What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-14 · 300 added, 208 removed, 544 unchanged (48% of the section changed)

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (UNAUDITED)

BK TECHNOLOGIES CORPORATION

1 unchanged sentence

( In thousands, except share data)

September 30,

Current assets:

37 unchanged sentences

10,000,000 authorized shares;

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

4,084,386 and 3,913,959 issued, and 3,742,306 and 3,571,879 outstanding shares as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

2 unchanged sentences

( 6,541 ) ( 15,850 )

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

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

( 6,053 ) ( 6,053 )

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

$ 24,411 $ 20,179 $ 64,630 $ 58,664

13 unchanged sentences

4,845 2,611 11,758 5,619

Other (expense) income:

Other income (expense):

Net interest income (expense)

11 unchanged sentences

3,436 2,357 9,309 4,702

Net income per share-basic:

Earnings per share-basic:

$ 0.93 $ 0.67 $ 2.56 $ 1.33

Net income per share-diluted:

Earnings per share-diluted:

$ 0.87 $ 0.63 $ 2.38 $ 1.30

8 unchanged sentences

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

Common stock issued under restricted stock units

2,156 1 ( 1 ) — — —

Common stock issued-stock options

Common stock issued-warrants exercised

14,465 10 218 — — 228

Common stock issued - exercised warrants

89,764 54 ( 54 ) — — —

Share-based compensation expense-stock options

— — 126 — — 126

Share-based compensation expense-restricted stock units

— — 299 — — 299

— — — 3,741 — 3,741

Balance at June 30, 2025

4,035,256 2,421 50,372 ( 9,977 ) ( 6,053 ) 36,763

Common stock issued under restricted stock units

41,540 25 ( 25 ) — — —

Common stock issued-stock options

7,171 4 110 — — 114

Common stock issued - exercised warrants

419 1 ( 1 ) — — —

Share-based compensation expense-stock options

— — 380 — — 380

Share-based compensation expense-restricted stock units

— — 257 — — 257

— — — 3,436 — 3,436

Balance at September 30, 2025

4,084,386 $ 2,451 $ 51,093 $ ( 6,541 ) $ ( 6,053 ) $ 40,950

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

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

See Accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

( In thousands ) ( Unaudited )

Six Months Ended

Nine Months Ended

September 30,

Operating activities

4 unchanged sentences

Amortization of deferred finance and other assets

Deferred tax benefit

Deferred taxes

Non-cash lease adjustments

( 60 ) ( 49 )

Depreciation and amortization

1 unchanged sentence

Share-based compensation expense-restricted stock units

Gain on sale of equipment

Loss on investments

Changes in operating assets and liabilities:

Trade accounts receivable

Trade accounts receivable, net

( 230 ) ( 1,565 )

Prepaid expenses and other current assets

ROU assets and lease liabilities

( 1,810 ) 5,251

Prepaid expenses and other current assets

Accounts payable

21 unchanged sentences

Net change in cash and cash equivalents

4,778 ( 475 )

Cash and cash equivalents, beginning of period

9 unchanged sentences

Notes to Condensed Consolidated Financial Statements

Three and Six Months Ended June 30, 2025 and 2024

Three and Nine Months Ended September 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 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 September 30, 2025 , the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 , and 2024 , the condensed consolidated statement of changes in equity for the three and nine months ended September 30, 2025 , and 2024 , and the condensed consolidated statements of cash flows for the nine months ended September 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.

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

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

Principles of Consolidation

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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”).

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.

The NAV was calculated using the observable fair value of the underlying stock of Fundamental Global Inc.

FGF) held by FG Holdings LLC, plus uninvested cash, less liabilities, further adjusted through allocations based on distribution preferences, as defined in the operating agreement of FG Holdings LLC.

The NAV was used as a practical expedient and has not been classified within the fair value hierarchy.

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

In exchange for the 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 .

As of September 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.

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

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023 - 09, Income Taxes (Topic 740 ):

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

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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.

The Company does not expect the adoption of ASU 2024 - 03 to have a material effect on its consolidated financial statements.

Segment Reporting Disclosures

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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 LMR radio products are used by public safety agencies of the federal government, state and local municipality agencies on their 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 Company’s chief operating decision maker is the senior executive committee that includes the chief executive officer, chief financial officer, and the chief technology officer.

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

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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 chief operating decision maker for the three and six months ended June 30, 2025, and 2024, respectively:

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024 September 30, 2025 September 30, 2024

$ 24,411 $ 20,179 $ 64,630 $ 58,664

12 unchanged sentences

4,845 2,611 11,758 5,619

Other (expense) income (a)

19 ( 141 ) ( 95 ) ( 331 )

Income tax (expense) benefit

Other income (expense) (a)

43 ( 7 ) ( 52 ) ( 338 )

4 unchanged sentences

Loss on investments

Income tax expense

( 1,452 ) ( 247 ) ( 2,397 ) ( 488 )

Consolidated net income

$ 3,436 $ 2,357 $ 9,309 $ 4,702

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

Significant Events and Transactions

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.

As we continue through 2025 the Solutions product group 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 product group 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 Note 10 of the consolidated financial statements.

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

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

Allowance for Credit Losses

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 allowance for credit losses on trade receivables was approximately $ 50 on gross trade receivables of $ 7,629 and $ 7,399 as of September 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.

4 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 June 30, 2025 and December 31, 2024 is adequate.

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

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

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 $ 1,694 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 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.

The allowances were approximately $ 1,315 and $ 1,694 as of September 30, 2025 and December 31, 2024 .

For the three and nine months ended September 30, 2025, the Company recorded an income tax expense of $ 1,452 and $ 2,397 , respectively, resulting in an effective tax rate of 20.47% .

The Company's taxable income is generated in the United States 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 nine months ended September 30, 2025, was reduced by the tax impact of research and development tax credits and carryforwards.

For the three and nine months ended September 30, 2024, the Company recorded an income tax expense of $ 247 and $ 488 , respectively.

The effective tax rate for the nine months ended September 30, 2024, was 9.32 %.

Relative to the federal and state statutory rate, the effective tax rate for the nine months ended September 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 $ 1.4 million as of June 30, 2025.

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

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

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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.

government enacted The One Beautiful Bill Act of 2025, (known as the "One Big Beautiful Bill Act or "OBBBA") which includes provisions such as the extension of certain expiring tax provisions from the 2017 Tax Cuts and Jobs Act, reinstatement of immediate expensing of qualifying business property, full expensing of domestic research and experimental expenditures, and changes to interest expense limitations..

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

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 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

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

Capitalized product development costs were $ 570 and $ 1,516 for the three and nine months ended September 30, 2025 and $ 321 and $ 751 for the three and nine months ended September 30, 2024, respectively.

Earnings Per Share

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

Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Net income for basic and diluted earnings per share

$ 3,436 $ 2,357 $ 9,309 $ 4,702

Denominator for basic income per share weighted average shares

Denominator for basic earnings per share weighted average shares

3,708,717 3,539,841 3,643,097 3,536,100

2 unchanged sentences

242,716 211,232 270,051 87,141

Denominator for diluted income per share weighted average shares

Denominator for diluted earnings per share weighted average shares

3,951,433 3,751,073 3,913,148 3,623,241

Basic income per share

Basic earnings per share

$ 0.93 $ 0.67 $ 2.56 $ 1.33

Diluted income per share

Diluted earnings per share

$ 0.87 $ 0.63 $ 2.38 $ 1.30

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.

Approximately 184,627 stock options and 54,189 restricted stock units for the three and nine months ended September 30, 2025, and approximately 21,700 stock options and 20,435 restricted stock units for the three months and nine months ended September 30, 2024, were excluded from the calculation because they were anti-dilutive.

Non-Cash Share-Based Employee Compensation

14 unchanged sentences

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 $ 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.

Related to these programs, the Company recorded non-cash share-based employee compensation expense of $ 380 and $ 624 for the three and nine months ended September 30, 2025 , compared with $ 78 and $ 210 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.

There was no non-cash share-based employee compensation expense capitalized as part of capital expenditures or inventory for the periods presented.

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 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 six months ended June 30, 2025 , is presented below:

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 the Company's common stock, with an exercise price 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.

The Company uses the Black-Scholes-Merton and Monte Carlo simulation option valuation models to calculate the fair value of stock option grants.

The non-cash share-based employee compensation expense recorded in the three and nine months ended September 30, 2025 , was calculated using certain assumptions.

Such assumptions are described more comprehensively in Note 11 (Share-Based 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, 2025 , is presented below:

As of January 1, 2025

8 unchanged sentences

( 4,380 ) 14.72 — 5.97 151

As of June 30, 2025

As of September 30, 2025

467,313 26.83 8.27 15.19 26,943

2 unchanged sentences

Restricted Stock Units

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.

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.

The Company recorded non-cash restricted stock unit compensation expense of $ 257 and $ 831 for the three and nine months ended September 30, 2025 , compared with $ 146 and $ 415 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:

6 unchanged sentences

Cancelled/forfeited

Unvested as of June 30, 2025

Unvested as of September 30, 2025

36,663 $ 26.19

10 unchanged sentences

Purchase Commitments

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.

As of September 30, 2025 , the Company had purchase commitments for inventory totaling approximately $ 5,369 , which are expected to be satisfied in the fourth quarter of 2025.

Significant Customers

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.

The following table summarizes customer concentration of net revenues

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Revenue as a percent of total revenue

United States government agencies

50.7 % 39.1 % 26.3 % 40.7 %

26.2 % 14.1 % - -

- - 13.3 % 10.3 %

The following table summarizes customer concentration of receivables

September 30, 2025

September 30, 2024

Receivables as a percent of total receivables

United States government agencies

29.8 % 21.3 %

Customer B and C

Geopolitical Tensions

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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.

Macroeconomic Trends

The Company continues to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, the impact of the ongoing U.S.

federal government shutdown and global or local recession.

Such changes in domestic and global macroeconomic conditions may lead to increased costs for the business.

Additionally, these macroeconomic trends could adversely affect the Company’s customers, which could impact their willingness to spend on the Company’s products and services, or their ability to make payments, which could harm the collection of accounts receivable and financial results.

The world’s financial markets remain susceptible to significant stresses, resulting in reductions in available credit and government spending, economic downturn or stagnation, foreign currency fluctuations and volatility in the valuations of securities generally.

As a result, the Company’s ability to access capital markets and other funding sources in the future may not be available on commercially reasonable terms, if at all.

The rapid development and fluidity of these situations precludes any prediction as to the ultimate impact they will have on the Company’s business, financial condition, results of operation and cash flows, which will depend largely on future developments.

Credit Facilities

6 unchanged sentences

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 June 30, 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 September 30, 2025, and as of the date of filing this report.

Debt (continued)

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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.

The Company accounts for its leasing arrangements in accordance with ASU 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.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

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

In February 2020, the Company entered into a lease for 6,857 square feet ( not in thousands) of office space at Sawgrass Technology Park, 1619 NW 136th Avenue in Sunrise, Florida, for a period of 64 months commencing July 1, 2020.

Annual rental, maintenance, and tax expenses for the facility will be approximately $ 196 for the first year, increasing by approximately 3 % for each subsequent 12 -month period.

In September 2025, the Company entered into an amendment to the Sawgrass Lease to lease an additional 1,514 square feet ( not in thousands) of office space and to extend the lease term an additional 62 months, commencing on the date construction on the additional leased area is completed (the “Sawgrass Amendment”).

Pursuant to the Sawgrass Amendment, the annual rental, maintenance, and tax expenses for the facility will be approximately $ 180 for the first year of the extended term and will increase approximately 3.0 % for each subsequent 12 -month period.

Lease costs consisted of the following:

Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Operating lease cost

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Variable lease cost

34 33 100 100

Total lease cost

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Three Months Ended

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

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

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Other information related to operating leases was as follows:

June 30, 2025

September 30, 2025

Weighted average remaining lease term (in years)

Weighted average discount rate

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

June 30, 2025

Remaining six months of 2025

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

September 30, 2025

Remaining three months of 2025

Total payments

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Subsequent Events

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.

On October 30, 2025, BK Technologies, Inc., a wholly owned subsidiary of the Company, as the borrower, entered into an amendment to the RLC with Fifth Third Bank (the “Amendment”).

Among other things, the Amendment revised the availability under the $6.0 million RLC to remove the borrowing base requirement, and to increase the accordion feature, if certain conditions are met, for up to an additional $8.0 million of borrowing capacity, totaling a maximum commitment of $14.0 million;

extended the maturity date to October 30, 2028;

added a new financial covenant providing that the borrower will cause the outstanding principal balance under the RLC to be $0 for at least 30 consecutive days during each annual period ending on October 30;

and amended the applicable interest rate margin, such that each advance under the RLC accrues interest on the outstanding principal amount thereof at a rate of the SOFR, plus a range of 1.75 % to 2.25 % per annum, based on certain total debt coverage ratios.

Since October 1, 2025, the Company has purchased 10,205 shares of it’s common shares utilizing a Rule 10b5 - 1 Qualified Plan, which plan was established pursuant to, and as a part of, the Company’s share repurchase program.

The common shares were purchased at an average price of $ 67.22 per share for a total cost of $ 685,972 ( not in 000’s ).

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

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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 in this report 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 , "Part II - Item 1A.

Risk Factors" in this Quarterly Report on Form 10-Q, 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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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 Solutions.

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

In business for over 70 years, BK operates one business segment through its operating subsidiary, BK Technologies, Inc.

BK has two product groups within the segment:

LMR Radio and Solutions.

The LMR Radio product group designs, manufactures, and markets wireless communications products consisting of two-way LMRs.

Two-way LMRs can be radios that are hand-held (portable) or installed in vehicles (mobile).

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

The Solutions product group 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.

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.

Going forward, we plan to continue to expand the Solutions product group 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 product group 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 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.

federal government shutdown, and global or local recession.

Such changes in domestic and global macroeconomic conditions may lead to increased costs for the business.

As a result, the Company’s ability to access capital markets and other funding sources in the future may not be available on commercially reasonable terms, if at all.

Customer demand and orders for our products were strong during fiscal year

2024 and continued during the first

nine months of

Our backlog of unshipped customer orders was approximately $24.5 million and $21.8 million as of

September 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.

For the three months ended September 30, 2025, sales increased approximately 21.0% to approximately $24.4 million, compared with $20.2 million for the same period of fiscal year 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.

Gross profit margins as a percentage of sales for the three months ended September 30, 2025, were 49.9%, compared with 38.8% for the comparative fiscal year 2024 quarter, generally reflecting price increases related to tariffs, 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, 2025, totaled approximately $7.3 million (30.1% of sales), compared with $5.2 million (25.9% of sales) in the same period of fiscal year 2024.

We recognized operating income for the three months ended September 30, 2025, of approximately $4.8 million, compared with operating income of approximately $2.6 million for the same period of fiscal year 2024.

For the three months ended September 30, 2025, we recognized other income, net totaling approximately $43,000.

This compares with other expenses, net totaling $7,000 for the same period of fiscal year 2024.

For the three months ended September 30, 2025, the pretax income totaled approximately $4.9 million, compared with pretax income of approximately $2.6 million for same period of fiscal year 2024.

We recognized tax expense of $1.5 million for the three-month period ended September 30, 2025, and approximately $247,000 for the same period of fiscal year 2024.

Net income for the three months ended September 30, 2025, totaled approximately $3.4 million ($0.93 per basic and $0.87 per diluted share), compared with a net income of approximately $2.4 million ($0.67 per basic and $0.63 per diluted share) for the same period last year.

The primary factors for the improvement for the three months ended September 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 September 30, 2025, working capital totaled approximately $33.8 million, of which $29.1 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.

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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.

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.

Third Quarter and Nine Months Summary

Customer demand and new orders for our products was $34.3 million during the three months ended September 30, 2025, compared to $21.8 million for the same period of fiscal year 2024.

Customer demand and new orders for our products of $69.3 million were recorded during the nine months ended September 30, 2025, compared to $72.4 million for the same period of fiscal year 2024.

The decrease in new orders for the nine months ended September 30, 2025, compared to the same period last year was primarily due to higher state agency orders in the first nine months of 2024.

For the third quarter of 2025, sales increased 21.0% to approximately $24.4 million, compared with approximately $20.2 million of sales for the third quarter of fiscal year 2024.

Sales for the nine months ended September 30, 2025, totaled approximately $64.6 million, an increase of 10.2% compared with approximately $58.7 million for the nine-month period last year.

Gross profit margin as a percentage of sales for the third quarter of 2025 was approximately 49.9%, compared with 38.8% for the same period of fiscal year 2024, generally reflecting price increases related to tariffs, 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 third quarter of fiscal year 2024.

Selling, general, and administrative (“SG&A”) expenses for the third quarter of 2025 totaled approximately $7.3 million, which was 40.6% higher than the SG&A expenses of approximately $5.2 million for the third quarter of fiscal year 2024.

The increase in SG&A expenses was attributed primarily due to new product development costs, and accrual of fiscal year 2025 incentive bonus expenses.

These factors yielded operating income of approximately $4.8 million for the three-month period ended September 30, 2025, compared with operating income of approximately $2.6 million for the same period of fiscal year 2024.

For the third quarter of 2025, we recognized other net income of approximately $43,000 on interest income on our cash investments and other expenses, compared to approximately $7,000 other expense, primarily related to other expenses for the same period of fiscal year 2024.

Net income for the three months ended September 30, 2025, was approximately $3.4 million ($0.93 per basic and $0.87 per diluted share), compared with net income of approximately $2.4 million ($0.67 per basic and $0.63 per diluted share) for the same quarter last year.

The primary factors for the improvement for the three-month period ended September 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 September 30, 2025, working capital totaled approximately $33.8 million, of which approximately $29.1 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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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of products

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(1) Amounts may not foot due to rounding

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.

For the third quarter ended September 30, 2025, net sales increased 21.0% to approximately $24.4 million, compared with approximately $20.2 million for the same quarter of fiscal year 2024.

Sales for the nine months ended September 30, 2025, totaled approximately $64.6 million, compared with approximately $58.7 million for the nine-month period last year.

Sales for the third quarter and nine months ended September 30, 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 third quarter and nine months ended September 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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However, the timing and size of orders from agencies at all levels can be unpredictable and subject to budgets, priorities, and other factors.

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.

While the potential impacts of the current administration's tariff policies, the ongoing government shutdown, material shortages, lead-times, high inflation and ongoing geopolitical conflicts in Ukraine and the Middle East and other geopolitical events remain uncertain in the 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 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.

Gross profit margins as a percentage of sales for the third quarter ended September 30, 2025, were approximately 49.9% compared with 38.8% for the same quarter of fiscal year 2024.

Gross profit margins as a percentage of sales for the nine months ended September 30, 2025, were approximately 48.2% compared with 36.9% 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.

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.

The increase in gross profit margins for the three- and nine-months ended September 30, 2025, compared to the same periods of fiscal year 2024, generally reflect price increases related to tariffs, 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 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.

SG&A expenses for the quarter ended September 30, 2025, totaled approximately $7.3 million (30.1% of sales), compared with approximately $5.2 million (25.9% of sales) for the same quarter of fiscal year 2024.

For the nine months ended September 30, 2025, SG&A expenses increased by $3.4 million, or 21.0%, to approximately $19.4 million (30.0% of sales), compared with approximately $16.1 million (27.4% of sales), for the nine-month period last year.

Engineering and product development expenses for the third quarter of 2025 totaled approximately $2.8 million (11.4% of sales), compared with approximately $1.9 million (9.2% of sales) for the same quarter of fiscal year 2024.

For the nine months ended September 30, 2025, engineering and product development expenses totaled approximately $7.8 million (12.1% of sales), compared with approximately $5.9 million (10.1% of sales) for the nine-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 restricted stock unit issuance costs described 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 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.

Marketing and selling expenses for the third quarter of 2025 totaled approximately $2.1 million (8.7% of sales), compared with approximately $1.5 million (7.2% of sales) for the third quarter of fiscal year 2024.

For the nine months ended September 30, 2025, marketing and selling expenses increased approximately $1.3 million, or 28.0%, to approximately $5.9 million (9.1% of sales), compared with approximately $4.6 million (7.9% of sales) for the same period last year.

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

Other general and administrative expenses for the third quarter of 2025 totaled approximately $2.4 million (10.0% of sales), compared with approximately $1.9 million (9.4% of sales) for the same period of fiscal year 2024.

For the nine months ended September 30, 2025, other general and administrative expenses totaled approximately $5.7 million (8.8% of sales), compared with approximately $5.5 million (9.4% of sales) for the nine-month period last year.

The increase in other general and administrative expenses for the three and nine months ended September 30, 2025, was attributed primarily to non-cash stock compensation and the non-recurring nature of certain corporate consulting expenses compared to the nine months ended September 30, 2024.

Operating Income

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 $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.

Operating income for the quarter ended September 30, 2025, totaled approximately $4.8 million (19.8% of sales), compared with operating income of approximately $2.6 million (12.9% of sales) for the same period of fiscal year 2024.

For the nine months ended September 30, 2025, our operating income totaled approximately $11.8 million (18.2% of sales), compared with operating income of approximately $5.6 million (9.6% of sales) for the nine-month period last year.

The operating income improvement for the three and nine months ended September 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 Income (Expense)

We recorded net interest income of approximately $94,000 for the quarter ended September 30, 2025, compared with approximately $1,000 net interest expense for the third quarter of fiscal year 2024.

For the nine months ended September 30, 2025, net interest income totaled approximately $136,000, compared with net interest expense of approximately $281,000 for the nine-month period last year.

Net interest expense for the nine months of 2024 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.

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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 $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

We recorded approximately $1.5 million and $247,000 tax expense for the three months ended September 30, 2025, and 2024, respectively.

For the nine months ended September 30, 2025, and 2024, we recorded $2.4 million and $0.5 million 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 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.

As of September 30, 2025, our net deferred tax assets totaled approximately $5 .5 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 June 30, 2025.

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

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Liquidity and Capital Resources

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 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.

For the nine months ended September 30, 2025, net cash provided by operating activities totaled approximately $16.4 million, compared with cash provided by operating activities of approximately $9.0 million for the same fiscal year period of 2024.

Cash provided by operating activities for the nine months ended September 30, 2025, was primarily related to net income of $9.3 million and an increase of $4.5 million in accounts payable, partially offset by an increase of $1.8 million in inventories.

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.

For the first nine months of 2025, we had net income of approximately $9.3 million, compared with a net income of approximately $4.7 million for the same period of fiscal year 2024.

Accounts receivable increased approximately $0.2 million during the nine months ended September 30, 2025, compared with an increase of approximately $1.6 million for the same period of fiscal year 2024, primarily due to the timing of customer collections in the first nine months of fiscal year 2025 and 2024.

Inventories increased during the nine months ended September 30, 2025, by approximately $1.8 million compared to a decrease of approximately $5.3 million for the same period of fiscal year 2024.

The increase in inventories during the nine months ended September 30, 2025 was primarily attributed to an increase in finished goods in 2025 somewhat offset by a decrease in raw materials.

Accounts payable for the nine months ended September 30, 2025, increased approximately $4.5 million, compared with a decrease of approximately $3.9 million for the same period of fiscal year 2024, primarily due to the increased contract manufacturing production to East West Manufacturing LLC, during of 2024.

Accrued other expenses decreased during the first nine months of 2025 by approximately $1.3 million compared with an increase of $0.8 million for the same period of fiscal year 2024.

Depreciation and amortization totaled approximately $1.3 million for the nine months ended September 30, 2025, compared with approximately $1.3 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 six months ended June 30, 2025, compared to approximately $0.1 million for the same period of fiscal year 2024.

There were no realized or unrealized losses on investments for the nine months ended September 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.

Cash used in investing activities for the nine months ended September 30, 2025, totaled approximately $2.4 million, compared with approximately $1.6 million for the same period of fiscal year 2024.

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

For the nine months ended September 30, 2025, approximately $0.4 million was provided by financing activities, compared with cash used in financing activities of approximately $6.6 million for the same period of fiscal year 2024.

During the first nine months of 2024, we received cash of approximately $46.4 million from our Alterna Capital Solutions, LLC revolving credit facility, net of repayments totaling approximately $53.0 million.

Our cash and cash equivalents balance on September 30, 2025, was approximately $21.5 million.

We believe these funds, combined with anticipated cash generated from operations and borrowing availability under our Fifth Third credit agreement, 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, 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.

federal government shutdown, 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.

entered into a Revolving Loan Commitment with Fifth Third Bank, National Association (“Fifth Third”) which was amended on October 30, 2025 (as amended, the “RLC”).

The Fifth Third RLC provides for a 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 $8 million of borrowing capacity, totaling a maximum commitment of $14 million.

The RLC will mature on October 30, 2028.

Each advance shall accrue interest on the outstanding principal amount thereof at a range of SOFR plus 1.75% to 2.25% per annum, based on certain total debt coverage ratios.

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 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.

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.

The Company has not utilized funding and there were no borrowings under the RLC agreement as of September 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 secured by a pledge of essentially all of the assets of the Company, BK Technologies, Inc.

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

BK Technologies, Inc.

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

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.

(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 (iii) a requirement that the outstanding principal balance under the RLC will be $0 for at least 30 consecutive days during each annual period ending on October 30.

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

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

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

There were no other changes to our critical accounting policies during the nine months ended September 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