Company: BKTI
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001437749-25-016253
Chunk: 20

Company: BK Technologies Corp
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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    December 31, 2024  
 Finished goods  $3,717  $3,194 
 Work in process   3,877   4,210 
 Raw materials   8,639   10,232 
  $16,233  $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 $1,624 as of  March 31, 2025, compared with approximately $1,694 as of  December 31, 2024.

   Note 5. Income Taxes 
    
   For the three months ended  March 31, 2025, the Company recorded an income tax expense of $670, resulting in an effective tax rate of 24.8%.  The Company's taxable income is generated in the United Sates and taxed at a federal and state statutory rate of 26.7%. Relative to the federal and state statutory rate, the effective tax rate for the three months ended  March 31, 2025, was reduced by the tax impact of research and development tax credits.
    
   For the three months ended  March 31, 2024, the Company recorded an income tax expense of $21.  The effective tax rate for the three months ended  March 31, 2024, was 3.0%. Relative to the federal and state statutory rate, the effective tax rate for the three months ended  March 31, 2024, was primarily impacted by the tax benefit for research and development tax credits for 2024 as compared to projected income before tax.

       10

   Note 5. Income Taxes (continued)
    
    Based on our analysis of all available evidence, both positive and negative, we have concluded that, except for the capital loss carryforward of approximately $0.8 million, we will have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets. Accordingly, we recorded a decrease in the valuation allowance of approximately $3.6 million as of  December 31, 2024. 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