BK Technologies (BKTI) 10-Q 13 May 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 07, 2021
Cover [Abstract]
Entity Registrant Name	BK Technologies Corp
Entity Central Index Key	0000002186
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	NV
Entity File Number	001-32644
Entity Common Stock, Shares Outstanding		12,536,471
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 6,363	$ 6,826
Trade accounts receivable, net	4,566	6,466
Inventories, net	10,511	9,441
Prepaid expenses and other current assets	1,821	1,878
Total current assets	23,261	24,611
Property, plant and equipment, net	4,299	3,566
Right-of-use (ROU) asset	2,689	2,887
Investment in securities	2,219	2,014
Deferred tax assets, net	4,300	4,300
Other assets	118	112
Total assets	36,886	37,490
Current liabilities:
Accounts payable	5,418	5,119
Accrued compensation and related taxes	1,320	1,635
Accrued warranty expense	718	791
Accrued other expenses and other current liabilities	162	307
Dividends payable	251	250
Short-term lease liability	418	525
Credit facility	800	0
Note payable-current portion	82	82
Deferred revenue	847	757
Total current liabilities	10,016	9,466
Note payable, net of current portion	226	247
Long-term lease liability	2,607	2,702
Deferred revenue	2,323	2,551
Total liabilities	15,172	14,966
Stockholders' equity:
Preferred stock; $1.00 par value; 1,000,000 authorized shares; none issued or outstanding	0	0
Common stock; $.60 par value; 20,000,000 authorized shares; 13,986,871 and 13,962,366 issued and 12,536,471 and 12,511,966 outstanding shares at March 31, 2021 and December 31, 2020, respectively	8,392	8,377
Additional paid-in capital	26,466	26,346
Accumulated deficit	(7,742)	(6,797)
Treasury stock, at cost, 1,450,400 shares at March 31, 2021, and December 31, 2020, respectively	(5,402)	(5,402)
Total stockholders' equity	21,714	22,524
Total liabilities and stockholders' equity	$ 36,886	$ 37,490

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Stockholders equity:
Preferred stock, par value	$ 1	$ 1
Preferred stock, authorized shares	1,000,000	1,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.60	$ 0.60
Common stock, authorized shares	20,000,000	20,000,000
Common stock, issued shares	13,986,871	13,962,366
Common stock, outstanding shares	12,536,471	12,511,966
Treasury stock, shares	1,450,400	1,450,400

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Sales, net	$ 8,564	$ 10,889
Expenses
Cost of products	5,468	6,994
Selling, general and administrative	3,973	4,743
Total expenses	9,441	11,737
Operating loss	(877)	(848)
Other (expense) income:
Net interest (expense) income	(4)	9
Gain (loss) on investment in securities	205	(306)
Other expense	(18)	(47)
Total other income (expense)	183	(344)
Loss before income taxes	(694)	(1,192)
Income tax benefit	0	0
Net loss	$ (694)	$ (1,192)
Net loss per share-basic and diluted	$ (0.06)	$ (0.09)
Weighted average shares outstanding-basic and diluted	12,517,412	12,555,108

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating activities
Net loss	$ (694)	$ (1,192)
Adjustments to reconcile net loss to net cash provided by operating activities:
Inventories allowances	289	38
Depreciation and amortization	298	320
Share-based compensation expense-stock options	32	30
Share-based compensation expense-restricted stock units	103	21
(Gain) loss on investment in securities	(205)	306
Changes in operating assets and liabilities:
Trade accounts receivable	1,900	(626)
Inventories	(1,359)	2,538
Prepaid expenses and other current assets	57	(69)
Other assets	(6)	28
Lease liability	(4)	23
Accounts payable	299	(474)
Accrued compensation and related taxes	(315)	(226)
Accrued warranty expense	(73)	(149)
Deferred revenue	(138)	424
Accrued other expenses and other current liabilities	(145)	(77)
Net cash provided by operating activities	39	915
Investing activities
Purchases of property, plant and equipment	(1,031)	(131)
Net cash used in investing activities	(1,031)	(131)
Financing activities
Cash dividends paid	(250)	(252)
Repurchase of common stock	0	(243)
Proceeds from credit facilities	800	0
Repayment of note payable	(21)	(19)
Net cash provided by (used in) financing activities	529	(514)
Net change in cash and cash equivalents	(463)	270
Cash and cash equivalents, beginning of period	6,826	4,676
Cash and cash equivalents, end of period	6,363	4,946
Supplemental disclosure
Cash paid for interest	4	5
Non-cash financing activity
Common stock issued under restricted stock units	$ 84	$ 0

1. Condensed Consolidated Finan

1. Condensed Consolidated Financial Statements	3 Months Ended
	Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
1. Condensed Consolidated Financial Statements	Basis of Presentation The condensed consolidated balance sheet as of March 31, 2021, the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, have been prepared by BK Technologies Corporation (the “Company” or “we”), and are unaudited. On March 28, 2019, BK Technologies, Inc., the predecessor of BK Technologies Corporation, implemented a holding company reorganization, which resulted in BK Technologies Corporation becoming the direct parent company of, and the successor issuer to, BK Technologies, Inc. For the purpose of this report, references to “we” or the “Company” or its management or business at any period prior to the holding company reorganization (March 28, 2019) refer to those of BK Technologies, Inc. as the predecessor company and its subsidiaries and thereafter to those of BK Technologies Corporation and its subsidiaries, except as otherwise specified or to the extent the context otherwise indicates. In the opinion of management, all adjustments, which include normal, recurring adjustments, necessary for a fair presentation, have been made. All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet at December 31, 2020, 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, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 3, 2021. The results of operations for the three months ended March 31, 2021, are not necessarily indicative of the operating results for a full year. Principles of Consolidation The accounts of the Company have been included in the accompanying consolidated financial statements. 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. (formerly 1347 Property Insurance Holdings, 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 March 31, 2021, and December 31, 2020, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments. The Company uses observable market data assumptions (Level 1 inputs, as defined in accounting guidance) that it believes market participants would use in pricing investment in securities. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including the removal of certain disclosure requirements. The amendments in the ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the ASU. The Company adopted this guidance as of January 1, 2020, and the adoption did not have an impact on its consolidated financial statements. Recent Accounting Pronouncements 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.

2. Significant Events and Trans

2. Significant Events and Transactions	3 Months Ended
	Mar. 31, 2021
Significant Events And Transactions
2. Significant Events and Transactions	Pursuant to the Company’s capital return program, the Company’s Board of Directors declared a quarterly dividend of $0.02 per share of the Company’s common stock on March 16, 2021, to stockholders of record as of April 12, 2021. These dividends were paid on April 26, 2021.

3. Allowance for Doubtful Accou

3. Allowance for Doubtful Accounts	3 Months Ended
	Mar. 31, 2021
Allowance For Doubtful Accounts
3. Allowance for Doubtful Accounts	The allowance for doubtful accounts on trade receivables was approximately $50 on gross trade receivables of $4,616 and $6,516 at March 31, 2021, and December 31, 2020, 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

4. Inventories, net	3 Months Ended
	Mar. 31, 2021
Inventory Disclosure [Abstract]
4. Inventories, net	Inventories, which are presented net of allowance for obsolete and slow-moving inventory, consisted of the following: March 31, 2021 December 31, 2020 Finished goods $ 2,350 $ 1,975 Work in process 3,441 3,288 Raw materials 4,720 4,178 $ 10,511 $ 9,441 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 $809 at March 31, 2021, compared with approximately $520 at December 31, 2020.

5. Income Taxes

5. Income Taxes	3 Months Ended
	Mar. 31, 2021
Income Tax Disclosure [Abstract]
5. Income Taxes	The Company has not recorded income tax expense or benefit for the three months ended March 31, 2021 or 2020. 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, 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 March 31, 2021, the Company’s net deferred tax assets totaled approximately $4,300 and were primarily derived from research and development tax credits, deferred revenue, and net operating loss carryforwards. In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years. 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 $98. 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 March 31, 2021.

6. Investment in Securities

6. Investment in Securities	3 Months Ended
	Mar. 31, 2021
Schedule of Investments [Abstract]
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 FG Financial Group As of March 31, 2021, the Company indirectly held approximately $96 in cash and 477,282 shares of FG Financial Group, Inc. (formerly 1347 Property Insurance Holdings, Inc.) (Nasdaq: FGF) (“FGF”), with fair value of $2,219, through an investment in 1347 LP. These shares were purchased in March and May 2018 for approximately $3,741. For the three months ended March 31, 2021, the Company recognized an unrealized gain on the investment of approximately $205, compared with an unrealized loss of $306 for the same period last year. There have been no costs, fees and expenses paid to the general partner or its affiliates for any periods, including the three months ended March 31, 2021 and 2020. As of March 31, 2021, the Company and the affiliates of FG, including, without limitation, Ballantyne Strong, Inc., beneficially owned in the aggregate 3,052,734 shares of FGF’s common stock, representing approximately 62% of FGF’s outstanding shares. Additionally, FG and its affiliates constitute the largest stockholder of the Company. Mr. Kyle Cerminara, a member 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.

7. Stockholders' Equity

7. Stockholders' Equity	3 Months Ended
	Mar. 31, 2021
Stockholders' equity:
7. Stockholders' Equity	The changes in condensed consolidated stockholders’ equity for the three months ended March 31, 2021 and 2020, are as follows: Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Deficit Treasury Stock Total Balance at December 31, 2019 13,929,381 $ 8,357 $ 26,095 $ (6,043 ) $ (5,133 ) $ 23,276 Share-based compensation expense-stock options — — 30 — — 30 Share-based compensation expense-restricted stock units — — 21 — — 21 Dividends declared ($0.02 per share) — — — (250 ) — (250 ) Net loss — — — (1,192 ) — (1,192 ) Repurchase of common stock — — — — (243 ) (243 ) Balance at March 31, 2020 13,929,381 $ 8,357 $ 26,146 $ (7,485 ) $ (5,376 ) $ 21,642 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 $ (6,797 ) $ (5,402 ) $ 22,524 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 Dividends declared ($0.02 per share) — — — (251 ) — (251 ) Net loss — — — (694 ) — (694 ) Balance at March 31, 2021 13,986,871 $ 8,392 $ 26,466 $ (7,742 ) $ (5,402 ) $ 21,714

8. Loss per Share

8. Loss per Share	3 Months Ended
	Mar. 31, 2021
Earnings Per Share [Abstract]
8. Loss per Share	The following table sets forth the computation of basic and diluted loss per share: Three Months Ended March 31, 2021 March 31, 2020 Numerator: Net loss (for basic and diluted loss per share) $ (694 ) $ (1,192 ) Denominator for basic loss per share weighted average shares 12.517,412 12,555,108 Effect of dilutive securities: Options and restricted stock units — — Denominator for diluted loss per share weighted average shares 12,517,412 12,555,108 Basic and diluted loss per share $ (0.06 ) $ (0.09 ) Approximately 489,000 stock options and 122,533 restricted stock units for the three months ended March 31, 2021, and 448,400 stock options and 85,621 restricted stock units for the three months ended March 31, 2020, were excluded from the calculation because they were anti-dilutive.

9. Non-Cash Share-Based Employe

9. Non-Cash Share-Based Employee Compensation	3 Months Ended
	Mar. 31, 2021
Compensation Related Costs [Abstract]
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 $32 for the three months ended March 31, 2021, compared with $30 for the same period last year. The Company considers its non-cash share-based employee compensation expenses as a component of cost of products and selling, general and administrative expenses. There was no non-cash share-based employee compensation expense capitalized as part of capital expenditures or inventory for the periods presented. The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of stock option grants under this plan. The non-cash share-based employee compensation expense recorded in the three months ended March 31, 2021, was calculated using certain assumptions. Such assumptions are described more comprehensively in Note 10 (Share-Based Employee Compensation) of the Notes to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. A summary of activity under the Company’s stock option plans during the three months ended March 31, 2021, is presented below: As of January 1, 2021 Stock Options Wgt. Avg. Exercise Price ($) Per Share Wgt. Avg. Remaining Contractual Life (Years) Wgt. Avg. Grant Date Fair Value ($) Per Share Aggregate Intrinsic Value ($) Outstanding 489,000 3.96 7.23 1.51 20,000 Vested 185,800 4.15 5.65 1.55 20,000 Nonvested 303,200 3.84 8.20 1.49 — Period activity Issued — — — — — Exercised — — — — — Forfeited — — — — — Expired — — — — — As of March 31, 2021 Outstanding 489,000 3.96 6.98 1.51 220,450 Vested 235,800 4.20 5.69 1.55 80,410 Nonvested 253,200 3.73 8.18 1.47 140,040 Restricted Stock Units 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, 2020, and issued 24,505 shares of common stock to Mr. Johnson. On August 24, 2020, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $40 per award (resulting in total aggregate grant-date fair value of $240), which will vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company. On April 24, 2020, upon the resignation of former director Ryan Turner, the Company, at the direction of the Board of Directors, accelerated the vesting of Mr. Turner’s unvested restricted stock units granted September 6, 2019, and September 6, 2018, and issued 10,389 and 4,050 shares of common stock, respectively. On September 6, 2019, the Company granted to each non-employee director restricted stock units with a grant-date fair value of $40 per award (resulting in total aggregate grant-date fair value of $280), which will vest in five equal, annual installments beginning with the first anniversary of the grant date, subject to the director’s continued service through such date, provided that, if the director makes himself available and consents to be nominated by the Company for continued service as a director, but is not nominated for the Board for election by stockholders, other than for good reason, as determined by the Board in its discretion, then the restricted stock units shall vest in full as of the director’s last date of service as a director of the Company. On June 4, 2018, the Company granted to each non-employee director restricted stock units with a grant fair value of $20 per award (resulting in total aggregate grant-date fair value of $140), which vested on June 4, 2019. There were 122,533 and 147,038 restricted stock units outstanding as of March 31, 2021, and December 31, 2020, respectively. The Company recorded non-cash restricted stock unit compensation expense of $103 for the three months ended March 31, 2021, compared with $21 for the same period last year.

10. Commitments and Contingenci

10. Commitments and Contingencies	3 Months Ended
	Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
10. Commitments and Contingencies	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. 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. Although we believe the pandemic has not had a material adverse impact on our business through 2021, it may have the potential of doing so in the future. The extent of the potential impact of the COVID-19 pandemic on our business and financial performance will depend on future developments, which are uncertain and, given the continuing evolution of the COVID-19 pandemic and the global responses to curb its spread, cannot be predicted. In addition, the pandemic has significantly increased economic uncertainty and caused a worldwide economic downturn. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its national and, to some extent, global economic impact, including any recession that may occur in the future. Purchase Commitments As of March 31, 2021, the Company had purchase commitments for inventory totaling approximately $9,540. Significant Customers Sales to United States government agencies represented approximately $2,116 (24.71%) of the Company’s net total sales for the three months ended March 31, 2021, compared with approximately $6,576 (60.4%) for the same period last year. Accounts receivable from agencies of the United States government were $1,490 as of March 31, 2021, compared with approximately $2,832 at the same date last year.

11. Debt

11. Debt	3 Months Ended
	Mar. 31, 2021
Debt Disclosure [Abstract]
11. Debt	BK Technologies, Inc., a wholly owned subsidiary of the Company, entered into the $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, 2020. 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 Technologies, Inc., are guarantors of BK Technologies, Inc.’s obligations under the Credit Agreement, in accordance with the terms of the Continuing Guaranty. On January 26, 2021, the Company extended this revolving credit facility for one year, through January 31, 2022. Borrowings under the Credit Agreement will bear interest at a rate per annum equal to one-month LIBOR or zero if the LIBOR is less than zero) plus a margin of 1.90% (2.011% as of March 31, 2021). The line of credit, as modified, is to be repaid in monthly payments of interest only, payable in arrears, commencing on February 1, 2020, with all outstanding principal and interest to be payable in full at maturity (January 31, 2022). 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 March 31, 2021, and the date of filing this report. As of March 31, 2021, and the date of filing this report, the Company had an outstanding balance of $800 and $470, respectively and a net balance availability of $3,387 and $2,644 respectively under the Credit Agreement. 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%.

12. Leases

12. Leases	3 Months Ended
	Mar. 31, 2021
Leases [Abstract]
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. The original term of the lease was through December 31, 2021. Lease costs consisted of the following: Three Months Ended March 31, 2021 March 31, 2020 Operating lease cost $ 166 $ 143 Short-term lease cost — 2 Variable lease cost 32 32 Total lease cost $ 198 $ 177 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2021 March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows (fixed payments) $ 211 $ 122 Operating cash flows (liability reduction) 171 82 ROU assets obtained in exchange for lease obligations: Operating leases 14 9 Other information related to operating leases was as follows: March 31, 2021 Weighted average remaining lease term (in years) 5.93 Weighted average discount rate 5.50 % Maturity of lease liabilities as of March 31, 2021, were as follows: March 31, 2021 Remaining nine months of 2021 $ 428 2022 582 2023 594 2024 607 2025 618 Thereafter 722 Total payments 3,551 Less: imputed interest (526 ) Total liability $ 3,025

1. Condensed Consolidated Fin_2

1. Condensed Consolidated Financial Statements (Policies)	3 Months Ended
	Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The condensed consolidated balance sheet as of March 31, 2021, the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, have been prepared by BK Technologies Corporation (the “Company” or “we”), and are unaudited. On March 28, 2019, BK Technologies, Inc., the predecessor of BK Technologies Corporation, implemented a holding company reorganization, which resulted in BK Technologies Corporation becoming the direct parent company of, and the successor issuer to, BK Technologies, Inc. For the purpose of this report, references to “we” or the “Company” or its management or business at any period prior to the holding company reorganization (March 28, 2019) refer to those of BK Technologies, Inc. as the predecessor company and its subsidiaries and thereafter to those of BK Technologies Corporation and its subsidiaries, except as otherwise specified or to the extent the context otherwise indicates. In the opinion of management, all adjustments, which include normal, recurring adjustments, necessary for a fair presentation, have been made. All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet at December 31, 2020, 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, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 3, 2021. The results of operations for the three months ended March 31, 2021, are not necessarily indicative of the operating results for a full year.
Principles of Consolidation	The accounts of the Company have been included in the accompanying consolidated financial statements. 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. (formerly 1347 Property Insurance Holdings, Inc.), made through FGI 1347 Holdings, LP, a consolidated VIE.
Fair Value	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 March 31, 2021, and December 31, 2020, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, notes payable, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments. The Company uses observable market data assumptions (Level 1 inputs, as defined in accounting guidance) that it believes market participants would use in pricing investment in securities.
Recently Adopted Accounting Pronouncements	In 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.

4. Inventories, net (Tables)

4. Inventories, net (Tables)	3 Months Ended
	Mar. 31, 2021
Inventory Disclosure [Abstract]
Components of inventory	March 31, 2021 December 31, 2020 Finished goods $ 2,350 $ 1,975 Work in process 3,441 3,288 Raw materials 4,720 4,178 $ 10,511 $ 9,441

7. Stockholders' Equity (Tables

7. Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2021
Stockholders' equity:
Changes in consolidated stockholders' equity	Common Stock Shares Common Stock Amount Additional Paid-In Capital Accumulated Deficit Treasury Stock Total Balance at December 31, 2019 13,929,381 $ 8,357 $ 26,095 $ (6,043 ) $ (5,133 ) $ 23,276 Share-based compensation expense-stock options — — 30 — — 30 Share-based compensation expense-restricted stock units — — 21 — — 21 Dividends declared ($0.02 per share) — — — (250 ) — (250 ) Net loss — — — (1,192 ) — (1,192 ) Repurchase of common stock — — — — (243 ) (243 ) Balance at March 31, 2020 13,929,381 $ 8,357 $ 26,146 $ (7,485 ) $ (5,376 ) $ 21,642 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 $ (6,797 ) $ (5,402 ) $ 22,524 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 Dividends declared ($0.02 per share) — — — (251 ) — (251 ) Net loss — — — (694 ) — (694 ) Balance at March 31, 2021 13,986,871 $ 8,392 $ 26,466 $ (7,742 ) $ (5,402 ) $ 21,714

8. Loss per Share (Tables)

8. Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2021
Earnings Per Share [Abstract]
Computation of basic and diluted loss per share	Three Months Ended March 31, 2021 March 31, 2020 Numerator: Net loss (for basic and diluted loss per share) $ (694 ) $ (1,192 ) Denominator for basic loss per share weighted average shares 12.517,412 12,555,108 Effect of dilutive securities: Options and restricted stock units — — Denominator for diluted loss per share weighted average shares 12,517,412 12,555,108 Basic and diluted loss per share $ (0.06 ) $ (0.09 )

9. Non-Cash Share-Based Emplo_2

9. Non-Cash Share-Based Employee Compensation (Tables)	3 Months Ended
	Mar. 31, 2021
Compensation Related Costs [Abstract]
Summary of stock option activity	As of January 1, 2021 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 ($) Outstanding 489,000 3.96 7.23 1.51 20,000 Vested 185,800 4.15 5.65 1.55 20,000 Nonvested 303,200 3.84 8.20 1.49 — Period activity Issued — — — — — Exercised — — — — — Forfeited — — — — — Expired — — — — — As of March 31, 2021 Outstanding 489,000 3.96 6.98 1.51 220,450 Vested 235,800 4.20 5.69 1.55 80,410 Nonvested 253,200 3.73 8.18 1.47 140,040

12. Leases (Tables)

12. Leases (Tables)	3 Months Ended
	Mar. 31, 2021
Leases [Abstract]
Lease cost	Three Months Ended March 31, 2021 March 31, 2020 Operating lease cost $ 166 $ 143 Short-term lease cost — 2 Variable lease cost 32 32 Total lease cost $ 198 $ 177
Supplemental cash flow information related to leases	Three Months Ended March 31, 2021 March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows (fixed payments) $ 211 $ 122 Operating cash flows (liability reduction) 171 82 ROU assets obtained in exchange for lease obligations: Operating leases 14 9
Other information related to operating leases	March 31, 2021 Weighted average remaining lease term (in years) 5.93 Weighted average discount rate 5.50 %
Maturity of lease liabilities	March 31, 2021 Remaining nine months of 2021 $ 428 2022 582 2023 594 2024 607 2025 618 Thereafter 722 Total payments 3,551 Less: imputed interest (526 ) Total liability $ 3,025

3. Allowance for Doubtful Acc_2

3. Allowance for Doubtful Accounts (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Allowance For Doubtful Accounts
Allowance for doubtful accounts on trade receivables	$ 50
Accounts receivable, gross	$ 4,616	$ 6,516

4. Inventories, net (Details)

4. Inventories, net (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Finished goods	$ 2,350	$ 1,975
Work in process	3,441	3,288
Raw materials	4,720	4,178
Total inventory	$ 10,511	$ 9,441

4. Inventories, net (Details Na

4. Inventories, net (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Reserves for slow-moving, excess, or obsolete inventory	$ 809	$ 520

5. Income Taxes (Details Narrat

5. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income tax (expense) benefit	$ 0	$ 0
Net deferred tax assets	$ 4,300

7. Stockholders' Equity (Detail

7. Stockholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Common Stock
Beginning balance, shares	13,962,366	13,929,381
Beginning balance, amount	$ 8,377	$ 8,357
Common stock issued under restricted stock units, shares	24,505
Common stock issued under restricted stock units, amount	$ 15
Ending balance, shares	13,986,871	13,929,381
Ending balance, amount	$ 8,392	$ 8,357
Additional Paid-in Capital
Beginning balance, amount	26,346	26,095
Common stock issued under restricted stock units, amount	(15)
Share-based compensation expense-stock options	32	30
Share-based compensation expense-restricted stock units	103	21
Dividends declared ($0.02 per share)
Net loss
Ending balance, amount	26,466	26,146
Accumulated Deficit
Beginning balance, amount	(6,797)	(6,043)
Share-based compensation expense-stock options
Share-based compensation expense-restricted stock units
Dividends declared ($0.02 per share)	(251)	(250)
Net loss	(694)	(1,192)
Ending balance, amount	(7,742)	(7,485)
Treasury Stock
Beginning balance, amount	(5,402)	(5,133)
Share-based compensation expense-stock options
Share-based compensation expense-restricted stock units
Dividends declared ($0.02 per share)
Net loss
Repurchase of common stock		(243)
Ending balance, amount	(5,402)	(5,376)
Beginning balance, amount	22,524	23,276
Share-based compensation expense-stock options	32	30
Share-based compensation expense-restricted stock units	103	21
Dividends declared ($0.02 per share)	(251)	(250)
Net loss	(694)	(1,192)
Repurchase of common stock	0	(243)
Ending balance, amount	$ 21,714	$ 21,642

8. Loss per Share (Details)

8. Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net loss (numerator for basic and diluted income per share)	$ (694)	$ (1,192)
Denominator:
Denominator for basic loss per share weighted average shares	12.517412	12,555,108
Effect of dilutive securities:
Options and restricted stock units	0	0
Denominator
Denominator for diluted loss per share weighted average shares	12.517412	12,555,108
Net loss per share-basic and diluted	$ (0.06)	$ (0.09)

8. Loss per Share (Details Narr

8. Loss per Share (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stock Options
Antidilutive securities	489,000	448,400
Restricted Stock Units
Antidilutive securities	122,533	85,621

9. Non-Cash Share-Based Emplo_3

9. Non-Cash Share-Based Employee Compensation (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)$ / sharesshares
Compensation Related Costs [Abstract]
Outstanding stock options | shares	489,000
Vested stock options | shares	185,800
Nonvested stock options | shares	303,200
Issued stock options | shares	0
Exercised stock options | shares	0
Forfeited stock options | shares	0
Expired stock options | shares	0
Outstanding stock options | shares	489,000
Vested stock options | shares	235,800
Nonvested stock options | shares	253,200
Outstanding wgt. avg. exercise price	$ 3.96
Vested wgt. avg. exercise price	4.15
Nonvested wgt. avg. exercise price	3.84
Issued wgt. avg. exercise price	0
Exercised wgt. avg. exercise price	0
Forfeited wgt. avg. exercise price	0
Expired wgt. avg. exercise price	0
Outstanding wgt. avg. exercise price	3.96
Vested wgt. avg. exercise price	4.20
Nonvested wgt. avg. exercise price	$ 3.73
Outstanding contractual life	6 years 11 months 23 days
Vested contractual life	5 years 8 months 8 days
Nonvested contractual life	8 years 2 months 5 days
Outstanding grant date fair value	$ 1.51
Vested grant date fair value	1.55
Nonvested grant date fair value	1.49
Issued grant date fair value	0
Exercised grant date fair value	0
Forfeited grant date fair value	0
Expired grant date fair value	0
Outstanding grant date fair value	1.51
Vested grant date fair value	1.55
Nonvested grant date fair value	1.47
Issued aggregate intrinsic value	$ 20,000
Exercised aggregate intrinsic value | $	$ 20,000
Forfeited aggregate intrinsic value	$ 0
Expired aggregate intrinsic value	$ 0
Outstanding aggregate intrinsic value | $	$ 220,450
Vested aggregate intrinsic value | $	80,410
Nonvested aggregate intrinsic value | $	$ 140,040

9. Non-Cash Share-Based Emplo_4

9. Non-Cash Share-Based Employee Compensation (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Compensation Related Costs [Abstract]
Restricted stock units outstanding	122,533		147,038
Non-cash share-based employee compensation expense	$ 103	$ 21

10. Commitments and Contingen_2

10. Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Purchase commitments	$ 9,540
Sales to United States Government	2,116	$ 6,576
Accounts receivable from US government	$ 1,490	$ 2,832

12. Leases (Details)

12. Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Operating lease cost	$ 166	$ 143
Short-term lease cost	0	2
Variable lease cost	32	32
Total lease cost	$ 198	$ 177

12. Leases (Details 1)

12. Leases (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows (fixed payments)	$ 211	$ 122
Operating cash flows (liability reduction)	171	82
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 14	$ 9

12. Leases (Details 2)

12. Leases (Details 2)	Mar. 31, 2021
Leases [Abstract]
Weighted average remaining lease term (in years)	5 years 11 months 5 days
Weighted average discount rate	5.50%

12. Leases (Details 3)

12. Leases (Details 3) $ in Thousands	Mar. 31, 2021USD ($)
Leases [Abstract]
Remaining nine months of 2021	$ 428
2022	582
2023	594
2024	607
2025	618
Thereafter	722
Total payments	3,551
Less: imputed interest	(526)
Total liability	$ 3,025