Company: BKTI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026668
Chunk: 28

Company: BK Technologies Corp
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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   The Fifth Third RLC agreement provided for customary events of default, including: (1) failure to pay principal, interest or fees under the RLC when due and payable; (2) failure to comply with other covenants and agreements contained in the Revolving Loan Commitment agreement and the other documents executed in connection therewith; (3) the making of false or inaccurate representations and warranties; (4) defaults 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, Fifth Third  may declare the entire unpaid balance immediately due and payable and/or exercise any and all remedial and other rights under the RLC agreement.
    
   As of  June 30, 2025, there were no outstanding borrowings under the Fifth Third RLC. 

   Note 11. 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 an expiration date of  June 30, 2027. The lease terms include an option to extend the lease agreement for an additional five (5) year term commencing  July 1, 2027 and terminating at midnight  June 30, 2032.  Annual rental, maintenance, and tax expenses