Company: BKTI
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001437749-25-009464
Chunk: 465

Company: BK Technologies Corp
Filing Date: 2025-03-27
Form: 10-K
Item: Item 2
Chunk 465
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 to be available to us. Although in the future we may encounter new product costs and competitive pricing pressures, the extent of their impact on gross margins, if any, is uncertain.

During the last three years, worldwide shortages of materials, including semiconductors and integrated circuits, have resulted in limited supplies and extended lead times for certain components used in our products. While we have been able to procure the material necessary to manufacture our products and fulfill customer orders, there have been delays, extended lead times and increased costs within our supply chain that improved through fiscal year 2023 and had significantly less impact on our operations for 2024. The impact on our operations of such shortages, or additional shortages that may surface, is uncertain, but could potentially impact our future sales, manufacturing operations and financial results.

      18

Selling, General and Administrative Expenses

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

SG&A expenses for the year ended December 31, 2024, totaled approximately $21.2 million (27.7% of sales), compared with approximately $23.0 million (31.1% of sales) for the prior year.

Engineering and product development expenses for 2024 totaled approximately $7.8 million (10.2% of sales), compared with approximately $9.3 million (12.6% of sales) for the prior year.  For 2024, the Company also capitalized approximately $1.3 million of costs related to the development of the all-band BKR9500 mobile radio.  Engineering and product development expenses are primarily related to the continued design and development of BKR Series, a new line of portable and mobile radios. These development activities are the main focus of our engineering team. The precise date for developing and introducing new products is uncertain and can be impacted by, among other things, supply chain shortages and the potential economic effects of the conflicts in Ukraine and the Middle East in coming quarters.

Marketing and selling expenses for the year ended December 31, 2024, totaled approximately $6.2 million (8.1% of sales), compared with approximately $6.1 million (8.2% of sales) for the year 2023. Marketing and selling expenses for 2024 remained consistent with 2023 levels reflecting steady staff-related and other sales and go