bkti_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 001-32644

BK TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		83-4064262
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

7100 Technology Drive

West Melbourne, Florida 32904

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (321) 984-1414

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value $0.60 per share		BKTI		NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 16,948,240 shares of common stock, $0.60 par value, of the registrant outstanding at August 8, 2022.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		1

Item 1.	FINANCIAL STATEMENTS	1

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	25

Item 4.	CONTROLS AND PROCEDURES	25

PART II - OTHER INFORMATION		26

Item 1A.	RISK FACTORS	26

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26

Item 6.	EXHIBITS	27

SIGNATURES		28

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PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BK TECHNOLOGIES CORPORATION

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	June 30, 2022			December 31, 2021
	(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	5,904		$	10,580
Trade accounts receivable, net		6,519			8,229
Inventories, net		22,498			16,978
Prepaid expenses and other current assets		1,282			1,634
Total current assets		36,203			37,421

Property, plant and equipment, net		4,574			4,556
Right-of-use (ROU) asset		2,198			2,399
Investment in securities		697			1,795
Deferred tax assets, net		4,116			4,116
Other assets		137			98
Total assets	$	47,925		$	50,385

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	9,804		$	5,883
Accrued compensation and related taxes		1,781			1,099
Accrued warranty expense		551			533
Accrued other expenses and other current liabilities		417			938
Dividends payable		508			505
Short-term lease liability		466			447
Credit facility		3,958			1,470
Notes payable-current portion		272			267
Deferred revenue		1,063			1,045
Total current liabilities		18,820			12,187

Notes payable, net of current portion		468			605
Long-term lease liability		2,032			2,269
Deferred revenue		2,894			2,706
Total liabilities		24,214			17,767
Commitments and contingencies Stockholders’ equity:
Preferred stock; $1.00 par value; 1,000,000 authorized shares; none issued or outstanding		-			-
Common stock; $0.60 par value; 50,000,000 authorized shares; 18,368,863 and 18,298,999 issued and 16,918,463 and 16,848,599 outstanding shares at June 30, 2022, and December 31, 2021, respectively		11,021			10,979
Additional paid-in capital		36,197			35,862
Accumulated deficit		(18,105	)		(8,821	)
Treasury stock, at cost, 1,450,400 shares at June 30, 2022, and December 31, 2021, respectively		(5,402	)		(5,402	)
Total stockholders’ equity		23,711			32,618
Total liabilities and stockholders’ equity	$	47,925		$	50,385

See notes to condensed consolidated financial statements.

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BK TECHNOLOGIES CORPORATION

Condensed Consolidated Statements of Operations

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

	Three Months Ended						Six Months Ended
	June 30, 2022			June 30, 2021*			June 30, 2022			June 30, 2021*

Sales, net	$	12,111		$	11,335		$	18,696		$	19,899
Expenses
Cost of products		10,386			6,982			15,499			12,426
Selling, general and administrative		5,405			4,553			10,321			8,526
Total operating expenses		15,791			11,535			25,820			20,952

Operating loss		(3,680	)		(200	)		(7,124	)		(1,053	)

Other (expense) income:
Net interest (expense) income		(24	)		(14	)		(39	)		(18	)
(Loss) gain on investment in securities		(602	)		2,262			(1,098	)		2,467
Other expense		(28	)		(26	)		(9	)		(44	)
Total other (expense) income		(654	)		2,222			(1,146	)		2,405

(Loss) income before income taxes		(4,334	)		2,022			(8,270	)		1,352

Provision for income tax		-			(184	)		-			(184	)

Net (loss) income	$	(4,334	)	$	1,838		$	(8,270	)	$	1,168

Net (loss) income per share-basic:	$	(0.26	)	$	0.14		$	(0.49	)	$	0.09
Net (loss) income per share-diluted:	$	(0.26	)	$	0.13		$	(0.49	)	$	0.09
Weighted average shares outstanding-basic		16,868,281			13,563,763			16,858,583			13,043,477
Weighted average shares outstanding-diluted		16,868,281			13,625,095			16,858,583			13,101,635

See notes to condensed consolidated financial statements.

* The amounts for the three and six months ended June 30, 2021 have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 4 to the Condensed Consolidated Financial Statements

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BK TECHNOLOGIES CORPORATION

Condensed Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

	Six Months Ended
	June 30, 2022			June 30, 2021*
Operating activities
Net (loss) income	$	(8,270	)	$	1,168
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Inventories allowances		48			428
Deferred tax expense		-			184
Depreciation and amortization		696			681
Share-based compensation expense-stock options		136			65
Share-based compensation expense-restricted stock units		241			128
Loss (gain) on investment in securities		1,098			(2,467	)
Changes in operating assets and liabilities:
Trade accounts receivable		1,710			(744	)
Inventories		(5,568	)		(3,189	)
Prepaid expenses and other current assets		352			12
Other assets		(39	)		11
ROU asset and lease liability		(17	)		(8	)
Accounts payable		3,921			1,197
Accrued compensation and related taxes		682			(154	)
Accrued warranty expense		18			(147	)
Deferred revenue		206			(47	)
Accrued other expenses and other current liabilities		(521	)		57
Net cash used in operating activities		(5,307	)		(2,825	)

Investing activities
Purchases of property, plant, and equipment		(714	)		(1,541	)
Net cash used in investing activities		(714	)		(1,541	)

Financing activities
Proceeds from common stock issuance, net of costs		-			11,559
Cash dividends paid		(1,011	)		(501	)
Proceeds from the credit facility and notes payable		2,488			3,543
Repayment of the credit facility and notes payable		(132	)		(1,400	)
Net cash provided by (used in) financing activities		1,345			13,201

Net change in cash and cash equivalents		(4,676	)		8,835
Cash and cash equivalents, beginning of period		10,580			6,826
Cash and cash equivalents, end of period	$	5,904		$	15,661

Supplemental disclosure
Cash paid for interest	$	43		$	14
Non-cash financing activity
Common stock issued under restricted stock units	$	178		$	84

See notes to condensed consolidated financial statements.

* The amounts for the six months ended June 30, 2021 have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 4 to the Condensed Consolidated Financial Statements

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BK TECHNOLOGIES CORPORATION

Notes to Condensed Consolidated Financial Statements

Unaudited

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

1. Condensed Consolidated Financial Statements

Basis of Presentation

The condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021, have been prepared by BK Technologies Corporation (the “Company,” “we,” “us,” “our”), and are unaudited. The condensed consolidated balance sheet at December 31, 2021, has been derived from the Company’s audited consolidated financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”) on March 17, 2022, as amended by filing Form 10-K/A with the SEC on April 29, 2022. The results of operations for the three and six months ended June 30, 2022, are not necessarily indicative of the operating results for a full year.

Principles of Consolidation

The accounts of the Company and its subsidiaries have been included in the accompanying condensed consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity (“VIE”) or a voting interest entity.

VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently, or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE.

Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out or participating rights for a limited partnership.

When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20% to 50%), the Company’s investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost.

The Company has an investment in FG Financial Group, Inc. made through FGI 1347 Holdings, LP, a consolidated VIE.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, trade accounts receivable, investment in securities, accounts payable, accrued expenses, notes payable, credit facilities, and other liabilities. As of June 30, 2022, and December 31, 2021, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

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

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Recent Accounting Pronouncements

The Company does not discuss recent pronouncements that are not anticipated to have a material impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Change in Accounting Principle

As disclosed in Note 4, on July 1, 2021, the Company changed its accounting for inventory to burden the material at the time of purchase receipts. Prior to July 1, 2021, the Company applied the material burden at the time the inventory was issued to work in progress. The Company believes that this method improves financial reporting by better reflecting the current value of inventory on the consolidated balance sheets, by providing better matching of revenues and expenses. This change resulted in a net increase of approximately $1,300 in inventory and a net decrease of $1,300 in accumulated deficit as of July 1, 2021.

The accounting change did not have a material effect on the loss from operations, net loss, or earnings per share for the three and six months ended June 30, 2022.

2. Significant Events and Transactions

Pursuant to the Company’s capital return program, the Company’s Board of Directors declared a quarterly dividend of $0.03 per share of the Company’s common stock on June 30, 2022, to stockholders of record as of July 25, 2022. These dividends will be paid on August 8, 2022.

On April 6, 2022, the Company’s Board of Directors declared a quarterly dividend of $0.03 per share of the Company’s common stock to stockholders of record as of May 2, 2022. These dividends were paid on May 16, 2022.

3. Allowance for Doubtful Accounts

The allowance for doubtful accounts on trade receivables was approximately $50 on gross trade receivables of $6,569 and $8,279 at June 30, 2022 and December 31, 2021, respectively. This allowance is used to state trade receivables at a net realizable value or the amount that the Company estimates will be collected of the Company’s gross trade receivables.

4. Inventories, Net

On July 1, 2021, the Company changed its accounting for inventory to burden the material at the time of purchase receipts. Prior to July 1, 2021, the Company applied the material burden at the time the inventory was issued to work in progress.

The fiscal 2021 financial statements have been retrospectively adjusted to apply the new inventory change method. The cumulative effect of this change on periods prior to those presented herein resulted in a net decrease in accumulated deficit of approximately $1,104 as of January 1, 2021.

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

	June 30, 2022		December 31, 2021
Finished goods	$	3,023	$	2,335
Work in process		5,237		4,527
Raw materials		14,238		10,116
	$	22,498	$	16,978

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Allowances for slow-moving, excess, or obsolete inventory are used to state the Company’s inventories at the lower of cost or net realizable value. The allowances were approximately $1,214 at June 30, 2022, compared with approximately $1,288 at December 31, 2021.

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

	As Originally Reported ($)			Effect of Change ($)			As Reported under Change in Accounting Principle ($)

Condensed Income Statements
Cost of goods sold:
Three months ended June 30, 2021		7,124			(142	)		6,982
Income before income taxes:
Three months ended June 30, 2021		1,880			142			2,022
Net income:
Three months ended June 30, 2021		1,696			142			1,838
Net income per share-basic:
Three months ended June 30, 2021		0.13			0.01			0.14
Net income per share-diluted:
Three months ended June 30, 2021		0.12			0.01			0.13
Cost of goods sold:
Six months ended June 30, 2021		12,592			(166	)		12,426
Income before income taxes:
Six months ended June 30, 2021		1,186			166			1,352
Net income:
Six months ended June 30, 2021		1,002			166			1,168
Net income per share-basic and diluted:
Six months ended June 30, 2021		0.08			0.01			0.09
Condensed Statements of Cash Flows
Net income for six months ended June 30, 2021		1,002			166			1,168
Inventories allowance		368			60			428
Inventories		(2,964	)		(226	)		(3,188	)

5. Income Taxes

The Company has recorded no income tax expense for the three and six months ended June 30, 2022, compared with an income tax expense of $184 for the same periods last year.

The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax provision (benefit) in any period will be affected by, among other things, permanent, as well as temporary, differences in the deductibility of certain items, changes in the valuation allowance related to net deferred tax assets, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

As of June 30, 2022, the Company’s net deferred tax assets totaled approximately $4,116 and were primarily derived from research and development tax credits, deferred revenue, and net operating loss carryforwards.

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In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years. The Company analyzed all positive and negative evidence to determine if, based on the weight of available evidence, it is more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon the Company’s conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.

Based on the analysis of all available evidence, both positive and negative, the Company has concluded that it does not have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets. Accordingly, the Company established a valuation allowance of $2,693 and $610 as of June 30, 2022 and December 31, 2021, respectively. The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future. If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of June 30, 2022.

6. Investment in Securities

1347 LP

The Company has an investment in a limited partnership, FGI 1347 Holdings, LP, of which the Company is the sole limited partner. FGI 1347 Holdings, LP (“1347 LP”), was established for the purpose of investing in securities.

Affiliates of Fundamental Global Investors, LLC (“FG”), serve as the general partner and the investment manager of 1347 LP, and the Company is the sole limited partner. As the sole limited partner, the Company is entitled to 100% of net assets held by 1347 LP. The general partner of 1347 LP is entitled to reimbursement of certain costs, fees, and expenses arising in connection with 1347 LP’s operations, as provided by the partnership agreement, upon approval by the Company’s Board of Directors.

FG Financial Group

As of June 30, 2022, the Company indirectly held approximately $53 in cash and 477,282 shares of FG Financial Group, Inc. (Nasdaq: FGF) (“FGF”), with fair value of $697, through an investment in 1347 LP. These shares were purchased in March and May 2018 for approximately $3,741. For the three and six months ended June 30, 2022, the Company recognized unrealized losses on the investment of approximately $602 and $1,098, respectively, compared with unrealized gains of $2,262 and $2,467, respectively for the same periods last year. There have been no costs, fees, and expenses paid to the general partner or its affiliates for any periods, including the three and six months ended June 30, 2022 and 2021.

As of June 30, 2022, the Company and the affiliates of FG, including, without limitation, Ballantyne Strong, Inc., beneficially owned in the aggregate 5,431,498 shares of FGF’s common stock, representing approximately 58.5% of FGF’s outstanding shares. Additionally, FG and its affiliates constitute the largest stockholder of the Company. Mr. Kyle Cerminara, Chairman of the Company’s Board of Directors, is Chief Executive Officer, Co-Founder and Partner of FG and serves as Chairman of the Board of Directors of Ballantyne Strong, Inc. Mr. Cerminara also serves as Chairman of the Board of Directors of FGF.

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7. Stockholders’ Equity

The changes in condensed consolidated stockholders’ equity for the three and six months ended June 30, 2022 and 2021, are as follows:

	Common Stock Shares		Common Stock Amount		Additional Paid-In Capital			Accumulated Deficit			Treasury Stock			Total
Balance at December 31, 2021		18,298,999	$	10,979	$	35,862		$	(8,821	)	$	(5,402	)	$	32,618
Common stock issued under restricted stock units		16,000		10		(10	)		—			—			—
Share-based compensation expense-stock options		—		—		85			—			—			85
Share-based compensation expense-restricted stock units		—		—		70			—			—			70
Net loss		—		—		—			(3,936	)		—			(3,936	)
Balance at March 31, 2022		18,314,999		10,989		36,007			(12,757	)		(5,402	)		28,837
Common stock issued under restricted stock units		53,864		32		(32	)		—			—			—
Share-based compensation expense-stock options		—		—		51			—			—			51
Share-based compensation expense-restricted stock units		—		—		171			—			—			171
Common stock dividends ($0.03 per share)		—		—		—			(1,014	)		—			(1,014	)
Net loss		—		—		—			(4,334	)		—			(4,334	)
Balance at June 30, 2022		18,368,863	$	11,021	$	36,197		$	(18,105	)	$	(5,402	)	$	23,711

	Common Stock Shares		Common Stock Amount		Additional Paid-In Capital			Accumulated Deficit			Treasury Stock			Total
Balance at December 31, 2020*		13,962,366	$	8,377	$	26,346		$	(5,693	)	$	(5,402	)	$	23,628
Common stock issued under restricted stock units		24,505		15		(15	)		—			—			—
Share-based compensation expense-stock options		—		—		32			—			—			32
Share-based compensation expense-restricted stock units		—		—		103			—			—			103
Common stock dividends ($0.02 per share)		—		—		—			(251	)		—			(251	)
Net loss*		—		—		—			(670	)		—			(670	)
Balance at March 31, 2021*		13,986,871		8,392		26,466			(6,614	)		(5,402	)		22,842
Common stock issued, net of issuance cost		4,249,250		2,549		9,010			—			—			11,559
Share-based compensation expense-stock options		—		—		33			—			—			33
Share-based compensation expense-restricted stock units		—		—		25			—			—			25
Net income*		—		—		—			1,838			—			1,838
Balance at June 30, 2021*		18,236,121	$	10,941	$	35,534		$	(4,776	)	$	(5,402	)	$	36,297

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

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8. Income (Loss) Per Share

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

	Three Months Ended					Six Months Ended
	June 30, 2022			June 30, 2021*		June 30, 2022			June 30, 2021*
Numerator:
Net (loss) income for basic and diluted earnings per share	$	(4,334	)	$	1,838	$	(8,270	)	$	1,168
Denominator for basic (loss) income per share weighted average shares		16,868,281			13,563,763		16,858,583			13,043,477
Effect of dilutive securities:
Options and restricted stock units		—			61,332		—			58,158
Denominator for diluted (loss) income per share weighted average shares		16,868,281			13,625,095		16,858,583			13,101,635
Basic (loss) income per share	$	(0.26	)	$	0.14	$	(0.49	)	$	0.09
Diluted (loss) income per share	$	(0.26	)	$	0.13	$	(0.49	)	$	0.09

Approximately 1,014,000 stock options and 102,791 restricted stock units for the three and six months ended June 30, 2022, respectively, and 444,000 stock options and 0 restricted stock units for the three and six months ended June 30, 2021, respectively, were excluded from the calculation because they were anti-dilutive.

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9. Non-Cash Share-Based Employee Compensation

The Company has an employee and non-employee director share-based incentive compensation plan. Related to these programs, the Company recorded non-cash share-based employee compensation expense of $51 and $136 for the three and six months ended June 30, 2022, respectively, compared with $33 and $65, for the same periods last year. The Company considers its non-cash share-based employee compensation expenses as a component of cost of products and selling, general and administrative expenses. There was no non-cash share-based employee compensation expense capitalized as part of capital expenditures or inventory for the periods presented.

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of stock option grants under this plan. The non-cash share-based employee compensation expense recorded in the three and six months ended June 30, 2022, was calculated using certain assumptions. Such assumptions are described more comprehensively in Note 10 (Share-Based Employee Compensation) of the Notes to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

A summary of activity under the Company’s stock option plans during the six months ended June 30, 2022, is presented below:

	Stock Options		Wgt. Avg. Exercise Price ($) Per Share		Wgt. Avg. Remaining Contractual Life (Years)		Wgt. Avg. Grant Date Fair Value ($) Per Share		Aggregate Intrinsic Value ($)
As of January 1, 2022
Outstanding		676,500		3.68		7.33		1.41		4,500
Vested		361,600		3.80		6.66		1.44		4,500
Nonvested		314,900		3.53		8.10		1.39		—

Period activity
Issued		342,500		2.41		—		0.80		—
Exercised		—		—		—		—		—
Forfeited		—		—		—		—		—
Expired		5,000		4.95		—		1.05		—

As of June 30, 2022
Outstanding		1,014,000		3.24		7.86		1.21		30,500
Vested		486,733		3.65		6.69		1.37		14,167
Nonvested		527,267		2.87		8.95		1.06		16,333

Restricted Stock Units

On June 30, 2022, the Company granted 3,200 restricted stock units to Joshua Horowitz for strategic advisory service compensation. These restricted stock units were fully vested and settled on the date of grant.

On June 30, 2022, the Company, at the direction of the Board of Directors, accelerated the vesting of former director Michael Dill’s unvested restricted stock units granted September 6, 2018, September 6, 2019, August 24, 2020, and July 30, 2021, and issued 34,264 shares of common stock to Mr. Dill.

On June 8, 2022, the Company, at the direction of the Board of Directors, granted 10,000 restricted stock units to John Suzuki for bonus compensation. These restricted stock units were fully vested and settled on the date of grant.

On May 31, 2022, the Company granted 3,200 restricted stock units to Joshua Horowitz for strategic advisory service compensation. These restricted stock units were fully vested and settled on the date of grant.

On April 30, 2022, the Company granted 3,200 restricted stock units to Joshua Horowitz for strategic advisory service compensation. These restricted stock units were fully vested and settled on the date of grant.

On March 31, 2022, the Company granted 16,000 restricted stock units to Joshua Horowitz for strategic advisory service compensation. These restricted stock units were fully vested and settled on the date of grant.

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On December 17, 2021, upon the resignation of former director John Struble, the Company, at the direction of the Board of Directors, accelerated the vesting of Mr. Struble’s unvested restricted stock units granted September 6, 2018, September 6, 2019, August 24, 2020, and July 30, 2021, and issued 34,264 shares of common stock to Mr. Struble.

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

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

On March 4, 2021, upon the resignation of former director Lewis Johnson, the Company, at the direction of the Board of Directors, accelerated the vesting of Mr. Johnson’s unvested restricted stock units granted September 6, 2018, September 6, 2019, and August 24, 2021, and issued 24,505 shares of common stock to Mr. Johnson.

There were 102,791 and 137,055 restricted stock units outstanding as of June 30, 2022, and December 31, 2021, respectively.

The Company recorded non-cash restricted stock unit compensation expense of $171 and $241 for the three and six months ended June 30, 2022, respectively, compared with $25 and $128, respectively for the same periods last year.

10. Commitments and Contingencies

Legal Matters

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of its business. On a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, it records a liability in its consolidated financial statements. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, the Company does not accrue legal reserves, consistent with applicable accounting guidance. There were no pending material claims or legal matters as of June 30, 2022.

Covid 19 and Geo Political Tension

In December 2019, a novel strain of the coronavirus (COVID-19) surfaced in Wuhan, China, which spread globally and was declared a pandemic by the World Health Organization in March 2020. The pandemic may have the potential of adversely impacting our business and financial performance in the future. The extent of the potential impact will depend on future developments, which are uncertain and, given the continuing evolution of the COVID-19 pandemic and the global responses to curb its spread, cannot be predicted. In addition, the pandemic has significantly increased economic uncertainty. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its national and, to some extent, global economic impact, including any recession that may occur in the future.

Additionally, U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine.

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Purchase Commitments

As of June 30, 2022, the Company had purchase commitments for inventory totaling approximately $9,394.

Significant Customers

Sales to United States government agencies represented approximately $5,316 (43.9%) and $6,965 (37.3%) of the Company’s net total sales for the three and six months ended June 30, 2022, respectively, compared with approximately $4,749 (41.9%) and $6,865 (34.5%), for the same periods last year. Accounts receivable from agencies of the United States government were $2,554 as of June 30, 2022, compared with approximately $3,279 at the same date last year.

11. Debt

BK Technologies, Inc. (“BK Inc.”), a wholly owned subsidiary of the Company, entered into a $5,000 Credit Agreement and a related Line of Credit Note (the “Note” and collectively with the Credit Agreement, the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMC”) on January 30, 2021. The Credit Agreement provides for a revolving line of credit of up to $5,000, with availability under the line of credit subject to a borrowing base calculated as a percentage of accounts receivable and inventory. Proceeds of borrowings under the Credit Agreement may be used for general corporate purposes. The line of credit is collateralized by a blanket lien on all personal property of BK Technologies, Inc., pursuant to the terms of the Continuing Security Agreement with JPMC. The Company and each subsidiary of BK Inc. are guarantors of BK Technologies, Inc.’s obligations under the Credit Agreement, in accordance with the terms of the Continuing Guaranty. On January 31, 2022, our revolving credit facility, which originated on January 30, 2020, was extended for one year, through January 31, 2023.

Borrowings under the Credit Agreement will bear interest at the secured overnight financing rate plus a margin of 2.0%. The line of credit, as modified, is to be repaid in monthly payments of interest only, payable in arrears, commencing on February 1, 2022, with all outstanding principal and interest to be payable in full at maturity (January 31, 2023). As of June 30, 2022, the interest rate was 3.344%.

The Credit Agreement contains certain customary restrictive covenants, including restrictions on liens, indebtedness, loans and guarantees, acquisitions and mergers, sales of assets, and stock repurchases by BK Technologies, Inc. The Credit Agreement contains one financial covenant requiring BK Technologies, Inc., to maintain a tangible net worth of at least $20,000 at any fiscal quarter end.

The Credit Agreement provides for customary events of default, including: (1) failure to pay principal, interest or fees under the Credit Agreement when due and payable; (2) failure to comply with other covenants and agreements contained in the Credit Agreement and the other documents executed in connection therewith; (3) the making of false or inaccurate representations and warranties; (4) defaults under other agreements with JPMC or 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, JPMC may declare the entire unpaid balance immediately due and payable and/or exercise any and all remedial and other rights under the Credit Agreement.

BK Technologies, Inc. was in compliance with all covenants under the Credit Agreement as of June 30, 2022, and the date of filing this report. As of June 30, 2022, the Company had an outstanding balance of $3,958, and a net balance availability of $1,042 under the Credit Agreement. As of the date of filing this report, the Company had an outstanding balance of $3,958, and a net balance availability of $1,042 under the Credit Agreement.

On April 6, 2021, BK Technologies, Inc., a wholly owned subsidiary of BK Technologies Corporation, and JPMC, as a lender, entered into a Master Loan Agreement in the amount of $743 to finance various items of manufacturing equipment. The loan is collateralized by the equipment purchased using the proceeds. The Master Loan Agreement is payable in 48 equal monthly principal and interest payments of approximately $16 beginning on May 8, 2021, matures on April 8, 2025, and bears a fixed interest rate of 3.0%.

On September 25, 2019, BK Technologies, Inc., a wholly owned subsidiary of the Company, and U.S. Bank Equipment Finance, a division of U.S. Bank National Association, as a lender, entered into a Master Loan Agreement in the amount of $425 to finance various items of manufacturing equipment. The loan is collateralized by the equipment purchased using the proceeds. The Master Loan Agreement is payable in 60 equal monthly principal and interest payments of approximately $8 beginning on October 25, 2019, matures on September 25, 2024, and bears a fixed interest rate of 5.11%.

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Current balances of notes payable at June 30, 2022 and December 31, 2021, are set forth in the table below:

	June 30, 2022		December 31, 2021
Note payable-US. Bank	$	88	$	86
Note payable-JP Morgan Chase Bank		184		181
	$	272	$	267

Long-term balances of notes payable at June 30, 2022 and December 31, 2021, are set forth in the table below:

	June 30, 2022		December 31, 2021
Note payable-US. Bank	$	116	$	161
Note payable-JP Morgan Chase Bank		352		444
	$	468	$	605

12. Leases

The Company accounts for its leasing arrangements in accordance with Topic 842, “Leases”. The Company leases manufacturing and office facilities and equipment under operating leases and determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are accounted for separately.

The Company leases approximately 54,000 square feet (not in thousands) of industrial space in West Melbourne, Florida, under a non-cancellable operating lease. The lease has the expiration date of September 30, 2027. Annual rental, maintenance and tax expenses for the facility are approximately $491.

In February 2020, the Company entered into a lease for 6,857 square feet (not in thousands) of office space at Sawgrass Technology Park, 1619 NW 136th Avenue in Sunrise, Florida, for a period of 64 months commencing July 1, 2020. Annual rental, maintenance and tax expenses for the facility will be approximately $196 for the first year, increasing by approximately 3% for each subsequent 12-month period.

In March 2021, the Company executed an agreement for the termination of its lease for 8,100 square feet (not in thousands) of office space in Lawrence, Kansas, effective March 31, 2021 and recognized a "Lease Termination” expense of approximately $53. The original term of the lease was through December 31, 2021.

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Lease costs consisted of the following:

	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Operating lease cost	$	136	$	136	$	272	$	302
Short-term lease cost		—		—		—		—
Variable lease cost		33		33		65		65
Total lease cost	$	169	$	169	$	337	$	367

Supplemental cash flow information related to leases was as follows:

	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows (fixed payments)	$	144	$	140	$	288	$	352
Operating cash flows (liability reduction)	$	109	$	100	$	218	$	271

ROU assets obtained in exchange for lease obligations:
Operating leases	$	—	$	—	$	—	$	14

Other information related to operating leases was as follows:

	June 30, 2022
Weighted average remaining lease term (in years)		4.71
Weighted average discount rate		5.50	%

Maturity of lease liabilities as of June 30, 2022, were as follows:

	June 30, 2022
Remaining six months of 2022	$	294
2023		595
2024		608
2025		618
2026		479
Thereafter		242
Total payments		2,836
Less: imputed interest		(338	)
Total present value of lease liability	$	2,498

13. Subsequent Events

On July 14, 2022, the Company granted 87,500 incentive stock options of the 2017 Incentive Compensation Plan, to a number of non-management employees. The options contained a 5 year vesting term, beginning on July 14, 2023 and on each anniversary date of the grant thereafter.

On July 1, 2022, the Company issued 18,715 and 11,062 restricted stock units to Michael Dill and Inez Tenenbaum, respectively, former directors of the Company for services performed. These restricted stock units were fully vested and settled on the date of grant.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SPECIAL NOTE CONCERNING

FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. 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 and 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), including the statements about our plans, objectives, expectations, and prospects. 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. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and in our subsequent filings with the Securities and Exchange Commission, and include, among others, the following:

	·	changes or advances in technology;

	·	the success of our land mobile radio product line;

	·	successful introduction of new products and technologies, including our ability to successfully develop and sell our anticipated new multiband product and other related products in the planned new BKR Series product line and our announced SaaS solution;

	·	competition in the land mobile radio industry;

	·	general economic and business conditions, including federal, state and local government budget deficits and spending limitations, any impact from a prolonged shutdown of the U.S. Government, and the ongoing effects of the COVID-19 pandemic, inflation, supply-chain constraints, ongoing geopolitical conflicts and related sanctions;

	·	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, skilled workers and key personnel;

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	·	our ability to manage our growth;

	·	our ability to identify potential candidates and consummate acquisition, disposition or investment transactions, and risks incumbent to being a noncontrolling interest stockholder in a corporation;

	·	the impact of general business conditions, including those resulting from the COVID-19 pandemic, inflation, ongoing geopolitical conflicts and related sanctions, on the companies in which we hold investments;

	·	impact of our capital allocation strategy;

	·	risks related to maintaining our brand and reputation;

	·	impact of government regulation;

	·	rising health care costs;

	·	our business with manufacturers located in other countries, including changes in the U.S. Government and foreign governments’ trade and tariff policies, as well as any further impact resulting from the COVID-19 pandemic, inflation, ongoing geopolitical conflicts and related sanctions;

	·	our inventory and debt levels;

	·	protection of our intellectual property rights;

	·	fluctuation in our operating results and stock price;

	·	acts of war or terrorism, natural disasters and other catastrophic events, such as the COVID-19 pandemic;

	·	any infringement claims;

	·	data security breaches, cyber-attacks and other factors impacting our technology systems;

	·	availability of adequate insurance coverage;

	·	maintenance of our NYSE American listing;

	·	risks related to being a holding company; and

	·	the effect on our stock price and ability to raise equity capital through future sales of shares of our common stock.

Some of these factors and risks have been, and may further be, exacerbated by the COVID-19 pandemic and general economic conditions such as inflation. 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.

Reported dollar amounts in the management’s discussion and analysis (“MD&A”) section of this report are disclosed in millions or as whole dollar amounts.

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report and the MD&A, consolidated financial statements and notes thereto appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 17, 2022, as amended by filing Form 10-K/A with the SEC on April 29, 2022.

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Executive Overview

BK Technologies Corporation (NYSE American: BKTI) (together with its wholly owned subsidiaries, “BK,” the “Company,” “we” or “us”) is a holding company that, through BK Technologies, Inc., its operating subsidiary, provides public safety grade communications products and services which make first responders safer and more efficient. All operating activities described herein are undertaken by our operating subsidiary.

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

The Radio business unit designs, manufactures and markets American-made wireless communications products consisting of two-way land mobile radios (“LMRs”). Two-way LMRs can be radios that are hand-held (portable) or installed in vehicles (mobile).

Generally, BK Technologies-branded products serve the government markets including but not limited to emergency response, public safety, homeland security and military customers of federal, state and municipal government agencies, as well as various industrial and commercial enterprises. We believe that our products and solutions provide superior value by offering a high specification, ruggedized, durable, reliable, feature rich, Project 25 (P25) compliant radio at a lower cost relative to comparable offerings.

The SaaS business unit focuses on delivering innovative, public safety smartphone applications which operate ubiquitously over the public cellular networks. Our BKRPlay branded smartphone application will offer multiple services which make the first responder safer and more efficient. When tethered to our radios, the combined solution will offer more unique capability which increases the sales reach of our radios.

We were incorporated under the laws of the State of Nevada on October 24, 1997. We are the resulting corporation from the reincorporation merger of our predecessor, Adage, Inc., a Pennsylvania corporation, which reincorporated from Pennsylvania to Nevada effective as of January 30, 1998. Effective on June 4, 2018, we changed our corporate name from “RELM Wireless Corporation” to “BK Technologies, Inc.”

Our principal executive offices are located at 7100 Technology Drive, West Melbourne, Florida 32904 and our telephone number is (321) 984-1414.

Available Information

Our Internet website address is www.bktechnologies.com. 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.” The information contained on our website is not incorporated by reference in this report. A copy of any of these materials may be obtained, free of charge, upon request from our investor relations department by submitting a written request to bktechnologies@imsinvestorrelations.com or calling (203) 972-9200. Additional information regarding our investor relations department can be found at our website. All reports that the Company files with or furnishes to the SEC also are available free of charge via the SEC’s website at http://www.sec.gov.

Impact of COVID-19 Pandemic and Recent Capital markets Disruption

In December 2019, a novel strain of the coronavirus (COVID-19) surfaced, which spread globally and was declared a pandemic by the World Health Organization in March 2020. In response to the COVID-19 pandemic, we implemented certain policies at our offices in accordance with best practices to accommodate, and at times mandate, social distancing, wearing face masks, and remote work practices. Among other things, we have invested in employee safety equipment, additional cleaning supplies and measures, adjusted production lines and workplaces as necessary and adapted new processes for interactions with our suppliers and customers to safely manage our operations. Any employees that test positive for COVID-19 are quarantined and, if possible, work remotely in accordance with accepted safety practices until after passing subsequent testing.

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Additionally, U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.

Furthermore, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.

The impact to our business in 2022, particularly customer orders, is not known with any certainty. Recently, worldwide shortages of materials, particularly semiconductors and integrated circuits, have resulted in limited supplies, extended lead times, and increased costs and inventory levels for certain components used in our products. While, generally, we have been able to procure the material necessary to manufacture our products and fulfill customer orders, there have been delays and long delivery times within our supply chain. While the progression and duration of these shortages is not known with certainty, they may last for several quarters or years. The impact on our operations of such shortages, or additional shortages that may surface, is uncertain, but could potentially impact our future sales, manufacturing operations and financial results. Continued progression of these circumstances could result in a decline in customer orders, as our customers could shift purchases to lower-priced or other perceived value offerings or reduce their purchases and inventories due to decreased budgets, reduced access to credit or various other factors, and impair our ability to manufacture our products, which could have a material adverse impact on our results of operations and cash flow. While the current impacts of COVID-19 and ongoing geopolitical conflicts and related sanctions are reflected in our results of operations, we cannot at this time separate the direct impacts of these matters from other factors that cause our performance to vary from quarter to quarter. The ultimate duration and impact of the COVID-19 pandemic, the ongoing geopolitical conflicts and related sanctions on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration and severity of the pandemic, the duration of the ongoing conflict in Ukraine and additional sanctions related thereto, and the related length of the impact on the global economy, which are uncertain and cannot be predicted at this time. Even after the COVID-19 pandemic has subsided and geopolitical tensions subside, we may continue to experience an adverse impact to our business as a result of the national and, to some extent, global economic impact. Furthermore, the extent to which our mitigation efforts are successful, if at all, is not presently ascertainable. However, our results of operations in future periods may continue to be adversely impacted by the COVID-19 pandemic, the ongoing geopolitical conflict and related sanctions, and their negative effects on global economic conditions.

We may experience fluctuations in our quarterly results, in part, due to governmental customer spending patterns that are influenced by government fiscal year-end budgets and appropriations. We may also experience fluctuations in our quarterly results, in part, due to our sales to federal and state agencies that participate in wildland fire-suppression efforts, which may be greater during the summer season when forest fire activity is heightened. In some years, these factors may cause an increase in sales for the second and third quarters, compared with the first and fourth quarters of the same fiscal year. Such increases in sales may cause quarterly variances in our cash flow from operations and overall financial condition.

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Second Quarter and Six Months Summary

Customer demand and orders for our products continued to be strong during the three and six months ended June 30, 2022. Supply chain constraints limited our ability to manufacture the quantities needed to ship and fulfill all the orders. Consequently, these orders were carried in backlog, and we anticipate fulfilling many of these orders during subsequent quarters this year.

Overall, our revenues for the three months ended June 30, 2022, improved compared with the same period of last year. For the second quarter 2022, sales increased 6.8% from the second quarter last year and 83.9% from the immediately preceding quarter. The improvement in sales for the second quarter brought sales for the six-months ended June 30, 2022, within 6.0% of the same six-month period last year. Gross profit margins as a percentage of sales for the second quarter and six-month periods of 2022 decreased compared with the same periods of last year, generally reflecting cost increases in materials and freight, and lower production volumes due to material shortages. Selling, general and administrative (“SG&A”) expenses for the second quarter of 2022 were 18.7% higher than the SG&A expenses for the second quarter last year, while SG&A expenses for the six-month period ended June 30, 2022, increased 21.1% compared to the same period last year. The increase in general and administrative expenses is attributed primarily to corporate and headquarters staffing and strategic initiatives. These factors yielded operating losses for the three and six month periods ended June 30, 2022, that increased primarily due to supply chain material challenges comparable to the same periods last year. During the second quarter of 2021 we closed a public offering of our common stock, raising net proceeds of approximately $11.6 million with the issuance of approximately 4.2 million common shares.

For the second quarter of 2022, our sales increased 6.8% to approximately $12.1 million, compared with approximately $11.3 million for the same quarter last year. For the six months ended June 30, 2022, sales totaled approximately $18.7 million, compared with approximately $19.9 million for the same period last year.

Gross profit margins as a percentage of sales for the second quarter of 2022 were approximately 14.2%, compared with 38.4% for the second quarter last year, as adjusted. For the six-month period ended June 30, 2022, gross profit margins as a percentage of sales were approximately 17.1%, compared with 37.6% when compared to the same periods last year, as adjusted.

SG&A expenses for the second quarter of 2022 totaled approximately $5.4 million, compared with approximately $4.6 million for the same quarter last year. SG&A expenses for the first six months of 2022 increased 21.1% to approximately $10.3 million, compared with approximately $8.5 million for the same period last year.

For the second quarter of 2022, we recognized an operating loss of approximately $3.7 million, compared with approximately $0.2 million for the same quarter last year, as adjusted. For the six-month period ended June 30, 2022, our operating loss totaled approximately $7.1 million, compared with approximately $1.1 million for the same period last year, as adjusted.

For the second quarter of 2022, we recognized an unrealized loss totaling approximately $0.6 million on our investment in FG Financial made through FGI 1347 Holdings, LP, a consolidated variable interest entity. This compares with an unrealized gain of approximately $2.3 million on the investment for the second quarter last year. For the six-month period ended June 30, 2022, we recognized an unrealized loss of approximately $1.1 million, compared with an unrealized gain of $2.5 million for last year’s six-month period.

Net loss for the three months ended June 30, 2022, was approximately $4.3 million ($0.26 per basic and diluted share), compared with a net income of approximately $1.8 million ($0.14 per basic and $0.13 diluted share) for the same quarter last year, as adjusted. For the six months ended June 30, 2022, our net loss totaled approximately $8.3 million ($0.49 per basic and diluted share), compared with a net income of approximately $1.2 million ($0.09 per basic and diluted share) for the same period last year, as adjusted.

As of June 30, 2022, working capital totaled approximately $17.4 million, of which approximately $12.4 million was comprised of cash, cash equivalents and trade receivables. As of December 31, 2021, working capital totaled approximately $25.2 million (as adjusted), of which approximately $18.8 million was comprised of cash, cash equivalents and trade receivables.

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Results of Operations

As an aid to understanding our operating results for the periods covered by this report, the following table shows selected items from our condensed consolidated statements of operations expressed as a percentage of sales:

	Percentage of Sales Three Months Ended						Percentage of Sales Six Months Ended
	June 30, 2022			June 30, 2021*			June 30, 2022			June 30, 2021*
Sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products		(85.8	)		(61.6	)		(82.9	)		(62.4	)
Gross margin		14.2			38.4			17.1			37.6
Selling, general and administrative expenses		(44.6	)		(40.2	)		(55.2	)		(42.8	)
Other income (expense)		(5.4	)		19.6			(6.1	)		12.1
Income (loss) before income taxes		(35.8	)		17.8			(44.2	)		6.8
Income tax (expense) benefit		--			(1.6	)		--			(0.9	)
Net loss		(35.8	)%		16.2	%		(44.2	)%		5.9	%

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

Net Sales

For the second quarter ended June 30, 2022, net sales increased 6.8% to approximately $12.1 million, compared with approximately $11.3 million for the same quarter last year. Sales for the six months ended June 30, 2022, totaled approximately $18.7 million, compared with approximately $19.9 million for the six-month period last year.

Customer demand and orders for our products continued to be strong, driving record bookings for the second quarter of 2022. Supply chain constraints limited our ability to manufacture the quantities needed to convert the orders into shipments and sales revenue. Consequently, unshipped orders were carried in backlog, and we anticipate fulfilling many of the orders in backlog during subsequent quarters this year. We are taking steps to manage delays in the supply chain, including carrying additional inventory of material and components with limited supplies. Although supply chain factors may continue to impact shipments during the next quarter, we anticipate being able to fulfill customer requirements. The precise impact to sales and shipments for the remainder of 2022, however, cannot be quantified.

Sales for the three months ended June 30, 2022, was attributed primarily to certain state and local public safety opportunities, as well as federal wildland fire related agencies. From a product perspective, the primary contributor to orders and shipments during the second quarter was our BKR 5000 portable radio and related accessories. The BKR Series is envisioned as a comprehensive line of new products, which will include new models in coming quarters. The timing of developing additional BKR Series products and bringing them to market could be impacted by various factors, including potential impacts related to our supply chain and the COVID-19 pandemic to various electronic component suppliers. BKR Series products, we believe, should increase our addressable market by expanding the number of federal and other public safety customers that may purchase our products. However, the timing and size of orders from agencies at all levels can be unpredictable and subject to budgets, priorities, and other factors. Accordingly, we cannot assure that sales will occur under particular contracts, or that our sales prospects will otherwise be realized.

While the potential impacts of material shortages, lead-times, the COVID-19 pandemic, and ongoing geopolitical conflict and related sanctions in coming months and quarters remain uncertain, 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.

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Cost of Products and Gross Profit Margin

Gross profit margins as a percentage of sales for the second quarter ended June 30, 2022 were approximately 14.2%, compared with 38.4% for the same quarter last year. For the six-month period ended June 30, 2022, gross profit margins were approximately 17.1%, compared with 37.6% for the same period last year.

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 quarter ended June 30, 2022, decreased compared with the same period last year primarily due to increased material costs, including electronic components, as well as escalated freight costs, which yielded sub-optimal absorption of manufacturing overhead costs.

During recent quarters, worldwide shortages of materials, including semiconductors and integrated circuits, have resulted in limited supplies, extended lead times and higher costs for certain components used in our products. Accordingly, we have experienced delivery delays and increased costs within our supply chain. While the progression and duration of these shortages is not known with certainty, we are monitoring a number of critical components for product cost improvement, but the shortages may last for several quarters. The impact on our operations of such shortages and increased product costs is uncertain, but could potentially impact our future sales, manufacturing operations and financial results.

We utilize a combination of internal manufacturing capabilities and contract manufacturing relationships for production efficiencies and to manage material and labor costs. While we anticipate continuing to do so in the future, we have increased and are continuing to increase, our utilization of U.S.-based resources, which provides greater security and control over our production. We believe that our current manufacturing capabilities and contract relationships or comparable alternatives will continue to be available to us. However, we may encounter new product cost and competitive pricing pressures in the future and the extent of their impact on gross margins, if any, is uncertain.

Selling, General and Administrative Expenses

SG&A expenses consist of marketing, sales, commissions, engineering, product development, management information systems, accounting, headquarters, and non-cash share-based employee compensation expenses.

SG&A expenses for the second quarter ended June 30, 2022, totaled approximately $5.4 million (44.6% of sales), compared with approximately $4.6 million (40.2% of sales) for the same quarter last year. For the six months ended June 30, 2022, SG&A expenses increased by $1.8 million, or 21.1%, to approximately $10.3 million (55.2% of sales), compared with approximately $8.5 million (42.8% of sales), for the six-month period last year.

Engineering and product development expenses for the second quarter of 2022 totaled approximately $2.3 million (18.9% of sales), compared with approximately $2.3 million (20.3% of sales) for the same quarter of last year. For the six months ended June 30, 2022, engineering and product development expenses totaled approximately $4.6 million (24.6% of sales), compared with approximately $4.1 million (20.7% of sales) for the six-month period last year. The increase in engineering expenses is attributed primarily to ongoing product design and development activities, particularly prototyping, for the new BKR series radios. Most of these activities are being performed by our internal engineering team and are their primary focus, combined with sustaining engineering support of 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 and the potential effects of the COVID-19 pandemic in coming months and quarters.

Marketing and selling expenses for the second quarter of 2022 totaled approximately $1.1 million (9.1% of sales), compared with approximately $1.1 million (9.4% of sales) for the second quarter last year, primarily reflecting increases in staffing, travel and go-to-market activities in support of anticipated sales growth from new products and customer. For the six months ended June 30, 2022, marketing and selling expenses increased approximately $0.1 million, or 3.6%, to approximately $2.1 million (11.1% of sales), compared with approximately $2.0 million (10.1% of sales). The increases for the six-month period ended June 30, 2022 are primarily reflecting increases in staffing, travel and go-to-market activities in support of anticipated sales growth from new products and customers.

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Other general and administrative expenses for the second quarter 2022 totaled approximately $2.0 million (16.4% of sales), compared with approximately $1.2 million (10.5% of sales) for the same quarter last year. For the six months ended June 30, 2022, general and administrative expenses totaled approximately $3.6 million (19.4% of sales), compared with approximately $2.6 million (12.5% of sales) for the six-month period last year. The increase in general and administrative expenses for the three and six month period ending June 30, 2022 is attributed primarily to corporate and headquarters staffing and strategic initiatives.

Operating Loss

The operating loss for the second quarter ended June 30, 2022, totaled approximately $3.7 million (30.4% of sales), compared with approximately $0.2 million (1.8% of sales) for last year’s second quarter, as adjusted. For the six months ended June 30, 2022, our operating loss totaled approximately $7.1 million (38.1% of sales), compared with approximately $1.1 million (5.3% of sales) for the six-month period last year, as adjusted. The operating loss for the quarter ended June 30, 2022 is attributed primarily to increased product costs, which adversely impacted gross profit margins and increased operating expenses. The operating loss for the six months ended June 30, 2022 is primarily attributed to increased product costs and a decrease in sales, which adversely impacted gross profit margins and increased operating expenses.

Other (Expense) Income

We recorded net interest expense of approximately $24,000 for the second quarter ended June 30, 2022, compared with approximately $14,000 for the second quarter of last year. For the six months ended June 30, 2022, net interest expense totaled approximately $39,000, compared with net interest income of approximately $18,000 for the six-month period last year. Net interest expense was primarily the result of equipment financing, our revolving credit facility and lower average cash balances.

For the second quarter ended June 30, 2022, we recognized an unrealized loss of approximately $0.6 million on our investment in FGF, compared with an unrealized gain of approximately $2.3 million for the second quarter last year. For the six months ended June 30, 2022, we recognized an unrealized loss of approximately $1.1 million on our investment in FGF, compared with an unrealized gain of approximately $2.5 for the same period last year.

Income Taxes

We recorded no tax provision or benefit for the quarter ended and for the six months ended June 30, 2022, compared with an income tax expense of $184,000 for the quarter and the same six month period last year.

Our income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax provision (benefit) in any period will be affected by, among other things, permanent, as well as temporary, differences in the deductibility of certain items, in addition to changes in tax legislation. As a result, we may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

As of June 30, 2022, our net deferred tax assets totaled approximately $4.1 million, and were primarily derived from research and development tax credits, operating loss carryforwards and deferred revenue.

In order to fully utilize the net deferred tax assets, we will need to generate sufficient taxable income in future years. We analyze all positive and negative evidence to determine if, based on the weight of available evidence, we are more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon our conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.

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Based on our analysis of all available evidence, both positive and negative, we have concluded that we do not have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets. Accordingly, we established a valuation allowance of $2.69 million and $0.6 million as of June 30, 2022 and December 31, 2021. We cannot presently estimate what, if any, changes to the valuation of our deferred tax assets may be deemed appropriate in the future. If we incur future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of June 30, 2022.

Liquidity and Capital Resources

For the six months ended June 30, 2022, net cash used in operating activities totaled approximately $5.3 million, compared with cash used by operating activities of approximately $2.8 million (as adjusted) for the same period last year. Cash used in operating activities for the six months ended June 30, 2022, was primarily related to a net loss and increased inventory, which were partially offset by increased accounts payable, a decrease in accounts receivable and an unrealized loss in marketable securities.

For the first six months of 2022, we had a net loss of approximately $8.3 million, compared with a net income of approximately $1.2 million (as adjusted) for the same period last year. Gross inventories increased during the six months ended June 30, 2022 by approximately $5.6 million, compared with approximately $3.2 million (as adjusted) for the same period last year. The increases for inventories were attributed primarily to increased purchases to account for the limited material and component availability combined with extended supplier lead-times and planned new product introductions. Prepaid expenses decreased during the six months ended June 30, 2022 by approximately $0.4 million, compared with a decrease of $12,000 for the same period last year. Accounts receivable decreased approximately $1.7 million during the six months ended June 30, 2022, compared with an increase of approximately $0.7 million for the same period last year. The decrease was primarily due to customer collections during the six months ended June 30, 2022. Accounts payable for the six months ended June 30, 2022, increased approximately $3.9 million, compared with an increase of approximately $1.2 million for the same period last year, primarily due to increased material and component purchases from suppliers related in-part to delays and shortages within our supply chain. Depreciation and amortization totaled approximately $0.7 million for the six months ended June 30, 2022, compared with approximately $0.7 million for the six same period last year. Depreciation and amortization are primarily related to manufacturing and engineering equipment. The unrealized loss on securities for the six months ended June 30, 2022, totaled approximately $1.1 million, compared with an unrealized gain of approximately $2.5 million for same period last year. For additional information pertaining to our investment in securities, refer to Note 1 (Condensed Consolidated Financial Statements) and Note 6 (Investment in Securities) to the condensed consolidated financial statements included in this report.

Cash used in investing activities for the six months ended June 30, 2022, totaled approximately $0.7 million, compared with approximately $1.5 million for the same period last year. The cash used for both periods was attributed primarily to the purchase of engineering and manufacturing related equipment.

For the six months ended June 30, 2022, cash of approximately $1.3 million was provided by financing activities, compared with cash provided by financing activities of approximately $13.2 million for the same period last year. During the six months ended June 30, 2022 we paid quarterly dividends, utilizing approximately $1.0 million, while for the same period last year, we paid a quarterly dividend of approximately $0.5 million. During the six months ended June 30, 2022, we received proceeds of approximately $2.5 million from our revolving credit facility and notes payable compared to $3.5 million for the same period last year. This was partially offset by loan and revolving credit facility repayments of approximately $0.1 million for the six months ended June 30, 2022 compared to $1.4 million for the same period last year. For the six months ended June 30, 2021, we closed a public offering of our common stock, generating net proceeds of approximately $11.6 million.

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

BK Technologies, Inc., our wholly owned subsidiary, entered into the $5 million Credit Agreement with JPMC. The Credit Agreement provides for a revolving line of credit of up to $5 million, with availability under the line of credit subject to a borrowing base calculated as a percentage of accounts receivable and inventory. Proceeds of borrowings under the Credit Agreement may be used for general corporate purposes. The line of credit is collateralized by a blanket lien on all personal property of BK Technologies, Inc. pursuant to the terms of the Continuing Security Agreement with JPMC. BK Technologies Corporation and each subsidiary of BK Technologies, Inc., are guarantors of the obligations under the Credit Agreement, in accordance with the terms of the Continuing Guaranty.

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On April 6, 2021, BK Technologies, Inc., a wholly owned subsidiary of BK Technologies Corporation, and JPMC, as a lender, entered into a Master Loan Agreement in the amount of $743,000 to finance various items of manufacturing equipment. The loan is collateralized by the equipment purchased using the proceeds. The Master Loan Agreement is payable in 48 equal monthly principal and interest payments of approximately $16,000 beginning on May 8, 2021, matures on April 8, 2025, and bears a fixed interest rate of 3.0%.

Our cash and cash equivalents balance at June 30, 2022, was approximately $5.9 million. We believe these funds, combined with anticipated cash generated from operations and borrowing availability under our 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 the COVID-19 pandemic, 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. For a description of these risks, see “Item 1A. Risk Factors” set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and “Item 1A. Risk Factors” below in this report.

Critical Accounting Policies

In response to the Securities and Exchange Commission’s financial reporting release, FR-60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, we have selected for disclosure our revenue recognition process and our accounting processes involving significant judgments, estimates and assumptions. These processes affect our reported revenues and current assets and are, therefore, critical in assessing our financial and operating status. We regularly evaluate these processes in preparing our financial statements. The processes for revenue recognition, allowance for collection of trade receivables, allowance for excess or obsolete inventory and income taxes involve certain assumptions and estimates that we believe to be reasonable under present facts and circumstances. These estimates and assumptions, if incorrect, could adversely impact our operations and financial position.

There were no changes to our critical accounting policies during the six months ended June 30, 2022.

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Change in Accounting Principle During 2021

As disclosed in Note 1 and 4, on July 1, 2021, we changed inventory accounting to burden the material at the time of purchase receipts. Prior to July 1, 2021, we applied the material burden at the time the inventory was issued to work in progress. This change resulted in a net increase of approximately $1.3 million in inventory and retained earnings as of July 1, 2021.

The accounting change did not have a material effect on the loss from operations, net loss, or earnings per share for the three months ended June 30, 2022.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” as defined by Item 229.10(f)(1) of Regulation S-K, the Company is not required to include the disclosure under this Item.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (who serves as our principal executive officer) and Chief Financial Officer (who serves as our principal financial and accounting officer), as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including each of such officers as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1A. RISK FACTORS

As of the date of this filing, except as set forth herein, there have been no material changes to the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 17, 2022, as amended by filing Form 10-K/A with the SEC on April 29, 2022 (the “2021 Form 10-K”). The Risk Factors set forth in the 2021 Form 10-K should be read carefully in connection with evaluating our business and in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q. Any of the risks described in the 2021 Form 10-K, could materially adversely affect our business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. These are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Dividend Restrictions

On January 31, 2022, BK Technologies, Inc., our wholly owned operating subsidiary, extended its Credit Agreement with JPMC. The Credit Agreement contains limitations and covenants that may limit BK Technologies, Inc.’s ability to take certain actions, including paying dividends to the Company.

Share Repurchase Program

On December 21, 2021, the Company announced that the Board has authorized a share repurchase program which permits the Company to purchase up to an aggregate of $5 million of its common shares. The program does not have an expiration date. Any repurchases would be funded using cash on hand and cash from operations. The actual timing, manner and number of shares repurchased under the program will be determined by management and the Board of Directors at their discretion, and will depend on several factors, including the market price of the Company’s common shares, general market and economic conditions, alternative investment opportunities, and other business considerations in accordance with applicable securities laws and exchange rules. The authorization of the share repurchase program does not require BK Technologies to acquire any particular number of shares and repurchases may be suspended or terminated at any time at the Company’s discretion. The following table provides information about purchases made by us of our common stock for each month included in the second quarter of 2022:

	ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Still be Purchased Under the Plans or Programs
April 1–30, 2022		—		—		—		5,000,000
May 1–31, 2022		—		—		—	$	5,000,000
June 1–30, 2022		—		—		—	$	5,000,000

Quarter Ended June 30, 2022		—	$	—		—	$	5,000,000

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Item 6. EXHIBITS

Exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index below.

Exhibit Index

Exhibit Number		Description

Exhibit 10.1		First Amendment to Employment Agreement (John M. Suzuki), incorporated by reference to Exhibit 10.1 to our Form 8-K filed on June 30, 2022
Exhibit 10.2		First Amendment to Employment Agreement (Timothy A. Vitou), incorporated by reference to Exhibit 10.2 to our Form 8-K filed on June 30, 2022
Exhibit 10.3		First Amendment to Employment Agreement (Henry R. (Randy) Willis), incorporated by reference to Exhibit 10.3 to our Form 8-K filed on June 30, 2022
Exhibit 31.1		Certification of Principal Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2		Certification of Principal Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S‑K)
Exhibit 32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S‑K)
Exhibit 101.INS		XBRL Instance Document
Exhibit 101.SCH		XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.LAB		XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 101.DEF		XBRL Taxonomy Definition Linkbase Document
Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document) (filed herewith)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BK TECHNOLOGIES CORPORATION
	(The “Registrant”)

Date: August 11, 2022	By:	/s/ John M. Suzuki
		John M. Suzuki Chief Executive Officer (Principal executive officer and duly authorized officer)

Date: August 11, 2022	By:	/s/ Scott A. Malmanger
		Scott A. Malmanger Interim Chief Financial Officer (Principal financial and accounting officer and duly authorized officer)