BK Technologies Corp

Previous wording

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, including any information incorporated by reference in this report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “should,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “are encouraged,” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. We also may make forward-looking statements in other documents that are filed or furnished with the SEC. In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, or others. Forward-looking statements include, but are not limited to, the following: changes or advances in technology; the success of our Solutions and Radio business lines and the products offered thereunder; successful introduction of new products and technologies, including our ability to successfully develop and sell our anticipated Solutions products, and our new multiband radio product and other related products in the BKR Series product line; competition in the land mobile radio ("LMR") industry; general economic and business conditions, including the impacts of high inflation, high interest rates, tariffs and other trade barriers and restrictions, labor and supply shortages and disruptions, federal, state, and local government budget deficits and spending limitations, any impact from a prolonged shutdown of the U.S. Government, the effects of natural disasters, changes in climate, severe weather events, geopolitical events, acts of war or terrorism, global health crises and other catastrophic events, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, including a potential U.S. or global downturn or recession; the availability, terms and deployment of capital; reliance on contract manufacturers and suppliers; risks associated with fixed-price contracts; heavy reliance on sales to agencies of the U.S. Government and our ability to comply with the requirements of contracts, laws, and regulations related to such sales; allocations by government agencies among multiple approved suppliers under existing agreements; our ability to comply with U.S. tax laws and utilize deferred tax assets; our ability to attract and retain executive officers, …

Excerpt shortened here; the source contains the full paragraph.

Current wording

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, including any information incorporated by reference in this report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “should,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “are encouraged,” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. We also may make forward-looking statements in other documents that are filed or furnished with the U.S. Securities and Exchange Commission ("the SEC"). In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, or others. Forward-looking statements include, but are not limited to, the following: changes or advances in technology; the success of our Solutions and Radio business lines and the products offered thereunder; successful introduction of new products and technologies, including our ability to successfully develop and sell our current and anticipated Solutions products, and our new multiband radio product and other related products in the BKR Series product line; competition in the land mobile radio ("LMR") industry; general economic and business conditions, including the impacts of high inflation, fluctuating interest rates, tariffs and other trade barriers and restrictions, labor and supply shortages and disruptions, federal, state, and local government budget deficits and spending limitations, any impact from a prolonged shutdown of the U.S. Government, the effects of natural disasters, changes in climate, severe weather events, geopolitical events, acts of war or terrorism, global health crises and other catastrophic events, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, including a potential U.S. or global downturn or recession; the availability, terms and deployment of capital; reliance on contract manufacturers and suppliers; risks associated with fixed-price contracts; heavy reliance on sales to agencies of the U.S. Government and our ability to comply with the requirements of contracts, laws, and regulations related to such sales; allocations by government agencies among multiple approved suppliers under existing agreements; our ability to comply with U.S. tax laws and utilize deferred…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in “Part I—Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in our subsequent filings with the SEC. We assume no obligation to publicly update or revise any forward-looking statements made in this report, whether as a result of new information, future events, changes in assumptions or otherwise, after the date of this report. Readers are cautioned not to place undue reliance on these forward-looking statements.

Current wording

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. 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. Readers are cautioned not to place undue reliance on these forward-looking statements.

Previous wording

The Solutions business unit focuses on delivering innovative, public safety smartphone applications that operate ubiquitously over public cellular networks. We presently have one U.S. patent in force and two pending U.S. patent applications. As we move forward in 2025, we plan to expand the Solutions business unit to include public safety solutions that provide for improved interoperability, intended to make the first responder safer and more efficient when operating in the field. We intend the new Solutions business to build a portfolio of solutions under a new brand, BK ONE. BK ONE includes SaaS solutions as well as other future software and hardware applications. When tethered to our radios, the combined solution will offer a unique capability which increases the sales reach of our radios. We 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.

Current wording

The Solutions business unit focuses on delivering innovative, public safety smartphone applications that operate ubiquitously over public cellular networks. We presently have one U.S. patent in force and two pending U.S. 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. BK ONE includes SaaS solutions as well as other future software and hardware applications. When tethered to our radios, the combined solution will offer a unique capability which increases the sales reach of our radios. We 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.

Previous wording

Customer demand and orders for our products were strong during fiscal year 2024 and continued during the first three months of 2025. Our backlog of unshipped customer orders was approximately $18.8 million and $21.8 million as of March 31, 2025, and December 31, 2024, respectively. Changes in the backlog are attributed primarily to the timing of orders and their fulfillment.

Current wording

Customer demand and orders for our products were strong during fiscal year 2024 and continued during the first six months of 2025. Our backlog of unshipped customer orders was approximately $16.0 million and $21.8 million as of June 30, 2025, and December 31, 2024, respectively. Changes in the backlog were attributed primarily to the timing of orders and their fulfillment.

Previous wording

For the three months ended March 31, 2025, sales increased approximately 4.5% to approximately $19.1 million, compared with $18.2 million for the same period of 2024. The increase was attributed primarily to the shipments of BKR series radio product sales. Gross profit margins as a percentage of sales for the three months ended March 31, 2025, were 47.0%, compared with 34.5% for the comparative fiscal year 2024 quarter, generally reflecting radio product and accessories sales mix and material cost improvements related to cost reduction initiatives. Selling, general, and administrative (“SG&A”) expenses for the three months ended March 31, 2025, totaled approximately $6.0 million (31.7% of sales), compared with $5.3 million (29.1% of sales) in the same period of fiscal year 2024. We recognized operating income for the three months ended March 31, 2025, of approximately $2.9 million, compared with an operating income of approximately $1.0 million for the same period of fiscal year 2024.

Current wording

For the three months ended June 30, 2025, sales increased approximately 4.5% to approximately $21.2 million, compared with $20.3 million for the same period of 2024. The increase was attributed primarily to the shipments of BKR series radio product and accessories sales. Gross profit margins as a percentage of sales for the three months ended June 30, 2025, were 47.4%, compared with 37.3% for the comparative fiscal year 2024 quarter, generally reflecting radio product and accessories sales mix and material cost improvements related to cost reduction initiatives. Selling, general, and administrative (“SG&A”) expenses for the three months ended June 30, 2025, totaled approximately $6.0 million (28.5% of sales), compared with $5.5 million (27.3% of sales) in the same period of fiscal year 2024. We recognized operating income for the three months ended June 30, 2025, of approximately $4.0 million, compared with operating income of approximately $2.0 million for the same period of fiscal year 2024.

Previous wording

For the three months ended March 31, 2025, we recognized other expenses, net totaling approximately $0.1 million. This compares with other expenses, net totaling $0.3 million for the same period of fiscal year 2024, which included interest expense on the Alterna IPSA Line of Credit and a realized loss of approximately $91,000 on the investment in FG Holdings LLC.

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

Net income for the three months ended March 31, 2025, totaled approximately $2.1 million ($0.60 per basic and $0.55 per diluted share), compared with a net income of approximately $0.7 million ($0.19 per basic and diluted share) for the same period last year. The primary factors for the improvement for the three months ended March 31, 2025, compared to the same period of fiscal year 2024, were radio product and accessories sales mix and lower raw material costs related to cost reduction efforts.

Current wording

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.

Previous wording

As of March 31, 2025, working capital totaled approximately $24.6 million, of which $19.1 million was comprised of cash, cash equivalents, and trade receivables. This compares with working capital totaling approximately $23.0 million at 2024 year-end, which included $14.4 million of cash, cash equivalents, and trade receivables.

Current wording

As of June 30, 2025, working capital totaled approximately $28.9 million, of which $23.4 million was comprised of cash, cash equivalents, and trade receivables. This compares with working capital totaling approximately $23.0 million at 2024 year-end, which included $14.5 million of cash, cash equivalents, and trade receivables.

Previous wording

Our Internet website address is www.bktechnologies.com. The information contained on or accessible from our website is not incorporated by reference in this report. Any reference to our website is intended to be an inactive textual reference only. We make available on our Internet website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and amendments to these reports as soon as practicable after we file such material with, or furnish it to, the U.S. Securities and Exchange Commission (the “SEC”). In addition, our Code of Business Conduct and Ethics, Code of Ethics for the CEO and Senior Financial Officers, Audit Committee Charter, Compensation Committee Charter, Nominating and Governance Committee Charter, and other corporate governance policies are available on our website under “Investor Relations.” A copy of any of these materials may be obtained, free of charge, upon request from our investor relations department. The SEC maintains an internet site that contains reports, proxy and information statements, and other information filed by the Company at http://www.sec.gov. All reports that the Company files with or furnishes to the SEC also are available free of charge via the SEC’s website.

Current wording

Our Internet website address is www.bktechnologies.com. The information contained on or accessible from our website is not incorporated by reference in this report. Any reference to our website is intended to be an inactive textual reference only. We make available on our Internet website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and amendments to these reports as soon as practicable after we file such material with, or furnish it to, the SEC. In addition, our Code of Business Conduct and Ethics, Code of Ethics for the CEO and Senior Financial Officers, Audit Committee Charter, Compensation Committee Charter, Nominating and Governance Committee Charter, and other corporate governance policies are available on our website under “Investor Relations.” A copy of any of these materials may be obtained, free of charge, upon request from our investor relations department. The SEC maintains an internet site that contains reports, proxy and information statements, and other information filed by the Company at http://www.sec.gov. All reports that the Company files with or furnishes to the SEC also are available free of charge via the SEC’s website.

Previous wording

For the first quarter 2025, sales increased 4.5% to approximately $19.1 million, compared with approximately $18.2 million of sales for the first quarter of fiscal year 2024. Gross profit margin as a percentage of sales for the first quarter of 2025 was approximately 47.0%, compared with 34.5% for the same period of fiscal year 2024, generally reflecting radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC compared to the first quarter of fiscal year 2024. Selling, general, and administrative (“SG&A”) expenses for the first quarter of 2025 totaled approximately $6.0 million, which was 13.7% higher than the SG&A expenses of approximately $5.3 million for the first quarter of fiscal year 2024. The increase in SG&A expenses is attributed primarily due to new product introduction costs, and an accrual of Engineering fiscal year 2023 RSU issuance expenses. These factors yielded operating income of approximately $2.9 million for the three-month period ended March 31, 2025, compared with operating income of approximately $1.0 million for the same period of fiscal year 2024.

Current wording

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.

Previous wording

Net income for the three months ended March 31, 2025, was approximately $2.1 million ($0.60 per basic and $0.55 per diluted share), compared with net income of approximately $0.7 million ($0.19 per basic and diluted share) for the same quarter last year. The primary factors for the improvement for the three month period ending on March 31, 2025, compared to the same period of fiscal year 2024, were radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC.

Current wording

Net income for the three months ended June 30, 2025, was approximately $3.7 million ($1.03 per basic and $0.96 per diluted share), compared with net income of approximately $1.7 million ($0.47 per basic and diluted share) for the same quarter last year. The primary factors for the improvement for the three month period ended June 30, 2025, compared to the same period of fiscal year 2024, were radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC. during fiscal year 2024.

Previous wording

As of March 31, 2025, working capital totaled approximately $24.6 million, of which approximately $19.1 million was comprised of cash, cash equivalents and trade receivables. As of December 31, 2024, working capital totaled approximately $23.0 million, of which approximately $14.4 million was comprised of cash, cash equivalents and trade receivables.

Current wording

As of June 30, 2025, working capital totaled approximately $28.9 million, of which approximately $23.4 million was comprised of cash, cash equivalents and trade receivables. As of December 31, 2024, working capital totaled approximately $23.0 million, of which approximately $14.4 million was comprised of cash, cash equivalents and trade receivables.

Previous wording

Sales for the first quarter ended March 31, 2025, were attributed primarily to Federal, state and local public safety opportunities. From a product perspective, the primary contributor to orders and shipments during the first quarter was our BKR series radios and related accessories. The BKR Series is envisioned as a comprehensive line of new products, which includes new models such as the BKR 9000, which achieved first sales in the second quarter of 2023.

Current wording

Sales for the second quarter and six months ended June 30, 2025, were attributed primarily to state and local public safety opportunities. From a product perspective, the primary contributor to orders and shipments during the second quarter and six months ended June 30, 2025, was our BKR series radios and related accessories. The BKR Series is envisioned as a comprehensive line of new products, which includes new models such as the BKR 9000, which achieved first sales in the second quarter of 2023.

Previous wording

Gross profit margins as a percentage of sales for the first quarter ended March 31, 2025, were approximately 47.0% compared with 34.5% for the same quarter of fiscal year 2024. Our cost of products and gross profit margins are primarily derived from material, labor, and overhead costs, product mix, manufacturing volumes and pricing. Gross profit margins for the three-months ended March 31, 2025, increased compared to the same period of fiscal year 2024, generally reflecting radio product and accessories sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC.

Current wording

Gross profit margins as a percentage of sales for the second quarter ended June 30, 2025, were approximately 47.4% compared with 37.3% for the same quarter of fiscal year 2024. Gross profit margins as a percentage of sales for the six months ended June 30, 2025, were approximately 47.2% compared with 35.9% for the same period of fiscal year 2024. Our cost of products and gross profit margins are primarily derived from material, labor, and overhead costs, product mix, manufacturing volumes and pricing. 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.

Previous wording

Engineering and product development expenses for the first quarter of 2025 totaled approximately $2.5 million (13.3% of sales), compared with approximately $2.1 million (11.4% of sales) for the same quarter of fiscal year 2024. The increase in engineering expenses was attributed primarily to non-capitalizable development costs for the BKR multi-band mobile radio product and RSU issuance costs described above and Note 10 (Non-Cash Share-Based Employee Compensation**)** to the condensed consolidated financial statements included in this report. Most of these activities were being performed by our internal engineering team and were their primary focus, combined with sustaining engineering support for our existing products. The precise date for developing and introducing new products is uncertain and can be impacted by, among other things, supply chain shortages, including the impact of tariffs and certain component lead times in coming months and quarters.

Current wording

Engineering and product development expenses for the second quarter of 2025 totaled approximately $2.3 million (10.9% of sales), compared with approximately $2.0 million (9.8% of sales) for the same quarter of fiscal year 2024. For the six months ended June 30, 2025, engineering and product development expenses totaled approximately $5.0 million (12.5% of sales), compared with approximately $4.1 million (10.6% of sales) for the six-month period last year. The increase in engineering expenses was attributed primarily to non-capitalizable development costs for the BKR multi-band mobile radio product and RSU issuance costs described above and in Note 8 (Non-Cash Share-Based Employee Compensation**)** to the condensed consolidated financial statements included in this report. Most of these activities were being performed by our internal engineering team and were their primary focus, combined with sustaining engineering support for our existing products. The precise date for developing and introducing new products is uncertain and can be impacted by, among other things, supply chain shortages, including the impact of tariffs and certain component lead times in coming months and quarters.

Previous wording

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

Current wording

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.

Previous wording

Other general and administrative expenses for the first quarter of 2025 totaled approximately $1.8 million (9.3% of sales), compared with approximately $1.7 million (9.3% of sales) for the same period of fiscal year 2024. The increase in general and administrative expenses for the three months ended March 31, 2025, was attributed primarily to the non-recurring nature of certain corporate consulting expenses during the three months ended March 31, 2024.

Current wording

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.

Previous wording

Operating income for the quarter ended March 31, 2025, totaled approximately $2.9 million (15.3% of sales), compared with operating income of approximately $1.0 million (5.4% of sales) for the same period of fiscal year 2024. The operating income improvement for the three months ended March 31, 2025, compared to the same period last year, was attributed to higher gross profit margins related to improved product sales mix and the full impact of material cost improvements related to the transition of manufacturing production to East West Manufacturing, LLC.

Current wording

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.

Previous wording

We recorded net interest income of approximately $3,000 for the quarter ended March 31, 2025, compared with approximately $0.2 million interest expense for the first quarter of fiscal year 2024. Net interest expense was primarily the result of our Alterna IPSA Line of Credit, which was paid in full in September 2024 and terminated in October 2024.

Current wording

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.

Previous wording

On January 25, 2024, the Company redeemed its Series B common membership interests (the “Interests”) of FG Holdings LLC and withdrew from FG Holdings LLC. In exchange for its Interests, the Company received 52,000 shares of our Common Stock, with an approximate fair value of $0.7 million on the date of the transaction and recorded a realized loss of approximately $91,000 on the investment during the first quarter of 2024. 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.

Current wording

On January 25, 2024, the Company redeemed its Series B common membership interests (the “Interests”) of FG Holdings LLC and withdrew from FG Holdings LLC. In exchange for its Interests, the Company received 52,000 shares of our Common Stock, with an approximate fair value of $0.7 million on the date of the transaction and recorded a realized loss of approximately $0.1 million on the investment during the first quarter of 2024. The shares received by the Company are held as treasury stock, increasing the total number of treasury shares held by the Company to 342,080.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating activities totaled approximately $2.1 million, compared with cash used in operating activities of approximately $0.8 million for the same fiscal year period of 2024. Cash provided by operating activities for the three months ended March 31, 2025, was primarily related to net income and a reduction in inventory, partially offset by an increase in accounts receivable. Cash used in operating activities for the three months ended March 31, 2024, was primarily related to an increase in accounts receivable and a decrease in accounts payable partially offset by net income, depreciation and amortization, reductions in inventory and deferred revenues.

Current wording

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.

Previous wording

For the first three months of 2025, we had net income of approximately $2.1 million, compared with a net income of approximately $0.7 million for the same period of fiscal year 2024. Accounts receivable increased approximately $2.8 million during the three months ended March 31, 2025, compared with an increase of approximately $3.6 million for the same period of fiscal year 2024, primarily due to the timing of customer collections in the first three months of fiscal year 2025 and 2024. Inventories decreased during the three months ended March 31, 2025, by approximately $1.4 million compared to a decrease of approximately $1.4 million for the same period of fiscal year 2024. The decreases in inventories were primarily attributed to the transition of manufacturing production of our products to East West Manufacturing LLC, in fiscal year 2024. Accounts payable for the three months ended March 31, 2025, increased approximately $0.8 million, compared with a decrease of approximately $0.8 million for the same period of fiscal year 2024, primarily due to the reduction in raw material purchases in 2024 related to the transition of manufacturing production of our products to East West Manufacturing LLC, in the second quarter of 2024. Accrued compensation and related expenses decreased during the first three months of 2025 by approximately $0.5 million compared with an increase of $0.3 million for the same period of fiscal year 2024. Depreciation and amortization totaled approximately $0.4 million for the three months ended March 31, 2025, compared with approximately $0.4 million for the same period of fiscal year 2024. Depreciation and amortization are primarily related to manufacturing and engineering equipment. There were no realized or unrealized losses on investments for the three months ended March 31, 2025, compared to approximately $0.1 million for the same period of fiscal year 2024. For additional information pertaining to our investments, refer to Note 1 and Note 7 (Investments) to the condensed consolidated financial statements included in this report.

Current wording

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. 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. For additional information pertaining to our investments, refer to Note 1 (Condensed Consolidated Financial Statement) included in this report.

Previous wording

Cash used in investing activities for the three months ended March 31, 2025, totaled approximately $0.3 million, compared with approximately $0.2 million for the same period of fiscal year 2024. The cash used for the three-month period ended March 31, 2025, was attributed primarily to purchases of engineering equipment, compared to cash used for the three-month period ended March 31, 2024, which was primarily attributed to the purchase of engineering and manufacturing related equipment.

Current wording

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.

Previous wording

For the three months ended March 31, 2025, approximately $13,000 was provided by financing activities, compared with cash provided by financing activities of approximately $0.8 million for the same period of fiscal year 2024. During the first three months of 2024, we received cash of approximately $15.0 million from our Alterna Capital Solutions, LLC revolving credit facility, net of repayments totaling approximately $14.2 million.

Current wording

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.

Previous wording

Our cash and cash equivalents balance on March 31, 2025, was approximately $8.9 million. We believe these funds, combined with anticipated cash generated from operations and borrowing availability under our Fifth Third RLC (as defined below), are sufficient to meet our working capital requirements for the foreseeable future. We may, depending on a variety of factors, including market conditions for capital raises, the trading price of our common stock and opportunities for uses of any proceeds, engage in public or private offerings of equity or debt securities to increase our capital resources. However, financial and economic conditions, including those resulting from supply chain delays or interruptions, labor shortages, wage pressures, rising inflation, geopolitical events, the impacts of tariffs, and other force majeure events, could result in volatility in the financial and capital markets and could limit our access to credit and impair our ability to raise capital, if needed, on acceptable terms or at all. We also face other risks that could impact our business, liquidity, and financial condition.

Current wording

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

Previous wording

BK Technologies, Inc.'s repayment obligations under the RLC are guaranteed by the Company and Relm Communications, Inc. and secured by a pledge of essentially all of the assets of the Company, BK Technologies, Inc. and Relm Communications, Inc. The loan parties are subject to customary negative covenants, including with respect to their ability to incur additional indebtedness, encumber and dispose of their assets and enter into affiliate transactions. BK Technologies, Inc. must also comply with: (i) a maximum total funded debt ratio of 2.00 to 1.00; (ii) a fixed charge coverage ratio of 1.2 to 1.0 as measured on a rolling twelve-month basis, each measured at the end of each fiscal quarter.

Current wording

BK Technologies, Inc.'s repayment obligations under the RLC are guaranteed by the Company and Relm Communications, Inc. and secured by a pledge of essentially all of the assets of the Company, BK Technologies, Inc. and Relm Communications, Inc. The loan parties are subject to customary negative covenants, including with respect to their ability to incur additional indebtedness, encumber and dispose of their assets and enter into affiliate transactions. BK Technologies, Inc. must also comply with: (i) a maximum total funded debt ratio of 2.00 to 1.00; 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.

Previous wording

The Fifth Third RLC agreement provided for customary events of default, including: (1) failure to pay principal, interest or fees under the RLC when due and payable; (2) failure to comply with other covenants and agreements contained in the Revolving Loan Commitment agreement and the other documents executed in connection therewith; (3) the making of false or inaccurate representations and warranties; (4) defaults under other debt or other obligations of BK Technologies, Inc.; (5) money judgments and material adverse changes; (6) a change in control or ceasing to operate business in the ordinary course; and (7) certain events of bankruptcy or insolvency. Upon the occurrence of an event of default, Fifth Third Bank may declare the entire unpaid balance immediately due and payable and/or exercise any and all remedial and other rights under the RLC agreement.

Current wording

The Fifth Third RLC agreement provided for customary events of default, including: (1) failure to pay principal, interest or fees under the RLC when due and payable; (2) failure to comply with other covenants and agreements contained in the Revolving Loan Commitment agreement and the other documents executed in connection therewith; (3) the making of false or inaccurate representations and warranties; (4) defaults under other debt or other obligations of BK Technologies, Inc.; (5) money judgments and material adverse changes; (6) a change in control or ceasing to operate business in the ordinary course; and (7) certain events of bankruptcy or insolvency. Upon the occurrence of an event of default, Fifth Third may declare the entire unpaid balance immediately due and payable and/or exercise any and all remedial and other rights under the RLC agreement.

Previous wording

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

Current wording

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