Company: BKTI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033457
Chunk: 22

Company: BK Technologies Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 respectively. The measurement and recognition of credit losses involves the use of judgment and represents management’s estimate of expected lifetime credit losses based on historical experience and trends, current conditions, and forecasts. The Company’s assessment of expected credit losses includes consideration of historical credit loss experience, the aging of account balances, customer concentrations, customer creditworthiness, and current and expected economic, market and industry factors affecting the Company’s customers, including their financial condition. The Company evaluates its experience with historical losses and then applies this historical loss ratio to financial assets with similar characteristics. The Company  may also establish an allowance for credit losses for specific receivables when it is probable that the receivable will not be collected and the loss can be reasonably estimated. If the Company’s actual collections experience changes, revisions to the allowance  may be required.  Amounts are written off against the allowance when all attempts to collect a receivable have failed, and reversals of previously reserved amounts are recognized if a specifically reserved item is settled for an amount exceeding the previous estimate.  Based on information available, management believes the allowance for credit losses as of  September 30, 2025 and  December 31, 2024 is adequate.

   Note 4. Inventories, Net
    
   Inventories, which are presented net of allowance for slow moving, excess, and obsolete inventory, consisted of the following:

       September 30, 2025    December 31, 2024  
 Finished goods  $7,771  $3,428 
 Work in process   3,177   4,610 
 Raw materials   8,942   11,292 
   19,890   19,330 
 Inventory reserve   (1,315)  (1,694)
  $18,575  $17,636 

   Allowances for slow-moving, excess, or obsolete inventory are used to state the Company’s inventories at the lower of cost or net realizable value. The allowances were approximately $1,315 and $1,694 as of  September 30, 2025 and   December 31, 2024. 

   Note 5. Income Taxes 
    
               For the three and nine months ended  September 30, 2025, the Company recorded an income tax expense of $1,452 and $2,397, respectively, resulting in an effective tax rate of 20.