Company: BKTI
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001437749-25-016253
Chunk: 29

Company: BK Technologies Corp
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 29
---
 “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 for the facility are approximately $610.
    
   In  February 2020, the Company entered into a lease for 6,857 square feet (not in thousands) of office space at Sawgrass Technology Park, 1619 NW 136th Avenue in Sunrise, Florida, for a period of 64 months commencing  July 1, 2020. Annual rental, maintenance, and tax expenses for the facility will be approximately $196 for the first year, increasing by approximately 3% for each subsequent 12-month period.
    
   Lease costs consisted of the following:

       Three Months Ended  
   March 31, 2025    March 31, 2024  
 Operating lease cost  $136  $135 
 Variable lease cost   33   33 
 Total lease cost  $169  $168 

       15

   Note 13. Leases (continued)
    
   Supplemental cash flow information related to leases was as follows:

       Three Months Ended  
   March 31, 2025    March 31, 2024