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Note 8 - Non-cash Share-based Employee Compensation
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

 

Note 8. Non-Cash Share-Based Employee Compensation

 

The Company’s stockholders approved the BK Technologies Corporation 2025 Incentive Compensation Plan (the “2025 Plan”) at the 2025 Annual Meeting of Stockholders of the Company (the “Annual Meeting”) held on June 18, 2025. The 2025 Plan was previously approved by the Company’s Board of Directors (the “Board”). The 2025 Plan replaces the 2017 Incentive Compensation Plan (the “Prior Plan”). No new awards will be granted under the Prior Plan after the date of the Annual Meeting. However, all awards granted under the Prior Plan that were outstanding on the date of the Annual Meeting will remain outstanding in accordance with their terms. The 2025 Plan authorizes the grant of equity-based and cash-based compensation awards to officers, directors, and employees of, and consultants to, the Company and its subsidiaries. Awards under the 2025 Plan may be granted in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards, and cash-based awards. There are 500,000 shares of the Company’s common stock reserved for issuance under the 2025 Plan. No awards may be granted under the 2025 Plan after March 11, 2035.

 

The stockholders of the Company also approved the BK Technologies Corporation Employee Stock Purchase Plan (the “ESPP”) at the Annual Meeting held on June 18, 2025. The ESPP was previously approved by the Board. The objective of the ESPP is to offer eligible employees of the Company and its designated subsidiaries the ability to purchase shares of the Company’s common stock at a discount, subject to various limitations under the ESPP. There are 150,000 shares of the Company’s common stock authorized for issuance under the ESPP.

 

Stock Options

 

The Company has employee and non-employee director share-based incentive compensation plans. Related to these programs, the Company recorded non-cash share-based employee compensation expense of $126 and $244 for the three and six months ended June 30, 2025, compared with $77 and $132 for the same periods last year, respectively. The Company considers its non-cash share-based employee compensation expenses as a component of cost of products and selling, general and administrative expenses. There was no non-cash share-based employee compensation expense capitalized as part of capital expenditures or inventory for the periods presented.

 

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of stock option grants under this plan. The non-cash share-based employee compensation expense recorded in the three and six months ended June 30, 2025, was calculated using certain assumptions. Such assumptions are described more comprehensively in Note 11 (Share-Based Employee Compensation) of the Notes to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

 

A summary of activity under the Company’s stock option plans during the six months ended June 30, 2025, is presented below:

 

      

Wgt. Avg.

  

Wgt. Avg.

  

Wgt. Avg.

     
      

Exercise

  

Remaining

  

Grant Date

  

Aggregate

 
  

Stock

  

Price ($)

  

Contractual

  

Fair Value

  

Intrinsic

 

As of January 1, 2025

 

Options

  

Per Share

  

Life (Years)

  

($) Per Share

  

Value (000s)

 

Outstanding

  285,100   13.65   7.72   6.39   5,885 

Vested

  109,840   15.23   6.25   5.46   2,094 

Nonvested

  175,260   12.66   8.63   6.97   3,791 
                     

Period activity

                    

Issued

  53,428   34.62   9.15   26.92   — 

Exercised

  18,110   13.37   —   6.41   555 

Forfeited

  7,880   18.17   —   10.66   180 

Expired

  2,220   15.49   —   5.99   40 
                     

As of June 30, 2025

                    

Outstanding

  310,318   16.57   7.50   16.57   9,179 

Vested

  120,090   14.88   6.03   5.75   3,873 

Nonvested

  190,228   17.69   8.48   12.38   5,625 

 

Restricted Stock Units

 

The Company recorded non-cash restricted stock unit compensation expense of $299 and $574 for the three and six months ended June 30, 2025, compared with $148 and $269 for the same periods last year, respectively.

 

A summary of non-vested restricted stock under the Company’s non-employee director share-based incentive compensation plan is as follows:

 

      

Weighted Average

 
  

Number of

  

Grant Date

 
  

Shares

  

Price per Share

 

Unvested as of January 1, 2025

  44,546  $12.99 

Granted

  45,789   24.34 

Vested and issued

  (13,475)  12.26 

Cancelled/forfeited

  —   — 

Unvested as of June 30, 2025

  76,860  $19.88