Company: BKTI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033457
Chunk: 47

Company: BK Technologies Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 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.

Based on our analysis of all available evidence, both positive and negative, we have concluded that, except for the capital loss carryforward of approximately $802,000, we will have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets. 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 September 30, 2025.

On July 4, 2025, new U.S tax legislation (referred to as the “One Big Beautiful Bill Act” or “OBBBA”) was enacted in the U.S. The OBBBA makes permanent the extension of certain provisions of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. Additionally, the OBBBA makes changes to certain U.S. corporate tax provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing the impact of the OBBBA on its consolidated financial statements.

Liquidity and Capital Resources

For the nine months ended September 30, 2025, net cash provided by operating activities totaled approximately $16.4 million, compared with cash provided by operating activities of approximately $9.0 million for the same fiscal year period of 2024. Cash provided by operating activities for the nine months ended September 30, 2025, was primarily related to net income of $9.3 million and an increase of $4.5 million in accounts payable, partially offset by an increase of $1.8 million in inventories. Cash provided by operating activities for the nine months ended September 30, 2024, was primarily related to net income of $4.7 million and a $5.3 million reduction in inventory, somewhat offset by a