Company: BKTI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033457
Chunk: 46

Company: BK Technologies Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 46
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4. 

Other Income (Expense)

We recorded net interest income of approximately $94,000 for the quarter ended September 30, 2025, compared with approximately $1,000 net interest expense for the third quarter of fiscal year 2024.  For the nine months ended September 30, 2025, net interest income totaled approximately $136,000, compared with net interest expense of approximately $281,000 for the nine-month period last year.  Net interest expense for the nine months of 2024 was primarily the result of our Alterna IPSA Line of Credit, which was paid in full in September 2024 and terminated in October 2024.

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On January 25, 2024, the Company redeemed its Series B common membership interests (the “Interests”) of FG Holdings LLC and withdrew from FG Holdings LLC. In exchange for its Interests, the Company received 52,000 shares of our Common Stock, with an approximate fair value of $0.7 million on the date of the transaction and recorded a realized loss of approximately $0.1 million on the investment during the first quarter of 2024.  The shares received by the Company are held as treasury stock, increasing the total number of treasury shares held by the Company to 342,080.

Income Taxes

We recorded approximately $1.5 million and $247,000 tax expense for the three months ended September 30, 2025, and 2024, respectively.  For the nine months ended September 30, 2025, and 2024, we recorded $2.4 million and $0.5 million tax expense, respectively

Our income tax provision is based on the effective tax rate for the year. The tax expense in any period may 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, we may experience fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

As of September 30, 2025, our net deferred tax assets totaled approximately $5.5 million and were primarily derived from capitalized research and development expenses and deferred revenue.

In order to fully utilize the net deferred tax assets, we will need to generate sufficient taxable income in future years. We