Item 3.03 Material Modification to Rights of Security Holders.
The Board of Directors of BK Technologies Corporation, a Nevada corporation (the “Company”), has approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, par value $0.60 per share (the “Common Stock”), at a ratio of one (1)-for-five (5) (the “Reverse Stock Split”).
Reasons for the Reverse Stock Split
The Reverse Stock Split is being effected because the Company believes the anticipated increase in the market price of the Common Stock resulting from the Reverse Stock Split will benefit the Company and its stockholders. The Company cannot provide assurance that such increase will occur or that, if such increase does occur, that it will be sustained.
Effects of the Reverse Stock Split
Effective Date; Symbol; CUSIP Number.
The Reverse Stock Split will become effective on April 21, 2023 (the “Effective Date”), at 5:00 p.m., Eastern Time. The Common Stock should begin trading on a split-adjusted basis at the commencement of trading on April 24, 2023, under the Company’s existing trading symbol, “BKTI.” The Company’s Common Stock has been assigned a new CUSIP number, 05587G 203, in connection with the Reverse Stock Split.
Split Adjustment; Treatment of Fractional Shares.
On the Effective Date, the total number of shares of Common Stock held by each stockholder of the Company will be exchanged for the number of shares of Common Stock equal to (i) the number of issued and outstanding shares of Common Stock held by each such stockholder immediately prior to the Reverse Stock Split, divided by (ii) five, with such resulting number of shares rounded up to the nearest whole share. As a result, no fractional shares will be issued in connection with the Reverse Stock Split and no cash or other consideration will be paid in connection with any fractional shares that would otherwise have resulted from the Reverse Stock Split. Also on the Effective Date, all equity awards outstanding immediately prior to the Reverse Stock Split will be adjusted to reflect the Reverse Stock Split.
Certificated and Non-Certificated Shares.
Stockholders who hold their shares in direct registration book-entry form with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC (“AST”), or in electronic form at brokerage firms, do not need to take any action, as the effect of the Reverse Stock Split will automatically be reflected in their accounts. Stockholders holding paper certificates will be contacted by AST, which is also acting as the exchange agent for the Reverse Stock Split, regarding the return of outstanding stock certificates to the Company.
Nevada State Filing.
The Reverse Stock Split will be effected pursuant to the Company’s filing of a Certificate of Change (the “Certificate”) with the Secretary of State of the State of Nevada. The Certificate will become effective at 5:00 p.m. on the Effective Date.
No Stockholder Approval Required.
The Reverse Stock Split was approved by the Board of Directors of the Company and given effect pursuant to and in accordance with Nevada law and, as such, no stockholder approval of the Reverse Stock Split is required.
Capitalization.
As of March 23, 2023, the Company was authorized to issue 50,000,000 shares of Common Stock, and there were 16,998,187 shares of Common Stock issued and outstanding. In addition, the Company was authorized to issue 1,000,000 shares of preferred stock, and there were no shares of preferred stock issued and outstanding. Immediately following the effectiveness of the Reverse Stock Split, the Company will be authorized to issue 10,000,000 shares of Common Stock, and there will be approximately 3.4 million shares of Common Stock issued and outstanding (subject to adjustment due to the treatment of fractional shares). There will be no shares of preferred stock issued and outstanding. The Reverse Stock Split will have no effect on the par value of the Common Stock or the par value or authorized number of the preferred stock.
Immediately after the Reverse Stock Split, each stockholder’s percentage ownership interest in the Company and proportional voting power will remain unchanged, except for minor changes and adjustments that will result from the treatment of fractional shares. The rights and privileges of the holders of shares of Common Stock will be unaffected by the Reverse Stock Split.