What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2026-02-05 compared with 2025-02-07 · 132 added, 120 removed, 138 unchanged (65% of the section changed)

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Market Information

Our common stock is traded in the United States on the Nasdaq Capital Market under symbol "BYRN" and in Canada on the Canadian Securities Exchange (“CSE”) under the symbol “BYRN.” The holders of our common stock are entitled to one vote per share on any matter to be voted upon by the stockholders.

Our common stock is traded in the United States on the Nasdaq Capital Market under symbol "BYRN".

The holders of our common stock are entitled to one vote per share on any matter to be voted upon by the stockholders.

All shares of common stock rank equally as to voting and all other matters.

On February 1, 2025, there were 58 holders of record of our common stock.

On February 1, 2026, there were approximately 74 holders of record of our common stock.

We have not paid any cash dividends on our common shares to date and do not currently intend to pay cash dividends.

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Stock Repurchases

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 vesting RSUs and treated as treasury stock.

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

On July 31, 2024, our Board of Directors approved a plan to repurchase up to $10 million worth of shares of our common stock (the “Stock Buyback Program”).

The Stock Buyback Program is intended to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards.

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See Note 14, "Stockholders’ Equity—Stock Buyback Plan", in the Notes to Consolidated Financial Statements included in Item 8 of this Report for further discussion.

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

Cost of Shares

Shares purchased - March 2024

Shares purchased - August 2024

Shares purchased - September 2024

Shares purchased - October 2024

During the three months ended November 30, 2025, we repurchased 60,534 shares of common stock for $1.05 million.

The following table summarizes repurchases made during the three months ended November 30, 2025:

Number of Shares

Average Cost per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Approximate Dollar Value of Shares that May Yet Be Purchased Under Plans or Programs

September 2025

November 2025

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Byrna Technologies Inc.

is a designer, manufacturer, retailer and distributor of innovative technological solutions for security situations that do not require the use of lethal force.

Our mantra is Live Safe , and our core mission is to empower individuals to safely and fully engage in life and adventure.

Our design team’s directive is to build easy-to-use self-defense tools to enhance the safety of our customers and their loved ones at home and outdoors.

We are also focused on developing tools that can be used instead of firearms by professional law enforcement and private security customers to reduce shootings and facilitate trust between police and the communities they seek to serve.

Our strategy is to establish Byrna® as a consumer lifestyle brand associated with the confidence people can achieve by knowing they can protect themselves, their loved ones and those around them.

We believe we have a significant opportunity to leverage the Byrna brand to expand our product line, broaden our user base and generate increasing sales from new and existing customers.

designs, manufactures, retails, and distributes less‑lethal personal security solutions intended for situations that do not require the use of lethal force.

Our mission is to empower individuals to protect themselves and others, and our product strategy emphasizes ease of use, effectiveness, and reliability in both consumer and professional safety environments.

We also develop tools intended to serve as alternatives to traditional firearms for law enforcement and private security customers, with the goal of reducing firearm‑related incidents and supporting de‑escalation practices.

Our strategy includes positioning Byrna® as a consumer lifestyle brand associated with personal confidence and safety, while expanding our product portfolio to broaden market reach and drive sales growth from both new and existing customers.

Our business strategy is twofold:

(1) to fulfill the growing demand for less-lethal products in the law enforcement, correctional services, and private security markets and (2) to provide civilians – including those whose work or daily activities may put them at risk of being a victim – with easy access to an effective, less-lethal way to protect themselves and their loved ones from threats to their person or property.

We believe that the United States, along with many other parts of the world, is experiencing a significant spike in the demand for less-lethal products and that the less-lethal market will be one of the faster growing segments of the security market over the next decade.

We plan to respond to this demand for less-lethal products through the production and distribution of the Byrna SD and expansion of the Byrna product line.

On January 10, 2023, we created a new joint venture ("Byrna LATAM") with Fusady S.A., an affiliate of Bersa S.A.

(“Fusady”) located in Uruguay, to expand our operations and presence in South American markets.

We held 51% of the stock in Byrna LATAM, and the remaining 49% of stock in Byrna LATAM was held by Fusady.

Under the terms of the joint venture, we did not control the Byrna LATAM.

We believe demand for less‑lethal products in the United States and globally continues to rise and that this category will remain a growing segment of the broader security market.

We plan to meet this demand by manufacturing and distributing our Byrna SD, Byrna LE, and most recently our Byrna CL launchers, along with continued expansion of our accessory and ammunition offerings.

On January 10, 2023, we acquired a 51% ownership interest in Byrna LATAM S.A.

(“Byrna LATAM”), a corporate joint venture formed to expand our operations and presence in South American markets, for $0.5 million.

We accounted for this investment using the equity method because we did not have voting control or substantive participating rights that would give us control over Byrna LATAM.

On August 19, 2024, we sold our 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”).

The 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 us a royalty on Byrna products manufactured.

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

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

Under this agreement, Byrna LATAM is authorized to exclusively manufacture the Byrna SD launcher and ammunition in certain South American countries and is required to pay us royalties on Byrna products manufactured.

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

Beginning in fiscal 2024 and continuing through fiscal 2025, we expanded our go‑to‑market strategy beyond our historical e‑commerce focus by adopting a broader omnichannel distribution model.

These initiatives included the commercial launch of the Byrna CL, expansion of the Byrna LE and LE PRO platforms, the opening of Byrna‑branded retail locations, and onboarding national retail partners such as Sportsman’s Warehouse.

In addition, we implemented an AI‑driven advertising engine and expanded our influencer‑based marketing program, both of which contributed to improved customer‑acquisition efficiency and increased brand reach.

Beginning in fiscal 2025, we also reorganized our operations into two reportable sales channels, Direct‑to‑Consumer (“DTC”) and Wholesale (dealer/distributor), to align with our expanded omnichannel strategy, the opening of Company‑operated retail stores, and increased penetration into national retail chains and international distributors.

RESULTS OF OPERATIONS

Revenue of $85.8 million during the fiscal year ended November 30, 2024 was $43.2 million higher than prior year revenue of $42.6 mainly due to an increase in e-commerce sales of $34.9 million.

The majority of revenue continues to be in high margin direct online sales via Amazon and our own website, as these e-commerce sales accounted for 76.8% of total net revenue in the current fiscal year and 72.6% of total revenue in the prior fiscal year.

In addition, we experienced growth in our dealer sales channel as well as sales into Canada.

Sales of Fox Labs branded products, which the Company acquired at the end of the second quarter of 2022, continued to increase during the fiscal year ended November 30, 2024.

We increased gross margin profitability by 6.1% as compared with the prior year.

With the increase in revenues, we have increased marketing spend, personnel costs, and professional fees.

Due to the increase in revenue during the fiscal year, the increase in operating expenses offset with the increase in gross profit led to a profit from operations of

$6.7 million for the fiscal year

November 30, 2024 as compared to a loss from operations of

$7.8 million for the fiscal year ended

November 30, 2023.

Revenue of $118.1 million for the fiscal year ended November 30, 2025 increased $32.3 million, or 37.7%, compared to $85.8 million in the prior fiscal year.

The increase was primarily driven by higher wholesale dealer and distributor sales, which increased by $21.6 million, as well as continued growth in direct‑to‑consumer e‑commerce sales.

E‑commerce transactions through Amazon and our website remained the largest revenue contributor, accounting for 64.8% of total net revenue for fiscal year 2025 compared to 76.8% in fiscal year 2024.

We also achieved growth in our dealer channel and experienced increased sales in Canada.

Gross margin declined by 1.0% compared to the prior year.

Operating expenses increased due to higher marketing expenditures, personnel‑related costs, and professional fees.

Although revenue growth resulted in higher gross profit, the increase in operating expenses partially offset these gains, resulting in profit from operations of $11.8 million for fiscal year 2025, compared to an operating profit of $6.7 million for fiscal year 2024.

Gross margin declined primarily due to a higher proportion of Wholesale and Retail revenue, which are lower‑margin channels, partially offset by improved cost absorption in manufacturing and lower per‑unit freight costs.

Year ended November 30, 2025, as compared to year ended November 30, 2024:

Revenues were $85.8 million for the year ended November 30, 2024 which represents an increase of $43.2 million or 101.1% compared to the prior year period revenues of $42.6 million.

The increase was primarily due to e-commerce sales that increased by 112.8% or $34.9 million from $30.9 million during the fiscal year ended November 30, 2023 to $65.9 million for the fiscal year ended November 30, 2024.

Direct sales via our website increased by $26.7 million from $24.6 million for the fiscal year ended November 30, 2023 to $51.3 million for the fiscal year ended November 30, 2024.

Sales via Amazon increased from $6.4 million during the fiscal year ended November 30, 2023 to $14.5 million for the fiscal year ended November 30, 2024.

Sales to domestic dealers/distributors, in combination with sales to security companies and law enforcement agencies increased by 48.3% from $8.7 million during November 30, 2023 to $12.9 million for the fiscal year ended November 30, 2024.

In addition, sales of pepper spray from Fox Labs, which we acquired on May 25, 2022, increased to $1.7 million for the fiscal year ended November 30, 2024 compared to $1.1 million during the fiscal year ended November 30, 2023.

We present revenue net of returns, allowances, and discounts.

Net revenue for the year ended November 30, 2025 was $118.1 million, an increase of $32.3 million, or 37.7%, compared to $85.8 million in the prior year.

Direct‑to‑consumer revenue, including sales through Amazon and our website, increased by $10.7 million, or 16.3%, from $65.9 million in fiscal year 2024 to $76.6 million in fiscal year 2025.

Domestic dealer and retail sales increased by $14.0 million, or 108.4%, from $12.9 million in fiscal year 2024 to $26.9 million in fiscal year 2025.

International revenue, including Canada, increased from $6.8 million to $12.1 million year‑over‑year.

We recognized $1.6 million in royalty revenue related to the LATAM Licensing Agreement during fiscal year 2025.

Segment Results

Direct‑to‑Consumer (DTC)

DTC revenue increased to $76.6 million in fiscal year 2025, driven by increased web sessions and expanded consumer reach, expanded digital‑marketing initiatives, enhanced influencer partnerships, and the launch of new Byrna‑operated retail locations.

These efforts increased overall brand visibility and market reach.

Wholesale (Dealer/Distributor)

Wholesale revenue increased to $41.5 million in fiscal year 2025, reflecting (i) expanded relationships with national and regional retailers, (ii) enhanced engagement with distributors, (iii) increased law‑enforcement interest, and (iv) the first year of royalty revenue under the LATAM Licensing Agreement.

Cost of Goods Sold

Cost of goods sold was $33.0 million in the fiscal year ended November 30, 2024 compared to $19.0 million in the fiscal year ended November 30, 2023.

This $14.0 million increase is primarily due to the increase in sales volume.

Cost of goods sold was $46.7 million for fiscal year 2025, compared to $33.0 million in fiscal year 2024.

The $13.7 million increase was driven primarily by higher sales volume.

Cost of goods sold attributable to Direct‑to‑Consumer (“DTC”) was $26.5 million in fiscal year 2025, compared to $22.9 million in fiscal year 2024.

Cost of goods sold attributable to Wholesale was $20.2 million in fiscal year 2025, compared to $10.1 million in fiscal year 2024.

Gross profit is calculated as total revenue less cost of goods sold, and gross margin is calculated as gross profit divided by total revenue.

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

Gross profit was $52.8 million for the fiscal year ended November 30, 2024, or 61.5% of net revenue, as compared to gross profit of $23.6 million, or 55.5% of net revenue, in the prior year.

Gross margin profitability increased primarily due to the increase in the proportion of high margin direct to customer sales (Web/Amazon) from 72.6% of total sales for the fiscal year ended November 30, 2023 to 76.8% of sales for the fiscal year ended November 30, 2024.

Gross profit was $71.5 million, or 60.5% of net revenue, for fiscal year 2025, compared to $52.8 million, or 61.5%, in the prior year.

The decline in gross margin resulted from an increased proportion of wholesale revenue relative to DTC revenue as well as manufacturing inefficiencies.

The broader shift toward Wholesale and Retail channels reduced the proportion of higher‑margin DTC revenue, contributing to the decline in consolidated gross margin for the year.

Because wholesale transactions generally carry lower average selling prices relative to DTC sales, the higher wholesale mix contributed to the decline in consolidated gross margin during the period.

Operating Expenses

Operating expenses were $46.1 million for the fiscal year ended November 30, 2024, as compared to operating expenses in the prior fiscal year of $31.4 million.

This $14.7 million increase is primarily due to an increase in marketing expenditures, personnel costs, and variable selling expenses.

Marketing expenditures increased $7.8 million from $4.6 million for fiscal year 2023 to $12.4 million in fiscal year 2024 Total employee compensation costs increased $1.9 million from $15.9 million for fiscal year 2023 to $17.8 million in fiscal year 2024.

Total variable selling expenses increased by $3.7 million from $4.1 million in fiscal year 2023 to $7.8 million for fiscal year 2024.

Professional fees increased by $0.9 million from $1.1 million in fiscal year 2023 to $2.0 million for fiscal year 2024.

Other operating costs, including administrative expenses, increased by $0.5 million from $5.6 million for fiscal year 2023 to $6.1 million for fiscal year 2024.

Operating expenses were $59.6 million for the fiscal year ended November 30, 2025, compared to $46.1 million in the prior fiscal year.

The $13.5 million increase was primarily driven by higher marketing expenditures, personnel‑related costs, and variable selling expenses.

Marketing expenditures increased by $5.5 million, from $12.4 million in fiscal year 2024 to $17.9 million in fiscal year 2025.

Total employee compensation costs decreased by $0.7 million, from $17.8 million in fiscal year 2024 to $17.1 million in fiscal year 2025.

Variable selling expenses increased by $3.6 million, from $7.8 million in fiscal year 2024 to $11.4 million in fiscal year 2025.

Professional fees increased by $0.1 million, from $2.0 million in fiscal year 2024 to $2.1 million in fiscal year 2025.

Other operating costs, including administrative expenses, increased by $2.0 million, from $6.1 million in fiscal year 2024 to $8.1 million in fiscal year 2025.

The increase was primarily driven by higher insurance costs—including D&O, umbrella, general liability, and cyber coverage—along with increases in facility expenses, repairs and maintenance, depreciation and amortization, and production‑related operating expenses.

These increases were partially offset by lower research and development expenses.

In addition, the overall increase in operating expenses reflects higher spending on influencer‑marketing programs, expanded creative‑content production to support AI‑assisted advertising initiatives, and initial occupancy and labor costs associated with new Company‑operated retail stores.

Profit from Operations

The increase in revenue, off-set by the increase in operating expenses resulted in an increase of $14.5 million in profit from operations of $6.7 million in the fiscal year ended November 30, 2024 as compared to a loss from operations of $7.8 million in the fiscal year ended November 30, 2023.

The increase in revenue, off-set by the increase in operating expenses resulted in an increase of $5.1 million in profit from operations of $11.8 million in fiscal year 2025, compared to a profit from operations of $6.7 million in fiscal year 2024.

Interest Income/Expense

Interest income for the fiscal year ended November 30, 2025 was $0.4 million compared to $1.0 million for the fiscal year ended November 30, 2024.

The increase in interest income is primarily due to higher interest rates on the Company's cash and cash equivalents and marketable securities.

The increase in interest income is primarily due to an increase in the amount of interest-earning funds held in cash and cash equivalents, marketable securities, and accrued interest receivable on loan receivable.

Loss from Joint Venture

Since the inception of the Byrna LATAM joint venture in January 2023, the Company's proportionate share of Byrna LATAM's losses were 51%.

On August 19, 2024, we sold our 51% ownership interest to Fusady S.A.

for $1 pursuant to the LATAM Share Purchase Agreement.

Our share of the joint venture’s loss for the fiscal year ended November 30, 2024 was less than $0.1 million.

The carrying value of our investment in the joint venture at November 30, 2024 and November 30, 2023 was $0 in the Consolidated Balance Sheets.

Other Income (Expense)

Other income (expenses) in the year ended November 30, 2024 includes $0.01 million investment gains.

Other income (expenses) in the year ended November 30, 2023 included ($0.05) million investment losses.

The decrease in interest income is primarily due to a decrease in the amount of interest-earning funds held in cash and cash equivalents, marketable securities, and accrued interest receivable on loan receivable.

Income Tax Provision (Benefit)

Our effective income tax rate was 17.49% for the year ended November 30, 2025, compared to an effective income tax rate of (80.31)% for the year ended November 30, 2024.

Our income tax benefit was $5.7 million for the fiscal year ended November 30, 2024 compared to an income tax provision of $0.2 million for the fiscal year ended November 30, 2023.

Our income tax expense was $2.1 million for the fiscal year ended November 30, 2025 compared to an income tax benefit of $5.7 million for the fiscal year ended November 30, 2024.

Our tax rate differs from the statutory rate of 21.0% primarily due to the release of the valuation allowance, the impact of stock compensation, as well as state income taxes, tax credits, the foreign tax rate differential for Byrna South Africa, and effects of permanent non-deductible expenses and other effects.

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Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide the following additional financial metrics that are not prepared in accordance with GAAP (non-GAAP):

non-GAAP adjusted EBITDA.

Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance.

In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide non-GAAP adjusted EBITDA, which is a financial metric that is not prepared in accordance with GAAP.

Management uses this non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance.

We believe that these non-GAAP financial measures help us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measures.

Accordingly, we believe that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

These non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

Accordingly, we believe that this non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

This non-GAAP financial measures does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure.

In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Non-GAAP Adjusted EBITDA

Non-GAAP Adjusted EBITDA is defined as net income (loss) as reported in our consolidated statements of operations and comprehensive income (loss) excluding the impact of (i) depreciation and amortization;

Non-GAAP Adjusted EBITDA is defined as net income as reported in our consolidated statements of operations and comprehensive income excluding the impact of (i) depreciation and amortization;

(ii) income tax provision (benefit);

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We also exclude certain one-time and non-cash costs.

Reconciliation of non-GAAP Adjusted EBITDA to net loss, the most directly comparable GAAP measure, is as follows (in thousands):

Reconciliation of non-GAAP Adjusted EBITDA to net income, the most directly comparable GAAP measure, is as follows (in thousands):

For the Year Ended

Net income (loss)

Interest income, net

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Cash and cash equivalents as of November 30, 2025, totaled $13.7 million, a decrease of approximately $3.1 million from $16.8 million of cash as of November 30, 2024.

Management believes existing cash balances, operating cash flows, and access to capital markets will be sufficient to fund operations, planned retail expansion, and manufacturing investments over the next 12 months.

Capital allocation priorities for fiscal 2026 include continued inventory optimization, retail buildout, and potential selective share repurchases under the Stock Buyback Program.

Operating Activities

Cash provided by operating activities was $11.7 million for the fiscal year ended November 30, 2024, compared to $3.9 million cash provided by operating activities for the fiscal year ended November 30, 2023.

Net income was $12.8 million for the fiscal year ended November 30, 2024 compared to a net loss of $8.2 million for the fiscal year ended November 30, 2023.

Significant changes in noncash and working capital activity are as follows:

Our non-cash activity adds back several non-cash items to net loss to calculate cash provided by operations during the fiscal year ended November 30, 2024.

Cash used in operating activities was $1.6 million for the fiscal year ended November 30, 2025, compared to cash provided by operations of $11.7 million for the fiscal year ended November 30, 2024.

Net income was $9.7 million for the fiscal year ended November 30, 2025, compared to $12.8 million for the fiscal year ended November 30, 2024.

Significant changes in noncash and working capital activity are described below.

Our non-cash activity adds back several non-cash items to net income to calculate cash provided by operations during the fiscal year ended November 30, 2025.

These include stock-based compensation expense of $3.1 million during the fiscal year ended November 30, 2025 compared to $3.4 million for the fiscal year ended November 30, 2024;

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depreciation and amortization of $2.1 million during the fiscal year ended November 30, 2025 compared to $1.5 million during the fiscal year ended November 30, 2024;

recovery of allowance for credit losses of $0.2 million during the fiscal year ended November 30, 2024 compared to provision for allowance for credit losses of $0.5 million for the fiscal year ended November 30, 2023;

recovery of provision for inventory of $0.2 million during the fiscal year ended November 30, 2024 compared to provision for allowance for inventory of $0.5 million for the fiscal year ended November 30, 2023;

and loss from joint venture of less than $0.1 million during the fiscal year ended November 30, 2024 compared to $0.6 million for the fiscal year ended November 30, 2023.

During the fiscal year ended November 30, 2024, our cost and liquidity management was reflected in the generation of cash for working capital needs.

Inventory increased $5.9 million during the fiscal year ended November 30, 2024 compared to a decrease of $0.5 million during the fiscal year ended November 30, 2023.

The increase in inventory was a planned measure to support anticipated growth in demand and to ensure the availability of key products during peak sales periods.

Accounts receivable increased by $0.2 million during the fiscal year ended November 30, 2024 compared to a decrease of $2.2 million during the fiscal year ended November 30, 2023 due to a significant increase in overall sales.

loss on disposal of fixed assets of $2.3 million during the fiscal year ended November 30, 2025 compared to zero for the fiscal year ended November 30, 2024;

In addition to the non‑cash activities mentioned above, we recognized a decrease in its deferred tax asset of $1.7 million during the fiscal year ended November 30, 2025, compared to an increase of $5.8 million during the fiscal year ended November 30, 2024.

During the fiscal year ended November 30, 2025, operating activities resulted in a net use of cash, driven primarily by increases in working capital balances associated with higher sales volumes and planned inventory investments.

Inventory increased $12.7 million during the fiscal year ended November 30, 2025 , compared to an increase of $5.9 million during the fiscal year ended November 30, 2024 , representing an approximate 64% increase from the prior-year ending balance.

The increase in inventory reflects intentional production builds ahead of anticipated demand for CL and LE product lines, expanded retail distribution, and the timing of inbound component deliveries related to production of new product configurations.

Management continues to monitor inventory levels to balance service levels with working capital efficiency.

Accounts receivable increased by $8.0 million during the fiscal year ended November 30, 2025 compared to a decrease of $0.5 million during the fiscal year ended November 30, 2024 due to a significant increase in overall wholesale sales.

Accounts payable and accrued liabilities increased $2.8 million for the fiscal year ended November 30, 2025 compared to an increase of $7.0 million for the fiscal year ended November 30, 2024.

Deferred revenue decreased $1.3 million during the fiscal year ended November 30, 2025 compared to a decrease of $0.1 million during the fiscal year ended November 30, 2024.

Prepaid expenses and other current assets increased by $1.1 million for the fiscal year ended November 30, 2024 compared to a decrease of $0.2 million for the fiscal year ended November 30, 2023.

Prepaid expenses and other current assets increased by $1.7 million for the fiscal year ended November 30, 2025 compared to an increase of $1.8 million for the fiscal year ended November 30, 2024.

Loan receivable decreased by $0.6 million for the fiscal year ended November 30, 2025 compared to a decrease of $0.5 million for the fiscal year ended November 30, 2024.

Operating lease liabilities decreased by $0.5 million during the fiscal year ended November 30, 2025 compared to a decrease of $0.7 million for the fiscal year ended November 30, 2024.

Investing Activities

During the fiscal year ended November 30, 2024, $11.2 million was used for investing activities.

This included $8.9 million for the acquisition of marketable securities and $2.3 million for the purchase of property and equipment.

In comparison, $3.0 million was used for investing activities during the fiscal year ended November 30, 2023, including $1.6 million loan to Byrna LATAM, $0.5 million investment in the joint venture, and $0.9 million to purchase property and equipment.

Cash flows used in investing activities was $0.5 million for the fiscal year ended November 30, 2025, compared to $11.2 million of cash used during the fiscal year ended November 30, 2024.

The prior year investing activities primarily related to purchases of property and equipment and marketable securities, while the current year activity reflects purchases of property and equipment, the acquisition of Federal Firearms Licenses, and proceeds from the sale of marketable securities.

Property and equipment increased by $7.6 million during the fiscal year ended November 30, 2025, compared to an increase of $2.3 million during the fiscal year ended November 30, 2024.

During the fiscal year ended November 30, 2025, proceeds from the sale of marketable debt securities totaled $8.8 million, while purchases amounted to $1.7 million, compared to no proceeds and $8.9 million in purchases of marketable debt securities during the fiscal year ended November 30, 2024.

Capital expenditures were higher than typical due to the build‑out of retail stores and the new ammunition manufacturing facility.

Financing Activities

Cash flows used in financing activities was $1.3 million during the fiscal year ended November 30, 2025, compared to $4.6 million during the fiscal year ended November 30, 2024.

The fiscal year ended November 30, 2024 amount was primarily due to tax payments of $0.9 million related to payroll taxes withheld on the vesting of restricted stock units, $0.1 million received in proceeds from stock option exercises and payments of $3.8 million for repurchases of common stock, compared to tax payments of $0.5 million related to payroll taxes withheld on the vesting of restricted stock units and $0.1 million received from proceeds associated with the sale of common stock during the fiscal year ended November 30, 2023.

The fiscal year ended November 30, 2025 amount was primarily due to tax payments of $0.5 million related to payroll taxes withheld on the vesting of restricted stock units, $0.3 million received in proceeds from stock option exercises and payments of $1.1 million for repurchases of common stock, compared to tax payments of $0.9 million related to payroll taxes withheld on the vesting of restricted stock units, $0.1 million received in proceeds from stock option exercises and payments of $3.8 million for repurchases of common stock during the fiscal year ended November 30, 2024.

MATERIAL CASH REQUIREMENTS FROM CONTRACTUAL OBLIGATIONS

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We believe that the following are the more critical judgmental areas in the application of our accounting policies that currently affect our financial position and results of operations.

Allowance for Credit Losses

The Company evaluates expected credit losses on trade receivables based on historical experience, current economic conditions, customer credit profiles, and forward‑looking information.

The increase in accounts receivable is primarily attributable to expanded wholesale and retail distribution.

This shift may increase collection risk relative to prior years’ e‑commerce‑dominant sales and is reflected in management’s estimates of expected credit losses.

Management reassesses the adequacy of the allowance each reporting period based on updated information, including aging trends, payment patterns, known customer‑specific risks, and reasonable and supportable forecasts of future economic conditions.

Revenue Recognition

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The Company generates revenue through the wholesale distribution of its products and accessories to dealers/distributors, large end‑users such as retail stores, security companies, and law enforcement agencies, and through e‑commerce portals to consumers.

Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to goods is passed and risk of loss transfers to the customer.

Depending on the contract terms, transfer of control is upon shipment of goods to or upon the customer’s pick-up of the goods.

Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to the goods is passed and risk of loss transfers to the customer.

Depending on the contract terms, transfer of control occurs upon shipment of goods to or upon the customer’s pickup of the goods.

Payment terms to customers other than e‑commerce customers are generally 30–60 days for established customers, whereas new wholesale and large end‑user customers have prepaid terms for their first order.

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The Company also sells an extended warranty for the same terms over three years.

The extended 3-year warranty can be purchased separately from the product and therefore, must be classified as a service warranty.

The extended three‑year warranty can be purchased separately from the product and therefore must be classified as a service warranty.

Since a warranty for the first year after sale is included and non‑separable from all launcher purchases, the Company considers this extended warranty to represent a service obligation during the second and third years after sale.

Therefore, the Company accumulates billings of these transactions on the balance sheet as deferred revenue, to be recognized on a straight-line basis during the second and third year after sale.

Therefore, the Company records billings for these transactions as deferred revenue, to be recognized on a straight‑line basis during the second and third years after sale.

The Company recognizes an estimated returns and discounts allowance based on its analysis of historical experience and an evaluation of current market conditions.

The Company also provides to its e-commerce consumers a 14-day money back guarantee, which allows for a full refund of the purchase price, excluding shipping charges, within 14 days from the date of delivery.

The right of return creates a variable component to the transaction price and needs to be considered for any possible constraints.

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 year ended November 30, 2024 and November 30, 2023 were 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 fiscal years ended November 30, 2024 and 2023 were immaterial.

The Company also provides its e‑commerce consumers a 14‑day money‑back guarantee, which allows for a full refund of the purchase price, excluding shipping charges, within 14 days from the date of delivery.

This right of return creates a variable component to the transaction price and must be evaluated for possible constraints.

The Company estimates returns using the expected‑value method.

The Company’s returns under the 14‑day money‑back guarantee for the fiscal years ended November 30, 2025 and November 30, 2024 were 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 contractually agreed‑upon discounts, marketing allowances, cooperative advertising programs, or other consideration to be netted from invoiced amounts.

The Company estimates and reserves for returns, discounts, marketing allowances, and other customer incentives based on historical experience, current contractual terms, and expectations of future activity, and reports revenue net of the estimated reserve.

The reserve for returns, discounts, marketing allowances, and other customer incentives for the fiscal years ended November 30, 2025 and November 30, 2024 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 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.

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 and are recognized when the product is shipped to the customer.

Included in 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.

Royalty Revenue

The Royalty revenue is recognized under licensing arrangements based on the total number of units manufactured by the licensee, to the extent collectability is probable.

Beginning in fiscal year 2025, this includes royalties earned under the LATAM Licensing Agreement.

Inventory Valuation

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In the United States, the Company has concluded that it is more-likely-than-not that it will realize its net deferred tax assets.

This conclusion is based on net income in 2024, projected cumulative three-year income through November 30, 2025, and the expectation of continued profitability due to increased product sales.

As a result, the Company has released its US valuation allowance as of November 30, 2024.

This conclusion is based on net income in 2025 and the expectation of continued profitability due to increased product sales.

As a result, the Company released its US valuation allowance as of November 30, 2024.

Conversely, in South Africa, the Company has determined that it is more-likely-than-not that it will not realize its net deferred tax assets.

This determination is based on a cumulative three-year loss position through November 30, 2024, and the forecasted closure of operations in FY2025.

Therefore, a full valuation allowance remains on the deferred tax assets in South Africa as of November 30, 2024.

The Company will continue to monitor its cumulative loss position and forecasted income on a quarterly basis, particularly focusing on the US operations, where a cumulative 12-quarter profit position is projected for FY2025.

This determination is based on a cumulative three-year loss position through November 30, 2025, and the closure of manufacturing operations in 2025.

Therefore, a full valuation allowance remains on the deferred tax assets in South Africa as of November 30, 2025 and 2024.

The Company will continue to monitor its forecasted income on a quarterly basis, particularly focusing on the US operations.

The Company records uncertain tax positions on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

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These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

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

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, 2025 and 2024, the Company has not recorded any uncertain tax positions in its consolidated financial statements.

The Company recognizes interest and penalties related to income taxes on the income tax expense line in the Consolidated Statement of Operations and Comprehensive Income.

As of November 30, 2025 and 2024, no accrued interest or penalties related to income taxes are included in the Consolidated Balance Sheets.

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

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 than likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company has the option to perform a qualitative assessment over goodwill when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit.

If the Company concludes, based on the qualitative assessment, that the carrying value of a reporting unit would more likely than not exceed its fair value, a quantitative assessment is performed which is based upon a comparison of the reporting unit’s fair value to its carrying value.

The fair values used in this evaluation are estimated by the Company based upon future discounted cash flow projections for the reporting unit.

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 fourth quarter of each year.

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

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.

The Company performs its annual impairment assessment during the fourth quarter of each year.

Goodwill is assessed for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment (a component).

As of November 30, 2025, the Company’s consolidated goodwill balance was $2.3 million.

Based on the Company’s annual assessment performed during the fourth quarter of fiscal year 2025, no impairment of goodwill was identified.

Stock-Based Compensation

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The measurement date for non-employee 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 Consolidated 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).

Stock-based compensation is classified in the accompanying Consolidated Statements of Operations and Comprehensive Income 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.

Forfeitures are accounted for as they occur.

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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 5. Market for Registrant’s Common Equity