What changed in this filing

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Item 9A. Controls and Procedures

2025-02-07 compared with 2024-02-14 · 342 added, 273 removed, 842 unchanged (42% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

The Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of November 30, 2023 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934.

Our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of November 30, 2024 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date in ensuring that information required to be filed in this annual report was recorded, processed, summarized and reported within the time period required by the rules and regulations of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

1 unchanged sentence

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of November 30, 2023.

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management assessed the effectiveness of our internal control over financial reporting as of November 30, 2024.

Management based this assessment on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting.

Management’s assessment included an evaluation of the design of our internal control over financial reporting.

Based on this evaluation management concluded that as of November 30, 2024 our internal control over financial reporting was effective based on those criteria.

3 unchanged sentences

OTHER INFORMATION

Insider Adoption or Termination of Trading Arrangements

On November 7, 2024 , Luan Pham , the Company’s Chief Marketing Officer , adopted a trading plan intended to satisfy Rule 10b5 - 1 (c) to sell up to 33,483 shares of Company common stock between February 12, 2025, and December 31, 2025, subject to certain conditions.

On November 21, 2024 , Northeast Industrial Partners LLP adopted a trading plan intended to satisfy Rule 10b5 - 1 (c) to sell up to 50,000 shares of Company common stock between February 20, 2025, and December 31, 2025, subject to certain conditions.

On November 22, 2024 , Lisa Wager , the Company's Chief Governance Officer and Corporate Secretary , adopted a trading plan intended to satisfy Rule 10b5 - 1 (c) to sell up to 12,500 shares of Company common stock between February 20, 2025, and December 31, 2025, subject to certain conditions.

On November 22, 2024 , Herbert Hughes , the Company’s Chairman , adopted a trading plan intended to satisfy Rule 10b5 - 1 (c) to sell up to 12,000 shares of Company common stock between February 20, 2025, and December 31, 2025, subject to certain conditions.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Consolidated Balance Sheets as of November 30, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Loss for the years ended November 30, 2023 and 2022

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended November 30, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended November 30, 2024 and 2023

6 unchanged sentences

We have audited the accompanying consolidated balance sheets of Byrna Technologies, Inc.

and Subsidiaries (the “Company”) as of November 30, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of November 30, 2023 and 2022, and the results of their consolidated operations and their consolidated cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

and Subsidiaries (the “Company”) as of November 30, 2024 and 2023, and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of November 30, 2024 and 2023 and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America

Basis for Opinion

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The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Investment in Joint Venture

As discussed in Note 6 to the financial statements, on January 10, 2023, the Company acquired a 51% ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company’s operations and presence in South American markets, for $0.5 million.

In addition, the Company loaned the joint venture approximately $1.6 million.

The Company evaluated whether or not the entity should be consolidated under the variable interest and voting rights models and concluded that Byrna LATAM should not be consolidated.

The Company concluded that it has joint control of Byrna LATAM in that it does not have voting control of Byrna LATAM and does not have substantive participating rights that would result in the Company having control of Byrna LATAM.

We identified the consolidation analysis as a critical audit matter because the consolidation analysis, and specifically the determination of joint control, involved an interpretation of especially complex accounting principles generally accepted in the United States of America.

The evaluation of management’s determination of joint control required an increased extent of effort.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

We obtained an understanding, evaluated the design and implementation of the Company’s process and controls, and assessed whether the process and controls enable the Company to properly account for the transaction in accordance with generally accepted in the United States of America.

We read transaction agreements, traced and agreed the facts included in the Company’s accounting position memo to the agreements, evaluated the assumptions used to arrive at the determined conclusion.

We consulted with our consolidation subject matter experts to assess the reasonableness of the Company’s accounting conclusions.

Income Taxes – Valuation Allowances

As discussed in Notes 4 and 18 to the financial statements, the Company recognizes deferred income tax assets and liabilities for the estimated future tax effects attributable to temporary differences and carryforwards.

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized in the future.

Future realization of deferred tax assets depends on the existence of sufficient taxable income within the carryforward period.

Sources of taxable income include future reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies, and results of recent operations.

The Company’s valuation allowance for deferred tax assets was $0.8 million as of November 30, 2024, and the Company recorded a tax benefit of $5.8 million during the year ended November 30, 2024 resulting from the reversal of valuation allowance on deferred tax assets.

The Company’s determination of the valuation allowance, and its reversal, involves estimates.

Management’s primary estimate in determining whether the valuation allowance should be reversed is the projection of future sources of taxable income.

Auditing management’s estimate of future sources of taxable income, which affects the recorded valuation allowances, required a high degree of auditor judgment, including the need to involve our income tax specialists.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

We obtained an understanding, evaluated the design and implementation of the Company’s process and controls, and assessed whether the process and controls enable the Company to accurately estimate future sources of taxable income.

With the assistance of our income tax specialists, we considered relevant tax laws and regulations in evaluating the appropriateness of management’s estimates of future sources of taxable income.

We evaluated management’s ability to accurately estimate future sources of taxable income by comparing actual results to management’s historical estimates.

Further, we evaluated the reasonableness of management’s estimates of future sources of taxable income by comparing the estimates to historical sources of taxable income or losses and evaluating whether there have been any changes that would affect management’s estimates of future sources of taxable income.

We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.

With the assistance of our income tax specialists, we evaluated whether the estimated future sources of taxable income were of the appropriate character to utilize the deferred tax assets under tax law.

We evaluated management’s assessment that it is more likely than not that sufficient taxable income will be generated in the future to utilize the net deferred tax assets.

/s/ EisnerAmper LLP

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Prepaid expenses and other current assets

Marketable debt securities

Total current assets

4 unchanged sentences

Intangible assets, net

Investment in joint venture

Loan to joint venture

Deferred tax asset

$ 71,922 $ 52,314

16 unchanged sentences

133,029 130,426

Treasury stock ( 2,165,987 shares purchased as of November 30, 2023 and 2022)

Treasury stock ( 2,515,217 shares purchased as of November 30, 2024 and 2,165,987 shares purchased as of November 30, 2023)

( 21,253 ) ( 17,500 )

9 unchanged sentences

BYRNA TECHNOLOGIES INC.

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands, except share and per share data)

6 unchanged sentences

46,101 31,437

LOSS FROM OPERATIONS

PROFIT (LOSS) FROM OPERATIONS

6,671 ( 7,790 )

4 unchanged sentences

Loss from joint venture

Other expenses

( 42 ) ( 603 )

LOSS BEFORE INCOME TAXES

Other Income / (Expense)

INCOME (LOSS) BEFORE INCOME TAXES

7,084 ( 8,027 )

Income tax provision

Income tax provision (benefit)

( 5,708 ) 165

NET INCOME (LOSS)

12,792 ( 8,192 )

Foreign exchange translation adjustment

Unrealized gain (loss) on marketable securities

COMPREHENSIVE INCOME (LOSS)

$ 13,199 $ ( 8,628 )

COMPREHENSIVE LOSS

Net profit (loss) per share – basic

$ 0.57 $ ( 0.37 )

Net loss per share – basic and diluted

Net profit (loss) per share – diluted

$ 0.55 $ ( 0.37 )

Weighted-average number of common shares outstanding during the year – basic and diluted

Weighted-average number of common shares outstanding during the year – basic

22,504,938 21,919,624

Weighted-average number of common shares outstanding during the year – diluted

23,139,549 21,919,624

See accompanying notes to consolidated financial statements.

4 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$ 12,792 $ ( 8,192 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Stock-based compensation expense

2 unchanged sentences

Depreciation and amortization

Allowance for bad debt

Provision for inventory

(Recovery of) Provision for allowance for credit losses

(Recovery of) Provision for allowance for inventory

Loss on disposal of property, plant, and equipment

Loss from joint venture

Deferred tax (benefit) provision

( 5,837 ) 129

Changes in assets and liabilities, net of acquisition:

Accounts receivable

2,189 ( 4,254 )

Deferred revenue

1 unchanged sentence

( 5,852 ) 542

Prepaid expenses and other current asserts

Prepaid expenses and other current assets

Loan receivable

Accounts payable and accrued liabilities

1 unchanged sentence

( 669 ) ( 689 )

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

3,892 ( 13,826 )

NET CASH PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

1 unchanged sentence

( 2,347 ) ( 903 )

Purchases of marketable securities

Equity method investment in joint venture

Loan to joint venture

Cash paid for acquisitions, net of cash acquired

Purchase of patent rights

NET CASH USED IN INVESTING ACTIVITIES

2 unchanged sentences

Proceeds from stock option exercises

Repurchases of common stock

Payment of taxes withheld on issuance of restricted stock units

3 unchanged sentences

Effects of foreign currency exchange rate changes

( 61 ) ( 326 )

NET CHANGE IN CASH AND CASH EQUIVALENTS FOR THE YEAR

4 unchanged sentences

$ 16,829 $ 20,498

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Supplemental schedule of noncash operating activities:

Income taxes paid

INTEREST PAID

Operating lease liabilities arising from obtaining right-of-use assets

Unrealized gain on marketable securities

Reclassification of interest receivable from accounts receivable to other assets

Recapitalization of loan receivable in connection with the divesture of the joint venture

See accompanying notes to consolidated financial statements.

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124,402 1 ( 1 ) — — — — -

Reclassification of stock-based compensation due to modification

— — ( 1,043 ) — — — — ( 1,043 )

Settlement of obligation to grant stock options

Payment of taxes withheld on issuance of restricted stock units

— — ( 456 ) — — — — ( 456 )

1 unchanged sentence

— — 5,375 — — — — 5,375

Repurchase of common shares under Stock Buyback Plan

— — — — — ( 8,192 ) — ( 8,192 )

— — — — — ( 7,885 ) — ( 7,885 )

Foreign currency translation

6 unchanged sentences

611,994 1 ( 949 ) — — — — ( 948 )

Payment of taxes withheld on issuance of restricted stock units

— — ( 456 ) — — — — ( 456 )

Stock-based compensation

— — 3,403 — — — — 3,403

Repurchase of common shares under Stock Buyback Plan

— — — ( 349,230 ) ( 3,753 ) — — ( 3,753 )

— — — — — 12,792 — 12,792

Unrealized gain on marketable securities

— — — — — — 65 65

Foreign currency translation

12 unchanged sentences

The Company added pepper spray aerosols to their less-lethal defense product line due to an acquisition in 2022.

See Note 5, “Business Combinations” for additional information.

These products are sold in both the consumer and security professional markets.

The Company operates two manufacturing facilities, a 30,000 square foot facility in located in Fort Wayne, Indiana and a 20,000 square foot manufacturing facility located in Pretoria, South Africa.

On January 10, 2023 , the Company created a new joint venture with Fusady S.A.

("Fusady") located in Uruguay, to expand the Company's operations and presence in South American markets.

The Company holds 51 % of the stock in the joint venture entity, Byrna LATAM (formerly known as Uldawer S.A.

prior to its legal entity re-naming in October 2023), and the remaining 49 % of stock in Byrna LATAM is held by Fusady.

The Company operates two manufacturing facilities, a 30,000 square foot facility located in Fort Wayne, Indiana and a 20,000 square foot manufacturing facility located in Pretoria, South Africa.

In January 2023, the Company acquired a 51 % ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company’s operations and presence in South American markets.

On August 19, 2024, the Company sold it’s 51 % ownership interest to Fusady S.A.

for $ 1 (the “LATAM Share Purchase Agreement”) and entered into an exclusive distribution, manufacturing and licensing agreement with Byrna LATAM (the “LATAM Licensing Agreement”).

See Note 6 , "Investment in Joint Venture" for additional information.

3 unchanged sentences

The Company has funded operations through the issuance of common stock.

The Company generated $ 42.6 million in revenue and net loss of a $ 8.2 million for the year ended November 30, 2023 .

It is expected that the Company will incur significant losses before the Company’s revenues sustain its operations.

The Company’s future success is dependent upon its ability to raise sufficient capital or generate adequate revenue, to cover its ongoing operating expenses, and also to continue to develop and be able to profitably market its products.

The Company believes that existing cash and cash expected to be provided by future operating activities are adequate to satisfy its working capital, capital expenditure requirements, and other contractual obligations for at least the next 18 months.

Management projects that all cash needs will be met beyond one year from the time these financial statements are issued.

The Company generated $ 85.8 million in revenue and a net income of $ 12.8 million for the year ended November 30, 2024 .

Having achieved profitability this year, the Company is optimistic about its ability to sustain operations through its revenue streams.

The Company’s future success will depend on its continued ability to generate sufficient revenue to cover operating expenses and to effectively market its products.

BASIS OF PRESENTATION

These consolidated financial statements for the years ended November 30, 2023 and 2022 include the accounts of the Company and its subsidiaries.

These consolidated financial statements for the years ended November 30, 2024 and 2023 include the accounts of the Company and its subsidiary.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain prior year amounts have been reclassified to conform to the current year presentation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Actual results could differ from those estimates, and any such differences may be material to the Company's consolidated financial statements.

Significant estimates include assumptions about stock-based compensation expense, valuation for deferred tax assets, incremental borrowing rate on leases, valuation and carrying value of goodwill and other identifiable intangible assets, useful life of long-lived assets, allowance for doubtful accounts, inventory reserves, and allowance for sales returns.

Significant estimates include assumptions about stock-based compensation expense, valuation allowance for deferred tax assets, incremental borrowing rate on leases, useful life of long-lived assets, allowance for estimated credit losses, and inventory reserves.

BYRNA TECHNOLOGIES INC.

2 unchanged sentences

(Amounts expressed in US Dollars)

Business Combinations

Assets and liabilities acquired in a business combination are accounted for at fair value.

The Company records the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the acquisition dates.

The excess, if any, of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

If the fair value of the assets and liabilities acquired exceed the fair value of the purchase consideration, negative goodwill is recognized in the statement of operations.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from the utilization of trade names from a market participant perspective, useful lives and discount rates.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Goodwill resulting from a business combination is not amortized but is reviewed for impairment annually or more frequently when events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

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An impairment charge is recognized for any amount by which the carrying amount of goodwill exceeds its fair value.

The Company performs its review for impairment during the third quarter of each year.

In accordance with Accounting Standards Codification (ASC) 350, "Intangibles – Goodwill and Other," the Company historically conducted its annual goodwill impairment analysis in the third quarter of each fiscal year.

However, for the fiscal year ending November 30, 2024, the Company has elected to change the timing of its annual goodwill impairment review to the fourth quarter.

This decision was made to better align the analysis with the Company’s strategic planning processes and to ensure a more comprehensive evaluation of goodwill in light of the latest operational and market conditions.

The Company will continue to monitor goodwill for signs of impairment and perform interim assessments if necessary.

This change in timing will not impact the Company's overall goodwill balance or financial position, but it may enhance the accuracy and relevance of the impairment assessment conducted.

The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component.

The Company’s operations constitute a single reporting unit and goodwill is assessed for impairment at the Company as a whole.

At August 31, 2023 , the Company determined that there was no impairment of goodwill.

At November 30, 2024 and 2023, the Company determined that there was no impairment of goodwill.

Investment in Joint Venture

1 unchanged sentence

Under this method of accounting, the Company’s investment is recorded initially at cost and subsequently adjusted for its proportionate share of the net earnings or losses.

The Company's share of net income or net loss in Byrna LATAM can have a significant impact on the reported equity method investment activity and the carrying value on the investment.

In the event that net losses of Byrna LATAM reduce the equity method investment carrying amount to zero, additional net losses may be recorded if other investments, which are not accounted for under the equity method, are at-risk even if the Company has not committed to provide financial support to Byrna LATAM.

The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

In January 2023, the Company acquired a 51 % ownership interest in Byrna LATAM, a corporate joint venture formed to expand our operations and presence in South American markets, for $ 0.5 million.

The Company accounts for the investment in the joint venture using the equity method because the Company does not have voting control of Byrna LATAM.

Additionally, the Company does not have substantive participating rights that would result in us having control of Byrna LATAM.

In January 2023, the Company acquired a 51 % ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company’s operations and presence in South American markets, for $ 0.5 million.

The Company accounted for the investment in the joint venture using the equity method since the Company did not have voting control of Byrna LATAM.

Additionally, the Company did not have substantive participating rights that would result in the Company having control of Byrna LATAM.

On August 19, 2024, the Company sold it’s 51 % ownership interest to Fusady S.A.

for $ 1 (the “LATAM Share Purchase Agreement”) and entered into an exclusive distribution, manufacturing and licensing agreement with Byrna LATAM (the “LATAM Licensing Agreement”).

See Note 6 , "Investment in Joint Venture" for additional information.

The Company recorded its share of the joint venture’s losses during the year ended November 30, 2024 of less than $ 0.1 million, and losses of $ 0.6 million during the year ended November 30, 2023, in the Consolidated Statements of Operations and Comprehensive Income (Loss) as loss from joint venture.

The carrying value of the Company's investment in the joint venture at November 30, 2024 and 2023 is at zero in the Consolidated Balance Sheets.

Cash and Cash Equivalents

1 unchanged sentence

Investments acquired with maturity dates of three months or less are considered cash equivalents.

Allowance for Doubtful Accounts Receivable

The Company provides an allowance for its accounts receivable for estimated losses that may result from its customers’ inability to pay.

The Company determines the amount of the allowance by analyzing known uncollectible accounts, aged receivables, economic conditions, historical losses, and changes in customer payment cycles and its customers’ creditworthiness.

Amounts later determined and specifically identified to be uncollectible are charged or written off against this allowance.

To minimize the likelihood of uncollectability, the Company reviews its customers’ creditworthiness periodically.

Material differences may result in the amount and timing of expense for any period if the Company were to make different judgments or utilize different estimates.

Marketable Debt Securities

The Company considers debt securities acquired with maturities of greater than 90 days to be available for sale debt securities.

Available for sale debt securities are classified as either current or non-current assets based on the nature of the securities and their availability for use in current operations.

Securities with an effective maturity greater than one year from the balance sheet date are classified as non-current.

Available for sale debt securities are recorded at fair value and unrealized gains and losses are recorded within accumulated other comprehensive income.

The estimated fair value of the available for sale debt securities is determined based on quoted market prices or rates for similar instruments.

Allowance for Expected Credit Losses

The Company estimates the balance of its allowance for expected credit losses.

In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations.

The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions.

Account balances are written off against the allowance when it is determined that the receivable will not be recovered.

As of November 30, 2024, 2023, and 2022, the total allowance for credit losses recorded was $ 0.3 million, $ 0.6 million and less than $ 0.1 million, respectively.

BYRNA TECHNOLOGIES INC.

11 unchanged sentences

Expenditures for major renewals and betterments to property and equipment are capitalized, while expenditures for maintenance and repairs are charged as an expense as incurred.

Upon retirement or disposition, the applicable property amounts are deducted from the accounts and any gain or loss is recorded in the Consolidated Statements of Operations and Comprehensive Loss.

Upon retirement or disposition, the applicable property amounts are deducted from the accounts and any gain or loss is recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Useful lives are determined based upon an estimate of either physical or economic obsolescence or both.

4 unchanged sentences

These assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Finite-lived and indefinite-lived intangible assets are tested for impairment annually during the third quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that it is more likely than not that an intangible asset is impaired.

If the carrying amount of a finite-lived intangible asset or an indefinite-lived intangible asset exceeds its fair value, an impairment expense is recognized in an amount equal to that excess.

Indefinite-lived intangible assets are tested for impairment annually during the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that it is more likely than not that an intangible asset is impaired.

If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment expense is recognized in an amount equal to that excess.

If an impairment expense is recognized, the adjusted carrying amount becomes the asset's new accounting basis.

At November 30, 2024 and 2023, the Company determined that there was no impairment of intangible assets.

Impairment of Long-Lived Assets

9 unchanged sentences

The Company has not used derivative financial instruments such as forwards to hedge foreign currency exposures.

The Company measures equity investments, including investments in marketable equity securities, at fair value and recognizes unrealized gains (losses) through net income (loss).

The Company measures equity investments, including investments in marketable equity securities, at fair value and recognizes unrealized gains (losses) through other comprehensive income (loss).

The Company uses quoted prices in active markets for identical assets (consistent with the Level 2 definition in the fair value hierarchy) to measure the fair value of its marketable equity securities on a recurring basis.

32 unchanged sentences

The Company estimates returns using the expected value method, as there will likely be a range of potential return amounts.

The Company’s returns under the 14 -day money back guarantee for the years ended November 30, 2023 and 2022 was $ 0.07 million and $ 0.05 million, respectively.

The Company’s returns under the 14 -day money back guarantee for the years ended November 30, 2024 and 2023 was immaterial.

The Company sells to dealers and retailers for whom there is no money back guarantee but who may request a return or credit for unforeseen reasons or who may have agreed discounts or allowances to be netted from amounts invoiced.

The Company reserves for returns, discounts and allowances based on past performance and on agreement terms and reports revenue net of the estimated reserve.

The Company's reserve for returns, discounts, and allowances for the years ended November 30, 2023 and 2022 was $ 0.1 million and $ 0.02 million, respectively.

The Company's reserve for returns, discounts, and allowances for the years ended November 30, 2024 and 2023 was immaterial.

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products.

Shipping and handling costs associated with the distribution of finished products to customers, are recorded in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss and are recognized when the product is shipped to the customer.

Shipping and handling costs associated with the distribution of finished products to customers, are recorded in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) and are recognized when the product is shipped to the customer.

Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs.

Contract Liabilities

Current deferred revenue relates to unfulfilled e-commerce orders and sales of extended warranties for the years ended November 30, 2023 and 2022 .

Deferred revenue long-term primarily relates to sales of extended warranties.

Current deferred revenue for the years ended November 30, 2024 and 2023 includes $ 1.7 million in advance payments from customers, $ 0.1 million in current portion of sales from extended warranties and less than $0.1 million in unfulfilled e-commerce orders.

Long-term deferred revenue pertains to the non-current portion of extended warranty sales.

Marketing and Advertising

Marketing and advertising related costs are expensed as incurred and are included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss and were $ 4.6 million and $ 5.5 million during the years ended November 30, 2023 and 2022 , respectively.

Marketing and advertising related costs are expensed as incurred and are included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) and were $ 12.4 million and $ 4.6 million during the years ended November 30, 2024 and 2023 , respectively.

Research and Development

Research and development (“R&D”) costs are expensed as incurred and are included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Research and development (“R&D”) costs are expensed as incurred and are included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

R&D costs were $ 0.6 million and $ 0.6 million during the years ended November 30, 2024 and 2023 , respectively.

15 unchanged sentences

As of November 30, 2024 and 2023 , the Company has not recorded any uncertain tax positions in the consolidated financial statements.

If incurred, the Company recognizes interest and penalties related to income taxes on the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Loss.

If incurred, the Company recognizes interest and penalties related to income taxes on the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Income (Loss).

As of November 30, 2024 and 2023 , no accrued interest or penalties related to income taxes are included in the Consolidated Balance Sheets.

4 unchanged sentences

The resolution of tax matters is not expected to have a material effect on the Company’s consolidated financial statements.

Loss Per Share

Basic loss per share is computed by dividing net loss, reduced by dividends, by the weighted-average number of common shares outstanding for the year.

Diluted loss per share is computed by dividing net loss, reduced by dividends, by the weighted-average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and restricted stock units.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss), reduced by dividends, by the weighted-average number of common shares outstanding for the year.

Diluted earnings (loss) per share is computed by dividing net income (loss), reduced by dividends, by the weighted-average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and restricted stock units.

Stock-Based Compensation

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The measurement date for director awards is the date of grant and stock-based compensation costs for non-employees are recognized as expense over the vesting period on a straight-line basis.

Stock-based compensation is classified in the accompanying Statements of Operations and Comprehensive Loss based on the function to which the related services are provided, which is included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Stock-based compensation is classified in the accompanying Statements of Operations and Comprehensive Income (Loss) based on the function to which the related services are provided, which is included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

Forfeitures are accounted for as they occur.

The fair value of each stock option grant is estimated on the date of grant by using either the Black-Scholes or the quoted stock price on the date of grant, unless the awards are subject to market conditions in which case the Company uses the Monte Carlo simulation model.

Due to the Company’s limited history, the expected term of the Company’s stock options granted to employees has been determined utilizing the method as prescribed by the Security and Exchange Commission's ("SEC’s") Staff Accounting Bulletin, Topic 14.

The expected term for stock options granted to non-employees is equal to the contractual term of the options.

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A change in the exchange rates between a subsidiary’s functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction.

That increase or decrease in expected functional currency cash flows is recorded as other income (expense), in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

That increase or decrease in expected functional currency cash flows is recorded as foreign currency transaction income (loss), in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

BYRNA TECHNOLOGIES INC.

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Therefore, the foreign currency transaction gains or losses associated with the intercompany loans were recorded in accumulated other comprehensive loss in the Consolidated Balance Sheets for the fiscal years ended November 30, 2024 and 2023.

Other Comprehensive Loss

Other comprehensive loss consists of foreign currency translation adjustments.

For the fiscal years ended November 30, 2023 and 2022, the Company recorded foreign currency translation losses of $ 0.7 million and $ 0.3 million, respectively, on its intercompany loan, which is considered permanent or long-term nature.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) consists of foreign currency translation adjustments and unrealized gains or losses on available for sale securities.

For the fiscal years ended November 30, 2024 and 2023, the Company recorded foreign currency translation gain of $ 0.4 million and loss of $ 0.7 million, respectively, on its intercompany loan, which is considered permanent or long-term nature.

For the fiscal year ended November 30, 2024, the Company recorded unrealized gains on available for sale securities of $ 0.1 million.

Unrealized gains or losses recorded for the fiscal year ended November 30, 2023 was zero .

Fair Value Measurement

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Recent Accounting Pronouncements

Accounting Pronouncements Issued but Not Adopted

The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs").

not discussed below were assessed and determined to be either

not applicable or are expected to have minimal impact on the financial statements.

Recently Adopted Accounting Pronouncement

In 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016 - 13, Financial Instruments – Credit Losses (Topic 326 ):

Measurement of Credit Losses on Financial Instruments.

The guidance changes the impairment model used to measure credit losses for most financial assets.

A new forward-looking expected credit loss model replaced the existing incurred credit loss model and applies to the Company’s accounts receivables.

This is expected to generally result in earlier recognition of allowances for credit losses.

The Company adopted ASU 2016 - 13 on December 1, 2023, and it did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued ASU 2017 - 04, Intangibles - Goodwill and Other (Topic 350 ):

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An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

ASU 2017 - 04 will be effective for the Company so long as it remains a smaller reporting company beginning in December 2023.

Early adoption is permitted.

Adoption of ASU 2017 - 04 is not expected to have a material impact on the Company’s consolidated financial statements.

In 2016 , the FASB issued ASU 2016 - 13 , Financial Instruments - Credit Losses (Topic 326 ):

Measurement of Credit Losses on Financial Instruments (“ASU 2016 - 13” ).

The guidance changes the impairment model used to measure credit losses for most financial assets.

A new forward-looking expected credit loss model will replace the existing incurred credit loss model and will impact the Company’s accounts and other receivables, including the loan receivable from Byrna LATAM.

This is expected to generally result in earlier recognition of allowances for credit losses.

ASU 2016 - 13 will be effective for the Company beginning in December 2023 since it is a smaller reporting company.

Early adoption is permitted.

The Company adopted ASU 2017 - 04 on December 1, 2023, and it did not have a material impact on the Company’s financial statements.

Accounting Pronouncements Issued but Not Adopted

The FASB also issued ASU 2023 - 07:

Segment Reporting Topic 280 - Improvements to Reportable Segment Disclosures.

This update requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

This update will be effective for fiscal years beginning after December 15, 2023, and is to be applied retrospectively to all periods presented in the financial statements.

The Company believes the adoption of ASU 2023 - 07 will not have a material impact on the consolidated financial statements.

In 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures.

This update standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures.

This update is required to be effective for the Company for fiscal years beginning after December 15, 2024.

The Company is evaluating the effect that ASU 2023 - 09 will have on its financial statements and disclosures.

In March 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024 - 03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses.

This guidance focuses on the disaggregation of income statement expenses.

This update requires entities to provide more detailed disclosures about the components of significant expense categories, enhancing the transparency and decision-usefulness of financial statements.

The objective is to provide users with a clearer understanding of the nature and variability of expenses reported in the income statement.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently assessing the impact of ASU 2024 - 03 on our financial statement disclosures.

While we anticipate that the adoption of this standard will require additional disclosures, we do not expect it to have a material impact on our financial position or results of operations.

In January 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025 - 01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Clarifying the Effective Date, which provides clarification regarding the effective date for implementing the expense disaggregation disclosures outlined in ASU 2024 - 03.

This update is intended to ensure that entities have a clear understanding of the timeline for adopting the new disclosure requirements, thereby promoting consistency and comparability in financial reporting.

The clarification specifies that the standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the implications of ASU 2025 - 01 on our implementation timeline and disclosure practices.

We remain committed to providing transparent and comprehensive financial information and will ensure compliance with the clarified effective date.

BYRNA TECHNOLOGIES INC.

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(Amounts expressed in US Dollars)

BUSINESS COMBINATIONS

Fox Labs International

On May 25, 2022, the Company acquired Fox Labs International, a producer of defensive pepper sprays, catering primarily to law enforcement and other security professionals (domestically and internationally).

The cash consideration was $ 2.2 million.

There were no acquisition-related expenses.

As part of the transaction, the Company acquired 10 trademarks.

The Company classified and designated identifiable assets acquired and assessed and determined the useful lives of the acquired intangible assets subject to amortization.

Trademarks have an indefinite life as the Company intends to renew the trademarks indefinitely.

Accounts receivable

Customer list intangible

Accounts payable

Deferred revenue

Net assets acquired

Adjustments were made to the acquired assets and liabilities subsequent to the acquisition date.

MARKETABLE DEBT SECURITIES

The following table summarizes our marketable securities and available-for-sale investments as of November 30, 2024 ( in thousands):

Unrealized Gains

Unrealized Losses

Corporate bonds

$ 2,950 $ 18 $ - $ 2,968 $ 2,968

Treasury securities

5,906 47 - 5,953 5,953

$ 8,856 $ 65 $ - $ 8,921 $ 8,921

November 30, 2024

Due within one year or less

$ 8,856 $ 8,921

November 30, 2024

Fair Value Measurement Based on

Quoted Prices in Active Market

Significant Other Observable Inputs

Significant Unobservable Inputs

Cash equivalents

$ 11,304 $ 11,304 $ 11,304 $ - $ -

Corporate bonds

2,950 2,968 - 2,968 -

Treasury securities

5,906 5,953 - 5,953 -

$ 20,160 $ 20,225 $ 11,304 $ 8,921 $ -

November 30, 2023

Fair Value Measurement Based on

Quoted Prices in Active Market

Significant Other Observable Inputs

Significant Unobservable Inputs

Cash equivalents

$ 16,324 $ 16,324 $ 16,324 $ - $ -

Corporate bonds

Treasury securities

$ 16,324 $ 16,324 $ 16,324 $ - $ -

BYRNA TECHNOLOGIES INC.

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INVESTMENT AND LOAN IN JOINT VENTURE

On January 10, 2023 , the Company acquired a 51 % ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company’s operations and presence in South American markets, for $ 0.5 million.

The Company accounts for the investment in the joint venture using the equity method since the Company does not have voting control of Byrna LATAM.

Additionally, the Company does not have substantive participating rights that would result in the Company having control of Byrna LATAM.

The Company recorded its share of the joint venture’s loss during the twelve months ended November 30, 2023 of $ 0.6 million in the Consolidated Statements of Operations and Comprehensive Loss as loss from joint venture.

The carrying value of the Company's investment in the joint venture at November 30, 2023 is $ 0.0 million and is recorded as investment in joint venture in the Consolidated Balance Sheet.

On January 10, 2023 , the Company loaned $ 1.6 million to Byrna LATAM.

The loan bears interest at a rate equal to Secured Overnight Financing Rate ("SOFR") plus 3.0 %.

The interest rate on the loan was 8.3 % as of November 30, 2023 .

The loan amount must be repaid within five years from the date of the loan, or January 10, 2028 .

Interest income related to the loan receivable totaled $ 0.1 million for the twelve months ended November 30, 2023 and is included in interest income in the Consolidated Statements of Operations and Comprehensive Loss.

The interest receivable on the loan is recorded in the Consolidated Balance Sheet under prepaid expenses and other current assets.

During the twelve months ended November 30, 2023, the cumulative net losses of Byrna LATAM exceeded the equity method investment by $ 0.1 million.

The carrying basis of the loan receivable was reduced by the $ 0.1 million excess loss from $ 1.6 million to $ 1.5 million.

Condensed financial data for Byrna LATAM is summarized below (in thousands).

November 30, 2023

Current assets

Non-current assets

Current liabilities

Other non-curren liabilities

November 30, 2023

Management regularly evaluates its investment in Byrna LATAM for impairment.

Based on evaluations, management concluded that its investment in Byrna LATAM was not impaired in 2023.

The Company accounted for the investment in the joint venture using the equity method since the Company did not have voting control of Byrna LATAM.

Additionally, the Company did not have substantive participating rights that would result in the Company having control of Byrna LATAM.

The Company recorded its share of the joint venture’s losses for the twelve months ended November 30, 2024 and November 30, 2023, of less than $ 0.1 million and $ 0.6 million, respectively, in the Consolidated Statements of Operations and Comprehensive Income (Loss) as loss from joint venture.

The carrying value of the Company's investment in the joint venture on November 30, 2024 and 2023, is at zero in the Consolidated Balance Sheets.

On August 19, 2024, the Company sold it’s 51 % ownership interest to Fusady S.A.

for $ 1 (the “LATAM Share Purchase Agreement”) and entered into an exclusive distribution, manufacturing and licensing agreement with Byrna LATAM (the “LATAM Licensing Agreement”).

This LATAM Licensing Agreement allows Byrna LATAM to exclusively manufacture the Byrna SD launcher and ammunition in certain South American countries and requires Byrna LATAM to pay the Company a royalty on Byrna products manufactured.

The amount of royalty earned and outstanding at end of November 30, 2024, was not material.

The LATAM Share Purchase Agreement also includes put and call rights based on defined triggers which expire on August 19, 2029.

In January 2023, the Company loaned $ 1.6 million to Byrna LATAM.

The loan bore interest at a rate equal to Secured Overnight Financing Rate ("SOFR") plus 3.0 %.

Interest income related to the loan receivable was less than $ 0.1 million for the year ended November 30, 2024.

The interest income is included in interest income in the Consolidated Statements of Operations and Comprehensive Income (Loss).

On August 19, 2024, the loan was amended to fix the loan amount at $ 1,431,112 plus accrued interest of $ 203,373 for a total loan amount of $ 1,634,485 .

The loan bears an annual rate of interest of 5 % per annum.

The loan will be repaid in twelve equal installments starting on August 19, 2025.

The loan receivable was recorded as loan to joint venture in the Consolidated Balance Sheets until the consummation of the LATAM Share Purchase Agreement at which time the Company recorded the current portion of the loan as part of Prepaid expenses and other current assets and the non-current portion is recorded as part of Other assets on the Consolidated Balance Sheet as of November 30, 2024.

REVENUE, DEFERRED REVENUE AND ACCOUNTS RECEIVABLE

Deferred Revenue

Changes in deferred revenue, which relate to unfulfilled e-commerce orders and amounts to be recognized under extended 3 -year service warranty, for the years ended November 30, 2023 and 2022 are summarized below (in thousands).

Changes in deferred revenue, which relate to advance payments, unfulfilled e-commerce orders and amounts to be recognized under extended 3 -year service warranty, for the years ended November 30, 2024 and 2023 are summarized below (in thousands).

The Company recognized warranty revenue totaling $ 0.3 million and $ 0.3 million, respectively, during the years ended November 30, 2024 and 2023.

Deferred revenue balance, November 30, 2022

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Accounts receivable, net of allowances, was $ 2.6 million, $ 2.9 million, and $ 5.9 million as of November 30, 2024, 2023 and 2022 respectively.

An allowance for doubtful accounts receivable is maintained for potential credit losses based upon management's assessment of the expected collectability of all accounts receivable.

As of November 30, 2023, 2022 and 2021 , the allowance for doubtful accounts receivable was $ 0.6 million, $ 0.02 million, and $ 0.01 million, respectively.

Allowance for Expected Credit Losses

The Company estimates the balance of its allowance for expected credit losses.

The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions.

Account balances are written off against the allowance when it is determined that the receivable will not be recovered.

As of November 30, 2024, 2023 and 2022 , the allowance for credit losses was $ 0.3 million, $ 0.6 million, and less than $ 0.1 million, respectively.

BYRNA TECHNOLOGIES INC.

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(Amounts expressed in US Dollars)

The Form 10 -K for the fiscal year ended November 30, 2022 incorrectly reported the balances of raw materials, work in process, and finished goods.

The amounts presented below are the original reported balances and the adjusted balances as of November 30, 2022.

These changes had no impact on previously reported consolidated balance sheets, consolidated results of operations, or shareholders' equity.

November 30, 2022 November 30, 2022

As Previously Reported

Raw materials

$ 7,228 $ 712 $ 7,940

Work in process

Finished goods

7,533 ( 781 ) 6,752

$ 15,462 $ — $ 15,462

The following table summarizes inventory as of November 30, 2023 and 2022 , respectively (in thousands).

The following table summarizes inventory (in thousands):

Raw materials

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PROPERTY AND EQUIPMENT

The following table summarizes cost and accumulated depreciation as of November 30, 2023 and 2022 , respectively (in thousands).

The following table summarizes cost and accumulated depreciation (in thousands):

Estimated Useful

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The Company recognized approximately $ 1.2 million and $ 1.0 million in depreciation expense during the years ended November 30, 2024 and 2023 , respectively.

Depreciation expense is presented in the operating expenses and within cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Depreciation expense is presented in the operating expenses and within cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

At November 30, 2024 and 2023 , the Company deposited $ 2.7 million and $ 1.2 million, respectively, with vendors primarily for supply of molds and equipment where the vendors have not completed supply of these assets.

The Company placed $ 0.4 million and less than $ 0.1 million of molds and equipment deposits and software deposits, respectively, from November 30, 2023 into service during fiscal year November 30, 2024 .

The Company placed $ 1.2 million and $ 0.5 million of molds and equipment deposits and software deposits, respectively from November 30, 2022 into service during fiscal year November 30, 2023 .

The Company placed $ 0.9 million of molds and equipment deposits from November 30, 2021 into service during fiscal year November 30, 2022 .

The deposits are presented in the Consolidated Balance Sheets as deposits for equipment.

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All other intangible assets are finite-lived.

Intangible assets amortization expenses are recorded within operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Intangible assets amortization expenses are recorded within operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

Total intangible assets amortization expense for the years ended November 30, 2024 and 2023 were $ 0.3 million and $ 0.3 million, respectively.

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On January 19, 2021, the Company entered into a $ 5.0 million revolving line of credit with a bank.

The revolving line of credit bears interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50 %, subject to a floor of 4.00 %.

The interest rate on the revolving line of credit was 7.50 % on November 30, 2023 .

The revolving line of credit is secured by the Company’s accounts receivable and inventory.

The line of credit is subject to an unused fee of 0.25 % paid once annually.

The revolving line of credit bore interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50 %, subject to a floor of 4.00 %.

The revolving line of credit was secured by the Company’s accounts receivable and inventory.

The line of credit was subject to an unused fee of 0.25 % paid once annually.

The line of credit expired on January 19, 2024.

Also on January 19, 2021, the Company entered into a $ 1.5 million equipment financing line of credit with a bank.

The line of credit bears interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50 %, subject to a floor of 4.00 %.

The interest rate on the equipment financing line of credit was 7.50 % on November 30, 2023 .

The line of credit is secured by the Company’s equipment.

The line of credit is subject to an unused fee of 0.25 % paid once annually.

The line of credit bore interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50 %, subject to a floor of 4.00 %.

The line of credit was secured by the Company’s equipment.

The line of credit was subject to an unused fee of 0.25 % paid once annually.

The line of credit expired on January 19, 2024.

As of November 30, 2023 and 2022 , there was no outstanding balance on the revolving line of credit and the Company had not drawn on the equipment financing line of credit.

As of November 30, 2024 there was no line of credit in place.

As of November 30, 2023 , there was no outstanding balance on the revolving line of credit and the Company had not drawn on the equipment financing line of credit.

Debt issuance costs related to the lines of credit were $ 0.1 million.

Debt issuance costs of $ 0.1 million are being amortized over the term of the debt and are presented as part of Other Assets in the Consolidated Balance Sheets.

Amortization of $ 0.03 million for the years ended November 30, 2023 and 2022 is included in Interest income, net in the Consolidated Statements of Operations and Comprehensive Loss.

Debt issuance costs of $ 0.1 million were amortized over the term of the debt and are presented as part of Other Assets in the Consolidated Balance Sheets.

Amortization of less than $ 0.01 million and $ 0.03 million for the years ended November 30, 2024 and 2023 is included in Interest income, net in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The revolving line of credit and equipment financing line of credit were terminated on January 19, 2024 and not renewed.

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STOCKHOLDERS’ EQUITY

Authorized Shares

At the Company's 2022 annual meeting of stockholders held on June 17, 2022 ( the "Annual Meeting"), the Company's stockholders approved a decrease in the amount of authorized common stock from 300,000,000 to 50,000,000 .

The decrease became effective upon filing of a Certificate of Amendment to the Company's Certificate of Incorporation on June 17, 2022.

Stock Buyback Plan

On February 15, 2022, the Company's Board of Directors approved a plan to buy back up to $ 10.0 million worth of shares of the Company's common stock from the open market (“Stock Buyback Plan”).

The Company's Stock Buyback Plan was used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards.

The Company completed the full $ 10.0 million for the repurchases under the Stock Buyback Plan during March 2022.

On April 28, 2022, the Company's Board of Directors approved a plan to buy back up to an additional $ 5.0 million worth of shares of the Company's common stock.

The Company completed the full $ 5.0 million repurchase of shares during May 2022.

On October 6, 2022, the Company's Board of Directors approved a plan to buy back up to an additional $ 2.5 million worth of shares of the Company's common stock.

The Company completed the full $ 2.5 million repurchase of shares during November 2022.

No repurchases were made during the fiscal year ended November 30, 2023.

On July 31, 2024, the Company's Board of Directors approved a plan to buy back up to $ 10 million worth of shares of Common Stock (the “Stock Buyback Program”).

The Company's Stock Buyback Plan is intended to return capital to shareholders and to minimize the dilutive impact of stock options and other sharebased awards.

The Stock Buyback Program will expire on the sooner of the two -year anniversary of its initiation or until we reach the aggregate limit of $ 10 million for the repurchases under the program.

The repurchased shares are recorded as part of treasury stock and are accounted for under the cost method.

In the twelve months ended November 30, 2024, we repurchased 0.3 million shares of common stock for $ 3.8 million.

The following table summarizes repurchases made during the fiscal year ended November 30, 2024:

Cost of Shares

Shares purchased - February 2022

296,168 $ 2,653,571 $ 9.0

Shares purchased - March 2024

21,905 $ 253,003 $ 11.6

Shares purchased - May 2022

Shares purchased - August 2024

291,141 2,994,296 10.3

Shares purchased - October 2022

Shares purchased - September 2024

506 5,695 11.3

Shares purchased - November 2022

Shares purchased - October 2024

35,678 499,997 14.0

349,230 $ 3,752,991 $ 10.7

In March 2024, 21,905 units were repurchased by the Company for $ 0.3 million for shares withheld to pay the payroll tax liability of the vesting RSUs and treated as treasury stock.

BYRNA TECHNOLOGIES INC.

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2020 Equity Incentive Plan (the “2020 Plan”).

The aggregate number of shares of common stock available for issuance in connection with options and other awards granted under the 2020 Plan was 2,500,000 .

The aggregate number of shares of common stock available for issuance in connection with options and other awards granted under the 2020 Plan is 2,500,000 .

On April 26, 2022, the Company’s Board of Directors approved and on June 17, 2022, the Company's stockholders approved the increase of the number of shares of common stock available for issuance under the 2020 Plan by 1,300,000 shares to a total of 3,800,000 shares.

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Total stock-based compensation expense was $ 3.4 million and $ 5.4 million for the years ended November 30, 2024 and 2023 , respectively.

Total stock-based compensation expense was recorded in Operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

During the first half of 2022, the Board of Directors authorized granting of RSUs in excess of the limit stipulated under the 2020 Plan.

Additionally, the Company agreed to grant 200,000 RSUs to the former Chief Technology Officer ("CTO") in exchange for his waiver of rights to future royalty payments.

See Note 19, "Commitments and Contingencies - Royalty Payments," for additional information.

Because these awards were then contingent on shareholder approval at the next annual shareholder meeting, these RSUs were not considered granted under Accounting Standards Codification ("ASC") 718, Compensation - Stock Compensation ("ASC 718" ) and were treated as obligation to issue RSU's and were remeasured at the end of each reporting period until the settlement date on June 17, 2022 and August 3, 2022, which were the dates that the plan limit was increased (for the RSUs to the former CTO).

Additionally, on March 23, 2022, the Board of Directors approved the issuance of RSU Amendment Agreements to each grantee of the double trigger RSUs in which 50 % of the RSUs ( 778,750 RSUs) were exchanged for stock options.

The original RSUs that were cancelled were issued in 2020 and 2021.

In accordance with ASC 718 , a cancellation of an award accompanied by the concurrent grant of a replacement award shall be accounted for as a modification of the terms of the cancelled award.

Similarly, because these stock options were then not considered granted under ASC 718, they were therefore treated as obligation to issue stock options and were remeasured at the end of each reporting period until the settlement date on June 17, 2022.

On June 17, 2022, the Company settled the obligation to issue RSUs and options by issuing the related RSUs and stock options and reclassified the fair value of the issuances at June 17, 2022 of $ 1.0 million from accounts payable and accrued liabilities to additional paid-in capital.

Additionally, the amounts recognized as employee incentive expense totaling $ 1.4 million during fiscal year end 2022 was reclassified to stock compensation expense.

The non-cash expense associated with these rewards were valued at the grant date of June 17, 2022, using a Monte Carlo model for double trigger RSUs and a Black Scholes model for simple employment period vesting stock options.

Total stock-based compensation expense was recorded in Operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

Restricted Stock Units

During the years ended November 30, 2023 and 2022 , the Company granted 102,720 and 536,805 RSUs, respectively.

Stock-based compensation expense for the RSUs for the years November 30, 2023 and 2022 , was $ 3.6 million and $ 2.6 million, respectively.

During the year ended November 30, 2024 the Company granted 600,000 of the RSU's with a “double trigger” for vesting based on stock price and time, as follows:

( 1 ) one - third of the RSUs will be triggered when the Company’s stock trades above $ 6.00 on a 20 -day VWAP, the second one - third of the RSUs will be triggered when the Company’s stock trades above $ 9.00 on a 20 -day VWAP, and the final one - third of the RSUs will be triggered when the stock trades above $ 12.00 on a 20 -day VWAP and ( 2 ) the employee must remain employed by the Company for three years from the effective date for the RSUs to vest.

During the year ended November 30, 2023 , the Company did not grant "double trigger" RSUs.

In addition, the Company also granted 153,232 and 102,720 time-based RSU's during the years ended November 30, 2024 and 2023 , respectively.

Stock-based compensation expense for the RSUs for the years ended November 30, 2024 and 2023 was $ 1.6 million and $ 3.6 million, respectively.

During the year ended November 30, 2023, the Company accelerated the vesting of 200,000 RSUs held by the Company's former CTO.

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The acceleration of these RSUs was considered an equity award modification and resulted in an immaterial stock-based compensation expense.

During the year ended November 30, 2022 , the Company accelerated the vesting of 3,874 RSUs to a former director and 8,392 RSUs to current board members for 2021 services.

The acceleration of these RSUs were considered an equity award modification and resulted in an immaterial stock-based compensation expense.

As of November 30, 2024 , there was $ 2.4 million of unrecognized stock-based compensation cost related to unvested RSUs which is expected to be recognized over a weighted average of 1.6 years.

RSU Valuation

The assumptions that the Company used to determine the grant-date fair value of RSUs granted for the year ended November 30, 2022 are presented in the table below.

The assumptions that the Company used in a Monte Carlo simulation model to determine the grant-date fair value of RSU's granted with a double trigger for the year ended November 30, 2024, are presented in the table below.

The Company did not grant RSUs for the year ended November 30, 2023 that required a Monte Carlo simulation model.

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Market price of the Company’s common stock on date of grant

— $ 7.69 - 8.24

The following table summarizes the RSU activity during the year ended November 30, 2024 :

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Outstanding, November 30, 2024

Of the 213,636 restricted stock units issued, 89,234 units were returned to the Company in exchange for the Company paying for the payroll withholding taxes.

Of the 690,077 restricted stock units issued, 57,697 units were returned to the Company and retired in exchange for the Company paying for the payroll withholding taxes, and 21,905 units were repurchased by the Company for $ 0.3 million for shares withheld to pay the payroll tax liability of the vesting RSUs and treated as treasury stock.

For the twelve months ended November 30, 2024, restricted stock units of 611,994 , net, were issued.

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( 49,500 ) 7.24

( 107,750 ) 8.09

Outstanding, November 30, 2024

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EARNINGS PER SHARE

For the years ended November 30, 2023 and 2022 , the Company recorded a net loss available to common shareholders.

As such, because the dilution from potential common shares was antidilutive, the Company used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share for the years ended November 30, 2023 and 2022 .

For the year ended November 30, 2024 , the Company recorded net income and, as such, used diluted weighted-average common shares outstanding when calculating diluted income per share for the year ended November 30, 2024 .

Stock options and RSUs that could potentially dilute basic earnings per share (“EPS”) in the future are included in the computation of diluted income per share.

For the year ended November 30, 2023 , the Company recorded net loss available to common shareholders.

As such, because the dilution impact from potential common shares was antidilutive, the Company used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share for the year ended November 30, 2023 .

Net income (loss)

$ 12,792 $ ( 8,192 )

Weighted-average number of shares used in computing net loss per share, basic, and diluted

Weighted-average number of shares used in computing net loss per share, basic

22,504,938 21,919,624

Net loss per share - basic and diluted

Weighted-average number of shares used in computing net loss per share, diluted

23,139,549 21,919,624

The Company’s potential dilutive securities, which include stock options and RSUs have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive.

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Net income (loss) per share - basic

$ 0.57 $ ( 0.37 )

Net income (loss) per share - diluted

$ 0.55 $ ( 0.37 )

The Company’s potential dilutive securities, which include stock options and RSUs have been excluded from the computation of diluted net income (loss) per share as the effect would be anti-dilutive.

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net income (loss) per share attributable to common stockholders is the same.

The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Stock Options

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The Company subleases office premises at its Massachusetts headquarters to a corporation owned and controlled by the Chief Executive Officer ("CEO") of the Company beginning July 1, 2020, with no stated termination date.

Sublease payments received were $ 0.03 million and $ 0.03 million during the years ended November 30, 2023 , respectively.

Sublease payments received were less than $ 0.1 million and less than $ 0.1 million during the years ended November 30, 2024 and 2023 , respectively.

Fusady is owned, in equal 25% shares, by four individual investors.

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is a distributor of the Company’s products in Argentina.

The Company’s sales to Bersa S.A.

were less than $ 0.06 million and $ 4.0 million for the fiscal years ended November 30, 2023 and 2022.

The Company had accounts receivable, which are due within one year as of November 30, 2023, from Bersa S.A.

of $ 1.6 million and $ 4.0 million as of November 30, 2023 and November 30, 2022 respectively.

There were $ 0.1 million sales to Bersa S.A.

during the year ended November 30, 2024 and less than $ 0.1 million for the year ended November 30, 2023.

As of November 30, 2023, the Company had accounts receivable of approximately $ 1.6 million.

Because of the divesture of the joint venture, Fusady is no longer considered a related party as of November 30, 2024.

Operating Leases

The Company has operating leases for real estate in the United States and South Africa and does not have any finance leases.

In 2019, the Company had entered into a real estate lease for office space in Andover, Massachusetts.

In 2019, the Company entered into a real estate lease for office space in Andover, Massachusetts.

In August 2021, the lease was amended to include additional space and extend the term of the existing space by one year.

The new lease expiration date is February 29, 2028.

The base rent is approximately $ 0.02 million per month.

The Company leases office and warehouse space in South Africa that expires in November 2024 .

The base rent is approximately $ 0.01 million per month.

In December 2022, the Company early terminated and fully exited the associated lease with no penalties incurred.

The Company entered into a new lease for a larger facility in November 2022.

The base rent is approximately $ 0.07 million per month.

The base rent is less than $ 0.1 million per month.

The Company leases office and warehouse space in South Africa.

The Company has exercised its right to extend the lease for an additional year.

The lease, which was originally set to expire in December 2024, is now extended to December 2025.

The Company leases warehouse and manufacturing space in Fort Wayne, Indiana.

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The lease expires July 31, 2027 .

The base rent is approximately $ 0.02 million per month.

The base rent is less than $ 0.1 million per month.

The Company sub-leases the former Fort Wayne facility which commenced in August 2022.

The amount received from the sub-lease is immaterial.

In March 2024, the Company terminated the lease and sublease on the former Fort Wayne facility.

Commencing in July 2024, the Company entered into a new operating lease for warehouse and retail office space located in Fort Wayne, Indiana.

The lease term is for five years, commencing on July 15, 2024 and expiring on July 14, 2029 .

As of November 30, 2024, the total right-of-use asset amounting to $ 0.3 million and the corresponding lease liability of $ 0.3 million are reflected in the Company's consolidated financial statements.

The Company also leases office space in Las Vegas, Nevada, which expires on January 31, 2027 .

The base rent is less than $ 0.1 million per month.

Commencing in August 2024, the Company entered into a new operating lease for retail office space located in Salem, New Hampshire.

The lease term is for seven years, commencing on August 22, 2024 and expiring on August 21, 2029 .

As of November 30, 2024, the total right-of-use asset amounting to $ 0.1 million and the corresponding lease liability of $ 0.1 million are reflected in the Company's consolidated financial statements.

Commencing in August 2024, the Company entered into a new operating lease for retail office space located in Scottsdale, Arizona.

The lease term is for ten years, commencing on August 27, 2024 and expiring on July 31, 2032 .

As of November 30, 2024, the total right-of-use asset amounting to $ 0.7 million and the corresponding lease liability of $ 0.7 million are reflected in the Company's consolidated financial statements.

Commencing in November 2024, the Company entered into a new operating lease for retail office space located in Franklin, Tennessee.

The lease term is for five and a half years, commencing on November 1, 2024 and expiring on April 30, 2030 .

As of November 30, 2024, the total right-of-use asset amounting to $ 0.2 million and the corresponding lease liability of $ 0.2 million are reflected in the Company's consolidated financial statements.

Certain of the Company’s leases contain options to renew and extend lease terms and options to terminate leases early.

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Weighted-average discount rate

The Form 10 -K for the fiscal year ended November 30, 2022 incorrectly reported operating lease costs of $ 2,421 .

The amount presented above for operating lease costs in 2022 are revised to the corrected amount of $ 568 .

This change had no impact on previously reported consolidated balance sheets, consolidated results of operations, or shareholders' equity.

BYRNA TECHNOLOGIES INC.

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Operating lease liabilities, non-current

Loss before income taxes consists of the following (in thousands):

Income (Loss) before income taxes consists of the following (in thousands):

Year Ended November 30,

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( 1,142 ) ( 857 )

$ 7,084 $ ( 8,027 )

The components of the provision (benefit) for income taxes is as follows (in thousands):

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Total deferred expense (benefit)

( 5,837 ) 129

Total income tax provision (benefit)

$ ( 5,708 ) $ 165

BYRNA TECHNOLOGIES INC.

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4.60 % ( 0.02 )%

( 80.31 )% ( 2.05 )%

The net deferred income tax asset (liability) balance related to the following (in thousands):

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$ 3,438 $ 6,551

R&D tax credits

Stock compensation

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Foreign tax credit carryforwards

Capital loss carryover

Unrealized losses

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R&E capitalization

Business interest limitation

Equity investments

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Depreciation and amortization

( 555 ) ( 678 )

Right of use asset

( 542 ) ( 390 )

Total deferred tax liabilities

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$ 5,837 $ ( 10 )

The Company notes $ 0.04 million of a United States state refundable tax credit awarded in fiscal year 2023 has been booked above the income tax line in accordance with US GAAP principles.

As of November 30, 2023 , the Company had federal and state net operating losses ("NOLs") carryforwards of approximately $ 27.8 million and $ 7.3 million, respectively, which begin to expire in 2025 for federal and state purposes.

The Company notes $ 0.04 million of a United States state refundable tax credit awarded in the year has been recorded as a component of income before income taxes in accordance with GAAP.

As of November 30, 2024, the Company had federal and state NOL carryforwards of approximately $ 13.4 million and $ 4.8 million, respectively, which begin to expire in 2029 for federal and state purposes.

The federal NOL carryforwards include approximately $ 10.3 million, which do not expire.

The Company had foreign NOL carryforwards of $ 1.2 million which can be carried forward indefinitely.

Deferred tax assets, which are offset by deferred tax liabilities, are presented in other assets in the accompanying Consolidated Balance Sheets.

The Company had federal and state research and development tax credits of approximately $ 0.2 and $ 0.1 million, respectively, as of November 30, 2024.

The federal and state research and development credits begin to expire in 2044 and 2039, respectively.

There were no federal or state research and development tax credits as of November 30, 2023.

Deferred tax assets are presented in other assets in the accompanying Consolidated Balance Sheets.

Future realization of the tax benefits of existing temporary differences and NOL carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period.

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The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years.

The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the worldwide deferred tax assets will not be realized.

Accordingly, the Company maintained a full valuation allowance as of November 30, 2023 and 2022 and a full valuation allowance on the US deferred tax assets as of November 30, 2023 and 2022 .

Additionally, a deferred tax liability has been established in the United States entity during the fiscal year ended

November 30, 2023 relating to tax basis in excess of book basis on an indefinite lived intangible.

November 30, 2023 and 2022 , the Company recognized valuation allowances of

The Company determined that it was possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the US deferred tax assets will be realized.

Accordingly, the Company has reversed most of its US valuation allowance as of November 30, 2024 and maintains a full valuation allowance on the South Africa deferred tax assets as of November 30, 2024.

The Company had a full valuation allowance on its worldwide deferred tax assets as of November 30, 2023.

Additionally, a deferred tax liability had been established in the United States during the prior year relating to tax basis in excess of book basis on an indefinite lived intangible given the valuation allowance position as of

November 30, 2023.

November 30, 2024 and

2023, the Company recognized valuation allowances of

$ 0.8 million and

$ 9.3 million, respectively, related to its deferred tax assets created in those respective years.

The net increase of

The net increase/(decrease) of (

$ 8.5 ) million and

$ 1.2 million in the valuation allowance reflects the net increase in gross deferred tax asset between

November 30, 2023 and 2022 and the prior fiscal years, respectively.

$ 1.4 million in the valuation allowance reflects the release of the US valuation allowance for

November 30, 2024 and a net increase in gross deferred tax asset between

November 30, 2023 and the prior fiscal years, respectively.

Pursuant to Internal Revenue Code Section 382, use of NOL carryforwards may be limited if the Company experiences a cumulative change in ownership of greater than 50% in a moving three -year period.

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The Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize, rather than deduct, research and experimental, or R&E, expenditures under section 174 for tax years beginning after December 31, 2021.

This rule became effective for the Company during the fiscal year ended November 30, 2023 and resulted in the capitalization for income tax purposes of R&E costs of $ 2.0 million.

The Company will amortize these costs for tax purposes over five years if the R&E was performed in the U.S.

This rule became effective for the Company during the prior year ended November 30, 2023 and resulted in the capitalization for income tax purposes of R&E costs of $ 2.0 million.

During the current year ended November 30, 2024, the capitalization for income tax purposes of R&E costs is $ 2.5 million.

The Company will amortize these costs for tax purposes over 5 years if the R&E was performed in the U.S.

and over 15 years if the R&E was performed outside the U.S.

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Royalty Payment

Pursuant to the Purchase and Sale Agreement between the Company and its former CTO dated April 13, 2018 and further amended on December 19, 2019, the Company was committed to a minimum royalty payment of $ 0.025 million per year.

Royalties on CO2 pistols were to be paid for so long as patents remain effective beginning at 2 ½% of the agreed upon net price of $ 167.60 (“Stipulated Net Price”) for the first year and reduced by 0.1 % each year thereafter until it reaches 1 %.

For each substantially new product in this category, the rate would begin again at 2 ½%.

Pursuant to the Purchase and Sale Agreement, dated April 13, 2018, and further amended on December 19, 2019, the Company was committed to a minimum royalty payment of less than $ 0.1 million per year.

Royalties on CO2 pistols were to be paid for so long as patents remain effective.

Royalties on the fintail projectiles (and any improved versions thereof) will be paid so long as patents remain effective at a rate of 4 % of the agreed upon Stipulated Net Price for fintail projectile products.

On January 7, 2022, the Company and its former CTO agreed to waive all future rights and entitlements under such agreement, including without limitation any right, title, or interest in the intellectual property or royalty fees except for those on the fintail projectiles.

In exchange for the royalty termination, the Company agreed to grant 200,000 RSU's upon stockholder's approval and renegotiation of the employment contract of the increase in the number of shares of common stock available for issuance under the 2020 Plan.

This was approved on August 3, 2022.

Refer to Note 14, "Stock-based Compensation" for additional information.

The RSU’s vests in two years from January 7, 2022.

In June 2023, the Company and the former CTO agreed to accelerate the vesting of the 200,000 RSUs.

As a result, the Company recognized stock compensation expense of $ 1.0 million and $ 0.3 million associated with the RSUs during the years ended November 30, 2023 and 2022 , respectively.

In exchange for the royalty termination, the Company agreed to grant 200,000 RSU's on August 3, 2022, which then vests in two years from January 7, 2022.

In June 2023, the Company and the former CTO agreed to accelerate the vesting of the 200,000 RSUs, and the Company recognized stock compensation expense of $ 1.0 million associated with the RSUs during the year ended November 30, 2023.

Legal Proceedings

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SEGMENT AND GEOGRAPHICAL DISCLOSURES

The Chief Executive Officer, who is also the Chief Operating Decision Maker, evaluates the business as a single entity, which includes reviewing financial information and making business decisions based on the overall results of the business.

The CEO, who is also the Chief Operating Decision Maker, evaluates the business as a single entity, which includes reviewing financial information and making business decisions based on the overall results of the business.

As such, the Company’s operations constitute a single operating segment and one reportable segment.

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Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

The financial instruments that potentially subject the Company to credit risk consist of cash, accounts receivable, and the loan receivable from Byrna LATAM.

The financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, marketable securities, accounts receivable, and the loan receivable from Byrna LATAM.

The Company maintains cash and cash equivalents with high credit quality financial institutions located in the US and South Africa.

The Company maintains cash and cash equivalent balances with financial institutions in the US in excess of amounts insured by the Federal Deposit Insurance Corporation.

The Company maintains cash and cash equivalents balances along with marketable securities with financial institutions in the US in excess of amounts insured by the Federal Deposit Insurance Corporation.

The Company provides credit to its customers in the normal course of its operations.

It carries out, on a continuing basis, credit checks on its customers.

The Company loaned $ 1.6 million to Byrna LATAM, which was formed in January 2023 as a joint venture in South America.

The ability to collect on the loan depends on the financial operations of Byrna LATAM.

SUBSEQUENT EVENTS

On January 19, 2024, the revolving line of credit and financing line of credit were terminated and not renewed.

Based on the liquidity position of the Company, the Company's management does not believe the lines of credit are necessary to support the operations during fiscal year 2024.

As of November 30, 2024 , two of the Company's customers accounted for approximately 36 % of total accounts receivable.

As of November 30, 2023 , one customer accounted for 12 % of total accounts receivable.

The Company loaned $ 1.6 million to Byrna LATAM in January 2023.

The Company determines if an estimate for a credit loss on this loan is needed by considering the financial position of Byrna LATAM, the current economic environment, collections on our accounts receivable balances with Byrna LATAM, as well reasonable and supportable forecasts to support the payment of this loan.

The Company reviews these factors quarterly to determine if any adjustments are needed.

(3) Exhibits.

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Employment Agreement, dated September 1, 2023, by and between the Company and Bryan Ganz (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 18, 2023).

Employment Agreement, dated July 13, 2023, by and between the Company and John Brasseur (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 30, 2024)

Employment Agreement, dated June 12, 2024, by and between the Company and Laurilee Kearnes (incorporated by reference to Exhibit 10.1 to the Company’ s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2024).

Separation Agreement, dated June 19, 2024 between the Company and David North (incorporated by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2024).

Consulting Agreement, dated June 19, 2024 between the Company and David North (incorporated by reference to Exhibit 10.3 to the Company’ s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2024).

Insider Trading Policy*

List of Registrant's Subsidiaries*

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(Principal Executive Officer)

/s/ Laurilee Kearnes

Chief Financial Officer

February 7, 2025

Laurilee Kearnes

(Principal Financial Officer and Principal Accounting Officer)

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures