscal year 2024.

Selling, general, and administrative (“SG&A”) expenses for the first quarter of 2025 totaled approximately $6.0 million, which was 13.7% higher than the SG&A expenses of approximately $5.3 million for the first quarter of fiscal year 2024.

The increase in SG&A expenses is attributed primarily due to new product introduction costs, and an accrual of Engineering fiscal year 2023 RSU issuance expenses.

These factors yielded operating income of approximately $2.9 million for the three-month period ended March 31, 2025, compared with operating income of approximately $1.0 million for the same period of fiscal year 2024.

For the first quarter of 2024, we recognized a net realized loss of approximately $0.1 million on the investment in FG Holdings, LLC, that was exited during the first quarter of 2024.

For the first quarter of 2025, we recognized net interest income of $3,000 compared to approximately $0.2 million interest expense for the same period of fiscal year 2024.

Net income for the three months ended March 31, 2025, was approximately $2.1 million ($0.60 per basic and $0.55 per diluted share), compared with net income of approximately $0.7 million ($0.19 per basic and diluted share) for the same quarter last year.

The primary factors for the improvement for the three month period ending on March 31, 2025, compared to the same period of fiscal year 2024, were radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC.

As of March 31, 2025, working capital totaled approximately $24.6 million, of which approximately $19.1 million was comprised of cash, cash equivalents and trade receivables.

As of December 31, 2024, working capital totaled approximately $23.0 million, of which approximately $14.4 million was comprised of cash, cash equivalents and trade receivables.

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Percentage of Sales

Three Months Ended

Nine Months Ended

September 30,

Cost of products

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Other income (expense)

Income (loss) before income taxes

Income before income taxes

Income tax (expense)

Net income (loss)

For the third quarter ended September 30, 2024, net sales increased 0.5% to approximately $20.2 million, compared with approximately $20.1 million for the same quarter last year.

Sales for the nine months ended September 30, 2024, totaled approximately $58.7 million, compared with approximately $57.8 million for the nine-month period last year.

Customer demand and orders for our products continued to be strong, reflecting the acceptance by the marketplace for our BKR 5000, as well as BKR 9000 product introduced in 2023.

Sales for the third quarter ended September 30, 2024, were attributed primarily to federal wildland fire-related agencies and certain state and local public safety opportunities.

From a product perspective, the primary contributor to orders and shipments during the third quarter was our BKR 5000 portable radio and related accessories.

The BKR Series is envisioned as a comprehensive line of new products, which includes new models such as the BKR 9000, which achieved first sales in the third quarter of 2023.

The timing of developing additional BKR Series products and bringing them to market could be impacted by various factors, including potential impacts on our supply chain as a result of various electronic component suppliers.

We believe that the BKR Series products should increase our addressable market by expanding the number of federal and other public safety customers that may purchase our products.

(1) Amounts may not foot due to rounding

For the first quarter ended March 31, 2025, net sales increased 4.5% to approximately $19.1 million, compared with approximately $18.2 million for the same quarter of fiscal year 2024.

Customer demand and orders for our products continued to be strong, reflecting the acceptance by the marketplace for our BKR series radio products.

Sales for the first quarter ended March 31, 2025, were attributed primarily to Federal, state and local public safety opportunities.

From a product perspective, the primary contributor to orders and shipments during the first quarter was our BKR series radios and related accessories.

The BKR Series is envisioned as a comprehensive line of new products, which includes new models such as the BKR 9000, which achieved first sales in the second quarter of 2023.

We believe that the BKR Series products should increase our addressable market by expanding the number of Federal, state and local public safety customers that may purchase our products.

However, the timing and size of orders from agencies at all levels can be unpredictable and subject to budgets, priorities, and other factors.

Accordingly, we cannot assure that sales will occur under particular contracts, or that our sales prospects will otherwise be realized.

While the potential impacts of the current inflationary environment and ongoing geopolitical conflict and related sanctions in coming months and quarters remain uncertain, such effects have the potential to adversely impact our customers and our supply chain.

While the potential impacts of the current administration's tariff policies, material shortages, lead-times, high inflation and ongoing geopolitical conflicts in Ukraine and the Middle East and other geopolitical events remain uncertain in coming months and quarters, such effects have the potential to adversely impact our customers and our supply chain.

Such negative effects on our customers and suppliers could adversely affect our future sales, gross profit margins, operations and financial results.

Cost of Products and Gross Profit Margin

Gross profit margins as a percentage of sales for the third quarter ended September 30, 2024, were approximately 38.8% compared with 31.9% for the same quarter last year.

For the nine-month period ended September 30, 2024, gross profit margins were approximately 36.9%, compared with 28.6% for the same period last year.

Gross profit margins as a percentage of sales for the first quarter ended March 31, 2025, were approximately 47.0% compared with 34.5% for the same quarter of fiscal year 2024.

Our cost of products and gross profit margins are primarily derived from material, labor, and overhead costs, product mix, manufacturing volumes and pricing.

Gross profit margins for the quarter and nine-months ended September 30, 2024, increased compared with the same period last year, primarily due to product sales mix and improvement in material costs, including electronic components and to a lesser degree, easing of escalated freight costs.

During the year ended December 31, 2023, worldwide shortages of materials, including semiconductors and integrated circuits resulted in limited supplies, which in turn, extended lead times and resulted in higher costs for certain components used in our products.

While the progression and duration of these shortages is not known with certainty, we monitored a number of critical components for product cost improvement and have experienced improvement to pre-pandemic levels.

Gross profit margins for the three-months ended March 31, 2025, increased compared to the same period of fiscal year 2024, generally reflecting radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC.

We utilize a combination of internal manufacturing capabilities and contract manufacturing relationships for production efficiencies and to manage material and labor costs.

During the year ended December 31, 2024, we completed the transfer of manufacturing most of our products and accessories to East West Manufacturing, LLC.

We believe that our current manufacturing capabilities and contract relationships or comparable alternatives will continue to be available to us.

However, we may encounter new product cost and competitive pricing pressures in the future and the extent of their impact on gross margins, if any, is uncertain.

However, we may encounter new product costs and competitive pricing pressures in the future and the extent of their impact on gross margins, if any, is uncertain.

Selling, General and Administrative Expenses

SG&A expenses consist of marketing, sales, commissions, engineering, product development, management information systems, accounting, headquarters, and non-cash share-based employee compensation expenses.

SG&A expenses for the quarter ended September 30, 2024, totaled approximately $5.2 million (25.9% of sales), compared with approximately $5.8 million (29.0% of sales) for the same quarter last year.

For the nine months ended September 30, 2024, SG&A expenses decreased by $1.6 million, or 9.2%, to approximately $16.1 million (27.4% of sales), compared with approximately $17.7 million (30.6% of sales), for the nine-month period last year.

Engineering and product development expenses for the third quarter of 2024 totaled approximately $1.9 million (9.2% of sales), compared with approximately $2.5 million (12.5% of sales) for the same quarter last year.

For the nine months ended September 30, 2024, engineering and product development expenses totaled approximately $5.9 million (10.1% of sales), compared with approximately $7.5 million (13.0% of sales) for the nine-month period last year.

The decrease in engineering expenses is attributed primarily to capitalization of BKR Mobile radio product design and development activities in 2024, and somewhat to development costs in 2023 for the BKR 9000 series radio introduced during the third quarter 2023.

SG&A expenses for the quarter ended March 31, 2025, totaled approximately $6.0 million (31.7% of sales), compared with approximately $5.3 million (29.1% of sales) for the same quarter of fiscal year 2024.

Engineering and product development expenses for the first quarter of 2025 totaled approximately $2.5 million (13.3% of sales), compared with approximately $2.1 million (11.4% of sales) for the same quarter of fiscal year 2024.

The increase in engineering expenses was attributed primarily to non-capitalizable development costs for the BKR multi-band mobile radio product and RSU issuance costs described above and Note 10 ( Non-Cash Share-Based Employee Compensation ) to the condensed consolidated financial statements included in this report.

Most of these activities were being performed by our internal engineering team and were their primary focus, combined with sustaining engineering support for our existing products.

The precise date for developing and introducing new products is uncertain and can be impacted by, among other things, supply chain shortages and certain component lead times in coming months and quarters.

Marketing and selling expenses for the third quarter of 2024 totaled approximately $1.4 million (7.2% of sales), compared with approximately $1.5 million (7.5% of sales) for the third quarter last year.

For the nine months ended September 30, 2024, marketing and selling expenses remained flat at approximately $4.6 million (7.9% of sales), compared with the same period last year.

Other general and administrative expenses for the third quarter of 2024 totaled approximately $1.9 million (9.4% of sales), compared with approximately $1.8 million (9.0% of sales) for the same period last year.

For the nine months ended September 30, 2024, general and administrative expenses totaled approximately $5.5 million (9.4% of sales), compared with approximately $5.6 million (9.7% of sales) for the nine-month period last year.

The decrease in general and administrative expenses for the three and nine months ended September 30, 2024, is attributed primarily to the non-recurring nature of certain corporate expenses related to the At-the-Market (ATM) program and reverse stock split during the nine months ended September 30, 2023.

Operating Income (Loss)

Operating income for the quarter ended September 30, 2024, totaled approximately $2.6 million (12.9% of sales), compared with operating income of approximately $0.6 million (3.0% of sales) for last year’s third quarter.

For the nine months ended September 30, 2024, our operating income totaled approximately $5.6 million (9.6% of sales), compared with an operating loss of approximately $1.2 million (2.0% of sales) for the nine-month period last year.

The operating income improvement for the three and nine months ended September 30, 2024, compared to the same periods last year, is attributed to higher gross profit margins related to improved product sales mix and lower material costs due to cost reduction efforts and supply chain improvements.

The precise date for developing and introducing new products is uncertain and can be impacted by, among other things, supply chain shortages, including the impact of tariffs and certain component lead times in coming months and quarters.

Marketing and selling expenses for the first quarter of 2025 totaled approximately $1.7 million (9.0% of sales), compared with approximately $1.5 million (8.4% of sales) for the first quarter of fiscal year 2024.

Other general and administrative expenses for the first quarter of 2025 totaled approximately $1.8 million (9.3% of sales), compared with approximately $1.7 million (9.3% of sales) for the same period of fiscal year 2024.

The increase in general and administrative expenses for the three months ended March 31, 2025, was attributed primarily to the non-recurring nature of certain corporate consulting expenses during the three months ended March 31, 2024.

Operating Income

Operating income for the quarter ended March 31, 2025, totaled approximately $2.9 million (15.3% of sales), compared with operating income of approximately $1.0 million (5.4% of sales) for the same period of fiscal year 2024.

The operating income improvement for the three months ended March 31, 2025, compared to the same period last year, was attributed to higher gross profit margins related to improved product sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC.

Other (Expense) Income

We recorded net interest expense of approximately one thousand dollars for the quarter ended September 30, 2024, compared with approximately $0.1 million for the third quarter last year.

For the nine months ended September 30, 2024, net interest expense totaled approximately $0.3 million, compared with net interest expense of approximately $0.4 million for the nine-month period last year.

Net interest expense was primarily the result of our Alterna IPSA Line of Credit.

We recorded net interest income of approximately $3,000 for the quarter ended March 31, 2025, compared with approximately $0.2 million interest expense for the first quarter of fiscal year 2024.

Net interest expense was primarily the result of our Alterna IPSA Line of Credit, which was paid in full in September 2024 and terminated in October 2024.

On January 25, 2024, the Company redeemed its Series B common membership interests (the “Interests”) of FG Holdings LLC and withdrew from FG Holdings LLC.

In exchange for its Interests, the Company received 52,000 shares of our Common Stock, with an approximate fair value of $0.7 million on the date of the transaction and recorded a realized loss of $0.1 million on the investment during the first quarter of 2024.

The Company recorded an unrealized loss of $0.3 million and $0.8 million, for the three and nine months ended September 30, 2023.

In exchange for its Interests, the Company received 52,000 shares of our Common Stock, with an approximate fair value of $0.7 million on the date of the transaction and recorded a realized loss of approximately $91,000 on the investment during the first quarter of 2024.

The shares received by the Company are held as treasury stock, increasing the total number of treasury shares held by the Company to 342,080.

We recorded $0.2 million and $0.5 million tax expense for the three and nine months ended September 30, 2024, respectively.

The Company recorded no tax expense or benefit for the same periods last year.

The Company's income tax provision is based on management’s estimate of the effective tax rate for the full year.

The tax provision (benefit) in any period will be affected by, among other things, permanent, as well as temporary, differences in the deductibility of certain items, in addition to changes in tax legislation.

As a result, we may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

As of September 30, 2024, our net deferred tax assets totaled approximately $4.1 million and were primarily derived from research and development tax credits, operating loss carryforwards, and deferred revenue.

We recorded approximately $670,000 and $21,000 tax expense for the three months ended March 31, 2025, and 2024, respectively.

Our income tax provision is based on the effective tax rate for the year.

The tax expense in any period may be affected by, among other things, permanent, as well as temporary, differences in the deductibility of certain items, in addition to changes in tax legislation.

As a result, we may experience fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

As of March 31, 2025, our net deferred tax assets totaled approximately $8.3 million and were primarily derived from capitalized research and development expenses and deferred revenue.

In order to fully utilize the net deferred tax assets, we will need to generate sufficient taxable income in future years.

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The recognition of the net deferred tax assets and related tax benefits is based upon our conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.

Based on our analysis of all available evidence, both positive and negative, we have concluded that we do not have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets.

Accordingly, we established a valuation allowance of $4.4 million and $4.4 million as of September 30, 2024, and December 31, 2023, respectively.

Based on our analysis of all available evidence, both positive and negative, we have concluded that, except for the capital loss carryforward of approximately $802,000, we will have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets.

We cannot presently estimate what, if any, changes to the valuation of our deferred tax assets may be deemed appropriate in the future.

If we incur future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of March 31, 2025.

Liquidity and Capital Resources

For the nine months ended September 30, 2024, net cash provided by operating activities totaled approximately $8.2 million, compared with cash provided by operating activities of approximately $3.9 million for the same period last year.

Cash provided by operating activities for the nine months ended September 30, 2024, was primarily related to net income of $4.7 million and a $5.3 million reduction in inventory, somewhat offset by a $1.6 million increase in accounts receivable and a $3.9 million decrease in accounts payable.

Cash provided by operating activities for the nine months ended September 30, 2023, was primarily related to an increase in deferred revenues and a reduction in accounts receivable, which was partially offset by net loss due to supply chain issues and decrease in accounts payable.

For the first nine months of 2024, we had net income of approximately $4.7 million, compared with a net loss of approximately $2.5 million for the same period last year.

Accounts receivable increased approximately $1.6 million during the nine months ended September 30, 2024, compared with a decrease of approximately $1.5 million for the same period last year, primarily due to increased sales in the first nine months of 2024.

Inventories decreased during the nine months ended September 30, 2024, by approximately $5.3 million compared with a decrease of approximately $0.6 million for the same period last year.

Accounts payable for the nine months ended September 30, 2024, decreased approximately $3.9 million, compared with a decrease of approximately $1.1 million for the first nine months last year.

The decreases in inventories and accounts payable were attributed primarily to improvement of supply chain challenges from fiscal year 2022 and early fiscal 2023.

Prepaid expenses and other current assets increased during the first nine months of 2024 by approximately $0.8 million compared with an increase of $0.4 million for the same period last year.

Depreciation and amortization totaled approximately $1.3 million for the nine months ended September 30, 2024, compared with approximately $1.2 million for the same period last year.

For the three months ended March 31, 2025, net cash provided by operating activities totaled approximately $2.1 million, compared with cash used in operating activities of approximately $0.8 million for the same fiscal year period of 2024.

Cash provided by operating activities for the three months ended March 31, 2025, was primarily related to net income and a reduction in inventory, partially offset by an increase in accounts receivable.

Cash used in operating activities for the three months ended March 31, 2024, was primarily related to an increase in accounts receivable and a decrease in accounts payable partially offset by net income, depreciation and amortization, reductions in inventory and deferred revenues.

For the first three months of 2025, we had net income of approximately $2.1 million, compared with a net income of approximately $0.7 million for the same period of fiscal year 2024.

Accounts receivable increased approximately $2.8 million during the three months ended March 31, 2025, compared with an increase of approximately $3.6 million for the same period of fiscal year 2024, primarily due to the timing of customer collections in the first three months of fiscal year 2025 and 2024.

Inventories decreased during the three months ended March 31, 2025, by approximately $1.4 million compared to a decrease of approximately $1.4 million for the same period of fiscal year 2024.

The decreases in inventories were primarily attributed to the transition of manufacturing production of our products to East West Manufacturing LLC, in fiscal year 2024.

Accounts payable for the three months ended March 31, 2025, increased approximately $0.8 million, compared with a decrease of approximately $0.8 million for the same period of fiscal year 2024, primarily due to the reduction in raw material purchases in 2024 related to the transition of manufacturing production of our products to East West Manufacturing LLC, in the second quarter of 2024.

Accrued compensation and related expenses decreased during the first three months of 2025 by approximately $0.5 million compared with an increase of $0.3 million for the same period of fiscal year 2024.

Depreciation and amortization totaled approximately $0.4 million for the three months ended March 31, 2025, compared with approximately $0.4 million for the same period of fiscal year 2024.

Depreciation and amortization are primarily related to manufacturing and engineering equipment.

The realized loss on investments for the nine months ended September 30, 2024, totaled approximately $0.1 million, compared with an unrealized loss of approximately $0.8 million for the same period last year.

There were no realized or unrealized losses on investments for the three months ended March 31, 2025, compared to approximately $0.1 million for the same period of fiscal year 2024.

For additional information pertaining to our investments, refer to Note 1 and Note 7 (Investments) to the condensed consolidated financial statements included in this report.

Cash used in investing activities for the nine months ended September 30, 2024, totaled approximately $0.9 million, compared with approximately $1.8 million for the same period last year.

The cash used for the nine-month period ended September 30, 2024, was attributed primarily to the development of the BKR mobile radio product, compared to cash used for the nine-month period ended September 30, 2023, attributed primarily to the purchase of engineering and manufacturing related equipment.

For the nine months ended September 30, 2024, approximately $6.6 million was used in financing activities, compared with cash provided by financing activities of approximately $0.1 million for the same period last year.

During the first nine months of 2024, we received cash of approximately $46.4 million from our revolving credit facility and notes payable, net of repayments totaling approximately $53.0 million, while for the same period last year, we received proceeds of approximately $58.9 million from our revolving credit facility and notes payable offset by loan and revolving credit facility repayments of approximately $58.9 million.

Our cash and cash equivalents balance on September 30, 2024, was approximately $4.2 million.

We believe these funds, combined with anticipated cash generated from operations and borrowing availability under our Fifth Third Line of Credit, are sufficient to meet our working capital requirements for the foreseeable future.

Cash used in investing activities for the three months ended March 31, 2025, totaled approximately $0.3 million, compared with approximately $0.2 million for the same period of fiscal year 2024.

The cash used for the three-month period ended March 31, 2025, was attributed primarily to purchases of engineering equipment, compared to cash used for the three-month period ended March 31, 2024, which was primarily attributed to the purchase of engineering and manufacturing related equipment.

For the three months ended March 31, 2025, approximately $13,000 was provided by financing activities, compared with cash provided by financing activities of approximately $0.8 million for the same period of fiscal year 2024.

During the first three months of 2024, we received cash of approximately $15.0 million from our Alterna Capital Solutions, LLC revolving credit facility, net of repayments totaling approximately $14.2 million.

Our cash and cash equivalents balance on March 31, 2025, was approximately $8.9 million.

We believe these funds, combined with anticipated cash generated from operations and borrowing availability under our Fifth Third RLC (as defined below), are sufficient to meet our working capital requirements for the foreseeable future.

We may, depending on a variety of factors, including market conditions for capital raises, the trading price of our common stock and opportunities for uses of any proceeds, engage in public or private offerings of equity or debt securities to increase our capital resources.

However, financial and economic conditions, which could be impacted by the current inflationary environment and current geopolitical tension, could limit our access to credit and impair our ability to raise capital, if needed, on acceptable terms or at all.

However, financial and economic conditions, including those resulting from supply chain delays or interruptions, labor shortages, wage pressures, rising inflation, geopolitical events, the impacts of tariffs, and other force majeure events, could result in volatility in the financial and capital markets and could limit our access to credit and impair our ability to raise capital, if needed, on acceptable terms or at all.

We also face other risks that could impact our business, liquidity, and financial condition.

On October 30, 2024, the Company's subsidiary, BK Technologies, Inc.

entered into a Revolving Loan Commitment (“RLC”) with Fifth Third Bank, National Association (“Fifth Third”) The Fifth Third RLC 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 an additional $4 million of borrowing capacity, totaling a maximum commitment of $10 million.

Each advance shall accrue interest on the outstanding principal amount thereof at a rate of SOFR plus 2.5% per annum.

Each advance may be prepaid at any time without penalty and the entire line of credit commitment may be permanently terminated by BK Technologies, Inc.

at any time upon 10 days’ prior written notice to the lender without penalty.

The RLC has a borrowing base equal to the sum of (i) 80% of eligible commercial accounts receivable, plus (ii) 50% of federal government accounts receivable, plus (iii) the lesser of (a) the sum of (i) and (ii) and (b) 50% of eligible finished goods inventory.

The Company has not utilized funding and there were no borrowings under the RLC agreement as of March 31, 2025, and as of the date of filing this report.

BK Technologies, Inc.'s repayment obligations under the RLC are guaranteed by the Company and Relm Communications, Inc.

and secured by a pledge of essentially all of the assets of the Company, BK Technologies, Inc.

and Relm Communications, Inc.

BK Technologies, Inc.

must also comply with:

(i) a maximum total funded debt ratio of 2.00 to 1.00;

(ii) a fixed charge coverage ratio of 1.2 to 1.0 as measured on a rolling twelve-month basis, each measured at the end of each fiscal quarter.

The Fifth Third RLC agreement provided for customary events of default, including:

(1) failure to pay principal, interest or fees under the RLC when due and payable;

(2) failure to comply with other covenants and agreements contained in the Revolving Loan Commitment agreement and the other documents executed in connection therewith;

(3) the making of false or inaccurate representations and warranties;

(4) defaults under other debt or other obligations of BK Technologies, Inc.;

(5) money judgments and material adverse changes;

(6) a change in control or ceasing to operate business in the ordinary course;

and (7) certain events of bankruptcy or insolvency.

Critical Accounting Policies

In response to the SEC’s financial reporting release, FR-60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, we have selected for disclosure our revenue recognition process and our accounting processes involving significant judgments, estimates and assumptions.

Our critical accounting policies include our revenue recognition process and our accounting processes involving significant judgments, estimates and assumptions.

These processes affect our reported revenues and current assets and are, therefore, critical in assessing our financial and operating status.

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These estimates and assumptions, if incorrect, could adversely impact our operations and financial position.

During the first quarter of 2024, the Company began development of the BKR series LMR multi-band mobile radio product.

The Company accounts for the costs of LMR multi-band development in accordance with ASC Topic 350-30, “ Intangibles – Goodwill and Other.

” Upon the general release of the LMR multi-band mobile radio product currently in development to customers, development costs for that product will be amortized over periods not exceeding ten years, based on future revenue of the product.

There were no other changes to our critical accounting policies during the three months ended September 30, 2024.

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07 Segment Reporting (Topic 280):

The new standard became effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company evaluated the requirements of ASU 2023-07 and determined that there is only one reportable segment:

Land Mobile Radio (LMR) Products and Solutions and included required disclosures in Note 1 to the consolidated financial statements.

There were no other changes to our critical accounting policies during the three months ended March 31, 2025.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” as defined by Item 229.10(f)(1) of Regulation S-K, the Company is not required to include the disclosure under this Item.

As a “smaller reporting company,” the Company is not required to include the disclosure under this Item.

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-Q

Item 1. Financial Statements