What changed in this filing

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Item 1. Financial Statements

2022-05-12 compared with 2021-11-12 · 95 added, 167 removed, 257 unchanged (50% of the section changed)

3 unchanged sentences

( In thousands, except share data)

September 30,

Current assets:

33 unchanged sentences

50,000,000 authorized shares;

18,264,736 and 13,962,366 issued and 16,814,336 and 12,511,966 outstanding shares at September 30, 2021, and December 31, 2020, respectively

18,314,999 and 18,298,999 issued and 16,864,599 and 16,848,599 outstanding shares at March 31, 2022, and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Treasury stock, at cost, 1,450,400 shares at September 30, 2021, and December 31, 2020, respectively

Treasury stock, at cost, 1,450,400 shares at March 31, 2022, and December 31, 2021, respectively

Total stockholders’ equity

1 unchanged sentence

See notes to condensed consolidated financial statements.

* The amounts as of December 31, 2020, have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 4 to the Condensed Consolidated Financial Statements.

BK TECHNOLOGIES CORPORATION

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of products

Selling, general and administrative

Total expenses

Operating (loss) income

Total operating expenses

Operating loss

Other (expense) income:

Net interest (expense) income

Loss on disposal of property, plant and equipment

Net interest (expense)

(Loss) gain on investment in securities

Other expense

Other income (expense)

Total other (expense) income

(Loss) income before income taxes

Income tax expense

Net (loss) income

Net (loss) income per share-basic:

Net (loss) income per share-diluted:

Weighted average shares outstanding-basic

Weighted average shares outstanding-diluted

Loss before income taxes

Provision for income taxes

Net loss per share-basic and diluted

Weighted average shares outstanding-basic and diluted

See notes to condensed consolidated financial statements.

* The amounts as of September 30, 2020, and the amounts prior to July 1, 2021, have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 4 to the Condensed Consolidated Financial Statements.

* The amounts for the three months ended March 31, 2021 have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 4 to the Condensed Consolidated Financial Statements.

BK TECHNOLOGIES CORPORATION

1 unchanged sentence

( In thousands ) ( Unaudited )

Nine Months Ended

September 30,

Three Months Ended

Operating activities

1 unchanged sentence

Inventories allowances

Deferred tax expense

Depreciation and amortization

1 unchanged sentence

Share-based compensation expense-restricted stock units

(Gain) loss on investment in securities

Loss (gain) on investment in securities

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses and other current assets

ROU asset and lease liability

ROU asset and lease liabilities

Accounts payable

8 unchanged sentences

Financing activities

Proceeds from common stock issuance, net of costs

Cash dividends paid

Repurchase of common stock

Proceeds from the credit facility and notes payable

Proceeds from the credit facility

Repayment of the credit facility and notes payable

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

Net change in cash and cash equivalents

6 unchanged sentences

See notes to condensed consolidated financial statements.

BK TECHNOLOGIES CORPORATION

3 unchanged sentences

Basis of Presentation

The condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, have been prepared by BK Technologies Corporation, and are unaudited.

On March 28, 2019, BK Technologies, Inc., the predecessor of BK Technologies Corporation, implemented a holding company reorganization, which resulted in BK Technologies Corporation becoming the direct parent company of, and the successor issuer to, BK Technologies, Inc.

For the purpose of this report, references to “we” or the “Company” or its management or business at any period prior to the holding company reorganization (March 28, 2019) refer to those of BK Technologies, Inc., as the predecessor company and its subsidiaries and thereafter to those of BK Technologies Corporation and its subsidiaries, except as otherwise specified or to the extent the context otherwise indicates.

In the opinion of management, all adjustments, which include normal, recurring adjustments, necessary for a fair presentation, have been made.

All intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021, have been prepared by BK Technologies Corporation (the “Company,” “we,” “us,” “our”), and are unaudited.

The condensed consolidated balance sheet at December 31, 2021, has been derived from the Company’s audited consolidated financial statements at that date.

1 unchanged sentence

GAAP”) have been condensed or omitted.

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, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 3, 2021.

The results of operations for the three and nine months ended September 30, 2021, are not necessarily indicative of the operating results for a full year.

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, 2021, as filed with the Securities and Exchange Commission (“SEC”) on March 17, 2022, as amended by filing Form 10-K/A with the SEC on April 29, 2022.

The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the operating results for a full year.

Principles of Consolidation

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

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

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

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

As of September 30, 2021, and December 31, 2020, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

As of March 31, 2022, and December 31, 2021, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

The Company uses observable market data assumptions (Level 1 inputs, as defined in accounting guidance) that it believes market participants would use in pricing investment in securities.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including the removal of certain disclosure requirements.

The amendments in the ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted upon issuance of the ASU.

The Company adopted this guidance as of January 1, 2020, and the adoption did not have an impact on its consolidated financial statements.

Recent Accounting Pronouncements

1 unchanged sentence

Change in Accounting Principle

As disclosed in Note 4, on July 1, 2021, the Company changed its accounting to burden the material at the time of purchase receipts.

As disclosed in Note 4, on July 1, 2021, the Company changed its accounting for inventory to burden the material at the time of purchase receipts.

Prior to July 1, 2021, the Company applied the material burden at the time the inventory was issued to work in progress.

The Company believes that this method improves financial reporting by better reflecting the current value of inventory on the consolidated balance sheets, by providing better matching of revenues and expenses.

This change resulted in a net increase of approximately $1,300 in inventory and a net decrease of $1,300 in accumulated deficit as of July 1, 2021.

The accounting change did not have a material effect on the loss from operations, net loss, or earnings per share for the three and nine months ended September 30, 2021.

The accounting change did not have a material effect on the loss from operations, net loss, or earnings per share for the three months ended March 31, 2022.

Significant Events and Transactions

Pursuant to the Company’s capital return program, the Company’s Board of Directors declared a quarterly dividend of $ 0.02 per share of the Company’s common stock on September 23, 2021, to stockholders of record as of October 7, 2021.

These dividends were paid on October 18, 2021.

Pursuant to the Company’s capital return program, the Company’s Board of Directors declared a quarterly dividend of $ 0.03 per share of the Company’s common stock on April 6, 2022, to stockholders of record as of May 2, 2022.

These dividends will be paid on May 16, 2022.

Allowance for Doubtful Accounts

The allowance for doubtful accounts on trade receivables was approximately $ 50 on gross trade receivables of $ 7,696 and $ 6,516 at September 30, 2021, and December 31, 2020, respectively.

The allowance for doubtful accounts on trade receivables was approximately $ 50 on gross trade receivables of $ 4,813 and 8,279 at March 31, 2022, and December 31, 2021, respectively.

This allowance is used to state trade receivables at a net realizable value or the amount that the Company estimates will be collected of the Company’s gross trade receivables.

Inventories, Net

On July 1, 2021, the Company changed its accounting to burden the material at the time of purchase receipts.

On July 1, 2021, the Company changed its accounting for inventory to burden the material at the time of purchase receipts.

Prior to July 1, 2021, the Company applied the material burden at the time the inventory was issued to work in progress.

The fiscal 2020 financial statements have been retrospectively adjusted to apply the new inventory change.

Inventories, Net - continued

The fiscal 2021 financial statements have been retrospectively adjusted to apply the new inventory change method.

The cumulative effect of this change on periods prior to those presented herein resulted in a net decrease in accumulated deficit of approximately $ 1,104 as of January 1, 2021.

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

September 30,

(as adjusted)

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

Finished goods

2 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 $ 1,160 at September 30, 2021, compared with approximately $ 588 (as adjusted) at December 31, 2020.

The allowances were approximately $ 1,214 at March 31, 2022, compared with approximately $ 1,288 at December 31, 2021.

As a result of the retrospective application of this change in accounting method, the following financial statement line items within the accompanying fiscal 2021 Condensed Consolidated financial statements were adjusted as follows:

in Accounting Principle

Consolidated Balance Sheets

Inventories, net as of December 31, 2020

Liabilities & Shareholders’ Equity

Accumulated deficit as of December 31, 2020

Consolidated Income Statements

Condensed Income Statements

Cost of goods sold:

Three months ended September 30, 2020

Nine months ended September 30, 2020

Income (loss) before income taxes:

Three months ended September 30, 2020

Nine months ended September 30, 2020

Net income (loss):

Three months ended September 30, 2020

Nine months ended September 30, 2020

Three months ended March 31, 2021

Loss before income taxes:

Three months ended March 31, 2021

Net loss income per share-basic and diluted:

Three months ended September 30, 2020

Nine months ended September 30, 2020

Consolidated Statements of Cash Flows

Net loss as of September 30, 2020

Three months ended March 31, 2021

Condensed Statements of Cash Flows

Net loss as of March 31, 2021

Inventories allowance

The Company has recorded income tax expense of $ 0 and $ 184 for the three and nine months ended September 30, 2021, respectively, compared with an income tax expense of $ 2 and $ 30 for the same periods last year.

The Company has not recorded income tax provision or benefit for the three months ended March 31, 2022 and 2021.

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

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

As of September 30, 2021, the Company’s net deferred tax assets totaled approximately $ 4,116 and were primarily derived from research and development tax credits, deferred revenue, and net operating loss carryforwards.

As of March 31, 2022, the Company’s net deferred tax assets totaled approximately $ 4,116 and were primarily derived from research and development tax credits, deferred revenue, and net operating loss carryforwards.

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

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

Accordingly, the Company established a valuation allowance of $ 98 .

Accordingly, the Company established a valuation allowance of $ 1,480 and $ 610 as of March 31, 2022 and December 31, 2021, respectively.

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

If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of September 30, 2021.

If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of March 31, 2022.

Investment in Securities

5 unchanged sentences

FG Financial Group

As of September 30, 2021, the Company indirectly held approximately $ 63 in cash and 477,282 shares of FG Financial Group, Inc.

As of March 31, 2022, the Company indirectly held approximately $ 62 in cash and 477,282 shares of FG Financial Group, Inc.

(formerly 1347 Property Insurance Holdings, Inc.) (Nasdaq:

1 unchanged sentence

These shares were purchased in March and May 2018 for approximately $ 3,741 .

For the three and nine months ended September 30, 2021, the Company recognized unrealized loss of $ 2,157 and unrealized gains of $ 310 , respectively, on the investment, compared with unrealized losses of $ 291 and $ 797 , respectively for the same periods last year.

There have been no costs, fees, and expenses paid to the general partner or its affiliates for any periods, including the three and nine months ended September 30, 2021 and 2020.

As of September 30, 2021, the Company and the affiliates of FG, including, without limitation, Ballantyne Strong, Inc., beneficially owned in the aggregate 3,032,765 shares of FGF’s common stock, representing approximately 60.0 % of FGF’s outstanding shares.

For the three months ended March 31, 2022, the Company recognized unrealized loss of $ 496 on the investment, compared with unrealized gain of $ 205 for the same period last year.

There have been no costs, fees, and expenses paid to the general partner or its affiliates for any periods, including the three months ended March 31, 2022 and 2021.

Investment in Securities -continued

As of March 31, 2022, the Company and the affiliates of FG, including, without limitation, Ballantyne Strong, Inc., beneficially owned in the aggregate 3,032,765 shares of FGF’s common stock, representing approximately 60.0 % of FGF’s outstanding shares.

Additionally, FG and its affiliates constitute the largest stockholder of the Company.

2 unchanged sentences

Stockholders’ Equity

The changes in condensed consolidated stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 *, are as follows:

Additional Paid-In Capital

The changes in condensed consolidated stockholders’ equity for the three months ended March 31, 2022 and 2021*, are as follows:

Balance at December 31, 2021

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Share-based compensation expense-restricted stock units

Common stock dividends ($0.02 per share)

Balance at March 31, 2022

Common stock issued, net of issuance costs

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Balance at June 30, 2021*

Common stock issued under restricted stock units

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Common stock dividends ($0.02 per share)

Balance at September 30, 2021

The balances as of December 31, 2020, March 31, 2021, and June 30, 2021, and the amounts for the three months ended March 31, 2021, and June 30, 2021, have been adjusted to reflect the change in inventory accounting method as described in Notes 1 and 4 of the Condensed Consolidated Financial Statements

Stockholders’ Equity - continued

Additional Paid-In Capital

Balance at December 31, 2020*

Change in inventory accounting method

Balance as of January 1, 2020 *

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Common stock dividends ($0.02 per share)

Repurchase of common stock

Balance at March 31, 2020 *

Common stock issued under restricted stock units

2 unchanged sentences

Common stock dividends ($0.02 per share)

Repurchase of common stock

Balance at June 30, 2020 *

Common stock issued under restricted stock units

Share-based compensation expense-stock options

Share-based compensation expense-restricted stock units

Common stock dividends ($0.02 per share)

Balance at September 30, 2020 *

The balances as of January 1, 2020, March 31, 2020, June 30, 2020, and September 30, 2020, and the amounts for the three months ended March 31, 2020, June 30, 2020, and September 30, 2020, have been adjusted to reflect the change in inventory accounting method as described in Notes 1 and 4 of the Condensed Consolidated Financial Statements.

Balance at March 31, 2021*

* The amounts as of December 31, 2020, and for the period ended March 31, 2021, have been adjusted to reflect the change in inventory accounting method as described in Notes 1 and 4 of the Condensed Consolidated Financial Statements.

Income (Loss) Per Share

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

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

Net loss for basic and diluted earnings per share

Denominator for basic loss per share weighted average shares

2 unchanged sentences

Denominator for diluted loss per share weighted average shares

Basic income (loss) per share

Diluted income (loss) per share

Approximately 681,500 stock options and 171,316 restricted stock units for the three and nine months ended September 30, 2021, respectively, and 480,900 and 505,900 stock options and 0 and 147,038 restricted stock units for the three and nine months ended September 30, 2020, respectively, were excluded from the calculation because they were anti-dilutive.

The amounts for 2020 and the amounts prior to July 1, 2021, have been adjusted to reflect the change in inventory accounting method, as described in Notes 1and 4 to Condensed Consolidated Financial Statements.

Basic and diluted loss per share

Approximately 909,000 stock options and 137,055 restricted stock units for the three months ended March 31, 2022, respectively, and 489,000 stock options and 122,533 restricted stock units for the three months ended March, 2021, respectively, were excluded from the calculation because they were anti-dilutive.

* The amounts for 2021 have been adjusted to reflect the change in inventory accounting method, as described in Notes 1and 4 to Condensed Consolidated Financial Statements.

Non-Cash Share-Based Employee Compensation

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

Related to these programs, the Company recorded non-cash share-based employee compensation expense of $ 150 and $ 215 for the three and nine months ended September 30, 2021, respectively, compared with $ 34 and $ 94 , respectively, for the same period last year.

Related to these programs, the Company recorded non-cash share-based employee compensation expense of $ 85 for the three months ended March 31, 2022, compared with $ 32 for the same period last year.

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

1 unchanged sentence

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

The non-cash share-based employee compensation expense recorded in the three and nine months ended September 30, 2021, was calculated using certain assumptions.

The non-cash share-based employee compensation expense recorded in the three months ended March 31, 2022, was calculated using certain assumptions.

Such assumptions are described more comprehensively in Note 10 (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, 2021.

A summary of activity under the Company’s stock option plans during the nine months ended September 30, 2021, is presented below:

As of January 1, 2021

Remaining Contractual Life (Years)

Non-Cash Share-Based Employee Compensation - continued

A summary of activity under the Company’s stock option plans during the three months ended March 31, 2022, is presented below:

($) Per Share

Intrinsic Value

As of January 1, 2022

Period activity

As of September 30, 2021

As of March 31, 2022

Restricted Stock Units

On March 31, 2022, the Company granted 16,000 restricted stock units to Joshua Horowitz for strategic advisory service compensation.

These restricted stock units were fully vested on the date of grant.

On December 17, 2021, upon the resignation of former director John Struble, the Company, at the direction of the Board of Directors, accelerated the vesting of Mr.

Struble’s unvested restricted stock units granted September 6, 2018, September 6, 2019, August 24, 2020, and July 30, 2021, and issued 34,264 shares of common stock to Mr.

On August 24, 2021, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $ 40 per award (resulting in total aggregate grant-date fair value of $ 240 ), which will vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company.

On July 30, 2021, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $ 50 per award (resulting in total aggregate grant-date fair value of $ 250 ), which will vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company.

1 unchanged sentence

Johnson’s unvested restricted stock units granted September 6, 2018, September 6, 2019, and August 24, 2021, and issued 24,505 shares of common stock to Mr.

On August 24, 2020, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $ 40 per award (resulting in total aggregate grant-date fair value of $240), which will vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company.

Non-Cash Share-Based Employee Compensation - continued

On April 24, 2020, upon the resignation of former director Ryan Turner, the Company, at the direction of the Board of Directors, accelerated the vesting of Mr.

Turner’s unvested restricted stock units granted September 6, 2019, and September 6, 2018, and issued 10,389 and 4,050 shares of common stock, respectively.

On September 6, 2019, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $40 per award (resulting in total aggregate grant-date fair value of $ 280 ), which will vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company.

On September 6, 2018, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $ 20 per award (resulting in total aggregate grant-date fair value of $ 140 ), which vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units vest in full as of the director’s last date of service as a director of the Company.

On June 4, 2018, the Company granted to each non-employee director restricted stock units with a grant fair value of $ 20 per award (resulting in total aggregate grant-date fair value of $ 140 ), which vested on June 4, 2019.

There were 171,316 and 147,038 restricted stock units outstanding as of September 30, 2021, and December 31, 2020, respectively.

The Company recorded non-cash restricted stock unit compensation expense of $ 34 and $ 162 for the three and nine months ended September 30, 2021, respectively, compared with $ 23 and $ 112 , respectively for the same period last year.

There were 137,055 restricted stock units outstanding as of March 31, 2022, and December 31, 2021.

The Company recorded non-cash restricted stock unit compensation expense of $ 70 for the three months ended March 31, 2022, compared with $ 103 for the same period last year.

Commitments and Contingencies

Legal Matters

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

3 unchanged sentences

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

There were no pending material claims or legal matters as of September 30, 2021.

There were no pending material claims or legal matters as of March 31, 2022.

In December 2019, a novel strain of the coronavirus (COVID-19) surfaced in Wuhan, China, which spread globally and was declared a pandemic by the World Health Organization in March 2020.

The pandemic may have the potential of adversely impacting our business and financial performance in the future.

The extent of the potential impact will depend on future developments, which are uncertain and, given the continuing evolution of the COVID-19 pandemic and the global responses to curb its spread, cannot be predicted.

In addition, the pandemic has significantly increased economic uncertainty.

Although we believe the pandemic has not had a material adverse impact on our business through 2020, it may have the potential of doing so in the future.

The extent of the potential impact of the COVID-19 pandemic on our business and financial performance will depend on future developments, which are uncertain and, given the continuing evolution of the COVID-19 pandemic and the global responses to curb its spread, cannot be predicted.

In addition, the pandemic has significantly increased economic uncertainty and caused a worldwide economic downturn.

Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its national and, to some extent, global economic impact, including any recession that may occur in the future.

Purchase Commitments

As of September 30, 2021, the Company had purchase commitments for inventory totaling approximately $ 13,142 .

As of March 31, 2022, the Company had purchase commitments for inventory totaling approximately $ 12,533 .

Significant Customers

Sales to United States government agencies represented approximately $ 6,371 ( 50.5 %) and $ 13,237 ( 39.4 %) of the Company’s net total sales for the three and nine months ended September 30, 2021, respectively, compared with approximately $ 8,476 ( 66.4 %) and $ 19,321 ( 57.5 %), respectively, for the same period last year.

Accounts receivable from agencies of the United States government were $ 5,197 as of September 30, 2021, compared with approximately $ 3,261 at the same date last year.

Sales to United States government agencies represented approximately $ 1,650 ( 25.05 %) of the Company’s net total sales for the three months ended March 31, 2022, compared with approximately $ 2,116 ( 24.71 %) for the same period last year.

Accounts receivable from agencies of the United States government were $ 1,314 as of March 31, 2022, compared with approximately $ 1,490 at the same date last year.

BK Technologies, Inc.

6 unchanged sentences

are guarantors of BK Technologies, Inc.’s obligations under the Credit Agreement, in accordance with the terms of the Continuing Guaranty.

On January 26, 2021, the Company extended this revolving credit facility for one year, through January 31, 2022.

Borrowings under the Credit Agreement will bear interest at a rate per annum equal to one-month LIBOR or zero if the LIBOR is less than zero) plus a margin of 1.90% (1.973% as of September 30, 2021).

On January 31, 2022, our revolving credit facility, which originated on January 30, 2020, was extended for one year, through January 31, 2023.

Debt - continued

Borrowings under the Credit Agreement will bear interest at the secured overnight financing rate plus a margin of 2.0 %.

The line of credit, as modified, is to be repaid in monthly payments of interest only, payable in arrears, commencing on February 1, 2022 , with all outstanding principal and interest to be payable in full at maturity ( January 31, 2023 ).

As of March 31, 2022, the interest rate was 2.398 %.

The Credit Agreement contains certain customary restrictive covenants, including restrictions on liens, indebtedness, loans and guarantees, acquisitions and mergers, sales of assets, and stock repurchases by BK Technologies, Inc.

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BK Technologies, Inc.

was in compliance with all covenants under the Credit Agreement as of September 30, 2021, and the date of filing this report.

As of September 30, 2021, and the date of filing this report, the Company had an outstanding balance of $ 1,470 , and a net balance availability of $ 3,530 under the Credit Agreement.

was in compliance with all covenants under the Credit Agreement as of March 31, 2022, and the date of filing this report.

As of March 31, 2022, the Company had an outstanding balance of $ 1,458 , and a net balance availability of $ 2,727 under the Credit Agreement.

As of the date of filing this report, the Company had an outstanding balance of $ 2,458 , and a net balance availability of $ 2,542 under the Credit Agreement.

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

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The Master Loan Agreement is payable in 60 equal monthly principal and interest payments of approximately $ 8 beginning on October 25, 2019 , matures on September 25, 2024 , and bears a fixed interest rate of 5.11 %.

Current balances of note payable at September 30, 2021, and December 30, 2020, are set forth in the table below:

September 30,

Debt - continued

Current balances of notes payable at March 31, 2022, and December 31, 2021, are set forth in the table below:

Note payable-US.

Note payable-JP Morgan Chase Bank

Long-term balances of note payable at September 30, 2021, and December 30, 2020, are set forth in the table below:

September 30,

Long-term balances of notes payable at March 31, 2022, and December 31, 2021, are set forth in the table below:

Note payable-US.

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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 March 2021, the Company executed an agreement for the termination of its lease for 8,100 square feet (not in thousands) of office space in Lawrence, Kansas, effective March 31, 2021, and recognized a termination lease expense of approximately $53.

The original term of the lease was through December 31, 2021 .

Leases - continued

Lease costs consisted of the following:

Three Months Ended

Nine Months Ended

September 30,

Operating lease cost

4 unchanged sentences

Three Months Ended

Nine months Ended

September 30,

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

4 unchanged sentences

Other information related to operating leases was as follows:

September 30,

Weighted average remaining lease term (in years)

Weighted average discount rate

Maturity of lease liabilities as of September 30, 2021, were as follows:

September 30,

Remaining three months of 2021

Maturities of lease liabilities as of March 31, 2022, were as follows:

Remaining nine months of 2022

Total payments

imputed interest

Total liability

Total present value of lease liabilities

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