Byrna Technologies Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures 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, 2025 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 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. Management ’ s Report on Internal Controls over Financial Reporting 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 our assets; (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, 2025. 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 our internal control over financial reporting. Based on this evaluation management concluded that as of November 30, 2025 our internal control over financial reporting was effective based on those criteria. Changes in Internal Controls Over Financial Reporting Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the fiscal year ended November 30, 2025. Based on that evaluation, management concluded that there were no changes to our internal control over financial accounting and reporting that occurred during the fiscal year ended November 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial accounting and reporting. ITEM 9B. OTHER INFORMATION Insider Adoption or Termination of Trading Arrangements During the fiscal quarter ended November 30, 2025, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408, except as described in the table below: Aggregate Number of Shares of Common Character of Stock to be Purchased Other Trading or Sold Pursuant to Material Date Name & Title Date Adopted Arrangement ( 2 ) Trading Arrangement Duration ( 3 ) Terms Terminated Laurilee Kearnes ( 1 ) October 13, 2025 Rule 10b5 - 1 Trading Arrangement Up to 2,500 shares to be sold February 9, 2026 through December 31, 2026 N/A N/A NEIP ( 2 ) November 4, 2025 Rule 10b5 - 1 Trading Arrangement Up to 288,059 shares to be sold February 10, 2026 through December 31, 2026 N/A N/A 1. Laurilee Kearnes is our Chief Financial Officer . 2. Bryan Ganz, Chief Executive Officer and a director of the Company is an indirect holder of shares held by Northeast Industrial Partners LLC (“NEIP” or“Seller”) , disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein, and the inclusion of these shares in this reportshall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose. 3. The trading arrangement is intended to satisfy the affirmative defense of Rule 10b5 - 1 (c), as amended (the “Rule”), and complied with the then applicable requirements of the Rule at the time of adoption. Loan and Security Agreement On February 3, 2026, Byrna Technologies Inc. entered into a Loan and Security Agreement (the “Loan Agreement”) with Texas Capital Bank, pursuant to which the Company obtained a senior secured credit facility consisting of (i) a revolving credit facility in an aggregate principal amount of up to $5.0 million and (ii) a delayed draw term loan facility in an aggregate principal amount of up to $15.0 million. Borrowings under the credit facility bear interest at a variable rate equal to Term SOFR plus an applicable margin determined in accordance with the Loan Agreement. The Company is also required to pay certain customary fees, including unused commitment fees on the revolving credit commitments and ticking fees on the unfunded portion of the delayed draw term loan commitments during the applicable availability period. The obligations under the Loan Agreement are secured by a first -priority security interest in substantially all of the Company’s assets, subject to customary exclusions. The Loan Agreement contains customary affirmative and negative covenants and financial maintenance covenants, as well as events of default upon the occurrence of which the lender may accelerate the obligations and exercise remedies. The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Loan and Security Agreement, which is filed as Exhibit 10.23 to this Annual Report. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 19 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2026 Annual Meeting of Stockholders. The information required by this Item relating to our executive officers is included in Item 1, “Business — Executive Officers” of this report. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2026 Annual Meeting of Stockholders. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2026 Annual Meeting of Stockholders. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2026 Annual Meeting of Stockholders. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2026 Annual Meeting of Stockholders. 20 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Report: (1) Financial Statements F-1 to F-28 (2) Financial Statements Schedules None. 21 BYRNA TECHNOLOGIES INC. CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED November 30, 2025 and 2024 Together with Report of Independent Registered Public Accounting Firm (Amounts expressed in US Dollars) TABLE OF CONTENTS Page No Report of Independent Registered Public Accounting Firm (PCAOB ID 274 ) F-2 Consolidated Balance Sheets as of November 30, 2025 and 2024 F-3 Consolidated Statements of Operations and Comprehensive Income for the years ended November 30, 2025 and 2024 F-4 Consolidated Statements of Cash Flows for the years ended November 30, 2025 and 2024 F-5 Consolidated Statements of Changes in Stockholders’ Equity for the years ended November 30, 2025 and 2024 F-6 Notes to Consolidated Financial Statements F-7 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Byrna Technologies Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Byrna Technologies Inc. and Subsidiaries (the “Company”) as of November 30, 2025 and 2024, and the related consolidated statements of operations and comprehensive income, 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, 2025 and 2024, 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 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. Revenue Recognition – Evaluation of Wholesale Contracts for Proper Revenue Recognition As discussed in Notes 4 and 7 to the consolidated financial statements, the Company’s wholesale contracts may include negotiated pricing, volume-based incentives, cooperative advertising allowances, and other customer-specific incentives that give rise to variable consideration under Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). The number and significance of such contracts increased during the year ended November 30, 2025. We identified revenue recognition of wholesale contracts as a critical audit matter due to the risk of material misstatement and the management judgement and the complexity involved in the evaluation of wholesale contracts and the estimates of variable consideration related to them. Auditing the Company’s estimates of variable consideration required especially challenging judgment because certain contracts contain non‑standard terms, limited historical experience existed for some incentive structures, and assessing the appropriate identification, estimation, and constraint of variable amounts involved significant auditor judgment. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others, evaluating the design and implementation of controls over revenue recognition; examining a sample of new wholesale agreements to assess the identification of variable consideration; evaluating management’s estimates, including comparison to historical realization trends where applicable; and assessing whether the resulting amounts were appropriately reflected in the transaction price, revenue recognized, and related disclosures. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2020. EISNERAMPER LLP New York, New York February 5, 2026 F-2 BYRNA TECHNOLOGIES INC. Consolidated Balance Sheets (Amounts in thousands, except share and per share data) November 30, 2025 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 13,727 $ 16,829 Accounts receivable, net 10,840 2,630 Inventory, net 32,694 19,972 Prepaid expenses and other current assets 4,681 2,623 Marketable debt securities 1,754 8,904 Total current assets 63,696 50,958 Deposits for equipment 1,495 2,665 Right-of-use-asset, net 2,042 2,452 Property and equipment, net 7,726 3,408 Intangible assets, net 3,086 3,337 Goodwill 2,258 2,258 Deferred tax assets 4,134 5,837 Other assets 51 1,007 TOTAL ASSETS $ 84,488 $ 71,922 LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 15,864 $ 13,108 Operating lease liabilities, current 734 539 Deferred revenue 496 1,791 Total current liabilities 17,094 15,438 LONG TERM LIABILITIES Deferred revenue, non-current 25 17 Operating lease liabilities, non-current 1,612 2,098 Total Liabilities 18,731 17,553 COMMITMENTS AND CONTINGENCIES (NOTE 18) STOCKHOLDERS’ EQUITY Preferred stock, $ 0.001 par value, 5,000,000 shares authorized, no shares issued — — Common stock, $ 0.001 par value, 50,000,000 shares authorized. 25,258,393 shares issued and 22,678,715 outstanding as of November 30, 2025 and, 25,010,976 shares issued and 22,495,759 outstanding as of November 30, 2024 25 25 Additional paid-in capital 135,870 133,029 Treasury stock ( 2,579,678 shares purchased as of November 30, 2025 and 2,515,217 shares purchased as of November 30, 2024) ( 22,355 ) ( 21,253 ) Accumulated deficit ( 47,096 ) ( 56,783 ) Accumulated other comprehensive loss ( 687 ) ( 649 ) Total Stockholders’ Equity 65,757 54,369 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 84,488 $ 71,922 See accompanying notes to consolidated financial statements. F-3 BYRNA TECHNOLOGIES INC. Consolidated Statements of Operations and Comprehensive Income (Amounts in thousands, except share and per share data) Years Ended November 30, 2025 2024 Net revenues $ 118,120 $ 85,756 Cost of goods sold ( 46,650 ) ( 32,984 ) Gross profit 71,470 52,772 Operating expenses 59,632 46,101 PROFIT FROM OPERATIONS 11,838 6,671 OTHER INCOME (EXPENSE) Foreign currency transaction loss ( 410 ) ( 576 ) Interest income, net 410 1,024 Loss from joint venture — ( 42 ) Other (Expense) / Income ( 97 ) 7 INCOME BEFORE INCOME TAXES 11,741 7,084 Income tax provision (benefit) 2,054 ( 5,708 ) NET INCOME 9,687 12,792 Foreign exchange translation adjustment 9 342 Unrealized gain (loss) on marketable debt securities ( 47 ) 65 COMPREHENSIVE INCOME $ 9,649 $ 13,199 Net profit per share – basic $ 0.43 $ 0.57 Net profit per share – diluted $ 0.40 $ 0.55 Weighted-average number of common shares outstanding during the year – basic 22,665,395 22,504,938 Weighted-average number of common shares outstanding during the year – diluted 24,149,794 23,139,549 See accompanying notes to consolidated financial statements. F-4 BYRNA TECHNOLOGIES INC. Consolidated Statements of Cash Flows (Amounts in thousands) Years Ended November 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 9,687 $ 12,792 Adjustments to reconcile net income to net cash (used) provided by operating activities: Stock-based compensation expense 3,071 3,403 Amortization of debt issuance costs — 4 Operating lease costs 667 757 Depreciation and amortization 2,115 1,491 Loss on disposal of property and equipment 2,298 — Recovery of allowance for credit losses ( 244 ) ( 176 ) Recovery of allowance for inventory ( 21 ) ( 230 ) Loss from joint venture — 42 Deferred taxes 1,703 ( 5,837 ) Changes in assets and liabilities, net of acquisition: Accounts receivable ( 7,966 ) 491 Deferred revenue ( 1,287 ) ( 127 ) Inventory ( 12,701 ) ( 5,852 ) Prepaid expenses and other current assets ( 1,679 ) ( 1,755 ) Loan receivable 599 455 Other assets ( 22 ) — Accounts payable and accrued liabilities 2,756 6,950 Operating lease liabilities ( 548 ) ( 669 ) NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES ( 1,572 ) 11,739 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment ( 7,623 ) ( 2,347 ) Proceeds from sale of property and equipment 67 — Proceeds from sale of marketable debt securities 8,839 — Purchases of marketable debt securities ( 1,736 ) ( 8,856 ) Acquisition of Federal Firearms License ( 6 ) — Purchase of patent rights — ( 24 ) NET CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES ( 459 ) ( 11,227 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock option exercises 296 149 Repurchases of common stock ( 1,102 ) ( 3,753 ) Payment of taxes withheld on issuance of restricted stock units ( 526 ) ( 948 ) NET CASH USED IN FINANCING ACTIVITIES ( 1,332 ) ( 4,552 ) Effects of foreign currency exchange rate changes 261 371 NET CHANGE IN CASH AND CASH EQUIVALENTS FOR THE YEAR ( 3,102 ) ( 3,669 ) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 16,829 20,498 CASH AND CASH EQUIVALENTS, END OF YEAR $ 13,727 $ 16,829 Supplemental schedule of noncash operating activities: Income taxes paid 706 — Operating lease liabilities arising from obtaining right-of-use assets 264 1,404 Unrealized gain on marketable securities ( 47 ) 65 Reclassification of interest receivable from accounts receivable to other assets — 203 Recapitalization of loan receivable in connection with the divesture of the joint venture — 119 See accompanying notes to consolidated financial statements. F-5 BYRNA TECHNOLOGIES INC. Consolidated Statement of Changes in Stockholders ’ Equity (Amounts in thousands, except share numbers) Accumulated Additional Other Paid- Treasury Accumulated Comprehensive Common Stock in Capital Stock Deficit Loss Total Shares (Issued) $ $ Shares $ $ $ $ Balance, November 30, 2023 24,168,014 $ 24 $ 130,426 ( 2,165,987 ) $ ( 17,500 ) $ ( 69,575 ) $ ( 1,056 ) $ 42,319 Issuance of common stock pursuant to exercise of stock options 230,968 — 149 — — — — 149 Issuance of common stock pursuant to vesting of restricted stock units 611,994 1 ( 949 ) — — — — ( 948 ) Stock-based compensation — — 3,403 — — — — 3,403 Repurchase of common shares under Stock Buyback Plan — — — ( 349,230 ) ( 3,753 ) — — ( 3,753 ) Net income — — — — — 12,792 — 12,792 Unrealized gain on marketable securities — — — — — — 65 65 Foreign currency translation — — — — — — 342 342 Balance, November 30, 2024 25,010,976 25 133,029 ( 2,515,217 ) ( 21,253 ) ( 56,783 ) ( 649 ) 54,369 Issuance of common stock pursuant to exercise of stock options 100,194 — 296 — — — — 296 Issuance of common stock pursuant to vesting of restricted stock units 147,223 — ( 526 ) — — — — ( 526 ) Stock-based compensation — — 3,071 — — — — 3,071 Repurchase of common shares under Stock Buyback Plan — — — ( 64,461 ) ( 1,102 ) — — ( 1,102 ) Net income — — — — — 9,687 — 9,687 Unrealized gain on marketable securities — — — — — — ( 47 ) ( 47 ) Foreign currency translation — — — — — — 9 9 Balance, November 30, 2025 25,258,393 $ 25 $ 135,870 ( 2,579,678 ) $ ( 22,355 ) $ ( 47,096 ) $ ( 687 ) $ 65,757 See accompanying notes to consolidated financial statements. F-6 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 1. NATURE OF OPERATIONS Byrna Technologies Inc. (the “Company,” or “Byrna,”) is a less‑lethal defense technology company specializing in next generation solutions for security situations that do not require the use of lethal force. The Company designs, develops, manufactures, and markets a portfolio of personal security devices, kinetic and chemical irritant projectiles, and related accessories for consumer, law enforcement, private security, and other institutional markets. Byrna personal security devices are less-lethal self-defense devices that are powered by CO2 and fire .61 and .68 caliber spherical kinetic and chemical irritant projectiles. The Company’s mission is to provide effective, easy‑to‑use, and reliable less‑lethal solutions that enable responsible self‑defense and de‑escalation. The Company sells its products through multiple channels including its e‑commerce websites, Amazon storefronts, Company‑operated retail stores, domestic and international dealers and distributors, and direct sales to law enforcement agencies. The Company was incorporated in Delaware on March 1, 2005. The Company’s products are manufactured at its facilities in Fort Wayne, Indiana. The Company previously operated a manufacturing facility in Pretoria, South Africa; these operations ceased during the third quarter of fiscal 2025, and the related lease was not renewed. In March 2025, the Company established a wholly owned subsidiary, Byrna Technologies Canada Inc., to support the distribution of Byrna products within the Canadian market. Byrna Canada does not conduct manufacturing activities and does not operate any owned or leased facilities; instead, it utilizes a third‑party logistics provider to fulfill customer orders placed through the Company’s Canadian e‑commerce platform. In January 2023, the Company acquired a 51 % interest in Byrna Latam S.A. ("Byran LATAM"), a corporate joint venture formed to expand the Company's presence in South America. On August 19, 2024, the Company sold its ownership interest in Byrna LATAM S.A., its South American joint venture, and concurrently entered into an exclusive distribution, manufacturing, and licensing agreement with Byrna LATAM. Under this agreement, Byrna LATAM manufactures certain Byrna products for South American markets and pays the Company royalties on units manufactured. The Company continues to market and sell products throughout Latin America through this new structure. Effective for the fiscal year ended November 30, 2025, the Company operates and reports its results through two reportable sales channels: Direct‑to‑Consumer (“DTC”) and Wholesale (dealer/distributors). Segment Reporting Effective for the fiscal year ended November 30, 2025, the Company adopted ASU 2023‑07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures . Separately from this adoption, and due to the significant growth in the Wholesale business and corresponding changes in how the Company’s Chief Operating Decision Maker (“CODM”) manages and evaluates the business, the Company now operates and reports its results through two reportable sales channels. The two sales channels are: ● Direct‑to‑Consumer (“DTC”) – includes sales through e‑commerce platforms, Amazon storefronts, and Company‑operated retail stores. ● Wholesale (dealer/distributors) – includes sales to domestic and international dealers, distributors, retailers, and law enforcement and other institutional customers, as well as royalty revenue earned under the Company’s licensing agreements. Financial information for these segments is presented in Note 19 — "Segment and Geographical Disclosures." Prior‑period segment disclosures have been conformed to the current presentation where applicable. 2. OPERATIONS AND MANAGEMENT PLANS From inception to November 30, 2025 , the Company had incurred a cumulative loss of $ 47.1 million. The Company has funded operations through the issuance of common stock. The Company generated $ 118.1 million in revenue and a net income of $ 9.7 million for the year ended November 30, 2025 . 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. 3. BASIS OF PRESENTATION These consolidated financial statements for the years ended November 30, 2025 and 2024 include the accounts of the Company and its subsidiaries. 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. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. 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 reserves for returns, allowances, and discounts, 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. F- 7 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) b) 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 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. An impairment charge is recognized for any amount by which the carrying amount of goodwill exceeds its fair value. The Company conducts its annual goodwill impairment analysis in the fourth quarter of each fiscal year. The Company performs its annual impairment analysis on this reporting‑unit basis. At November 30, 2025 and 2024 , the Company determined that there was no impairment of goodwill. c) Cash and Cash Equivalents Cash and cash equivalents include bank deposits and short-term, highly liquid investments. Investments acquired with maturity dates of three months or less are considered cash equivalents. d) 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, other than the portion related to credit 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. e) Allowance for Current Expected Credit Losses The Company estimates the balance of its allowance for current expected credit losses. In determining the amount of the allowance for current expected 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, 2025, 2024, and 2023, the total allowance for credit losses recorded was $ 0.1 million, $ 0.3 million and $ 0.6 million, respectively. F- 8 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) f) Inventories Inventories, which are comprised of raw materials, work‑in‑process, and finished goods, are stated at the lower of cost or net realizable value. Cost is determined on a standard cost basis that approximates the first -in, first -out (FIFO) method. Inventory costs include labor, overhead, subcontracted manufacturing costs and inbound freight costs. The Company reviews inventories for obsolete items to determine adjustments that it estimates will be needed to record inventory at lower of cost or net realizable value (see Note 8, "Inventory"). g) Property and Equipment Property and equipment are recorded at cost and reflected net of accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, primarily three to seven years for computer equipment and software, furniture and fixtures, and machinery and equipment. Leasehold improvements are amortized over the lesser of the useful lives of three to seven years or lease terms. 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 Income. Useful lives are determined based upon an estimate of either physical or economic obsolescence or both. h) Intangible Assets In June 2025, the Company acquired two Federal Firearms Licenses, each effective June 1, 2025 and expiring July 1, 2028. These licenses support the Company’s ability to conduct certain regulated firearms‑related activities in connection with product development, testing, and compliance functions. The licenses are recorded as finite‑lived intangible assets and are amortized over their contractual term. The perpetual, irrevocable, exclusive and non‑exclusive permit to use technology with respect to the cost of patent rights is capitalized and amortized over the estimated useful life, currently estimated to be 10 to 17 years. Customer lists acquired are amortized over an estimated useful life of two years. These assets are tested for impairment if events or changes in circumstances indicate that the asset might be impaired. Trademarks have an indefinite life as the Company intends to renew the trademarks indefinitely. 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, 2025 and 2024 , the Company determined that there was no impairment of intangible assets. i) Impairment of Long-Lived Assets Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. There were no impairments of long-lived assets during the years ended November 30, 2025 and 2024 . j) Fair Value of Financial Instruments The Company determines fair value based on its accounting policy for fair value measurement (i.e. exit price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date). See Note 4 (u). The Company has not used derivative financial instruments such as forwards to hedge foreign currency exposures. The Company measures investments, including investments in marketable debt securities, at fair value and recognizes unrealized gains (losses), other than credit losses, through other comprehensive income. 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 debt securities on a recurring basis. F- 9 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) k) Leases The Company determines if an arrangement is a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. ROU assets are based on the measurement of the lease liability and also include any lease payments made prior to or on lease commencement and exclude lease incentives and initial direct costs incurred, as applicable. As the implicit rate in the Company’s leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease terms may include options to extend or terminate the lease when the Company is reasonably certain it will exercise such options. Lease costs for the Company’s operating leases are recognized on a straight-line basis over the lease term. Variable lease payments include lease operating expenses. Lease expense is included in operating expenses on the consolidated statements of operations and comprehensive income. The Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component. The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less. l) Revenue Recognition Product Sales The Company generates revenue through e‑commerce portals to consumers, as well as through the wholesale distribution of its products and accessories to dealers, distributors, retail stores, and large end‑users such as private security companies and law enforcement agencies. The Company does not manufacture or sell any products regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives or for military applications. Revenue is recognized upon the transfer of control of goods to the customer, which occurs when the Company has satisfied its performance obligation by making the goods available to the customer’s designated carrier in accordance with the Company’s standard shipping terms. Under these terms, which are Ex‑Works (EXW), title and risk of loss pass to the customer once the goods are picked, packed, and loaded into the carrier’s trailer at the Company’s facility and the order is marked as shipped in the Company’s ERP system. At that point, the Company has a present right to payment, the customer has obtained legal title, and the carrier—acting as the customer’s agent—has physical possession of the goods. Accordingly, revenue is recognized as of the date the goods are loaded into the carrier’s trailer, regardless of when the carrier physically removes the trailer from the Company’s premises. Payment terms to customers other than e‑commerce customers are generally 30–60 days for established customers. New wholesale and large end‑user customers typically prepay for their initial order. Revenue is recognized net of estimated returns, discounts, and allowances. Products purchased include a standard one‑year assurance‑type warranty that cannot be purchased separately. This warranty allows customers to return defective products for repair or replacement within one year of sale. The Company also sells an extended three‑year warranty that may be purchased separately and is accounted for as a service‑type warranty. Because the first year of warranty coverage is included and non‑separable from all launcher purchases, the extended three ‑year warranty represents a service obligation during the second and third years after sale. Amounts billed for extended warranties are recorded as deferred revenue and recognized on a straight‑line basis during the coverage period. The Company maintains a reserve for expected warranty claims based on historical experience and current conditions. During the second quarter of fiscal 2025, the Company offered a complimentary five‑year extended warranty with any launcher purchased during May 2025. The Company determined the standalone selling price of the five‑year warranty and, in accordance with ASC 606, allocated a portion of the transaction price to this separate performance obligation using the relative standalone selling price method. The allocated amount is recorded as deferred revenue and is recognized on a straight‑line basis over the five‑year coverage period. Revenue related to both the three‑year and five‑year extended warranties was immaterial for the years ended November 30, 2025 and 2024 . The Company offers e‑commerce customers 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 of the transaction price. The Company estimates expected returns using the expected value method, as a range of potential outcomes may exist. Returns under the 14‑day money‑back guarantee were immaterial for the years ended November 30, 2025 and 2024. For purchases made through Amazon, certain Byrna products—including launchers, CO₂ tubes, chemical irritant projectiles, and pepper sprays—are designated as non‑returnable. Other accessories are subject to Amazon’s standard 30‑day return policy. The Company estimates expected Amazon returns using the same expected value method applied to its direct‑to‑consumer sales. Expected Amazon‑related return reserves were immaterial for the years ended November 30, 2025 and 2024 . 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‑upon discounts, marketing allowances, cooperative advertising programs, or other promotional incentives to be netted from amounts invoiced. The Company reserves for returns, discounts, marketing programs, and allowances based on past performance, contractual terms, and expectations of future activity, and reports revenue net of the estimated reserve. The Company’s reserve for returns, discounts, marketing programs, and allowances for the years ended November 30, 2025 and 2024 was immaterial. Shipping and handling activities related to contracts with customers are accounted for as costs to fulfill the performance obligation. Shipping and handling costs associated with 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 related product is shipped. Included in cost of goods sold are expenses 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 Company recognizes royalty revenue associated with the LATAM Licensing Agreement. Under the Company’s exclusive LATAM Licensing Agreement, Byrna LATAM has been granted the right to manufacture, market, sell, and distribute certain Byrna products within specified Latin American territories. Byrna LATAM is authorized to use the Byrna® trademark and logo subject to the terms of the agreement. In exchange, Byrna LATAM pays the Company a royalty fee based on quantities and values of licensed products manufactured. The agreement includes minimum revenue requirements for certain territories; no minimum guaranteed royalty exists unless triggered by these minimum revenue provisions. Royalty revenue is recognized in accordance with ASC 606. Sales‑based royalties related to licenses of functional intellectual property are recognized when the licensed products are manufactured, provided the amount is fixed or determinable and collection is probable. Accordingly, the Company recognizes royalty revenue when (i) the licensee’s manufacturing activity occurs, (ii) the royalty amount is fixed or determinable under the agreement, and (iii) collection is probable. Royalty revenue totaled $ 1.6 million for the fiscal year ended November 30, 2025 . Contract Liabilities Current deferred revenue at November 30, 2025 includes $ 0.5 million in advance payments from customers, less than $ 0.1 million in current portion of sales from extended warranties, and less than $0.1 in deferred revenue pertaining to the non-current portion of extended warranty sales. Current deferred revenue at November 30, 2024 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 in deferred revenue pertaining to the non-current portion of extended warranty sales. See Note 7, "Revenue, Deferred Revenue and Accounts Receivable". m) 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 Income and were $ 17.9 million and $ 12.4 million during the years ended November 30, 2025 and 2024 , respectively. n) 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 Income. R&D costs were $ 0.3 million and $ 0.6 million during the years ended November 30, 2025 and 2024 , respectively. o) Incomes Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. F- 10 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 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. The Company records uncertain tax positions as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the unrecognized tax benefit liabilities. 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, 2025 and 2024 , 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 Income. As of November 30, 2025 and 2024 , no accrued interest or penalties related to income taxes are included in the Consolidated Balance Sheets. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under statute from November 30, 2021 to the present. The resolution of tax matters is not expected to have a material effect on the Company’s consolidated financial statements. p) Earnings Per Share Basic earnings per share is computed by dividing net income, reduced by dividends, by the weighted-average number of common shares outstanding for the year. Diluted earnings per share is computed by dividing net income, 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. q) Stock-Based Compensation The Company accounts for all stock-based payment awards granted to employees and directors as stock-based compensation expense at their grant date fair value, which the Company uses Black-Scholes valuations, Monte Carlo models, and other market valuations to determine fair value. The Company’s stock-based payments include stock options and restricted stock units. The measurement date for employee awards is the date of grant, and stock-based compensation costs are recognized as expense over the employees’ requisite service period, on a straight-line basis. 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 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. The fair value of each stock option grant is estimated on the date of grant using either the Black‑Scholes model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case the Company uses a Monte Carlo simulation model. The expected term of stock options granted to employees is determined using the simplified method prescribed by the 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. The risk‑free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant for periods approximating the expected term of the award. Expected dividend yield is based on the fact that the Company has not paid cash dividends on its common stock and does not expect to do so in the foreseeable future. r) Foreign Currency Transactions Foreign currency transactions are transactions denominated in a currency other than a subsidiary’s functional currency. 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 foreign currency transaction income (loss), in the accompanying Consolidated Statements of Operations and Comprehensive Income. F- 11 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) s) Foreign Currency Translation The Company maintains its books and records in US Dollars, which is its functional and reporting currency. Assets and liabilities of the Company’s international subsidiaries in which the local currency is the functional currency are translated into US Dollars at period-end exchange rates. Income and expenses are translated into US Dollars at the average exchange rates during the period. The resulting translation adjustments, including adjustments on intercompany loans that are considered permanent, are included in the Company’s Consolidated Balance Sheets as a component of accumulated other comprehensive loss. The Company considers intercompany loans to be of a permanent or long-term nature if management expects and intends that the loans will not be repaid. For the fiscal years ended November 30, 2025 and 2024 , all intercompany loan arrangements were determined to be permanent based on management’s intention as well as actual lending and repayment activity. 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, 2025 and 2024 . t) Other Comprehensive Income Other comprehensive income consists of foreign currency translation adjustments and unrealized gains or losses on available for sale securities. For the fiscal years ended November 30, 2025 and 2024 , the Company recorded foreign currency translation gain of less than $ 0.1 million and foreign currency translation loss of $ 0.1 million, respectively. For the fiscal years ended November 30, 2025 and 2024 , the Company recorded foreign currency translation gain of less than $ 0.1 million and $ 0.4 million, respectively, on its intercompany loan, which is considered permanent or long-term nature. For the fiscal year ended November 30, 2025 , the Company recorded net unrealized loss on available for sale securities of less than $ 0.1 million. Unrealized gains recorded for the fiscal year ended November 30, 2024 , was $ 0.1 million. u) Fair Value Measurement The Company follows a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three -tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: ● Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. ● Level 2 - Inputs (other than quoted prices included in Level 1 ) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. ● Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. v) Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). 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 2023, the FASB issued ASU 2023‑07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures, which requires expanded annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The guidance also requires enhanced reconciliations of segment measures to consolidated financial results. The Company adopted the guidance effective for the fiscal year ended November 30, 2025. Adoption resulted in expanded segment disclosures, including significant segment expenses and reconciliations to consolidated measures. See Note 19, "Segment and Geographical Disclosures" for additional information. Accounting Pronouncements Issued but Not Adopted 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, as amended by ASU 2025 - 01. 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, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently assessing the impact of this standard 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 July 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025 - 05, which addresses the measurement of credit losses for accounts receivable and contract assets. This update introduces a practical expedient that allows entities to assume that current conditions will remain unchanged until the maturity of the asset, simplifying the estimation of expected credit losses. ASU 2025 - 05 is effective for annual reporting periods beginning after December 15, 2025, and for interim periods thereafter, requiring prospective application to estimates of expected credit losses post-adoption. The Company is currently evaluating the impact that ASU 2025 - 05 will have on its financial statements and disclosures. While it is too early to determine the specific effects, the Company anticipates that the adoption may improve the relevance and usability of the financial information provided to users without having a material impact on its consolidated financial position or results of operations. F- 12 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 5. MARKETABLE DEBT SECURITIES The following table summarizes the Company's available-for-sale marketable debt securities as of November 30, 2025 ( in thousands): Cost Unrealized Gains Unrealized Losses Fair Value Investments Corporate bonds $ 737 $ 11 $ - $ 748 $ 748 U.S. Treasury securities 999 7 - 1,006 1,006 Total $ 1,736 $ 18 $ - $ 1,754 $ 1,754 The following table summarizes the Company's available-for-sale marketable debt securities as of November 30, 2024 ( in thousands): Cost Unrealized Gains Unrealized Losses Fair Value Investments Corporate bonds $ 2,950 $ 18 $ - $ 2,968 $ 2,968 U.S. Treasury securities 5,889 47 - 5,936 5,936 Total $ 8,839 $ 65 $ - $ 8,904 $ 8,904 The following table summarizes the fair value of marketable debt securities by level within the fair value hierarchy as of November 30, 2025: November 30, 2025 Fair Value Measurement Based on Quoted Prices in Active Market Significant Other Observable Inputs Significant Unobservable Inputs Cost Fair Value (Level 1) (Level 2) (Level 3) Cash equivalents $ 5,043 $ 5,043 $ 5,043 $ - $ - Corporate bonds 737 748 - 748 - U.S. Treasury securities 999 1,006 - 1,006 - Total $ 6,779 $ 6,797 $ 5,043 $ 1,754 $ - The following table summarizes the fair value of marketable debt securities by level within the fair value hierarchy as of November 30, 2024: November 30, 2024 Fair Value Measurement Based on Quoted Prices in Active Market Significant Other Observable Inputs Significant Unobservable Inputs Cost Fair Value (Level 1) (Level 2) (Level 3) Cash equivalents $ 11,304 $ 11,304 $ 11,304 $ - $ - Corporate bonds 2,950 2,968 - 2,968 - U.S. Treasury securities 5,889 5,936 - 5,936 - Total $ 20,143 $ 20,208 $ 11,304 $ 8,904 $ - F- 13 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 6. TRANSACTIONS WITH BYRNA LATAM In January 2023, the Company acquired a 51 % ownership interest in Byrna LATAM S.A. ("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. On August 19, 2024, the Company sold its 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 during the fiscal year ended November 30, 2025 , and outstanding as of November 30, 2025 , was $ 1.6 million and $ 1.1 million, respectively. The amount outstanding as 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 years ended November 30, 2025 and 2024 . The interest income is included in interest income in the Condensed Consolidated Statements of Operations and Comprehensive Income. 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 is to be repaid in twelve equal monthly installments beginning 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 the Other assets on the Consolidated Balance Sheets as of November 30, 2025 and 2024 . The loan amount outstanding as of November 30, 2025 was $ 1.1 million, all of which is recorded as part of Prepaid expenses in the consolidated balance sheet. The loan amount outstanding as of November 30, 2024, was $ 1.7 million. $ 0.7 million was recorded as part of Prepaid expenses and $ 1.0 million was recorded as part of Other assets in the consolidated balance sheet. 7. REVENUE, DEFERRED REVENUE AND ACCOUNTS RECEIVABLE Deferred Revenue The balance of deferred revenue, which relate to advance payments, unfulfilled e-commerce orders and amounts to be recognized under extended three -year and five -year service warranty, was $ 0.5 million as of November 30, 2025 , $ 1.8 million as of November 30, 2024, and $ 1.9 million as of November 30, 2023. Changes in deferred revenue for the years ended November 30, 2025 and 2024 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, 2025 and 2024 . Deferred revenue balance, November 30, 2023 $ 1,936 Net additions to deferred revenue 66,120 Reductions in deferred revenue for revenue recognized during the fiscal year ( 66,248 ) Deferred revenue balance, November 30, 2024 1,808 Net additions to deferred revenue 69,351 Reductions in deferred revenue for revenue recognized during the fiscal year ( 70,638 ) Deferred revenue balance, November 30, 2025 $ 521 Less current portion $ 496 Deferred revenue, non-current $ 25 Revenue Disaggregation The Company presents disaggregation of revenue by reportable sales channel consistent with ASC 280, as the CODM evaluates the business on a segment basis. The following table presents disaggregation of the Company’s revenue by market and distribution channel (in thousands): Years Ended November 30, Geographical Market 2025 2024 U.S./Mexico $ 106,128 $ 78,932 South Africa 1,365 198 Europe/South America/Asia 8,114 4,156 Canada 2,513 2,470 Total $ 118,120 $ 85,756 Years Ended November 30, Distribution channel 2025 2024 Wholesale (dealer/distributors) $ 39,910 $ 19,900 E-commerce 76,572 65,856 Royalties 1,638 — Total $ 118,120 $ 85,756 The Company presents revenues net of returns, allowances, and discounts. The following table presents disaggregation of the Company’s net revenue by revenue stream (in thousands): Years Ended November 30, Revenue type 2025 2024 Product $ 116,482 $ 85,756 Royalties 1,638 — Total $ 118,120 $ 85,756 Accounts Receivable The Company records accounts receivables due from dealers/distributors, large end-users such as retail stores, security companies and law enforcement agencies. Accounts receivable, net of allowances, was $ 10.8 million, $ 2.6 million, and $ 2.9 million as of November 30, 2025, 2024 and 2023 respectively. F- 14 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 8. INVENTORY The following table summarizes inventory (in thousands): November 30, November 30, 2025 2024 Raw materials $ 18,736 $ 10,307 Work in process 4,387 3,433 Finished goods 9,571 6,232 Total $ 32,694 $ 19,972 The Company reviews inventory for excess and obsolete products and records provisions based on its estimate of the probability that material will not be consumed in production or will be sold below cost. Inventory increased from $ 20.0 million as of November 30, 2024 to $ 32.7 million as of November 30, 2025 , primarily due to planned production increases to support the expansion of the wholesale and retail segment and the launch of new product configurations. The Company recorded an inventory reserve of $ 0.4 million at November 30, 2025 related to slow‑moving components and discontinued SKUs, which is consistent with the $ 0.4 million inventory reserve recorded at November 30, 2024 . 9. PROPERTY AND EQUIPMENT The following table summarizes cost and accumulated depreciation (in thousands): Estimated Useful November 30, Lives in Years 2025 2024 Computer equipment and software 3 - 5 $ 886 $ 791 Furniture and fixtures 5 820 276 Leasehold improvements 3 - 7 1,931 1,048 Machinery and equipment 5 - 7 8,307 4,095 11,944 6,210 Less: accumulated depreciation and amortization 4,218 2,802 Total $ 7,726 $ 3,408 The Company recognized approximately $ 1.9 million and $ 1.2 million in depreciation expense during the years ended November 30, 2025 and 2024 , respectively. Depreciation expense is presented in the operating expenses and within cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Income. At November 30, 2025 and 2024 , the Company deposited $ 1.5 million and $ 2.7 million, respectively, with vendors primarily for supply of molds and equipment where the vendors have not completed supply of these assets. The deposits are presented in the Consolidated Balance Sheets as deposits for equipment. The Company placed $ 1.1 million, less than $ 0.1 million, and $ 7.1 million of leasehold improvements deposits, software deposits, and molds and equipment deposits, respectively, from November 30, 2024 into service during fiscal year November 30, 2025 . 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 . 10. INTANGIBLE ASSETS The components of intangible assets were as follows (in thousands): As of November 30, 2025 As of November 30, 2024 Estimated Useful Lives in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents 10 - 17 $ 3,955 $ ( 1,234 ) $ 2,721 $ 3,955 $ ( 978 ) $ 2,977 Trademarks Indefinite 360 — 360 360 — 360 Customer List 2 70 ( 70 ) — 70 ( 70 ) — Federal Firearms License 3 6 ( 1 ) 5 Total $ 4,391 $ ( 1,305 ) $ 3,086 $ 4,385 $ ( 1,048 ) $ 3,337 The trademarks have an indefinite life and will be assessed annually for impairment. 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 Income. Total intangible assets amortization expense for the years ended November 30, 2025 and 2024 were $ 0.3 million and $ 0.3 million, respectively. Estimated future amortization expense related to intangible assets as of November 30, 2025 , are as follows (in thousands): Fiscal Year Ending November 30, 2026 $ 259 2027 259 2028 258 2029 257 2030 257 Thereafter 1,436 Total $ 2,726 F- 15 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following (in thousands): November 30, 2025 2024 Trade payables $ 10,082 $ 7,715 Accrued sales and use tax 648 570 Personnel costs 4,696 4,193 Accrued professional fees 153 124 Other accrued liabilities 285 506 $ 15,864 $ 13,108 F- 16 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 12. STOCKHOLDERS’ EQUITY Stock Buyback Plan 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 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. For the year ended November 30, 2025 , the Company repurchased 0.06 million shares of common stock for $ 1.1 million. For the year ended November 30, 2024 , the Company repurchased 0.3 million shares of common stock for $ 3.8 million. F- 17 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 13. STOCK-BASED COMPENSATION 2020 Plan In 2020, the Board and the stockholders approved the Byrna Technologies Inc. 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 is 2,500,000 . In 2022, the Company’s Board of Directors and 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. The 2020 Plan is administered by the Compensation Committee of the Board. The Compensation Committee determines the persons to whom options to purchase shares of common stock, stock appreciation rights (“SARs”), restricted stock units (“RSUs”), and restricted or unrestricted shares of common stock may be granted. Persons eligible to receive awards under the 2020 Plan are employees, officers, directors, consultants, advisors and other individual service providers of the Company. Awards are at the discretion of the Compensation Committee. Stock-Based Compensation Expense Total stock-based compensation expense was $ 3.1 million and $ 3.4 million for the years ended November 30, 2025 and 2024 , respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. Restricted Stock Units During the year ended November 30, 2025, the Company granted performance-based RSUs (“PSUs”) to certain employees. The number of PSUs that may ultimately vest is contingent upon the achievement of specified GAAP revenue targets for the fiscal year 2026 performance period ( December 1, 2025 through November 30, 2026), as well as the participant’s continued employment through November 30, 2027. As of November 30, 2025 , the performance metrics are probable of being achieved. The actual number of shares that may be earned ranges from 0 % to 200 % of the target award, depending on the level of achievement of the performance goals. Any earned PSUs will vest on November 30, 2027, subject to continued service through such date. Compensation expense is recognized for PSUs only to the extent that it is probable the performance conditions will be achieved. During the year ended November 30, 2025, the Company granted 129,588 RSUs consisting of 97,102 time-based RSUs and 32,486 PSUs. During the year ended November 30, 2024, the Company granted 600,000 PSUs with a “double trigger” for vesting based on stock price and time, as follows: ( 1 ) one - third of the RSUs would be triggered when the Company’s stock trades above $ 6.00 on a 20 -day VWAP, the second one - third of the RSUs would be triggered when the Company’s stock trades above $ 9.00 on a 20 -day VWAP, and the final one - third of the RSUs would 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. Stock-based compensation expense for the RSUs and PSUs for the year ended November 30, 2025, and November 30, 2024, was $ 2.1 million and $ 1.6 million, respectively. As of November 30, 2025 , there was $ 3.4 million of unrecognized stock‑based compensation cost related to unvested awards, consisting of $ 2.8 million associated with RSUs and $ 0.6 million associated with PSUs. This cost is expected to be recognized over a weighted‑average period of approximately 0.9 years. RSU Valuation 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, 2025 , that required a Monte Carlo simulation model. (Monte Carlo simulation model) 2024 Risk free rate 4.33 % Expected dividends $ — Expected volatility 33 % Expected life (in years) 2.7 Market price of the Company’s common stock on date of grant $ 6.03 The following table summarizes the RSU activity during the year ended November 30, 2025 : RSUs Outstanding, November 30, 2023 976,226 Granted 753,230 Issued ( 691,596 ) Forfeited ( 122,630 ) Outstanding, November 30, 2024 915,230 Granted 129,588 Issued ( 165,017 ) Forfeited ( 12,664 ) Outstanding, November 30, 2025 867,137 Of the 165,017 RSUs that were settled during the year ended November 30, 2025 , 17,794 units were withheld by the Company in exchange for the Company paying for the payroll withholding taxes. For the year ended November 30, 2025 , RSUs of 147,223 , net, were issued in connection with the settlement of RSUs. Of the 691,596 RSUs that were settled during the year ended November 30, 2024 , 57,697 units were withheld by the Company 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 year ended November 30, 2024 , RSUs of 611,994 , net, were issued in connection with the settlement of RSUs. Stock Options During the year ended November 30, 2025 , the Company did not grant any options. During the year ended November 30, 2024 , the Company granted options to employees and directors to purchase 199,500 shares of common stock. The Company recorded stock-based compensation expense for options granted to its employees and directors of $ 1.0 million and $ 1.8 million during the years ended November 30, 2025 and 2024 , respectively. As of November 30, 2025 , there was $ 0.3 million of unrecognized stock-based compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.2 years. Stock Option Valuation The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and non-employees for the year ended November 30, 2024, were as follows: 2024 Risk free rate 4.10 % Expected dividends 0 % Expected volatility 76 % Expected life (in years) 6.5 Market price of the Company’s common stock on date of grant $ 6.89 Exercise price $ 6.89 F- 18 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) The following table summarizes option activity under the 2020 Plan during the years ended November 30, 2025 and 2024 : Weighted-Average Stock Exercise Price Per Stock Options Option Outstanding, November 30, 2023 1,384,666 $ 7.12 Granted 199,500 6.89 Exercised ( 292,827 ) 3.01 Expired — — Forfeited ( 49,500 ) 7.24 Outstanding, November 30, 2024 1,241,839 $ 9.11 Granted — — Exercised ( 137,001 ) 10.58 Expired ( 586 ) 1.90 Forfeited ( 16,667 ) 8.96 Outstanding, November 30, 2025 1,087,585 $ 8.96 Exercisable, November 30, 2025 878,250 $ 9.26 Exercisable, November 30, 2024 766,196 $ 9.58 Of the 137,001 shares issued upon exercise of options during the year ended November 30, 2025 , 36,807 options were surrendered due to cashless exercise. Of the 292,827 shares issued upon exercise of options during the year ended November 30, 2024 , 61,859 options were surrendered due to cashless exercise. The stock options outstanding at the end of the year had weighted-average contractual life as follows: 2025 2024 (in years) (in years) Total outstanding options 6.60 7.48 Total exercisable options 6.33 7.04 F- 19 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 14. EARNINGS PER SHARE Diluted earnings per share (“EPS”) includes the effect of potentially dilutive common stock equivalents, including stock options and restricted stock units (“RSUs”), to the extent such securities are dilutive. Basic EPS is computed using the weighted‑average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. November 30, 2025 2024 Net income $ 9,687 $ 12,792 Weighted-average number of shares used in computing net income per share, basic 22,665,395 22,504,938 Weighted-average number of shares used in computing net income per share, diluted 24,149,794 23,139,549 Net income per share - basic $ 0.43 $ 0.57 Net income per share - diluted $ 0.40 $ 0.55 The Company’s potential dilutive securities, which include stock options and RSUs have been excluded from the computation of diluted net income per share as the effect would be anti-dilutive. The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net income per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: November 30, 2025 2024 Stock options — 256,423 Restricted stock 29,233 19,374 Total 29,233 275,797 F- 20 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 15. RELATED PARTY TRANSACTIONS The following transactions are in the normal course of operations and are measured at the amount of consideration established and agreed to by related parties. Amounts due to related parties are unsecured, non-interest bearing and due on demand. 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 less than $ 0.1 million and less than $ 0.1 million during the years ended November 30, 2025 and 2024 , respectively. Fusady is owned, in equal 25% shares, by four individual investors. These four individuals also each own 25% of Bersa S.A. Bersa S.A. is a distributor of the Company’s products in Argentina. There were $ 0.1 million sales to Bersa S.A. during the year ended November 30, 2024. Because of the divesture of the joint venture in August 2024, Fusady is no longer considered a related party. 16. LEASES Operating Leases The Company has operating leases for real estate in the United States and formerly in South Africa and does not have any finance leases. 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 extended the term of the existing space by one year. The new lease expiration date is February 29, 2028. The Company previously leased office and warehouse space in South Africa. The lease had been extended through December 2025 and was not renewed. Manufacturing operations at this location ceased during the third quarter of 2025. The Company leased warehouse and manufacturing space in Fort Wayne, Indiana. The lease was to expire on July 31, 2025 . Commencing in August 2022, the Company sub-leased this Fort Wayne facility. The amount received from the sub-lease was immaterial. In March 2024, the Company terminated the lease and sublease. 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 . The Company also leases office space in Las Vegas, Nevada, which expires on January 31, 2027. 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 five years, commencing on August 22, 2024 and expiring on August 21, 2029 . 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 eight years, commencing on August 27, 2024 and expiring on July 31, 2032 . 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 . Commencing on April 1, 2025, the Company entered into another operating lease for office space located in Las Vegas, Nevada. The lease term is for three years, expiring on April 30, 2028 . As of November 30, 2025, the total right-of-use asset amounting to $ 0.1 million and the corresponding lease liability of $ 0.2 million are reflected in the Company's consolidated financial statements. Commencing in October 2025, the Company assumed two operating leases for retail suites located in Santa Clarita, California. The leases each have a two -year term, commencing on October 3, 2025 and expiring on September 14, 2027 . The Company subleases both suites to a third -party dealer. The Company remains the primary obligor under the head leases and invoices the subtenant for an equivalent amount of rent with no markup. As of November 30, 2025, the combined right-of-use assets and lease liabilities associated with the two leases 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. Reflected in the right-of-use asset and lease liability on the Company’s balance sheets are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain to not exercise. F- 21 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) As of November 30, 2025 and 2024 , the elements of lease expense were as follows (in thousands): November 30, 2025 2024 Lease Cost: Operating lease cost $ 767 $ 599 Short-term lease cost 74 — Total lease cost $ 841 $ 599 Other Information: Cash paid for amounts included in the measurement of operating lease liabilities $ 562 $ 633 Operating lease liabilities arising from obtaining right-of-use assets $ 264 $ 1,404 Operating Leases: Weighted-average remaining lease term (in years) 3.8 4.7 Weighted-average discount rate 7.8 % 8.04 % F- 22 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) Future lease payments under non-cancelable operating leases as of November 30, 2025 are as follows (in thousands): Fiscal Year Ended November 30, 2026 $ 885 2027 773 2028 386 2029 266 2030 160 Thereafter 226 Total lease payments 2,696 Less: imputed interest 350 Total lease liabilities $ 2,346 Operating lease liabilities, current $ 734 Operating lease liabilities, non-current $ 1,612 17. INCOME TAXES Income (loss) before income taxes consists of the following (in thousands): Year Ended November 30, 2025 2024 United States $ 12,418 $ 8,226 Foreign ( 677 ) ( 1,142 ) Total $ 11,741 $ 7,084 The components of the provision (benefit) for income taxes is as follows (in thousands): Year Ended November 30, 2025 2024 Current expense: Federal $ 67 $ 6 State 267 123 Foreign 17 — Total current expense: 351 129 Deferred expense (benefit): Federal 1,832 ( 5,164 ) State ( 129 ) ( 673 ) Foreign — — Total deferred expense (benefit) 1,703 ( 5,837 ) Total income tax provision (benefit) $ 2,054 $ ( 5,708 ) F- 23 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended November 30, 2025 2024 Income at US statutory rate 21.00 % 21.00 % State income taxes 0.74 % 3.15 % Permanent differences ( 1.82 )% 15.06 % Foreign rate differential ( 0.35 )% (0.96 )% Valuation allowance ( 0.33 )% ( 118.75 )% Tax credits ( 2.03 )% ( 4.41 )% Other 0.28 % 4.60 % Total 17.49 % ( 80.31 )% The net deferred income tax asset (liability) balance related to the following (in thousands): November 30, 2025 2024 Net operating loss ("NOL") carryforwards $ 2,002 $ 3,438 Research and development tax credits 430 318 Stock-based compensation 1,230 1,033 Inventory reserve 110 107 Allowance for current expected credit losses 14 70 Personnel costs 949 879 Warranty reserves 35 57 Foreign tax credit carryforwards 9 9 Capital loss carryover 118 115 Unrealized losses 23 14 Deferred revenue — 21 Lease liability 535 583 Research and experimental capitalization 1,113 802 Business interest limitation 425 325 Subtotal deferred tax assets 6,993 7,771 Valuation allowance ( 775 ) ( 837 ) Total deferred tax assets 6,218 6,934 Depreciation and amortization ( 1,619 ) ( 555 ) Right of use asset ( 465 ) ( 542 ) Total deferred tax liabilities ( 2,084 ) ( 1,097 ) Net deferred tax assets (liabilities) $ 4,134 $ 5,837 The Company notes less than $ 0.1 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 U.S. GAAP. As of November 30, 2025 , the Company had federal and state NOL carryforwards of approximately $ 7.5 million and $ 3.2 million, respectively, which begin to expire in 2029 for federal and state purposes. The federal NOL carryforwards include approximately $ 4.7 million, which do not expire. The Company had foreign NOL carryforwards of $ 0.9 million which can be carried forward indefinitely. The Company had federal and state research and development tax credits of approximately $ 0.2 and $ 0.2 million, respectively, as of November 30, 2025 . The federal and state research and development credits begin to expire in 2044 and 2039, respectively. There were $ 0.1 and $ 0.2 million of federal or state research and development tax credits as of November 30, 2024 , respectively. Deferred tax assets are presented separately 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. As of November 30, 2025 and 2024 , respectively, the Company performed an evaluation to determine whether a valuation allowance was needed. 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 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, 2025 and 2024 . At November 30, 2025 and 2024 , the Company recognized valuation allowances of $ 0.8 million and $ 0.8 million, respectively, related to its deferred tax assets. The net increase (decrease) of less than $ 0.1 million and $( 8.5 ) million in the valuation allowance reflects the net operating loss position in South Africa for November 30, 2025 and the release of the U.S. valuation allowance for November 30, 2024, 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. Ownership changes could impact the Company’s ability to utilize the NOL carryforwards remaining at an ownership change date. The Company last completed a Section 382 analysis regarding whether an ownership change had occurred for Company through November 30, 2024 . Based on the analysis, the cumulative ownership change is 12.07 %. As a result, no resulting limitation of NOL carryforwards has been considered in determining the valuation allowance position against the related deferred tax assets as noted above. 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 prior year ended November 30, 2023 and resulted in the capitalization for income tax purposes of R&E costs through November 30, 2024 of $ 4.5 million. During the year ended November 30, 2025 , the capitalization for income tax purposes of R&E costs is $ 2.4 million. The Company will amortize these costs for tax purposes over five 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. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA amends U.S. tax law including provisions related to domestic research and development expenses and bonus depreciation, among others. Bonus depreciation on new fixed asset additions placed in service after January 19, 2025 is now 100% and the Company has included the estimated impact of items affecting its current tax period as part of its income tax expense computed for the year ended November 30, 2025. The provision related to domestic research and development expenses and other provisions are in effect for tax years beginning after December 31, 2024 and will not be in effect for the Company until next year, but the Company does not expect a material impact of the OBBBA on its consolidated financial statements as of November 30, 2025 . F- 24 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 18. COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of its business, the Company may be subject to certain legal actions and claims, including product liability, consumer, commercial, tax and governmental matters, which may arise from time to time. The Company does not believe it is currently a party to any pending legal proceedings. Notwithstanding, legal proceedings are subject to inherent uncertainties, and an unfavorable outcome could include monetary damages, and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on the Company’s business, financial position, results of operations, and/or cash flows. Additionally, although the Company has specific insurance for certain potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material adverse impact on the Company’s business, financial position, results of operations, and/or cash flows. F- 25 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) 19. SEGMENT AND GEOGRAPHICAL DISCLOSURES Effective for the fiscal year ended November 30, 2025, the Company adopted ASU 2023‑07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures. As a result, the Company expanded its segment disclosures to provide information about significant segment channel expenses, other segment items, and the measures used by the Company’s Chief Operating Decision Maker (“CODM”) in evaluating segment performance. Beginning in fiscal 2025, the Company manages its operations through two reportable channels: ( 1 ) Direct‑to‑Consumer (“DTC”) – includes sales through the Company’s e‑commerce websites, Amazon storefronts, and Company‑operated retail stores, and ( 2 ) Wholesale ("dealer/distributor") – includes sales to distributors, law‑enforcement agencies, retailers, and international distributors. The CEO, who is also the CODM, evaluates sales channel performance primarily based on sales channel revenue less cost of sales and gross margin. Operating expenses, including marketing and variable expenses, executive compensation, public company costs, certain IT infrastructure costs, share‑based compensation, and items not allocable to a specific segment, are reported as Other Items. No segment‑specific balance sheet information is regularly reviewed by the CODM; therefore, the Company does not report segment assets or segment liabilities. The tables below (in thousands) summarize the Company’s revenue, long-lived assets and total assets as of November 30, 2025 and 2024 , respectively by geographic region. The Company’s long-lived assets consist of intangible assets, property and equipment, right of use assets, and deposits for equipment: Revenue U.S./Mexico South Africa Europe/South America/Asia Canada Total 2025 $ 106,128 $ 1,365 $ 8,114 $ 2,513 $ 118,120 2024 $ 78,932 $ 198 $ 4,156 $ 2,470 $ 85,756 Long-lived assets US South Africa Total 2025 $ 14,256 $ 93 $ 14,349 2024 $ 10,966 $ 896 11,862 Total Assets US South Africa Canada Total 2025 $ 80,160 $ 3,990 $ 338 $ 84,488 2024 $ 66,794 $ 5,128 $ — $ 71,922 The table below (in thousands) summarize the Company’s revenue by reportable sales channel as of November 30, 2025 : Year Ended November 30, 2025 DTC Wholesale Total Revenue $ 76,572 $ 41,548 $ 118,120 COS 26,493 20,157 46,650 Gross Margin $ 50,079 $ 21,391 $ 71,470 Gross Margin % 65.4 % 51.5 % 60.5 % Operating Expenses $ 59,632 Profit from operations $ 11,838 Operating Margin % 10.0 % The table below (in thousands) summarize the Company’s revenue by reportable sales channel as of November 30, 2024 : Year Ended November 30, 2024 DTC Wholesale Total Revenue $ 65,856 $ 19,900 $ 85,756 COS 22,863 10,121 $ 32,984 Gross Margin $ 42,993 $ 9,779 $ 52,772 Gross Margin % 65.3 % 49.1 % 61.5 % Operating Expenses $ 46,101 Profit from operations $ 6,671 Operating Margin % 7.8 % 20. FINANCIAL INSTRUMENTS The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them. i) Currency Risk The Company held its cash balances within banks in the US in US dollars and with banks in South Africa in US dollars and South African rand. The value of the South African rand against the US dollar may fluctuate with the changes in economic conditions. F- 26 BYRNA TECHNOLOGIES INC. Notes to Consolidated Financial Statements November 30, 2025 and 2024 (Amounts expressed in US Dollars) During the years ended November 30, 2025 and 2024 , the US dollar weakened in relation to the South African rand, and upon the translation of the Company’s subsidiaries’ revenues, expenses, assets and liabilities, and intercompany loan held in South African rand, respectively. As a result, the Company recorded a translation adjustment loss of $ 0.4 million and $ 0.6 million primarily related to the South African rand during the years ended November 30, 2025 and 2024 , respectively. The translation adjustment related to the Company’s Canadian subsidiary, which was established in 2025, was immaterial for the period. The Company’s South African subsidiary's revenues, cost of goods sold, and operating costs are denominated in South African rand. Consequently, fluctuations in the US dollar exchange rate against the South African rand increases the volatility of sales, cost of goods sold and operating costs and overall net earnings when translated into US dollars. The Company is not using any forward or option contracts to fix the foreign exchange rates. Using a 10 % fluctuation in the US exchange rate, the impact on the loss and stockholders’ equity is not material. The Company’s Canadian subsidiary’s revenues, cost of goods sold, operating costs, and capital expenditures are denominated in Canadian dollars. Consequently, fluctuations in the U.S. dollar exchange rate against the Canadian dollar may increase the volatility of reported sales, cost of goods sold, operating costs, and net earnings when translated into U.S. dollars. The Company does not currently use forward contracts, options, or other derivative instruments to manage foreign‑currency exchange risk. Management believes that the impact of reasonably possible changes in foreign‑currency exchange rates on the Company’s loss and stockholders’ equity is not material. ii) Credit Risk 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 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, Canada, and South Africa. 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. As of November 30, 2025 , two of the Company's customers accounted for approximately 47 % of total accounts receivable. As of November 30, 2024 , two customers accounted for 36 % of total accounts receivable. The Company loaned $ 1.6 million to Byrna LATAM in January 2023. As of November 30, 2025 , the outstanding balance on this loan was $ 1.1 million. 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. 21. SUBSEQUENT EVENTS On February 3, 2026, the Company entered into a credit agreement with Texas Capital Bank (the "Credit Agreement"). The Credit Agreement is for a total of $ 20 million credit facility and is made up of a $ 5 million revolving line of credit and a $ 15 million delayed term loan. The term of the Credit Agreement is five years with a maturity date of February 3, 2031. The interest rate is SOFR plus 2.5 % - 2.75 % depending on certain ratios. The Credit Agreement is collateralized by all assets of the Company. F- 27 (3) Exhibits. The following exhibits are filed as part of this Report. Where such filing is made by incorporation by reference to a previously filed document, such document is identified. Exhibit No. Description 3.1 Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2021). 3.2 Certificate of Amendment to the Certificate of Incorporation, dated April 28, 2021 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 28, 2021). 3.3 Certificate of Amendment to the Certificate of Incorporation, dated June 17, 2022 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 21, 2022). 3.4 Amended and Restated By-laws dated April 19, 2021 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 26, 2021). 3.5 Certificate of Designations of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 15, 2020). 3.6 Amendment to the Certificate of Designations of Series A Convertible Preferred Stock, dated January 15, 2021 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2021). 4.1 Description of Capital Stock (incorporated herein by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2021). 4.2 Form of Common Stock Purchase Warrant (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 23, 2018). 4.3 Common Stock Purchase Warrant, dated January 15, 2020 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 22, 2020). 10.1# Byrna Technologies Inc. 2020 Amended and Restated 2020 Equity Incentive Plan (incorporated herein by reference to Annex B to the Company's Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on May 6, 2022). 10.2# Consulting Agreement dated June 15, 2016 between the Company and Northeast Industrial Partners, LLC, as amended by Extension Agreement to Consulting Agreement, dated May 1, 2017, between the Company and Northeast Industrial Partners, LLC (incorporated herein by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 28, 2018). 10.3# Form of Incentive Stock Option Award Agreement under the Byrna Technologies Inc. 2020 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1 filed with the Securities Exchange Commission on June 1, 2021). 10.4# Form of Nonqualified Stock Option Award Agreement under the Byrna Technologies Inc. 2020 Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1 filed with the Securities Exchange Commission on June 1, 2021). 10.5 Purchase and Sale Agreement by and among the Company and Andre Buys of South Africa, dated April 13, 2018 (incorporated herein 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 16, 2018). E-1 10.6 Amendment to Purchase and Sale Agreement by and among the Company and Andre Buys of South Africa, dated December 19, 2019 (incorporated herein by reference to Exhibit 10.2 to the Company’ s Current Report on Form 8-K filed with the Securities Exchange Commission on January 8, 2020). 10.7 Manufacturing Supply Agreement by and between the Company and Micron Products, Inc. dated August 11, 2017 (incorporated herein by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 28, 2018). 10.8 License and Supply Agreement by and between the Company and Safariland, LLC dated May 1, 2017 (incorporated herein by reference to Exhibit 10.9 to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 28, 2018). 10.9† Securities Purchase Agreement, by and among the Company, Northeast Industrial Partners, LLC, and the purchasers party thereto, dated April 22, 2019 (incorporated herein 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 23, 2019). 10.10† Securities Purchase Agreement, by and among the Company, Northeast Industrial Partners, LLC, and the purchasers party thereto, dated July 22, 2019 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2019). 10.11 Purchase and Sale Agreement by and among by and among the Company and Andre Buys of South Africa, dated April 13, 2018 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 8, 2020). 10.12 Amendment to Purchase and Sale Agreement by and among the Company and Andre Buys of South Africa, dated December 19, 2019 (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 8, 2020). 10.13† Stock Purchase Agreement, dated as of May 5, 2020, by and among the Company, Roboro, the Sellers and the Seller Representative (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 18, 2020). E-2 10.14† Asset Purchase Agreement by and among the Company, Kore Outdoor (US) Inc. and Kore Outdoor Inc., dated as of May 12, 2021 (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 May 21, 2021). 10.15# Form of Indemnification Agreement by and between the Registrant and each of its officers and directors (incorporated by reference to Exhibit 10.17 to the Amendment to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 12, 2021). 10.16† Asset Purchase Agreement by and between Byrna Technologies Inc. and Fox Labs International, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K wiled with the Securities and Exchange Commission on May 25, 2022). 10.17# 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). 10.18# 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). 10.19# 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). 10.20 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). 10.21# Byrna Technologies, Inc. Executive Severance Plan (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 July 30, 2025). 10.22# Form of Participation Agreement for Byrna Technologies, Inc. Executive Severance Plan (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 July 30, 2025). 10.23 Credit Agreement dated February 3, 2026, between the Company and Texas Capital Bank. 19.1 Insider Trading Policy.* 21.1 List of Registrant's Subsidiaries* 23.1 Consent of Independent Registered Public Accounting Firm* 31.1 Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).* 31.2 Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).* 32.1 Certification of the Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350** 97.1 Byrna Technologies Inc. Clawback Policy . * 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document* 101.SCH Inline XBRL Taxonomy Extension Schema* 101.CAL Inline XBRL Taxonomy Calculation Linkbase* 101.LAB Inline XBRL Taxonomy Label Linkbase* 101.PRE Inline XBRL Definition Linkbase Document* 101.DEF Inline XBRL Definition Linkbase Document* 104 Cover Page Interactive Data File (embedded within the Inline XBRL Document and include in Exhibit 101) * Filed herewith ** Furnished herewith # Management contract or compensatory plan or arrangement † Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby agrees to provide the Securities and Exchange Commission, upon request, copies of any omitted exhibits or schedules to this exhibit. E-3 Item 16. FORM 10-K SUMMARY Not applicable. 43 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. February 5, 2026 Byrna Technologies Inc. By: /s/ Bryan Ganz Name: Bryan Ganz Title: Chief Executive Officer, President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Position Date /s/ Bryan Ganz Chief Executive Officer, President and Director February 5, 2026 Bryan Ganz (Principal Executive Officer) /s/ Laurilee Kearnes Chief Financial Officer February 5, 2026 Laurilee Kearnes (Principal Financial Officer and Principal Accounting Officer) /s/ Herbert Hughes Chairman February 5, 2026 Herbert Hughes /s/ Leonard Elmore Director February 5, 2026 Leonard Elmore /s/ Chris Lavern Reed Director February 5, 2026 Chris Lavern Reed /s/ Emily Rooney Director February 5, 2026 Emily Rooney 44