Company: BKTI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033457
Chunk: 2

Company: BK Technologies Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 4
Chunk 2
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 financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

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      Table of Contents

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of our business. We assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance. In the opinion of management, while the outcome of such claims and disputes cannot be predicted with certainty, our ultimate liability in connection with these matters is not expected to have a material effect on our results of operations, financial position or cash flows, and the amounts accrued for any individual matter are not material. However, legal proceedings are inherently uncertain. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending on the size of loss or our income in that particular period.

During the quarter ended September 30, 2025, we had a cyber incident that impacted certain portions of our information technology (IT) systems. We have completed an investigation into the cybersecurity incident and remediated and mitigated cybersecurity concerns related thereto.  For the avoidance of doubt, all critical IT systems have been restored and are operational at this time. We believe that we maintain a sufficient level of insurance coverage related to such events, and the related incremental costs incurred to date are immaterial. In October 2025, a class action lawsuit was filed against us related to the cyber incident. The suit is currently pending in the circuit court of Brevard County, Florida. We intend to vigorously defend this