BK Technologies Corp

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 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.

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

Previous wording

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

Current wording

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.

Previous wording

The Radio business unit 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).

Current wording

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).

Previous wording

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.

Current wording

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 high specification, ruggedized, durable, reliable, feature-rich, Project 25 ("P25") compliant radios at a lower cost relative to comparable offerings.

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. 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.

Current wording

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. patent in force and two pending U.S. patent applications. 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. 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 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.

Current wording

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

Previous 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.

Current wording

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 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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

While the potential impacts of the current administration's tariff policies, material shortages, lead-times, high inflation and ongoing geopolitical conflicts in Ukraine and the Middle East and other geopolitical events remain uncertain in coming months and quarters, such effects have the potential to adversely impact our customers and our supply chain. Such negative effects on our customers and suppliers could adversely affect our future sales, gross profit margins, operations and financial results.

Current wording

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.

Previous 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.

Current wording

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 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.

Previous wording

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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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

Current wording

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

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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 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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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, a prolonged U.S. 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.

Previous wording

On October 30, 2024, the Company's subsidiary, BK Technologies, Inc. entered into a Revolving Loan Commitment (“RLC”) with Fifth Third Bank, National Association (“Fifth Third”). The Fifth Third RLC provides for a one-year revolving line of credit with a maximum commitment of $6 million, with an accordion feature, if certain conditions are met, for up to an additional $4 million of borrowing capacity, totaling a maximum commitment of $10 million. Each advance shall accrue interest on the outstanding principal amount thereof at a rate of SOFR plus 2.5% per annum. Each advance may be prepaid at any time without penalty and the entire line of credit commitment may be permanently terminated by BK Technologies, Inc. at any time upon 10 days’ prior written notice to the lender without penalty. The RLC has a borrowing base equal to the sum of (i) 80% of eligible commercial accounts receivable, plus (ii) 50% of federal government accounts receivable, plus (iii) the lesser of (a) the sum of (i) and (ii) and (b) 50% of eligible finished goods inventory. The Company has not utilized funding and there were no borrowings under the RLC agreement as of June 30, 2025, and as of the date of filing this report.

Current wording

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

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; 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.

Current wording

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. 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 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.

Previous wording

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

Current wording

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