What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-13 · 278 added, 251 removed, 474 unchanged (53% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

( In thousands, except share data)(Unaudited)

( In thousands, except share data)

Current assets:

37 unchanged sentences

10,000,000 authorized shares;

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

4,035,256 and 3,913,959 issued, and 3,693,176 and 3,571,879 outstanding shares as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

2 unchanged sentences

( 9,977 ) ( 15,850 )

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

Treasury stock, at cost, 342,080 shares as of June 30, 2025, and December 31, 2024

( 6,053 ) ( 6,053 )

8 unchanged sentences

Three Months Ended

Six Months Ended

$ 21,165 $ 20,254 $ 40,219 $ 38,485

Cost of products

Selling, general and administrative

Total operating expenses

11,130 12,707 21,234 24,650

10,035 7,547 18,985 13,835

Selling, general and administrative expenses

Engineering and product development

2,306 1,984 5,033 4,061

Marketing and selling

1,941 1,706 3,781 3,230

General and administrative

1,791 1,832 3,258 3,536

Total selling, general and administrative expenses

6,038 5,522 12,072 10,827

Operating income

3,997 2,025 6,913 3,008

Other (expense) income:

Net interest income (expense)

39 ( 106 ) 42 ( 280 )

Gain on disposal of property, plant and equipment

1 unchanged sentence

Other expense

Total other (expense), net

( 20 ) ( 35 ) ( 137 ) ( 53 )

Total other income (expense), net

19 ( 141 ) ( 95 ) ( 422 )

Income before income taxes

4,016 1,884 6,818 2,586

Provision for income tax (expense)

( 275 ) ( 220 ) ( 945 ) ( 241 )

3,741 1,664 5,873 2,345

Net income per share-basic:

$ 1.03 $ 0.47 $ 1.63 $ 0.66

Net income per share-diluted:

$ 0.96 $ 0.47 $ 1.51 $ 0.66

Weighted average shares outstanding-basic

3,646,503 3,529,910 3,609,744 3,534,209

Weighted average shares outstanding-diluted

3,893,373 3,564,170 3,893,462 3,559,305

See Accompanying Notes to Condensed Consolidated Financial Statements.

BK Technologies Corporation

Condensed Consolidated Statements of Changes in Equity

(In thousands, except share and per share data) (Unaudited)

Balance at December 31, 2024

Common stock issued under restricted stock units

Common stock issued-stock options

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Balance at March 31, 2025

Common stock issued under restricted stock units

Common stock issued-stock options

Common stock issued-warrants exercised

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Balance at June 30, 2025

Balance at December 31, 2023

Common stock issued under restricted stock units

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Treasury shares

Balance at March 31, 2024

Common stock issued under restricted stock units

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Balance at June 30, 2024

See Accompanying Notes to Condensed Consolidated Financial Statements.

BK TECHNOLOGIES CORPORATION

Condensed Consolidated Statements of Cash Flows

( In thousands ) ( Unaudited )

Three Months Ended

Six Months Ended

Operating activities

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

$ 5,873 $ 2,345

Adjustments to reconcile net income to net cash provided by operating activities:

Inventories allowances

Allowance for credit losses

Amortization of deferred finance and other assets

Deferred tax benefit

5 unchanged sentences

Trade accounts receivable

( 4,193 ) ( 3,748 )

Prepaid expenses and other current assets

Capitalized product development cost

ROU assets and lease liabilities

( 38 ) ( 30 )

Accounts payable

3,508 ( 1,037 )

Long-term uncertain tax position liability

3 unchanged sentences

Accrued other expenses and other current liabilities

Net cash provided by (used in) operating activities

( 1,344 ) 181

Net cash provided by operating activities

Investing activities

Purchases of property, plant, and equipment

( 519 ) ( 418 )

Capitalized product development cost

( 946 ) ( 430 )

Net cash used in investing activities

( 1,465 ) ( 848 )

Financing activities

2 unchanged sentences

Repayment of the credit facility and notes payable

Net cash provided by financing activities

Net cash provided by (used in) financing activities

241 ( 2,938 )

Net change in cash and cash equivalents

4,778 ( 475 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

$ 11,853 $ 2,981

Supplemental disclosure

2 unchanged sentences

Common stock issued under restricted stock units

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

Cashless exercise of stock options, warrants 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 Months Ended March 31, 2025 and 2024

Three and Six Months Ended June 30, 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 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 June 30, 2025 , the condensed consolidated statements of operations for the three and six months ended June 30, 2025 , and 2024 , the condensed consolidated statement of changes in equity for the three and six months ended June 30, 2025 , and 2024 , and the condensed consolidated statements of cash flows for the six months ended June 30, 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 months ended March 31, 2025 , and 2024 , are not necessarily indicative of the operating results for a full year.

The results of operations for the three and six months ended June 30, 2025 , and 2024 , are not necessarily indicative of the operating results for a full year.

Principles of Consolidation

5 unchanged sentences

Fair Value of Financial Instruments

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 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.

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

As of June 30, 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”).

As further discussed in Note 7, the Company recorded the investment according to guidance provided by ASC 820 “Fair Value Measurement,” as the Company did not have a controlling financial interest in, nor exerted significant influence over the activities of FG Holdings LLC.

The Company recorded the investment according to guidance provided by ASC 820 “Fair Value Measurement,” as the Company did not have a controlling financial interest in, nor exerted significant influence over the activities of FG Holdings LLC.

The investment in Series B common membership interests of FG Holdings LLC was reported using the net asset value (“NAV”) of interests held by the Company at period-end.

5 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 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 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.

The Company generally relies on cash from operations, commercial debt, and equity offerings to the extent available, to satisfy its liquidity needs and to meet its payment obligations.

The Company may engage in public or private offerings of equity or debt securities to maintain or increase its liquidity and capital resources.

However, financial and economic conditions, including those resulting from the current inflationary environment and current geopolitical tension, could impact our ability to raise capital or debt financing, if needed, on acceptable terms or at all.

Reverse Stock Split

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

The Company executed the Reverse Stock Split, which became effective at 5:00 p.m.

Eastern Time on April 21, 2023.

Shares of Common Stock underlying outstanding stock options and restricted stock units were proportionately reduced, and the respective exercise prices were proportionately increased in accordance with the terms of the agreements governing such securities.

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.

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.

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

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 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 ):

3 unchanged sentences

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.

The Company does not expect the adoption of ASU 2023 - 09 to have a material effect on its consolidated financial statements.

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

5 unchanged sentences

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 LMR segment provides radio devices that are hand-held (portable) or installed in vehicles (mobile) and operate on private radio systems that are Project 25 ( "P25" ) compliant.

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

9 unchanged sentences

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:

The table below summarizes the significant categories regularly reviewed by the chief operating decision maker for the three and six months ended June 30, 2025, and 2024, respectively:

Three Months Ended

Six Months Ended

$ 21,165 $ 20,254 $ 40,219 $ 38,485

1 unchanged sentence

11,130 12,707 21,234 24,650

10,035 7,547 18,985 13,835

Engineering and product development

2,306 1,984 5,033 4,061

Marketing and selling

1,941 1,706 3,781 3,230

General and administrative

1,791 1,832 3,258 3,536

Selling, general and administrative expenses

6,038 5,522 12,072 10,827

Operating income

3,997 2,025 6,913 3,008

Other (expense) income (a)

9 unchanged sentences

$ 3,741 $ 1,664 $ 5,873 $ 2,345

(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.

As we continue to move forward into 2025 the Solutions business unit will continue to 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 also continue to build a portfolio of solutions under a new brand, BK ONE.

BK ONE includes 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”).

Pursuant to the Agreements, the Company will transition its West Melbourne, Florida manufacturing activities to East West’s facilities, and East West will become the exclusive third -party manufacturer of the Company’s radio product line under a three -year arrangement.

In connection with the Agreements, the Company and East West entered into a Stock Purchase Agreement (the “SPA”), pursuant to which East West purchased 77,520 shares of the Company’s common stock (the “BKTI Stock”) for an investment of $ 1,000 .

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

Additionally, East West purchased a warrant (“Warrant”), with a five -year term to purchase up to 135,300 shares of the Company’s common stock at an exercise price per share of $ 15.00 .

The consideration for the Warrant is payment equal to (a) One Million Dollars ($ 1,000 ) minus (b) (i) the amount of any outstanding accounts payable by Company to East West and (ii) the amount of any excess or obsolete inventory of Company currently held by East West (solely to the extent not otherwise taken into account pursuant to the MSA or any other agreement between the Company and East West).

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

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.

For additional information, see Note 10 of the consolidated financial statements.

Allowance for Credit Losses

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 allowance for credit losses on trade receivables was approximately $ 50 on gross trade receivables of $ 11,592 and $ 7,399 as of June 30, 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, 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, and 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.

2 unchanged sentences

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.

Based on information available, management believes the allowance for credit losses as of June 30, 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:

March 31, 2025

June 30, 2025

December 31, 2024

4 unchanged sentences

18,861 19,330

Inventory reserve

( 1,694 ) ( 1,694 )

$ 17,167 $ 17,636

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 $ 1,624 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 allowances were approximately $ 1,694 as of June 30, 2025 and December 31, 2024 .

For the three and six months ended June 30, 2025, the Company recorded an income tax expense of $ 275 and $ 945 , respectively, resulting in an effective tax rate of 13.86 %.

The Company's taxable income is generated in the United Sates and taxed at a federal and state statutory rate of 26.72 %.

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.

Relative to the federal and state statutory rate, the effective tax rate for the six months ended June 30, 2025, was reduced by the tax impact of research and development tax credits.

For the three and six months ended June 30, 2024, the Company recorded an income tax expense of $ 220 and $ 241 , respectively.

The effective tax rate for the six months ended June 30, 2024, was 9.32 %.

Relative to the federal and state statutory rate, the effective tax rate for the six months ended June 30, 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.

Accordingly, we recorded a decrease in the valuation allowance of approximately $ 1.4 million as of June 30, 2025.

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.

If we incur future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of June 30, 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.

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 June 30, 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.

1 unchanged sentence

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.

On July 4, 2025, the U.S.

government enacted The One Beautiful Bill Act of 2025, (known as the "One Big Beautiful Bill Act or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.

In addition, the OBBBA makes changes to certain U.S.

corporate tax provisions, but many are generally not effective until 2026.

The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on the results of operations.

Capitalized Product Development Costs

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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 $ 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.

In exchange for its Interests, the Company received 52,000 shares of the Company’s Common Stock, with an approximate fair value of $ 650 on the date of the transaction and recorded a realized loss of $ 91 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 .

The investment in the Series B common membership interests of FG Holdings LLC was measured using the NAV practical expedient in accordance with ASC 820 Fair Value Measurement and has not been classified within the fair value hierarchy.

Prior to the redemption, FG Holdings LLC invested in the common and preferred stock of Fundamental Global Inc.

FGF) (“FGF”).

FG Holdings LLC’s structure provided for Series A preferred interests, which accrued a return of eight percent per annum and receive 20 % of positive profits with respect to the total return in the capital provided by the holders of Series A preferred membership interests.

The Series B common membership interests received cumulative distributions equal to the aggregate capital contributions by the Series B common membership interest equal to the total return on capital provided by the Series B common membership interests.

Series B common membership interests also received an additional return equal to 1.5 times the Series A of positive profits described above.

There was no defined redemption frequency, and the Company could not redeem or transfer its investment without the prior written consent of FG Holdings LLC' managers, who were related parties.

Distributions could be made to members at such times and amounts as determined by the managers, and were based on the most recent NAV.

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

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.

Kyle Cerminara, who served as a director of the Company and chairman of the Board of Directors until December 14, 2023, is Chief Executive Officer, Co-Founder, and Partner of FG and serves as chairman of the board of directors of FG Group Holdings Inc., the entity that is a majority Series B member in FG Holdings LLC.

Cerminara also serves as a manager of FG Holdings, LLC and chairman of the board of directors of FGF.

Stockholders ’ Equity

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

3,913,959 $ 2,348 $ 49,386 $ ( 15,850 ) $ ( 6,053 ) $ 29,831

Common stock issued under restricted stock units

13,764 7 ( 7 ) — — —

Common stock issued-stock options

1,148 1 12 — — 13

Share-based compensation expense-stock options

— — 118 — — 118

Share-based compensation expense-restricted stock units

— — 275 — — 275

— — — 2,132 — 2,132

Balance at March 31, 2025

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

Balance at December 31, 2023

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

Common stock issued under restricted stock units

4,710 3 ( 3 ) — — —

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

Capitalized product development costs were $ 506 and $ 946 for the three and six months ended June 30, 2025 and $ 283 and $ 430 for the three and six months ended June 30, 2024, respectively.

Income Per Share

1 unchanged sentence

Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Net income for basic and diluted earnings per share

11 unchanged sentences

$ 0.96 $ 0.47 $ 1.51 $ 0.66

Approximately 168,579 stock option and 5,739 restricted stock units for the three and six months ended June 30, 2025, and approximately 137,600 stock options and 35,682 restricted stock units for the three months and six months ended June 30, 2024, were excluded from the calculation because they were anti-dilutive.

Non-Cash Share-Based Employee Compensation

The Company’s stockholders approved the BK Technologies Corporation 2025 Incentive Compensation Plan (the “2025 Plan”) at the 2025 Annual Meeting of Stockholders of the Company (the “Annual Meeting”) held on June 18, 2025.

The 2025 Plan was previously approved by the Company’s Board of Directors (the “Board”).

The 2025 Plan replaces the 2017 Incentive Compensation Plan (the “Prior Plan”).

No new awards will be granted under the Prior Plan after the date of the Annual Meeting.

However, all awards granted under the Prior Plan that were outstanding on the date of the Annual Meeting will remain outstanding in accordance with their terms.

The 2025 Plan authorizes the grant of equity-based and cash-based compensation awards to officers, directors, and employees of, and consultants to, the Company and its subsidiaries.

Awards under the 2025 Plan may be granted in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards, and cash-based awards.

There are 500,000 shares of the Company’s common stock reserved for issuance under the 2025 Plan.

No awards may be granted under the 2025 Plan after March 11, 2035.

The stockholders of the Company also approved the BK Technologies Corporation Employee Stock Purchase Plan (the “ESPP”) at the Annual Meeting held on June 18, 2025.

The ESPP was previously approved by the Board.

The objective of the ESPP is to offer eligible employees of the Company and its designated subsidiaries the ability to purchase shares of the Company’s common stock at a discount, subject to various limitations under the ESPP.

There are 150,000 shares of the Company’s common stock authorized for issuance under the ESPP.

Stock Options

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 $ 118 for the three months ended March 31, 2025 , compared with $ 55 for the same period last year.

Related to these programs, the Company recorded non-cash share-based employee compensation expense of $ 126 and $ 244 for the three and six months ended June 30, 2025 , compared with $ 77 and $ 132 for the same periods last year, respectively.

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

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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 months ended March 31, 2025 , was calculated using certain assumptions.

The non-cash share-based employee compensation expense recorded in the three and six months ended June 30, 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 three months ended March 31, 2025 , is presented below:

A summary of activity under the Company’s stock option plans during the six months ended June 30, 2025 , is presented below:

As of January 1, 2025

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2,220 15.49 — 5.99 40

As of March 31, 2025

As of June 30, 2025

310,318 16.57 7.50 16.57 9,179

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Restricted Stock Units

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.

The Company recorded non-cash restricted stock unit compensation expense of $ 299 and $ 574 for the three and six months ended June 30, 2025 , compared with $ 148 and $ 269 for the same periods last year, respectively.

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

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Cancelled/forfeited

Unvested as of March 31, 2025

Unvested as of June 30, 2025

76,860 $ 19.88

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

As of June 30, 2025 , the Company had purchase commitments for inventory totaling approximately $ 12,115 , which are to be satisfied in the third quarter of 2025.

Significant Customers

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.

Sales to United States government agencies represented approximately 12.0 % and 11.5 % of the Company’s net total sales for the three and six months ended June 30, 2025 , respectively, compared with approximately 30.4 % and 41.5 % for the same periods last year, respectively.

Accounts receivable from agencies of the United States government were 2 % of accounts receivable at of June 30, 2025 , compared with approximately 17.4 % at the same date last year.

In addition, two commercial customers accounted for approximately 24.8 % and 26.6 % of net sales for the three and six months ended June 30, 2025, respectively.

There were no commercial customers accounting for more than 10% of net sales for the same periods last year.

Three commercial customers accounted for approximately 45.1 % of accounts receivable at June 30, 2025, compared to approximately 39.1 % of accounts receivable at June 30, 2024.

Geopolitical Tensions

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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.

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 $ 6,000 , with an accordion feature, if certain conditions are met, for up to an additional $ 4,000 of borrowing capacity, totaling a maximum commitment of $ 10,000 .

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

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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.

The Company has not utilized funding and there were no borrowings under the RLC agreement as of June 30, 2025, and as of the date of filing this report.

Debt (continued)

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

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(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.

and (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:

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

Bank Equipment Finance, a division of U.S.

Bank National Association, as a lender, entered into a Master Loan Agreement in the amount of $ 425 to finance various items of manufacturing equipment.

The loan was collateralized by the equipment purchased using the proceeds.

The Master Loan Agreement was payable in 60 equal monthly principal and interest payments of approximately $ 8 beginning on October 25, 2019, was scheduled to mature on September 25, 2024, and bore a fixed interest rate of 5.11 %.

This note payable was paid in full on June 24, 2024.

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

As of June 30, 2025 , there were no outstanding borrowings under the Fifth Third RLC.

The Company accounts for its leasing arrangements in accordance with Topic 842, “Leases.” The Company leases manufacturing and office facilities and equipment under operating leases and determines if an arrangement is a lease at inception.

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Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Operating lease cost

$ 136 $ 135 $ 272 $ 270

Variable lease cost

Total lease cost

$ 169 $ 168 $ 339 $ 336

Leases (continued)

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Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

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

Operating cash flows (fixed payments)

$ 155 $ 150 $ 310 $ 300

Operating cash flows (liability reduction)

$ 139 $ 129 $ 280 $ 256

ROU assets obtained in exchange for lease obligations:

Operating leases

$ — $ 24 $ — $ 24

Other information related to operating leases was as follows:

March 31, 2025

June 30, 2025

Weighted average remaining lease term (in years)

Weighted average discount rate

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

March 31, 2025

Remaining nine months of 2025

Maturity of lease liabilities as of June 30, 2025 , were as follows:

June 30, 2025

Remaining six months of 2025

Total payments

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Subsequent Events

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.

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act ("OBBBA").

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation on qualified property acquired and placed in service after January 19, 2025.

ASC 740, " Income Taxes, " requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

The Company is assessing these impacts on its consolidated financial statements.

On July 10, 2025, the Company approved the grant of performance-based stock options for certain executives.

The options provide the executives with the option to purchase up to an aggregate of 162,566 shares of Common Stock of the Company's common stock on the grant date of $ 42.81 per share and will vest based on whether certain common share prices are achieved over a five -year period ending on July 10, 2030.

On August 6, 2025, the Company issued 39,250 shares of common stock related to Restricted Stock Unit (RSU) grants issued in 2023.

The RSU grants included performance vesting criteria for certain Engineering employees, upon achieving $ 20 million revenues related to sales of the BKR9000 multi-band portable radio product.

The shares were issued at the August 6, 2025, closing price of $ 38.27 , for a total non-cash stock compensation expense of approximately $ 1.5 million.

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

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

We also may make forward-looking statements in other documents that are filed or furnished with the SEC.

We also may make forward-looking statements in other documents that are filed or furnished with the U.S.

Securities and Exchange Commission ("the SEC").

In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, or others.

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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;

successful introduction of new products and technologies, including our ability to successfully develop and sell our current and 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.

general economic and business conditions, including the impacts of high inflation, fluctuating 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.

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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.

Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 in this report 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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patent applications.

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.

Going forward, we plan to continue 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 for the 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.

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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 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.

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

Our backlog of unshipped customer orders was approximately $16.0 million and $21.8 million as of June 30, 2025, and December 31, 2024, respectively.

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

For the three months ended June 30, 2025, sales increased approximately 4.5% to approximately $21.2 million, compared with $20.3 million for the same period of 2024.

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

Gross profit margins as a percentage of sales for the three months ended June 30, 2025, were 47.4%, compared with 37.3% 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 June 30, 2025, totaled approximately $6.0 million (28.5% of sales), compared with $5.5 million (27.3% of sales) in the same period of fiscal year 2024.

We recognized operating income for the three months ended June 30, 2025, of approximately $4.0 million, compared with operating income of approximately $2.0 million for the same period of fiscal year 2024.

For the three months ended June 30, 2025, we recognized other income, net totaling approximately $19,000.

This compares with other expenses, net totaling $141,000 for the same period of fiscal year 2024, which primarily included interest expense on the Alterna IPSA Line of Credit.

For the three months ended June 30, 2025, the pretax income totaled approximately $4.0 million, compared with pretax income of approximately $1.9 million for same period of fiscal year 2024.

We recognized tax expense of $275,000 for the three-month period ended June 30, 2025, and approximately $220,000 for the same period of fiscal year 2024.

Net income for the three months ended June 30, 2025, totaled approximately $3.7 million ($1.03 per basic and $0.96 per diluted share), compared with a net income of approximately $1.7 million ($0.47 per basic and diluted share) for the same period last year.

The primary factors for the improvement for the three months ended June 30, 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 June 30, 2025, working capital totaled approximately $28.9 million, of which $23.4 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 $14.5 million of cash, cash equivalents, and trade receivables.

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

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

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.

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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.

Second Quarter and Six Months Summary

Customer demand and new orders for our products of $18.3 million were impacted by delays in federal government contracts during the three months ended June 30, 2025, compared to $28.2 million for the same period of fiscal year 2024.

Customer demand and new orders for our products of $35.1 million were recorded during the six months ended June 30, 2025, compared to $50.5 million for the same period of fiscal year 2024.

The decrease in new orders for the six months ended June 30, 2025, compared to the same period last year was primarily due to timing of the release of federal government orders delayed until July 2025.

For the second quarter of 2025, sales increased 4.5% to approximately $21.2 million, compared with approximately $20.3 million of sales for the second quarter of fiscal year 2024.

Sales for the six months ended June 30, 2025, totaled approximately $40.2 million, compared with approximately $38.5 million for the six-month period last year.

Gross profit margin as a percentage of sales for the second quarter of 2025 was approximately 47.4%, compared with 37.3% 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 second quarter of fiscal year 2024.

Selling, general, and administrative (“SG&A”) expenses for the second quarter of 2025 totaled approximately $6.0 million, which was 9.3% higher than the SG&A expenses of approximately $5.5 million for the second 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 restricted stock units ('RSU") issuance expenses.

These factors yielded operating income of approximately $4.0 million for the three-month period ended June 30, 2025, compared with operating income of approximately $2.0 million for the same period of fiscal year 2024.

For the second quarter of 2025, we recognized other net income of approximately $19,000 on interest income on our cash investments, compared to approximately $141,000 other expense, primarily related to interest expense for the same period of fiscal year 2024.

Net income for the three months ended June 30, 2025, was approximately $3.7 million ($1.03 per basic and $0.96 per diluted share), compared with net income of approximately $1.7 million ($0.47 per basic and diluted share) for the same quarter last year.

The primary factors for the improvement for the three month period ended June 30, 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.

during fiscal year 2024.

As of June 30, 2025, working capital totaled approximately $28.9 million, of which approximately $23.4 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

Six Months Ended

Cost of products

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(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.

For the second quarter ended June 30, 2025, net sales increased 4.5% to approximately $21.2 million, compared with approximately $20.3 million for the same quarter of fiscal year 2024.

Sales for the six months ended June 30, 2025, totaled approximately $40.2 million, compared with approximately $38.5 million for the six-month period last year.

Customer demand and orders for our products continued to be strong, but were impacted by delays in the release of certain federal government agency contracts, until the early third quarter of 2025.

Sales for the second quarter and six months ended June 30, 2025, were attributed primarily to state and local public safety opportunities.

From a product perspective, the primary contributor to orders and shipments during the second quarter and six months ended June 30, 2025, 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.

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Cost of Products and Gross Profit Margin

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.

Gross profit margins as a percentage of sales for the second quarter ended June 30, 2025, were approximately 47.4% compared with 37.3% for the same quarter of fiscal year 2024.

Gross profit margins as a percentage of sales for the six months ended June 30, 2025, were approximately 47.2% compared with 35.9% for the same period 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 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.

The increase in gross profit margins for the three- and six-months ended June 30, 2025, compared to the same period of fiscal year 2024, generally reflected 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., during fiscal year 2024.

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

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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 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.

SG&A expenses for the quarter ended June 30, 2025, totaled approximately $6.0 million (28.5% of sales), compared with approximately $5.5 million (27.3% of sales) for the same quarter of fiscal year 2024.

For the six months ended June 30, 2025, SG&A expenses increased by $1.2 million, or 11.5%, to approximately $12.1 million (30.0% of sales), compared with approximately $10.8 million (28.1% of sales), for the six-month period last year.

Engineering and product development expenses for the second quarter of 2025 totaled approximately $2.3 million (10.9% of sales), compared with approximately $2.0 million (9.8% of sales) for the same quarter of fiscal year 2024.

For the six months ended June 30, 2025, engineering and product development expenses totaled approximately $5.0 million (12.5% of sales), compared with approximately $4.1 million (10.6% of sales) for the six-month period last year.

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 in Note 8 ( 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, 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.

Marketing and selling expenses for the second quarter of 2025 totaled approximately $1.9 million (9.2% of sales), compared with approximately $1.7 million (8.4% of sales) for the second quarter of fiscal year 2024.

For the six months ended June 30, 2025, marketing and selling expenses increased approximately $0.6 million, or 17.1%, to approximately $3.8 million (9.4% of sales), compared with approximately $3.2 million (8.4% of sales) for the same period last year.

The increase in marketing and selling expenses for the three and six months ended June 30, 2025 was attributed primarily to additional salespeople and increased trade show participation.

Other general and administrative expenses for the second quarter of 2025 totaled approximately $1.8 million (8.5% of sales), compared with approximately $1.8 million (9.0% of sales) for the same period of fiscal year 2024.

For the six months ended June 30, 2025, other general and administrative expenses totaled approximately $3.3 million (8.1% of sales), compared with approximately $3.5 million (9.2% of sales) for the six-month period last year.

The decrease in other general and administrative expenses for the three and six months ended June 30, 2025, was attributed primarily to the non-recurring nature of certain corporate consulting expenses during the six months ended June 30, 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.

Operating income for the quarter ended June 30, 2025, totaled approximately $4.0 million (18.9% of sales), compared with operating income of approximately $2.0 million (10.0% of sales) for the same period of fiscal year 2024.

For the six months ended June 30, 2025, our operating income totaled approximately $6.9 million (17.2% of sales), compared with operating income of approximately $3.0 million (7.8% of sales) for the six-month period last year.

The operating income improvement for the three and six months ended June 30, 2025, compared to the same periods 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., during fiscal year 2024.

Other (Expense) Income

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.

We recorded net interest income of approximately $39,000 for the quarter ended June 30, 2025, compared with approximately $106,000 net interest expense for the second quarter of fiscal year 2024.

For the six months ended June 30, 2025, net interest income totaled approximately $42,000, compared with net interest expense of approximately $0.3 million for the six-month period last year.

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 approximately $91,000 on the investment during the first quarter of 2024.

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 $0.1 million 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 approximately $670,000 and $21,000 tax expense for the three months ended March 31, 2025, and 2024, respectively.

We recorded approximately $275,000 and $220,000 tax expense for the three months ended June 30, 2025, and 2024, respectively.

For the six months ended June 30, 2025, and 2024, we recorded $945,000 and $241,000 tax expense, respectively

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

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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.

As of June 30, 2025, our net deferred tax assets totaled approximately $7.4 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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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.

If we incur future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of June 30, 2025.

On July 4, 2025, new U.S tax legislation (referred to as the “One Big Beautiful Bill Act” or “OBBBA”) was enacted in the U.S.

The OBBBA makes permanent the extension of certain provisions of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.

Additionally, the OBBBA makes changes to certain U.S.

corporate tax provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently assessing the impact of the OBBBA on its consolidated financial statements.

Liquidity and Capital Resources

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.

For the six months ended June 30, 2025, net cash provided by operating activities totaled approximately $6.0 million, compared with cash provided by operating activities of approximately $3.3 million for the same fiscal year period of 2024.

Cash provided by operating activities for the six months ended June 30, 2025, was primarily related to net income and an increase in accounts payable, partially offset by an increase in accounts receivable.

Cash provided by operating activities for the six months ended June 30, 2024, was primarily related to net income and a decrease in inventories, partially offset by an increase in accounts receivable and a decrease in accounts payable.

For the first six months of 2025, we had net income of approximately $5.9 million, compared with a net income of approximately $2.3 million for the same period of fiscal year 2024.

Accounts receivable increased approximately $4.2 million during the six months ended June 30, 2025, compared with an increase of approximately $3.7 million for the same period of fiscal year 2024, primarily due to the timing of customer collections in the first six months of fiscal year 2025 and 2024.

Inventories decreased during the six months ended June 30, 2025, by approximately $0.3 million compared to a decrease of approximately $2.4 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.

Accounts payable for the six months ended June 30, 2025, increased approximately $3.5 million, compared with a decrease of approximately $1.0 million for the same period of fiscal year 2024, primarily due to the increased contract manufacturing production and reduction in raw material purchases in 2024 related to the transition of manufacturing production of our products to East West Manufacturing LLC, during the second quarter of 2024.

Accrued compensation and related expenses decreased during the first six months of 2025 by approximately $0.6 million compared with an increase of $0.3 million for the same period of fiscal year 2024.

Depreciation and amortization totaled approximately $0.9 million for the six months ended June 30, 2025, compared with approximately $0.8 million for the same period of fiscal year 2024.

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

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 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.

There were no realized or unrealized losses on investments for the six months ended June 30, 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 (Condensed Consolidated Financial Statement) included in this report.

Cash used in investing activities for the six months ended June 30, 2025, totaled approximately $1.5 million, compared with approximately $0.8 million for the same period of fiscal year 2024.

The cash used for the six-month period ended June 30, 2025, was attributed primarily to capitalized product development costs and purchases of engineering equipment and tooling, compared to cash used for the six-month period ended June 30, 2024, which was also primarily attributed to capitalized development costs and the purchase of engineering and manufacturing related equipment.

For the six months ended June 30, 2025, approximately $0.2 million was provided by financing activities, compared with cash used in financing activities of approximately $2.9 million for the same period of fiscal year 2024.

During the first six months of 2024, we received cash of approximately $29.0 million from our Alterna Capital Solutions, LLC revolving credit facility, net of repayments totaling approximately $31.9 million.

Our cash and cash equivalents balance on June 30, 2025, was approximately $11.9 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.

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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.

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.

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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.

The Company has not utilized funding and there were no borrowings under the RLC agreement as of June 30, 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.

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(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.

and (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:

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and (7) certain events of bankruptcy or insolvency.

Critical Accounting Policies

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

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.

There were no other changes to our critical accounting policies during the six months ended June 30, 2025.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

What changed 10-Q

Item 1. Financial Statements