Note 1. Condensed Consolidated Financial Statements

Basis of Presentation

The condensed consolidated balance sheet as of June 30, 2026, the condensed consolidated statements of operations for the three and six months ended June 30, 2026, and 2025, the condensed consolidated statement of changes in stockholders' equity for the three and six months ended June 30, 2026, and 2025, and the condensed consolidated statements of cash flows for the six months ended June 30, 2026, and 2025, have been prepared by BK Technologies Corporation (the “Company,” “we,” “us,” “our”), and are unaudited but include all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2025, has been derived from the Company’s audited consolidated financial statements at that date.

These condensed consolidated financial statements have been prepared in accordance with the requirements of Article 8 of Regulation S-X and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 12, 2026. The results of operations for the three and six months ended June 30, 2026, and 2025, are not necessarily indicative of the operating results for a full year.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2026, as compared to those disclosed in the consolidated financial statements included in the Company’s Annual Report on the Form 10-K for the year ended December 31, 2025.

Principles of Consolidation

The accounts of the Company have been included in the accompanying condensed consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company consolidates entities in which it has a controlling financial interest. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20% to 50%), the Company’s investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected or at cost.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, and other liabilities. As of June 30, 2026, and December 31, 2025, the carrying amount of cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, and other liabilities approximated their respective fair value due to the short-term nature and maturity of these instruments.

The Company does not discuss recent pronouncements that are not anticipated to have a material impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, an accounting standard update to improve income statement expenses disclosures. The standard requires more detailed information related to the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each interim and annual income statement’s expense caption, as applicable. This authoritative guidance can be applied prospectively or retrospectively and will be effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company does not expect the adoption of ASU 2024-03 to have a material effect on its condensed consolidated financial statements.

Segment Reporting Disclosures

The Company has one reportable segment - Land Mobile Radio (LMR) Products and Solutions.

The LMR segment provides radio devices that are hand-held (portable) or installed in vehicles (mobile) and operate on private radio systems that are Project 25 ("P25") compliant. The Company derives revenue primarily in North America and manages its business activities on a consolidated basis.

The LMR radio products are used by public safety agencies of the federal government, state and local municipality agencies on their P25 compliant radio systems. The radio systems operate on frequencies managed by the Federal Communications Commission ("FCC"). The Company’s chief operating decision maker ("CODM") is the senior executive committee that includes the chief executive officer, chief financial officer, and the chief technology officer.

The accounting policies of the LMR segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the LMR segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets.

The CODM uses operating income and net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the LMR segment or into other parts of the entity, the development of public safety applications utilizing cellular technology or for acquisitions. Net income is used to monitor budget versus actual results. The CODM also uses net income in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

The table below summarizes the significant categories regularly reviewed by the CODM for the three and six months ended June 30, 2026, and 2025, respectively:

(a) Other segment items include interest income (expense) and foreign currency exchange gains/losses.