8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 11, 2021

BK Technologies Corporation

(Exact name of registrant as specified in its charter)

Nevada	001-32644	83-4064262
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation or organization)	File No.)	Identification Number)

7100 Technology Drive, West Melbourne, FL	32904
(Address of principal executive offices)	(Zip Code)

(321) 984-1414

(Registrant’s telephone number including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 $.60 per share	BKTI	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02 Results of Operations and Financial Condition

On November 11, 2021, BK Technologies Corporation (the “Company”) announced its financial and operating results for the third quarter ended September 30, 2021, in the press release furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

Also on November 11, 2021, the Company’s management discussed the Company’s financial results for the third quarter ended September 30, 2021, and certain aspects of the Company’s business plan, on an earnings conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.2.

Item 7.01 Regulation FD Disclosure

The information disclosed in Item 2.02 above is incorporated herein by this reference.

The information contained in Items 2.02 and 7.01 to this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, is being “furnished” and, as such, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated November 11, 2021, issued by the Company.
99.2	November 11, 2021 Earnings Conference Call Transcript

2

SIGNATURES

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

	BK TECHNOLOGIES CORPORATION
Date: November 12, 2021	By:	/s/ William P. Kelly
		William P. Kelly
		Executive Vice President and Chief Financial Officer

3

EX-99.1

EXHIBIT 99.1

BK Technologies Announces Third Quarter 2021 Results

WEST MELBOURNE, FL November 11, 2021 / BK Technologies Corporation (NYSE American: BKTI) (the “Company” or “BK”) today announced financial and operating results for the third quarter and nine months ended September 30, 2021. The Company will host a conference call today, November 11, 2021, at 9:00 AM eastern time.

Recent Financial and Operational Highlights

· Third quarter revenue of $12.6 million decreased slightly as compared to revenue of $12.8 million in the third quarter of 2020.

· The Company experienced increased order activity for third quarter driven by strong demand for its new BKR 5000 Digital P25 portable communications technology (“BKR 5000”)

· The Company enters fourth quarter with backlog at highest level in five years and more than double the $5.9 million backlog at December 31, 2020, due to a combination of strong order activity coupled with extended product delivery schedules associated with supply chain constraints

· High backlog positions Company to achieve sequential revenue growth in the typically seasonally slow fourth quarter and provides momentum looking into 2022

John Suzuki, BK’s Chief Executive Officer, commented, “We continue to see strong demand and order activity for our BKR 5000, from a variety of state and federal agencies as they upgrade their portable communications technology. The BKR 5000 enables the highest level of dependable communications technology and is especially well suited to mission critical fire & rescue operations, as well as forestry and land management across large geographic footprints.

“The reliable, real-time capabilities of our radios are generating tremendous marketplace interest and we experienced robust order activity during the third quarter. However, we, like many others in our industry and beyond, continue to face material shortages and increased lead times related to nationwide supply chain constraints. These supply chain issues have continued to impact our ability to convert customer orders to shipments. We are working closely with our vendors and logistics partners as we navigate this challenging time, and we have also strengthened our supply chain management to drive proactive measures to fulfill demand and service our customers. Additionally, our inventory has increased as a result of the unpredictability of the supply chain, however, when the supply chain stabilizes we anticipate returning to more normalized inventory levels.

“With our product portfolio today, we believe we are in a strong position to continuing winning new contracts and customers. Looking forward, our balance sheet is strong, providing us with the financial flexibility to explore acquisition opportunities to complement our organic growth ,” Mr. Suzuki concluded.

Third Quarter 2021 Financial Review

Revenue decreased 1% to $12.6 million, compared with $12.8 million for the third quarter of last year. The gross profit margin was 33% compared to 41% in the same prior year period largely due to product sales mix and cost increases for material and freight.

Selling, General & Administrative expenses totaled $4.5 million, compared with $4.2 million for the same quarter last year, reflecting the timing of engineering expenses as well as increased sales commissions.

Operating loss totaled approximately ($370,000) compared with an operating income of $1.2 million, as adjusted, in the third quarter of last year.

The Company recorded net loss ($2.6) million or $(0.15) per basic and diluted share, compared with net income of $790,000, or $0.06 per basic and diluted share, as adjusted, for the third quarter of last year. In the third quarter of 2021 the Company recognized an unrealized loss of ($2.2) million on its investment in FG Financial Group (FGF), compared with an unrealized loss of ($300,000) in the third quarter of 2020.

On July 1, 2021, the Company changed its accounting to apply the material burden at the time of purchase receipts. Prior to that date, the Company applied the material burden at the time the inventory was issued to work in progress. The financial statements for 2020 and 2021 have been adjusted to apply the accounting change.

First Nine Months 2021 Financial Review

Revenue for the first nine months of 2021 totaled $32.5 million, compared with $33.6 million for the first nine months of 2020. The gross profit margin was approximately 36% compared with 40% for the same period last year largely due to product sales mix and cost increases for material and freight.

Selling, General & Administrative expenses totaled $13.0 million, compared with $13.3 million for the same period of 2020.

Operating loss totaled approximately ($1.4) million compared with operating income of $5,000, as adjusted, for the first nine months of last year.

The Company recorded net loss of ($1.4) million, or $(0.10) per basic and diluted share, compared with a net loss of $(970,000), or $(0.08) per basic and diluted share, for the first nine months of 2020.

Working capital totaled approximately $25.6 million, of which approximately $21.7 million was comprised of cash, cash equivalents, and trade receivables. This compares with the working capital at year-end of last year of approximately $16.2 million, as adjusted, of which $13.3 million was comprised of cash, cash equivalents, and trade receivables.

Conference Call and Webcast

The Company will host a conference call and webcast for investors today, November 11, 2021, at 9:00 AM eastern time.

Shareholders and interested parties may participate in the conference call by dialing (888) 506-0062 and international participants should dial (973) 528-0011 and use access code 272417. The call will also be webcast at www.bktechnologies.com. Please allow extra time prior to the call to visit the site.

An online archive of the webcast will be available on the Company’s web site for thirty (30) days following the call at www.bktechnologies.com. A replay of the conference call will be available one hour after completion of the call until November 18, 2021, by dialing (877) 481-4010 and international participants should dial (919) 882-2331. All callers must use passcode 43435 to access the replay.

About BK Technologies

BK Technologies Corporation manufactures high-specification, American-made communications equipment of unsurpassed reliability and value for use by public safety professionals and government agencies. BK Technologies is honored to serve these heroes with reliable equipment when every moment counts. The Company’s common stock trades on the NYSE American market under the symbol “BKTI”. Maintaining its headquarters in West Melbourne, Florida, BK Technologies can be contacted through its web site at www.bktechnologies.com or directly at 1-800-821-2900.

Forward-Looking Statements

This press release contains certain forward-looking statements that are made pursuant to the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern the Company’s operations, economic performance and financial condition and are based largely on the Company’s beliefs and expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks, some of which have been, and may further be, exacerbated by the COVID-19 pandemic, 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 BKR Series product line; 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; 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; our ability to manage our growth; our ability to identify potential candidates for, and to consummate, acquisition, disposition or investment transactions; risks incumbent to being a noncontrolling interest stockholder in a corporation; impact of the COVID-19 pandemic on the companies in which the Company holds investments; impact of our capital allocation strategy; risks related to maintaining our brand and reputation; impact of government regulation; impact of rising health care costs; risks related to 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; 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 of future sales of shares of our common stock. Certain of these factors and risks, as well as other risks and uncertainties, are stated in more detail in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in the Company’s subsequent filings with the SEC. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Company Contact:

IMS Investor Relations
John Nesbett/Jennifer Belodeau
bktechnologies@imsinvestorrelations.com

(203) 972-9200

# # #

(Financial Tables to Follow)

BK TECHNOLOGIES CORPORATION

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	September 30, 2021			December 31, 2020 *
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	14,087		$	6,826
Trade accounts receivable, net		7,646			6,466
Inventories, net		15,981			10,545
Prepaid expenses and other current assets		1,941			1,878
Total current assets		39,655			25,715
Property, plant and equipment, net		4,454			3,566
Right-of-use (ROU) asset		2,497			2,887
Investment in securities		2,324			2,014
Deferred tax assets, net		4,116			4,300
Other assets		88			112
Total assets	$	53,134		$	38,594
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,520		$	5,119
Accrued compensation and related taxes		1,522			1,635
Accrued warranty expense		666			791
Accrued other expenses and other current liabilities		836			307
Dividends payable		336			250
Short-term lease liability		437			525
Credit facility		1,470			—
Notes payable-current portion		264			82
Deferred revenue		992			757
Total current liabilities		14,043			9,466
Notes payable, net of current portion		673			247
Long-term lease liability		2,385			2,702
Deferred revenue		2,789			2,551
Total liabilities		19,890			14,966
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $1.00 par value; 1,000,000 authorized shares; none issued or outstanding		—			—
Common stock; $.60 par value; 20,000,000 authorized shares; 18,264,736 and 13,962,366 issued and 16,814,336 and 12,511,966 outstanding shares at September 30, 2021, and December 31, 2020, respectively		10,958			8,377
Additional paid-in capital		35,701			26,346
Accumulated deficit		(8,013	)		(5,693	)
Treasury stock, at cost, 1,450,400 shares at September 30, 2021, and December 31, 2020, respectively		(5,402	)		(5,402	)
Total stockholders’ equity		33,244			23,628
Total liabilities and stockholders’ equity	$	53,134		$	38,594

See notes to condensed consolidated financial statements.

* The amounts as of December 31, 2020, have been adjusted to reflect the change in inventory accounting method.

1

BK TECHNOLOGIES CORPORATION

Condensed Consolidated Statements of Operations

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

	Three Months Ended						Nine Months Ended
	September 30, 2021			September 30, 2020 *			September 30, 2021			September 30, 2020 *
Sales, net	$	12,626		$	12,760		$	32,526		$	33,586
Expenses
Cost of products		8,488			7,448			20,914			20,316
Selling, general and administrative		4,508			4,158			13,034			13,265
Total expenses		12,996			11,606			33,948			33,581
Operating (loss) income		(370	)		1,154			(1,422	)		5
Other (expense) income:
Net interest (expense) income		(19	)		(6	)		(37	)		(4	)
Loss on disposal of property, plant and equipment		(6	)		—			(6	)		—
(Loss) gain on investment in securities		(2,157	)		(291	)		310			(797	)
Other expense		(14	)		(65	)		(59	)		(144	)
Total other (expense) income		(2,196	)		(362	)		208			(945	)
(Loss) income before income taxes		(2,566	)		792			(1,214	)		(940	)
Income tax expense		—			(2	)		(184	)		(30	)
Net (loss) income	$	(2,566	)	$	790		$	(1,398	)	$	(970	)
Net (loss) income per share-basic:	$	(0.15	)	$	0.06		$	(0.10	)	$	(0.08	)
Net (loss) income per share-diluted:	$	(0.15	)	$	0.06		$	(0.10	)	$	(0.08	)
Weighted average shares outstanding-basic		16,795,356			12,505,096			14,307,847			12,518,587
Weighted average shares outstanding-diluted		16,795,356			12,517,493			14,307,847			12,518,587

See notes to condensed consolidated financial statements.

* The amounts as of September 30, 2020, and the amounts prior to July 1, 2021, have been adjusted to reflect the change in inventory accounting method.

EX-99.2

EXHIBIT 99.2

Transcript of

BK Technologies Corporation

BKTI Third Quarter & Nine Months 2021 Earnings Call

November 11, 2021

Participants

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Timothy Vitou - President, BK Technologies Corporation

William Kelly - Chief Financial Officer, BK Technologies Corporation

Analysts

Orin Zvi Hirschman - AIGH Investment Partners LP

Presentation

Operator

Good morning, ladies and gentlemen, and welcome to the BK Technologies Corporation Conference Call for the Third Quarter 2021. This call is being recorded. All participants have been placed in a listen-only mode. Following, management’s remarks, the call will be opened to questions.

Before turning the call over to our Chief Executive Officer, Mr. John Suzuki, for opening remarks, I will provide the following safe harbor statement.

Statements made during this conference call that are not based on historical facts are forward-looking statements. Such statements include, but are not limited to, projections or statements of future goals and targets regarding the company’s revenue and profits. These statements are subject to known and unknown factors and risks.

The company’s actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, and some of the factors and risks that could cause or contribute to such material differences have been described in yesterday’s press release, and in BK’s filings with the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements.

I will now turn the call over to John Suzuki, CEO of BK Technologies. Mr. Suzuki, you may begin.

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Thanks, everyone, for joining today. I’d like to start by reviewing some highlights of our operations and financial results during the quarter. Then I’ll turn it over to Tim Vitou, BK’s President and then to our Executive Vice President and Chief Financial Officer, Bill Kelly, to dive deeper into our financial results.

Transcript Provided by

We’ll conclude by opening up the call for a brief Q&A.

During Q3, we saw strong demand and order activity for our portable communications technology, particularly the BKR 5000. The product is gaining excellent traction in the marketplace, as new and existing customers at the state and federal levels look to modernize their radio fleet. Unfortunately, this better-than-expected demand was not fully reflected in our results for the quarter.

The supply-chain challenges that we and many other companies are contending with has extended our product delivery schedules. That said, the strong demand we are seeing has resulted in BK exiting the third quarter with the highest backlog in 5 years, more than double the $5.9 million reported backlog at the end of 2020.

This backlog sets us up well for what is typically a seasonally slow fourth quarter and provides momentum as we move into 2022.

As you would expect, the supply-chain challenges also impacted our gross margin, as we saw increased material and freight costs. We’re hopeful that the extra costs will return to more normal levels later in 2022 as we optimize and normalize our supply-chain. As we continue to scale our business, and as customers continue to upgrade to BKR Series products, we believe the company is well positioned to see margin improvement.

We have taken multiple initiatives to deal with the supply-chain challenges. Of note, we recently announced the appointment of Sean Conroy as Director of Supply Chain. Sean brings 20 years of supply-chain management expertise, and he is already doing a great job leading the charge to minimize short-term supply chain disruptions, maximize our efficiency and convert customer orders to shipments.

Second, we strategically increased our inventory levels to ensure we have certain components on hand when we need them. We expect inventory to return to normal levels as our supply-chain stabilize. It is our priority that our customers who have come to rely on our mission-critical technology receive their orders in a timely fashion.

Finally, I’d like to address the status of the BKR 9000. We were originally shooting to get the product launched this year. When moving into the manufacturing phase, it became apparent that additional development time was necessary. It is essential for us to get this product right for our customers.

Hence, I don’t want to provide a specific date as to when we will launch the product. But rest assured, it is a priority to get the best product launched, when it is ready for the market. From a financial performance standpoint, with our existing products exceeding our expectations, rest assured, that we have plenty of horsepower to drive growth, and our salespeople are more than busy as we head into 2022.

To conclude my remarks, I like to reiterate how impressed and encouraged I am by the dedication and hard work of our team.

Transcript Provided by

With our product portfolio today, we are in a strong position to continue winning new contracts and customers. We also have a solid balance sheet and the financial flexibility to explore acquisition opportunities that will complement our growth. As we continue scaling BK Technologies to be a leader in the communication industry.

At this point, I’d like to pass the call to Tim Vitou, our President to highlight some of the customer traction we’ve seen for the BKR 5000 since we last spoke. Tim?

Timothy Vitou - President, BK Technologies Corporation

Thank you, John, and good morning, everyone. The BK 5000 is being very well received in the market. We continue to win contracts and orders across the country, including the following. In August, we received a $2.5 million purchase order from the USDA Forest Service for the BKR 5000. As part of the 5-year Blanket Purchase Agreement with the USDA, we announced back in May of 2021. We also received a purchase order for the BKR 5000 from the National Interagency Fire Center, better known as NIFC, and radio cache, for the BKR 5000 for their Wildland Management Program.

In September, we received purchase orders for the BKR 5000 from Grand Teton National Park in Wyoming and the Mississippi Forestry Commission, and a selection for purchase from the Arizona Department of Forestry and Fire Management.

Also in September, the BKR 5000 was selected for purchase by our longtime customer. The Nevada Bureau of Land Management, as it conducts a lifecycle replacement program for its fire and land management portable communications technology. In October, the BKR 5000 was selected for purchase and deployment by the U.S. Army at Camp Arifjan, in Arifjan, Kuwait.

Additionally, the BKR 5000 was selected for the Helena, Montana Fire Department, as part of its lifecycle replacement program for the aging radios in its wildland fire radio fleet. These continued selections, upgrades and orders represent the confidence that both our new and existing customers have in our products.

As you know, many of our customers are frontline workers and first responders operating with zero margin for error. And they choose our best-in-class state-of-the-art portable communications technologies to maintain this standard in life threatening situations. We take great pride in that, and we look forward to getting our products in the hands of more of these heroes.

And, I’ll turn the call over to Bill Kelly, our Executive Vice President and Chief Financial Officer, who will review the financial and operating highlights. Bill?

William Kelly - Chief Financial Officer, BK Technologies Corporation

Thanks, Tim. The following is a summary of our financial and operating results for the periods ending September 30, 2021. Sales for the third quarter totaled approximately $12.6 million, compared with $12.8 million for the same quarter last year. Gross profit margins as a percentage of sales in the third quarter were 32.8% compared with 41.6% for the third quarter last year. As John mentioned, this is primarily due to sales mix, and cost increases related primarily to material and freight.

Transcript Provided by

Selling, general and administrative expenses, or SG&A, for the third quarter totaled approximately $4.5 million, or 35.7% of sales, compared with $4.2 million, or 32.6% of sales for the same quarter last year. This increase is related to the timing of engineering prototype material as well as sales commissions.

For the third quarter of 2021, we recognized an unrealized loss of approximately $2.2 million on our investment in FG Financial Group, compared with an unrealized loss of $291,000 for the third quarter last year.

Our net loss for the third quarter 2021 totaled approximately $2.6 million or $0.15 per basic and diluted share, compared with a net income of approximately $790,000 or $0.06 per basic and diluted share for the same quarter last year.

As of September 30, 2021, working capital totaled approximately $25.6 million, of which approximately $21.7 million is comprised of cash, cash equivalents and trade receivables. This compares with working capital totaling $16.2 million at 2020 year-end, which included $13.3 million of cash, cash equivalents and trade receivables. Our capital return program has paid 22 consecutive quarterly dividends, with the most recent being paid on October 18, 2021.

I would also like to mention that on July 1, 2021, the company changed its accounting to apply manufacturing overhead at the time of purchase receipts. Prior to that date, the company 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. The comparable 2020 periods have been adjusted to reflect this change, which will be detailed in the 10-Q. The change did not have a material effect on the operating loss, the net loss or loss per share for 3 and 9 months.

This concludes my remarks. I’ll now move on to the question-and-answer session of the conference call.

I would like to remind everyone that we do not provide financial or operating guidance on a quarterly or annual basis.

Operator

Thank you. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] We did have a question come in from [Walter Ballenger] [ph] from Mayflower Capital. Walter, your line is live.

Q: Hey, guys, thanks for taking my questions. So are you seeing any shift in revenue composition with the improved performance of the 5000?

Transcript Provided by

Timothy Vitou - President, BK Technologies Corporation

Hi, Walter. This is Tim. Thanks for the question. We are seeing a change in shift in some of the revenue mix. The BKR 5000 contribution to the overall revenue mix is growing. And especially exciting to me is with the 5000, we’re also attracting some additional new customers, which is expanding the revenue base. So we’re getting not only a bigger contribution from that product, but a better expansion into some new market verticals.

Q: Okay. Great. And then, are you able to pass some of the price increases that you’re seeing onto your customers?

Timothy Vitou - President, BK Technologies Corporation

Again, this is Tim, Walter. Thanks again for that question. In some cases, we are capable of passing on some cost increases to our customers. However, a great deal of our business is done utilizing contracts, due to our customers being in the government agencies. Most of these contract vehicles prevent us from passing price increases on to the customers at any one specific time. There is only a couple of different times throughout the year we can pass things on. So not everyone can be passed the price increase.

Q: Got it. Okay. I think that’s it for me. So, thanks a lot for taking my questions, guys, and good luck.

Timothy Vitou - President, BK Technologies Corporation

Thank you.

Operator

Thank you. [Operator Instructions] And the next question is coming from Orin Hirschman from AIGH Investment Partners. Orin, your line is live.

Q: Hi, thank you. So, obviously, there’s been a lot of expectations with the new product release, that was really going to expand your TAM dramatically, and get the company on a growth track. Delays, albeit some pre-orders, et cetera, what still gives you the confidence that this is just a hiccup at this point in time in terms of the production aspects. And are you still feeling so confident that you can compete with the major competitors that’s out there with a product that’s at least as good or superior?

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Hi, Orin. It’s John Suzuki. Thank you for that question. So I can take the second part of your question first, which is getting a product out into the market that can compete. I mean, that is definitely our priority. And those were the design goals that we put forth.

So the confidence level we have, and part of this is a little bit understanding, the hardware development cycle. So when you go through hardware developments, it’s a very much an iterative approach. So you do your design, you get it into manufacturing, you build your boards, and then you do your testing to see if it meets those performance criteria.

So as I said in my opening remarks, we put it into manufacturing. We built the boards and we determine that the performance was not where we wanted it to be. And so, the decision was to bring it back into the design phase and re-tweak the boards of the design, so that the next time we go into manufacturing we’ll see an improvement or achieve those goals.

Transcript Provided by

So with hardware development, it’s an iterative approach. Unfortunately, it’s not something that you can do very quickly. So every time you do a design spin on a hardware, you have to go through design of the board, you have to manufacture the board, then you populate the boards, and then you bring it into manufacturing. So all of that takes weeks of time.

And it is unclear how many iterations that we will have to do before we get a final product that we believe will compete effectively in the marketplace. But we’re confident that we have the right team, we have the right platform. And that, when the time is right, when the product is right, when it meets those goals, at that point we’re going to do a press release and we’re going to launch it into the marketplace.

Q: I don’t know if you said that, you could say it, but what’s the total backlog at this point for that product?

John Suzuki - Chief Executive Officer, BK Technologies Corporation

So the comment, we have total backlog at the end of Q3, the comment that we made during our statement was that it’s over double our ending backlog of 2020, which was $5.9 million, so it’s over double.

Q: Yeah, it’s over double, meaning if you can – can I apologize, it’s over double compared meaning within that the new product? I’m sorry if I didn’t follow that.

John Suzuki - Chief Executive Officer, BK Technologies Corporation

No, that’s fine, Orin. Our total backlog.

William Kelly - Chief Financial Officer, BK Technologies Corporation

Yeah, that’s total backlog that includes legacy product as well as the new BKR, the piece of the backlog that is 9000, I wouldn’t describe as material at this point, Orin.

Q: Okay. So the orders though that you have seen for that product are like early sample orders, like small volumes that people want to play with, before they give you more volume orders?

Timothy Vitou - President, BK Technologies Corporation

Hey, Orin, this is Tim. The presale orders that we received are customers who are doing just that. They’re looking at the product in some cases. Some are utilizing funding. They know they’re going to switch to that platform, when it’s available and shipping in mass quantities. But they’re getting some early orders into the system. So it’s a kind of a mixed bag of things.

We also have a lot of different agencies, who are picking up products for comparison to other BK products like the BKR 5000. So, as Bill said, the total dollars is not necessarily material at this point, but it is several orders from several different types of customers.

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Q: Has anything changed in the competitive landscape for the 5000 in terms of they will be leading edge and have the capabilities that the customers want? Did anybody come out with a new gadget, so to speak?

Timothy Vitou - President, BK Technologies Corporation

Well, on the 5000 and the 9000, it’s 2 different type of customer basis.

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Sorry, Orin. Orin, [indiscernible] the 9000?

Q: I meant the 9000. Yeah, I’m sorry.

Timothy Vitou - President, BK Technologies Corporation

Okay.

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Yeah, so the market overall has not changed in terms of multiband products. There is still only 2 primary competitors that have products in that particular space.

Q: Okay. And then last 2 questions, if I may. One is just on that record backlog, can you characterize how much of it you think is just related to – or that is probably easier one to characterize it, probably both easy to characterize? How much is related to the shipment delays, meaning $2 million or $3 million sort of really going out the door already and you couldn’t do it versus the strength of incoming orders based on the customers’ increased demand for products?

John Suzuki - Chief Executive Officer, BK Technologies Corporation

I’m trying to think – sorry, Orin, you’re asking of the backlog, how much we could have shipped?

Q: Yeah, I could ask it that way, because what, ultimately, I’m looking for is the strength of the measure of the incoming orders, as opposed to the backlog being a composition. That’s a combo of that both incoming orders versus what’s stacking up and stuff you really hope to have shipped?

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Sure. It’s certainly weighted on the incoming order side. The demand is strong.

Q: Okay. That’s what I’m looking for. And lastly, can you just take us through, and again, my apologies for not being familiar with this, the FG Financial, what is that? What are you going to do with it? Does it affect the overall picture of the company’s financial strength? Just give us a quickie on that one.

William Kelly - Chief Financial Officer, BK Technologies Corporation

Orin, this is Bill. The investment in FG Financial, there are no plans to change that at this time. Generally speaking, that’s handled at the Board level with the Directors. The prospects for FG Financial, I believe, are viewed as positive. It was a challenging quarter for them in third quarter. But for now, I don’t have any plans that have been announced for that to change.

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Q: Okay. Where does it actually show up on the balance sheet? I wasn’t clear on that.

William Kelly - Chief Financial Officer, BK Technologies Corporation

That shows up on the other assets section of the balance sheet. Orin, if you look, it’s below current assets called investment in securities.

Q: Okay, got it. Thanks, again. Okay, great. Okay. Thanks very much.

Operator

Thank you. There were no other questions in queue at this time. I would like to hand the call back to the BK Technologies management team for any closing remarks.

John Suzuki - Chief Executive Officer, BK Technologies Corporation

Thank you, Paul. Thank you all for participating in today’s call. We look forward to speaking with you again, when we report our Q4 2021 results in March of 2022. All the best to all of you and have a great day on this November today.

Operator

Thank you, ladies and gentlemen. This does conclude today’s conference. You may disconnect at this time and have a wonderful day. Thank you for your participation.

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XML

Cover	Nov. 11, 2021
Cover [Abstract]
Entity Registrant Name	BK Technologies Corporation
Entity Central Index Key	0000002186
Document Type	8-K
Amendment Flag	false
Entity Emerging Growth Company	false
Document Period End Date	Nov. 11, 2021
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Incorporation State Country Code	NV
Entity File Number	001-32644
Entity Tax Identification Number	83-4064262
Entity Address Address Line 1	7100 Technology Drive
Entity Address City Or Town	West Melbourne
Entity Address State Or Province	FL
Entity Address Postal Zip Code	32904
City Area Code	321
Local Phone Number	984-1414
Security 12b Title	Common Stock, par value $.60 per share
Trading Symbol	BKTI
Security Exchange Name	NYSE