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BK Technologies Signs Transformational Agreement with East West Manufacturing
Based in Atlanta, Georgia, East West is an integrated design, engineering, manufacturing, and distribution services partner for original equipment manufacturers and distributors throughout North America and Europe. It is a portfolio company of MSD Partners. Under the terms of the Agreement, East West will make, in aggregate, a $2,000,000 investment in the Company. This includes the purchase of 77,520 shares of BK at a price of $12.90 per share, representing an investment of $1,000,000. East West will also receive Warrants to purchase 135,500 shares of BK at a strike price of $15.00 per share. The Warrants have a term of five years from the issuance date.
John Suzuki, CEO of BK Technologies, commented, "We are pleased to announce the expansion of our existing manufacturing relationship with East West, a proven, longtime partner who has provided reliable and efficient support to our in-house manufacturing operations for many years. Moving to an asset-light model is an important transformational step that we are undertaking after careful analysis and evaluation. Outsourcing the manufacturing of our products will simplify our supply chain management, which has been a challenging part of our operations in recent years, and will enable us to continue to reduce both production and product costs. By moving supply chain and production management to a partner, we can more intently focus on our core competencies - the development and marketing of LMR communications technology - while lowering costs and ensuring we continue to meet all federal compliance requirements."
Manufacturing of BK Technologies products is expected to begin at East West during the first quarter of 2024 with the full operational transition expected to be completed within the ensuing six months. The move will take place in stages and BK Technologies is taking precautions to prevent any production or delivery delays associated with the factory transition.
Kyle Cerminara, Chairman of the Board of BK Technologies stated, "The transition of our manufacturing operation to a trusted and reliable partner is an important strategic step that will help ensure efficient fulfillment of demand for our products while also strengthening margins over time. This is a partnership in every sense of the word. We are particularly pleased that East West has aligned themselves with BK even further by virtue of their purchase of BK common shares. This share purchase and desire to hold BK Warrants demonstrates East West's recognition of BK's valuable suite of products and their belief in the long-term market opportunity for our Company."
- Strategic shift to asset-light strategy expected to significantly improve working capital, reduce inventory, and lower production costs
- East West to become shareholder of BK Technologies
Based in Atlanta, Georgia, East West is an integrated design, engineering, manufacturing, and distribution services partner for original equipment manufacturers and distributors throughout North America and Europe. It is a portfolio company of MSD Partners. Under the terms of the Agreement, East West will make, in aggregate, a $2,000,000 investment in the Company. This includes the purchase of 77,520 shares of BK at a price of $12.90 per share, representing an investment of $1,000,000. East West will also receive Warrants to purchase 135,500 shares of BK at a strike price of $15.00 per share. The Warrants have a term of five years from the issuance date.
John Suzuki, CEO of BK Technologies, commented, "We are pleased to announce the expansion of our existing manufacturing relationship with East West, a proven, longtime partner who has provided reliable and efficient support to our in-house manufacturing operations for many years. Moving to an asset-light model is an important transformational step that we are undertaking after careful analysis and evaluation. Outsourcing the manufacturing of our products will simplify our supply chain management, which has been a challenging part of our operations in recent years, and will enable us to continue to reduce both production and product costs. By moving supply chain and production management to a partner, we can more intently focus on our core competencies - the development and marketing of LMR communications technology - while lowering costs and ensuring we continue to meet all federal compliance requirements."
Manufacturing of BK Technologies products is expected to begin at East West during the first quarter of 2024 with the full operational transition expected to be completed within the ensuing six months. The move will take place in stages and BK Technologies is taking precautions to prevent any production or delivery delays associated with the factory transition.
Kyle Cerminara, Chairman of the Board of BK Technologies stated, "The transition of our manufacturing operation to a trusted and reliable partner is an important strategic step that will help ensure efficient fulfillment of demand for our products while also strengthening margins over time. This is a partnership in every sense of the word. We are particularly pleased that East West has aligned themselves with BK even further by virtue of their purchase of BK common shares. This share purchase and desire to hold BK Warrants demonstrates East West's recognition of BK's valuable suite of products and their belief in the long-term market opportunity for our Company."
